Helping Hugs Family Day Care Pty. Ltd. and Secretary, Department of Education - [2022] AATA 2895

Helping Hugs Family Day Care Pty. Ltd. and Secretary, Department of Education [2022] AATA 2895 (6 September 2022)
Division:GENERAL DIVISION
File Number(s): 2019/7721
Re:Helping Hugs Family Day Care Pty. Ltd.
APPLICANT

Secretary, Department of Education And
RESPONDENT

Decision
Tribunal:Ms A E Burke AO, Member
Date: 6 September 2022
Place:Melbourne

1.The Tribunal sets aside the decision of the authorised review officer of 7 November 2019 affirming the decision to cancel Helping Hugs Family Day Care Pty Ltd’s (Helping Hugs) approval to operate a child care service;
2.In substitution, the Tribunal determines that Helping Hugs’ approval be granted on the basis that the number of educators allocated to the service does not exceed 45 and the number of child care places allocated to the service under s 198B does not exceed 315.
3.The Tribunal determines that breaches identified by the Respondent have been made out, as such Helping Hugs has received an overpayment of $65,654.10 ///and the balance of the monies held in trust by Helping Hands must be remitted to the Respondent.
4.To ensure that Helping Hugs continues to comply with all the conditions of its approval, it must require all families to deposit gap payments directly with the service and not the individual educators.

....................[sgd]....................................................
Ms A E Burke AO, Member
Catchwords
CHILD CARE – family assistance law – child-care benefit – cancellation of approval as an approved child care service – breach of conditions of provider approval – child swapping – claiming sessions of care for children 14 years older or at secondary school – overseas educators – overseas children – late reporting and enrolments – overlapping sessions – absences before and after care – exceeding educator to child ratios – appropriate sanction – decision set aside
Legislation
Acts Interpretation Act 1901 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
A New Tax System (Family Assistance) Act 1999 (Cth)
Child Care Benefit (Children in respect of whom no-one is eligible) Determination 2015 (Cth)
Child Care Benefit (Eligibility of Child Care Services for Approval and Continued Approval) Determination 2000 (Cth)
Child Care Benefit (Eligibility of Child Care Services for Approval and Continued Approval) Rules 2017 (Cth)
Child Care Benefit (Session of Care) Determination 2016 (Cth)
Child Care Subsidy Minister's Rules 2017 (Cth)
Criminal Code Act 1995 (Cth)
Education and Care Services National Law Act 2010 (Vic)
Education and Care Services National Regulations 2011 (Vic)
Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Act 2017 (Cth)
Cases
Al-Huda Pty Limited v Secretary, Department of Education, Skills and Employment [2020] FCA 1613
Jessica Education Centre Pty Ltd and Secretary, Department of Education and Training [2019] AATA 3739
Moonlight Family Day Care Pty Ltd and Secretary, Department of Education and Training [2018] AATA 2706
Secretary, Department of Education and Training v Simpson Networks Pty Ltd t/as Melbourne School Holiday Club (2019) 273 FCR 252
Sunrising Family Day Care Pty Ltd and Secretary, Department of Education and Training [2018] AATA 1463
Sweet Melon Family Day Care Pty Ltd and Secretary, Department of Education and Training [2018] AATA 1862
Secondary Materials
Child Care Provider Handbook, Version 2, June 2019
REASONS FOR DECISION
Ms A E Burke AO, Member
6 September 2022

This application by Helping Hugs Family Day Care Pty Ltd (Helping Hugs) is for review of a decision made by the Authorised Review Officer (ARO) of the Respondent, the Secretary of the Department of Education (the Department), on 7 November 2019. That decision affirmed the decision of the delegate dated 31 May 2019 which cancelled the provider approval of Helping Hugs under the family assistance law (FAL), pursuant to section 195H(1)(b) of the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).
Helping Hugs sought review of the ARO decision by the Administrative Appeals Tribunal on 22 November 2019. Helping Hugs stated in its application:
The Applicant considers the decision maker's decision was wrong for various reasons including:
1. The Applicant does satisfy, and has satisfied, any eligibility rules applicable lo the service;
2. The Applicant has not contravened any obligalion(s) imposed on it under the family assistance law;
3. The Applicant has not contravened obligation(s) imposed on ii under any other relevant law;
4. The Applicant has not suffered a significant failure of governance:
5. The Applicant has not contravened its reporting requirements;
6. The Applicant has implemented appropriate governance arrangements to ensure ongoing compliance with its obligations;
7. The Applicant is and was at all limes a fit and proper person to operate a child care service;
8. The Applicant has and will continue to comply with all of its legal obligations;
9. The Applicant has taken extensive steps to ensure ongoing future compliance with all applicable laws. Regulations and obligations.
Helping Hugs was represented Mr Tom Lui of Counsel. The Secretary of the Department was represented by Mr David Brown of the Australian Government Solicitor.
BACKGROUND
On 11 April 2019, a delegate of the Respondent advised Helping Hugs that the Department was considering imposing a sanction of cancellation on the service, as the service had not complied with the conditions of its approval. The Department identified numerous eligibility rules where the operator of the service was non-compliant. It found that Helping Hugs was not a suitable person to operate a childcare service, as the service had not provided complete and accurate reports to the Secretary of the Department. The Department considered that Helping Hugs appeared to have reported care where care may not have actually been provided, or where care may have been provided at another service. This demonstrated that Helping Hugs may have failed to ensure that children in its care were appropriately accounted for, and it may have failed to monitor its educators as required. The delegate claimed that this was a serious breach of Helping Hugs’ obligations as it was unlikely that the service had undertaken sufficient home visits.
On 2 May 2019, Helping Hugs responded to the notice of intention to cancel by requesting that sanctions not be imposed, for the following reasons:
• We are extremely committed to our family day care business
• We have achieved a rating of Meeting under the National Quality Standards
• We have no compliance issues under the Education and Care Services National Law 2010 nor the Education and Care Services National Regulations 2011
• We have a long and strong community reputation as a quality education and care
provider
• We are reputable in any other endeavours, such as trainers delivering early
childhood qualifications
• Initially we were approved for just 60 educators, then we were incrementally
granted approval for 80, 100 then to 120 after successful audits conducted by the department of Education as a result of our high compliance history
On 31 May 2019, a delegate of the Secretary of the Department decided to cancel Helping Hugs’ approval with effect from 15 July 2019, as they found that Helping Hugs had breached a condition of continual approval to comply with the FAL by failing the requirements to be a fit and proper person and to be a suitable person. As a result, the delegate decided that cancellation was the appropriate sanction. The delegate identified a number of failures by Helping Hugs. Specifically,
(a)I It had a poor record of compliance with family assistance law and national regulations, including inaccurate reporting where no care has been provided, reporting care for whom no one was eligible, incorrect identification of educators’ details, and other non-compliance;
(b)There were many instances where Helping Hugs had breached the national laws and national regulations by exceeding the ratios of educators to children;
(c)Helping Hugs had not demonstrated it had instituted, or could maintain, effective governance arrangements to ensure compliance with FAL. Despite having been provided with education information, including previous notifications of non-compliance, it had been unable to institute and maintain good governance practices to ensure compliance with family assistance law.
(d)The extent of the identified non-compliance did not give the delegate confidence that Helping Hugs had the ability to either identify non-compliance or prevent a re-occurrence once it had been identified. The delegate considered a prudent provider would have sufficient checks and balances in place to identify any possible non-compliance, along with the ability to adjust policies and procedures to ensure the non-compliance does not reoccur, particularly where it has been made aware of non-compliance previously.
(e)The delegate considered that Helping Hugs had demonstrated a poor record of administering Commonwealth funds. There were many occasions where Helping Hugs had failed to provide accurate reports, which is a primary obligation, as it allows the determination of an individual's eligibility to receive child care fee assistance, along with the amount of the entitlement.
(f)The delegate identified many occasions where Helping Hugs failed to pass on child care fee assistance payments to eligible individuals as a fee reduction, or to remit any amounts it was unable to pass on.
On 12 June 2019, Helping Hugs’ legal representative, Mills Oakley, requested an internal review of the decision of the delegate to cancel the provider approval.
On 8 July 2019, Mills Oakley provided an extensive response to the allegations raised by the delegate. It advised that Helping Hugs was concerned by the allegations and had immediately launched an investigation into the alleged instances of non-compliance. Mills Oakley, on behalf of Helping Hugs, disagreed with the proposed sanction for the following reasons:
(a)Educators overseas:
(i)It denied the allegations, claiming they were largely not made out and provided an extensive list of educators, noting their timesheets and recorded home visits.
(ii)It claimed they had a comprehensive understanding of family assistance law and current policy, and that they had procedures in place to ensure compliance of educators and the service.
(iii)It only submitted timesheets which were signed by both the educator and the parent(s).
(b)Children overseas:
(i)It denied the allegations and stated that for a majority of the children who were alleged to have been overseas, it had attendance records confirming care took place. Also, for many of the children who were alleged to have been overseas, the educators reported the sessions of care as an absence.
(ii)As such, it maintained that care was accurately reported in compliance with obligations.
(c)Overlapping sessions: it maintained that it reported sessions of care in compliance with its obligations under the Family Assistance Law and the allegations had not been made out.
(d)Educator CRN’s:
(i)It had complied with its obligations, in that a CRN was obtained for the educators where it was available. However, as the service was previously using an older version of Harmony software, which did not contain any provisions for recording CRN’s and as a result they were not recorded.
(ii)It had now recorded educator CRN’s in Harmony and implemented new procedures. It stated that it understood the importance of recording these details and was committed to ensuring these details were properly recorded.
(e)Absences reported before care commences and after care ceased: it had commenced providing training to educators and staff to prevent this kind of non-compliance from reoccurring.
(f)Late reporting of attendance and enrolments:
(i)It submitted that there was a variety of reasons why, from time to time, they may have submitted attendance records outside the required time frame including: technical issues, late submission by educators, intentional delays while checking accuracy of records or while waiting for a child to return from an absence; and inadvertent delays due to staff or system errors.
(ii)it acknowledged that there may have been instances where it was late in recording enrolments; but that these instances were rare and relatively minor, and an insufficient reason for the cancellation of their approval.
(g)Care in own home: it denied the allegation and submitted that the mere fact that Centrelink or CCMS records may indicate a child as residing at an educator’s care premises is insufficient to support the allegation.
(h)Child swapping:
(i)It had issued parents with questionnaires, and therefore had made enquiries in compliance with its obligations.
(ii)It acknowledged that there were educators at the service who had children enrolled in the service; and it accepted that some of these sessions of care ought not have been reported and had taken steps to withdraw these sessions of care.
(iii)It was improving its internal processes to ensure it would be able to identify such discrepancies.
(i)Older children: the older child qualified as a special circumstance or exception; and therefore it considered that it had complied with its obligations.
(j)Failure to pass on payments to relevant individuals and to remit amounts that could not be passed on to the Secretary: it denied this allegation as it took reasonable steps to ensure it was appropriate to pass on the subsidy, and at all material times, believed that the attendances it was reporting were accurate.
(k)Exceeding ratio limits: it denied these allegations and contended that there was not a single occasion where the prescribed ratio was exceeded. However, due to administrative error there were occasions where it appeared that the ratio has been exceeded.
(l)Fit and proper person: it denied the allegations and maintained that it was a fit and proper person to operate a child care service.
On 10 July 2019, the Federal Court of Australia consented to a stay of the original decision until 8 November 2019 or until the internal review was conducted, whichever date was earlier.
On 7 November 2019, an ARO affirmed the original decision to cancel Helping Hugs’ provider approval. The ARO determined the sanction of cancellation was appropriate due to the seriousness, frequency and ongoing nature of the provider's non-compliance. The ARO found that Helping Hugs’ non-compliance formed part of a history of contraventions over a four-year period. They identified non-compliance in the following areas:
·The submission of inaccurate reports with respect to sessions of care
·Reporting sessions of care which could not have been provided due to educators or children being overseas
·Sessions of care reported when children were attending other services
·Absences reported before care commenced to after-care ceased
·Educator CRN details not provided
·Sessions of care reported when care was provided in the child's own home
·Failure to ensure compliance in respect to child swapping with the result that care was provided for which no one was eligible
·Failure to ensure the children attending secondary school were properly assessed as being eligible for child care fee reductions
·Failure to comply with the national regulations by exceeding educator to child ratios
The ARO concluded that Helping Hugs had demonstrated a deliberate and reckless disregard for its obligations to comply with the condition, and a lack of ability to understand its obligation under the family assistance law.
In summary, Helping Hugs had submitted inaccurate reports to the Department, thus breaching the family assistance law. It had received childcare subsidies that could not be passed on to the relevant families. In total, this represented a debt to the Commonwealth of $67,094.88:

Non-compliance identified in Review Decision

Contravention

Quantity of instances e.g. sessions

CCB/CCR/CCS

Overseas Educators

1121

$18,651.41

Overseas Children

302

$6,499.51

Overlapping Sessions

108

$2,303.03

Absences before care commenced

36

$1335.50

Absences after care ceased

189

$7,947.49

Late attendances – CCMS Late attendances - CCSS

480

251

Late enrolments

227

Care in own home

335

$6,512.94

Child Swapping

450

$22,404.22

Secondary school child

119

$1440.78

Exceeding Educator to child ratio > 7 children

315

Exceeding Educator to child ratio pre school

312

Total

4252

$67,094.88

On 17 January 2020 the AAT granted a stay of the delegate’s decision of 31 May 2019 until the outcome of the substantive application for review on the conditions that Helping Hugs provided a security to the value of $67,094.88 less any monies already remitted for sessions of care not provided, not exceed employment of 51 educators and advise all individuals with a child enrolled in their service of the status of their CCS approval.
LEGISLATIVE FRAMEWORK
The Respondent provided an extensive overview of the legislative framework and provisions relevant to this review at the commencement of the hearing. As they are extensive, the Tribunal will not reproduce all the relevant legislation in this decision. It should also be noted that given the period over which the alleged breaches occurred, the Tribunal has considered the relevant legislation in force at the time of the alleged breaches.
The family assistance law, as it relates to childcare fee assistance, is wholly directed to supporting eligible individuals (for example, parents/guardians) with childcare costs. In this context, the family assistance law provides a statutory framework under which parents’ childcare fee assistance is calculated based on their individual circumstances, including by reference to personal income and activity-based parameters such as paid employment.
What is known as the ‘family assistance law’ comprises two statutes being A New Tax System (Family Assistance) Act 1999 (the “Assistance Act") and A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the “Administration Act”). The family assistance law has created a system that provides several entitlements, including those known as the child care benefit (CCB) and the child care rebate (CCR), now replaced by the child care subsidy (CCS). These benefits are payable subject to satisfaction of certain conditions contained in the family assistance law in respect of childcare sessions provided by an approved childcare service. Payments are only payable in respect of childcare sessions provided by an approved childcare service. For clarity, throughout this determination, regardless of the timeframe in which the payment occurred, the Tribunal will refer to all payments as CCS.
Under section 194 of the Administration Act in effect prior to amendment on 2 July 2018 (the Old Administration Act), and s 194A of the Administration Act currently in force, anyone seeking to operate a childcare service may apply for approval as an approved childcare service for the purpose of claiming benefits under the family assistance law.[1] When approval is granted to the operator of a childcare service under Division 1 of Part 8 of the Administration Act, the approval is subject to conditions which the approved childcare service must comply with at all times. These conditions are extensive and include, but are not limited to, eligibility requirements, compliance with family assistance law, compliance with Commonwealth, State and Territory laws, financial viability, compliance with childcare placement limits and compliance with conditions imposed by the Minister and/or the Secretary.
[1] A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) s 194 (‘Administration Act’).

The central requirement of the family assistance framework is that childcare service operators must report fully and accurately to the Department. Accurate reporting is essential for the Department to correctly calculate childcare fee assistance, and to ensure that no overpayments of public funding occur. In addition, when any payments of childcare fee assistance are first made to childcare service operators, the family assistance law requires that operators fully pass on any such financial assistance to eligible individuals by way of fee reduction. If that is not able to occur (for example, because the childcare did not actually occur), then childcare service operators are required to immediately remit such amounts of fee assistance to the Department.
Section 195A of the Administration Act (section 196 of the Old Administration Act) provides that there are three types of conditions for continued approval under the FAL:
(a)Eligibility rules that are set out in a legislative instrument made under section 205(1) of the Old Administration Act.[2] The applicable instrument for the purpose of this review is the Child Care Benefit (Eligibility of Child Care Services for Approval and Continued Approval) Rules 2017 (Cth) (the Eligibility Rules);
(b)Requirements imposed under the FAL,[3] including conditions for continued approval referred to in Part 8 of the Old Administration Act (Part 8, Division 2 of the current Administration Act), the obligations set out in Part 8A of the Old Administration Act (Part 8A and Part 8, Division 1, of the current Administration Act), and any other provision that imposes an obligation on a childcare service under that law; and
(c)Other child care laws that relate to the operation of the service, the provision of care and its construction and equipment,[4] including the Education and Care Services National Law Act 2010 (the National Law) and the Education and Care Services National Regulations 2011 (the National Regulations).
[2] Section 196(1) of the Old Administration Act or s 195A(1) of the current Administration Act. The eligibility rules are now contained in sections 194C and 194D of the current Administration Act.
[3] Section 195A(2) Old Administration Act
[4] Section 196(3) of the Old Administration Act or s 195A(4) of the current Administration Act.
The Secretary can only approve a childcare service if the Secretary is satisfied that the service satisfies the eligibility rules made under Part 8 of the Administration Act.[5] Part 2 of the Eligibility Rules provides an overview of the issues before the Tribunal in this matter:
[5] Section 195(1)(c) of the Old or s 194D(g) of the current Administration Act.
7 Applicant to be a suitable person
(1)The applicant for approval of a child care service must be a suitable person to operate the service.
(2)In making an assessment for subsection (1), the Secretary may consider the following matters:
Matters relevant to management of child care services
(a)the applicant’s expertise and experience in providing child care;
(b)the applicant’s ability to meet and provide the appropriate quality of child care;
(c)the applicant’s governance arrangements, including:
(i)any arrangements with other persons for the management or supervision of the child care service; and
(ii)any arrangements to ensure compliance by the applicant, or any person the applicant is, or will be, responsible for managing, with the laws and standards mentioned in paragraphs (d) through to (f);
…
10 Undertakings as to operation of child care services—general
…
(1A)The applicant for approval of a family day care service must undertake that:
(a)most of the children to be provided with care by the service will attend the service at least one day a week; and
(b)the service will operate on all normal working days in at least 48 weeks of the year; and
(c)the service will be available to provide care for any particular child for at least 8 continuous hours on each normal working day on which it operates; and
(d)where a child attends a session of care, the service will not prevent the child from attending any part of that session; and
(f)if a service approval has been granted in relation to the service under the Education and Care Services National Law, the service will comply with any conditions imposed by the Regulatory Authority (within the meaning of that Law) to which the service approval is subject; and
(g)the service will ensure that:
(i)each of its FDC carers is listed as ‘service personnel’ and is assigned a unique alphanumeric identifier (Service Provider Personnel ID) in its registered software; and
(ii)in each report given by the service in accordance with subsections 219N(1) or 219N(2) of the Family Assistance Administration Act, the service includes the Service Provider Personnel ID for the FDC carer who provided the session or sessions of care that is or are the subject of the report; and
(h)the service will ensure that, for each of its FDC carers that has a CRN, the CRN is entered in its registered software.
…
10A Additional undertakings as to operation of family day care service—monitoring compliance with section 8 of the Child Care Benefit (Children in respect of whom no-one is eligible) Determination 2015
(1A)The applicant for approval of a family day care service must undertake to do the things set out in this section.
(1)Within 7 days of the date on which a child is enrolled by an individual for care by the service, the service will ensure that:
(a)each eligible individual is asked whether the eligible individual or the eligible individual’s partner is an FDC carer; and
(b)each eligible individual is asked to inform the service if, in the future, the eligible individual or the eligible individual’s partner becomes an FDC carer.
(2)If the service becomes aware (because of subsection (1) or for any other reason) that an eligible individual or their partner is an FDC carer, the service will, within 7 days of becoming aware, request the information or documents set out in subsection (4) from the eligible individual, if the eligible individual informs the service that in relation to one or more sessions of care the service has provided, is providing, or will provide, to the FDC child of the eligible individual or the eligible individual’s partner any of the following provisions in the Child Care Benefit (Children in respect of whom no-one is eligible) Determination 2015 apply:
(a)the FDC child is an eligible disability child;
(b)the FDC child is a remote area child;
(c)paragraph 8(2)(c) of the Child Care Benefit (Children in respect of whom no-one is eligible Determination) 2015 applies to the FDC carer in relation to sessions of care provided to the FDC child;
(d)paragraph 8(2)(d) of the Child Care Benefit (Children in respect of whom no-one is eligible Determination) 2015 applies to the FDC carer in relation to sessions of care provided to the FDC child.
(3)If the service becomes aware (because of subsection (1) or for any other reason) that an eligible individual or their partner is an FDC carer and the service is aware that, in relation to one or more sessions of care the service has provided, is providing, or will provide, to the FDC child of the eligible individual or the eligible individual’s partner, the child is an eligible ISP child, the service will:
(a)request from the eligible individual the information or documents set out in paragraphs (4)(a) to (g) and record the information or documents in the register mentioned in subsection (6); and
(b)record, in the register mentioned in subsection (6), documentary evidence that the child is an eligible ISP child.
(4)The information or documents are:
(a)the name of the eligible individual and the eligible individual’s partner (if any); and
(b)the name of the FDC carer; and
(c)the CRN (if any) of the FDC carer; and
(d)the CRN (if any) of the eligible individual, if the eligible individual is not the FDC carer; and
(e)the CRN of the FDC child of the eligible individual, or of the eligible individual’s partner; and
(f)the name of the approved family day care service where the FDC carer works (regardless of whether this is the service or another approved service); and
(g)the days and times of sessions of care that the FDC carer ordinarily provides at the approved family day care service where the FDC carer works (regardless of whether this is the service or another approved service); and
(h)where relevant, documentary evidence that the FDC child is an eligible disability child; and
(i)where relevant, documentary evidence that the FDC child is a remote area child; and
(j)where relevant, documentary evidence that:
(i)paragraph 8(2)(c) of the Child Care Benefit (Children in respect of whom no-one is eligible Determination) 2015 applies; or
(ii)paragraph 8(2)(d) of the Child Care Benefit (Children in respect of whom no-one is eligible Determination) 2015 applies.
(5)If the service requests that an eligible individual provide information or documents to the service under subsection (2) or paragraph (3)(a), the service will also request:
(a)that the individual inform the service of any change in circumstances which would result in the individual providing information or documents different from those provided under subsection (2) or paragraph (3)(a); and
(b)within 7 days of the change in circumstances, that the individual provide to the service the different information or documents.
(6)The service will record any information provided in response to a request mentioned in subsection (2), paragraph (3)(a) or subsection (5) in a register in the form approved by the Secretary, and also record in the register the following information in relation to each entry:
(a)the day on which the service enters the information in the register; and
(b)the day on which the service is given or sees documentary evidence provided under subsections (2) or (5).
(7)The service will, within 7 days of being notified that funding under the Inclusion Support Programme is no longer being paid in relation to a child to whom subsection (3) applies, or applied, record that fact and any other relevant information in the register mentioned in subsection (6).
(8)The service will keep:
(a)any documents provided in response to a request mentioned in subsections (2) or (5); and
(b)if applicable:
(i)a copy of the documentary evidence mentioned in paragraph (3)(b); and
(ii)any notification of the kind mentioned in subsection (7).
(9)The service will request that an individual who provides information or documents to it under this section will authorise the service, in writing, to disclose the information and documents to the Secretary.
Under section 195H of the current Administration Act, if the Secretary or their delegate is satisfied that an approved operator of a childcare service has not complied, or is not complying, with a condition for the continued approval of the service, the Secretary may impose sanctions upon it. The sanctions that may be imposed by the Secretary are prescribed in section 195H(1) and are extensive. They include measures such as variation of conditions, reduction of any child care places allocated to the service, and suspension or cancellation of the service's approval. Specifically, under section 195H(1)(b) of the Administration Act, the Secretary may cancel the approval of a childcare service.
The Secretary is required, under section 195H(2) of the Administration Act, to have regard to any matters prescribed by the Minister’s rules, when applying any of the sanctions contained in subsection (1).
For the purposes of section 195H(1), section 52(3) of the Child Care Subsidy Minister’s Rules 2017 (the “Minister’s Rules”) prescribes the following factors, among others, that are to be taken into account by the Secretary in considering whether to impose sanctions, and if so, which sanctions to impose:
(a)whether the breach of conditions for continued approval is minor or serious;[6]
(b)whether the service has breached any conditions of continued approval before, and if so, how often;[7] and
(c)whether the breach may threaten the safety of children for whom care is provided.[8]
[6] S 52(3)(f) of the Minister’s Rules.
[7] Minister’s Rules s 52(3)(a).
[8] Minister’s Rules s 52(4)(b)(iv).
It should be noted that the sanction of cancellation does not necessarily mean that the childcare business must cease operation. The consequence of cancellation of approval under the family assistance law is that the Child Care Subsidy is not payable to parents/guardians for any childcare provided by that service. The childcare service concerned is still able to function commercially, subject to it holding the requisite approval as an "Education and care service". This approval comes from the appropriate regulator in a state which administers a separate approval framework, dedicated to ensuring minimum standards of quality and safety of care under the National Law.
ISSUES
The Tribunal needs to consider:
(a)whether Helping Hugs has failed to comply with the conditions of their continued approval as an approved child care service under the FAL; and if so,
(b)whether this non-compliance justified the cancellation of their approval.
evidence
The evidence before the Tribunal included documents lodged by the respondent under section 37 of the Administrative Appeals Tribunal Act 1975 (the “T‑documents” and “supplementary T-documents”). Ms Jacqueline-Su Cockfield from the Department of Education and Training gave evidence in person. Solicitors for Helping Hugs tendered statements from their clients, Ms Fadzai Simango and Ms Savani Punj, Directors of Helping Hugs, who also gave evidence in person at the hearing.
Ms Fadzai Simango and Ms Savani Punj are joint directors of Helping Hugs which has been operating since 23 July 2013. Both directors outlined their impressive tertiary qualifications in education, their diploma qualifications in childcare, and their extensive employment history in education and childcare in Australia and overseas.
The Tribunal was impressed by both directors’ passionate commitment and dedication to providing the best quality care to children, particularly to families from diverse multicultural backgrounds and in lower socio-economic areas.
Educators overseas
"Educator overseas", as the description implies, is where the Department of Home Affairs has provided information indicating that care could not have been provided by an educator as they were overseas at the time the sessions of care were reported.
The Respondent contends that Helping Hugs reported 1,121 sessions of care for 17 educators, which could not have occurred because the educators were overseas at the time, in contravention of section 219N of the Old Administration Act, and section 204B of the current Administration Act. Therefore, Helping Hugs has received fee reductions which could not be passed on to the relevant families; nor were they remitted to the department. This has resulted in an overpayment of $18,651.41.
The immigration advice movement data sighted by the Tribunal indicates that the educators in question were overseas at the times when they were reported as providing care.
Helping Hugs’ letter to the Department responding to the notice to sanction dated 2 May 2019 states:
Some of these instances you have mentioned date back to a period where educators and families were colluding to take advantage of government monies, which we have addressed over time and improved our governance and monitoring accordingly. You will note some of the educators mentioned in your report were with us for a short period and were the same educators that move from service to service prior to being discovered or upon discovery.
We have during the periods mentioned in your reports continually adapted to an improved governance arrangement to secure ethical educators improve our monitoring and supporting stakeholders with their obligations in signing claims. As these type of instances came to light, we adapted and have been on a continual improvement trajectory.
I am sure you would agree, as we are all aware, family day care has been susceptible and a target to unscrupulous educators and families, leading to these type of non-compliance.
The affidavit of Helping Hugs’ director Fadzai Simango dated 19 May 2020 states at [116]-[121]:
The Applicant had significant governance procedures throughout the period of alleged non-compliance. I refer to FS4-855 which contains, for example, Educator Leave Request Forms and Monthly Home Visit Reports, that evidence the Applicant's monitoring of educators to prevent care being recorded while educators are overseas.
One of the measures taken was to require educators to provide notice of leave to the Applicant. However, without the Applicant's knowledge or permission, several of the educators failed to provide notice of leave to the Applicant, despite having signed a declaration stating that they would do so.
I have been informed by my solicitors and believe that on 28 February 2020, the Respondent provided immigration movement records (IMR).
Following receipt of the IMR, the Applicant reviewed 979 allegations:
a. in relation to 977 of the allegations, I sought to contact the 7 educators involved to discuss the allegations but have not been able to speak with them. As a result of receiving the IMR and in the absence of evidence to contrary, the Applicant is not in a position to dispute the educator was travelling as alleged. I note that none of the educators provided notice of leave to the Applicant, despite each having signed a declaration stating they would do so 2 weeks prior to leave commencing; and
b. in relation to 2 of the allegations of care provided by 1 educator in circumstances where the Respondent has provided IMR indicating that the educator could not have provided care for the first hour recorded, due to the time of her arrival at the airport, the Applicant does not dispute the allegation.
In relation to the above-mentioned 979 sessions that are not disputed, the Applicant maintains that it acted reasonably in seeking to ensure that the relevant educator reported accurately: the Applicant had been provided timesheets that confirmed care was given; continued to undertake monitoring visits, and sought to require educators to seek leave if they were travelling internationally. Evidence relating to the Applicant's efforts are referred to in the table and copies are contained at FS4- 1091. The Applicant did not deliberately or recklessly report the sessions of care inaccurately.
The remaining 142 of the Respondent's allegations are disputed for the following reasons:
a. 22 of the Respondent's allegations relate to care purportedly provided by 1 educator on 1 day, being the educator's day of return to Australia. The Applicant's records show that the care was provided by the educator's assistant in the early morning, before the educator arrived at the care residence from the airport and commenced providing care. The Applicant maintains that care was provided while the educator was in Australia;
b. 1 of the Respondent's allegations relates to care purportedly provided by 1 educator on their day of return to Australia. Care was booked in accordance with the educator's scheduled arrival time. Care did not occur in the morning session, and the educator commenced providing care when the educator arrived at the care residence from the airport. The educator claimed the booked hours of care for the morning session;
c. 62 of the Respondent's allegations relate to instances where despite the Applicant requiring all educators to provide notice of leave 2 weeks prior to leave commencing, and all of its educators providing declarations confirming that they would comply with this requirement, educators did not provide notice of this leave, or the educator did provide notice of leave, but for the incorrect dates. As a result, the Applicant did not detect any care being improperly recorded, causing the inadvertent submissions of inaccurate care. Given the information it was provided by the educators, the Applicant maintains that it acted reasonably in submitting these attendance reports and did not deliberately or recklessly submit inaccurate care. The Applicant is in the process of, or has already, amended its CCSS/CCMS records to rectify this;
d. 10 of the Respondent's allegations relate to 2 educators who recorded time correctly in the educator timesheet, but the ordinary booked hours of the child, rather than actual care hours, were recorded in Harmony, which was not picked up by the Applicant before submitting these reports to the Respondent due to human error. This was not a deliberate error of Applicant, and it is in the process of, or has already, amended its CCSS/CCMS records to rectify these errors; and
e. 47 of the Respondent's allegations relate to 1 educator who made an administrative data entry error their first time using the new e-signature system for electronic timesheets, accidentally recording and signing attendance records indicating that care had been provided during a time that she was overseas. The parent did not pick this up when approving the timesheet, nor did the Applicant when verifying the care recorded (who was also at that time inexperienced at the time with the new e-signature system). The Applicant did not deliberately report the sessions of care inaccurately, and is in the process of, or has already, amended its CCSS/CCMS records to rectify this.

The affidavit of Helping Hugs’ director Fadzai Simango dated 18 June 2020 states at [9]:
In response to paragraph 35(a)(vi) of the Respondent’s SFIC, I say:
a. the Applicant had in place policies and procedures which were designed to ensure the Applicant operated with good governance;
b. despite this, there were a number of reasons why the Applicant was not aware that some educators were overseas whilst reporting care. Those reasons include the following:
i. care takes place in the homes of educators;
ii. the Applicant conducts monthly home visit inspections on educators;
iii. the dates that the Applicant conducted monthly home visit inspections fell on either side of educator travel dates.
iv. prior to December 2018, the Applicant relied on the submission of paper timesheets by educators;
v. for each occasion that the Applicant reported care whilst an educator was overseas, the Applicant had received from that educator a hard copy timesheet containing the signature of both the educator and the parent of the relevant child confirming the timesheet was accurate;
vi. the Applicant had a policy in effect at all relevant times which required educators to sign a declaration stating that they would provide notice of leave two weeks prior to leave commencing;
vii. each educator had signed that declaration and provided it to the Applicant prior to reporting care whilst overseas;
viii. some educators did not provide notice of leave in accordance with the declaration they had made to the Applicant, or did provide notice of leave, but for the incorrect dates.
c. I believe the Applicant has remitted to the Respondent the incorrectly received subsidy amounts as part of the Remittance of Subsidy Amounts and Bank Guarantee.
Ms Simango’s oral evidence at the hearing on 9 May 2022 was that:
There were a number of problems identified in the review decision with educators being overseas and service not being aware of that, is that correct - yes
How did that arise? – what happened is we had policy that educator should inform us with leave application form, so we used to have monthly home visits, so it happened we didn’t know because they didn’t inform us, didn’t put in application for leave and some cases it happened soon after we visited for normal home visits and then they go overseas, this is why we came up with random calls and visits
So why were you not doing those random calls before – we thought they were following, we had trust in them that they follow policies, it was a surprise, it was shocking so we had to look into how to address this so doesn’t happen again
A number of child care attendances were recorded as having taken place while educator overseas, do you remember that – yes
Over 1000 examples of 17 educators who were actually overseas at time – ok
My question is how that can happen – as I said before we had paper time sheets which were signed by parents and educator
So what was going on then – I’m not sure
So you were getting paper documents signed by educator and parents, claiming child care was provided when educator were overseas, what was going on? – for us we didn’t know until we got this from the Department, didn’t know it happened, they didn’t put leave forms in so we didn’t know
Some gave you leave forms didn’t they? – no, the ones who gave us leave forms didn’t give us timesheets
Children overseas
"Children overseas" is where the Department of Home Affairs has provided information indicating that care could not have been provided to the child, as the child was overseas at the time the sessions of care were reported.
The Respondent contends that Helping Hugs reported 302 sessions of care to 42 children when the child was overseas at the time, in contravention of section 219N of the Old Administration Act and section 204B of the current Administration Act. Therefore, Helping Hugs has received fee reductions which could not be passed onto the relevant families, nor were they remitted to the department. This has resulted in an overpayment of $6,534.94.
The immigration advice movement data sighted by the Tribunal indicates that the children in question were overseas at the times when they were reported to have been in care
The affidavit of Helping Hugs’ director Fadzai Simango dated 19 May 2020 states at [126]-[127]:
As a result of our Investigation, on behalf of the Applicant, I do not dispute 146 of the Respondent's allegations, including:
a. 115 allegations which relate to 2 educators recording sessions for 4 children, noting the following:
i. the Respondent has provided IMR indicating that the children were overseas on dates care was reported;
ii. the timesheet submitted by the educator was purportedly signed by the parent, but I accept that due to human error the Applicant did not detect care was improperly recorded, which it should have done as the Applicant had been provided with notice of the child's leave from the parent; and
iii. the Applicant is in the process of, or has already, amended its CCSS/CCMS records to remove these sessions;
b. 30 allegations which relate to 1 educator recording sessions for 3 children, noting the following:
i. the Respondent has provided IMR indicating that the children were overseas on dates care was reported;
ii. the parent did not provide notice of the child's travel to the Applicant; and
iii. despite attempts, on behalf of the Applicant, I have been unable to contact the relevant educator or parent to discuss the allegation; and
c. 1 allegation which relates to 1 child, noting the following:
i. the Respondent has provided IMR indicating that the child was overseas on dates care was reported;
ii. the parent did not provide notice of the child's travel to the Applicant; and
iii. the parents indicated to the Applicant that care had been provided as recorded.
As regards the remaining 158 allegations:
a. 55 of the Respondent's allegations relate to circumstances where the educator correctly recorded (and the Applicant consequently reported) absences for children while those children were overseas, in accordance with parent consent;
b. 99 of the Respondent's allegations relate to instances where the educator correctly recorded absences in the educator timesheet, in accordance with parent consent to do so, but an attendance rather than an absence was reported to CCSS/CCMS making it appear as if care was recorded for children while those children were overseas. This was a result of an administrative error at the time care was being entered into Harmony, which was not picked up on by the Applicant before the care was submitted to the Respondent due to human error. This occurred because when a child is enrolled with the Applicant, the child's 'booked hours' are entered into Harmony prior to care taking place. These 'booked hours' are then automatically reported by Harmony each fortnight, unless the hours are manually amended prior to submission. For these instances, the Applicant was responsible for the administrative error because it should have recorded an absence for children as per the timesheets completed by the educator and parent, but due to an oversight it failed to do so. This then resulted in Harmony (and the Applicant) automatically reporting the child as being in attendance. Generally, the subsidy amount is payable in any event and this would not result in any overpayment of the subsidy amount. This is because each child is entitled to 42 absences each year whilst still remaining entitled to the subsidy (I note due to legislative amendments as a result of COVID-19 this number has temporarily increased). The Applicant did not deliberately report the sessions of care inaccurately and is in the process of amending its CCSS/CCMS records to rectify this;
c. 2 of the Respondent's allegations relate to 1 child in instances where the parent did not provide the Applicant with notice that the child would be absent from care. As a result, the Applicant did not that detect any care being improperly recorded by the educator, causing the inadvertent submissions of inaccurate care, when a child was overseas. Given the failure of the parent and educator to notify the Applicant that the child was overseas, the Applicant maintains that it acted reasonably in submitting these attendances, and notes that it did not deliberately or recklessly report the sessions of care inaccurately;
d. 1 of the Respondent's allegations relate to care purportedly provided to 1 child on their day of departure from Australia, and the Applicant's records show that care was provided. The care recorded as being provided by the educator is consistent with the time the child would have been required to leave for the airport given the IMR. The Applicant maintains that care was provided as reported, while the child was in Australia; and
e. 1 of the Respondent's allegations relate to care purportedly provided to 1 child in circumstances where the Applicant was not provided with notice that the child would be absent, the Applicant has attempted to contact the relevant educator and parent to discuss the allegation but has had no response, and the Respondent has not provided IMR confirming that the child was overseas. In these circumstances, on behalf of the Applicant, I reject this allegation.
The affidavit of Helping Hugs’ director Fadzai Simango dated 18 June 2020 states at [10]:
In response to paragraph 35(b)(v) of the Respondent’s SFIC, I say:
a. in paragraphs 127(a) and 127(b) of FS4, in respect of 154 allegations, I distinguished between circumstances where:
i. the educator correctly recorded absences for children while those children were overseas, in accordance with parent consent (55 sessions of care); and
ii. the educator correctly recorded absences for children while those children were overseas, in accordance with parent consent, but an attendance rather than an absence was submitted in CCSS/CCMS as a result of an administrative error at the time care was being entered into Harmony (99 sessions of care);
b. on receipt of the Respondent’s SFIC and the Affidavit of JC, I accessed the Applicant’s CCMS/CCSS records to confirm whether attendances or absences were reported by the Applicant for all 154 allegations;
upon my further review of the Applicant’s records, I am now aware that all 154 sessions were reported in accordance with subparagraph (a)(ii) above;
d. distinguishing between (i) and (ii) was an oversight on my part; and
e. the effect of this is that an attendance was reported instead of an absence. It is my understanding that if the Applicant had reported the absence for each child for each session of care, the same subsidy amount would have been payable. As a result, it is my understanding that this administrative error did not result in any incorrect payment of subsidy amount.
Ms Simango’s oral evidence at the hearing on 9 May 2022 was:
But despite being told the child was going on leave, the service still reported 115 occasions of care as having been provided, my question is why did that happen – it happened due to paper time sheets where they submitted them and we didn’t pick that this child was overseas, goes back to submitting it due to human error because we didn’t pick up it was incorrect
But the service knew – yes parent communicated it but when educator completed time sheet it wasn’t recorded, we should have picked up child was overseas but we didn’t
You were told beforehand, I’m asking why wasn’t the administrator who had been provided with that information alerted to these timesheets which claimed child receiving care as improperly completed – I get it, we did it due to human error, we didn’t pick that educator had not recorded time sheet properly
So when service gets notification from parent as to child being on leave, what do you do with it – it’s now very easy under new system, we can run report to detect which children are absent and also with electronic signature. It’s not possible for child to be marked present without parent marking them
But back in 2016-19 the administrator failed to remember – yes through human error
You and your colleague you were supposed to remember as well – yes but we didn’t pick it because of systems we had in place
You say in 50 cases there were no error – yes
You then say a further 99 instances were recorded as absences by educator but in the Department system by administrator, it was recorded as attendance, why that number of errors? – human error, not picked up in checks
Overlapping sessions of care
"Overlapping sessions of care" is identified by the Department as where a child has been reported as receiving a session of care with two providers at the one time. Therefore, the educator could not have provided a session of care, as another approved childcare service has reported a session of care for the same child at the same time.
The Respondent contends that Helping Hugs submitted attendance reports for 108 sessions of care where it appeared the child was also being provided care at another service. The Respondent argues that this constitutes a contravention of section 219N of the Old Administration Act and an overpayment of a total of $2,303.03 in CCS.
Reports generated by the Department, and sighted by the Tribunal, indicate that on numerous occasions children attending Helping Hugs were also reported as being provided with care at another child care service at the same time. The Respondent provided evidence from the other childcare service providers (various long day care and outside school hours care providers) that care had been provided to the same child at the same time at their service.
The reasons for the delegate’s decision of 7 November 2019 states at [154]-[155]:
In the remaining 108 sessions, either the information supplied with the provider’s submission is insufficient to satisfy me that care was undertaken by the provider’s educators or there is apparent inaccurate reporting by the provider. In some cases this is because the provider supplied no further information relating to those sessions. In other cases, I have considered this information provided by the other child care service to be more reliable or convincing than that of the provider, including data entered into the CCMS or the CCSS.
For these 108 sessions, the other service was an LDC or Out of School Hours Care (‘OSHC’) service. I consider these other services to be reliable with respect to enrolling and confirming child attendance due to the enrolment processes attendance checks that are in place at these services. It is less likely that records could be falsified or completed incorrectly at the services without it being drawn to the attention of the educators, administrative staff or management.
Helping Hugs’ letter to the Department responding to the notice to sanction dated 2 May 2019 states:
In the instance of child overlapping, child was in school and according to your report the child was reported as being in attendance at a long day care service, we have provided evidence to the contrary…
The affidavit of Helping Hugs’ director Fadzai Simango dated 19 May 2020 states at [131]:
As a result of our Investigation, on behalf of the Applicant, I reject the Respondent's allegations for the following reasons:
a. 73 of the Respondent's allegations relate to instances where the Applicant has provided documentary evidence substantiating care recorded, and the Respondent has determined that the information provided by another provider is "more reliable" than the information provided by the Applicant. On behalf of the Applicant, I reject the preference of the records other providers over those of the Applicant, and maintain that the sessions as recorded by the educator and reported by the Applicant were accurate;
b. 30 of the Respondent's allegations relate to instances where the educator has correctly recorded that care was not provided in the educator timesheet, but an attendance has been reported to CCSS/CCMS. This was a result of an administrative error at the time care was being entered into Harmony, which was not picked up on by the Applicant before the care was submitted to the Respondent due to human error. The Applicant did not deliberately or recklessly report the sessions of care inaccurately and is in the process of, or has already, amended its CCSS/CCMS records to rectify this; and
c. 5 of the Respondent's allegations relate to instances where the Applicant did not provide documentary evidence to substantiate the care recorded in its previous submissions but has now obtained such documentary evidence and is able to substantiate its rejection of these allegations.
The affidavit of Helping Hugs’ director Fadzai Simango dated 18 June 2020 states at [17]:
In response to paragraph 35(h)(v) of the Respondent’s SFIC, I say:
a. I note that the Respondent favours the records of various other child care providers over the records of the Applicant;
b. At page 102 of T2, the Respondent sets out a table containing details of all alleged instances of overlapping sessions;
c. The first allegation relates to the child ANR for a session reported on 3 August 2018. In relation to that child and that session of care, I note:
i) The Respondent has provided relevant details in a spreadsheet running over multiple pages contained at pages 3179-3200 of T50. The relevant details are contained at pages 3195, 3197 and 3199.
ii) The Respondent has stated on page 3197:
“No information included in submissions. Empty folder provided. Consider data from other provider more reliable.”
iii) At page 3199 of T50, the Respondent identifies the ‘other provider’ as being QB Outside School Hours Care;
iv) I understand the Respondent issued a number of Section 158 Notices on other child care services requiring production of documents and records which would confirm whether care took place as reported by that service.
v) I have been unable to locate any Section 158 Notice issued to QB Outside School Hours Care, for the session of care which took place on 3 August 2018 (or at all);
vi) I have been unable to locate any documents or data from QB Outside School Hours Care in the Respondent’s T Documents,
the Respondent’s evidence or the Respondent’s Statement of Facts, Issues and Contentions;
vii) At page 1788 of FS4 is a copy of the Parent/Educator Agreement with respect to ANR.
viii) At page 1800 of FS4 is a copy of the Child Enrolment Form for the child ANR.
ix) At page 1808 of FS4 is a copy of an email from the child’s educator, AK, confirming the child was in their care on 3 August 2018 from 9am to 6pm.
x) I maintain that the Applicant accurately reported care for the child ANR for the session of care reported on 3 August 2018.
d. The second allegation relates to the child AT for a session reported on 9 September 2016. In relation to that child and that session of care, I note:
i) The Respondent has provided relevant details in a spreadsheet running over multiple pages contained at pages 3179-3200 of T50. The relevant details are contained at pages 3180, 3183, 3186 and 3189.
ii) The Respondent has stated on page 3183: “No timesheet provided.”
iii) At page 3189 of T50, the Respondent identifies the ‘other provider’ as being St Peter Apostle Outside School Hours Care;
iv) I understand the Respondent issued a number of Section 158 Notices on other child care services requiring production of documents and records which would confirm whether care took place as reported by that service.
v) I have been unable to locate any Section 158 Notice issued to St Peter Apostle Outside School Hours Care, for the session of care which took place on 9 September 2016;
vi) I have been unable to locate any documents or data from St Peter Apostle Outside School Hours Care in the Respondent’s T Documents, the Respondent’s evidence or the Respondent’s Statement of Facts, Issues and Contentions;
vii) At page 1810 of FS4 is a copy of the timesheet completed by the educator with respect to AT, which confirms the child was in care with the educator Z P from 7.10am to 6.16pm on 9 September 2016;
viii) At page 1816 of FS4 is a copy of the attendance report submitted by the Applicant for the child AT on 9 September 2016, which reflects the care details on the timesheet at page 1810;
ix) At page 1813 of FS4 is a copy of an email from the child’s parent, VT , confirming the child was in the care of the Applicant with educator ZP on 9 September 2016.
x) I maintain that the Applicant accurately reported care for the child AT for the session of care reported on 9 September 2016.
e. There are many other instances where I believe the Respondent has unreasonably rejected the evidence relied on by the Applicant with respect to the allegations of overlapping care.

Ms Simango’s oral evidence at the hearing on 9 May 2022 was that:
IRD identified 108 occasions of overlapping sessions, the Department found 29 children appeared to attend another provider at the time claims were made by your service, how has that happened – goes back to administrative error as well, the educator did their part correctly but because of manual time sheets, this administrative error occurred
Manual time sheet wasn’t problem, it was translated – yeah, transferring it
Your checking process didn’t pick up – no but it wasn’t deliberate
Another example of checking system not working – yeah the checking system didn’t work properly there, all these instances of incorrect recording of data, it happened because of the system we had before, we were manually doing things, bound to make a mistake, it’s not happening now because of systems we have in place
Absences before care commenced
Section 10 of the Assistance Act determines when a session of care is provided.
Basic rule about when a session of care is provided
(1) For the purposes of this Act and the Family Assistance Administration Act, a child care service provides a session of care to a child if:
(a) the child is enrolled for care by the service and the child attends the session of care or any part of it; or
(b) if the child does not attend any part of the session of care-the service is taken to have provided the session of care to the child under subsection (2) or (3).
(2) A child care service is taken to have provided a session of care to a child on a day in a financial year if:
(a) had the child attended the session of care, one or more of the hours in the session would have been taken into account in accordance with paragraph 4(1)(a) of Schedule 2; and
(b) the day is:
(i) a day on which the child is enrolled for care by the service; and
(ii) after the day the child first attended a session of care provided by the service; and
(iii) before the day the service permanently ceased providing care to the child; …
The Respondent contends that Helping Hugs had reported 36 session of care for which there was no liability to pay CCS as they had not commenced providing care to the children, thus resulting in an overpayment of $1335.50.
The reasons for the delegate’s decision of 7 November 2019 states at [164]:
Based on the information and evidence before me, including the timesheets and other information provided with the second submission, I am satisfied that the provider has submitted inaccurate reports to the department by recording 36 absences in CCMS when according to the provider they should have been reported as an attendance. In doing so, the provider has not complied with a condition for continued approval as provided for at section 195A(2) at the Current Administration Act and section 196(2) the Old Administration Act.
The affidavit of Jacqueline-Su Cockfield dated 3 June 2020 states at [18]:
On review of this data, I identified that 19 of the reported absences fell on a public holiday. In circumstances where the absence was reported on a public holiday, I also identified that for eight of the eleven educators, Helping Hugs FDC reported only absences for all other children and sessions of care that fell on these public holidays:
a. For educator PTY, MN and MN, Helping Hugs FDC reported some sessions of care for other children on the public holiday;
b. For educators NHK, SJ, AM and AK, KKD, SP, LM and ASH, Helping Hugs FDC reported only absences for all other children and sessions of care that fell on these public holidays
The affidavit of Helping Hugs’ director Fadzai Simango dated 19 May 2020 states at [134]:
As a result of our Investigation, on behalf of the Applicant, I reject the Respondent's allegations, noting that each of the Respondent's allegations relate to instances where the educator had correctly recorded care provided, but the Applicant incorrectly recorded an absence instead of an attendance for the child's first day of care. This was a result of an administrative error at the time care was being entered into Harmony, which was not picked up on by the Applicant before the care was submitted to the Respondent. The fact is that each child was in attendance. The Applicant is in the process of amending its CCSS/CCMS records to rectify this.
The affidavit of Helping Hugs’ director Fadzai Simango dated 18 June 2020 states at [11]:
In response to paragraph 35(c)(i) of the Respondent’s SFIC, I say:
a. each of the sessions identified by the Respondent as being absences before care were reported prior to 1 July 2018. The Applicant is unable to amend or withdraw any attendance reports submitted prior to 1 July 2018, because the CCMS system operated by the Respondent is closed;
b. parents were charged (and paid) the ‘gap fee’ for the sessions described in the table exhibit at paragraph (a) above;
b. now shown to me and marked FS5-1 is evidence that parents were charged (and caid) for the non-subsidised amount of the fee for the sessions described in the table exhibited at paragraph (a) above.
d. I believe the Applicant has remitted to the Respondent the incorrectly received subsidy amounts as part of the Remittance of Subsidy Amounts and Bank Guarantee.
Absences after care ceased
The Respondent contends that Helping Hugs had reported 189 session of care for which there was no liability to pay CCS as they had ceased providing care to the children; thus resulting in an overpayment of $7,947.49.
The affidavit of Jacqueline-Su Cockfield dated 3 June 2020 states at [21]:
On review of this data, I identified that Helping Hugs FDC reported 1 session of care as an absence in respect of the child SS (Enrolment ID: 4-4PNVSY1) after the child had ceased with the service. Helping Hugs FDC submits it had no record of providing care to this child. However, I have identified Helping Hugs FDC reported 206 sessions of care from 22 March 2017 to 23 November 2017 in respect of this child
The affidavit of Helping Hugs’ director Fadzai Simango dated 19 May 2020 states at [137]:
As a result of our Investigation, on behalf of the Applicant, I reject the Respondent's allegations for the following reasons:
a. 188 of the Respondent's allegations relate to instances where the educator and the Applicant were not aware that the child had ceased care because the parent did not provide a termination notice. The educator continued recording absences on the child's regular care days, under the misapprehension that the child would be returning to receive care. As the child did not return to care, the Applicant is in the process of, or has already, amended its CCSS/CCMS records. The Applicant did not deliberately or recklessly report the sessions of care inaccurately; and the remaining 1 allegation relates to 1 child that the Applicant has no record of ever providing care to. In these circumstances, the Applicant is not able to respond to the allegation.
b. the remaining 1 allegation relates to 1 child that the Applicant has no record of ever providing care to. In these circumstances, the Applicant is not able to respond to the allegation.
The affidavit of Helping Hugs’ director Fadzai Simango dated 18 June 2020 states at [12]-[13]:
In response to paragraph 35(d)(i) of the Respondent’s SFIC, I say:
a. I fully accept that the relevant obligations under the FAL are owed by the Applicant;
b. the Applicant had in place policies and procedures which were designed to ensure the Applicant operated with good governance;
c. despite this, the Applicant did not identify long term absences, because:
i. there are occasions where a child has regularly attended care but suddenly ceases attending without notice;
ii. I understand that by reason of section 10 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), the Applicant was entitled to report up to 42 absence days per child per year and to receive the subsidy for those 42 absences;
iii. the effect of being able to claim up to 42 absences is that when a child is absent for up to 42 days per year, the subsidy amount remains payable for those 42 days even if the child was absent;
iv. a child can be absent for many different reasons, such as sickness, holiday or otherwise. I understand that the 42 absence entitlement is in place because when a child is absent from a session of care, an educator remains entitled to be paid for that care session. The subsidy remains payable for up to 42 absences per year to assist the parent(s) with the cost of child care;
v. the Applicant therefore administers the subsidy payment for those absences and passes on the subsidy amount(s) to the eligible individual(s).
d. in responding to 188 of the allegations in this category, I was not apportioning blame to parents but explaining that the Applicant’s ability to identify absences after care was impeded by the fact that some parents did not provide a termination notice despite the Applicant requiring this as a term of its service;
e. the Applicant implemented an electronic sign-in process or around December 2018. Since that date, the Applicant has required each educator to provide an explanation whenever a child is absent from their care. The Applicant does not report the absence without the explanation having been provided;
f. the Applicant has always had a process in place whereby it monitors and reviews reports in circumstances where a child has been absent for 10 or more continuous days. In that event, the Applicant will contact the parent(s) to enquire the reason for the child to be absent;
g. the instances of non-compliance identified by the Respondent are instances where the Applicant’s process described in (f) above was ineffective;
h. as stated at paragraph 91 of my Fourth Affidavit, in or around July 2019 the Applicant engaged an independent consultant, Rabaale Business Consulting Services. One service provided by the consultant is reviewing the Applicant’s attendance reports on a fortnightly basis prior to submission to the Respondent and identifying circumstances where a child has been absent for 10 or more days. Amongst other things, this assists the Applicant with identifying instances where a child has been absent and where the child may not be intending to return to care;
i. this process has and will enable the Applicant to identify where an absence has been reported for a child on their last date of care, and allow the Applicant to withdraw or amend the relevant report(s);
j. in January 2020, the Applicant remitted to the Respondent the value of the incorrectly received subsidies as part of the Remittance of Subsidy Amounts in January 2020;
k. In respect of child AS, I note that:
i. the child had been attending care regularly on Tuesdays and Thursdays for approximately 4 months prior to his final day of care;
ii. 12 absence days were claimed for the child between 15 November 2017 and 22 December 2017;
iii. as referred to above, since July 2019, the Applicant has had an improved process in place to enable it to detect that absences are being recorded – I believe that process will prevent any similar occurrence being repeated;
iv. each of those sessions were reported prior to 1 July 2018. The Applicant is unable to amend or withdraw any attendance reports submitted prior to 1 July 2018, because the CCMS system operated by the Respondent is closed.
In response to paragraph 35(d)(ii) of the Respondent’s SFIC, I say:
a. I have previously not provided a response in relation to child SS, and have explained that the Applicant did not have any child enrolled with it by that name;
b. The Affidavit of Jacqueline-Su Cockfield dated 3 June 2020, at paragraph 21, described the Enrolment ID for the child. This information had not previously been provided to the Applicant;
c. I have now been able to search in our Harmony software based on the Enrolment ID provided for the child;
d. I have now discovered that SS was enrolled at the Applicant under the name SS;
e. now shown to me and marked FS5-2 are documents confirming that the child was enrolled under the name SS;
f. in respect of the 1 allegation made in respect of SS, I note that the child attended care regularly on Wednesdays and Fridays. The child suddenly and without notice stopped attending care. The educator recorded an absence for the child’s first absence, not realising that the child would not be returning to care because the parent had not provided a termination notice;
g. while I believe it may have been reasonable for the educator to initially record an absence for this day as the child attended care regularly on Fridays, I accept that the sessions did not qualify for a child care subsidy and the session should have been withdrawn once it became clear the child was not returning to care;
h. I accept that the Applicant was not entitled to receive payment from the Respondent in relation to this session of care;
i. I believe the Applicant has remitted to the Respondent the incorrectly received subsidy amounts as part of the Remittance of Subsidy Amounts and Bank Guarantee; and
j. I believe the Applicant has amended all inaccurate sessions reported on and from 1 July 2018.
Late reporting of attendance and enrolment
Section 219N(5) of the Old Administration Act (and 204B(2) of the current Administration Act) provides that reports to the Secretary must be given no later than seven days after the day on which enrolment was confirmed, if the session fell wholly before the day on which the enrolment was confirmed; and otherwise at the end of the second week immediately following the week. The Child Care Provider Handbook outlines the Reporting sessions of care as follows:
Why is accurate reporting important?
It is vital that a provider submits accurate session reports on time. This enables the Commonwealth to correctly calculate of the amount of Child Care Subsidy or Additional Child Care Subsidy (if any) that is payable for care provided to a child.
Inaccurate reports can result in incorrect Child Care Subsidy and Additional Child Care Subsidy and affect the eligible individuals and children to whom the care relates. Further, under Family Assistance Law, a person may commit an offence and is liable for a civil penalty if a session report is not submitted within the required timeframe (see below) and containing the required information (as set out in Table 7 below), including information needed to determine whether an individual is eligible for, or entitled to be paid, Child Care Subsidy or Additional Child Care Subsidy and, if so, the amount.
How is a session report submitted?
Sessions of care are reported through a provider's child care software or the PEP. Child Care Subsidy cannot be paid until a session report is received.
A session report must be submitted for each child for each week a session of care has been provided (including absences). It must contain at least one session of care for a week, recorded as either an attendance or absence. It must only include sessions of care for which an individual incurred a genuine fee liability.
Session reports must be accurate. If the Department of Human Services has concerns about the accuracy of session reports, it can stop processing payments until the information has been verified.
When are session reports submitted?
Session reports must be submitted within 14 days after the end of the week when the sessions were provided, except where:
a provider or service was not yet approved, or was suspended, on the day the child's enrolment started. In this case the session report must be provided within seven days after the end of the week in which the approval was provided or the suspension was revoked
a provider has received business continuity payments because it is unable to provide session reports (such as because its system access is down). In this case, session reports must be submitted within 14 days after it becomes able to submit reports again.
The Respondent contends that Helping Hugs failed to submit attendance reports prior to 2 July 2018 to CCMS within the required timeframes on 480 occasions.
The Respondent contends that Helping Hugs failed to submit attendance reports after 2 July 2018 to CCSS within the required timeframes on 251 occasions.
The Respondent contends that Helping Hugs submitted 227 enrolments outside the prescribed time frames of section 219AB of the Old Administration Act.
The affidavit of Helping Hugs’ director Fadzai Simango dated 19 May 2020 states at [140]-[141]:
On behalf of the Applicant, I have investigated these allegations and as a result of our Investigation, reject the Respondent's allegations for the following reasons:
a. many of the allegations relate to instances where CCMS/CCSS or Harmony were experiencing technical issues which affected the Applicant's ordinary timely submission of attendances and enrolments. Sometimes these technical issues simply delayed the Applicant in submitting, and other times they required the Applicant to re-submit attendances and enrolments already submitted;
b. many of the allegations relate to instances where the Applicant received timesheets from the educator late as a result of, for example, the educator not submitting their timesheets before travelling overseas, the educator not arranging for the delivery of timesheets to ensure they would be received by the Applicant with sufficient time to allow timely submission, or a variety of personal circumstances specific to individual educators which purportedly prevented them from submitting timesheets promptly;
c. some of the allegations relate to instances where timesheets had to be sent back to educators to obtain an initial or signature from them or a parent, or the Applicant had to request confirmation of the care provided due to an issue with the accurate or decipherable recording of care sessions on the educator timesheet;
d. many of the allegations relate to parents omitting to provide necessary information with Child Enrolment Forms, preventing the Applicant from submitting attendances. For example, the Child Enrolment Form may appear complete, but when it comes time to submit the enrolment, the Applicant's administrators realise that the parent has provided an outdated document or has noted a detail on the form which is inconsistent with supporting documents. In these circumstances, the Applicant has to contact the parent prior to submitting the enrolment or any attendances;
e. some of the allegations relate to circumstances where the enrolment is rejected because, for example, the enrolment notes the child being under the care of one parent, but Centrelink records indicate that the child is in the care of the other parent, requiring the Applicant's administrators to contact Centrelink and the parents to address the issue; and
f. some of the allegations relate to instances where there has been an oversight on the part of the Applicant's administrative staff, causing some timesheets or enrolment forms to be received from the educator and filed, without being reported to CCMS/CCSS.
Documents substantiating my response in the paragraph above are contained in a bundle of documents now shown to be and marked FS4-2207.
I am aware that submitting attendances and enrolments late is an offence of strict liability, but I believe the above reasons are relevant considerations for the Tribunal when assessing these allegations. I also note that as a result of:
a. the electronic submission of timesheets since December 2018; and
b. further training to administrators on the importance of accurate data entry, late reporting is less likely to occur in the future.
Care in own home
Paragraph 11(1)(b)(i) of the Child Care Benefit (Session of Care) Determination 2016 (Session of Care Determination) provides that care provided by a family day care service is not a session of care if the care is provided in the child's own home.
The Respondent contends that Helping Hugs reported 335 sessions of care when no one was eligible under paragraph 11(1)(b)(i) of the Session of Care Determination as the session of care had been delivered at the same address at which the child lived. The Respondent argues this resulted in an overpayment of $7,947.49.

The Tribunal finds, based on the evidence before it, that Helping Hugs demonstrated limited oversight of its educators, as reflected in the number of sessions of care incorrectly reported in circumstances where the session of care could not have occurred. This lack of governance placed the health, safety and wellbeing of children in their care at risk. Oversight is the fundamental requirement for an approved provider. Numerous Tribunal determinations have consistently accepted that the obligations imposed on the operator of a childcare service cannot be avoided or excused by blaming others, including its own staff.
The Tribunal does not consider that the evidence indicates that Helping Hugs has been involved in any fraud, dishonesty or reckless behaviour. However, the Tribunal does consider that Helping Hugs’ significant non-compliance demonstrates its governance procedures were systemically flawed, and is indicative of it not being a fit and proper person to operate a child care service, at the time the authorised review officer affirmed the decision to cancel its approval on 7 November 2019.
Given Helping Hugs has continued to operate since 7 November 2019, while the stay order has been in place, the Tribunal can make a determination as to whether Helping Hugs has taken measures to improve arrangements to ensure it complies with the FAL, and to ensure all employees and contractors of Helping Hugs are complying with the FAL. Additionally, the Tribunal can assess if these measures have been successful, based on any non- compliance breaches after 7 November 2019. There was no evidence of any such breaches before the Tribunal.
The Tribunal does not consider that Helping Hugs is no longer a fit and proper person to provide a child care service for the purposes of section 194E of the Administration Act. The Tribunal took into account Helping Hugs’ record of compliance since 7 November 2019, in particular its efforts, outlined below, to ensure it, its staff and educators were now complaint, and the frank admission of the failure of the previous systems. The Tribunal notes:
(a)Since July 2019, helping Hugs has continually engaged an independent consultant, Abdul Sheikhahmed of Rabaale Business Consulting Services, to perform a regular fortnightly audit of the Applicant’s attendance reports;
(b)Helping Hugs continues to utilise its consultants to assist with compliance, monitoring and governance by:
(i)Making unannounced visits at educator’s premises while they have children in their care;
(ii)Providing training to educators and staff; and
(iii)Reviewing all policies and procedures for quality and improvement.
(c)Helping Hugs has introduced an electronic attendance records system, as described in Ms Simango’s affidavit of 19 May 2020:
In or around December 2018, this process was modified by the introduction of electronic timesheet submission. Rather than submitting paper timesheets fortnightly which were then manually entered by the Applicant's administrative assistants, educators began submitting electronic timesheets directly into Harmony at the end of each week. This procedure is ongoing. The timesheets are signed electronically by both educators and parents.
The introduction of electronic attendance records has made verifying timesheet entries much easier, as the Applicant is not required to decipher handwriting, engage in a lengthy back and forth with educators to get timesheets signed, or rely on educators posting timesheets on time to ensure the Applicant can submit records within the required timeframe.
(d)Helping Hugs has undertaken additional training and arranged for its educators to receive additional training from the Lady Gowrie centre, on numerous aspects of family assistance law, most notably compliance requirements.
Should sanctions be imposed on the operator, and if so, is cancellation the appropriate sanction?
Under s 195H(1) of the Current Administration Act, if the Tribunal is satisfied that an approved child care service has not complied, or is not complying, with a condition for the continued approval of the service, it has a discretion whether to impose a sanction. Under s 195H(2) the Tribunal must have regard to any matters prescribed by the Minister’s Rules.
Rule 52(3) of the Minister’s Rules prescribes matters that must be taken into account in deciding whether a sanction should be imposed but does not limit the matters that may be taken into account. In particular, rule 52(3) requires the Tribunal to take into account whether the provider’s non-compliance:
(a) appears to be an isolated incident or forms part of a history of apparent contraventions engaged in by the provider;
(b) has resulted in overpayments of CCS and ACCS, or is likely to result in such overpayments;
(c) involves a failure to reasonably cooperate with a person exercising powers under the family assistance law;
(d) involves a failure to take reasonable care to ensure that information given to the Secretary in connection with the family assistance law, including in a report under section 204B(1) of the Current Administration Act, is not inaccurate, false or misleading;
(e) is associated with a debt to the Commonwealth (whether or not discharged) under Division 2 of Part 4 of the Current Administration Act; or
(f) is associated with any other relevant aggravating or mitigating factors in relation to the non-compliance.
The Tribunal determines that Helping Hugs’ compliance record could not be considered an isolated incident but an extensive history of non-compliance comprising numerous breaches over many years, which resulted in significant overpayments of child care fees by the Commonwealth. While no debt has been raised against Helping Hugs, the Tribunal determines that Helping Hugs has breached sections 204B of the Current Administration Act and section 219N of the Old Administration Act, resulting in a requirement to remit to the Commonwealth the balance of $53,016.71 in overpayments, currently held in trust by the Australian Government Solicitor.
The Tribunal determines that Helping Hugs previously lacked the proper governance and administrative processes to ensure it was not putting the health, safety and wellbeing of children in its care at risk, and to be sufficiently accountable for the large amounts of government subsides it was administering. While the Tribunal is fully appreciative of Helping Hugs’ admission that their system was open to human error, this is ultimately not a legitimate excuse for failing to comply, despite the complex nature of the governing legislative scheme. Helping Hugs’ non-compliance has resulted in an overpayment of child care subsidies of $65,654.10 and compromised the Respondent’s ability to properly administer the child care assistance scheme.
Section 195H(1) of the Current Administration Act provides that if the Secretary (and now, the Tribunal) is satisfied that an approved child care service has not complied, or is not complying, with a condition for the continued approval of the service, one or more of the following sanctions may be imposed:
(a) suspend the provider’s approval;
(b) cancel the provider’s approval;
(c) suspend the provider’s approval in respect of one or more child care services;
(d) vary the provider’s approval so that the provider is not approved in respect of one or more child care services;
(e) reduce the number of child care places allocated to the service under s 198B;
(f) suspend, for a maximum of 3 weeks, payment under s 67EB of fee reduction amounts in respect of the sessions of care provided by one or more approved child care services.
The Tribunal is satisfied that Helping Hugs did not comply with the conditions for continued approval as an approved provider of a child care service. The nature and extent of this non-compliance was serious and warrants the imposition of a sanction. As the Tribunal has determined to impose a sanction, it must next determine if the breaches are serious enough to warrant the sanction of cancellation under s 195H(1)(b).
Section 195H(2) requires that, in exercising the power under s 195H(1), the decision-maker must have regard to any matters prescribed by the Minister’s Rules. The factors to be considered in the application of a sanction are specified under Rule 52(4) of the Minister’s Rules, which provides that:
(4) The Secretary must take into account the following matters in considering which sanction to impose:
(a) whether it would be more appropriate to exercise the power to suspend the provider’s approval under paragraph 195H(1)(a) of the Family Assistance Administration Act rather than to impose a different sanction, having regard to the following matters:
(i) whether the provider’s non-compliance is of a systemic and ongoing nature (taking into account that systemic and ongoing contraventions may be more appropriately dealt with through cancellation rather than suspension);
(ii) whether the provider’s non-compliance has resulted in significant debts of CCS and ACCS, or is likely to result in overpayments of CCS or ACCS if the approval is not suspended (taking into account that the higher the debts or overpayments, the more appropriate it is to cancel rather than suspend);
(iii) any other relevant matters;
(b) whether it would be more appropriate to cancel the provider’s approval under paragraph 195H(1)(b) of that Act rather than to impose a different sanction, having regard to the following matters:
(i) whether the non-compliance has resulted in significant and multiple overpayments of CCS and ACCS, or is likely to result in such overpayments if the approval is not cancelled;
(ii) whether the non-compliance indicates a failure to take reasonable care to comply to comply with the condition, or a lack of ability to understand the obligation to comply;
(iii) whether the non-compliance demonstrates that the provider is no longer a fit and proper person to provide a child care service for the purposes of section 194E of the Family Assistance Administration Act;
(iv) whether the non-compliance constitutes an unacceptable risk to the safety, health or wellbeing of children being cared for in one or more child care services for which the provider is approved;
(v) any other relevant matters.
The Tribunal determines that Helping Hugs has breached the FAL on 4,126 occasions, by recording sessions of care which could not have taken place, claimed when no one was eligible, providing information late, and breached educator to child ratios. In addition, Helping Hugs failed to provide vital information to the Respondent on countless occasions by not recording educator’s CRNs. These instances of non-compliance exhibit a systemic and ongoing pattern of non-compliance. The Tribunal is not satisfied that Helping Hugs had adequate oversight, governance and systems in place to meet its obligations under the Act.
Helping Hugs’ non-compliance has resulted in significant overpayments and debts to the Commonwealth totalling $65,654.10.
While acknowledging Helping Hugs’ failure to meet its obligations under the FAL, the Tribunal is not satisfied, given its genuine efforts to now meet its obligations, that Helping Hugs is no longer a fit and proper person to provide a childcare service. The Tribunal is satisfied that these measures will ensure Helping Hugs, and its educators and staff, comply with the FAL. This does not suggest that Helping Hugs’ systems are foolproof, particularly given the noted observation of the complexities of the Act. The Full Court of the Federal Court observed in Secretary, Department of Education and Training v Simpson Networks Pty Ltd t/as Melbourne School Holiday Club (2019) 273 FCR 252 at [21] that:
The provisions of the Act and the Administration Act are a thicket of obscurity created by interwoven lengthy provisions that appear to seek to deal in a prescriptive manner with every possible eventuality…They would defy ready interpretation by any person that the legislation is intended to benefit.
And in Al-Huda Pty Limited v Secretary, Department of Education, Skills and Employment [2020] FCA 1613 at [1] the Federal Court commented that: ’There is a myriad of complexity in the rules with which providers must comply under childcare subsidy arrangements’.
The evidence did indicate that numerous instances of non-compliance by Helping Hugs involved an unacceptable risk to the safety, health or wellbeing of the children in its care, with the breaches of educator to child ratios of particular concern. The breaches of reporting sessions of care which did not happen also called into question Helping Hugs’ ability to oversee its educators appropriately.
Counsel for Helping Hugs’ addendum to its final submission contended that:
For the purposes of deciding whether to impose a sanction and, if so, what sanction to impose, the amendments to the Rules replaced the standard of recklessness with a standard of “failure to take reasonable care”. Neither the decision under review nor the respondent’s SFIC addresses this new standard. And the respondent has not confirmed whether it relies on the current version of s 52(3)(d) and s 52(4)(b)(ii) of the Minister’s Rules to support a cancellation decision.
Counsel for Helping Hugs expanded at length on this contention at the hearing, arguing that as the Applicant had not been able to respond to any adverse allegations, specifically that Helping Hugs failed to take reasonable care, it would be a denial of procedural fairness if the Tribunal made an adverse finding that Helping Hugs had failed to take reasonable care.
The Tribunal does not find that Helping Hugs has been reckless in its administration of its obligation under the FAL.
The Tribunal is satisfied that all the evidence and contentions put forth by the Respondent and Helping Hugs sufficiently addressed the issue of whether Helping Hugs had failed to take reasonable care, such that it was open to the Tribunal to make a finding on this question.
The Tribunal notes that Helping Hugs seems to have conceded that it failed to take reasonable care. Counsel for Helping Hugs asked the Tribunal to place significant weight on Helping Hugs’ directors’ oral evidence describing, it as ‘credible and honest and made reasonable concessions’. The Tribunal was at a loss to understand Counsel’s contention that it had not had an opportunity to respond to the allegations that it had failed to take reasonable care, as the core submission from the Applicant seems to be that their approval should not be cancelled because their non-compliance was due to human error, rather than fraud or dishonesty.
The Respondent submitted that if the Tribunal did not concur that cancellation was the appropriate sanction, then it should impose conditions on Helping Hugs’ approval. The Respondent argued that the evidence before the Tribunal indicated that in 2016-2019 Helping Hugs grew quickly to a level where the directors lost control of it. The Respondent argued if the Tribunal was against them on cancellation, the Tribunal should give consideration to imposing a condition as to the number of educators that Helping Hugs be allowed to employ, currently less than 40. The Respondent argued that this seemed a level of operation which Helping Hugs was able to operate satisfactorily.
The Respondent submitted that an additional condition should be imposed that any gap payment paid by a parent was to be deposited with Helping Hugs rather than with the educator, which would allow Helping Hugs to assess payments and would reduce the risk of abuse by educators.
The Respondent directed the Tribunal to the following comments made by Deputy President Pascoe in Jessica Education Centre Pty Ltd and Secretary, Department of Education and Training [2019] AATA 3739 at [34-36], in considering which sanction to impose (and determining that cancellation was the appropriate sanction):
The breaches have been both extremely serious and very frequent. The misreporting of attendances has resulted in a significant misappropriation of public money but perhaps of even greater seriousness is the apparent failure to ensure that the educators were aware of their responsibilities, that the educators were properly supervised and that the whereabouts of the educators and the children for whom they were responsible were known at all times. When it comes to the welfare of children there is no place for non-compliance or any lack of vigilance in relation to all aspects of their safety and well-being.
I accept the Applicant’s evidence as to the pressures faced in operating the centre, as well as the difficulties arising due to the fact that for many of the educators, the children and their parents, English was a second language. I also accept that the Harmony software program caused very significant difficulties in reporting to the department and meeting requirements…
Despite this however, the legislation is clear as to the responsibilities of the operator and it is also clear that these responsibilities cannot be delegated to others…
The Tribunal notes the similarities in the nature and extent of the breaches between this application and those in Jessica Education, a decision which ultimately affirmed the original decision to cancel the Applicant’s approval (see paragraph [9]):
The original decision-maker found the Applicant had committed breaches by doing the following:
(a) reporting 447 sessions of care when that care could not have been provided because the educators were overseas at the time those sessions of care were reported;
(b) reporting 471 sessions of care when that care could not have been provided because the children were overseas at the time those sessions of care were reported;
(c) reporting 39 sessions of care that could not have occurred because those sessions of care overlapped with sessions of care reported by other services;
(d) reporting 595 sessions of care as “absences” under section 10 of the Assistance Act before the child had either commenced with the service, or after the child had permanently ceased to attend the service, and were therefore not absences;
(e) reporting 85 sessions of care that were not provided as reported, where visits to the educator’s homes indicated that care was not being provided on the days that those sessions of care had been reported;
(f) submitting 1,036 enrolment reports between the period of 1 January 2015 and 15 October 2017, and 19 enrolment reports between the period of 22 October 2017 and 14 January 2018, outside of the timeframes prescribed by subsection 219AB(2) of the Administration Act; and
(g) submitting 528 attendance reports between the period of 1 January 2015 and 15 October 2017 and 47 attendance reports between 28 November 2017 and 7 February 2018, outside the timeframes prescribed by subsection 219N(5) of the Administration Act.
The Tribunal acknowledges that Ms Simango was frank in conceding that human error, the paper-based timesheet records, and lack of effective systems had resulted in numerous breaches of the FAL. Ms Simango identified this and has taken concrete steps to address the procedural flaws identified. Her evidence at the hearing, of the steps Helping Hugs has taken to ensure ongoing compliance, was commendable:
Since cancellation in 2019 has the service taken steps to address compliance issues? – yes, we have taken number of steps, we had to look into each area of concern and we took steps to rectify the issues of concern. Firstly, we engaged consultants, accountant dealt with these issues, also not-for-profit deals with supporting educators. We re-educated people if breached legislation and make them aware of breach and introduced electronic signature which helps to get real-time attendance which has helped monitoring attendance. We also updated agreement to include that educators must be contactable at all times, random phone calls make sure they are contactable and if not, conduct an unannounced visit. We also had consultant every fortnight check attendance and check for those issues, children absent, but before submission and after we enter the data, me and Ms Punj check before submitting attendance in case missed anything and consultant checks data and rectify within 28 days. Also with regard to entering data, we have done training to train personnel as well. Also train educators, check child ratio appropriate, also run professional development where identify gaps in staff and come up with training plans to determine what they need. Also subscribe to consultant Child Care Desktop, help us continuously update on regulations.

The Tribunal is satisfied that Helping Hugs has now established procedures to ensure adequate oversight, governance and compliance systems, in a genuine effort to meet its obligations. It is also satisfied that Helping Hugs and its directors were genuine in their desire to provide a quality child care service to children from diverse cultural backgrounds in growing communities with high needs and limited resources. Helping Hugs has demonstrated that it is endeavouring to understand its obligations and has committed to complying with them.
Given the weight of evidence, the Tribunal would have been satisfied that cancellation was the appropriate sanction at the time. The breaches identified were egregious and highlight that Helping Hugs’ governance arrangements at the time were systematically flawed or non-existent. This is particularly so as the health and safety of children is paramount, and the blatant disregard of the public purse cannot be ignored. If the delegate had not sought to cancel Helping Hugs approval, none of these breaches would have been detected by Helping Hugs, monies owed would not have been remitted, and action to ensure ongoing compliance would not have been taken by the service.
However, in the time since the imposition of the stay and the hearing, Helping Hugs has been able to demonstrate that it has now put in place policies, procedures and governance arrangements to ensure it is complaint with the requirements for approval. Therefore, the Tribunal is not of the opinion that cancellation is still warranted.
The Tribunal nevertheless finds that Helping Hugs should be sanctioned for its numerous breaches and determines that limits need to be imposed on its approval due to its systemic failures. The evidence before the Tribunal leads it to the conclusion that Helping Hugs is still not completely cognizant of its obligations under the FAL, which is concerning given the service has been operating since 2013.
The Tribunal determines that a limit of child-care places and number of educators should be imposed on Helping Hugs to ensure it is able to manage its service effectively. Additionally, conditions should be imposed on the collection of fees to ensure that all public funds administered by Helping Hugs were either passed on to eligible families or remitted to the Commonwealth.
The Tribunal has determined that Helping Hugs’ failure to take reasonable care has led to numerous reporting errors which has resulted in substantial overpayments and put the health, safety and wellbeing of children in their care at risk. This failure, or as described and conceded by Helping Hugs, – human error – was significant enough for the Tribunal to consider if a sanction needed to be imposed. Upon review of the actions taken by Helping Hugs to ensure they are now taking reasonable care to comply with the requirements of their approval, the Tribunal determines that cancellation is no longer warranted but sanctions should be imposed.
decision
The Tribunal sets aside the decision of the ARO of 7 November 2019 affirming the decision to cancel Helping Hugs approval to operate a child care service; and in substitution the Tribunal determines that Helping Hugs’ approval be granted on the basis that the number of educators allocated to the service does not exceed 45 and the number of child care places allocated to the service under s 198B does not exceed 315.
As the Tribunal has determined that all breaches identified by the Respondent have been found, Helping Hugs has received an overpayment of $65,654.10; and as such the balance of monies held in trust must be remitted to the Respondent. To ensure that Helping Hugs continues to comply with all of the conditions of its approval, the Tribunal requires that gap payments must be deposited directly with the service and not the individual educators.

I certify that the preceding 268 (two hundred and sixty-eight) paragraphs are a true copy of the reasons for the decision herein of Ms Anna Burke AO, Member

.................[sgd].....................................
Associate
Dated: 6 September 2022

Date of hearing: 9 and 10 May 2022

Counsel for the Applicant:

Solicitors for the Respondent:

Mr Tom Lui

Mr Sindri Bergsson
Mills Oakleigh

Advocate for the Respondent:

Solicitors for the Respondent:

Mr David Brown
Australian Government Solicitors

Mr Myles Norris
Australian Government Solicitors

Non-compliance identified in Review Decision
Contravention	Quantity of instances e.g. sessions		CCB/CCR/CCS
Overseas Educators	1121	$18,651.41
Overseas Children	302	$6,499.51
Overlapping Sessions	108	$2,303.03
Absences before care commenced	36	$1335.50
Absences after care ceased	189	$7,947.49
Late attendances – CCMS Late attendances - CCSS	480
	251
Late enrolments	227
Care in own home	335	$6,512.94
Child Swapping	450	$22,404.22
Secondary school child	119	$1440.78
Exceeding Educator to child ratio > 7 children	315
Exceeding Educator to child ratio pre school	312
Total	4252	$67,094.88