Funds for vulnerable kids spent on senior execs’ homes
Jack Gramenz |
A family services provider receiving tens of millions of dollars in public funds to care for vulnerable children paid above-market rents for properties owned by its staff, an inquiry has been told.
Allambi Care is one of NSW’s largest out-of-home-care providers, receiving about $76 million in the current funding year.
For more than a decade, it operated an “unacceptable” incentive scheme in which employees and their partners could lease properties they owned to the government trying to keep kids out of state care, Families Minister Kate Washington said.
“Funds that are intended and ought to be going to support vulnerable children haven’t been going where they should be,” she told a budget estimates hearing on Tuesday.
Allambi had confirmed the incentive scheme would cease, as would a 20-per-cent mark-up on rents paid to the property owners, Ms Washington said on Tuesday.
Other providers have been warned not to operate similar schemes.
“I’m just fed up and quite angry that there are funds that ought to be going to vulnerable children that are being used in other ways,” Ms Washington said.
“Every single dollar we put into the system should be going to vulnerable children, not to senior executives or senior staff to prop up their own property investments.”
Staff benefited through mark-ups to rent, property maintenance and paying water and council rates, she said.
While open to all staff, an independent review found the majority of the beneficiaries were senior leadership.
The incentive was marketed as a staff retention measure but the review found little evidence of a retention issue.
Contract variations have been issued to providers, who have been informed the practice will be “expressly prohibited through government policy” by the conclusion of contracts in mid-2027.
“A review of the initial beneficiaries of the scheme would suggest it was created to provide senior executives additional and significant financial reward courtesy of the taxpayer,” a letter from Ms Washington said.
Allambi Care provided the Department of Communities and Justice information about transactions under its staff housing initiative since it began in 2014, and moved to end it as soon as concerns were raised, the organisation told AAP.
Accommodation owned by staff accounted for more than 10 per cent of the total housing leased.
The initiative provided children in Allambi’s care long-term, safe and secure housing, saving money by reducing movement in-and-out of the general rental market, the organisation said.
“Importantly, the review raised no concerns about the treatment, safety or welfare of children and young people in our care, which remains our absolute priority,” the organisation said.
It welcomed the new policy guidance and strongly rejected any suggestion there had been any misuse of funds or inappropriate action that disadvantaged children in the organisation’s care.
Greens MP Sue Higginson said a report’s revelation of the scheme made for “sober reading” but it was unsurprising.
“We have been watching the out-of-home care system outsourced, privatised and falling further into crisis for a long time now,” she said in a statement.
NSW allocated $1.2 billion to child protection, boosting foster care allowances and funding out-of-home care reforms in June’s state budget.
Almost 16,000 children were in out-of-home care in the state in June 2021 according to data from the Australian Institute of Health and Welfare, more than any other state.
NSW is the most populous state in Australia and had 8.9 children per 1000 in out-of-home care on the data.
Tasmania, South Australia and the Northern Territory had higher rates of children in out-of-home care.
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