1 Surviving 1 and thriving under the DCSP Policy For CEOs and Boards

Economic Audit Report October 2009Partnership Forum July 2010State Budget May 2011DCSP Policy July 2011 Context

Delivering Community Services in Partnership Policy

Change 1: Rebalancing of the nature of the relationship between the public and not-for-profit sectors

Change 2: Funding and Contracting Reform

Change 3: Reducing the Administrative Burden

Where are we up to? Nature of the relationship Partnership Forum encourages feedback Some departments are engaging with CSOs and the reforms are viewed positively Funding and Contracting Options Component I funding increase implemented Component II Funding Agency Implementation plans to be completed by July. Extra 10% to be rolled out July 2013 – 30 June 2014 as contracts are re-negotiated Reducing the Administrativ e Burden Not clear yet Contracts are being rolled over No government consensus on a particular form of outcomes based measurement and reporting

Governance Considerations Relationships  Stakeholder engagement  Client/citizen involvement  Move to stronger partnership approach Planning  Outcomes  Theory of change  Activity to impact  Inform strategic planning development

Step 1: Outcomes Participation Number of participants reached, number of contacts and intensity of contact Engagement By clients and staff Learning Changes in knowledge, skill and attitude Actions Changes in behaviour and practices Impact Long-term effects for the individual, community and systems Outputs Outcomes Impact

Governance Considerations Compliance  Industrial Relations (new award and pay equity)  OSH  Incorporate Associations Act  ACNC  New Service Agreements (comprised of request, general provisions, offer, letter of acceptance)

Governance Considerations Risks  General industry/individual org risks  Issues with reform Small org viability Capacity to respond successfully to tenders Effective negotiation for Component II $ Individualised Funding

Finance : Jeff Simper Activities Governance Considerations Costs Prices Outcomes Value Proposition

Costing and Pricing of Services Costing issues to consider Salaries and salary on costs Understanding Overheads Providing for closing of services Providing for the cost of data collection and quality systems Understanding and valuing notional costs Understanding and valuing the cost of capital Review of depreciation rates Doubtful Debts and Concessions

Developing a Pricing Policy Strategic and Organisational Issues Impact and support for other organisational services Position of clients –capacity to pay Market demand – fee for service Discounting for leveraging for donation income Capital management and debt repayment Cash flow issues

Costing Issues Costs recovery Considering the value of notional costs Considering the value of capital employed Quality of service Experience and reputation Developing a Pricing Policy

Building in a margin Margin for risk Margin for Innovation Margin for Capital Investment – new assets Margin for Social Dividend

Responding to a fixed level of funding Changing outcome – managing volumes Changing model - activities Changing model -quality Adjusting margin (per pricing policy) Support from other profitable activities Implement supplementary income – fee for service Don’t do it

Other topics Public expectations and reputation Preparing for consumer directed care Preparing for the reporting obligations for the Australian Charities and Not-for-Profit Commission Auditing standards