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Report on Financial Practices and Costs in Queensland's Residential Child Care Sector

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Review of Queensland's Child Safety System Details Financial Practices in Residential Care

A review commissioned by an inquiry into Queensland's child safety system has detailed financial practices within the state's residential care sector, including executive salaries and provider investments. The report precedes scheduled hearings on residential care costs, which have increased substantially over the past decade.

Report Overview and Commission Context

The Financial Review of Non-Family-Based Residential Care was prepared by the firm KPMG for the Commission of Inquiry into the Child Safety System. The report's findings were released ahead of two weeks of commission hearings focused on residential care costs.

The commission's final report and recommendations are scheduled for release on May 22.

Key Financial Findings

The review, which did not name specific providers, presented several financial observations:

  • Executive Compensation: The report found that some chief executives in the sector receive annual salaries between $400,000 and $679,000.

    • In one case, a CEO's salary was reported to constitute 21 percent of the provider's total revenue.

  • Provider Investments: The review identified instances of providers allocating funds to assets not directly related to care. Examples cited include one provider investing $242,000 in gold and $100,000 in cryptocurrency. The same provider was reported to own two Mercedes-Benz vehicles and to have paid $140,000 in dividends to its owners.

  • Financial Metrics: The report indicated that the profits reported by providers were an unreliable measure for analyzing their financial performance and service delivery.

Sector Funding and Structure

  • Funding Increase: Over the last ten years, the cost of residential care in Queensland has risen from $200 million to $1.2 billion per year.

  • Current Funding: For the 2024/25 financial year, 163 providers received funding, averaging $7.2 million each. The top 15 providers accounted for half of the total residential care funding.

  • Licensing Status: Of the 163 providers, 125 were unlicensed, representing 77 percent of all providers. Licensed services are assessed under the Human Services Quality Framework (HSQF). Unlicensed providers, often utilized for immediate or specialized placements, are monitored by the department but are not subject to the same certification process.

Government Response and Policy Direction

Queensland's Minister for Child Safety, Amanda Camm, described the report's findings as concerning for vulnerable children. The minister stated the government is working to transition from high-cost, for-profit individual placement supports to longer-term contracts.

Minister Camm acknowledged risks associated with ending existing contracts but emphasized the goal of moving children into stable placements.

The government has terminated one provider's contract and stated it will refer any evidence of corrupt or criminal behavior to the appropriate authorities. A stated policy aim is to increase licensed and fostering kinship care placements.

Sector Context

Approximately 12,500 children are in out-of-home care in Queensland, with about 2,200 of those children residing in residential care facilities.