DCJ has not succeeded in reorienting the child protection system to focus on early intervention support for families as recommended by multiple reviews

Successive independent reviews into the child protection system have recommended that DCJ redirect its resource profile from a ‘crisis driven’ model of service intervention—predominantly focused on out of home care—to one that is oriented to early intervention services with support for ‘vulnerable children and their parents’. The independent reviews recommended that appropriate services and support be available to families so they can address risks in the home at the earliest opportunity.

DCJ has made minimal changes to its resource profile or its service model to implement the recommendations of various child protection reviews. Since 2018–2019, DCJ’s expenditure on the child protection system shows an expansion of resources to the out of home care sector and no expansion of resources to early intervention services.

In 2018–2019, DCJ dedicated 13% of its child protection budget to family support services. Five years later in 2022–2023, DCJ allocated a similar proportion of its child protection budget to family support. Since 2018–2019, most of DCJ’s additional funding for child protection has been used to address budget shortfalls for out of home care.

DCJ has a legislative responsibility to provide support services for families engaged in the child protection system. This means assessing the availability of services, and commissioning new services to meet demand. A range of government agencies provide universal health and welfare services, some of which are appropriate for families in the child protection system. DCJ has a role to work with these agencies to establish an appropriate and responsive service sector, and to ensure that services are available for families in all of its Districts. DCJ currently commissions services from NSW Health, the Department of Education, and from a range of NGOs. DCJ does not collect data that would indicate whether these services are sufficient to meet service demands.

In 2015, the Independent Review of Out of Home Care in New South Wales recommended that DCJ work with partner agencies to secure cross-portfolio cooperation in service planning. The Independent Review recommended a range of activities to achieve this goal, including that DCJ ‘establish local cross-agency boards in each … District to provide local advice, and commission services in line with its priorities and defined outcomes.’ In response, DCJ developed a program known as Their Futures Matter.

In 2020, the NSW Audit Office assessed Their Futures Matter and found that DCJ had not given cross-agency boards the powers to commission services. At the time of this audit, there is minimal evidence that DCJ has addressed the recommendations of the Audit Report or the Independent Review of Out of Home Care in New South Wales.

DCJ’s organisational structure and governance arrangements are not enabling system reform

DCJ’s organisational structure reflects multiple operational and policy functions across its three branches - the Commissioning Branch, the Operational Branch, and the Branch responsible for Transforming Aboriginal Outcomes. These branches have responsibility for similar functions, and it is not clear where overall executive-level accountability resides for system reform.

All three branches have a policy function, and DCJ’s organisational structure does not show where organisational responsibility resides for the overall policy direction of the agency. DCJ cannot demonstrate how it manages consistency of purpose, or policy outcomes with its different operating arms across the organisation.

DCJ has over 30 governance committees and working groups with responsibilities for leadership and oversight of the statutory child protection and out of home care system. DCJ’s governance arrangements include forums to provide corporate and operational direction, forums for financial and resourcing decisions, and forums for leadership and oversight of the different child protection programs and functions. Some committees and working groups oversee DCJ’s activity to meet government strategic priorities and respond to the findings and recommendations of child protection and out of home care reviews and commissions of inquiry.

Much of DCJ’s work in child protection and out of home care is interdependent, but its governance arrangements are not structured to show how agency-wide decisions are made. While DCJ has three large branches with responsibility for child protection, there is no roadmap for cross-divisional decision-making. This has implications for the management of systemwide reform.

DCJ does not collate data about the therapeutic service needs of children and families, and as a result, has limited evidence to inform investments in family support services

DCJ refers families to support services during different stages of the child protection process. However, DCJ does not collect, collate, or report on this family referral activity. DCJ does not record the types of therapeutic services that are needed for children and families in different geographical locations. This lack of demand data means that DCJ’s commissioning activity is not informed by a reliable evidence base.

Referral data is essential to guide DCJ’s own investments in commissioned child protection services, and the investments of other relevant family support agencies. At the time of this audit, DCJ lacked reliable information about whether there was an available or equitable supply of family support services in each of its service Districts. There are risks in not collecting this information. DCJ does not know whether families are able to address child protection risks in the home, or whether a lack of services is leading to poorer outcomes for children.

DCJ has not established routine meetings with relevant government agencies to coordinate services for children and families. DCJ has not established system-level arrangements with health agencies or other government departments to plan for child protection support services. Any efforts to establish arrangements with other government agencies have been piecemeal. For example, one DCJ District has developed a localised partnership with NSW Health to give priority access to children connected to the statutory child protection system. DCJ has not assessed the viability of this project to be expanded to other Districts.

Despite this, the availability of health services is a critical element in assisting families to keep their children safe. Section 23 (1)(b) of the Care Act identifies that a child may be at risk of significant harm if ‘the parents or other caregivers have not arranged and are unable or unwilling to arrange for the child or young person to receive necessary medical care’ (emphasis added).

DCJ’s knowledge of the utilisation rates of family support services in each District is limited. Fifteen of DCJ’s 16 Districts lack vacancy dashboards to indicate when family support services are available in local services. This means that most caseworkers do not have information about whether local services have vacancies or are full. This information is essential for successful referral processes.

In 2022–2023, DCJ caseworkers screened more than 400,000 child concern reports. From these reports, 112,592 individual children were presumed to be risk of significant harm based on multiple desktop assessments of their circumstances. Of this cohort, 10,059 received a ‘family preservation package’. Most of the ‘family preservation’ services were in the form of additional visits from caseworkers. Only a small proportion of the families receiving family preservation services were offered a therapeutic or clinical service component. DCJ was not able to provide a breakdown of the types of family service available in 2022–2023, due to ‘data quality issues.’ In previous years, approximately 1,000 children and families had access to clinical, therapeutic services through the family preservation program.

DCJ does not collect data about its service interventions, to know whether the level of service support achieved its intended outcomes for children and families.

It is a requirement of the Care Act that DCJ assist families to receive appropriate support and services. The Act requires that ‘appropriate assistance is rendered to parents and other persons … in the performance of their child-rearing responsibilities in order to promote a safe and nurturing environment’, and that any intervention ‘must … promote the child’s or young person’s development.’ DCJ is not meeting this statutory requirement.

Seventy-five per cent of children presumed to be at risk of significant harm do not receive a home-based safety and risk assessment, and DCJ does not know the outcomes for these children

DCJ is the sole entity responsible for assessing the safety of children after a child protection report has been made. After a report is received, DCJ caseworkers conduct multiple desktop assessments of the child and family context, and determine whether the child meets a range of risk factors that indicate a presumed risk of significant harm. The threshold for risk of significant harm is described at Section 23 of the Care Act. DCJ’s process for reaching this decision requires a desktop assessment of each report by at least five different caseworkers and managers across DCJ’s Helpline and DCJ’s Community Service Centres.

When the desktop assessments are complete, DCJ only has staffing capacity to visit approximately 25% of children who are presumed to be at risk of significant harm. DCJ caseworkers make decisions about the children they will visit at staff meetings where they discuss the risks of each case, and the availability of staff to make home visits. The remaining 75% of children that are presumed to be at risk of significant harm, do not receive a follow-up visit from DCJ to determine their safety in the home. DCJ does not know the outcomes for these children.

DCJ advises that the statutory threshold of risk of significant harm can only be confirmed once a caseworker has visited a child in the home and conducted both a safety assessment, and a follow up risk assessment. However, there is some confusion amongst the DCJ workforce about the point when this determination occurs. Some Helpline personnel understand that risk is determined after the Helpline report assessment process. This view is corroborated by DCJ’s public facing dashboards that publish data about the numbers of children at risk of significant harm after Helpline report assessments. However, in response to this audit, DCJ managers confirmed that risk of significant harm can only be determined after a child has had two visits by a caseworker.

In 2022–2023, DCJ closed 63% of the cases of children who were presumed to be at risk of significant harm, due to the ‘competing work priorities’ of caseworkers. There were over 112,500 children presumed to be at risk of significant harm in 2022–2023. While around 27,800 children were visited by a caseworker at home, around 85,000 children had their cases closed without a home-based risk and safety assessment. Approximately 71,000 children had their cases closed because there were no available caseworkers to assess them in the home. The reason given for these case closures was ‘competing work priorities’.

The multiple and repetitious stages of DCJ’s desktop assessments and review, significantly reduce the availability of caseworkers to provide services to children and families. DCJ’s five mandatory desktop assessments consume the time of many caseworkers and managers. While DCJ does not have reliable caseworker time and motion data, the high numbers of closed cases due to ‘competing work priorities’ tells a story of caseworker activity.

DCJ is not meeting most of its timeframes to assess child protection reports and visit children who are presumed to be at risk of significant harm

DCJ has set urgency timeframes for processing reports of children who are presumed to be at risk of significant harm. The most urgent cases require a completed Helpline assessment and a completed triage process at Community Service Centres within 24 hours. The next category of urgency requires that this process be completed within three days. A further category requires that triage be completed within ten days.

In 2022–2023, on average, the most urgent reports were transferred from the Helpline and triaged at a Community Service Centre within the required 24 hour timeframe. However, of the 95,000 reports that required Helpline transfer and Community Service Centre triage in under three days, on average, the Helpline took 5.6 days to process these reports. This was almost twice the required timeframe. The Helpline took an average of 13.9 days to transfer reports requiring a response in under ten days. In 2022–2023, almost one-quarter (23.4%) of all Helpline reports were not assessed and transferred to Community Service Centres within the statutory 28 day timeframe.

While DCJ has data to determine the timeframes for child protection reports to be transferred from the Helpline and triaged at the Community Service Centres, DCJ does not monitor the average time it takes for a child to receive a service. In particular, there is no regular District-level and State-wide reporting to show senior managers the average time it takes from the point when a child protection report is made, to the point where the child receives a visit from a caseworker, a service referral, or the case is closed. Therefore, it is not possible to determine whether children presumed to be at risk of significant harm are receiving a timely service intervention.

DCJ has high re-report rates of children who receive caseworker support. Of the children who received a home-based assessment and were confirmed as being at significant risk of harm, approximately a third were re-reported within 12 months. Each year for the five years from 2018–2019 to 2022–2023, the re-report rates of children who are assessed in the home have remained at over 33%.

The re-report rates indicate that DCJ’s interventions are not fully successful in keeping children safe. Re-reports can be due to a number of factors. These can include a lack of timely service interventions, a lack of appropriate therapeutic care or services, or over-reporting. DCJ has not dedicated sufficient resources to make improvements in any of these areas and does not have sufficient information to pinpoint the areas where most improvements can be made. As a result, children remain locked in a child protection risk assessment cycle, with limited opportunities for an effective or timely service intervention.

NSW’s out of home care system is unsustainable, with increasing numbers of children in emergency high cost accommodation, including hotels, motels, and serviced apartments

The overall cost of the out of home care sector is increasing. From 2018–2019 to 2022–2023, the costs of out of home care increased from $1.39 billion annually, to $1.9 billion annually. This is a 36% increase in the five year period, or an average increase of just over seven per cent each year. These increases are unsustainable, and it is emergency care costs that account for much of the overall increase in the out of home care expenditure.

In August 2023, there were 471 children living in high cost, emergency arrangements. Expenditure on emergency accommodation has grown from approximately $100 million in 2018–2019, to an estimated annual cost of $300 million in 2022–2023.

Of the 471 children in emergency care arrangements, 142 children were housed in hotels, motels, or serviced apartments. In 2022–2023, this type of emergency care cost approximately $829,000 per annum, per child, with some placements costing in excess of $1 million per annum, per child. For example, in one case that this audit reviewed, $530,000 was spent on staffing, $84,000 on accommodation, and $22,000 on food and activities for the child over a year long period in 2022–2023.

The average time that children spent in hotels, motels, or serviced apartments has increased from around two and a half months (80 nights) in July 2022, to just over four months (122 nights) in July 2023. Some children live in hotel-like accommodation for years. In April 2023, of the 48 organisations managing these emergency care placements, 41 of them, or 85% were private, commercial providers that do not require accreditation to provide out of home care services.

Both DCJ and NGOs subcontract most emergency care to commercial, labour-hire companies who in turn employ casual staff to supervise children in shifts. Children are usually supervised by multiple staff each week, with limited consistency in carers. The children in emergency placements are not living in home-like environments. DCJ does not use a clinical assessment process to routinely assess the wellbeing of children in these emergency environments.

There are insufficient out of home care options for children with complex needs, especially children under the age of 12

Some children in out of home care require extensive support. These can be children with disabilities, or children who have experienced significant trauma. In June 2022, when data was available, there were 509 children in intensive, therapeutic care placements in NSW. The demand for intensive therapeutic accommodation options for these children is higher than available placements. In March 2023, the demand for therapeutic care was estimated to be 40% higher than DCJ predicted when it introduced its intensive therapeutic housing model in 2018. This has put pressure on the placement options for children with complex needs, and is leading to increasing numbers of children being placed in emergency accommodation, such as hotels, motels, and serviced apartments.

DCJ’s intensive therapeutic care model was not designed to accommodate children younger than 12 years of age. DCJ identified that home-based foster care is the most appropriate option to meet the developmental needs of younger children. While this is the position of DCJ, not all children under 12 are able to be placed in foster homes. Between 30% to 40% of all children in out of home care have high care needs, including many children under 12 years. Providers of child protection services advise that finding appropriate carers for children with complex needs is increasingly difficult.

A lack of intensive therapeutic placement options for children with complex needs is one of the factors that leads to children being placed in emergency care. NGO service providers advise that the current therapeutic housing models are not appropriate for the service needs of all children in out of home care. Most therapeutic houses are designed to accommodate multiple children, but increasingly, children require one-on-one service support, and cannot be successfully accommodated with other children. This is leading to vacancies in some therapeutic houses, and a perception that these therapeutic houses are underutilised. NGO providers advise that to take additional children into these placements would risk the success of the original placement.

DCJ and NGOs have not been successful in matching foster carers to all children in out of home care, especially carers for children with complex needs

In June 2023, the Office of the Children’s Guardian reported that the total number of Authorised Carers (foster carers and relative or kinship carers) was 17,121, a significant drop of 15% from the 20,137 Authorised Carers in June 2018. DCJ advises that there has been an increase in the total number of foster carer applications over the past four years (to 30 June 2023), from 2,667 to 3,057 applications. The increased applications have not translated into an increase in authorised carers.

Foster care allowances vary according to the age and needs of the child, from $540 per fortnight to $817 per fortnight. This allowance is expected to fund all routine, child related expenses, including a separate bedroom for each child. A separate bedroom is a requirement for out of home care. The foster care allowance is expected to cover the child’s housing, food, clothing, hobbies and activities, daily travel, holidays, gifts, general education, and routine health expenses. Foster carers reported that the carer allowance does not adequately cover the rising cost of living expenses, including challenges in finding appropriate housing.

DCJ and its commissioned NGOs report that they face challenges in recruiting foster carers who can provide short-term respite care. These carers provide breaks for long-term foster carers. Respite foster carers can provide a circuit-breaker when there are problems with a foster placement. They can assist in maintaining foster placements. Data on new child entries to emergency care show that breakdowns in foster care placements are the most common reason for children entering emergency care. In 2022, 60% of the children who were placed in emergency accommodation, were moved there because of foster care breakdowns.

Some NGOs have proposed a professionalised model of home-based care whereby trained foster carers are paid to provide care for children with complex needs. There have been limited trials or evaluations of this model to date.

A 2022 survey reported that foster carers are under pressure. The survey results indicate that carers do not receive the financial or practical support they need. Foster care allowances do not cover the costs of lost income or compensate for increased cost of living expenses. Carers raised concerns about a lack of access to counselling or psychological services, behaviour support, and specialist medical care to address the complex trauma of children in their care.

DCJ has not measured the wellbeing impacts of out of home care on children and lacks systemwide data about their wellbeing or about the outcomes of care provided to them

DCJ has not developed an effective system to collect information or to report on the wellbeing of children in its out of home care system. DCJ does not collate or report systemwide data about:

• the welfare and wellbeing of children in out of home care
• the quality and safety of care for children requiring emergency placements
• the outcomes of out of home care case management interventions and therapeutic service interventions.

While some NGOs independently assess aspects of their service performance and monitor outcomes, these assessments are isolated, and not reported across the system. This means that there is limited systemwide data about the quality, impacts, or outcomes of out of home care for children in the care of DCJ and the commissioned NGOs. DCJ cannot determine whether, overall, children are better off in out of home care, or whether their wellbeing is declining as a result of child protection interventions.

Between 2015 and 2021 DCJ developed and trialled a Quality Assessment Framework that was intended to provide strategic and qualitative insights into the efficiency and effectiveness of the child protection system. However, DCJ advised it was unable to report on the qualitative insights, due to an inability to aggregate data from child wellbeing questionnaires using the ChildStory system.

DCJ has limited systemwide measures to monitor and report on the services provided to children in emergency care. There is arguably a higher requirement for reporting on these children because a quarter of them are not directly cared for by social workers employed by DCJ or NGOs. DCJ does not collect data on the qualifications of shift workers providing care to children in emergency placements.

DCJ issues more than 850 contracts for a range of child protection services. The majority of these are for casework services, with a smaller number for therapeutic services. DCJ does not consistently measure and report on the outcomes from its casework or its therapeutic service interventions, nor those of its NGO providers. For example, from 2018–2019 to 2020–2021, DCJ did not collect consistent data on one of its programs known as Brighter Futures. This program cost approximately $50 million per annum during its years of operation. Up until 2022, DCJ collected quarterly data through separate spreadsheets from each NGO provider. DCJ did not consolidate this data to provide a statewide view of the locations or the effectiveness of Brighter Futures. DCJ has not developed consistent processes for collating or analysing the data across its various programs. As a result, DCJ lacks historical data or trends to show how its programs and its services are performing.

Until 2022–23, DCJ did not provide a full suite of child protection data to a national research institute for online reporting. Since 2014–2015 or earlier, Australian states and territories have provided anonymised child-level data to the Australian Institute for Health and Wellbeing (AIHW). DCJ did not provide this form of data, and instead provided aggregated data tables. This meant that some information could not be extracted for public reporting purposes.

Over the past five years, there has been a decline in the number of children returning to their parents after being placed in out of home care

One of DCJ’s objectives for children who are in out of home care is to restore them to their parents when it is safe to do so. While restoration is DCJ’s preferred outcome for children in out of home care, the numbers of children being restored to their parents has been declining over the past five years.

In 2018–2019, 569 children were restored to their parents. This number decreased to 417 children in 2022–2023. The restoration rate for Aboriginal children is lower than for non-Aboriginal children. It decreased from 202 children in 2018–2019 to 164 children in 2022–2023.

A number of factors can impact on the successful restoration of children to their parents. One of the necessary inputs for successful restoration, is access to family support services. These services are needed so that parents can address any harmful behaviours that have been identified by DCJ caseworkers. Restoration support services are offered to some parents after a child or sibling group has been removed to the out of home care system. If a family is deemed eligible, they should receive services from either DCJ or an NGO service provider.

Restoration support services are a form of caseworker support for families. Caseworkers provide mentoring and advice to parents to assist them in actions that may lead to their children being restored to their care. Caseworkers may also refer parents and other family members to external services. Parents may be referred to mental health or drug and alcohol services if these services are available.

In 2023, an independent evaluation of the programs for out of home care found that a lack of restoration support for parents contributed to ‘a low rate’ of children being restored to their care.

The providers of out of home care services are required to assist parents in restoration processes when the families meet the eligibility criteria. The Care Act requires that service providers make ‘active efforts to restore the child or young person to the child's or young person's parents’.

While restoration to parents is the most desirable goal when it is safe to do so, placing children with extended family and kin is the next best option. Over the past five years, the proportion of children placed with relatives and kin has been stable. In June 2019, 8,949 of the 16,884 children in out of home care (53%) were placed with relatives and kin. In March 2023, 7,933 of the 14,756 children in out of home care (54%) were placed with relatives and kin.

DCJ has created an uncertain contracting environment for NGOs and does not have effective forums for resolving contract and system inefficiencies with its NGO partners

DCJ does not have efficient systems or processes for managing its contract and reporting arrangements with commissioned NGO providers. DCJ has not established an effective integrated business to business system interface with NGOs. NGOs have their own data systems, and must duplicate data into DCJ’s ChildStory database to meet contract requirements. This duplicated data entry process adds time and effort to administrative workloads, and can lead to data errors. The result is prolonged reconciliation processes, and delays in finalising expenditure against contract requirements.

DCJ’s arrangements for contract management are overly complex and confusing. Over the past five years, DCJ has made changes to program names, rules, and guidelines - in some instances, without notifying contracted NGOs. This has led to delays in payments and confusion over the contract arrangements. NGO contractors must routinely reconcile different bundles of funding with different contract managers across DCJ, and this extends the time and the resources for contract reconciliations.

DCJ requires its commissioned NGOs to report on early intervention programs through one system, and reporting on out of home care services through another. This increases the administrative workloads for both DCJ and NGO contract managers. While in recent years there have been minor improvements to administrative processes, for the most part, the administrative difficulties are ongoing.

DCJ’s onerous acquittal processes for emergency care funding have delayed contract payments to NGOs. All five of the NGOs that we audited, reported that there were delays in receiving payments for services associated with emergency care placements. Some of the delays have been significant, with individual NGOs carrying debt burdens of more than a million dollars. Data from one NGO shows that ten per cent of its emergency care payments took at least 90 days to be finalised, with some payments outstanding for over a year. Staff at both DCJ and at the audited NGOs advise that the delays are ‘due to the layers of DCJ sign offs’ and the ‘time it takes for NGO caseworkers to develop briefings’ regarding their expenditure.

In 2019, DCJ set up a taskforce, to improve the administrative and contract arrangements associated with NGO payments and contract reconciliations. While the contracting problems were well known by the taskforce, DCJ did not authorise its representatives with sufficient decision-making powers to effect the required system changes through this forum. As a result, progress was minimal.

The taskforce includes personnel from DCJ, peak body representatives, and some representatives from NGOs. Not all NGOs are able to participate in meetings, meaning that many operate in isolation without consistent guidance, or opportunities to participate in problem solving. There are no alternate forums for NGOs to provide input into contract inefficiencies and potential fixes.

This creates an uncertain and unstable contract environment, and does not provide the right preconditions to encourage the growth of an Aboriginal Community Controlled Organisation sector in the child protection space.

DCJ and NGOs did not meet the timeline to transition the case management of Aboriginal children in out of home care to Aboriginal Community Controlled Organisations

In 2012, the NSW Government made a policy commitment to ensure the transfer of all Aboriginal children in out of home care to Aboriginal Community Controlled Organisations. Over the past 12 years, there has been limited progress in this transition.

As at June 2023, 1,361 children were managed by Aboriginal Community Controlled Organisations across NSW, but 5,202 Aboriginal children were yet to be transferred. DCJ planning documents show that the full transition process should have been finalised over a ten year timeframe, from 2012 to 2022, but DCJ has since revised its timeframes, and now aims to see the ‘majority’ of transfers by June 2026.

NGO contract requirements should have been one of the drivers of the transition of Aboriginal children to Aboriginal Community Controlled Organisations. It is only with the most recent NGO contracts, issued in October 2022, that NGOs have been required to develop a transition plan, with an initial due date of 31 December 2022. This timeframe was further extended to 30 June 2023. All of the NGOs consulted for this audit have developed a plan, but NGO managers advise that the transition process is impeded by factors outside of their control, including the willingness of carers to transfer to Aboriginal Community Controlled Organisations. There is limited information to verify this impediment.

In July 2023, DCJ wrote to carers of Aboriginal children who receive case management services from organisations that are not Aboriginal Community Controlled. DCJ advised these carers about the timelines and the need to transition their case management services to Aboriginal Community Controlled Organisations. The purpose of this correspondence was to indicate the Department’s explicit support for this transfer process, which had previously been lacking.

This audit does not seek to reiterate recommendations from prior reviews and inquiries, but we note that DCJ retains an ongoing obligation to systematically address, acquit and report on all unaddressed recommendations from these prior investigations into the NSW child protection system.

As an urgent priority, the Department of Communities and Justice should:

1. implement structured measures to understand the experiences of children who are in out of home care (under the care of the Minister), in relation to their physical safety and psychological wellbeing. Collect, aggregate, and publicly report this data by location and vulnerable cohorts on an annual basis.

By June 2025, the Department of Communities and Justice should:

1. identify the Departmental roles and responsibilities for enacting system reform and ensure that governance and decision-making processes are communicated and published.

2. address inefficiencies and duplications in child protection reporting and risk assessment processes by:

• enhancing information and training for mandatory reporters
• fixing delays in the processing of the online child concern reports that are received and processed by the child protection Helpline
• reducing the replicated risk assessments from the child protection Helpline through to the Community Service Centres
• reviewing the financial delegations of Community Service Centre managers to streamline permissions and decisions about routine child support and resource requirements.

3. establish protocols to ensure that all families engaged in the child protection system have a guaranteed place at an appropriate and effective therapeutic service, and monitor service outcomes by:

• establishing arrangements with clinical service providers to ensure that families engaged in the child protection system have priority access to clinical care assessments and clinical services as required by Section 17 of the Children and Young Persons (Care and Protection) Act 1998
• collecting referral data in each District to monitor the therapeutic service requirements of children and families, and use this data to inform localised resourcing, staffing, and commissioning of therapeutic services to match referral requirements
• formalising arrangements with relevant government agencies to enhance access to therapeutic services and support
• developing a framework to resource, support, and train DCJ personnel to provide therapeutic support for children and families to match local service needs, in particular, in locations where funded therapeutic services do not meet service needs
• measure and report on systemwide service access and service outcomes for children and families as a result of casework and therapeutic interventions.

4. develop and implement a strategy to end the use of hotels, motels, and serviced apartments for children in out of home care

5. develop a model to accredit and train foster carers to support children with complex needs

6. ensure that foster carers are surveyed annually, with opportunities to identify the pressures of caring, and describe their ongoing support requirements. Use this information to improve resources and support to the foster carer workforce

7. develop an effective business to business interface with contracted NGO providers to reduce the administrative burden for all agencies

8. establish an effective mechanism to communicate changes to policy, administrative or system processes so that all NGOs have timely access to changes in expectation, process or practices

9. continue to contribute all data requirements to national research and reporting on child protection activity and outcomes by sending child-level data records to the Australian Institute of Health and Welfare in line with other Australian states and territories

10. ensure that all eligible children and families have access to targeted, support services so that every child has the chance to be restored to their parents when it is safe to do so

11. annually report on the ‘Active Efforts’ made by DCJ and its commissioned NGOs in restoring children to their parents, and report on progress and outcomes over time.

Over the five years from 2018–2019 to 2022–2023, DCJ’s expenditure on child protection services increased across all of its service areas. The most significant increases were for out of home care services.

In 2018–2019, DCJ’s expenditure on out of home care was $1.39 billion. Five years on, in 2022–2023, expenditure had increased to $1.9 billion. In 2018–2019, DCJ’s expenditure on assessments and interventions at the Helpline and Community Service Centres was $0.64 billion, and by 2022–2023 this had increased to $0.8 billion. In 2018–2019 DCJ spent $0.31 billion on family support services, including early intervention and intensive support services, and five years later in 2022–2023, DCJ expenditure had increased to $0.41 billion.

Exhibit 2 charts DCJ expenditure on key aspects of child protection work for the five year period from 2018–2019 to 2022–2023. Expenditure on assessments and interventions at the Helpline and Community Service Centres was lower in 2020–2021, partly due to COVID restrictions on home visits.

Children and Young Persons (Care and Protection) Act 1998

The Children and Young Persons (Care and Protection) Act 1998 (the Care Act) guides and directs administrative actions so that ‘children and young persons receive such care and protection as is necessary for their safety, welfare and well-being’.

The legislation emphasises that the care of children and young people is a responsibility shared by families, government and the agencies working in partnership. It requires that ‘appropriate assistance is rendered to parents and other persons responsible for children and young persons… in order to promote a safe and nurturing environment’, and that any intervention ‘must be the least intrusive’ and ‘promote the child’s or young person’s development.’

Care and Protection Orders

In NSW, the Children's Court can make a range of orders under the Care Act. These orders are usually referred to as ‘Care Orders’. Care Orders are made in response to applications brought before the Children’s Court by DCJ. DCJ makes applications when it is deemed that a child is ‘in need of care and protection.’ These orders allocate parental responsibility to the Minister or another suitable person on either an interim or final basis. In situations where there is an urgent need to protect a child, DCJ can apply for an emergency care and protection order. While in force, the order places the child or young person under the care and responsibility of the Secretary (of DCJ) or another person specified in the order.

Applications to the Children’s Court can also be made to vary or rescind a care order. These can be initiated by DCJ, the child, the child’s parents, or another person who has a significant relationship with the child. The Court can only vary, rescind, or replace existing orders if it can be shown that there has been a significant change in circumstances since the final orders were made or last varied.

Department of Communities and Justice

DCJ has primary responsibility for designing, monitoring, and implementing child protection policies and practices in NSW. DCJ is both a provider of child protection services, as well as a purchaser of child protection services from non-government organisations. As system steward, DCJ has a role to develop systemwide governance arrangements for all child protection services and operations. This includes the design and the monitoring of reporting arrangements that apply to commissioned non-government organisations and DCJ staff. The organisational structure of DCJ reflects these roles:

• the Deputy Secretary (Child Protection and Permanency, District And Youth Justice Services) controls the operational arm of the child protection system as well as practice leadership: the office of the senior practitioner
• the Deputy Secretary (Strategy, Policy and Commissioning) coordinates the commissioning of child protection and out of home care services and develops policy for the child protection system
• the Deputy Secretary (Transforming Aboriginal Outcomes), is responsible for the implementation of NSW’s commitments to protect Aboriginal children and to implement the national agreement to Close the Gap

See Appendix two for the Department of Communities and Justice organisation structure.

DCJ has sole responsibility for assessing child protection reports and determining whether children are at risk of significant harm. This assessment occurs at DCJ’s Helpline in the first instance, and then at DCJ’s Community Service Centres where further assessment processes occur.

DCJ’s child protection administrative structure comprises seven Cluster Districts that sit above 16 Districts. The Districts have administrative and operational responsibilities for child protection and out of home care services. Their roles include contract management, resource allocation and the coordination of performance reporting of both Community Services Centres and NGOs. Within the Districts there are 79 local Community Services Centres. Child protection case managers are located in Community Services Centres, and this is where most of the frontline child protection work occurs.

Non-government organisations

DCJ develops contract arrangements with non-government organisations for the delivery of child protection services and programs. There are two main service types that non-government organisations can be contracted to deliver in the child protection space. The first is out of home care services. In 2022–2023, approximately half of all children in out of home care were under the management of non-government organisations. Fifty-two non-government organisations provided the management of out of home care under the ‘Permanency Support Program’ contract arrangements with DCJ.

The second service type that non-government organisations are funded to deliver is family support services for children and families engaged in the child protection system. The largest support programs are the ‘Targeted Early Intervention’ program and the ‘Family Preservation’ program. In 2022–2023, 464 non-government organisations each received more than $10,000 under contract arrangements to deliver the ‘Targeted Early Intervention’ program. Fifty-one non-government organisations received more than $10,000 in funding to deliver the ‘Family Preservation’ program.

Some non-government organisations receive funds to deliver both out of home care services and family support services, and some deliver only one service type.

Funding to non-government organisations for both out of home care services and family support services, totalled $1.59 billion in 2022–2023. This was an increase of 12.7% from 2021–2022, when non-government organisations received $1.41 billion in funding. Some non-government organisations have multi-million dollar contracts with DCJ, and others have very small contracts.

The Office of the Children’s Guardian

The Office of the Children’s Guardian has a role to accredit the organisations that provide child protection services in NSW. The responsibilities of the Office of the Children’s Guardian include:

• promoting the quality of child safe practices
• overseeing the operations of organisations providing child-related services
• accrediting providers of out of home care and adoption services, including DCJ
• conducting Working with Children Checks
• maintaining the NSW Carers Register and the NSW Residential Care Workers Register.

Government agencies

A number of government departments provide universal support services to children and families, including therapeutic services that may assist in keeping children safe at home. For example, NSW Health delivers an early intervention mental health program in selected schools for children who display challenging behaviours, and operates a network of specialist counsellors. NSW Health is responsible for commissioning and delivering alcohol and other drug rehabilitation services to people across NSW, including residential rehabilitation services.

Therapeutic services are highly rationed in NSW and are not always available to the children and families who need them. There are 30% fewer General Practitioners for people living in outer regional, remote and very remote NSW compared with availability in major cities. Major cities and inner regional areas have more than twice as many public psychologists compared with outer regional, remote and very remote NSW. The Special Commission of Inquiry into the Drug ‘Ice’ reported in January 2020 on ‘the critical lack of available and effective treatment pathways, particularly [for] people living in rural, regional and remote NSW.’

The NSW Department of Education plays an important role in identifying child protection issues and providing support to families. In 2022, over 60% of all NSW school-aged children were enrolled in government schools. Education initiatives can include support and resources for parents, school counselling services, and support for families from culturally and linguistically diverse communities.

In the last decade there have been 12 major reviews and reports into the child protection system in NSW, making just over 200 recommendations to the NSW Government and to the Department of Communities and Justice on child protection matters.

Inquiries into the child protection system have informed child protection service models. The Keep Them Safe report in 2009 led to increased funding for a ‘universal service system’ and early intervention services, and aimed to improve collaboration across government agencies. The Safe Home for Life reforms announced in 2014 provided additional funds for early intervention programs and IT systems, and introduced new casework interventions.

The 2015 Independent Review of Out of Home Care in NSW investigated drivers for the growing demand for out of home care. It found that the out of home care system was ineffective, unsustainable, and failing to improve long-term outcomes for vulnerable children and families.

In 2016, the NSW government announced Their Futures Matter in response to the Independent Review. Their Futures Matter was allocated $190 million over four years (2016–2017 to 2019–2020) for the design and commissioning of evidence-based pilots, data analytics work, staffing for the implementation unit and secretariat, and cross-agency collaboration.

In 2016 a NSW Parliamentary Inquiry into child protection recommended longer-term contracts for child protection prevention and early intervention services, changes to court processes, and improved staff training. The government response noted that Their Futures Matter initiatives would address many of the issues raised in the inquiry. A 2020 NSW Audit Office performance audit into Their Futures Matter concluded that governance arrangements were not effective and that the ‘evidence base [was] insufficient to drive greater direction of resources from crisis to early intervention.’

In 2017, DCJ implemented a new case management system called ChildStory. ChildStory aims to place the child or young person at the centre of their story and provide ‘a holistic view for informed decision-making to help ensure a child or young person has the best life outcomes.’

DCJ also implemented the NSW Government’s service reform of child protection and out of home care titled the ‘Permanency Support Program’ in October 2017, with amendments to the Care Act passed in November 2018. This program aims to reduce the number of children and young people entering care, reduce the amount of time children spend in care and provide a better care experience to children. This program is delivered to children and families by non-government providers.

Between 2019 and 2022, the ‘Centre for Evidence and Implementation’ was contracted by DCJ to conduct an independent three-year evaluation of the ‘Permanency Support Program.’ This evaluation was published in 2023 and concluded that during the evaluation period, there were some improvements to service delivery and outcomes, but the program ‘experienced significant implementation challenges and failed to demonstrate the larger positive impact on children that DCJ intended through this reform effort.’

The child protection system

For the purposes of this audit, we use the term, ‘the child protection system’, to mean all aspects of child protection activity including:

• the processes that DCJ undertakes to assess any risks to a child when a child protection report has been made to the Helpline
• the processes that DCJ and NGOs undertake to manage, oversee, and deliver out of home care services to children
• the processes that DCJ and NGOs undertake to deliver support services to children and families
• the processes that DCJ and NGOs undertake to refer children and families to support services.

A range of actions and services form part of the child protection system. Practitioners often refer to child protection work as a continuum to reflect the fact that programs, interventions, and activities often overlap. Our audit assessed most aspects of the system, but we did not assess the quality of early intervention services, or any of the activity that occurs to support children when they exit out of home care.

For information about the steps between a child being reported to the Child Protection Helpline and entering out of home care see Appendix three.

Reporting child protection concerns

Child protection concerns are usually reported to the Child Protection Helpline by ‘mandatory reporters’ or other members of the public. Mandatory reporters are professionals who are required by legislation to report children they suspect are at risk of significant harm. They include medical practitioners, psychologists, teachers, social workers, and police officers. Members of the public who report child protection concerns can include family members or neighbours.

DCJ’s ‘Mandatory Reporter Guide’ may direct mandatory reporters to report their concerns to ‘Child Wellbeing Units’ if reports do not reach the threshold to warrant a report to the Child Protection Helpline. ‘Child Wellbeing Units’ are external to DCJ and were introduced in 2010 to provide support to mandatory reporters from Police, Health, and Education. These units help mandatory reporters gather information to determine the safety, welfare, and wellbeing of children, and provide advice on appropriate services and interventions to address any identified risks.

Determining ‘risk of significant harm’

The fundamentals of child protection activity in NSW are governed by legislation: specifically, by the provisions of the Care Act. A key element in any child protection activity is to determine whether a child is at ‘risk of significant harm’. Exhibit 5 describes ‘risk of significant harm’ at Section 23 of the Act.

Source: Section 23 of the Children and Young Persons (Care and Protection) Act 1998.

DCJ advises that the process for confirming that a child is at risk of significant harm can only occur after the following processes are complete:

• a child protection report has been made
• the risk report has been assessed by multiple caseworkers and managers
• the child has received a safety check in the home
• the child has had a follow up risk assessment in the home.

This process of assessment and review can take a number of months. Before DCJ confirms that a child is at risk of significant harm, the child is either suspected or presumed to be at risk of significant harm. In this report, we use the terms suspected and presumed to be at risk of significant harm interchangeably.

Therapeutic services and support for families

In this report, the term ‘therapeutic’ services is used to refer to drug and alcohol services, domestic violence services, mental health services, and parenting courses and support. Access to these services can assist families to create safer environments in the family home so that children are not removed to out of home care. Therapeutic services can also assist parents after their children have been removed from their care. In these instances, therapeutic services may assist parents to address any identified harmful behaviours so that their children can be returned to the family home.

Both DCJ and commissioned NGOs can support children and families to access therapeutic services. Support services are usually provided by NGOs or other NSW Government Departments, such as health services.

Therapeutic services may be required for children who are in out of home care. These services may be required to assist children to address their trauma, to support children with disabilities, or to assist children with their developmental needs.

Early intervention

DCJ funds NGOs to deliver ‘targeted early intervention’ services to parents and caregivers to support them to reduce safety concerns for children before they escalate to a statutory threshold of risk of significant harm. The primary objective of this program is to prevent children and families from entering the child protection system. Early interventions for children and families aim to address the early signs of any behaviours or problems that may impact on the safety of children.

Family preservation

Family Preservation is DCJ’s intervention program that aims to assist the families of children who are at risk of significant harm. The goal is to prevent children being removed from their parents and entering out of home care. DCJ funds NGO service providers to deliver family preservation services to children and families. Service providers are expected to work with families to keep their children safe at home by addressing the risks that lead to children being removed to out of home care. The four objectives of the family preservation program are:

• more children remain safely at home in their communities
• more children are healthy, thriving and have improved long-term outcomes
• vulnerable families can access the right supports at the right time
• the system can respond to a variety of complex needs across all areas of safety and wellbeing.

Family preservation services are not always successful in helping families to address identified risks to children. In these cases, children may be re-reported to the Child Protection Helpline or re-assessed by caseworkers, and subsequently removed from their families.

Out of home care

Out of home care is provided to children who have been removed from their families. There are a range of out of home care environments that include:

• home-based environments where care is provided by relatives and kin
• home-based environments where care is provided by foster carers
• home-like environments where care is provided by staff from accredited NGOs who assist children requiring intensive therapeutic care
• hotels, motels, or serviced apartments where care is mostly provided by rostered staff who are employed by unaccredited, labour hire agencies.

Pathways for children in out of home care

DCJ and NGO providers of out of home care services are responsible for working with children and their families and carers to ensure that all children in out of home care have a legal pathway to achieve either restoration, guardianship, adoption, or long-term care.

‘Restoration’ describes the process of physically returning children who are in out of home care to their parents when it is safe to do so. The Children’s Court must consider whether restoration is a realistic possibility for all children who enter out of home.

If the NSW Children’s Court decides that there is no realistic possibility of restoring a child to their parents, the Court can make a guardianship order that allocates parental responsibility for a child to a suitable person until the child reaches 18 years of age.

Alternatively, the NSW Supreme Court can make an adoption order to legally transfer all parental right and responsibilities, guardianship, and custody from the child’s parents (or person who has parental responsibility for the child) to the adoptive parents. An adoption order is made when guardianship is not possible, and the Court considers adoption to be in the ‘best interests’ of the child.

A long-term care order is made by the NSW Children’s Court when restoration, guardianship and adoption are not possible options for non-Aboriginal children in out of home care. For Aboriginal children, the Care Act reflects that long-term orders should be considered before adoption orders. Long-term care orders allocate parental responsibility to the Minister until the child reaches 18 years of age.

The objective of this audit was to assess the effectiveness of the planning, design, and oversight of the statutory child protection system in NSW.

In making this assessment, the audit examined whether:

• there is quality information to understand and effectively plan for child protection services and responses
• there are effective processes to manage, support, resource, and coordinate child protection service models and staffing levels
• there is effective oversight of the quality and outputs of child protection services and drivers of continuous improvement.

This audit reviewed the contract arrangements and the performance data of five NGOs that are contracted by DCJ to manage out of home care services. The NGOs were assessed on the effectiveness of the following:

• the quality data used to understand their service requirements
• the arrangements for operational service needs
• the governance arrangements to deliver safe and quality out of home care services under contract arrangements with DCJ.

This audit utilised the ‘follow-the-dollar’ audit powers. These powers came into effect in November 2022 through amendments to the Government Sector Audit Act 1983. The amendments gave the Auditor-General the ability to audit the activities of non-public sector entities that deliver programs or services on behalf of the NSW Government.

Five non-government organisations were selected for inclusion in this audit, including two Aboriginal Community Controlled Organisations. They are:

• Barnardos Australia
• Burrun Dalai Aboriginal Corporation (Aboriginal Community Controlled Organisation)
• KARI Ltd (Aboriginal Community Controlled Organisation)
• Life Without Barriers
• Wesley Community Services Limited.

In selecting these agencies, the Auditor-General considered the following criteria:

• A diversity of locations - ensuring that the selected NGOs operated in metropolitan, regional, and remote locations.
• A high volume of funding - ensuring that the selected NGOs operated with a high volume of funding in comparison to other NGOs.
• A high number of children in out of home care - ensuring that the selected NGOs accounted for a large proportion of children. Collectively, the five selected NGOs provided over 2,600 foster care places, or one-third of the total contracted foster care places in 2021–2022.
• Larger Aboriginal-specific organisations - KARI Ltd and Burrun Dalai Aboriginal Corporation are larger than many of the other Aboriginal community controlled organisations providing similar services. Collectively, they provided foster care to 751 children in 2021–2022, or approximately 20% of the total number of Aboriginal children in foster care during that year. KARI is based in South-Western Sydney and Burrun Dalai Aboriginal Corporation is in Kempsey.

The follow-the-dollar provisions are retrospective and allow the Auditor-General to audit activities of a related relevant entities that were carried out before the commencement of the amending legislation.

Audit methodology

As part of this audit, the audit team undertook the following activities:

• visits to six of the 16 DCJ’s administrative districts to observe child protection operations and conduct meetings with children protection personnel from DCJ and selected NGOs
• meetings with central policy and operations staff of both DCJ and selected NGOs
• assessments of documents and data from DCJ and NGOs.

For full information about the audit methodology, please see Appendix four.