Community Sector Red-tape Reduction Forum –

Report

Community Sector Reform Program Red-tape Reduction Project

Contents

Community Sector Red-tape Reduction Forum – Report 3

1.1 Executive Summary 3

1.1.1 Introduction 3

1.1.2 Principle findings 3

1.1.3 Recommendation 3

1.2 Purpose of this Report 4

1.2.1 Document Audience 4

1.3 Red-tape Reduction Forum - Background 4

1.4 Forum Objectives 4

1.5 Forum Methodology 4

1.5.1 Overview 4

1.5.2 Forum Design 4

1.6 Forum Analysis Design 6

1.6.1 Conducting an affinity process 6

1.6.2 Conducting cause and effect analysis 6

1.7 Principle Findings 6

1.7.1 Out of scope issues 6

1.7.2 Strategic issues 6

1.7.3 ACT Government procurement process 7

1.7.4 Reporting requirements – both regulatory and funding agency 8

1.7.5 Contract management and contract compliance 8

1.7.6 Relationship management 9

1.7.7 Regulation by governments 10

1.7.8 Financial management/Auditing and funding issues 10

1.7.9 Any other issues 11

1.8 Recommendations 11

Appendix A. Community Sector Red-tape Forum – Participating Community Sector Organisations 12

Community Sector Red-tape Reduction Forum – Report

1.1 Executive Summary1.1.1 Introduction

A red-tape reduction forum for 65 of the ACT community sector leaders was conducted on 20 February 2013. The forum applied a ‘world cafe’ approach and collected 346 issues raised by the participants under six table topics that summarise the relationship between the sector and government:

a. ACT Government procurement processes;b. Reporting requirements – both regulatory and funding agency;c. Regulation by government regulators;d. Contract management and contract compliance;e. Relationship management; andf. Financial management and funding processes.

The attached report describes the design of the forum and the design of the analysis applied to the forum results and provides a précis of the issues raised by the participants, grouped into fifty four ‘affinity’ groups and analysed further through a cause and effect analysis.

1.1.2 Principle findingsThe report extracts eight strategic issues that are embedded throughout the fifty four affinity groupings of issues raised. These strategic issues were:

a. Overcome the silos;b. Understanding of risk;c. Differences between directorates;d. Outcomes over outputs;e. Whole of Government Approach;f. Change fatigue;g. Dealing with scale; andh. Inflexibility of funding arrangements.

Following the conduct of the cause and effect analysis, three priority areas were identified for more concentrated attention. These three areas are:

a) Procurement;b) Contract management; andc) Reporting.

A fourth issue, relationship management, was also identified as ‘wrapping around’ the three priority areas above. As there is a significant structural component to relationship management this issue will be managed separately.

1.1.3 RecommendationThe CSRAG have recommended the development of an options paper to address the options and issues around procurement, contract management and reporting. The development of an options paper would provide an opportunity for the sector to participate in the development of options and would be expected to form the basis of consideration by the Government into the most effective approach to resolving issues around procurement, contract management and reporting.

1.2 Purpose of this ReportThe community sector reform program conducted a red-tape reduction forum for members of the ACT community sector on 20 February 2013. This paper provides a report on the scope and methodology of the forum and the principle findings of the forum.

1.3 Red-tape Reduction Forum - BackgroundRed-tape reduction is one of the core components of the overall community sector reform program.

The Red-tape Reduction Forum was conducted to collect as much information as possible on the red-tape issues that impact upon the community sector in the ACT. The forum was agreed in conjunction with the Community Sector Reform Advisory Group in late 2012 for conduct in early 2012.

1.4 Forum ObjectivesThe objective of the community sector red-tape forum was to collect sufficient feedback from the community sector to inform a structured approach to reducing unnecessary red-tape from the relationship between the sector and the ACT Government. The information collected needed to be sufficiently precise and detailed to enable it to be considered against the relevant element of the business process that it pertains to.

Additional objectives of the forum were to confirm, or to create an expectation within the community sector around the intent of the Government with regard to red-tape reduction.

1.5 Forum Methodology1.5.1 Overview

The forum was designed as an element in a structured, process improvement, approach to the overall red-tape reduction program. Under this methodology, the key processes that characterise the relationship between the community sector and the ACT Government are identified.

Once identified, each of the key processes is assessed for process objectives, the extent to which the process outputs meet that objective and the potential to modify the process to either improve alignment between process outcomes and objectives, or to improve the efficiency of the process, or both.

Understanding the extent to which a process is delivering on its objectives and understanding its relative efficiency are both enhanced by the views participants in those processes and of the clients of those processes.

1.5.2 Forum DesignThe success of the forum design is key to achieving results that will flow through to well structured initiatives that are likely to reduce red-tape. Forum design is, in turn, largely dictated by numbers of participants and the available time.

Design criteria were that the forum must be available to all ACT Government funded community sector entities, should they wish to participate; that it provide an open opportunity to address concerns about red-tape; that there be no public servants (other than the two facilitators) present; that it would be advantageous for the members of the Community Sector Reform Advisory Group (CSRAG) to play a role; and that it be completed in a single afternoon.

There are approximately 150 ACT Government funded community sector organisations, of which approximately 30 might be considered to be large entities, another 30 might be considered medium sized, with the remaining 90 organisations ranging from small to smallish. The organisations represented at the red-tape forum are listed at Appendix A.

As this was the initial contact with the sector on red-tape, the decision was to seek breadth of feedback from the participants, rather than depth. This decision was taken on the basis that depth could be added through follow up work in smaller groups, but that issues not picked in the forum ran the risk of being overlooked later.

With acceptances to the forum from approximately 70 organisations, mostly, but not all, in the medium to large category, it was not possible to conduct the forum as a single group, particularly if it was to be completed in a single afternoon.

Alternatives considered were to either conduct the forum as a series of parallel brainstorming exercises, where groups were free to explore red-tape reduction and with each group facilitated by a member of the CSRAG, or to conduct it using the world cafe model, where groups rotate through a series of issues.

The world cafe model was chosen on the basis that it had a lower requirement for group facilitation, and that it provided a starting structure that allowed each sector representative the opportunity to address any aspect of red-tape that concerned them. The alternative model had significantly higher facilitation requirements and ran the risk of either not matching the skills and interests of participants to the issues that concerned them, or of not addressing some areas of concern.

A variation was added to the world cafe model to ensure that, instead of fixed groups rotating past a fixed group of table issues, each table rotation was designed to ensure that participants formed a different group each time, while also never addressing the same table issue twice. This variation maintained a continual turnover of the table participants to encourage new combinations of ideas to emerge for each table.

Under a world cafe model, determining the table issues for each rotation is vital. This was addressed by a discussion among stakeholders to explore the key processes that represent the relationship between the community sector and the government, as described above. The results of this exercise were matched with the results of a separate red-tape reduction brainstorm that was held in 2012 with ACT Government representatives from the Community Services and Health Directorates. Six table issues were selected as representing the span of the relationship, with a seventh, any other issues, being included to provide an opportunity to address any issue that had not been included:

a. ACT Government procurement processes (participants were asked to focus on the current procurement process on the basis that significantly different approaches were explored through a separate process);

b. Reporting requirements – both regulatory and funding agency;c. Regulation by government regulators, including both the ACT and the

Australian Governments;d. Contract management and contract compliance;e. Relationship management;f. Financial management and funding processes; andg. Any other issue.

There were no limits to the scope of the discussion within these broad areas.

It can be immediately seen that these issues are heavily focused around the more formal and structured aspects of the relationship between the sector and the Government. This reflects both the impact of these processes on the community sector and also their inherent potential for process improvement. There is of course red-tape reduction potential around less structured and less formal aspects of the

relationship and this potential has been reflected in many of the comments and issues raised during the forum.

Following an introduction by the Minister for Community Services and an introduction to the task and the methodology, each rotation was allocated 20 minutes, with five minutes allowed for groups to reform for each rotation. The schedule for rotations provided that a member of the CSRAG would be at each table for each rotation and it was the role of the CSRAG member to ensure a steady flow of content from the participants.

Each table had the benefit of seeing the material collected by their predecessors and could add to it. Items were collected on butcher’s paper for later collation and assessment.

1.6 Forum Analysis DesignThe methodology described above delivered 346 separate items related to red-tape issues. As might be anticipated, these items align well with the key processes that form the relationship between the ACT Government and the ACT community sector.

1.6.1 Conducting an affinity processThese 346 items were grouped through an affinity process and it is the results of that affinity process that are described below in the report. In this process all of the 346 issues were transferred to separate pieces of paper and then analysed by a small group according to the ‘affinity’ that each of the issues raised had for any other issue. This process resulted in fifty four affinity groups. While the fifty four groups were constructed from the all of the responses to allow for relationships between table topics to be collected, the fifty four groups are structured in this report under the table topic that best reflects the issues involved.

It should also be noted that, under an affinity process, issues may be represented by multiple items from the brainstorm process, or may be represented by a single item, with the number of items forming a category not necessarily indicating the importance of the issue.

1.6.2 Conducting cause and effect analysisIn order to determine the cause and effect relationships between the issues aggregated through the affinity process, an interrelationship analysis process was conducted. This process is designed to determine whether or not cause and effect relationships existed, and the direction of that causality.

The results of the cause and effect analysis will be provided separately.

1.7 Principle FindingsThe principle findings from the forum are outlined below under a set of strategic issues and under the table issues against which they were collected. Where a particular group crossed the boundary of a table issue and addressed other issues, the points made have been addressed under the relevant heading.

1.7.1 Out of scope issuesA small number of issues were raised that pertained to government policy issues or to the delivery of specific services, rather than red-tape. Where the policy issue had a red-tape element it was included. However, where this was not the case these issues were extracted from the total and will be provided separately to the relevant policy or line area.

1.7.2 Strategic issuesA considerable number of issues raised related to red-tape reduction but also had connections broader policies or strategies. Most of these issues are embedded within the responses discussed in more detail below, but have been separately drawn out here.

a. Overcome the silos – comments here spread through many separate topics and related to the multiple and overlapping relationships that are necessary for the sector to manage their relationship with the ACT Government. Specific suggestions were to rationalise program silos and to rationalise the multiple strategies which operate to perpetuate the silos;

b. Understanding of risk - A recurring theme, linked with many aspects of the relationship from procurement to reporting and contract/relationship management, was the determination of and response to risk. The specific issues will be addressed below. In summary, the commentary was a call for a more developed approach to risk that limits increasing regulation/reporting/compliance as a reaction. Risk management should be made with reference to the specific underlying risk, with proportional measures to reduce the risk or ameliorate its potential impact;

c. Differences between directorates - One issue that was raised a number of times was that some directorates were ‘better’ at maintaining/managing a relationship with the community sector than others. In particular, that the processes used by some directorates were simpler, faster, and more effective than those used by others;

d. Outcomes over outputs – A number of suggestions that continuing a shift to measuring outcomes over outputs was necessary;

e. Whole of Government Approach – A related issue raised was the adoption of a whole of Government approach. This was often expressed as ‘implement the Hawke Review’;

f. Change fatigue – The issue of change fatigue was also raised, from a number of perspectives. These included transparency around upcoming changes; a single calendar/reporting tool around change; better co-ordination of change by directorates; and a suggestion for better assessment of the impact of change initiatives on the sector;

g. Dealing with scale – there were many points in the forum where the issue of scale arose, along with the disadvantage that small organisations faced when dealing with systems designed for larger organisations;

h. Inflexibility of funding arrangements – there were suggestions that funding was too inflexible and that an inability to move resources between programs that may be related was too restrictive;

1.7.3 ACT Government procurement processUnder this section, the results of the forum will be grouped roughly according to stages in the procurement process. It should be noted that there are overlaps between many of these issues. Issues raised were:

a. Strategic procurement conversations – there were suggestions around better co-production of services and better conversations and communications between policy makers and procurement processes and a better understanding of the costs involved in doing business in order to develop more realistic proposals and better cost services before tendering, thus avoiding inaccurate or deliberately under bidding;

b. Prequalification – many comments were received in relation to prequalification. Comments included increasing the validity period to beyond three years; the use

of public and ACNC records where possible; the elimination of tender requirements where they have been addressed in the prequalification process; overcoming the duplication between prequalification processes and other accreditation requirements; extending prequalification to other Directorates. There was call for a post-implementation review of prequalification that addresses the assessment process, changes to processes as a result of prequalification, consistency of process over the implementation and ways of better managing the impact on the sector;

c. Choose the most appropriate procurement process – Issues here ranged from determining when to go to market and when not to; whether procurement should be through a grant or a service funding agreement (SFA) to a better balance between the decision around procurement approach and the inherent risk involved in the procurement/service;

d. Collaborate on the procurement process – Here, the issue is that CSD needs to match talk about collaboration/co-production with appropriate processes, with commentary that the NSW Government has been able to achieve this through community sector participation on assessment panels;

e. Match funding terms to desired outcomes – This issue has connections to others in this section, particularly collaboration, and seeks to ensure that the delivery mechanism aligns with the desired outcome;

f. Ensure tendering times are appropriate – A number of comments went to different aspects of this issue. These included avoiding Christmas tenders, providing sufficient time to prepare the tender and ensuring that the decision be arrived at promptly, with a suggestion that it match the time given to preparing the tender;

g. Reduce the burden of tender writing – This issue related to both scale of entity and to the scale of funding;

h. Better links between policy makers and procurement decision making – This was a suggestion to strengthen these links to better align decisions with policies and to overcome one cause of gaps between service delivery and contract requirements;

i. Problems with communication between program and administrative units – This issue was tangentially commented on in a number of ways, as well as being directly addressed.

j. Address the transition timing of procurement decisions – Procurement decisions need to be made known with sufficient time to enable transition out or start up of new provider;

k. Conflict of interest – there was a perception that the ACT Government had a conflict of interest in being both a provider and a purchaser of services.

1.7.4 Reporting requirements – both regulatory and funding agencyReporting by the community sector is for a number of purposes. In particular, regulatory reporting to either ORS or to the ACNC, national reporting, to AIHW or the ABS or to meet national objectives, and regular funding agency reporting. This section was designed to gain views on all of these reporting elements.

a. Reporting timeframes – Move all reporting to financial year and limit all reporting to 12 months, rather than six months;

b. Consistent templates – There were many suggestions that the ACT apply whole of Government, and consistent, reporting templates and processes;

c. Consistent reporting across jurisdictions – This issue is an extension of the one above and relates to an objective of consistent reporting across jurisdictions;

d. Reduce duplicate and unnecessary reports – as might be anticipated, there were many requests for duplicated requirements, both within single reports, within CSD, across the ACT and between jurisdictions. Other requests were for the elimination of unnecessary reporting, particularly information sought but not used;

e. Validate reporting requirements and processes – separate from requests to eliminate duplicated and unnecessary reports, there were many suggestions around the validation with the sector of reporting requirements – why information was collected and how it was to be used. These suggestions extended to not just the data, but also to the processes, procedures and the expectations;

f. Financial and Annual Reports – there was a suggestion that financial and annual reports should be the same thing, along with warnings not to use annual reporting requirements to address reductions in reporting elsewhere;

g. Align performance reporting with tender terms – There were suggestions that the terms for performance reporting should match the terms of the funding agreement;

h. Scaled and risk based reporting – This issue addressed the question of scale in reporting, both scale of reporting entity and scale of funding reported on, with the suggestion that all reporting requirements should take scale and risk into account;

i. Penalties for late reporting – Suggestion that there should be exception reporting for established organisations;

j. Use of reporting technology – there were several suggestions that reporting could be supported through better use of technology, with a number of examples from the Commonwealth and other jurisdictions of better approaches than used by the ACT.

1.7.5 Contract management and contract complianceThe contract management relationship forms a significant proportion of the formal contact between the Government and the community sector. (something on the role and on numbers and levels of contract managers?)

a. No feedback - Lack of feedback on contract management was strongly commented on, with concern that reports disappeared into a ‘black hole’ that there was no return of information in such a way that it could help improve service delivery, a desire for analysis and a fear that reports were not even read.

b. Lack of respect by contract managers - a considerable number of the comments made during the forum related to perceptions by the sector that contract managers did respect the relationship between themselves and the sector. Examples given included a lack of notice of meetings, time wasting chatting without substance, tick box processes and meetings held just for the sake of having a meeting;

c. Lack of equivalence in contracting roles - Other comments in relation to contract management included observations that contract managersdid not have the necessary seniority, or understanding of the business of the sector to be undertaking their role;

d. Excessive turnover of contract managers – an issue broadly commented on was what was considered to be excessive turnover of contract managers. Examples of five managers in eighteen months were given. Examples were given of the destabilising impact on organisations, including wasted time, loss of knowledge, loss of trust and a loss of consistency and of continuity;

e. Unclear role of contract managers - Related comments went to an apparent lack of clarity around the role of contract managers;

f. Standard contract clauses – There were suggestions that these were out of date and needed to be updated;

g. Contract managers exceeding their role – There were many comments on the role confusion between contract managers and relationship managers and in general, managers did not appear to liaise with the business areas, have clear direction and imposed administration procedures such as output delivery processes on organisations; inconsistent and idiosyncratic interpretations of contracts between contract managers; and changes to the size of contracts without consultation.

h. Indexation payment timing – Concerns were raised that indexation payments were late and suggestions that they should be made automatically and only changed by exception;

i. Roles of Contract managers and Relationship managers - There is also a question around the relationship between the roles of the contract mangers and relationship managers, with the suggestion that both roles may not be needed (see 1.6.5);

j. Conflict resolution – there were suggestions that there were no conflict resolution processes in place in regard to contract management;

k. Process confusion regarding changes to agreements, and outputs– some participants suggested that procedures for changes to outputs were inconsistent and sometimes occurred without proper consultation. Further, notice of contractual changes could be lost or not well communicated between program and administrative functions;

l. Process errors – there were a number of comments around the contract management process, including that quality control was not strong; that organisations for example could receive other organisation’s contracts in the mail; that contracts contained errors; that the process of contracts being prepared and signed was onerous and should be able to be managed electronically; that the late completion of contracts threatened service delivery and created rollover issues;

1.7.6 Relationship managementIn this process, relationship management includes the role of relationship managers as well as the more ad hoc elements of relationship management, both strategic and operational. It was generally noted that Health maintained better relationships than CSD.

a. Social Compact – There were perceptions that the social compact was honoured more in the breach than in fact, and that it should be honoured in both principle and practice and form the basis of the relationship;

b. Reciprocal time requirements – There were multiple suggestions that the ACT Government meet the same time requirements over business processes that it imposes on the sector and that there should be penalties for failure to do so;

c. The Club – A comment made a number of times was that there was a ‘club’ of community sector leaders who had access to the government, there was no clear rationale for this club, with a negative impact on the role of the peaks;

d. Role of relationship managers - There was a suggestion that both relationship managers and contract manager are not needed.

e. Number of relationship managers – there needs to be a single relationship manager for each government agency, regardless of the number of contracts involved, and that this person manage the internal relationships within government that relate to the different contract outcomes;

f. Annual contract meetings – This was suggested as a whole of government approach to avoid repetitive meetings;

g. Sector/Government secondments – These were proposed as a mechanism to improve understanding and relationships.

1.7.7 Regulation by governmentsThe red-tape reduction project seeks the removal of unnecessary red-tape. This section addresses commentary on red-tape that is due to regulation by any tier of government, but separate from the red-tape imposed through the funding relationship.

a. Elimination of duplicated red-tape due to ACNC - All of the rotations raised the issue of the regulatory duplication created by the establishment of the Australian Charities and Not-for-profit Commission and called for the duplication to be eliminated.

b. The ACNC as a data clearing house - Some groups proposed that the ACNC be a clearing house for reporting, including reporting to the ACT.

c. Use of compliance standards – A number of comments were received around the requirement by Government for compliance with industry, or other related standards. In particular the cost of maintaining compliance with multiple, often overlapping, standards along with the cost of tracking the multiple and overlapping requirements;

1.7.8 Financial management/Auditing and funding issuesMany of these issues are related to other categories considered in the forum.

a. Better balance administrative and delivery costs – this issue related to comments around an overly prescriptive approach to what portion of funding comprised administrative costs, with specific comments relating to the inadequacy of applying 10% and the intrusion of stipulating any figure. It was also noted that administrative costs were rising faster than other costs;

b. Compliance burden on small organisations is unrealistic – comments in this area were heavily influenced by scale issues, with much of the commentary around the disadvantage that smaller organisations face when meeting compliance needs. There were also comments around the scale of the funding, where small funding amounts had significant compliance requirements that threatened the viability of the grant;

c. Audit costs – a related scale issue is around the cost of audits for small organisations;

d. Aggregate auditing – issues raised in this area related to conducting single audits of an organisation, not multiple audits based on separate programs; participants advised that this is now the Commonwealth approach;

e. Build financial knowledge – There were suggestions that knowledge of accounting standards should be increased across the sector;

f. Awareness of external issues – consideration in developing funding programs for external issues, such as award requirements for minimum employment periods of three hours – so don’t require one hour services;

g. Separate bank accounts – don’t require separate bank accounts to be established for separate programs. There were also comments that this was required under the Charitable Collections Act 2002;

h. Funding in arrears – funding in arrears can be a practical issue;

i. Inconsistent processes – some programs require invoices to trigger payments, while others do not. This is inconsistent.

1.7.9 Any other issuesa. Working with vulnerable people – There were a number of comments about

the cost and complexity of this process. Specific comments were that there were additional requirements outside the process, such as OCYFS driving record check, the timeliness of the results and overlaps with the CHIPS checks.

b. Equal Remuneration Case Process – There were comments that this had been a time consuming process.

1.8 RecommendationsThe recommendations from the conduct of the red-tape forum relate to both the proposed actions to address the red-tape issues identified and also to how to provide feedback to the community sector participants in the process.

The primary finding of this process has been that procurement, contracting and reporting are the key areas of activity with the potential to reduce red-tape for the community sector and for the ACT Government. Resolution of the red-tape issues will require the examination of existing ACT Government legislation, whole of Government policies and practices. Resolution should also take account of the rapidly changing environment in which community services are delivered and explore new approaches to procurement, contracting and reporting, where these have the potential to deliver benefits to all parties, as well as to improved outcomes for clients.

All Australian jurisdictions are currently dealing with similar issues and a number have already, or are undertaking, similar review processes for similar purposes, and it is likely that valuable lessons can be learned from their experiences and processes. The CSRAG has offered to work with the Community Sector Reform Program and relevant others to contribute to the development of an options paper that explores the question of procurement, contracting and reporting in the community sector in the ACT and explores different ways of addressing this question for consideration by the Government.

The material on which this analysis is based was provided by 65 community sector leaders. These leaders have a reasonable expectation that the outcome of the process be reported back to them, preferably with sufficient feedback of the collected content to keep faith with their contribution. The most effective way of achieving this outcome would be to would be through a letter to the sector outlining the proposed next steps by the Government, supported by a list with a reasonable level of detail of the issues raised, extracted from this report.

Appendix A. Community Sector Red-tape Forum – Participating Community Sector Organisations

Organisation

People with Disabilities ACT Capital Community HousingSHFPACT Aids Action CouncilAustism Asperger ACT Gunghalin Regional Community ServiceMental Illness Education ACT Families ACTCarers ACT Salvation ArmyHealth Care Consumers Network Girl Guides ACT and SE NSW RegionACT Playgroups Association Inc Relationships AustraliaParentline ACT SHOUT IncWinnunga Nimmityjah CatholiccareBelconnen Community Service TandemRed Cross InannaBeryl Women Woden Community ServicesCOTA Mental Health Community CoalitionNorthcott UnitingCare KippaxNDS Youth Coalition of the ACTCare Financial Counselling Northside Community ServiceKarinya House KarralikaCommunities@Work Doris Womens' RefugeKoomari Focus ACTHavelock House Prisoners AidWomen's Centre for Health Matters Conflict Resolution ServiceKoomari Canberra Rape Crisis CentreACT Deafness Resource Centre Sharing PlacesThe Smith Family Community OptionsSharing Places St Vincent de Paul Society - Canberra/GoulburnACTCOSS Ozhelp FoundationADACAS Hartley LifecareBarnardos Canberra Childrens Family Centre ACT ME & CFSAnglicare Connections ACT