Stakeholder views

VOS is administered as a grants program rather than a procurement program (Department of Finance and Deregulation, 2009 & Department of Finance and Deregulation 2009a, Department of Finance and Deregulation, 2009,b). As such, the Commonwealth Grant Guidelines (Department of Finance and Deregulation 2009a) apply to its administration. One implication of this is that arrangements between DoHA and VOS optometrists are reflected in a funding agreement.
From the perspective of optometrists, there are two main administrative VOS processes:
    • Development and submission of outreach service proposals and the subsequent development of funding agreements.
    • Management of the processes for submitting invoices and reports, arranging payment and analysis of submitted data.
Issues related to data reporting are addressed in the next section.

Of the optometrists responding to the survey, 46% indicated that the administrative processes in developing the funding agreements were reasonable, 37% that the administrative process were onerous and 17% were not involved with the process (Table 89). In qualitative responses, one optometrist indicated that the funding agreement for the current period (commencing in July) had not been finalised as at late August, which seriously impacted delivery of services. Others commented that the move to three year funding agreements was a significant improvement.

In relation to ongoing processes of submitting invoices and reports, 57% responded that the administrative processes were reasonable, 29% that the administrative process were onerous and 14% were not involved with the process. In qualitative responses, nine optometrists raised issues about problems with the invoicing and payment process, in particular related to delays experienced. Two respondents believed payments (currently every six months) needed to be broken up to address cash flow issues. One respondent suggested on-line submission of invoices/reports. Another believed the administration of the scheme had been very unsatisfactory and should be contracted out to another organisation to manage. Communication issues between the Department and optometrists were raised by several respondents.
Table 89 VOS optometrists views on VOS administrative processes
  Participating optometrists assessment of the administrative processes for:
  The development and renewal of the VOS contract: Submitting an invoice and associated reports once services have been delivered:
1. Reasonable relative to funding involved 46% 57%
2. Onerous relative to funding involved 37% 29%
3. No directly involved with this admin. process 17% 14%

Table 90 VOS optometrists suggestions for improving VOS administrative processes
What suggestions do you have on how the administration of the VOS program could be improved? Responses mentioning these issues
Planning and developing outreach service proposals  
More transparent process in choosing locations and frequencies 2
Regional Eye health Coordinators should have more influence in VOS 2
More flexibility in circuits 1
Clearer contracts 1
Communication between Department and service providers  
Better communications between the Department and VOS providers. Departmental officers to have a better understanding of optometry services 3
Provide feedback to participating optometrists on overall statistics and provision of services against need, including who is providing services and when they are occurring 2
Improved invoicing / payments, including timeliness and information of stage of processing 9
Implement online reporting/submission of invoice 1
Break up payments or have more regular payments closer to when services are delivered rather than on a six monthly basis 2
Reduce paperwork 1
Contract out the administration of VOS 1

Source: HPA survey of VOS service providers, 2011. See also Table 3.16 in Volume 3.

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In its written submission, the Optometrists Association of Australia supported the continued administration of VOS by DoHA through a set of funding agreements with VOS optometrists. It was argued this arrangement “is free from any potential influence by interested parties and ensures that the program does what it is intended to do”. The adoption of a fundholder arrangement was not supported.

The Association recommended a number of changes to improve administration, including:
    • a standard VOS funding agreement length of three years, with flexibility built into the funding agreement to allow for alterations in planned services or methods of delivery where these are necessary.
    • online completion of forms and reports
    • provision of standard excel spreadsheet to assist optometrists more easily fulfil contractual and reporting requirements
    • removing the requirement for audited financial statements except for funding agreements over a designated amount
    • removing the requirement for separate bank accounts for VOS funding.
Several state/Northern Territory DoHA offices considered the level of administrative effort involved with the program was disproportionate to its size. Time was spent in assessing proposals, negotiating funding agreements and approving payments for each invoice received. However, all delegations related to the program are held at the DoHA central office. Officers in the central office check matters forwarded by the state/Northern Territory offices and there is often an exchange between these two levels before final approvals are made. State/Northern Territory officers typically administer VOS issues as only a part of their responsibilities. There is also commonly a turn-over of staff. As a result, state/Northern Territory DoHA officers are not always familiar with the administrative processes associated with VOS, and are sometimes unfamiliar with the issues associated with optometry and optometry outreach services. Some of the qualitative responses to the survey suggested optometrists can get frustrated with a lack of understanding of these issues on the part of DoHA officers and an overly bureaucratic approach to addressing them.

Evaluation findings

One of the key questions for this evaluation is whether the establishment of a fundholder arrangement for the ongoing management of VOS should be considered. There are several ways in which a fundholder model could operate with respect to VOS. These options should be considered against the options to improve the administrative processes within DoHA. The following broad options have been identified:

Option A – Status quo: That is, management of the program through both the central and state/Northern Territory offices of DoHA.

Option B – Centralise administration within DoHA: Continue to manage the Scheme through DoHA but rationalise administrative processes with a single point/unit for receipt of service proposals/applications, receipt of tax invoices/reports, management of payment of service providers, and management of program data base (i.e. remove state/Northern Territory level role in these processes).

Option C – Single national VOS fundholder: Under this option DoHA would maintain its role with respect to assessment of proposals and decision making. A single national fundholder would be contracted to manage program administrative processes including: management of receipt of service proposals/applications, developing funding agreements with service providers, receipt of tax invoices/reports, payment of service providers. Under this option DoHA would manage one contract or funding agreement with the fundholder. The fundholder would negotiate funding agreements with service providers, and pay the service providers.

Option D – Jurisdictional based fundholders with VOS integrated into the MSOAP/ Rural Outreach Fund arrangements: Under this option DoHA would maintain its role with respect to assessment of proposals and decision making. The VOS fundholder roles would be undertaken by the relevant MSOAP/Rural Outreach Fund fundholder in each jurisdiction. The fundholder would be contracted to manage program administrative processes including: management of receipt of service proposals/applications, developing funding agreements with service providers, receipt of tax invoices/reports, and payment of service providers. Under this option DoHA would manage one contract or funding agreement with the fundholder. The fundholder would negotiate funding agreements with service providers, and pay service providers.

Under each of these options VOS would remain a discrete scheme with its own funding stream. In addition, the decision making process for VOS, as recommended above, would remain in place, including final recommendations on VOS proposals by the VOS National Advisory Committee, and final decisions on proposals by the Minister’s delegate.

The option of moving the administration of VOS onto a fundholder arrangement was discussed with several stakeholders. This was not supported by most optometrists consulted, including the Optometrists Association of Australia. However, it was indicated that if the arrangement were to occur, the preference would be for a single national fundholder. Option D is not supported by optometrists. It is believed that under this approach VOS issues would be dominated by medical and specialist issues, that MSOAP fundholders are principally concerned with medical practitioners and do not understand optometry, and that the program would eventually lose resources.
Four issues appear to be important in assessing these options. These include:
    • Will the option compromise the achievement of the objectives of the scheme? Our assessment is that continuation with the current arrangements is not optimal. Inconsistencies in administration at the state/Northern Territory office level, for example, resulting in delayed payments, detracts from the effectiveness of the scheme by discouraging VOS optometrists. Absorbing VOS into the MSOAP fundholder arrangements (Option D) could potentially impact on the Scheme through the competing priorities faced by MSOAP fundholders.
    • Will the option reduce administrative costs for VOS optometrists? Options B, C and D have the potential to reduce costs by rationalising processes, particularly submission of data and tax invoices, and improving timeliness of payments, by reducing the number of administrative steps required for approval of payment. Option B would still necessitate all VOS optometrists to have funding agreements with DoHA and these funding agreements would need to be consistent with whole of government requirements (see discussion and recommendations below). Our understanding is that fundholders in MSOAP have been able to simplify funding agreements with service providers. In these respects options C and D are likely to have advantages over option B. By having responsibility for all outreach optometry, option C is likely to be superior to option D by creating a consistent set of processes for VOS optometrists across Australia. The single national fundholder is likely to develop a good understanding of the issues for outreach optometry.
    • Will the option reduce overall administrative costs for DoHA? By rationalising and centralising processes, option B has the potential to remove current inefficiencies in the processing of tax invoices and reports and the payment of optometrists, resulting in saving in staff time. Under option C, DoHA will need to manage one contract/funding agreement rather than 70, significantly reducing staff costs associated with contract development and management. Under option D, DoHA will need to manage funding agreements with each of the jurisdictional fundholders. Both options C and D eliminate the requirement to manage processing of tax invoices and reports and the payment of optometrists. The extent of savings on these issues depends on the level of payment to the fundholder/s. Under all options, DoHA will have continued costs associated with supporting advisory groups, managing processes for assessing proposals, approving them and approving changes.
Based on these considerations we recommend option C as the preferred option. We understand option C cannot be fully implemented until 1 July 2012, when the current round of funding agreements with VOS optometrists expires. These funding agreements are between the Department and VOS optometrists. If option C is not accepted, then we recommend option B be adopted.

The Commonwealth Grants Guidelines (Department of Finance and Deregulation 2009a) espouse a number of key principles with respect to the administration of grant programs. These are:
    • robust planning and design
    • an outcomes orientation
    • proportionality
    • collaboration and partnership
    • governance and accountability
    • probity and transparency
    • achieving value with public money.
Administrative arrangements for grants programs typically attempt to balance these considerations. Overall, we conclude that reforms to VOS implemented around 2006 have improved the extent to which VOS reflects a reasonable balance of these principles, and this is reflected in the feedback through the VOS survey. However, there are some areas in which improvements could be made, mainly related to the proportionality issue. As the Commonwealth Grant Guidelines indicate, the proportionality principle may “for example, inform the choice of the particular form of funding agreement to be used, so that funding agreements are tailored to the particular granting activity. Relevant considerations include the purpose, value and duration of a grant, the deliverables to be supplied, grant conditions, enforceability considerations, and the nature and level of the risks involved… Funding agreements for small-scale, one-off or low risk grants could take the form of a simple letter of offer or exchange of letters, having regard, in the drafting of such documents, to the elements of contract formation and considerations of enforceability” (Department of Finance and Deregulation 2009).

The largely retrospective nature of funding provided under VOS (i.e. most funding is only provided once the outreach service has been delivered), and the relative small size of some grants provided, means that risks of Departmental funds being allocated for services that have not been delivered are relatively low. We believe that several VOS administrative processes could be streamlined, both in the context of a devolved fundholder arrangement, or with the continued administration of the program by DoHA. These include:
    • Development of an excel spreadsheet or online calculator to assist optometrists in developing service proposal budgets. The calculator should allow optometrists to input relevant details, such as locations to be visited, distances travelled and allowances to be claimed. The application should calculate the appropriate subsidy levels and produce a report compliant with what is required for the service proposal.
    • Creation of a capacity to submit service proposals on-line. Persons submitting the proposal should be able to develop draft versions, which can be edited at a later date, and be able to attach all additional documentation as portable document format (pdf) documents. On-line forms should include error checking functions to prompt for missing or incorrect data. Once submitted, applicants should be able to receive/save a copy of the proposal and a receipt confirming its submission. Data on submitted service proposals should be directly captured and transferred to a national VOS database (see discussion below).
    • Creation of a capacity to submit reports and tax invoices on-line. On-line forms should include error checking functions to prompt for missing or incorrect data. Once submitted reports and invoices should be forwarded directly to the officer/s responsible for assessment and/or processing.
    • The VOS application form could be simplified by:
        • Removing the requirement for the application to provide details of the ‘project governance arrangements’. Instead, the form should require the applicant to nominate the person within the business/organisation responsible for managing the project.
        • Include a limited but standard list of risks and require applicants to identify how they will manage these risks, rather than require a ‘risk management plan’ without further specification.
        • Review whether the requirement that all companies or incorporated organisations provide copies of their last ‘three audited financial statements’ could be replaced with providing ‘suitable financial statement’, such as a business return. It is not clear the provision of audited statements in an application is helpful in assessing financial viability and whether this in any way mitigates risks under VOS. Many companies, particularly small businesses, do not obtain audited statements, which are costly. However, all companies are required to prepare financial statements.
        • Remove the requirement for the application to provide details of the ‘project governance arrangements’. Instead, require the applicant to nominate the person within the organisation who will be responsible for delivering services as specified.
    • VOS funding agreements should be further developed to:
        • Have a standard length of three years.
        • Allow for VOS optometrists to negotiate a quarterly payment schedule if this is required.
        • Require a simplified final report which outlines: the achievements of the outreach service over the contracted period and any issues impacting the delivery of the outreach service over this period.
        • Eliminate the requirement to provide a complete version of ‘Project Material and all Commonwealth Material’, unless there is a specific requirement for this.
In addition, the Department could review whether an alternative to the requirement for audited financial statements at the end of the project could be developed.

Recommendations – Administrative processes

46. DoHA implement an arrangement through which one single national fundholder is appointed, following a competitive tender process, to administer the following aspects of VOS:
    a. receipt and processing of service proposals/applications
    b. development of funding agreements with service providers
    c. receipt of tax invoices/reports
    d. payment of service providers.
The Department should retain its roles and responsibilities in relation to:
    a. Supporting the VOS National Advisory Committee and associated state/territory level advisory groups in their roles in identifying and approving priority localities.
    b. Approval of service proposals under the program.
47. A VOS web site be established, either by the Department, or by the proposed VOS national fundholder, through which potential or VOS optometrists can access a VOS budget calculator, lodge service proposal applications and lodge tax invoices and associated reports
48. The VOS application form be simplified as suggested in the report.
49. VOS funding agreements be further simplified as suggested in the report.
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