Introduction

1. The Commonwealth, state and territory governments have acknowledged that high quality early childhood services help give children the best possible start in life, and help parents to be active participants in the workforce and in community life.¹ However, many Australian children have not had access to preschool programs.²

2. There are a variety of approaches to delivering preschool programs across Australia. For example, in some jurisdictions preschool is mainly delivered as part of the school system, while in others there is significant provision of preschool by government funded community groups and in childcare centres.

3.The average hours per week of preschool offered in 2008 varied across jurisdictions from 10 to 13 hours. The rate of enrolment in preschool also varied considerably: some jurisdictions had enrolment at or in excess of 95 per cent; several had enrolment from 80 to 90 percent; and Queensland, due to the introduction of a preparatory year of school in 2007, had an enrolment rate of 29 per cent.

National Partnership on Early Childhood Education

4. To help provide universal access to preschool programs by 2013 and to continue improvements in service quality, in November 2008 the Council of Australian Governments (COAG) agreed to a National Partnership on Early Childhood Education (NP ECE). The main features of this agreement are:

• The Commonwealth provides the states and territories with new funding of $970 million over five years commencing 2008–09.
• The states and territories arrange delivery of expanded early childhood education with the new Commonwealth funding and, at a minimum, maintain their own contribution. In 2007–08 states and territories spent some $565 million on preschool.
• At the commencement, and subsequently on acceptance of regular progress reports, the Commonwealth transfers agreed funds to the states and territories. The payments are lower initially during the early implementation phase, and increase to $450 million in 2012–13.

5. The key outcome sought for the NP ECE is that in the year before formal schooling all children have access to an affordable, quality preschool program.³

6. The specific goals of the NP ECE are that: children have universal access to a preschool program for 15 hours per week, 40 weeks per year; and preschool programs are delivered across a range of settings⁴ at a cost which is not a barrier to access, by teachers who are four-year university trained and early childhood qualified. The NP ECE goal of universal access is measured by a target enrolment rate of 95 per cent, on the basis that enrolment is voluntary. The NP ECE also includes specific targets of 95 per cent for the enrolment rates for disadvantaged and Indigenous children.

7. Achieving universal access to early childhood education by 2013 is a challenging goal. The combined effect of higher enrolment rates, higher hours per week and population growth implies an approximately 60 per cent increase over five years in the total number of hours of enrolment by children in preschool programs.⁵

8. The NP ECE defined six specific performance indicators to measure progress towards the agreed outcome. In addition, through the NP ECE, the Commonwealth, state and territory governments resolved that a comprehensive national evaluation would be undertaken throughout the life of the agreement.

9. The Department of Education, Employment and Workplace Relations (DEEWR) has broad policy responsibility for improved access to quality services that support early childhood learning and care for children. In terms of the NP ECE, DEEWR’s major responsibilities were to: work with states and territories to develop bilateral agreements under the National Partnership for ministerial consideration; lead development of a national Aboriginal and Torres Strait Islander Universal Access Strategy; and undertake ongoing roles such as assessing progress and providing advice to the Minister.

10. The NP ECE is one of some 20 national partnerships agreed to by COAG since 2008. This national partnership approach to program delivery and reform was introduced as one aspect of broader reforms to federal financial relations. Significant funding is now provided through national partnerships—for example approximately $17 billion in 2010–11.⁶

Audit objective, criteria and scope

11. The audit objective was to assess the effectiveness of DEEWR’s administration of the initial phases of the NP ECE. The high-level criteria used to make this assessment were the appropriateness of DEEWR’s:

• establishment of a sound foundation for implementation, including implementation plans, monitoring arrangements and an Indigenous strategy for universal access; and
• ongoing monitoring and support activities, including assessing progress reports, making payments, maintaining relationships, improving data quality and public reporting.

12. The audit report summarises the progress reported by the states and territories in relation to the NP ECE. The report also includes case studies of preschools and childcare centres which have expanded services because of the NP ECE.

13. The audit did not independently assess the rate of progress by jurisdictions, or assess the adequacy of funding. These issues are considered separately by reviews and evaluations reporting to the relevant COAG ministerial committee. The audit also did not assess the specific use of the NP ECE funding by states and territories.

14. The main component of the ANAO’s fieldwork was conducted in DEEWR’s National Office in Canberra. The ANAO visited five state and territory agencies for discussions about the partnership approach adopted by DEEWR.

Overall conclusion

15. The goal of providing universal access to early childhood education by 2013 has the potential to make a real difference to the lives of many children and their families. The goal represents a substantial increase in the availability of preschool programs, and is being pursued though a partnership between the Commonwealth, as a significant new funder, and the states and territories with responsibility to manage service delivery and also as significant funders. The most significant increases in preschool programs, and 78 per cent of the total Commonwealth funding of $970 million, are planned for the final two years of the NP ECE, 2011–12 and 2012–13.

16. For the first two years of the NP ECE, up to December 2010, states and territories predominantly report that progress is as planned, or better, in increasing preschool enrolment rates and the number of hours offered per week. In this regard, the preschool enrolment rate in New South Wales is reasonably high but increasing more slowly than planned;⁷ and in Queensland the rate is low but increasing as planned. Mixed results are reported for increasing preschool enrolments for disadvantaged and Indigenous children, with some jurisdictions ahead and some behind plan, and with some uncertainty in the data.

17. Overall, DEEWR’s administration of the initial phases of the NP ECE has been effective. Initial planning was generally sound—although the preparation of an Indigenous universal access strategy was slower than desirable—and ongoing administration has been well managed. This provides a good foundation for DEEWR to further develop its administrative approach as the NP ECE moves into the main expenditure and delivery phase in the next two years.

18. In terms of initial planning, following agreement to the NP ECE by COAG in November 2008, DEEWR had responsibility on behalf of its Minister to develop an appropriate administrative foundation for implementation. DEEWR generally worked effectively to develop individual NP ECE implementation plans with states and territories (called ‘bilateral agreements’) for ministerial consideration, including establishment of performance indicators and benchmarks through the plans to measure the transition to universal access. The department also established satisfactory arrangements for the detailed reporting and monitoring of progress against implementation plans for the NP ECE, although there was not as strong an approach to assessing delivery risks in light of key challenges, such as increasing the number of qualified teachers. In the context of steep increases in funding and delivery expectations scheduled over the next two years, the ANAO has recommended that DEEWR strengthen its assessment of delivery risks, to help inform advice to the Minister on the anticipated achievement of outcomes and possible responses to any emerging issues.

19. As part of initial planning, DEEWR coordinated preparation of an informative strategy document on achieving universal access to early childhood education (ECE) for Indigenous children. The strategy, however, was substantially developed after bilateral agreements were signed and was published halfway through the NP ECE. This reduced the opportunity for the strategy to focus activity being funded through the NP ECE in support of Indigenous universal access. Progress toward this goal will be assisted by DEEWR focusing on the reliable measurement of Indigenous participation in ECE, and promoting evaluation of the effectiveness of the various Indigenous–related initiatives under the strategy.

20. Following initial planning, DEEWR had ongoing responsibilities for monitoring and support activities. In this regard, DEEWR assessed progress reports and made payments satisfactorily; developed and maintained relationships with relevant state and territory agencies well; effectively coordinated action in relation to the quality of data to assess progress of the NP ECE; and complied with the formal requirements for public reporting on the NP ECE.

21.Although DEEWR (and other parties associated with the NP ECE) complied with the relevant public reporting requirements and much detailed information is now available, it was not easy to access and readily understand NP ECE performance information. One of the objectives of the national partnership approach is to enhance the accountability of governments to the public through simpler, standardised and more transparent public performance reporting. The ANAO has recommended that, to support improved information to stakeholders and accountability, DEEWR provide access to timely, consolidated and clearly presented NP ECE performance information at national, state and territory levels, alongside relevant background information.

22. The reforms to federal financial relations, which came into effect from January 2009, were intended to enhance accountability to the public for outcomes achieved or outputs delivered through Commonwealth, state and territory agreements and partnerships. Aspects of the NP ECE which support this objective include the establishment of suitable output-related performance indicators and benchmarks for the transition to universal access, annual progress reporting by states and territories against them, and commitment by governments to improving the quality of data to measure the status of early childhood education. In this context, the parties to the NP ECE have also agreed an evaluation strategy which more broadly considers effectiveness in terms of the impact of universal access on children’s development and families. This is an important element of the agreement to inform governments of the impact of these additional measures to provide universal access to enhanced preschool programs by 2013. Consistent with the objectives of the COAG reforms, the audit highlights scope for DEEWR to further strengthen accountability through two recommendations directed towards heightened focus on potential risks to the delivery of anticipated outcomes, and improved presentation of publicly available performance information.

Key findings by chapter

Establishing the Foundations for Implementing the National Partnership (Chapter 2)

23. To give effect to the high-level goals of the NP ECE, bilateral agreements were made between the Australian Government and each jurisdiction. These bilateral agreements established state and territory implementation arrangements for the NP ECE, such as specific benchmarks for performance indicators. DEEWR’s role was to work with officials from states and territories to develop these agreements for consideration by the Commonwealth Minister and the minister from each jurisdiction.

24. DEEWR generally worked effectively within the framework of the NP ECE to develop the bilateral agreements for ministerial consideration:

• All bilateral agreements were signed within ten months of the national partnership being signed. This was reasonable in the context of a five year agreement and the negotiation process.
• Detailed definitions and sources of data for performance indicators for each jurisdiction were developed, and intermediate performance benchmarks were generally set, which assists monitoring.⁸ However, for a few indicators, there was scope to have improved the treatment of data difficulties so as to assist consolidated national reporting.
• The bilateral agreements signed by the Minister included performance benchmarks and payment schedules totalling $955 million. Relevant briefings at the time by DEEWR to the Minister adequately described the context of the agreements, including funding amounts, but did not explain that the Minister would be exercising a power to approve expenditure, or facilitate documentation of this approval. Documentation relating to the expenditure approval was prepared during the course of the audit.

25. Having established broad partnership governance arrangements and specific output-related performance benchmarks for each year, DEEWR appropriately developed more detailed reporting and monitoring arrangements to help understand progress being reported by jurisdictions towards universal access to ECE, and to provide a basis for advising the Minister on the approval of payments. In this context, there are key challenges to achieving universal access, such as increasing teacher numbers and the availability of early childhood education facilities. DEEWR did not, however, have a strong approach in place for assessing delivery risks, to help inform advice to the Minister on the achievement of anticipated outcomes; potential policy responses to any emerging issues; and any related communications between the Minister and state and territory counterparts.

26. The NP ECE specified that the Commonwealth was responsible for leading the development of an ‘Indigenous (including remote communities) universal access strategy’. DEEWR had carriage of this role for the Commonwealth.⁹ A wide range of stakeholders were initially consulted by DEEWR in October 2009 on the strategy, with DEEWR subsequently working closely with state and territory officials on its development.

27. The national Aboriginal and Torres Strait Islander Universal Access Strategy was approved by the relevant COAG ministerial council in February 2011 and publicly released by DEEWR in June 2011. The strategy identifies four areas for focus, namely: increasing access to early childhood education; positive community awareness and engagement; quality early childhood programs and activities; and Aboriginal and Torres Strait Islander cultural awareness of teachers and support staff. The strategy lists many additional activities to those in bilateral agreements. Nonetheless, the fact that the strategy was substantially developed after the bilateral agreements were signed, and was released more than halfway through the life of the NP ECE, reduced the opportunity for the strategy to focus activity being funded through the NP ECE in support of Indigenous universal access.

Ongoing Monitoring and Activity in Support of Universal Access (Chapter 3)

28. In accordance with the bilateral agreements, jurisdictions provide reports twice a year to DEEWR on activities and progress toward Universal Access. DEEWR assesses these reports, and provides advice to the Minister about their assessment and whether to make progress payments to the jurisdictions. DEEWR carried out the assessment and payment process effectively.

29. An important role in successful program delivery is developing and maintaining relationships with service partners and stakeholders. This is particularly important in the context of national partnership agreements, where the arrangements are a relatively new approach and where the parties have consciously reduced the degree of prescription in the arrangements. For the NP ECE, the key relationship for DEEWR is with the relevant agencies within state and territory governments. The ANAO interviewed officials from five of the eight jurisdictions who had dealt with DEEWR in the development and operation of the NP ECE. The overall view of those interviewed was that DEEWR had been professional and responsive, and had taken an effective partnership approach.

30. A focus on achieving agreed results, as used in national partnerships, relies on being able to reliably measure those results. The NP ECE noted there were a number of challenges to measuring progress—the foremost being the lack of nationally comparable data in areas such as participation in ECE and the qualifications of ECE teachers. To help address this challenge, the parties agreed in the NP ECE to work in partnership to develop the agreed data for performance measurement, with DEEWR responsible for coordinating these data improvement initiatives from a Commonwealth perspective. In this regard, DEEWR has effectively coordinated activities to improve the quality of data to help measure the progress of the NP ECE towards the goal of universal access. Important achievements include agreed national data definitions for ECE and an initial national statistical report.

31. The public reporting of information about government funded activities helps the Parliament and public understand how public money is being spent and whether the intended results are being achieved. There are specific reporting responsibilities associated with the NP ECE arising from Commonwealth public sector arrangements, such as Portfolio Budget Statements and annual reports; and from the NP ECE itself. DEEWR has complied with these formal requirements for reporting with regard to the NP ECE.

32. More broadly, to help interested parties assess the benefits being achieved in relation to the Commonwealth’s NP ECE expenditure, information should be easily accessible which explains the context and reasoning for the expenditure, the existing and target situation, and provides regular and timely progress reports on a useful and comparable basis. In this regard, there remains scope to make it easier for stakeholders to find and understand consolidated performance information on the NP ECE. One of the objectives of the national partnership approach is to enhance the accountability of governments to the public through simpler, standardised and more transparent public performance reporting. DEEWR is well placed to further contribute to this goal because it already undertakes analysis of progress, and can readily provide access to stakeholders to timely, consolidated and clearly presented performance information at national, state and territory levels, alongside relevant background information.

33. The parties to the NP ECE have developed and overseen implementation of an evaluation strategy for the partnership. The initial focus of evaluations is on the achievement of immediate outcomes, such as increasing capacity and ensuring affordability. The evaluation strategy envisages a subsequent focus on longer-term outcomes, including jurisdictions achieving the targets set in the NP ECE, and the impact of preschool attendance on children’s development and families. The first evaluation annual progress report was published in August 2011, including state and territory progress to 31 December 2009 and an early childhood development literature review. The longer-term focus of evaluations on the impact of the program will be important to inform governments of the effectiveness of these measures.

Summary of agency response

34. DEEWR provided the following summary response to the audit report: The Department of Education, Employment and Workplace Relations (DEEWR) appreciates the opportunity to participate in the Performance Audit of the Administration of the National Partnership on Early Childhood Education.

DEEWR welcomes the ANAO’s findings that:

• Overall administration of the initial phases of the National Partnership on Early Childhood Education has been effective, initial planning was generally sound and ongoing administration has been well managed. The ANAO have concluded that, “This provides a good foundation for DEEWR to further develop its administrative approach as the National Partnership on Early Childhood Education moves into the main expenditure and delivery phase in the next two years.”
• Development of bilateral agreements was effective with satisfactory arrangements in place for the reporting and monitoring of implementation plans.
• Stakeholder relationships were considered to be well managed by DEEWR.
• DEEWR has effectively coordinated activities to improve the quality of data to help measure the progress of the National Partnership on Early Childhood Education towards the goal of universal access.

DEEWR acknowledges that while the ANAO findings were generally positive toward DEEWR’s administration of the National Partnership on Early Childhood Education there is further opportunity for improvement.

35. DEEWR agreed with the two recommendations in the report.

Footnotes

[1] Adapted from paragraph 8 of the National Partnership on Early Childhood Education.

[2] For example, the 2011 Report on Government Services indicates that in 2009–10, an estimated 68 per cent of children nationally, in the year before commencement of full time schooling, were enrolled in state and territory government funded and/or provided preschools.

[3]   The NP ECE defines a preschool program as structured, play-based early childhood education. Alternative terms for preschool in some jurisdictions include ‘kindergarten’, ‘pre-prep’ and ‘reception’. It is also useful to note that preschool programs may be delivered in a childcare centre, by providing specific activities in addition to standard child care.

[4]   For example, some families may find ECE delivered through child care is more accessible, while other families may find that school-based ECE is more accessible.

[5]   Source: ANAO analysis of the 2008 starting points reported by states and territories in their NP ECE Data Capability Reports, compared to the NP ECE goals.

[6]   Commonwealth of Australia, Portfolio Budget Statements 2010-11 Treasury Portfolio, Commonwealth of Australia , Australia, 2010, p. 52.

[7]   In response to the draft audit report, the New South Wales Office of Education advised that the New South Wales performance benchmarks for preschool enrolment rates may have been set at unrealistically high levels at the start of the NP ECE and, subject to agreement with the Commonwealth, may be adjusted.

[8]   For example, performance benchmarks were set for the percentage of eligible children enrolled in preschool each year.

[9]   In assessing the role of DEEWR, it is relevant to note that the NP ECE funding was provided as a total package for progress toward universal access. The NP ECE itself included a specific target for Indigenous children. There was no component of the overall funding made subject to agreement of a national Aboriginal and Torres Strait Islander Universal Access Strategy.