This page answers questions about our audit on the Department of Health’s funding of community service organisations. This page sums up key parts of the report in Basic English. The whole report is here. Please note: this page is not the whole report.
We refer to the Department of Health as ‘Health.’
Why did you do this audit?
Community service organisations help Tasmanians. They get about $75 million a year from Health. This money helps keep Tasmanians healthy. Sometimes, they provide help to our most vulnerable people. It’s important that the Department of Health manages this money well, so we decided to check if they do.
What is a community service organisation?
We use the Australian Taxation Office’s definition. They say a community service organisation is a not-for-profit group set up to help the community.[1] We call them CSOs.
Some of the ones you might know are:
- Anglicare Tasmania Inc.
- Baptcare Ltd
- Cancer Council of Tasmania Inc.
- Colony 47 Inc.
- Dementia & Alzheimer’s Australia Ltd
- Meals on Wheels Association of Tasmania Inc.
- Tasmanian Aboriginal Corporation
- Youth, Family and Community Connections Inc.
There are many more.
What did you find out and why does it matter?
Health’s management of funding arrangements with community service organisations was not effective.
They did not set up good systems and processes.
The did not always show how the funding was going towards meeting a government goal. They also did not properly check if funding was good value or had risks attached.
They also did not regularly check to see CSOs were performing well. They did not visit them or check their quality and safety. They did not check how well CSOs had been going before they gave them more money. This was despite requiring CSOs to produce reports every 6 months.
This could mean:
- the Tasmanian community is not getting good value
- risks not being managed
- Health does not know about problems with the quality and safety of services
- goals are not being achieved
- problems with community service organisations not being identified or addressed.
What is a grant, what is a procurement, and why does it matter?
A procurement is where an agency buys goods or services for itself or others to meet a policy goal. The Treasurer gives instructions that tell agencies how they must do procurement. The Department of Treasury and Finance’s has guides to help agencies do this.
A grant is where an agency gives money to another organisation so it can reach its own goals. Those goals should match governments goals. The Treasurer gives instructions that tell agencies how they must do grants. The Department of Treasury and Finance has guides to help agencies do this.
Choosing the right method matters because it decides which rules apply and the legal protections and controls. There are more legal protections and controls for procurement.
We found Health did not have good processes for deciding which one it should be. We found they used grants by default. We also found they didn’t always document how the grants aligned with government goals.
We also found that other agencies did not know how to choose. The Department of Treasury and Finance told us it was going to make its guidance clearer.
Who is responsible for ensuring compliance with Treasurer’s Instructions?
Every agency head and officer is responsible. The Financial Management Act 2016 says this.
The instructions from the Treasurer also say agency heads must have systems to make sure their agency follows the rules. For this audit, the head of the agency is the Secretary of Health.
It is not the job of the Department of Treasury and Finance to make sure agencies comply with Treasurer’s Instructions. But they do provide guides to help agencies comply with Treasurer’s Instructions.
Did the audit look at the performance of individual community service organisations?
No. We did not check the performance of community service organisations. We did not see any issues with CSOs performance. We did not see any issues from CSOs about accreditations or service standards. CSOs engaged professionally with us for this audit.
We did look at how well Health managed CSO performance. We found they didn’t do most of the checks to see if CSOs were performing well.
Quotes from CSOs are in the report. We used CSO quotes to illustrate the issues we found at Health. The quotes should be read in context.
What do agencies have to do if a Minister tells them to give a grant to a particular community service organisation?
A Minister can tell an agency to give a grant to a CSO. Sometimes they do this because they make an election promise. The agency still has to make sure it would be good value for money. They also have to check if it is risky, and work out how they can make it less risky. The agency should tell the Minister if they think it would not be value for money or too risky and why. A Minister can still choose to provide the funding but should have all the right information to make that decision.
We found staff at Health did not check if funding was value for money, or check if it was risky in the way they should have. Some people told us they didn’t know how to, or they were not sure if they should.
What did you recommend?
We found that Health knew about a lot of the problems we found. Many other reports told Health how to fix these problems. Even so, the issues are still happening and have not been fixed properly.
Because of this, we think there are cultural or structural issues that stop Health from fixing these problems. We did not want to recommend the same things as others, because they did not help in the past. So instead, we recommended Health should first work out why it has not been able to fix these problems before. Then, we recommended they look at the other reports and information they have to fix them properly.
[1] For a complete definition, see: Australian Taxation Office (31 May 2024) Community Service Organisations, accessed 26 June 2024.