Department of Health and Ageing Office for Aboriginal and Torres Strait Islander Health (OATSIH)

1. Office for Aboriginal and Torres Strait Islander Health Department of Health and Ageing Office for Aboriginal and Torres Strait Islander Health (OATSIH) Tony Ellul & Dave Ralph

2. Office for Aboriginal and Torres Strait Islander Health Part 1 -This information Session will provide an overview of the OATSIH Standard Funding Agreement (SFA)

3. OATSIH Standard Funding Agreement (SFA) Office for Aboriginal and Torres Strait Islander Health The OATSIH SFA has been refined with the following objectives in mind: • Greater consistency with other Departmental funding agreements and those issued by other Commonwealth agencies to Indigenous organisations - eg FaCSIA, (OIPC/ATSIS). • Greater clarity in the specification of obligations and reporting requirements. • Revision of certain clauses, for example the definition of Audited Financial Statements, Records Reports and Acquittals and Unspent Funds • Attachment of a ‘Letter of Audit Engagement’ for organisations to use.

4. OATSIH Standard Funding Agreement (SFA)Our long term aim is to………. Office for Aboriginal and Torres Strait Islander Health • Standardise & streamline our dealings with OATSIH funded organisations. • Cut down on work & costs in establishing and managing many different funding agreements. • Strengthen and standardise the reporting framework. • Strengthen the linkages between financial and non-financial reporting. • Assist organisations in identifying and managing risk (eg.Budgets).

5. Release of Funding Agreements Office for Aboriginal and Torres Strait Islander Health • The funding agreements for 2006-07 will be produced from about the end of May. • They will be sent to organisations in early to mid June 2006. • This should allow the first quarterly payment to be made to organisations in early July 2006.

6. Key features Office for Aboriginal and Torres Strait Islander Health • Funding agreements for 2006-07 will be available from about mid June onwards. • The OATSIH Standard Funding Agreement for 2006-07 will have no major changes. • There will be different arrangements for funding allocations for those organisations with SDRF action plans in 2006-07 and those organisations that will join the SDRF in later years. • One Primary Funding Agreement (Recitals) with maximum of four schedules. (A,B, C & D)

7. Key features cont’d Office for Aboriginal and Torres Strait Islander Health Schedules may include: • A - Health programs eg Mental Health, Hearing Health, Substance Use & Eye Health. • B - Bringing Them Home / Link up. • C - Auspiced services eg Outpost services or new services in development. • D - SDRF action plan.

8. Changes to funding arrangements Office for Aboriginal and Torres Strait Islander Health From 2005-06 (and until the introduction of the SDRF is completed for all organisations in 2007-08), there will be two distinct funding arrangements for organisations: • Organisations using the SDRF will manage and acquit their recurrent funds on a global allocation basis with the exception of BTH and Auspiced funds. • Other organisations will continue to manage and acquit their funds on a ‘project-by-project’ basis.

9. Changes to funding arrangements Office for Aboriginal and Torres Strait Islander Health SDRF Organisations - ‘Global’ Allocation • Organisations will receive total amounts of funding in accordance with the budgets based on their Action Plans. (Note: the Action Plan is not the budget.) • Organisations will be able to allocate funds to any service activity in accordance with their needs, action plans and is consistent with the Funding purpose. • Costs (eg: salaries, fuel, electricity) will therefore be budgeted and reported at the organisational (not project) level. • However, one-off and recurrent funds will be distinguished for acquittal purposes.

10. Changes to funding arrangements Office for Aboriginal and Torres Strait Islander Health Non SDRF Organisations - ‘Project by Project’ Funding • Other organisations will remain on ’Project-by- Project’ funding until they join the SDRF (2007- 08 at the latest). • Budgeting, reporting and acquittals will continue along existing lines, SAR, DASR & BTH questionnaire will continue.

11. Changes to funding arrangements Office for Aboriginal and Torres Strait Islander Health Insurance (clause 18) and Schedule A Item H • Clause 18 has been made consistent with the Departmental standard and, in addition, Item H of Schedule A has been changed to reflect the levels of insurance. • It has been agreed that it is the responsibility of organisations to agree adequate levels of cover with their insurance advisors. • 18.4 The Organisation is to provide to the Department any relevant insurance policies and certificates of currency for inspection.

12. Changes to funding arrangements Office for Aboriginal and Torres Strait Islander Health Insurance Schedule A Item H (cont’d) • Insurance for Assets • Workers’ compensation insurance for the amount required by law (Statutory amounts prescribed by State and Territory Legislation). • Public liability insurance for an amount of not less than $10,000,000 (ten million dollars). • Adequate professional indemnity insurance to cover liability arising out of the following - • non clinical work • clinical work by non – medical practitioners • clinical work by medical practitioners • vicarious liability.

13. Changes to funding arrangements Office for Aboriginal and Torres Strait Islander Health Letter of Audit Engagement • Organisations are required to use the Letter of Audit Engagement now formally attached to the SFA to engage qualified auditors for the acquittals. • It has been decided to attach the Letter of Audit Engagement to the SFA to standardise and clarify the terms on which organisations appoint Qualified Auditors, and the outputs that Qualified Auditors are expected to produce.

14. Changes to funding arrangements Office for Aboriginal and Torres Strait Islander Health Funds Management and Reporting Requirements SDRF organisations cont’d Action Plans • Where one-off funds, or additional recurrent funds, are provided by a variation to the original Funding Agreement services do not need to supply an amended Action Plan unless the variation is more than $50 000 or 25% of the original total funding (which ever is the greater). However, irrespective of whether an amended Action Plan is required, organisations must include the activities undertaken with the additional funds in their six monthly reports.

15. Changes to funding arrangements Office for Aboriginal and Torres Strait Islander Health Funds Management and Reporting Requirements Non-SDRF organisations • Other organisations will remain on ’Project-by-Project’ funding until they join the SDRF (2007-08 at the latest). • Budgeting, reporting and acquittals will continue along existing lines. Budget variations • Organisations will need to provide amended Project Budgets only where the variation is $50 000 or 25% of the original funding for the Project, whichever is the greater.

16. OATSIH Standard Funding Agreement (SFA) Office for Aboriginal and Torres Strait Islander Health Records, Reports and Acquittals (clause 5) • Organisations to engage a Qualified Auditor to audit their financial statements and prepare other required documentation. • Organisations are required to use the ‘Letter of Audit Engagement’ now annexed to the SFA. • The acquittals certificate must be signed by the organisation’s CEO and an authorised Board member.

17. OATSIH Standard Funding Agreement (SFA) Office for Aboriginal and Torres Strait Islander Health Risk Analysis (clause 9) • The risk analysis process has been formalised in the SFA. The risk assessment questionnaire is a management tool which will assist both the Organisation and OATSIH and will focus on three core areas: • Governance and Management • Service Delivery and Operational; and • Financial Management Project Officers with consult with Organisations on the questionnaire during the year while on field visits. The questionnaire serves as a link between the Risk Assessment Process (RAP) and the Capacity and Development Program. 2. Organisations are to provide OATSIH with copies of any audit management letters they receive as a result of the end of year audit and acquittals.

18. OATSIH Standard Funding Agreement (SFA) Office for Aboriginal and Torres Strait Islander Health Unspent Funds (clause 16) Calculation and treatment of Unspent Funds is now a 3-step process: • Organisations can retain Unspent Funds for one-off projects provided they can complete the projects within a reasonable time and the Department and the organisation agree that the projects are related to the original funding purpose. • Organisations can retain up to $25 000/5% (whichever is the greater) of total Unspent Funds for recurrent projects (ie: not by project and excluding BTH and one-off projects). • If any unspent funds are left over after this process OATSIH will implement strategies for the recovery or utilisation of the unspent funds.

19. Part 2 – Budgets and Reporting Office for Aboriginal and Torres Strait Islander Health This part of the presentation informs you about Budgets & Financial / Non Financial OATSIH reporting requirements.

20. Budgets Office for Aboriginal and Torres Strait Islander Health • Organisations to provide Board endorsed budgets on each project as described in Item A of the relevant Schedules by 28 April 2006. • Will include core items such as Salaries, Operational, Insurance, Superannuation and Workers Compensation. (refer to OATSIH budget template) • Organisations can monitor actual expenditure against budgets regularly. • Organisations can vary budgets during the course of the financial year without seeking OATSIH approval. Services to communicate variations with their Regional Coordinator.

21. Progress Financial Reporting Office for Aboriginal and Torres Strait Islander Health • Organisations to provide progress financial reports according to organisations reporting frequency (quarterly or half yearly) as indicated at Item D of the Schedules. • Progress reports comprise a Statement of Actual Income & Expenditure against Budget by Project for a period ie. 1 January 2006 to 30 June 2006. • A pro-forma statement of the Income & Expenditure will be attached to the 2006/07 SFA as in previous years.

22. Service Development Reporting Framework Office for Aboriginal and Torres Strait Islander Health • Organisations to provide SDRF Report against their Action Plan (Due half yearly on – 15 February and 15 August) • Organisations to provide draft Action Plan for the following financial year (Due yearly – April / May)

23. Non Financial Reporting Office for Aboriginal and Torres Strait Islander Health • Organisations are to return their SAR or DSAR annual questionnaire to the Research and Data Section in Central Office in the timeframes advised by the Department at the time the questionnaire is sent to the organisation. • Services that receive BTH program funding for counsellor positions must fill out and return the “Questionnaire on Performance Indicators for Bringing Them Home Counsellor Positions”. Reporting against Action Plans in the SDRF will not change this. (BTH Questionnaire due – 30 September 2006.)

24. Audited Financial Statements Office for Aboriginal and Torres Strait Islander Health • All organisations are to provide audited financial statements by 30 September each year as part of the acquittals process. • Audited Financial Statements consist of the following as a minimum requirement: • Audit Report • Committee Statement • Statement of Financial Position (previously known as a Balance Sheet) • Statement of Financial Performance (previously known as Profit & Loss Statement)

25. Audited Financial Statements cont’d Office for Aboriginal and Torres Strait Islander Health • Statement of Financial Performance (previously known as Profit & Loss Statement) • Statement of Cash Flows • Notes to and forming part of the accounts • Statement of receipts and expenditure by project • Statement identifying unspent funds and provisions • Audit Management

26. Office for Aboriginal and Torres Strait Islander Health Thank you for yourparticipation