Introduction

1. Improving educational outcomes for Indigenous students has been an important policy priority for successive national and state/territory governments. Indigenous students in all jurisdictions record lower attendance and retention rates, and lower scores against standardised benchmarks for academic performance, than their non Indigenous peers. Indigenous students, particularly those in rural and remote areas of Australia, face a range of barriers to receiving a quality education, including limited access to schools.

2. Various programs have been developed by the Australian Government in order to improve Indigenous access to secondary schooling and, in doing so, contribute to improved educational outcomes. These programs include individual scholarships for students to board at established schools in metropolitan areas¹ and two separate programs to construct boarding facilities to improve access to schooling for students living in remote areas. The boarding initiatives fit within a range of other government measures, including the Closing the Gap in the Northern Territory National Partnership Agreement, the National Partnership Agreement on Remote Service Delivery and the Smarter Schools National Partnerships.

3. This audit focuses on the two programs for the construction of boarding facilities for secondary school students: the Indigenous Boarding Facilities (IBF) program, administered by the Department of Education, Employment and Workplace Relations (DEEWR); and the Indigenous Boarding Hostels Partnerships (IBHP) program, administered by the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). Taken together, these programs represent an investment of over $80 million in secondary school accommodation for Indigenous students in remote communities.

4. In 2008, the Council of Australian Governments (COAG) agreed the National Indigenous Reform Agreement (NIRA), which set six targets for reducing Indigenous disadvantage. The NIRA gives effect to the overarching Closing the Gap in Indigenous disadvantage policy framework and the six targets are known as the Closing the Gap targets. Half of these targets relate to improving educational outcomes for Aboriginal and Torres Strait Islander students, highlighting the critical role of education in overcoming Indigenous disadvantage. Two of the three education targets relate to schooling and are:

• To halve the gap in reading, writing and numeracy achievements for children within a decade; and
• To halve the gap for Indigenous students in Year 12 (or equivalent) attainment rates by 2020.²

5. To measure progress towards these targets, key indicators have been agreed by COAG: participation and achievement in National Assessment Program–Literacy and Numeracy (NAPLAN) testing; Year 12 attainment; retention rates from Years 7/8 to Year 10 and Year 12; and attendance rates from Years 1 to 10. As improved access is an important element of making progress towards the COAG targets, the Government has consistently described both boarding facility programs as important contributors to meeting the Closing the Gap targets.

The IBF program

6. The IBF program is the larger of the two programs and aims to establish three boarding facilities in separate locations in the Northern Territory.³ The policy intent of the IBF program is that ‘improving access to secondary schools through expanded accommodation facilities will improve Year 12 retention (or its vocational equivalent) and performance of Indigenous students.’⁴ The program is also expected to provide more opportunity and choice for students living in remote areas to attend school locally (‘on country’), so as to assist retention and attainment of Year 12, or its equivalent. Total funding of $43.9 million has been made available for the IBF program, comprising:

• $28.9 million to be administered by DEEWR over four years; and
• $15 million to be contributed by the Indigenous Land Corporation (ILC).⁵

7. In July 2008, the Minister for Indigenous Affairs and the then Deputy Prime Minister (in her capacity as the then Minister for Education) announced a shortlist of four potential sites in the Northern Territory for the construction of three facilities: Wadeye; the Warlpiri Triangle;⁶ East Arnhem; and Maningrida. The Ministers’ July 2008 press release indicated that the three facilities would provide more than 150 beds in a range of accommodation styles for students in Years 8 through 12 and were ‘an important step in meeting the Government’s commitment to at least halve the gap for Indigenous students in Year 12 or equivalent attainment rates by 2020.’ The first of the facilities in Wadeye was expected to be completed in 2009, with the remaining two to be completed in 2010.⁷ Construction of the Wadeye facility has commenced, with completion expected in late 2011. The second site, at Garrthalala in East Arnhem, has been agreed and preliminary planning and survey work has commenced with a view to finalising construction in late 2012. The location for the third site has yet to be announced, but is likely to be in the area covered by the Warlpiri Triangle. DEEWR is presently not able to estimate when this remaining facility will be commenced, as community negotiations are continuing.

The IBHP program

8. The Australian Government is also funding the construction of a boarding facility under the IBHP program, administered by FaHCSIA. The objective of the IBHP program is to provide Indigenous secondary school students from remote areas with the opportunity to live at boarding facilities in major regional centres, in order to access educational opportunities not otherwise available to them, and to provide safe environments that support Indigenous students to fulfil their educational and personal potential. FaHCSIA described the IBHP program as ‘part of the Australian Government's commitment to providing quality education opportunities for Indigenous students, and closing the gap between Indigenous and non Indigenous students' education outcomes.’⁸ Under the IBHP program, FaHCSIA has funded an expansion, worth $3 million, to an existing boarding facility in South Australia, which opened in June 2010. The main funding of the program is directed at the construction of a new facility in Weipa, Queensland, which is the focus of this audit.

9. Following consideration of four potential sites across northern Australia, the Minister for Indigenous Affairs announced in March 2008 that a 120-bed boarding facility would be constructed in Weipa to open in early 2009 for students to attend the local campus of the Queensland Government operated Western Cape College. The Australian Government committed $35.8 million for this facility, referred to as the Western Cape Residential College (WCRC). The initial target for completion of early 2009 was revised on several occasions by FaHCSIA and the facility is now scheduled to open on a phased basis from January 2012. The project is being delivered by FaHCSIA in collaboration with the ILC. The collaboration arrangements were developed in June 2009 following initial planning and community consultation activities. FaHCSIA’s responsibilities for the project under the partnership are to:

• fund the establishment of the WCRC;
• identify and engage a suitable hostel operator for the WCRC;
• secure funding required for the sustainable operation of the hostel; and
• develop and implement a community engagement strategy.

10. The ILC is responsible for:

• acquiring the land identified as the preferred hostel site from Rio Tinto Alcan;
• converting the tenure of the required land from leasehold (with a permitted use of ‘recreation’) to freehold;
• designing and constructing the hostel;
• leasing the facilities to an appropriate hostel operator identified by FaHCSIA; and
• funding annual public liability insurance costs for the property.

11. As at 30 August 2011, a range of preparatory activities had been undertaken by both FaHCSIA and the ILC, enabling the design of the facility to be finalised, a construction contractor to be engaged and operators sought to manage the facility, although this latter activity remains ongoing.

Audit objective, scope and criteria

12. This performance audit focuses on the two separate student boarding facility programs for Indigenous secondary school students: the IBF program administered by DEEWR, and the IBHP program administered by FaHCSIA.

13. The audit objective was to assess the extent to which DEEWR and FaHCSIA have effectively managed the planning and consultation phases for the IBF program and the IBHP program. The audit scope included consideration of the issues likely to affect the ongoing operation and sustainability of the facilities.

14. The audit criteria focused on: the effectiveness of the departments’ implementation planning and site selection arrangements; the departments’ engagement with communities and state/territory governments; and arrangements being developed for the ongoing operation and maintenance of the facilities to contribute to the objectives of improving access. As improved access is ultimately expected to lead to better retention, attainment and outcomes, which are now COAG performance indicators for Closing the Gap, the audit has considered the performance of the programs in the context of the Closing the Gap initiative.

Overall conclusion

15. Limited access to schools is recognised as a primary driver of Indigenous disadvantage in education affecting student attendance, retention rates and academic performance. Students in remote Indigenous communities across the country are required to travel extended distances, frequently in excess of 100 km, and sometimes more than 250 km, to access a suitable secondary school. Accordingly, successive Australian governments have made the development and expansion of boarding facilities for Indigenous secondary students from remote communities a key policy priority for improving Indigenous education outcomes. By improving access to secondary schools in remote areas, the Australian Government seeks to encourage more Indigenous students to stay in school to complete Year 12 and to improve the overall academic outcomes for Indigenous students. While both the Indigenous Boarding Facilities (IBF) program administered by the Department of Education, Employment and Workplace Relations (DEEWR) and the Indigenous Boarding Hostels Partnerships (IBHP) program administered by the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) have the intent to improve access for students from remote areas, the IBF program seeks to do this by making facilities available in remote areas, ‘on country’. The IBHP program, on the other hand, has focussed on providing a facility in a regional location to cater to students from remote areas.⁹

16. The construction of the boarding facilities under the IBF program and the IBHP program is now three years behind the schedules initially announced by the Australian Government. At various stages, and to different degrees across the programs, the departments have encountered difficulties in implementing the programs with the result that timeframes have slipped significantly. In relation to the IBF program, further work needs to occur to agree on a site for one of the three facilities to be constructed under the program.

17. Both departments had put in place arrangements to implement the planning and consultation phases for the two programs, although these arrangements were not effective in all respects. From a planning perspective, the original timeframes developed by the departments were overly optimistic and did not allow for sufficient time for community consultations, negotiations with state/territory governments, the engagement of implementation partners, and the design and construction of the facilities.

18. The effectiveness of the planning phase would also have been improved by the development of a stronger information base to support the key decisions on locations for the facilities. To determine the locations for the facilities, both departments undertook a number of studies into the demography of possible locations, identifying some general patterns of existing student numbers and the likely supply of students. These studies also gave consideration to possible implementation issues, such as the location of potential service delivery partners and the availability of ancillary services.

19. Greater emphasis on quantifying the likely levels of demand specifically for boarding facilities in each potential location would have led to better informed considerations about the extent to which the various sites will contribute to improved access for students who would not otherwise had those opportunities, and the numbers of students who are likely to attend a boarding facility. DEEWR advised that it considered the level of general support from communities, the historically low levels of access and the supply of potential students as important factors in gauging demand, when considered from the perspective of providing access ‘on country’. FaHCSIA advised that broader factors, such as the population of children who have disengaged from the schooling system as a result of poor access, are relevant to the assessment of potential demand.

20. Nonetheless, under both programs, there is currently uncertainty about whether sufficient demand exists to generate the revenue required to sustain the ongoing operation of the boarding facilities. There have been opportunities over the period of consultations to date to develop a firmer assessment of actual demand for boarding facilities and the relative contribution that facilities are likely to make to the broader Council of Australian Government (COAG) targets in such areas as Year 12 attainment.

21. In relation to the consultation arrangements, both departments appropriately identified the need for two streams of stakeholder engagement—with communities and key contributing stakeholders. Consultations with Indigenous communities were required to gauge support and obtain information to inform the design of the facilities. The departments’ community consultation processes were generally effective, drawing out a range of local perspectives about the possible location, size, and operating models for the proposed boarding facilities. Relevant stakeholders were also involved in discussions about the programs at the local level and community views were factored into key decisions about the design and operating arrangements proposed for the facilities.

22. Consultations and negotiations were also necessary with the key contributing stakeholders to agree commitments for the provision of funding, schooling services and ancillary services. Both DEEWR and FaHCSIA engaged with their state and territory counterparts during their planning phases in 2008. This engagement was effective in obtaining overall support for the development of boarding facilities. However, in relation to the actual sites, DEEWR and FaHCSIA undertook lengthy negotiations to reach agreement about specific state/territory government commitments to fund the provision of ancillary services necessary for ongoing facility operations and, in the case of the IBF program, the provision of schooling services in two sites. Formal agreements have been developed with counterpart departments in the Northern Territory and Queensland, although as at July 2011 these were not yet signed.

23. Looking ahead, a number of issues require attention in order to secure the effective and sustainable operation of the planned boarding facilities. Both departments face potential shortfalls in their operational funding for each facility and there is still a high risk that there will be insufficient demand for places at the facilities, at least in the shorter term. FaHCSIA is currently negotiating arrangements for an operator for the Weipa facility and will shortly be in a position to ascertain the likely extent of government subsidy required to support the facility’s operations. There are opportunities for DEEWR to take into account FaHCSIA’s experience in testing the market and to factor relevant issues into the department’s own planning for ongoing operations.

24. In addition, further work is required to develop coherent performance measurement arrangements across both programs that give sufficient focus to assessing the contribution that boarding facilities make to improving access, and ultimately to the desired outcome of improved performance, retention and attainment under the COAG targets. There will be a range of factors that influence the actual achievement of educational outcomes, however, developing a clear understanding of the specific contributions made by boarding facilities will be valuable for any future consideration of expanding the use of boarding facilities to contribute to improved outcomes, including the relative merits of catering to remote students by locating facilities in remote areas or in regional areas. There are opportunities for close collaboration between FaHCSIA and DEEWR in this regard, and with relevant state and territory education departments. Finally, noting the delays and implementation challenges to date, it would be prudent for DEEWR to assess its implementation experiences and consider the potential contribution that the Warlpiri Triangle facility, which is yet to be commenced, can make to the COAG targets.

25. The ANAO has made two recommendations covering clarification of ongoing financial requirements and the development of collaborative approaches to performance measurement.

Key findings by chapter

Site selection

26. The site selection processes for both boarding facility programs were characterised by a mix of community consultation and research approaches, with external consultants conducting a number of feasibility studies to examine issues about the location and size of potential boarding facilities, and to inform future decisions about engagement and ongoing operations. For both programs, the information evidencing the likely demand for boarding facilities in the locations considered by the departments was not well developed. The analysis for each program did not include an indication of how many students would be likely to use the proposed facilities. There are several important factors to consider in site selection, including general community support and the availability of infrastructure, but quantifying demand is a key factor. The studies gave consideration to issues such as community interest and infrastructure, but a more limited assessment of actual demand was undertaken; this is likely to have flow-on effects into the financial requirements to support the individual facilities and ultimately on the actual contribution that these investments will make to the overall objectives sought by government.

Stakeholder engagement

27. The arrangements put in place by DEEWR and FaHCSIA for the purposes of engaging with Indigenous communities were sound overall, providing opportunities to seek information as well as channels to provide information. While initial consultations conducted during the planning phase and in the early days of program implementation identified the need for more formal strategies to guide ongoing engagement, both departments have only recently moved to develop such strategies.

28. Critical for the timely implementation of the programs was the engagement with key contributing stakeholders in the Australian, Queensland and Northern Territory governments. Both programs received early, high level support from relevant state and territory governments. However, in the Northern Territory, lengthy engagement has been required to obtain support for specific decisions about the location and size of facilities. This led to DEEWR encountering delays as the Northern Territory Government assessed the extent to which it could support requests from the Australian Government to provide the ancillary services and infrastructure required for the new boarding facilities. These matters have now largely been resolved. The Northern Territory Government and the Indigenous Land Corporation (ILC) could have been better engaged by DEEWR, both during the feasibility studies and further negotiations, considering the significant level of financial support that is required of them. The IBHP program has been characterised by generally regular engagement by FaHCSIA with the Queensland Government at a number of levels.

Sustainability and performance measurement arrangements

29. Financial models used by the departments for their respective programs have predicted potential shortfalls in the operating funding for individual facilities, arising from growing costs and risks associated with uncertain levels of student demand. Both departments propose to address these shortfalls through subsidies to students, principally in the form of ABSTUDY payments and additional per student subsidies paid directly to the boarding facilities. In this regard, DEEWR has secured ongoing funding over the period of forward estimates to 2015–16, while FaHCSIA also has some funds available within the original appropriation for the program that the department intends to apply as a subsidy, if necessary, to the selected operator. FaHCSIA also intends that operating shortfalls will be covered by philanthropic donations. However, the analyses presented in the departments’ feasibility studies indicate that these subsidies will not be sufficient to sustain the operations of facilities in the medium to long term. Further work by the two departments to clarify the extent of future shortfalls, and advise government accordingly, would be appropriate.

30. Both programs were initially designed with the intent of providing opportunity and access, and the Australian Government has consistently presented both boarding facilities programs as measures intended, through better access, to help close the gap on Indigenous disadvantage in education. Both departments have commenced work to design performance frameworks although, despite the similarities of the programs, are taking different approaches. DEEWR acknowledges the importance of measuring educational outcomes, but currently intends to confine its performance measurement approach to assessing improvements in access, in line with the ‘on country’ emphasis. FaHCSIA has indicated that it will seek to align its performance measures with COAG indicators by measuring improvements in student access, Year 12 retention and academic performance.

31. Improved access to secondary education is a useful indicator to gauge intermediate program progress. It is unlikely, though, that this indicator on its own will adequately reflect the contribution made by the IBF program to meeting the government’s stated target of improving Year 12 retention and attainment, if these too are not measured. In this regard, there are opportunities for the development of a more coherent and consistent approach to assessing performance across the two programs, and for collaboration with state and territory education departments to obtain the performance information necessary to inform assessments about program performance.

32. The COAG targets, to which the two programs are now intended to contribute, are time bound, with an end date of 2018 in the case of achievement of results and 2020 in the case of Year 12 attainment rates. In the light of the implementation experiences of both DEEWR and FaHCSIA in the development of the first two boarding facilities, it would be timely for DEEWR to reconfirm the potential contribution that the Warlpiri Triangle facility could make by 2018 and 2020, relative to other delivery options, given that agreement is yet to occur on its location.

Summary of agency responses

33. The proposed audit report or relevant extracts were provided to DEEWR, FaHCSIA, Aboriginal Hostels Limited (AHL), ILC, the Queensland Government Department of Education and Training and the Northern Territory Government Department of Education and Training (NTDET). Comments were received from all agencies, with a summary of the formal comments from DEEWR, FaHCSIA, AHL and NTDET set out below. Detailed responses are at Appendix 1.

Department of Education, Employment and Workplace Relations

34. DEEWR provided the following summary response to this report:

The Department of Education, Employment and Workplace Relations acknowledges the work of the ANAO in its analysis of the Indigenous Secondary Student Accommodation Initiatives and notes the findings outlined in the ANAO report. The ANAO report concludes that the Department of Education, Employment and Workplace Relations appropriately identified the need for two streams of stakeholder engagement - with communities and key contributing stakeholders. The report also notes that the Department of Education, Employment and Workplace Relations has placed a strong emphasis on community consultation to support the Indigenous Boarding Facilities implementation and ongoing operations, and has continued with these consultations over an extended period of time and in the face of considerable challenges. Given these challenges, the ANAO report has found that the arrangements put in place by the Department of Education, Employment and Workplace Relations for the purposes of engaging with Indigenous communities were generally effective, drawing out a range of local perspectives and that relevant stakeholders were also involved in discussions about the program at the local level and community views were factored into key decisions about the design and operating arrangements proposed for the facility. The ANAO report has also concluded that the Department of Education, Employment and Workplace Relations engaged with its state and territory counterparts during the planning phases, and that this engagement was effective in obtaining overall support for the development of the boarding facilities. However, the report does not recognise the extensive amount of work that has been undertaken in the planning and development phases for this extremely complex and difficult project being implemented in the most remote regions in the Northern Territory. This has included the challenging issues associated with capital construction in remote communities and the negotiations required to undertake this work. The report acknowledges the considerable challenges of community consultation in remote communities, but fails to recognise the vast regions where these consultations have been required. The complexity of Community consultations that are necessary to ensure strong, broad based community support should not be underestimated, as this is a critical element in contributing to the longer term success of any initiative. The Northern Territory, in particular, experiences the highest levels of disparity in the country in education, employment and health outcomes for Aboriginal and Torres Strait Islander people. The Indigenous Boarding Facilities initiative (the initiative) is one of many elements of the Australian Government's substantial investment to support the Northern Territory Government to address the severe disparities in remote student education. This initiative requires long term strategic investment that recognises the cultural and behavioural shifts required to break the cycle of disadvantage and improve access to and engagement in remote education opportunities. It is expected that over time, the facilities' supportive environments and high expectations will provide the conditions that assist student boarders to achieve Year 12 or equivalent qualifications (consistent with the Closing the Gap target). However, it is important that all stakeholders understand that the boarding facilities are not schools. The ANAO report assumes that the boarding facilities have active agency in regard to school outcomes and hence the broader Government Closing the Gap policy objectives. Rather, the boarding facilities will provide choice, support, opportunity and access for remote Aboriginal and Torres Strait Islander students in the Northern Territory, working closely with and complementing the efforts of the local schools that have responsibility for educational outcomes.

Department of Families, Housing, Community Services and Indigenous Affairs

35. FaHCSIA provided the following summary response to this report:

FaHCSIA acknowledges the work of the ANAO in its analysis of the Indigenous boarding facility programs being implemented by FaHCSIA and DEEWR. FaHCSIA agrees with the recommendations and takes the opportunity to highlight the significant work the department has undertaken in the planning phase of the Western Cape Residential Campus (WCRC) including work to determine a best practice operational model and to commission detailed financial modelling. FaHCSIA has also developed strong, productive and effective relationships with all key partners in the WCRC project. Among other things, these strong partnerships have resulted in a peer reviewed design, the commitment of educational resources for the use of campus’ children and a reporting framework.

Aboriginal Hostels Limited

36. AHL provided the following summary response to this report:

AHL is contracted to construct the boarding facility at Wadeye on land leased by DEEWR. It has not been offered or accepted a contract to operate this facility. If asked, AHL’s agreement to operate the Wadeye boarding facility would depend on satisfactory financial and governance arrangements. HL confirms that it does not wish to be involved in the construction of or operation of boarding facilities at Yuendumu or Garrthalala.

Northern Territory Department of Education and Training

37. NTDET provided the following summary response to this report:

The report extract has been carefully examined and I confirm that it is assessed as providing a fair and accurate statement of issues and events surrounding the proposed provision of boarding facilities in various Territory locations.

Footnotes

[1] This funding includes a $20 million commitment made in 2009–10 to the Australian Indigenous Education Foundation (AIEF); and the Indigenous Youth Leadership Program. Both these programs are administered by DEEWR.

[2] The third education-related COAG target is to ensure access to early childhood education for all Indigenous four-year-olds in remote communities within five years.

[3] Within DEEWR, the program is referred to as the ‘Three New Boarding Facilities in the Northern Territory Initiative

[4] Commonwealth of Australia 2009, Closing the Gap for Indigenous Australians – Contribution to Indigenous boarding colleges, http://www.fahcsia.gov.au/about/publicationsarticles/corp/BudgetPAES/budget2008-09/IndigenousFactSheets/Pages/ClosingGapIndigAusBoardingCollegeFS2.aspx, [accessed 18 April 2011].

[5] The Indigenous Land Corporation (ILC) is a statutory body established in 1995. The ILC's purpose is to assist Indigenous people with land acquisition and land management to achieve economic, environmental, social and cultural benefits.

[6] The Warlpiri Triangle is most readily identified as a regional Aboriginal education forum, rather than a geographic region. The Warlpiri Triangle was established in the 1980s to develop professional links between educators at the Lajamanu, Yuendumu, Nyirrpi and Willowra schools to develop and implement education approaches incorporating Warlpiri language and culture. These four communities are located in the Tanami Desert, north of Alice Springs and west of Tennant Creek.

[7] Media release, 23 July 2008, Indigenous Boarding Facilities in Northern Territory to Help Close the Gap, http://www.jennymacklin.fahcsia.gov.au/mediareleases/2008/Pages/indig_facilities_23july08.aspx, [accessed 18 April 2011].

[8] Commonwealth of Australia 2009, Indigenous Boarding Hostels Partnerships,http://www.fahcsia.gov.au/sa/indigenous/progserv/housing/Pages/IndigenousBoardingHostelsPartnerships.aspx, [accessed 4 May 2011].

[9] Media release, 26 March 2008, New school hostel for Cape York, http://www.jennymacklin.fahcsia.gov.au/mediareleases/2008/Pages/new_school_hostel_26mar08.aspx, [accessed 18 April 2011].