Preliminary Report On Impact of Victorian Regulations on NFPs

Not for Profits have sent a loud message to the Victorian government highlighting difficulties and inconsistencies in the reporting requirements imposed by legislation and government departments, according to the preliminary findings of a regulatory review by the State Services Authority.

In a sneak preview of the full report that has been delivered to the Victorian Government but not yet tabled in parliament, Inquiry Commissioner, Susan Pascoe says she believes her recommendations will have far reaching implications for NPFs nationally.

Pascoe outlined her preliminary findings in a podcast through QUT’s Centre for Philanthropy and Nonprofit Studies.

The Commissioner says much of the focus from NFPs was on small regulations colloquially referred to as ‘red tape’. The NFP message was that:

– In dealing with the Government, NFP Organisations encountered a lot of inconsistency.
– NFP Organisations had difficulties and felt confused with requirements that government had for them.
– NFP Organisations reported that they didn’t find government was using proportionate requirements for the tendering process, the grants application process or the volume of reporting that was required by the small and medium entities.
– Successful applicants for the smaller grants found that much of the funding available to them was being absorbed in some of the data collection and administrative requirements for government for example:
– Requirements in some cases warranted that NFP Organisations keep separate bank accounts for all grants and in some cases that grants are separately audited rather than an overall audit from an entity which has a range of government programs.

The SSA inquiry found evidence of duplication not only within and between government departments in Victoria, but certainly between state and federal governments. There was also concern from the Not for Profit sector about the communication from government and the lack of feedback on the information that they would be reporting back to the government.

Pascoe says there was however a consistent request that all of the data provided by NFP Organisations be recorded, combined and then feedback to them in a way that they could use in their future planning.

The Review also looked at the impact of the Associations Incorporations Act 1981 and the Fundraising Appeals Act 1988.

Pascoe says there is certainly a sense of pent up expectation that there will be a review and improvement of both acts in the near future.

She says with both acts there is currently a request that there be online registration and transaction processes.

NFP Organisations reported that the sort of improvements they would like to see in the sector is a move to whole of government grant agreements and guidelines.

Pascoe says there are a lot of examples within the agreements that could be used to develop standard application and acquittal processes to allow reporting to be scaled and proportionate to the risk or funding level and common financial definitions including a standard chart of accounts.

She says in relation to the whole of government approach, the SSA would be looking at an agreed minimum notice period for funding, enabling improvements that can be made right across government and not within single departments.

She reveals that other recommendations will relate to the streamlining of the application processes and the introduction of an expression for interest stage where it’s appropriate.

Pascoe says that while this might seem counter intuitive that in a review that is looking at reducing the regulatory burden you might introduce another stage. However, there were strong calls from the NFP sector that this would in fact relieve the burden in the long run, that by following an expression of interest stage they could make a judgement they could put the work of tendering in more detail for a particular grant.

The SSA is looking at creating a central repository for Not for Profit core information. In the UK they use a term that they call ‘Passporting’ where you use a core a repository of information that can then be used when a NFP applies for a grant or when there is a need for verification regarding their benefits.

The information is checked and verified on a regular ongoing basis.

The Review says this would be a real improvement and lighten the administrative load of the NFP sector.

Pascoe says while she cannot give the final detail, a number of recommendations that are being looked at are in four broad areas relating to the legislation, grants applications, service agreements and information systems and electronic transactions.

The SSA is also following up on repeated requests from the NFP sector during the consultations that there be a higher level of support for the sector in terms of its capacity for e.g. to compete competitively for bids to imply with government regulatory requirements to operating the contemporary competitive environments in which they find themselves.

Susan Pascoe says the SSA is looking at ways that there can be improved regulatory support for them as well.

She says some of these issues have as much traction in the federal as the state sphere and given that regulation is one of the three key planks of the national reform agenda, there is also discussion about the degree to which some of these issues might be as better or better served nationally.

You can listen to or download a transcript of Susan Pascoe’s podcast at www.bus.qut.edu.au/research/cpns/podcast/shows/show17.jsp