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National auditor finds JobKeeper delivery effective

The government’s pandemic support scheme was effective despite “shortcomings” across ATO’s compliance program.

Tax&Compliance Tony Zhang 07 April 2022
— 2 minute read

The Australian National Audit Office (ANAO) has found the ATO has been effective in the administration of the JobKeeper scheme. 


In line with its priority of making timely payments to eligible entities, the ATO largely implemented fit-for-purpose arrangements to protect the integrity of JobKeeper payments. 

Around $89 billion in JobKeeper payments were made and 1,160 ATO staff were involved in administering the scheme in August 2020.

However, the audit report found the ATO did not implement all key compliance and integrity measures as intended.

“Of the 22 compliance measures tested, two were partly implemented as intended, seven largely as intended and eight fully as intended,” the ANAO said.

“The ANAO was unable to conclude on five compliance measures due to data integrity issues. 

The ATO’s governance and internal reporting arrangements did not provide clear assurance on the implementation of the compliance measures.”

The auditor-general said a more structured approach for documenting the reasons for exercising discretion on JobKeeper overpayments would have provided more transparency and accountability for the use of public funds.

The ATO had exercised discretion on overpayments largely in accordance with its internal policies and procedures. 

“The ATO’s approach was that the exercise of discretion needed to be reasonable based upon the circumstances of the case,” the national auditor said.

“The ATO’s guidance material set out two significant factors to be taken into account when exercising discretion — honest mistake and retention of financial benefit. 

“Based on a sample of 63 overpayments, the ATO did not consistently document how its exercise of discretion related to the two significant factors. The ATO’s understanding of the law was that the Commissioner’s discretion on JobKeeper overpayments could not be limited by internal policies and procedures.”

The audit report also raised concerns with the evidence asked for and received by the Tax Office showing a company receiving the JobKeeper payment met the relevant decline in turnover test.

While the ATO conducted reviews on the recipient’s proposed decline in turnover, the audit found inconsistencies in the documentation process.

The ATO was generally accepting of entity assertions with regard to the manner in which the decline in turnover test was completed and did not seek to verify the responses provided.

For instance, the ATO could have requested primary documentation to evidence the date on which the projections were produced.

“While the ATO conducted a decline in turnover reviews in accordance with its internal procedures, the nature of the ATO’s procedures and variability in the documentation maintained did not provide strong assurance on the assessed eligibility of entities that were reviewed,” the ANAO said.

The ATO recognised that finding and said it faced the challenge of delivering a program of the scale and complexity of JobKeeper under exceptional circumstances.

“We recognise the findings identified the potential for better record-keeping practices, particularly in relation to the favourable exercise of discretions and decisions not to continue compliance action, although we do note the actual environment required rapid implementation while balancing the need to support the community in a time of great uncertainty,” the ATO said.

We note also that the ATO, under a self-assessment system and having regard to the efficient use of resources, has traditionally put more effort into documenting reasons for decisions unfavourable to taxpayers (to ensure rigour in the decision and to provide procedural fairness to a taxpayer who may wish to challenge that decision) than to favourable decisions (which are unlikely to be challenged).

“Whilst there are some differences of opinion, the ATO has taken on board the findings from the ANAO and will continue to refine and improve processes in the delivery of our key programs of work.”

National auditor finds JobKeeper delivery effective
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Tony Zhang

Tony Zhang

Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.

Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.

You can email Tony at This email address is being protected from spambots. You need JavaScript enabled to view it.