1. Governance and Operations

 

1.1 Background to the NQF and ACECQA

The National Quality Framework

The National Quality Framework (NQF) is the national system for the regulation and quality assessment of early education and care services. It applies to most long day care, family day care, preschool and kindergarten, and outside schools hours care services.

The objectives of the NP NQA are to:

  • ensure the safety, health and wellbeing of children attending education and care services
  • improve the educational and developmental outcomes for children attending education and care services
  • promote continuous improvement in the provision of quality education and care services
  • establish a system of national integration and shared responsibility between participating jurisdictions and the Commonwealth in the administration of the NQF
  • improve public knowledge, and access to information, about the quality of education and care services
  • reduce the regulatory and administrative burden for education and care services by enabling information to be shared between participating jurisdictions and the Commonwealth.

The NQF includes:

  • a legislative framework that consists of the Education and Care Services National Law (National Law) and the Education and Care Services National Regulations (the National Regulations), incorporating the National Quality Standard (NQS)
  • a quality assessment and rating system
  • a lead regulatory authority in each state and territory with primary responsibility for the approval, monitoring and quality assessment of services in their jurisdiction in accordance with the national legislative framework and the NQS
  • a national body, ACECQA, to guide the national implementation and administration of the NQF and to monitor and promote consistency in its implementation and administration.

The NQF improves quality in children's education and care through:

  • national learning frameworks to support and promote children's learning. The two nationally approved learning frameworks are Belonging, Being and Becoming: The Early Years Learning Framework for Australia (Early Years Learning Framework) and My Time, Our Place: Framework for School AgeCare in Australia (Framework for School Age Care)
  • improved educator to child ratios to ensure each child receives more individual care and attention
  • educator qualification requirements to ensure educators have the skills to help children learn and develop
  • a quality rating system to ensure Australian families have access to transparent information relating to the quality of children's education and care services.

ACECQA

ACECQA is a national statutory authority established by section 224 of the National Law. ACECQA is a body corporate with perpetual succession. It is not a Commonwealth statutory authority.

The objectives and guiding principles of the NQF inform ACECQA's undertaking of functions under the National Law. The Authority is guided by the Education Council's Letter of Expectation for 2014-16, which outlines the strategic priorities and expectations for the ACECQA Board.

ACECQA delivers its functions in close collaboration with the state and territory regulatory authorities and the Australian Government, and consults with their respective policy departments on NQF policy matters through the Early Childhood Policy Group (ECPG).

ACECQA is governed by a Board of up to 13 members appointed by, and accountable to, the Education Council. ACECQA reports to the Council through the Australian Education Senior Officials Committee (AESOC).

The term of the second Board expired on 31 December 2015. The third ACECQA Board was appointed by the Education Council from 14 April 2016.

ACECQA's Letter of Expectation from the Education Council for 2014-16 is at Appendix A. The ACECQA Chair's response to the Letter of Expectation is at Appendix B.

The ACECQA Strategic Plan 2012-16 is available on the ACECQA website and was last reviewed by the Board in December 2014. In 2016-17, the Board anticipates undertaking a fundamental review of the Strategic Plan, in particular to align with the anticipated new Ministerial Letter of Expectation.

Ministerial directions

Under section 222 (1) of the National Law, the Education Council may give directions to the ACECQA Board in relation to carrying out its functions under the law. Section 222 (2) also permits the Education Council to give directions to a regulatory authority with respect to the administration of the NQF. No directions were given by the Education Council in 2015-16.

Figure 1. ACECQA's governance structure

Figure 1. ACECQA's governance structure

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1.2 ACECQA Board and Sub Committees

ACECQA Board

2015-16 saw the transition from a second to a third ACECQA Board. The second ACECQA Board, which had again been led by Ms Rachel Hunter as Chair and Professor Collette Tayler as Deputy Chair, completed its term on 31 December 2015. The third ACECQA Board, led by Ms Judy Hebblethwaite as Acting Chair, was appointed from 14 April 2016. Membership of the Board is outlined at Appendix C.

The ACECQA Board held five meetings (three of which were the second Board) in 2015-16; with four meetings in Sydney and one by teleconference. Board meeting attendance is outlined at Appendix D.

Significant work undertaken by the Board during the reporting period includes:

  • monitoring the delivery of the organisation's statutory obligations and achievement of strategic priorities set by all ministers through the ACECQA Letter of Expectation
  • monitoring the financial performance of the Authority, which saw ACECQA continue to operate within its overall funding envelope
  • reviewing the ACECQA Board Charter and deciding the structure and composition of the new Board's sub committees to ensure effective and robust governance
  • engaging with state, territory and Australian Government regulators and policy makers on approaches to risk-based regulation and the application of best practice principles in regulating children's education and care service
  • conducting preliminary analyses of ACECQA's guidelines to assess equivalent Early Childhood Teacher qualifications for educators under the NQF, which will inform a scheduled review in the second half of 2016
  • finalising ACECQA's third research report on services' perceptions and experiences of regulatory burden under the NQF, which found that education and care services have reported a decline in perceptions of overall burden associated with the administrative requirements of the National Law and Regulations.

The ACECQA Board

The ACECQA Board. Back row (left-to-right): Naomi Wilson, Ann Farrell, Catherine Hudson, Robyn Layton, Catherine Weber, Sabine Phillips. Front row (left-to-right): Nick Ryan, Sandra Cheeseman, Judy Hebblethwaite, Mark Brown. Absent: Joce Nuttall and Jackie Wilson.

 

Board Sub Committees

Audit, Finance and Risk Sub Committee

During the reporting period, the Board was supported by its Audit, Finance and Risk (AFR) Sub Committee. The Sub Committee provides independent oversight and monitors the organisation's governance, risk and control frameworks, financial performance and external accountability requirements. Membership of the AFR Sub Committee and details of meetings held in 2015-16 are outlined at Appendix E.

Major priorities for the Sub Committee during the reporting period included:

  • reviewing and endorsing the Authority's 2014-15 financial statements
  • reviewing and monitoring ACECQA's risk management plan and fraud control strategies
  • reviewing and monitoring ACECQA's investment and financial policies and procedures, including compliance with these policies
  • overseeing an internal audit on ACECQA's compliance with the Payment Card Industry Data Security Standards, which concluded that the National Authority is compliant with the relevant standards
  • conducting its own annual performance review.

Performance and Remuneration Sub Committee

In 2015-16, the Performance and Remuneration Sub Committee provided advice on relevant performance and remuneration matters for ACECQA. Membership of the Sub Committee and details of meetings held in 2015-16 are outlined at Appendix E.

Policy, Research and Consistency Sub Committee

In 2015, the Policy, Research and Consistency (PRaC) Sub Committee provided strategic advice and recommendations to the Board on the connected themes and functions of policy, research and consistency, as they relate to ACECQA and the NQF more broadly. Membership of the Sub Committee and details of meetings held in 2015 are outlined at Appendix E.

In addition to the above sub committees, in 2016 the Board established three, project specific working groups, to respectively:

  • provide direction to management as part of enterprise bargaining for a new Agreement post 30 June 2016
  • review and provide advice to the Board on high level qualifications policy matters
  • commence preparatory work in reviewing ACECQA's high level engagement with governments and regulators, which in turn will inform the development of a new strategic plan in 2016-17.

Membership of these three working groups and details of meetings held in the first six months of 2016 are outlined at Appendix E.

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1.3 ACECQA's operations

Organisational structure and staffing

On 30 June 2016, the Executive comprised the Chief Executive Officer, Chief Operating Officer, General Manager Strategy, Communications and Consistency and National Education Leader/General Manager Educational Leadership.

In January 2016, the organisation's structure was realigned for two of the three business groups with strategy, communications and consistency functions reporting to the General Manager, Strategy, Communications and Consistency and the National Education Leader managing sector support, training and promoting excellent practice, supported by the newly created role of Deputy National Education Leader. The structure for Business Services remained unchanged.

In addition, the Board and Governance team continued to report to the CEO and support the ACECQA Board and manage legal, governance, planning, reporting and accountability requirements across the organisation, including ACECQA's participation in inter-governmental fora. The Board and Governance team also manage ACECQA's second tier review function.

The Educational Leadership Group is led by the National Education Leader/General Manager Educational Leadership and delivers:

  • advice on educational programs, practices and pedagogy
  • ACECQA's operational function of assessing Excellent rating applications
  • educational resources and professional development for the sector and regulatory authorities
  • training, resources and support for state and territory regulatory authority authorised officers.

The Strategy, Communications and Consistency group is led by the General Manager for Strategy, Communications and Consistency and delivers:

  • stakeholder engagement, including media and social media, web content and design, ACECQA newsletters and other mass communications, internal communications, major presentations and conference appearances, and inbound and outbound sponsorship
  • expert policy analysis, advice, and research and evaluation under the NQF
  • national consistency initiatives, including national audits of aspects of the NQF
  • ACECQA's operational functions of assessing educator qualifications and organisations' early childhood education programs
  • responses to enquiries from the sector and wider community through a dedicated service unit.

The Business Services group is led by the Chief Operating Officer and delivers:

  • human resources
  • IT
  • information and records management
  • finance and facilities functions.

This group also includes ACECQA's education and care systems team, which provides maintenance and development of the National Quality Agenda IT System (NQA ITS) for the NQF, including sector and regulatory authority support.

The number of FTE staff at 30 June 2016 was 72.7. A breakdown of the workforce profile by FTE, headcount and gender is at Figure 2.

The ACECQA organisational structure as at 30 June 2016 is outlined in Figure 3.

Figure 2. Workforce Profile - FTE and headcount by gender, 30 June 2016

 
Female
Male
Total
FTE
49.04
23.66
72.7
Headcount
54
24
78
% of workforce (headcount)
67.46%
32.54%
100%

Office relocation

ACECQA's tenancy at Level 15, 255 Elizabeth Street Sydney came to an end in December 2015 with the expiry of its lease. ACECQA subsequently secured an alternative property at Level 6, 175 Liverpool Street Sydney and commenced operations in the new premises on 14 December 2015. The new property provides cost effective, equivalent facilities to ACECQA's previous premises with some additional meeting rooms.

Figure 3. ACECQA's organisational structure

Figure 3. ACECQA's organisational structure

Human Resources

During 2015-16, human resources continued its focus on the implementation of HR policies as well as facilitating training for all staff and managers in relation to their obligations and responsibilities under the policies and ACECQA's Enterprise Agreement. ACECQA's Enterprise Agreement nominally expired on 30 June 2016 and bargaining commenced in May 2016 after the appointment of the new Board.

In 2015-16, the human resources team also managed payroll, recruitment, induction, learning and development, Work Health and Safety (WHS), mandatory and professional development training and staff separations. The temporary employment register established in 2014-15 has continued to support workforce management planning and reporting.

A number of HR and specialist providers facilitated learning and professional development for new and aspiring managers and communications training. Staff also completed specific learning and development training including administrative law, advanced excel and business writing.

Funding

The operations of ACECQA are largely funded by the Australian Government and the state and territory governments under the National Partnership Agreement (NPA) on the National Quality Agenda for Early Childhood Education and Care. The current Agreement covers the period up to 31 December 2018.

In addition to operational funding in 2015-16, ACECQA also received:

  • fee revenue under the National Regulations relating to ACECQA's functions of assessing qualifications, second tier review and Excellent rating applications
  • 10 per cent of NQF related transaction and annual fees levied by the state and territory governments for calendar year 2015 in accordance with the NPA
  • operational funding from the Australian Government and states and territories for administering, maintaining and developing the NQA ITS.

Financial performance 2015-16

ACECQA operated in accordance with its Board approved budget to deliver on the strategic priorities contained in the Letter of Expectation from the Education Council, and a 2015-16 work plan that was developed in consultation with all jurisdictions and noted by the Education Council. The operating result for the 2015-16 financial year was a small deficit of $117 thousand.

Operational funding from governments received in 2015-16 was approximately $12.7 million. ACECQA also received own source revenue of approximately $500 thousand mainly from the sale of NQF resource kits, services delivered under the National Regulations on a fee for service basis and interest income.

Since its establishment in 2011, ACECQA received or invoiced part of its annual funding from the Australian Government and the state and territory governments in June each year for its operations in the following financial year. The funding received or receivable was recognised in the year the funding was designated for, not in the year it was received or invoiced. This revenue recognition treatment under Australian Accounting Standards (AASB 118) was applied for the last four years.

In 2015-16, following discussions with the Australian National Audit Office, ACECQA applied a different Accounting Standard (AASB 1004) to ACECQA's government funding to recognise the funding as revenue when it was received, not in the year the funding was designated for. This was based on a technical accounting judgement about the most appropriate standard to apply.

As a result, ACECQA's Financial Statements report approximately $13 million accumulated surplus as at 30 June 2016. This includes a working capital threshold and $6.8 million funding received in advance for 2016-17 from the Australian Government, which will be progressively spent in that period. As an independent statutory authority, ACECQA requires adequate working capital to ensure that the agency is able to arrange supplier contracts, declare solvency and cover any funding shortfall or funding delays.

The total expenditure for the 12 months was $13.3 million. The main expenditure items were:

  • salaries and on-costs (approximately 69 per cent)
  • ICT costs (approximately 9 per cent)
  • occupancy (approximately 7 per cent).

At 30 June 2016, the cash and cash equivalent balance of ACECQA was $5.3 million. Where cash and cash equivalents exceeded ACECQA's at call requirements, they were transferred to investments in accordance with ACECQA's investment policy.

Information and Communication Technologies

ACECQA's IT team delivered a number of major projects in 2015-16, including:

  • supporting the ACECQA office relocation, including establishing the new office IT infrastructure
  • implementing an across-the-board desktop refresh program, comprising the replacement of the majority of personal computers and laptops
  • supporting an internal Business Continuity Plan working group, and working towards implementation of a revised IT Disaster Recovery plan
  • the renegotiation of ACECQA's primary IT hosting agreement, which facilitated a major server refresh program and communications upgrade, thereby providing ACECQA with greater value and improved services
  • the renegotiation of a new corporate telephony system, as well as implementing improved mobile phone plans.

The IT Team also provided guidance to major projects across ACECQA, including the early childhood video library, website user experience redesign, and an upgrade to MYOB for ACECQA's Finance team.

Information management

The focus of the information management program this year was to shift from the implementation phase to incorporating information best practice into the daily operations of the organisation. This was accomplished through the following achievements:

  • completion of the digitisation of hardcopy records
  • improved monitoring and reporting to ensure compliance with ACECQA's records management policy and procedure
  • strengthening ACECQA's information management through revisions to records management and information security policies and procedures
  • supporting records management compliance obligations for information stored in the NQA ITS
  • development and implementation of digital archiving and retention procedures, with the development of tools for the application of retention policies at record creation and the assigning of retention policies to all records.

WHS and work environment

ACECQA is committed to maintaining and improving the health and wellbeing of its staff through a robust WHS management system, which provides a framework for the delivery of WHS policies and procedures and other initiatives across the organisation. The WHS system fosters a strong safety culture through consultation arrangements, agreed employer/employee responsibilities and WHS structures and arrangements. There are also provisions relating to workplace inspections, ergonomic workstation assessments, training and information, and emergency procedures.

ACECQA continues to promote a strong commitment to a supportive workplace through initiatives that demonstrate staff, community and social engagement. In 2015-16, activities managed by the social committee, ACECQA Life, supported events such as Harmony Day, NAIDOC Week, Movember and other charities including the Cancer Council, R U OK Day and Youth off the Streets. ACECQA Life continues to engage staff through mindful leadership that promotes self-awareness, well-being, social conscience and compassion.

In 2016, ACECQA's Reconciliation Action Plan working group oversaw the development of the Authority's 'Reflect Reconciliation Action Plan'. The Action Plan, which was being finalised in consultation with Reconciliation Australia as at 30 June 2016, documents ACECQA's commitment to, and strategies to promote, reconciliation, and celebrates the unique place that Aboriginal and Torres Strait Islander cultures hold in Australia.

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