New Models for
Sustainability
Directed Care environment
Australian Multicultural Community
Services approach to financial
tracking in a Client Directed Care
environment
13/04/2015
Consumer Directed
Care (CDC) – Strategies
for success
A tracking system that will measure
viability in providing CDC services
with a whole of organisational
approach.
13/04/2015
Produced and funded
Australian Multicultural Community Services Inc. (producer)
Department of Human Services – Victoria (funder)
The Building Community Sector Capacity to Adapt to a New Funding Environment project was
supported by the Victorian Government
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About AMCS
AMCS is a community based organisation addressing
the diverse and changing needs of multicultural
communities in Victoria.
We are caring for, supporting and educating Victoria’s
multicultural communities, families and individuals to
reach their full potential. We work with people of all
cultures, faiths and genders to achieve cultural
diversity, equity and consumer satisfaction.
We care, we support, we educate.
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The project
Project background
 AMCS and Leadership Victoria
Costing model, Training program & Tool
 Project outcomes
 Key learning and applicability to other
organisations
 Conclusion
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Project Background
Not-for-profit organisations are now adapting to a raft of government reforms
that have been influenced by changing policy objectives, including:

The introduction of the first stage of the National Disability
Insurance Scheme and the roll-out of pilot projects.

The One DHS policy and funding plan.

The award modernisation process.

The commencement of the Consumer Directed Care (CDC)
funding and care model for community aged care programs.

Office for the Community Sector was approached to support the
project as an example of how community sector capacity could be
enhanced through partnerships
Key themes across the current Victorian and national reform agenda include a
focus on service delivery based on individual choice and purchase.
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AMCS and Leadership Victoria

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Leadership Victoria is a not-for-profit organisation that aims to develop
outstanding leaders who can create positive change within a global
community.
GreatConnections is a program that links experienced professional
volunteers with the needs of not-for-profit organisations in areas such as
business planning, governance, strategic planning and marketing.
AMCS approached Leadership Victoria to provide pro bono business
mentoring through GreatConnections. In turn this enabled Leadership
Victoria to investigate the level of support required in the businessplanning sphere.
Leadership Victoria recommended a suitably qualified volunteer to
undertake a review of AMCS’s readiness to operate under a CDC model
and build their capacity to develop and implement a unit-based costing
model.
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Costing Model, Training Program and Tool

Expenses are allocated to programs either:
Directly including the cost of care and wages (plus on-costs) incurred and
an hourly rate calculated for care workers and case managers.
Recording centrally and allocated based on the resources intensity of
the program; includes direct labour, administration and general overheads.
In addition, an organisation needs to include an appropriate margin to
ensure their sustainability. This can be included in two ways:
Direct labour hourly rate and the overhead recovery rate
OR
Separately identified on the client’s budget and recorded as a line.
How the margin is included depends on the degree of transparency an
organisation wishes to adopt with their clients. There are arguments to
support both ways: the labour rate allows easy comparison to brokerage
rates charged by external clients; the overhead rate is consistent with the
concept of a margin on costs, such as labour. Or they can be separately
identified for transparency reasons.
A tool (in Excel) has been developed to assist providers to determine
hourly and overhead recovery rates. This model identifies the margin
separately.
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The Components of the CDC Tool
Consumers Individual Budgets - "ledger"
Income
Cost Allocations
Reporting Mechanisms
Matching Mechanisms
I – Income
E – Expenses
R – Reporting
M - Matching
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Consumers Individual Budgets - "ledger“
Step 1:
Step 2:
Step 3:
Step 4:
Step 5:
Set up a "ledger" account for each consumer
As funds are received that relate to the consumer then these are
allocated against the consumers "ledger" account
As the costs of their care is expended then this cost will be
allocated against the consumers "ledger" account
Each month the income and expenses will be balanced to determine
and over or under expenditure of funds to the individual consumer
"ledger" accounts
Each month these consumer "ledger" accounts will need to be
reviewed and consideration given to whether any adjustments are
required as the result of over or under expenditure
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Consumers Individual Budgets - "ledger“
Step 6:
Any surplus funds are to be kept in the consumers "ledger"
account, while any over expenditure will have to be negotiated with
the consumer in relation to cutting back future costs
Step 7:
In the provider is unable to make any cut backs to the individual
consumer, then the provider will have to carry the costs
Step 8:
These "ledger" accounts will provide the monthly statement for the
consumers, with the attachments of expenditure, if required
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Exercises in CDC
Income
Administration
Core Advisory Services
Direct Services
Matching
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Project Outcomes
As part of preparing AMCS to be CDC-ready, financial
reporting was improved to ensure indirect program
costs were allocated on an appropriate basis. A
suitable costing model has also been identified and
trialled.
 The Leadership Victoria volunteer program is an
excellent way for not-for-profit organisations to access
skilled assistance with projects on a pro bono basis that
otherwise would be beyond their capacity.
 Following a project trial and analysis, and consultations
with several community aged care organisations, the
following Consumer Directed Care (CDC) financial
approach can be considered for use by other
organisations:

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Key Learning and applicability to other organisations
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Community sector organisations impacted by the introduction of the CDC
model need to build internal capacity to adjust to the operational and
financial changes required as a result of the new policy and funding model.
Leadership Victoria is one organisation which can enhance the capacity of
not- for-profit organisations to adapt to the new policy and funding
environment by providing specialist volunteer support in areas such as
business planning, governance, strategic planning and marketing.
Appropriate financial recording systems need to be in place and all
relevant staff need to be cognisant of the overall cost of providing home
aged care, both in the main financial system and the care management
system.
Regular review of levels of care provided is required to ensure clients are
not receiving care above the funding received. This review should
encompass both care levels and available funding.
It is important to acknowledge that the introduction of a CDC model will
also require significant cultural change as staff adapt to a new model of
operating which requires an increased level of attention to “costing” the
various activities they undertake.
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Conclusion
 The Building Community Sector Capacity to Adapt to a
New Funding Environment project has identified the
extent of systems and cultural changes community
service providers will need to implement to ensure
adherence to new government funding guidelines and
to ensure financial sustainability.
 The CDC tool and training program has been developed to
assist organisations to become CDC-ready. This resource
is now available for use by other community organisations.
 The project has also highlighted the benefits of partnership
with other NFP organisations, such as Leadership Victoria,
regarding unit costing and change management.
 Thank you
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