An organisation co-directed by Noel Pearson came close to losing its $24 million funding agreement for failing to deliver jobs to Aboriginal people in Cape York.

A Government letter leaked to the ABC reveals the Department of Prime Minister and Cabinet wrote to Cape York Employment (CYE) in October last year saying its performance was “unsatisfactory” and “needed to improve” since as early as July 2015.

The department wrote in October last year that this surmounted to a “serious breach” of its federal funding agreement.

The documents are addressed to CYE’s executive general manager, Fiona Jose and Duncan Murray, CEO of Cape York Partnerships — which owns Cape York Employment.

Prominent Indigenous figure Mr Pearson is one of the founding directors of the organisation.

The “breach notice” told CYE it had:

• Not conducted services to a high professional standard
• Not met performance targets
• Not complied with a “performance improvement plan”

Cape York Employment is the Commonwealth’s “Work for the Dole” provider in remote communities Coen and Aurukun, in far north Queensland.

It has been granted — on a fee-for-services basis — approximately $24 million in a five year Government contract, expiring June next year.

However, after more than a year of performance deemed “unsatisfactory” the Department of the Prime Minister and Cabinet issued this warning:

“Termination of the Funding Agreement or reducing the scope of the Funding Agreement [are options] being seriously considered.”

Breach letter ‘as draconian as it gets’

Professor Jon Altman, of the Centre for Aboriginal Economic Policy Research, said Cape York Employment or its CEO should be “deeply concerned” by the letter.

“The Commonwealth is saying they may terminate the contract,” he said.

“It really is as draconian as it gets in terms of a breach notice from the Department of Prime Minister and Cabinet.”

Mr Pearson did not answer the ABC’s requests for an interview but wrote for News Corp that the breach notice must be seen in the context of other providers.

“My understanding is that 54 of the 60 providers received similar notices,” he said.

However, the Department of Prime Minister and Cabinet told the ABC that was not the case, saying “the vast majority of providers have not been breached for under-performance”.

Professor Altman said the letter was “a real issue for Indigenous job seekers in Aurukun and Coen”.

According to overall performance assessments attached to the breach notice, “Cape York employment seems to be at the very worst end of the spectrum in terms of delivering outcomes,” he said.

CYE says problems are fixed

Mr Pearson said in The Australian the problems identified “were administrative compliance issues that have been turned around and the breaches fixed”.

However, Duncan Murray from Cape York Partnership, which owns CYE, and CYE’s general manager Fiona Jose told the ABC the organisation remains in breach of its funding agreement but has improved.

Mr Murray and Ms Jose supplied the ABC a letter from Department of Prime Minister Cabinet written to CYE in January. It states:

“CYE’s results against the breach notice targets demonstrates significant improvement in CYE’s performance and indicates that CYE will likely be able to perform its obligations under the Funding Agreement in the future.”

MP calls for investigation into Pearson network

But Far North Queensland MP Warren Entsch — a longtime critic of Mr Pearson’s welfare reform agenda — remains highly sceptical of the way the organisation is run.

“I think it is a disgrace that you have an organisation like this, that is putting their hands out, getting paid so much for performing so little,” he said.

“These organisations exist because of an investment of taxpayer funds … [and] they don’t generate any income that we’re aware of.”

Mr Entsch’s criticism extends beyond Cape York Employment.

He believes many organisations linked to Mr Pearson’s efforts to break Indigenous welfare dependency have been a waste of taxpayer funds.

“It needs to be fully investigated and it needs to be done independently … we need to know exactly how much money has gone into these entities and how much value we’ve got out of these things,” Mr Entsch said.

– ABC