DISABILITY, HOUSING AND COMMUNITY SERVICES – DISABILITY AND COMMUNITY
SERVICES
SDMS Id Number P2012/0177 - 010
Effective From 15 June 2013
Functional Sub Group Disability, Housing and Community Services
Summary Resource allocation to community organisations funded through the Disability and Community Services program to be primarily administered using a unit price funding model.
Pricing mechanism to be used to fund disability and community services organisations funded through the Disability and Community Services program,
Department of Health and Human Services.
Replaces Doc. No.
Author Area
Contact
Applies to
N/A
Disability and Community Services
All staff of Disability, Housing and Community Services program, Department of Health and Human Services.
Policy Type
Review Date
Prepared by
Operational
15 June 2016
Project Management Officer 1300 135 513 15 May 2013
Through 1300 135 513 4 July 2013
Cleared by
Director, Disability and Community Services
Deputy Secretary, Disability, Housing and Community
Services
1300 135 513 4 July 2013
This Policy may be varied, withdrawn or replaced at any time. Compliance with this directive is mandatory for the Department of
Health and Human Services. P
LEASE
D
ESTROY
P
RINTED
C
OPIES
. The electronic version of this Policy is the approved and current version and is located on the Agency’s intranet. Any printed version is uncontrolled and therefore not current.
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 This policy will assist in the implementation and maintenance of a unit pricing mechanism being used in the allocation of resources by the Department to funded community services organisations funded under the Disability and Community Services program.
 The policy will ensure the fair and equitable distribution of funds while continuing to respect sector diversity and client choice, encourage innovative approaches to service delivery, drive continuous quality improvement and foster a financially viable service sector.
 Funding to the Disability and Community Services sector will be administered through unit price funding and principles. The resource allocation and unit pricing mechanism used is based on the
Development of a Resource Allocation and Unit Pricing Framework Final Summary Report 2011
(Attachment A) and subsequent Resource Allocation and Unit Pricing Framework (Attachment B).
 A Unit Price is the price per unit paid by Government to a service provider for the provision of services. Unit prices incorporate a provision for salaries, allowances, long service leave, recreation and sick leave, public holidays, annual leave loading, workers compensation and superannuation. The unit prices also include provisions for operating and other non-labour costs.
 In recognition of ongoing cost movements unit prices are adjusted annually in accordance with the
Department of Health and Human Services annual indexation allocation.
 The unit pricing model used by Disability and Community Services is the ‘fully distributed cost’ model. Under this model the price for a unit of service is based on the total average cost per unit of output (fixed cost, variable direct costs and overheads).
 This method of unit pricing is widely used to fund human services because it offers a relatively simple way of allocating joint costs and corporate overheads.
 Fully distributed costing has a further benefit in that its simplicity is relatively easy to reflect within funding agreements and hence lends itself well to the establishment of government funded human services.
 Not all service types funded under the Disability and Community Services program are suitable for unit funding. In cases where a unit price is not appropriate, the price will be established based on the individual staffing needs and other supports required to deliver the particular service.
 DHHS and the “Agency” refer to the entire Department of Health and Human Services made up of:
Departmental Units – responsible for policy, planning and performance; and interface with government, and Operational Units – responsible for delivering services against policies, plans and standards set by the departmental units.
This Policy may be varied, withdrawn or replaced at any time. Compliance with this directive is mandatory for the Department of
Health and Human Services. P
LEASE
D
ESTROY
P
RINTED
C
OPIES
. The electronic version of this Policy is the approved and current version and is located on the Agency’s intranet. Any printed version is uncontrolled and therefore not current.
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The Unit Pricing Principles set out the ‘market rules’ that define the general scope of costs that pricing is intended to cover. The Principles also define the relationship between the funder (DHHS) and the recipients of funds (service providers) in relation to the management and discharge of costs and price based issues within service funding. The Principles are as follows:
 Pricing should recognise the primacy of the client and enhance the capacity of clients to exercise choice and access the most appropriate services.
 Prices paid for services should enable service providers to recover costs for a nominated service over the short and long terms.
 Prices paid for services should provide incentives to promote effectiveness, innovation and quality.
 Prices paid should be based on a reasonably accepted definition of efficient services and allow service providers to benefit from increasing their efficiency.
 Prices should be predictable over time and provide certainty to service providers.
 Prices should be transparent.
 Prices should promote equitable access to services by clients and promote client choice where appropriate.
 Pricing should enhance sector and individual service provider sustainability and viability.
 Pricing should be based on open and ethical relationships between funder and service provider.
 This is a statewide policy and must not be re-interpreted so that subordinate policies exist. Should discreet operational differences exist, these should be expressed in the form of an operating procedure or protocol that must be approved at the same level as this policy.
 This policy will be implemented through the Funding Agreement used by the Department to provide funding to community organisations through the Disability and Community Services program of the
Department of Health and Human Services.
 As part of ongoing reforms in the disability services sector work was commissioned by the
Department to undertake a review and provide recommendations in regard to best practice in funding processes that will promote equity and transparency across the sector.
 All funded services will be funded on an equitable, transparent and sustainable basis.
 Government will be clear about the level and quality of services that are being purchased.
This Policy may be varied, withdrawn or replaced at any time. Compliance with this directive is mandatory for the Department of
Health and Human Services. P
LEASE
D
ESTROY
P
RINTED
C
OPIES
. The electronic version of this Policy is the approved and current version and is located on the Agency’s intranet. Any printed version is uncontrolled and therefore not current.
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 All staff within Disability and Community Services involved in developing, negotiating, amending or implementing Funding Agreements with community sector organisations.
 Failure to comply with this policy, without providing a good reason for doing so, may lead to disciplinary action.
 Compliance and audit requirements will be implemented and monitored through the Funding
Agreement.
 DHHS – Unit Pricing – Final Summary Report
 Resource Allocation and Unit Pricing Framework.
N/A
a) DHHS – Unit Pricing – Final Summary Report b) Resource Allocation and Unit Pricing Framework
This Policy may be varied, withdrawn or replaced at any time. Compliance with this directive is mandatory for the Department of
Health and Human Services. P
LEASE
D
ESTROY
P
RINTED
C
OPIES
. The electronic version of this Policy is the approved and current version and is located on the Agency’s intranet. Any printed version is uncontrolled and therefore not current.
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