Discussion Topic 1

Discussion topic 1

Object and principles

Funded entities provide a diverse range of products and services that are essential to the state’s general wellbeing and growth. The One Funding System for Better Services Bill 2011 is intended to establish a single, streamlined set of laws across all Queensland Government departments for funding these entities and working with them to ensure the safe, accountable delivery of publicly funded products and services.

The object and principles state this overall intention and the key considerations for applying and administering the new laws.

Main provisions

The draft object describes the overarching purpose of the laws (clause 5):

To support the delivery of products and services that —

(a)contribute to Queensland’s economic, social and environmental wellbeing; and

(b)enhance the quality of life of life of individuals, groups and communities.

The object is to be achieved by providing for funding by departments, and a supporting set of powers to safeguard the delivery of funded products and services.
Six draft principles are provided to guide decisions made under the

legislation (clause 7). The principles aim to identify key considerations

about how the laws will be applied and administered. As the principles will be applicable to all types of funding provided under the Bill, they reflect general aspects of funding relationships rather than focusing on how particular services or products are to be delivered. The guiding principles are specifically referenced in the provisions on making funding agreements (clause 16).

Matters covered in the principles include:

transparency in funding processes and practices
efficient and effective use of resources
minimising red tape and promoting cooperative approaches to dealing with concerns
quality, safety and accountability
recognising and respecting each other’s autonomy, purpose, functions, contribution and accountabilities
cooperative, collaborative and respectful relationships between government and funded entities.

Discussion topic 2

Providing funding

The Bill is intended to establish consistent laws for entities funded by the Queensland Government. It defines ‘funding’ for the purpose of the legislation, lists examples of the ways funding may be provided, gives some guidance on the matters that government may consider when making funding decisions, and sets out some basic elements of thefunding process.

While a major aim of the Bill is to provide consistent funding laws, government recognises that these need to be flexible and practical and should not impose unnecessary burdens on entities. Provisions in the Bill largely reflect current funding practices. They are designed to strike a balance between providing consistency and allowing sufficient flexibility to accommodate the broad range of entities delivering products and services, and their funding arrangements with government.

Main provisions: defining funding

The Bill defines ‘funding’ as money or other support provided to an entity to enable them to deliver specified products or services (clause 10 (1)). Examples of ways that funding may be provided include:

granting an amount of money
leasing a building
transferring land
providing goods or services
giving in-kind support.

The Bill also identifies what is not treated as ‘funding’ under the legislation (clause 10 (2)). Some examples are:

money or other support provided where the department buys or sells goods or services, or enters into a commercial arrangement
grants of licences and permits
money or other support provided directly to an individual to enable them to obtain (rather than deliver) a product or service(e.g. an interest-free loan to cover a rental bond, or funds to obtain a specialist support service)
ex gratia payments (e.g. compensation)
tax concessions or offsets
investments or loans of money
sponsorship.
Some funding is exempted from the Bill (clause 12), including:
Commonwealth funding that the Queensland Government distributes but has no responsibility for (i.e. government acts as a ‘post box’)
rebates and subsidies
funds provided for the general operation of local government

funding provided solely for the purposes of economic development and sustainability (e.g. an incentive for a business to implement climate-friendly manufacturing practices, or a project to develop new products to support emerging technologies such as clean coal and hybrid cars)

funding provided under some other legislation, such as the Education (Capital Assistance) Act 1993, Education (Accreditation of Non-State Schools) Act 2001, Mater Public Health Services Act 2008.

Main provisions: funding decision and process

The Bill will apply to a wide range of entities, including for-profit and

not-for-profit organisations, companies, corporations, unincorporated entities

and local governments.

The Minister (or delegate) may make funding decisions based on any matter relevant to the product or service being funded, e.g. the entity’s capacity to

meet service delivery needs, its corporate governance and record of financial management (clause 15). For some types of funding, Ministers may also need to consider the requirements set out in another relevant Act. For example, if funding

a disability service, the Minister will need to have regard to the principles in the Disability Services Act 2006.

The Bill sets two basic requirements for the funding process:
Entities are to submit a written application for funding (clause 14).
Once the Minister approves the funding, the government department and the entity are to enter into a written agreement for the funding being provided (clause 16). (In urgent circumstances, government departments will be able to provide funding before an agreement is made, although an agreement must be made within a specified time.)

The Bill stipulates that funding agreements should have regard to the legislation’s guiding principles, state the way in which funding is to be provided and refer to the legislation. Otherwise, it does not set any specifications about form or content. Similar flexibility is allowed for funding applications. This approach preserves flexibility and allows these documents to be tailored to suit the purpose and type of funding being provided.
As part of the move to simplify and streamline funding processes and reduce

red tape, the Bill does not contain any requirement for entities to be

‘pre-approved’ for funding before they submit a funding application. ‘Pre-approval’ is currently required under the Disability Services Act 2006 and Community Services Act 2007, and often means that entities have to provide the same information twice — for approval, and for a funding application. This requirement will be removed under the new laws, so that all relevant information about an

entity will be considered at the time the funding decision is being made.

The requirement for registration under the Housing Act 2003 will be retained for social housing providers, ahead of the development of a national regulatory system. Other housing service providers will no longer need to be registered.

Discussion topics 3 and 4

Dealing with serious concerns

The vast majority of entities use government funding in good faith to provide the best possible products and services. If problems occur, these are often resolved between the parties cooperatively, under the terms of funding agreements.

From time to time, however, serious concerns can arise — and in some situations it may not be possible to manage these effectively through cooperative means or agreements. In these cases, government needs to be able to take action to investigate and remedy the concerns. Legislation provides additional measures for doing this where necessary.

To reduce red tape, the draft Bill identifies the matters that are serious concerns, rather than prescribing requirements that all funded entities must comply with (e.g. to develop and implement a particular operational policy). This approach will help to reduce compliance costs for entities funded under legislation, and prevent any additional compliance costs for organisations not currently funded under legislation, but still ensure strong legislative safeguards are available for publicly funded products and services.

The Bill outlines a number of remedial and investigative measures that may be used, depending on the nature of the matter, how much is known about it, the need to continue delivery of the product or service, and the level of cooperation between the parties. The aim is to enable responses to be appropriate to the circumstances, maximise opportunities for issues to be resolved collaboratively and at the same time allow urgent action on the most serious matters.

Safeguards are included in the Bill to ensure the use of remedial and investigative measures is justified and to protect the rights of both individuals and organisations. Powers are only to be used where necessary. Government will also continue to have the option of dealing with concerns through collaborative means or under a funding agreement, where feasible. These are the preferred options.

Main provisions: serious concerns

Remedial and investigative powers will only be used where necessary as a means of responding to serious concerns as defined by the Bill.

The Bill defines serious concerns (clause 11) as the presence of, or serious

risk of:

improper use of funding (e.g. for dishonest or fraudulent purposes, or

purposes contrary to the agreement)

failure to deliver funded products and services (e.g. closing an emergency service that is required to be continually open)
harm to a person resulting from a funded entity’s act or omission in delivering

a funded product or service.

By defining serious concerns, the Bill makes remedial and investigative

powers available where necessary and justified, without imposing any

‘upfront’ obligations on funded entities.

As a result, the prescribed requirements that are currently contained in the Disability Services Act 2006 and Community Services Act 2007 will be removed. This aims to reduce red tape for organisations currently funded under these Acts.

Some prescribed requirements will be retained under the Housing Act 2003

to support the continued operation of Queensland’s One Social Housing

System. The number of prescribed requirements will be significantly reduced

and will only apply to social housing providers.

The funding agreement will be the primary vehicle for setting out the funding relationship, describing any terms and conditions for funding, and carrying out any associated monitoring and reporting.

Main provisions: remedies and investigations

Using remedial and investigative powers

The Bill requires that a cooperative approach is considered before a power is used (clause 17) and notes that the availability of legislative powers does not limit the ability to address concerns in other ways, such as through the terms of a funding agreement (clauses 18 and 44).
In the event that a cooperative approach is not feasible, the Bill will provide a range of measures that government could use to investigate and remedy the concerns.
The Bill describes the circumstances in which remedial and investigative powers may be used. However, the powers do not have to be used, even if the circumstances allow it. Decisions about whether use of the powers is warranted will be made on a case-by-case basis, often by the chief executive (or their delegate).

Remedying concerns

Where it is clear that a serious concern exists, the Bill will enable government

to respond in a variety of ways. These include:

issuing a compliance notice stating actions the entity is required to take to rectify the problem, and timelines to be followed (clause 20)
appointing an interim manager (clauses 21–42) where there is no other workable option and the products or services are essential and must continue to be delivered. The Bill sets out matters to be considered when appointing an interim manager (clauses 21–22), the process for appointment (clauses 24–29), and the functions and powers of an interim manager (clauses 30–42). It stipulates that the appointment of an interim manager is only a temporary measure (for up to 3 months initially, and a maximum of 6 months) and only covers management of the funding specified in the agreement. The manager’s role will not extend to the wider business practices or activities of the entity.
recovering misspent or unspent funds as a debt (clause 43).

Remedial powers — safeguards for funded entities

Remedial powers will be accompanied by strict safeguards to ensure

government only uses them where justified. For example:

the criteria for a serious concern must be met
a cooperative approach must be considered first
government must state the reasons for wanting to take remedial action.

In addition, funded entities can seek a review of decisions to appoint an interim manager or to suspend or stop funding following a compliance notice process (clause 80).
A funded entity can apply for a review to the relevant government department (clauses 81– 83) and, if the matter is not resolved, an external review by the Queensland Civil and Administrative Tribunal (clause 84).
Any individual information gained through the exercise of a power will be confidential (clause 91).

Investigating concerns

Where a serious concern is suspected and further information is needed to determine an appropriate response, the Bill will:
allow chief executives and authorised officers to require entities to provide relevant documents and information when requested (clause 71)
if strict criteria are met, allow suitably qualified and properly appointed authorised officers to conduct investigations by inspecting premises and records and speaking to people (clauses 66–70).

When carrying out an investigation, authorised officers must take all reasonable steps to minimise any inconvenience their activities may cause (clause 73).
The Bill stipulates requirements that government must comply with when appointing authorised officers (clauses 45–51). These requirements and other provisions about procedures for authorised officers are based on standard provisions in other Acts that refer to authorised officers.

Investigative powers — safeguards for funded entities

Investigative powers will be accompanied by strict safeguards to ensure government only uses them where justified. For example:
a cooperative approach must be considered first
authorised officers will only be able to enter premises following set procedures, and under strict conditions, such as where they have the occupier’s consent (clauses 54–58) or a Magistrate’s warrant(clauses 59–64), and have explained the purpose of the entry (clause 57).

A Magistrate may issue a warrant for entry to premises only in very limited circumstances (clause 60) such as where suspected misuse of funds would severely affect the delivery of a product or service, or where there is a risk of harm resulting from abuse, neglect or exploitation.
Any individual information gained through the exercise of a power will be confidential (clause 91).

Discussion topic 5

Transitional arrangements: dealing with existing funding agreements

The Bill will establish a streamlined set of laws that will be used by all Queensland Government departments for funding entities and working with them to ensure the safe, accountable delivery of publicly funded products and services. Once the legislation is in force, all new funding agreements will be subject to and made under this legislation, unless an exemption applies.

Arrangements are being developed to deal with funding agreements that are in place before the new legislation comes into force and may have several years left to run before expiring.

Some of these agreements will be subject to and made under existing funding legislation (e.g. Housing Act 2003, Disability Services Act 2006 and Community Services Act 2007). Other agreements will not (e.g. agreements for sport and recreation projects and activities and Home and Community Care services).

Considerations for transitional arrangements

The arrangements for dealing with existing funding agreements will reflect the variety of funding arrangements across government. This means that agreements for different types of funding or different funding programs may be dealt with differently.
Generally, the development of these arrangements will take account of the

need to:

make reductions in red tape and the administrative burden available to

funded entities and government as soon as possible

cause minimal disruption to existing funding arrangements
make consistent safeguards for funding available as soon as possible across government.

In designing transitional arrangements there will also be a need to consider how to deal with:

applications for funding that have been made but not yet decided
investigations or remedial actions in progress under existing funding Acts
reviews or appeals of relevant decisions occurring under existing funding Acts.