Queensland’s Department of Child Safety has given tens of millions of dollars to unlicensed residential care providers in recent years, a hearing has heard.

In the case of one provider, which had almost 80 children under its care, an estimated $35 million in funding was provided.

The inquiry heard the unnamed business does not hold a license despite being a provider for the department since December 2022.

The commission of inquiry, announced in May last year, was launched to review and fix systemic issues that allowed the sector to deteriorate, leading to inadequate outcomes for vulnerable children in its care.

A man in a suit sitting in a high-back leather chair at a timber bar with microphones on it.

Paul Anastassiou, KC is hearing evidence in the Commission of Inquiry into child safety. (AAP: Darren England)

In Queensland, providers of residential care can be licensed or unlicensed. 

Licensed services are certified under the Human Services Quality Framework, while unlicensed providers, which are often used for immediate or specialised placement, are regulated and monitored by the department, but not subject to certification assessment processes.

Unlicensed providers still have to comply with minimum accreditation standards.

Deputy director-general for the Department of Families, Seniors, Disability Services and Child Safety Bernadette Harvey told the hearing that attaining a licence could be a lengthy endeavour.

“That can take some time for them to go through that process,” she said.

The inquiry heard less than one Individual Placement and Support-only provider has been licensed per year since 2013.

Asked about “a flurry of activity” in the licensing department since the commission of inquiry was announced, Ms Harvey denied the two were linked. 

A woman in brown jacket and glasses speaking at an inquiry

Bernadette Harvey told the inquiry obtaining a licence could be a lengthy affair. (Supplied)

However, she acknowledged the department “did increase staffing to the licensing team … that provided some capacity for that work to occur”.

She told counsel assisting Tom Diaz that 67 per cent of children in care were now with licensed providers. 

She said eight per cent of children were being cared for by unlicensed providers.

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This week’s hearings heard financial issues around the placement of children in staffed group homes — instead of kinship or foster care.

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In the 2024-25 financial year, 163 providers received an average of $7.2 million in funding for delivering residential care services in Queensland.

The review found the top 15 providers had received half of the total residential care funding.

Of the 163 providers, 125 were unlicensed, a group that has been increasing in size in the past four years and, in the last financial year, accounted for 77 per cent of all providers.