Victorian Auditor-General’s report
25 May 2011

Early Childhood Development Services: Access and Quality 
Audit summary
Good quality early childhood programs not only promote a young child’s health, learning and skill development, but also positively influence their longer-term health, educational and social outcomes. This is particularly so for vulnerable and disadvantaged children.
The Department of Education and Early Childhood Development (DEECD) is accountable for planning and providing early childhood services. They include universal kindergarten and maternal and child health services for all young children and their families, and early start kindergarten and enhanced maternal and child health services for vulnerable and disadvantaged children and families. Participation in these services is voluntary.
DEECD partners with local government to plan and provide early childhood services. It funds about 1 400 organisations, including local councils and community and private organisations to deliver these through service agreements. In 2010–11 DEECD budgeted $405 million for early childhood services.
DEECD needs a sound understanding of demand for services so it can effectively plan for all young children and families to access and participate in them. DEECD also needs to set appropriate standards for providers, and to monitor their compliance with these standards in order to assess whether the services are of a consistently high quality. 
This audit examined whether access to early childhood services has improved and if services are meeting the required standards. It assessed whether:
·	early childhood services are accessible when and where needed
·	DEECD understands and effectively manages demand for early childhood services
·	high-quality services are provided that support achievement of program objectives.
Conclusion
Access to universal maternal and child health and kindergarten services, and services for vulnerable children has improved over the five years to 2010 as shown by increasing participation rates.
While this is positive, DEECD cannot demonstrate that early childhood services are accessible when and where needed, especially for vulnerable children and families. The department’s inability to reliably identify all vulnerable children and families means it does not know the extent to which children are missing out on the benefits of attending targeted services specifically developed and funded to meet their needs.
DEECD also does not sufficiently understand or effectively manage demand for early childhood services. It needs to better identify which children and families do not use its services, and why, and then act to remove barriers to participation. 
Further, until DEECD oversees service quality more rigorously, it cannot be reliably assured that services provided are of high quality.
Because local governments also have statutory responsibility to plan and provide services for the local community, which include maternal and child health and kindergarten services, there is a risk that ambiguity of roles can result in a lack of clear accountability for performance. DEECD has not actively managed this risk and needs to take a stronger leadership role in this regard, and in its partnership with local government.
Findings
Access to and participation in services
The use of maternal and child health and kindergarten services has improved, including for vulnerable children and families.
Despite the increase in maternal and child health participation rates, attendance at the ten health and developmental checks progressively declines after the first check. This pattern of progressive decline in the take-up of health and developmental checks from the universal maternal and child health service has not improved and remains consistent with 2005–06. A similar trend also occurred over the five years to 2005. DEECD has not worked systematically and in partnership with service providers to find the reasons for this fall despite the trend occurring for the past decade.
These checks play an important role in the early detection and treatment of health and developmental problems. However, checks must be timely as any delay in detection increases the likelihood that children remain vulnerable and at risk throughout the health and education system. Ultimately this results in a greater cost to the community and government.
While the current 95 per cent kindergarten participation rate meets the nationally agreed target for universal access, DEECD has not established who the non‑participants are and, most importantly, whether they include the children and families most in need of the service.
Addressing barriers to access and participation
DEECD does not have an adequate understanding of what delays and barriers eligible children and families experience in accessing its early childhood services. This limits its ability to develop targeted strategies to remove the barriers.
In the last few years DEECD has reacted to the issue by primarily funding one-off projects rather than working purposefully and in partnership with service providers to address barriers identified during ongoing service planning and monitoring. Given that most of these projects are yet to be finalised, it is too early to assess their effect.
Service planning and delivery responsibilities
While DEECD is ultimately accountable for achieving the policy objectives, it regards the levels of responsibility and accountability for service planning and achievement of program outcomes to be complex and ambiguous.
DEECD and the Municipal Association of Victoria, representing local government, have made an explicit commitment to work collaboratively as partners in planning and delivering early childhood services, but the partnership is not working as effectively as it could be. The department has advised that a formal evaluation is scheduled for August 2011 to investigate opportunities to enhance the Partnership Agreement’s effectiveness.
DEECD has adopted a limited role in planning. It believes local government has the main responsibility for knowing and meeting the needs of young children and families within their own municipalities, including resourcing services appropriately. It relies on local government to determine service demand but does not seek assurance on the quality and consistency of the planning. 
Although DEECD has funded the Municipal Association of Victoria to develop a planning framework to improve councils’ early years plans, it has not evaluated its success.
Understanding and managing service demand
Local governments collect information and data on children and families that could better inform DEECD’s understanding of demand, yet DEECD does not use it.
DEECD does not know why all eligible children and families do not use universal kindergarten and maternal and child health services, because it cannot identify them.
While DEECD has information on the number of vulnerable children and families that use the targeted services, variable service referral processes, inconsistent data collection methods, unreliable data on population projections, and the department’s narrow definition of vulnerability means that DEECD is not in a position to know whether the information it has accurately reflects real demand.
Consequently, DEECD does not know whether it is reaching all vulnerable children and families, and it does not know the reasons why or extent to which children and families experience delays or difficulties accessing early childhood services.
DEECD needs to regularly assess its understanding of service demand and take appropriate action to address identified gaps. Without a complete understanding of service demand, DEECD cannot know if participation rates are as good as they can be, and that in turn children and families are benefiting from services as it intends for them.
Monitoring service quality
DEECD assesses the quality of its early childhood services in three ways. It monitors that service providers are complying with regulations, program standards and their service agreements.
Each of these is an important but different aspect of service quality. DEECD could strengthen its evaluation of service quality by better integrating its processes for monitoring compliance with all three.
Legislative and regulatory requirements
Children’s services legislation focuses on the physical safety of children at kindergarten. Kindergartens must comply with legislative and regulatory requirements to gain and keep their licences.
DEECD uses a Monitoring and Compliance Framework to assess kindergarten compliance. Although the framework is used effectively, providers varied in the quality of the documentation showing how they had remedied identified areas of non‑compliance.
Program standards
Program standards set a baseline for good performance. DEECD has recently revised the standards for maternal and child health services. DEECD encourages providers to use the program standards to self-assess their services as part of their annual service review. 
DEECD has developed service improvement plans to help providers identify areas to improve then to implement and evaluate them. While the service improvement plans provide a sound framework to support improvement in service quality, providers vary in how well they use them. 
DEECD has not developed or put in place statewide program standards for kindergartens. Since 2008, it has been collaborating on the development of national quality program standards for kindergartens. These will not be introduced until January 2012.
DEECD requires kindergartens to regularly evaluate the quality of their own programs. These evaluations are not based on a standardised assessment and DEECD does not review the results to see if they will actually improve service quality. Kindergartens are also required to survey parents on their satisfaction with the program. DEECD only receives the overall satisfaction rating by parents. It does not ask for responses to questions about potential barriers to participation or areas for improvement. Nor does it use the survey to help form a regional and statewide view about the quality of kindergarten programs.
Service agreements
The service agreements between DEECD and service providers clearly set out the relevant legislation, program objectives, service delivery standards, funding responsibilities, performance measures and reporting requirements. 
The performance measures and targets, however, are limited to numbers of children and families using early childhood services. DEECD could include performance measures or targets for service quality to hold providers accountable. It would also help improve service quality if DEECD were to link the agreements with service improvement plans. 
DEECD uses a statewide Monitoring Framework to assess how well kindergarten and maternal and child health service providers comply with their service agreements. If DEECD were to collate its ongoing monitoring results it would gain a comprehensive picture of provider performance at any point in time. DEECD monitors only 3 per cent of providers annually against operational risks, a significant gap in its awareness of performance against service agreements.
Recommendations
Number	Recommendation	Page	
1.	That the Department of Education and Early Childhood Development exercise more purposeful oversight of the quality and consistency of council planning.	22	
2.	That the Department of Education and Early Childhood Development develop a better understanding of service demand, particularly for the vulnerable and disadvantaged by:
·	reviewing its definition of vulnerability to guard against children and families ‘slipping through the net’
·	working in partnership with service providers to identify and act to remove barriers to access and participation, especially for the vulnerable and disadvantaged
·	working in partnership with service providers to identify and act to mitigate the reasons for the fall in attendance at maternal and child health checks after the first visit.	 22	
3.	That the Department of Education and Early Childhood Development strengthen its monitoring of service quality by:
·	better integrating its processes for assessing provider compliance with regulations, program standards and service agreements 
·	including performance measures and targets for service quality in its service agreements with providers
·	reviewing the results of self-assessments by kindergarten service providers to inform decisions on improving service quality
·	assessing provider compliance with the revised maternal and child health program standards, and the new kindergarten program standards when introduced.	31	
Submissions and comments received
In addition to progressive engagement during the course of the audit, in accordance with section 16(3) of the Audit Act 1994 a copy of this report was provided to the Department of Education and Early Childhood Development with a request for submissions or comments.
Agency views have been considered in reaching our audit conclusions and are represented to the extent relevant and warranted in preparing this report. Their full section 16(3) submissions and comments, however, are included in Appendix A.