Services provided by non-government organisations but funded by government are often provided on condition that the use of funding and performance of the services can be audited or reviewed. The organisations that provide these services are often also subject to other statutory or regulatory requirements, some of which are overseen by the departments responsible for the funding. This can lead to situations where the department has more than one interest in exercising statutory, regulatory or contractual powers and, consequently, a lack of clarity concerning the use of those powers.
The Department of Justice and Attorney General (‘the Department’), in reliance upon the Standard Terms of a Service Agreement, decided to conduct a financial and compliance audit of Sisters Inside Inc (‘Sisters Inside’). Sisters Inside objected to the scope of the audit, contending that the Department sought access to documents and information that did not relate to its funding of Sisters Inside’s activities. It also claimed that it had received information about ‘matters of concern’ from an undisclosed source and sought to use the audit procedure to investigate those matters. Sisters Inside successfully applied to the Supreme Court of Queensland for relief in respect of the audit request. The decision is available to read here.
- The background of the dispute and why it was important to Sisters Inside to resist the scope of the audit;
- The reasons given by the Supreme Court of Queensland for deciding that the audit request (as amended shortly before the hearing date) was not valid; and
- The consequences of the judgment for non-government organisations that are contracted to provided services by the State Government and possible future consequences of the judgment.