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New South Wales Updates AI Assessment Framework

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Artificial intelligence (AI) is swiftly transforming the digital landscape and reshaping societal dynamics. Recognising the profound impact of AI, the NSW Government has taken a stance on its responsible use. The NSW AI Strategy and an AI Ethics Policy were introduced in 2020, followed by the NSW AI Assurance Framework in March 2022.

Since 2017, the NSW Government has utilised the Digital Assurance Framework (previously known as the NSW ICT and Digital Assurance Framework) for ICT project delivery. Given the rapid advancements in AI, the government has updated this framework to integrate the new AI Assessment Framework, addressing emerging risks such as Generative AI.

Digital NSW has enhanced the AI Assessment Framework, formerly the AI Assurance Framework, which serves as a self-assessment tool aiding agencies in evaluating AI risks in their digital projects. By May 2024, significant progress had been made in ensuring the safe and responsible use of AI, setting the stage for NSW agencies to manage AI risks effectively.

The updates aim to streamline AI risk management, providing better oversight and guidance. The recent approval of these frameworks marks a significant shift, with implementation across NSW set to begin in Q3 2024.

The NSW Government has developed a comprehensive and structured approach to ensure the safe and responsible use of AI. This approach encompasses AI governance and oversight, risk management and mitigation, ethics, capability and capacity building, and continuous improvement.

AI assurance is now embedded within the NSW Digital Assurance Framework. Consequently, any agency project with a budget exceeding AU$5 million, or any project funded by the Digital Restart Fund, must adhere to the NSW mandate to use the AI Ethics Policy and the AI Assessment Framework (Circular DCS-2024-01).

For other AI applications, agencies are required to manage AI risk through the NSW AI Assessment Framework, a self-assessment tool aligned with the NSW AI Ethics Policy. This framework enables agencies to evaluate the risk associated with their AI solutions and determine necessary mitigations. Additionally, the tool assists agencies in identifying when to present their AI solutions to the NSW AI Review Committee for further evaluation.

Digital NSW is collaborating with all NSW Government departments to develop requirements that simplify compliance with the NSW AI assessment framework. These requirements aim to enhance the sector’s capacity to identify areas needing further support, thereby strengthening AI assurance across NSW.

The NSW AI Assessment Framework (AIAF) guides NSW Government agencies in the ethical development, deployment, and use of AI technologies. Its primary goal is to ensure AI solutions are designed, built, and operated in strict adherence to the mandatory AI Ethics Principles outlined in NSW Circular DCS-2024-01. This involves a systematic process for identifying, documenting, and mitigating AI-specific risks. The framework promotes responsible AI use, ensuring community benefits, fairness, privacy and security, transparency, and accountability are central to all AI initiatives within government operations.

The AIAF is a risk self-assessment tool mandatory for all NSW Government agencies. It is designed for project and executive sponsors, technical leads, and data governance leads and is intended for use across all phases of the AI solution lifecycle. The framework should be applied when designing, developing, deploying, procuring, or using systems containing AI components. It emphasises continuous adherence to ethical principles through ongoing assessments from project inception to operations, highlighting the importance of understanding AI’s limitations and risks, especially regarding data security and privacy.

To enhance compliance, project leaders and solution owners are encouraged to use the framework during the planning phase of AI implementation. The AI Assurance Framework is organised into sections that align with the AI Ethics Principles, each containing questions for assessing specific risks and advising on mitigation actions. Upon completing the self-assessment, agencies must implement the required mitigations. Some controls may necessitate pausing or stopping the project until necessary information is confirmed.

At the conclusion of the self-assessment, agencies will confirm the highest residual risk rating for each of the five Ethics Principles. This rating determines whether they need to submit their assessment to the AI Review Committee, proceed without changes, make changes, or halt the project. Agencies must submit their completed AI self-assessment to the AI Review Committee if the residual risk remains high or greater following the application of all mitigations and controls.

The NSW AI Assessment Framework references other NSW Government policies, legislation, and tools that provide context and information relevant to AI, including the NSW AI Strategy and AI Ethics Policy. It is designed to complement, not replace, agency-specific policies and standards, ensuring teams consult with subject matter experts for tailored guidance. Integrated into the NSW Digital Assurance Framework, the AIAF ensures a comprehensive approach to compliance with AI ethical principles. As a living document, the AIAF will undergo regular updates to incorporate AI advancements, enhance risk understanding, adapt to evolving standards, and accommodate the increasing maturity of AI within the NSW Government.


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