Cancellation of Child Care Benefit Approval: Jessica Education Centre Pty Ltd and Secretary, Department of Education and Training

This case involves an application for review of the decision by the Commonwealth Department of Education and Training (respondent) to cancel the Child Care Benefit Approval of Jessica Education Centre Pty Ltd (applicant). The review was heard by the Australian Administrative Appeals Tribunal which determined that it had three issues to determine:

• whether the Tribunal is satisfied that the Applicant failed to comply, or is not complying, with a condition for continued approval as an operator of an approved child care service under the family assistance law; and
• if so, whether to impose a sanction on the Applicant, and
• if so, which sanction to impose.

A number of breaches were alleged by the Department:

• reporting 447 sessions of care when that care could not have been provided because the educators were overseas at the time those sessions of care were reported;
• reporting 471 sessions of care when that care could not have been provided because the children were overseas at the time those sessions of care were reported
• reporting 39 sessions of care that could not have occurred because those sessions of care overlapped with sessions of care reported by other services;
• reporting 595 sessions of care as “absences” under section 10 of the Assistance Act before the child had either commenced with the service, or after the child had permanently ceased to attend the service, and were therefore not absences;
• reporting 85 sessions of care that were not provided as reported, where visits to the educator’s homes indicated that care was not being provided on the days that those sessions of care had been reported;
• submitting 1,036 enrolment reports between the period of 1 January 2015 and 15 October 2017, and 19 enrolment reports between the period of 22 October 2017 and 14 January 2018, outside of the timeframes prescribed by subsection 219AB(2) of the Administration Act;
• submitting 528 attendance reports between the period of 1 January 2015 and 15 October 2017 and 47 attendance reports between 28 November 2017 and 7 February 2018, ou.tside the timeframes prescribed by subsection 219N(5) of the Administration Act.

The applicant blamed these breaches on clerical errors, software errors and educators. The Tribunal upheld the decision of the Department stating:

This matter raises two very serious issues. Firstly, the care and welfare of children, especially very young children, and secondly, the misuse of public funds. To some extent, the issues are intertwined, for example where there has been a failure to provide proper oversight of educators or a failure to be aware of what was happening “on the ground”. Both issues go to the very heart of the Applicant’s suitability to hold a licence under the relevant legislation.
The breaches have been both extremely serious and very frequent. The misreporting of attendances has resulted in a significant misappropriation of public money but perhaps of even greater seriousness is the apparent failure to ensure that the educators were aware of their responsibilities, that the educators were properly supervised and that the whereabouts of the educators and the children for whom they were responsible were known at all times. When it comes to the welfare of children there is no place for non-compliance or any lack of vigilance in relation to all aspects of their safety and well-being.
I accept the Applicant’s evidence as to the pressures faced in operating the centre, as well as the difficulties arising due to the fact that for many of the educators, the children and their parents, English was a second language. I also accept that the Harmony software program caused very significant difficulties in reporting to the department and meeting requirements. Mrs Choi, a director of the child care service who represented the Applicant at the hearing, came across to me during the course of the hearing as both intelligent and caring. I am sure that the demands of running a large childcare operation became overwhelming for her, particularly given her lack of experience.
Despite this however, the legislation is clear as to the responsibilities of the operator and it is also clear that these responsibilities cannot be delegated to others. I note that section 4A of the Breach Determination creates a presumption in favour of cancellation in circumstances where there are repeated breaches of reporting obligations or there are contraventions involving a failure to comply with obligations relevant to children’s health and safety.
As outlined above the failures to comply in this case were very serious in number and even more alarming in terms of the potential risk to children. Taken together it is hard to conclude that any sanction other than cancellation of the Applicant’s license is the appropriate one.
I have considered the possibility of suspending the license but again, the nature of the breaches and the number of the breaches points to a reckless disregard for the welfare of the children, the obligations in relation to the use of public funds and the obligations to exercise due care and diligence in reporting (paras 33-38).