1.1 Research has shown that overcrowding and poor quality housing are associated with poor health, educational and employment outcomes, and increased family violence.⁴ In Australia, the highest levels of overcrowding occur in remote areas of the Northern Territory (NT). Approximately 27,600 Indigenous people in the NT were living in overcrowded houses in 2016, and an estimated 54 per cent of homes in remote Aboriginal communities were considered overcrowded in 2019.^{5, 6}

1.2 Appropriate, affordable housing is one of the 17 Closing the Gap socio-economic targets.⁷ The target aims to increase the proportion of Aboriginal and Torres Strait Islander people living in appropriately sized (not overcrowded) housing from 78.9 per cent in 2016 to 88 per cent by 2031.⁸ In 2018 the Department of the Prime Minister and Cabinet (PM&C) estimated the NT required 1857 new dwellings immediately to address overcrowding, and an additional 74 new dwellings per year to meet population growth.

The National Partnership for Remote Housing Northern Territory (2018–2023)

1.3 On 30 March 2019 the Australian and NT Governments entered into the National Partnership for Remote Housing Northern Territory (the National Partnership). The objective of the National Partnership is to improve housing conditions and reduce overcrowding in 73 NT remote communities and the 17 Alice Springs town camps. The intended outcomes of the National Partnership are:

1. reducing overcrowding;
2. ensuring a role for the four NT Land Councils (Central Land Council, Northern Land Council, Tiwi Land Council and Anindilyakwa Land Council) in the National Partnership’s governance;
3. providing transparency about how money is spent; and
4. ensuring, to the maximum extent possible, works are delivered by local Indigenous Territorians and businesses.

1.4 Under the National Partnership the Australian Government has committed to provide $550 million in funding to the NT Government over five years (from 2018–19 to 2022–23), divided between:

• $337.5 million for capital works — to deliver a minimum of 1950 bedrooms, providing an equivalent of 650 three-bedroom houses;
• $175 million ($35 million per financial year) for property and tenancy maintenance (PTM) services — to be delivered to over 5,000 houses across the 73 remote communities and 17 Alice Springs town camps; and
• $37.5 million to support the engagement and development of Aboriginal employees.

1.5 The National Partnership states that, to avoid duplication of effort, the primary mechanism for the delivery of the Australian Government investment will be through the NT Government’s Our Community. Our Future. Our Homes (OCOFOH) program. The NT Government committed to match the Australian Government $550 million investment over the National Partnership’s five-year timeframe, with this co-contribution forming part of its OCOFOH program funding of $1.1 billion over ten years (from 2017–18 to 2026–27) to improve Aboriginal housing in remote communities.⁹

Figure 1.1: Brick house under construction in Galiwin’ku under the OCOFOH program

 

 

Source: ANAO.

Operational arrangements for the National Partnership

1.6 The National Indigenous Australian Agency (NIAA) administers the National Partnership on behalf of the Australian Government.¹⁰

1.7 Operation of the National Partnership is governed by a Joint Steering Committee (JSC) with representatives from NIAA, the NT Government and the four NT Land Councils.¹¹ The JSC is defined in the National Partnership as the main forum to monitor the delivery of the National Partnership’s outcomes.¹² The JSC’s responsibilities are also to:

• make decisions on matters of policy and strategy (but not on operational program issues or procurement, which remain the prerogative of the Australian and NT Governments);
• ensure accountability and transparency over housing outcomes and investments; and
• conduct a review of the remote housing and leasing models and a review of land servicing costs and availability.¹³

1.8 As at November 2021, ten JSC meetings had taken place, which is in line with the terms of reference’s schedule of quarterly meetings (see Table 1.1). The first meeting took place on 30 August 2019, five months after the National Partnership was executed. Six of the ten meetings did not occur face to face, due to COVID-19 travel restrictions and the NIAA team managing the administration of the National Partnership being based in Canberra.

Table 1.1: JSC meetings date and location

Source: ANAO analysis of entity information.

1.9 The National Partnership commits to developing various subsidiary documents, including: annual Capital Works Plans; the property and tenancy management (PTM) Framework; the Reporting Framework; the Employment and Procurement Framework; and the Local Decision-Making Framework.

1.10 Schedule A of the National Partnership is an Implementation Plan, which sets out the strategy for delivering outputs, including performance benchmarks, milestones and associated payments. Schedule B provides the draft terms of reference for the JSC, which were endorsed at the first JSC meeting of August 2019.

Australian Government expenditure on the National Partnership

1.11 As at 30 September 2021, the NT Government reported to NIAA that 363 bedrooms (equivalent to 121 three-bedroom houses) had been completed, representing 19 per cent of the capital works target of 1950 bedrooms (equivalent to 650 three-bedroom houses) expected to be completed by 30 June 2023. Twenty-six per cent of the total Australian Government agreed funding had been paid to the NT Government, including 11 per cent of the capital works funding (see Table 1.2).

Table 1.2: National Partnership funding expended, as at 30 September 2021

Note a: Upfront payment representing 30 per cent of the cost of the bedrooms planned for 2019-20.

Note b: As at November 2021, the NT Government had submitted an additional payment claim for capital works that NIAA was in the process of assessing.

Source: ANAO analysis of entity information.

Australian Government funding for remote Indigenous housing

1.12 The Australian Government first provided funding for Indigenous housing programs in 1968, following the 1967 amendment to the Australian Constitution which gave the Federal Parliament the power to make laws relating to Aboriginal and Torres Strait Islander people.¹⁴ Between 1968 and 2008, approximately $3.5 billion was invested in remote housing across Australia.¹⁵

1.13 In 2008, following the establishment of the NIRA, all states and territories (except the Australian Capital Territory) entered into the National Partnership Agreement on Remote Indigenous Housing (NPARIH). The NPARIH aimed to address overcrowding, homelessness, poor housing conditions and housing shortages in remote Indigenous communities, and was to last for ten years. However, Victoria and Tasmania exited the NPARIH in 2014, and New South Wales in 2016, having met their most critical remote housing needs. In 2016 a new National Partnership on Remote Housing (NPRH) (2016–2018) was negotiated to replace the NPARIH between the Australian Government, NT, Queensland, South Australia and Western Australia.

1.14 Following the completion of the NPRH in 2018 the Australian Government’s position was that states and territories were responsible for housing in remote communities, except in the NT, where the Australian Government considered that the housing need was significantly higher and that it had a role in continuing to invest in remote housing through the National Partnership.

1.15 In 2018–19 the Australian Government provided ‘one-off funding contributions’ for remote indigenous housing to Western Australia ($121 million) and South Australia ($37.5 million), with matched funding from states to assist the transition of responsibility for funding remote housing to the states. In 2020–21 the Australian Government made a ‘final payment’ of $105 million to the Queensland Government to fund Aboriginal and Torres Strait Islander Councils to deliver remote housing in Indigenous communities.

1.16 Between 2008 and 2018, the Australian Government allocated $5.4 billion to the NPARIH and the NPRH. A total of $1.677 billion was provided to the NT under the two national partnership agreements, including $1.236 billion for capital works. Just over 1500 new houses and almost 3000 refurbishments were reported to have been completed in the NT over the ten-year period, across 100 communities.

1.17 Covering the period 2012–2023, three other intergovernmental agreements have included remote housing components.

• The National Partnership Agreement on Stronger Futures in the NT was established in 2012 for a duration of ten years to 2022 and included a remote housing component of $283.5 million.
• The National Partnership on NT Remote Aboriginal Investment (NPNTRAI) superseded the National Partnership Agreement on Stronger Future in the NT in 2016 and is due to expire in June 2022. It has a total estimated value of $986 million, including $141.6 million to upgrade houses in remote communities.
• The National Housing and Homelessness Agreement (NHHA) is expected to contribute $7.845 billion over five years (from 2018–19 to 2022–2023), including $98.5 million to the NT. The NHHA includes a housing component across urban, regional and remote areas, and identifies Indigenous Australians as a priority cohort. Both the National Partnership and the NPNTRAI aim to support the outcomes of the NHHA, without being dependant or directly linked to it.

1.18 Figure 1.2 provides a diagrammatic representation of the intergovernmental agreements for remote housing in the NT since 2008.

Figure 1.2: Australian Government intergovernmental agreements for housing, 2008–2023

 

 

Source: ANAO analysis.

1.19 Since 2019 the National Partnership has been the primary Australian Government funding commitment for housing in remote Aboriginal and Torres Strait Islander communities.

Land tenure and asset ownership on Aboriginal land in the Northern Territory

1.20 In 1976 the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) established communal Aboriginal land ownership in Australian law. Title to land granted under the ALRA is held by a land trust on behalf of the traditional owners of the land.¹⁶ Title is inalienable and equivalent to freehold title, but is held communally, reflecting the nature of Aboriginal land ownership. The Northern Land Council estimates the ALRA has enabled Aboriginal people to gain inalienable freehold title to almost half the land mass of the NT (a map of land tenure and Aboriginal communities in the NT is at Appendix 3).

1.21 While the land cannot be sold or mortgaged, it can be leased from the land trusts by agreement with the traditional owners who must give informed consent before action is taken to affect their land. ALRA establishes that councils must be formed to represent Aboriginal people in the task of managing their land and the opportunities it may offer. One of the key responsibilities of the four NT Land Councils is to consult with traditional owners and other Aboriginal people with an interest in land subject to a leasing request. The NT Land Councils are Commonwealth corporate entities and are the only bodies with authority and capacity to direct and administer Aboriginal land trusts.

1.22 For most NT communities on Aboriginal land, the entity that holds the land title (in most cases, the Aboriginal land trust represented by a Land Council) has ultimate ownership of a housing asset on its land. However, responsibility for a housing asset is determined by the leasing arrangements in place. Where there is no leasing arrangement over a housing asset, the asset is the responsibility of the Aboriginal title-holding entity. If a housing asset is located in a community where the Australian Government holds a long-term housing lease, the Australian Government holds an underlying interest in the housing asset. Where a subleasing arrangement has been established with the NT Government, responsibility for the housing asset rests with the NT Government until the subleasing arrangement ends.

1.23 Under the Northern Territory National Emergency Response Act 2007 (NTNER Act)¹⁷, the Australian Government took compulsory five-year leases over 73 communities to secure its long-term investment in remote NT housing. These leases were mostly replaced with long-term leases (40–99 years), largely held by the Executive Director of Township Leasing¹⁸, under the ALRA and other legislation. As a result of these leases, the Australian Government retains an underlying interest in the majority of public housing in remote areas of the NT (approximately 3500 houses, which represents 59 per cent of the total remote housing portfolio in the NT).

1.24 Through acquisition of these leases the Australian Government became a public housing landlord, which means that the Australian Government is required to deliver public housing services and maintenance either directly or through a third party, and is accountable for keeping houses at an appropriate standard and keeping tenants safe. The Australian Government has transferred its responsibility as landlord to the NT Government through a series of subleasing arrangements. The latest subleasing arrangements are due to expire at the same time as the National Partnership, in June 2023.¹⁹

Cost of remote housing

1.25 The NT is the third largest jurisdiction in land mass, and almost 50 per cent of its population live in remote or very remote areas. Research has shown that the size and remoteness of the NT affects the cost of delivering housing and housing related services, including because of:

• higher price of materials due to the distance from sources of building materials and a lack of competition in the supply;
• shortage of tradespeople;
• insufficient competition in tender processes due to the scarcity of building companies willing and able to build in remote areas;
• higher labour costs and longer building times from having only a six or seven month construction window due to inaccessibility in the wet season in the north, and desert summer heat in the south of the NT; and
• greater costs of developing and maintaining infrastructure such as water, electricity and sewage.²⁰

1.26 In addition, research indicates that overcrowding contributes to higher construction and maintenance costs, due to increased wear and tear on hardware (including doors, kitchens and bathrooms), and the corrosion caused by harsh climate conditions (from heavy rainfall and high humidity in the north, and to sand in the south). To minimise the impact of these factors, more robust building materials and stronger construction technologies are required than for houses in non-remote areas.²¹

Rationale for undertaking the audit

1.27 Improving Indigenous housing in the NT has been a policy priority for successive Australian and NT Governments. By 2022–23 the Australian Government will have invested $2.65 billion over 15 years in remote housing in the NT through successive national partnership agreements.

1.28 A 2017 review of remote housing arrangements noted significant progress had been made as a result of the Australian Government’s investment under previous national partnership agreements. However, the review also identified a number of implementation issues and made several recommendations for future housing programs, including recommending a recurring housing maintenance program, additional investment in housing and a cost sharing arrangement between the Australian Government and states and territories.²²

1.29 Recent ANAO performance audits have identified issues related to insufficient validation of benchmarks and risk-based assurance arrangements for Aboriginal and Torres Strait Islander participation targets, which are relevant to NIAA’s monitoring of the National Partnership.²³

1.30 This audit was conducted to provide Parliament with independent assurance of NIAA’s effectiveness in administering funding for remote housing in the NT.

Audit approach

Audit objective, criteria and scope

1.31 The audit objective was to assess the effectiveness of NIAA’s administration of funding for remote housing in the Northern Territory.

1.32 To form a conclusion against this objective, the following high-level criteria were applied:

• Was the development of the National Partnership effective? (Chapter 2)
• Has NIAA effectively assessed the delivery of the program of works? (Chapter 3)
• Has NIAA ensured the outcomes of the National Partnership will be achieved? (Chapter 4)

Audit methodology

1.33 The audit methodology involved:

• examining NIAA’s records, including ministerial briefs;
• examining minutes and papers from the JSC and subcommittees;
• observing three JSC meetings and the JSC’s July 2021 risk workshop;
• interviewing relevant NIAA officers;
• discussions with relevant NT Government officers, the four NT Land Councils, and other relevant housing stakeholders (including the Executive Director of Township Leasing and Aboriginal Peak Organisations Northern Territory); and
• visiting three remote communities (Hermannsburg, Galiwin’ku and Amoonguna) where houses are being built under the National Partnership.

1.34 The audit was conducted in accordance with ANAO auditing standards at a cost to the ANAO of $383,000.

1.35 The team members for this audit were Isabelle Favre, Elizabeth Robinson, Graeme Corbett, Deborah Jackson and Daniel Whyte.

2.1 Between the establishment of the Closing the Gap framework in 2008 and the end of the National Partnership in 2023, the Australian Government will have invested over $2.65 billion in remote housing in the NT through intergovernmental agreements. The ANAO examined whether, to optimise the impact of the Australian Government’s investment, the development of the National Partnership:

• was aligned to government policy objectives, as outlined in Closing the Gap agreements;
• integrated relevant guidance and lessons learnt;
• was supported by advice to the Minister for Indigenous Affairs that was timely and based on sound analysis; and
• did not duplicate other Australian Government investments in remote housing in the NT.

Is the National Partnership aligned to government policy objectives, as outlined in Closing the Gap agreements?

National Indigenous Reform Agreement (Closing the Gap) (2008–2018)

2.2 The government policy objectives relevant to the National Partnership are identified primarily in the National Indigenous Reform Agreement (Closing the Gap) (NIRA), which was developed by the Council of Australian Governments (COAG) in 2008.²⁴ The NIRA set out targets aimed at closing the gap in outcomes between Indigenous and other Australians.²⁵ The NIRA also established seven ‘building blocks’ — early childhood; schooling; health; economic participation; healthy homes; safe communities; and governance and leadership — that were identified as interlinked and foundational to achieving the Closing the Gap targets. In addition, the NIRA specified six ‘service delivery principles’ which all governments were expected to apply when designing and delivering services for Aboriginal and Torres Strait Islander peoples (see Table 2.1).

Table 2.1: The NIRA’s service delivery principles

Source: COAG, National Indigenous Reform Agreement (Closing the Gap), November 2008, Schedule D.

National Agreement on Closing the Gap (2020–2030)

2.3 In July 2020 a new ten-year National Agreement on Closing the Gap (2020 National Agreement) came into effect, building on and replacing the NIRA.²⁶ The 2020 National Agreement is between the Australian, state and territory, and local governments and the Coalition of Aboriginal and Torres Strait Islander Peak Organisations. It commits to ‘a future where policy making that impacts on the lives of Aboriginal and Torres Strait Islander people is done in full and genuine partnership’ and includes four priority reforms and 17 socio-economic outcomes (see Box 1).²⁷

2.4 While the 2020 National Agreement came into effect after the National Partnership was signed, it had been developed over the two years preceding its execution.

• The COAG Statement on the Closing the Gap Refresh, signed in December 2018, committed to forming a partnership with Aboriginal and Torres Strait Islander peoples to finalise the refreshed Closing the Gap. It also included a draft framework of outcomes, to be used as a basis for further discussion between governments and Aboriginal and Torres Strait Islander representatives.²⁸
• The Partnership Agreement on Closing the Gap 2019–29 between all Australian Governments, the Australian Local Government Association and the Coalition of Peaks, signed in March 2019, gave effect to the December 2018 COAG Statement on the Closing the Gap Refresh and established the principle of equal participation and shared decision-making by Aboriginal and Torres Strait Islander people on Closing the Gap.²⁹

National Partnership’s alignment to Closing the Gap policy objectives

2.5 The National Partnership includes general statements on its alignment to government policy objectives in its ‘purpose’ section, which states that it supports the outcomes of the NIRA and ‘embodies the principles of the [COAG] Statement on the Closing the Gap refresh’. Table 2.2 shows that the National Partnership is also consistent with specific policy objectives as identified in the NIRA; and with the relevant policy objectives of the Closing the Gap Refresh as stated in the 2018 COAG Statement and later in the 2020 National Agreement.

Table 2.2: National Partnership’s alignment to government policy objectives

Source: ANAO analysis of the National Partnership, NIRA and 2020 National Agreement.

Did the National Partnership integrate relevant guidance and lessons learnt?

2.6 Intergovernmental agreements are part of the framework for Australia’s federal financial relations, which is overseen by the Council on Federal Financial Relations (CFFR).³⁰ The CFFR has issued guidance to support the drafting of intergovernmental agreements.

2.7 As noted in Paragraphs 1.12 to 1.19, the National Partnership was preceded by several intergovernmental agreements relating to remote housing. These agreements have been reviewed and audited, and the findings and recommendation of reviews and audits were available to be considered when drafting the National Partnership.

Guidance from the Council on Federal Financial Relations

2.8 At the time of the design of the National Partnership, the CFFR had issued three Circulars to support officers drafting new partnership agreements.

• Circular 2015/1 outlined the framework that governs intergovernmental funding agreements.
• Circular 2015/2 provided guidance to Australian Government portfolio agencies on drafting Federation Funding Agreement Schedules.
• Circular 2015/3 provided portfolio agencies with examples of the CFFR’s role in developing Federation Funding Agreement Schedules through different negotiation pathways.³¹

2.9 Circular 2015/1 included a guide to the structure of a national partnership agreement (reproduced at Appendix 4). The ANAO’s assessment of the National Partnership against the requirements set out in this guide found a high level of consistency with most of the guide’s principles. In particular, there were:

• clear linkages with other relevant intergovernmental agreements (the National Housing and Homelessness Agreement, the NIRA, previous National Partnerships on Remote Housing and the December 2018 COAG Statement on the Closing the Gap Refresh);
• a focus on outcomes (such as reducing overcrowding) and outputs (such as the target of providing a minimum of 1950 bedrooms over five years), rather than inputs;
• specified roles and responsibilities; and
• other key design requirements such as time limitation, appropriate provision for delegation, and inclusion of relevant standard clauses (such as for dispute resolution, review, enforceability and variation).

2.10 However, the National Partnership did not follow the CFFR guidance on two significant aspects: the description of the outcomes and outputs; and the drafting of the Implementation Plan.

Description of outcomes and outputs

2.11 Outcomes are defined in Circular 2015/1 as ‘the measurable improvements that governments expect to observe from implementing the agreement effectively’. Circular 2015/1 also states that:

As National Partnerships are expected to cover the totality of Commonwealth and non-Commonwealth involvement in the policy area covered by the agreement, it is expected that any own purpose expenditure will be in the agreement with the corresponding, outcomes, outputs, and roles and responsibilities included where relevant.³²

2.12 However, in February 2019, the Department of the Prime Minister and Cabinet (PM&C)³³ advised the Minister that:

Under the Federal Financial Relations framework, [a national partnership agreement] can only set outcomes for the Commonwealth’s funding contribution. This means we cannot insist the [NT Government] include their $550 million in the [National Partnership’s] joint governance arrangements.

Consequently, the National Partnership does not prescribe outcomes and output targets for the NT Government matching funding of $550 million.³⁴

2.13 In line with Circular 2015/1, the National Partnership should have included details about the outcomes and outputs associated to the NT Government’s co-contribution. Not having output targets for activities funded through this co-contribution introduces risks that:

• achievement of the target for capital works funded by the Australian Government under the National Partnership is prioritised over capital works funded by the NT Government under its Our Community. Our Future. Our Homes (OCOFOH) program (discussed at Paragraph 4.9);
• the NT Government co-contribution is allocated to activities that are not covered by the National Partnership, such as government employee housing or land servicing; and
• the National Partnership’s outcome of providing transparency about how money is spent is not achieved (discussed at Paragraphs 4.51 to 4.54).

2.14 In addition, outputs are expected to ‘describe the projects or services being delivered to achieve the stated outcomes’.³⁵ The National Partnership’s outputs refer to the program of capital works, the participation of Aboriginal people in employment, and the reporting of investments and outcomes. However, property and tenancy management (PTM) services, which represents 32 per cent ($175 million) of the total funding provided by the Australian Government under the National Partnership, is not mentioned or reflected in the outputs.

Drafting of the Implementation Plan

2.15 The National Partnership includes an Implementation Plan, which provides details on the performance monitoring, reporting and financial arrangements. The Implementation Plan has several weaknesses that impact on the interpretation of the National Partnership; principally, a lack of: provision for risk management; recognition of partial performance; and clarity of language and interpretation.

Provision for risk management

2.16 The Implementation Plan template provided in Circular 2015/2 includes a component on risk management, the purpose of which is ‘to demonstrate that a risk assessment has been undertaken, any identified risks considered and a risk management plan has been developed’.³⁶ The National Partnership does not include this component and NIAA was not able to provide evidence that a risk assessment had been conducted or that a risk management plan had been developed.³⁷

Recognition of partial performance

2.17 Circular 2015/1 states that the conditions under which the state or territory would be eligible for a partial payment and the method for calculating this payment should be included in the national partnership agreement or implementation plan.³⁸

2.18 In the National Partnership, PTM payments of $35 million a year are to be made upon the achievement of a set of measures (as approved by the Joint Steering Committee). The National Partnership does not include information on recognition of partial performance if the targets are met for only some of the measures.

2.19 Indigenous employment is one of the four outcomes of the National Partnership.³⁹ An annual payment of $7.5 million is to be made to the NT Government upon the achievement of an initial employment target of 40 per cent in 2019–20, rising in two per cent increments to 46 per cent by 2022–23. The Implementation Plan does not specify how the payment for Indigenous employment is to be determined if either the PTM or capital works employment targets are not met (see Table 3.4 and Paragraph 3.43).

Clarity of language and interpretation

2.20 The CFFR stresses the importance of clarity of language and mutual understanding of the roles and responsibilities, performance indicators and reporting requirements. This clarity, including in implementation plans, contributes to ensuring the effectiveness of the partnership and to supporting public accountability:

Implementation Plans are public transparency documents and should provide the public with confidence that there is a strategy in place for implementation.⁴⁰

2.21 The wording of sections on Aboriginal employment creates ambiguity about the conditions under which the $7.5 million annual payment is to be made. Clause A37 states that the payment is for achievement of the target in both capital works and PTM:

A37 – The Employment and Procurement Framework, will be approved by the Joint Steering Committee and will outline how an annual minimum Aboriginal full-time equivalent annual rate of Aboriginal employment of 40 per cent of the workforce [sic] involved in capital works and property and tenancy management in 2019–2020, followed by increases of 2 per cent per financial year for the remainder of this Agreement.⁴¹

2.22 However, clauses A38 and A39 states that the payment is for achievement of the target in capital works only. For PTM, the employment target also applies but without attracting a specific payment:

A38 – Annual milestone payments have developed to provide $7.5 million of support the Northern Territory to deliver the employment targets through capital works.

A39 – Property and tenancy management are to be delivered as per the annual employment target outlined in A37.⁴²

2.23 The interpretation that the Aboriginal employment payment applies to capital works only is reinforced by the fact that an annual payment of $35 million is to be made for PTM services upon achievement of six performance measures, which include Aboriginal employment.⁴³

2.24 In addition, the Implementation Plan includes a large number of syntax errors and reporting period inconsistencies that impact on the readability of the document.⁴⁴ For example, the PTM milestones and payment table contains several typographic and period errors, including irregular and overlapping milestone periods. One section of the Implementation Plan indicates that milestone payments for capital works totalling $337.5 million will be made across five years from 2018–19 to 2022–23, while a table of capital works milestone payments in another section shows payments over four years from 2019–20 to 2022–23 totalling $270 million.

2.25 The Implementation Plan was developed in conjunction with the National Partnership, which is consistent with the CFFR guidance. However, the guidance also provides that when this is not possible, an implementation plan should be developed within six months of the national partnership being signed.

2.26 The guidance also notes that implementation plans can be amended to address significant shortcomings that place the achievement of policy objectives at risk, to improve the efficiency and effectiveness of the implementation plan’s operation, or when public accountability is reduced. There would be benefit in NIAA making use of this provision to address deficiencies with the Implementation Plan for the National Partnership.

2.27 NIAA informed the ANAO in November 2021 that it has commenced discussions with the NT Government on proposed amendments to the National Partnership’s Implementation Plan, to improve clarity and consistency. NIAA also indicated that it considers that the Aboriginal employment payment applies to both PTM services and capital works and it will clarify this in the revised Implementation Plan. NIAA anticipates finalising these amendments in early 2022.

Key learnings from reviews and audits

2.30 As noted at Paragraph 1.13, the National Partnership was preceded by the National Partnership on Remote Indigenous Housing (2008–2016) (NPARIH) and National Partnership on Remote Housing (2016–2018) (NPRH), between the Australian, state and territory governments. NPARIH and NPRH were reviewed on several occasions, including through: performance audits by the ANAO in 2011 and 2018; an investigation by the Commonwealth Ombudsman in 2012; and reviews by the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) in 2013 and PM&C in 2017.⁴⁵ Table 2.3 outlines the key findings and recommendations from these reviews, and assesses whether they were reflected in the National Partnership.

Table 2.3: Key findings or recommendations reflected in the National Partnership

Source: ANAO analysis.

2.31 Table 2.3 shows that some important lessons learnt (cost sharing, prioritisation of local employment, and involvement of communities in decision-making) were integrated in the design of the National Partnership. However, as previously noted, risk management was not incorporated, despite remote housing programs being recognised as complex and high risk.

Was the advice to the minister on the National Partnership’s design timely and based on sound analysis?

2.32 Seventeen briefs were provided to the minister in relation to the development of the National Partnership between January 2017 and March 2019. The ANAO assessed whether the advice provided by PM&C in these briefs was effective in supporting the minister’s negotiations and decision-making leading up to the execution of the National Partnership in March 2019.

2.33 Early negotiations led to the Australian Government committing in late April 2018 to five years of funding of up to $110 million a year commencing in 2018–19. The $110 million a year commitment was based on matching the NT Government’s level of annual funding for remote housing and PTM services under the ten-year $1.1 billion OCOFOH program.⁴⁶ This did not include matching funding for land servicing as the Australian Government considered this to be a NT Government responsibility. The NT Government agreed to retain responsibility for sub-leasing arrangements in the communities covered by the National Partnership for its five-year duration. As part of these sub-leasing arrangement, $35 million of the Australian Government’s annual $110 million funding would be directed towards the delivery of PTM services by the NT Government.

2.34 Over the next eleven months, the following elements were negotiated with the NT Government:

• the number of new houses to be built;
• the schedule of payment for PTM services;
• the extent of the Land Councils’ participation in the governance structure; and
• the targets for Aboriginal employment, and whether a payment was to be contingent on the NT Government meeting these targets.

2.35 The advice to the minister in relation to these points was adequate, documenting in a timely manner the range of negotiating options available and the expected responses from the NT Government. The impact of potential and actual changes in the Australian Government’s position on the future of remote housing in the NT was also well documented.

2.36 The advice did not appropriately address some of the National Partnership’s key parameters: the cost of houses; cost of PTM services; and impact of the National Partnership’s program of works on overcrowding.

Cost of houses

2.37 In August 2018 PM&C intended to include the construction of 750 three-bedroom houses in the National Partnership. This number was based on a unit cost of $500,000 per house (excluding land servicing and infrastructure). The advice provided to the minister on the number of houses did not include a cost analysis, but indicated that the approximate cost of houses under NPARIH and NPRH between 2013 and 2018 was excessive at $620,000.

2.38 By March 2019 the proposed number of houses had reduced to 650 after negotiation with the NT Government, which meant that the average cost of a house would have been $576,923. PM&C ministerial advice indicates that this new position was reached after examination of NT Government’s delivery costs and advice from the NT Government. NIAA advised the ANAO that data on delivery costs may have been provided as part of reporting under the previous national partnership agreements and as part of the negotiations, but it was unable to locate this information.

2.39 In the National Partnership signed in March 2019, the $375 million capital works envelop was reduced by $37.5 million representing the payment for Aboriginal employment targets. As a consequence, the average cost for a three-bedroom house funded under the National Partnership was reduced to $519,230, or $173,077 per bedroom.

Cost of PTM services

2.40 The advice to the minister did not provide a rationale for the decision to set the funding amount for PTM services at $35 million. A December 2018 ministerial brief stated that ‘independent financial modelling’ confirmed the proposed base annual rate to be paid to the NT Government to manage Australian Government leases. However, the ANAO examined the financial modelling and found that the cost of PTM services was estimated at between $53.3 and $76.6 million annually. Australian Government funding to the NT Government for PTM services under NPARIH and NPRH averaged $42 million annually between 2013–14 and 2017–18. NIAA advised the ANAO that funding for PTM services was constrained by the available total funding envelope of $110 million per year.

Impact on overcrowding

2.41 In August 2018 advice to the minister established that, to address overcrowding, the NT would need 1857 additional dwellings, and another 74 every year to address population growth. The advice did not include an estimate of the decrease in the proportion of overcrowded households that would result from the construction of 750 (later reduced to 650) new houses. For example, the 2017 Review of Remote Housing indicated that the delivery of 11,500 new or refurbished houses led to a decrease in the proportion of overcrowded houses from 51.1 per cent in 2008 to 41.3 per cent in 2014–15.⁴⁷ NIAA advised the ANAO that the National Partnership intended to include both new homes and renovations or extensions, which have differing impacts on overcrowding in communities. Nevertheless, an estimate would have aided understanding of the impact of the National Partnership’s capital works on progress towards the Closing the Gap target (88 per cent of Aboriginal and Torres Strait Islander people living in appropriately sized — not overcrowded — housing by 2031).

2.42 The National Partnership was executed on 31 March 2019, nine months into the first year, which means that the five-year schedule needed to be completed in just over four years. The advice to the minister did not document the increased risk to the completion of the program of capital works resulting from this compressed timeframe.

Has NIAA ensured other Australian Government investments in remote housing in the NT do not duplicate the National Partnership?

2.43 In addition to the National Partnership, the Australian Government has provided funding concurrently for remote housing in the NT through:

• the National Partnership on Northern Territory Remote Aboriginal Investment (NPNTRAI);
• the National Housing and Homelessness Agreement (NHHA); and
• three smaller infrastructure projects which aim to improve housing in specific remote areas at Borroloola, Warankuwu (Ranku) and the Barkly Region.

2.44 As noted at Paragraph 1.13, the National Partnership represents the Australian Government’s largest investment in remote housing in the NT (see Figure 2.1).

Figure 2.1: Australian Government funding for remote housing in the NT

 

 

Source: ANAO analysis.

National Partnership on Northern Territory Remote Aboriginal Investment

2.45 The NPNTRAI’s objectives are to improve schooling for Aboriginal children, make remote communities safer and healthier, and increase access to interpreter services and job opportunities for adults. The Australian Government has committed $986 million in funding over seven years (2015–16 to 2021–22) to the NT Government under the NPNTRAI.

2.46 The NPNTRAI includes a housing component which aims to improve the durability and amenity of public housing in remote communities through the upgrade of 1009 houses, and to complement the capital works being rolled out under the previous NPRH. The housing component was scheduled to be conducted between 1 July 2015 and 30 June 2018, with funding of $141.6 million.

2.47 NIAA advised the ANAO that the housing component was extended by one year and completed in June 2019, and that it achieved the target of 1009 housing upgrades. Houses (new or refurbished) that received capital investment under the NPARIH or NPRH were not eligible to receive funding under the NPNTRAI. NIAA also advised that, to ensure that this condition was implemented, it cross-checked NT Government’s reporting on the NPNTRAI and NPARIH, which provided information at the lot level.

2.48 NIAA completed an internal audit of the NPNTRAI in June 2021. The audit made two recommendations, which were accepted by NIAA, that lessons learnt be documented and shared internally to inform other agreements or programs. This included lessons relating to:

• verification mechanisms to obtain assurance over performance reporting information; and
• mechanisms for making partial payments where performance targets are not fully met.

National Housing and Homelessness Agreement

2.49 The NHHA was signed in 2018 and is administered by the Department of Social Services. Its objective is to contribute to improving access to affordable, safe and sustainable housing, including to prevent and address homelessness, and to support social and economic participation. Indigenous Australians are identified as a priority cohort. The Australian Government’s contribution to states and territories under the NHAA is $7.845 billion over five years (2018–19 to 2022–23), including $98.5 million to the NT Government.

2.50 The NHHA’s key outputs are: the development of a publicly available housing and homelessness strategy; and data collection and reporting against a set of national performance indicators that should demonstrate progress towards achieving NHHA’s objective and outcomes. The NT Housing Strategy 2020–2025 was published in December 2019⁴⁸ and refers to the OCOFOH program as the NT Government’s primary initiative to address overcrowding and improve housing conditions in remote communities.

2.51 While the NHHA requires the NT Government to allocate Australian Government funding to housing and homelessness services, it is not prescriptive in relation to how the NT Government should use the funds. NIAA advised that it communicates with the Department of Social Services on a weekly basis to discuss housing and homelessness issues under the two agreements.

Community-based infrastructure projects

Borroloola Housing Project

2.52 In September 2018 the Australian Government committed to build 12 new houses and ten temporary accommodation units in Borroloola. NIAA advised that the construction was completed in 2021, at an estimated cost of $15 million including land servicing, fencing and play facilities. To further improve housing and decrease overcrowding in Borroloola, an additional 38 houses have been built or are scheduled to be built under the OCOFOH program and the National Partnership, using Australian and NT Governments combined funds.

Ranku Housing and Infrastructure Project

2.53 In 2019 NIAA agreed to provide, through the Indigenous Advancement Strategy, up to $6 million to the Executive Director of Township Leasing for housing and infrastructure upgrades to 19 houses at Ranku on the Tiwi Islands. The three-year investment aims to ensure housing complies with the NT Residential Tenancies Act 1999. Ranku is categorised as a homeland, and as such is not part of the remote communities included in the National Partnership.

Barkly Regional Deal — Social and Affordable Housing Initiative

2.54 The Barkly Regional Deal is a $78.4 million commitment between the Australian Government, NT Government and Barkly Regional Council over a ten-year period (2019–29) to support the economic, social and cultural development of the Barkly Region. The Australian Government’s share of the investment is $45.4 million, including $950,000 to build 20 units of social and affordable housing. The Barkly Regional Deal is administered by the Department of Infrastructure, Transport, Regional Development and Communications on behalf of the Australian Government. NIAA advised the ANAO that housing provided as part of the Barkly Regional Deal will be constructed in Tennant Creek, which is not covered by the National Partnership, with the number of houses reduced from 20 to 16.

3.1 Under the National Partnership, NIAA is responsible for providing a financial contribution to the NT Government to support the delivery of the program of works, and for monitoring and assessing the performance of the delivery of this program of works. NIAA is also responsible for ensuring that payments are only made to builders accredited under the Australian Government Work Health and Safety Accreditation Scheme or the NT equivalent, and that the Building Code 2016 is complied with. The NT Government should also provide assurance to NIAA that builders are complying with the National Indigenous Housing Guide.⁴⁹

3.2 Payments are to be made upon achievement of performance targets for: capital works; property and tenancy management (PTM) services; and Aboriginal employment. To support the release of the payments, NIAA needs to assess the NT Government’s performance against the milestones in the Implementation Plan and, based on this assessment, make recommendations to the Australian Government Minister for Indigenous Australians. NIAA is also required under the National Partnership to consider the recommendations of the Joint Steering Committee (JSC) when assessing the NT Government’s performance against the milestones in the Implementation Plan. Figure 3.1 shows a summary of the assessment process.

Figure 3.1: Assessment process for milestone payments

 

 

Source: ANAO analysis of entity documentation.

3.3 The ANAO examined whether NIAA has effectively assessed the:

• delivery of capital works;
• delivery of PTM services; and
• achievement of Aboriginal employment targets.

Has NIAA effectively assessed the delivery of capital works?

Capital works plans

3.4 The Implementation Plan requires the NT Government to produce annual capital works plans to the JSC for approval by 31 May of each year. Capital works plans are expected to enable the JSC to monitor the progress of building works, and to provide NIAA a framework against which to anticipate NT Government milestone payment claims for completed bedrooms. The plans aim to provide transparency on where funding is spent and to give Land Councils visibility on the rollout of the construction program year by year and community by community.

3.5 The Implementation Plan specifies the matters that must be covered in the annual capital works plans for each location:

• scope of works to be completed in the period;
• schedule of delivery;
• anticipated impact on overcrowding; accompanying infrastructure works;
• estimated cost;
• Aboriginal employment and Aboriginal business participation; and
• engagement of local decision making.⁵⁰

3.6 As at October 2021, three annual works plans have been endorsed by the JSC. Table 3.1 examines the process of submission and endorsement of the capital works plan from 2019–20 to 2021–22.

Table 3.1: Capital works plans submission and endorsement process, 2019–20 to 2021–22

Source: ANAO analysis.

3.7 JSC meeting minutes and evidence from members of the JSC indicate that the capital works plans were often a focus of discussions between the NT Government, NIAA and the Land Councils to determine what additional or clearer content should be included. In October 2021 a capital works plan that satisfied the requirements stated in the Implementation Plan and the JSC’s requests for improved clarity was endorsed by the JSC.

3.8 Capital works plans should play an important role in the implementation of the National Partnership and provide the JSC, including the Land Councils, with visibility over the program of works planned and delivered, and confidence that progress is being made towards the National Partnership’s objectives.⁵¹ Until October 2021, the capital works plans had not met the following expectations as set out in the National Partnership:

• the 2019–20, 2020–21 and 2021–22 capital works plans were not submitted to the JSC by 31 May each year, as required under the Implementation Plan (with the 2019–20 and 2020–21 plans being approved after the end of the year they covered and the 2021–22 plan being endorsed in October 2021)⁵²; and
• information included in the plans did not provide the expected visibility on scheduled work until October 2021, 20 months before the end of the five-year National Partnership.⁵³

Capital works assessment

3.9 The National Partnership Implementation Plan provides that, upon submission and JSC approval of the 2019–20 capital works plan, an upfront payment equal to 30 per cent of the cost for the planned number of bedrooms for the year is to be made to the NT Government. Subsequently, payments are made upon completion of work. All payments are calculated on the basis of $173,077 per completed bedroom.

3.10 In September 2019, upon NIAA’s recommendation, the Minister for Indigenous Australians approved the up-front payment of $38.73 million to the NT Government. This represented 30 per cent of the cost of the 746 bedrooms planned for 2019–20. As noted in Table 3.1, the capital works plan did not meet the requirements of the Implementation Plan and had not been approved by the JSC, but had been given ‘in-principle support’. NIAA recommended that the minister approve the payment to enable the NT Government commencing the pipeline of works across 2019–20 and beyond.⁵⁴

3.11 In November 2021, the NT Government made a claim for a $13.01 million payment for 299 bedrooms completed to 30 June 2021, at the agreed unit cost of $173,077.⁵⁵

3.12 As part of its assessment for capital works payments NIAA is required to ensure all capital works are compliant with the Work Health and Safety Accreditation Scheme, the Building Code 2016 and the Indigenous building guide. The National Partnership also states that the construction of additional and replacement houses should contribute to improving housing quality. The 2017 Remote Housing Review found that high quality housing was needed to overcome the increase on the wear and tear on houses resulting from overcrowding, and recommended that details about certification of properties (at all stages of building, and for life after acceptance and tenanting) be reported to the governing body to ensure construction in remote communities is compliant with the appropriate building and certification standards.⁵⁶

3.13 From August to October 2021 NIAA worked with the NT Government to determine what evidence the NT Government would be required to submit to demonstrate achievement of capital works, and the assurance processes NIAA would apply to validate NT Government’s evidence. The resulting document describes the approach that NIAA may apply to verify the NT Government’s capital works claim. It states that, if NIAA chooses to, it could select a sample of up to five per cent of houses with bedrooms completed in the claim period, and review certification documents (including the certificate of occupancy) for each of the houses. A further verification step may consist of a site visit. However, as at November 2021, NIAA had not implemented the verification approach.⁵⁷

Has NIAA effectively assessed the delivery of PTM services?

3.17 Under the National Partnership, biannual payments of $17.5 million are to be made to the NT Government upon achievement of four tenancy performance measures and two Aboriginal employment performance measures. The performance measures are included in the PTM Framework, which outlines the strategic and operational directions supporting the delivery of PTM services and was endorsed at the first JSC meeting of August 2019. The JSC reviews and has the ability to vary the performance measures from year to year. In August 2020 and July 2021, the JSC agreed to maintain the same measures until January 2022, with changes in the targets for some of the measures (see Table 3.2).

3.18 As agreed in the Implementation Plan, in April 2019 NIAA released $35 million to the NT Government for PTM services delivered in 2018–19. This payment was not subject to performance measures and targets. As at November 2021, the NT government had submitted four PTM milestone reports to NIAA. Table 3.2 summarises the NT Government’s reported performance against PTM targets in 2019–20 and 2020–21.

NIAA assessment of Northern Territory Government’s reports

3.19 The NT Government provided documentation in its milestone reports to support its achievement against the six PTM performance measures. The data provided is extracted from the NT Government’s Tenancy Management System. The supporting documentation provided by the NT Government included:

• spreadsheets with data on the amount of rent collected and charged, number of accounts in arrears, number of dwellings, and number of dwellings inspected for each community or region; and
• tables that summarised the number of houses that had been handed over to tenants within an eight-week period, the tenancy start date, the region and community the house is located in and specific explanations for any houses that were not handed over to tenants within eight weeks.

3.20 NIAA’s assessment of the milestone reports consisted of verifying if the results reported by the NT Government were supported by documentation, and how reported results compared against the targets for each performance measure. When the NT Government did not meet a target NIAA sought additional information to explain the shortfalls.

3.21 NIAA sent its assessments of the NT Government’s milestone performance reports to the JSC for noting in out of session meeting papers. NIAA advised this was done to ensure transparency of actions and inform Land Council members in line with their monitoring role. In September 2021 NIAA advised the Land Councils had not raised issues with NIAA’s assessment as part of this process.

3.22 Under the National Partnership, the Minister for Indigenous Australians is authorised to certify that performance benchmarks and milestones have been achieved so payments can be made. Once NIAA had completed its assessment for milestone reports 1, 2 and 3, it submitted a brief to the minister outlining the results of the report’s assessment and recommending that the minister authorise payment (NIAA had not assessed milestone report 4 as at November 2021).

3.23 For Report 2a NIAA recommended the NT Government receive a partial payment of $12.6 million to reflect the reporting received covered only 72 per cent of the PTM period (from 1 July 2019 to 31 March 2020). NIAA recommended the NT receive the remaining $4.9 million after reporting covering 1 July 2019 to 30 June 2020 was provided in Report 2b. Table 3.3 summarises the justifications provided by the NT Government when targets were not met.

Table 3.3: Justifications for PTM performance measures not met

Note a: A rental rebate is the difference between rent charged and full rent for the property and is calculated on a percentage of a household’s assessable income. A rental rebate can last either six or 12 months or for a shorter period if household income varies from week to week. Tenants need to provide supporting documents on household income to renew rebates. A non-rebated account is an account where a tenant’s rental rebate has expired and is pending renewal. It may take time for rebate renewals to be resolved with tenants, processed administratively and captured in NT data.

Note b: Housing Reference Groups operate in remote communities, town camps and community living areas to give the NT Government advice on issues including local community concerns and needs for housing; access to jobs and training in housing construction and maintenance; and ideas for planning future housing needs.

Source: ANAO analysis of entity documentation.

Validation of reported data

3.24 In June 2020 the NT Auditor-General’s Office reported on the results of its performance management systems audit of the Our Community. Our Future. Our Homes (OCOFOH) Room to Breathe program. The audit found deficiencies pertaining to:

… the record management system supporting the Program; the need to establish approved program guidance earlier in the life of similar future programs; and the formal identification of key performance indicators specific to the Program with improved regular reporting against performance targets.⁵⁸

3.25 The audit made 11 recommendations aimed at the NT government improving planning, governance, procurement, contract management, performance monitoring and financial reporting.

3.26 In July and August 2020 NIAA and the JSC asked the NT Government about the issues raised by the NT Auditor-General’s report. The NT Government stated that it has significantly improved the performance management system that underpins the program.

3.27 Given the NT Auditor-General’s findings, NIAA should have ensured that it gained appropriate assurance on the program. However, NIAA does not verify the accuracy of the information provided by the NT Government in support of its achievement against the National Partnership targets, nor the reliability of the systems used by the NT Government to generate its reporting.

3.28 NIAA advised that broad assurance was provided by Land Councils who, through their work in communities, would be aware of the progress and quality of PTM services and capital works to the extent their work in communities and general awareness of National Partnership implementation would allow. However, some Land Councils informed the ANAO that this assurance role can only be performed at a general level, and that they do not have the capacity to collect feedback at a sufficiently detailed level.⁵⁹ In JSC meetings Land Councils have also noted the difficulty of clarifying how PTM and capital works have been delivered (see Paragraph 3.7).

3.29 In 2018 the ANAO conducted an audit of the monitoring and payment arrangements for national partnership agreements, including the previous National Partnership on Remote Housing (2016–2018). The audit found that there was no evidence that the Department of the Prime Minister and Cabinet (PM&C) (which managed the previous national partnership agreement) validated reported results for PTM and employment targets before authorising milestone payments.⁶⁰

3.30 In 2020 the ANAO conducted an audit of Aboriginal and Torres Strait Islander participation targets in intergovernmental agreements. The National Partnership was one of the intergovernmental agreements examined. The audit found that in relation to Indigenous employment, there was a risk that participation levels may be misreported. The audit report stated that entities, including NIAA, should establish appropriate controls and assurance activities to ensure reporting is accurate and policy outcomes are achieved. Entities should also provide clear advice to jurisdictions on controls and assurance activities and undertake reviews to check that these arrangements have been implemented. The audit included a recommendation that NIAA ensure appropriate risk-based assurance arrangements are in place for Aboriginal and Torres Strait Islanders participation target requirements.⁶¹

3.31 NIAA closed the 2020 ANAO recommendation in June 2021 on the basis that a risk workshop, to be conducted in July 2021, was the opportunity to further embed specific risk-based assurance arrangements. However, the ANAO examined the outcomes of this workshop and found they did not relate to assurance arrangements.⁶²

3.32 NIAA also mentioned in the recommendation closure report that the Reporting Framework for the National Partnership incorporated appropriate risk-based assurance arrangements. However, sections of the Reporting Framework relating to verification and assurance processes were not completed for any of the performance measures until November 2021, when the NT Government submitted an updated Reporting Framework to the JSC that stated, for each set of performance measures, the validations applied by the NT Government to reported data.⁶³

3.33 In November 2021 NIAA obtained documentation from the NT Government relevant to these validations, and advised the ANAO that it intended to develop, in collaboration with the NT Government, a practical approach to gain assurance on the effectiveness of the NT Government validation procedures.

Reporting periods

3.37 To claim a PTM payment, the NT Government must demonstrate its achievement of the PTM performance measures for the preceding reporting period. However, three of the five reports submitted by the NT Government have covered overlapping periods (see Figure 3.2).

Figure 3.2: Reporting periods of NT Government performance reports

 

 

Source: ANAO analysis of entity documentation.

3.38 The overlapping of reporting periods means that the data reported did not correspond with the period for which payments were claimed. For example, instead of receiving reporting that 70 per cent of properties received an annual inspection in the six months between 1 November 2019 and 31 May 2020, NIAA received data on the number of properties inspected in the nine months between 1 July 2019 to 31 March 2020, which included a period against which a payment had already been made (1 July to 31 October 2019). There is insufficient evidence to assess whether performance against the targets would have been equivalent if the reporting periods were consecutive, rather than overlapping.

3.39 NIAA accepted the NT Government’s performance reporting and did not request that the NT Government provide data that aligned with the reporting periods for the payments claimed. In the two briefs to the minister relating to the overlapping periods, NIAA used the reporting periods stated in the Implementation Plan, not the dates the NT Government actually reported against.

• In the brief for Report 2a, NIAA used a reporting period from 1 November 2019 to 31 March 2020, when NT Government reporting was for 1 July 2019 to 31 March 2020.
• In the brief for Report 2b, NIAA used a reporting period from 1 November 2019 to 31 May 2020, when NT Government reporting was for 1 July 2019 to 30 June 2020.

3.40 NIAA advised the ANAO that the NT Government provided three sets of PTM reporting for 2019–20 with a reporting date starting 1 July 2019, because the PTM performance measures are agreed by the JSC annually. NIAA further advised that it understands the NT Government did so to reflect full performance across the year to date and provide a true average against the annual targets. NIAA accepted the NT Government’s reporting method due to the targets being agreed annually.

Has NIAA effectively assessed the achievement of local Aboriginal participation outcomes?

3.41 One of the National Partnership’s outcomes is to ensure, to the maximum extent possible, that works are delivered by local Indigenous Territorians and businesses. Supporting this outcome, an annual payment of $7.5 million is to be made upon the achievement of an Aboriginal employment target of 40 per cent in 2019–20, rising to 46 per cent by 2022–23. The Procurement Framework, which outlines the strategies for undertaking procurement activities, and the Aboriginal Employment and Business Enterprise Development Framework, which outlines the rationale and strategies for achieving the Aboriginal employment target, were endorsed at the first JSC meeting of August 2019.

3.42 To qualify for the employment payment the NT Government must submit a report which demonstrates its achievement against the target each financial year. As at November 2021, the NT Government had claimed the annual payments for 2018–19, 2019–20 and 2020–21. Table 3.4 presents the NT Government’s reported achievement against the Aboriginal employment target, separating achievement for PTM and capital works, for the three years.

Table 3.4: Aboriginal employment target achievement, 2018–19 and 2020–21

Note a: For 2019–20 NIAA advised the minister that the payment should be split over two partial payments of $6.45 million and $1.05 million, to reflect that the NT Government’s first claim only covered 83 per cent of the reporting period required.

Source: ANAO analysis of entity documentation.

3.43 For 2018–19 the full payment of $7.5 million was made for PTM alone, as no capital works had been delivered under the National Partnership. Based on the achievement for PTM and capital works combined for 2019–20, NIAA recommended that the Minister for Indigenous Australians release the full annual payment of $7.5 million (split across two partial payments). NIAA did not seek information for the NT Government on whether the Aboriginal workforce employed was from the local community for either payment, despite the fact that one of the National Partnership’s outcome is to maximise the employment of local Aboriginal people.⁶⁴ (Recommendation no. 1 aims at NIAA revising the Implementation Plan, including clarifying the interpretation of the Aboriginal employment target).

3.44 Similar to the assessment of PTM services (see Paragraph 3.27), NIAA has not gained assurance over the information received from the NT Government to support their Aboriginal employment payment claims. In accordance with Recommendation no. 3, NIAA should develop a risk-based approach to gain assurance over reporting on Aboriginal employment.

4.1 The National Partnership defines one of the NIAA’s primary responsibilities as ‘monitoring and assessing the performance of the delivery of the agreed program of works under this Agreement to ensure that outputs are delivered and outcomes are achieved within the agreed timeframe’.⁶⁵

4.2 Chapter 3 examined NIAA’s assessment of the delivery of the program of works, which is tied to financial payments. The National Partnership also aims to achieve outcomes that are not linked to payments. These are:

• reducing overcrowding;
• ensuring a role for the Land Councils in the National Partnership’s governance; and
• providing transparency about how money is spent.

4.3 In addition, the National Partnership seeks to engage Indigenous communities in housing decision-making processes, and commits the Australian Government, NT Government and the Land Councils to undertaking two reviews to continue the work towards establishing a sustainable model for remote Indigenous community housing in the NT.

4.4 This chapter examines NIAA’s actions to ensure these outcomes and other objectives are being achieved. It also examines NIAA’s management of risk, and its advice to the Minister for Indigenous Australians about the progress of the National Partnership.

Has NIAA ensured overcrowding is reduced?

4.5 Reducing overcrowding in 73 remote NT communities and the 17 Alice Springs town camps is an agreed outcome of the National Partnership. The construction or extension of 1950 bedrooms, equivalent to 650 three-bedroom houses, by 30 June 2023 is the primary activity undertaken under the National Partnership to achieve this outcome.

4.6 The National Partnership does not define a target for the intended reduction in overcrowding by 30 June 2023. However, the proportion of overcrowded houses is one of the performance measures monitored by the Joint Steering Committee (JSC) and reported publicly by the NT Government on its website.⁶⁶ NT Government reporting against this measure indicated that as at 30 September 2021 the proportion of overcrowded houses had decreased from 58.1 per cent in 2017 to 54.5 per cent. The NT Government also reported to the JSC that it expects overcrowding to have reduced by 20 per cent on 2017 levels, to 46.5 per cent, by the end of June 2022.

4.7 NIAA advised that as at 30 September 2021, 363 bedrooms (equivalent to 121 three-bedroom houses) had been completed using Australian Government funding. This represented 19 per cent of the houses that should be delivered by June 2023.

4.8 As early as November 2019 and consistently after this date, NIAA has expressed concerns at the slow delivery of capital works during JSC meetings and emphasised to the NT Government that delivering housing was a priority. In October and November 2021, the NT Government Minister for Remote Housing and Town Camps and the Chief Executive Officer for the NT Department of Territory Families, Housing and Communities wrote to the Australian Government Minister for Indigenous Australians and to NIAA’s Chief Executive Officer, committing to deliver the agreed program of works by June 2023. NIAA requested that the NT Government present a paper on procurement arrangements supporting accelerated housing construction at the JSC meeting scheduled for February 2022.

4.9 As the NT Government does not have a target for capital works funded through its co-contribution (discussed at Paragraphs 2.12 to 2.13), there is a risk that achievement of the capital works funded by the Australian Government under the National Partnership will be prioritised over capital works funded by the NT Government. NIAA should ensure that the acceleration of the delivery of Australian Government funded houses does not impact on the NT Government’s capacity to deliver its capital works under the OCOFOH program.

Has NIAA ensured that Land Councils and local Aboriginal people are effectively engaged in decision-making?

4.10 The National Partnership commits to ‘a genuine and mutually respectful formal partnership between governments and Aboriginal people from the NT’.⁶⁷ The two main mechanisms to achieve this objective are: the inclusion of the Land Councils in the JSC; and the implementation of the local decision-making policy to inform housing outcomes at the community level.

Land Council participation

4.11 The Land Councils’ key responsibilities at the JSC are:

• consulting with and representing communities with respect to housing policies and outcomes arising from the National Partnership;
• monitoring outcomes and investment under the National Partnership;
• participating in decisions of policy and strategy for remote housing;
• informing the JSC of other Land Council policies and programs in the NT that may impact on investments and programs occurring under the National Partnership;
• working with the NT Government on land matters necessary for the delivery of housing outcomes; and
• ensuring operational requirements relating to land matters, including land tenure consultations, are in place to effectively implement the National Partnership.

4.12 Housing is not a primary function of the Land Councils (see Paragraph 1.21). To support the role of the Land Councils in the National Partnership, the Minister for Indigenous Affairs agreed in October 2018 to provide $900,000 over two years to the Northern Land Council for three additional full-time staff and operational costs associated with remote housing reforms. In March 2020 the Minister also agreed to provide $300,000 to the Central Land Council to progress work on a new model for delivering remote housing in the NT.

4.13 The JSC terms of reference establish that each Land Council should have two representatives at the JSC, including the Land Councils’ Chief Executive Officers. Representatives from at least two Land Councils are required to reach the quorum for a formal JSC meeting. Each JSC meeting should be co-chaired by a representative of one of the Land Councils and a representative of either the Australian or NT Governments (on a rotating basis). For the first ten meetings to September 2021, the four Land Councils were represented at each meeting (except for meeting 7 of March 2021 and meeting 10 of November 2021, for which the Anindilyakwa Land Council representatives were apologies) and co-chaired the meeting on a rotating basis. The Land Councils are also represented in the two JSC sub-committees (the reporting sub-committee and leasing and housing review sub-committee).

4.14 The level of representation of Land Councils in the JSC suggests that the JSC has been an effective forum to support Land Councils’ participation in decisions of policy and strategy for remote housing. In discussions with the ANAO the Land Councils confirmed that their involvement had generally been effective. The inclusion of the Land Councils in the JSC has allowed them to participate in decisions of broad policy and strategy for remote housing, as stated in the National Partnership.

4.15 During the National Partnership’s negotiations, NIAA played a key role in ensuring that the Land Councils were represented in the National Partnership’s governance. This resulted in the National Partnership being the first national partnership agreement for remote housing to include Land Councils in the governance structure, in line with Priority Reforms 1 and 3 of the National Agreement on Closing the Gap (see Table 2.2). The Australian Government’s Closing the Gap Implementation Plan refers to Land Councils’ oversight role in the National Partnership as one of the areas where the objectives of Priority Reform 1 (partnership and shared decision-making) are being implemented.⁶⁸

4.16 However, as noted at Paragraph 3.8, the insufficient visibility on scheduled capital works has impacted on the ability of the Land Councils to effectively consult with and represent their communities with respect to the timing and location of houses scheduled for construction or extension. Further, as noted in at Paragraph 3.28, some Land Councils indicated that they have not always had the capacity to fulfil the role that NIAA expected in relation to providing broad assurance over the progress and quality of property and tenancy management (PTM) services and capital works.

Community engagement and the local decision-making policy

4.17 Under the National Partnership, capital works must be informed by the local decision-making principles and the NT Government must report to the JSC on the implementation of the local decision-making policy in the capital works program.

4.18 The local decision-making policy is the NT Government’s strategy to provide communities with the opportunity to have input into improvements to housing through a community engagement and design process. The policy was developed to be applied to the OCOFOH program and was incorporated into the National Partnership. Under the policy, houses are to be ‘co-designed with local decision-makers and individual families to ensure they are place-based, directly related to local priorities and are underpinned by sustainable local employment initiatives’.⁶⁹

4.19 Implementation of local decision-making involves meetings held by the NT Government with communities at several points in the rollout of the capital works program, to determine the design and location of houses, the schedule of construction, and whether locally operating Aboriginal Business Enterprises (ABEs) have the capacity to deliver works. Parameters that are discussed with the communities include:

• for new houses — location and housing options (for example, three or four bedrooms, duplex), floor plan designs (including bathroom, veranda and kitchen) and fabrication (for example, brick or cladding); and
• for renovations and extensions — location and options (for example, renovation or addition of bedrooms, living spaces, outdoor kitchen or undercover areas, and granny flats for the elderly) and improvement of existing amenities (for example, wet areas or disability modifications).

4.20 Some parameters are non-negotiable. Works are excluded that: are not considered by the NT Government to be reasonable in cost and value for money; would exceed the essential services capacity of a community; or are not within reasonable distance of existing infrastructure or within a safe location (for example, within a flood zone). Renovations or extensions are not acceptable if they do not improve overcrowding levels (unless they address the needs of special groups, such as residents with disability), or for dwellings that have been classified as beyond economic repair. The works must also comply with leasing arrangements, planning zones and building standards.

4.21 Figure 4.1 illustrates the modular models for new houses and extensions used to discuss the different construction options with communities.

Figure 4.1: Models of new houses and extensions

 

 

Source: ANAO.

4.22 The Australian Government’s Closing the Gap Implementation Plan refers to local decision-making processes, such as the process implemented under the National Partnership, as an avenue to provide an Aboriginal and Torres Strait Islander voice in housing strategy and decisions.⁷⁰ The 2017 Remote Housing Review states that local engagement, when done well, delivers better housing.⁷¹

4.23 The NT Government has updated the JSC on the schedule of visits to communities conducted to implement the local decision-making process at most JSC meetings, providing on four occasions the list of communities visited or scheduled to be visited. On three occasions, during JSC meetings in 2019 and 2021, the NT Government invited NIAA and the Land Councils to attend a community engagement meeting to observe the local decision-making policy in practice. In October 2021 NIAA advised the ANAO that, despite several attempts to visit communities to view capital works progress, these visits had not occurred due to the impact of COVID-19’s border and community closures.

4.24 As noted at Paragraph 3.32, in November 2021 the Reporting Framework was updated to state, for each set of performance measures, the validations applied by the NT Government for data reported to the JSC. For the community engagement and local decision-making process performance measures, the validations noted in the Reporting Framework consist of conducting a desktop verification that the planned meetings have been conducted as scheduled and NT Government recording systems being subject to audit.

4.25 NIAA has not sought confirmation from the NT Government that the local decision-making process is being effectively implemented as part of the National Partnership, including whether it has been evaluated to verify, for example, that communities have been appropriately represented at the meetings, or communities’ decisions were fully informed and adequately implemented.

Has NIAA ensured that the reviews to inform a future remote housing model have been undertaken?

4.29 Under the National Partnership, all members of the JSC share responsibility for conducting two reviews:

• a review of the remote leasing and housing model (leasing and housing review); and
• a review of land servicing costs and availability (land servicing review).

4.30 Secretariat, including responsibility for preparing draft terms of reference for the reviews, sits with the Australian Government for the leasing and housing review and with the NT Government for the land servicing review.

Leasing and housing review

4.31 During the negotiation of the National Partnership, the Australian Government expressed an intention to move towards an Aboriginal-controlled remote housing model. The housing review is expected to progress this project, continuing ‘the work towards options for sustainable remote Indigenous community housing in the NT’, and acknowledging that:

The current government-led and implemented model …. may no longer meet the aspirations of remote communities for more influence in housing delivery and more opportunities for local and regional Aboriginal organisations to be involved in housing management and service delivery.⁷²

4.32 At the first JSC meeting of August 2019, a decision was made to establish a sub-committee to conduct the review. The sub-committee includes representatives from NIAA, the NT Government, the four Land Councils, the Office of Township Leasing⁷³ and several Aboriginal peak body organisations.⁷⁴ The subcommittee met six times between February 2020 and March 2021.⁷⁵

4.33 Terms of reference for the review, drafted by NIAA, were endorsed by the JSC in February 2020, and a decision was made to split the housing review in two components: a leasing review looking at current and potential future leasing arrangements for remote community and homelands housing; and a remote housing review aiming to improve and optimise the remote housing model, with a particular focus on community housing alternatives. The draft report for the leasing review (conducted by Milika Consulting) was submitted to the JSC for consideration in March 2021. The report found that while the current leasing system had broad support across housing stakeholders, some aspects of the current arrangements were less than optimal, including:

… lengthy and complex documents, differing tenure systems, a lack of timeliness in negotiating leases, no realistic pathway to home ownership and an anomaly concerning funding for new housing on homelands/outstations.

4.34 The report for the housing model was commissioned from PricewaterhouseCoopers’ (PwC’s) Indigenous Consulting in September 2021, with a final report expected in early 2022.

4.35 The timeframe for completing the leasing and housing review has been delayed several times, from a final date of June 2020 to mid-2022 (as at November 2021). The outcomes of the review are expected to inform housing arrangements after the end of the National Partnership in June 2023, including (as stated in the Australian Government’s Closing the Gap Implementation Plan) options for community-controlled housing in the NT.⁷⁶ As a part of Closing the Gap Priority Reform 2, the community-controlled housing sector is one of the priority areas for the development of a Sector Strengthening Plan.⁷⁷ This plan, due for completion in April 2022, should be informed by the leasing and housing review.⁷⁸

4.36 Due to its interdependences with these other priority actions, NIAA should work with the NT Government, Land Councils and NT housing peak body organisations to ensure that completion of the leasing and housing review is not further delayed.

Land servicing review

4.37 The land servicing review aims to examine strategies to manage more effectively the issues associated with high cost of servicing land in remote communities and the limited land availability resulting from environmental and other factors, such as water availability or seasonal flood risk. As at November 2021, no progress had been made on conducting the review.⁷⁹

Has NIAA ensured transparency about how money has been spent?

4.38 Advice sent by the Department of the Prime Minister and Cabinet (PM&C) to the Minister for Indigenous Affairs in August 2018 highlighted the importance of financial transparency being reflected in the National Partnership. The Australian Government’s objective was to ensure that under the National Partnership there would be full public transparency over how funding was spent and where it was having an impact. While the primary mechanism for the delivery of the Australian Government investment is through the NT Government OCOFOH program, the brief outlined an expectation that there would be clear and demarcated transparency between the Australian and NT Governments funding contributions. This transparency would also address Aboriginal communities’ requests for information on the timing and modalities of housing investments made in their communities. For ease of access, information on the National Partnership’s performance and investments would be available publicly on a NT Government website.

4.39 The National Partnership Implementation Plan makes provision for the development of a Reporting Framework, in order to define the measures that should be reported to demonstrate progress and support assessment of milestones. The Reporting Framework’s purpose is to support the JSC’s monitoring of the National Partnership outcomes and milestones payments. It also aims to promote transparency of the program’s investments and outcomes for the range of stakeholders involved in housing.

4.40 The JSC decided to establish a subcommittee to consider the Reporting Framework at the first August 2019 meeting, but the framework was not endorsed until the JSC meeting of November 2020.⁸⁰

4.41 The Reporting Framework reflects reporting processes existing under the OCOFOH program, and identifies measures that relate specifically to the National Partnership. For each of the 80 measures included, the framework specifies the data source and whether the results are to be reported publicly (on the NT Government’s OCOFOH program website) or only to the JSC.⁸¹ The measures specific to the National Partnership are presented in Table 4.1.

Table 4.1: Performance measures for the National Partnership

Note a: An ABE is defined under the National Partnership as ‘an organisation that is 50 per cent or more Aboriginal owned or controlled that is operating as a business, including companies, incorporated associations, trusts and social enterprises or registered charities if they operate as a business; or another form of Aboriginal organisation as agreed by the JSC.’ Northern Territory Department of Local Government, Housing and Community Development, Aboriginal Employment and Business Enterprise Development Framework, September 2019, p. 3.

Source: Northern Territory Government, Our Community. Our Future. Our Homes. Reporting Framework, Appendix A, October 2020.

Public reporting

4.42 Of the 80 performance measures listed in the Reporting Framework, 70 per cent (55) were reported on the NT Government’s OCOFOH program website.⁸² The information is cumulative, updated quarterly and includes, for each program (HomeBuild or Room to Breathe), community and funding source (Australian or NT Government): expenditure; houses and bedrooms planned and completed; community engagement visits; proportion of Aboriginal employment; and impact on overcrowding.

4.43 For instance, the website indicates that in Hermannsburg, as at 30 September 2021, 46 houses had been approved for construction or extension, 24 of which had been completed. The Australian Government had spent $7.9 million and the NT Government $950,600. The proportion of overcrowded houses had decreased from 53.6 per cent at the start of the OCOFOH program to 51.1 per cent, and 15 community engagement visits had been conducted under the local decision-making process. For the year 2021–22 to date, 14.4 per cent of the full-time equivalent workforce employed to deliver the housing program in Hermannsburg were Aboriginal (34.5 per cent since the start of the OCOFOH program).

Figure 4.2: A completed modular house in Hermannsburg

 

 

Source: ANAO.

4.44 Table 4.2 shows the financial information that was reported as at 31 October 2021, at the OCOFOH program level.

4.45 The publicly available information is comprehensive and can provide good visibility for stakeholders and residents to understand and confirm work conducted in communities.

Reporting to the JSC

4.46 Annual capital works plans are expected to enable the JSC to monitor the progress of building works, and to provide NIAA a framework against which to schedule payments. The plans should play an important role in the implementation of the National Partnership and provide the JSC with visibility over the program of works planned and delivered, and confidence that progress is being made towards the National Partnership’s objective.

4.47 As discussed at Paragraphs 3.4 to 3.8, until October 2021 capital works plans prepared by the NT Government had not met the expectations as set out in the National Partnership. The first three annual plans were submitted after or towards the end of the year they covered, and did not provide the expected visibility on scheduled work.

4.48 Improvement to performance reports provided by the NT Government has been a topic of discussion at several JSC meetings, and reporting has not been consistent. Detailed financial reporting was provided at the JSC meetings of August 2020, November 2020 and March 2021 and included information on expenditure to date and forecast expenditure for each government by component (capital works, PTM and Indigenous employment). However, reporting provided at the July 2021, September 2021 and November 2021 JSC meetings included information on expenditure to date by component, but not a breakdown by source (Australian Government or NT Government).

4.49 NIAA advised that the decision to report capital works progress jointly for the Australian and NT Governments was made in consultation between NIAA and the NT Government, and aimed to provide a high-level performance reporting that would enable the JSC members to more clearly track and jointly manage the agreed capital works program.

Reporting to the Australian Government

4.50 Reporting is provided separately to the Australian Government in support of the NT Government’s claims for payment. The reporting provided by the NT Government in support of its claims for PTM and Aboriginal employment, examined at Paragraphs 3.17 to 3.44, consists of the record of the NT Government’s achievement against the relevant performance measures. The reporting supporting the November 2021 claim for capital works completed to 30 June 2021 consisted of a list of houses where work had been completed, at the community level, indicating that the work had been done using the funding originating from the Australian Government.

4.51 Reporting should also be provided to NIAA demonstrating how the NT Government is meeting its commitment to make a co-contribution of $550 million dollars over the life of the National Partnership through its OCOFOH program.⁸³

4.52 NIAA informed the ANAO that it receives verbal updates from NT Government on program expenditure against its matching commitment. As at 30 June 2021, NIAA understood that the NT Government’s matched expenditure for the period 2018–19 to 2020–21 was $314.1 million. However, reporting on the NT Government website indicated that the total expenditure under the OCOFOH program as at 31 July 2021 since 2017–18 (one year before the beginning of the National Partnership) was $259.5 million.

4.53 NIAA further advised that annual capital works plans also provide anticipated NT Government matched expenditure, and that the 2021–22 annual capital works plan indicated that the NT Government has programmed a total expenditure of $165 million (including $82.9 million on infrastructure and land servicing, $62.5 million on HomeBuild, $16.7 million on Room to Breathe and $3.4 million on demolitions). NIAA also advised the ANAO that it understands governments have maintained a shared understanding since the beginning of National Partnership that the NT Government’s expenditure on land servicing should be counted as part of the NT Government’s matched expenditure. However, the National Partnership states that the NT Government’s co-contribution is part of the funding committed under its OCOFOH program, which does not include land servicing.⁸⁴ Further, as noted at Paragraph 2.33, when the National Partnership was negotiated, the Australian Government considered land servicing to be additional to the funding under the National Partnership.

4.54 As a consequence, NIAA does not have assurance that the NT Government will meet its co-contribution commitment over the life of the National Partnership.

Have risks to the delivery of the National Partnership been managed effectively?

Prioritising housing construction

4.55 As noted at Paragraph 4.8, NIAA’s key concern when monitoring NT Government’s delivery of the program of works has been the slow pace of construction, and NIAA has consequently focused on seeking to accelerate the delivery of houses. However, NIAA has not obtained assurance that: housing meets required standards (see Paragraphs 3.12 to 3.13); works are delivered by local Indigenous Territorians and businesses (see Paragraph 3.43); and the local decision-making process effectively informs construction (see Paragraph 4.25).

4.56 There is a risk that, in prioritising an accelerated delivery, other outputs and outcomes are negatively impacted, especially given the shortened timeframe available (just over four years) and the conditions of construction in remote locations (where, for example, access may be restricted for several months every year during the wet season). Box 2 below shows that objectives such as Aboriginal employment and local decision-making have the potential to lead to positive social and economic outcomes and more sustainable housing, although their establishment and implementation require time.

Source: PM&C, Remote Housing Review, October 2017, p. 58.

4.57 The National Partnership incorporates some potentially conflicting priorities: delivering 650 quality houses in just over four years; while at the same time implementing a local-decision making process and providing local employment. To reconcile these priorities, robust risk management would have been required to inform NIAA’s monitoring of the National Partnership and to guide the JSC’s decisions.

NIAA’s approach to administering the National Partnership

4.58 The delivery of Indigenous programs generally requires a high level of collaboration and integration between different levels of governments. National partnership agreements were designed to promote this collaboration and encourage shared accountability for outcomes. The National Indigenous Reform Agreement (Closing the Gap) (NIRA) highlighted this requirement for effective collaboration as a priority (see NIRA’s integration principle in Table 2.1).

4.59 The ANAO 2011 performance audit of the National Partnership Agreement on Remote Indigenous Housing in the NT (NPARIH) noted that, whereas in the early stages of the NPARIH implementation the Australian Government had largely adopted the position of being the funder of a program to be delivered by the NT Government, subsequently joint management arrangements were established leading to responsibility for program delivery and the overall accountability for results being shared between the two governments. The ANAO audit found that these joint arrangements had given the Australian Government greater visibility over key implementation issues and had assisted with managing progress and risks.⁸⁵

4.60 Similarly, the 2017 Remote Housing Review of NPARIH noted that a regional governance structure has the potential to facilitate better program administration:

What is needed is a shift from capital city-based haggling over data sets and finances to regionally and locally based fora where officials from the national Indigenous administration and jurisdiction housing administrators jointly engage in much more granular and focussed discussions. Far from being limited to outcomes’ data, Commonwealth Indigenous Affairs officials need to see and understand how the program is rolling out on the ground.⁸⁶

4.61 Since the commencement of the National Partnership, NIAA has focused on its monitoring role to ensure the delivery of the program of works, using a model of administration based on core staff located in the NIAA national office in Canberra and travelling to the NT when necessary or possible. The restrictions due to the COVID-19 pandemic since early 2020 have limited NIAA’s ability to travel to the NT, including to conduct face to face meetings.

4.62 The benefits of having NIAA officials based in the NT and working closely on implementation issues as they arise have been discussed at several JSC meetings.

4.63 In November 2021 the Chief Executive Officer of NIAA wrote to the Department of Territory Families, Housing and Communities to offer that an NIAA officer be embedded in the department. NIAA expects that this change will ensure greater coordination and integration between NT Government remote housing program delivery and Australian Government Indigenous employment and business support programs, and enhance assurance and verification processes for the National Partnership reporting.

Risk management

4.64 As at November 2021, NIAA had not developed an internal risk management plan for the National Partnership.⁸⁷

4.65 In March 2021 the NT Government provided a draft risk management plan to NIAA for comments, ahead of a risk workshop to be conducted with JSC members in May 2021. NIAA returned its comments on the plan in April 2021. The risk workshop was conducted in July 2021, but did not use the draft and incomplete risk management plan. Instead a new risk register was drafted and submitted to the September 2021 JSC meeting, identifying seven key risk categories (outlined in Table 4.3) and corresponding causes, consequences and mitigation actions.

Table 4.3: Draft risk register categories as at September 2021

Source: ANAO, based on NIAA and NT Government documents.

4.66 NIAA endorsed the risk register out of session on 11 October 2021. One of the actions listed in the risk register was the finalisation of the JSC Governance Framework, including a risk management plan, but no finalisation date was indicated. The risk register was renamed strategic risk report and submitted to the November 2021 JSC meeting. A new ‘status’ section indicated that risks had been addressed through:

• a work plan that included the following items: communication strategy; PTM measures; land servicing review; progress reporting; Aboriginal Employment and Business Development; and Governance Framework; and
• improved progress reporting.

4.67 As at November 2021, none of the work plan items had been completed.⁸⁸ In addition, while ‘improved progress reporting’ was identified as addressing the risk of not achieving the delivery of 1950 bedrooms by June 2023 (risk no. 3), no explanation is provided for how this action had addressed the risk.

Has advice to the minister on the National Partnership’s progress been timely and based on sound analysis?

4.70 Between September 2019 and September 2021, NIAA provided 14 briefs to the minister on the National Partnership. During this time, NIAA provided regular updates on the progress of the development of options for Aboriginal-controlled remote housing delivery and the work of the JSC subcommittee on the joint review on housing and leasing model, including consultations undertaken with key stakeholders, policy and legal work supporting the reform, and delays encountered conducting the joint review.

4.71 As early as September 2019 (six months after the National Partnership was executed) and in all subsequent briefs, NIAA expressed concerns at the slow pace of delivery of the capital works program. NIAA explained in its advice to the minister that this was due to a range of factors including delays in the execution of the National Partnership (signed on 30 March 2019) and the COVID-19 pandemic, which restricted remote area travel or access and impacted on supply chains.

4.72 From April 2020, NIAA raised the risk that the program of construction may not be completed over the duration of the National Partnership and suggested strategies to address this risk, including: receiving from the NT Government annual capital works plans that provide adequate visibility on work schedule and reviewing the Implementation Plan to improve its clarity.

4.73 While NIAA provided regular updates on the rollout of the capital works program, the advice was incomplete as it did not include coverage of the following important considerations.

• Progress against all of the National Partnership’s outputs — The first brief, in September 2019, provided information on how different options for housing construction may impact overcrowding, housing quality, Indigenous employment and local decision-making. Subsequent briefs focused on the slow delivery of capital works and NIAA’s efforts to obtain assurance from the NT Government that the pace of construction would increase, but did not document the impact the pressure of accelerated construction may have on the National Partnership’s other outcomes and outputs.
• Advice on co-contributions — The advice did not document whether the NT Government was meeting or likely to meet its commitment to match the Australian Government’s financial contribution over the duration of the National Partnership.
• A robust analysis of all the factors underpinning the slow delivery of houses — The advice did not document whether contextual factors (such as the limited time available in communities affected by the wet season, difficulties in sourcing construction material, communities’ prioritisation of culture obligations, or difficulties in finding an interpreter to conduct community consultations) had been adequately factored in the delivery of the program of work.

Appendix 1 Entity responses

 

 

 

 

 

 

Appendix 2 Performance improvements observed by the ANAO

1. The fact that independent external audit exists, and the accompanying potential for scrutiny, improves performance. Program-level improvements usually occur: in anticipation of ANAO audit activity; during an audit engagement as interim findings are made; and/or after the audit has been completed and formal findings are communicated.

2. The Joint Committee of Public Accounts and Audit (JCPAA) has encouraged the ANAO to consider ways in which the ANAO could capture and describe some of these impacts.

3. Performance audits involve close engagement between the ANAO and the audited entity as well as other stakeholders involved in the program or activity being audited. Throughout the audit engagement, the ANAO outlines to the entity the preliminary audit findings, conclusions and potential audit recommendations. This ensures that final recommendations are appropriately targeted and encourages entities to take early remedial action on any identified matters during the course of an audit. Remedial actions entities may take during the audit include:

• strengthening governance arrangements;
• initiating reviews or investigations; and
• introducing or revising policies or guidelines.

4. In this context, the below improvements were observed by the ANAO during the course of the audit. It is not clear if these actions and/or the timing of these actions were already planned before this audit commenced. The ANAO has not sought to obtain reasonable assurance over the source of these improvements or whether they have been appropriately implemented.

5. Performance improvements observed by the ANAO during the course of this audit were that:

• the 2020–21 capital works plan received approval from the JSC at the September 2021 meeting, and the 2021–22 capital works plan was submitted to the JSC at the September 2021 meeting and endorsed by NIAA in October 2021 (see Table 3.1);
• NIAA has determined the reporting required to demonstrate achievement of capital works and the assurance processes to validate capital works achievement, including compliance with relevant standards (see paragraph 3.13);
• the number of bedrooms completed increased from 175 as of 30 April 2021 to 363 as of 30 September 2021 (see paragraph 4.7), and the NT Government has committed to deliver the agreed program of works by June 2023 (see paragraph 4.8);
• NIAA is considering embedding an NIAA officer in the NT Government, to ensure greater coordination and integration between Australian and NT Governments’ programs and to enhance existing assurance and verification processes (see paragraph 4.63); and
• a risk management workshop took place and a risk register was developed for the JSC members in July 2021, with work on risk management ongoing (see paragraphs 4.64 and 4.65).

Appendix 3 Map of land tenure in the Northern Territory

 

 

Note: ALRA stands for Aboriginal Land Rights (Northern Territory) Act 1976 and NTER for NT Emergency Response.

Source: Department of Families, Housing, Community Services and Indigenous Affairs Occasional Paper No.34 2010 The Evaluation of income management in the Northern Territory, p. 70 [Internet], available from https://www.dss.gov.au/about-the-department/publications-articles/research-publications/occasional-paper-series/number-34-evaluation-of-income-management-in-the-northern-territory?HTML [accessed 16 February 2022].

Appendix 4 Guide on the Structure of National Partnership Agreements

Source: Council on Federal Financial Relations, Federal Financial Relations Circular 2015/01, 2015.