Guiding Partnerships – The Funding Managers' Guide

Appendix 3 – SFA Reporting Checklist

Guiding Partnerships – The Funding Managers’ Guide

For ACT Government and Community Organisations

Version 01052012

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This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part may be

reproduced by any process without written permission from the Territory Records Office, Community and

Infrastructure Services, Territory and Municipal Services Directorate, ACT Government, GPO Box 158, Canberra

City, ACT, 2601

Produced by: ACT Government Funding Managers Network.

Contact:Senior Director

Governance, Advocacy and Community Policy

Community Services Directorate

ACT Government

GPO Box 158

Canberra City ACT 2601

Phone: 13 22 81

This publication has been prepared by officers of the ACT Government Community Services Directorate. It is

believed that the information is correct and reliable, but neither the authors nor the Community Services

Directorate give warranty in relation hereto and no liability is accepted by the authors or the Directorate, or

any other person who assisted in the preparation of the publication, for errors and omissions, loss or damage

suffered as a result of any person acting in reliance thereon.

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Contents

Part 1: Overview

1.1 Purpose of the Funding Managers’ Guide

1.2 Who is the Guide for?

1.3 The Funding Agreement Life Cycle

Part 2: Policy,

planning and

evaluation

2.1 Policy and legislative context

2.2 Principles for working together

2.3 Planning and evaluation

Part 3: Procuring

goods and services

3.1 What is procurement?

3.2 Quotation and tender thresholds

3.3 Undertaking a procurement process

3.4 Sub-sector Funding Plans

3.5 Outcomes Based Purchasing Framework

Part 4: Developing

and negotiating

Agreements

4.1 Key tasks and practices in agreement management

4.2 Developing the Agreement

4.3 Establishing performance indicators and a reporting regime

4.4 Negotiations

4.5 Formalising the Agreement

4.6 Identifying and managing risks

4.7 Insurance

Part 5: Agreement

management

5.1 The role of the Agreement Manager

5.2 Agreement management plans

5.3 Managing relationships

5.4 Managing performance

5.5 Dealing with underperformance

5.6 Breaches, suspension and termination

5.7 Managing risks in Agreement management

5.8 Ending an Agreement

5.9 Records Management and Privacy

Part 6: Administering

grants

6.1 What is a grant?

6.2 Legislative and policy framework

6.3 Key principles of Grant Administration

6.4 Planning for an ACT Government Grant Program

6.5 Resources

Glossary

Definitions

Appendix 1 Guidance

on the Service

Funding Agreement

A1.1 Body of the Agreement

A1.2 Schedule 1 – Agreement definitions and further definitions

A1.3 Schedule 2 – The Services

A1.4 Schedule 3 – Reports and reviews

A1.5 Schedule 4 – Funding amount and payment

A1.6 Schedule 5 - Assets

A1.7 Schedule 6 – Special conditions

A1.8 Attachments to the Service Funding Agreement

Appendix 2

Agreement Management Plan template

Appendix 3

SFA Reporting Checklist

Appendix 4

Better practice example performance feedback letter

Appendix 5

Better practice example late report letter

Acknowledgements

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1.1 Purpose of the Funding Managers’ Guide

Part 1: Overview

The purpose of Guiding Partnerships – the Funding Manager’s Guide (Guide) is to help government and

community sector employees understand the processes involved in managing government funded

community services. Understanding the funding management process will promote effective partnerships

between government and community organisations, and is important to ensure optimal outcomes for

service users. The Guide will progress the Hawke Review recommendations and provide for greater

coordination, cohesion and consistency of effort by officials in the pursuit of Government priorities.

It is intended that the Guide be a user-friendly, plain English reference text that can be referred to as

needed. It is hoped that the Guide will be a living document that is useful to both Government and non-

government officers in understanding the Agreement management process and in resolving specific queries.

As different ACT Government Directorates fund a diverse range of programs, the Guide aims to provide a

set of strategies and guiding principles, rather than prescriptive rules. The Guide does, however, provide

information about policy and legislative requirements that will apply to all Agreement management, such

as insurance and record management requirements.

1.2 Who is the Guide for?

The Guide aims to assist both government and the community sector. It is primarily written to provide

guidance to government Agreement Managers, though it is hoped that it will also provide useful insights for

those in the community sector responsible for managing ACT Government funded community services.

1.3 The Funding Agreement Life Cycle

The process for funding and managing community services can be represented as a ‘Funding Agree

Cycle’. Each of the stages of the cycle corresponds to a section in this Guide:

 Part 2 - policy context, planning and evaluation processes;

 Part 3 - procurement processes;

 Part 4 - development and negotiation of Agreements; and

 Part 5 - Agreement management.

ment Life

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2.1 Policy and legislative context

There is a range of legislation and policy which guides funding of community services by the

ACT Government. These documents instruct government officers in how to achieve value for money,

accountability, effective partnerships and optimal outcomes for service users.

The Canberra Social Plan sets out a vision that “all people reach their potential, make a contribution and

share the benefits of an inclusive community”. In developing the 2011 update of the Plan, three themes

have evolved that support our vision of an inclusive community:

 Connection – creating a socially cohesive society;

 Belonging – making sure every individual has the opportunity to reach their potential and participate

in the community; and

 Collaboration – working together to improve the lives of all Canberrans.

The Social Compact is a statement of understanding between the ACT Government and the community

sector, outlining principles of good communication and partnership. The Compact sets out undertakings that

each sector has committed to in working together for the public good. This includes undertakings by the ACT

Government to ensure fairness and transparency in funding, to seek the sector’s views, respect its right to

challenge government policy, and to publicly acknowledge the value, autonomy and contribution of the

sector. The community sector undertakes to communicate openly and constructively with government, to

maintain a central focus on consumer and community needs, to engage in quality improvement, planning

and policy development.

The Community Sector Funding Policy outlines a collaborative approach to funding between government and

the community sector. This partnership adopts a consistent whole of government approach with three-year

funding cycles and multi-year Funding Agreements to support effective service delivery. The Policy aims to

enhance the viability of the sector, the effectiveness of its service provision and to maximise client outcomes.

Legislation guiding government purchasing includes the Government Procurement Act 2001, Financial

Management Act 1996, Territory Records Act 2002 and the Government Procurement Regulation 2007

(available from http://www.legislation.act.gov.au). Shared Services Procurement has developed

procurement guidelines (known as ‘Circulars’) on a range of procurement related matters to assist

government employees in their procurement activities. These Circulars are available from the Shared

Services Procurement website at http://www.procurement.act.gov.au/about_us/procurement_policy.

Further information on procurement is available in Part 3 of this guide.

2.2 Principles for working together

Under The Social Compact a number of principles provide the positive basis for partnership and constructive

working relations between the community sector and government, including:

 trust, openness and transparency of communication and processes;

 mutual respect for the capacity, capabilities and limitations of each sector;

 respect for the diversity and independence of community organisations and groups;

 integrity, ethical practice, accountability and leadership in the way each sector operates;

 consumer and community participation in planning, policy development and other decision making

processes; and

 innovation and continuous improvement in the planning and delivery of services.

Part 2 – Policy, planning and evaluation

2.3 Planning and evaluation

To ensure that community needs are met and value for money is achieved, it is important that

government has rigorous planning processes in place. In addition to the policy documents outlined above

there are a range of specific strategic plans and national agreements that guide this process. These

documents, such as the National Partnership Agreement on Homelessness and the ACT Young People’s

Plan, set out broad policy directions and high-level targets. Within this framework, government

Directorates must undertake planning and develop policy that is both evidence based and responds to

community expectations.

When determining priorities and courses of action, Directorates go through a policy development process

that can be represented as a cycle. The policy development cycle involves identifying an issue that

requires government action, conducting analysis, consulting with the community, coordinating across

government, developing and implementing a policy approach, and then evaluating its success.

It is important that these processes are

used to inform the procurement and

management of specific programs and

services, and that the objectives of

funded services are tied to the

objectives of the Directorate and those

of the government as a whole.

The ACT Government uses sub-sector

funding plans to fund specific ‘sub-

sectors’, enabling multiple services to b

bundled together in one procurement

process. These funding plans are based

on policy and planning processes, and

provide a systemic link between broad

policy directions and specific funding

decisions. More information on sub-

sector funding plans is provided in Part

3.4 of this Guide.

Consultation

Consistent with The Social Compact, and in the interest of achieving optimal outcomes, it is good practice

to consult with the community sector and relevant stakeholders on the scope, scale and nature of services

to be funded. Information about the ACT Government’s commitment to, and mechanisms for, community

engagement are available from ACT Community Engage

http://www.communityengagement.act.gov.au.

ment Online

Evaluation

In December 2010 the ACT Government released the ACT Government Evaluation Policy and Guidelines.

The policy defines evaluation as

the process of measuring and assessing the impacts and merits of government policies, strategies and

programs. It is a means of determining the appropriateness, effectiveness and efficiency of

government policies and programs, and contributing to policy improvements and innovation (p3).

The policy goes on to state that “evaluation is a key component of the policy cycle or the process of

conceiving, developing, implementing and modifying public policies” (p3). The ACT Government

Evaluation Policy and Guidelines are available from:

http://www.cmd.act.gov.au/__data/assets/rtf_file/0005/175433/ACT-Evaluation-Policy-Guidelines.rtf

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3.1 What is procurement?

The Government Procurement Act 2001 (the Act) defines procurement as:

 the process of acquiring goods, services, works or property by purchase, lease, rental or exchange;

and

 the process of disposing of goods, works or property including by sale.

ACT Government Directorates are required to keep reasonable records of all purchasing activities and to

seek approval of proposed expenditure in accordance with financial delegations. A Directorate may

manage a procurement valued under $25,000 itself but any procurement with a value of $25,000 or more

must be referred to Shared Services Procurement to facilitate the process.

The threshold for a notifiable contract is $25,000. A copy of all notifiable contracts must be provided to

Shared Services Procurement to enable publication of the contracts on the ACT Government Contracts

Grants are not covered by the Act and are not defined as a procurement activity. Information about grant

processes is provided at Part 6 of this Guide.

The Act also states that a Territory entity must pursue value for money in undertaking any procurement

activity. In pursuing value for money, defined in the Act to mean the best available procurement outcome,

the entity must have regard to the following:

 probity and ethical behaviour (see Circular PC21);

 management of risk (see Circulars PC24 and 2007/14);

 open and effective competition;

 optimising whole of life costs (see Circular 2010/11); and

 anything else prescribed by regulation.

Who is Shared Services Procurement?

In 2005 the ACT Government announced the centralisation of procurement activities. The Government’s

decision was that Shared Services Procurement, part of Treasury Directorate, would provide all capital

works delivery and the procurement of all goods and services above a threshold of $25,000 on behalf of

Directorates.

The role of Shared Services Procurement includes, but is not limited to;

 providing advice about or managing procurement processes, including preparing procurement

proposals and obtaining quotes;

 assisting ACT Government Directorates in evaluating tenders received; and

 proof reading draft contracts to ensure they comply with formatting conventions.

What role does the purchasing Directorate play?

When undertaking procurement processes, ACT Government Directorate responsibilities include:

 seeking Shared Services Procurement’s advice and assistance for all procurements with a value of

$25,000 or more;

 clearly defining the scope of each procurement and preparing functional briefs and/or statements

of requirements;

Part 3 – Procuring goods and services

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 considering the procurement plan, which, if agreed by the relevant Directorate delegate,

undertaking the procurement, authorises ‘expenditure of public monies’;

 participating in the evaluation of tenders relating to that entity and making decisions on selecting

preferred tenderers; and

 managing Agreements for the provision of goods and services.

What role do community organisations play?

Community organisations can:

 look for funding opportunities advertised by government in newspapers and on the Shared

Services Procurement website (http://www.procurement.act.gov.au/tenders_advertised); and

 submit offers (e.g. a quote, tender, proposal or expression of interest) when government

approaches the market with a Request for Offer.

For more information:

 ACT Government Purchasing Guide, available from

http://sharedservices/actgovt/ProcDocs/ACT_Govt_Purch_Guide.pdf

 Procurement Circulars are available from

http://www.procurement.act.gov.au/about_us/procurement_policy

 ACT Government Tendering Guide http://sharedservices/actgovt/ProcDocs/TenderingGuide.pdf

Source: The above information is adapted from Procurement Circular 2009/01 ACT Government Procurement Framework – an Overview

(http://www.procurement.act.gov.au/about_us/procurement_policy).

3.2 Quotation and tender thresholds

The value of a project will determine how proposals are sought for the delivery of the service. Under the

Government Procurement Regulation 2007 (as amended in 2009), Government Directorates are required

to comply with the following quotation and tender thresholds when purchasing goods, services and

works:

Quotation and Tender Threshold requirements

Section 5

Direct Sourcing (Single Select Tendering)

at least one quotation must be sought for all procurements valued under $25,000.

Section 6

Select Sourcing (Select Tendering)

a minimum of three written quotations must be sought for all procurements valued at

$25,000 or more and less than $200,000.

Section 9

Open Tendering

a Territory entity must invite public tenders for all procurements valued at or above

$200,000.

As thresholds are amended from time to time it is important to check the current thresholds when

undertaking each procurement process. These can be checked at the following website:

www.procurement.act.gov.au/about_us/procurement_policy.

Shared Services Procurement has a Procurement Circular on Select and Single Select Procurements (PC25)

to provide advice to Directorates, available from the Shared Services Procurement website and the Shared

Services Customer Portal.

Exemptions from quotation and tender threshold requirements

Section 10 of the Regulation provides that the responsible Director-General (or delegated officer) may, in

writing, exempt the entity from complying with either the quotation or tender threshold requirements as

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described in sections 6 and 9. The Director-General (or delegated officer) must be satisfied, on reasonable

grounds, that the benefit in giving the exemption outweighs the benefit in complying with the threshold.

Examples of when an exemption might be given:

 only a single or limited number of suppliers are available because of an organisations specialist

knowledge or experience;

 only one organisation can supply a particular good or service;

 social procurement;

 the use of another jurisdiction’s common use arrangements; and/or

 the time within which a particular procurement activity must be completed prevents the calling of

public tenders.

The exemption must be in writing, must state the procurement proposal to which it applies and the

responsible Director-General’s (or delegate’s) reasons for the exemption.

Source: adapted from Procurement Circular 2010/23 Quotation and Tender Thresholds, available from

http://www.procurement.act.gov.au/about_us/procurement_policy.

3.3 Undertaking a procurement process

Once the relevant quotation threshold is identified it is possible to proceed with the procurement. The

relevant ACT Government Directorate employee will work with Shared Services Procurement to develop

the specifications of the purchase and the procurement plan. The procurement plan must be approved by

the relevant delegate in order to proceed.

The Government Procurement Regulation 2007 defines which procurement proposals must be presented

to the Government Procurement Board for consideration. Generally, it applies to procurements valued at

$5 million or more, except when procuring information and communication technology (ICT)

development; or a disposal activity, in which case a $1 million threshold applies.

Where the tender thresholds dictate that a public tender process is to occur, advertising must be done in a

manner that gives all organisations a reasonable opportunity to be aware of the procurement activity (e.g.

through the Canberra Times and the Shared Services Procurement website, www.procurement.act.gov.au).

Shared Services Procurement also publishes the Goods and Services Forecast and the Call Tender Schedule

on its website to assist industry in forward planning.

Where an exemption from quotation thresholds has been obtained it is possible to undertake Direct

Sourcing (otherwise known as a ‘Single Select’ tender). This process avoids the need for public advertising

of a tender when there are strong reasons for directly approaching a single organisation. Similarly ‘Select

Sourcing’ (also known as a ‘Select Tender’) allows proposals to be invited from several known

organisations rather than advertising publicly through an open tender.

Once the time period for tender responses, quotations or proposals has expired, the Directorate must

evaluate the submissions in accordance with the Government Procurement Act 2001 and the approved

evaluation methodology described in the procurement plan. Shared Services Procurement can provide

assistance with this process. Written approval must be obtained from the Director-General (or relevant

delegate) in order to engage a particular service provider for the goods, services or works. The submission

seeking delegate approval should detail the evaluation methodology and the basis for recommending the

preferred service provider above other service providers, including a comparative statement. In the case

of direct sourcing, an evaluation should be undertaken of the proposal to verify that a value for money

outcome is achievable.

Once the procurement process is complete, it is possible to commence service funding negotiations with

the successful tenderer.

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For further information:

 ACT Government Purchasing Guide, available from

http://sharedservices/actgovt/ProcDocs/ACT_Govt_Purch_Guide.pdf

 Procurement Circulars are available from

www.procurement.act.gov.au/about_us/procurement_policy

 ACT Government Tendering Guide

www.procurement.act.gov.au/__data/assets/pdf_file/0004/121468/Tendering_Guide_1.3.pdf

 Procurement circular PC02 on Social Procurement is available from

www.procurement.act.gov.au/__data/assets/pdf_file/0004/134752/2010_02_Social_Procuremen

t.pdf

 Procurement circular 2007/08 on Sustainable Procurement is available from

www.procurement.act.gov.au/__data/assets/pdf_file/0016/16027/2007_08_Sustainable_Procure

ment.pdf

3.4 Sub-sector Funding Plans

In 2004, as part of the Community Sector Funding Policy, the ACT Government committed to three-year

funding cycles and multi-year funding arrangements for services that are performing well. In order to

implement the change, the ACT Government introduced sub-sector funding plans (Funding Plans).

These Funding Plans are developed by government for specific ‘sub-sectors’, enabling multiple services to be

bundled together in one procurement process. For example, there is a sub-sector funding plan dedicated to

homelessness services, enabling the ACT Government to procure multiple homelessness services in one

process rather than engaging in a separate process for each one.

Funding Plans:

 are based on policy and planning information following sub-sector review;

 provide a systemic link between broad policy directions, planning information, and specific funding

decisions; and

 specify the optimal mix of service types to meet identified community needs.

The Funding Plan process allows Service Funding Agreements for multiple services to be renewed for further

multi year periods, negating the need to regularly undertake open tender processes. However a service

provider is only able to be considered for this process if the service is:

 able to meet priority needs;

 likely to be able to maintain services for the proposed funding Agreement term;

 actively engaged in quality improvement; and

 currently providing the service and meeting all performance measures and funding requirements.

Funding Plans provide the option of directly negotiating with existing service providers where the above

conditions have been met. Where funding is available, the service is part of a Funding Plan and the resources

have been allocated to this purpose, multi-year Agreements should be considered.

From time to time funding may be identified as available to address a specific government priority not covered

by a sub-sector funding plan. In order to allow for flexibility to address such matters when they arise, it is

possible to provide a one-off grant or to undertake a single select procurement.

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3.5 Outcomes Based Purchasing Framework

In 2010 the ACT Government commenced a project to develop an Outcomes Based Service Funding

Agreement - Purchasing Framework for the procurement and quality improvement of community services

funded by the Community Services Directorate (CSD). Once implemented within CSD, the framework may

be transferable across ACT Government delivering community services.

The project will develop a population based approach and measure the achievement of specific population

results over a 10 year period, in relation to improving social and economic outcomes for vulnerable

Canberrans.

What will a Purchasing Framework look like?

It is anticipated that all organisations funded to deliver human services by the CSD will have:

 a Pre-qualification Framework;

 a maximum 10 year Service Funding Agreement consisting of a fixed term with option periods and

agreed performance milestones;

 an outcomes based quality framework;

 standard common terms and conditions in their Service Funding Agreements; and

 work within a common performance reporting framework.

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4.1 Key tasks and practices in funding management

Each year the ACT Government provides approximately $130 million in funding to the community sector

incorporating over 150 community organisations. Through this government funding, these organisations

are able to provide a range of services to the ACT community, including accommodation for the homeless,

and support to children, families, people with disabilities and those with mental illness.

To ensure that public monies are used effectively and properly accounted for, it is important that strong

management processes are put in place. In its 2007 Better Practice Guide, Developing and Managing

Contracts, the Australian National Audit Office (ANAO) identifies a number of factors that are important at

all stages of the contracting process.

These are:

 managing risks;

 managing relationships;

 managing resources;

 specifying responsibilities;

 behaving ethically; and

 keeping records.

Part 4 of the Funding Managers Guide covers these and related issues. Section 4.2 covers the types of

Agreements that may be used, 4.3 covers performance indicators and measurement, 4.4 discusses

negotiations and 4.5 covers contract finalisation. Coverage is then provided on the important topics of risk

management and insurances. Record keeping is covered in Section 5.9.

4.2 Developing the Agreement

When there is significant risk or expenditure, important outcomes or specific outputs required, it is

important that Government use written Agreements as evidence of terms agreed with other parties. In

developing Agreements there are a number of key steps involved:

 Determining the form of the Agreement;

 Identifying the key tasks and performance indicators; and

 Establishing a reporting and performance management regime.

Determining the form of Agreement

In order to ensure consistency across services the ACT Government developed a number of standardised

Agreement templates. The following table is provided to assist Agreement Managers to determine the

appropriate template to use for particular purposes:

Source: Chief Minister Jon Stanhope, Hansard, 12 February 2009 http://www.hansard.act.gov.au/hansard/2009/week02/782.htm

Part 4 – Developing and negotiating agreements

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Standard ACT Government Agreement templates

Agreement template

Purpose

Alternative templates

Service Funding

Agreement (SFA)

Funding of community

services (e.g. family support

services)

Single service SFA template

Short form SFA template - for use when :

 there is low risk (i.e. the public liability

insurance risk rating determined for the

Agreement is 6 or lower); AND

 the service is of low value (total estimated

value (excluding GST) of the procurement is

$50,000 over 1 year, or $150,000 over 3

years).

Multiple

services

Multiple Schedule 2 SFA template

(for use when Schedules 1 and 3 to 6

proposed for each service ARE

identical for each service.

Appendix model SFA template (for

use when Schedules 1 and 3 to 6

proposed for each service ARE NOT

identical for each service.

Consortia

Sub-contracting SFA

(where a lead organisation sub-

contracts other organisations)

Multi-organisation SFA (where

multiple organisations are jointly

funded to deliver a service in a

single SFA)

Services Agreement

(Consultancy)

Consultancies – (e.g. for a program evaluation report)

Services Agreement

(Contractor)

Contracting – for time-limited projects or ongoing funding of non-human services

(e.g. architectural services)

Deed of Variation

Changes to an existing Agreement

Deed of Grant

Grants – for one-off funding ‘gifts’ with minimal reporting requirements

Sponsorship

Agreement (Territory

Providing Sponsorship)

Sponsorship – providing financial or in-kind support for an event or activity in

exchange for promotion (e.g. festival or conference sponsorship with Directorate

banners on display)

Sponsorship

Agreement (Territory

Receiving Sponsorship)

Goods Agreement

Procuring goods

Service Partnership

Agreement

Establishing high level protocols and processes across Government

Exchange of Letters

Low value, low risk items (e.g. below $20,000). A Letter of Offer can be drafted

by the funding entity, detailing the terms and conditions of the funding. The

letter is then signed by the recipient and returned for signature by Government.

Note: Letters of offer should be used with caution as they provide a lower level of

protection to the Territory than the standard Agreements. Unless there are strong

grounds for using a Letter of Offer, standard Agreement templates should be used to

ensure that the Territory’s interests are protected.

Agreement templates are available to ACT Government staff from the Shared Services intranet site:

http://sharedservices/actgovt/default.htm?tab=7#servcfunding.

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The ‘front-end’ (body) of the Agreement should not be edited as it contains important content that should

be in all Agreements, including definitions, conditions for termination, and dispute resolution. It has been

written by the Government Solicitors Office to ensure that it contains necessary conditions to protect the

Territory and other parties.

The actual specifications for the Agreement are included in Schedules attached at the back of the SFA. It is

in the Schedules that the particular outcomes and outputs of the Agreement are specified, in addition to

administrative processes including reporting and payment processes.

Shared Services Procurement can review draft Agreements to ensure that they comply with formatting

conventions. Within CSD, the Contracts and Grants Unit can also assist with quality control by reviewing

Agreements internally.

Guidance on the body and schedules of the standard Service Funding Agreement is provided at Appendix 1.

Important notes:

1. It is important that the words “draft” or “without prejudice” are included on the front cover and/or as a

watermark on all draft Agreements. These terms indicate to other parties that the version provided to

them is not the final version and is still subject to change and negotiation. Failure to include such a caveat

raises the risk that a draft Agreement can be interpreted as the final version by the other party, potentially

resulting in the Territory being legally bound to those terms despite the fact that it had intended to modify

the draft further prior to finalisation. When the final version is agreed upon, the terms “draft” and “without

prejudice” should be removed prior to printing and signing.

2. Territory officers should be careful not to inadvertently commit to, or make an offer to, enter into a binding

Agreement prior to the procurement process being conducted or management approval. Legally

enforceable contracts may inadvertently be made if officers verbally (or in writing) state to an

organisation that the Territory wishes to engage that organisation to deliver a service and that

organisation agrees.

4.3 Establishing performance indicators and a reporting regime

Before an offer of an Agreement is made to a service provider, the Directorate needs to determine which

activities are critical to the success of the service and what good performance by the funded organisation

would look like. From this understanding of good performance, performance indicators can be developed

and the service’s performance over the life of the Agreement measured against these indicators.

Specific performance indicators should be included in the terms of the Agreement. The level of

performance required to satisfy performance indicators must be clearly defined in Schedule 2 of the SFA,

in order to properly protect both the Territory’s and the community organisations’ interests by ensuring

that there are clear expectations and the service performs as expected.

The outcomes, outputs and performance indicators included in an Agreement should align closely with

the proposal put forward by the community organisation at the tendering stage. If a specific funding level

or service model were key to the organisation winning the tender, it is important that the Territory

ensures that these features form part of the Agreement. Both parties should also have the opportunity to

negotiate on the conditions of the Agreement (see section 4.4 below).

Within the standard Service Funding Agreement, outcomes, outputs and performance indicators are

included in Schedule 2, with reporting requirements in Schedule 3. Guidance on how to complete the SFA

template is provided at Appendix 1 of this Guide.

Source: adapted from Queensland Government (2000) Better Purchasing Guide: Managing and Monitoring a Suppliers’ Performance

(http://www.qgm.qld.gov.au/02_policy/complete_series.htm).

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Establishing a reporting and performance management regime

The objective of regular reporting is to formally track the progress of a service against Funding Agreement

objectives. A range of reports can be required from organisations under the Agreement, including:

 regular performance and financial reports from the service provider (usually six-monthly);

 annual reports and audited financial reports;

 other management information;

 external reviews or evaluations; and/or

 quality assurance certification reports, if applicable.

Performance monitoring can be undertaken by the funding Directorate (liaising directly with service

users), by the service provider (e.g. through performance reporting) or by a third party (e.g. through an

independent evaluation or annual accreditation process). Where monitoring is devolved to the

community organisation, information should be verified through a range of means, such as audits, service

visits or benchmarking against similar services. Third party monitoring may be appropriate where

particular technical knowledge is needed to assess data and to provide an independent assessment to the

funding body and funded organisation. Third party assessments may, however, involve greater cost.

Greater detail on the reporting and performance management is included in Part 5 of this Guide, and an

SFA Reporting Checklist is provided at Appendix 3. Reporting requirements are included in Schedule 3 of

the standard SFA. Guidance on how to complete the SFA template is provided at Appendix 1 of this Guide.

4.4 Negotiations

Effective negotiations ensure that both parties discuss and understand each other’s position and

parameters and agree on the final content of an Agreement. Successful negotiations require that the

personnel involved have the relevant experience, skill and authority to act, and that both parties are

acting in good faith, with mutual understanding and a commitment to amicably resolve issues that may

arise.

Negotiations are more likely to be successful when they:

 involve senior management in setting the policy parameters and communicating progress;

 define the objectives and constraints of the negotiation;

 agree the terms and conditions that will be subject to negotiation;

 ensure that those involved have the legal authority (or delegation) to act on behalf of the party

they represent; and

 identify any problems or barriers as well as opportunities, and an approach to address these.

It is important that Agreement negotiations are conducted in a professional and structured manner. This

can be achieved by addressing the following issues:

 agreeing on the make-up of the negotiating team of both parties;

 agreeing the location and agenda for each negotiating session;

 establishing timeframes in which negotiations will be conducted;

 establishing any interrelationships between individual issues/provisions that are subject to

negotiation to ensure these are taken into account during negotiations (e.g. there will generally be

a relationship between service levels and funding amount);

 focusing on achieving the objective sought over the life of the Agreement, rather than on short-

term gains;

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 keeping issues that are not negotiable to a minimum and being prepared to trade-off less

important requirements to achieve objectives;

 keeping unresolved issues to a minimum and agreeing arrangements for their later resolution; and

 taking formal minutes of the negotiations and ensuring minutes are circulated and agreed within

specified timeframes.

In order to ensure that the optimal outcomes are achieved, a formalised negotiation plan may need to be

written. This should include the key objectives and outcomes required, those items which are negotiable

and those which are non-negotiable.

A useful guide on negotiation is available from http://mams.rmit.edu.au/6jk40wqopx78z.pdf.

Source: adapted from Australian National Audit Office (ANAO) (2007), Better Practice Guide on Developing and Managing Contracts

(http://www.anao.gov.au/uploads/documents/Developing_and_Managing_Contracts.pdf).

4.5 Formalising the Agreement

Once negotiations are complete and the terms of the Agreement agreed, it must be signed by an authorised

officer in each organisation. Shared Services Procurement will print and bind two (or more) copies of the

Agreement and forward these to the responsible Government Directorate. That Directorate will then provide

all copies to the funded organisation to be signed and returned. This is the last opportunity for the

organisations to check the accuracy and completeness of the contract before legally committing to it. Once the

signed copies are received by the Government Directorate they will be signed by the appropriate delegate and

one copy returned to the service.

Under the Government Procurement Act 2001, the Director-General is responsible for publishing all their

Directorate’s contracts and Funding Agreements worth $25,000 or more on the publicly available Contracts

provide a hard copy) in order that they can be placed on the register.

The ACT Government Contracts Register includes a search facility and can be accessed from the Shared

Services Procurement website:

http://www.procurement.act.gov.au/contracts/contracts_register/contracts_register_functionality/contracts_search.

4.6 Identifying and managing risks

Managing risk is an integral part of good management. It is a process that is best embedded into existing

practices or business processes. The management of risks should therefore be an integral part of all

aspects of procurement, including the development and management of contracts (ANAO 2007).

Two risk management sections are included in this Guide. This first section introduces the topic of risk

management and provides examples of risks that may be encountered when developing Agreements, while

the second is included in Part 5 of the Guide, and addresses risks in the Agreement management phase.

Risk management involves the identification of potential events with adverse impacts, and planning to

respond to these events if they eventuate. Procurement Circular 2009/24 outlines the importance of

applying effective risk management techniques when undertaking government procurement. The circular

states that ACT Government “must, in the procurement of goods, services or works:

 identify, analyse and evaluate any likely risks; and

 implement sound risk management strategies to mitigate them.”

There is also an expectation that funded organisations will undertake similar processes.

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In its Risk Management Guide (2004), the ACT Insurance Authority (ACTIA) outlines the steps involved in

managing risk in the following flowchart:

ACTIA also provide tools to assist government and community organisations to understand and manage

risks. Risk Management Plans and a Risk Management Toolkit are available from the ACTIA website

http://www.treasury.act.gov.au/actia/index.htm

The Australian National Audit Office has identified a range of risks that may be encountered in developing

Agreements. These include:

Sources of risk

Means of addressing risk

Agreement

deliverables

 Ensure Agreement deliverables described in clear, unambiguous terms

 Obtain stakeholder and/or end-user input into Agreement deliverables

Performance

measurement

 Specify performance indicators that can be effectively measured and ensure effective

monitoring and assessment of performance

 Link Agreement payment to satisfactory performance

Payments

 Cap Agreement expenditure

 Establish payment milestones that are linked to Agreement performance (where

appropriate)

Other Agreement

provisions

 Ensure inclusion of relevant legislative and policy requirements in the Agreement (e.g.

privacy, security, record keeping)

 Ensure inclusion of all relevant Agreement provisions (e.g. Agreement variations,

disputes, termination)

Actions of the

funder

 Protect against unknowingly entering into a contract orally or by exchange of non-

contract letters or documents

 Ensure that the Agreement is signed prior to work commencing

Negotiations

 Focus Agreement negotiations on key outcomes

 Ensure the negotiating team understands the extent of their authority

 Ensure the negotiating team has sufficient skills, experience, or access to specialist

advice

 Ensure that final negotiating position achieves the value for money outcome

Final Agreement

drafting

 Ensure that all required outcomes are reflected in the final Agreement

 Ensure that the interests of service users are paramount in the Agreement

Source: adapted from Australian National Audit Office (ANAO) (2007), Better Practice Guide on Developing and Managing Contracts

(http://www.anao.gov.au/uploads/documents/Developing_and_Managing_Contracts.pdf).

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4.7 Insurance

Appropriate insurance is an important consideration in determining how to manage the financial risks for

the ACT Government (and funded organisations), and is a condition of entering into a Service Funding

Agreement (SFA). It is imperative that adequate insurances are identified and mitigation strategies

established to protect both parties.

The main insurance requirements specified in a SFA are identified in schedule 6, item 1, Insurances, of the

Agreement. This section provides information that guides the level of Public Liability insurance required,

and if the funded activities also require Professional Indemnity insurance. Public Liability insurance will be

required in the majority of SFA’s while Professional Indemnity Insurance will only be required for specific

Agreements where professional advice is being provided (e.g. financial counselling services).

Risk Profile rating and Public Liability insurance

Public Liability insurance protects the parties against the financial risk of being found liable to a third party

for death or injury, loss or damage of property or ‘pure economic’ loss resulting from negligence. The

Financial Management Guidelines 2011 stipulates procedures to be undertaken to determine appropriate

levels of public liability insurance in relation to a funded activity.

Funded community organisations are required to register on the ACT Government risk advisory website

(http://www.insuranceriskadvice.act.gov.au/riskadvisory/risk.nsf) and to complete a Risk Profile by

completing a checklist of the activities the organisation will be undertaking. The online Risk Profile tool

will then determine an overall Risk Rating for the organisation, between 0 and 10. Community

organisations are required to submit the profile and rating to Government along with evidence that that

an appropriate level of public liability insurance has been purchased. If the rating is 7 or above the

organisation is also required to submit a Risk Management Plan.

If an organisation, during the funded period, undertakes significantly different and potentially higher risk

activities, it would be advisable for the organisation to undertake a further risk assessment to determine if

a higher level of insurance is required.

Identifying the required Public Liability Insurance coverage

The levels of Public Liability insurance required by non-profit community organisations are:

Minimum Public Liability

Insurance coverage

Applies to these organisations/risk rating levels

$20 million

 Risk rating of 7 or greater

$10 million

 Risk rating of 6 or less; or

 Risk rating of 7 or greater where the organisation is named as

insured on a group insurance scheme or a national insurance

policy (as a part of a national organisation).

Professional Indemnity Insurance

Professional indemnity insurances covers an organisation or individual for legal liability for an act, error or

omission, breach of confidentially, dishonesty of employees, breach of copyright or intellectual property

that results in a financial loss and disruption suffered by a customer or third party. It also covers the legal

costs associated with defending such a claim.

A funded organisation should only need Professional Indemnity insurance if there is potential for the

Territory or another party to incur a financial loss by acting on Professional Advice or Service given by that

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organisation. The actual dollar amounts for Professional Indemnity insurance should be determined after

a risk assessment has been completed.

The ACT Insurance Authority has devised a flowchart to assist in determining whether organisations are

required to have Professional Indemnity Insurance. The flowchart can be accessed at

http://www.treasury.act.gov.au/actia/PI_Flowchart.pdf.

Other Insurances

Workers Compensation insurance is mandatory for funded organisations under Territory legislation and

must be specified in the Agreement.

Other types of insurance that may apply include:

 Product Liability Insurance (covering the liability arising from a defective product that causes

personal injury, property damage or other losses);

 Motor Vehicle insurance;

 Asset Insurance and Consequential Loss (often called Industrial and Special Risk); and

 Medical indemnity insurance, if the Agreement involves the giving of medical advice or the use of

medical or surgical procedures.

In the body of the standard Service Funding Agreement, clause 5.3 (Insurances and indemnities) there is a

stipulation that the organisation, from the commencement of the Agreement period, is required to have

all insurances required by law (such as Workers Compensation). It also requires appropriate and

adequate insurance over assets (including where appropriate motor vehicle insurance) and adequate

insurance over the organisation’s volunteers, as well as the insurances as required in Schedule 6, as

discussed above.

For further information:

 The Treasury Directorate offers advice on public liability insurance and risk management for small

business and community groups (www.insuranceriskadvice.act.gov.au)

 The ACT Insurance Authority (ACTIA) provides insurance coverage and risk management advice for the

ACT Government (www.treasury.act.gov.au\actia).

 Procurement Circular 2007/14: Managing financial risks through the use of Insurances, Indemnities

and Performance Guarantees.

(http://www.procurement.act.gov.au/__data/assets/pdf_file/0004/20101/2007_14_Managing_financ

ial_risks_Replacement_080208.pdf)

 Public Liability Insurance – Financial Management (Public Liability Insurance) Guidelines 2011

(http://www.legislation.act.gov.au/di/2011-166/current/pdf/2011-166.pdf)

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5.1 The role of the Agreement Manager

Part 4 of this Guide described the need to define clear Agreement outcomes, performance measures and

reporting arrangements. Once these are put in place it is then necessary for ongoing performance

monitoring, assessment and feedback to take place, in order to ensure that objectives are achieved.

Government Agreement Managers

ACT Government Agreement Managers are responsible for:

 establishing and maintaining a constructive working relationship;

 ensuring that both parties understand the terms of the Agreement and the services to be

delivered;

 drafting, negotiating and implementing Agreements;

 analysing reports submitted by funded organisations and ensuring the reports meet agreed

timelines and indicate satisfactory performance;

 maintaining clear lines of communication with funded organisations;

 providing clear, unambiguous and timely feedback to funded organisations; and

 responding to issues and correspondence in a timely manner.

Funding Agreement Managers should use the relevant program guidelines and the Funding Agreement to

analyse service provider reports. As a guide, when analysing reports, they should be satisfied that:

 the funds have been used in accordance with the terms of the Agreement and expenditure was

within +/-10% of the funding amount (or an adequate explanation provided if it wasn’t);

 the performance requirements (outcomes, outputs, targets and standards) have been met, or an

adequate explanation provided if they have not been met; and

 other conditions of funding have been met.

Community sector Agreement Managers

Community sector Agreement Managers are responsible for:

 establishing and maintaining a constructive working relationship;

 ensuring that they understand the terms of Agreements and the services to be delivered;

 negotiating and implementing Agreements;

 drafting and submitting reports in accordance with the requirements of their Agreement

(particularly Schedules 2 and 3);

 maintaining clear lines of communication with the funding body;

 providing clear, unambiguous and timely feedback to the funding body; and

 responding to issues and correspondence in a timely manner.

Chapter 2.8.2 of the ACT Government Chief Executive Financial Instructions provides better practice

guidelines on contract management. This is available from the Treasury Directorate website:

http://www.treasury.act.gov.au/accounting/html/guidelines.htm.

Source: adapted from Australian National Audit Office (ANAO) (2007), Better Practice Guide on Developing and Managing Contracts

(http://www.anao.gov.au/uploads/documents/Developing_and_Managing_Contracts.pdf).

Part 5 – Agreement management

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5.2 Agreement management plans

Depending on the size, nature and duration of the Agreement, an Agreement management plan may be

required to assist in managing and administering the Agreement. Sometimes known as contract

management plans or Funding Agreement Management Plans, these contain all the key information about

how the Agreement should be managed.

An Agreement management plan should change over time and may cover:

 who will undertake performance monitoring, including responsibility for collecting and analysing

data;

 how frequently monitoring will take place;

 due dates and expected contents of performance reports and financial acquittals;

 frequency of service visits and service review meetings; and

 a list of issues to monitor over the course of the funding Agreement.

Funded organisations should also have an opportunity to have input into these processes through regular

communication, Agreement negotiations, service visits and annual reviews. An Agreement Management

Plan template is available at Appendix 2 of this Guide.

5.3 Managing relationships

The ACT Government must manage its relationships with funded organisations to ensure effective and

efficient management of current and future funding Agreements. The extent of contact will depend on the

risk profile of the organisation and the amount of monitoring activity required. Both parties are

responsible for establishing and maintaining a healthy and productive relationship.

Good relationship management requires Agreement Managers to:

 make regular, focused contact with the other party to facilitate the flow of information;

 document communication to ensure there is a record of what has been discussed;

 set and manage expectations;

 clarify funding program requirements and priorities; and

 ensure a ‘no surprises’ approach to the monitoring of the funding Agreement lifecycle.

Consistent with the undertakings made in the Social Compact, ACT Government officers should also

ensure that community organisations are consulted to inform policy directions, provide an understanding

of client need and to improve service planning. The community sector also undertook in the Compact to

actively engage in these processes.

5.4 Managing performance

If service providers are to respond to Government requirements it is important that performance management

processes are formalised, clear, unambiguous and timely. If there are concerns regarding the performance of a

community service provider these need to be clearly communicated to the service provider and agreement

needs to be reached on an improvement plan. Similarly, if performance is considered satisfactory or better,

this should also be communicated in order that funded organisations are aware of the particular outcomes

valued by the funder.

Wherever possible, performance feedback should be made in writing to ensure that it is clearly stated and can

be kept on record by both parties for future reference. A ‘better practice’ example of a performance feedback

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letter is provided at Appendix 4 of this Guide. In some cases feedback will be provided at meetings and

documented in the form of meeting minutes.

Issues of concern should be discussed with the service provider and agreement reached on an improvement

plan. The funder should then monitor the service provider’s progress in achieving the milestones in the

improvement plan. Mechanisms for doing this may include:

 reassessing service provider risk;

 adjusting the frequency or content of site visits; and/or

 other modified or increased monitoring activity.

When using Service Agreements a portion of funding can also be made contingent on the completion and

submission of particular pieces of work. Payments should be made in a timely fashion when that work is

submitted to a satisfactory standard.

Government Directorates should also ensure that there are mechanisms to receive feedback from funded

organisations regarding their own performance. The terms of the standard Service Funding Agreement allows

both parties to raise issues and to seek remediation. In order to maintain effective relationships and avoid the

need for formal grievances from funded organisations, Government Directorates should ensure that they

communicate clearly and in a timely manner, and that they meet their own obligations under Agreements.

Where concerns have been raised by funded organisations, Government Directorates should ensure that they

investigate and undertake corrective action where necessary.

Ultimately both the Government and funded organisations share objectives to support service users and the

broader community. This will be most effectively achieved if a measured approach and open communication is

used by both parties.

Over and Under expenditure

Prior to procuring services Government should undertake a costing exercise to determine the approximate

cost of running a service or project. There are, however, a range of environmental factors that can impact on

the cost of a service in practice. Once services are operational, unforeseen circumstances, such as recruitment

delays or higher than expected administration costs, may result in expenditure varying from that budgeted.

Where service providers have significantly over or under spent it is important that Government ensure that

value for money is still achieved, as required by the Government Procurement Act 2001. In order to achieve

this, officers should monitor expenditure of funded organisations and take remedial action where expenditure

varies from the funding amount.

Funded organisations should ensure that expenditure remains within 10% (over or under) the funded amount.

Where expenditure is outside of this window an explanation should be provided in the regular financial

reporting provided by the organisation.

In circumstances where there is significant under-expenditure, Government may:

 allow the organisation to retain the surplus to build its infrastructure and ensure sustainability of the

service into the future;

 request the organisation return the full or a smaller amount of the surplus (e.g. surplus amounts

greater than 10% be returned);

 agree with the organisation on additional outputs (or a specific higher numerical benchmark) to be

achieved with the surplus funds.

This should be undertaken in a flexible and collaborative fashion, seeking agreement from the funded

organisation. Considerations should also include accountability, and the fact that it is beneficial to ACT

Government programs when organisations have a range of funding sources, such as fund-raising and the

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Commonwealth Government. Wherever possible, Directorates should also have a consistent approach to

surplus funds and should clearly articulate this approach to the organisations funded.

5.5 Dealing with underperformance

Many contract performance problems can be avoided by managing the relationship well.

Underperformance can be minimised by having a performance regime that allows prompt and

ongoing feedback, particularly in relation to critical timeframes or deliverables (ANAO 2007).

Being alert to signs of potential under-performance enables Agreement Managers to address these before

they become serious. At the early stages of under-performance, informal remedial action is often the best

approach. Such action could include more regular communication, increased reporting requirements or

modifying processes or clarifying the funding requirements.

For more serious under-performance, formal action may be required, such as:

 involving senior management from both parties in formal discussions or written communications;

 developing strategies to address the problem and formally documenting them, and tracking

whether they are working;

 withholding payments until performance returns to an acceptable level; and/or

 terminating the contract (as a last resort).

Under the terms of the standard Service Funding Agreement there are specific processes that must be

followed for formally raising more serious concerns. Important processes to be aware of include that:

 a written notice needs to be delivered by the party with concerns to the other party;

 the notice must be served by personal delivery, mail or fax (notices cannot be served by email);

 both parties will endeavour to promptly resolve the issue in good faith;

 issues will be escalated to senior management if not resolved within 10 business days;

 if not resolved within 20 business days, the parties should undertake mediation prior to resorting

to litigation.

A summary of these provisions is included at Appendix 1.1.

Source: adapted from Australian National Audit Office (ANAO) (2007), Better Practice Guide on Developing and Managing Contracts

(http://www.anao.gov.au/uploads/documents/Developing_and_Managing_Contracts.pdf).

5.6 Breaches, suspension and termination

The Territory may suspend payments or terminate a Service Funding Agreement (SFA) if there are

significant concerns regarding an organisation or service. The Territory may suspend payment to the

organisation if it has failed to provide reports or information reasonably required under the Agreement.

The Territory may terminate the SFA in writing under these circumstances:

 immediate termination of the Agreement in whole or part if there has been a breach of the

Agreement that has not been resolved within 40 days of a notice being served;

 immediate termination of the Agreement if there is a Compelling Reason (defined as “a situation

of urgency, such as substantial non-delivery of services or a situation concerning the safety or

health of, or harm to, any person”);

 both parties may agree in writing to terminate the Agreement.

Terminating an Agreement is usually a last resort. Both parties should first endeavour to resolve the issue by

other means and in good faith.

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An Agreement breach occurs when one party does not perform well, performs differently from the

Agreement, does not perform at all, or indicates in advance that they will not be performing as agreed

(anticipatory breach).

A summary of the suspension and termination provisions of the SFA is included at Appendix 1.1.

5.7 Managing risks in Agreement management

As mentioned in Part 4, ACT Government must identify, analyse and evaluate any likely risks and implement

sound risk management strategies to mitigate them. Refer to Part 4 for more information on these processes.

The Australian National Audit Office has identified a range of risks that may be encountered in contract

management. These include:

Sources of risk

Means of addressing risk

Systems,

procedures and

guidance

 Ensure systems are integrated and do not require multiple entry of same data

 Ensure systems are supported by appropriate procedures and/or guidance material

Procurement

knowledge and

capability

 Ensure that Agreement Managers have an understanding of government procurement policies and

reporting requirements

 Ensure staff are provided with targeted training in procurement processes

Agreement

management

capability

 Ensure staff have adequate experience in managing Agreements

 Ensure staff are provided with targeted training in funding Agreement management

 Ensure recognition of the importance of Agreement management

 Ensure that under-performance is acted upon in a timely manner

Service

performance

 Ensure that Agreement deliverables are provided on time and to agreed quality standards

 Ensure that the agreed budget is adhered to

 Ensure that all Agreement provisions are adhered to (e.g. privacy, record keeping)

 Protect against fraud and/or unethical conduct by the funded organisation

Changes in

circumstances

and/or

requirements

 Ensure that Agreement changes are dealt with through a Deed of Variation

 Be prepared for the possibility that a funded organisation is not be prepared to agree to Agreement

variations

 Ensure that changes in circumstances are managed in a timely manner

Stakeholder

relationships

 Ensure that stakeholders are consulted and/or kept informed about contract performance

 Take steps to identify and address differing and/or conflicting stakeholder expectations

Ending the

Agreement

 Take steps to agree final payment details upfront

 Ensure verification that all Agreement obligations have been met

 Ensure the to return all required materials, information and records within agreed timeframes and/or

in the required format

Transition

arrangements to

new or

replacement

services

 Ensure the appropriate management of the transition out by the organisation

 Ensure that new procurement processes are undertaken early enough to have the replacement service

up and running prior to the previous service ceasing

 Ensure that the re-tendering process is conducted in line with probity requirements, particularly where

the existing contractor is re-tendering

 Guard against disruption to the provision of services

 Ensure that performance problems are addressed is an existing contractor is re-engaged

 Review value for money when Agreements are extended

Source: adapted from Australian National Audit Office (ANAO) (2007), Better Practice Guide on Developing and Managing Contracts

(http://www.anao.gov.au/uploads/documents/Developing_and_Managing_Contracts.pdf).

Source: http://wps.pearsoned.co.uk/ema_uk_he_elliott_conlaw_6/67/17357/4443528.cw/-/4443758/index.html

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5.8 Ending an Agreement

In order to minimise the impacts on clients and community organisations, it is important that Agreement

Managers treat the cessation of Agreements with sensitivity and professionalism. Nevertheless,

government has an obligation to ensure that it is accountable for the use of public funds. If a program is

not achieving its objectives, objectives change over time, or a service provider does not perform to the

standard expected, it is important that government has mechanisms to address these scenarios.

An Agreement can be discharged in a number of ways. It can end because all obligations under the

Agreement have been fulfilled, by agreement between the parties, or when one party believes that the

other party has failed to remedy a serious breach. On expiry of an existing Agreement, the Government

may also elect not to renew the Agreement where policy priorities have changed or the service is to be re-

tendered to determine if there is a more suitable service available.

There can be legal subtleties in some forms of termination. Agreement Managers are encouraged to

obtain appropriate professional advice from the ACT Government Solicitors Office (ACTGS), particularly

when unusual or complex situations arise.

It is also important that the ending of an Agreement is fully documented. The agreement to terminate will

normally be given effect by provisions of the Agreement, by a deed of termination or by a written

settlement that sets out the basis for termination, including payments owing and settlement of any

outstanding claims or actions.

Transition arrangements

Transition refers to the changeover from one organisation to another or from one arrangement to

another. The transition phase will generally involve:

 undertaking a new tender process;

 re-negotiating the Agreement with the current organisation, or

 taking up options in the current Agreement to extend its life, based on value for money.

The foundations for managing transition to new Agreement arrangements should have been addressed

when initiating the Agreement. The Agreement or plan should cover transfer of records, information or

equipment.

Transition arrangements can extend over a significant period of time, so it is important that adequate time

is allowed when undertaking procurement processes for replacement services. This will ensure that all the

necessary processes are completed prior to the original Agreement ending.

Tender processes will often need to be conducted for a new service provider in parallel with the continued

provision of services by the existing organisation. The existing organisation must be treated in the same

way as any other tenderer to the extent possible, and bias (and perceptions of bias) in the treatment of

tenderers should be avoided.

Handover arrangements

The handover from the outgoing organisation to a new organisation can be a high risk period. If not

managed well, this period can result in strained relationships with service providers and negative impacts

on service delivery.

There is also a risk that one or both organisations could incur additional unforeseen costs and seek to

claim reimbursement from the funding body. It is therefore in the acquiring organisation’s interests to

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plan the handover arrangements carefully. A ‘transition plan’ may assist, addressing key matters and

actions that need to be completed or considered in the transition process.

In order to achieve a seamless transition, it is also recommended to build in a period of overlap, where the

new organisation works alongside the outgoing organisation. This time can be used to transfer materials

and assets to the new organisation and for the new organisation to acquire information and knowledge

about their new responsibilities.

Where an overlap period is not possible, Government should take steps to maximise the transfer of

information and knowledge to the new organisation, such as:

 arranging discussions between the parties;

 arranging for the new organisation to access procedural documents created and used by the

outgoing organisation;

 facilitating the transfer of custody and/or ownership of assets and materials to the new

organisation; and

 arranging discussions between the new organisation, service users and other stakeholders.

Source: adapted from Australian National Audit Office (ANAO) (2007), Better Practice Guide on Developing and Managing Contracts

(http://www.anao.gov.au/uploads/documents/Developing_and_Managing_Contracts.pdf).

Administering the end of an Agreement

At the end of an Agreement, it is important to verify that all contractual obligations have been successfully

met. This can include the need to:

 obtain all final reports from the funded organisation;

 review the statement of Agreement deliverables to ensure that goods or services have met

Agreement requirements;

 arrange for the return of all required documents, material, information and records used or

generated during the Agreement that are the property of the acquiring entity;

 arrange the return of all assets, equipment or other goods provided to the organisation and check

that they are in a satisfactory condition;

 ensure to the extent possible, that any issues that may result in a claim against the funding body

are resolved;

 make all final payments payable under the Agreement;

 terminate all access arrangements to premises and systems; and

 undertake post Agreement analysis, evaluation and reporting.

It is also of utmost importance that the interests and welfare of service users are protected. Arrangements

should be agreed between Government and funded organisation for the seamless transition of any

existing clients to new support arrangements.

Other areas that may need to be considered because they are legal rights and obligations that may survive

after the contract has been discharged include: rights to recover money, indemnities, intellectual property

rights and handling information. These may be covered by survivorship clauses in the Agreement, such as

Section 19 of the standard Service Funding Agreement.

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5.9 Records Management and Privacy

There are several pieces of legislation that obligate ACT Government and funded organisations to properly

manage their records and the private information of clients. This includes the Territory Records Act 2002,

the Privacy Act 1988 (Commonwealth), the Health Records (Privacy & Access) Act 1997 and the Human

Rights Act 2004. Organisations dealing with children and young people may also have obligations

regarding the handling of information under the Children and Young People’s Act 2008. These obligations

are briefly outlined below.

Agreement Managers should also be aware of the relevant sections of the standard Service Funding

Agreement (SFA) template. Clause 8 of the SFA relates to privacy requirements and Item 5, Schedule 6

provides for records management.

Territory Records Act 2002

The Territory Records (Standard for Records Management Number 5: Recordkeeping and Outsourced

Government Business) Approval 2009 provides guidance on implementing the Territory Records Act 2002

when contracting out government services. The Standard states that:

outsourced activity records must be managed as if the Agency were undertaking the activity itself.

Agencies must make provision in their contracts to ensure that they gain legal and beneficial

ownership and custody of records from service providers.

The Standard goes on to say that:

 Agencies must be careful to ensure recordkeeping responsibilities are specified in outsourcing

contracts;

 Agencies can meet their record keeping obligations by either

o delegating the recordkeeping responsibility to the service provider and ensuring that

appropriate records are transferred according to an agreed schedule; or

o ensuring the Government Agency creates its own records of the work performed by the

service provider;

 all records must be transferred to the custody of the Government Agency at the completion of the

contract.

An example of where ACT Government records are held by funded organisations is in the area of child

protection and foster care services. The Office of Children, Youth and Family Support (within CSD) funds a

number of community organisations to provide support to children and foster carers, and provides those

organisations with registered files on which all records must be kept. Should a service cease or client

move on, these files can then be transferred back to CDS.

Privacy Act 1988

The Privacy Act 1988 (Commonwealth) contains 11 Information Privacy Principals (IPPs) that regulate how

government and non-government organisations manage personal information. They cover how and when

personal information can be collected, how it should be used and disclosed, and storage and security.

They also allow individuals to access that information and have it corrected if it is wrong.

The Information Privacy Principles are summarised here:

 IPP 1: manner and purpose of collection - The information must be necessary for the

organisation’s work, and collected fairly and lawfully.

 IPP 2: collecting information directly from individuals - An organisation must take steps to tell

individuals why they are collecting personal information, what laws give them authority to collect

it, and to whom they usually disclose it.

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 IPP 3: collecting information generally - An organisation must take steps to ensure the personal

information it collects is relevant, up-to-date and complete and not collected in an unreasonably

intrusive way.

 IPP 4: storage and security - Personal information must be stored securely to prevent its loss or misuse.

 IPPs 5 - 7: access and amendment - These principles require organisations to take steps to record the

type of personal information that they hold and to give individuals access to personal information about

them. Personal information can be amended or corrected if it is wrong.

 IPPs 8 - 10: information use - These principles outline the rules about keeping accurate, complete and

up-to-date personal information; using information for a relevant purpose; and only using the

information for another purpose in special circumstances, such as with the individual's consent or for

some health and safety or law enforcement reasons.

 IPP 11: disclosure - This principle sets out when an organisation may disclose personal information to

someone else, for example another organisation. This can only be done in special circumstances, such as

with the individual's consent or for some health and safety or law enforcement reasons.

Source: http://www.privacy.gov.au/law/act/ipp.

An example of one of these principles in practice is the use of consent forms. Many organisations use a

Consent to Exchange and Release Information form. This form provides for a number of parties to be

specified with whom the client’s private information can be exchanged, informs the client how the

information may be used and advises them that they can revoke consent at any time. Once completed the

client signs the form. Consent may be received verbally and documented by staff, though written consent

is preferable.

Health Records (Privacy & Access) Act 1997

Due to the broad definition of a ‘health service’ in the Health Records (Privacy & Access) Act 1997 (the

Act), some community organisations in the ACT will be defined as ‘health service providers’ and will

therefore be obligated to comply with the Act. The definition of health service covers any activity to

assess, record, improve or maintain the physical, mental or emotional health of a consumer, and includes

a disability, palliative care or aged care service.

The Act provides 12 privacy principles and specifies how health records should be managed. It also gives

consumers of a health service a right to access information on their health records, subject to a number of

conditions and procedures.

Schedule 6, Item 5, of the standard Service Funding Agreement provides for requirements to be specified

relating to this legislation.

An example of the application of this may relate to records held by an organisation funded to provide

disability support. Under the Act, clients have the right to access their ‘health records’. If a client

requested access to their records, the support service would be required to provide those records (in a

format compliant with the Act).

Health Directorate provides a guide titled Health Records (Privacy & Access) Act 1997 - Information for

record keepers, which can be accessed from

http://www.health.act.gov.au/c/health?a=sendfile&ft=p&fid=1285829449&sid

Human Rights Act 2004

The Human Rights Act 2004 (HRA) is a bill of rights that provides protections to individuals in a range of

areas. Compliance with the HRA is mandatory for public authorities in the ACT, which includes all

government Directorates and a limited number of community organisations that are considered to be

“functional public authorities” due to their being government funded and having functions that are

uniquely public in nature.

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Section 12 (privacy and reputation) of the HRA states that “everyone has the right—

(a) not to have his or her privacy, family, home or correspondence interfered with unlawfully or

arbitrarily; and

(b) not to have his or her reputation unlawfully attacked”.

Children and Young People Act 2008.

The Children and Young People Act 2008 allows for persons delegated by the CSD Director-General under

the Act to share ‘safety and wellbeing information’ (with or without consent) with public employees and

community based services, where this information is relevant to the health, safety or wellbeing of a child

or young person. This information may also include information about the children or young persons’

family or another person and may be ‘protected’ or ‘sensitive’ information. Safety and wellbeing

information relating to a child or young person may also be sought by public employees and community

based services from Care and Protection Services or Youth Justice.

If you receive information from Care and Protection Services or Youth Justice, it is protected information

and you will become an information holder. It is an offence for an information holder to divulge or record

protected information unless permitted under the Act or other law in force in the Territory.

Schedule 6, Items 5 and 7, of the standard Service Funding Agreement provides for requirements to be

specified relating to this legislation.

One example of the Children and Young People Act 2008 in practice is the making of voluntary (or

mandated) reports of possible child abuse or neglect to Care and Protection Services. The sharing of a

child’s personal information is permitted under the Act in these circumstances.

Government employees should ensure that they comply with the requirements of the Children and Young

People Act 2008 (http://www.legislation.act.gov.au/a/2008-19/current/pdf/2008-19.pdf).

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6.1 What is a grant?

The Policy – Administration of Government Grants in the ACT defines a grant as “a sum of money given by

the Territory to a recipient as a gift for a specified purpose to enable the recipient to achieve goals and

objectives that are consistent with Territory policy”. Grants typically have significantly lower reporting

requirements than other forms of Agreement, though an acquittal is usually required to demonstrate that

grant recipients have used the funds for the purpose for which it was intended.

Other features of grants are:

 grants may be made to individuals or organisations;

 grants recipients are generally selected on merit against a set of criteria;

 grant givers may unilaterally impose conditions on grants;

 grants are one-off amounts and are not used to fund ongoing goods or services; and

 grant funds may be paid to third party auspicing organisations to manage and to make decisions

regarding specific allocations of funding to the grant recipient.

Grants are not:

 the procurement (or acquiring) of goods or services by the Territory;

 subject to the Government Procurement Act 2001;

 a means of service funding to community organisations for the provision of recurrent human

services to the community;

 the same as Sponsorship arrangements in which the Territory provides money to an organisation

or individual to enable the organisation or individual to carry out a particular event or activity for

which the Territory receives sponsorship (e.g. marketing) rights.

 compensation payments under legislation.

If you are unsure as to whether an anticipated arrangement is a grant arrangement, please contact the

ACT Government Solicitor for assistance.

6.2 Legislative and policy framework

The Policy – Administration of Government Grants in the ACT outlines an ACT Government Legislative and

Policy Framework. The key documents making up this framework include:

 Financial Management Act 1996;

 Public Sector Management Act 1994;

 Freedom of Information Act 1989;

 Chief Executive Financial Instructions (CEFIs);

 ACT Government Solicitor’s Deed of Grant template; and

 other ACT Government policy, including, but not limited to:

Source: adapted from Australian National Audit Office (ANAO) (2002) Administration of Grants Better Practice Guide

(http://www.anao.gov.au/uploads/documents/Administration_of_Grants.pdf)

Source: Chief Minister and Cabinet Directorate 2010, Policy – Administration of Government Grants in the ACT.

Part 6 – Administering grants

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o Agency risk management policy and processes;

o insurance determinations; and

o any universal criterion that may be developed.

ACT Government grants should be administered with reference to advice published by the Australian Tax Office.

Financial Management Act 1996

Under section 31 of the Financial Management Act 1996 (FMA), the Director-General of a Directorate is

accountable for the efficient and effective financial management of the Directorate. This includes

responsibility for the efficient and effective management of grants. The Treasury Directorate provides

FMA Guidance Papers, which are available at http://www.treasury.act.gov.au/accounting/html/fma.htm.

Chief Executive Financial Instructions

Chief Executive Financial Instructions (CEFIs) are put in place to assist Directors-General and their

delegates in implementing their responsibilities under the FMA. Directorate officers should use the CEFIs

to guide their practice, to ensure appropriate decisions are made and that they adequately discharge their

financial and general management responsibilities in relation to grant arrangements.

Public Sector Management Act 1994

Under section 6 of the Public Sector Management Act 1994 (PSMA), government Directorates shall have

an objective implementation of the following values and principles:

(a) service to the public;

(b) responsiveness to—

(i) the requirements of the government; and

(ii) the needs of the public;

(d) fairness and integrity;

(e) efficiency and effectiveness.

Deed of Grant template

ACT Government grant arrangement must be documented using the ACT Government Solicitor’s Deed of

Grant template. This template is available from the Shared Services intranet site, at

http://sharedservices/actgovt/default.htm?tab=7#servcfunding.

As the Deed of Grant template provides important clauses that protect the interests of the

ACT Government, any decision not to use the template should be justified, documented and approved by

the relevant delegate. If alternative documentation is considered (such as a Letter of Offer), it is

recommended Directorates consult with the ACT Government Solicitor.

Policy – Administration of Government Grants in the ACT

In addition to the general legislative and policy requirements outlined above, the Policy – Administration

of Government Grants in the ACT (the Policy) stipulates additional requirements for grant programs that

fit into particular streams. Grants that fit into the Health and Community Wellbeing or the City and

Territory Services streams (or other grant programs notified from time to time) should:

Source: Chief Minister and Cabinet Directorate 2010, Policy – Administration of Government Grants in the ACT.

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 be administered taking into account the key principles of grant administration outlined in Section

III of the Policy;

 be made publicly available through the Grants Portal (noting any legal or policy restrictions on the

publication of that information) (http://www.grants.act.gov.au); and

 comply with the ACT Government Website Policy.

6.3 Key principles of Grant Administration

Part III of the Policy – Administration of Government Grants in the ACT outlines Key Principles for Grant

Administration for Territory Officers:

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6.4 Planning for an ACT Government Grant Program

Part III of the Policy – Administration of Government Grants in the ACT outlines best practice for planning

an ACT Government Grant Program. Planning sets out the steps and processes to ensure that grants

administration identifies what resources are needed and how they will be used.

The key considerations in the Planning Process are shown in the below diagram. A summary of each item

is provided below.

Key considerations in the grant planning process

Planning and

design

Establish the Need for the Program

 Territory Officers should ensure that the granting activity has a performance framework

linking Directorates directions and the grant’s operational objectives to government

outcomes.

 Directorates should determine to what extent the operation of a granting activity may

interact with other programs, including those administered by other bodies. These can

include Commonwealth, State, Territory or local government bodies, private trusts and

foundations or national or state coordinating organisations. Consultation and cooperation

with other bodies can help avoid duplication of effort and improve outcomes for potential

recipients and government.

Define Operational Program Objectives

 Operational objectives should be a concise, unambiguous, realistic, outcome oriented

statement of what the granting is intended to achieve. The more specific the operational

objectives the easier it is to develop supporting documentation (such as selection criteria),

limit wasted applications and develop an appropriate performance information framework.

Undertake Risk Management

 Risk management involves the systematic identification, analysis, treatment and allocation

of risks. The extent of risk management required in grants administration will vary, because

a variety of risks may arise during each stage of grants administration. Risk management

should be developed with reference to the key principles for grants administration,

particularly (3) Proportionality. A useful guide to risk management is available at

http://www.treasury.act.gov.au/actia/Guide.doc

Design Program for Value for Money

 Relevant considerations include the purpose, value and duration of a grant, the

deliverables to be supplied, grant conditions, enforceability considerations, and the nature

and level of the risks involved. In certain circumstances government may have an

affirmative action dimension on value for money considerations.

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Design Program Accountability

 Accountability arrangements in grants administration should relate to both the process of

administration and the achievement of government outcomes.

Establish Performance Measures

 Performance information should make clear the extent to which the granting activity is

contributing to government outcomes. In addition, it should reflect the extent to which

government outcomes and Directorate strategic directions remain appropriate in light of

changing circumstances that may result from the impact of the granting activity itself.

Select Funding Strategy

 While no form of funding Agreement is right for all circumstances, an enforceable

Agreement should be established wherever possible. Advice on the forms of enforceable

Agreements must be sought from the ACT Government Solicitor's Office. Advice on funding

strategies should be obtained from Treasury Directorate.

Produce Program Guidelines

 Grant program guidelines should be fit for purpose and should include information on the

outcomes and objectives of the grant program, governance arrangements, funding and

selection processes, performance monitoring and reporting, evaluation, operational issues

and complaint handling mechanisms.

Selection and

decision- making

Government Directorates should establish processes, and communicate them to staff, around:

Handling Applications

 Under the financial management framework, there is an overarching requirement to

manage Directorate’s affairs efficiently, effectively and ethically. Where a selection process

is undertaken, those involved should be adequately trained and procedure instructions

should be available before processing the first application.

Appraising Applications

 In the case of grant programs, unless specifically agreed otherwise, competitive, merit-

based selection processes should be used, based upon clearly defined selection criteria.

Establishing appropriate internal control mechanisms for granting activity.

 The separation of duties is a fundamental internal control. No single officer should appraise

an application for funding assistance, give financial approval for the expenditure and make

the offer to the applicant.

 It is important that appraisal and selection processes be transparent and free from the risk

of political or other bias. It is better practice for all like applications to be assessed using a

common appraisal process, and where there is a departure from the common approved

process, the reasons should be documented.

 Grant assessors should document when referring to, or relying on, knowledge or

documentation other than the application form.

Grant Announcements

 Directorates must publish, on the ACT Government Grants Portal, information on its

individual grants or where appropriate a bundle of grants. The default position is that all

Directorates must report all grants awarded on their website.

 There may be circumstances where a Directorate determines that public reporting of grants

in accordance with this Policy is contrary to the Privacy Act 1988 (Privacy Act), other

statutory requirements, or the specific terms of a Deed of Grant. In these circumstances:

o A Directorate must endeavour to publish as much information as legally possible;

o the reasons for not reporting fully must be documented by the Directorate; and

o Directorates should take all possible steps to ensure that Deeds of Grant contain

provisions that do not prevent the disclosure of information in accordance with this

policy.

Making and

documentation of

Establish Deeds of Grant

 After selecting a funding strategy the form of the funding Agreement should protect the

Guiding Partnerships – The Funding Managers’ Guide 35 | P a g e

a grant

Territory’s interests in ensuring that public money is used for the intended purpose,

defining project deliverables, scheduling payments (according to progress), and specifying

progress reporting requirements and acquittal procedures.

Establish Monitoring Arrangements

 Conditions should be expressed with sufficient precision so that it can be determined

whether the recipient is complying with those conditions.

Management of

Deeds of Grant

Monitor Progress and Payments

 Monitoring of payments and progress are an integral part of good governance and risk

management and provide a measure of assurance that public funds allocated to grant

recipients have been spent for their intended purposes.

Acquit Funds

 Reliable, timely and adequate evidence is required to demonstrate that grant funds have

been expended in accordance with the terms and conditions of the Deed of Grant. The

stringency of acquittal procedures should be balanced against the level of risk and take into

account the cost of compliance. Where acquittal is not possible, the decision to recover or

write-off outstanding funds should be documented.

Reporting

Payment of Grants and Grant Management

 Payment of grants and grant management is detailed in Part II (Legal and Policy

Environment) of the grant administration policy.

Grant Agreement

 It may also be appropriate for proportionality principles to inform consideration of

reporting requirements for recipients. It should not be assumed that the same approach

will suit all circumstances, regardless of the scale or purposes of the grant in question or

the performance record of the grant recipient.

Review and

evaluation

Granting activity should be ‘fit for purpose’. That is, key design features and related processes

should be commensurate with the scale, nature, complexity and risks involved in the granting

activity.

6.5 Resources

For further reading:

 ACT Government Grants Portal http://www.grants.act.gov.au/

 FMA Guidance Papers: http://www.treasury.act.gov.au/accounting/html/fma.htm

 Chief Executive Financial Instructions template:

http://www.treasury.act.gov.au/accounting/html/guidelines.htm

 GST advice published by the Australian Taxation Office is currently available at

http://www.ato.gov.au/businesses/content.asp?doc=/content/00171997.htm

 The Risk Management - Principles and guidelines (AS/NZS ISO 31000:2009) supersedes AS/NZS

4360:2004 Risk Management and is available for purchase online or in hard copy at

http://infostore.saiglobal.com/store/Details.aspx?productID=1378670.

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Term

Definition

Agency

A term used to refer to a government entity, such as a Directorate.

Agreement

The term Agreement is used in this document to refer to a legally binding contract

between two parties.

Agreement

Manager

The officers within the funding Directorate and the community service provider

responsible for managing a particular Agreement.

Agreement

management

The process of managing Agreements between a funding body and funded organisation.

This typically involves a number of tasks, including the development and negotiation of

Agreements, maintaining an effective relationship, and monitoring and addressing

performance.

Assignment

Assignment is the act by which one party to an Agreement transfers their rights or

interests (not obligations) to another person. Assignment Agreements must be in

writing. An example of assignment might be transferring a construction warranty to a

person buying a building from the original purchaser.

Breach of

Agreement

A breach occurs when one party does not perform well, performs differently from the

Agreement, does not perform at all, or indicates in advance that they will not be

performing as agreed (anticipatory breach).

Contract

A legally binding agreement setting out the terms and conditions agreed by the parties

to the agreement.

Direct sourcing

Direct sourcing (also known as single select tendering) is a procurement process

whereby a Territory entity seeks a quotation from a single supplier. This method is used

for procurements with an estimated total value of less than $25,000 or when the

Director-General (or delegate) has approved an exemption from Quotation and Tender

Thresholds for purchases over $25,000.

Funding

Agreement

See Agreement.

Funding

Manager

See Agreement Manager.

Grant

A sum of money given by the Territory to a recipient as a gift for a specified purpose to

enable the recipient to achieve goals and objectives that are consistent with Territory

policy.

Novation

Novation is the making of a new Agreement in substitution for an earlier one. Under a

novation, a third party will take over the rights and obligations of an original party

whose rights and obligations are being novated. Novation Agreements must be in

writing. Examples of novation might be when the seller of a business transfers the

contracts with their customers to the buyer, or when an organisation changes it’s legal

name and Agreements need to be re-issued in that new name.

Open tender

An open tender (also known as public tender) is a procurement process whereby a

Source: http://www.treasury.act.gov.au/accounting/download/bp2_17.doc

Source: http://wps.pearsoned.co.uk/ema_uk_he_elliott_conlaw_6/67/17357/4443528.cw/-/4443758/index.html

Source: http://www.treasury.act.gov.au/accounting/download/bp2_17.doc

Glossary

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process

Territory entity publicly advertises a procurement opportunity for all interested

organisations. This method may be used for all procurements, and is required to be used

for procurements with an estimated value of $200,000 or more unless the Director-

General (or delegate) has approved an exemption from the Quotation and Tender

Thresholds.

Organisation

The term used within ACT Government Agreements to refer to a funded organisation.

Each organisation may deliver a number of services.

Procurement

The process of acquiring goods, services, works or property by purchase, lease, rental or

exchange, and the process of disposing of goods, works or property including by sale.

Within government, procurement involves formalised processes and documentation

relating to purchasing decisions, approvals and Agreement management.

Quotation and

Tender

Thresholds

The value above which a procurement, unless exempt, is subject to particular

procurement procedures. The quotation and tender thresholds are set out in the

Government Procurement Regulation 2007.

Select sourcing/

select Tender

A procurement process whereby a Territory entity seeks a quotation from a selection of

suppliers, generally three. This may be used for procurements with an estimated value

of less than $200,000, and is required for all procurements between $25,000 and

$200,000 unless the Director-General (or delegate) has approved an exemption from the

Quotation and Tender Thresholds.

Single select

tender

See Direct sourcing.

Service

The term used within ACT Government Agreements to refer to the particular set of

activities that ACT Government has funded an organisation to undertake in order to

achieve specific objectives. One organisation may deliver several services.

Service Funding

Agreement

A contract legally binding a funding Directorate and service provider. Service Funding

Agreements (SFAs) contain conditions specifically customised to the funding of

community services.

Sub-sector

funding plan

Multi-year procurement plans for services required by the ACT Government, where like

services are bundled together.

Tender

Tender has two meanings:

 the process of responding to a Request for Offer and bidding for government

work; and

 the actual response, or bid, which is submitted to the ACT Government in

response to a Request for Offer.

The Territory

For the purpose of this Guide, ‘the Territory’ refers to the ACT Government and the

Territory entities representing the Government.

Territory entities

Include all ACT Government Directorates, Agencies and authorities. It does not refer to

the University of Canberra or Territory-owned corporations.

Value for money

The best available procurement outcome as defined in Section 22A of the Government

Procurement Act: “a Territory entity must pursue value for money in undertaking any

procurement activity”. In determining assessing what is value for money, government

Directorates should consider whole of life costs, such as ongoing maintenance and

operating costs. Value for money may not be the lowest priced option.

Works

Capital works include the design, construction, maintenance and upgrade of roads,

buildings and infrastructure. Capital works procurements are primarily targeted towards

the design and construction industries.

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Service Funding Agreements (SFAs) are the standard contract format used by the ACT Government in the

funding of human services. They are legally binding agreements between the funding Directorate and the

service provider and contain conditions specifically customised to the funding of human services.

The ‘front-end’ (body) of the SFA should not be edited, as it contains important content that needs to be

included in all SFAs, such as definitions, dispute resolution and termination. The actual specifications for the

Agreement are included in Schedules attached at the back. It is in the Schedules that the particular outcomes,

outputs and conditions of the Agreement are specified, in addition to administrative processes including

reporting and payment processes.

Below is a summary of some of the important elements of the body and Schedules of the standard Service

Funding Agreement. The below list is not comprehensive, and provides a summary of only some sections of the

Agreement. Refer to the Service Funding Agreement for the full terms of the Agreement.

Prompts are included in red text in each of the Schedules to guide Agreement Managers in populating the SFA

template. The red text should be replaced with the content applicable to the Agreement being drafted. Brief

guidance on the Schedules is provided below to complement that already in the template.

Further information:

The ACT Council of Social Service (ACTCOSS) provides an online Organisation Information Kit that provides

guidance about governing and managing community organisations in the ACT. The kit includes a section titled

Obtaining and Managing Funding, which includes guidance on the standard Service Funding Agreement

targeted to the needs of the community sector. This is available from:

http://www.actcoss.org.au/oik/sections/funding.html.

Appendix 1.1 – Body of the Agreement

The body of the Agreement contains definitions and conditions common to all SFAs. Important provisions in the

body include how concerns are addressed and the circumstances under which an Agreement may be

terminated.

Significant provisions contained in the body of the SFA include:

Access to premises

 There is a requirement that organisations allow Territory officers to enter their premises on two (2)

weeks written notice (clause 5.1).

 Organisations may require that Territory not to permit staff of a nominated gender to enter the

premises (clause 5.2).

Insurances and indemnities

 Organisations indemnify the Territory against liability for all claims, costs and expenses for loss,

damage, injury or death to persons or property caused by the organisation, its employees or agents,

except to the extent that the Territory caused the relevant loss, damage or injury (clause 5.4(1)) [i.e.

the organisation will cover any such costs].

Provision of information

 Organisations will provide information requested in writing by the Territory within the timeframe

stipulated (clauses 5.7 and 6.4).

Appendix 1 – Guidance on the standard Service Funding

Agreement

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 Organisations will provide immediate notice if they will wind up, liquidate or appoint a receiver (clause

5.9).

Territory’s Obligations:

 To act promptly and in good faith in resolution of any questions, issues or disputes (clause 6.1(3)).

 As soon as practical, provide a reasonable level of feedback regarding reports submitted by

organisations (clause 6.3).

 Commence communications at least three (3) months prior to the expiration of Agreements

concerning the Territory’s intentions in relation to the continuation or otherwise of funding of the

services (clause 6.5).

Treatment of Personal and Agreement Information:

 Organisations will comply with the Commonwealth Privacy Act 1988 (clause 8.2(3)).

Intellectual Property

 Title to and ownership of intellectual property rights (including copyright) belong to the party that

creates the material (clauses 9.1 and 9.3).

 Territory materials must be used in accordance with the Agreement and the organisation grants free

licence to the Territory (consent required if for commercial purposes) (clauses 9.2, 9.4 and 9.5).

Resolution of issues:

 When an issue arises, one party may issue a written notice to the other party and both parties will

endeavour to promptly resolve the issue in good faith (clause 10.1).

 Issues will be escalated to senior management if not resolved within 10 business days (clause 10.2).

 If not resolved within 20 business days the parties will undertake mediation prior to resorting to

litigation (clause 10.3).

 No unresolved issue will entitle the organisation to suspend services unless this is agreed in writing

(clause 10.5).

Suspension and termination:

 The Territory may suspend payment to the organisation if it has failed to provide reports or

information reasonably required under the Agreement (clause 11.1).

 The Territory may in writing immediately terminate the Agreement in whole or part if there has been a

breach of the Agreement that has not been resolved within 40 days of a notice being served (clause

11.2).

 The Territory may in writing immediately terminate the Agreement if there is a Compelling Reason

(defined as ‘a situation of urgency, such as substantial non-delivery of services or a situation

concerning the safety or health of, or harm to, any person) (clause 11.5).

 Both parties may agree in writing to terminate the Agreement (clause 11.6).

 If the Agreement is terminated it may be agreed that assets held by the organisation are transferred to

another organisation funded under the program (clause 11.9).

Notices

 Formal notices served by one party to the other must be served by delivering the notice, posting it or

faxing it (clause 15.1). [Note that, as at October 2010, email is not listed as a method of serving a

notice].

Continuation of obligations

 Some of the organisation’s obligations under the contract continue after the expiration or termination

of the Agreement (including indemnity, confidentiality, etc) (clause 19).

Guiding Partnerships – The Funding Managers’ Guide 40 | P a g e

Appendix 1.2 – Schedule 1 – Agreement details and further definitions

Schedule 1 provides a summary of the service(s) to be provided and additional definitions specific to the

service(s). It is important that the Funding Amount and Agreement Period are accurately completed. Where

prompted for “organisation’s Agreement Manager” and “Territory’s Agreement Manager” it may be preferable

to insert generic position titles rather than the names of individuals to allow for changes over time.

Appendix 1.3 – Schedule 2 – The Services

Schedule 2 is the core part of the SFA in terms of specifying the purpose, outcomes and performance

requirements of the service.

Item 1 (The Services) - it is important to have meaningful and specific information about the broad policy goals

that the service will contribute towards. It may be useful to specify ACT Government targets or program

objectives here to link the role of this service to the Government’s broader agenda. Item 1 should also provide

a detailed outline of the services to be provided under the Agreement.

Item 2 (Outcomes) – it is increasingly important that funded services are directed at achieving community and

Government objectives. This section should include the changes, results and impacts that will be achieved for

service users, the program, or institutional change.

Item 3 (Outputs) – these are measurable activities that contribute towards the achievement of the outcomes,

the goals of the program or the broader policy goals set out in Item 1. Outputs may be the categories of activity

(expanded upon with Performance Indicators) or may include the quantity of goods and/or services provided or

delivered by the organisation.

Item 4 (Performance indicators) – relate to outputs and specify the effectiveness of the outputs to be

measured. This section is often divided into Quantitative Indicators and Qualitative Indicators.

Quantitative Indicators - it is good practice to include numerical minimum benchmarks that should be met in a

range of areas in order that the number achieved can be compared against that required by the Agreement.

Example indicators might be:

 A minimum of 40 clients provided with outreach support each reporting period;

 A minimum 95% of urgent property repairs completed within 24 hours; or

 A minimum client satisfaction rating of 90% in client surveys.

It may not be possible to set some numerical benchmarks when establishing new services as the level of

demand for the service may not be determined until it has operated for a period of time.

Qualitative Indicators – these are indicators that impact on the quality of the outcome for service users, but

which cannot be measured numerically. Examples indicators might be:

 Qualitative evidence that Service User’s needs are being met in each of the specified Output areas.

Evidence may include case studies, Service User surveys, action research, independent evaluation

and/or other relevant means adopted by the organisation;

 Evidence that mechanisms are in place to receive Service User feedback and that service planning and

delivery is improved as a result of this feedback;

 A formal complaints mechanism is made available to Service Users;

 Service Users will be supported to develop skills and resilience, encouraged to move toward

independence of the service and successfully exited from the service as appropriate.

Item 5 (Performance Requirements) – this section specifies details about how the service is to operate.

Examples that might be included under this section include:

Guiding Partnerships – The Funding Managers’ Guide 41 | P a g e

 The required opening hours (e.g. 24 hours per day 365 days per year; or 9am-5pm weekdays for 48

weeks of the year);

 Expectations of sector participation and collaboration with the Territory and other organisations,

operationally and/or in policy development;

 Whether fees may be charged (e.g. “Access to the Services should not be contingent upon the Service

Users financial ability to pay – however, any fees received will be reinvested in the Services”);

 Expectations that the service contribute data to particular ACT or national data collections or surveys;

 An ‘early warning’ clause whereby the organisation must notify the Territory as soon as possible after

any significant event or critical incident, or where performance will be significantly below that

expected;

 Requirements regarding any properties made available by the ACT Government (e.g. standards of

cleanliness and repair, details of rental arrangements, how often the organisation is to inspect

properties);

 A clause such as “The organisation must implement strategies to ensure access by Aboriginal and

Torres Strait Islanders and people from culturally and linguistically diverse backgrounds”;

 A clause requiring that all employees of a particular service are to have undergone particular training;

 A requirement that the service comply with other guidelines (e.g. The “National Program Guidelines

for the Home and Community Care Program 2007” provides the principles under which the HACC

Program is to be delivered and identifies specific strategies to be used by a service provider in the

allocation of its services. These include access for special needs groups, the basis for assessment, the

provision of integrated services and prioritisation of resources.)

Item 6 (Quality Standards) – this section should contain details of any ACT or national standards that the

service must comply with, as well as quality assurance tasks more specifically required of the service. Examples

might be:

 The organisation is to provide evidence that it is actively working towards quality improvement and is

reviewing its practices against a set of recognised quality indicators including but not limited to the

National Standards for Mental Health Services, or the ACT generic standards for community services –

Raising the Standard;

 Consumers and carers are involved in the planning, implementation and evaluation of the

organisation’s service provision;

 The organisation is expected to work within the Disability ACT Quality Improvement Framework,

including establishing a Quality Plan and undertaking an annual review of its practice against the

National Disability Service Standards (or equivalent).

Item 7 (Territory Material – Intellectual Property Rights) – it must specified here if there is any material

created under the Agreement that the Territory wishes to retain ownership rights over.

Item 8 (Form of Acknowledgement) – this is where the Territory specifies how the organisation should

acknowledge the Territory (and the Commonwealth where appropriate) in any published or presented

information.

Appendix 1.4 – Schedule 3 – Reports and reviews

Schedule 3 is the appropriate place to include reporting requirements, including the nature of reports and

when they should be submitted.

Item 1 (Reports and documentation) – this item includes reference to any annual reports required and allows

for inclusion of additional reports above that normally required (e.g. Action plans, Reporting in targeted areas

of concern, etc). Note that organisations may produce annual reports at different times of year, depending on

whether they are registered as incorporated associations (under the ACT Associations Incorporation Act 1991)

or as companies (under the Commonwealth Corporations Act 2001).

Guiding Partnerships – The Funding Managers’ Guide 42 | P a g e

Item 2 (Financial Reports) – two types of financial report are typically required – a regular (usually 6 monthly)

report and an annual audited financial statement. Audited financial statements must include the auditors

opinion as to whether the Funding Amount has been expended in the manner required by the Agreement.

Item 3 (Performance Reports) – this section specifies what performance reporting is required and how often.

In order to minimise administrative burden to funded organisations, performance reports are generally only

required once every six months, though the timing may be shorter or longer to meet the requirements of each

program.

Item 4 (Annual Review) – it is generally a requirement that the Territory meet with the organisation at least

once per year to review the Agreement and the performance of the service. In the final year the review will be

conducted at least three months prior to the Agreement ending.

Appendix 1.5 – Schedule 4 – Funding amount and payment

This schedule specifies the amounts to be paid for each service and when and how these payments will be

made. Prompts in the template provide further guidance.

Appendix 1.6 – Schedule 5 – Assets

Schedule 5 provides for conditions to be included in the SFA regarding assets. Schedule 5 allows for the

inclusion of lists of assets that remain the property of the Territory and the organisation, and states the

obligations that each party has in regards to those assets.

Assets that should not be purchased with the funding can also be specified and there is an obligation that the

organisation maintains an assets register that will be provided to the Territory on request.

In the SFA definitions, “Assets” are defined as all items of equipment, furniture, vehicles, buildings, real

property and leasehold improvements, which

 are specified in Item 1 Schedule 5; or

 have a value of $3000.00 or more and are purchased, leased or hired, wholly or partly with the

Funding Amount.

Disposal of assets

There will be times, such as at the expiration or Termination of an Agreement, when assets held by the

organisation will need to be ‘disposed’ of. There are contractual, policy or legislative obligations that may

restrict the way in which this is done.

Section 11.9 of the SFA allows the Territory to direct the organisation on how it transfers assets on Termination

of the Agreement. The organisation may request that such assets be transferred to another organisation

funded under the same program, in order that Service Users still benefit from those assets.

Item 1, Schedule 5, of the SFA, allows the Territory to specify that listed assets be returned to the Territory (or

a third party) on expiry or termination of the Agreement. If this item is left blank the Territory may risk waiving

its rights to these assets, so it is important that a list of assets be inserted if the Territory wishes to retain

ownership over them.

Procurement Circular PC 06 Disposal of Assets provides further guidance, processes and obligations related to

the disposal of assets. The Circular states that “the objective of any disposal action should be to achieve value

for money for the Territory”, where “Value for Money means maximising the overall benefit to the Territory

from the disposal of an asset. Value for Money does not necessarily mean ‘highest dollar return’”.

Procurement Circular PC 06 states that Directorates should also:

Guiding Partnerships – The Funding Managers’ Guide 43 | P a g e

 identify the assets and dispose of them in accordance with legislation and policy;

 ensure the Territory’s social, economic and environmental interests are protected;

 consider future remediation costs that may be borne by the Territory;

 minimise or eliminate any potential for abuse or risk from hazardous, pollutant and dangerous

materials when assets are being disposed of;

 consider recycling/reuse options before undertaking any dumping or destruction action; and

 provide the highest level of cost effectiveness and procedural flexibility consistent with regulation,

probity and ethical practice.

Appendix 1.7 – Schedule 6 – Special conditions

Schedule 6 provides for the inclusion of special conditions not covered in the other schedules. While a number

of special conditions are common to most SFAs (such as Insurance and Police Checks), the Territory may also

add clauses to Schedule 6 that are specific to the service or funding program. Some guidance on the existing

provisions is included here:

Item 1 (Insurances) – There is a range of insurance types, some of which are compulsory for funded

Organisations to have (notably public liability and workers compensation insurances), and others that will be

conditional on the nature of the organisation and the goods or services being supplied.

The level of public liability insurance required by non-profit organisations is summarised at Part 4.3 of this

Guide.

A funded organisation should only need Professional Indemnity insurance if there is potential for the Territory

or another party to incur a financial loss by acting on Professional Advice or Service given by that organisation.

The ACT Insurance Authority (ACTIA) has developed a flowchart to assist in determining whether an

organisation should have this insurance (available from

http://www.treasury.act.gov.au/actia/PI_Flowchart.pdf).

Item 2 (AFP Checks – Recruitment of employees and volunteers) – This item provides protection for children

and vulnerable adults by placing requirements on funded organisations to have processes in place to ensure

that their employees are ‘fit and proper’ persons for working with such groups. This includes a requirement

that referee reports be checked and clearances be obtained from the Australian Federal Police (AFP).

Note that the ACT Government is currently developing a scheme whereby Working with Vulnerable People

Checks will replace the current police checks.

Item 3 (Generic Requirements of funding program) – This item allows for the inclusion of requirements

specific to the funding program, such as service standards.

Item 4 (Confidentiality of Agreement) – Replace the text under this item with the phrase “Not Applicable”

unless the organisation requires that part of the Agreement not be publicly disclosed. If some of the Agreement

is not to be publicly disclosed, the reasons for this must be listed at Item 4 (4), in accordance with the

Government Procurement Act 2001.

An example where this item might be used could be where a women’s refuge does not want its physical

address known in order to protect its clients’ safety. In this scenario the address could be included in the SFA

but declared as confidential text under Item 4, thereby ensuring that the address is deleted when the SFA is

published on the public contracts register.

Item 5 (Records on Behalf of Territory) – This item only needs to be included in those Agreements when the

services being funded are exercising a function under a Territory law. The item contains important provisions to

assist Government Directorates in meeting their obligations under the Territory Records Act 2002.

Organisations are also required to comply with other relevant legislation, including the Privacy Act 1988

(Commonwealth) and the Health Records (Privacy & Access) Act 1997.

Guiding Partnerships – The Funding Managers’ Guide 44 | P a g e

The Territory Records (Standard for Records Management Number 5: Recordkeeping and Outsourced

Government Business) Approval 2009 provides guidance on implementing the Territory Records Act 2002 when

outsourcing government services. The Standard states that “outsourced activity records must be managed as if

the Agency were undertaking the activity itself. Agencies must make provision in their contracts to ensure that

they gain legal and beneficial ownership and custody of records from service providers”.

The Standard goes on to say that:

 Agencies must be careful to ensure recordkeeping responsibilities are specified in outsourcing

contracts;

 Agencies can meet their record keeping obligations by either

o delegating the recordkeeping responsibility to the service provider and ensuring that

appropriate records are transferred according to an agreed schedule; or

o ensuring the Government Agency creates its own records of the work performed by the

service provider;

 all records must be transferred to the custody of the Government Agency at the completion of the

contract.

Source: Territory Records (Standard for Records Management Number 5: Recordkeeping and Outsourced Government Business)

Approval 2009 (No 1) (http://www.legislation.act.gov.au/ni/2009-15/default.asp)

Item 6 (Survival of Provision of Information Requirement in Clause 6.4) - Replace the text under this item with

the phrase “Not Applicable” unless the proposed arrangement is high risk, a pilot program or short term (less

than 3 years).

Item 7 (Child Protection – Reporting & Training) – This item must be included if the organisation will be

involved in any way with children or young persons in providing the services (otherwise “Not applicable” may

be inserted). The item requires relevant organisations to have a child protection policy in the specified format.

Item 8 (Policy Submissions and Advocacy Documents) – Insert this item for peak bodies and advocacy groups,

otherwise the phrase “Not Applicable” may be inserted.

Item 9 – Provides for the insertion of other special conditions as required (insert “Not Applicable” if unused).

Appendix 1.8 – Attachments to the Service Funding Agreement

Attachment A (Financial Report) – Attachment A allows for the Territory to provide the format in which

financial reports are required. This will generally include the funded amount for the period, the actual

expenditure, and the variation between them. Explanations are generally sought from funded organisations

when actual expenditure is 10% (or more) above or below the funded amount.

Attachment B (Performance Report) – Attachment B allows for the inclusion of a performance report template

that organisations should use for their regular reporting. The template will typically list the performance

benchmarks set out in Item 3 (Outputs) and Item 4 (Performance indicators) of Schedule 2. Organisations then

insert the actual numbers achieved. The templates may also require reporting against other aspects of the

organisation’s performance, including the other items in Schedule 2 (e.g. Performance Requirements; Quality

Standards).

Other attachments – Other attachments may be included, depending on the needs of particular funding

programs.

Guiding Partnerships – The Funding Managers’ Guide 45 | P a g e

ACT Government

Agreement Management Plan

[Insert Organisation name]

[List services]

Purpose

The Agreement Management Plan (AMP) is an important tool to assist

ACT Government Agreement Managers in effectively managing human

services that are delivered by community organisations.

The AMP outlines the key objectives and outcomes of the Service Funding

Agreement, and addresses key tasks necessary to minimise risk and

ensure the success of the service.

The Agreement Management Plan also enables the Agreement Manager

to develop a strong understanding of the Agreement and the

responsibilities of the parties involved. It also establishes a system against

which the performance of both parties can be monitored, in order to

identify and address problems early.

Instruction

This template provides prompts for each section. Replace the prompts

with brief details addressing each item.

Background

Insert a brief description of the policy context, the services being provided

and how the Agreement was established.

Key deliverables

What are they key objectives, outcomes and outputs expected from a

successful Agreement.

Contacts

List the key personnel associated with the Agreement and provide contact

details and their role in the Agreement:

Name

Role (e.g. CEO,

Organisation’s

Agreement

Manager)

Contact Details

(phone, email,

fax)

e.g. Bill Smith

Chief Executive

Officer, It Matters Inc

B.Smith@itmatters.org

.au

Phone 62123456

Fax 62123456

Risk Management

What risks are involved with the management and delivery of this service,

and what strategies are being put in place to manage these risks?

Appendix 2 – Agreement Management Plan template

Guiding Partnerships – The Funding Managers’ Guide 46 | P a g e

Risk

Risk rating (Low,

Medium, High or

Very High)

Strategy to address

risk

Transitional

arrangements

If it is a new service provider, how will clients and other stakeholders be

impacted? How will transition be managed (is there a transition plan)?

What transitional tasks need to be addressed (eg notification to

stakeholders/users, transfer of relevant service information from previous

service provider)?

Communication

strategies

How regularly will service visits and review meetings be held between the

Organisation and the Agreement Manager?

What are the other methods for communication to be used and when will

they be used?

If there are concerns regarding the service, how and when will these be

communicated to the organisation?

Reporting

requirements

What are the reporting requirements under the Agreement? What will be

the method of reporting (eg paper reports, electronic, etc)?

Example:

Service-specific performance and financial reports are required to be

submitted once every six months (within 30 days of 30 June and 31

December each year). These can be in paper or electronic form.

Expenditure should be within 10% of the budget for the service, or an

adequate reason provided as to why expenditure has varied by more than

10%.

An audited financial statement for the organisation is required by 30

November each year and an annual report is required within one month

of the latest date the organisation is legally required to lodge the report

with the relevant regulatory authority.

Evaluation of

performance and

financial

management

What are the measures against which the organisation’s performance will

be assessed? How will the information be collected? How often will the

evaluation occur?

Example: The Directorate will assess performance and financial reports

on a six monthly basis and send a performance feedback letter to the

service within four weeks of the report being received.

If this is an existing service – how has the organisation performed in the

recent past and what actions will be put in place to address any concerns

regarding performance?

Example: Concerns have arisen that an insufficient proportion of this

service’s clients have been supported to enter safe and secure long term

accommodation. An improvement plan will be developed with the service

provider in the coming weeks, with proposed milestones for

improvement listed in the Agreement Milestones section below.

Guiding Partnerships – The Funding Managers’ Guide 47 | P a g e

Agreement

milestones

List all milestones in relation to delivery of services under the Agreement.

Where there are concerns regarding an organisation’s performance,

milestones can be agreed with the organisation detailing how it can bring

its performance back to the level required.

Key tasks with milestones

Responsibility

Due date

Other

Requirements

 Insurance requirements

 Police Checks

 Risk Profile

 Risk Management Plan

Agreement

operation

How are conflict and disputes to be resolved under the Agreement?

How will Agreement variations be handled?

What conditions apply to payments, and when will payment be made?

Agreement review

How soon before the Agreement expiry date will the review occur? How

will the review be undertaken? How will success be measured (should be

in terms of the identified outcomes and outputs)? Will the Agreement

management process itself be reviewed?

Future Agreement

options

What will occur at the end of the Agreement? If it is a continuing

requirement, is there an option to extend?

Chapter 2.8.2 of the ACT Government Chief Executive Financial Instructions provides better practice

guidelines on contract management. This is available from the Treasury Directorate website:

http://www.treasury.act.gov.au/accounting/download/bp2_17.doc.

Source: adapted from the Tasmanian Government Contract Management Plan Pro-forma.

Schedule

and item

Reporting Requirements

Date Due

Date

Received

Action

required?

Feedback

provided?

Year 2011-

SFA Reporting Checklist

Every six months

Sch 3, Item 2

Financial Reports “Attachment A”

30 July

30 January

Sch 3, Item 3

Performance Reports “Attachment B” Sch

2, Items 3 and 4

31 July

31 January

Insert name and title of key contact

Insert name of organisation and service

Every 12 months

Deed of Variation

(Date signed, significant changes)

Sch 2, Item 6

Quality Improvement

(insert name of Quality Standards)

Once every 12

months

(Record progress)

Sch 3, Item 1

Annual Report

Within one month of

adoption by org.

Sch 3, Item 2

Audited Financial Statements

30 November

Sch 3, Item 3

Performance Reports “Attachment B” Sch

2, Items 5 and 6, Sch 6

Once every 12

months

Sch 3, Item 3

Optional report on unmet need

Once every 12

months

Sch 3, Item 4

Annual review meeting

Prior to signing SFA

Sch 6, Item 1

Insurances

(type of insurance, amount and date of expiry)

Sch 6, Item 2

Police Checks

(evidence of compliance)

Sch 6, Item 7

Child Protection Policy

Copy provided to Directorate?

Regulations

ACTIA Risk Assessment

(copy of Public Liability Assessment received)

Shared Services

Procurement

Ethical Suppliers declaration

Date signed

Appendix 3 – SFA Reporting Checklist

Instruction: Send to service provider within four (4) weeks of report being received. Edit or remove text in red

and copy onto your Directorate’s letterhead. Change all text to black prior to sending.

[Name of organisation’s Agreement Manager]

[Position]

[Organisation name]

[Address]

[SUBURB] [ACT] [POSTCODE]

Dear [Title] [surname of Organisation’s Agreement Manager]

Thank you for the [organisation name] six monthly performance and financial reports for [services] for the

period [July to December YEAR OR January to June YEAR], received by the Directorate on [date received]. This

letter provides formal feedback from [funding Directorate] in relation to these services.

Report assessment

Overall [Directorate] considers that the performance and financial reports satisfy your organisation’s

contractual obligations for the period, the outputs of the Service Funding Agreement (SFA) have been met

and the funding has been expended appropriately [delete parts of this paragraph if not accurate].

[Directorate] recognises that [insert text recognising good performance, achieved output levels and/or

innovations in service delivery].

[Directorate] does, however, note that there appear to be items within your reporting that have not met the

requirements of the Service Funding Agreement. Specifically, [include brief reference to these items using

restrained language]. In order to clarify whether this indicates that the required outputs have not been

achieved or is simply a matter of the report format, it is necessary to arrange a service visit to discuss the

report. An officer of [Directorate] will be in contact with you shortly to arrange this visit. [Delete this

paragraph if not accurate or appropriate].

Financial outcome

The organisation has reported a [deficit/surplus] of [x% above/below the funding level] during this reporting

period. We note that this is due to [extra hours expended, or other reason provided] and note that

reimbursement is not being sought [OR] We note that this variation is greater than 10%, but that no

explanation has been provided for the variation. Please provide an explanation for this variation in writing by

[date in two weeks].

Annual reports

Thank you for providing [Directorate] with the [organisation] [year] annual report in a timely manner. In

providing [Directorate] with a copy of your report it increases our understanding of the activities and

priorities of [organisation].

Insurance

Our records show that your current insurance policy expired on [date]. It would be appreciated if you could

send [Directorate] a copy of your renewal at your earliest convenience.

Service visits and review

Appendix 4 – Better practice example performance feedback

letter

Guiding Partnerships – The Funding Managers’ Guide 50 | P a g e

In order to maintain a strong relationship with your organisation and to ensure that effective outcomes are

achieved for service users, we would like to arrange a service visit to your organisation. An officer of

[directorate] will be in contact with you shortly to arrange this visit.

[Directorate] is appreciative of the efforts of [organisation] under this Service Funding Agreement and looks

forward to continuing to work productively together. If you wish to discuss these matters or other issues

relating to your Service Funding Agreement, please contact [Agreement Manager’s name] on [phone] or

[email].

Yours sincerely

[Position]

[Business area]

[Day] [Month] [Year]

Guiding Partnerships – The Funding Managers’ Guide 51 | P a g e

Instruction: Send this letter if report(s) have not been received within seven (7) days of the due date (to allow

for postage and other minor delays). Edit or remove text in red and copy onto your Directorate’s letterhead.

Change all text to black prior to sending.

[Name of Organisation’s Agreement Manager]

[Position]

[Organisation name]

[Address]

[SUBURB] [ACT] [POSTCODE]

Dear [Title] [surname of Organisation’s Agreement Manager]

I am writing in relation to the performance and financial reporting that [organisation] is required to submit

under its Service Funding Agreement (SFA) for [list services].

As you are aware, under the terms of the SFA, six-monthly performance and financial reports need to be

submitted within 30 days of each six month period. It appears that the directorate has not received the

[performance and/or financial report(s)] that were recently due for [list services].

This/these report(s) is/are now overdue and should be submitted by [date in one week]. Your prompt

attention to this matter would be appreciated. If you have already submitted your report(s) or they are

currently in the mail, please ignore this letter.

Performance and financial reports can be submitted via email to [CSD only: DHCSContractsandGrants@act.gov.au

OR other Directorates insert appropriate email address] or by mail to:

[CSD only: Contracts and Grants Unit

Community Services Directorate

PO Box 158

Canberra ACT 2601

Other Directorates insert appropriate address here].

If you wish to discuss these matters or other issues relating to your Service Funding Agreement, please

contact [Agreement Manager’s name] on [phone] or [email].

Yours sincerely

[Position]

[Business area]

[Day] [Month] [Year]

Appendix 5 – Better practice example late report letter

Guiding Partnerships – The Funding Managers’ Guide 52 | P a g e

Acknowledgements

This Guide was compiled with the assistance of Shared Services Procurement, the ACT Government Solicitor,

and Agreement Managers from a number of ACT Government Directorates. The Community Services

Directorate wishes to thank all those who assisted in developing the Guide. The following ACT Government

employees are specifically acknowledged for the valuable input they provided: Brian Myers, Michelle Callen,

Catriona Vigor, Jan Pearse, Rowan Ford, Lindy Keefer, Marilynne Read, Nicole Moore, Robyn Porter, Kate

Miller, Susan Cutler, Cornelius Weber, Michelle Fisher, Liz Stewart-Jones, Alison Lawrence, Katie Acheson,

Elizabeth Stevens and Sarah Watson. The following community sector representatives are also thanked for

their input: Dira Horne (Belconnen Community Service), Camilla Rowland (Communities @ Work), Kylie

Stokes (Sharing Places) and Llewellyn Reynders (ACT Council of Social Service).

The Guide includes excerpts from the Australian National Audit Office publication, Developing and Managing

Contracts Better Practice Guide (2007). This publication is copyright of the Commonwealth of Australia and

excerpts have been reproduced with permission.