DHS Victoria pulled the contract on a NFP, CSO.

ABC Report - November 2011

The State Government terminated its contract with Community Connections Limited, after the DHS found a series of breaches had not been addressed.

The group runs a care home for 12 children at Warrnambool.

The chief executive of Community Connections, Bruce Du Vergier, says the breaches have been addressed and is seeking legal advice.

"They have no reason whatsoever, no substantial reason to withdraw the contract of residential care program," he said.

The assistant secretary of the Australian Services Union (ASU), Lisa Darmanin, says the moves validate its concerns about the organisation.

"The ASU is pleased to see the Department of Human Services take some action on concerns raised over an extended period of time," she said.

The DHS will transfer care of the children to other agencies in the region from December 6, 2011

LISA Inc. maintains CSOs can be made accountable for service level and quality through the potential to terminate service contracts, in contrast with DHS direct care service which have no such potential for accountability for service provision.

Although this example demonstrates the DHS do have the guts to terminate CSO contracts, there should be an independent of government tribunal to review such cases