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Finance and Public Administration References Committee
(Senate-Monday, 29 June 2015)
CHAIR (Senator Gallagher)
- Mr Gooda
Content WindowFinance and Public Administration References Committee - 29/06/2015 - Commonwealth Indigenous Advancement Strategy tendering processes
BLACK, Ms Susan, First Assistant Secretary, Program Implementation Taskforce, Department of the Prime Minister and Cabinet
CARROLL, Ms Liza, Associate Secretary, Indigenous Affairs, Department of the Prime Minister and Cabinet
ECCLES, Mr Richard, Deputy Secretary, Indigenous Affairs, Department of the Prime Minister and Cabinet
EDWARDS, Ms Caroline, First Assistant Secretary, Department of the Prime Minister and Cabinet
EWENS, Mrs Maxine, Acting Assistant Secretary, Grants System Office, Department of the Prime Minister and Cabinet
GIBSON, Mr Brendan, Assistant Secretary, Department of the Prime Minister and Cabinet
HEFREN-WEBB, Ms Elizabeth, First Assistant Secretary, Schools, Information and Evaluation Division, Department of the Prime Minister and Cabinet
HOSKING, Ms Ngaire, First Assistant Secretary, Indigenous Employment and Recognition Division, Department of the Prime Minister and Cabinet
MATTHEWS, Mr Gavin, Assistant Secretary, Department of the Prime Minister and Cabinet
MOSS, Ms Marian, Assistant Secretary, Legal Services Branch, Department of the Prime Minister and Cabinet
NITSCHKE, Ms Linda, Acting Chief Financial Officer, Department of the Prime Minister and Cabinet
RICHARDSON, Mr Geoff, Assistant Secretary, Culture and Capability, Department of the Prime Minister and Cabinet
STEEL, Ms Julie, Acting Assistant Secretary, Program Office, Department of the Prime Minister and Cabinet
TAYLOR, Mrs Marie, First Assistant Secretary, Housing, Land and Community Capability Division, Indigenous Affairs Group, Department of the Prime Minister and Cabinet
TURNBULL, Mr Stuart, Assistant Secretary, Program Implementation Taskforce, Department of the Prime Minister and Cabinet
WILLIAMS, Ms Nadine, First Assistant Secretary, Remote Jobs and Communities Program Implementation Taskforce, Department of the Prime Minister and Cabinet
CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses in giving evidence to Senate committees has been provided to you. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers of the department are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim. I will shortly invite you to make an opening statement if you have one. At the conclusion of that, I will invite members of the committee to answer questions. We have resolved not to break for afternoon tea at 3.15 and to proceed with questions throughout the afternoon, with the agreement of Prime Minister and Cabinet. Thank you very much for that. Ms Carroll, do you have an opening statement you would like to make?
Ms Carroll : I thank the committee for the opportunity to provide an opening statement. As we have heard today and through the submissions, the primary focus of moving to the grant process that is under consideration today came from the consolidation of 150 programs and activities into five funding streams. A lot of work that had previously been done through ANAO and the Department of Finance led to this policy initiative to streamline the funding streams. The ANAO had a report, Capacity development for Indigenous service delivery, which analysed FaHCSIA's funding for Indigenous affairs. It found that since July 2007 a total of 820 organisations had received funding from 84 different programs. On average each organisation had 4.5 funding agreements, and they were required to submit over 20,000 performance and financial acquittal reports, and that is the key driver for the reform. We acknowledge, though, that clearly it is a big step for organisations—in particular, Aboriginal and Torres Strait Islander organisations—to make the change.
The competitive funding round is one element of the broader IAS reform agenda. The IAS is designed to manage a more strategic investment in Indigenous affairs. The IAS also seeks to improve the way government does business, including simpler program management arrangements, less red tape and, in particular, fewer performance and financial and acquittal reports. The new arrangement seeks to provide more flexibility and a more consistent approach across the different program areas while allowing for local-level decisions and differences. About 80 per cent of the new funding agreements are for two years or longer, and this is designed to provide some funding stability for organisations. As of today, the majority of the new funding agreements have been executed, and during negotiations with organisations on their contracts we have made a concerted effort to look across the regions—and I think we have spoken about this before in Senate estimates—to look at the service delivery gaps. That led to two different announcements which were made by the minister.
The department recognises the contribution that a range of Indigenous and non-Indigenous organisations make in supporting Indigenous Australians and their communities to overcome disadvantage. This contribution is reflected in the overwhelming number of applications submitted to the IAS funding round. Indigenous organisations make up 46 per cent of organisations recommended for funding and 55 per cent of the actual funding to be received. The oversubscription of the IAS funding round meant that the assessment and prioritisation of the very large number of applications became a significant task for the department. As you are aware, the department extended the period and we had a multistage merit based assessment. All assessment panels were chaired by senior executive employees of the department, and also our regional managers had a key role in looking at all the applications.
It is acknowledged that the transition to the new arrangements has been a significant shift and for a number of organisations very difficult. For some organisations the IAS funding round may have been the first time they have had to formally apply for funding in a national funding process. As noted previously, following the announcement of the outcomes on 4 March the government committed to ensuring that there were no unintended gaps resulting from the funding round. On 27 May the minister announced a number of additional grants aimed at providing longer funding agreements and ensuring that the service delivery gaps were filled. Feedback received directly by the department and through submissions to the inquiry process has indicated that there was a mixed level of awareness and understanding of these new arrangements. The department acknowledges this and, as I think has already been mentioned, has started a process to review the funding round process and the guidelines. The reviews are twofold. There is an external review and there is also an internal departmental review. We have started to write to people out in the sector and also key leaders in the area to consider what we will be doing in the post-implementation review of the funding round The review will consider processes, administration and communication around the funding round. The review of the IAS guidelines will include consideration of matters such as program descriptions, linkages to the outcomes and additional information that could be included in any guidelines in the future. We will be consulting widely on these elements.
The consultation process will begin in July and we are currently working through the details, but there will be a range of mechanisms, not just face-to-face mechanisms, for this process. We have also engaged an independent consultant to help us with an internal post-implementation review so we can look at our internal processes and make any changes as we go forward.
There are three final things I want to make the committee aware of. Firstly, we have officers here from each of the IAS program areas, which means that they will be available to answer more detailed questions for you. Secondly, we took a series of questions on notice from the budget Senate estimates period. We are still finalising those answers, but for some of them we might be able to provide answers here in the room. They will be finalised very shortly. Thirdly, we have two pieces of information that we would like to hand out to the committee that we think will be very useful. The first is a diagrammatic representation of the IAS showing the outcome and activity level, and the second is a snapshot of the current process.
CHAIR: Thank you. Before I hand to Senator Bernardi and Senator McLucas, I have a question. The committee learned of this review this morning from witnesses who appeared. Is there any reason the committee was not apprised of this review when it was released last week to other stakeholders?
Ms Carroll : No. I think because we had already made our submission to the inquiry we just had not thought to update it when we started the process of having the reviews signed off last week. I apologise for that.
Senator SIEWERT: Could I just clarify something: was a media release put out on it?
Ms Carroll : No.
Senator SIEWERT: I was looking this morning, and I could not find it on your website.
Ms Carroll : All the details around the review have not been finalised. We have just started to write to people to have the engagement, because in fact we want some of that engagement to finalise exactly what the review will look like.
Senator SIEWERT: So you are consulting on the review before you consult on the review.
Ms Carroll : There are two pieces. Obviously we are doing a review, but we want to make sure that the scale and scope of the review is correct, and we are seeking some feedback before the detail of the review is finalised with the minister.
Senator MOORE: Can we have on record how many people have already been written to and the basis of who was written to last week? I will put that on notice.
Senator BERNARDI: Ms Carroll, a common thread of the evidence we have heard today, if I was to weave it all together, is that there was not a great deal of consultation before the implementation of IAS and people thought the process was abbreviated—I will use that term; they might say it was too short. How do you respond to that?
Ms Carroll : The IAS came into being through a budget related process. Obviously those budget processes are more confidential. What we did in the lead-up to that budget process was, as I mentioned at the beginning of my opening statement, look at all the reviews and things that had gone before to get us to that place. Once the IAS was established we then communicated about the IAS and the next steps. We are taking onboard the fact that people were asking for extra engagement and consultation in those early stages, which is why, through the review process, we want to make sure that we look at what engagement is needed before any future processes occur.
Senator BERNARDI: We heard from Mr Gooda this morning, and I am sure you heard his evidence too. There was someone in the department who he was working directly with and establishing a relationship with. That person then left, and that hole was never filled. Is that just an oversight of the department, or was it a conspiracy? In choosing between conspiracy and mistake I will always go with mistake, but how do you explain the breakdown in that relationship with the department?
Ms Carroll : I think what happened in terms of the breakdown in that relationship was that yes, the person left the department, and it took us a little while. Ms Black came in, but it was a period of a number of weeks later—it could have been a couple of months—before that position was finally filled. And we were in the full swing of the grant process by then, so it was just that that communication was not retained. As soon as we realised that it was not, we enlisted further regular contact.
Senator BERNARDI: Mr Gooda said he made a couple of phone calls and did not really get much response. That was his evidence. I do not want to sink him into it but it does not seem good enough, I would suggest.
Ms Carroll : I would say that there were some periods of time where we had some staff turnover, where our communication and the relationships that people had built up fell off a little bit. When we realised that, we certainly put things back in place to try to get things back on track.
Senator BERNARDI: Universities Australia were critical again of the consultation, or the lack thereof, with them. There was, I think, a little bit of confusion in that some of the representatives of the individual universities said that they had heard stories and had engaged with the department. What is the department's regular policy in the sense of: do they engage with Universities Australia as the umbrella body? Or do they deal with individual universities?
Ms Carroll : We have multilayered engagement and communication. We certainly engage more broadly with peak groups et cetera. But around specific funding, we liaise directly with universities. My colleague, Ms Hefren-Webb, can probably add to that.
Ms Hefren-Webb : We liaise with Universities Australia and with other peak organisations like the innovation universities. But we also have a one-on-one relationship with the 40 universities because we fund them not only through the IAS but through a range of other activities. They were all talked to before the grant application opened to advise them that aspects of their funding would be part of the process. I think we could possibly have engaged a bit earlier but they were all spoken to individually.
Senator BERNARDI: I do not want to be antagonistic but being spoken to the day before it is announced is one thing but being spoken to two months or six weeks before minimises some grievances, I guess, in some respects. I am trying to establish whether Universities Australia are legitimate in their complaint about the lack of consultation, given that there is a slight variation in some of the evidence.
Ms Hefren-Webb : I think there had been general discussions with universities and university peak bodies. But final confirmation about the inclusion of that funding in the round was pretty much just before the opening of the round. So I think that is a legitimate criticism and we have taken that on board.
Senator McLUCAS: On the question of timing, the timing for you as the department to know that those funds were going to move into the IAS was at the 2014-15 budget. Is that right?
Ms Hefren-Webb : There are two things. There is funding in the Indigenous Advancement Strategy as a whole and then not all of the funding in the Indigenous Advancement Strategy is part of the grant round. So some programs were held separate from the grant round for a range of reasons.
Senator McLUCAS: And that was a decision of government?
Ms Hefren-Webb : That is correct.
Senator McLUCAS: To follow on from Senator Bernardi's comment to say you could have done it couple of months earlier, there actually was not a couple of months between the decision and the implementation was my understanding.
Ms Carroll : Effectively, yes. At the budget announcement, the decision was made about the pooling of all the funds. But then there was a series of decisions that needed to be made about how much funding was available. I think during that period we were talking generally to the universities. Some of it also goes to the universities, as a particular example, where it is quite complicated because some of the funding was in the grant round and some of it was not. So the detailed communication about exactly which pieces were in and which were not occurred close to the period. But we recognise that and we certainly have taken on board that that was too close. We need to look at what we could do to bring that as far forward as possible.
Senator BERNARDI: Given that the first tranche of the policy has now been enacted and there is a review of it, there is an opportunity for the ongoing consultation of all stakeholders, is there not? There is not going to be like a rapid turn around of 180 degrees or a new approach in the next 12 or 18 months, is there?
Ms Carroll : No, and the point of the review process is for us to actually use the review process to understand what kind of engagement is wanted, what is feasible from a government perspective and have those discussions. It will also look at what the process will be around any grant rounds in the future, what people's feedback on that is and then obviously it is a decision for the government. But the future of that will be informed by the review process that we are undertaking.
Senator BERNARDI: There were some comments made by Mr Gooda this morning when I asked him about the competitive tender process. He said it was not the only way and it was not necessarily the best way in which to get value for money and engagement with stakeholders. How do you respond to that?
Ms Carroll : One of the things that occurred when all of the programs came into the Department of the Prime Minister and Cabinet was it was very clear that more broadly the bureaucracy and therefore the government did not have a very good handle on what was actually being funded or what outcomes were being achieved through that breadth and diversity of funding. The process that we underwent through the IAS grants process was to really start to reset the benchmark and say, 'All right we are really focused on outcomes.'
We designed the criteria to make sure that people who were already receiving funding or were Indigenous organisations would be able to demonstrate their capacity through that process. But it really did mean that while it was difficult for organisations—and many had not had to put in a competitive bid before—it was the first time that we actually were able to look across the board and have everyone's applications together and look at the breadth and depth of what was possible.
Senator BERNARDI: Can you appreciate that it could be difficult for some organisations? There are professional applicants for grants and government paper filling in that are very effective and there are others who may be very effective at delivering services but are not perhaps as competent or as skilled at submitting forms. That may be a deficiency indeed. Mr Gooda may indeed have had a point.
Ms Carroll : We recognise that. What we did in the process was we actually had some of our staff that were available, that were not going to be involved in the assessment process and that were available to work with organisations help them with their grant applications. But we recognise that even we had underestimated the breadth and difficulty for a number of organisations. Some of that is what contributed to the fact that we were not able to kind of finish our assessment process at the end of last financial year, because we had underestimated how difficult that transition would be for organisations.
Senator BERNARDI: The service delivery gaps, you said you did review some of those. Specifically the evidence I was thinking of today was NATSIS and ATSIS, where they had the A-G's money in and they had some other programs which were funded through the intervention, Stronger Communities, and that has now come under IAS. Are you confident that what NATSIS and ATSIS were doing supplementary to their A-G's funding is now covered in other areas instead of being denied their funding or refused funding?
Ms Edwards : I think, just to be clear, you are asking about the issue that came up with Ms Collins this morning to do with the additional funding that used to be part of the Stronger Futures national partnership agreement?
Senator BERNARDI: That is right. They also put in for some additional programs, of which some were funded in part and some were not funded. Are they being covered elsewhere?
Ms Edwards : I saw Ms Collins's evidence this morning. It is a complicated situation, but we are pretty much on the same page about what the situation is. Aboriginal legal services, by and large, are funded out of the Attorney-General's Department. Prior to the election there was an announcement that there would be a cut to that program. That was across the whole of those programs. Subsequently, after the election, a small area of those legal services came to PM&C—the family violence prevention legal services; a small program called the Indigenous women's program; and a program called supplementary legal assistance, which was part of the Stronger Futures arrangements, but not payments that went to the Northern Territory like most national partnerships ones; ones that were always paid by the Commonwealth. Those three bits came over to PM&C together with their share of those cuts. We worked with those programs to make the cuts not have an impact. We moved our money around and did some other things, so there was no impact. You would recall there was considerable controversy about the remaining reduction in funding anticipated for legal services. So, earlier this year, the government decided that it would reverse those cuts.
Senator BERNARDI: That was the $41 million?
Ms Edwards : Correct. That was fully reinstated. So we can put the cuts to one side, because they were fully restored. But the situation remains that the vast majority of funding to provide legal services is through the Attorney-General's Department, including the funding to the peak body, which is now being provided by Attorney-General's Department, and the core funding.
Generally speaking the family violence prevention legal services would have been provided maintained funding. There have been some on and offs, small amounts of expansions and change of providers, but pretty much there is the same level of funding as previously. For the Indigenous women's program, which was a very small program of about $1 million I think for the whole country, and the supplementary legal assistance, which was in the Territory only arising out of Stronger Futures, all of the providers who previously had been receiving those moneys have been offered a 12-month extension of that funding, as Ms Collins was saying. They were all provided effectively the same as they had last year. I know Ms Collins was very concerned about the short duration of that funding period. It is because we, like the committee and Ms Collins, are looking at how that works, having moved those small amounts over to PM&C, when the bulk of the funding is with AGD. We are talking to AGD about how, after the current year's funding, we can make sure that is streamlined and put back together. That is our aim: to make it a single source. So the one year's funding is to make sure there is no loss of funding in the meantime while these discussions happen. I know it is horrendously complicated.
CHAIR: If I could just follow up from the Senator Bernardi's question. Ms Collins, in her evidence, advised the committee that NATSILS was advised to apply under IAS funding, and it was only later that Attorney-General's essentially came to the party and said, 'We are going to be funding them now', once the cuts were reversed. Can you shed any more light on the evidence from Ms Collins this morning.
Ms Edwards : As I understand it, there was uncertainty still about the ongoing funding for the peak body—for NATSILS—so they elected to make an application under the IAS as a just-in-case strategy.
CHAIR: I think she said Attorney-General's advised her to apply under IAS.
Ms Edwards : I am not aware of what Attorney-General's may have told her or not. But they did apply and, because the guidelines are pretty clear that we do not try and then go and fund things that are traditionally funded from elsewhere, I spoke to the head of NATSILS on the day of the funding round announcement to explain the situation that we were not going to step in and take over that funding. Then we kept a very close eye on it to make sure that the funding was in fact provided. That is what happened with that funding.
Senator BERNARDI: I remember asking who notified Ms Collins. I could not recall whether she told us whether it was A-G's or which department.
CHAIR: I think it was Attorney-General's.
Senator BERNARDI: We will have to go to Hansard for that.
Senator McLUCAS: Thanks for bringing such a good team with you. Hopefully we will be able to resolve a lot of the questions today. Unfortunately, I have to leave before we finish, so I may look a bit hotchpotch jumping around all over the place. Please excuse me for that. I have a question around attachment A to your document, which is the legacy programs to IAS. Would it be too much to ask for you to put another couple of columns in that document to identify the legacy department the program came from—the Aboriginal and Torres Strait Islander education improving teacher project was from the department of education, I expect—and also the quantum that was transferred? Is that possible?
Ms Carroll : I imagine we will be able to identify the department very easily, and we will look at what we can do on the funding side. It might be that some of them are bundled together, but we will look at that.
Senator McLUCAS: Members of this committee have worked a lot in Indigenous affairs and we have done other work in different committees, but we are stretching the limits of our knowledge to know what the name of a program in the Attorney-General's might have been and whether it was all transferred or not. I think that was part of the confusion we had earlier today. It would be really helpful if you could do that.
I will use your submission to construct my questions. Chapter 2 is the case for reform of Indigenous specific programs, and you talk about there being eight departments previously, the ANAO report and the 2010 report—and that is fine. The principle is that we try and collect all Indigenous funding into PM&C as a policy principle. What I and, I think, the community are finding difficult to understand is that, if that is the policy principle, why is it that we still have some funds in Attorney-General's? Why do we still have a very large proportion of funds in Health? We still have some moneys, it would seem, in Education. It is not clear what the policy parameters are that say, 'Of course that funding would stay there because it's obvious.' That is not clear. Could you help the committee understand. I understand the principle in your submission—I might not agree with it, but I understand that it is to put money together. Why didn't it happen like that?
Ms Carroll : Obviously, the government had made a commitment that it was going to bring the different elements together, and it was about the Indigenous specific funding. So every department should have activities within broader mainstream programs that still go to assisting Aboriginal and Torres Strait Islander people, and some of that might be around particular activities, but they will be part of a broader mainstream program. The key area that did not come into the Department of the Prime Minister and Cabinet was health, where the vast majority of that funding stayed with the Department of Health. The rationale for that was the links between health in particular and the mainstream health system and the importance of maintaining those links. So the government made a decision that, because of the embedded nature, it was not going to bring the Indigenous health components across. Primarily, there is a little bit in Attorney-General's, but, apart from that, most of what would be classified as Indigenous specific funding came into the Department of the Prime Minister and Cabinet. That was the framework and the rationale behind it.
Senator SIEWERT: Can we explore that a little more, because some of it did go in. You would have heard the evidence this morning where people think it should go back to Health.
Ms Carroll : Yes.
Senator SIEWERT: Why did some go in and some not?
Ms Edwards : Obviously, there is an area of grey at the edges when you are making this determination between what is Indigenous specific and what is very closely linked to the mainstream. The services you are talking about—the social and emotional wellbeing program, as it then was, and alcohol and other drugs services—much of which are funded through the Aboriginal controlled health services, is one of those areas which people talk about a lot. You have heard the evidence today and so on. That is probably where the stark issue comes and you can see people might think it could be one place or another.
Senator SIEWERT: Most people I have spoken to think it can be clearly in one place, and that is Health.
Ms Edwards : The NACCHOs members definitely think that, or at least that is what has been communicated to me, and I understand that. In order to try to mitigate their concerns, we have a close and increasingly close relationship with the Department of Health. We are working towards a single-funding agreement. We are working towards streamlining. We are already using a lot of their evaluation tools in order to assess our program. So that this one.
The other thing to mention of course is that not all of the people who are funded under the Alcohol and Other Drugs program or SEWB program were NACCHO members and AMSs. A lot of them are other organisations. For some of those organisations, they actually have a much closer relationship with some of the other things that did come into PM&C. So for them, it is actually a streamlining. Yes, we do accept that for those particular AMSs who were previously for that element of their funding, and of course they are organisations that get funding from all sorts of sources, bringing over AOD and SEWB caused them a level of additional inconvenience and we are working hard to try to reduce the red tape. But for others it was, for example, AOD being closer to where night patrols are run or closer to some of the diversionary things or petrol sniffing and so on—petrol sniffing got put all back together.
You will remember it used to be dispersed between A-G's, DEWR, Health and the former FaHCSIA. That is all together now and that is providing some great streamlining and accessibility. We are much closer to the ground with Opal and youth diversion are in the same place. Yes, we accept there are some instances where it is causing people to be inconvenienced and we are working hard to try to reduce any red tape increase. But there are also real benefits for having those particular elements of Health over with the rest of our community safety agenda.
Senator McLUCAS: Health is probably the area this committee understands more than any other. But I was somewhat surprised this morning when Universities Australia were talking about the philosophical approach and how, from their perspective, they are trying to make all universities responsible for all potential students and some of those will be Aboriginal and Torres Strait Islander people. To remove or to subsume that responsibility into the Indigenous specific realm means that the driver in educating Indigenous people in your university as part of your day-to-day, everyday business has now been removed. It seems to me that has been little contemplation of that in the move, especially the Commonwealth scholarships, into PM&C; also the tutorial program and those other programs which were becoming fairly bread and butter for our universities. That is what I picked up, and I am no expert in this area.
Ms Carroll : One of the key agendas for the government is obviously streamlining and looking at how we get better outcomes and making sure we are removing overlap and duplication on the program side. But in fact by coming into PM&C, we are making sure we are still leveraging the mainstream and the mainstream departments and programs et cetera, and the universities are probably a good example. We meet very regularly and jointly with the universities and with the Department of Education. We have been working very closely with them as they go through a university and look at the impact for Aboriginal and Torres Strait Islander students and how can we make sure that the universities do not step away, whereas they had been starting to step up, and also consider whether there are other elements. Scholarship programs is a good one.
There are actually lots of scholarship programs which run across high schools and into universities, and into all sorts of things. We were quite surprised when we first looked at the list of what scholarships we are funding. We found masses and masses of different kinds of scholarship programs. We did some work that looked at the best way to do it. We were cognisant of the risks associated with a disconnect from mainstream and mainstream organisations and departments, and we have been working very hard with them on that.
Ms Hefren-Webb : We are actually undertaking a consultation process at the moment about future directions for Indigenous-specific higher education funding, because one of the things that came out in the Behrendt review back in 2012 was that the individual tutorial and other assistance programs were not flexible enough. So we have some models around how we might improve that and we are working closely with Education to consult on those models.
Senator MOORE: One of things that worried me in the evidence this morning from Universities Australia was the fact that they have been working long term on the Behrendt inquiry and the recommendations out of that. It was always my view that there was going to be a clear response to that in 2015, seemingly late 2015. But it seems that the decisions that have already been made have cut right across that process. I am worried about it. Behrendt went much further than just the programs that are mentioned there. There were quite significant recommendations in that about changing education to really enforce the needs and aspirations of people from an Indigenous background. I am a little concerned about the loss of that, which has been in some ways truncated by this decision.
Ms Hefren-Webb : I do not think it has been. The decisions we have made around, say, Indigenous tutorial assistance are to the end of 2016 only. The reason we did it that way was that we understood there is a bigger reform agenda here and we did not want to lock funding into a specific program for the long term when we think there are some gains to be made. For example, that program has been consistently underspent over many years. In the last year we have data for it only spent about 73 per cent of its funding. We want to look at that program and other programs like the scholarships programs and the Indigenous support program to see what we can do to make them more flexible so that universities can use them in a range of ways to improve outcomes for Indigenous students—and also what they can do with their core funding, which is a very large part of their funding. What we have done in this process is try not to prevent or second-guess particularly where that might go. We have been working with ATSIHEAC and we now have a specific working group looking at these programs. We have just circulated a short discussion paper to them and to Universities Australia for comment.
Senator MOORE: Is that your working party? ATSIHEAC—a shocking title—belongs to Education and has already been told it is gone. There seems to be a series of decisions happening in a space which was already working towards change. Following on from Senator McLucas's process of questioning, it adds to the insecurity and the lack of trust. My specific question is: is the working party looking at that Prime Minister and Cabinet's, or Education's, or the child of both of you?
Ms Hefren-Webb : It is the child of both in some ways. We have asked ATSIHEAC to nominate some members—
Senator MOORE: Before they die.
Ms Hefren-Webb : before they cease, which they have done.
Senator MOORE: They have passed that on before they cease to exist?
Ms Hefren-Webb : Yes. And we are working very closely with the department of education on that.
Senator McLUCAS: One of the questions that Universities Australia had was about how, with the five funding streams, which do not really talk about the age cohort of the people they are trying to attract into universities, and the three government priorities, which also do not seem to capture higher education, they are to be comforted that in the future the funds that have moved across from the department of education into Prime Minister and Cabinet will continue to be applied to higher education. I might be asking you an inappropriate question as to how you second-guess government priorities in the future. But for them, watching a quantum of money move out of their department—how will they know that they have not lost funds that were previously applied to the higher education sector?
Ms Carroll : We can answer that in general. The specular diagram that we have provided is one of the things we have been developing to go to that sort of lack of understanding. Clearly when a decision is made to call something 'children and schooling' people cannot find where youth, higher education et cetera are. So what we have tried to do is frame it in a way that helps to show the particular outcomes that we are after and then have those conversations with those particular areas. In terms of proportion of funding and all of those things, we cannot sit here and guarantee that same amount of funding will be there in the future. But it is a priority for government. It is not something that is going away and we are really working closely with the education department to see how it fits with the mainstream funding, because that clearly is also core to this.
Senator McLUCAS: That is the driver. Something we might end up recommending from this side is that we can track funding over time so that we can recommend to the department to be able to give people comfort that they have not given up their funds for a good thing. Children should go to school, but they want the to go to university as well. Going to some specifics, NACCHO told us that there was an 80 per cent rejection rate of applications that you would have described as health. Is that true, and, if so, what is the explanation for it? Perhaps I should say 'non-acceptance' instead of 'rejection'.
Ms Edwards : I am just hesitating so that I can think through the answer. I am not sure if that number would be true or not true. It sounds extremely high. But when you take into account the very large number of organisations that applied for a number of new activities they have never done before. A significant number of activities were not successful in the round. Because one of our real focuses was on making sure we did not upset or discontinue existing effective frontline services, we have also looked at it through that lens. The AMSs are in most cases very mature and effective organisations that do a lot of good work. The overall funding for NACCHO members has ended up in the first recommended round to be much the same. Perhaps there is a slight decrease, primarily as a result of some organisations not applying for things they used to do. That is one of the things we are gap-filling as we go along. We expect by the end of that process to have about the same funding, perhaps a bit more, for NACCHO members.
In relation to AAD activities, the amount of funding recommended for NACCHO members has increased. That is primarily due to us taking up some of the funding that was previously provided by AHL, which we have talked about in previous committees.
In relation to SEWB, the overall funding for NACCHO members has decreased slightly, we think. But there have been some issues there with services that either did not apply, or there were other issues with the providers that had nothing to do with the round. We are working through those. But in terms of overall funding, it is pretty much what it was. We talked about lots of organisations applying for many new things, some of which were successful and many of which were not. Mr Gibson might want to comment.
Mr Gibson : The IAS unleashed a lot of ambitions. We had some examples of organisations that had not received funding before ACCHOs. There is one in my mind, because I remember giving the feedback. They put in their application for $18 million, for example, which was way more than they were already receiving for their core grant to do primary health care and a range of other things. It is very difficult when faced with a submission like that. There were some good ideas in the submission, but it was a major submission about covering a very large area of the country with a new service type that had not been tested. There is no real evidence base for what it was they were proposing to do. The service delivery model was not grounded or tested. I am not saying that all the 83 fit that picture, but I am giving you an idea of what came forward amongst those 83 programs that were looking for money.
Senator McLUCAS: Ms Edwards and Mr Gibson, you have confirmed what I think, which is that essentially what has happened in this funding round is that by and large people who were funded to do certain things have been funded to continue to do that. I am not critical of your department but expectations were set in the community by the minister, in particular, to think outside the square, saying that it was going to be really flexible and we were going to do amazing things. 'Think big' was one of the terms. 'Be brave' and 'be innovative' were others. Then, as Commissioner Gooda said, there were high hopes, which have not materialised. That, I think, is because the communication strategy that started this program opened expectations to such enormous levels, which necessitated all of these people going out and writing submissions for $18 million. It was probably a very good submission for doing marvellous things, but frankly it was never going to be funded, because the quantum of funding was cut.
Mr Gibson : Not necessarily—
Senator McLUCAS: That is the construct we were looking at. Sorry, that was a bit of a rant.
Ms Edwards : In our space in the safety and wellbeing program, which is where most of the major national service centres are, it is probably true to say that many of our current providers were re-funded and at similar levels to previously. But I would not underestimate the value of the process. If I look across things that used to be part of our alcohol and substance abuse program, their analysis was done and we have expanded in five or six place. We have new activities, we have new providers, we have maintained a large number and we have also reduced some. We have also quarantined some funding and we ask, 'Those people did not apply or they no longer want to do it. How should we do it?' We have looked at those. If you look at the previous SEWB program the situation is even more complicated. We have a large number of providers who did not apply or who did not apply for the sort of activity they were doing before. We had a good look at those and often there was a good reason for it—they were not the best way.
We have maintained funding for quite a large number, but we have new providers, expanded providers, we have reduced and ceased providers and, subsequent to the round, we have been continuing to find ways to do that sort of funding. With some of our other programs the changes have been similar to that. But we were unashamedly careful about existing service systems. I think we have demonstrated care but we have made sure that we do not break what is working but we do give opportunities for innovation.
Senator McLUCAS: Going to the process that happened from 4 March through to 27 May—the concept of what a gap is, when you fill it, and the broader conversation about who knows the new arrangements and how fair this all is across the community. It has been put to us in the submissions, and privately and confidentially from a lot of community organisations—not so much in health, I must say—that the initial construct was that this was a competitive tendering process and we then found out that all the non-compliant tenders were included, which I have never seen before in government purchasing, but we did, and I can understand why. So the first principle was that you had to comply, it was all very competitive and we were playing by these new rules. That was broken at round 1, because it had to. My recollection is that there were 1,300 non-compliant applications, so that got broken. Then we found a number of absolutely frontline, essential services did not apply because they did not know they had to. So they had to be funded. So there are rolling, changing rules. The concern that has been put to me very strongly is one of how fair it is for an organisation that believes they should be funded for something to make representations either through the minister's office or the department. The rules are now very unclear about what has to happen. Where is the fairness in all this so that we can ensure we do get the right service array, that we fund the right organisations that are doing the work—and often frontline work—and that gaps are in fact being filled? We are told that, but I would like to see some evidence around that. It is a really big question, but I think you understand the scope of where we are up to.
Ms Carroll : In the process that we set up right at the beginning, we purposely built in a mechanism that it would be—obviously the minister was the decision maker—at the minister's discretion about whether late, non-compliant applications were included. Yes, you are right, there is often a process which says, if it is not in by the closing date, in the proper form et cetera, then things are out. This is not a tender process; it is a grant process, which means there is a lot more flexibility that is built in, because it is not a formal tender process. We were very clear from the beginning that it was not a tender process, that it was a grant process.
Senator McLUCAS: Sure, but the grant processes in the old FaHCSIA were—
Ms Carroll : I recognise that.
Senator McLUCAS: I have got a bit of experience there. We just did not say: 'Thirteen hundred of them are non-compliant. Oh, that's okay. It doesn't matter. You can come in.'
Ms Carroll : We certainly did not anticipate, as I think I said in the opening statement, that our noncompliance rate would be that high. It was clear to us that we would get the wrong outcome if we did not include all of those non-compliant applications.
Senator McLUCAS: I agree with that. I think you did the right thing.
Ms Carroll : Therefore we made a decision that, if we could not pick and choose which of those non-compliant applications were in or out, we would make a decision that they were all in. The minister made the decision. That decision was made to include them all, because otherwise we would not have been able to get the best outcome that was possible. The process was always set up to have a negotiation period. Because the service providers and we had never done this before, during that negotiation period there was a clear period by which we talked to individual service providers—'You've put in an application to do this; this is what we want to select'—to actually make sure that that was possible with the kinds of funds that we were offering et cetera. That was built into the process.
In the next phase, we did the gap filling as well as the negotiations. The gap filling came from three primary sources. The first one was as we negotiated with individual service providers around their particular contract, the thing that we wanted to contract them for. It became clear in some of those negotiations that they were concerned about the length of funding or the things that we were expecting them to buy. With what we thought we had read in an application, there was a little bit of a mismatch. That is a normal part of a negotiation. The other thing that that showed was that, for some of those service providers, there were some things that were embedded in the application process that had not come out clearly. I think we have talked previously at Senate estimates about how the youth services were one example of that. That was the first category.
The second was: our regional managers knew who were successful and unsuccessful, and it became clear there were some gaps where we did not have a service provider for a particular thing, and there was somebody that had applied in the process, and we needed to fill those gaps—or, as we said, a lot of the gap filling was extending the length of the contract.
The third one was where individuals or organisations came to us. That, obviously, is a less systematic process. I understand your concern about that. But, because we had the two previous and our regional managers on the ground, understanding what existed, then it was not just the fact that somebody approached us; it was: 'Is this actually a real concern?' If they were not part of the IAS grant process, and we had identified a gap, then we needed to think about: 'Nobody applied in that grant process. There will be gap in service provision. What will we do? We couldn't deal with it as part of the IAS process, but we know we can deal with it over here as part of a separate process.' So effectively we had triaged it to make sure the focus was on the outcome but we had the mechanisms as we went through.
CHAIR: Ms Carroll, can I just ask a follow-up question to that: with all the flexibility that is required, this is a highly unusual set of arrangements being put in place for the administration of public moneys, is it not? Have you been involved in a process like this, or can you point us to a process where, for the expenditure of $860 million, there is such flexibility and such arrangements that seem to be being put in place as the situation evolves rather than being put in place at the beginning of the process?
Ms Carroll : I certainly have never been involved in a process that was as diverse as this—of bringing all the programs together and trying to go out across a range of sectors all the same time; hence, points were purposely built in along the way to make sure that decisions could be made to get the right outcome as we went forward.
CHAIR: What was the right outcome? That is critical, isn't it?
Ms Carroll : Yes.
CHAIR: Whose right outcome?
Ms Carroll : I think that the key for us—and Ms Edwards just described it before—was to actually make sure that, primarily, if good service providers were providing a service on the ground that was getting good outcomes—and, in particular, that was a frontline service—then our objective out of all of this was that those kinds of service providers had positive ways in which they could continue to get funding. There was some innovation. There was some change when it was possible that there was a better service provider to provide a particular activity but also that a significant amount of the funding went to Aboriginal and Torres Strait Islander service providers who had the local connection with the community.
CHAIR: I will hand back to Senator McLucas, but, in the sheet that you provided us with today—and I do not know what document it is; not the circle graph but the other one—it has got $860 million announced in March and then $1 billion in May. Is that telling us that there was $240 million provided in funding after the gap analysis part of the process?
Ms Carroll : That is right, and that came from either gaps or extensions of the length of the funding agreement.
CHAIR: At the beginning of this process, did you have an implementation plan? As you rolled out IAS, was there an implementation plan, a risk plan or audits done of that process as you were going that mapped out, 'We will need to put in some gap analysis at this stage'? Were those guiding documents available for officers in your department?
Ms Black : We had a range of planning documentation, so we had a range of implementation plans. As Ms Carroll said, we built in segments along the way so that we could stop and say, 'Where are we up to now and what are our next steps?' We had risk plans. We had an external probity adviser. We had an internal probity adviser. We followed the Commonwealth grant guidelines incredibly closely as we made sure we covered all of those governance and regulation arrangements around a grant funding process.
CHAIR: In terms of the probity advisers' advice on your internal and external processes, what were those reports? Did they provide reports or audits?
Ms Black : They provided a final sign-off for us, which we received.
CHAIR: Without any problems being identified?
Ms Black : They gave us their sign-off at the end, so that was that they were satisfied that we had met the requirements of all of our documentation and all of our governance arrangements were strong along the way.
CHAIR: Sorry, Senator McLucas.
Senator McLUCAS: No, that is where I was heading, too; it was a good start. When you said, Ms Black, that there was a range of implementation plans, was competitive tendering the only option considered?
Ms Carroll : If I could just go back to the IAS guidelines: obviously, identified in those guidelines there are different mechanisms for funding—
Senator McLUCAS: Sorry, no—I think you have misunderstood me. I was talking about: in the design of pulling together all this money from all these different programs, you do it in a certain way; was there a range of considerations about how this might happen, of which one was a competitive tendering et cetera model—the one that we have taken on?
Ms Carroll : We looked a range of options right at the beginning, so after the government made the decision and the budget announcement occurred. Obviously the department did a lot of work about how we would move to new funding agreements within the new framework. A range of options were considered—pros and cons of different options. One of the key things for going out for everything at the same time was a view that we had a lot of service providers that would run across the different program streams, which was part of the original design. We had a very strong look at: should we be going by funding stream? Should we stagger it? How would we do it? Effectively, the reason that we went with everything together at the same time in the process was to give organisations the opportunity to not be locked into a narrow funding stream but to go across the different funding streams and to put in a more holistic application.
Senator McLUCAS: You have all these different ways that we could tackle this big problem. Who made that decision? Was that a departmental decision or was that a government decision?
Ms Carroll : All the decisions were made by the minister.
Senator McLUCAS: You would have seen in the submissions that we received lots of commentary about the time frame—that it seems to have been far too fast; that is has been too much too quickly. Was that an understanding that your prework contemplated? I am sure it did——that there would be a lot of new learning, a lot of new work, a lot of things that people had done very little of in the past within a pretty short time frame?
Ms Carroll : We were aware that the time frame was short, but we did think that we would be able to move through the process in a way that brought people with us. I think the non-compliant applications is a good example of where we, in general, in the department underestimated what was required and the shift that was needed and the communication and engagement that was required. We did think it was achievable and doable. But part of the review process is to go back and look at how we could do things differently in the future. What are the learnings from this process?
Senator McLUCAS: One of the things that is a fundamental principle of working with Aboriginal and Torres Strait Islander people is engagement. Did the various models for delivering, as we now know, the IAS contemplate a much higher level of engagement in any way? The criticism is that there has not been any—or not enough, anyway.
Ms Carroll : The different models of how we might go forward involved a range of pros and cons of different elements. I think, across them all—and I would have to go back and think back where we were a year ago on the very specifics of it—we probably had underestimated the amount of effort that we are now realising was needed up-front. We recognised it needed some, but I do not think we had recognised the depth of that early enough.
Senator McLUCAS: What I am trying to understand is: what was the driver that it all had to happen in 12 months? What drove that?
Ms Carroll : I think the key driver was to really move people into an outcomes model, to give some security to people that they had longer term funding agreements. People had funding agreements coming to an end. We were very cognisant of the fact, as was the minister, of: how can we move through this process, removing some of the overlap and duplication, getting towards the outcomes model and really focusing on delivering into the future, but also giving funding certainty for organisations as we went forward?
Senator McLUCAS: Ms Black, in the early design of the implementation, was there ever any contemplation of doing it over, say, a two- or three-year period?
Ms Black : Not documentation that I am aware of.
Senator McLUCAS: I am surprise at that. Ms Carroll, you said that a majority of the contracts have been executed. What is the percentage?
Ms Black : As of last night, we had nearly 700 executed. That was about 72 per cent. More importantly, 90 per cent of negotiations are complete. Part of our challenge in giving you exact numbers is that the funding grants system shut down on Friday at 10 o'clock at night for end of financial year processing and we cannot get back into that for a couple of days. So we did a manual reconciliation last night for—
Senator McLUCAS: Someone counted them? That person needs a star.
Ms Black : So that is as at last night. We are happy to provide an update to the committee just after 1 July.
Senator McLUCAS: Thank you.
Senator SIEWERT: It is hard for me to know where to start, because we have traversed so much. I have to say that I am struggling when you say, 'We just didn't contemplate it would be this hard and that people would struggle.' You have all spent time in Aboriginal communities and have spent years working on this. I cannot believe that you could not understand how this would hit Aboriginal organisations in particular. Did you not talk to anybody about the time frames? Who did you talk to? Did you raise concerns with the government about it?
Ms Carroll : I was trying to say that we knew it would be difficult but we had not anticipated that it would be as difficult as it was.
Senator SIEWERT: I suppose it is a waste of time traversing that particular process much longer. When you talk about grant certainty, the grants are going out to three years, Are there any that go beyond three years?
Ms Black : Not to the best of my knowledge. We can only do it as far as the appropriation is, but I will check that for you.
Senator SIEWERT: I would be interested in the analysis that shows what organisations were working on prior to this. Many of the organisations that will have applied will have had three-year funding cycles—some less but many of them three. The push was for certainty, but they are only getting three years, which is what many of them had in the first place.
Ms Carroll : A lot of them were on year-to-year funding agreements. They were not two- or three-year funding agreements.
Senator SIEWERT: How many? I asked this morning on Stronger Futures, and that had been more than year to year and they have been given a year at this time. This was NAAJA. So, for all the angst that has gone on, what is the comparison on what we actually achieved here in terms of certainty of funding
Ms Carroll : We can investigate that for you.
Senator SIEWERT: Thank you. Is there yet—and I apologise if there is and I just cannot find it on the website—more than this list that we have got for who has grants? Is there now a list that shows how much organisations got, for what specific project and where?
Ms Black : Not yet, but there is one in between. Last estimates the committee asked for that list to be separated out by top-up and duration, and we have added whether the contract is executed or not. We have that here today for you.
Senator SIEWERT: You have?
Ms Black : Yes, we have that. The information you are now asking for is how much the contract is executed for and for what, and we have not done that bit yet.
Senator SIEWERT: What do you have now? If we could have that, that would be great.
Ms Black : That has the organisations. Senator McLucas asked whether they had been topped up in terms of the gap process, whether they had received extra duration as a result of the negotiation and whether the contract was executed.
Senator SIEWERT: That is for top-up, though. I am pretty certain we also asked for one that basically told us who has got what and where.
Ms Carroll : The issue is about getting those funding agreements signed.
Ms Black : And executed and into the systems so we can give you the amount the contract is executed for.
Senator SIEWERT: But we do not actually have what the project is for?
Ms Carroll : Obviously the funding amount will be in the next iteration.
Ms Black : It will give you the program and the activity type as well in that. We are required, as you know, to publish that on our website within 14 days of the contract taking effect. So we will do that. But we will try to get that to you as soon as we can get back into the system.
Senator SIEWERT: Thank you—because it is still impossible for any outsiders to tell where the rest of the gaps are. I want to go back to the beginning of your evidence this afternoon where you were talking about the two reviews. Do you have terms of reference for the internal review?
Ms Black : We do. I did take a question on notice—I think it was in February—where we indicated that we would do an internal review. We have started that process. I have a summary of what we are looking at now and we are happy to give you something else on notice.
Senator SIEWERT: If you could, thanks.
Ms Black : Someone has commenced the internal review already.
Senator SIEWERT: Who is that?
Ms Black : An external person.
Senator SIEWERT: Do we have a name?
Ms Black : The consultant's name is Pauline Peel.
Senator SIEWERT: So it is not a company; it is an external reviewer?
Ms Black : Yes. An external person is coming to do our internal review.
Senator SIEWERT: I understand. I was thinking that DSS has Nous.
Ms Black : I think she is called Pauline Peel Consulting, from memory. She has a background in Indigenous affairs in South Australia and she is an ex bureaucrat. So she is quite well placed to do it. She has started that and we are expecting that to be finished in the next three to four weeks. The areas that we were looking at—and I will just read this for you: assess the efficiency and effectiveness of the IAS funding round with emphasis on planning and processes; resourcing; the governance of the funding round; our IT and system infrastructure; our internal communication processes; and other features of processes and administration as raised.
Senator SIEWERT: Is it just for the grant round?
Ms Black : Yes, it is purely on the grant round.
Senator SIEWERT: It is not the other elements of the IAS?
Ms Black : No, it is purely the IAS grant round.
Senator SIEWERT: And that will go to the minister?
Ms Black : Yes.
Senator SIEWERT: Even though I know I am going to be told to go and ask the minister, I am going to ask whether it is the intention that that will be publicly released.
Ms Carroll : While we obviously do not have anything formal from the minister yet, he has indicated that, for both of the reviews, he will be wanting to make some or all of it public.
Senator SIEWERT: We will ask that in October at estimates. Did the Review of the Indigenous Advancement Strategy Program guidelines and funding round processes' go out with a letter to stakeholders?
Ms Black : Yes, that went with a letter.
Senator SIEWERT: Is it possible to get a copy of the letter?
Ms Black : Yes.
Senator SIEWERT: Thank you. All we have is the one page. If we could get a copy of the letter, that would be appreciated. Going back to the conversation we had a little bit earlier, this is the prelim to set up the parameters of the review, is it?
Ms Black : It is to have a conversation around 'Have we got it right?' This one page that was attached to that letter talks through what we think we should look at in terms of the grant funding round given all the submissions to this inquiry and the feedback the department has had, particularly from our regional network, about how people have found the experience of going through the grant round. These are the things that we think we need to look at. In addition to that, as Ms Carroll said, we are also going to look at the operation of our guidelines. We just want to reality test that first to say: 'Have we got it right? Is there anything else that was a real bugbear that we haven't picked up here? Is there anything else systemic that we've missed that we really should have a look at as well?'
Senator SIEWERT: What is the time line for the process that you have just described?
Ms Black : We are starting that now. I would hope we would do that in the next four weeks or so, so that we can at least start our external review process towards the end of July.
Senator SIEWERT: So all you are doing is taking written feedback for the first process that you have just described and then start on the more formal process.
Ms Black : Exactly. I think we will take written feedback but I also think we will make contact with each of the people we have written to as well and offer to meet with those organisations.
Senator SIEWERT: Who have you actually written to? Sorry if you have told me before.
Ms Black : We wrote to Mr Mundine as the chair of the Indigenous Advisory Council. We wrote to Ms Parker and Mr Malezer from National Congress of Australia's First Peoples. We wrote to Mr Brian Wyatt from the National Native Title Council. We wrote to Matthew Cooke from the National Aboriginal Community Controlled Health Organisation. We wrote to Ms Sharon Williams from the Secretariat of National Aboriginal and Islander Child Care; Mr Shane Duffy, chair of the National Aboriginal and Torres Strait Islander Legal Services; Mr Trevor Tim, chair of the Australian Indigenous Communications Association; Mr John Lockyer, chair of the Indigenous Remote Communications Association; Ms Cronin, the president of the Australian Council of Social Services; and Professor Glover, chair of Universities Australia.
Senator SIEWERT: Once you have got that feedback and decided on the scope, is it again just on the actual grant process, not the demand driven programs?
Ms Black : That is correct. It will just be on the round.
Senator SIEWERT: Including the gap process?
Ms Black : That is part of the round, yes.
Ms Carroll : That formal process is on that, but one of the things that we have recognised is that we need broader engagement, communication and consultation about the whole of the work. To that end, we have set up within Ms Black's division a branch whose focus is going to be specifically on helping with this review and moving that forward but also thinking about what that other engagement looks like across broader than just the grant process.
Senator SIEWERT: There is a specific set of questions that I want to ask about the rest of the process. We will see if we can come back to that. If we could just finish the external review. You will finalise what you are looking at. Whose responsibility is it for carrying out the review, and how do you intend to do it?
Ms Black : Our intent is to have someone external facilitate some sessions around the country. We are still working through what that looks like and that is part of the conversations we need to have. Our inclination is that we would have at least a session in every capital city and one in each region. We have not tested this fully with our minister's office. So, obviously, we will have to do that; but we understand that people might not be able to get those sessions, too, so we need mechanisms—
Senator SIEWERT: You will not get anyone from the Kimberley to go to Perth, unless you are going to pay them to come down.
Ms Black : Yes. So we need to work through what that looks like. We will have someone external to the department to do that so that people feel quite safe and confident in talking to them about their experiences with the process.
Ms Carroll : Mr Richardson is working on that process as well; that is the broader process.
Senator SIEWERT: Mr Richardson, you are responsible for overseeing the process?
Mr Richardson : Yes, I am for the external consultations.
Senator SIEWERT: Will you be letting out a tender process? How are you determining who is the person that carries out this process?
Mr Richardson : I will be leading these consultations. The social secretary has set up a new branch, which I will be heading up towards the end of this week to start this process, and 100 per cent of my time will be spent on engaging with the community on this process for the next few months.
Senator SIEWERT: I am not trying to be rude, but we have already heard how some organisations do not even want to put a submission into our process, because they are concerned about the impact that will have on their ability to get a grant. People were pretty clear about that. They have said that to me personally, I have had emails to that effect, and we have heard evidence from our witnesses this morning. Picking up on what Ms Carroll just said—or was it Ms Black? I beg your pardon. Somebody external that they can actually trust, who is not from the department, is likely to get a fuller response, with all due respect, than somebody from the department.
Mr Richardson : That may be the case. We have 700 people out in the network. It is our job to engage with communities and to perform this task of engaging around the impact of the IAS grant round. The task in front of us is to look at the 700 people in our network, as well as the senior officers in the national office, and to work out exactly how best to deploy those staff to engage with relevant stakeholders to review the impact of the IAS and to ascertain what we could have done better and where to go in the future.
Senator SIEWERT: I am hearing two different things here. You just told me one thing, and quite frankly, Mr Richardson, you are just telling me another.
Ms Carroll : If I can just clarify, Mr Richardson is going to be leading it from a departmental perspective but, as we have indicated, we recognise that people perhaps will not want to talk to departmental people, because of fear et cetera. So we certainly are looking at having an external person that will be able to have confidential conversations with people if they are concerned. The idea is to have a team of people working on this, but I think what Mr Richardson has been describing is how we will use the resources of the department in the broad to make sure that engagement starts to happen and people are aware of the review, how to involve themselves in it et cetera.
Ms Black : In addition to that, we have obviously read the submissions and we have heard what people have said about how this has been rushed and we needed to have some more genuine engagement. This is really the start of that process, if you like. We have to have the conversation around the guidelines and the grant round, because we understand people want to hear that and we need that information to assist us for future processes that we will do, but this is the start of it. So Mr Richardson will provide that continuity once we start to develop a more holistic engagement approach as well. This is just one part of that, and we need to be able to move on to the next stage of that once we have people's feedback on their experiences through the round.
Senator SIEWERT: Will there be external facilitators for the sessions that are held, wherever they happen to be held?
Ms Carroll : We certainly will have external people. We have not worked out whether they will be the ones facilitating how it will work, but they will be extra people involved so people can feel safe about telling their story.
Senator SIEWERT: Thank you. Could you tell me how much you are budgeted for the internal and external processes.
Ms Black : I can tell you how much it is for the internal.
Ms Carroll : We do not have the external yet, because we are still finalising the scope. We will have that once we understand the full scope.
Ms Black : But I can tell you the external. The consultant is at a cost of $58,410, but we have not finished that contract. It may be a little bit less than that. That is what we have engaged her for. In terms of planning on the external, we have given ourselves a little bit of flexibility to see. When we get the feedback in about what it should look like, it will dictate a little bit about what our costs should be.
Senator MOORE: That will include the travel and all?
Ms Black : The travel for people to come in to sessions?
Senator MOORE: Yes.
Ms Black : I think we need to have a conversation about that internally first around whether we will—
Senator MOORE: All of the administrative costs. There will be able to be a costing, which includes all the admin as well.
Ms Carroll : That is right.
CHAIR: What is the duration for that? I think I heard you saying before that you would have a report within four weeks.
Ms Black : The internal?
Ms Black : The consultant has been on since about mid-June, so we would expect her to finish probably in the next two to three weeks. We should have a report from her then for our internal process.
Senator SIEWERT: You provided a list of legacy programs; how was it determined what a legacy program was?
Ms Carroll : What we tried to pick up here was where whole programs came over into the Department of the Prime Minister and Cabinet. Sometimes activities within a broader program came over, but not the whole program itself; that is why it is a mix of programs and activities. Effectively, it is a summary of what, in the machinery-of-government changes, were the administrative elements that came over into the Department of the Prime Minister and Cabinet.
Senator SIEWERT: Not all the programs that were subject to the grants process. Some of those programs that did not continue still had ongoing funding allocated against them, didn't they—for example, Stronger Futures—so some programs finished and some did not. How was the decision made about what would finish and what would not?
Ms Carroll : Effectively, it is a bit of a bureaucracy. What happened is that when the new Indigenous Advancement Strategy and the five new programs were established, effectively every old program ceased to exist on that day—from 1 July last year. What transferred into the new programs were the old activities, so the old funding agreements came over. None of the old programs exist anymore; only the new programs exist. What happened is where the funding agreement was finishing, primarily a decision was made by asking: was it something that was an ongoing activity, and therefore it was in the grant process; was it a demand-driven activity, so it sat outside in the demand-driven bundle; or was it, for example, one of the higher-ed ones—demand-driven but in the education space, where it is an accommodation allowance. If there is a student enrolled, they automatically perhaps get an accommodation allowance. I do not know if that answers your question.
Senator SIEWERT: I understand that bit. But no, not all of them, because some of these programs are continuing programs that will continue to be funded. For example, it says here the Stronger Futures Northern Territory schooling is in the legacy programs.
Ms Edwards : I might be able to help in relation to the Stronger Futures program. Some of the Stronger Futures initial package was moneys expended directly by the Commonwealth. Those programs are now all part of the IAS or in relation to some of the elements of, say, part of the Department of Health. But all of the payments that were Treasury-to-Treasury payments to the Northern Territory through a national partnership agreement remained. For example, the teacher one you just referred to is a Treasury-to-Treasury payment made for schools funding through the Northern Territory government. That was not affected.
Senator SIEWERT: So anything that is government-to-government remained?
Ms Edwards : Anything under a national partnership agreement remained.
Senator SIEWERT: Are you saying that anything that is a legacy program has that?
Ms Edwards : I am saying that the examples you have raised so far under Stronger Futures all fall into that category. I am not sure I have explained every instance you might be looking at.
Senator SIEWERT: I might put some written questions on notice on that one. Going to the Corporations Act, I know that we have traversed this before. You have heard the evidence today and you have seen the evidence in the submissions and NAAJA's comments about how they are getting a number of organisations that get funding under a number of sources having different requirements for incorporation. Can you take us through that process and the reason for decision making?
Ms Carroll : I think we have traversed this before. Effectively the requirement is that if an organisation is an Aboriginal organisation that is currently incorporated under ASIC or ORIC then it retains whatever kind of incorporation it has. If it is a non-Indigenous organisation and it is not incorporated under ASIC it is required to incorporate under ASIC. If it is an Indigenous organisation that is not incorporated currently under ASIC or ORIC it is required to transfer across or it can apply for an exemption.
Senator SIEWERT: If they are not incorporated under either they are to incorporate under ORIC. There is a misunderstanding then about organisations that are already incorporated under the Corporations Act having to transfer.
Ms Carroll : There was confusion about that. We have clarified with the minister and, we hope, back out to service providers that they are not required to transfer.
CHAIR: Where did that confusion arise from? That has been consistent in the submissions and in the presentations today.
Ms Carroll : I am not really sure of the source of it but we have gone back to the minister to confirm. I think it was because broadly the thing was that if you are an Aboriginal organisation you need to incorporate under ORIC. But we have been very clear and have clarified with the minister that the decision is if that you are already under ASIC you can maintain ASIC.
CHAIR: But it was advice from the department to organisations, was it?
Ms Carroll : I think it was communication with the organisations, because none of this triggered until we started the funding negotiations. It was only after the first round of offers when we went out to start talking to people. We were not clear, so we have now clarified that.
CHAIR: So it was miscommunication or inaccurate communication provided to service providers from the department or from the minister's public statements? I am just trying to understand where it came from, because it seems quite entrenched.
Ms Carroll : It effectively is from the minister's public statements. The department was working from those statements. We have since clarified with the minister and have—
CHAIR: You have changed the position and we just need to get the message out that it is—
Ms Carroll : Yes.
Senator MOORE: Is this a standard provision across government? If you are applying for funding under Health, DSS, Defence or any of the other places that have grant rounds, do you have to have the same process?
Ms Carroll : It is not a requirement; however, the minister has spoken to other ministers about making it a broader requirement.
Senator MOORE: Has the minister spoken with the community about why he wants it?
Ms Carroll : I could not speak on behalf of the minister but it certainly—
Senator MOORE: You would have his press releases.
Ms Carroll : He has made a number of public statements. Certainly I have heard him talk a lot about his desire for this, and he has made a lot of statements about it.
Senator MOORE: Did the department raise it with the community before the decision was made under IAS? Is this something that has been floating around for community discussion about whether it is a good idea to have this particular process in place?
Ms Carroll : It is not something that we had specifically engaged with the community about before this. However, it is something that has been more broadly around over a number of years about how to ensure the good governance and accountability of all organisations. There have been different ideas thrown around but there was not something specific before this grant round.
Senator MOORE: So the first time that this was actually a policy direction was in this budget?
Ms Carroll : Yes.
Senator MOORE: And in DSS it is not—in FaHCSIA it was not?
Ms Carroll : That is correct.
Senator MOORE: So the people who had received funding in previous rounds under FaHCSIA were not required to have this particular provision?
Ms Carroll : That is right.
Senator MOORE: And the $10,000 that the department has put out as the support that would be available—where does that figure come from?
Mrs Taylor : The $10,000 is an estimate of the costs. It is not meant to be a full reimbursement but a contribution towards the costs of incorporation under Commonwealth legislation.
Senator MOORE: I am interested because the submissions we have had say anything up to $25,000 could be the cost. So where did the figure of $10,000 come from?
Mrs Taylor : I actually do not have the right answer and I am happy to take that on notice, but I would imagine that it was an estimate that was made by the department.
Senator MOORE: Right. Could we get some information on notice about where the amount of $10,000 came from?
Mrs Taylor : Sure.
Senator MOORE: That would be good.
CHAIR: How well understood are the exemptions, and has anyone applied for an exemption to this?
Mrs Taylor : The exemption policy is outlined on our website. There is the policy as well as questions and answers on the website. Ten organisations have applied for exemptions. Five of those organisations will not require one because of the policy that Ms Carroll outlined, in terms of the clarification that we have done from the minister—
CHAIR: They are already incorporated under the Corporations Act.
Mrs Taylor : That is correct. So there are five exemptions, which the department is processing.
CHAIR: It is an important area, because, as we know from the submissions and from some of the witnesses this morning, whom I am sure you heard, there is an element of feeling discriminated against because of this unfortunate communication or change in position. I think it is certainly something that needs to be broadcast loud and clear, going forward.
Ms Carroll : Senator, perhaps we can give you the numbers of people that need to—I think I heard an earlier question about what kinds of numbers there were?
Ms Black : I might just check with Ms Taylor and she might brief you on that one.
Mrs Taylor : I might take that one. There are 54 organisations as at 26 June that we have identified will be required to transfer their incorporation status. Nine of those are non-Indigenous organisations that would be required to transfer to the Corps Act, and 35 are Indigenous organisations that would be required to transfer from state and territory legislation to the CATSI Act.
Senator SIEWERT: Fifty-four would be required to transfer from where?
Mrs Taylor : Some of them would be incorporated under state law or as associations, so they would be required to transfer to Commonwealth legislation.
Senator SIEWERT: Okay.
CHAIR: What is the rationale for that? Are the state and territory incorporation laws not adequate?
Mrs Taylor : I think the view of the Commonwealth would be that it is not fit for purpose, given the amount of money that is going out in the grant round. So, for anything over $500,000, the view would be that Commonwealth legislation is more robust.
Senator MOORE: Have you given out amounts of over $500,000 before without having this?
Mrs Taylor : In terms of previous policies?
Senator MOORE: Is $500,000 within a Commonwealth grant unusual?
Ms Carroll : Certainly, previously, as we have indicated, organisations that did not have CATSI registration have received that funding before, but there has been a concern that, in some organisations, the level of governance and accountability that is required under their incorporation in different state and territory legislation is not adequate.
Senator MOORE: Do we have any data, Ms Carroll, on previous grant rounds to look at the numbers of grants that were over the $500,000 mark and how many organisations were found to be at fault?
Ms Carroll : We would have to go and have a look, in terms of compliance et cetera, and we could perhaps take it on notice to see what is—
Senator MOORE: Certainly, it would have to be on notice. It is just about trying to understand the rationale clearly if the deciding point of effective governance is compliance with either ORIC or ASIC, which seems to be the argument—that that will be the protection if these people are actually working through that process. It would be interesting to look at whether this has been a determining factor in the past where there have been issues about governance—and we have talked about it over many years, not just in Aboriginal programs, but there have been quite a few in Aboriginal programs—and what data there is and what the argument is for actually instituting this particular step. It would be useful, I think, because of the amount of concern that there has been around this process, to see whether there is any argument that can be built on that.
Ms Carroll : We certainly can look at our evidence, at the data that we have. It is clear that what we know about organisations generally is that good governance and having things like independent board members et cetera are key contributors to ensuring that the governance of the organisation and the organisation itself are more sustainable into the future. To achieve that governance, the decision has been to make that benchmark either the ORIC registration or ASIC.
Senator MOORE: I am just interested to see the data; it may be useful.
Senator SIEWERT: I went back and had another look at the guidelines, and I can understand why organisations and interpreted the guidelines the way they did because it says, 'You'll do this or you'll be under the corps act,' so it is really open to interpretation and most people interpreted it that way. Given the reinterpretation here, if an Aboriginal organisation decides it wants to be under the Corporations Act rather than the C(ATSI) Act, do they still have to go under the C(ATSI) Act and there is no choice?
Ms Carroll : If they are an existing organisation under ASIC, they can—
Senator SIEWERT: I understand that. If they are not, do they have to go under the C(ATSI) Act?
Ms Carroll : Yes.
Senator SIEWERT: What is the reasoning for that? Aren't you then discriminating against an organisation that has not yet registered by saying to that Aboriginal organisation, 'You have to do this,' whereas if it is already listed under ASIC it can stay there? And that is fine; I am not arguing they should move.
Mrs Taylor : As Ms Carroll outlined, if an organisation is already registered under the corps act, they can stay there. If they are not registered under Commonwealth legislation, if they are Indigenous they would go to C(ATSI) and if they are non-Indigenous they would go to the corps act.
Senator SIEWERT: Why do they have to?
Mrs Taylor : The benefit of the C(ATSI) Act is that it provides a whole range of special supports to Indigenous corporations by way of assistance that the registrar can provide to these organisations. I have a list of the sorts of things that that does.
Senator SIEWERT: You do outline them in your submission. I understand that, but it does not get past my question. If I do not want that and I want to go to the Corporations Act generally, why can't I?
Ms Carroll : You would have to apply for an exemption. I think we have got to this point before.
Senator SIEWERT: It is a decision that ministers made. No, we have got further with than we did last time, because last time were having the conversation where you understood that it was about to change.
CHAIR: I did not hear that conversation. It just seems unfair to me that, if you say you are an Indigenous organisation and you are not incorporated under either at the moment, you would not have the choice to go to either the C(ATSI) Act or the Corporations Act. I cannot see why the government would be seeking to remove choice for people that is open to non-Indigenous organisations—although they cannot go to C(ATSI).
Ms Carroll : As Mrs Taylor indicated, it is because of the support that is provided under ORIC.
CHAIR: But what if they do not want that? What if they say, 'I just want to be like every other organisation and go to ASIC'?
Ms Carroll : The option for them then is to apply to the minister for an exemption to incorporate under ASIC, but, based on that framework, that is the decision of government.
CHAIR: Presumably the department would have sought legal advice around this, because a concern that has been raised here and in submissions is that it is discriminatory. That probably related more to the misunderstanding about how the arrangements worked, but did you have legal advice that supported these arrangements?
Mrs Taylor : Yes.
CHAIR: And it did not raise any concerns?
Mrs Taylor : We are confident that the arrangements are okay. As you know, it is not our practice to discuss our legal advice.
Senator SIEWERT: Going to the red-tape issue, as I understand it there is the head agreement that organisations sign and then different schedules—is that what you are calling them?—that come off that.
Ms Carroll : That is correct.
Senator SIEWERT: As it has been described to me by organisations—and you refer to it too—you then sign off each of the schedules. What organisations are saying to me is: 'That is even more red tape than there used to be,' because they are doing different KPIs through each of the schedules, so they have to write a report against each of the schedules, whereas I think people understood that they were going to be writing one report that dealt with all of them and they did not have to keep reporting against them. Is that another area of misinterpretation, or is that in fact the case?
Ms Black : I am happy for one of my colleagues to come to the table if I do not answer your question fully. Yes, there are different schedules attached to the head agreement, but the head agreement outlines the reporting requirements. So that is a final streamlined reporting requirement, and then previous contracts. The head of agreement takes precedence over the schedules, so they would not have to report under each of the schedules.
Senator SIEWERT: So there is one reporting mechanism, through the head of agreement—the head piece. So what do the schedules then do, if I am not reporting against the schedules?
Ms Black : They outline the activity that is being delivered. So they have the details around the activity.
Senator SIEWERT: So what you are saying is that it is not more red tape?
Ms Black : Not to the best of our knowledge.
Senator SIEWERT: That is not what organisations are saying. I was just having a conversation with someone over the weekend, in fact, where they were saying, 'We have to report against each of the schedules.'
Ms Black : If you want to give us the details of the organisation, we are happy to have a conversation with them and work it through, if that is easier, in case they have misunderstood or there has been incorrect information relayed.
Senator SIEWERT: It is not the first time that I have been told of this. So it is not just one organisation; a number of organisations think the same thing.
Ms Carroll : I think that what we can do is to go away and clarify that the communication to organisations is clear about reporting requirements et cetera, and obviously we could take on notice any detail we can provide you with about how that reporting arrangement works.
Senator SIEWERT: That would be appreciated, if you could, and then people can actually have a look at what their understanding is compared to what they are saying.
I want to go back to the issue of organisations having basically the same that they got last time, but asking a question first on indexation. What we found out on Friday in the DSS inquiry process is that some organisations got basically the same, even though they had put in for more funding; so they got the same as they got last year but with no indexation. So because you don't get indexation on the first year of your grant they got the same funding as last year with no indexation. It seems there are different indexation processes occurring for different streams. If organisations got the same funding as last year, did they get indexation on that, or did they get exactly the same as last year? Am I making myself clear?
Ms Carroll : I will take indexation more generally across the Indigenous Advancement Strategy, and one of my colleagues will help me if I get this wrong. Effectively the indexation was paused across the Indigenous Advancement Strategy until what is now the final year—the fourth that has just come in through—
Senator SIEWERT: So nobody is getting indexation?
Ms Carroll : and indexation kicks in again from that year. So that is the broad of the indexation, and it means that there is one indexation factor that applies across all of our programs and activities. So it is not that there are people who are in or out. However, within each of the activities that people have been funded for, effectively, if they got exactly the same as they got last year, it really comes down to the amount of funding and what had been agreed to do with that particular amount of funding. So I am hesitant to say that, because they got a particular amount of money, that does or does not include indexation, but, more broadly across the Indigenous Advancement Strategy, indexation has been paused until the final year.
Senator SIEWERT: Is that 2017-18?
Ms Edwards : It is 2018-19. It is a budget measure. In Budget Paper No. 2 this year, there was a measure for the indexation of funding. What happens is that all of the stuff that came into PM&C had varying levels of indexation, or none, and this means that from the 2018-19 financial year, across the entirety of the $4.9 billion—as it is in the current forwards—there is a consistent indexation level. That is requiring an additional investment of funds, starting in that year, of $4.8 million.
Senator SIEWERT: That is that $4.8 million.
Ms Edwards : Correct, which does not reflect all of the level of indexation but the change that is required in order to bring them all up to a single level.
Senator SIEWERT: Okay. So organisations are then going to have to scale back their activities, aren't they?
Ms Carroll : Effectively, they have to make their activities fit the funding that they have.
Senator SIEWERT: It is called scaling back, yes. Thank you. I have another area I want to traverse, which is the other programs—the demand-driven programs. Is it okay if I go there?
Senator SIEWERT: Can we go to the other programs and just clarify how they are now going to work. Those are the targeted and restricted rounds, the direct grant allocations, the demand-driven, and the one-off ad hoc grants. How are those processes going to work?
Ms Carroll : If I go with the direct grant allocation, one of the things that often happen is that there is an emerging need, an emergency need or whatever. That is often where a direct grant might be applied, so a need might be seen by the community and indicated to the department, or the department has noticed it on the ground or whatever, and that direct process can occur. In terms of the broader process, we will certainly be using our review process to look at how we go forward across the streamlined assessment process.
Senator SIEWERT: I am not trying to be clever here, but when you talk about the review process do you mean the internal or the external one, or both?
Ms Black : Primarily the external. In talking to people about the grant round, it will be hard to separate the guidelines from your experience of the grant round. That is why we have joined them together. But we are looking at the operation of the guidelines: do those methods of applying under the guidelines make sense to people? Does the demand-driven make sense? Does targeted make sense? It is to get people's views on what the best avenue is if you want to apply for funding and how we are best to target that across organisations and the rest of our money.
Senator SIEWERT: That is where I am struggling, to tell you the truth. Why would I go into the open, competitive round, whether they are tenders or grants, when I could do a demand-driven one or a direct grant? That does not seem to me to be transparent or fair.
Ms Carroll : I understand the concern there. We will deal with the demand-driven, because it is quite a different process, and Mr Eccles might be able to give more detail around it. But primarily the demand-driven has a particular frame to it and came from old programs. The easiest one to explain is the old Indigenous Employment Program, where it was, 'There's a job available now; there's an activity; let's link it up,' or some of the education ones, where it is a student enrolled in university and, by its nature, it is demand driven, because if you enrolled then these things automatically went with you. I think what we have not done—and certainly we are looking at it—is to put more understanding around what makes up a demand-driven approach.
Mr Eccles : As Ms Carroll said, one of the clearest examples of a demand-driven program is the funding that we provide to businesses to achieve employment outcomes. We will negotiate with a company or an organisation to achieve, for example, up to 50 job outcomes. But the amount of money that ends up with that company is dependent on the outcomes—the number of individuals placed in employment and the achievement of 26-week outcomes. At the point of signing the contract it is impossible to understand exactly how much money is going to go over. There is, if you like, a formulaic unit price for each of the outcomes achieved.
The other thing about these is: the ability for organisations to place people in employment changes depending on the level of success of the company and to seasonal issues. So it does not lend itself to a particular-point-in-time application process. We might receive an application for a demand-driven jobs program at any point in time. We might get one tomorrow, for example, from an organisation that are going through a particular expansion and are interested in placing 20, 30, 40 or however many Indigenous people, into work. It is at that point in time that we will assess that and work with them to negotiate a unit price. As I said, the key feature of these is that the funding is provided based on the outcomes.
Senator SIEWERT: Are you setting criteria around what is an acceptable price for a start and who can apply?
Mr Eccles : Absolutely. As it is based on the Indigenous Employment Program, there are very set criteria around the 26-week outcomes, the dollar value, what constitutes a placement—there is a long track record and a long history for these.
Senator MOORE: So it is to an employer, not a broker?
Mr Eccles : Yes, that is right.
Senator MOORE: So this is directly to employers? ACME Electrics may have a program; it is not to a JSA? You can see then—
Senator SIEWERT: Is it just about employment?
Ms Hosking : Sorry, I will just answer the initial question first. We do have a panel. It has been established for employment programs. We do sometimes deal with a broker. But they are engaging employment directly for an employer.
Senator MOORE: I was happy but now I am not.
Mr Eccles : The significant focus of this—and it is not unrelated to the government's new Employment Parity initiative announced earlier in the year—is that we are taking that model which I have just described, where we have a relationship with the employer and provide funding based on outcomes, and we are having a different kind of discussion with some of Australia's biggest companies around what it would take them to increase the number of Indigenous people that they employ. Then we negotiate a contract based on the achievement of job outcomes.
The starting assumption for those job outcomes is usually about a 26-week placement. The data shows that once people have been employed for 26 weeks there is a marked improvement in their sticking, if you like, in retaining employment. That is one of the key features of the new way we are doing business. We are increasingly providing funding based on outcomes. The way we describe 'demand-driven' is almost formulaic in that the amount of money that goes to a particular entity is dependent on the success they have in achieving those outcomes.
Senator MOORE: I understand that, Mr Eccles and Ms Hosking. But I want to follow up on Senator Siewert's question about why you would go for an open tender as opposed to a closed arrangement. I can understand why you would do a negotiation with an individual employer and why that would be closed—a person has come forward with a proposal to say, 'We are prepared to do this.' I can understand that. But when we have such processes as we have with JSAs normally, where they do have to tender and compete in the process, I would have thought that the panel process would be more appropriate for an open tender as opposed to a selective or closed tender.
Ms Carroll : Perhaps I can clarify. We have the demand-driven process. We can provide, on our website and to the committee, some more detail about in what circumstances you apply under the demand-driven, the framework that sits around it, the payments and all of those things so it is much more transparent. On the open, competitive, targeted or restricted grants process, one of the things that we are really wanting out of our external review process is to relook at these categories, see when would be the best time to use them, work out how we would use those into the future and also provide more clarity around it.
The direct grant process is used in a much more limited set of circumstances. Again, our review process will help us describe this. It is one of the mechanisms that is used. For example, a service provider might have fallen over in a particular location and we urgently need someone else to pick up the particular activity that they were doing. Often, in those circumstances, the department might approach a—there might only be one other—service provider in that location to pick it up for a short period of time while we work it out. Or sometimes service providers approach us and say: 'We have a particular thing. It is a significant issue and we think you need to fund us to do this extra thing.' That is primarily when a direct funding mechanism is used. But, in particular on the open, competitive and targeted or restricted round, we are wanting to use our review process to update our guidelines and then communicate more clearly in which circumstances the different mechanisms would be used.
Senator MOORE: And the transparency of it?
Ms Carroll : Yes.
Senator SIEWERT: I think my question on the demand-driven process got lost in all the other issues we were talking about. Is it just for employment?
Ms Black : No.
Senator SIEWERT: What else?
Ms Black : The guidelines indicate some other demand-driven type activities.
Senator SIEWERT: What page are we on?
Ms Black : I do not have a page number for this. For example, alcohol management plans in the NT are demand-driven in nature and may be applied for at any time. There are a range of other ones in the guidelines that we indicate are demand-driven in nature as well. I think it is fair to say that largely they are employment based ones that arise out of our demand-driven allocation.
Senator SIEWERT: But the guidelines for that assessment are being reviewed?
Ms Black : Yes. All of these guidelines will be reviewed.
Ms Carroll : Yes. All of these guidelines are under review.
Senator SIEWERT: I beg your pardon, but I thought that, when I asked that before, you said no. When I asked, 'What is up for the review', I understood you—and maybe it is the two different ones—to say that it was just about the open tender; it was just about the competitive process.
Ms Black : The internal process is just about the grant round. It is about our staff experiences in the round. The external is the round and the guidelines.
Senator SIEWERT: The round and all the guidelines—
Ms Carroll : That is right.
Senator SIEWERT: not just the guidelines for the competitive round?
Ms Black : No. The IAS guidelines.
Senator SIEWERT: The whole lot?
Ms Carroll : Yes.
Ms Black : Because the round is one element under the guidelines, we did not think it was fair to separate them out. We think people will have a view on both things as we go and talk to people.
Senator SIEWERT: How much demand has there been for the demand-driven process and also the direct grant process? The information, as I understand it, that you have given us in terms of the list is for the open process.
Ms Black : That is correct.
Senator SIEWERT: Is it possible for you to provide a list of what has been approved under the other processes—the demand-driven process and the direct grant process? Could you take that on notice.
Ms Black : We can do that.
Senator SIEWERT: It is basically the same thing that I have asked for for the other—
Ms Black : Certainly.
Senator SIEWERT: That would be appreciated. Thank you. I know we are going to run out of time in a sec, but I just want to traverse this issue where organisations, particularly large non-Aboriginal organisations, have said they have been in partnership with groups. This applied for DSS. We heard this on Friday and we have heard it today. Through the IAS process, organisations' names were put down, and they are not in partnership with them. They are quoted as being—'Yes, we've spoken to this group,' or, 'We've consulted,' or, 'We have a relationship with them'—but what we have been told is that some organisations have not in fact even been spoken to, or it has been very minimal. I am wondering how vigorously you tested, when applications came in from major organisations, that in fact they had consulted or were in partnership with some of these other Aboriginal organisations. DSS did not test those. We asked, and they did not verify whether it was true or not.
Ms Black : Our application form, as you know, asked people to nominate that and to nominate referees to support that. Not all applications provided referees. It is a little bit difficult to answer in the abstract.
Senator SIEWERT: With all due respect, I sort of understand what you said, but did you test them or not in those applications? Did you test the references and whether they were in genuine partnership with other organisations?
Ms Black : Did we call all the referees that were submitted? No, we did not.
Senator SIEWERT: What is the point of having referees, then?
Ms Black : We asked people to provide them, and we used them as part of our assessment process, but did we make contact with those referees? Not all the time, no.
Senator SIEWERT: I just do not understand why you would ask for them if you do not test them.
Ms Black : If people provide them, I guess we rely on the bona fides of providing them—maybe wrongly.
Senator SIEWERT: Have you been at the other end of writing out an application form, where you are answering questions and desperately trying to get all this information together?
Ms Black : As I think I have spoken about before, we had a parallel process on our assessment: one was our assessment panel and one was our original assessment teams. We relied on our original assessment teams to look at the local knowledge that they provided in terms of partnerships, where people were saying they had partnerships with organisations.
Senator SIEWERT: There are two things. I thought that states did not assess their own. I thought you said ages ago that states assessed other states. Did you not tell me that ages ago? Did states look at their own?
Ms Black : No.
Ms Carroll : You mean our regional people?
Senator SIEWERT: Yes.
Ms Carroll : They looked at their own.
Senator SIEWERT: They looked at their own? I will have to go back and check Hansard.
Senator MOORE: Using their local knowledge.
Mr Eccles : Using their local knowledge in the assessments.
Ms Carroll : That is what we were very keen to have.
Mr Eccles : One of the significant changes with this processing before is the level of engagement with our on-the-ground staff.
Ms Carroll : I think what we described was basically two processes. There was an assessment panel that was chaired by an SES officer, and what we did was make sure there was a diversity of people on that panel and that, if they were looking at children and schooling applications, they were not just from children and schooling. That is where we made sure they came from different areas, but the regions assessed the organisations in their region.
Ms Black : Because we relied on their expertise in assessing those applications.
Senator SIEWERT: The point there is: where organisations were applying from interstate to carry out larger projects across Australia, how do the local teams then know whether those partnerships have been built or not?
Ms Carroll : As Ms Black said, we relied on what was provided.
Senator SIEWERT: In the application?
Ms Carroll : In the application. We will obviously be pursuing that as we go forward. The funding agreement would be requiring that that partnership be demonstrated as part of that funding agreement, and we will be assessing it as we go forward.
Ms Black : But I would also assume that in our review process this issue will come up as well. It is an issue that has been bubbling. We may look at the way our application form works, and we may build in more stringent checks on referees.
Senator SIEWERT: Thank you.
CHAIR: I want to go back almost to the beginning. When I look at the timetable for what is a very significant reform, prior to the machinery-of-government changes PM&C was not a service-delivery agency to any great degree. Is that correct?
Ms Carroll : That is right.
CHAIR: In terms of handling grants rounds and money of this order, that was not PM&C's area of expertise?
Ms Carroll : It was not for the old part of PM&C. The people with that expertise came in, because part of the machinery-of-government was that people from all of those different departments came in, including what we would call the enabling areas. It was the kind of people with grants management process et cetera.
CHAIR: You said they came into the department, but when you look at it from September to May it seems to be a period of review and implementation of a new way of doing things in the Indigenous Advancement Strategy. It comes in in May, to commence six weeks later, in July. Then, in August, the guidelines are released and in September there is the opening funding round for 5½ or 6 weeks, until October, at which time you are inundated with 2,345 organisations with almost 5,000 projects. It seems to me to be a massive ask of the department to be able to manage that sort of reform and workload coming in in such a short time.
Commissioner Gooda, a witness today, said he would have envisaged a three-year transition as a more reasonable timetable for transition. With the benefit of hindsight, was that original transition period unrealistic and were recommendations provided to the government about such a significant reform agenda and the timetable to achieve it?
Ms Carroll : What is clear is that it was obviously a very tight timeframe to work with organisations. We looked at different models and mechanisms but value was seen in doing it as a whole, recognising that it would be a big ask. We certainly recognised that it was a big transition for service providers as well as for staff within the department to get everybody ready for this. Obviously we still worked on trying to achieve that time line, but we understood that it would be a step up, but it was a bigger step than we anticipated.
CHAIR: Was the time line set in the budget? In a sense not only are you reforming an area of government assistance and work in the community but you were also being asked to implement some savings at the same time. So you have new policy, savings and a new department being formed and, from my reading of it, a completely unrealistic timetable to deliver it. Considering the package as it was, I think you could say that you have actually done a pretty good job of it, despite some of the submissions and advice we have had from witnesses today. You were not only trying to implement a decision but you were trying to find savings in the same way and open up a whole new way of tendering for government grants.
Ms Carroll : One of the big issues was that a large number of the funding agreements come to an end on 1 July 2015, so we were going to have to do something with all of those funding agreements. They were either 1 January 2015 or 1 July 2015. One focus was on what we could do to achieve meeting this milestone of having a 1 July 2015 time line when people's funding agreements ceased, and there was a 1 January group, as well. That was one of the keys to looking at what we could achieve in that period of time.
CHAIR: Was it the budget decision that led to that timetable?
If I were the minister getting advice from my department on this and they said, 'We can do all of this by 1 July 2015,' starting in 2014, I reckon I would be pretty surprised. I would be going, 'Really? You reckon you can do all that?' I do not know who set the timetable; but, whoever it was, the timetable has delivered a lot of the concerns and complaints that we have had raised with us.
Ms Carroll : I think there were two key drivers. Obviously, the timing of when people's funding agreements finished was one big driver of having things ready for that point in time. The other was actually shifting to the new model, having the IAS in place; if we retained the old, historic kinds of programs and activities, we did not get to move to an outcomes model et cetera. Those were the key drivers of the timing, and the department has worked at achieving that timing.
CHAIR: So the timing was something that was asked of you as a department? 'This is the time by which we'd like to see this reform in place.' That is, I guess, the question that we are not really getting an answer to today. Who set the timetable to deliver it?
Ms Carroll : At the end of the day, the timetable is set by advice from the department to the minister and the minister in hand. But I think they were the key drivers behind the timetable.
CHAIR: There wasn't any thought of weighing the implementation of this against the backdrop of everything else you were trying to do? Because you did a triage within the process. Once you got going, you saw you had to do that to get to the end. But at the beginning there was no thought of 'let's roll these over'—which is exactly what you did with some of the funding agreements for six months or 12 months once, I presume, the workload came rushing in. There wasn't any thought to implementing it like that from the beginning?
Ms Carroll : We gave a lot of thought, as I think I said earlier, to different options and models, and what could be achieved by when, what were the risks associated with them. But, effectively, in the end the decision was made that we really needed to think about what we were trying to achieve and the best way to do that. And we set up processes to make sure that, as Ms Black said earlier, there were key points where we did an assessment to see how we were going and provided clear feedback about what might be the next steps and what we needed to do along the way.
CHAIR: With the benefit of hindsight, knowing what you know now, would you do anything differently, from the beginning; and what lessons have you learnt over the past 15 months?
Ms Carroll : I think we will get lots of information from our review process, but—
CHAIR: I thought that might be the answer.
Ms Carroll : the key thing for us, I think, is that we did not engage heavily enough at the beginning of the process. Post the budget decision and announcement, we did not have a consistent enough engagement plan and mechanism for engaging more broadly with service providers and the community more generally, and a plan to then build that into thinking about how we get from where we are to where we need to be. It was really about more not just communication but also engagement up-front, which is why we are making sure we have a much more consistent and thorough engagement process as we go forward.
CHAIR: That came out in the submissions, too, I think; they were seeking genuine engagement. Were any formal complaints lodged with the department or with other agencies around the handling of this?
Ms Black : We have had one complaint. The guidelines provided that you could seek advice, seek feedback and—the last stage—make a complaint. We have had one complaint lodged with the department, and the department has provided advice back to the complainant. We have had nothing else back from the complainant to date.
CHAIR: Any appeals against decisions?
Ms Black : There was not an appeal process in this grant round, under the guidelines.
CHAIR: Okay. Any further questions?
Senator SIEWERT: We heard a lot of evidence today about organisations that did not apply. Have you looked at who did not apply? Obviously you have done the gap process, but, in terms of those organisations—you referred to them earlier—that did not apply, (a) will they be included in the review and (b) have you specifically spoken to them about why they did not?
Ms Black : The answer to the first question is: we have not thought about that. I will have to take that on notice.
Senator MOORE: It did not come up in the gap process?
Ms Black : No, it did not.
Senator SIEWERT: I thought that you did have a bit of a look at it. We heard from Ms Carroll—
Ms Black : We did a little bit of analysis around who did not apply. Our estimate was that about 85 per cent we would not have expected to apply. They were, for example, people who had a wage subsidy and some of the programs such as menu support and essential services, which have other ways of being funded now. We did not expect everyone who was currently funded to come through the grant round door anyway. That leaves about 14 per cent where we thought there was probably a question around why they did not apply. That is the analysis we have done to date. But it did not come up, remarkably, through the gap process at all—at least, not that I am aware of. In terms of the review, we might think about how we best factor those organisations in. I had not thought about that.
Senator MOORE: The other thing would be that your state regional offices would know their people. It has just been a consistent statement in a number of the submission that people had self-selected out because of either their own confusion or issues about the process. I think it is just something to check out in the review.
Ms Carroll : Certainly. There is another thing we will be doing as we go forward. The grant process for that grant round is now finished, but that does not mean that we will not still looking for where the gaps are and where the issues are as we go forward. We are asking, 'Is that something we need to do urgently or can we wait until the end of the review process and consider it as we go forward?'
Senator MOORE: I have one last general question. Ms Carroll, it is a general question about whether PM&C is talking with DSS. For those of us who are looking at the processes in those two major rounds from this budget, it just seems that there is a lot of common experience and knowledge that could be shared not only internally but across agencies. We will be asking DSS the same thing. I do not know why we have not done it before.
Ms Carroll : We have very regular communication—
Senator MOORE: On the grant stuff?
Ms Carroll : On the grant stuff, absolutely. Ms Black talks to counterparts—
Ms Black : I talked to my counterpart last week, and I have a meeting with him and his team in about two days time.
Senator MOORE: Good.
Ms Black : So we are fed information very regularly through the processes. Many of the same issues have arisen through both the processes—
Senator MOORE: Absolutely.
Ms Black : That happens very regularly.
Senator MOORE: Just in terms of that knowledge being not just internal—
Ms Black : Exactly. It is about sharing it across our common processes. We are learning from that, absolutely.
Senator SIEWERT: I thought we talked about this on Friday. Where organisations have both DSS funding and IAS funding—
Senator MOORE: And there would be a couple that do.
Senator SIEWERT: Yes, there are a number. I note that the ACCHOs in particular have a number. They have Health funding as well. My understanding from DSS is that that was not taken into consideration when they were looking at the grants. Did you?
Ms Black : Is the question: did it work against someone—
Senator SIEWERT: Did you say, 'This mob have applied for funding for this, but they have also applied for DSS funding,' and to take a holistic approach? They patch funding together. All NGOs do.
Ms Black : The answer is: yes, we did map those who had DSS and IAS funding. So we had that picture across both sets of our agencies. We asked organisations to tell us in their application forms what other Commonwealth funding and state funding—
Senator SIEWERT: Or had applied for?
Ms Black : Or had applied for. It was probably not systematic as you are describing, but we certainly shared information at the Commonwealth level between the two of us. I was in DSS, and we did share information across about who was getting funded and for what.
Ms Carroll : When they had their grant funding announcements, if there were people who perhaps were not successful in our round we actually did a very immediate check of those people and what that might mean. In our assessment process, as I think as Ms Edwards said earlier, one of our principles was that if the source of funding for a particular activity should be with the mainstream department then we would leave it with the mainstream department because obviously we do not have enough money to pick up all of the different activities. So we were certainly looking across, especially at DSS, because we were working very closely with them.
Senator MOORE: Aspirationally, are you going to be on the same draft platform, with DSS?
Ms Carroll : We are now—from 1 July. Almost all. We still have some legacy systems.
Senator MOORE: Aspirationally, I know the date was 1 July, but the intent is that this will be able to be worked on the same platform for information sharing and—
Ms Black : It will be our primary grant management system—the DSS system. We will retain what is call ESS, which is the employment system for our employment based contracts. Also, we still have some legacy systems with contracts that are still live for those systems.
Senator MOORE: Employment and education would be the two that were outside, wouldn't they?
Ms Black : Yes, there is a small one for environment and there is an old ATSIC one called GMS that still has some live contracts in it. But FOFMS will be our primary system from 1 July.
Ms Carroll : The key to all of that is actually one of the reasons—which was another driver I did not mention before—why we are wanting to achieve this by 1 July 2015 is that the diagrams we have given you today could not be done if we had not done the grant process, because it was so disparate on different systems, through different processes. We actually could not collect up the information and nor did we have it. So for the first time we actually have it. What we have been able to do now is start to look at that as a whole.
Senator MOORE: There is no-one we have had evidence from in this process or in the DSS process who has not seen some value in the need to have the change. I do not think we have had anyone saying we should not do it. The complaint has been about how it is done.
Senator SIEWERT: How and the timing.
CHAIR: Thank you for your evidence.
Committee adjourned at 16 : 52