Calculating Unit Costs Using a Staff Based
Approach

Facilitator:
Leslie Gevers

Participant Introductions

Housekeeping: Toilets, Phones

Morning Tea Break 10.15
 Your
financial statements for the last year
(2009-10)
 Information on gross wages for key staff
groups or positions (e.g. Support Workers,
Assessment Officer/s, Manager, Bookkeeper,
etc.)
 Your HACC Service Specification for 2009–10
which contains your contracted outputs
 Your MDS reported outputs for the same
period
 You
also need a good understanding of the
proportion of staff time spent across the four
Unit Costs categories of:
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Direct work (delivering services)
Direct travel (travel to deliver services)
Indirect work (backup work to service delivery eg rosters, training, progress notes)
Management and administration (management,
accounting, quality, reception).
Participants:
 Understand Unit Costs
 Understand the value of calculating Unit Costs
 Understand the different elements of a Unit Cost
 Are aware of changes they need to make in their
service to effectively calculate Unit Costs
 Know how to use the Unit Costs Staff Based
Spreadsheet
 Have commenced the calculation of the Unit Costs for
their service.

The cost of delivering one unit of service

At its most simple – Unit Cost = total $ spent (HACC Annual
Funding Level (AFL) + fee income + other HACC related income)
divided by the delivered units
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E.g. if we spend $70,000 of funding plus fee income of
$15,000 plus interest of $5,000 to deliver 3,000 hours of
personal care the Unit Cost is $30.00
OPTIONS – reduce the costs of delivering services and
increase the outputs being delivered – consider if other
services can deliver for a lower Unit Cost
Unit Price – funding divided by contracted units
E.g. $70,000/3,000 = $23.33
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Gain an understanding of the actual costs of providing
HACC services
Assess which service areas are most cost effective
Identify ways of improving the cost effectiveness of all
service areas
Identify the impact of different variables affecting services
such as geographical area, client group, size of services
Assess fees to be charged
Provide an overview of how the service is operating
Establish benchmarks or targets
Assess the effect of changes to services (e.g. does the new
roster system result in lower unit costs?)
Decide which areas of service delivery provide the most
value for money to clients
What is a reasonable Unit Cost for:
 Domestic Assistance
 Personal Care
 Social Support
 Day Centre
 Transport - small bus based
Having a single Unit Cost figure (as in our example)
does not provide adequate information for
understanding why a Unit Cost may be high and how it
can be reduced
 The HACC Unit Cost Model is based on 9 elements or
components called Categories

DIRECT COSTS
 Cat 1
Direct employee costs
 Cat 2
Direct travel
 Cat 3
Materials
 Cat 4
Direct Purchased Services
INDIRECT COSTS
 Cat 5
Indirect time costs
 Cat 6
Management & admin employee costs
 Cat 7
Accommodation
 Cat 8
Other service costs
 Cat 9
Overhead allocation
Definitions are included in the Cost Cats tab of the
spreadsheet
A new Unit Costs Spreadsheet has been developed to
make it easier for services who have a lack of financial
management support or other difficulties in using the
current Spreadsheet
The new spreadsheet is based on the allocation of staff
hours across the following categories for each service
type:
 Cat 1
Direct employee costs
 Cat 2
Direct travel
 Cat 5
Indirect time costs
 Cat 6
Management & admin employee costs
Wages are then automatically allocated on the basis of
hours and other Costs can also be allocated in the same
way
The Unit Costs Guide presents information on Unit Costs
and instructions on using the Unit Costs Spreadsheet
Break followed by work on
the Unit Costs Staff Based
Spreadsheet
1.
2.
3.
4.
5.
6.
Open the spreadsheet and your Guide
Rename the spreadsheet using Save As
Enable macros (see Next Slide)
Enter your information working progressively
through the Services sheet, the Hours sheet and the
Costs sheet
Save regularly
Copy to your USB stick at the end of the session
HINT: Use the ORANGE column on the Costs sheet to
automatically distribute costs across the different
service types based on the proportion of wages costs for
each service type
 Click
on Circle (LH top corner)
 Excel Options (in bottom bar)
 Trust Centre
 Trust Centre Settings
 Macro Settings
 Enable all macros
 OK
 OK
 Save the Spreadsheet and close it
 Re-open it
Things to check – on the Summary Sheet:
 Reasonableness of the Unit Cost
 If high - check the information you have entered
 Are service delivery and other staff fully engaged?
 Do schedules maximise staff time?
 Are staff hours appropriate to the service provision?
 Look at the component parts – these will indicate
where expenditure may be too high – consider the %
of each component – what are reasonable
percentages
Send your Unit Costs Summary Sheet to your
HACC Project Officer
REMINDER: Unit Costs are to be provided to
HACC at the end of each financial year
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