Oranga Tamariki: Inquiry into procurement and contract management
Summary of our inquiry
Oranga Tamariki – Ministry for Children is responsible for caring for and protecting some of New Zealand's most vulnerable children. It delivers services to children and families in need through contracts with social service providers.
These contracts are worth about half a billion dollars each year. It is crucial that Oranga Tamariki manages these contracts well. Failing to do so might result in children and their families not receiving the support that they need when and where they need it.
We found that Oranga Tamariki was poorly prepared to carry out the 2024/25 contracting round. It did not have a strategic approach to procurement and contract management that was informed by a comprehensive understanding of providers, their services, or most importantly the needs of children and their families. It had not made material improvements to its contracting practices despite being aware of issues with them for some years.
Oranga Tamariki did not plan the contracting round well and left its decision-making until late in the process. It documented its decision-making poorly and its decisions were not adequately informed by evidence of how they would affect children and their families.
The effects of decisions on children and their families are still not known. Given that this is the core role of Oranga Tamariki, it is unacceptable for it to be in this situation.
What's in this report
Background to the contracting round
Going into the 2024/25 contracting round, Oranga Tamariki had not yet addressed known weaknesses it its practices. It was under financial pressure, forecasting that its spending would go over budget. An organisational restructure was running in parallel to the 2024/25 contracting round and finalised in July 2024.
Reconciliation process
Oranga Tamariki decided to fully recover any funding that it considered providers had not spent on services (known as reconciliation). Concerns raised by providers included that the approach to reconciliation was new, that it had not been adequately communicated or consulted upon, and that the process did not appear to be consistent or clear.
Contracted services plan
Oranga Tamariki did not plan the contracting round well and left its decision-making until late in the process. It documented its decision-making poorly and its decisions were not adequately informed by evidence of how they would affect children and their families.
Implementing the contracting decisions
We describe how Oranga Tamariki implemented its decisions. It is clear that decisions took providers by surprise and many aspects of the contracting round were not in line with good procurement or contract management practice.
Findings and recommendations
We provide our observations on the 2024/25 contracting round, including the effects on the community and providers, and make recommendations for improvement.
Events still unfolding
We set out our concluding remarks about what Oranga Tamariki told us it intends to do to improve its practices and the aspects that we intend to monitor.