DSS Inquiry Calls on Auditor General to Intervene

The long awaited inquiry into the Department of Social Services tendering process has called on the Auditor General to investigate and make changes to the Commonwealth Grants Guidelines.

The report also called on the Auditor General to examine “the effect the truncated timelines of the 2014 process had on poor engagement with the Not for Profit sector and stakeholder disenfranchisement”.

The Senate Committee said its ability to finalise the report however had been affected by the actions of the Department of Social Services.

“The committee received a submission from DSS and had the opportunity to ask questions of Departmental officials at the public hearing in April. On 7 May 2015, the committee received answers to questions taken on notice at the hearing. However, a number of key questions relevant to this inquiry's terms of reference remain unanswered,” the report said.

“The committee therefore intends to recall the Department after this [interim] report has been tabled. These answers, and the committee's full list of recommendations, will be the subject of a further report.

“The committee also flags its intent to conduct a further public hearing to examine the impact of the tendering process at a regional level. Stakeholders have strong concerns that the tender process has created gaps in the delivery of services, particularly at a regional level.”

The Senate Inquiry into the Impact on service quality, efficiency and sustainability of recent Commonwealth community service tendering processes by the Department of Social Services was initiated by WA Greens Senator Rachel Siewert after the Federal Government's $1 billion cuts to community services in 2014. The Inquiry received 97 submissions from a range of peak bodies and community service providers.

In April, Not for Profit peak bodies and leading welfare organisations fronted the Senate Inquiry venting their anger and frustration over the Department of Social Services’ “open tender” process in which just 15 per cent of applications for funding were successful.

Peak bodies told a Senate Community Affairs Reference Committee that the tender process by the Department of Social Services had been deliberately divisive and had “pulled the rug out from underneath” the sector.  

The inquiry was told that the Social Services Department received 5,572 applications from welfare groups seeking $3.9 billion over four years when there was just $800 million available.

As a result a number of peak bodies and advocacy groups learned that they have been defunded as part of the $240 million budget cuts to social services – two days before Christmas.

Not for Profit sector peak body, Community Council for Australia, described the tender process as “a dog’s breakfast” approach to human service contracting across Federal Government agencies in its submission to the inquiry.

The Interim Senate report tabled in Parliament said an Auditor General review should include an assessment of how the process fared against each of the Commonwealth Grants Guidelines seven key principles:

• robust planning and design;

• collaboration and partnership;

• proportionality;

• an outcomes orientation;

• achieving value with relevant money;

• governance and accountability; and

• probity and transparency.

The Inquiry Committee recommended that the Auditor General also consider the merit of a two stage process for discretionary grant funding applications, beginning with an Expression of Interest followed by a closed grant round for successful EOI applicants; and whether there is merit in setting a standard that requires that new contracts are finalised within a minimum time prior to the end of existing service contracts.

“This inquiry has to date received considerable evidence that raises serious

questions about the entire tendering process,” Committee Chair Senator Rachel Siewert said.

“The committee has concerns that the Government's express goals of innovative service delivery and improved outcomes for service users have actually been hindered as a result of the way that the tendering process was designed and executed.

“This report canvasses many of these concerns. Given the complexity of the issues associated with the tendering process, and that its impact is still to be determined, the committee will deliver its full recommendations at a later time.”

The findings of the Interim Report, however were not unanimous.

The four Coalition Senators on the Committee made additional dissenting comments stating that the majority interim report was “a flawed, partisan report that contributes nothing to the real ongoing debate about how the Government can best deliver frontline community services”.

Coalition Senators Zed Seselja, Linda Reynolds, Arthur Sinodinos and Chris Back however acknowledged the good work of the community service sector in helping those most in need in our society.

“Coalition Senators appreciate the concerns raised by community groups in the hearings of this inquiry but comprehensively reject the partisan nature of the committee interim report,” they said.

“The Government is committed to dealing with the legacy of debt and deficit left by the Labor Government and reform of the DSS Grants process is vital to that ongoing work.”

The Inquiry has been given an extension to deliver the full report by August 19 2015.