bimberi operations and financial performance audit - Community

ACT DEPARTMENT OF DISABILITY, HOUSING AND COMMUNITY SERVICES

CONTENTS 1. EXECUTIVE SUMMARY ..................................................................................... 1

1.1 INTRODUCTION ........................................................................................................... 1

1.2 AUDIT OBJECTIVES..................................................................................................... 1

1.3 AUDIT CRITERIA ......................................................................................................... 1

1.4 AUDIT APPROACH....................................................................................................... 1

1.5 CONCLUSIONS............................................................................................................ 2

2. BACKGROUND .................................................................................................. 4

3. AUDIT FINDINGS AND RECOMMENDATIONS ................................................. 5

3.1 FUNCTIONAL DESIGN OF BIMBERI FACILITY ................................................................. 5

3.2 PROGRAMS AND SERVICES PROVIDED TO BIMBERI RESIDENTS .................................... 8

3.3 PREVIOUS FORECASTS OF EXPENDITURE.................................................................. 10

3.4 ACTUAL BIMBERI EXPENDITURE ................................................................................ 12

3.5 FUTURE COSTING METHODOLOGIES ......................................................................... 17

3.6 ONGOING MONITORING AND MANAGEMENT REPORTING MECHANISMS....................... 19

ATTACHMENT A – AUDIT FINDING CATEGORIES .............................................. 21

ATTACHMENT B– ACTION SHEET ....................................................................... 22

ATTACHMENT C – COMPARISON OF SERVICES AND PROGRAMS BEING OFFERED ................................................................................................................ 25

DECEMBER 2009 BIMBERI OPERATIONS AND FINANCIAL PERFORMANCE Page i AUDIT


1. EXECUTIVE SUMMARY

1.1 Introduction

Oakton has performed an audit of the operations and financial performance of the Bimberi Youth Justice Centre.

Oakton would like to thank ACT Department of Disability, Housing and Community Services (DHCS) staff for their co-operation and assistance.

1.2 Audit Objectives

The objective of the audit was to provide assurance to the Chief Executive DHCS that the Bimberi Youth Justice Centre was meeting operational and financial expectations.

1.3 Audit Criteria

The audit criteria were:

1) To review the functional design of the facility and assess if it meets user requirements.

2) To assess if the facility is operating and delivering the services and programs as planned.

3) To review actual operating expenditure and assess if it is in line with previous forecasts.

4) To assess if operating costs for future years are well planned and budgeted accordingly, including flexible labour strategies and cost control options.

5) To assess if mechanisms have been established to ensure continuous improvement.

1.4 Audit Approach

The audit included the following:

Reviewing of Bimberi concept/planning information and policy proposal information.

Consultation with relevant stakeholders to determine risks, issues and policies and procedures in place.

Reviewing information relating to operations to date.

Reviewing financial information including initial operating cost predictions, current operating expenditure and out-year operating forecasts.

Collection and analysis of evidence to support audit findings.

Regular progress reporting to key stakeholders.

DECEMBER 2009 BIMBERI OPERATIONS AND FINANCIAL PERFORMANCE Page 1 AUDIT


1.5 Conclusions

Audit conclusions against the audit criteria are set out in the table below.

Criteria Conclusion

1) To review the functional design of the facility and assess if it meets user requirements.

The functional design of the Bimberi facility meets the user requirements set out in the Human Rights Audit and supports the intended operations.

2) To assess if the facility is operating and delivering the services and programs as planned.

A majority of the community programs are being delivered to residents and education support up to Year 10 is currently being made available. However some of the vocational training programs are currently not practicable to be provided to the residents as there are insufficient residents with particular needs to make training programmes cost effective.

Bimberi management are aware of a gap in program support for education levels above Year 10 and are working to address this.

3) To review actual operating expenditure and assess if it is in line with previous forecasts.

The 2007/08 Quamby budget was applied to Bimberi in 2008/09. Additional funds were provided through the 2008/09 budget to support the transition from Quamby to Bimberi. A detailed budget was not prepared for Bimberi as the extent of costs associated with Bimberi was unknown.

There are increased costs associated with providing a facility, services and programs that facilitate ongoing compliance with the Human Rights Act. Current annualised Bimberi costs are estimated to be $6,786,492 which is $1,025,900 (17.8%) higher than the funding currently budgeted.



Criteria Conclusion

4) To assess if operating costs for future years are well planned and budgeted DHCS has not decided on a costing

methodology to estimate Bimberi’s futureaccordingly, including flexible labour strategies and cost control options.

funding requirements. DHCS requires a sophisticated costing methodology to estimate future costs for Bimberi as inadequate financial information is currently available to rely on historical trends.

Bimberi management have adopted cost containment strategies to ensure that actual expenditure is as close to the budget as possible. These include:

introducing 12 hour shifts to match the staffing requirements to the day/night cycle.

minimising the number of permanent staff to minimise fixed costs in periods of low residency.

an inventory system to record usage of consumables and supplies and minimise wastage.

5) To assess if mechanisms have been A high level monthly financialestablished to ensure continuous improvement.

performance report is forwarded to the Board of Management and a more detailed financial performance report which includes HR reporting is provided to senior management on a monthly basis.

Weekly reports containing key statistics and a quarterly key performance indicators (KPI) report is provided to senior management within the Office of Youth, Children and Family Support.

6) Other Issues Noted From January 2009 the Quamby site was occupied by ACT Corrective Services. Under an agreement between DHCS and ACT Correction all costs incurred by DHCS relating to the Quamby facility after January 2009 were to be reimbursed by ACT Corrective Services. A review of the costs allocated to the Quamby cost centre indicates that there may be some costs that have not yet been recovered by DHCS.



2. BACKGROUND

A human rights audit of the Quamby Youth Detention Centre (Quamby) was conducted in 2005 by the Human Rights Commissioner. As a result of the audit, 52 recommendations were made to help improve the overall living standards of young people in detention and the level of services being provided to them. The audit also supported ACT Government initiatives to build a new youth detention facility.

Bimberi Youth Justice Centre (Bimberi) was built by the ACT Government following the human rights audit of Quamby. The facility was officially opened on the 3rd of September 2008 and became fully operational in December 2008 after an initial commissioning period.

Young people were relocated to Bimberi from Quamby towards the end of December 2008. Following the relocation, the Quamby facility was briefly operated by ACT Corrective Services for their own purposes. In April 2009 the Quamby facility was officially transferred from the ACT Department of Disability, Housing and Community Services (DHCS) to the ACT Department of Territory and Municipal Services (TAMS).

Bimberi is the first youth custodial facility in Australia to be designed and operated under the Human Rights legislation. The functional design and build of the facility is unlike conventional youth detention facilities and resembles a secondary school campus.

Bimberi can accommodate up to 40 residents aged between 10-18 years but also has the capacity to accommodate young people up to the age of 21 years. The operations of the facility and the programs and services being offered seek to address the recommendations made in the Human Rights Audit of Quamby, and improve the overall quality of services and living standards of young people in detention.

.



3. AUDIT FINDINGS AND RECOMMENDATIONS

3.1 Functional Design of Bimberi Facility

Findings

The functional design of the Bimberi facility meets the user requirements set out in the Human Rights Audit and supports the intended operations.

Discussion

The Bimberi facility has been built to resemble a secondary school campus and the young people in remand, although living in a confined environment are made to feel comfortable and respected. A comparison of the Quamby and Bimberi facilities is available in the table below.

Quamby Bimberi

Fu

nct

ion

al

Des

ign

Quamby was a 26 bed facility. It consisted of three units. A six bed unit was made available for new inductees and detainees with special needs, an eight bed unit housing female residents and young males aged 10-14 and a twelve bed unit which housed young males from 15 – 21 years. An additional 7 beds were made available by purchasing and installing a demountable building.

Bimberi is a 40 bed facility which is currently spread across 3 buildings. The facility layout has a footprint of an additional building that can be built in the future to accommodate higher numbers of residents. The facility has one building with three units containing four beds each and two buildings each housing 2 units with six beds. Apart from these unit there is a separate unit available for new inductees and for residents with special needs.

The Quamby facility rated poorly against the Human Rights Act and there were more than 50 recommendations made within the Human Rights Audit to improve the facility and make it compliant.

The Bimberi facility is the first youth justice centre to be built within Australia that is fully compliant with the Human Rights Act. The facility has been built using state of the art technology and offers a range of new amenities and services to help rehabilitate young offenders.

The Quamby facility did not have the The buildings at Bimberi are divided into capacity to segregate residents based on units, with 8 units readily available to staff their age and gender. The facility did not if they need to segregate residents. The have the capability to deal with a large higher number of units available to staff and diverse resident population. This was ensures that they can segregate residents mainly due to the limited number of units appropriately and remain compliant with available to staff, so they could segregate the Human Rights Act. residents based on their age and gender.

The Human Rights audit highlighted the need to introduce less invasive security protocols, to ensure residents have

Bimberi uses highly advanced non-invasive security systems.



Quamby Bimberi

privacy.

The Quamby Facility was a much smaller facility and included very limited amenities.

Bimberi is 4 times the size of Quamby, it has a sports field, and indoor sports centre, heated swimming pool and other amenities

The Human Rights audit identified that living conditions within Quamby did not facilitate compliance with the Human Rights Act.

The Bimberi design ensures that residents receive ample fresh air and light in their quarters.

The Quamby facility appeared like a correctional facility, with the inside setup akin to a correctional facility as well.

The Bimberi facility was designed to resemble a school and to provide its residents with a degree of normality to improve their chance of rehabilitation.

Residents were provided with catered meals and there were no professional kitchens within the facility.

Quality kitchens have been built within the facility, and professional cooks have been hired to ensure residents receive nutritional meals.

The facility has been built to be flexible, less intrusive, and secure and to resemble any other building. The footprint of the facility is approximately twice the size of Quamby and although currently it houses three buildings there is a capacity to build an additional building. The facility also houses amenities for its residents such as an indoor heated swimming pool, a sports field, an indoor gym area including a basketball court, a reading room, client services centres, a spiritual centre and a fully equipped and functioning industry grade kitchen in each building.

The facility can house up to 40 residents and there is segregation in the living arrangements for both male and female residents. There are rooms available for residents with a disability as well as for pregnant residents. There is a safe room available for high risk residents, the room has access to day light and is completely padded with a soft material to prevent residents from hurting themselves.

Each resident unit has a toilet and shower area, the units also have a window with an attached ventilator that allows residents to access fresh air. The units have been provided with heating and cooling and also provide residents with their own access to a television which is made available to them based on their behaviour. Telephones are available in the common areas and these are available to residents to use to communicate with their families and friends.

All units house security cameras. However these cameras are not used continuously. Residents are able to look at the LED light in the camera and identify when the camera is being used and when it is not being used. This feature has been introduced so residents have their privacy, and is subject to their behaviour. For residents with a good behavioural



pattern the camera is not operated. For residents who are repeat offenders within the facility and may be a risk to other residents and themselves the camera is operated on an ongoing basis.

The facility uses state of the art technology to run a safe and secure establishment. Although the facility is structured unlike other youth justice centres, it has a highly advanced security system in place. The security system secures the perimeter of the facility with a large unscaleable fence and an electric fence. The material used to construct the fence allows residents to look at the surrounding landscape however protects the privacy of the residents by preventing individuals on the exterior from prying. The fences are also protected by a state of the art object recognition camera system. The system trips the alarm if it detects any unidentifiable objects within the fence perimeter.

Motion sensors are also placed on the roof top of all buildings within the facility and this prevents residents from scaling the roof. All common areas are covered by a camera network and there is ongoing monitoring to ensure the safety of all residents. The reception area of Bimberi has high end security systems in place so all visitors and employees are checked by security personnel and scanners before they enter the facility.

There are no recommendations for this section



3.2 Programs and Services provided to Bimberi Residents

Findings

Programs and services being offered to Bimberi residents are in most instances age specific and are designed to help young people to develop or improve social skills. In many instances the young person is in remand with the length of custody unknown, hence it is quite difficult to develop time specific programs.

A majority of the community programs are being delivered to residents and education support up to Year 10 is currently being made available. However some of the vocational training programs are currently not practicable to be provided to the residents as there are insufficient residents with particular needs to make training programmes cost effective.

Discussion

The staff at Bimberi promote the benefits of education and vocational training so young people have increased opportunities for rehabilitation and have a better chance of reintegration in the society. Staff try to promote a sense of normality in the life of these young people so they can improve their social skills and contribute to society once they are no longer in remand. Bimberi staff believe that this behaviour towards young detainees will reduce the risk of recidivism.

The Bimberi facility houses up to 40 residents of mixed gender on remand and committal sentences. When a young person is first processed as they enter Bimberi they are handled by a member of the case management team. The case manager will help develop a program specific to the requirements of the young person in care and may choose to recruit the help of various other agencies. The program developed will take into consideration all the needs of the individuals ranging from health interventions, cognitive behavioural support, drug and alcohol programs, sexual health programs and a range of educational and vocational training opportunities.

In instances where the individual has a committal sentence, a program is developed based on the timeframe of the sentence to best assist the individual in progressing and dealing with issues. When the individual is on remand staff find it difficult to develop a program specific to that individual’s needs as they are unaware of the timeframe the individual will be at the facility. On such instances residents on remand take part in ad hoc programs over the length of their stay.



When the initial plans were drawn for the Bimberi facility, a number of agencies and community groups registered their interest to run programs and provide services within Bimberi. However since the opening of the facility some of the interested organisations have not been able to provide all the programs and services intended. This is largely due to the fact that there has been a low occupancy rate within the facility and those residents that are currently housed within the facility belong to a varied age group. Even when the occupancy has been high, the large range in ages and competencies of the residents makes delivery of standard services difficult.

A majority of the community programs are being delivered to residents and education support up to Year 10 is currently being made available. However some of the vocational training programs are currently not practicable to be provided to the residents. A detailed comparison on the services and programs planned to be delivered and the programs and services currently being delivered is provided in the table in Attachment C.

Bimberi staff have identified that there is significantly less support for residents beyond the year 10 qualification support. In addition staff have also identified the need for vocational training for some of the residents to help improve overall life skills of individuals and help with the rehabilitation process.

Exposure

There may be some residents who require study support beyond the level currently available within the facility. Lack of support may hinder the progress of these individuals.

Recommendation 1 Bimberi management continue to liaise with the Department of Education or other education and training providers to develop study and training programs to support higher learning beyond the Year 10 Level.

Rating Low

Management Comments Agreed - There are currently options available for young people to undertake both Vocational training in a number of areas including Horticulture and Metal Work. There is planning for extension to the range of Vocational options available. It is expected for Vocational Training options in Barista to become available early 2010.

Year 11 and 12 studies are currently available to be delivered on-site through a distance education program run through Karabar High School, Queanbeyan NSW.

Bimberi will continue to develop and expand the range of programs offered for young people in detention.

Action Officer Frank Smith

Estimated Completion Date

June 2010



3.3 Previous Forecasts of Expenditure

Findings

The 2007/08 Quamby budget was used as the basis for determining the financial budget for Bimberi in 2008/09.

Additional Funds were provided to support the transition from Quamby to Bimberi in the 2008/09 budget

A detailed budget was not prepared for Bimberi as the extent of costs associated with Bimberi were unknown.

Initial financial analysis shows that not all recoverable costs have been claimed from ACT Corrective Services.

Discussion

The Quamby funding model was transferred across to Bimberi with no additional funding currently requested. As Bimberi is a new facility which is much larger than Quamby and many of the resource requirements were not completely known, management decided to implement cost reduction strategies and to operate Bimberi on the Quamby budget for the initial twelve months. No detailed forecasts were initially prepared for Bimberi expenditure.

Management took the decision to analyse the financial Information collected over the initial 12 month period of operation to identify the true costs of operating the Bimberi facility and utilise this information to prepare an ongoing budget for Bimberi. Based on the financial information collected since Bimberi became operational, management became aware that the size of the facility and the additional amenities provided would lead to an increase in the expenditure when compared to Quamby. Analysis of actual Bimberi expenditure is detailed in section 3.4.

Quamby 2008/09 Expenditure

It was noted that cost amounting to $667,207 were allocated to the Quamby cost centre from January to June 2009 after residents had vacated the facility. Further investigation is required to determine the nature of these costs and their relevance to the Quamby facility.

The Quamby site was officially transferred to the Department of Territory and Municipal Services (TAMS) in April 2009, from the period January to April 2009 Quamby was utilised by the ACT Corrective Services Office for its own purposes. Discussions with DHCS management indicated that there is an agreement between DHCS and ACT Corrective Services that requires ACT Corrective Services to reimburse DHCS for operating costs incurred for the period January to April 2009. It is recommended that management review all Quamby costs incurred from January 2009 to ensure any costs recoverable from ACT Corrective Services are identified and recovered.



Exposure

DHCS may have incurred costs related to the use of the Quamby facility by ACT Corrective Services from January 2009 – April 2009. Non-recovery of these costs would put DHCS at a financial disadvantage.

Recommendation 2 Finance staff should review all costs allocated to the Quamby cost centre from January 2009 to ensure any recoverable costs are identified and passed on to ACT Corrective Services.

Rating Medium

Management Comments Agreed - The Department has reviewed the Quamby cost centre and identified any and all costs to be recovered from ACT Corrective Services.

Action Officer Danny O’ Mara


March 2010



3.4 Actual Bimberi Expenditure

Findings

Insufficient funds have been allocated to manage Bimberi. Current annualised Bimberi costs (excluding depreciation) are estimated to be $6,786,492 which is $1,025,900 (17.8%) higher than the funding currently budgeted.

There are increased costs associated with providing a facility, services and programs that facilitate ongoing compliance with the Human Rights Act.

Bimberi management have adopted some cost containment strategies to ensure that actual expenditure is as close to the budget as possible.

Historically there has been a high use of casuals compared to permanent staff. Bimberi management has recognised this and are currently going through a recruitment process to address this issue.

Discussion

In calendar year 2009 $5,760,592 of ACT Government funding was allocated to the operation of Bimberi. Internal Audit estimates that the annualised actual cost of operating Bimberi for the calendar year 2009 would be $6,786,492 which is $1,025,900 (17.8%) higher than the 2009 calendar year budget. This is despite cost containment strategies and some ongoing costs not being incurred in the first year of operation. Therefore, any future estimates of Bimberi costs require a more sophisticated costing strategy than simply using operational costs to date. Future costing strategies are discussed in section 3.5.

The 2008/09 financial year information could not be relied upon as the first half of the financial year related to a transition period when the Quamby centre was being decommissioned and Bimberi was becoming operational. Also the budget allocation and some of the costs incurred during the year were one off and could not be used for comparison purposes.

For the purpose of the audit, actual cost information for a 12 month period relating to Quamby was compared to the costs incurred at Bimberi across 12 months. The comparisons were made on a calendar month basis as Bimberi was not operational across a full financial year. The actual cost information for Quamby relates to the 2007/08 financial year. These costs have been indexed to provide a more accurate and realistic comparison of costs between the two facilities.



Table 1 provides a comparison of monthly expenditure for Bimberi over the 2009 calendar year and the Quamby Facility over the 2007/08 financial year1.

TABLE 1: MONTHLY EXPENDITURE COMPARISON

Comparison Month

2009 Bimberi Expenditure

2007/08 Quamby Expenditure

2007/08 Quamby Expenditure (Inc Indexation)2

Variance ($)

Variance (%)

January $763,750 $330,194 $342,698 $421,052 123%

February $469,895 $454,382 $471,653 ($1,758) 0%

March $553,876 $305,431 $317,255 $236,621 75%

April $710,356 $510,060 $529,752 $180,604 34%

May $525,498 $511,213 $530,605 ($5,107) -1%

June $608,110 $557,350 $579,077 $29,033 5%

July $399,588 $297,825 $309,565 $90,023 29%

August $674,123 $422,493 $438,029 $236,094 54%

September $572,027 $328,216 $341,677 $230,350 67%

October $378,186 $433,775 $449,894 ($71,707) -16%

November $565,5413 $385,224 $400,037 $165,504 41%

December $565,5413 $368,937 $383,316 $182,225 48%

Total $6,786,492 $4,905,101 $5,093,557 $1,692,935 33%

A breakdown of the expenditure categories from Table 1 is provided in the Table 2 and discussed further in the section below.

TABLE 2: COST CATEGORY COMPARISON

Type of Expenditure

2009 Bimberi Expenditure

2007/08 Quamby Expenditure (Inc Indexation)

Variance ($)

Variance (%)

Employee Costs $5,318,775 $4,295,424 $1,023,351 24%

Operating Costs $1,090,601 $690,732 $399,869 58%

Facilities Costs $377,116 $107,401 $269,715 251%

TOTAL $6,786,492 $5,093,557 $1,692,935 33%

1 Quamby monthly expenditure for the 2007/08 and Bimberi expenditure for January - October 2009 have been used for the purpose of this comparison. All data was derived from DHCS reports. No assurance is provided on the accuracy of transactions. 2 The expenses incurred in 2007/08 for operating the Quamby Facility have been indexed to provide a more realistic comparison to the Bimberi expenses incurred in Calender Year 2009. (3% indexation for operating and facilities cost, 4% wage cost indexation for employee costs)3 An average cost of the first 10 months has been used to estimate the cost for the final two months of 2009 for Bimberi. DECEMBER 2009 BIMBERI OPERATIONS AND FINANCIAL PERFORMANCE Page 13

AUDIT


EMPLOYEE COSTS

The largest component of costs incurred in operating Bimberi relates to employee costs. The facility uses a unit management model to effectively operate in accordance with Human Rights covenants. There are three residential buildings (two with 2 units of 6 residents and one with 3 units of 4 residents. Unit management allows segregation by gender and age as required by the Human Rights Act.

Bimberi management has introduced cost containment strategies to minimise employee costs. They are:

Introduction of twelve hour shifts to more closely align with the resource requirements of the facility (i.e. more staff during the day and less at night).

Not filling permanent positions for the third building in order to minimise ongoing fixed staffing costs. This has been an ongoing balancing act as casual staff may be called in only when needed but represent a higher hourly cost.

Bimberi management have provided Internal Audit with a breakdown on the staffing requirements by building. This is reproduced in the table below:

The table above indicates that Bimberi is currently understaffed by permanent positions. As two out of three buildings within Bimberi are mostly vacant due to low average residency levels (approximately 20 residents), this has not led to significant operational issues.

Historically there has been a high use of casuals compared to permanent staff despite the fact that neither Bimberi nor Quamby were funded for casual staff. Bimberi management has recognised this and are currently going through recruitment process to fill some full time positions. However, discussions with Bimberi management indicate Bimberi would not be able to operate at full capacity even with the use of casuals as there is insufficient permanent staff and trained casuals to fully staff all units.



Oakton is of the view that Bimberi should aim to recruit sufficient permanent staff to fully operate the two buildings currently occupied without relying in casuals to cover training time as well as scheduled leave. The use of casuals should be restricted to unexpected absences or sudden increases in resident numbers. This would be more cost effective and provide a better capacity to respond to unexpected demand.

Planning for future employee costs requires consideration of a number of ongoing issues:

The recruitment of ongoing permanent staff will result in an upfront cost to Bimberi as all new staff are required to undergo a minimum of eight weeks of training prior to deployment. This cost will recur as Bimberi experiences staff turnover and should be budgeted for.

As staff tenure increases, more junior staff will move up incremental bands and as a result staffing costs will increase. This increase will be in addition to standard wage increases.

OPERATIONAL AND FACILITIES COSTS

Operating and Facilities costs have more than doubled when compared to Quamby. However, when you consider that the Bimberi facility is approximately four times the size of Quamby, this doubling of costs is not unreasonable. Due to the larger size additional heating, lighting, cooling and cleaning is required within the facility. The larger facility also includes additional amenities such as an indoor basketball court, indoor heated swimming pool and full size oval.

Advanced security features have been implemented to minimise intrusion and enhance privacy for residents while maintained the security levels required for the facility as recommended by the Human Rights Audit of Quamby. Some security features such as enhanced security screening on entry and advanced surveillance capability allow for a safer and more normalised environment within Bimberi. Installing advanced security systems and maintaining these systems involves a large cost factor. Although the capital cost of installing the system was included within the initial building budget the annual maintenance fee, estimated at $267,000 per annum going forward has not been budgeted for or incurred to date.

Management has endeavoured to minimise costs where possible by maintaining an inhouse presence to attend to routine maintenance. In addition to this an inventory management model has been adopted at Bimberi to track the usage of consumables and other supplies. Each unit is issued limited consumables and supplies based on the resident numbers and their needs with supplies being replaced on an as needed basis. This has pinpointed areas of excess use and minimised wastage.



Exposure

DHCS does not have sufficient funds allocated for the ongoing operations of Bimberi, particularly if there is a significant increase in resident numbers.

Currently, Bimberi does not have sufficient permanent and casual staff to deal with a sudden surge in resident numbers that would require Bimberi to operate at full capacity.

Recommendation 3 Request additional funding from the ACT Government to support the higher operational costs associated with Bimberi.

Rating High

Management Comments Agreed – The Department will develop a budget submission seeking an increase in the budget available to support the operational costs of the new facility.

Action Officer Matthew Kennedy


January 2010

Recommendation 4 Amend Bimberi’s staffing numbers to ensure that Bimberi has the ability to operate at full capacity (with the assistance of casuals) in the short to medium term.

Rating High

Management Comments Agreed – The Department will develop a budget submission seeking an increase in the budget available to support the staffing requirements to cover operations in the short to medium term. The submission will include both permanent and casual staffing needs.



January 2010



3.5 Future Costing Methodologies

Finding

DHCS has not decided on a budget methodology to estimate Bimberi’s future funding requirements. DHCS requires a sophisticated costing methodology to estimate future costs for Bimberi as inadequate financial information is currently available to rely on historical trends.

Discussion

Bimberi management and the finance staff need to develop a budget that captures actual costs of operating Bimberi efficiently and effectively. Based on the information collected since Bimberi became operational it is quite evident to management that the costs associated with operating the new facility are much larger than those experienced while managing Quamby.

Management need to adopt a suitable costing methodology and develop a budget accordingly. Stated below are the two most common costing methodologies used to develop budgets and Oakton’s view on their suitability for Bimberi.

THE TOP-DOWN BUDGETING METHOD

The top-down budgeting method is a simple method that works out what was spent in the previous year and then adds or subtracts a percentage. If management are to use this method of funding they should ensure that historical budget data is not used in developing a new budget as this data would relate to the operation of Quamby. Even if Bimberi operational costs to date are used, this may not result in a realistic budget.

Additional factors that would have to be considered would include:

Flexibility in the budget to amend permanent staffing levels and staff resource mixes (permanent/casual) to ensure Bimberi can operate at full capacity in the short to medium term.

Repairs and maintenance costs currently covered under building warranties.

Ongoing costs that were not incurred in the first year of operation. For example, annual security system maintenance costs of approximately $267,000.

Any key operational staffing costs not incurred to date due to vacancies and recruitment delays.

THE BOTTOM-UP BUDGETING METHOD

The bottom-up or zero based budgeting method involves justifying all expenditure from the ground up. It questions the relationship between costs and benefits. This is Oakton’s preferred method as it allows management to consider Bimberi’s operational costs on their merits rather than making an unrealistic comparison to the operational costs of the Quamby facility. However, this method is time-consuming and requires detailed analysis by Bimberi management.



Once Bimberi has been in operation for a number of years, it may be appropriate to revert to a top-down approach.

Regardless of the method adopted management should ensure that the budget prepared should take into consideration the drivers of costs within the three main cost categories. They are:

COST DRIVER SUGGESTED LEVEL

Staffing Number of operational units/buildings

Permanent staffing up to the average.

Casual staffing for third building.

Facility Fixed based on size of facility.

Full cost

Operating Number of residents Based on average resident numbers

Exposure

An inappropriate budget that does not capture all the true costs will provide management with inaccurate information and could lead to budget overruns.

Recommendation 5 Management should review all the financial information data for Bimberi and develop an updated budget based on either a bottom-up or adjusted top-down approach.

Rating Medium

Management Comments Agreed – As previously stated in this report, the Department decided to run the new facility for a year to ascertain the actual costs of operating the facility prior to requesting any additional resources from Government.

As part of development of an appropriate budget for the new facility, the Finance and Budget area of the Department will work with Bimberi Management to construct a zero-based or bottom-up funding model. This would complement the 12 month assessment of actual costs to provide a sound basis for seeking additional funding for the facility. Part of the zero-based approach would be additional modelling of the costs that would arise if all of the accommodation buildings were occupied.


Danny O’Mara


29 January 2010



3.6 Ongoing Monitoring and Management Reporting Mechanisms

Findings

There is adequate financial reporting in place to allow Youth Services executive and Bimberi management to manage Bimberi’s financial performance.

Weekly reports containing key statistics and a quarterly key performance indicators (KPI) report is provided to senior management within the Office of Youth, Children and Family Support.

Discussion

Bimberi is a business unit that falls within the Youth Services section of DHCS. The board of management currently receive a monthly management report from the finance section which contains information in relation to the actual monthly expenditure as compared to the budget. High level commentary on the variances is provided within the report for senior management to review. This report includes all relevant expenditure information directly extracted from the financial system.

The report also contains itemised financial data for Bimberi management to review. Availability of this financial data ensures that management are in a better position to understand the key cost drivers and are also able to effectively manage these so as to reduce costs.

Bimberi management also prepare weekly reports containing key statistics and a quarterly KPI report for senior management within the Office of Youth, Children and Family Support These reports contain detailed resident statistics and also provide performance statistics based on a few pre determined targets. The KPI reports include strategic indicators such as the rate of recidivism for young offenders in custody as compared to young offenders committed to community programs; and accountability indicators that contain information in relation to the days in custody, number of young offenders in custody, average cost per custody day and other information.

There are no recommendations for this section


ATTACHMENTS


ATTACHMENT A – AUDIT FINDING CATEGORIES

Negligible Minor Moderate Major Severe

Almost Certain Medium High High Very High Very High

Likely Medium Medium High High Very High

Possible Low Medium High High High

Unlikely Low Low Medium Medium High

Rare Low Low Medium Medium High

DECEMBER 2009 BIMBERI OPERATIONS AND FINANCIAL PERFORMANCE AUDIT Page 21


ATTACHMENT B– ACTION SHEET

Area Audited: Bimberi Youth Justice Centre Date of Audit: August 2009 – December 2009

Audit Recommendation Rating Management Comment Responsible Officer


1. Bimberi management continue to liaise with the Department of Education or other education and training providers to develop study and training programs to support higher learning beyond the Year 10 Level.

LOW Agreed - There are currently options available for young people to undertake both Vocational training in a number of areas including Horticulture and Metal Work. There is planning for extension to the range of Vocational options available. It is expected for Vocational Training options in Barista to become available early 2010.

Year 11 and 12 studies are currently available to be delivered on-site through a distance education program run through Karabar High School, Queanbeyan NSW.

Frank Smith June 2010

Bimberi will continue to develop and expand the range of programs offered for young people in detention.





2. Finance staff should review all costs allocated to the Quamby cost centre from January 2009 to ensure any recoverable costs are identified and passed on to ACT Corrective Services.

MEDIUM Agreed - The Department has reviewed the Quamby cost centre and identified any and all costs to be recovered from ACT Corrective Services.

Danny O’ Mara March 2010

3. Request additional funding from the ACT Government to support the higher operational costs associated with Bimberi.

HIGH Agreed – The Department will develop a budget submission seeking an increase in the budget available to support the operational costs of the new facility.

Matthew Kennedy January 2010

4. Amend Bimberi’s staffing numbers to ensure that Bimberi has the ability to operate at full capacity (with the assistance of casuals) in the short to medium term.

HIGH Agreed – The Department will develop a budget submission seeking an increase in the budget available to support the staffing requirements to cover operations in the short to medium term. The submission will include both permanent and casual staffing needs.

Matthew Kennedy January 2010





5. Management should review all the financial information data for Bimberi and develop an updated budget based on either a bottom-up or adjusted top-down approach.

MEDIUM Agreed – As previously stated in this report, the Department decided to run the new facility for a year to ascertain the actual costs of operating the facility prior to requesting any additional resources from Government.

As part of development of an appropriate budget for the new facility, the Finance and Budget area of the Department will work with Bimberi Management to construct a zero-based or bottom-up funding model. This would complement the 12 month assessment of actual costs to provide a sound basis for seeking additional funding for the facility. Part of the zero-based approach would be additional modelling of the costs that would arise if all of the accommodation buildings were occupied.

Matthew Kennedy

Danny O’Mara

29 January 2010



ATTACHMENT C – COMPARISON OF SERVICES AND PROGRAMS BEING OFFERED

Department/Organisation Services & Programs planned to be delivered.

Department of Education (DET) The academic programs planned to be offered at Bimberi were to cover

Literacy and Numeracy

SOSE

Visual Arts

Music

Science

PE & Health

Services & Programs currently Staff currently provided being offered.

Learning Options – A pre year 10 program developed by CIT. Targets younger detainees who do not have sufficient educational background to complete a year 10 equivalent course.

Access 10 – is a year 10 equivalent program which provides young detainees with a basic secondary education equivalent. This qualification is accepted as a pre requisite for other educational courses across ACT.

School Leader – Level C (Part Time)

General Education Teacher (Full Time)

Art Teacher (Full Time)

Aboriginal Liaison Officer (Part Time)

Music Teacher (Part Time)




Services & Programs currently being offered.

Staff currently provided

Canberra Institute of Technology The vocational training programs to CIT currently provides several part Metal Works Teacher (Part (CIT) be offered at Bimberi were to cover

Horticulture;

Automotive;

time staff members. And also supports the Learning Options program currently run at Bimberi.

Time)

Horticulture Teacher (Part Time)

Metals and Engineering (including welding and motor repair and maintenance);

Hospitality;

Barista;

Textiles, Arts and Craft; and

Food Preparation;

Department of Disability Housing and Community Services (DHCS)

Community Based programs funded through the DHCS Youth Support Program.

Community Services groups provide various programs under the Youth Support Agreement.

ACT Health Health services were to be provided to residents and these covered

General Health Primary Services

Mental Health Services

General Health Tertiary Services

On Call Medical Officer

Case Assessment Services

Health Services are being provided to residents through the Corrections Health Service run by ACT Health

Preventative/Protective health education programs.

Medical Doctor (once per week and on call)

Nurse (8 hrs per day 5 days a week with some weekend service)






Master Builders Association (MBA)

A program was to be delivered in conjunction with the MBA with a view to introducing building skills related training.

This program is not yet being provided.

Australian Academy of Initial discussions took place to This has not been completed yet. Interactive Entertainment (AAIE) develop and map interactive

computer training applications into the Bimberi Education and Program Centre curriculum.

Winnunga Nimmityjah Provision of Aboriginal Health Service to young detainees

Aboriginal Health Services session provided every 4 weeks.

Forensic Mental Health Services (FMH)

Provision of Mental Health support programs

Support is provided by 2 psychologists daily and a psychiatrist once a week.

2 Psychologists (5 days a week)

Psychiatrist ( one morning per week)

Northside Community Services (NCS)

Community Based programs funded through the DHCS Youth Support Program.

Soulbeat – this is a program provided by NCS which encourages team work within young detainees and also helps build confidence and self esteem. It also encourages residents to share their thoughts and feelings.

Woden Youth Centre (WYC) Community Based programs funded through the DHCS Youth Support Program.

The Building Strengths Program seeks to provide fresh and relevant life skills programs to young people.

The program seeks to improve the mutual understanding and communication between residents and youth workers.






U Turn Youth Services Community Based programs funded through the DHCS Youth Support Program.

U Turn runs a program called “Defuse” which primarily looks at addressing aggressive behaviour amongst detainees. It is a anger management program which enables detainees to effectively communicate their frustrations and also helps promote mental and physical health.

Gugan Gulwan Community Based programs funded through the DHCS Youth Support Program.

Gugan Gulwan provide a indigenous art program.

Indigenous Worker (weekly during school term)

Ted Noff’s ACT Government provides funding for the Ted Noff’s program and services were to be provided to the Bimberi residents as part of the funding agreement.

The organisation provides a weekly program of drug and alcohol interventions based on a harm minimisation approach.

AFP (RecLink) A program to be provided under the Community Policing/Youth Liaison program.

The RecLink program provided weekly to residents covers a range of recreational and sporting events.


Documents

bimberi operations and financial performance audit - Community