Saunders’ payment process full of conflicts, report says

The Department of Parliamentary Services has implemented new guidelines for incentive-to-retire payments following a scathing review of the $315,000 arrangement for former DPS deputy secretary Cate Saunders.

The DPS commissioned Dr Fiona Roughley in July 2024 to undertake a detailed review of the incentive-to-retire payment for Saunders after it became clear she and former secretary Rob Stefanic had a friendship that created a conflict when it came to ending her time in the public service.

This occurred after Saunders completed a six-month secondment in an executive role with Services Australia, which ended in October 2023.

Saunders expressed interest in being considered for an incentive-to-retire payment about two-thirds of the way through the secondment when it became apparent there was no role for her to return to in DPS.

That process was overseen by Services Australia chief executive Rebecca Skinner. The Australian Public Service Commission advised Stefanic to delegate the task because of his conflict of interest.

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Roughley’s report was handed to the DPS in March, but a four-page summary detailing key findings and actions taken was only released last week.

DPS secretary Jaala Hinchcliffe told a Senate estimates hearing in March that the department had received the report, but she would need to consider how and when to provide more information about its contents publicly, given the ongoing investigations into the department by the National Anti-Corruption Commission.

“On 12 March 2025, I received from Dr Fiona Roughley SC her report arising from the fact-finding investigation into the actions of the Department of Parliamentary Services on the incentive-to-retire payment made to Ms Catherine Saunders,” Hinchcliffe told estimates. 

“The report is an extensive examination of the department’s actions and engagement, with Dr Roughley’s findings and recommendations supported by evidence. The report contains seven recommendations that go directly to DPS’s internal processes and decision-making when making ITR decisions and payments, including the management of conflicts of interest and record-keeping. 

“I can confirm that I have accepted, and the department is in the process of adopting, each of these recommendations.”

The four-page summary of Roughley’s report said there were several issues identified with the payment made to Saunders.

“There were conflicts of interest, and conflicted persons, within DPS, involved in the decision-making process,” the abridged report says.

“There were multiple procedural failures by DPS, or informed by DPS, in relation to the calculation of the ITR payment. The payment deviated from the Australian Public Service Commission (APSC) guidance material in its calculation, which resulted in an increase in the quantum of the payment made.”

Roughley expressed concerns about errors identified in the calculation of the payment, the absence of either consultation with or disregard for advice from specialist payroll staff working in DPS, and excessive pressure applied on the timing of the payment.

Roughley’s DPS recommendations included crafting of guidelines so that it is clear how decisions are made on incentive-to-retire payments and what factors might be relevant to both a decision to pay such as payment and how an amount might be quantified.

Roughley also suggested offers of such payments should usually be made in a specified amount or “where any variable still to be calculated could only reasonably reduce rather than increase the amount to be paid”.

Other recommendations included that reasons for making such payments to any individual and the rationale for the amount should be documented, and the payroll team should be involved in assisting with the calculation of possible incentive-to-retire payment.

The DPS summary of the Roughley report also says that the DPS has implemented recommendations arising from the review of the Saunders payment.

“DPS has accepted all of Dr Roughley’s recommendations. No ITR payments have been made by the department since 1 October 2023. Further, DPS has finalised and implemented a Retirement and Redundancy Incentives Policy which incorporates Dr Roughley’s recommendations,” the summary says.

“The policy establishes the principles and requirements for the appropriate calculation and approval of financial incentives related to Incentives to Retire (ITR), Voluntary Redundancies (VR), and Involuntary Redundancies (IR) applicable to DPS employees.”