Flexible Fund Guidelines
QUALITY USE OF DIAGNOSTICS, THERAPEUTICS AND PATHOLOGY
FLEXIBLE FUND
January 2014
Introduction
As part of the 2011-12 Budget, the Australian Government announced a range of improvements to
administrative arrangements within the Department of Health (the Department). These
improvements include the establishment of 18 flexible Funds with a further six programs
transferred from the Department to the portfolio agencies of Cancer Australia and the National
Health and Medical Research Council.
The Quality Use of Diagnostics, Therapeutics and Pathology Fund (the Fund) is one of these 18
flexible funds in the health portfolio and came into operation from 1 July 2011.
Note: Fund Guidelines may be varied from time-to-time by the Australian Government as the needs
of the Fund require. Amended Fund Guidelines will be published on the Department’s website in
advance of any grants process.
Fund objectives and priorities
The establishment of flexible funds will enable the continuation of support for health protection
priorities while facilitating a more streamlined and flexible approach. These funds reduce red tape,
provide increased flexibility to respond to emerging issues and anticipate change, and deliver better
value for money, quality and evidence based funding.
The Fund’s primary objective is to support activities that contribute to providing information and
raising awareness for health professionals and consumers on the quality use of medicines and
medical services, which in turn, supports the sustainability of the Pharmaceutical Benefits Scheme
(PBS) and the Medicare Benefits Schedule (MBS).
Current activities undertaken through the organisations currently supported by the Fund include
education and information resources for health professionals and consumers on existing general
community health issues and priorities such as health literacy, newly available drugs and drug
testing, and safe and appropriate disposal of consumer medicines through community pharmacies.
For some activities there is an additional focus on specific population groups such as seniors,
Aboriginal and Torres Strait Islander Peoples or people from culturally and linguistically diverse
backgrounds. The organisations provide independent, evidence based information and education
services to health professionals on the quality use of medicines and medical services, including the
safe disposal of unwanted medicines and the use of evidence based requests for diagnostic imaging
tests and pathology services, aiming to improve the quality use of medicines and the health of all
Australians.
The Fund priorities are:
Quality use of therapeutics for health professionals
This priority aims to improve the health of Australians with the practice of quality use of medicines
through the provision of independent, evidence based information and education to health
professionals.
The ability to collect data from clinical settings is also being developed to inform education
programs and evaluation. This includes work under the MedicineInsight program, being developed
and delivered as a part of the broader 2011-12 Budget measure: Improving Sustainability of the PBS
through enhanced post-market surveillance.
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
2
Quality use of therapeutics for consumers
This priority aims to promote and achieve better health outcomes for consumers through quality
use of therapeutic education activities, including development of resources and tools, as well as
phone lines about therapeutics and adverse events. The Generics Medicines are an Equal Choice
awareness campaign announced in the 2010-11 Budget is also undertaken through this priority.
Quality use of diagnostics and pathology testing
This priority aims to promote the use of evidence based requests for diagnostic imaging tests and
pathology services through the provision of information and education campaigns for health
professionals, leading to savings to the MBS.
Information and awareness on new therapeutics
This priority aims to provide independent, evidence based information to health professionals and
consumers regarding new therapeutics, including expert advice and intervention design.
Publications, including Rational Assessment of Drugs and Research (RADAR) and Australian
Prescriber, are researched and reviewed before being published. Materials are developed for
programs to be implemented for health professionals and to assist with consumer education
activities.
Disposal of returned and unwanted medicines
This priority aims to collect consumers expired and unwanted medicines through the Community
Pharmacy network to help avoid, among other things, accidental childhood poisoning and
medication misuse. This program contributes to the Quality Use of Medicines through disposing of
these medicines in a safe and environmentally friendly manner, predominantly using high
temperature incineration. Consumers are able to return their expired and unwanted medicines to
all community pharmacies across Australia. There is no fee charged either to consumers or
pharmacies for this service.
These Fund priorities, and the types of activities to be supported under them, are further described
at Attachment A. Fund priorities may be adjusted from time to time to take into account evidence
about the effectiveness, efficiency and appropriateness of Fund activities, as well as emerging
challenges.
Background
The Fund was established on 1 July 2011 through the consolidation of a range of existing
Departmental programs currently undertaken government funded organisations.
The establishment of the Fund followed a strategic review of the administrative arrangements in
the Health portfolio commissioned by the Government in 2010. The review identified an
opportunity to improve the management of existing programs through consolidating them into
larger, flexible funds, in order to cut red tape for grant holders, increase flexibility, and provide
funding for the community more efficiently.
Further information about the strategic review and the establishment of the flexible funds is
available on the Department’s website at: www.health.gov.au.
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
3
Fund scope and operating parameters
The Fund will support the types of activities that have previously been supported under the various
programs, where these programs are proven to demonstrate a viable and effective use of
Commonwealth resources and provide for the consideration of the introduction of new quality use
of diagnostics, therapeutics and pathology priorities as they are identified.
As funding becomes available, priorities and activities will be determined, including, but not limited
to, those listed at Attachment A, and then administered as set out in these guidelines.
The funding committed to particular priorities and supported activities may be varied over time, to
take into account:
 availability of funding;
 evidence, including from evaluation activities, of the effectiveness, efficiency and
appropriateness of Fund activities;
 emerging quality use of diagnostics, therapeutics and pathology challenges; and
 changing Government priorities.
Fund Timeframe
The Fund is an ongoing initiative available from 1 July 2011.
Initiatives may be funded for a variety of timeframes depending on the priorities and activities for
which funding is provided.
Fund value
The total value of funds available, as announced in the 2011 Federal Budget, is $190.7 million (GST
exclusive) from 2011-12 to 2014-15.
Existing activities already committed currently amount to $164.3 million (GST exclusive). The
remaining $26.4 million (GST exclusive) will be allocated to activities which align with the Fund
priorities over this period.
Organisations supported by the Fund must deliver during the Project Period savings of $232 million
to the PBS as well as significant savings to the MBS.
Roles and responsibilities
Minister
The Minister for Health (the Minister) is responsible for reviewing and setting priorities for the Fund
and the allocation of funding against these priorities. These priorities will reflect the aims and
objectives of the Fund at all times but may change over time to address emerging issues that will
support quality use of diagnostics, therapeutics and pathology related activities. The Minister has
delegated the approving responsibilities for the grants to the Department.
Department of Health
The Department is responsible for the management and monitoring of activities under the Fund,
including:
 developing funding agreements or any alternative contractual arrangement with the supported
organisations for the delivery of programs and activities under the Fund;
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
4





monitoring the performance of projects to ensure the conditions of the contractual
arrangements are met;
assessing performance and financial reports and undertaking follow up activity as necessary;
making payments on acceptance of milestone reports as specified in the contractual
arrangement;
evaluating and acquitting the programs and activities provided by the supported organisations
under the Fund; and
providing feedback to the supported organisations on the overall project following the
conclusion of activities.
Funding Recipients
The supported organisations are currently the only competition in the market with the capacity and
expertise to deliver the programs and activities required by the Department. All funding recipients
will be required to deliver substantial savings to the PBS and MBS as part of the funding
agreements.
Funding will extend to existing activities and additional activities which are consistent with the
objectives and priorities of the Fund. Funding arrangements will be made available through a
variety of means that may include targeted funding or one-off activity funding arrangements.
Funds may also be used for the procurement of work by the Department which is directly related to
the purpose of the Fund (e.g. program evaluation). Such procurements will be undertaken in
accordance with the requirements of the Commonwealth Procurement Rules.
An entity applying for funding is responsible for the development of its funding proposal. As part of
any process, entities submitting proposals must ensure all information provided to the Department
is accurate.
The Department will enter into contractual arrangements for funding with single entities only.
Where two or more entities seek funding as a consortium, one entity must be appointed as the lead
entity and will enter into any subsequent contractual relationship with the Department. The lead
entity must be identified in any proposal for funding and that proposal should identify all members
of the proposed consortium. Entities seeking funding support must be prepared to meet the costs
associated with the development and lodgement of the proposal.
Eligibility
Who can access the Fund?
Ongoing funding is provided through the Fund for existing activities in line with agreed Fund
priorities.
In addition, one-off and unsolicited proposals can be accepted for assessment from supported
organisations. Applicants must be a legal entity to be eligible for funding, for example:

Incorporated Associations (incorporated under State/ Territory legislation, commonly have
‘Association’ or ‘Incorporated’ or ‘Inc’ in their legal name);

Incorporated Cooperatives (also incorporated under State/ Territory legislation, commonly
have ‘Cooperative’ in their legal name);

Companies (incorporated under the Corporations Act 2001 – may be not-for-profit or forprofit proprietary company [limited by shares or by guarantee] or public companies);
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
5






Aboriginal Corporations (incorporated under the Aboriginal and Torres Strait Islander Act 2006
and administered by the office of the Registrar of Aboriginal and Torres Strait Islander
Corporations);
Organisations established through a specified piece of Commonwealth or State/ Territory
legislation (many public benevolent institutions, churches, universities, unions, etc.);
Partnerships;
Trustees on behalf of a Trust;
State/ Territory or Local Governments; or
where there is no suitable alternative, an individual or – jointly and separately – individuals.
Should a funding and/or procurement process have restricted eligibility requirements, this will be
clearly specified in the application documentation for that process.
Probity
The Australian Government is committed to ensuring that the process for providing funding meets
acceptable standards of probity and is in accordance with published Fund Guidelines. Individual
grant processes contain detailed guidance on the specific requirements of probity protocols for the
process and these will be consistent with the Fund Guidelines.
Probity issues to be addressed include, but are not limited to, conflict of interest, confidentiality
and protection of personal information.
Conflict of interest
A conflict, or perceived conflict, of interest may exist if, for example, the applicant or any of its
personnel:
 has a relationship (whether professional, commercial or personal) with a party who is able to
influence the application assessment process, such as a Departmental staff member;
 has a relationship with, or interest in an organisation, which is likely to interfere with or restrict
the applicant in carrying out the proposed activities fairly and independently; or
 has a relationship with, or interest in, an organisation from which they will receive personal gain
as a result of the granting of funding under the Quality Use of Diagnostics, Therapeutics and
Pathology Fund.
Each applicant will be required to declare as part of any application process, existing conflicts of
interest, or that to the best of their knowledge there is no conflict of interest. This includes, in
relation to the examples above, any interest that would impact on the applicant, or prevent it from
proceeding with the project or any contractual arrangements it may enter into with the Australian
Government.
Where an applicant subsequently identifies that an actual, apparent, or potential conflict of interest
exists or might arise in relation to an application for funding, the applicant must inform the
Department in writing immediately, noting that the appearance of a conflict of interest is as
important as any actual conflict of interest. A conflict of interest, or the appearance of a conflict, is
likely to undermine the credibility of the project, process or decision.
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
6
Confidentiality and Protection of Personal Information
It is a Commonwealth requirement that all confidential information and personal information is
kept confidential. This will require each funded entity to:
 comply with the Privacy Act (1988) (‘the Privacy Act’), including the 11 Information Privacy
Principles (IPPs), as if it were an agency under the Privacy Act, and the National Privacy
Principles (NPPs);
 refrain from engaging in direct marketing (s 16F of the Privacy Act), to the extent that the NPP
and/or s 16F apply to the Funded organisation; and
 impose the same privacy obligations on any subcontractors it engages to assist with the project.
The Confidentiality Clause in any subsequent contractual arrangement imposes obligations on the
funded organisation with respect to special categories of information collected, created or held
under the Agreement. The funded organisation is required to seek the Commonwealth’s consent in
writing before disclosing Confidential Information.
The specific clauses governing the confidentiality provisions of any grant process under this Fund
will be contained in the contract that will form part of any grant application documentation
available to potential applicants.
Fund Application Processes
Access to Funding
The Department may undertake any of the following funding processes to achieve the aims,
objectives and priorities for the Fund:
Direct grant funding
Under existing funding arrangements, supported organisations receive direct ongoing grant funding
for current priority activities. Although this funding is ongoing, new funding arrangements are renegotiated regularly to ensure funded activities remain appropriate and to allow for changes to
Government priorities.
One-off or unsolicited approaches
Organisations may submit a one-off or unsolicited proposal to the Fund. These one-off or
unsolicited proposals may be considered, at the Department’s discretion:

when funds remain available for the funding period; or

where the proposed activities will meet an urgent or emerging priority.
In the event that any one-off or unsolicited proposals are considered, they will be assessed
individually against the aims, objectives and priorities of the Fund.
All grant funding provided through the Fund will be undertaken in accordance with the
Commonwealth Grant Guidelines.
Fund Under expenditure
Funding allocations will be monitored throughout the year with potential underspends allocated to
activities identified as being the most appropriate method of meeting the aims and objectives of
the Fund.
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
7
Under expenditure may also be used to procure additional services from the supported
organisations where such activities will meet the objectives and priorities of the Fund.
From time to time, the Australian Government may direct additional or supplementary funding to
services under the Fund. For example, by providing targeted services to areas where evidence
shows a legitimate need.
Decisions
Approval of funding
For targeted funding arrangements, an assessment of the proposal will be undertaken by the
Department to determine whether the merits of the funding proposal offer value for money to the
Commonwealth. Funding recipients will be required to deliver substantial savings to the PBS and
MBS as part of the funding agreement.
Where a funding process is undertaken, an assessment process will be established by the
Department to assess any proposals for funding against assessment criteria, value for money and
determine allocation of funding. A Funding Approver (the Approver) will be appointed from the
Department. Following the assessment of a proposal, advice will be provided to the Approver on
the merits of the proposal, including value for money. The final decision about the approval of a
grant will be made by the Minister or agency Chief Executive (including a Chief Executive’s
delegate).
The Approver will consider whether the proposal will make an efficient, effective, ethical and
economical use of Commonwealth resources, as required by Commonwealth legislation and the
Commonwealth Grant Guidelines, and whether any specific requirements will need to be imposed
as a condition of funding. Funding approval is at the discretion of the Approver.
Any applicants submitting proposals for funding will be advised of the outcome of their proposal.
Approval of procurement
Any procurement activity will be undertaken in accordance with the Commonwealth Procurement
Rules to ensure the process provides the Commonwealth with a value for money outcome.
Complaint handling
The Department’s Procurement and Funding Complaints Handling Policy applies to complaints that
arise in relation to a procurement or funding process. It covers events that occur between the time
the request documentation is released publicly and the date of contract execution, regardless of
when the actual complaint is made. The Department requires that all complaints relating to a grant
or procurement process must be lodged in writing. Further details of the policy are available 'About
Us' page on the Department’s internet site (www.health.gov.au).
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
8
Conditions of Funding
Funding/contracting arrangements
The supported organisations will be required to enter into funding agreements or alternative
contractual arrangements with the Australian Government (represented by the Department). A
copy of the proposed contractual arrangement will form part of any material that forms the basis of
a grant process under this Fund.
Specific conditions
There may be specific conditions attached to the funding approval required as a result of the
appraisal process or imposed by the Approver, such as substantial savings to be delivered to the
PBS and MBS. These will be identified in the offer of funding or during contract negotiations.
Payment Arrangements
Payments will usually be made on achievement of agreed milestones. Before any payment can be
made, funding recipients will be required to provide:

a tax invoice for the amount of the payment; and

evidence of meeting the obligations of the funding agreement or contract.
Where payments are linked to the achievement of specific milestones, payments will only be made
after the Department is satisfied that those milestones and associated obligations of the
contractual arrangement have been met.
Reporting requirements
The supported organisations will be required to provide progress reports on the agreed milestones.
These progress reports may include funding acquittal requirements. The timing of progress reports
will be negotiated and form part of the final contractual arrangement. The format and framework
for providing progress reports will take into account the size, cost and relative risks of the initiative/
project being undertaken by the funding recipient.
Monitoring
The supported organisations will be required to actively manage the delivery of the project. The
Department will monitor progress against the funding agreement or contract through assessment
of progress reports and by conducting site visits as necessary.
Evaluation
An evaluation by the Department will determine how the funding contributed to the objectives and
priorities of the Fund. The supported organisations may be required to provide information to assist
in this evaluation for a period of time, as stipulated in the funding agreement or contract, after
funding has been provided.
Ongoing evaluation by the Department will occur during the project period in the context of an
assessment of reports provided by the supported organisations each year as required under the
funding agreements. At the end of the project period, the supported organisations are required to
provide a final report. Similarly, the Department will evaluate this report having regard to program
aims and deliverables and the funding allocated to the funding recipient for this purpose.
Appropriate evaluation assessments will be undertaken for contractual arrangements.
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
9
Attachment A – Fund priorities activities and assessment requirements
Priority: Quality use of therapeutics for health professionals
Potential Activities
 provide independent, evidence based information and education about therapeutics to health
professionals;
 deliver substantial savings to the PBS;
 collect clinical use data to inform education programs and evaluation;
 encourage and support cross-discipline and cross sector collaborations that promote quality
use of therapeutics;
 support nationally coordinated approaches to quality use of therapeutics; and
 undertake ongoing evaluation.
Broad Assessment Requirement
The first level of assessment for any funding arrangement will be to determine the broad capacity
of the potential funding recipient and the proposed project to meet the purpose, scope, objectives
and outcomes of the Fund.
The second level of assessment will be consideration of the proposal against the parameters of the
above objective which may include, but is not limited to:
 the relevance and effectiveness of the proposal in relation to the priority objectives;
 complete details of the project plan and budget projections;
 the applicants demonstrated capacity to deliver outcomes related to the priorities;
 demonstration that the benefits of the project are sustainable (where relevant);
 demonstration of partnerships with other organisations/sectors/agencies to maximise the
outcomes of the project; and
 details of the applicant’s capacity to implement the project within the proposed timeframe.
Priority: Quality use of therapeutics for consumers
Potential activities
 provide independent evidence based education activities and information about therapeutics
for consumers;
 manage public phone lines to provide assistance for consumers about therapeutics and adverse
events;
 develop and deliver mass awareness campaigns on therapeutics issues; and
 undertake ongoing evaluation.
Broad Assessment Requirement
The first level of assessment for any funding arrangement will be to determine the broad capacity
of the potential funding recipient and the proposed project to meet the purpose, scope, objectives
and outcomes of the Fund.
The second level of assessment will be consideration of the proposal against the parameters of the
above objective which may include, but is not limited to:
 the relevance and effectiveness of the proposal in relation to the priority objectives;
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
10





complete details of the Project Plan and Budget Projections;
the applicants demonstrated capacity to deliver outcomes related to the priorities;
demonstration that the benefits of the project are sustainable (where relevant);
demonstration of partnerships with other organisations/sectors/agencies to maximise the
outcomes of the project; and
details of the applicant’s capacity to implement the project within the proposed timeframe.
Priority: Quality use of diagnostics and pathology testing
Potential Activities
 Provide independent, evidence based information and education about diagnostic services and
pathology testing services;
 deliver savings to the MBS;
 collect clinical use data to inform education programs and evaluation;
 encourage and support cross-discipline and cross sector collaborations that promote quality
use of therapeutics;
 support nationally coordinated approaches to quality use of diagnostics services and pathology
testing; and
 undertake ongoing evaluation.
Broad Assessment Requirement
The first level of assessment for any funding arrangement will be to determine the broad capacity
of the potential funding recipient and the proposed project to meet the purpose, scope, objectives
and outcomes of the Fund.
The second level of assessment will be consideration of the proposal against the parameters of the
above objective which may include, but is not limited to:
 the relevance and effectiveness of the proposal in relation to the priority objectives;
 complete details of the Project Plan and Budget Projections;
 the applicants demonstrated capacity to deliver outcomes related to the priorities;
 demonstration that the benefits of the project are sustainable (where relevant);
 demonstration of partnerships with other organisations/sectors/agencies to maximise the
outcomes of the project; and
 details of the applicant’s capacity to implement the project within the proposed timeframe.
Priority: Information and awareness on new therapeutics
Potential Activities
 Develop, produce and distribute publications that provide:
 independent, reliable, up-to-date and readily accessible information about broad drugs and
therapeutics issues; and
 independent information to prescribers and consumers on new and revised listings on the PBS
 provide expert advice on intervention design and selection for all relevant audiences and
programs;
 develop materials and implement education strategies on new and revised listings on the PBS
for the primary audience of general practitioners, pharmacists and medical specialists;
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
11


develop consumer materials and implement consumer education strategies on new and revised
listings on the PBS; and
establish an ongoing evaluation strategy for the project, building on existing evaluation
processes.
Broad Assessment Requirement
The first level of assessment for any funding arrangement will be to determine the broad capacity
of the potential funding recipient and the proposed project to meet the purpose, scope, objectives
and outcomes of the Fund.
The second level of assessment will be consideration of the proposal against the parameters of the
above objective which may include, but is not limited to:
 the relevance and effectiveness of the proposal in relation to the priority objectives;
 complete details of the Project Plan and Budget Projections;
 the applicants demonstrated capacity to deliver outcomes related to the priorities;
 demonstration that the benefits of the project are sustainable (where relevant); demonstration
of partnerships with other organisations/sectors/agencies to maximise the outcomes of the
project; and
 details of the applicant’s capacity to implement the project within the proposed timeframe.
Priority: Disposal of returned and unwanted medicines
Potential Activities
 Safe and environmentally appropriate collection and disposal of consumers’ expired and
unwanted prescription, non-prescription and proprietary medicines;
 consultation with appropriate regulatory and industry bodies in developing and agreeing
protocols for collection and disposal services;
 collection and analysis of collection and disposal data, including analysis of issues regarding the
safe and quality use of therapeutics; and
 activities to raise awareness amongst consumers regarding the availability of the service.
Broad Assessment Requirement
The first level of assessment for any funding arrangement will be to determine the broad capacity
of the potential funding recipient and the proposed project to meet the purpose, scope, objectives
and outcomes of the Fund.
The second level of assessment will be consideration of the proposal against the parameters of the
above objective which may include, but is not limited to:
 the relevance and effectiveness of the proposal in relation to the priority objectives;
 complete details of the Project Plan and Budget Projections;
 the applicants demonstrated capacity to deliver outcomes related to the priorities within
budget;
 demonstration that the benefits of the project are sustainable (where relevant);
 demonstration of partnerships with other organisations/sectors/agencies to maximise the
outcomes of the project; and
 details of the applicant’s capacity to implement the project within the proposed timeframe.
Flexible Fund Guidelines – Quality Use of Diagnostics, Therapeutics and Pathology Fund
12