The Joint Committee of Public Accounts and Audit of the Parliament has slammed the Commonwealth Department of Education for failing to ensure that government funding of public and private school systems is distributed according to needs-based principles. In a bi-partisan report tabled in the Parliament last week, the Joint Committee criticised a lack of transparency and accountability about school funding caused by inadequate administrative arrangements.
The Committee was strongly of the view that the current monitoring arrangements established by the Department of Education and Training do not provide sufficient assurance that Australian Government school funding is administered in a way that is transparent, accountable and compliant with the Australian Education Act 2013. [p.2]
The Committee noted a lack of transparency and accountability as a result of inadequate administrative arrangements — specifically in relation to compliance monitoring, evaluation and reporting mechanisms. [p. 7]
The Joint Committee’s report is the outcome of its inquiry into Commonwealth Government funding of schools and health last year. The inquiry into the school funding part was based on the report on Monitoring the Impact of Australian Government School Funding by the National Audit Office in 2017. The Joint Committee report has in effect endorsed the findings of the Audit Office report which found that the Department of Education has failed to enforce its own legislation by failing to ensure that:
- School systems’ funding arrangements are publicly available and transparent;
- School systems distribute taxpayer funding to affiliated schools on a needs-basis;
- Progress of agreed national reform directions is adequately monitored.
The Joint Committee report criticises the failure of the Department to monitor whether the funding models of school systems were publicly available and sufficiently transparent. The Audit Office had previously found that only two of 25 private school systems had published their needs-based funding arrangements while seven of the eight state departments had done so for public schools. The Joint Committee report says that public reporting of the funding models of school systems is critical to supporting transparency requirements under the Act. It highlighted an observation by the National Audit Office in its submission to the inquiry:
Addressing educational disadvantage through the application of a transparent and accountable needs-based funding model is a key element of the Australian Government’s education policy. The department had not monitored and reported on the manner in which funding had been allocated or subsequently redistributed by system authorities effectively. As a result, the department had limited assurance that the funding had been used in accordance with the legislative framework, in particular the requirement for funding to be distributed on the basis of need. [p. 11]
The report said the Department has failed to undertake a comprehensive review of needs-based funding arrangements to ensure compliance with the funding principles of the Act. It expressed its concern that a planned review into compliance needs-based funding arrangements by the National School Resourcing Board that was due to take place in mid-2018 had been delayed and a revised timeline has not been scheduled.
The Committee noted that Department officials were unable to explain why accountability provisions for needs-based funding arrangements by school system authorities had not been enforced or complied with under the Act. It said that it was concerned about the evident confusion by Department officials under questioning as to why the Department had not ensured this. This confusion is very evident from the transcript of the hearings relating to questioning of the Acting General Manager, Schools Funding and Assurance.
The report also criticised the Department’s heavy reliance on self-reporting by school systems instead of targeted verification of how funds are distributed to schools. The Department had previously told the Audit Office that it does not monitor whether school system funding models are publicly available and transparent in order to minimise the regulatory burden.
The Committee was also concerned that the Department was not adequately measuring progress against the achievement of policy directions and objectives. While it acknowledged that the Department utilises a number of mechanisms to support reporting against the policy objectives it needed to improve its approach.
The Committee made the following recommendations:
- that the Department of Education and Training establish arrangements to monitor the impact of Australian Government school funding in accordance with the Australian Education Act 2013, and provide greater assurance that funding is being distributed on the basis of need;
- that the Australian Government amend the Australian Education Act 2013, and the accompanying Regulation as required, to provide a specific legislative requirement that the Department of Education and Training monitor compliance and provide assurance that Australian Government school funding is delivered in accordance with the Act;
- that the Department of Education and Training conduct a risk-based analysis and review of existing compliance and accountability arrangements of Australian Government school funding under the requirements of the Australian Education Act 2013, and report back to the Committee on the findings and plans for improvement;
- that the Department of Education and Training report back to the Committee on the development and implementation of improvements to its administrative arrangements for compliance certificates for Australian Government school funding and acquittal certificates under the Australian Education Act 2013;
- that the Department of Education and Training develop and implement a monitoring program of needs-based funding arrangements for Australian Government school funding to ensure compliance with the funding principles of the Australian Education Act 2013, and report back to the Committee on its progress;
- that the Department of Education and Training improve its approach to measuring progress against the achievement of reform directions under the National Education Reform Agreement and report back to the Committee on the progress and outcomes of the proposed National School Resourcing Board review;
- that the Auditor-General consider conducting a follow-up audit of the monitoring arrangements for Australian Government School Funding.
It also called for full implementation of the recommendations of the previous report by the National Audit Office. It said:
…full implementation of both the ANAO’s and the Committee’s recommendations would improve Education’s monitoring arrangements. Improvements in compliance monitoring and accountability arrangements will enable Education to clearly demonstrate in the future that it is in full compliance with the Australian Education Act 2013. [p. 9]
It remains to be seen whether the Joint Committee report will result in any real change, especially in holding private school systems to account on how they spend taxpayer funds. The results of past reports give little cause for optimism. Most of the criticisms in the Audit Office and Joint Committee reports have been aired in previous reports including an Audit Office report in 2009 and the Gonski report in 2011. The Department has consistently ignored the requirements of the Education Act to ensure transparency and accountability, presumably at the behest of its political masters in the Coalition Government.
The Joint Committee report has set another test for the Department in calling for it to report back to the Committee on progress in developing and implementing a monitoring program of needs-based funding arrangements to ensure compliance with the funding principles of the Education Act. The report has also set a test for the Government by calling on it to amend the Education Act and the Regulation to provide a specific legislative requirement that the Department monitor compliance and provide assurance that school funding is delivered in accordance with the Act.
The principle of transparency and accountability for the use of taxpayer funds by school systems should be inviolate. As the Joint Committee said:
The transparent and accountable administration of Commonwealth funding is integral to the way the Australian Government supports the critical areas of education and health, so the Parliament and the Australian public can be assured of the effectiveness of government programs. [p. 1]