The audit objective was to assess the effectiveness of the Department of Education, Employment and Workplace Relation's administration of the Digital Education Revolution program, focusing on the major component of the program, the National Secondary Schools Computer Fund.


Digital Education Revolution

1. In January 2007, the then Opposition announced its intention to make policy on education one of three main priorities of a future Federal Labor Government. In a policy paper on the critical link between prosperity, productivity growth and human capital investment, the Labor Party (Labor) committed itself to ‘lift the quantity of Australia's investment in education and the quality of education outcomes'[1] through an Education Revolution.

2. A key policy under Labor's education reform agenda, which it has pursued in government, is the Digital Education Revolution (DER) program.[2]  The objective of the DER program is to contribute sustainable and meaningful change to teaching and learning in Australian schools that will prepare students for further education, training and to live and work in a digital world.

3. The main components of the $2.4 billion DER program are:

  • the National Secondary Schools Computer Fund (NSSCF) which provides for new information and communication technology (ICT) equipment for all secondary schools with students in Years 9 to 12 ($1.4 billion plus $807 million to cover the legitimate and additional costs of implementing the NSSCF);
  • the High Speed Broadband to Schools initiative to support the deployment of high speed broadband connections to Australian schools ($100 million); and
  • the Digital Strategy for Teachers and School Leaders initiative to support ICT professional development ($40 million).

4. As the Australian Government department responsible for education, the Department of Education, Employment and Workplace Relations (DEEWR) was given responsibility for implementing the Government's DER program policy. From the outset of the DER program, the Government recognised that success would require a partnership approach with stakeholders in the states and territories. In this context, DEEWR works through state and territory education departments and Block Grant Authorities[3] (collectively referred to as ‘education authorities') to pursue the achievement of program objectives. These education authorities are responsible for working with government and non-government schools respectively, to deliver the program.

National Secondary Schools Computer Fund

5. The NSSCF accounts for a large majority of DER funding, and its implementation was given first priority among the components of the DER program. The objective of the NSSCF is to achieve a computer to student ratio of 1:1 for all Australian students in Years 9 to 12 by 31 December 2011. Under the DER program, the Government has also committed funding to sustain the 1:1 ratio through to 2013–14. NSSCF funding is to be used by schools, or education authorities on their behalf, to provide for new information and communications technology (ICT) equipment for secondary schools with students in Years 9 to 12.

6. The Government committed to opening the first application round of the NSSCF within 100 days of being sworn into office, and reached agreement with education authorities to conduct an audit of ICT in their schools so that initial funding could be directed to where it was most needed and where there was capacity to use it effectively. Three application based funding rounds took place in 2008 and 2009, with $295 million in funding provided to progress schools in need to a computer to student ratio of 1:2. The Government has also commenced provision of a further $1.1 billion in funding to education authorities on a per capita basis[4] for schools to achieve and sustain a computer to student ratio of 1:1.

7. The DER program policy approved by the Government in December 2007 did not include provision for the full costs associated with the effective deployment and support of the computers funded through the NSSCF.[5] In December 2007, the Government sought through the Council of Australian Governments (COAG), but did not gain, the commitment of the states and territories to provide for all the costs of technical training and support, maintenance of the computers, and infrastructure support such as electricity and suitable learning spaces.

8. Subsequently, the Review of Legitimate and Additional Financial Implications of the National Secondary Schools Computer Fund (the On-costs Review) estimated the full costs of computers funded through the NSSCF. Following agreement by COAG in November 2008 and based on the On-costs Review's findings, the Government announced an additional $807 million in funding for the on-costs of computers purchased using NSSCF funds. On-costs include expenditure necessary to support computers, and install and maintain network equipment. Funding agreements

9. For the three applications based funding rounds of the NSSCF, the Government entered into funding agreements with education authorities to provide funding for successful applicant schools. Funding was provided upfront as a lump-sum, subject to education authorities meeting defined terms and conditions, among them, reporting to the department on a six monthly basis on schools' progress in the purchase and installation of computers.[6]  Education authorities undertook centralised purchasing processes, or devolved responsibility for ICT purchases to schools, depending on their particular circumstances.

10. The DER program is now being delivered under the new federal financial relations framework[7], including through the National Partnership Agreement (NPA) on the Digital Education Revolution.[8] The NPA sets out high level governance arrangements for the delivery of the program, including: objectives, outcomes and outputs; roles and responsibilities; and performance benchmarks and reporting.

11. The devolved delivery of the program by education authorities under the federal financial relations framework has been governed by the establishment of bilateral agreements with government education authorities (under the NPA), and separate funding agreements are in place with non-government education authorities. Under these agreements, education authorities are paid twice yearly, subject to defined terms and conditions, for all schools to achieve a computer to student ratio of 1:1 by 31 December 2011 and then sustain the ratio. Payments are linked to the completion of an education authority implementation plan, and DEEWR's acceptance of six monthly progress reports.[9]

Audit approach

12. The audit objective was to assess the effectiveness of the Department of Education, Employment and Workplace Relation's administration of the Digital Education Revolution program, focusing on the major component of the program, the National Secondary Schools Computer Fund. To form a conclusion, the ANAO assessed whether DEEWR:

  • has established sound administrative and payment arrangements that are consistent with government policy; properly manages administrative and payment arrangements;
  • and effectively monitors and reports on delivery and outcomes.

13. The main component of the ANAO's fieldwork was conducted in DEEWR's National Office in Canberra. The ANAO also met with selected education bodies, and visited government schools in New South Wales and Victoria to observe approaches adopted using computers purchased under the NSSCF.

14. The ANAO sought feedback from each of the 22 education authorities on aspects of DEEWR's administration of the NSSCF; and 21 education authorities provided feedback. Additionally, a survey was conducted of a random sample of 450 school principals across Australia that participated in the NSSCF application rounds, in order to obtain their opinions on aspects of the department's administration of the fund. Responses to the survey were received from 175 schools, a response rate of 39 per cent.

Overall conclusion

15. The Digital Education Revolution (DER) is a substantial program aimed at changing teaching and learning in Australian schools, to prepare students for further education and training; and to live and work in a digital world. The major component of the DER program is the National Secondary Schools Computer Fund (NSSCF), which provides funding to take all Australian secondary schools to a computer to student ratio of 1:1 for students in Years 9 to 12, by 31 December 2011. The NSSCF was initially devised to provide funding for new ICT in schools, before being extended to also provide for the on-costs associated with computers purchased, at a total cost of some $2.2 billion. In early 2008, at the outset of the NSSCF, 90 per cent of schools reported a computer to student ratio of worse than 1:2.

16. The department's administrative arrangements have had to support achievement of the NSSCF objective, while maintaining accountability for the use of government funding. This has involved DEEWR devolving delivery responsibilities to education authorities and schools best placed to undertake them; and the department establishing funding terms and conditions, and monitoring and reporting on delivery and progress.

Progress to date

17. Progress towards the objective of the NSSCF has involved a collaborative effort across governments, education authorities and schools. Education authorities have reported solid progress to date in the installation of computers purchased using NSSCF funding, indicating around 268 000 computers were installed from the three funding rounds.[10] For Round 1, a reported 97 per cent[11] of schools that received funding to achieve a computer to student ratio of 1:2 had done so by the target date of 30 June 2010. Further, as at September 2010 a reported 80 per cent of schools from Rounds 2 and 2.1 had already achieved the 1:2 ratio, even though they were not required to do so until March 2011. Nevertheless, under the DER timelines, following the conclusion of application round funding agreements, schools must transition to a computer to student ratio of 1:1 in a relatively short period of time. As at 30 September 2010[12], the reported computer to student ratio across Australia was slightly better than 1:2, with 15 months remaining for schools to install another 438 000 computers to reach a 1:1 ratio by 31 December 2011.[13]  Education authorities' progress, for students in their state/sector, towards the computer to student ratio of 1:1 ranged from around 1:1.3 through to around 1:2.5.[14] In this context, the then Minister for Education agreed to education authorities committing program funds by 31 December 2011 and completing computer installation early in 2012.

18. Early indications from the ANAO survey of school principals regarding the impact of the NSSCF on teaching and learning are broadly positive. School principals noted some encouraging changes in students' access and use of computers, engagement, and preparation for a digital world. There is also evidence from education authorities that the NSSCF has provided a catalyst for the modernisation and integration of ICT infrastructure in the secondary schooling sector.

Administrative effectiveness

19. To meet the Government's funding priorities and timetable for the NSSCF, DEEWR moved quickly to design and implement processes aimed at determining need and assessing capacity within schools eligible for funding. This enabled the department to open the first application round within 100 days of the Government being sworn into office, and to invite those schools determined as most in need of funding to apply.

20. The department, in partnership with education authorities, administered three application rounds and, by mid 2009, had allocated up-front funding for around 300 000 computers in 2802 schools across the government, Catholic and independent sectors, to achieve a computer to student ratio of 1:2 in the schools. Subsequently, the department established ongoing funding arrangements with education authorities for all schools designed to achieve and sustain a computer to student ratio of 1:1. The importance of achieving value for money in delivering the NSSCF was recognised by the department, with agreements and guidelines encouraging centralised purchasing and collaboration across states and sectors. The extent to which education authorities were able to maximise their purchasing power through the achievement of economies of scale was, however, dependent upon their size and the model in place for procurement.

21. Overall, DEEWR's administration of the DER program has been effective in supporting progress through a partnership approach towards the NSSCF's objective of increasing the computer to student ratio for students in Years 9 to 12. Nevertheless, there were some aspects of the department's oversight of implementation that could have been strengthened. While DEEWR worked with education authorities to collect preliminary survey computer data as a basis for allocating application round funding, and required education authorities to verify and provide assurances about the accuracy of the data, DEEWR did not perform simple checks on the data to provide assurance over data quality. Further, unlike agreements with government education authorities, those with the non-government sector do not require annual acquittal of the use of funds, nor reporting on education authorities' or schools' on­going investment in schools' ICT.[15]  More broadly, establishing one or two intermediate progress milestones for education authorities, based on their respective implementation plans, would have assisted DEEWR and stakeholders to better gauge progress towards the 1:1 target ratio and identify any delivery problems sufficiently early to allow remediation.

22. The implementation of programs premised on a partnership approach that involve the devolution of key implementation activities to funded organisations necessarily requires administering agencies to strike an appropriate balance between accountability and devolved responsibility. While the provision of flexibility to funded organisations to determine how best to use funding to achieve agreed objectives supports innovation and capitalises on expertise, administering agencies remain accountable to responsible Ministers and the Parliament for the use of Australian Government funding. Opportunities for enhancement identified by the audit, and reflected in its recommendations, build on the DER program's partnership approach by seeking well-timed assurance over aspects of the program's delivery by education authorities, and strengthening of reporting on performance to stakeholders.

Key findings

Determining need and assessing capacity (Chapter 2)

23. DEEWR required accurate data to identify those schools most in need of ICT investment under Round 1 of the NSSCF, and to calculate the correct amount of funding for schools participating in application rounds. The department, in consultation with education authorities, developed a preliminary survey of ICT needs and provided the instrument to authorities to capture required data for each school within their state/sector.

24. Responses provided by school principals on the ease with which they completed the department's preliminary survey of computers in schools were generally positive. DEEWR relied on verification of preliminary survey data by education authorities. Within the time available, DEEWR could have improved the reliability of the survey data by: providing brief guidance on how to categorise different types of computers (such as leased computers); using simple systems­based data validation checks to minimise reporting errors; and following-up on unusual school computer numbers. This would have increased assurance over the appropriateness of allocated funding amounts and reduced the number of preliminary survey data revisions that occurred over time.

25. Discrepancies in preliminary survey data identified by the department's internal auditors in early 2009 and by the ANAO using the most up-to-date preliminary survey data in mid 2010, on which funding decisions have been based, are yet to be addressed.[16]  The ANAO's testing revealed that there were 460 instances (16 per cent of 2929 schools) where schools had provided anomalous data. For the majority of these instances, the size of data discrepancies was in the vicinity of 10 computers ($10 000 in application round funding) or less, although some discrepancies were greater.

26. The administration of the application rounds for the NSSCF by DEEWR was generally sound, with the department providing suitable guidance material in a timely manner to assist education authorities and schools participating in these rounds. The assessment of applications was devolved to education authorities, with the department quality assuring a selection of applications from each round. While DEEWR's quality assurance process enabled it to check education authorities' assessments of selected schools' applications based on data provided by schools, it did not allow the department to assess the accuracy of schools' application data.

27. The application process led to consideration by education authorities and schools of the factors needed to be put in place to support additional ICT. A large majority of schools advised through their applications that they met relevant capacity requirements (such as learning spaces to accommodate additional computers). Nevertheless, as would be expected, there was variability in schools' readiness to purchase and install NSSCF computers.

28. DEEWR advised that the approach adopted was for education authorities to be the bodies responsible for ensuring schools' readiness for the installation of computers, and considered that adopting a more hands on role in this regard would have been detrimental to progress.[17]  As mentioned above, education authorities reported almost all successful Round 1 schools had installed computers to reach the ratio of 1:2 by the target date, indicating that variability in the readiness of these schools at the outset of the NSSCF did not affect their achievement of the target ratio.

Establishing delivery arrangements (Chapter 3)

29. The NSSCF involves a large number of separate agreements between the Australian Government, states and territories and the non-government education sector. This reflects the evolving nature of the fund, including supplementation for on-costs and the transition to an NPA arrangement under reforms to the federal financial relations framework. The complexity of accountability arrangements and administration has, as a result, increased, but will become more streamlined over time as application round funding agreements lapse. Importantly, DEEWR took the opportunity presented by the introduction of an NPA to consolidate strategic planning for the DER, including by emphasising the importance of four strands of change: leadership, infrastructure, learning resource and teacher capability.

30. The issue of responsibility for the on-costs associated with installation of computers purchased under the NSSCF was of significant concern to education authorities, with one authority withdrawing from a funding round due to the uncertainty. There was, however, limited opportunity for DEEWR to consult with education authorities on the issue of on-costs prior to the Government first agreeing the components of the DER (which excluded on­costs) in December 2007. DEEWR briefed the then Minister for Education on the issue of on­costs on several occasions during NSSCF implementation in 2008, including the positions taken by states and territories, and provided potential options to resolve the issue. On 29 November 2008, following the completion of a review into the financial implications of the NSSCF, the Government announced COAG's agreement to additional Australian Government funding of $807 million to assist education authorities with on-costs associated with ICT purchased under the fund.

31. The funding agreements established for the NSSCF included provisions to protect the Australian Government's interests, which were primarily designed to ensure that public money was used for its intended purpose. Steps taken by DEEWR included: articulating the purpose of the funding and related deliverables; outlining funding priorities and uses; and requiring progress reporting by education authorities, particularly in relation to the purchase and effective deployment of ICT. However, funding agreements with non­government education authorities to achieve the 1:1 ratio do not provide for annual audited financial acquittals. DEEWR should also explore opportunities with education authorities for non­government schools to report on their funding contribution to maintain the computer to student ratio of 1:1—education authorities are required to contribute 30 per cent of the total required future funding. These steps would assist DEEWR in obtaining timely assurance over the use of funding and complementary state/sector funding.

32. DEEWR provided up-front, lump sum application round and on-costs funding to education authorities to facilitate progress against the NSSCF objective. Subsequently, under bilateral and funding agreements with education authorities to achieve a computer to student ratio of 1:1, DEEWR has moved to six monthly payments on ‘acceptance' of education authorities' progress reports. The basis for DEEWR's ‘acceptance' of progress reports and making of subsequent payments would have been strengthened by agreement on and monitoring against, one or two intermediate progress milestones, established through education authorities' implementation plans under the bilateral and funding agreements.

33. DEEWR was aware of the importance of value for money outcomes from the outset of the NSSCF and established mechanisms through agreements and guidelines to support the achievement of value for money. In particular, the department encouraged education authorities to adopt centralised purchasing processes for schools to achieve economies of scale and to collaborate across states and sectors. Where economies of scale were realised through bulk purchasing or other arrangements, DEEWR allowed the use of residual funds for the effective deployment of new computers and the purchase of complementary ICT equipment. The extent to which education authorities were able to maximise their purchasing power was closely linked to the size of the education authority and the model in place for procurement—that is, centralised versus decentralised purchasing. Consequently, the value for money outcomes for large education authorities that use a centralised purchasing model differed significantly from those obtained by smaller education authorities that have devolved purchasing to the school level.

Payments (Chapter 4)

34. Under the NSSCF, DEEWR will pay over $2 billion to education authorities from 2007–08 to 2012–13. Overall, DEEWR has effectively administered funds for each of the application rounds, on-costs, and in relation to payments under bilateral and funding agreements with government and non-government education authorities respectively. Monitoring and reporting (Chapter 5)

35. In accordance with the Australian Government's budget reporting framework, agencies are required to establish in their Portfolio Budget Statements (PBS) deliverables and key performance indicators for each program.[18] In its 2010–11 PBS, DEEWR has not established key performance indicators to measure program effectiveness for the DER. The sole key deliverable included in the statements for the DER—‘number of schools assisted'—has a target of 2900 schools assisted in 2010–11. The absence of a balanced set of key deliverables and performance indicators for the DER, including the NSSCF, reduces the quality of DEEWR's annual reporting on program progress to stakeholders. The inclusion of a more representative set of performance information would assist the department to more effectively measure and communicate program progress.

36. The department has closely aligned its monitoring arrangements with the DER program and NSSCF objectives, through the provision of regular progress reports by education authorities focusing on computer installations and the four strands of change. As referred to above, under bilateral and funding agreements to achieve a computer to student ratio of 1:1, the department did not require education authorities to establish one or two interim progress milestones based on their implementation plans, against which education authorities would subsequently report. Such an approach would have assisted DEEWR to monitor progress and report to stakeholders on performance, and to identify implementation problems sufficiently early to allow remedial action to be taken.

37. DEEWR monitors the receipt of progress reports and computer installation data, and where necessary follows-up with education authorities where information is inconsistent, incomplete or problematic. DEEWR also draws on community feedback on the rollout of computers in schools to help identify unreported implementation issues. DEEWR proposes a review of computer installation numbers be conducted in early 2012 to verify that the computer to student ratio of 1:1 has been achieved. An audit of a small, targeted sample of schools would increase assurance over progress and provide valuable intelligence to inform future policy advice.

38. Analysis of education authorities' progress reports for computer installations, and the results of the ANAO's survey of school principals show that the majority of schools are progressing well towards the effective use of additional ICT in classrooms. Nevertheless, a small proportion of principals that responded to the ANAO survey raised ongoing issues in relation to achieving the 1:1 target ratio in time and the effective use of computers installed under the NSSCF. Key matters raised included the need to upgrade infrastructure and improve teacher training.

39. Evaluating the DER, as a multijurisdictional program focused on changing teaching and learning in schools, is important and inherently difficult. The timetable for NSSCF implementation led to focus on key administrative activities, with an evaluation framework (and measurement approaches) considered later following completion of more detailed DER strategic and implementation planning. Nonetheless, it has taken some time for an evaluation framework to be finalised and DEEWR is continuing to work in this direction. Earlier investment in evaluation methodologies and associated data as the program evolved would have provided a stronger foundation for measuring the impact of the DER, particularly given the proposed focus of an evaluation of the four strands of change: leadership, infrastructure, learning resources and teacher capability.

Summary of agency response

40. DEEWR provided the following summary response to the audit report: The ANAO recognises the significant achievement by the Department of Education, Employment and Workplace Relations (the Department) in quickly establishing efficient and inclusive processes to implement the Fund. The ANAO survey of school principals provided early indications that the Fund is having a positive impact on teaching and learning within schools, and that students are becoming more engaged due to students' increased access to computers. The Report states that sound progress has been made in implementing the Fund, with 97 percent of schools achieving the computer to student ratio of 1:2 in Round 1 and 80 percent of schools achieving the 1:2 ratio in Rounds 2 and 2.1 in advance of the March 2011 deadline.  The Department agrees with the recommendations made in the report. The Report acknowledges the evolving nature of the Fund and the complexity of the accountability and administration that exists. The Report indicates that the Department has effectively administered funds for each of the application rounds, on-costs, and in relation to payments under bilateral and funding agreements with government and non-government education authorities respectively. The Department notes the comments on the evaluation of the DER and adds that monitoring of the program has been undertaken from the beginning of implementation and will be central to the evaluation of the DER. The Department expects a DER Evaluation Strategy, endorsed by government and non-government education bodies, to be finalised in early 2011.

41. DEEWR agreed with each of the three recommendations in this report.


[1] Australian Labor Party, January 2007, The Australian economy needs an education revolution, p. 27.

[2] Labor released its DER election policy in early November 2007, which was to provide capital grants to government, Catholic and independent secondary schools and schooling systems to assist them to provide world class ICT for every secondary student in Years 9 to 12.

[3] Block Grant Authorities (BGAs) are bodies that represent non-government schools in the states and territories for capital funding purposes. There are 14 BGAs, one for each of the two territories that represents both the Catholic and independent sectors, and two in each state (one for Catholic schools and another for independent schools).

[4] That is, based on students in Years 9 to 12 from the 2007 Schools Census.

[5] The Labor Government was sworn into office on 3 December 2007. Cabinet met for the first time on 4 December 2007, at which time it approved the DER policy.

[6] On-costs funding was also provided to education authorities as a lump sum payment, under a separate funding agreement.

[7] The new framework for federal financial relations, which commenced on 1 January 2009, aims to provide clearer specification of the roles and responsibilities of each level of government so that the appropriate government is accountable to the community. It also aims to provide more transparent reporting of outcomes and outputs to drive better service delivery and reform.

[8] The states and territories are signatories to the NPA but the Block Grant Authorities are not.

[9] The progress reports include details on installation of computers by schools, and on addressing the four strands of change: leadership, infrastructure, learning resources and teacher capability.

[10] Data reported for: Round 1 is as at 30 June 2010; and for Rounds 2 and 2.1 is as at 30 September 2010.

[11] There were legitimate reasons for another two per cent of Round 1 schools not meeting the 1:2 ratio by the required date. Funding requirements had changed for nine schools; seven schools had computers reallocated due to student movements; one school had been closed; and the registration of one school had been suspended.

[12] Data reported for: Round 1 is as at 30 June 2010, Rounds 2 and 2.1 is as at 30 September 2010, and for the DER Bilateral and funding agreements is as at 15 July 2010.

[13] This estimate does not allow for replacement of broken computers or growth in student numbers.

[14] Within states/sectors some schools have already achieved the computer to student ratio of 1:1.

[15] Education authorities are required to contribute to maintenance of effort of 30 per cent of the total required future funding to sustain the computer to student ratio of 1:1.

[16] The reported number of desktop/laptop computers for student use (for curriculum use only) must equal the reported number of desktop/laptop computers that are less than/greater than 48 months old as of 30 June 2008. However, one in six schools provided conflicting data.

[17] Round 1 funding agreements provided education authorities two years for schools to achieve a computer to student ratio of 1:2. Although for Round 1, education authorities (excluding the New South Wales Department of Education) were required to expend, or make reasonable efforts to expend 40 per cent of funding within six months.

[18] Deliverables represent the goods and services produced and delivered by the program in meeting its objectives, while key performance indicators represent the primary means by which agencies address and achieve government outcomes. Consequently, reporting on program performance provides stakeholders, including government, with an indication of the relative success of a particular program in achieving its outcomes.