Cancellation of Child Care Benefit Approval: Kids Vision Family Day Care Pty Ltd and Secretary, Department of Education and Training

In this case, heard by the Administrative Appeals Tribunal of Australia, Kids Vision (the applicant) applied for a review of the merits of a decision of the Secretary of the Department of Education and Training dated 18 August 2017. The reviewable decision affirmed an earlier decision dated 15 May 2017 made under section 200(1)(e), A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) to cancel the approval of the applicant as an operator of an approved child care service.

The Department decided to cancel Kids Vision approval as it identified 3,204 sessions of care reported by the service which attributed the provision of care to particular educators, for dates when those educators were overseas (since 1 January 2015). The Department’s review, also identified 765 sessions of care reported by the service since 1 January 2015 for children who were in fact overseas. The service argued that it had a system of relief educators when these educators were overseas.
 
The Tribunal considered whether the sanction of cancellation was appropriate and concluded:

In terms of the seriousness of the breaches, the Tribunal finds that the breaches by Kids Vision were at the higher end of a scale of seriousness. Whether the ‘relief educator’ system was set up under an honest misunderstanding is, to the Tribunal, a highly dubious conclusion to draw. But the fact that it continued for such lengthy period weighs in favour of a heavy sanction. Most importantly to the Tribunal, the fact that when Mr Worres realised that Kids Vision had been operating outside the regulatory framework, this fiction was quietly abandoned, and the Applicant failed to notify the Department, strongly supports the strongest sanction available.
If the Tribunal accepts the Applicant’s argument that Fact Sheet 9 might be said to provide some basis for claiming of benefits when a child is temporarily overseas, that does not support the evidence before the Tribunal of frequent listing of children who were not present, and the regular listing of persons who were not registered educators as providing care. The Applicant contended that he could not always know if a child’s name was recorded who was not present, and the Tribunal agrees with that and that the Department should allow a small amount of discrepancy in reporting to account for honest mistake. But, allowing for this, this does not address the magnitude of the documented misreported sessions of care, evidenced in the T-documents and the scale of which is referred to above.
The Tribunal does not conclude, on the evidence available, that the safety of children was threatened by the breaches. There was some evidence provided of frequent field visits to locations where Kids Vision was providing child care, which the Tribunal accepts. However, this is about the only point that the Tribunal is able to say goes in favour of Kids Vision’s governance structure in this consideration.
The Tribunal cannot reasonably conclude that, as the Applicant contended, Kids Vision has shown itself to be capable of ongoing compliance with its reporting obligations, given it had ‘self-identified the problem and fixed it internally’; what Kids Vision actually did was realise that it had been operating wrongly for several years and stopped the practice, hoping the regulator would not notice.  This conduct is far below what is expected of a provider of child care services.
The Tribunal concludes that the cancellation of Kids Vision as a provider for multiple breaches of compliance was the correct decision in law, and that the exercise of the discretion to apply the sanction to cancel the approval of Kids Vision as an approved child care service provider was the preferable decision. (paras.46-50)