Auditor General's Report

The CHAIR: Are they all on that section?

Ms SANDERSON: Yes. My first question refers to page 61, communication of audit matters. Given that until recently the department was not complying with the drug testing required in section 20, part 2, of the now repealed Children's Protection Act 1993 or the reporting requirement to parliament as referenced in the inquest regarding Chloe Valentine, with all the new legislation that affects the department, without a legal compliance process in place how will the minister ensure staff on the ground are firstly aware of the changes and are correctly implementing them?

The Hon. S.E. CLOSE: We appointed a head of legal services in May, which was a crucial appointment to make sure that we are being adequately responsive on legal compliance. There is a draft legal compliance framework currently under discussion in the department and about to be considered for finalisation by the executive of the department . We expect that to be in place by the end of November.

Ms SANDERSON: I now refer you to page 72, expenses. Can the minister explain why there has been a huge increase in the cost of commercial care, from $37 million in the 2013-14 year to $126.6 million three years later, representing a 242 per cent increase?

The Hon. S.E. CLOSE: As the member will be well aware, we have seen a large increase in the number of young people who are unfortunately in out-of-home care due to the incapacity of their families to look after them. To give some sense of the scale of the increase, from 2014-15 to 2015-16 we saw a 14.3 per cent increase in the number of young people in out-of-home care, and from 2015-16 to 2016-17 a further 8 per cent increase.

While we have seen a steady increase in the number of young people who are able to be placed in kinship or foster care, that has not been able to keep pace with the number of young people who have come into out-of-home care. In addition, while I do not have figures here with me, the length of time that a young person stays in out-of-home care has extended, so unfortunately we are picking up children younger and they are under longer orders.

What that has all combined to do is put enormous pressure on placements. Without having been able to increase the number of placements in family-based care to the extent that we would have liked (although, as I said, it has increased), the only alternative is to pay people to care for children. That has been largely through the residential care facilities run by the department. There are some residential care places that are run by non-government organisations, and of course we have resorted to the use of shift-work commercial care in some instances. We are working very hard on reducing the extent of that.

The answer to why we are spending more is evident in the increased demand and the need for us to continue to increase the number of foster care and kinship care family-based placements. We have been working very hard to do that. As I say, we have seen increases, but unfortunately as yet not sufficient to more than compensate for the number of additional young people coming into our care.

Ms SANDERSON: Does the minister think that, as you have just outlined, an increase of 14.3 per cent in one year and then 8 per cent, totalling 22.3 per cent, should then give a 242 per cent increase in the cost of commercial care? Whilst there is an increase, they do not seem comparable in any way.

The Hon. S.E. CLOSE: You are not comparing apples to oranges. There is an increase in the overall pool of the number of kids in care. The relatively small number of young people who were in residential care has absorbed a disproportionate amount of that increase of 22 per cent; therefore, you have seen a dramatic increase. I am not sure what other explanation there could be for this increase. We are not spending more on paying our staff. We are not using the money for other purposes; we are using the money to house young people.

There is an additional expense associated with young people who have significant disabilities, and there are some young people in that situation who are expensive. I do not for a minute—and I am sure no South Australian would for a minute—not want to spend the money on those young people who need nursing care around the clock. Depending on the composition of the young people who are in non family-based care, that can significantly change the amount of money being spent on that part of our budget from year to year.

Ms SANDERSON: On 6 February 2016, the minister announced an investment of $9 million to increase the number of foster carers by at least 130 and reduce the need for temporary commercial accommodation. That was 21 months ago. Almost two-thirds of the way through that policy, what is the net increase in foster carers since the $9 million was announced?

The Hon. S.E. CLOSE: Because I have given you figures on the increase in the number of young people in care over the period from 2014 to the end of June this year, I will do the same with the increase in kinship care and in foster care to give a sense of the increases that we have seen. These are not foster carers or kinship carers: they are placements of children, so there are two ways of measuring. From 2014-15 to 2015-16, we saw an increase of 16.5 per cent of placements in kinship care and from 2015-16 to 2016-17 a further 6.7 per cent increase. With foster carers, we have seen from 2014-15 to 2015-16 an increase of 8.9 per cent and from 2015-16 to 2016-17 a 6 per cent increase. So we have seen a steady increase.

The last figures I have for the number of carers who had a placement are not up to date, so I am not able to give you the final figures. Forgive me, I am misreading my own notes. The number of foster carers we had as at 30 June 2016 was 688. In 2016-17, so the end of 2017, the number was 730. So we have seen an increase in carers, both in the placements of children and in the number of carers. What we need, as everyone I think understands, are more and more children in placements where that is appropriate and safe for the children.

Ms SANDERSON: That is a net increase of 42 extra foster carers. Given that your goal is 130 in three years, how will you make up the difference? You are nearly 90 behind.

The Hon. S.E. CLOSE: We are a third of the way through, but the fact is that our target is the target to have all children who can possibly live in family-based care in family-based care. That needs to increase. We should pay attention to the number of carers who are kinship carers. Being with kin, with people the children know, is very important and we have seen an increase in those numbers also—in fact, a larger increase in the number of placements with kinship carers.

We have recently, again, worked on attracting more people to the idea of being foster carers. We have gone to all public servants through a SAGEMS message and also a targeted message in the education department. We will be following that up. We think that people who are already working with children are more likely to consider using their skills to be foster carers.

Importantly, one of the challenges we have had is making sure that we are treating our foster carers in a way that means that they will speak well of the experience of fostering. There are foster carers who have not had a good experience, but they love the kids. They care, but they do not necessarily promote the idea to their friends, family and extended networks. It has been very important for us to work much more closely with foster carers and we have been working through the legislation that went through earlier this year on increasing the rights of foster carers.

We have recently appointed four people who are placed in the department to be liaisons for foster carers so that when they have a problem that they can not deal with with their immediate case manager, they will get the support that they need. We are also working with the non-government organisations who recruit foster carers on the ways in which we contract with those organisations to make sure that they are getting the right incentives to get more foster carers, but to get quality foster carers, and that they themselves are supporting carers. It is a multiple prong. The money that the member refers to was an advertising campaign and is part of it but is by no means the full effort that we are going to to increase both kinship and foster care placements.

Ms SANDERSON: Certainly I note that there have been a lot of ads and I am sure they have cost millions of dollars out of the $9 million. As you have identified, it is actually the treatment of the foster carers that is the issue. As recently as yesterday, I was notified of another foster carer who relinquished a child and was very upset to do so. I wrote to your office, and there has been no extra support. All the mother needed was support for that child, and now that child has been relinquished.

The child has a sibling who is also in danger if your department does not get onto this very quickly. I will resend it to you, as you look unsure. Issues have been raised, I bring them up with your office, and they need urgent attention. If you have two or four liaison people in the department, they have a lot of work cut out for them. It costs far more money for that breakdown in relationship if you do not put the supports in place and it is a lot worse for the child.

I am still on page 72. Given that in 2015-16 commercial care expenditure was $82.9 million, what miracle was the minister expecting when she budgeted for only $25.2 million for commercial care, which then ended up being $126.6 million?

The Hon. S.E. CLOSE: It was not the accurate figure to the budget, and that has subsequently been revised and dealt with. The department, in preparing a budget, tries to take account of what it believes will occur in demand and also what kind of options there are to meet that demand. We had engaged in a contract for 100 residential care places with non-government organisations, and there was hope that that would take the majority of the commercial care placements.

What became apparent over a period of time, though, was that that twin impact of more children needing to be placed in out-of-home care and children staying longer, which maximises the effect, was miscalculated. I say that not in criticism but in the recognition that it is very difficult to predict, in child protection, what will be required when, and also how often you will be able to place children with kinship.

The number of children who may have disabilities or significant behavioural disorders varies from year to year. Both of those triggers will often require accommodation and care that is not within a family. We rectified the amount of money that we needed to spend. The Treasurer has worked very closely with us to make sure that we were able to offer the services that we need to offer.

Ms SANDERSON: Is this the first time the minister has ever had to access money from the Governor's appropriation fund in any of you portfolio areas and, if so, how much?

The Hon. S.E. CLOSE: I will take that on notice.

Ms SANDERSON: Does the minister also know how much is in the Governor's appropriation fund? I am not sure if that would be in your area.

The Hon. S.E. CLOSE: I imagine that is the province of the Treasurer.

Ms SANDERSON: I now refer to page 68, incidental payments. Can the minister explain how incidental expenses could possibly add up to $19 million in one year? What is the minister doing to ensure foster carers are receiving the correct loadings so the incidentals account is not used to this extent?

The Hon. S.E. CLOSE: As the member points out, the Auditor-General has drawn attention to incidentals and they cover a very wide variety of expenditure. The department is preparing to develop a policy in order to give better shape to that. I think the second question the member asked was about the carer payments and that has been the subject of very detailed work by the incoming chief finance officer as the new department has been formed in working with the contract arrangements with the non-government organisations to make sure that the payments are accurate and not causing grief and irritation to foster carers. An enormous amount of work is being done in the department at present.

Ms SANDERSON: Also on page 68 under 'Advance account previously used to provide a loan to a carer' regarding the $10,000 loan given to a carer, has the documentation now been found regarding the nature and circumstances of the loan? If so, what are they? What is the current balance? What are the processes now in place to ensure this does not happen again?

The Hon. S.E. CLOSE: We do not have the figures, so we will take that on notice.

Ms SANDERSON: Has the documentation at least been found, if you do not have the figures? Do you know what the loan was for?

The Hon. S.E. CLOSE: I believe the department still has not found the original documentation. It dates from some time ago. They are seeking it, but the main thing is that we will give you a comprehensive answer on notice.

Ms SANDERSON: Page 68, as to the management of DCP's advance accounts needing to improve, have the 11 of the 20 advance accounts now been closed, as mentioned in the AuditorGeneral's Report? What policies has the minister put in place to ensure this also never happens again?

The Hon. S.E. CLOSE: I am advised that those advance accounts are being progressively closed and that a credit card system is being put in place so that there will be no need for that kind of accounting.

Ms SANDERSON: Page 65, under 'Controls over payments to NGO service providers need to improve', related to the 10 non-government organisations, three of which were double paid when children moved out of commercial care into residential care. Can the minister guarantee that no children are being paid for twice at the moment? What systems are in place to ensure that does not happen?

The Hon. S.E. CLOSE: I am advised that we now have a database constructed so that we are able to track every expenditure related to an individual child so that this should not happen again.

Ms SANDERSON: Page 64, as to invoices not being reviewed and checked for validity, regarding the sample done of six commercial care payments, it was found in five cases (which is a huge percentage) that the rates charged by service providers were not checked to contracted or quoted rates for accuracy by either the case worker or the business support officer before payment. Has this now been rectified? If so, how?

The Hon. S.E. CLOSE: We have instituted a program of extensive training for our staff and we have also instituted random checks to ensure quality.

Ms SANDERSON: I refer to page 69. A number of split transactions were paid using DCP purchase cards. In the Auditor-General's Report, people were splitting invoices so that they would be below the threshold so that they could use a credit card. What has the minister done to ensure splitting of transactions no longer occurs, who is checking this and how many cards have been cancelled since this due to misuse?

The Hon. S.E. CLOSE: The member will see in the last paragraph on page 69 that the Auditor-General has noted a number of improvements that have been made by the department in order to ensure that we have a sound system. While I understand that no credit cards have been revoked, there have been a number of warnings issued.

Ms SANDERSON: I refer to page 70, the ineffective review of key payroll reports. I note that ever since I have been doing this, since 2014, the bona fide reports and the annual leave have been mentioned in 2014, 2015, 2016 and again in 2017. What is the minister doing to ensure that changes are made?

The Hon. S.E. CLOSE: The department acknowledges that this is a real issue. It is one that occurs in some agencies, but obviously not all. They have been working hard not only to provide the right training environment or the right training effort so that the management is operating in a way that is consistent with the Auditor-General's requirements but also to improve the processes within the department.

The department has been in existence for just over a year and in that time has had to form the part of the department that is responsible for the corporate management. As those leaders have come in place and as staff have been appointed, there has been a very big effort to make sure that there is a diligent response to all issues, particularly those that have previously been raised by the Auditor-General. This is one that is still in process.

As the Auditor-General has noted in the report, there are interim measures that have been undertaken by the department, which is really about making sure that the managers are aware of their obligations. We will be working very hard over the next year so that when you are asking me questions next year or I am asking you questions next year there will be a more satisfactory response for the management of bona fides.

Ms SANDERSON: Just to be clear, in 2014 the agency's response to why the bona fide reports had not been checked as well was that the department would continue to remind managers and supervisors of the requirement to review outstanding BFRs in a timely manner. It was the same response in 2015. In 2016, it was noted that it still was not occurring, and there was a need to print out the reports. Are they still paper reports that are having to be printed out, or has it moved to online as it was expected to?

The Hon. S.E. CLOSE: We are moving at some stage in the not too distant future, sometime in the next several months, to fully implement CHRIS 21, which will enable us to be fully online. It is important, particularly for a very geographically dispersed department such as ours with many part-time workers, that we are automated as much as possible. We are expecting that that full implementation will make a significant improvement to our management of bona fides.

Ms SANDERSON: Last year, the response from the department was that existing procedures would be updated to include an internal escalation process and more frequent reviews of noncompliant sites and also to advise that sites would be informed that the process of certifying these reports can be delegated to other staff. Were those done and there is still a problem, or have these not been implemented yet?

The Hon. S.E. CLOSE: Those actions, I am advised, have been undertaken, but it will be when we are fully automated that you will see a significant improvement in the quality.

Ms SANDERSON: Still on page 70, the report for this year states:

Where BFCs and MLRs are not promptly checked, DCP has no assurance that only valid employees are paid, that employees are paid correctly or that leave balances recorded in Chris21 are accurate, impacting the reliability of associated liability balances.

Were they audited for the sake of the end-of-year balances that the Auditor-General has checked?

The Hon. S.E. CLOSE: It is standard for the Auditor-General to audit in order to be accurate in reporting. As I have said, there is no question that this is an issue for this department and that we have made progress, but not sufficient yet to be clear of concerns from the Auditor-General. We will be working diligently over the next year to improve that as this department gets on its feet as an independent department.

The CHAIR: The time having expired, we thank the member for Adelaide for her questions and the minister and her advisers for making themselves available. We ask that the Minister for Disabilities and the Minister Assisting the Minister for Recreation and Sport move into position with her advisers as soon as possible.