Introduction
This report provides an assessment of how well the Department of Housing (Housing) delivers power, water and wastewater repair and maintenance services to selected remote Aboriginal communities through the Remote Area Essential Services Program.
We focused on the level and quality of these services provided to eligible remote communities, and how Housing managed their delivery, and its coordination with other agencies. As part of our audit we visited 27 remote communities.
The scope of this audit did not include the provision of all services to all remote communities or their sustainability.
Background
Around 15 per cent of the State’s Aboriginal[1] population, or 11 400 people live in 274 remote[2] communities across Western Australia. Three quarters of these communities are permanent, with the rest seasonally or occasionally occupied.
Permanent communities vary in size from single families to around 600 at Bidyadanga south of Broome. Populations often fluctuate, sometimes more than doubling during cultural or law events. Communities also range in remoteness, from very isolated sites near State borders to those near regional centres like Kalgoorlie.
An agreement between the Commonwealth, the State and the Aboriginal and Torres Strait Islander Commission to provide housing services to eligible Aboriginal communities was signed in December 1997. These services include power, water and sewerage under the State-funded Remote Area Essential Services Program (the Program).
Housing began managing the Program on 1 January 1999. The Program:
- repairs and maintains power, water and wastewater infrastructure in eligible remote Aboriginal communities
- maintains and monitors water quality according to Australian Drinking Water Guidelines (the Guidelines) as required by the Department of Health (Health)
- trains community members to take on some essential services work.
Housing also has from time to time sought funding to replace or upgrade assets serviced by the Program.
The Program was originally aimed at larger permanent communities. It has never included all Aboriginal communities. By 2007, Cabinet had approved the inclusion of 91 communities in the Program although services to seven are suspended for various reasons including being abandoned. Forty-nine of the communities are in the Kimberley, 22 in the Pilbara and 13 in the Goldfields (Appendix 1). There are six eligibility criteria for assessing inclusion in the Program including having a normal population of at least 50 people, permanency of occupation, and the level and standard of infrastructure (Appendix 2). Currently there are several quite small communities in the Program.
From 1999 to June 2014, the State provided Housing with a total of $244.1 million to administer the Program. A further $30 million was budgeted by Treasury for 2014-15.
The Commonwealth also funded other services to communities in the Program and to other Aboriginal communities across the State, totalling $619 million from 1997 to 2015. These included major capital works, fuel for power plants and municipal services like road maintenance, rubbish and dog control through the Municipal and Essential Services Program (MUNS). However, in September 2014 the Commonwealth announced it would stop funding services for all remote communities. The Commonwealth has provided $90 million to cover the period until funding ceases at the end of June 2016. It is not yet clear how the funding will be applied and who will assume responsibility for municipal services and capital works.
To deliver the Program, Housing uses a contracted Program Manager to supervise Regional Service Providers (Service Providers) that repair and maintain power, water and wastewater infrastructure in these communities. The current Program Manager was appointed in 2005 and is contracted to April 2016. Housing separately contracts three regionally based Service Providers for the Kimberley, Pilbara and Goldfields. Their three year contracts began in February 2013.
Service Providers visit communities to check and repair water and wastewater infrastructure and power. They also sample water monthly for quality testing. Service Providers employ community members to carry out some of this work.
Audit Conclusion
The Remote Area Essential Services Program delivers reliable power and water supplies to selected remote Aboriginal communities, but the quality of drinking water often falls short of Australian standards. Testing of wastewater systems was irregular or incomplete between January 2012 and 2014, so Housing could not be sure if they were working effectively.
Housing’s current arrangements for managing the Program limit its effectiveness and efficiency. In particular, they restrict the Program Manager’s effectiveness. The condition of key assets and associated future costs is not well understood, and weaknesses in coordinating services to communities means there are missed opportunities to reduce costs.
The criteria to determine eligibility for the Program have not been applied since 2008. This means that Housing does not know if the right communities are in the Program. Some communities may be receiving services they are no longer entitled to while others may have become eligible but are receiving no services.
Key Findings
The supply of water and power to communities is generally reliable. On average, interruptions to community power and water services have occurred twice a year since July 2011, which is similar to services provided in cities and towns. Service Providers respond to around 90 per cent of service disruptions within 24 hours, exceeding their minimum contract targets of 75 per cent.
Drinking water quality often does not meet Australian standards:
- Tests detected either E. coli or Naegleria microbes in at least one community in every month in the two years to June 2014. Both of these can cause serious illness and are potentially fatal. The microbes were found at least once in sixty-eight communities in the last two years, and more than eight times in four communities. The presence of these microbes means that the drinking water is non-compliant with the Australian guideline.
- In the same period, four communities exceeded safe levels of uranium in their water by up to double the level allowed for under the Australian guideline.
- Fourteen communities recorded nitrates above the safe level for bottle-fed babies under three months old in 2014.
Testing of wastewater systems between January 2012 and June 2014 to establish if they are working effectively was irregular or incomplete and failed to meet contractual requirements. The lack of testing means that Housing could not always know if wastewater systems were effective. Ineffective systems can result in blockages and even sewage overflows, which can directly impact on community health.
Poor contracting means Housing is not getting full value from the Program Manager and its $1 million a year fee. The Program Manager is contracted and paid to supervise the Service Providers. However, at times this has not happened and instead the Service Providers deal directly with Housing.
Poor oversight means there is a risk that Housing may have overpaid for services. Self-reporting by Service Providers, a lack of inspections by the Program Manager, and inconsistency in invoice and job order descriptions have created this risk. In 2013-14, invoices for all unplanned maintenance and repairs in the Program totalled $14.7 million.
Housing does not know if the right communities are in the Program as it has not applied the eligibility criteria since 2008. However, its data show that 24 of 84 communities receiving services no longer meet the population criteria of 50 people. Although it is Cabinet’s decision as to which communities should receive services, Housing has a clear role in assessing eligibility to support these decisions. We note that Housing has suspended services to seven of the 91 communities in the Program.
Housing does not have an up-to-date view of the condition of Program assets which have an estimated value of $765 million. This severely limits its ability to plan effectively for asset maintenance and replacement. In March 2014, Housing began to collect all asset data using its Essential Services Asset Management System (ESAMS) as a means of ensuring consistency. At January 2015, ESAMS included key information for 28 per cent of major assets.
The remoteness of communities directly affects the cost of supporting them but better coordination of maintenance and repair for Program assets and public housing could reduce these costs. Improved planning, information sharing and coordinating by the various service delivery entities would improve efficiency in travel and on site costs, as well as reduce downtime.
Recommendations
Housing should:
- by December 2015 have determined how it can improve water quality in remote communities to meet Australian Drinking Water Guidelines
- by December 2015, take steps to ensure that Service Providers’ testing of wastewater systems complies with contractual requirements
- review its contracting of the Program Manager and Service Providers before issuing new contracts in 2016 to ensure:
- clear roles and responsibilities for contractors
- clear performance measures for contractors
- efficient service delivery
- efficient use of contractors’ capabilities
- clarify with government the roles and responsibilities for essential services previously provided by the Commonwealth to remote Aboriginal communities
- ensure that communities’ eligibility for Program services is subject to regular review
- improve its coordination of services to remote Aboriginal communities internally and with other agencies.
Response from the Department of Housing
The Department of Housing welcomes the Auditor General’s report.
In addition to its core role as a social housing provider, for many years the Department has been funded by the State to provide a repairs and maintenance service (RAESP) to essential services equipment and infrastructure in certain remote communities. Importantly, the Department does not own or operate the equipment and infrastructure. The report should be read in this context.
The area of essential services in remote communities has a complex history of funding and operational responsibility involving State and Commonwealth governments, a number of different public sector agencies and the former ATSIC. The Department’s RAESP service is one component of the current arrangements for the provision and delivery of essential services to remote communities, which is made more complex by the isolated location and harsh climate that can impact service delivery.
In addition to RAESP, the delivery of essential services to remote communities has historically relied on Commonwealth funding to meet operating costs (including powerhouse fuel), and for asset replacements and upgrades.
The report acknowledges that RAESP has delivered consistent power and water supplies and the Department would like to recognise the efforts of its contracted service providers in providing reliable essential services and mitigating known risks in an environment of ageing assets and funding uncertainty. A number of findings and recommendations in the report have highlighted some opportunities to improve the administration of the RAESP service, which the Department accepts and will implement.
The Department is managing the transition of related services that are currently funded under the Commonwealth’s existing MUNS program and for which the State will assume responsibility on 1 July 2015. The Department will implement actions arising from this report in conjunction with the integration of RAESP and MUNS services.
In addition to areas where the Department can improve the administration of services, the report also highlights some important issues related to the adequacy of existing essential services infrastructure to provide acceptable standards of service, in particular water quality in some communities.
While the Department takes appropriate action to address identified short term water quality risks including the supply of bottled drinking water to affected communities, a permanent solution to long term and ongoing water quality risks is outside the scope of RAESP and will require significant investment. In this regard the Department notes the unilateral withdrawal of the Commonwealth from its historical funding role.