Queensland Community Services Futures Forum

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1 Queensland Community Services Futures Forum Submission to the Queensland Audit Office Report Results of Performance Management Systems Audit of Management of Funding to Non-Government Organisations September

2 Executive Summary This submission is made to respond and provide support to the findings and recommendations of the Queensland Audit Office Report: Results of Performance Management Systems Audit of Management of Funding to Non-Government Organisations, (QAO Report hereafter). The submission has been prepared on behalf of the Queensland Community Services Futures Forum. The Forum is a coalition of twenty statewide human services peak organizations and networks in Queensland which provides a representative voice for the Community Services Sector in Queensland. This submission supports and expands on the recommendations contained in the QAO report. We strongly urge that priority be given in the first instance to implementing the higher level recommendations. These are clarified below. Community Services Futures Forum Recommendations 1. Audit Conclusions Implementation of QAO Report Recommendations 1.1 That a central government agency be delegated responsibility for the implementation of the recommendations contained in QAO Report Section 3 Wider Public Sector Findings and Recommendations, and that monitoring mechanisms are established to track progress around the implementation of all recommendations. Clarifying the Relationship with Government 1.2 That a Compact be developed between government and the Community Services Sector which outlines principles for working together and clearly articulates the roles and responsibilities of each. 2. QAO Recommendations across all Public Sector Departments Principles for a Funding Framework: 2.1 That prior to implementing the recommendations contained in the QAO report, the following draft principles for the funding relationship be adopted in consultation with the Community Services Sector, as part of the development of a Compact between government and the sector: Recognition of the added value that the Community Services Sector brings Strengthened sustainable capacity to ensure service quality Enhanced cooperation and collaboration between government and the sector and between various organisations in the sector Innovation development of new approaches and new methods of responding to need Diversity and equitable access including the concept that services delivered by a variety of service provider options (large, small, localised, broadly available, rural, remote, and urban), that each have a place in and make an important contribution to the overall sector Flexibility services that are responsive to individual and changing need Quality services that have a culture of continuous improvement and that meet quality and accountability obligations. Transparency and consistency Efficient and effective use of funds in order to maximise the quantum of services available and the number of people able to be assisted. 2

3 Model to Underpin a Funding Framework: 2.2 That in the implementation of QAO Report recommendation 1(b): That the overarching whole-of-government policy framework for grants and subsidies administration is updated to encompass contemporary funding practice and relationship models with NGO, that government adopt an investment model of government/ngo interaction as the basis of a funding framework. 2.3 That specific investment in building capacity be continued during the next five years to bring the Community Services Sector up to a base line which is sufficient to ensure its effective delivery of current services and sustainability into the future. 2.4 That service delivery funding incorporate the full cost of service delivery, consistent with an investment approach to funding. 2.5 That funding be output based rather than input based, consistent with an investment approach to funding. Clarifying the Broader Relationship: 2.6 That a whole of government funding policy should not be the sole and most important driver of the relationship between the State Government and the Qld Community Services Sector. 2.7 That the finalisation of the whole of government funding policy be developed in parallel with and in accordance with a broader agreement in the form of a Compact between the State Government and the Qld Community Services Sector. 2.8 That the Compact be based on the principles outlined in the Community Services Strategy: Statement of Partnership, and agreed principles to underpin the funding relationship, but also includes detail which will guide and ensure the implementation of the partnership in practice. Information Systems 2.9 That the Community Services Sector be resourced to develop sector based information systems in parallel with the improvement of government information systems. Reducing Red Tape 2.10 That the Bracks Government s Reducing the Regulatory Burden initiative be used as a model to guide the implementation of recommendations around reducing administrative duplication in the NGO sector. QAO Recommendations For Individual Departments 3.1 That individual departmental information management systems are integrated both across each department as well as with whole of government information management systems. 3.2 That before undertaking to improve systems for aggregating performance data consideration is given to how to improve the current systems for collecting this data. 3.3 That Departmental planning processes involve the Community Services Sector in the development of outcomes and performance indicators. 3.4 That evaluation of the outcomes of programs be given a high priority; that this is conducted jointly; and that it contributes to improved joint planning and service delivery in the future. 3

4 Introduction This submission is made in response to Queensland Audit Office Report: Results of Performance Management Systems Audit of Management of Funding to Non-Government Organisations, (QAO Report hereafter). The submission has been prepared on behalf of the Queensland Community Services Futures Forum. The Forum is a coalition of twenty statewide human services peak organizations and networks in Queensland which provides a representative voice for the Community Services Sector in Queensland. The Forum has been meeting for a period of over two years and is working to create a positive future for the Community Services Sector in Queensland through: Creating a unified Community Services Sector by developing a shared vision Developing a strong collective voice for the sector to increase our influence Raising the profile of the sector and raising awareness of its role and contribution to society Engendering proactive, cooperative action around key issues of concern. The submission addresses the following sections of the QAO Report: 1. Audit Conclusion (Section 1.2 pg 7) 2. Recommendations Across all Public Sector Departments (Section 3 pg 13) 3. Departmental Recommendations (Section 3 pg 33) This submission supports and expands on the recommendations contained in the QAO report. We strongly urge that priority be given in the first instance to implementing the higher level recommendations. These are clarified below. This submission does not attempt to comment on all recommendations and addresses only those which are considered to be either of the highest priority, or which may not be implemented. Additionally the submission makes recommendations where the Forum considers a significant issue has been raised by the QAO report but this has not been translated into a recommendation. 4

5 1. Audit Conclusions The Community Services Futures Forum welcomes the recommendations contained in the QAO report, both at the whole of government level and for the individual departments audited. However the Forum is concerned that the recommendations made across all relevant government departments will not be addressed due to a lack of a central agency responsible for their implementation. It is crucial that a central government agency, such as the Department of Premier and Cabinet, be deemed responsible for driving the implementation of the recommendations contained in QAO Report Section 3 Wider Public Sector Findings and Recommendations, and that monitoring mechanisms are established to track progress on the implementation of recommendations. The Forum is further concerned that, in the implementation of the recommendations, individual departments may well focus on the more detailed operational recommendations (many of which have already been initiated by them) in the report, rather than the higher level or overarching recommendations. We strongly recommend that the first matters that need to be addressed are the need for a clear understanding between the sector and the government about our respective roles and responsibilities and establishing principles that underpin our funding relationship (refer to Section of this submission). However neither of these issues are addressed in the recommendations contained in the report. The QAO report does highlight the need for Departments to continue to work with the NGO sector to acknowledge and respect the particular strengths and responsibilities of each and to operationalise their relationships without compromising the particular strengths of both (pg 8), but this is not picked up in the recommendations. The Queensland Community Sector Futures Forum considers the development of a Compact between government and the Community Services Sector would be the best way for government to both acknowledge the value of the sector and clearly articulate the relationship between the two (This issue is examined in more detail in Section of this submission) Recommendations Implementation of QAO Report Recommendations 1.1 That a central government agency be delegated responsibility for the implementation of the recommendations contained in QAO Report Section 3 Wider Public Sector Findings and Recommendations, and that monitoring mechanisms are established to track progress around the implementation of all recommendations. Recommendations Clarifying the Relationship with Government 1.2 That a Compact be developed between government and the Community Services Sector which outlines principles for working together and clearly articulates the roles and responsibilities of each. 5

6 2. QAO Recommendations Across all Public Sector Departments (QAO Report Section 3 pg 13) The QAO Report makes recommendations across all relevant government departments in the following three areas: Governance Improving systems Increasing transparency and public disclosure. 2.1 Enhancing Governance Arrangements (QAO Report Section 3.2 pg 14) This section covers legislation and policy framework for funding, roles and responsibility for engaging with and sustaining relationships with NGOs, adoption of common standards, and alignment of administrative and approval delegations. The Queensland Community Sector Futures Forum wishes to register strong support for all recommendations relating to the adoption of common standards, and alignment of administrative and approval delegations. We would like to provide additional comment in relation to recommendations concerned with refining legislation and policy frameworks and clarifying roles and responsibilities Refining Legislation and Policy Frameworks (QAO Report Section 3.2.1) The report highlights the need for a whole of government funding policy which clearly articulates the objectives of government in its funding of NGOs and the relationship model which dictates funding practice. The report details three models of interaction which could underpin a funding policy framework. However it is the perspective of Futures Forum that, prior to the adoption of a funding model, there is a need to first establish principles to underpin the funding relationship, as these will inform the appropriate model of funding, and an overarching funding policy. Principles for a Funding Framework The community sector in Queensland has for some time been calling for the adoption of principles to underpin the funding relationship, consistent with developments in other jurisdictions. In New South Wales the following principles have been set out to guide the Funding Relationship (Working Together for NSW: An Agreement between the NSW Government and NSW Non- Government Human Services Organisations, June 2006): Value for money. Fairness, integrity and transparency. Cooperation. Consistency. Probity. Coordination. Similarly, in Canada the following principles have been established to underpin the funding relationship (A Code of Good Practice on Funding, October 2002): The Voluntary Sector s Value Strengthened Sustainable Capacity Cooperation and Collaboration Innovation Diversity and Equitable Access Accountability Transparency and Consistency Efficiency and Effectiveness 6

7 The Fair Level of Funding project being run by the portfolio of the Ministers for Communities and Disability Services Qld has undertaken work to establishing principles to underpin the determination of a fair level of funding. The following have been agreed: Sustainability ensuring service continuity Flexibility services that are responsive to individual and changing need Diversity services delivered by a variety of service provider options (large, small, localised, broadly available, rural, remote and urban), that each have a place in and make an important contribution to the overall sector Innovation development of new approaches and new methods of responding to need Quality services with a culture of continuous improvement and that meet quality and accountability obligations Value for money providing services that efficiently and effectively use funds in order to maximise the quantum of services available and the number of people able to be assisted. Recommendations principles for a funding framework: 2.1 That prior to implementing the recommendations contained in the QAO report, the following draft principles for the funding relationship be adopted in consultation with the Community Services Sector, as part of the development of a Compact between government and the sector: Recognition of the added value that the Community Services Sector brings Strengthened sustainable capacity to ensure service quality Enhanced cooperation and collaboration between government and the sector and between various organisations in the sector Innovation development of new approaches and new methods of responding to need Diversity and equitable access including the concept that services delivered by a variety of service provider options (large, small, localised, broadly available, rural, remote, and urban), that each have a place in and make an important contribution to the overall sector Flexibility services that are responsive to individual and changing need Quality services that have a culture of continuous improvement and that meet quality and accountability obligations. Transparency and consistency Efficient and effective use of funds in order to maximise the quantum of services available and the number of people able to be assisted. The establishment of agreed principles will clear the way for the development of a sound and clear policy base for funding non government organisations. Model to Underpin a Funding Framework The QAO outlines the following models which can be used to conceptualise government s objectives and relationship with NGOs, and to inform the basis of the funding policy framework: Giving an approach where the role of government is as a philanthropist supporting a worthy cause. Within this approach there is very little specificity about where funds go, very general accountability requirements and little relationship between the activity, its cost and the amount of funding given. Shopping this approach reflects a market model, where government purchases a service (using quasi-voucher systems and/or competitive tendering). The model does not recognise the fact that, in practice, the community service industry is not a conventional market. Investing an approach characterised by the provision of funding for the full cost of service delivery as well as costs that will enable organisations to be sustained into the future (appropriate indexation funds, adequate costing of administrative and operational support and quality assurance). 7

8 The QAO Report notes that the current approach is more about buying service delivery capacity rather than investing in the sector (p. 7). The Community Services Sector strongly supports the adoption of an investment model of government/ngo interaction as the basis of a funding framework. Such a model will ensure investment into sector capacity into the future as a long term partner with government in service provision. In the adoption of an investment model it is particularly important that this approach is applied to both existing services and new services. Current work around fair level of funding is focusing on the sustainability of new services. Sustainability is a significant issue for existing services and needs to be addressed through investment in building the capacity of these services. While the sector supports an investment model as the predominant approach it is recognized that there are different contexts when each of the other approaches may be appropriate. Gifts of financial assistance (or grants in aid) are an established and acceptable method for providing money to not-for-profit human service providers to meet special circumstances, so long as it remains subject to normal audit processes and parliamentary scrutiny. The purchasing approach is more appropriate for specific short term consultancy or one-off projects which may also be appropriately delivered by the for-profit sector. Recommendations Model to underpin a funding framework: 2.2 That in the implementation of QAO Report recommendation 1(b): That the overarching whole-of-government policy framework for grants and subsidies administration is updated to encompass contemporary funding practice and relationship models with NGO, that government adopt an investment model of government/ngo interaction as the basis of a funding framework. 2.3 That specific investment in building capacity be continued during the next five years to bring the Community Services Sector up to a base line which is sufficient to ensure its effective delivery of current services and sustainability into the future. 2.4 That service delivery funding incorporate the full cost of service delivery, consistent with an investment approach to funding. 2.5 That funding be output based rather than input based, consistent with an investment approach to funding Clarifying Roles & Responsibilities (QAO Report Section 3.2.2) The QAO examined whether there are clearly established and communicated roles and responsibilities within Government for sustaining relationships with the NGO Sector. The report makes recommendations for greater clarity in this area including the establishment of protocols for consultation. The Community Sector Futures Forum is firmly in support of the need for clarification regarding the roles and responsibilities of Government and the NGO sector in their different interactions and considers this work should have taken place before the development of a funding policy. The funding relationship is only one part of the broader relationship between government and the sector and should not dictate, nor lead the nature of this broader relationship. While the community sector is keen for the work around funding policy to commence, the sector strongly supports the development of a compact, or partnership agreement between Government and the Community Services Sector during the same period, so they are consistent and supportive of each other. A compact will outline the roles and responsibilities of government and the sector, values to underpin the partnership, and would provide protocols to guide collaboration. 8

9 Similar compacts and partnership agreements between state government and the nongovernment sector are already in place in New South Wales, Victoria, South Australia, the ACT and Western Australia. Additionally agreements are in place between federal governments and the community and voluntary sectors in the UK, Scotland and Canada. The QAO report acknowledges the existence of the Community Services Strategy Statement of Partnership. This document was developed by the Premiers Department in 2000 and outlines principles to underpin the relationship Government and the Community Services Sector, as well the roles and responsibilities of each party. The principles outlined in the statement include: Interdependence: government and non-government community service providers have distinct but complementary roles and responsibilities in developing public policy and delivering community services. Independence and autonomy: the role of community service providers in activities outside of those funded by State Government, includes the development of innovative service responses and the right, within the law, to publicly comment on, or challenge State Government policy and practice, and lobby when necessary. Meaningful communication: communication should be two-way, open, direct and timely, supported by structures that facilitate ongoing dialogue on all matters relating to community service delivery. This includes planning, policy development, program and organisational reviews. Accountability for public funds: community service providers are accountable for public funds in their care. Outcomes for government funded community services should be identified and negotiated in a collaborative manner, recognising the contribution community services make to achieving broader government objectives. While the document was intended to guide the relationship between community service providers and government it does not contain enough detail to affect the partnership in practice. Additionally, while significant consultation was employed in its development the document was not co-signed by the sector and as a result there is no ownership of the document by the sector. Recommendations Clarifying the Broader Relationship: 2.6 That a whole of government funding policy should not be the sole and most important driver of the relationship between the State Government and the Qld Community Services Sector. 2.7 That the finalisation of the whole of government funding policy be developed in parallel with and in accordance with a broader agreement in the form of a Compact between the State Government and the Qld Community Services Sector. 2.8 That the Compact be based on the principles outlined in the Community Services Strategy: Statement of Partnership, and agreed principles to underpin the funding relationship, but also includes detail which will guide and ensure the implementation of the partnership in practice. 2.2 Improving Systems (QAO Report Section 3.3 pg 20) This section covers information systems, collection and use of performance information; program evaluation, and the reduction of red tape Improving Systems: Grants management, performance measurement and evaluation (QAO Report Section 3.3.1, 3.3.2, 3.3.3) 9

10 The Community Services Sector strongly supports the recommendation to develop a whole-ofgovernment grant management system order to improve information systems. The sector further supports the recommendations made regarding the collection and use of performance information and service evaluation. In implementing these recommendations it is essential that support is given to the Community Services Sector to enable the development of sector based information systems in parallel. Recommendations Information systems 2.9 That the Community Services Sector be resourced to develop sector based information systems in parallel with the improvement of government information systems Reducing Red Tape (QAO Report Section 3.3.4) The QAO report makes recommendations in this area including streamlining compliance requirements and developing funding agreements for NGOs that cross program and regional boundaries. Particularly the report highlights that there needs to be shift from reporting for compliance to accountability. The Community Services Sector recommends that the implementation of these recommendations should be informed by Victoria s Bracks Government s Reducing the Regulatory Burden initiative as an example of reduction of red tape on business and the not-for-profit sector. Recommendations Reducing Red Tape 2.10 That the Bracks Government s Reducing the Regulatory Burden initiative be used as a model to guide the implementation of recommendations around reducing administrative duplication in the NGO sector. 2.3 Increasing Transparency & Public Disclosure (QAO Report Section 3.4 pg 30) This QAO report acknowledges the need for greater transparency and public reporting by the public sector and makes recommendations to this effect. The Community Services Sector is in support of the recommendations contained in the report. 10

11 3. QAO Recommendations for Individual Departments (QAO Report Section 4 pg 33) In response to the recommendations made in the QAO report relating to each of the departments, the Community Sector Futures Forum wishes to make the following observations and recommendations: Common issues highlighted in the QAO report include the need for: Improved systems for measuring and aggregating NGO service delivery performance and financial information including the development of business rules for the capture of NGO performance and financial data and a cross functional IT systems to aid in collection and analysis of this data. Better use of performance and financial information as an aid in planning to address service gaps and resource allocation within the community (specific to Dept of Communities and DSQ). Improved evaluation of programs and services The need for improved systems is highlighted at both the whole of government and departmental levels. This creates a need for the integration of information management systems within departments and portfolios, as well as across government. It is the view of the Forum however that the departments need to go beyond improvement in their information management systems to collect and aggregate financial and performance data. It the first instance, the departments need to work closely with the Sector on strategies which will ensure better ability to collect the data through data collection tools and software and hardware so that it is both efficient and beneficial to the sector as well as to the departments. There is a need for a clearer definition of types of services so that data and performance measures have connectivity between service delivery and desired outcomes. Most funded community sector organisations now have to create their own data collection tools and systems at considerable cost and involving a great deal of time and resources. It should also be noted that NGOs already contribute significant data to support accountability and planning. We would strongly support a discussion between the Sector and the Departments about the value of performance information. The benefits lie in reflective practice and learning which leads to improved service delivery which leads to better outcomes for communities and individuals. Too often the collection of performance data has been viewed by both parties in the past as a means for government to monitor funding and enforce compliance rather than a positive and valuable exercise for all parties. Additionally data provided by NGOs is not well utilized by government and should be made more accessible to funded organizations for planning and performance monitoring at a service level. In the same vein, we would argue that valuing performance information both at a program and a service level should be supplemented by more detailed evaluation systems which measures outcomes for disadvantaged people and communities, rather than simply outputs as agreed in a performance plan. Subsequently the performance information as well as the results of the evaluation would feed into a shared understanding between the Community Services Sector and the Government about appropriate solutions and future directions and inform a strong needs based planning approach. This will, in turn, enable joint policy and program planning and development into the future. NGOs not only have the capacity but are very keen to be participating more actively in regional planning processes. It will also feed into improved workforce and organizational planning for Community Services Sector organizations. 11

12 Recommendations For Individual Departments 3.1 That individual departmental information management systems are integrated both across each department as well as with whole of government information management systems. 3.2 That before undertaking to improve systems for aggregating performance data consideration is given to how to improve the current systems for collecting this data. 3.3 That Departmental planning processes involve the Community Services Sector in the development of outcomes and performance indicators. 3.4 That evaluation of the outcomes of programs be given a high priority; that this is conducted jointly; and that it contributes to improved joint planning and service delivery in the future. 12

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