Cancellation of Provider Approval: Jump Start Family Day Care Pty Ltd v Department of Education and Training (Review and Regulation)

Following the cancellation of its CCB approval, the Victorian Department of Education cancelled the provider approval, under section 31 of the National Law, of Jump Start Family Day Care. This case concerns its appeal to the Victorian Civil and Administrative Tribunal against that decision.

In support of its decision to cancel provider approval the Department relied on one or more of sections 31(a), (b), (e) or (f) of the National Law, specifically that:

• Jump Start is not a fit and proper person to be involved in the provision of an education and care service; 
• the continued provision of education and care services by Jump Start would constitute an unacceptable risk to the safety, health or wellbeing of any child or children being educated and cared for by an education and care service operated by Jump Start; 
• Jump Start has breached conditions of its provider approval; or 
• Jump Start has not operated any education and care service since on or about 6 March 2018, a period in excess of twelve months.

The Tribunal assessed the fitness and propriety of Jump Start and made the following comments:

In relation to the Department’s submissions, while regard may be had to sanctions imposed under the FAA Act [A New Tax System (Family Assistance) (Administration Act) 1999 (Cth)] it is just one consideration. Having regard to the structure of section 13 of the National Law, it is inappropriate to consider that factor alone and draw a conclusion...

As previously observed, a mandatory consideration in section 13(1) of the National law is ‘the person’s history of compliance with … this Law’. The matters which lead to cancellation of Jump Start’s CCB approval – and which are admitted by Jump Start – clearly involve breaches of the National Regulations.

In terms of regulations 151 and 158, when children were overseas, they were not ‘attending the service’ and so should not have been included in the records that Jump Start was required to maintain.  When the educators were overseas, there was either a breach of the same requirement (ie. if no family day care was provided) or a breach of the requirement that the attendance record be signed by an educator at the time the child arrives and departs (as the educator could not have done so).

In terms of regulations 169 and 170, given the considerable number of educators and care hours involved, it is apparent that either:

·            the policies and procedures of Jump Start for the monitoring, support and supervision of its educators were inadequate; or

·            Jump Start failed to take reasonable steps to ensure they were followed.

 These were not simple one-off record keeping errors; rather (like the situation in It All Starts Here FDC) they involved ‘systemic failure … to oversee the level of child care that [the approved provider] held approval to provide’. 

The lack of compliance with those regulations on multiple occasions over an extended period is a factor which strongly points against Jump Start being a fit and proper person...

In relation to the discretionary considerations in section 13(2) of the National Law, the cancellation of Jump Start’s CCB approval under section 200(1)(e) of the FAA Act also points against Jump Start being a fit and proper person...

The considerations in section 13(2) of the National Law relating to the approved provider’s financial circumstances and management capability are also of importance in the current case...

Given Jump Start’s inability in the past to produce a profit, the lack of operations since March 2017 and the absence of any detailed financial plan to demonstrate Jump Start’s viability in the absence of CCB approval, I consider that its financial circumstances ‘may significantly limit [Jump Start’s] capacity to meet [its] obligations’ under the National Law...

The difficulty for Jump Start is that the evidence is quite clear that:

·            Mr Wanaw [Director] appears to be the only person currently involved in the management of Jump Start and, on his own evidence, he does not have the management capability to operate the family day care service, but rather requires the assistance of others to do so.

·            At this time, Jump Start’s policies and procedures do not adequately meet the requirements under the National Regulations or address the issues leading to the CDET decision.

·            It will take some time for those policies and procedures to be developed, with no evidence as to the time period involved.

·            Even after the policies and procedures are developed, Jump Start will be unable to operate in accordance with the National Law until it has a new supervisor in place, and a team of trustworthy educators.

In those circumstances, I am of the view that Jump Start does not (at least presently) have the ‘management capability to operate an education and care service in accordance with [the National] Law’. (paras. 51, 53-58, 60, 62, 65, 71-2).

The Tribunal therefore concluded that the approved provider was not a fit and proper person holding that cancellation was the appropriate sanction:

As mentioned in the discussion of the applicable law, in determining what the correct or preferable decision is, the Tribunal must be guided by the objectives and guiding principles underlying National Law, with a focus on ensuring the ‘safety, health and wellbeing of children attending education and care services’.

The National Regulations clearly serve this purpose, and it is not possible to say that the failures to comply with those regulations did not place the children at risk. 

As already observed, in at least one case, the educator went overseas leaving children in the care of other family members.  This posed an obvious risk to the safety, health and wellbeing of the children concerned. 

More generally, the failure by Jump Start to identify the issue:

·            despite the extraordinary number of care hours involved and the number of its educators concerned; or

·            before it was raised by the CDET [Commonwealth Department of Education and Training], notwithstanding the evidence of Mr Pestana that the risks of incorrect claims was well known in the industry,

evidences the ‘systemic failure’ of the policies, procedures and systems which Jump Start had in place for monitoring, supporting and supervising the educators for which it was responsible. As was found in It All Starts Here FDC, systemic failure of this nature clearly put children at risk. 

While it would be relevant if steps had already been taken to effect repayment of the overclaimed amounts and to put in place new procedures and policies to address the problems identified, the evidence is that neither of these things have occurred as yet, with rather vague plans and promises to do so if provider approval is restored.

As I said to Mr Wanaw at the hearing, a further difficulty for Jump Start is that it has not identified how it will be able to make the service viable in circumstances where its CCB approval remains cancelled.

I note the concerns expressed by Mr Wanaw about his health and the impact of the Decision on his community work and involvement.  I emphasise, for the avoidance of doubt, that the conclusion that Jump Start is not a fit and proper person does not (and should not be taken) to cast any aspersions on the honesty of Mr Wanaw.  There is no evidence before the Tribunal suggesting that he was involved with or aware of the false CCB claims.

One factor that does point in favour of imposing a sanction other than cancellation of the provider approval is the evidence given by Mr Wanaw (and to some extent confirmed by Mr Pestana) that there is a community need for the service.  It is consistent with ‘principles of equity, inclusion and diversity’ and the respect and support for the ‘role of parents and families’ that families have access to family day care services within the community that they are comfortable with.  However, as the ‘rights and best interests of the child are paramount’, this factor cannot overcome the concerns already expressed above.  Further, Mr Wanaw’s own evidence is that he has referred people to other services, so it is not clear to what extent there is an unmet need...

Taking all these matters into account, I consider that the correct or preferable decision is to cancel Jump Start’s provider approval and, accordingly, the Decision should be affirmed. (paras. 83-90, 93).