Child Care Subsidy fraud prevention policy

This policy outlines Early Learning Victoria's commitment to meeting all Child Care Subsidy obligations to prevent fraud and corruption in our centres.

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Early Learning Victoria is committed to meeting all the Child Care Subsidy (CCS) obligations set in Family Assistance Law and National Law to prevent fraud and corruption from occurring within Early Learning Victoria centres.

1. Scope

This policy applies to the approved provider, nominated supervisor, staff, and management of Early Learning Victoria centres.

2. Policy statement

Early Learning Victoria has a responsibility to ensure that all funds received from the Commonwealth of Australia for the purposes of CCS are used properly and accounted for.

The Victorian Government Department of Education (the department) is committed to implementing and maintaining effective fraud prevention policy to set out the approach, structures and processes to prevent, detect and respond to fraud and corruption. The department does not tolerate fraud or corruption.

Instances of fraud or corruption significantly impact the department by causing financial loss, reputational damage, and eroding the department’s ability to deliver its strategic vision. The department requires all employees and contractors to act honestly, with integrity and to safeguard the public resources for which the department is responsible.

The department is committed to ensuring employees feel confident to speak up about suspected fraud and corruption and maintains a confidential whistle-blower service to assist employees. The department does not tolerate detrimental action being taken in reprisal against employees who speak up about their concerns.

The department will:

  • treat all allegations of fraudulent activity seriously
  • refer to the Staff code of conduct policy for incidents involving employees
  • manage allegations in line with the department’s Fraud, corruption and other losses control policy
  • ensure privacy, confidentiality, and protection for individuals reporting suspected fraud
  • gather necessary supporting documents and evidence.

This policy should be read in conjunction with the following policies:

2.1 Requirements

Fees

Gap fee payments are collected from families and receipts are issued as per the Payment and collection of fees policy. Early Learning Victoria will follow the guidelines within the Child Care Provider Handbook to ensure compliance of CCS payments and to ensure funding is processed and administered correctly.

Early Learning Victoria will ensure all obligations under the Family Assistance Law and A New Tax System (Family Assistance) (Administration) Act 1999 are met regarding setting of fees, ensuring the following:

  • an individual is not charged more than the usual CCS hourly session fee, when the individual may be eligible for Additional Child Care Subsidy (ACCS) or who receives a prescribed payment
  • families are not charged additional fees during a particular event or circumstance (for example during a service closure).

Reporting fraudulent activity or corruption

Early Learning Victoria supports employees to report any reasonable suspicion of reportable matters of improper, illegal or misconduct within the service to management including, but not limited to:

  • breaches of the Staff code of conduct policy or other Early Learning Victoria policies
  • breaches of the Education and Care Services National Law Act 2010 (the National Law) and Education and Care Services National Regulations 2011 (the Regulations)
  • breaches of legislation or law
  • criminal activity
  • corruption
  • improper or misleading financial practices.

Internal controls to prevent fraud

Financial compliance

Early Learning Victoria uses the Kidsoft Child Care Management System to ensure compliance of CCS payments to families. Kidsoft will be monitored by the department to ensure data integrity and security is maintained by all staff who process CCS payments to families (see the CCS data integrity policy).

The department (Financial Services Division (FSD)) will conduct a continuous review and monitoring process of CCS payments on a regular (monthly) basis. This process aims to ensure that the payments received from the Australian Government match those recorded in the service bank account and Kidsoft.

If any anomalies are identified during this review, Early Learning Victoria central office and centre directors will be required to provide explanations and evidence within a reasonable timeframe set by FSD.

FSD will report any discrepancies between the payments recorded in the service bank account and those in Kidsoft to the Early Learning Victoria CEO. Where there are allegations of fraud or potential fraud, FSD will notify the department’s Fraud and Corruption Control Unit.

CCS compliance checklist

The CCS compliance checklist (see Attachment 1, CCS compliance checklist, DOCX 254KB) (the checklist) will be used by area managers and the Director, Early Learning as a tool to facilitate fraud prevention and detection within Early Learning Victoria centres. The checklist will be used randomly to conduct spot checks, ensuring that enrolments, attendance, and absences are accurately recorded in Kidsoft and reported to the Australian Department of Education.

Early Learning Victoria code of conduct

The Staff code of conduct policy guides expected standards of behaviour for staff working in Early Learning Victoria centres. Early Learning Victoria employees are responsible for demonstrating the Public Sector Values, which are upheld by the department:

  • responsiveness
  • integrity
  • impartiality
  • accountability
  • respect
  • leadership
  • human rights.

Early Learning Victoria upholds the Victorian Public Service value of integrity by ensuring that all employees involved in administering CCS maintain transparency and honesty. Early Learning Victoria expect that employees demonstrate integrity by:

  • being honest, open and transparent in their dealings
  • using powers responsibly
  • reporting improper conduct
  • avoiding any real or apparent conflicts of interest
  • striving to earn and sustain public trust of a high level.

Centre directors are responsible for fostering a culture of compliance and clearly communicating Early Learning Victoria’s expectations from an employee’s induction. This includes ensuring that all staff understand the importance to operate ethically in their role. Early Learning Victoria employees will participate in departmental training, including on the Fraud, corruption and other losses control policy.

Conflicts of interest

Early Learning Victoria will uphold strong reporting standards, adhering to all reporting requirements as per the department’s Conflict of interest policy.

Early Learning Victoria central office will provide notification within 7 days to the Australian Department of Education regarding changes in persons with management or control (PMCs) or a nominated supervisor, changes to the fit and proper status of a PMC or a nominated supervisor, or conflicts of interest. See the CCS notifications and records policy for more information.

2.2 Background and information

For reporting fraud and corruption, the department has adopted the following definitions of fraud and corruption as set out in Australian Standard: Fraud and Corruption Control AS 8001:2021.

Fraud is defined as dishonest activity causing actual or potential financial loss to any person or entity including theft of moneys or other property by employees or persons external to the entity and where deception is used at the time, immediately before or immediately following the activity. This also includes the deliberate falsification, concealment, destruction or use of falsified documentation used or intended for use for a non-business purpose or the improper use of information or position for financial benefit.

Corruption is defined as dishonest activity in which a director, executive manager, manager, or employee or contractor of an entity acts contrary to the interests of the entity and abuses his/her position of trust in order to achieve some personal gain or advantage for him or herself or for another person or entity.

3. Actions and procedures

1. Early Learning Victoria employees and managers must report instances of fraudulent activity to the department’s Fraud and Corruption Control Unit as a first step

All employees are required by law (under the Public Administration Act 2004) to report activities they suspect might be fraud or corruption. If a manager or supervisor receives a report from a team member, they are obligated to promptly forward this information to the Fraud and Corruption Control Unit.

If you have knowledge or reason to believe a departmental employee, contractor or service provider has been involved in fraudulent or corrupt conduct, you should report it as a complaint or public interest disclosure. To make a complaint, please contact:

The Fraud and Corruption Control Unit accepts anonymous reports via the Speak Up Service and also through the Fraud and Corruption Control phone line. Once a report has been made, the department will follow the Fraud, corruption and other losses control policy.

The Fraud and Corruption Control Unit assesses all reports to consider whether the report:

  • may be a public interest disclosure under the Public Interest Disclosures Act 2012, which provides disclosers with protections from reprisals, and requires strict confidentiality of these reports be maintained
  • must be notified to IBAC
  • should be notified to Victoria Police
  • should be referred to another area of the department for action
  • should be investigated by the Fraud and Corruption Control Unit.

The department will report all breaches of Family Assistance Law within the administration of CCS to the Australian Department of Education.

For more information on reporting fraudulent or corrupt conduct, please see the Fraud, corruption and other losses control policy.

2. Early Learning Victoria employees may also contact the Australian Department of Education's Child Care Tip-Off Line to make a secondary report, if they choose to do so

If an Early Learning Victoria employee has a reportable matter regarding the administration of CCS, they can directly report this through the online CCS fraud tip-off form.

When making a report, the form will require the following information:

  • who is involved? Include as much detail as possible, including name of the person or organisation, addresses and phone numbers
  • what fraud you think has occurred? Provide details of your concerns, including how, when and where the fraudulent activity occurred
  • how did you come across this information?
  • do you believe the behaviour is continuing?
  • your contact details.

The Australian Department of Education will assess each allegation of suspected fraud and where appropriate, investigate the matter for potential referral to the Commonwealth Director of Public Prosecution.

Disciplinary action

Where allegations of fraud are substantiated, the department may be subject to penalties including recovering overpaid funds, cancelling the service approval, or pursuing a criminal fraud prosecution.

Early Learning Victoria staff may also be subject to disciplinary action for breaches of the law, including deception or by giving false or misleading information.

All matters of suspected fraud and corruption will be managed by Early Learning Victoria in accordance with departmental policy and fulfill all obligations as an approved provider under Family Assistance Law.

3.1 Responsibilities of staff

4. Resources

Legislation and standards

  • A New Tax System (Family Assistance) Act 1999
  • A New Tax System (Family Assistance) (Administration) Act 1999
  • Child Care Subsidy Minister’s Rules 2017
  • Child Care Subsidy Secretary’s Rules 2017
  • Education and Care Services National Law Act 2010
  • Education and Care Services National Regulations 2011
  • Family Law Act 1975
  • Conflict of interest policy
  • CCS data integrity policy
  • CCS notifications policy
  • CCS governance policy
  • CCS fraud prevention and auditing policy
  • Staff code of conduct policy
  • Handling complaints and feedback policy
  • Payment and collection of fees policy
  • Fraud, corruption and other losses control policy

Attachments

Definitions

Additional Child Care Subsidy (ACCS): extra financial support for families facing specific hardships or challenges, supplementing the standard CCS to cover up to 100% of child care fees.

Child Care Subsidy (CCS): A Commonwealth payment made to approved providers, who pass it on to families as a fee reduction. Families must make a co-contribution by paying the gap fee. Providers must report fee information to the government.

Corruption: dishonest activity in which a director, executive manager, manager, or employee or contractor of an entity acts contrary to the interests of the entity and abuses his/her position of trust in order to achieve some personal gain or advantage for him or herself or for another person or entity.

Fraud: dishonest activity causing actual or potential financial loss to any person or entity including theft of moneys or other property by employees or persons external to the entity and where deception is used at the time, immediately before or immediately following the activity. This also includes the deliberate falsification, concealment, destruction or use of falsified documentation used or intended for use for a non-business purpose or the improper use of information or position for financial benefit.

Persons with management or control (PMCs): The persons within or outside the approved provider who are responsible for managing the delivery of the provider’s service(s) or who have significant influence over the activities or delivery of the service. A PMC has the same legal responsibility for the safety, health and wellbeing of children at their service as an approved provider. A nominated supervisor, person in day-to-day charge of a service, or a person who holds other operational management roles in a service (such as a centre manager) would not meet the PMC definition. People holding these roles will only meet the PMC definition if they also participate in executive or financial decision-making or have authority or responsibility for, or significant influence over, the planning, direction or control of the activities or the delivery of the education and care service.

Education

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