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Forums on Lump Sum Grant Review

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... 200M in recurrent subventions for NGOs in ... up of the LSG subvention system: ... Introduction of an improved subvention system for NGOs to deliver the ... – PowerPoint PPT presentation

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Title: Forums on Lump Sum Grant Review


1
  • Forums on Lump Sum Grant Review
  • Forum One

18 March 2008
2
1 Progress Update
  • LSG Steering Committee Meeting - 3 March 2008
  • Increase of 200M in recurrent subventions for
    NGOs in 2008-09
  • Concerns of subvented agencies not on LSG mode

3
2 Todays Discussion LSG Review
  • 2.1 Spirit basic principles of LSG
  • 2.2 Irregularities and inconsistencies in actual
    implementation
  • 2.3 Complaints-handling mechanism

4
LSG Independent Review
  • The Terms of Reference of the Committee

1. To review LSG with a view to assessing its
overall effectiveness and identifying areas and
scope for improvement covering but not limited to-
  • overall implementation
  • flexibility, efficiency cost-effectiveness in
    the use of public funds and in service delivery
    by subvented NGOs
  • the accountability and corporate governance of
    subvented NGOs
  • the impact of the LSG on the quality of welfare
    service and
  • the handling of complaints related to
    implementation.

2. To report findings and make recommendations to
the Secretary for Labour and Welfare
5
Spirit basic principles of LSG
  • Rationale for setting up of the LSG subvention
    system
  • To replace the inflexible, complex and
    bureaucratic Model System and Modified Standard
    Cost System

6
Spirit basic principles of LSG
Objectives
  • A commitment of the government to meet service
    needs
  • Introduction of an improved subvention system for
    NGOs to deliver the services

7
Spirit basic principles of LSG
With the above objectives, the following basic
principles are to be observed
  • 1 Flexibility
  • 2 Transparency
  • 3 Partnership between SWD NGOs
  • 4 Benchmark approach in allocations

8
Spirit basic principles of LSG
1 Flexibility
According to the LSG Manual, NGOs will be given
flexibility in the deployment of funds to meet
the service needs.With the exception of a few
designated items, NGOs may freely deploy the
funds as long as the required objectives,
outputs, results and standards are met.
9
Spirit basic principles of LSG
  • Flexibility problems encountered

With FSA, LSG does not allow NGOs to really
deploy funds in delivering services beyond the
FSA scope though they are much needed in the
community ----- flexibility only in a narrow
sense of deployment of funds on staffing/PE but
not on meeting the service needs which can be
changing very fast.
10
Spirit basic principles of LSG
  • Flexibility problems encountered

Lot of tedious workload for agencies (i) Lots
of reporting making justifications on agencies
expenditures (e.g., on items over 5 variance as
compared with the previous year) (ii) Lots of
checking/disagreements on recognized
non-recognized items (e.g., directors
officers liability insurance) (iii) Lots of
checking in preventing cross-subsidies for
non-LSG activities Agencies not treated as a
one-whole organization!!!
11
Spirit basic principles of LSG

2 Transparency
  • No transparency on how the resources are
    allocated to NGOs at all by SWD. Without the
    transparency, agencies are difficult to formulate
    their planning, in particular on HR-related
    matters.

12
Spirit basic principles of LSG
  • Transparency
  • Transparency is only required on NGOs
    management, but not on SWD. NGOs are
  • - Not given the basis for calculating for new
    services
  • Not given the basis for calculating resources
    for new
  • units of existing services
  • Not given the basis for calculating add-on
    resources
  • Not given the basis for calculating resources
    for
  • in-situ expansion
  • Not given the basis for revised allocations to
    NGOs
  • subsequent to each adjustment


13
Spirit basic principles of LSG
3 Partnership between SWD NGOs
  • Original objective of setting up LSG
  • ..SWD is committed to introducing a package of
    measures to both the funding monitoring of
    services provided by the subvented sector to meet
    service objectives..The improvements made to
    service monitoring and funding will lay a solid
    foundation for the Government to work with
    service providers to improve the welfare planning
    framework and process. ------- implying a
    partnership/collaboration relationship

14
Spirit basic principles of LSG
Partnership between SWD NGOs
  • No equilibrium partnership relationship is
    found. Rather, agencies goodwill is always
    exploited, such as
  • Agencies still suffer from the budget cut by the
    govt even though there is a benchmark for LSG
    that has been agreed by both sides at
    implementation
  • Agencies have no say even though the govt does
    not honour their pledge/commitment (e.g., provide
    welfare planning framework)

15
Spirit basic principles of LSG
4 Benchmark approach in allocations
  • The use of the mid-point allocations and notional
  • staffing establishment being the gist of LSG
  • allocations.
  • Problem ----- no review mechanism in face of
  • the ever changing social economic environment
    and community needs which affect optimal staff
    mix and staff establishment
  • the growing maturity of the work force of the
    sector
  • the market demand of different posts

16
Spirit basic principles of LSG
  • Proposed measures for improvement
  • To reconfirm the spirit and basic principles of
    LSG and clarify their application in
    implementation of the subvention system
  • To set up a platform between the Department and
    NGOs for better communication ----- to discuss
    and update on agencies needs so as to make
    adjustment from time to time
  • To establish a platform for appeal when there are
    disputes

17
Irregularities and inconsistencies in actual
implementation
  • Examples of irregularities
  • No supervisory nor clerical support for new
    add-ons
  • Irregularities on the unit costs for some
    services when they are contracted to NGOs through
    different modes
  • Difficult to integrate the new add-ons to the
    original services since no formula nor
    calculation basis for the add-ons are provided
    to NGOs

18
Irregularities and inconsistencies in actual
implementation
  • Examples of inconsistency
  • The existing Grant Code create lots of
    complication during cross-services or cross-units
    staff movement, staff deployment apportion of
    manpower especially during audit
  • The approved items for LF Block Grant are unclear
    - difficult for agencies to determine which items
    should or should not be included in their
    applications
  • Different requirement of SWD and HKICPA regarding
    accural basis accounting and depreciation
    practices cause extra workload
  • The inadequacy of funding from Lotteries Fund
    Block Grant for repair maintenance
  • Different benchmark between old new services
    (commenced after 1/1/2008)

19
Irregularities and inconsistencies in actual
implementation
  • Proposed measures for improvement
  • To clarify with NGOs on all the irregularities
    inconsistent areas
  • To set up a platform with NGOs, especially with
    their accounting staff, on the unclear areas and
    then to set up a regular meeting for the Finance
    Branch to communicate with agencies staff on
    SWDs accounting requirements
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