Kids Community Pty Ltd and Secretary, Department of Education, Skills and Employment - [2022] AATA 788

Kids Community Pty Ltd and Secretary, Department of Education, Skills and Employment [2022] AATA 788 (18 March 2022)
Division:GENERAL DIVISION
File Number(s): 2020/7811
Re:Kids Community Pty Ltd
APPLICANT

AndSecretary, Department of Education, Skills and Employment
RESPONDENT

DECISION
Tribunal:Member West
Date:18 March 2022
Place:Melbourne

The Tribunal sets aside the decision of the authorised review officer of 11 November 2020 affirming the decision to cancel the Applicant’s approval to operate a child care service; and in substitution the Tribunal determines that the Applicant’s approval to operate a child care service be suspended from 18 March 2019 to 18 March 2022.
............................................................
Member West
Catchwords
CHILDCARE – education and care services – family assistance law – child care benefit – continued approval of a childcare service – cancellation – breach of conditions of provider approval – whether sanction should be applied – what sanction is appropriate – decision set aside – approval suspended
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
A New Tax System (Family Assistance)(Administration) Act 1999 (Cth)
A New Tax System (Family Assistance) Act 1999 (Cth)
Education and Care Services National Law Act 2010 (Cth)
Children, Youth and Families Act 2005 (Vic)
Cases
Al-Huda Pty Limited v Secretary, Department of Education, Skills and Employment [2020] FCA 1613
Azaria Family Day Care v Secretary, Department of Education and Training [2018] FCA 1640
Jessica Education Centre Pty Ltd and Secretary, Department of Education and Training [2019] AATA 3739
Mohamed trading as Billan Family Day Care v Secretary, Department of Education, Skills and Employment (No 2) [2020] FCA 1749
Secretary, Department of Education and Training v Simpson Networks Pty Ltd t/as Melbourne School Holiday Club [2019] FCAFC 239
Sweet Melon Family Day Care Pty Ltd and Secretary, Department of Education and Training [2018] AATA 1862
Secondary Materials
Child Care Benefit (Eligibility of Child Care Services for Approval and Continued Approval) Rules 2017 (Cth)
Child Care Benefit (Children in respect of whom no-one is eligible) Determination 2015 (Cth)
Education and Care Services National Regulations
REASONS FOR DECISION
Member West
18 March 2022

This matter concerns the decision of the Respondent to cancel the Applicant’s approval to operate a child care service for the purpose of the family assistance law.
Background
The background to the application for review is as follows:
(a)
The Applicant received approval to operate a child care service for the purposes of the family assistance law on 2 May 2011, with the approval to take effect from

15 April 2011.
(b)On 11 May 2018, the Applicant was issued with a notice notifying the Applicant that consideration was being given to cancelling that approval because of non-compliance with the family assistance law (Notice of Intention to Cancel).
(c)The Applicant responded to the Notice of Intention to Cancel on 8 June 2018.
(d)On 2 August 2018, the Applicant was sent a letter titled Further Contraventions of the Family Assistance Law Kids Community Pty Ltd which stated that the department had identified further possible contraventions. The Applicant responded to this letter on 23 August 2018.
(e)On 17 January 2019, a delegate of the Respondent cancelled the Applicant's approval to operate a child care service on and from 18 March 2019, for non-compliance with the family assistance law during period 1 July 2014 to 30 June 2018 (Cancellation Decision).
(f)The Applicant sought internal review of the Cancellation Decision on 30 January 2019.
(g)An Authorised Review Officer (ARO) affirmed the Cancellation Decision on 11 November 2020 (Review Decision).
(h)On 27 November 2020, the Applicant applied to the Administrative Appeals Tribunal (the Tribunal) for review of the Review Decision.
Legislation
The legislative scheme known as the family assistance law[1] comprises:
(a)A New Tax System (Family Assistance)(Administration) Act 1999 (Cth), as in effect from 2 July 2018 (Current Administration Act);
(b)A New Tax System (Family Assistance)(Administration) Act 1999 (Cth), as in effect prior to its amendment on 2 July 2018 (Old Administration Act);
(c)A New Tax System (Family Assistance) Act 1999 (Cth), as in effect from 2 July 2018 (Current Assistance Act);
(d)A New Tax System (Family Assistance) Act 1999 (Cth), as in effect prior to its amendment on 2 July 2018 (Old Assistance Act); and
(e)the legislative instruments made under those statutes.
[1] as defined under s 3 of the Current Administration Act.
The family assistance law establishes a framework for the payment of child care subsidies[2] to eligible parents and guardians of children to reduce the expenses of child care. The payments are generally made directly to an approved childcare service, which is then obliged to pass the subsidy on to the parents as a fee reduction.
[2] formerly known as Child Care Benefit (CCB) and the Child Care Rebate (CCR).
The Applicant received approval to operate a child care service for the purpose of the family assistance law under s195 of the Old Administration Act.
Under the Old Administration Act, once approval was granted, the operator was obliged to comply with a number of "conditions for continued approval" in order to maintain approval of the service.
Under s196 of the Old Administration Act, there were three categories of conditions for continued approval under the family assistance law:
(a)Eligibility rules that are set out in a legislative instrument. The applicable instrument for the purposes 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 family assistance law, including:
(i)conditions for continued approval referred to in Part 8 of the Old Administration Act;
(ii)the obligations set out in Part 8A of the Old Administration Act; and
(iii)any other provision that imposes an obligation on a child care service under the family assistance law, including obligations not to contravene civil penalty and criminal offence provisions.
(c)Other child care laws that relate to the operation of the service, the provision of care at the service, the construction of the premises at the service and the equipment at the premises of the service. This includes the Education and Care Services National Law Act 2010 (the NationalLaw) and Education and Care Services National Regulations (the National Regulations)
The Cancellation Decision was made under s 195H(1)(b) of the Current Administration Act because of alleged breaches of conditions by the Applicant between 1 July 2014 and 30 June 2018, when the Old Administration Act was in effect.
Under section 195H of the Current Administration Act, if satisfied that an approved child care service had not complied, or was not complying, with a condition (or conditions) for continued approval, the Respondent may impose one or more of a range of "sanctions" set out in subsection 195H(1), including cancellation of the service's approval under paragraph 195H(1)(b).
Hearing
A hearing in relation to the Review was held on 25, 26 and 27 October and 1 December 2021. The hearing was conducted in the context of restrictions placed on the community in response to the COVID–19 pandemic. The Tribunal determined, pursuant to s 33A of the Administrative Appeals Tribunal Act 1975 (AAT Act), to conduct the hearing by video conference. The Applicant was represented by its director, Mr Ahmad Hashmi. The Respondent was represented by Mr Tom Galvin, a solicitor with Minter Ellison.
In conducting the Second Tier Review, the Tribunal has had regard to:
(a)the documents produced by the Respondent pursuant to s 37 and s 38AA of the AAT Act (T Documents);
(b)the oral evidence of Mr Ahmad Hashmi;
(c)the oral evidence of Ms Reyan Ozdemir; and
(d)the following exhibits:
(i)affidavit of Ahmad Hashmi, sworn 10 June 2021 (Exhibit A1); and
(ii)affidavit of Teresa Mathers, deposed on 9 July 2021 (Exhibit R1).
Issue for Consideration on Review
The issues for determination by the Tribunal on Review pursuant to s 195H of the Current Administration Act are:
(a)whether the Tribunal is satisfied that the Applicant has not complied, or is not complying, with a condition for continued approval as an approved provider of an approved child care service under the family assistance law;
(b)if so, whether to impose a sanction on the Applicant; and
(c)if so, which sanction to impose.
Issue 1 - Alleged Non-Compliance
The Respondent identified the following instances of non-compliance with the family assistance law between 1 July 2014 and 30 June 2018 as a basis for cancellation of the Applicant's approval to operate a child care service:
(a)the Applicant reported 957 sessions of care in relation to 7 educators when the care could not have been provided as reported because the educator was overseas at the time, in contravention of s 219N of the Old Administration Act, resulting in the Applicant being overpaid child care benefits (CCB) and child care rebate (CCR) of $19,879 based on incorrect information (Alleged Overseas Educators Contravention);
(b)the Applicant reported 135 sessions of care in relation to 24 children when the child was overseas at the time in breach of s 219N of the Old Administration Act, resulting in the payment of child care subsidies of $2,534 based on incorrect information; and further on 6 occasions with respect to 2 educators the Applicant contravened paragraph 10(1A)(d) of the Eligibility Rules by breaching its undertaking not to prevent a child from attending any part of a session of care (Alleged Child Overseas Contravention);
(c)the Applicant reported 444 sessions of care that were instances of "child swapping", in contravention of s 219N of the Old Administration Act and ss 10A and 16A(2)(b) of the Eligibility Rules, resulting in the Applicant being overpaid CCB and CCR of $14,429 (Alleged Child Swapping Contravention);
(d)
the Applicant reported 245 sessions of care for two children where no individual was eligible to receive CCB or CCR payments because one child was 14 years old and the other was attending secondary school, in breach of its obligations under

s 16A(2)(b) of the Eligibility Rules (Alleged Child Under14/Secondary School Contravention);
(e)the Applicant contravened Reg 124 of the National Regulations by providing 71 one-hour blocks of care to more than 7 children at a time, and 388 instances of care of more than 4 children of preschool age at one time (Alleged Child Care Ratios Contravention);
(f)the Applicant submitted 2,327 attendance reports and 582 enrolment reports outside the statutory timeframes, in contravention of its obligations under s 219N of the Old Administration Act and Regs 158 and 159 of the National Regulations and s 196(2) of the Old Administration Act (Alleged Late Reporting Contravention);
(g)The Applicant failed to enter Centrelink Customer Reference Numbers (CRNs) for 32 educators into the Child Care Management System (CCMS) as soon as practicable, in breach of its obligation under ss 10(1A)(h) and 16A(2)(b) of the Eligibility Rules and s 196(1) of the Old Administration Act (Alleged CRN Contravention).
Under s 195H of the Old Administration Act the decision-maker is required to be satisfied that an approved provider has not complied, or is not complying, with a condition for continuing approval. In exercising this power on review, the Tribunal is required to be satisfied, on reasonable grounds, that as a matter of fact the Applicant has not complied, or is not complying, with a condition for continuing approval.
Overseas Educators Contravention
The Respondent provided evidence based on data from CCMS records showing 957 sessions of care in relation to seven educators for the period from 1 January 2016 to 22 April 2018, and data from the Centrelink Mainframe System (CMS) via the Department of Home Affairs, showing that each of the educators was outside Australia at the time the sessions were conducted. The data was collated in a spreadsheet included in the T documents[3]. In summary, the Respondent identified the following sessions being recorded when the relevant educator was overseas:
[3] T16.
(a)Khoula Mannan – 31 sessions reported for the period from 2 December 2014 to 2 January 2015, and 155 sessions reported for the period from 14 February 2015 to 24 February 2015.
(b)Parminder Kaur – 22 sessions reported for the period from 25 January 2016 to 18 April 2016.
(c)
Shazma Roohi – 704 sessions reported for the period from 9 December 2014 to

3 February 2015.
(d)Mariam Ahmadzai – 6 sessions reported for the period from 28 March 2015 to 14 April 2015.
(e)Fatima Adnan – 2 sessions reported for the period from 25 January 2015 to 31 January 2015.
(f)Meetu Arora – 21 sessions reported for the period from 14 November 2015 to 13 February 2016.
(g)Md Muhit Hossain – 16 sessions reported for the period from 2 April 2017 to 14 April 2017.
Mr Hashmi, on behalf of the Applicant, did not dispute the accuracy of the data contained in the spreadsheet[4], but he explained that 954 of the sessions identified by the Respondent were provided by fully qualified relief educators in place of the primary educator who was overseas. He conceded that the sessions were recorded in weekly reports in the name of the educator who was overseas and not the relief educator.
[4] See Exhibit A1 at [138] – [141].
The Applicant conceded that the remaining 3 cases were the result of misreporting. Of these three, Mr Hashml identified one as a session of care provided by Khoula Mannan, who claimed to have provided care on 2 December 2014 up to 11.00 am, when she left to go to the airport to catch a flight. He said the Applicant relied on a timesheet signed by the parents which incorrectly recorded attendance for a full day. Mr Hashmi conceded that the report was inaccurate. Of the remaining two cases, Mr Hashmi identified that they related to an educator named Fatima Adnan who he had been unable to contact. He said he was prepared to accept that the two sessions did not occur, and he undertook to repay any overpayment of the CCB resulting from the misreporting in all three cases[5].
[5] Exhibit A1 at [141].
Section 219N(1) requires an approved child care service to provide weekly reports to the Respondent in the form and manner required by the Respondent and containing such information as the Respondent requires. Paragraph 10(1A)(g)(ii) of the Eligibility Rules requires a service to provide, in each report it provides under s 219N(1) and (2), the Service Provider Personnel ID for the carer who provided the session or sessions of care that is or are the subject of the report.
The Respondent contends that, except for 2 sessions of care reported with respect to Fatima Adnan, the Applicant reported 955 sessions of care as having been provided by an educator who was overseas at the time, when in fact those sessions of care were provided by another person, and the Tribunal should find that:
(a)by providing inaccurate attendance reports the Applicant did not comply with section 219N of the Old Administration Act; and
(b)by failing to identify the relief educators for the 955 sessions, the Applicant also failed to comply with paragraph 10(1A)(g)(ii) of the Eligibility Rules by not including the Service Provider Personnel ID for the relief educators in its attendance reports for those sessions of care.
Finding
Based on the evidence produced and the admissions of the Applicant, the Tribunal accepts the evidence presented by the Respondent in the spreadsheet. The Tribunal finds that during the period from 1 January 2016 to 22 April 2018, the Applicant reported 954 sessions of care in relation to 7 educators, as detailed in paragraph [15] above, when the care was not provided by the educator named. In doing so, the Applicant failed to comply with its obligations under s 219N of the Old Administration Act and paragraph 10(1A)(g)(ii) of the Eligibility Rules;
The Respondent also provided evidence based on a review of movement records obtained from the Department of Home Affairs in relation to two educators:
(a)Khoula Mannan departed Australia at 12:09:14 pm on 2 December 2014 and returned on 2 January 2015. Yet the Applicant reported that on the day of departure the educator provided 2 sessions of care from 8am to 6pm. Due to the time of departure, it was not possible for the educator to have physically provided these sessions of care as reported.
(b)
Parminder Kaur departed Australia at 09:41 on 25 January 2016 and returned on

18 April 2016. Yet the Applicant reported that on the day of departure the educator provided 4 sessions of care commencing at 8am and 10am and ending at 5.30pm and 6pm, respectively. Due to the time of departure, it was not possible for the educator to have physically provided these sessions of care as reported.
The Respondent contends that the Tribunal should find that these 6 sessions of care not only represent a failure to comply with s 219N of the Old Administration Act, but also represent a circumstance where a child or children were prevented from attending a part of a session of care in respect of care reported for Khoula Mannan and Parminder Kaur.
Paragraph 16A(2)(b) of the Eligibility Rules requires a family day care service to comply with all undertakings under, inter alia, paragraph 10(1A). Under paragraph 10(1A)(d) an approved family day care service undertakes that '… where a child attends a session of care, the service will not prevent the child from attending any part of that session'.
The Respondent noted that no issue had been taken with the ARO’s findings on this point by the Applicant in its written submissions. However, the 6 sessions are encompassed by the Applicant’s explanation that the 954 sessions were actually provided by relief educators. The timing of the departure of the two educators in question, allowing for the time to travel to the airport and to progress through departure procedures, makes it highly unlikely that the named educators actually provided any part of the 6 sessions of care. The Tribunal therefore accepts that these sessions were provided by a relief educator; and it is not satisfied that the departure details establish that the children were prevented from attending any part of the sessions.
Consequently, the Tribunal does not find that the Applicant failed to comply with its obligations under paragraph 10(1A)(d) of the Eligibility Rules in relation to those 6 sessions of care.
Child Overseas Contravention
The Respondent provided records from CCMS which indicate that the Applicant reported 121 sessions of care during the period from 1 January 2016 to 22 April 2018 in relation to 24 children, at times when the children were overseas and care could not have been provided to those children[6]. The Respondent identified a further 16 sessions of care reported by the Applicant during that period in relation to one child at a time when the child was overseas[7]. Of those 137 identified sessions, the Respondent accepted that 2 sessions (in respect of Adiva Khalil and Amal Khalil) could have occurred based on the time those children cleared immigration for departure overseas. Consequently, the Respondent asserted that 135 sessions of care were misreported in respect of children who were overseas at the time it was reported by the Applicant that they received care in Australia
[6] T17.
[7] T37 at p.2309.

The Applicant accepted that the 135 impugned session of care were reported inaccurately and that this resulted in overpayment of about $2,354 in subsidies. Mr Hashmi accepted personal responsibility for the misreporting, stating in his oral evidence that it occurred while he was on holidays. He explained in his affidavit[8] that the inaccurate reports resulted from administrative errors in recording data, educators using pre-filled timesheets recording a child’s regular hours of attendance which were not updated to reflect a child’s absence, and (in one instance) purposely false timesheets submitted in relation to two children.
Finding
[8] Exhibit A1 at [148]-[151] and in the annexure AH1-5 at Table C.
On the basis that it is not disputed by the Applicant, the Tribunal accepts the evidence presented by the Respondent and finds that during the period from 1 January 2016 to 22 April 2018 the Applicant misreported in its weekly reports 135 sessions of care in respect of children who were overseas at the time; and that child-care subsidies in the amount of $2,534 were incorrectly paid as a result. In so doing, the Applicant did not comply with its reporting obligations under s 219N of the Old Administration Act with respect to those 135 sessions of care.
Child Swapping Contravention
Under section 8 of the Child Care Benefit (Children in respect of whom no-one is eligible) Determination 2015 (Cth) (No-one Eligible Determination), a person is not eligible to receive CCB or CCR payments for sessions of care that are instances of "child swapping”, unless a specified circumstance applies.
"Child swapping" is a practice where a family day care educator, or their partner, attempts to receive child care fee assistance from the Commonwealth for a session of family day care provided to their own child on the same day that the educator provided family day care for another child. Under the family assistance law, an individual is not eligible to receive CCB or CCR payments where they have engaged in "child swapping".
Section 10A of the Eligibility Rules required providers, within 7 days of being notified by the Secretary that a parent is believed to be a family day care educator, to request information or documents from parents as required under subsections 10A(3) and (4) of the Eligibility Rules. Section 10A also required the provider to keep a register of documentary evidence showing that despite the parent or parent's partner being an educator, one of the exceptions applied under section 8 of the No-one Eligible Determination.
The Respondent provided evidence that in the period from 1 January 2016 to 22 April 2018, the Applicant had reported 444 sessions of care that were instances of "child swapping", for which the parents were not eligible to receive CCB or CCR[9]. The Respondent alleged that this resulted in the Applicant being overpaid CCB and CCR in the sum of $14,429.
[9] T2 at pp30-38, see also T13 at p.246 and T14
The Applicant accepted that 50 of the 444 sessions of care were inaccurately reported[10], and provided the following explanation:
(a)19 sessions regarding 7 children involved administrative errors[11] whereby:
(i)an administrator incorrectly entered an attendance for two children in Harmony (timesheet and record-keeping software used by the Applicant) when no care had been provided;
(ii)care was recorded on timesheets on a particular date for 3 children when no care was provided on that day; and
(iii)one educator had recorded care for one child on an incorrect understanding that the child’s mother was not providing care on the same day.
(b)13 sessions regarding 3 children[12] concerned two parents who failed to disclose that they were carers on their child’s enrolment form, and one child where the Applicant’s educator failed to notify the Applicant when she became aware that a parent of the child was working as a carer.
[10] Exhibit A1 at [154(a)].
[11] Exhibit A1 at [155] and [156].
[12] Exhibit A1 at [157].
The Tribunal notes that the Applicant has offered to repay any subsidy incorrectly paid as a result of these matters and has dismissed the educator who had failed to notify the Applicant when she became aware that a parent of the child was working as a carer.
Nevertheless, given the Applicant’s admissions, the Tribunal finds that the Applicant did not comply with its reporting obligations under s 219N of the Old Administration Act with respect to those 50 sessions of care.
The Applicant argued that 394 of the 444 sessions of care (which took place between
1 January and 7 October 2016) were for two children, Raid and Abdul Mohammed, who each fall within the exception for an eligible disabled child in section 8(2)(a) of the No-one Eligible Determination.
The term “eligible disability child” is defined in section 4 of the No-one Eligible Determination as:
(a) A child who has been diagnosed by a qualified medical practitioner as suffering from one or more of the conditions listed in Schedule 1…….
Where:
(c) documentary evidence of the diagnosis has been provided to the approved family day care service proving care to the child in accordance with the timeframes stated in section 10 of this Determination; and
(d) the diagnosis was obtained within a period of 24 months prior to the provision of the documentary evidence to the service.
Schedule 1 relevantly lists Autism Spectrum Disorder when diagnosed by a psychiatrist or developmental paediatrician experienced in the assessment of Pervasive Developmental Disorders and using the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5).
The Applicant’s evidence before the Tribunal in relation to the two children[13], which was not disputed, is:
(a)The children were enrolled by the Applicant on or about 12 October 2015[14];
(b)Each child was separately diagnosed with Autism Spectrum Disorder by Dr Deb Marks, a paediatrician, from the Royal Children’s Hospital. She provided a written diagnosis for Raid dated 25 February 2010[15], and a separate written diagnosis for Abdul (jointly with Dr Sophie Weiscop, a psychologist and Jennifer Buckland, a speech pathologist on 5 August 2010[16].)
(c)The diagnoses were confirmed in writing with the children’s parents by a general practitioner, Dr Satya Inumala, on 14 October 2015 and 19 March 2016 (Abdul), and 14 October 2015 and 18 March 2016 (Raid)[17].
(d)The diagnosis for Abdul relied on the Autism Diagnostic Observation Schedule, Module 2 standardised assessment process, and the report for Raid refers to the Childhood Autism Rating Scale.
(e)The children’s parent provided the various medical reports to the Applicant at the time of enrolment.
[13] T32 at pp.1907-1919 and Exhibit A1 at [155].
[14] Exhibit A1 at [155(b)]
[15] T32 at pp.1910-1912
[16] T32 at pp.1916-1919
[17] T32 at pp.1901-1919.
The Respondent did not dispute that the two children were diagnosed with, and did in fact have, Autism Spectrum Disorder. The Respondent asserted that the issue is not whether they had both been diagnosed with Autism Spectrum Disorder. Instead, the issue is whether they met the definition of "eligible disability child" for the purposes of paragraph 8(2) of the No-one Eligible Determination. The Respondent pointed to the absence of evidence of a diagnosis of Autism Spectrum Disorder "by a psychiatrist or developmental paediatrician experienced in the assessment of Pervasive Developmental Disorders and using the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5)". Accordingly, neither child met the definition of "eligible disability child" for the purposes of paragraph 8(2)(a) of the No-one Eligible Determination.
The Applicant’s response to these assertions by the Respondent was:
(a)the Respondent’s position should not be accepted as a matter of law because the Determination cannot be construed in a way that requires re-diagnosis of Autism Spectrum Disorder at least every two years, not for clinical purposes, but simply so that a child can continue to satisfy the documentary evidence requirements; and
(b)the Tribunal should reject the Respondent’s pedantic approach which elevates form over substance and disregards common sense, particularly where this finding is used in support of the discretion to impose a sanction.
The Tribunal does not accept the Applicant’s first proposition. The language of the No-one Eligible Determination is plain; and sets out specific criteria which do not need to be construed to require re-diagnosis of Autism Spectrum Disorder at least every two years. The combined effect of paragraphs 4, 10 and Schedule 1 is that the child’s condition be diagnosed by an appropriate medical practitioner within 24 months of the date it is provided to the service and that such provision be within the time frames in s 10. Paragraph 10(2) states that documentary evidence only needs to be provided once in relation to each matter to be evidenced. Accordingly, the Determination requires only one diagnosis.
As to the second proposition, the Tribunal acknowledges that the issues of non-compliance raised by the Respondent are matters of form rather than substance. Even so the Tribunal is bound to apply the statutory definitions in the No-one Eligible Determination to assess whether, as a factual matter, the Applicant has not complied, or is not complying, with a condition for continuing approval. A different consideration arises in relation to the exercise of the Tribunal’s discretion under s 195H of the Current Act when deciding what if any sanction should be imposed on the Applicant in respect of its failure to comply.
The evidence does not establish that the diagnosis by Dr Marks of either child in 2010 met the requirements of the definition of Autism Spectrum Disorder in Schedule 1. Dr Marks’ diagnoses were made in 2010 and not within a period of 24 months prior to the provision of her reports to the Applicant in October 2015 as required in the definition of eligible disability child in s 4(d) of the No-one Eligible Determination. In addition, while
Dr Marks is a paediatrician, the evidence does not establish that she was a developmental paediatrician experienced in in the assessment of Pervasive Developmental Disorders and using the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5). Her reports make no reference to the use of DSM-5 in making her assessments.
On this basis, the Tribunal is satisfied that the 394 sessions of care provided for Raid and Abdul Mohammed between 1 January and 7 October 2016, did not fall within the exception for an eligible disabled child in section 8(2)(a) of the No-one Eligible Determination.
Finding
Accordingly, the Tribunal finds that, for the period from 1 January 2016 to 22 April 2018, the Applicant reported 444 sessions of care for which no-one was eligible, and this resulted in the Applicant being overpaid CCB and CCR in of $14,429. In so doing, the Applicant did not comply with its reporting obligations under s 219N of the Old Administration Act with respect to those sessions of care.
The Respondent also contends that the Applicant did not comply with its obligations under paragraph 16A(2)(b) of the Eligibility Rules to comply with its undertakings under paragraph10A(1) and (2) of the Eligibility Rules when notified by the Respondent of ten parents who were believed to be family day care (FDC) educators.
On 11 May 2018 the Applicant was served with a Notice of Intention to Cancel[18] identifying 10 parents identified as FDC educators and drawing the requirements of paragraph10A(1) and (2) of the Eligibility Rules to the Applicant’s attention[19].
[18] T13 at pp.236.
[19] See T13 at p.241 [28] and p.246.
Paragraph 10A(1) requires:
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.
Paragraph 10A(2) provides that if the service becomes aware that an eligible individual or their partner is an FDC carer, the service must within 7 days of becoming aware request the information or documents regarding the person’s role as a carer set out in subparagraph (4).
The Respondent asserted that, to fulfil this obligation, it is reasonable to expect a family day care service, at a minimum:
(a)to provide evidence that the question of whether the eligible individual or their partner is a family day care educator within 7 days of the date the child is enrolled with the service;
(b)to provide evidence that the eligible individual was informed that, if their partner changes, they should inform the service whether their new partner is a family day care educator or not;
(c)to provide evidence that the eligible individual was made aware that if they, or their partner, became a family day care educator in the future, that they should inform the service;
(d)to ask the question periodically whether the eligible individual, or their partner, is a family day care educator; and
(e)if the service becomes aware that an eligible individual, or their partner, is a family day care educator, to raise this immediately with them by requesting the information required under paragraphs 10A(2) and 10A(3).
The Applicant did not provide any evidence of steps taken to comply with these obligations within 7 days of receipt of the Notice of Intention to Cancel, nor any evidence of steps taken to comply generally. The issue was not addressed in the Applicant’s written submissions; nor in the evidence of Mr Hashmi.
In relation to the parents of Raid and Abdul Mohammed, the Applicant provided to the Tribunal an enrolment form for the two children dated 12 October 2015 which was completed by each parent[20]. It states clearly that the mother’s occupation was a childcare carer. The Applicant did not provide any further evidence to satisfy the Tribunal as to its compliance with paragraphs 10A(1) or (2) in relation to these parents. The Tribunal notes that the enrolment form makes no direct reference to any of the matters required under paragraphs 10A(1) and (2) and the Applicant did not provide any other documentation directed at compliance with those requirements.
Finding
[20] Exhibit A2 – attachments at pp.1232-1242.
On this basis, the Tribunal finds that between 12 and 19 October 2015 the Applicant failed to comply with its undertakings under paragraph 10A(1) and (2) of the Eligibility Rules in respect of the parents of Raid and Abdul Mohammed. The Tribunal is further satisfied, based on the absence of any evidence in response to the Notice of Intention to Cancel and the absence generally of evidence from the Applicant of steps taken by the Applicant to comply with paragraphs 10A(1) and (2) of the Eligibility Rules, that the Applicant did not ensure compliance with paragraph10A(1) and (2) of the Eligibility Rules, and had not complied with its undertakings under paragraphs 10A(1) and (2) of the Eligibility Rules during the period between 1 January 2016 and 18 May 2018.
Child Under14/Secondary School Contravention
Under section 9 of the No-one Eligible Determination, no-one is eligible to receive CCB or CCR payments for sessions of care that are provided to children that were 14 years or older or are attending secondary school, unless, under subsection 9(2), the child needs to be cared for by the approved family day care service because:
(i) the child cannot reasonably be left alone in the circumstances; and
(ii) no individual over the age of 18 can provide suitable care to the child in the circumstances; and
(iii) documentary evidence has been provided to the service in respect of (i) and (ii) above by the individual who is otherwise eligible for CCB or CCR for the session of care in accordance with the relevant timeframes; and
(iv) one of the following exemptions applies:
(A) the child is an eligible disability child or inclusion support programme child;
(B) the child resides in a remote or very remote area; or
(C) the child has not yet turned 16 years of age and each individual who would otherwise care for the child on the day on which the session of care is provided is required to work at least 5 hours of paid work, which is not for a family day care service, and the required documentary evidence has been provided to the service.
Paragraph 16A(2)(b) of the Eligibility Rules provides that an approved family day care service must comply with all undertakings, including the undertaking in paragraphs 10, 10AB and 10A(6) of the Eligibility Rules requiring the Applicant to keep a register of specified circumstances and obtain certain documentary evidence in respect of care provided to children aged 14 years or older or children in secondary school for whom no-one is eligible unless specified circumstances apply.
Children over 14 years
The Respondent provided evidence that for the period from 13 March 2017 to 26 March 2017, the Applicant reported 42 sessions of care in respect of the child Hamzah Khan who was 14 years or older at the time, such that no-one was eligible to receive CCB or CCR[21]. This resulted in ineligible payments of $495.
[21] See T2 at p.38-40, T13 at p.246 and spreadsheet at T18.
The Applicant accepted that, at the time that it reported these sessions of care, it did not have the required documentation to establish one of the specified circumstances in s 9(2) of the No-one Eligible Determination during the period 13 March 2017 to 26 March 2017. The Applicant indicated its willingness to repay the $495.
Mr Hashmi gave evidence[22] that subsequent to 26 March 2017 he obtained the documentation necessary to justify the specified circumstances and these documents demonstrated that those circumstances had existed during the period from 13 to 26 March 2017.
Finding
[22] Exhibit A1 at [158]-[164].
Based on this evidence, the Tribunal is satisfied that the Applicant reported in its weekly reports for the period from 13 March 2017 to 26 March 2017 42 sessions of care in respect of one child for which no-one was eligible contrary to section 9 of the No-one Eligible Determination, and in doing so the Applicant did not comply with its obligations under s 219N of the Old Administration Act.
Secondary School Children
The Respondent provided evidence that for the period from 23 October 2017 to 31 October 2017, the Applicant had reported 203 sessions of care in respect of a child Salih Ozdemir, who was in secondary school at the time[23], and asserted that no-one was eligible to receive CCB or CCR in respect of those sessions. Accordingly, the Respondent submitted the Tribunal should be satisfied that the Applicant had failed to comply with the reporting obligations under s 219N(1) of the Old Administration Act and was overpaid CCS of $2,378.
[23] T2 at pp. 40-41.
In order to be satisfied that the Applicant has not complied with s 219N(1) in reporting the 203 sessions of care in respect of Salih Ozdemir in the period from 23 October 2017 to
31 October 2017, the Tribunal needs to be satisfied that no-one was eligible to receive CCB or CCR in respect of those sessions. Put simply, the reports are only inaccurate if you accept that no-one was eligible to receive CCB or CCR in respect of those sessions. It is not disputed that Salih Ozdemir was not yet 16 years old at the relevant time, nor that he was in secondary school. The relevant question is whether the exemption in s 9(2) applied.
The Applicant asserts that the exemption did apply to Salih during the relevant time, and it submitted its weekly reports on that basis. In order to conclude that the reports are inaccurate, as the Respondent asserts, the Tribunal needs to be satisfied that the exemption in s 9(2) did not apply to Salih Ozdemir at the relevant time.

The child’s mother Reyhan Ozdemir provided a statutory declaration declared on 27 March 2017[24] and a letter addressed to ‘whom it may concern’ also dated 27 March 2017[25] to the Applicant which the Applicant relied on to justify the exemption. These documents were in evidence and Ms Ozdemir gave evidence at the hearing.
[24] T32 at p.1964.
[25] T32 at p.1962.
In her statutory declaration Ms Ozdemir stated:
I am a single parent and work on the full-time basis. My other children attend family daycare service and they are looked after very well by the Educator — Nermin. My son, Salih also wanted to attend day care with the siblings. He feels left alone at the home and I cannot reasonably leave him alone at the home as there are no one who can take care of him. I do not want him to feel isolated. There are none apart from me who can provide suitable care for him. Since I am a single working mother, I need the help of educator, and that is the main reason why I wanted him to send to the family day care along with my other children
In her letter of 27 March 2017 Ms Ozdemir stated that:
(a)she was the proprietor of a newly established business which she was required to operate 7 days per week;
(b)she is a single mother of 4 children and is struggling financially;
(c)she needs to work 7 days at all hours of the week, sometimes until 4 am;
(d)she could not leave Salih at home alone for such long hours; and
(e)her family in Australia cannot assist her in the care of the children.
In her oral evidence, Ms Ozdemir explained that she had been subjected to domestic violence by the children’s father.
The Respondent’s assertion that no-one was eligible in respect of the 203 sessions was not directed at the substance of the eligibility requirements under paragraph 9(2) of the No-one Eligible Determination but rather whether the documentation provided by Ms Ozdemir met the evidence requirements.
The ARO expressed the Respondent’s position in the Review Decision[26] as follows:
In my view the documents accepted by the provider as documentary evidence to establish that a specified circumstance and exemption did not satisfy the requirements of section 9 of the No-One Eligible Determination.
Specifically the document submitted in respect of the requirement for Ms Ozdemir undertake paid work does not specify that she is required to work for at least 5 hours on the day in which the session of care is provided nor does it set out any requirement that Ms Ozdemir is required to usually work at the same time as the session/s of care are provided.
I note that the provider relied on Ms Ozdemir’s Statutory Declaration to satisfy itself that the child’s father could not provide any care for the child in secondary school and also note the additional information obtained from Ms Ozdemir and submitted with the 18 March 2019 submission.
In my opinion this documentation did not provide any new information relevant to the question of whether the provider had obtained documentary evidence to satisfy the provider’s obligations under section 9 of the No-One Eligible Determination. I have not given it any weight in this review decision.
[26] T2 at p.41.
Section 9 contains two specific obligations which required that Ms Ozdemir provide to the Applicant documentary evidence that:
(a)the child cannot reasonably be left alone and no individual over the age of 18 can provide suitable care to the child in the circumstances – s 9(2)(iii); and
(b)
the child has not yet turned 16 years of age and each individual who would otherwise care for the child on the day on which the session of care is provided is required to work at least 5 hours of paid work which is not for a family day care service –

s 9(2)(iv)(C).
The Applicant has an obligation under s 219N to provide accurate reports. In order to do so, it is required to determine that the information regarding eligibility included in the weekly reports is correct. This requires the Applicant to make all reasonable inquiries so as to be satisfied on reasonable grounds that a session of care is eligible for receipt of family care benefits before reporting.
In this case the Applicant was provided with appropriate documentation in the form of a statutory declaration and a supporting letter from the child’s mother.
In those documents the mother clearly stated that the child could not reasonably be left alone given his circumstances. She also stated that there was none apart from her who can provide suitable care for him. Since I am a single working mother, I need the help of educator. She added in her letter that her family in Australia cannot assist her in the care of the children. She also explained that she was struggling financially. Given this documented evidence, the Tribunal is satisfied that it was reasonable for the Applicant to conclude that the child met the requirements of paragraphs 9(2)(i)-(ii).
As to the second requirement in s.9(2)(iv)(C), the Respondent’s criticism is directed at the fact that the documentary evidence does not address the exemption in specific terms. The ARO stated that it does not specify that she is required to work for at least 5 hours on the day in which the session of care is provided nor does it set out any requirement that
Ms Ozdemir is required to usually work at the same time as the session/s of care are provided.
However, the mother stated in her statutory declaration that she worked on a full-time basis. She expanded on this in her letter stating that she was the proprietor of a newly established business which she was required to operate 7 days per week, and she needed to work 7 days at all hours of the week, sometimes until 4 am. This, together with her evidence that she was the only person able to care for the child makes it reasonable to conclude that each individual who would otherwise care for the child on the day on which the session of care is provided is required to work at least 5 hours of paid work. The Tribunal is satisfied that, on this basis, it was reasonable for the Applicant to conclude that the requirements of s 9(2)(iv)(C) were met and the Tribunal is not satisfied that no-one was eligible to receive CCB or CCR in respect of the 203 sessions of care reported in respect of a child Salih Ozdemir. Accordingly, the Tribunal does not find that the Applicant submitted inaccurate reports regarding the 203 sessions of care for Salih Ozdemir in the period from 23 October 2017 to 31 October 2017.
Child Care Ratios Contravention
The Respondent provided evidence that between 1 January 2016 and 30 June 2018 the Applicant’s educators provided a total of 71 one-hour blocks of care for more than 7 children at a time[27], and alleged that this was in contravention of Regulation 124 of the National Regulations which provides that, unless an exemption applies, an educator may not care for more than 7 children at a time.
[27] In the Authorised Review Officer's decision, it was found that there were 568 instances between 1 January 2016 and 30 June 2018 where the Applicant reported one-hour blocks with more than 7 children. The Respondent subsequently reviewed the data relied upon by the Authorised Review Officer, and identified that there was a miscalculation in the number of instances where the ratio was breached. The evidence regarding that review is set out in the affidavit of Teresa Mathers, affirmed on 9 July 2021 (Exhibit R1).
The Respondent provided evidence[28] that, during the same period there were 388 instances where the Applicant reported more than the allowed limit of no more than 4 preschool aged children cared for by an educator at any one time[29] and alleged that this was in contravention of Regulation 124 of the National Regulations.
[28] Exhibit R1.
[29] In the Authorised Review Officer's decision, it was found that there were 1,945 instances between 1 January 2016 and 30 June 2018 where the Applicant reported more than the allowed limit of no more than 4 children of preschool age or under that may be cared for by a family day care educator at any one time. The Respondent subsequently reviewed the data relied upon by the Authorised Review Officer, and identified that there was a miscalculation in the number of instances where the Educator to Child—Preschool Aged Children ratio was breached. The evidence regarding that review is set out in the affidavit of Teresa Mathers, affirmed on 9 July 2021 (Exhibit R1).
In each case, the Applicant accepted that its educators had exceeded the ratios as asserted by the Respondent, but stated that in every case it had a ‘Emergency care approval form’ which was signed by one or both parents of the child who received the care[30]; and this was a proper basis for it to determine that the child was in need of protection under a child protection law and the Applicant was the best person to educate and care for the child[31]. The Applicant asserted that this entitled it to rely on the exceptional circumstances exemption in Regulation 124(6) of the National Regulations.
[30] The internal review decision acknowledges the existence of these forms and the fact that they were signed by parents – T2.
[31] Exhibit A1 at [183] and [186]-[187].
Regulation 124(6)(b) of the National Regulations provides that exceptional circumstances exist if:
(a)all the children being educated and cared for by the educator are siblings of the same family;
(b)a child to be educated and cared for is determined to be in need of protection under a child protection law and the family day care educator is determined to be the best person to educate and care for the child; or
(c)the family day care residence or approved family day care venue is in a rural or remote area and no alternative education and care service is available.
The parties have not asserted that either paragraph (a) or (c) of this definition are relevant to the Applicant. The relevant question to be asked in this case to determine whether the exemption applied is whether each child in question was determined to be in need of protection under a child protection law and the family day care educator is determined to be the best person to educate and care for the child.
The criticism in the internal review decision[32] was that the Applicant did not closely analyse the information it had in relation to the exemptions against the Children, Youth and Families Act 2005 (Vic) in determining whether a child was in need of protection under a child protection law.
[32] T2 at p.44 [256]-[258].
The Applicant asserts that the need for protection is a matter that the Applicant could determine from the information provided by parents in the emergency care approval forms. The process described by the Applicant to establish exceptional circumstances was for the parents to request emergency care and for the educators and a coordinator to approve the request[33]. A number of examples of the emergency care forms were included in the T documents[34]. Examples of the reason the child was said to be in need of protection given in the forms included:
X is a single mother. She has a voluntary work on [date]. She cannot take care of the child and child cannot be left alone[35].
Parents busy on [dates] child cannot be left alone at home as no body will be not at home to look after (child). Father disabled and mother work.[36]
Mother is working on [date] and father is sick so child can not stay at home with father is sick and at risk.[37]
Both parents are working and they cannot pick up the child early as they have an appointment with client[38].
Mother got urgent call from work. Father working need emergency care from 2.30 pm.[39]
Due to domestic violence at home between parents, parents did not want any child at home. So, she requested educator to keep (child) in care.[40]
[33] Exhibit A1 - AH1-10 at pp.1343-47.
[34] T 42 at pp. 2464-2476.
[35] Ibid p. 2465.
[36] Ibid p.2466.
[37] Ibid p.2467.
[38] Ibid p.2469.
[39] Ibid p.2470.
[40] Ibid p.2471.
These statements do not establish that children had been determined by any public body to be in need of protection under a child protection law, or that the educator had been determined to be the best person to educate and care for the child, as required under regulation 124(6) of the National Regulations.
The Applicant’s evidence was that the determination was made without reference to the Children, Youth and Families Act 2005 (Vic). The reasons contained in the emergency care forms, possibly with the exception of the one referring to family violence[41], are more about matters of convenience for the parents than the need for protection of the children involved.
[41] Ibid p. 2471.
On the basis of this evidence, the Tribunal is not satisfied that the Applicant had applied a proper process for assessing whether special circumstances under Regulation 124(6)(b) of the National Regulations applied. Having considered the Applicant’s specific explanation for exceeding the ratios in each of the cases alleged by the Respondent[42], the Tribunal is satisfied that exceptional circumstances did not apply.
Findings
[42] Exhibit A1 at AH1-10 at pp. 1343-1347 and AH 1-11 at pp.1373-1375.
Accordingly, the Tribunal finds that between 1 January 2016 and 30 June 2018 the Applicant provided a total of 71 one-hour blocks of care for more than 7 children at a time, and there were 388 instances where more than 4 preschool-aged children were cared for by an educator at any one time, in contravention of Regulation 124 of the National Regulations.
Late Reporting Contravention
Section 219N(5) of the Old Administration Act required the Applicant to submit its section 219N reports to the Respondent no later than:
(i) if the week in which the session of care was provided fell wholly before the day on which the enrolment was confirmed—the period of 7 days after the day on which the enrolment was confirmed; and
(ii) otherwise—the end of the second week immediately following the week the care was provided.
Regulations 158 and 159 of the National Regulations require attendance records for the service to be made and kept by the approved provider and family day care educators that accurately record the name of children attending as well as their respective arrival and departure times.
The Respondent has provided evidence based on records from CCMS which indicate that the Applicant submitted attendance reports late on 2,327 occasions during the period from
1 January 2016 to 30 June 2018[43]. Of those instances of late reporting:
(a)106 reports were submitted 10 or more days after the end of the prescribed timeframe; and
(b)2,221 reports were submitted between 1 and 9 days after the end of the prescribed timeframe.
[43] T34.
The Respondent contends that the Applicant’s late reporting is a contravention of s 219N of the Old Administration Act and Regulations 158 and 159 of the National Regulations, and has therefore contravened s 196(3) of the Old Administration Act.
The Applicant does not dispute that the identified reports were submitted outside the prescribed time periods. The Applicant explained[44] the reason for the late reporting was due to:
(a)the practical challenges of checking and auditing physical timesheets submitted by multiple educators, following up with educators and parents to verify details, and correcting errors before entering the data into the registered software for reporting to the respondent – and ensuring that all these tasks are completed within a 7 or 14- day timeframe; and
(b)occasionally information obtained from parents and educators did not contain all the required details asked for on a form. This caused delays and necessitated further enquiries to ensure a complete and accurate report.
Finding
[44] Exhibit A1 at [175]-[177].
Having regard to the Respondent’s evidence and the Applicant’s admissions, the Tribunal finds that during the period from 1 January 2016 to 30 June 2018 the Applicant submitted attendance reports outside the statutory timeframes (under s 219N(5)) in 2,327 instances, and submitted enrolment reports outside the timeframe (under s 219AB) on 582 instances, which constituted a failure to comply with its obligations under s 219N of the Old Administration Act and Regulations 158 and 159 of the National Regulations.
CRN Contravention
Paragraph 10(1A)(h) of the Eligibility Rules requires operators applying for approval of a family day care service under the family assistance law to undertake that the service would ensure that, for each of its family day care educators that has a Customer Reference Number (CRN), it would enter the CRN in its registered software as soon as its registered software enabled it to do so.
Paragraph 16A(2)(b) of the Eligibility Rules provides that a failure to comply with subsection 10(1A) is a breach of the eligibility rules for continued approval under the family assistance law.
The Respondent has alleged[45] that during the period 14 March 2017 to 22 April 2018, the Applicant did not enter the CRN for the 32 educators into its registered Harmony software, and submitted attendance reports in relation to 84,875 sessions of care to the Respondent in which the 32 educators’ CRNs were not included.
[45] T39 at p. 2323.
Mr Hashmi addressed this allegation in his affidavit[46]. He stated the Applicant did in fact enter the CRN details for the 32 educators into the software as required and he was at a loss as to why the data was not visible to the Respondent. He stated that his practice was to always enter the CRN and he produced screenshots of a number of educator profiles on Harmony showing the CRN entry[47]. Mr Hashmi also noted that in March 2017 the Applicant had transitioned from Harmony Desktop to Harmony Web and that there were various issues with the accuracy of the data being stored on Harmony[48]. He surmised that the reason the Respondent was not able to access the CRN data was because of a system glitch. He provided a spreadsheet in response to the Respondent’s Further Contraventions Notice[49] which set out the CRNs detail for 36 of the 37 educators as at the period 13 March 2017 to 22 April 2018[50].
[46] Exhibit A1 at [171] to [174].
[47] T47 at pp. 2599-2630, 2658-2677 and 2680-2693.
[48] Exhibit A1 at [84(f)].
[49] T37.
[50] Exhibit A1 AH1-8 at p.1323.
The Respondent relied on a spreadsheet[51] listing the names of the educators for whom it claims the Applicant failed to provide CRNs which was provided to the Applicant as part of the Further Contravention Notice dated 2 August 2018[52]. The spreadsheet is little more than a list of names. The Respondent did not produce any actual evidence to the Tribunal to substantiate the allegation that the Applicant failed to enter the CRNs into Harmony, other than the spreadsheet. It did however refer to the findings of the ARO in the Review Decision.
[51] See T39 and T37 at p.2310.
[52] T37.
The ARO noted in the Review Decision that the Applicant could not have entered CRNs for five of a list of 37 educators into its registered software because those educators did not have a CRN at the time, or had not disclosed it to the Applicant. The ARO further stated that, following review of departmental records and assessment of the Applicant’s submissions, they were satisfied that the Applicant had not entered the CRNs of the remaining 32 educators into Harmony before the Notice of Intent was sent on 11 May 2018. The ARO did not give any weight to the provider’s assertion that it had entered the educator CRNs into its registered software prior to its transition to a web-based version of its registered software (Harmony) in March 2017 and that the CRNs identified as the department as missing may have been ‘lost’ due to technical errors with the software during the transition. I take this view because departmental records indicate that CRNs for the 32 identified educators in question had not been entered before the provider’s transition to a web-based version of Harmony. A review of departmental records for this period also did not identify any requests for advice or assistance with this matter from the provider.

The Tribunal accepts that the Respondent did not have visibility of the CRNs for 32 of the Applicant’s educators on Harmony in the period from 14 March 2017 to 22 April 2018. However, the Tribunal is not satisfied on the evidence that this was due to the Applicant failing to enter the CRN on the system as required. The issue raised by Mr Hashmi was that the data he entered seemed not to be visible to the Respondent. If that were the case, the Tribunal is not sure that a review of department records by the ARO could be definitive. The ARO did not elaborate on his conclusion and there was no evidence on the matter before the Tribunal. In the circumstances, the Tribunal is not prepared to speculate about what may or may not have transpired with the Harmony system; but it is not satisfied the evidence establishes that the Applicant failed to enter a CRN for the 32 educators in question.
Finding
The Tribunal is not satisfied that the Applicant failed to provide CRNs as alleged.
Conclusion
On the basis of the findings set out above the Tribunal is satisfied that the Applicant has not complied with conditions for continued approval as an approved provider of an approved child-care service under the family assistance law in the following respects:
(a)During the period from 1 January 2016 to 22 April 2018, the Applicant reported 955 sessions of care in relation to 7 educators when the care was not provided by the educator named, and in doing so the Applicant failed to comply with its obligations under 219N of the Old Administration Act and paragraph 10(1A)(g)(ii) of the Eligibility Rules (Overseas Educators Contravention).
(b)During the period from 1 January 2016 to 22 April 2018 the Applicant misreported in its weekly reports 135 sessions of care in respect of children who were overseas at the time resulting in child-care subsidies in the amount of $2,534 being incorrectly paid In so doing the Applicant did not comply with its reporting obligations under s 219N of the Old Administration Act (Child Overseas Contravention).
(c)In the period from 1 January 2016 to 22 April 2018, the Applicant reported 444 sessions of care for which no-one was eligible by reason of child swapping, and this resulted in the Applicant being overpaid CCB and CCR in the sum of $14,429. In so doing the Applicant did not comply with its reporting obligations under s 219N of the Old Administration Act. In or about 12-19 October 2015 the Applicant failed to comply with its undertakings under paragraph 10A(1) and (2) of the Eligibility Rules in respect of the parents of Raid and Abdul Mohammed and did not did not comply with its undertakings under paragraph 10A(1) and (2) of the Eligibility Rules during the period between 1 January 2016 to 18 May 2018 (Child Swapping Contravention).
(d)In the period from 13 March 2017 to 26 March 2017 the Applicant reported in its weekly reports 42 sessions of care in respect of one child who was over 14 years of age for whom no-one was eligible contrary to section 9 of the No-one Eligible Determination; and in doing so the Applicant did not comply with its obligations under s 219N of the Old Administration Act (Child Under 14/Secondary School Contravention).
(e)In the period from 1 January 2016 to 30 June 2018 the Applicant provided a total of 71 one-hour blocks of care for more than 7 children at a time, and 388 instances of care where more than 4 preschool aged children were cared for by an educator at any one time, in contravention of Regulation 124 of the National Regulations (Child Care Ratios Contravention).
(f)In the period from 1 January 2016 to 30 June 2018 the Applicant submitted attendance reports outside the statutory timeframes (under s 219N(5)) in 2,327 instances, and submitted enrolment reports outside the timeframe (under s 219AB) on 582 instances, which constituted a failure to comply with its obligations under s 219N of the Old Administration Act and Regulations 158 and 159 of the National Regulations (Late Reporting Contravention).
Issue 2 - Whether to impose a 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 noncompliance:
(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.
Whether the non-compliance appears to be an isolated incident or to form part of a history of apparent contraventions engaged in by the provider
The Respondent contends that instances of non-compliance and misreporting by the Applicant have been significant and frequent, and have resulted in a significant number of breaches of the Applicant's obligations under the family assistance law, and the National Law and National Regulations, over an extended period.
The Respondent submits that, in deciding whether to impose a sanction, the Tribunal should not just look at the circumstances of each category of contravention as an isolated event, but also at the contraventions as a whole, such that the Applicant’s non-compliance forms part of a history of non-compliance.
The Tribunal is satisfied that the Applicant’s non-compliance was not an isolated incident and there was a history involving a significant number of contraventions across the period from July 2014 to June 2018. Each category of contravention was the result of a separate set of circumstances and there was no consistent pattern of non-compliance.
Whether non-compliance has resulted, or is likely to result, in overpayments of CCS and ACCS
The Respondent asserts that the Applicant’s non-compliance has led to significant payments of CCB and CCR of at least $39,715, in the absence of any legal entitlement to receive those payments.
The Respondent contends that this represents a significant overpayment of public funds, to which no-one (including the Applicant) had an entitlement, and the extent of the overpayment is a factor that weighs significantly in favour of the imposition of a sanction on the Applicant.
The Respondent’s assessment of the amount of the overpayments is comprised of:
(a)$19,879 due to the Overseas Educators Contravention
(b)$14,429 due to the Child Swapping Contravention
(c)$2,534 due to the Overseas Child Contravention;
(d)$495 due to the Child Over 14/Secondary School Contravention
The Tribunal accepts that the Applicant’s failure to comply with its obligations as found in the Overseas Child Contravention resulted in an overpayment of subsidies in the sum of $2,534.
The Tribunal accepts that the Applicant’s failure to comply with its obligations as found in the Child Over 14/Secondary School Contravention resulted in an overpayment of subsidies of $495. This contravention related to 42 sessions of care provided to one child over a two-week period. These sessions were not eligible for a subsidy not because of any substantive reason, but because the Applicant had not obtained the required documentation before providing the care.
In relation to the Overseas Educators Contravention the Respondent asserts that 957 sessions of care (referable to 7 educators who were overseas) reported to the Respondent under s 219N of the Administration Act were inaccurate and that this resulted in $19,879 in overpaid subsidies.
The Applicant accepts that reports covering 3 out of the 957 sessions inaccurately reported care and resulted in the overpayment of subsidies in the sum of $62.
The Applicant’s evidence demonstrates that 954 of the 957 sessions of care were provided by fully qualified relief educators in place of the primary educator in the residence of a primary educator who was unavailable (for 6 of the 7 primary educators). The relief educators who provided the 954 sessions of care all had the required qualifications of a primary educator[53].
[53] Exhibit A1, Table B.
The Applicant asserted that it had a basis for using relief educators in this way. Guidance published by a State Regulatory Authority supported the use of relief educators to provide care in the residence of a primary educator who was unavailable[54],
[54] Exhibit A1 at [132], T 42 at pp. 2456-2458 and T47 at pp.2678-2679.
The Applicant argues, therefore, that 99.69% of the relevant sessions of care did not result in payment of subsidies where there was no entitlement (because the parents in fact knew about and received the benefit of the care provided by a relief educator) and that the correct amount for the overpayment of subsidies was $62.
The Respondent’s response to this contention as set out in its written submission was:
With respect, that contention misunderstands the point and, in effect, amounts to a concession that the Applicant misreported all 957 sessions of care. The point that the Applicant's contentions fail to grapple with is that it was responsible for submitting accurate attendance reports, which it failed to do on 957 occasions because it reported care as being provided by an educator that was overseas at the time. Consequently, even if the Applicant's contention that the care was in fact provided by persons that held the qualifications to be a family day care educator is accepted by the Tribunal, it does not change the fact that the Applicant:
(i) provided inaccurate attendance reports in respect 957 sessions of care, in breach of section 219N of the Old Administration Act;
(ii) breached paragraph 10(1A)(g)(ii) of the Eligibility Rules in not including the Service Provider Personnel ID for the relief educators in its attendance reports for those sessions of care; and
(iii) the Applicant has demonstrated a lack of appropriate governance and oversight over its service and educators.
The Tribunal does not dispute the Respondent’s assertion regarding the Applicant’s failure to comply with its reporting obligations in respect of the 957 sessions of care, but that contention does not take issue with the Applicant’s assertion regarding the proper basis for calculating the amount of any overpayment of subsidies.
The Tribunal is not satisfied that the Applicant’s failure to comply with its reporting obligations resulted in an overpayment of $ $19,879 as alleged. It accepts the Applicant’s submission that for 954 of those sessions the care was provided by fully qualified relief educators in place of the primary educator for which subsidies were eligible. The Tribunal finds that the correct amount of overpayment resulting from this form of non-compliance was $62.
As to the Child Swapping Contravention, the Tribunal accepts that the Applicant’s failure to comply with its child swapping obligations in relation to 444 sessions of care resulted in an overpayment of subsidies in the sum of $14,429. However, the large majority of these overpayments ($12,804[55]) related to 394 sessions of care provided for Raid and Abdul Mohammed between 1 January and 7 October 2016. These sessions did not fall within the exception for an eligible disabled child in section 8(2)(a) of the No-one Eligible Determination because of process rather than substantive reasons. It was not disputed that the two children had been diagnosed with Autism Spectrum Disorder which, in substance, would qualify them as an eligible disabled child. The failure to comply related to the absence of evidence regarding the timing of the diagnoses and the qualifications of the paediatrician providing the diagnoses.
[55] $12,804 represents 88.7% or 394/444 of the total $14,429.
The Tribunal is satisfied that the correct total of overpaid subsidies resulting from the Applicant’s failures to comply during the period from 1 January 2016 to 30 June 2018 was $17,520. Of this amount, some $13,499 resulted from process rather than substantive reasons.
The Tribunal accepts that the overpayment of public funds is a factor which weighs in favour of a sanction. However, the magnitude of the overpayments in this case is not so significant that this factor should attract substantial weight. The large majority of the overpayments resulted from the Applicant having inadequate documentation for an otherwise eligible service. It is only in relation to the Child Overseas Contravention that subsidies were paid for care for which there was no legitimate basis for eligibility. This totals $2,534.
Whether the non-compliance involves a failure to reasonably cooperate with a person exercising powers under the family assistance law
The Respondent does not contend that there has been a failure to reasonably cooperate with a person exercising powers under the family assistance law.
The Compliance History set out in the evidence of Mr Hashmi[56] indicates that the Applicant readily and fully cooperated with the Respondent in responding to the concerns raised by the Respondent in its Invitations to Respond and Contravention Notices. The only instance where the Applicant failed to respond was in relation to the Warning Letter issued on
5 April 2017[57], which the Applicant claimed it did not receive. Mr Hashmi gave evidence that he did not become aware of the warning letter until more than a year after it was purportedly issued. He explained that this may have resulted from the letter being incorrectly addressed. The Warning Letter was addressed to 1447-1451 Sydney Road, Campbellfield. Mr Hashmi gave evidence that the correct address was 4/1447 Sydney Road, Campbellfield.
The Tribunal accepts Mr Hashmi’s explanation for not responding to the warning letter of
5 April 2017, and is satisfied on the basis of the evidence as a whole that the Applicant’s non-compliance did not involve a failure to reasonably cooperate with the Respondent in exercising powers under the family assistance law.
Whether the non-compliance involves a failure to take reasonable care to ensure that information given to the Secretary, including in a report under subsection 204B(1) of the Current Administration Act, is not inaccurate, false or misleading
[56] Exhibit A1 at [89]-[123].
[57] T11 at p.207.
The Respondent asserts that this factor does not require actual knowledge or awareness of the inaccurate, false or misleading reporting, merely a failure to take reasonable care.
The Respondent submits that:
.. the Applicant has submitted thousands of inaccurate, false or misleading reports to the Respondent, including in attendance and enrolment reports under sections 219N and 219AB of the Old Administration Act. In this statement of facts, issues and contentions, and in the supporting evidence, the Respondent has identified at least 4,500 instances of inaccurate, false or misleading information in reports submitted by the Applicant.
Based on the Tribunal’s findings set out at paragraph [101] above, the Applicant submitted a total of 2035 reports of individual sessions of care which have been shown to be inaccurate or false.
Of these reports, the Tribunal is satisfied that some 1090 were submitted without reasonable care. This includes 955 reports which incorrectly named educators who were overseas, and 135 reports of care provided to children who were overseas. In both cases, the false reports were a direct result of an absence of reasonable care by the Applicant.
The remaining reports were inaccurate largely because the Applicant had misunderstood the requirements for documenting exemptions, notably for establishing that a child was an eligible disabled child for the purpose of the child swapping requirements, to determine if special circumstances applied to provide care to a child over 14 years, and to determine the child protection requirements in relation to child ratios. In relation to this category, the Tribunal is satisfied that the false reports were due to a combination of a lack of reasonable care and a genuine misunderstanding as to the legal requirements.
Accordingly, the Tribunal accepts that the total 2035 false reports resulted from, or were contributed to by, a lack of reasonable care on the Applicant’s part. While this demonstrates that there were incidents where the Applicant failed to exercise proper care in the administration of its business, the Tribunal is not satisfied, when considered in the context of the Applicant’s reporting as a whole, that it demonstrates that the Applicant did not have adequate oversight, governance and systems in place. Rather, the contraventions evidence that the Applicant was careless on occasions in applying the systems it had in place.
The Applicant’s lack of reasonable care is a significant factor weighing in favour of the imposition of a sanction.
Whether the non-compliance is associated with a debt to the Commonwealth under Division 2 of Part 4 of the Administration Act
The Respondent asserts that the Applicant's non-compliance has led to significant payments of CCB and CCR in circumstances where there was no legal entitlement to receive such payments, and the effect of Division 2 of Part 4 of the Current Administration Act is that those amounts constitute a debt due to the Commonwealth.
Sections 71B(1) and 71C(1) and (2) of the Current Administration Act deem ineligible payments and overpayments of child care subsidies to be debts due to the Commonwealth[58]. Accordingly, the Tribunal is satisfied that ineligible payments of CCB and CCR due to the Applicant’s contraventions totalling $17,520 constitute a debt owed to the Commonwealth, a factor weighing in favour of a sanction.
[58] See Mohamed trading as Billan Family Day Care v Secretary, Department of Education, Skills and Employment (No 2) [2020] FCA 1749 at [54].
Whether the non-compliance is minor or serious in nature
Based on the totality of the Applicant's non-compliance, the Respondent contends that the Applicant's non-compliance should be regarded as very serious.
(a)First, the Respondent contends that misreporting or inaccurately reporting sessions of care is an extremely serious matter, particularly given the frequency and extent to which the Applicant has engaged in this behaviour. These breaches, the Respondent submits, demonstrate a lack of care and compliance with a number of legislated requirements under the family assistance law and demonstrates systematic deficiencies in the Applicant’s management arrangements. The Respondent submits that the evidence clearly demonstrates that the Applicant has falsely or inaccurately reported a significant number of sessions of care and had caused the Respondent to make payments of public funds to the Applicant that were not payable under the family assistance law.
(b)Secondly, it is incumbent on the Applicant to supervise its own educators to ensure that care was occurring. Furthermore, the Respondent contends that this lack of oversight and monitoring raises serious concerns about the health and safety of the children. The Respondent contends that the demonstrated failures in the Applicant’s governance and management structures should cause the Tribunal to have concerns about the health and safety of the children that it proposes to provide care to.
(c)Thirdly, the Respondent contends that the Applicant's non-compliance should be considered as particularly serious given the Applicant's lack of insight into its actions and tendency to minimise its involvement in, or responsibility for, the non-compliance by attempting to shift the blame to other parties.
(d)Fourthly, the Respondent notes that sections 219N, 219AB, 219QB and 219QE of the Old Administration Act are offence provisions attracting a maximum penalty of 60 penalty units for each contravention (80 penalty units and 70 penalty units under the Current Administration Act, respectively). This demonstrates the seriousness of breaches of these obligations by the Applicant. Further to this, failure to comply with the requirements of section 219AB is a strict liability offence. This demonstrates the seriousness of such breaches and why it is of utmost importance for the Applicant to have ensured strict compliance with its legislated requirements.
(e)Fifthly, the Respondent contends that the evidence demonstrates that the Applicant has failed to comply with National Law and National Regulations in a number of ways that has put the health, welfare and safety of children under its care at risk. In particular, the Respondent notes that the Applicant had exceeded the Educator to Child Ratio and Educator to Child Ratio—Preschool Aged Children in over 660 instances in circumstances where these ratios were prescribed to ensure that the children are not subject to an unacceptable risk to their health, safety and wellbeing. In the Respondent’s view, these demonstrate a very serious breach of the Applicant’s obligations under the National Law and National Regulations.

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.
In the instant case, the Respondent does not assert that the sanctions specified in paragraphs (c), (d), (e) or (f) are appropriate, and the Tribunal is satisfied that the evidence before it does not support a determination in relation to those forms of sanction. The question for determination is therefore whether to impose the sanction of cancellation under s 195H(1)(b) or suspension under s 195H(1)(a).
The Respondent contends that having regard to the totality of the instances of the Applicant’s non-compliance, the appropriate sanction to be imposed is cancellation.
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 as follows:
(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.
Whether the provider’s non-compliance is of a systemic and ongoing nature
The Tribunal’s findings in relation to the Applicant’s non-compliance involve various failings by the Applicant but principally they fall into three broad categories. First, there were incidents of a lack of reasonable care by the Applicant in avoiding errors due to the use of pre-filled timesheets by educators, administrative errors in data entry, instances of parents failing to disclose that they were educators and in one case an educator intentionally recording inaccurate information. Secondly, there were instances of misapplying the rules regarding exceptions and special circumstances due to a lack of care and a misunderstanding of the requirements. Thirdly, there were incidents of tardiness on the Applicant’s part in not submitting reports on time.
These instances of non-compliance did not exhibit a systematic pattern but were rather a number of unrelated failings of the Applicant’s compliance processes, indicating that the Applicant needed to tighten up its otherwise adequate systems and processes.
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 or 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
The Applicant’s non-compliance has resulted in overpayments and debts to the Commonwealth totalling $17,520. While this amount is a significant sum, the majority of the overpayment ($12,804) related to 394 sessions of care provided for two children Raid and Abdul Mohammed between 1 January and 7 October 2016. In that case, the documents relied on by the Applicant to determine that the children fell within the exception for an eligible disabled child were deficient because they did not adequately address the qualifications of the paediatrician and the timing of her diagnosis. It is really only in relation to the Child Overseas Contravention that, due to the lack of reasonable care by the Applicant, subsidies totalling $2,534 were paid for care for which there was no legitimate entitlement.
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
The Tribunal is satisfied that the Applicant had adequate oversight, governance and systems in place, which the Applicant applied in a genuine effort to meet its obligations. However, for the reasons discussed elsewhere in this decision, the Applicant’s failure to comply with the conditions of its approval was due largely to its failure in some specific instances to exercise proper care in the administration of its business.
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
The Respondent contends that, having regard to the matters under section 194E of the Administration Act, the Applicant is not a fit and proper person.
Section 194E(1) of the Administration Act provides matters the Secretary (or delegate) must have regard to when determining whether a person is a "fit and proper person", as discussed below.
(a) any non-compliance by a relevant person with a law of the Commonwealth or a State or Territory;
(b) any proceedings currently before a court or tribunal that involve a relevant person;
(c) any decision made under a law of the Commonwealth or a State or Territory relating to child care which adversely affects a relevant person;
(d) subject to Part VIIC of the Crimes Act 1914 , any conviction, or finding of guilt, against a relevant person for an offence against a law of the Commonwealth or a State or Territory, including (without limitation) an offence against children, or relating to dishonesty or violence;
(e) any order for a relevant person to pay a pecuniary penalty for the contravention of a civil penalty provision of a law of the Commonwealth or a State or Territory;
(f) any act of a relevant person involving fraud or dishonesty;
(g) the arrangements the person has:
(i) to ensure the person complies with the family assistance law; and
(ii) to ensure anyone the person is responsible for managing complies with the family assistance law;
(h) the record of administering of Commonwealth, State or Territory funds of a relevant person;
(i) any debts to the Commonwealth incurred by a relevant person (whether or not the debt has been discharged);
(j) the record of financial management of a relevant person, including any instances of bankruptcy, insolvency or external administration involving the person;
(k) any other matter prescribed by the Minister's rules;
(l) any other matter the Secretary considers relevant.
For the purposes of s 194(1), a relevant person is defined in s 194F as a person with management or control of a body, being:
(a) a member of the group of persons responsible for the executive decisions of the body;
(b) a person who has authority or responsibility for, or significant influence over, planning, directing or controlling the activities of the body;
(c) a person who is responsible for the day-to-day operation of the body (whether or not the person is employed by the body);
(d) a person who is responsible for the day-to-day operation of a child care service in respect of which the body is approved or is seeking to be approved (whether or not the person is employed by the body).
In the Applicant’s case, the person identified in the evidence as a relevant person is
[69] Exhibit A1 at [62].
Mr Hashmi; who described himself as the sole director of the Applicant and prior to the Cancellation Decision, I was the Operational Manager and person with day to day management of Kids Community. I worked on a full-time basis for the duration of Kids Community’s operation from 2010 to 2019.[69]
The Tribunal is satisfied that Mr Hashmi is a relevant person of the Applicant for the purposes of s 194E(1).
Factors Relevant to Mr Hashmi
Of the factors listed in s 194(1), the Respondent concedes that there is no evidence to support a finding against Mr Hashmi in relation to paragraphs (b), (c), (d), (e) and (f).
As to paragraph (a), the Respondent contends in its written submission that the Applicant’s non-compliance with both Commonwealth and State laws (National Law) is serious, frequent and ongoing. The Respondent’s assertion in this respect fails to address the terms of paragraph (a). It refers to any non-compliance by a relevant person with a law of the Commonwealth or a State or Territory. The relevant person in this case is Mr Hashmi. The assertions of the Respondent relate to alleged failure of the Applicant to comply with its obligations. The evidence does not establish any separate non-compliance by Mr Hashmi.
The matters raised by the Respondent relevant to Mr Hashmi, as a relevant person, are those stated in paragraphs (h), (i) and (j).
The Tribunal is satisfied that Mr Hashmi’s record of administering Commonwealth funds has been marked by instances of carelessness and the misunderstanding of some technical requirements as documented in relation to Issue 2 above. These failings have resulted in debts to the Commonwealth totalling $17,520. There is no evidence that Mr Hashmi has been subject to bankruptcy, insolvency or external administration. The Tribunal notes further that Mr Hashmi is a professional person who holds Masters’ degrees in Business Administration and Accounting and worked as an accountant before setting up the Applicant’s business[70].
Factors Relevant to the Applicant
[70] Exhibit A1 at [14]-[24].
The matters directly relevant to the Applicant are those set out in paragraph 194E(1)(g), namely the arrangements it has:
(i) to ensure the Applicant complies with the family assistance law; and
(ii) to ensure anyone the Applicant is responsible for managing complies with the family assistance law;
Mr Hashmi gave evidence as to the steps he took in seeking information and advice before preparing the Applicant’s governance documents[71]. He exhibited to his affidavit[72] various versions of the Applicant’s policies and procedures manual which were amended to incorporate frequent changes to the law[73]. He gave evidence that updated copies of the policies and procedures documents were distributed to educators and other staff and that parents were provided with information received from the Respondent from time to time[74]. He gave evidence regarding the specific steps taken when the Child Care Subsidy regime was introduced in July 2018, including reviewing resources provided by the Respondent, updating the Applicant’s policies and procedures manual, providing compulsory training to all educators and staff, updating parents on the changes via an updated parents’ handbook and the provision of a presentation on the changes provided by the Respondent and posting a summary document on the Applicant’s website.[75] Mr Hashmi also gave evidence that the Applicant’s compliance material included a number of forms and handouts for educators, staff and parents, which were updated to reflect legislative changes[76]. Mr Hashmi exhibited various versions of the Applicant’s enrolment forms, educator agreements and home visit rosters showing progressive amendments[77]. Mr Hashmi gave evidence regarding the training of educators and staff undertaken by the Applicant[78]. He also gave evidence of the use of a Coordination Unit to ensure compliance with family assistance laws[79];and of the educator recruitment process which was designed to engage educators who only met specified recruitment criteria[80]. Mr Hashmi also set out in his affidavit the Applicant’s processes for administering CCB and CCS[81].
[71] Exhibit A1 at [34].
[72] Exhibit A1.
[73] Ibid at [46].
[74] Ibid at [47].
[75] Ibid at [49] and AH1-2.
[76] Exhibit A1 at [53].
[77] see T32 at pp.1973-2113.
[78] Exhibit A1 at [54]-[61].
[79] Ibid at [65]-[68].
[80] Ibid at [75].
[81] Ibid at [81].
The Tribunal is satisfied that these are adequate measures to ensure the Applicant and the people it manages comply with the family assistance law, although the implementation of these measures has not ensured 100% compliance, as evidenced by the Tribunal findings of non-compliance set out earlier in this decision.
Mr Hashmi gave evidence that, if the Applicant is able to recommence operating, it would initially operate in a limited capacity with a maximum of 20 educators, each with a maximum of 7 registered children. He indicated that the number of educators would then be slowly increased, up to a maximum of 60, but with continued restrictions on the number of children registered in the care of each educator. Mr Hashmi stated that he would also invest in external training services for staff and educators, including facilitating an equal number of internal and external training sessions, and would engage a child care consultant to review and amend the full suite of the Applicant’s governance documents to ensure strict compliance with family assistance law.[82]
Other matters - Paragraphs 194E(1)(k) and (l)
[82] Exhibit A1 at [202].
The Respondent contends that given the Applicant’s history of non-compliance the Tribunal should:
(a)find that the Applicant does not understand the obligations that apply under the family assistance law; and
(b)have no confidence that the Applicant’s proposed new governance arrangements will ensure future compliance.
The Tribunal does not accept the submissions of the Respondent. Mr Hashmi was a credible witness, who demonstrated in the thoroughness of his response to the Respondent’s Notice of Intention to Cancel and in the conduct of the Applicant’s case at the hearing that he is genuine in his endeavour to understand the Applicant’s obligations and is committed to complying with them.
Conclusion
While acknowledging the Applicant failure to meet its obligations under the family assistance law, the Tribunal is not satisfied, having regard to the factors set out in s 194E(1) of the Administration Act, that the Applicant is not a fit and proper person to provide a child care service.
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
The evidence does not indicate that any of the instances of non-compliance by the Applicant involved an unacceptable risk to the safety, health or wellbeing of the children in its care. The Respondent referred specifically to the Child Ratios Contravention. The Tribunal accepts that the educator to child ratios are set for the protection of the child’s health, safety and wellbeing, but in setting those ratios allowance is made for exceptional circumstances where justified on the grounds of child protection. The fact that the Applicant applied an incorrect approach to determining if exceptional circumstances applied does not establish that the Applicant exposed any children to an unacceptable risk to their health, safety or wellbeing. The Respondent has not otherwise demonstrated any actual unacceptable risk to children by the Applicant’s failure to comply with its obligations.
Any other relevant matters
In assessing the seriousness of the Applicant’s contraventions for the purpose of determining the appropriate penalty to impose it is relevant to consider the factors required under s 52(4) of the Minister’s Rules bearing in mind two matters. First, the Applicant’s overall record, and secondly the nature of the legislative scheme under which the services are required to operate.
The Tribunal notes that the Applicant has conducted an approved child care service since 15 April 2011[83]. There is no evidence that the Applicant, or anyone associated with the operation of the Applicant’s business, has been prosecuted under the family assistance law or otherwise during that time. The issues relevant to this matter were first raised with the Applicant on 18 February 2016.
[83] Approval was granted on 2 May 2011 – Exhibit A1 at AH-1 p.32.
As to the legislative scheme itself, 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[84] that:
[t]he 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[85], and that:
[t]hey would defy ready interpretation by any person that the legislation is intended to benefit.[86]
In Al-Huda Pty Limited v Secretary, Department of Education, Skills and Employment[87] the Court commented that ...there is a myriad of complexity in the rules with which providers must comply under childcare subsidy arrangements.
[84] [2019] FCAFC 239.
[85] Ibid [21].
[86] Ibid.
[87] [2020] FCA 1613 per Rares J.
The Tribunal notes that it is not just the Applicant that has experienced difficulty in addressing the complications in the legislative scheme. In the ARO's Decision, it was asserted that there were 568 instances between 1 January 2016 and 30 June 2018 where the Applicant reported more than the allowed limit of no more than 7 children cared for by an educator at any one time[88]. In finalising its case for hearing, the Respondent recognised that the ARO was in error and revised its position filing a detailed affidavit and spreadsheet[89]; which confirmed that, during the relevant period, there were only 71 instances where the Applicant reported more than the allowed limit of no more than 7 children cared for by an educator at any one time.
[88] T2 at p.45 and the data annexed at T35.
[89] Exhibit R1 and TM 2.
The Tribunal raises this matter not as an overt or veiled criticism of the Respondent, but to illustrate the observations of the Courts that the system in which the Applicant was required to operate its service is a testing environment because of the regulatory complexity.
Conclusion
The Tribunal is satisfied that the Applicant did not comply with conditions for continued approval as an approved provider of an approved child care service in a number of respects. This non-compliance was serious and warranted the imposition of a penalty.

The Review Decision affirmed the original decision to cancel the Applicant’s approval effective 18 March 2019[90].
[90] T2 at p.7.
The Respondent in these proceedings contends that the Applicant’s non-compliance has been of such a nature that the Tribunal should be satisfied that cancellation of the Applicant’s approval is the appropriate sanction. In doing so the Respondent adopted the comments of Deputy President Pascoe in Jessica Education Centre Pty Ltd and Secretary, Department of Education and Training[91]:
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.
[91] Ibid at [34].
The nature and extent of the breaches in Jessica Education was more extensive than in the instant case. The Tribunal concluded that in Jessica Education the breaches were extremely serious and very frequent, involving a reckless disregard for the welfare of the children and a significant misappropriation of public money.
Having considered the factors relevant to penalty, as specified under Rule 52(4) of the Minister’s Rules, the Tribunal’s conclusion is that the Applicant’s non-compliance:
(a)did not exhibit a systematic pattern but consisted of several unrelated failings of the Applicant’s compliance processes;
(b)was due largely to a failure to exercise proper care in some specific instances;
(c)resulted in overpayments and debts to the Commonwealth totalling $17,520, of which the majority ($12,804) related to technical deficiencies in the documents upon which the Applicant relied in one specific incident;
(d)did not justify a finding that the Applicant is not a fit and proper person to provide a child care service; and
(e)did not demonstrate any actual unacceptable risk to children.
The Tribunal is satisfied that the Applicant had adequate oversight, governance and compliance systems in place, which the Applicant applied in a genuine effort to meet its obligations. It is also satisfied that Mr Hashmi, its executive director, was genuine in his endeavour to understand the Applicant’s obligations and is committed to complying with them.
In the circumstances the Tribunal is not satisfied that cancellation is an appropriate penalty. The seriousness of the Applicant’s non-compliance warrants a period of suspension.
As to the length of the suspension, the Tribunal notes that the effect of the Review Decision was to cancel the Applicant’s approval to provide an approved child care service from 18 March 2019. As a result of that decision, the Applicant has been unable to operate its approved child care service since 18 March 2019. The Tribunal is not satisfied that the seriousness of the Applicant’s non-compliance warrants a suspension of its approval for a period of more than 3 years. Whether or not a shorter period of suspension would be appropriate is a moot point given the practical effect of the Review Decision. Accordingly, the correct and preferrable decision is to set aside the Review Decision and in substitution to suspend the Applicant’s approval for the period from 18 March 2019 to 18 March 2022.
DECISION
The Tribunal sets aside the decision of the authorised review officer of 11 November 2020 affirming the decision to cancel the Applicant’s approval to operate a child care service; and in substitution the Tribunal determines that the Applicant’s approval to operate a child care service be suspended from 18 March 2019 to 18 March 2022.

I certify that the preceding 200 (two hundred) paragraphs are a true copy of the reasons for the decision herein of Member West
.............................[SDG]................................
Associate
Dated: 18 March 2022

Date(s) of hearing: 25 - 27 October 2021 and 1 December 2021

Date final submissions received: 15 December 2021

Applicant: Ahmad Hashmi

Advocate for the Respondent: Tom Galvin

Solicitors for the Respondent: Minter Ellison

Date(s) of hearing:	25 - 27 October 2021 and 1 December 2021
Date final submissions received:	15 December 2021
Applicant:	Ahmad Hashmi
Advocate for the Respondent:	Tom Galvin
Solicitors for the Respondent:	Minter Ellison