Following is Practice Statement 1
Clearly this is simply propaganda put out by ITSA and contradicts the IGPS statement 10.1.
It appears senior management at ITSA and Regulations are fucking each other up the ARSE!!!.
According to IGPS 10.1 complaints to Regulations about ITSA and private trustees are fucked over because Veronique Ingram and Matthew Osborne have made the decision that a trustee under S 134 has discretion on the bankruptcy Act and so therefore bankruptcy Regulation is instructed that misconduct by ITSA staff and private trustees are to be fucked over and to be labelled as 'JUSTIFIED"
INSPECTOR-GENERAL PRACTICE STATEMENT 1
REGULATORY FRAMEWORK
Released 17 February 2010
Updated 1 February 2013
If you have any comments, suggestions or queries on a matter referred to in this Practice Statement, please contact us on 1300 364 785 or at regulation@itsa.gov.au or by mail addressed to:
Practice Manager – Regulation
Insolvency and Trustee Service Australia
PO Box 10443
Adelaide Street
BRISBANE QLD 4000
Inspector-General Practice Statement 1 – Regulatory framework 2
CONTENTS
1. INTRODUCTION 3
2. A COMPLIANCE FRAMEWORK 3
Risk analysis and environmental mapping of the individual 4
Diagram 1 – ITSA Regulation Compliance Model 4
Attitudes to compliance 5
Compliance strategies 5
3. USING THE MODEL 6
Getting the strategies clear 6
Understanding behaviour 6
Liaising and nurturing relationships 7
Encouraging compliance by choosing the right approach 7
Inspector-General Practice Statement 1 – Regulatory framework 3
1. INTRODUCTION
1.1. This document examines the purpose of ITSA Regulation in undertaking the role of the Inspector-General in Bankruptcy of regulating
Bankruptcy Act 1966 practitioners. It explores the philosophies and core strategies used in undertaking its role, against a backdrop of ITSA’s purpose, stakeholder and public perceptions and expectations.
1.2. The current ITSA Business and Strategic Plan 2011-2014 states that ITSA’s purpose is to provide:
"Improved and equitable financial outcomes for consumers, business and the community through application of bankruptcy and personal property securities laws, regulation of personal insolvency practitioners and trustee services."
1.3. The role performed by ITSA Regulation is:
"We regulate insolvency practitioners to ensure high national standards of personal insolvency practice and procedure and this includes:
registering private bankruptcy trustees and debt agreement administrators
monitoring unregistered debt agreement administrators (ie those that have 5 or fewer active administrations)
inspecting the systems and files of registered trustees and debt agreement administrators
investigating complaints and applying sanctions when appropriate.
We also fulfil the Inspector-General’s administrative review role, determining applications for review of decisions made by trustees."
1.4. This paper outlines the fundamental compliance model that underpins the regulatory strategies and guides ITSA Regulation’s actions.
2. A COMPLIANCE FRAMEWORK
2.1. Non-compliance is a significant risk to the integrity of the personal insolvency system in Australia and adds significant cost to the system. It is important to understand what motivates people to comply with legislation. It needs to be recognised that practitioners respond to their obligations under the Bankruptcy Act differently and that a one-size-fits-all approach is not the answer to achieving long-term compliance.
2.2. The Compliance Model depicted in Diagram 1 is a useful tool in understanding what a regulator needs to do and when. It draws on extensive research and follow-up work undertaken in developing the Australian Taxation Office’s compliance strategy, incorporating work by Dr Val Braithwaite and her colleagues.
2.3. The model depicted has three key elements:
environmental and risk issues that may affect compliance
attitudes to compliance
compliance strategies.
Inspector-General Practice Statement 1 – Regulatory framework
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2.4. It also has degrees of connectivity between these elements which also enables an assessment of the degree of urgency needed in respect to the how ITSA Regulation might assist in achieving compliance.
Risk analysis and environmental mapping of the individual
2.5. Clearly people are different. ITSA Regulation needs to understand the environment that each operates in and understand what factors influence their attitude to compliance. These factors will include business factors, the part of the insolvency industry they are in, geographical, economic and sociological issues and their own psychological makeup.
2.6. What drives attitudes in some will not influence others. ITSA Regulation should therefore take care not to stereotype practitioners. This may mean that ITSA Regulation has to treat some practitioners differently to obtain compliance. ITSA Regulation currently undertakes a risk analysis of each practitioner based on the size of their business, levels of segregation of duties and other controls in place, history of the practitioner with respect to complaints, annual inspection errors and Inspector-General reviews overturning their decisions.
2.7. In addition to undertaking a risk rating based on the empirical data in our risk model, ITSA Regulation also needs to understand what leads individual practitioners to comply or to not comply. A practitioner’s risk rating and their attitudes to compliance will determine the strategies adopted for achieving compliance.
Diagram 1 – ITSA Regulation Compliance Model
Inspector-General Practice Statement 1 – Regulatory framework 5
Attitudes to compliance
2.8. The second aspect to consider is the relationship between compliance attitudes and strategies that should be utilised. These are reflected diagrammatically above. On the left of the triangle, there is a continuum of attitudes to compliance, depending on what is happening at the time. At the base of the continuum people have the desired attitude of being willing to do the right thing. These are trustees and administrators who, for example, will hurry to correct any error or non-compliance identified.
2.9. The continuum acknowledges that attitudes can change at different times. For example, a practitioner may move from being willing, to active resistance, and back to resigned compliance on an issue, and the change could be outside of the regulator’s influence driven by the practitioner’s own environmental factors. The important thing to note about this model is that, before moving into "disengagement" shown at the apex of the triangle, practitioners are still willing to work with the regulator to comply, albeit begrudgingly in some cases where there is some disagreement.
2.10. The most serious situation is when a practitioner has disengaged – they have essentially moved out of the regulatory/compliance system (being the Act and Regulations, including the Schedule 4A standards, case law and Inspector-General’s directions). They become non-compliant practitioners – those who choose to avoid their responsibilities, indulge in game-playing and ignore or flout regulatory warnings. Obtaining compliance in these cases can be extremely costly and difficult.
Compliance strategies
2.11. The right hand side of the model features a hierarchy of compliance strategies, increasing in severity. This list is not comprehensive; rather, it indicates the general nature of strategies that can be employed.
2.12. The model gives people every opportunity to get it right. Research shows that a regulator should be aiming to keep practitioners at the bottom of the triangle, so ITSA Regulation commences on the basis of working cooperatively with practitioners using supportive regulatory strategies. These include:
working closely and consulting with professional associations
providing education and training
providing proactive inspections feedback
jointly developing standards
providing assistance including involvement in alternative dispute resolution.
2.13. As you move up the model, our strategies become more focused on keeping people on track with compliance, with strategies such as reminder letters and phone calls to encourage rectification. Further up the continuum, you move into strategies including investigations, warnings of consequential action that might eventuate, section 12 reports being released to creditors or the IPA, publicity and possibly some legal action.
2.14. At the top of the list are the strongest quick strike strategies, used for the most serious issues and non-compliant practitioners. Examples of action at this level
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are prosecution, litigation, cancellation of registration and publicity. These strategies should also be used where the most serious issues emerge that challenge the credibility of the personal insolvency system, even though the practitioner may subsequently acknowledge their mistakes or non-compliance and move to remedy same.
3. USING THE MODEL
3.1. Regulators are viewed with integrity only when they use the range of tools available when needed for the particular situation.
3.2. Research shows that it is also easier and cheaper to keep people at the bottom of the pyramid. If you want people to do the right thing, you need to provide them with opportunity and choice. This has generally been ITSA Regulation’s approach to date.
3.3. It is important to recognise that strategies on the lower end of the right hand side hierarchy, aimed at willing practitioners, will have little impact on a practitioner at the left hand side top end disengagement area of the model. If there is serious non-compliance and ITSA Regulation doesn’t take quick tough action it will be seen to lack integrity leading others to lessen their willingness for compliance.
3.4. Equally ITSA Regulation will also be seen as lacking regulatory integrity if it uses strong enforcement strategies on a willing complier for anything less that the most serious issues. Utilising extreme regulatory strategies from the apex of the model on a practitioner with a history of willingness to comply may well have the reverse impact on the practitioner’s willingness to comply in future, moving them up the attitudes side of the model. It’s all about matching and balancing the strategies with the compliance attitudes.
3.5. A significant aspect of the model is the ability of practitioners to move from the top to the bottom of the model (as well as the reverse). One mistake does not brand them for life. It is important to give people the opportunity to move down the model and it is important to use strategies that do not drive them up the model.
3.6. It is also important to note that regulatory effectiveness needs to be measured across the range of compliance strategies, and not just by one element. For example, the level of education and information activity is just as important a measure as the level of disciplinary action taken, and probably more so.
Getting the strategies clear
3.7. ITSA Regulation needs a different mix of strategies and escalation levels. These need to be comprehensively articulated.
Understanding behaviour
3.8. ITSA Regulation needs to be active in finding out what is happening in the profession. Systemic liaison with key professional bodies at regional and national levels is essential. Obtaining a greater understanding of the
Inspector-General Practice Statement 1 – Regulatory framework 7
environmental issues impacting locally is needed and people should pass on ideas and findings on issues that might be causing non-compliance.
Liaising and nurturing relationships
3.9. ITSA Regulation needs to continue to look for opportunities to work with practitioners, creditors, other government agencies and community organisations to educate people about their obligations. ITSA Regulation aims to find the people who have most influence and work with them.
3.10. Everyone likes to be recognised for doing a good job. ITSA Regulation should be giving positive feedback if a practitioner is doing the right thing. It is important to let them know, particularly if they’ve erred before. It is appropriate to give this feedback in complaint findings, on review of decisions and at annual inspections during exit interviews, particularly where a practitioner’s performance has improved from that identified in the past. This doesn’t prevent the regulator from taking issue with practitioners in future if they err.
Encouraging compliance by choosing the right approach
3.11. ITSA Regulation will treat all people as individuals, with respect in accordance with the APS Values approach. It is important that ITSA Regulation articulates the Inspector-General’s expectations in respect to practice
3.12. ITSA Regulation should consider what is known about the person and utilise the most effective compliance strategy to ensure compliance now and in the future.
3.13. When a practitioner has been given a reasonable opportunity to comply and has elected not to do so, ITSA Regulation will take quick decisive action.
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