This edition of the Update covers the following topics:
- New Commonwealth Grants Guidelines and what they mean
- Common Ways of Doing Business - risk assessments and new funding agreements
- Improving the use of performance indicators in the new funding agreements
- What’s new and what’s different in the funding agreements?
- National COMPACT
- ABS Community Survey
Commonwealth Grant Guidelines
On 1 July 2009 the Australian Government released new guidelines promoting the consistent, transparent and accountable administration of Commonwealth grants. These new guidelines provide a framework for the administration of grants by all Australian Government portfolios, and contain new legislative requirements for a grant approver to record the basis for their approval.
The new regulations will make it a requirement to act in accordance with the guidelines when administering grants and require all officials to record the basis on which they are satisfied that approving particular grants is an efficient and effective use of public money.
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Common Ways of Doing Business
The FaHCSIA Common Business Model for Grants Management commenced implementation from April 2009 and is designed to simplify the management of grants and reduce administrative burden on providers while continuing to ensure that proper accountability is in place. This Common Business Model has been developed to be consistent with the principles of the new Commonwealth Grant Guidelines.
Reporting is made easier through the Standard Performance Framework which focuses on the achievement of outcomes and the new suite of funding agreements which promotes appropriately targeted contractual arrangements. All of this is underpinned by an enhanced risk management approach, targeting our interaction with providers to those areas which pose the greatest risk to the successful delivery of programs.
The FaHCSIA Program Risk Framework is based around five critical success factors:
- Governance - ensuring that roles and responsibilities are clear and processes are in place for decision making.
- Financial Management - ensuring that appropriate financial management processes are in place and that financial reporting and acquittals are timely and accurate.
- Viability - ensuring that programs are able to be delivered to those eligible and in the targeted communities.
- Performance Management - ensuring that agreed performance targets are met and reporting clearly indicates the achievement of outcomes.
- Issues and Stakeholder Management - ensuring that stakeholders are engaged in decision making and that issues/complaints are dealt with in a timely and equitable way.
FaHCSIA will be engaging with providers to gain assurances that the risks to success are being appropriately managed rather than focussing on inputs that providers manage as part of their ongoing organisational arrangements.
For providers this means that requirements in funding agreements will be tailored to focus on areas of higher risk in the critical success factors. The type of funding agreement will also depend on the size and nature of the programs they deliver on FaHCSIA's behalf. For example, larger more complex programs may require supplementary conditions to support delivery, however, for many low risk programs and low risk providers there will be a streamlining of processes. This will also mean that applying a risk based approach to data collection will see alternative methods and processes developed and implemented over time.
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Performance Indicators in the new Funding Agreements
In the May edition, we outlined the changes to FaHCSIA Outcomes and listed the seven new outcome statements for the department. During this process all programs in FaHCSIA reviewed performance measures in line with the new outcome statements and these will be reported in the 2009-10 Annual Report. The 2008-09 Annual Report will provide information in line with the previous four outcome statements.
Consistent with the FaHCSIA Outcomes and performance measures FaHCSIA has developed a standardised approach to developing and selecting performance indicators in new funding agreements. Performance indicators continue to be an essential tool for setting performance expectations and to enable funded organisations to show that they have met commitments to the community and to FaHCSIA for the activities delivered under the agreement.
A set of generic indicators is now being used to develop performance indicators across all FaHCSIA funded projects/services. The set of indicators is also being used in Indigenous specific funding programs across Government. The framework is based on results-based methodology and focuses on three areas of achievement:
- How much was done?
- How well was it done, and
- Did it achieve what was expected?
The generic indicators have the flexibility for program managers to tailor the indicators to specific projects so that they reflect the expected project scope, delivery requirements and agreed deliverables and goals – each of which will continue to be explicitly defined in the funding agreement. An important part of the new approach is to ensure that performance indicators are clearly related to the program objectives and aligned to the agency and whole-of-government outcomes.
Prior to signing a funding agreement a funded organisation should check the performance indicators and ask:
- Do I have adequate information about the set of performance indicators that will be used to assess my performance under the funding agreement?
- Do I have adequate information about the performance targets/requirements for each performance indicator?
- Am I satisfied that the data collection and reporting requirements under the funding agreement are reasonable?
This new approach to performance indicators in funding agreements will be progressively implemented over the next 2 years.
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What’s new and what’s different in funding agreements?
The new ‘plain English’ suite of funding agreements is simpler to understand and will reduce red tape for funded organisations. The new suite of funding agreements consists of:
- Letter of Funding
- Minimalist Agreement
- Standard Agreement
- Capital Agreement
Service Providers receiving the standard Terms and Conditions will receive them in booklet format for ease of reference.
These funding agreements also have a simplified schedule format with clear financial and performance reporting obligations and timelines. As noted above they will also contain standardised performance indicators.
The type of funding agreement offered to successful funding applicants will be influenced by the nature of the activity, the assessed activity risk level, the length of the activity and the value of the activity. For more detail regarding the new funding agreements and what’s different, please see the FaHCSIA website via Grants and Funding.
Through the offer of the new funding agreements FaHCSIA is reviewing how we engage with providers in a more effective way. Meetings are occurring with some large affiliated organisations to discuss the impact of these changes. Some organisations have differing structures associated with their overarching legal entity and we need to get the right balance in the streamlining and maintaining relationships at the appropriate level.
If issues arise for organisations as a result of the new arrangements please contact your funding agreement manager in the first instance. Where issues may need to be resolved more broadly within a network of providers then other key FaHCSIA staff will also engage to seek a positive resolution.
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National COMPACT
The Australian Government, as part of its social inclusion agenda, is exploring ways to develop a new and stronger relationship with the non-profit sector, based on partnership and respect. A new compact, or agreement, is being developed between the Australian Government and the non-profit sector. The National Compact Joint Task Force was set up to advise on the second phase consultations. The role of the Task Force is to develop a framework for the compact containing key priorities and principles for the relationship between Government and non-profit organisations. The draft will then go out for broad consultation with the sector. For current updates please visit the Social Inclusion website.
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Australian Bureau of Statistics Community Services Survey 2008-09
The Australian Bureau of Statistics (ABS) is planning to conduct a survey of selected Community Services industries. The survey questionnaire will be despatched in August 2009 to a representative sample of organisations, whose cooperation in providing information enables the ABS to produce accurate and timely results, available free on the web in mid 2010. For further information contact William Milne, ABS Victoria (telephone: 03 9615 7862).
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How can providers access relevant and up to date information?
- Regularly check FaHCSIA internet website via Grants and Funding
- Speak with your usual funding agreement manager in your state or National Office