PUBLIC hospital reform wasn't the only issue put on the backburner at this week's Council of Australian Governments meeting in Brisbane. The Rudd government has also put off decisions about indigenous health.

This is disappointing because some of the recommendations in the final report of the National Health and Hospitals Reform Commission are worth pursuing.

The indigenous health sectoris plagued by a lack of accountability. The NHHRC has therefore proposed that a national Aboriginal and Torres Strait Islander health authority be establishedto assume complete responsibility for funding indigenous healthservices.

This is an overdue move in the right direction. A single authority responsible for indigenous health, combined with greater financial transparency, is an essential prerequisite for improving the delivery of health services to indigenous communities.

Commonwealth funding for indigenous-specific health programs has increased by 328 per cent in the past 12 years, from $115 million in 1995-96 to $492m in 2007-08, with no appreciable improvement in health outcomes.

Increased funding has failed to make any significant progress towards closing the appalling health gaps between indigenous and non-indigenous Australians because no one really knows where this money is going and what it is or is not achieving.

In an attempt to control where funding is going and to provide the illusion that it is targeting resources, the commonwealth government has channelled money into more and more indigenous health programs. Rather than leading to greater accountability, this has resulted in a mess of overlapping state and federal government programs. The delivery of these programs is equally complex, with Aboriginal Community Controlled Health Services vying with other government and non-government health services.

The result is waste and duplication in some areas and service gaps in others.

Proper accountability is next to impossible when, for example, one Aboriginal health service receives 42 different buckets of money, each with separate applications and reporting requirements.

Not surprisingly, while bigger services have the money and expertise to complete the paperwork, smaller services struggle tocomply.

The Department of Health and Ageing report Aboriginal and Torres Strait Islander Health Performance Framework 2008 shows that in 2005-06 only half of ACCHS fully met legal reporting requirements to the Office of the Registrar of Indigenous Corporation under the Aboriginal and Torres Strait Islander Corporations Act.

Unlike ORIC, the Department of Health and Ageing has the stick of being able to withdraw funding. But even this stick does not appear to be enough as the department's 2007-08 outcome report shows.

Despite significant additional support from the department, a number of Aboriginal and Torres Strait Islander health organisations were still considered to be of serious concern and at extreme risk of not managing their finances, leading in some cases to mismanagement and even fraud.

An administrator had to be appointed at the Biripi Aboriginal Medical Service in regional NSW (at a cost of $150,000 to taxpayers) when it was revealed that nearly all the staff, including the receptionist, had been given mobile phones and $400,000 earmarked for a building project was not used appropriately.

Another organisation was put in liquidation after it was found to have poor record keeping; it had also failed to hold an annual general meeting and its directors were unaware of its financial position.

The long list of Aboriginal and Torres Strait Islander corporations (not all ACCHS) in breach of their reporting requirements published on ORIC's website suggests that these are not isolated instances. ORIC says it will undertake compliance activities against all large corporations that do not report by December 31.

A single funder for indigenous health could make a real difference. But only if a non-negotiable requirement is accurate reporting, including how patient outcomes are related to the cost and quality of services provided.

Demanding greater accountability should not be confused with calls to abolish Aboriginal health services. Community-controlled services are not a bad idea in themselves. Diversity and cultural appropriateness can be important in meeting the complex health needs of indigenous people.

But the same standards that apply in the rest of Australia must also apply in indigenous Australia.

Mushy pledges by politicians about closing the gap are no substitute for greater financial transparency. Closing the accountability gap is the first step to better indigenous health.

Sara Hudson is a policy analyst with the Centre for Independent Studies. Her report Closing the Accountability Gap: The First Step towards Better Indigenous Health was released last week.

It's racist and a waste of valuable resources to pander to hopeless cases.