UPDATE: Government Funding Delayed After Avalanche of Applications

The Federal Government has been forced to extend the current funding arrangements for more than 5000 welfare charities for up to four months as it tries to respond to an “avalanche” of applications – but the charities are yet to be officially informed.

A Senate Estimates Committee hearing in Canberra was told that the Social Services Department received 5,572 applications from welfare groups seeking $3.9 billion over four years when there is just $800 million available after cuts to the program budget.

The Federal Opposition has slammed the Government saying the “shambolic” community grants process will affect a diverse range of organisations delivering services including emergency food and financial relief to Australia’s most vulnerable people.  

“The Department admitted today that grants are way oversubscribed with an avalanche of applications from charities and Not for Profits,” Labor’s Shadow Minister for Communities Claire Moore said.

Department of Social Services Deputy Secretary Barbara Bennett told the hearing the department expected a lot of interest from organisations for funding but were not prepared for a ‘five-fold overbidding for funding’.

“I am concerned that the large volume of applications will inevitably mean many agencies that provide services for disadvantaged groups will miss out,” Moore said.

“Confusion reigns. The process which started in June was supposed to be completed in mid-November. But organisations will have an agonising wait with contracts to be signed in March 2015.”

“While Minister Andrews has given his Department more time, by contrast agencies had to drop everything to meet a punishing submission deadline.”

“This week the Department gave notice on its website of a further two month transition for existing contracts but admitted today that it has not personally contacted affected organisations.”

The Senate Estimates Committee was told that Department of Social Services decided on Tuesday that it would not be able to process all of the 5572 applications for welfare programs by their expected date in mid-November.

Dr Tim Reddell from DSS told the Senate hearing that a notification had been placed on the Department website offering two month funding extensions to the majority of existing grant agreements due to expire on 31 December 2014 to ensure continuity of important community services over the Christmas/New Year period.

He said no charities had yet been told directly but letters offering the extensions would be sent out in coming days.

He said to reduce the impact on organisations, extensions would be offered through a simple variation to existing grant agreements with the expectation that the contracts would be finalised by March 1 2015.

The DSS website says the variations will be modelled closely on existing agreements allowing organisations to continue delivery of current services under the same arrangements they have in place now.

Under questioning from Senate Committee member, Labor Senator Claire Moore, Dr Reddell said that the decision had been made only on Tuesday to delay the funding decisions and that the website had received 580 hits since the delay was posted.

Also under questioning from Greens Senator Rachel Siewert, the Department agreed that charities could have funding extended for up to four months, including two months to consider the extension offer,and funds would be provided until the end of February 2015.

Siewert told the Department heads that the delay would come at a vexed time for the charities when most were making staffing and program decisions.

“The expected gap with what has been tendered and for what is available in the budget will require a significant rethink for many organisations,” she said.  

A list of extensions is available.