The Indigenous Australians’ Health Program (IAHP) was established in 2014 through the consolidation of four existing Indigenous health funding streams administered by the Department of Health (the department). The IAHP aims to provide Aboriginal and Torres Strait Islander people with access to effective high quality, comprehensive, culturally appropriate, primary healthcare services in urban, regional, rural and remote locations across Australia. Primary healthcare services are usually the ‘entry point’ for persons into the broader health system and can be contrasted to services provided through hospitals or when people are referred to specialists.

The bulk of IAHP expenditure is via grants. Since 2015, IAHP primary healthcare grants totalling approximately $1.44 billion have been awarded with 85 per cent of this funding going to Aboriginal Community Controlled Health Organisations.

As at March 2018, a total of 164 organisations are receiving IAHP primary healthcare grant funding. In 2016–17, IAHP-funded services provided primary healthcare services to an estimated 352,000 Indigenous Australians. This represents 54.2 per cent of the estimated total Indigenous population.

The IAHP was selected for audit because it is intended to contribute towards achieving the Indigenous health-related ‘Closing the Gap’ targets regarding life expectancy and infant mortality. The program represents the Australian Government’s largest direct expenditure on Indigenous primary healthcare.

The audit objective was to assess the effectiveness of the Department of Health’s design, implementation and administration of primary healthcare grants under the IAHP.

To form a conclusion against this objective, the ANAO adopted the following high-level criteria:

• Did the department design the IAHP primary healthcare components consistent with the Government’s objectives in establishing the IAHP?
• Has implementation of the IAHP primary healthcare components been supported through effective coordination with key Government and non-Government stakeholders?
• Has the department’s approach to assessing primary healthcare funding applications and negotiating funding agreements been consistent with the Commonwealth Grant Rules and Guidelines?
• Has the department implemented a performance framework that supports effective management of individual primary healthcare grants and enables ongoing assessment of program performance and progress towards outcomes?