Part 1: Introduction

Oranga Tamariki: Inquiry into procurement and contract management.

1.1
Oranga Tamariki – Ministry for Children (Oranga Tamariki) is a public service department that was established in 2017. It administers the Oranga Tamariki Act 1989. The Act's purpose is to promote the well-being of children, young persons, and their families, whānau, hapū, iwi, and family groups, including by:

  • setting up, promoting, or co-ordinating services;
  • supporting and protecting children and young people to prevent them from suffering harm, abuse, neglect, ill treatment or deprivation, or responding to those things;
    • assisting families and whānau, hapū, iwi, and family groups to:
    • prevent their children and young people from suffering harm, abuse, neglect, ill treatment or deprivation, or responding to those things; and
    • fulfil their responsibility to meet the needs of their children and young persons;
  • ensuring that children who need to be removed have a safe, stable, and loving home as quickly as possible and support to address their needs;
  • responding to alleged offending; and
  • assisting young people to transition out of care to independence.1

1.2
Oranga Tamariki also administers and oversees a substantial amount of public spending on contracting social service providers (providers) to achieve its purpose and functions. When it was established, Oranga Tamariki inherited responsibility for managing the funding and contracting of social services to support vulnerable children and young people from the Ministry for Social Development.2

1.3
In July 2024, concerns were raised with our Office about how Oranga Tamariki had managed contracts with providers – in particular, about how it had managed the 2024/25 contracting round. The media also reported extensively on these concerns.

1.4
In October 2024, we published terms of reference for our inquiry (see Appendix 1).

Why we were interested in this matter

1.5
Public money must be spent prudently and with due attention to transparency, integrity, accountability, and value for money. When public organisations use third-party providers, they need robust procurement and contract management to ensure that procurement spending provides New Zealanders with the best possible outcomes and value for money.

1.6
The services provided under contract support some of New Zealand's most vulnerable children and their families. Therefore, it is critical that Oranga Tamariki manages the contracts well.

1.7
Because of the critical importance of these services, the concerns raised, and the significant amount of funding involved, the Auditor-General decided to carry out an inquiry.

1.8
Appendix 2 sets out what we mean by procurement and contract management, the importance of good procurement and contract management, and additional considerations in relation to social services and te Tiriti o Waitangi.

What we looked at

1.9
We examined the process Oranga Tamariki used to renew, vary, or allow to expire contracts with providers for 2024/25. This included:

  • the processes, frameworks, and practices Oranga Tamariki had to support its decision-making;
  • the criteria and evidence Oranga Tamariki relied on to make its decisions, including the contracts' monitoring and reporting requirements;
  • what Oranga Tamariki communicated to providers – in particular, what it told providers whose contracts it would vary or allow to expire; and
  • what planning Oranga Tamariki did to ensure a smooth transition to new contracts and to exit from others.

1.10
Our inquiry focused on the processes, decisions, and actions that Oranga Tamariki took between 1 July 2023 and 30 June 2024. However, we also considered subsequent events to the extent that they were relevant.3

What we did

1.11
In carrying out our work, we:

  • examined documents that Oranga Tamariki provided and/or were in the public domain;
  • met with Oranga Tamariki officials who were involved in the 2024/25 contracting round;
  • interviewed a range of providers who had been affected by decisions in the 2024/25 contracting round;
  • reviewed information from providers;
  • heard from Te Pai Ora Social Service Providers Aotearoa (Te Pai Ora SSPA) in its role as a representative body for more than 240 providers in the sector; and
  • heard from other parties with an interest in our inquiry because of their relationship with Oranga Tamariki as an oversight body or as a te Tiriti o Waitangi partner, including Aroturuki Tamariki – Independent Children's Monitor, Mana Mokopuna – Children & Young People's Commission, and representatives from Waikato-Tainui.

What we did not look at

1.12
We did not examine the policy decisions or strategy underpinning the contracting decisions Oranga Tamariki made. Commenting on government policy decisions is outside the Auditor-General's mandate.

1.13
We also did not examine the merits of individual decisions about whether to continue to contract with any particular provider or the amount of funding a provider ought to receive.

1.14
Our inquiry function relates only to public organisations. We have no role in looking at the activities of private individuals or private organisations. This means that our focus was on Oranga Tamariki and not on the performance of providers.

Structure of this report

1.15
In Part 2, we describe the key drivers of the 2024/25 contracting round.

1.16
In Part 3, we describe the process Oranga Tamariki used to recover funds from providers for 2023/24.

1.17
In Part 4, we describe how Oranga Tamariki decided which providers it intended to contract with in 2024/25.

1.18
In Part 5, we describe how Oranga Tamariki implemented its decisions.

1.19
In Part 6, we provide our observations on the 2024/25 contracting round, including the effects on the community and providers, and make recommendations for improvement.

1.20
In Part 7, 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.

1: See section 4 of the Oranga Tamariki Act 1989.

2: The Ministry for Social Development retained responsibility for funding and contracting other social services, such as services to help people build financial capability. The Ministry also retained responsibility for assessing whether providers meet social services accreditation standards.

3: For example, some important decisions in the 2024/25 contracting round were not made until July 2024. Further, how Oranga Tamariki implemented those decisions are examples of its procurement and contract management practices.