Reform Process
In the lead-up to the South Australian state election in 2014, SACOSS – in consultation with the Health and Community Services Sector– developed a 20-point Better Contracting and Red Tape Reduction Plan. One of the key initiatives proposed was the development of State Grant Guidelines similar to the Commonwealth guidelines, through which we hoped to get more uniformity across government and to mandate simpler grant processes.
A joint government/not -for profit (NFP) working group under the auspices of the Human Services Partnership Forum began working on this project in September 2013. In 2016 the Department of Treasury and Finance took over the process and worked in conjunction with peak bodies in each NFP sector (SACOSS, Volunteering SA&NT, Arts Industry Council, Conservation Council, Sport SA). It has been a long road, and the reform process is ongoing, but there have been significant outcomes and changes in funding principles and processes:
- Funding Principles
- Indexation
- Grants v Procurement, Procurement Guidelines
- Standardised Funding Contracts
PC 044 - The Principles
On 1 July 2017, the South Australian Funding Policy for the Not-for-Profit Sector came into effect (PC 044). This is a Cabinet Policy binding on government departments and sets out the principles for working with and funding the not-for-profit sector, including:
•Robust planning and design
•Collaboration and partnership
•Proportionality
•An outcomes orientation
•Achieving value with relevant money
•Governance and accountability
•Probity and transparency
•Community development principles
Indexation
On 1 July 2017 the government also introduced a policy setting a standard indexation rate to be applied to multi-year contracts with the not-for-profit sector. The rate in set several years ahead and is published on the Treasury website. Departments can no longer set their own indexation rate, or have multi-year contracts without indexation.
Grants, Procurement and State Procurement Board Guidelines
On 1 January 2019, a new set of rules came into effect covering funding to the not-for-profit sector with the new Treasurer's Instruction 15 containing a definition of a grant and enabling grants to be separated from procurements. There will inevitably be some gray areas which will need to be decided on a case-by-case basis, but the the distinction is important because different rules and authorities apply depending on whether funding is a grant or a procurement of services. The State Procurement Board has published a two-page explainer.
The State Procurement Board has also updated its policies and guidelines which apply to all state government procurements (not grants) to incorporate special conditions to apply to the not-for-profit sector procurement. These policies deal with procurement planning and selection processes, and include the requirement to consider 3+3+3 year funding arrangements.
Standardised Funding Contracts
On 1 January 2019 new rules came into effect mandating a standardised funding contracts for grants and for procurements. This means that the same format and standard terms and conditions will apply regardless of the department or program. These contracts were negotiated over a two year period and represent a considerable red-tape reduction for the sector (and for government) and provide for fairer funding arrangements more in line with the principles of PC 044.
Links to the contract templates can be found on the Treasury website.