Preliminary Ideas Towards Best Practice

• Establish aims;
• Relate aims to desired outcomes and outputs;
• Develop performance indicators to measure success;
• Relate grant scheme to other government schemes so that overlap and duplication is minimised;
• Design administration process that encompasses the following phases.

• Develop application forms that are related to scheme's objectives. Forms should advise on, in plain English, objectives etc and include:
  • criteria for eligibility;
  • criteria for selection;
  • decision making processes;
  • grant conditions and requirements; including requesting certified photocopies of the relevant applicants (if an organisation) "Incorporation Certificate" and a copy of their specific "Members rules and regulations";
  • questions specific to whether or not an applicant has acquitted past grants provided;
  • penalties for beaches;
  • grievance mechanisms.

   

• Receipt of applications:
  • establish individual and group identification classification system. (Grants are unlikely often to be made to a specific purpose body, so consideration of the applicant body's purpose, authority, activities and funds' sources might be required for an effective classification system);
  • establish individual and group identification classification system. (Grants are unlikely often to be made to a specific purpose body, so consideration of the applicant body's purpose, authority, activities and funds' sources might be required for an effective classification system);
  • notification to applicant on expected processes and timing.

   

• Appraisal of applications includes:
  • checking for completeness;
  • checking for internal consistency;
  • application of any external checks to be made on presented information;
  • rating of application against eligibility and selection criteria and allowing natural justice;
  • desirability of two tier processing:
    • recommendation phase;
    • decision making phase;
  • a personal "statement of conflict of interest" on behalf of any person involved with the sorting and/or assessment process should be formally made and recorded.;
  • application of fraud reduction techniques will feature in this stage of operations.

• Recording of Ministerial Decisions to be included in official departmental files, including Ministerial decisions that differ from recommendations made by persons engaged for this purpose.

• Advising unsuccessful applicants:
  • provision of reasons for lack of success;
  • advising whether subsequent application can address shortcomings or would not meet criteria;
  • allow opportunity for "appeal" and Freedom of Information processes.

• Advising successful applicants:
  • making the offer (conditional or not); a dollar ($) amount should be set that determines the one-off grants that do not require acquittal procedures;
  • requiring acceptance (in a legally binding form that recognises conditions and requirements and obligations of each party);
  • applicants should be required to have a specific bank account to acquit funds to.

• Making of grants involves processes that depend on the characteristics of the scheme. If the grant is a lump sum pre-payment it will involve different processes to sequential payments that require acquittal. The characteristics depend in part on the amount of the grant (and thus the trade-off with administration costs).

• A complex grant scheme (involving sequential pre-payments) could involve:
  • a request from grantee;
  • grantee advice on changes to essential conditions/requirements;
  • acquittal of prior grant through adequate evidence;
  • payment to an account.

• If capital grants are involved (eg for buildings, computer hardware, software, library, motor vehicles) several issues are involved:
  • purchase versus lease options should be considered;
  • maintenance and operating costs and their impact on outputs/outcomes is required;
  • ownership of any residual capital value should be decided at the beginning.

• This stage also allows application of important fraud reduction techniques.

• Monitoring should be a condition of the grant and in-built into the grant scheme. It should be based, at least in part, on authorised reports required of each grantee during the period covered by the grant.
• Monitoring includes monitoring of each grant and monitoring of scheme overall. Therefore processes should allow for aggregation of data under a sound categorisation framework.
• As noted above, a sequential, pre-payment approach to grants offers an "in-built" opportunity to monitor individual grants. In any event, it might be sound to allow for a final payment of the grant only on completion of activity to allow individual grant monitoring.
• Evidence of monitoring depends, in part, on size of grants. Large grants can support independent certification of funds use, if reliance on evidence from outputs or outcomes is inadequate.
• Fund processes should allow regular reporting on grant scheme including, for large schemes, the ability to consider individual grants under a number of classifications, eg by value, by time, by species of outcome/outputs, by grantee classification (by location or industry or ownership).
• Fund monitoring should cover Fund finances and Fund's expected outputs/outcomes.
• Fund monitoring should especially allow identification of trends in administration and of "at risk" grants (eg. large grants, recipients of multiple grants, grants failing to meet conditions).
• Fund monitoring should show where there is a need to seek recovery of grant, eg because of failure of grantee to meet conditions. Where the total grant was not expended, a refund cheque should accompany any final paperwork o be received from the applicant.

• Some evaluation should be undertaken annually through, for example, an analysis of performance indicators.
• Evaluation should encompass: economy of operations (eg cost per grant dollar); efficiency of scheme (eg. grant cost of outputs/outcomes obtained); effectiveness of scheme (eg. ability to meet aims).
• Major evaluation should be undertaken, say every three or so years.
• Evaluation should encompass matters internal to the scheme (eg criteria, outputs required) and externally imposed (eg. by legislation).
• Evaluations should be published (eg. in annual report) and brought to the attention of relevant bodies.