Chapter 4 Audit Report No.26 2011–12 Capacity development for Indigenous
service delivery
Introduction
4.1
The capacity of an organisation refers to its ability to deliver the
programs or services for which it is funded, and to the required standards.
Capacity will have a strong influence on an organisation’s effectiveness in meeting
the outcomes sought by government.[1]
4.2
The Australian National Audit Office (ANAO) explained in its audit
report that capacity constraints to service delivery present risks to the achievement
of outcomes and require an appropriate response from those government
departments tasked with administrating the funding. The ANAO audit was framed
around this premise and examined how the Department of Families, Housing,
Community Services and Indigenous Affairs (FaHCSIA), the Department of Education,
Employment and Workplace Relations (DEEWR) and the Department of Health and
Ageing (DoHA) sought to address potential capacity constraints in Indigenous
organisations.[2]
4.3
The three audited departments administer the bulk of the Australian
Government Indigenous Expenditure (AGIE), with programs and services being
delivered through a range of mechanisms including National Partnership
Agreements with state and territory governments, funding agreements with local
government bodies, contracts with private sector entities and agreements with
other third party organisations.[3]
4.4
In terms of third party service delivery, Indigenous organisations play
an important role by delivering programs and services to Aboriginal and Torres
Strait Islander people, especially in remote communities. Out of the total AGIE
of $3.5 Billion in 2010–11, an estimated $1.34 billion was directed to grants for
Indigenous organisations to provide services.[4]
4.5
Indigenous organisations are broadly defined as Indigenous controlled
organisations that are based in, or primarily serving, Indigenous communities;
initiated by an Indigenous community or group; and governed by an Indigenous
body. There are an estimated 9000 Indigenous organisations across Australia.[5]
4.6
These organisations deliver a range of programs and services, particularly
in remote areas, including aged care; child care; youth and family services; employment
preparation; primary health care; legal aid; community development; family
violence prevention; municipal services; sport and recreation; community safety;
arts and cultural heritage services; and native title representations. While in
some cases, particularly in remote communities, Indigenous organisations may be
the only provider of services, in other places they may be the service provider
of choice due to their ability to provide a more culturally appropriate
service.[6]
4.7
The capacity of organisations may be influenced by:
- Factors internal to
an organisation, such as the strength of governance structures; the
sophistication of financial management systems and processes; infrastructure;
resources; and staff skills.
- External factors from
the organisation’s operating environment, such as location; overall funding
patterns and approaches; red tape; the presence of other services; community
circumstances; and the ability to attract and retain suitable staff.[7]
4.8
The topic of Indigenous service delivery has been an important facet of
the government’s Indigenous policy agenda for quite some time, with capacity
development for Indigenous organisations a focus of government reviews and
reports since the late 1980s. More recently, governments have signed agreements
and developed compacts in support of Indigenous service delivery.
4.9
In 2008, the Council of Australian Governments (COAG) agreed to the National
Indigenous Reform Agreement, which included six Service Delivery Principles to
‘guide the design and delivery’ of government programs and services. Of most
relevance, the ‘Sustainability’ principle gives particular attention to
‘building the capacity of both Indigenous people and of services to meet the
needs of Indigenous people’.[8]
4.10
In a 2010 report, the Productivity Commission found that the
not-for-profit sector’s efficiency and effectiveness in delivering services was
being hampered by inadequate contracting processes, including overly
prescriptive requirements, micro-management, the need to return surplus funds,
and inappropriately short‑term contracts.[9]
4.11
Additionally, in 2010 the Government released a National Compact to
guide relations with the not-for-profit sector. Priority action areas
identified in the compact include strengthening the capacity of the sector,
information sharing, reducing red tape, streamlining reporting, simpler
financial arrangements and improving funding processes.[10]
Audit objective and scope
4.12
The objective of the audit was to assess the extent to which FaHCSIA, DEEWR
and DoHA seek to reduce service delivery risks posed by capacity constraints in
Indigenous organisations. The ANAO assessed:
- approaches taken by
the three departments to identify and mitigate risks to outcomes posed by the
capacity of an organisation to deliver services; and
- whether, in line with the COAG Service Delivery Principles for Programs
and Services for Indigenous Australians, these three departments invested in
the service delivery capacity of Indigenous organisations.[11]
Audit conclusion
4.13
The ANAO’s audit report indicated that, overall, more attention is
required to better support service delivery capacity in Indigenous
organisations. While the report noted some efforts had been made to improve
support for capacity in Indigenous organisations, it also suggested that the reforms
have not been uniform across departments and progress has been uneven.[12]
4.14
The ANAO’s findings fell into three main categories:
- influences on service
delivery capacity;
- risk management for
program and service delivery outcomes; and
- investment to support
capacity for Indigenous service delivery.
4.15
Influences on capacity identified by the ANAO included the
administrative burden placed on service providers as a result of government
administrative frameworks. The ANAO highlighted that a large number of
Indigenous-specific programs have been spread across multiple departments, and
although the programs are generally low-value and often short-term, they each come
with annual administrative arrangements which require a significant number of
reports to be produced by the provider. The ANAO noted that these issues are
not new, having been raised since the 1980s and more recently in the 2010 Strategic
Review of Indigenous Expenditure.[13]
4.16
The ANAO found that further contributions were being made to the
administrative burdens of service providers as departments sought to mitigate risks
relating to the internal capacity of organisations by requiring more
comprehensive reporting from them. The ANAO suggested that more strategic risk
management approaches are needed that take into account the external factors
influencing an organisation’s ability to deliver outcomes. In particular, the
level of reporting required from organisations needs to be commensurate with
the actual level of risk.[14]
4.17
When looking at the investment being made to support Indigenous service
delivery, the ANAO noted slow progress by departments in addressing
administrative burdens, with reforms not always sustained or achieving
anticipated results. Further, the ANAO found that service providers approaching
departments for capacity building assistance found it difficult to access
support. The ANAO noted that that there were mixed views within departments on
whether it was a government responsibility to assist organisations with capacity
building, and that this was reflected in the limited guidance, and subsequent
activities, to implement capacity development efforts.[15]
4.18
Overall, the ANAO suggested that more formal and coordinated efforts are
required, in particular a whole-of-government strategy on capacity development
to provide a long term, integrated and consistent approach.[16]
ANAO recommendations
The audit report made three recommendations aimed at better
positioning the three departments to invest in Indigenous organisations by:
reviewing current funding arrangements; taking a more strategic approach to
risk management; and developing a whole-of-government strategy for capacity
development.[17]
Table 4.1 ANAO recommendations, Audit Report No.26 2011–12
1.
|
To ensure funding arrangements adequately support the
achievement of desired policy outcomes, the ANAO recommends that the
departments review their current funding approaches and supporting arrangements,
and where appropriate, consider other options to achieve program deliverables
such as longer‐term
partnerships or core support.
FaHCSIA’s response: Agreed.
DEEWR’s response: Agreed.
DoHA’s response: Agreed.
|
2.
|
To support service delivery arrangements and the achievement
of desired policy outcomes in the longer‐term,
the ANAO recommends that the departments take a more strategic approach to
risk management that gives greater consideration to the broader operating
environment, and balances compliance requirements with the actual level of
risk and the achievement of outcomes.
FaHCSIA’s response: Agreed.
DEEWR’s response: Agreed.
DoHA’s response: Agreed.
|
3.
|
To implement the capacity development elements of the
National Indigenous Reform Agreement the ANAO recommends that FaHCSIA,
through the Executive Coordination Forum on Indigenous Affairs, facilitates
the development of a whole‐of‐government strategy
and an implementation approach to provide a long‐term, integrated and consistent
approach to capacity development across Australian Government departments.
FaHCSIA’s response: Agreed.
|
The Committee’s review
4.19
On 13 March 2013, the Committee held the second public hearing of its
examination of Indigenous-related audit reports. Representatives from the
following organisations appeared before the Committee to discuss Audit Report No.26:
- Australian
National Audit Office
- Department
of Families, Housing, Community Services and Indigenous Affairs
- Department
of Education, Employment and Workplace Relations
- Department
of Health and Ageing.
4.20
The Committee also received some evidence relating to capacity
development for Indigenous service delivery in response to questions on notice,
in other written submissions and at its first public hearing on 6 February
2013.
4.21
The Committee’s evidence covered the following issues:
- The importance of
capacity building in Indigenous organisations
- The role of
government supporting capacity in Indigenous organisations
- Capacity building within
government
- High number of
separate Indigenous programs
- Approaches to funding
- Reporting and compliance
burdens
- Current capacity
development initiatives
- A whole-of-government
capacity development strategy.
The importance of capacity building in Indigenous organisations
4.22
The capacity of Indigenous organisations—and governments—to deliver
outcomes was a key item of focus during the Committee’s review.
4.23
As noted above, the National Indigenous Reform Agreement, agreed to by
COAG, gave prominence to capacity building in its Sustainability principle. Through
its audit report, the ANAO concluded that, given the overall level of funding
to Indigenous organisations:
… the service delivery capacity of Indigenous organisations
is an important element in delivering government programs effectively and a
relevant area for attention by these departments.[18]
4.24
During the Committee’s first public hearing, the Coordinator General for
Remote Indigenous Services said that capacity development was a ‘critical
issue’ for remote service delivery, and an area of focus in his reports.
Overall, 13 of the 38 recommendations made in his six reports to date related
to capacity development issues.[19]
4.25
At another hearing, FaHCSIA similarly discussed how difficult it could
be for organisations to build their capability and capacity to deliver on their
funding agreements and program guidelines, and the role of the department in
providing assistance on a case by case basis.[20]
The role of government supporting capacity in Indigenous organisations
4.26
The ANAO’s report noted that there were ‘mixed views’ within the
departments under audit on the responsibility of government to assist in
developing capacity in third party organisations. An ANAO survey in the three
departments found that 63 per cent of Senior Executive Staff considered it was
the service provider’s responsibility to ensure sufficient capacity to deliver
services, with a smaller proportion considering that government departments had
a role.[21]
4.27
In its response to the audit report, DoHA indicated that it considered
capacity building to be a shared responsibility of the sector and the
Commonwealth. It noted that while the audit report had advocated more
assistance from the Commonwealth, the Aboriginal and Torres Strait Islanders
community controlled health sector’s claim was that ‘responsibility for
improvement lies within the sector’.[22]
4.28
At a public hearing, DoHA’s Office for Aboriginal and Torres Strait
Islander Health (OATSIH) told the Committee that it was working in partnership
with the sector’s peak body, the National Aboriginal Community Controlled
Health Organisation (NACCHO), on capacity building strategies. This included
funding NACCHO to develop a program of capacity building and governance
improvement for the sector, with NACCHO rolling the initiatives out on the
ground with its member organisations.[23]
Capacity building within government
4.29
Although the audit report focused on the capacity of Indigenous
organisations to deliver outcomes for government, several inquiry participants
pointed out to the Committee that capacity within government agencies was also
an issue of concern.
4.30
In a written submission, the National Congress of Australia’s First
Peoples (the Congress) said that:
In our view there has been a great deal of focus in recent
years on the corporate governance of Aboriginal and Torres Strait Islander
organisations, such as the work of the Office of the Registrar of Indigenous
Corporations (ORIC), and far too little attention paid to how Government itself
operates in our communities.[24]
4.31
The Congress added that there was an ‘urgent need for agencies to focus
on their own capacity building’, particularly in regard to the capacity and
experience of non-Indigenous officers in the public sector:
In the experience of Congress and its members, non-Aboriginal
government employees too often lack the knowledge, experience and cultural competency
to engage appropriately with Aboriginal and Torres Strait Islander peoples. This
is particularly the case in remote communities, where current service delivery
models, particularly fly-in, fly-out arrangements, undermine efforts to build
appropriate and effective relationships with the communities.[25]
4.32
The Congress pointed to a suggestion in the 2010 Strategic Review of
Indigenous Expenditure for a ‘paradigm shift in the value placed on
investing in structured training, recognising and valuing skills and experience
in working in the Indigenous affairs arena’.[26]
4.33
The Congress submission also raised concerns about the declining
representation of Aboriginal and Torres Strait Islanders in the public sector.
Despite commitments to increase representation to 2.7 per cent by 2015, the
submission noted that the representation of ongoing Indigenous employees in the
Australian Public Service had declined from 2.3 per cent in 2009 to 2.1 per
cent in 2012, continuing a longer term trend over the past two decades. Indigenous
representation at senior levels was even lower, at only 0.6 per cent of Senior
Executive Service employees in 2012.[27]
4.34
As noted in Chapter 2, in his submission the Aboriginal and Torres
Strait Islander Social Justice Commissioner referred the Committee to his
recent recommendation that the Government ‘builds its own capacity to enable
and support effective Indigenous governance’.[28]
4.35
The Coordinator General for Remote Indigenous Services also highlighted
in his evidence before the Committee that the capacity of government was
‘equally important’ to that of non-government organisations.[29]
As noted in Chapter 2, the Coordinator General said that there was increasing
Indigenous representation on jurisdictional boards of management within the
Remote Service Delivery model:
More recently there has been a move to include Indigenous
representation on those boards. It is already happening in South Australia, it
is happening in New South Wales and is starting to happen in other places. I
think that is good progress when they sit with other government public servants
talking about [the] things being delivered.[30]
4.36
The government departments involved in the Committee’s review showed
some recognition of the need to develop their own capacities. DEEWR told the
Committee that it had worked hard to improve the understanding of its staff of
the Closing the Gap targets and to improve cultural competency. DEEWR was also
close to reaching its target of over six per cent Indigenous employment, which
was being achieved through ‘a big focus on Indigenous specific recruitment
pathways into DEEWR, such as traineeship programs and cadetship graduates’.[31]
4.37
DEEWR also noted that it was important to invest in internal capability
not just in its Indigenous-specific programs, but also in it mainstream
programs.[32]
4.38
In a joint response to questions on notice taken at a hearing, DEEWR and
FaHCSIA also noted work being done to improve their capacities. For DEEWR, this
included an online cultural awareness training package for Job Services
Australia staff.[33] FaHCSIA summarised work
underway on a COAG National Indigenous Governance and Leadership Framework,
which would highlight the need to:
… increase the cultural competence of governments and their
capacity to engage Aboriginal and Torres Strait Islander people in the
development of policies and programs and the delivery of services’.[34]
High number of separate Indigenous programs
4.39
As noted in Chapter 2, in 2011 there were 210
Indigenous-specific programs and sub-programs identified as making a contribution
to the Closing the Gap initiative. These programs were administered by more
than 40 different agencies across 17 portfolios, and the large number of
programs places a heavy compliance burden on service providers.[35]
4.40
In 2010, the Department of Finance and
Deregulation’s Strategic Review of Indigenous
Expenditure found that there was ‘a strong case to reduce the
number of Indigenous-specific programs operating across the Commonwealth’. It
identified 51 currently separate programs that could be consolidated into 18
continuing programs; 25 programs that could cease or be restructured; and 15
programs that could be transferred to state and territory governments.[36]
4.41
Noting that the large number of Indigenous programs being administered
across departments had been identified by the ANAO as a factor influencing the
capacity of Indigenous organisations,[37] the Committee asked
FaHCSIA in a written question what progress had been made across government to
reduce the number of separate programs being delivered.
4.42
The response from FaHCSIA indicated that:
… most of the recommendations of the Strategic Review of
Indigenous Expenditure have now been implemented, including the
recommendations for program consolidation. A range of programs have been
consolidated following the review, in particular programs in relation to
Indigenous health care (recommendation 27), working on Country (recommendation
40), early childhood (recommendation 6.2), remote air services (recommendation
47), family support including related Indigenous specific services
(recommendation 51, 52) and Indigenous law and justice (recommendation 58).[38]
4.43
The response also identified several specific examples of programs where
consolidation had recently occurred:
- The Remote Jobs and
Communities Program, which consolidates four previously separate programs.
- The Indigenous Family
Safety Program, which merged the Family Violence Partnership Program and the
Family Violence Regional Activities Program.
- The Family Support
Program, which drew together a suite of previously separate programs under a
single set of arrangements.[39]
Approaches to funding
4.44
Another contributing factor identified by the ANAO to capacity constraints
in Indigenous organisations was the high number of short–term and small value
funding arrangements. These arrangements ‘can make it difficult for
organisations to predict future funding, which has planning and resource
implications’.[40]
4.45
The ANAO recommended that the departments ‘review their current funding
approaches and supporting arrangements, and where appropriate, consider other
options to achieve program deliverables such as longer-term partnerships or
core support.[41]
4.46
In its written submission, the National Congress of Australia’s First
Peoples told the Committee that the difficulties associated with ‘short and
piecemeal funding arrangements’ for programs and services had been raised as a
concern by many of its member organisations. The Congress endorsed the
Auditor-General’s findings on this matter, and noted that its Policy Platform
advocates:
- long-term funding
arrangements which provide greater certainty for Aboriginal community
organisations; and
- funding which
provides community control of what and how services and infrastructure are
provided.[42]
4.47
At a public hearing, FaHCSIA provided a brief overview of its
implementation of this recommendation, telling the Committee:
We do this writ small as well as writ large. Yesterday the
Prime Minister announced $14 million in funding for Reconciliation Australia
over four years. It is essentially a partnership, and it is core funding. So
that is the writ small, if you like. Writ large, we are locking in long-term
funding through national partnerships. The National Partnership Agreement on
Remote Indigenous Housing is ten years. The Stronger Futures national
partnership will be ten years. We are looking to, in a sense, lock in a joint
approach with the states and the Commonwealth.[43]
4.48
The three departments provided more detailed information about their
implementation of the ANAO’s recommendation in response to written questions
from the Committee.
4.49
DoHA advised that its Office for Aboriginal and Torres Strait Islander
Health (OATSIH) had introduced multi-year funding agreements, ‘reducing the
reporting burden and red tape associated with funds administration’. The OATSIH
multi-year funding agreements were now available to around 80 per cent of
OATSIH-funded organisations, and the agreement was being used to administer
funding from other areas of DoHA. The department was also introducing a
‘multi-year, multi-program’ funding agreement to ‘allow all organisations to
operate under one agreement for all their funding’.[44]
4.50
In their joint response, FaHCSIA and DEEWR pointed to the incoming
Remote Jobs and Communities Program, a $1.5 billion program which will provide
employment and participation services and community development in remote
Australia. The program will provide five-year funding agreements, with options
for further extensions of up to five years, giving ‘greater certainty to
providers and communities’. There would be a single service provider offering a
‘single, local point of contact’ in each of 59 remote regions.[45]
At a public hearing, DEEWR explained that the five year agreements were:
… longer that we have traditionally offered for employment
services funding in DEEWR, and we often have project based funding. So there
would be an assurance to those organisations that, so long as they are
achieving outcomes and working with their communities and job seekers and
towards the goals of the Remote Jobs in Communities Program, they have a
sustainable period in which to operate.[46]
4.51
Other examples referred to by FaHCSIA and DEEWR of initiatives in which
longer term funding or core support have been used included:
- the ten year
investment timeframe for the Stronger futures in the Northern Territory
package, in which agencies were ‘looking to develop multi-year funding
agreements with providers’;
- providing core
support, for example, through the National Partnership Agreement on Early
Childhood Education administered by DEEWR;
- a proposed new
national school funding model under the National Plan for School Improvement,
which would ‘support improvements in policy areas that are critical to the
closing the gap reform agenda such as lifting teacher quality and providing
more information for parents’; and
- funding to the Supply
Nation program to link Indigenous businesses with major contract opportunities.[47]
Reporting and compliance burdens
4.52
The ANAO found that the extent of administration associated with
individual funding agreements can create a high administration load for
organisations, limiting their ability to use existing capacity to actually
deliver programs and services.[48] It concluded that while
more comprehensive reporting was often used by departments as a mitigation
strategy to address internal capacity risks, the ability of an organisation to
comply with reporting requirements was itself a common risk. Noting that such
mitigation strategies can divert resources away from service delivery, the ANAO
recommended that departments:
… take a more strategic approach to risk management that
gives greater consideration to the broader operating environment, and balances
compliance requirements with the actual level of risk and the achievement of
outcomes.[49]
4.53
The National Congress of Australia’s First Peoples endorsed the ANAO’s
findings, noting that they reflected the experience of its member organisations
and that its Policy Platform states that it ‘will work with the Government to
cut red tape from all stages of funding processes’.[50]
4.54
At one of the Committee’s public hearings, DEEWR, in relation to the
Remote Jobs and Communities Program, acknowledged that ‘we need to look at the
obligations that government imposes on providers and the proportionality of
reporting and the way we manage risk’. It said that it was ‘conscious of and
thinking about’ how it could do better in this area.[51]
4.55
In its joint written response to questions from the Committee, FaHCSIA
said it had been implementing broad administrative reforms to ‘streamline
administrative requirements for grant programs and ensure that only essential
information is collected’. These reforms included introducing (in 2009):
- a Common Business
Model for Grants Management, which applied a risk-based approach to grant
administration resulting in a reduced level of monitoring, reporting and
acquittal requirements for most funding recipients as a result of their ‘low’
risk ratings; and
- Standard Terms and
Conditions for Funding Agreements.[52]
4.56
FaHCSIA informed the Committee that it had been ‘proactive in recent
years’ strengthening its Program Risk Framework. This included in 2011 bringing
together previously separate processes, tools and templates into a single
Service Delivery Monitoring Tool to give performance and risk ratings to all of
FaHCSIA’s funded activities. Additionally, in 2012, a department-wide Risk
Maturity Strategy was implemented to ‘further embed a culture of risk
management across all areas of the Department’s operations’.[53]
Current capacity building initiatives
4.57
Through public hearings and responses to questions on notice, the three
departments informed the Committee of a range of initiatives currently underway
to help build the internal capacity of Indigenous organisations to delivery
services and programs.
4.58
At the Committee’s hearing on 6 February 2013, FaHCSIA said that
capacity building had been built into the program design of the incoming Remote
Communities and Jobs Program. This was in the form of around $10 million being
allocated to build capacity within organisations during the lead up to the
rollout, in addition to ‘local knowledge’ being one of the criteria used to
select providers:
… we have deliberately built into the planning for this
program a brokering role as we go forward in selecting so that existing job
service providers or disability employment service providers might form a
partnership with a local organisation so that we get the best combination of
both local knowledge, Indigenous sensitivity, if you like, and capacity to
deliver for what is a mainstream program.[54]
4.59
During the Committee’s second public hearing on 13 March 2013, DEEWR
provided more information on capacity building activities built into the Remote
Communities and Jobs Program. Capacity strengthening began at the application
and expression of interest phases, and would extend throughout the transition
in to the new program on 1 July 2013:
During the assessment phase we have got the capacity to work
with applicant organisations to develop their capability and once we have
successful organisations identify, through our experience of those
organisations and also through the selection process, areas where they need
capacity development and to work with them in the lead up to 1 July, not only
training them in the nuts and bolts of the program itself—because it is a new
program—but also about their governance, their frameworks and how they will
operate as an organisation. We are also adopting a more supportive approach in
agreement management with the organisations from 1 July. So we will be working
with them to develop their organisations as well as to develop the delivery of
the program.[55]
4.60
Many of the capacity-building activities identified by the three departments
focused on the internal corporate governance of Indigenous organisations. For
example, at a public hearing DoHA told the Committee that it was funding the
National Aboriginal Community Controlled Health Organisation to develop a
program of capacity building and governance improvement in its sector, of which
a key feature was the establishment of a sector governance network. The
network’s focus was on ‘how to improve the capacity within their own
organisations and on the development and promotion of national principles and
guidelines for good governance training and development’ and providing expert
support services for members:
They have established a governance member support function in
each of the affiliates—they are staff who are dedicated to actually providing
advice to the Aboriginal community controlled organisations in each location so
that they can be supported through business advice and general advice from the
national body and from each state affiliate.[56]
4.61
FaHCSIA told the Committee that its Office of the Register of Indigenous
Corporations provided a ‘whole suite’ of assistance to organisations
incorporated under the Corporations (Aboriginal and Torres Strait Islander)
Act 2006. This included training programs, assistance to directors of
organisations, provision of materials to boards, and one-on-one work with
particular organisations on a risk basis.[57] Internal FaHCSIA policy was
to encourage Indigenous organisations to incorporate under the Corporations
(Aboriginal and Torres Strait Islander) Act 2006 or the Corporations Act
2001, if they were not already so incorporated.[58]
4.62
FaHCSIA also said that it was encouraging its major service providers to
consider the appointment of independent directors in order for them to be able
to contribute their specific governance skills to the directorship of
Indigenous organisations.[59]
4.63
Another initiative being led by FaHCSIA was the development of the COAG
National Indigenous Governance and Leadership Framework. The Framework would be
a guide for the Federal and state and territory governments in implementing the
National Indigenous Reform Agreement ‘Governance and Leadership’ Building Block,
and ‘increase the focus on governance and leadership’ for policies and programs
across the other Building Blocks. It would aim to ‘facilitate, support and
enable good leadership and governance practice in Aboriginal and Torres Strait
Islander peoples, organisations and communities’ by building on existing good
practice.[60]
4.64
Other governance-related issues were also raised in the submissions
received from the National Congress of Australia’s First Peoples and the Aboriginal
and Torres Strait Islander Social Justice Commissioner, primarily relating to
participation of Indigenous people and their representatives in government decision-making.[61]
These issues were discussed in Chapter 2 on Australian Government Coordination
for Indigenous Programs.
4.65
Other internal capacity building activities identified by the three
departments in evidence provided to the Committee included:
- Providing assistance
to Indigenous organisations for effective business planning and budgeting
(FaHCSIA).[62]
- Consultations with
the Australian Charities and Not-for-Profits Commissions to ensure its
activities are aligned with the Government’s broader not-for-profit reform
agenda, including contributing to a range of working groups examining
regulation, streamlining grant arrangements and performance reporting
(FaHCSIA).[63]
- A Job Services
Australia Indigenous mentoring pilot, in which providers are funded to deliver
culturally appropriate mentoring support for Indigenous workers (DEEWR).[64]
- The provision of
professional support to staff of early childhood services through Professional
Support Coordinators and Indigenous Support Units, supporting staff to improve
their qualifications, through the Budget Based Funded Quality Measure (DEEWR).[65]
- The Remote Indigenous
Professional Development Project, which supports the delivery of early
childhood education practice for early childhood educators in remote Indigenous
communities for whom English is a second or third language (DEEWR).[66]
- The Establishing
Quality Health Standards–Continuation measure, which ‘supports eligible
organisations to achieve clinical and organisational accreditation under
mainstream standards relevant in the Australian healthcare environment’ (DoHA).[67]
- Other DoHA projects
which have a capacity building component, including the Expanding Health
Service Delivery Initiative in the Northern Territory.[68]
- Funding to NACCHO and
its state and territory affiliates to provide support and capacity building to
Indigenous health services (DoHA).[69]
A whole-of-government capacity development strategy
4.66
The ANAO’s audit report observed that none of the audited departments
had an overarching policy which drew together their capacity development
efforts or provided guidance to staff implementing the capacity development
activities. Similarly, there was no overarching whole-of-government strategy
for implementing capacity development. The ANAO concluded that:
… in the absence of an overall strategy, the impact of
individual initiatives within programs is likely to be limited, and may lead to
duplication in implementation or a piecemeal approach.[70]
4.67
The ANAO recommended that FaHCSIA, through the Executive Coordination
Forum on Indigenous Affairs (ECFIA), facilitate the development of a
whole-of-government capacity development strategy and implementation approach.
The recommendation was agreed to by FaHCSIA.[71]
4.68
At the public hearing on 13 March 2013, the Committee asked FaHCSIA
whether a whole-of-government strategy was in place yet, noting that it had
been more than 12 months since the ANAO’s report had been released. FaHCSIA
indicated that it had been ‘instrumental’ in ensuring that capacity building
was an ‘integral part’ of major cross-agency initiatives such as Stronger
Futures in the Northern Territory and the Remote Jobs and Communities Program,
and that it was using ECFIA to drive such initiatives:
… there is a strong push underpinning all these major
initiatives and if next year there is another major initiative, FaHCSIA will be
there with our shoulder to the wheel pushing the same issue.[72]
4.69
Asked to confirm ‘yes or no’ whether its ongoing work through ECFIA
constituted its response to the ANAO’s recommendation for a whole-of-government
strategy, FaHCSIA responded affirmatively. It explained:
Is there a pamphlet out there that says: ‘Strategy on
capacity development’? The answer is no. Is there a strong drive across
government, led by FaHCSIA, to improve the focus on capacity development? The
answer is yes.[73]
4.70
Despite this response, after the hearing, in response to a question on
notice about the capacity development initiatives currently underway, FaHCSIA
indicated that it was ‘already engaged in a range of activities which will
inform a whole-of government capacity building strategy’.[74]
4.71
FaHCSIA provided more information to the Committee in its response to a
question on notice about progress being made towards an overarching capacity
development framework. It described how the COAG National Indigenous Governance
and Leadership Framework (briefly discussed above), led by FaHCSIA, was being
developed in consultation with Indigenous leaders, state and territory
governments and across the Commonwealth, and was due to be considered at the
next meeting of the COAG Working group for Indigenous Affairs. FaHCSIA noted
that while the Framework would be based on the Service Delivery Principles of
the National Indigenous Reform Agenda, it would also include two additional
principles relating to capacity building and a ‘strengths-based approach’. Recommendations
were being developed for actions to achieve the Framework’s outcomes commencing
in 2013–14.[75]
4.72
In regard to the development of a strategy to support capacity development
across agencies, FaHCSIA added that a range of activities and reforms had been
identified which would inform the strategy, including:
- On the ground
activities, such as awareness raising and business planning guidance;
- Structural actions,
such as a modified new policy proposal template requiring capacity risks to be
addressed;
- Governance related
activities, such as encouraging Indigenous organisations to incorporate under
the Corporations (Aboriginal and Torres Strait Islander) Act 2006;
- Additional support to
peak bodies to build the capacity of their member organisations; and
- Sector-specific
actions, for sectors such as health, education, aged care and early childhood.[76]
Committee comment
4.73
The Committee welcomes the audit report and endorses the ANAO’s
findings.
4.74
The evidence from all participants in the Committee’s review indicates
that capacity development in Indigenous organisations is a critical issue for
improving outcomes on the ground, particularly in remote communities. The large
amount of funding, both in real terms and as a proportion of total Australian
Government Indigenous Expenditure, necessitates concerted efforts to ensure
that everything possible is being done to remove barriers to Indigenous
organisations being as effective as they need to be in delivering services and
programs.
4.75
It is clear that there is a lot of valuable action underway and the
issue of capacity development is being taken seriously. For example, the
departments demonstrated an increased awareness of the need for longer term
funding partnerships with service providers and noted a range of instances in
which they were being used. However, more than one year after the release of
the ANAO report, the capacity development efforts by departments still appear
relatively patchy and varied in their focus.
4.76
The Remote Jobs and Communities Program, which was noted extensively in
the evidence from FaHCSIA and DEEWR, appears to be a good model for future
initiatives. The program’s focus on longer term partnerships associated with
longer term funding, consolidation of previously separate programs, and support
for the internal capacity of service provider organisations being built into
the package all point to capacity building having been incorporated right
throughout the initiative. However, the Committee shares the concern expressed
in the ANAO’s report that the good efforts being made in programs such as the
Remote Jobs and Communities Program may not be repeated in other programs and
may not be sustained into the future in the absence of a stronger framework to
support them.
The need for a shift in focus
4.77
A point that was made in the audit report, and was also observed by the
Committee in the evidence it received, is that the departments’ activities still
seem to be primarily focused on addressing internal capacity constraints within
Indigenous organisations, without necessarily addressing external constraints
that are within the scope of government to influence. This was evidenced in the
departments’ responses to questions about their capacity initiatives currently
underway, which were overwhelmingly dominated by measures to support capacity
within organisations, particularly in relation to corporate governance.
4.78
While support for internal capacity of organisations is important, and
the departments should be commended for their efforts, an overemphasis on these
factors creates a risk that agencies will not address the external drags on organisational
capacity that may be within their ability to address—or worse, could even
contribute to those factors. For example, the ANAO report noted that some
departmental efforts to mitigate internal capacity risks, such as through
increased reporting and monitoring, can actually negatively impact service
provider capacity overall by diverting resources away from actual service
delivery.
4.79
Closing the Gap is a big policy challenge, and will require risks to be
taken in order to achieve results. The Commonwealth Financial Accountability Review
currently underway calls for better engagement with risk in the public service,
working towards a 'positive risk culture'. The Committee sympathises with the
difficult position of public servants in balancing the need to ensure
compliance against the burdens that some compliance activities can place on
service providers. However, in the context of Indigenous service delivery, a
positive risk culture means agencies (and indeed ministers and the Parliament) need
to be willing to accept increased levels of risk, such as by reducing reporting
requirements for Indigenous organisations, as a trade-off for greater overall
outcomes.
4.80
Capacity within government was identified by non-government
inquiry participants as an issue needing more attention, particularly in regards
to cultural awareness. The Committee was pleased to hear that there were some
initiatives within the three departments to address this issue, and suggests
that efforts to improve cultural awareness and Indigenous representation in the
Australian Public Service must increase and be sustained if the issues are to
be overcome.
4.81
Many of the current capacity-building activities listed by the
departments centred on the provision of training, support and advice. This
approach is critical. However, the Committee notes the ANAO’s warning that,
while there is a place for training to help support the internal capacity of
organisations, it is unlikely to be enough on its own. These type of activities
do not address other internal influences on capacity such as access to
infrastructure and resources.[77]
4.82
The evidence suggests that cultural change may be needed within
departments to move towards a greater focus on improving the enabling
environment within which Indigenous organisations operate. Demonstrating this, ‘governance’
was raised as a capacity issue by most inquiry participants. However, while the
departments talked about providing assistance for the internal governance of
organisations, the external inquiry participants had a much broader
perspective, talking about reforms to the governance of the programs
themselves. This suggests a shift in focus may be needed within departments.
4.83
At a broader level, the ANAO identified that the high number of distinct
Indigenous programs and subsequent funding agreements creates administrative
burdens that contribute to service provider capacity constraints. The Committee
was pleased to learn that progress has been made in consolidating Indigenous
programs, both in response to the Strategic Review of Indigenous Expenditure
and separately, and compliments the departments on these reforms. The Committee
encourages this type of rationalisation to continue and advocates for the
overall impacts on the service delivery environment to be considered before any
new separate programs are created in the future.
A whole-of-government strategy
4.84
At the public hearing, FaHCSIA pointed to the work of the Executive
Coordination Forum on Indigenous Affairs along with some particular initiatives
as evidence of its new focus on capacity; but it did not appear that the ANAO's
recommendation for a whole-of-government strategy was being implemented in any
explicit manner. The Committee considers that an explicit, written strategy
would provide the clear and consistent guidance across departments that is
needed to improve support for service provider capacity, and would be a
worthwhile exercise of FaHCSIA's lead agency role. Indeed, the presence of such
an explicit strategy could provide FaHCSIA with some additional leverage to
drive improvements across departments, the need for which was discussed earlier
in this report (see Chapter 2).
4.85
Interestingly, although somewhat confusing the matter, FaHCSIA’s written
response to questions taken on notice at the hearing implied that a written
whole-of-government strategy was being developed, and that it would be
informed by a range of activities underway and reforms that have been
identified. The Committee understands that the strategy will be associated with
the COAG National Indigenous Governance and Leadership Framework, which will
have a strong focus on supporting capacity development. The Framework will
provide FaHCSIA with an excellent opportunity to develop an explicit capacity
development strategy for implementation across Commonwealth agencies.
4.86
Although it is unclear why the work underway towards developing a
whole-of-government strategy was not able to be presented at the public
hearing, the Committee is pleased to hear that work does appear to be in
progress, and looks forward to seeing the outcome. To emphasise the
Auditor-General’s findings, the Committee suggests that it will be important
for such a strategy to address not only internal capacity issues such as
corporate governance, but also external influences on capacity that are within
the ability of government to influence, such as reporting requirements. It is
also important that the strategy address the issue of capacity within
government itself.
Recommendation 5 |
|
The Committee recommends that FaHCSIA lead the development
of an explicit whole-of-government strategy for capacity development in order
to provide guidance across departments on the Government’s role in supporting
capacity development in Indigenous organisations. The strategy should take
into account both internal and external influences on the capacity of
organisations, and also provide guidance on building the capacity of
government agencies working with Indigenous organisations. |
Rob Oakeshott MP
Chair
May 2013