Sub-sector Funding Plans

This information is based on a transcript of the presentation made by Sarah King of the Department of Disability Housing and Community Services (DHCS) at the ACTCOSS seminars on the Standard Funding Agreement.

The powerpoint slides that accompanied the presentation are also available for download: Funding Plans in Human Services Funding (PowerPoint presentation: 121 KB)

Sections include:

• The Role of Sub-Sector Funding Plans
• The Implementation Process
• The Way Ahead

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The Role of Sub-Sector Funding Plans

The need for funding plans emerged at the time of the development of new procurement guidelines. They were developed to put an accountability framework around government purchasing.

The funding plans require departments to demonstrate that the purchasing or funding is happening in an appropriate manner and consistent with ACT Purchasing Guidelines.

The funding plan must be approved for any purchase over $100,000.00. The plan is approved by:

• Members of the tender evaluation team and Authorised Procurement Unit (APU)
• If over $1 million also by the Government Procurement Board (GPU).

The funding plans outline:

• The background to the purchase and the objectives of the purchase ? what we need is being met; what is hoped to be achieved.
• The method of procurement to be used: is the process to be an open tender, select tender, or is only one provider available and a "single select" process to be used.
• Supply market analysis: the funder needs to outline the state of the market and the amount of competition available - are there many providers who could undertake the work or is it a limited market because of the specialist or not-for-profit nature of the arrangement.
• Sector consultation - who has been consulted and how has the relevant sector been consulted or engaged in decision around the service to be funded.
• Value of the procurement - the plan outlines the total value of dollars to be awarded through the tender process.
• Types of contracts to be awarded: a copy of the agreement format to be used is included. It is also attached to tender documents so potential tenders can consider the types of requirements they will need to fulfill if successful.
• Funding availability and approval: the procurement plan ensures that at the highest level of the department there is assurance that a new tender is only let in the context of the funds being available.
• Funding period: to determine from the outset the length of the agreement to be entered into and potentials for extension (some of these accountabilities are driven by experiences in building ventures and reflect the need for a mechanism to "contain" contracts).
• Risk management: a risk management plan must be undertaken in relation to each procurement process. The plan must accord with the Australian Standard (AS/NZ 4360:1999).
• Likely contract Performance Indicators: this enables the funding agency to look from the start at the kinds of measures that would be included in the funding agreement.
• Compliance with government policies: the department must confirm that the procurement is consistent with the full complement of relevant government policies, circulars and guidelines.
• External advice: whose input was sought through the development (for example, the Government Solicitor's Office)?
• Timetable: for each stage of the process including commencement, authorisation and conclusion of the agreement.
• Evaluation Methodology: what evaluation criteria will be included in the tender who will be on the assessing panel?

The Implementation Process

The current annual value of human service funding agreements is approximately $70 million - this is a significant purchase. Last year was the first year that departments were required to use the funding plan process before entering into agreements with community services.

The first sub-sector plans were completed last year by the Department of Disability, Housing and Community Services for services funded under the CSP & SAAP Programs. A one year extension was granted by ACT Treasury for other areas and existing agreements were "rolled over" for one year.

Treasury was very clear that no further extension would be given and all departments would be required to lodge sub sector plans with the Government Procurement Board before negotiating new agreements from 1 July 2004.

The general template that I have outlined for funding a single, new service is used for this purpose. The same requirements need to be met and demonstrated.

The approval of the sub sector plan gives the department permission to enter into new agreements. To this extent it is an administrative process for the funding department.

Sub sector plans provide the mechanism for departments to offer multi-year agreements (up to 3 years) for services:

• that are continuing to meet priority needs,
• that have met all performance measures,
• are likely to maintain service provision for the life of the agreement; and
• are actively engaged in quality improvement.

The Way Ahead

Each department is now working to develop sub sector plans. Different departments will have begun to do this in different ways.

The first strategic action outlined in the Community Sector Funding Policy "Working Together" relates to the development of sub sector plans.

"Working Together" talks about the sub sector planning process as providing "a systemic link between broad policy directions, planning information and specific funding decisions by specifying the optimal mix of service types to meet identified community needs"

This presents funding departments with an opportunity and an obligation to work more closely with community services in making decisions about how and where funding is directed.

The Youth Section of the (former) Department of Education Youth and Family Services began a sector wide planning process last year. The Home and Community Care program has for many years held regular sector network meetings.

The Supported Accommodation Assistance Program services have more recently begun to meet regularly to share information and consider sector wide issues.

The ways in which we work together to identify service delivery priorities and gaps and to develop funding frameworks that reflect an agreed way forward to these issues will continue to develop.

This is particularly challenging in a context of set budgets (no new money). The sub sector planning process provides the opportunity for us together to ensure that funds are targeted to respond to those most in need in the community.


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