OVERCOMING GRANTS RAGE NSW Grants Administration Reform. Cathy Peters, NSW Premier s Department

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1 OVERCOMING GRANTS RAGE NSW Grants Administration Reform Address to the Best Practice in Grantmaking Conference Melbourne, February 17, 2006 Cathy Peters, NSW Premier s Department The NSW Government s response to representations from the NGO sector on improving grants management has been to embark on reform, engaging both grants administrators and grants recipients in the process. A number of key issues for reform were identified: NGO peak bodies wanted a compact between the Government and the NGO Sector. NGOs wanted assistance from Government in developing their capacity to partner with the Government to deliver services. NGOs, together with a report from the NSW Council on the Cost and Quality of Government, suggested areas of duplication and administrative burden in administering grants programs. All the issues had similar stakeholders so a number of workshops and focus groups with government agencies and NGOs were held in locations throughout the State. The Government acknowledged up-front the importance of the NGO sector in: sharing their expertise to inform and implement government policy promoting equity, social inclusion and alleviating the effects of poverty or other disadvantage supporting and empowering service users, volunteers and active communities building bridges between the public sector and communities providing high quality services that are complementary or additional to public services; and identifying new needs and better ways of meeting existing needs of individuals, groups and communities. From the consultation we gained a good understanding of the issues confronting both the NGO sector and government agencies and this provided a guide for: 1. how the Government might proceed in developing the relationship with NGOs 2. how NGOs could be supported to deliver services to the community 3. views on improving grants administration processes In relation to 1, the outcome has been an agreement, called Working Together for NSW, between the Government and the NSW Non-Government human services organisations. The agreement provides a framework for consultation and negotiation between government and

2 human services NGOs. A joint Government/NGO reference group monitors implementation of the agreement. In relation to 2, the human services agencies are reviewing options to improve development and support services to NGOs to enhance sustainability and performance across NGO grants and funding programs. In relation to 3, the Premier s Department commenced the Grants Administration Review (GAR). WHAT WERE WE ASKED TO DO? Terms of reference were developed for the GAR with imprimatur to change both grants policy and operations. Information from the consultation process was used to help determine an overall work plan and to get in-principle agreement to certain aspects of grants reform. On the policy side, in-principle endorsements were given to: moving away from an historical basis of funding. This approach was seen to restrict the flexibility of the Government to allocate resources fairly according to changing needs, as well as restricting the ability of the NGO sector to deliver different service needs in a changing environment. moving to longer term agreements to provide some certainty of funding which would enable NGOs to concentrate on the outcomes rather than the following year s agreement creating more effective and efficient use of agency and NGO time. providing a capacity to transfer funds between programs giving the government flexibility to fund emerging issues on a sustainable basis and provide emerging NGOs access to funding streams not currently available. engaging risk management practices to align better the degree and cost of accountability with the value of funding provided or the level of sensitivity. The Government also agreed to improve the general operational aspects of the grants programs. Groups of NGOs and government agencies were established to work collaboratively on these aspects. The agencies partnering with the Premier s Department GAR have been - the Department of Ageing, Disability and Home Care, Department of Education and Training, Department of Community Services, Department of Health, Department of Housing, Department of Juvenile Justice, Community Relations Commission, Department for Women, Department of Aboriginal Affairs, Department of Sport and Recreation, Department of Infrastructure, Planning and Natural Resources and the Department of Gaming and Racing, the Department of Commerce and the Treasury. NGO involvement came from various NGOs on different working groups and with FONGA as a consultative forum at specific stages. WHAT HAVE WE DONE SO FAR? Snapshot of NSW Government grants The GAR undertook an analysis of all the government s grants and subsidies payments. In NGOs received around $2.9 billion of which more than $1.5 billion went towards the delivery of human services.

3 The analysis provided a good overview of the nature and purposes to which grants payments are made and confirmed the scope to rationalise funding programs. It also helped to identify two broad categories of grants programs: grants to deliver a service or grants for a community project. The analysis highlighted a lack of detailed and consistent data on grants and programs which does not easily allow the Government to see if they are effective. The Government is currently reviewing the need to establish a simplified, whole of government data base to inform decision making. Principles for reforming grants administration The first working group concentrated on developing a set of principles under which grants reform would happen. These are: Value for Money. The concept of value for money is a broad one and requires obtaining the best mix of services to meet community needs within available funding and selecting the mix of resources that delivers the best possible outcomes to clients. Fairness, integrity and transparency ensuring that the Government grants system is and is seen to be accessible, appropriate and fair. Cooperation with government agencies and non government organisations working together to promote a funding relationship based on reciprocity. Diversity embodying the recognition of diversity in the community in grants administration practice. Consistency recognising that grants administration procedures should be consistent within programs, across individual agencies, across government and as grant programs evolve. Coordination recognising outcomes for people and communities can be improved through better alignment of planning program design and service delivery within and across both government agencies and NGOs. Accountability establishing clear and documented procedures are in place for the management of grants, recognising the multiple channels of accountability applying to both funding agencies and NGOs. Monitoring and Evaluation with the process and parameters for monitoring and evaluation to be agreed between the funding agency and the funding recipient and embodied in the funding agreement. Probity with grants administration conducted in an environment of integrity, honesty and scrutiny. The principles have been incorporated into the Working Together for NSW agreement between the Government and the Federation of Non Government Associations. Public access to information about grants programs A major source of frustration expressed by NGOs was in obtaining timely access to information about grants programs. The Government has responded by providing a single point of electronic access to all grants programs through the Government s community website

4 This website, established by the Premier s Department in 1999, is an interactive electronic clearing house for everyone involved in community level social, economic and environmental renewal including community leaders, community and government workers, volunteers, program managers, academics and policy makers. The website has been recognised by the world Organisation for Economic Development Advisory Committee on egovernment as The world s most comprehensive e-public Works project. The site s funding module now provides NGOs and community groups with a planning tool to know what programs are available and when. The site contains all the NSW Government grants programs together with some Commonwealth and philanthropic programs. A comprehensive search engine allows users to search for programs using key word, subject or funding agency name. Each grants program includes a program summary, whether the program is open or closed, key dates, who can and can t apply, what will be funded and how much funding is available. Hyperlink access is also provided to each funding agency s website to down load more detailed information if required. Site users can join a free list to receive a monthly update of funding and awards programs closing in the next 90 days. Funding program managers are issued with a user id and password which enables them to login and publish their program information. Electronic alerts are in-built to remind program managers to keep information current. The system is providing agencies with an efficient means to market their grants programs at minimal cost. In the first month of operation the funding module had more than 600,000 hits and more than 60,000 page requests. Grants planning Another working group concentrated its efforts on issues around planning grants programs. The main issues were: from the NGO perspective-what is due and when from the Government perspective improving links with the budget cycle determining if the current service centre model is the way to continue or whether other models are more beneficial to service users using common statistics such as the Australian Bureau of Statistics regional data to inform grants planning A new planning model has been developed that will support integrated grants planning initially across the human services agencies and potentially across government. It provides the capacity for greater community input into determination of how needs can be addressed, better cross agency participation in resolving issues, better alignment of funding with government priorities and a capacity to move funding from historically based funded programs to those that meet new and emerging needs. The model proposes an evidenced based rather than an intuitive approach. Evidence mechanisms to be used are regular grants program reviews and a monitoring and performance evaluation regime. Coordination of research at the local level is proposed by formally tapping into local government social and community plans and population data provided by the Australian Bureau of Statistics Regional Profiles, and community and regional profiles developed by the NSW Regional Coordination Management Groups. Formal engagement with NGO service provider initiated research and consultation processes is proposed, for example evaluations, complaints analysis and community planning days.

5 The model also provides improved connection with the existing decision making structures in Government. The model is now ready to pilot. Grants applications and assessment Applications From a NGO perspective, addressing the operational aspects of filling out and lodgement of application forms were of major importance in streamlining business between the two sectors. The GAR was successful in taking 27 application forms used by twelve agencies and developing a single model. The model has a single standard set of questions to collect organisation details and separate sets of questions to collect information for either community project programs or service delivery programs. There is some capacity for the funding agency to customise the model. An e-form prototype of the model has been developed for use should the Government decide to move to fully electronic lodgement for grants administration. Assessment The assessment practices used by agencies were mapped and found to be similar across those agencies partnering in the GAR project. Guidelines have been developed to reinforce a consistent approach to appraising grants applications against eligibility and selection criteria and the approvals process. Funding agreement Initial consultation on funding agreements clearly identified that no one form of agreement is applicable in all circumstances. There are, however, principles, common elements and some standard wording that can inform an effective funding agreement. From this starting point a model funding agreement was developed. The model contains standard clauses to be adopted by all funding agencies including compliance with law, employees, dispute resolution, asset management, confidentiality and insurance; and schedules to contain the specifics of the grant arrangements such as amount of funding, reporting and performance measures. The model also supports consistency in the relationship between the Government and the non government sector. Where NGOs are funded by multiple programs it is possible to use the one agreement with different sets of schedules. Monitoring and review NGOs in receipt of funding from multiple sources are often required to meet multiple accountability requirements, each with different reporting periods, vocabulary, formats and measurements. This can be in addition to other legislative financial reporting obligations. In smaller organisations compliance with various and conflicting reporting standards taxes limited resources. The current work of the GAR is around streamlining monitoring and review activities. The main objective is to address the proliferation of reporting regimes and inconsistency between the level of accountability required and the level of funding being provided.

6 Firstly, it was determined that performance monitoring activities funded by government grants should collectively answer three simple questions: What has been done? How well was it done? Is anyone better off? The work has focussed on providing two outputs: developing good practice guidelines for monitoring and acquittal of grants programs and developing a collaborative approach to reviewing multi-funded NGOs against service standards. The principles applied by the working group to streamlining reporting are: evaluate grants programs according to their efficiency, effectiveness and risk management practices. outline clearly the agreed purpose, form and timing of monitoring. incorporate mechanisms to review the effectiveness of monitoring activities, including appropriate data collection and information sharing within and between agencies. Particular attention has been paid to uniformity of language and the development of templates. Templates have been developed to capture information relating to different aspects and levels of financial and performance reporting. Most of the templates can be adapted for both interim and final reports and include: basic performance report acquittal certificate balance sheet income & expenditure statement surplus funding retention form asset register employee remuneration form The results will be: a framework for identifying and reporting grants expenditure in a more consistent way, reducing administrative burden and increasing the accuracy and usability of the data collected. A new policy and guidelines to enable cross-recognition of compliance with standards by multi-funded human services NGOs WHAT STILL NEEDS TO BE DONE? Operationally, what remains to be done is to pilot and implement the grants planning model, pilot and implement the monitoring and reporting templates and procedures and to complete the new policy for review of NGO compliance against service standards. The Grants Administration Review will substantively complete its work in June 2006 with the publication of a better practice guide to grants administration in NSW. The Guide will contain all the products of the GAR and is designed to assist agencies to engage consistent administration practices for grants programs and provide clarity to the recipients of grants about the policies

7 which Government agencies should adopt to manage the funding relationship. The guide will be published on and HAS THE NSW GOVERNMENT ADDRESSED GRANTS RAGE? The NSW Government has made significant progress to improve the working relationship between the Government and non government organisations through: the Working Together Agreement which is guiding engagement with the NGO Sector and assisting to identify and respond to issues from a whole-of-government perspective which is providing a single point of public access to key information about grants programs; and streamlined models and processes such as a model application form, model funding agreement and reporting templates designed to reduce the administrative burden on both grants managers and grants recipients.