The Child Care Subsidy (CCS) aims to improve access to early childhood education and care. The Department of Education is responsible for approving child care providers and services to access CCS. CCS is paid directly to approved providers by Services Australia and passed on to eligible families in the form of fee reductions.

This audit provides assurance to Parliament on the effectiveness of the management and oversight of compliance activities within CCS by the Department of Education and Services Australia. 

The audit made seven recommendations to improve the management and oversight of compliance activities within the CCS: four to Education and three to both Education and Services Australia. Education agreed to all seven recommendations, and Services Australia also agreed to the three joint recommendations.

Key findings

• The management and oversight of compliance activities within the CCS is partly effective.
• Governance arrangements are partly effective. Education’s oversight of CCS compliance activities in Services Australia is not sufficient.
• The approach to compliance activities is partly effective. Both entities have effective approaches to prevention, but deficiencies were identified in monitoring and enforcement arrangements.