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NSW government report uncovers alleged misuse of public money alotted to vulnerable kids
A not-for-profit helping at-risk youth has been accused of possible corrupt conduct after a report revealed alleged misuse of taxpayer funds.
The redacted report, tabled in the NSW parliament on Friday, made claims of systematic misuse of taxpayer funds.
The not-for-profit organisation, whose name was redacted, received nearly $70 million last year in government funding to deliver services to children and young people in out-of-home care.
The forensic audit found $4.1 million was unaccounted-for funding used by the organisation to buy property. The funding had been used by the organisation not only to purchase properties but use Department of Communities & Justice (DCJ) funds to maintain or upgrade the homes, amounting to $180,000.
In the documentation provided to the third-party company compiling the report on behalf of the government, the not-for-profit claimed it shouldn't have used $63,000 of the program's funding.
Greens spokesperson for justice, Sue Higginson, claimed that the staff members of the large provider had purchased properties privately and leased them back to themselves.
"There's been a spend on properties and some kind of investment portfolio there of senior staff, board members and those properties have been leased back to the program operators, with some 20% mark-up is what it looks like," she said of the report.
"It's very, very dubious. We do need to get to the absolute bottom of it."
The report also identified potential conflicts of interest as five addresses of vendors paid by the organisation matched the address of an employee.
The organisation also used $30,000 worth of funding on 68 bean bags, some for use in the office, others for clients and 42 of which remain in storage, according to documents provided. The organisation also used nearly $30,000 in "document scanning" using public funds.
Ms Higginson said the entire sector needed significant reform after other reports had highlighted shortfalls in the care provided to the state's most vulnerable children.
"This report sends a chilling message that they're probably are really bad actors in this system, or some actors that thought they were perhaps doing the right thing, and they're not doing the right thing," she said.
NSW Premier Chris Minns said by any "objective measure" out-of-home care in NSW was wildly out of control, and was "letting a lot of families down and letting a lot of children down as well". He said this report, revealing the misuse of funds, was "just the latest iteration".
Another report, handed down in December last year, found the out-of-home care system in NSW was "not fit for purpose" and failed to meet the needs of children at an efficient cost.
The total DCJ child protection budget for 2024-25 was $3.2 billion, with $2 billion allocated to out-of-home care.
The report found a "profound lack of accountability and ineffective oversight" within the system, and said it was slow to respond in the best interests of children and young people.
"We have introduced a range of major reforms and changes that we believe, over time, will fix the system, and I realise, particularly for those that are in the system as it's currently constituted, is not good enough," Mr Minns said on Sunday.
"We want to make sure that we're getting value for money, but more important than that, we want to make sure that children are safe when they are in care."
NSW Minister for Communities and Families Kate Washington declined to comment. Ms Higginson said she would be questioning the minister in the upcoming budget estimates.
Ms Higginson said there was "definitely a question" about whether corruption had occurred with this particular organisation.
"When you see such glaring features, ie, property purchases, and then those purchases becoming part of the service provision, all in an in-house closed circuit of a provider, I think we're definitely looking at corruption of some form," she said.
