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Auditor-General Audit reports for 2012-13 No. 50 Performance audit Administration of the GP Super Clinics program: Department of Health and Ageing


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T h e A u d i t o r - G e n e r a l

Audit Report No.50 2012-13 Performance Audit

Administration of the GP Super Clinics Program

Department of Health and Ageing

A u s t r a l i a n N a t i o n a l A u d i t O f f i c e

 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

2

   

© Commonwealth of Australia 2013

 

ISSN 1036-7632 ISBN 0 642  81370 1 (Print)  ISBN 0 642  81371 X (On‐line) 

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for the content in this document supplied by third parties, the Australian National Audit Office logo, the Commonwealth Coat of Arms, and any material protected by a trade mark, this document is licensed by the

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Executive Director Corporate Management Branch Australian National Audit Office 19 National Circuit BARTON ACT 2600

Or via email: webm

aster@anao.gov.au

 

         

 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

3

Canberra ACT 20 June 2013

Dear Mr President Dear Madam Speaker

The Australian National Audit Office has undertaken an independent performance audit in the Department of Health and Ageing with the authority contained in the Auditor-General Act 1997. I present the report of this audit to the Parliament. The report is titled Administration of the GP Super Clinics Program.

Following its presentation and receipt, the report will be placed on the Australian National Audit Office’s Homepage—http://www.anao.gov.au.

Yours sincerely

Ian McPhee Auditor-General

The Honourable the President of the Senate The Honourable the Speaker of the House of

Representatives

Parliament House Canberra ACT    

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

2

   

© Commonwealth of Australia 2013

 

ISSN 1036-7632 ISBN 0 642  81370 1 (Print)  ISBN 0 642  81371 X (On‐line) 

Except

for the content in this document supplied by third parties, the Australian National Audit Office logo, the Commonwealth Coat of Arms, and any material protected by a trade mark, this document is licensed by the

Australian National Audit Office for use under the terms of a

Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 Australia licence. To view a copy of this licence, visit http://creativecommons.org/licenses/by-nc-nd/

3.0/au/

You

are free to copy and communicate the document in its current form for non-commercial purposes, as long as you attribute the document to the Australian National Audit Office and abide by the other licence terms. You may not alter or adapt the work in any way.

Permission to use material for which the copyright is owned by a third party must be sought from the relevant copyright owner. As far as practicable, such material will be clearly labelled.

For terms of use of the Commonwealth Coat of Arms, visit It’s an Honour at http://www.itsanhon

our.gov.au/coat-arms/index.cfm.

Reque

sts and inquiries concerning reproduction and rights should be addressed to:

Executive Director Corporate Management Branch Australian National Audit Office 19 National Circuit BARTON ACT 2600

Or via email: webm

aster@anao.gov.au

 

         

 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

3

Canberra ACT 20 June 2013

Dear Mr President Dear Madam Speaker

The Australian National Audit Office has undertaken an independent performance audit in the Department of Health and Ageing with the authority contained in the Auditor-General Act 1997. I present the report of this audit to the Parliament. The report is titled Administration of the GP Super Clinics Program.

Following its presentation and receipt, the report will be placed on the Australian National Audit Office’s Homepage—http://www.anao.gov.au.

Yours sincerely

Ian McPhee Auditor-General

The Honourable the President of the Senate The Honourable the Speaker of the House of

Representatives

Parliament House Canberra ACT    

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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Contents Summary and Recommendations .............................................................................. 7 

Summary ........................................................................................................................ 8 

Introduction ............................................................................................................... 8 

Audit objective and scope ....................................................................................... 10 

Overall conclusion ................................................................................................... 10 

Key findings by chapter ........................................................................................... 14 

Summary of agency response ................................................................................ 21 

Recommendations ....................................................................................................... 22 

Audit Findings ............................................................................................................ 23 

1.  Introduction ............................................................................................................. 24 

Improving primary healthcare ................................................................................. 24 

Grants administration framework ............................................................................ 32 

Audit objective, scope, criteria and methodology ................................................... 34 

Previous audit coverage ......................................................................................... 36 

Structure of the audit report .................................................................................... 36 

2.  From Policy to Program .......................................................................................... 37 

Introduction ............................................................................................................. 37 

Announcement of the 32 initial clinic locations ....................................................... 38 

Developing the program .......................................................................................... 39 

Announcement of additional clinic locations ........................................................... 49 

Grant funding processes ......................................................................................... 52 

Location of clinics and the distribution of funding ................................................... 54 

Conclusion .............................................................................................................. 57 

3.  Selection Processes ................................................................................................ 59 

Introduction ............................................................................................................. 59 

Framework for assessing applications .................................................................... 59 

Addressing local needs ........................................................................................... 62 

Assessment of value for money .............................................................................. 66 

Treatment of unsuccessful Invitation to Apply processes ....................................... 72 

Conclusion .............................................................................................................. 75 

4.  Rolling out the Clinics.............................................................................................. 77 

Introduction ............................................................................................................. 77 

Managing the clinic roll-out ..................................................................................... 80 

The completion of clinics ......................................................................................... 91 

Conclusion .............................................................................................................. 94 

5.  Reporting and Assessing Clinic and Program Outcomes ....................................... 96 

Development of program key performance indicators and evaluation framework ............................................................................................................... 96 

External evaluation of the GP Super Clinics program ............................................ 99 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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AUDITING FOR AUSTRALIA

The Auditor-General is head of the Australian National Audit Office (ANAO). The ANAO assists the

Auditor-General to carry out his duties under the Auditor-General Act 1997 to undertake performance audits, financial statement audits and assurance reviews of Commonwealth public sector bodies and to provide independent reports and advice for the Parliament, the Australian Government and the community. The aim is to improve Commonwealth public sector administration and accountability.

For further information contact: The Publications Manager Australian National Audit Office GPO Box 707 Canberra ACT 2601

Te

lephone: (02) 6203 7505 Fax: (02) 6203 7519

Email: webmaster@anao.gov.au

ANAO audit reports and information about the ANAO are available at our internet address:

http://www.anao.gov.au

Audit Team An gus Martyn

Clifford Lloyd Claudia Shepherd Ryan Wilson Fiona Knight

 

   

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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Contents Summary and Recommendations .............................................................................. 7 

Summary ........................................................................................................................ 8 

Introduction ............................................................................................................... 8 

Audit objective and scope ....................................................................................... 10 

Overall conclusion ................................................................................................... 10 

Key findings by chapter ........................................................................................... 14 

Summary of agency response ................................................................................ 21 

Recommendations ....................................................................................................... 22 

Audit Findings ............................................................................................................ 23 

1.  Introduction ............................................................................................................. 24 

Improving primary healthcare ................................................................................. 24 

Grants administration framework ............................................................................ 32 

Audit objective, scope, criteria and methodology ................................................... 34 

Previous audit coverage ......................................................................................... 36 

Structure of the audit report .................................................................................... 36 

2.  From Policy to Program .......................................................................................... 37 

Introduction ............................................................................................................. 37 

Announcement of the 32 initial clinic locations ....................................................... 38 

Developing the program .......................................................................................... 39 

Announcement of additional clinic locations ........................................................... 49 

Grant funding processes ......................................................................................... 52 

Location of clinics and the distribution of funding ................................................... 54 

Conclusion .............................................................................................................. 57 

3.  Selection Processes ................................................................................................ 59 

Introduction ............................................................................................................. 59 

Framework for assessing applications .................................................................... 59 

Addressing local needs ........................................................................................... 62 

Assessment of value for money .............................................................................. 66 

Treatment of unsuccessful Invitation to Apply processes ....................................... 72 

Conclusion .............................................................................................................. 75 

4.  Rolling out the Clinics.............................................................................................. 77 

Introduction ............................................................................................................. 77 

Managing the clinic roll-out ..................................................................................... 80 

The completion of clinics ......................................................................................... 91 

Conclusion .............................................................................................................. 94 

5.  Reporting and Assessing Clinic and Program Outcomes ....................................... 96 

Development of program key performance indicators and evaluation framework ............................................................................................................... 96 

External evaluation of the GP Super Clinics program ............................................ 99 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

4

AUDITING FOR AUSTRALIA

The Auditor-General is head of the Australian National Audit Office (ANAO). The ANAO assists the Auditor-General to carry out his duties under the Auditor-General Act 1997 to undertake performance audits, financial statement audits and assurance reviews of Commonwealth public sector bodies and to provide independent reports and advice for the Parliament, the Australian Government and the community. The aim is to improve Commonwealth public sector administration and accountability.

For further information contact: The Publications Manager Australian National Audit Office GPO Box 707 Canberra ACT 2601

Te

lephone: (02) 6203 7505 Fax: (02) 6203 7519

Email: webmaster@anao.gov.au

ANAO audit reports and information about the ANAO are available at our internet address:

http://www.anao.gov.au

Audit Team An gus Martyn

Clifford Lloyd Claudia Shepherd Ryan Wilson Fiona Knight

 

   

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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ANAO assessment of the GP Super Clinics program ........................................... 101 

Management information and clinic operational reporting .................................... 107 

Conclusion ............................................................................................................ 109 

Appendices ............................................................................................................... 111 

Appendix 1:  Announced GP Super Clinics ........................................................... 112 

Appendix 2:  ANAO methodology to assess effectiveness of program administration ................................................................................... 114 

Appendix 3:  Distribution of GP Super Clinics and funding based on electoral type ................................................................................................... 116 

Index ........................................................................................................................... 119 

Series Titles ................................................................................................................ 121 

Current Better Practice Guides .................................................................................. 127 

Tables

Table 1.1

Announcement of clinic locations ....................................................... 27 

Table 1.2 Progress in establishing the GP Super Clinics program .................... 30  Table 1.3 Structure of the audit report ................................................................ 36 

Table 2.1 Number of clinics meeting GP Super Clinic location factors .............. 41  Table 2.2 Initial identification and responses to program level risks .................. 46  Table 2.3 Funding application process, competitive and non-competitive ......... 53  Table 3.1 Value for money—factors to be considered in assessing

applications ......................................................................................... 67 

Table 4.1 Time from execution of funding agreement to clinic completion— first round clinics ................................................................................. 91 

Table 4.2 Operational first round clinics—delays to anticipated clinic completion .......................................................................................... 92 

Table 4.3 Non-operational first round clinics—delays on anticipated clinic completion .......................................................................................... 92 

Table 5.1 Performance of 18 operational clinics against selected indicators... 103  Table A.1 Distribution of clinic locations included in the ANAO sample ........... 115  Table A.2 Distribution of GP Super Clinic locations, by electorate ................... 117  Table A.3 Distribution of GP Super Clinic funding as announced, by

electorate .......................................................................................... 117 

Table A.4 Distribution of GP Super Clinic locations, by marginal electorate .... 118  Table A.5 Distribution of GP Super Clinic funding as announced, by marginal electorate ........................................................................... 118 

Figures

Figure 1.1

Location of GP Super Clinics ............................................................. 31 

Figure 3.1 Site Map of Palmerston GP Super Clinic ........................................... 65 

Figure 5.1: Patient presentations ........................................................................ 105 

Figure 5.2 Share of patient presentations by service type ................................ 106 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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Summary and Recommendations

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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ANAO assessment of the GP Super Clinics program ........................................... 101 

Management information and clinic operational reporting .................................... 107 

Conclusion ............................................................................................................ 109 

Appendices ............................................................................................................... 111 

Appendix 1:  Announced GP Super Clinics ........................................................... 112 

Appendix 2:  ANAO methodology to assess effectiveness of program administration ................................................................................... 114 

Appendix 3:  Distribution of GP Super Clinics and funding based on electoral type ................................................................................................... 116 

Index ........................................................................................................................... 119 

Series Titles ................................................................................................................ 121 

Current Better Practice Guides .................................................................................. 127 

Tables

Table 1.1

Announcement of clinic locations ....................................................... 27 

Table 1.2 Progress in establishing the GP Super Clinics program .................... 30  Table 1.3 Structure of the audit report ................................................................ 36 

Table 2.1 Number of clinics meeting GP Super Clinic location factors .............. 41  Table 2.2 Initial identification and responses to program level risks .................. 46  Table 2.3 Funding application process, competitive and non-competitive ......... 53  Table 3.1 Value for money—factors to be considered in assessing

applications ......................................................................................... 67 

Table 4.1 Time from execution of funding agreement to clinic completion— first round clinics ................................................................................. 91 

Table 4.2 Operational first round clinics—delays to anticipated clinic completion .......................................................................................... 92 

Table 4.3 Non-operational first round clinics—delays on anticipated clinic completion .......................................................................................... 92 

Table 5.1 Performance of 18 operational clinics against selected indicators... 103  Table A.1 Distribution of clinic locations included in the ANAO sample ........... 115  Table A.2 Distribution of GP Super Clinic locations, by electorate ................... 117  Table A.3 Distribution of GP Super Clinic funding as announced, by

electorate .......................................................................................... 117 

Table A.4 Distribution of GP Super Clinic locations, by marginal electorate .... 118  Table A.5 Distribution of GP Super Clinic funding as announced, by marginal electorate ........................................................................... 118 

Figures

Figure 1.1

Location of GP Super Clinics ............................................................. 31 

Figure 3.1 Site Map of Palmerston GP Super Clinic ........................................... 65 

Figure 5.1: Patient presentations ........................................................................ 105 

Figure 5.2 Share of patient presentations by service type ................................ 106 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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Summary and Recommendations

Summary

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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2009,  the  location  of  individual  GP  Super  Clinics  reflected  policy  announcements made in the context of the 2007 and 2010 federal elections. 

3. Across the two funding rounds, $418.7 million in grant funding was  announced to establish 65 GP Super Clinics. As at 5 April 2013, $396.6 million  has been committed through executed funding agreements, with $278.4 millio

expended.  Funding  for  individual  clinics  has  ranged  from  $1  million  to  $15 million,  and a  number  of  clinics  have  been  jointly funded  by  state  and  territory governments. 

4. While the incoming government’s 2007 GP Super Clinics policy did not  specify how capital funding for the clinics would be made available, the GP  Super Clinics program subsequently established in 2008 provided for a mix of  competitive and non‐

competitive grant processes. Typically, non‐competitive  grant processes were adopted where a clinic was to be built by a state health  department,  regional  or  community  health  service,  Division  of  General  Practice or local council. In total, non‐competitive processes were adopted for  22 of the 65 locations.4 

5. The  Department  of  Health  and  Ageing  (DoHA)  administers  the  GP  Super Clinics program. The department’s responsibilities have included the:  provision of policy and program advice; development

 of program guidelines; 

assessment of grant applications; selection of a preferred applicant for each  location;  negotiation  of  funding  agreements;  and  administration  of  funding  agreements. While the two funding rounds are now largely complete5, there  will be an ongoing administrative role for DoHA, as a condition of the grant  funding is that the clinics must operate for 20 years and co

ntinue to report to 

DoHA during this time. 

6. Commencing  in  December  2007,  at  the  time  the  GP  Super  Clinics  program was under development, significant enhancements were made to the  Australian Government’s grants administration framework. The enhancements  included  the  introduction,  initially  through  Finance  Minister’s  Instructions  promulgated  in  2007  and  revised  in  2009,  of  requirements  for  published  program  guidelines,  departmental  advice  on  grant  applications,  and  public  reporting  of  the  a

ward  of  grants.  In  July  2009,  the  Commonwealth  Grant 

                                                       4 Applications submitted under non-competitive grant processes were subject to the same assessment procedures as those used for the competitive grants. 5

Funding agreements have yet to be executed for four second round clinic locations.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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Summary

Introduction 1. New Directions for Australia’s Health: Delivering GP Super Clinics to local  communities (the GP Super Clinics policy) was released by the Australian Labor  Party (ALP), then in opposition, on 24 August 2007.1 The policy outlined a plan  to  fund  the  establishment  of  an  unspecified  number  of  ‘GP  Super  Clinics’  across the country that would provide multidisciplinary care and help reduce  pressure on Australia’s hospitals.2 In regard to the specific  location of Super  Clinics, the policy provided that the ‘factors that will be taken into account ...  will include’ areas: 

 where there is currently poor access to services, particularly where this  is due to shortages of doctors; 

 where there is currently poor health infrastructure; 

 where  a  clinic  could  help  take  the  pressure  off  local  public  hospital  services; and 

 with  high  levels  of  chr

onic  disease  and/or  demographics  with  high 

needs, such as large numbers of children or elderly residents.  

2. Following the release of the policy, the locations of 32 proposed GP  Super Clinics3 were announced progressively in the lead‐up to the 2007 federal  election, held on 24 November, along with the indicative maximum level of  grant  funding  for  each  location.  Another  five  proposed  locations  were  announced in August 2009

 by the Labor Government, taking the total of ‘first 

round’  clinic  locations  to  37.  A  second  round  of  funding,  as  part  of  the  National Primary Health Care Strategy, was announced in the context of the  May 2010 Budget, to establish ‘around’ 23 new GP Super Clinics.  The locations  for 28 new clinics were subsequently announced by the Government during  the 2010 election campaign. Wi

th the exception of the five clinics announced in 

                                                       1 The policy was announced as part of a wider $2 billion National Health and Hospitals Reform Plan. 2

Australian Labor Party, New Directions for Australia’s Health: Delivering GP Super Clinics to local communities, ALP, Canberra, 2007, p. 3. 3 Clinics announced in 2007 included a Hobart clinic (‘Hobart Eastern Shores’) which was to have branches at two

locations approximately 15 kilometres apart. These locations were subsequently funded through separate grant processes, and funding agreements were executed with two different recipients. For the purposes of this audit they are treated as two clinics.

Summary

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

9

2009,  the  location  of  individual  GP  Super  Clinics  reflected  policy  announcements made in the context of the 2007 and 2010 federal elections. 

3. Across the two funding rounds, $418.7 million in grant funding was  announced to establish 65 GP Super Clinics. As at 5 April 2013, $396.6 million  has been committed through executed funding agreements, with $278.4 millio

expended.  Funding  for  individual  clinics  has  ranged  from  $1  million  to  $15 million,  and a  number  of  clinics  have  been  jointly funded  by  state  and  territory governments. 

4. While the incoming government’s 2007 GP Super Clinics policy did not  specify how capital funding for the clinics would be made available, the GP  Super Clinics program subsequently established in 2008 provided for a mix of  competitive and non‐

competitive grant processes. Typically, non‐competitive  grant processes were adopted where a clinic was to be built by a state health  department,  regional  or  community  health  service,  Division  of  General  Practice or local council. In total, non‐competitive processes were adopted for  22 of the 65 locations.4 

5. The  Department  of  Health  and  Ageing  (DoHA)  administers  the  GP  Super Clinics program. The department’s responsibilities have included the:  provision of policy and program advice; development

 of program guidelines; 

assessment of grant applications; selection of a preferred applicant for each  location;  negotiation  of  funding  agreements;  and  administration  of  funding  agreements. While the two funding rounds are now largely complete5, there  will be an ongoing administrative role for DoHA, as a condition of the grant  funding is that the clinics must operate for 20 years and co

ntinue to report to 

DoHA during this time. 

6. Commencing  in  December  2007,  at  the  time  the  GP  Super  Clinics  program was under development, significant enhancements were made to the  Australian Government’s grants administration framework. The enhancements  included  the  introduction,  initially  through  Finance  Minister’s  Instructions  promulgated  in  2007  and  revised  in  2009,  of  requirements  for  published  program  guidelines,  departmental  advice  on  grant  applications,  and  public  reporting  of  the  a

ward  of  grants.  In  July  2009,  the  Commonwealth  Grant 

                                                       4 Applications submitted under non-competitive grant processes were subject to the same assessment procedures as those used for the competitive grants. 5

Funding agreements have yet to be executed for four second round clinic locations.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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Summary

Introduction 1. New Directions for Australia’s Health: Delivering GP Super Clinics to local  communities (the GP Super Clinics policy) was released by the Australian Labor  Party (ALP), then in opposition, on 24 August 2007.1 The policy outlined a plan  to  fund  the  establishment  of  an  unspecified  number  of  ‘GP  Super  Clinics’  across the country that would provide multidisciplinary care and help reduce  pressure on Australia’s hospitals.2 In regard to the specific  location of Super  Clinics, the policy provided that the ‘factors that will be taken into account ...  will include’ areas: 

 where there is currently poor access to services, particularly where this  is due to shortages of doctors; 

 where there is currently poor health infrastructure; 

 where  a  clinic  could  help  take  the  pressure  off  local  public  hospital  services; and 

 with  high  levels  of  chr

onic  disease  and/or  demographics  with  high 

needs, such as large numbers of children or elderly residents.  

2. Following the release of the policy, the locations of 32 proposed GP  Super Clinics3 were announced progressively in the lead‐up to the 2007 federal  election, held on 24 November, along with the indicative maximum level of  grant  funding  for  each  location.  Another  five  proposed  locations  were  announced in August 2009

 by the Labor Government, taking the total of ‘first 

round’  clinic  locations  to  37.  A  second  round  of  funding,  as  part  of  the  National Primary Health Care Strategy, was announced in the context of the  May 2010 Budget, to establish ‘around’ 23 new GP Super Clinics.  The locations  for 28 new clinics were subsequently announced by the Government during  the 2010 election campaign. Wi

th the exception of the five clinics announced in 

                                                       1 The policy was announced as part of a wider $2 billion National Health and Hospitals Reform Plan. 2

Australian Labor Party, New Directions for Australia’s Health: Delivering GP Super Clinics to local communities, ALP, Canberra, 2007, p. 3. 3 Clinics announced in 2007 included a Hobart clinic (‘Hobart Eastern Shores’) which was to have branches at two

locations approximately 15 kilometres apart. These locations were subsequently funded through separate grant processes, and funding agreements were executed with two different recipients. For the purposes of this audit they are treated as two clinics.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

10

Guidelines  (CGGs)6  came  into  effect  and  related  changes  were  made  to  the  Financial Management and Accountability Regulations 1997 (FMA Regulations).  Whilst 16 first-round GP Super Clinic grants were awarded before the CGGs  and associated FMA Regulations amendments came into force on 1 July 2009,  the enhancements to the grants framework introduced between 2007 and 2009  applied to the program, as did the financial framework re

quirement for the 

‘proper use’ of public money, which pre-dated the CGGs and applied to all GP  Super Clinic grants. 

Audit objective and scope 7. The objective of the audit was to assess the effectiveness of DoHA’s  administration  of  the  GP  Super  Clinics  program  to  support  improved  community access to integrated GP and primary health care services. 

8. The  audit  examined  DoHA’s  compliance  with  the  mandatory  requirements  of  the  CGGs  and  the  extent  to  which  DoHA  adopted  sound  practices  in  relation  to  the  key  principles  for  grants  administration  in  the  CGGs. In cases where g

rants were approved prior to the CGGs coming into  effect the audit examined compliance with the applicable parts of the relevant  Finance Minister’s Instructions of December 2007 and January 2009. 

9. While the audit examined whether DoHA had considered the issue of  local  health  needs  in  its  administration  of  the  program,  it  did  not  assess  whether GP Super Clinics had a direct business or ec

onomic impact on existing 

primary healthcare facilities. 

Overall conclusion 10. The  GP  Super  Clinics  program  is  one  of  a  number  of  health  infrastructure grant programs administered by DoHA in recent years7, and is  intended  to  improve  access  to  integrated  primary  health  care  services8  and 

                                                       6 Department of Finance and Deregulation, Commonwealth Grant Guidelines: Policies and Principles for Grants Administration, Canberra, July 2009. The CGGs, issued under Regulation 7A of the FMA Regulations, represent the

whole-of-government policy framework for grants administration and apply to all departments and agencies subject to the Financial Management and Accountability Act 1997 (FMA Act). The second edition of the CGGs was released in March 2013, with effect from 1 June 2013. 7

These have included the Primary Care Infrastructure Grants program, examined in ANAO Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program; and the Health and Hospitals Fund program, examined in ANAO Audit Report No.45 2011-12 Administration of the Health and Hospitals Fund. 8

A team based approach to primary health care would bring together general practitioners (GPs), nurses and allied health care professionals such as dietitians and physiotherapists. A team based approach differs from co-location, which simply puts various medical professionals within close proximity of each other.

Summary

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

11

improve  opportunities  for  education  and  training  placements  in  a  multidisciplinary  setting.  Over  two  funding  rounds  administered  by  the  department between 2008 and 2012, grant funding of $418.7 million has been  announced for 65 GP Super Clinics across Australia. Individual clinics have  variously  received  capital  funding,  recurrent  funding  and  relocation  incentives, through a combination of competitive and non‐c

ompetitive grants 

processes.  As a condition of Commonwealth funding, clinics are expected to  operate  in  accordance  with  the  program  objectives  for  20  years,  leaving  an  administrative  role  for  the  department  which  will  continue  long  after  the  clinics are established and grant funds are disbursed. 

11. Overall, DoHA’s administration of the GP Super Clinics program has  been generally effective and consistent with government policy. In support of  the  incoming  government,  DoHA  acted

  quickly,  within  relatively  tight 

timeframes, to consult with stakeholders on program design, assess and plan  for risks, and draft grant guidelines, and was consequently in a position to  provide  well  developed  first  round  program  guidelines  for  ministerial  consideration by April 2008. These guidelines addressed the key elements of  the program’s operation and formed the basis for a generally sound grants  application and assessment process. Revised progr

am guidelines were issued 

for  the  second  round  and  essentially  the  same  application  process  was  employed.  The  funding  agreements  used  by  the  department  evolved  over  time,  in  light  of  experience  and  in  response  to  emerging  issues.9  The  department  also  placed  considerable  emphasis  on  operational  reporting;  recognising  the  challenges  the  clinics  would  face  in  their  construction  and  early operational phases.   

12. As part of developing the relevant new

 policy proposal (NPP), in less 

than four weeks following the election of the new government in 2007, DoHA  advised the incoming Minister on a range of program implementation risks. A  risk  identified  by  DoHA  in  its  advice  was  the  degree  of  ‘acceptance  and  support’  for  the  announced  clinics  by  local  communities  and  health  professionals,  including  possible  concerns  about  impacts  on  existing  health  services.  The  department  proposed  th

at  this  risk  be  managed  through 

consultations with stakeholders both nationally and at the local level, with the  latter focussing on ensuring that proposals addressed local needs and priorities 

                                                       9 These included issues relating to land acquisition and development approvals, which at times contributed to delays in the rollout of clinics across the program.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

10

Guidelines  (CGGs)6  came  into  effect  and  related  changes  were  made  to  the  Financial Management and Accountability Regulations 1997 (FMA Regulations).  Whilst 16 first-round GP Super Clinic grants were awarded before the CGGs  and associated FMA Regulations amendments came into force on 1 July 2009,  the enhancements to the grants framework introduced between 2007 and 2009  applied to the program, as did the financial framework re

quirement for the 

‘proper use’ of public money, which pre-dated the CGGs and applied to all GP  Super Clinic grants. 

Audit objective and scope 7. The objective of the audit was to assess the effectiveness of DoHA’s  administration  of  the  GP  Super  Clinics  program  to  support  improved  community access to integrated GP and primary health care services. 

8. The  audit  examined  DoHA’s  compliance  with  the  mandatory  requirements  of  the  CGGs  and  the  extent  to  which  DoHA  adopted  sound  practices  in  relation  to  the  key  principles  for  grants  administration  in  the  CGGs. In cases where g

rants were approved prior to the CGGs coming into  effect the audit examined compliance with the applicable parts of the relevant  Finance Minister’s Instructions of December 2007 and January 2009. 

9. While the audit examined whether DoHA had considered the issue of  local  health  needs  in  its  administration  of  the  program,  it  did  not  assess  whether GP Super Clinics had a direct business or ec

onomic impact on existing 

primary healthcare facilities. 

Overall conclusion 10. The  GP  Super  Clinics  program  is  one  of  a  number  of  health  infrastructure grant programs administered by DoHA in recent years7, and is  intended  to  improve  access  to  integrated  primary  health  care  services8  and 

                                                       6 Department of Finance and Deregulation, Commonwealth Grant Guidelines: Policies and Principles for Grants Administration, Canberra, July 2009. The CGGs, issued under Regulation 7A of the FMA Regulations, represent the

whole-of-government policy framework for grants administration and apply to all departments and agencies subject to the Financial Management and Accountability Act 1997 (F

MA Act). The second edition of the CGGs was released in

March 2013, with effect from 1 June 2013. 7 These have included the Primary Care Infrastructure Grants program, examined in ANAO Audit Report No.44 2011-12

Administration of the Primary Care Infrastructure Grants Program; and the Health and Hospitals Fund program, examined in ANAO Audit Report No.45 2011-12 Administration of the Health and Hospitals Fund. 8 A team based approach to primary health care would bring together general practitioners (GPs), nurses and allied

health care professionals such as dietitians and physiotherapists. A team based approach differs from co-location, which simply puts various medical professionals within close proximity of each other.

Summary

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

11

improve  opportunities  for  education  and  training  placements  in  a  multidisciplinary  setting.  Over  two  funding  rounds  administered  by  the  department between 2008 and 2012, grant funding of $418.7 million has been  announced for 65 GP Super Clinics across Australia. Individual clinics have  variously  received  capital  funding,  recurrent  funding  and  relocation  incentives, through a combination of competitive and non‐c

ompetitive grants 

processes.  As a condition of Commonwealth funding, clinics are expected to  operate  in  accordance  with  the  program  objectives  for  20  years,  leaving  an  administrative  role  for  the  department  which  will  continue  long  after  the  clinics are established and grant funds are disbursed. 

11. Overall, DoHA’s administration of the GP Super Clinics program has  been generally effective and consistent with government policy. In support of  the  incoming  government,  DoHA  acted

  quickly,  within  relatively  tight 

timeframes, to consult with stakeholders on program design, assess and plan  for risks, and draft grant guidelines, and was consequently in a position to  provide  well  developed  first  round  program  guidelines  for  ministerial  consideration by April 2008. These guidelines addressed the key elements of  the program’s operation and formed the basis for a generally sound grants  application and assessment process. Revised progr

am guidelines were issued 

for  the  second  round  and  essentially  the  same  application  process  was  employed.  The  funding  agreements  used  by  the  department  evolved  over  time,  in  light  of  experience  and  in  response  to  emerging  issues.9  The  department  also  placed  considerable  emphasis  on  operational  reporting;  recognising  the  challenges  the  clinics  would  face  in  their  construction  and  early operational phases.   

12. As part of developing the relevant new

 policy proposal (NPP), in less 

than four weeks following the election of the new government in 2007, DoHA  advised the incoming Minister on a range of program implementation risks. A  risk  identified  by  DoHA  in  its  advice  was  the  degree  of  ‘acceptance  and  support’  for  the  announced  clinics  by  local  communities  and  health  professionals,  including  possible  concerns  about  impacts  on  existing  health  services.  The  department  proposed  th

at  this  risk  be  managed  through 

consultations with stakeholders both nationally and at the local level, with the  latter focussing on ensuring that proposals addressed local needs and priorities 

                                                       9 These included issues relating to land acquisition and development approvals, which at times contributed to delays in the rollout of clinics across the program.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

12

and complemented existing services. However, while the department provided  the Minister with some general background information on the Divisions of  General Practice in which the announced clinics were located, its advice did  not  address  whether  it  was  aware  of  any  particular  implementation  risks  applying to the specific locations announced in the context of the 2007 election. 

13. Further, notwithstanding the

 incoming government’s decision that all 

guidelines  for  new  discretionary  grant  programs  be  submitted  for  consideration by the Expenditure Review Committee of Cabinet (ERC)10, this  was not done. While the program guidelines were approved by the Minister in  April 2008, DOHA’s briefing seeking ministerial approval did not advise her of  the requirement for ERC consideration. The guidelines for the second round  were however submitted for ERC consideration.  

14. As discussed above, DoHA a

ssessed potential risks and their treatment 

early, in the context of its original planning and design of the program. One  issue that would have benefited from further consideration related to the use  of both competitive and non‐competitive processes to select funding recipients  within  the  one  program11,  and  the  attendant  risks  to  be  managed.12  In  the  event,  non‐competitive  processes  were  adopt

ed  for  22  of  the  65  locations, 

typically where a clinic was to be built by a state health department, regional  or community health service, Division of General Practice or local council. 

15. DoHA’s  approach  to  risk  management  for  the  program  has  evolved  over time, drawing on lessons learned from the first round.  The department  sought  to  better  manage  risks  through  changes  to  funding  agreement  requirements

 and its internal processes; measures which improved the overall  effectiveness  of  program  administration  in  the  second  funding  round.  Nonetheless,  a  range  of  complex  issues,  including  land  acquisition  and  development approval matters which have delayed the completion of certain  clinics, are likely to remain an ongoing challenge for the department. These 

                                                       10 The decision was promulgated in Finance Minister’s Instructions dated 14 December 2007. The Instructions required guidelines to be developed for any new discretionary grant programs and for these guidelines to be considered by the

ERC.

11 The ANAO’s Better Practice Guide on grants administration suggests that ‘in establishing the form of application and selection process to be applied to a particular grant program, it is advisable for agencies to document consideration of the risks, costs and benefits of the available options’, ANAO Better Practice Guide—Implementing Better Practice

Grants Administration, June 2010, Canberra, p. 60. The Commonwealth Grant Guidelines, which were introduced in July 2009 and applied to the second funding round, provide that ‘In the case of gra

nt programs, unless specifically

agreed otherwise, competitive, merit based selection processes should be used, based upon clearly defined selection criteria’. Commonwealth Grant Guidelines, op. cit., p. 29. 12 Potential risks included the capability of the potential grant recipient to: develop a proposal meeting program objectives,

manage the development approval and construction processes, and successfully operate the clinic once completed.

Summary

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

13

and related issues have emerged in the other infrastructure grants programs  administered by DoHA, and the ANAO has observed in previous audits13 that  DoHA has over time strengthened its capacity to effectively administer such  grant programs, informed by practical experience and initiatives such as the  establishment  of  the  Centre  for  Capital  Excellence  within  the  department,  comprising staff with expertise in infrastructure project management. 

16.  In

 light of the experience gained by DoHA in the administration of a  variety  of  infrastructure  projects  over  some  years,  there  is  scope  for  the  department to draw on and document its experience, including the scope for  applying a more consistent and systematic approach to the assessment of value  for money. This process could consider the use of commercially available ‘cost  per sq

uare metre calculation’ tools in infrastructure programs, which did not  feature in the assessment process for the first round of GP Super Clinics.14  

17. As  at  5  April  2013,  funding  agreements  for  all  of  the  first  round  locations have been executed and 29 of the 36 clinics15 have been completed  and are operational; with seven not yet completed.16 For the second round,  funding agreement

s for 24 of the 28 clinic locations have been executed and  one clinic is operational, with so-called ‘early services’17 being provided from  existing  premises  at  another  seven  locations.  The  time  taken  from  the  execution  of  funding  agreements  to  the  completion  of  clinics  has  varied  considerably, reflecting amongst other things, delays associated with resolving  often complex issues of land tenure, development approvals and construction  works. 

18. The  AN

AO’s  analysis  of  operational  reporting  to  DoHA  on  18  first  round  clinics  indicates  that  the  majority  of  these  clinics  are  making  good  progress  towards  achieving  some  key  service  delivery  expectations,  though  recruiting and retaining sufficient staff has been the biggest challenge for most  clinics. However, the key performance indicators for the program are framed 

                                                       13 Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program, Audit Report No.45 2011-12 Administra

tion of the Health and Hospitals Fund.

14 The ANAO also identified that there was scope to use cost per square metre calculations in the grant assessment process in Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program, p. 61.

15 While 37 clinics were announced in the first round, the Commonwealth withdrew funding from the proposed Sorell clinic in Tasmania, leaving 36 clinics.

16 DoHA has advised that a further clinic was open for business as at 31 May 2013. 17 DoHA advised the ANAO that, to be classified as ‘early services’, these must be ‘additional to the services previously

available to the community and form part of the services at the GP S uper Clinic when it is operational’.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

12

and complemented existing services. However, while the department provided  the Minister with some general background information on the Divisions of  General Practice in which the announced clinics were located, its advice did  not  address  whether  it  was  aware  of  any  particular  implementation  risks  applying to the specific locations announced in the context of the 2007 election. 

13. Further, notwithstanding the

 incoming government’s decision that all 

guidelines  for  new  discretionary  grant  programs  be  submitted  for  consideration by the Expenditure Review Committee of Cabinet (ERC)10, this  was not done. While the program guidelines were approved by the Minister in  April 2008, DOHA’s briefing seeking ministerial approval did not advise her of  the requirement for ERC consideration. The guidelines for the second round  were however submitted for ERC consideration.  

14. As discussed above, DoHA a

ssessed potential risks and their treatment 

early, in the context of its original planning and design of the program. One  issue that would have benefited from further consideration related to the use  of both competitive and non‐competitive processes to select funding recipients  within  the  one  program11,  and  the  attendant  risks  to  be  managed.12  In  the  event,  non‐competitive  processes  were  adopt

ed  for  22  of  the  65  locations, 

typically where a clinic was to be built by a state health department, regional  or community health service, Division of General Practice or local council. 

15. DoHA’s  approach  to  risk  management  for  the  program  has  evolved  over time, drawing on lessons learned from the first round.  The department  sought  to  better  manage  risks  through  changes  to  funding  agreement  requirements

 and its internal processes; measures which improved the overall  effectiveness  of  program  administration  in  the  second  funding  round.  Nonetheless,  a  range  of  complex  issues,  including  land  acquisition  and  development approval matters which have delayed the completion of certain  clinics, are likely to remain an ongoing challenge for the department. These 

                                                       10 The decision was promulgated in Finance Minister’s Instructions dated 14 December 2007. The Instructions required guidelines to be developed for any new discretionary grant programs and

for these guidelines to be considered by the

ERC.

11 The ANAO’s Better Practice Guide on grants administration suggests that ‘in establishing the form of application and selection process to be applied to a particular grant program, it is advisable for agencies to document consideration of the risks, costs and benefits of the available options’, ANAO Better Practice Guide—Implementing Better Practice

Grants Administration, June 2010, Canberra, p. 60. The Commonwealth Grant Guidelines, which were introduced in July 2009 and applied to the second funding round, provide that ‘In the case of grant programs, unless specifically agreed otherwise, competitive, merit based selection processes should be used, based upon clearly defined selection criteria’. Commonwealth Grant Guidelines, op. cit., p. 29

.

12 Potential risks included the capability of the potential grant recipient to: develop a proposal meeting program objectives, manage the development approval and construction processes, and successfully operate the clinic once completed.

Summary

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

13

and related issues have emerged in the other infrastructure grants programs  administered by DoHA, and the ANAO has observed in previous audits13 that  DoHA has over time strengthened its capacity to effectively administer such  grant programs, informed by practical experience and initiatives such as the  establishment  of  the  Centre  for  Capital  Excellence  within  the  department,  comprising staff with expertise in infrastructure project management. 

16.  In

 light of the experience gained by DoHA in the administration of a  variety  of  infrastructure  projects  over  some  years,  there  is  scope  for  the  department to draw on and document its experience, including the scope for  applying a more consistent and systematic approach to the assessment of value  for money. This process could consider the use of commercially available ‘cost  per sq

uare metre calculation’ tools in infrastructure programs, which did not  feature in the assessment process for the first round of GP Super Clinics.14  

17. As  at  5  April  2013,  funding  agreements  for  all  of  the  first  round  locations have been executed and 29 of the 36 clinics15 have been completed  and are operational; with seven not yet completed.16 For the second round,  funding agreement

s for 24 of the 28 clinic locations have been executed and  one clinic is operational, with so-called ‘early services’17 being provided from  existing  premises  at  another  seven  locations.  The  time  taken  from  the  execution  of  funding  agreements  to  the  completion  of  clinics  has  varied  considerably, reflecting amongst other things, delays associated with resolving  often complex issues of land tenure, development approvals and construction  works. 

18. The  AN

AO’s  analysis  of  operational  reporting  to  DoHA  on  18  first  round  clinics  indicates  that  the  majority  of  these  clinics  are  making  good  progress  towards  achieving  some  key  service  delivery  expectations,  though  recruiting and retaining sufficient staff has been the biggest challenge for most  clinics. However, the key performance indicators for the program are framed 

                                                       13 Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program, Audit Report No.45 2011-12 Administration of the Health and Hospitals Fund. 14

The ANAO also identified that there was scope to use cost per square metre calculations in the grant assessment process in Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program, p. 61. 15 While 37 clinics were announced in the first round, the Commonwealth withdrew funding from the proposed Sorell clinic

in Tasmania, leaving 36 clinics. 16 DoHA has advised that a further clinic was open for business as at 31 May 2013. 17

DoHA advised the ANAO that, to be classified as ‘early services’, these must be ‘additional to the services previously available to the community and form part of the services at the GP Super Clinic when it is operational’.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

14

in a qualitative and descriptive manner and there would be merit in enhancing  them to support longer term reporting to the Parliament and government on  the extent to which the program is achieving its intended outcomes. With the  maturing of an increasing number of clinics, it is timely for DoHA to consider  revising  the  overarching  framework  for  reporting  o

n  the  performance  of 

individual GP Super Clinics and the program as a whole. 

19. The ANAO has made four recommendations. One relates to providing  Ministerial advice on implementation risks in the establishment phase of grant  activities,  one  addresses  better  practice  assessment  of  value  for  money  for  health  infrastructure  projects  and  two  propose  improvements  to  the  framework for reporting on program performance. 

Key findings by chapter

Chapter 2: From Policy to Program

20. The ANAO has previously observed that departments should advise  Ministers  on  any  measures  considered  necessary  to  manage  risks  to  the  Commonwealth  achieving  value  for  money  when  acting  on  election  commitments.18  In  the  lead  up  to  the  2007  election  the  ALP  announced  32  proposed  locations  for  GP  Super  Clinics.    Following  the  election,  DoHA  provided advice to the Minister that a key implementation risk was the

 degree 

of ‘acceptance and support’ for the announced clinics by local communities  and  health  professionals—including  possible  concerns  about  impacts  on  existing  health  services—and  proposed  that  this  risk  be  managed  through  consultations.  

21. However, the department did not advise the Minister whether it was  aware of any particular implementation risks applying to the specific locations  announced in the context of the incoming government’s 2007 election policy. A  range  of  options  were  p

otentially  available  for  doing  so,  including  some 

analysis, in the time available, of the extent to which the announced locations  potentially satisfied some or all of the four factors outlined in the incoming 

                                                       18 ANAO Audit Report No.14 2007-08, Performance Audit of the Regional Partnerships Program, Volume 2, p.148.

Summary

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

15

government’s GP Super Clinics policy.19 The department advised the ANAO  that it considered there was insufficient and unsophisticated data available at  the time to draw conclusions on location issues. While some information and  analysis was provided to the Minister’s office by DoHA on a number of factors  that might inform the choice of clinic locations in the sec

ond round in 2010, 

that  information  was  of  a  relatively  informal  nature  through  emails  to  ministerial staff rather than a formal briefing to the Minister.20 To inform the  development and administration of infrastructure grant activities, the ANAO  has proposed that the department advise Ministers of any significant risks to  the effective implementation of election policy commitments.  

22. In response to a question on notice at Senate Estimates in early 2011

 

regarding  the  65  locations  announced  across  the  two  rounds,  DoHA  commissioned a broad post-hoc analysis against the four factors in the 2007  election policy, plus an additional fifth factor of high population growth. The  analysis indicated that a high proportion (83.8 per cent) of first round clinic  locations met one or two of the five factors.21 Conversely, a reasonably high  proportion (71.4 per cent) o

f second round clinics met three or more factors. 

23. Over  one‐third  of  the  65  locations  were  subject  to  non‐competitive  grant processes. The choice of competitive or non‐competitive processes was  informed  by  the  media  statements  released  in  the  election  context22,  and  bilateral discussions with other jurisdictions where relevant.23 Based on these  considerations, DoHA sought and received confirmation from the Minister for  both  round

s  as  to  which  process  should  apply  to  the  individual  clinics 

                                                       19 In this context, the ANAO’s 2002 Better Practice Guide—Administration of Grants noted that: ‘Even where the Government does take a specific decision regarding the establishment of a program, agencies should still consider

whether further needs analysis would assist in targeting the areas or projects most in need of funding assistance, consistent with the Government’s objectives. For example, the Government may establish a program to improve regional Australia’s access to information technology. In these circumstances, the relevant agency should consider conducting analysis to determine those regions in greatest need or those services needed most’, p.8. The same sentiment is ex

pressed in the ANAO’s 2010 Better Practice Guide—Implementing Better Practice Grants Administration: ‘it is advisable that agencies consider, as part of the implementation process, whether further needs analysis would assist in ensuring the available funding will be directed towards funding recipients or projects that will maximise the effectiveness of, and value for money achieved by, the program’, p. 21. 20

The ANAO similarly observed in a previous grants administration audit that there was scope for DoHA to better assist the Health Minister through more comprehensive advice: ANAO Audit Report No.45 2011-12, Administration of the Health and Hospitals Fund, p. 86. 21

The 2007 GP Super Clinics policy indicated that the clinic locations would be c hosen by taking into account the factors. 22 A number of media statements released by the ALP and the Government in the context of the 2007 and 2010 elections referred to whether selection processes would be competitive or not. 23

In one first round location (Palmerston) the Minister did not decide that the funding would be a non-competitive process until late 2008: up until that point the funding process was unclear. In the second round, there were three occasions (Lower Hunter, Emerald, and Townsville (Northern Beaches)) where, following community consultation sessions, the Minister decided to change the process from competitive to non-competitive.

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in a qualitative and descriptive manner and there would be merit in enhancing  them to support longer term reporting to the Parliament and government on  the extent to which the program is achieving its intended outcomes. With the  maturing of an increasing number of clinics, it is timely for DoHA to consider  revising  the  overarching  framework  for  reporting  o

n  the  performance  of 

individual GP Super Clinics and the program as a whole. 

19. The ANAO has made four recommendations. One relates to providing  Ministerial advice on implementation risks in the establishment phase of grant  activities,  one  addresses  better  practice  assessment  of  value  for  money  for  health  infrastructure  projects  and  two  propose  improvements  to  the  framework for reporting on program performance. 

Key findings by chapter

Chapter 2: From Policy to Program

20. The ANAO has previously observed that departments should advise  Ministers  on  any  measures  considered  necessary  to  manage  risks  to  the  Commonwealth  achieving  value  for  money  when  acting  on  election  commitments.18  In  the  lead  up  to  the  2007  election  the  ALP  announced  32  proposed  locations  for  GP  Super  Clinics.    Following  the  election,  DoHA  provided advice to the Minister that a key implementation risk was the

 degree 

of ‘acceptance and support’ for the announced clinics by local communities  and  health  professionals—including  possible  concerns  about  impacts  on  existing  health  services—and  proposed  that  this  risk  be  managed  through  consultations.  

21. However, the department did not advise the Minister whether it was  aware of any particular implementation risks applying to the specific locations  announced in the context of the incoming government’s 2007 election policy. A  range  of  options  were  p

otentially  available  for  doing  so,  including  some 

analysis, in the time available, of the extent to which the announced locations  potentially satisfied some or all of the four factors outlined in the incoming 

                                                       18 ANAO Audit Report No.14 2007-08, Performance Audit of the Regional Partnerships Program, Volume 2, p.148.

Summary

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government’s GP Super Clinics policy.19 The department advised the ANAO  that it considered there was insufficient and unsophisticated data available at  the time to draw conclusions on location issues. While some information and  analysis was provided to the Minister’s office by DoHA on a number of factors  that might inform the choice of clinic locations in the sec

ond round in 2010, 

that  information  was  of  a  relatively  informal  nature  through  emails  to  ministerial staff rather than a formal briefing to the Minister.20 To inform the  development and administration of infrastructure grant activities, the ANAO  has proposed that the department advise Ministers of any significant risks to  the effective implementation of election policy commitments.  

22. In response to a question on notice at Senate Estimates in early 2011

 

regarding  the  65  locations  announced  across  the  two  rounds,  DoHA  commissioned a broad post-hoc analysis against the four factors in the 2007  election policy, plus an additional fifth factor of high population growth. The  analysis indicated that a high proportion (83.8 per cent) of first round clinic  locations met one or two of the five factors.21 Conversely, a reasonably high  proportion (71.4 per cent) o

f second round clinics met three or more factors. 

23. Over  one‐third  of  the  65  locations  were  subject  to  non‐competitive  grant processes. The choice of competitive or non‐competitive processes was  informed  by  the  media  statements  released  in  the  election  context22,  and  bilateral discussions with other jurisdictions where relevant.23 Based on these  considerations, DoHA sought and received confirmation from the Minister for  both  round

s  as  to  which  process  should  apply  to  the  individual  clinics 

                                                       19 In this context, the ANAO’s 2002 Better Practice Guide—Administration of Grants noted that: ‘Even where the Government does take a specific decision regarding the establishment of a program, agencies should still consider

whether further needs analysis would assist in targeting the areas or projects most in need of funding assistance, consistent with the Government’s objectives. For example, the Government may establish a program to improve regional Australia’s access to information technology. In these circumstances, the relevant agency should consider conducting analysis to determine those regions in greatest need or those services needed most’, p.8. The same sentiment is expressed in the ANAO’s 2010 Better Practice Guide—Implementing Better Practice Grants Administration: ‘it is advisable that a

gencies consider, as part of the implementation process, whether further needs analysis would assist in ensuring the available funding will be directed towards funding recipients or projects that will maximise the effectiveness of, and value for money achieved by, the program’, p. 21. 20

The ANAO similarly observed in a previous grants administration audit that there was scope for DoHA to better assist the Health Minister through more comprehensive advice: ANAO Audit Report No.45 2011-12, Administration of the Health and Hospitals Fund, p. 86. 21

The 2007 GP Super Clinics policy indicated that the clinic locations would be chosen by taking into account the factors. 22 A number of media statements released by the ALP and the Government in t he context of the 2007 and 2010 elections referred to whether selection processes would be competitive or not. 23

In one first round location (Palmerston) the Minister did not decide that the funding would be a non-competitive process until late 2008: up until that point the funding process was unclear. In the second round, there were three occasions (Lower Hunter, Emerald, and Townsville (Northern Beaches)) where, following community consultation sessions, the Minister decided to change the process from competitive to non-competitive.

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16

announced by the Government. However, DoHA’s advice to the Minister on  program  implementation  did  not  address  the  risks  to  be  managed24  in  adopting a non‐competitive process for specific locations. The ANAO observed  that typically, non‐competitive grant processes were adopted where a clinic  was to be built by a state health department, regional or community health  service, Division of Gene

ral Practice or local council. 

24. While the first round GP Super Clinics program guidelines suggested  that the program was at that stage restricted to the 32 locations announced in  the  2007  election  context,  a  number  of  unsolicited  proposals  for  GP  Super  Clinics funding were submitted to DoHA and the Minister during 2008 and  2009. These received varying treatment. One proposal received in early 2008  for the establishment o

f a clinic in the Australian Capital Territory was rejected  by the Minister on the basis that a GP Super Clinic ‘was not planned for the  [ACT] at this time’.25 However, a further five unsolicited proposals received  over  the  period  late  2008  to  early  2009  were  the  subject  of  detailed  departmental advice to the Minister and were subsequently included in the  program. The department’s advice did not

 address the issue of whether, in the 

absence of any analysis against other areas of poor access to health services,  and the reference in the program guidelines to the specified locations, it was  equitable  or  appropriate  that  the  new  locations  be  considered  for  potential  funding.  Following  further  development,  these  proposals  were  formally  assessed by the department and collectively received $26.2 million of funding  under the

 program. 

25. Analysis  of  the  distribution  of  the  clinic  locations  announced  in  the  2007  election  context  shows  that  54.8  per  cent  of  clinics  were  located  in  marginal  electorates;  these  clinics  also  accounted  for  65.7  per  cent  of  the  announced indicative funding. This compares with 31 per cent of electorates  being marginal in the 2007 election. In relation to the remaining clinics—the  five announced in 2009 and th

ose announced in the 2010 election context—

43.8 per  cent  were  in  marginal  electorates;  these  clinics  also  accounted  for  43.7 per  cent  of  the  announced  indicative  funding.  This  compares  with  37 per cent of electorates being marginal in the 2010 election. Further analysis  of  clinics  announced  in  marginal  electorates,  on  the  basis  of  District  of 

                                                       24 Footnote 12 outlines a number of the potential risks. 25

Following further contact from the proponent, the Minister subsequently agreed to provide funding of $220 000 for the proposal under the General Practice Infrastructure Training Support program.

Summary

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Workforce Shortage (DWS) status26, shows that 82.4 per cent of these clinics  announced in 2007 were in a DWS. For the remaining clinics announced in  2009 and 2010 that were in marginal electorates, 57.1 per cent were also in  a DWS. 

Chapter 3: Selection Processes

26. DoHA established a generally sound and well documented framework  for assessing applications.27 The department made extensive use of relevant  expertise  from  medical  and  independent  financial  advisers  and  accessed  probity  advice  to  align  its  approach  with  better  practice  in  grants  administration. 

27. While the GP Super Clinics program guidelines required applications  to  address  the  extent  to  which  a  proposed  clinic  could  impact  on  existing  health services, this issue was not explicitly or substantively considered in the  overall  application  assessment.28  DoHA  faced  challenges  in  determining  whether  applications  for  funding  would  meet  local  needs  and  whether  a  proposed clinic would affect existing health services. There was limited, if any,  specific information from independent sources about existing health services  available  to  assessment  panels,  which  had  to  rely  almost  entirely  on  information contained in applications, which was of variable quality.  

28. The ANAO observed a number of opportunities for DoHA to improve  how  it  a

ssessed  value  for  money.  In  respect  to  the  assessment  of  physical  infrastructure, assessment panels were not asked to use commercially available  ‘cost  per  square  metre  calculation’  tools  during  the  first  round.  The  consideration of value for money was also hampered by a lack of clear and  specific guidance to assessment panels on assessing the value for money of  physical infrastructure, resulting in a lack of clari

ty and consistency in how the 

concept was applied in the assessment and selection process. In terms of the 

                                                       26 DWS status is determined by DoHA, using Australian Bureau of Statistics population data and Medicare Australia billing data. In general, an area is considered to be a DWS if it falls below the national average for the provision of medical

services, indicating that it has unmet healthcare needs. See DOHA, DWS Fact Sheet, available at htt

p://www.doctorconnect.gov.au/internet/otd/publishing.nsf/Content/dwsFactsheet [acce

ssed April 2013].

27 The framework was supported by parallel processes that allowed for risks to be identified, probity issues to be addressed and for associated financial administration and management issues to be considered. DoHA also provided support for the application process through local consultation processes at most GP Super Clinic locations. An

interested parties list was created and used to notify potential applicants and provide access to Invitation to Apply (ITA) documentation via advertising competitive ITAs in the press and on the Department’s GP Super Clinics Website and tenders and grants webpage. 28

In one case in the ANAO’s sample, the positioning and design of a GP Super Clinic which opened in 2010 has resulted in the main pedestri an access to a pre-existing GP practice being via the waiting area of the new GP Super Clinic.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

16

announced by the Government. However, DoHA’s advice to the Minister on  program  implementation  did  not  address  the  risks  to  be  managed24  in  adopting a non‐competitive process for specific locations. The ANAO observed  that typically, non‐competitive grant processes were adopted where a clinic  was to be built by a state health department, regional or community health  service, Division of Gene

ral Practice or local council. 

24. While the first round GP Super Clinics program guidelines suggested  that the program was at that stage restricted to the 32 locations announced in  the  2007  election  context,  a  number  of  unsolicited  proposals  for  GP  Super  Clinics funding were submitted to DoHA and the Minister during 2008 and  2009. These received varying treatment. One proposal received in early 2008  for the establishment o

f a clinic in the Australian Capital Territory was rejected  by the Minister on the basis that a GP Super Clinic ‘was not planned for the  [ACT] at this time’.25 However, a further five unsolicited proposals received  over  the  period  late  2008  to  early  2009  were  the  subject  of  detailed  departmental advice to the Minister and were subsequently included in the  program. The department’s advice did not

 address the issue of whether, in the 

absence of any analysis against other areas of poor access to health services,  and the reference in the program guidelines to the specified locations, it was  equitable  or  appropriate  that  the  new  locations  be  considered  for  potential  funding.  Following  further  development,  these  proposals  were  formally  assessed by the department and collectively received $26.2 million of funding  under the

 program. 

25. Analysis  of  the  distribution  of  the  clinic  locations  announced  in  the  2007  election  context  shows  that  54.8  per  cent  of  clinics  were  located  in  marginal  electorates;  these  clinics  also  accounted  for  65.7  per  cent  of  the  announced indicative funding. This compares with 31 per cent of electorates  being marginal in the 2007 election. In relation to the remaining clinics—the  five announced in 2009 and th

ose announced in the 2010 election context—

43.8 per  cent  were  in  marginal  electorates;  these  clinics  also  accounted  for  43.7 per  cent  of  the  announced  indicative  funding.  This  compares  with  37 per cent of electorates being marginal in the 2010 election. Further analysis  of  clinics  announced  in  marginal  electorates,  on  the  basis  of  District  of 

                                                       24 Footnote 12 outlines a number of the potential risks. 25

Following further contact from the pro ponent, the Minister subsequently agreed to provide funding of $220 000 for the proposal under the General Practice Infrastructure Training Support program.

Summary

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17

Workforce Shortage (DWS) status26, shows that 82.4 per cent of these clinics  announced in 2007 were in a DWS. For the remaining clinics announced in  2009 and 2010 that were in marginal electorates, 57.1 per cent were also in  a DWS. 

Chapter 3: Selection Processes

26. DoHA established a generally sound and well documented framework  for assessing applications.27 The department made extensive use of relevant  expertise  from  medical  and  independent  financial  advisers  and  accessed  probity  advice  to  align  its  approach  with  better  practice  in  grants  administration. 

27. While the GP Super Clinics program guidelines required applications  to  address  the  extent  to  which  a  proposed  clinic  could  impact  on  existing  health services, this issue was not explicitly or substantively considered in the  overall  application  assessment.28  DoHA  faced  challenges  in  determining  whether  applications  for  funding  would  meet  local  needs  and  whether  a  proposed clinic would affect existing health services. There was limited, if any,  specific information from independent sources about existing health services  available  to  assessment  panels,  which  had  to  rely  almost  entirely  on  information contained in applications, which was of variable quality.  

28. The ANAO observed a number of opportunities for DoHA to improve  how  it  a

ssessed  value  for  money.  In  respect  to  the  assessment  of  physical  infrastructure, assessment panels were not asked to use commercially available  ‘cost  per  square  metre  calculation’  tools  during  the  first  round.  The  consideration of value for money was also hampered by a lack of clear and  specific guidance to assessment panels on assessing the value for money of  physical infrastructure, resulting in a lack of clari

ty and consistency in how the 

concept was applied in the assessment and selection process. In terms of the 

                                                       26 DWS status is determined by DoHA, using Australian Bureau of Statistics population data and Medicare Australia billing data. In general, an area is considered to be a DWS if it falls below the national average for the provision of medical

services, indicating that it has unmet healthcare needs. See DOHA, DWS Fact Sheet, available at htt

p://www.doctorconnect.gov.au/internet/otd/publishing.nsf/Content/dwsFactsheet [accessed April 2013]. 27 The framework was supported by parallel processes that allowed for risks to be identified, probity issues to be addressed and for associated financial administration and management issues to be considered. DoHA also provided

support for the application process through local consultation processes at most GP Super Clinic locations. An interested parties list was created and used to notify potential applicants and provide access to Invitation to Apply (ITA) documentation via advertising competitive ITAs in the press and on the Department’s GP Super Clinics Website and tenders and grants webpage. 28

In one case in the ANAO’s sample, the positioning and design of a GP Super Clinic which opened in 2010 has resulted in the main pedestri an access to a pre-existing GP practice being via the waiting area of the new GP Super Clinic.

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services to be delivered by clinics, of the six locations in the ANAO’s sample  where a grant of up to $15 million was available to establish a GP Super Clinic,  DoHA did not explicitly assess whether the specialised services required under  the program guidelines for these locations were appropriately addressed in the  applications. 

29. In  instances  where  the  initial  Invitation  to  Apply  process  did  not  identify  a  successful  applicant,  DoHA  used  a  variety  of  strategies  and  processes  to  generate  new  or  substantially  revised  applications  and  subsequently assess the merits of those applications. The processes adopted in  these  cases  were  generally  adequate  and  there  was  a  positive  trend  in  the  second round where DoHA involved the Minister earlier in advising on risks  and  options,  especially  where  non‐competitive  processes  were  involved.  However, the absence of a full panel assessment in some instances meant that  the expertise of a medical adviser was not used in assessing some applications.  

Chapter 4: Rolling out the Clinics

30. In establishing the program, DoHA assessed and planned for a range of  program  implementation  risks.  During  the  first  funding  round,  there  were  nonetheless  occasions  when  DoHA’s  risk  management  approach  in  the  awarding of grants, and subsequently managing risks in the early stages of  clinic  roll‐out,  lacked  rigour.  This  contributed  to  the  eventual  inability  to  establish a clinic at Sorell, where the estimated cost of constructing a clinic  exceeded available grant funding by around $880 000, as well as being a factor  in the long delay in opening the Redcliffe clinic.29  

31. In  the  case  of  Sorell,  DoHA  took  six  months  to  fully  recognise  and  respond to the risks of a budget shortfall after the funding recipient advised  the  department  that  it  had  concerns  about  the  adequacy  of  the  amount  available under the GP Super Clinics grant. While the department responded  appropriately once the shortfall was confirmed (after the receipt of building  quotes), earlier engagement with the funding recipient on building design and  construction costs would have enabled the department to better manage the  risk.  In  the  case  of  the  Redcliffe  project,  while  the  department  identified  a  number of financial risks during the assessment stage of the initial $5 million  grant, and a mitigation strategy was proposed (including finding a financial 

                                                       29 The Redcliffe clinic was originally expected to open around September 2011, but has yet to open.

Summary

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guarantor  for  the  project  and  /  or  reducing  its  capital  cost),  the  FMA  Regulation 9 documentation did not refer to whether the identified risks had in  fact been treated, and a funding agreement for $5 million was subsequently  signed without explicit provisions relating to those risks.  In the event, the  recipient  was  unable  to  secure  a  loan  to  fund  any  of  the  project’s  cost30,  resulting in a significant increase in the Commonwealth contribution towards  construction works; from $5 million to $13.2 million.  

32. Overall,  DoHA’s  compliance  with  the  requirements  of  the  Commonwealth financial management framework in the awarding of grants  has  been  generally  sound.  Exceptions  related  to  the  FMA  Regulation  9  documentation for Redcliffe, discussed above, and non‐compliance (identified  during the audit) with the mandatory public reporting of grants as required  under the Finance Minister’s Instructions and later by the Commonwealth Grant  Guidelines. 

33. As  at  5  April  2013,  funding  agreements  for  all  of  the  first  round  locations have been executed and 29 of the 36 clinics have been completed and  are operational; with seven not yet completed.31 Of the 29 completed clinics,  three were completed within the timeframe originally specified in the funding  agreement,  while  four  clinics  were  completed  12  months  or  more  after  the  specified  date  and  22  clinics  were  completed  less  than  12  months  after  the  specified date. For the second round, funding agreements for 24 of the 28 clinic  locations  have  been  executed  and  one  clinic  is  operational,  with  so-called  ‘early  services’    being  provided  from  existing  premises  at  another  seven  locations.  The  time  taken  from  the  execution  of  funding  agreements  to  the  completion of clinics has varied considerably, reflecting amongst other things,  delays  associated  with  resolving  often  complex  issues  of  land  tenure,  development approvals and construction works.  

   

                                                       30 The funding recipient, the Redcliffe Hospital Foundation, was created under, and subject to specific Queensland legislation, and therefore required approval from the Queensland Government to take out loans that were intended to

co-finance the construction of the Super Clinic. 31 DoHA has advised that a further clinic was open for business as at 31 May 2013.

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services to be delivered by clinics, of the six locations in the ANAO’s sample  where a grant of up to $15 million was available to establish a GP Super Clinic,  DoHA did not explicitly assess whether the specialised services required under  the program guidelines for these locations were appropriately addressed in the  applications. 

29. In  instances  where  the  initial  Invitation  to  Apply  process  did  not  identify  a  successful  applicant,  DoHA  used  a  variety  of  strategies  and  processes  to  generate  new  or  substantially  revised  applications  and  subsequently assess the merits of those applications. The processes adopted in  these  cases  were  generally  adequate  and  there  was  a  positive  trend  in  the  second round where DoHA involved the Minister earlier in advising on risks  and  options,  especially  where  non‐competitive  processes  were  involved.  However, the absence of a full panel assessment in some instances meant that  the expertise of a medical adviser was not used in assessing some applications.  

Chapter 4: Rolling out the Clinics

30. In establishing the program, DoHA assessed and planned for a range of  program  implementation  risks.  During  the  first  funding  round,  there  were  nonetheless  occasions  when  DoHA’s  risk  management  approach  in  the  awarding of grants, and subsequently managing risks in the early stages of  clinic  roll‐out,  lacked  rigour.  This  contributed  to  the  eventual  inability  to  establish a clinic at Sorell, where the estimated cost of constructing a clinic  exceeded available grant funding by around $880 000, as well as being a factor  in the long delay in opening the Redcliffe clinic.29  

31. In  the  case  of  Sorell,  DoHA  took  six  months  to  fully  recognise  and  respond to the risks of a budget shortfall after the funding recipient advised  the  department  that  it  had  concerns  about  the  adequacy  of  the  amount  available under the GP Super Clinics grant. While the department responded  appropriately once the shortfall was confirmed (after the receipt of building  quotes), earlier engagement with the funding recipient on building design and  construction costs would have enabled the department to better manage the  risk.  In  the  case  of  the  Redcliffe  project,  while  the  department  identified  a  number of financial risks during the assessment stage of the initial $5 million  grant, and a mitigation strategy was proposed (including finding a financial 

                                                       29 The Redcliffe clinic was originally expected to open around September 2011, but has yet to open.

Summary

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guarantor  for  the  project  and  /  or  reducing  its  capital  cost),  the  FMA  Regulation 9 documentation did not refer to whether the identified risks had in  fact been treated, and a funding agreement for $5 million was subsequently  signed without explicit provisions relating to those risks.  In the event, the  recipient  was  unable  to  secure  a  loan  to  fund  any  of  the  project’s  cost30,  resulting in a significant increase in the Commonwealth contribution towards  construction works; from $5 million to $13.2 million.  

32. Overall,  DoHA’s  compliance  with  the  requirements  of  the  Commonwealth financial management framework in the awarding of grants  has  been  generally  sound.  Exceptions  related  to  the  FMA  Regulation  9  documentation for Redcliffe, discussed above, and non‐compliance (identified  during the audit) with the mandatory public reporting of grants as required  under the Finance Minister’s Instructions and later by the Commonwealth Grant  Guidelines. 

33. As  at  5  April  2013,  funding  agreements  for  all  of  the  first  round  locations have been executed and 29 of the 36 clinics have been completed and  are operational; with seven not yet completed.31 Of the 29 completed clinics,  three were completed within the timeframe originally specified in the funding  agreement,  while  four  clinics  were  completed  12  months  or  more  after  the  specified  date  and  22  clinics  were  completed  less  than  12  months  after  the  specified date. For the second round, funding agreements for 24 of the 28 clinic  locations  have  been  executed  and  one  clinic  is  operational,  with  so-called  ‘early  services’    being  provided  from  existing  premises  at  another  seven  locations.  The  time  taken  from  the  execution  of  funding  agreements  to  the  completion of clinics has varied considerably, reflecting amongst other things,  delays  associated  with  resolving  often  complex  issues  of  land  tenure,  development approvals and construction works.  

   

                                                       30 The funding recipient, the Redcliffe Hospital Foundation, was created under, and subject to specific Queensland legislation, and therefore required approval from the Queensland Government to take out loans that were intended to

co-finance the construction of the Super Clinic. 31 DoHA has advised that a further clinic was open for business as at 31 May 2013.

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Chapter 5: Reporting and Assessing Clinic and Program Outcomes

34. The ANAO’s analysis of the operational reports of the 18 clinics in its  sample indicates that the majority of these clinics are making good progress  towards  achieving  some  key  service  delivery  expectations.  Recruiting  and  retaining  sufficient  staff  have  been  the  biggest  challenges  for  most  clinics.  However, an analysis of patient presentations does not show any p

articular 

trend, at this stage, in support of DoHA’s objective to achieve a significant shift  towards an increasing proportion of overall services at GP Super Clinics being  delivered by nurses and allied health professionals. 

35. The development of key performance indicators (KPIs) for the ten GP  Super  Clinic  program  objectives  was  originally  to  occur  in  2008,  but  this  process was not commenced by the department until 2010.  A set

 of detailed 

and measurable KPIs were agreed between DoHA and the Department of the  Prime Minister and Cabinet (PM&C) and DoHA sought the Minister’s formal  endorsement of these in March 2011.32 The Minister directed that the KPIs be  reworked, and a revised set of KPIs, now framed in a more qualitative manner,  was approved by the Minister in November 2011. As disc

ussed below, there 

remains scope for revised KPIs to support longer term reporting on the extent  to which the program is achieving its intended outcomes. 

36. With the maturing of an increasing number of clinics, it is timely for  DoHA  to  consider  whether  more  quantifiable  information  on  the  services  provided  by  clinics—focusing  particularly  on  those  that  involve  integrated,  multidisciplinary team based care and preventative care—should be collected  and pu

blicly reported on an aggregated basis.  Similarly, aggregated public  reporting of the numbers of vocational placements and other education and  training activities for medical, nursing and allied health professional students,  including GP registrars, could be commenced. This reporting would usefully  be supported by analysis of whether the more mature clinics are providing  vocational  placements  and  educational  activities  at  proportionally  higher  levels  than  other  comparable  primary  healthcare  facilities.  In

  addition  to 

information  provided  by  the  clinics,  reporting  could  be  informed  by  data  collected by the Department of Human Services as part of its administration of  healthcare-related financial payments.  

                                                       32 DoHA, Minute to the Minister-Response to Cabinet Implementation Unit Assessment Report GP Super Clinics, 23 March 2011.

Summary

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37. As already noted, the GP Super Clinics program will have an effective  life of 20 years, and a revised performance and reporting framework would  provide an improved basis for assessing the extent to which the program is  achieving  its  key  intended  outcomes:  improved  access  to  integrated,  multidisciplinary primary care health services; and increased education and  training placements in a multidisciplinary care setting f

or the future primary 

care workforce. 

Summary of agency response 38. The  Department  of  Health  and  Ageing  notes  the  audit  report  and  agrees with the recommendations. 

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Chapter 5: Reporting and Assessing Clinic and Program Outcomes

34. The ANAO’s analysis of the operational reports of the 18 clinics in its  sample indicates that the majority of these clinics are making good progress  towards  achieving  some  key  service  delivery  expectations.  Recruiting  and  retaining  sufficient  staff  have  been  the  biggest  challenges  for  most  clinics.  However, an analysis of patient presentations does not show any p

articular 

trend, at this stage, in support of DoHA’s objective to achieve a significant shift  towards an increasing proportion of overall services at GP Super Clinics being  delivered by nurses and allied health professionals. 

35. The development of key performance indicators (KPIs) for the ten GP  Super  Clinic  program  objectives  was  originally  to  occur  in  2008,  but  this  process was not commenced by the department until 2010.  A set

 of detailed 

and measurable KPIs were agreed between DoHA and the Department of the  Prime Minister and Cabinet (PM&C) and DoHA sought the Minister’s formal  endorsement of these in March 2011.32 The Minister directed that the KPIs be  reworked, and a revised set of KPIs, now framed in a more qualitative manner,  was approved by the Minister in November 2011. As disc

ussed below, there 

remains scope for revised KPIs to support longer term reporting on the extent  to which the program is achieving its intended outcomes. 

36. With the maturing of an increasing number of clinics, it is timely for  DoHA  to  consider  whether  more  quantifiable  information  on  the  services  provided  by  clinics—focusing  particularly  on  those  that  involve  integrated,  multidisciplinary team based care and preventative care—should be collected  and pu

blicly reported on an aggregated basis.  Similarly, aggregated public  reporting of the numbers of vocational placements and other education and  training activities for medical, nursing and allied health professional students,  including GP registrars, could be commenced. This reporting would usefully  be supported by analysis of whether the more mature clinics are providing  vocational  placements  and  educational  activities  at  proportionally  higher  levels  than  other  comparable  primary  healthcare  facilities.  In

  addition  to 

information  provided  by  the  clinics,  reporting  could  be  informed  by  data  collected by the Department of Human Services as part of its administration of  healthcare-related financial payments.  

                                                       32 DoHA, Minute to the Minister-Response to Cabinet Implementation Unit Assessment Report GP Super Clinics, 23 March 2011.

Summary

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37. As already noted, the GP Super Clinics program will have an effective  life of 20 years, and a revised performance and reporting framework would  provide an improved basis for assessing the extent to which the program is  achieving  its  key  intended  outcomes:  improved  access  to  integrated,  multidisciplinary primary care health services; and increased education and  training placements in a multidisciplinary care setting f

or the future primary 

care workforce. 

Summary of agency response 38. The  Department  of  Health  and  Ageing  notes  the  audit  report  and  agrees with the recommendations. 

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Recommendations

Recommendation No.1

Para 2.18

To  inform  the  d evelopment  and  administration  of 

infrastructure grants activities, the ANAO recommends  that DoHA advise Ministers of any measures considered  necessary  in  managing  any  significant  risks  to  the  effective  implementation  of  election  policy  commitments. 

DoHA response: Agreed. 

Recommendation N

o.2

Para 3.36

To maximise the

 benefit from DoHA’s experience in the  administration of health infrastructure grant programs,  the ANAO recommends that the department document  a better practice approach for the assessment of value for  money for health infrastructure projects.  

DoHA response: Agreed. 

Recommendation N

o.3

Para 5.11

To  im

prove  longer‐term  reporting  on  program  outcomes, the ANAO recommends that DoHA revise the  GP Super Clinics performance and reporting framework  to include measurable KPIs on the extent to which the  program is achieving its key intended outcomes.  

DoHA response: Agreed. 

Recommendation N

o.4

Para 5.41

To  support  a  more  outcome‐

focused  performance 

reporting framework for the GP Super Clinics program,  it is recommended that DoHA put in place arrangements  with  the  Department  of  Human  Services  to  obtain  information  on  claimable  services  provided  by  operational  GP  Super  Clinics,  as  well  as  information  regarding vocational placements, medical education and  training  for  GP  Registrars  and  allied  health  professionals.  

DoHA response: Agreed.  

 

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Audit Findings

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Recommendations

Recommendation No.1

Para 2.18

To  inform  the  d evelopment  and  administration  of 

infrastructure grants activities, the ANAO recommends  that DoHA advise Ministers of any measures considered  necessary  in  managing  any  significant  risks  to  the 

effective  implementation  of  election  policy  commitments. 

DoHA response: Agreed. 

Recommendation N

o.2

Para 3.36

To maximise the

 benefit from DoHA’s experience in the  administration of health infrastructure grant programs,  the ANAO recommends that the department document  a better practice approach for the assessment of value for  money for health infrastructure projects.  

DoHA response: Agreed. 

Recommendation N

o.3

Para 5.11

To  im

prove  longer‐term  reporting  on  program  outcomes, the ANAO recommends that DoHA revise the  GP Super Clinics performance and reporting framework  to include measurable KPIs on the extent to which the  program is achieving its key intended outcomes.  

DoHA response: Agreed. 

Recommendation N

o.4

Para 5.41

To  support  a  more  outcome‐

focused  performance 

reporting framework for the GP Super Clinics program,  it is recommended that DoHA put in place arrangements  with  the  Department  of  Human  Services  to  obtain  information  on  claimable  services  provided  by  operational  GP  Super  Clinics,  as  well  as  information  regarding vocational placements, medical education and  training  for  GP  Registrars  and  allied  health  professionals.  

DoHA response: Agreed.  

 

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Audit Findings

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1. Introduction

This chapter provides the context for the audit, including an overview of the GP Super  Clinics policy and subsequent grants program, and outlines the audit objective, scope,  criteria and methodology. 

Improving primary healthcare 1.1 Primary healthcare is care provided by health professionals working in  the community, as opposed to hospitals, institutions or specialist services. It is  usually considered to include general practitioners (GPs), dentists and nurses  working in private practices, community health services or Aboriginal Medical  Services, allied health professionals (such as physiotherapists, dietitians and  mental health counsellors) and pharmacists. Funding for primary healthcare is  shared between the Commonwealth and the st

ates and territories33, although 

the proportion varies according to the particular service. 

1.2 There has been considerable effort over the last two decades to improve  the degree of integration between various primary healthcare providers as well  as other parts of the healthcare sector. The aim is to foster more structured,  coordinated  and  multidisciplinary  care  and  increase  the  emphasis  on  preventative health and early detection of disease, particularly in light o

f the 

growing incidence of chronic diseases and an ageing population. Initiatives  introduced as part of this process include: the establishment of the Divisions of  General Practice and the Medicare Locals network; Commonwealth incentive  payments such as the GP Links program34 and Practice Incentives program;35  the Primary Care Infrastructure Grants program;36 and various initiatives to  fund general practice education and training37 and facilitate Medicare f unding  for  a  greater  range  of  primary  healthcare  services.38  State  and  territory 

                                                       33 The Commonwealth funds general practices (via Medicare), but the states and territories do not. Both levels of government contribute funding for community health services and Aboriginal Medical Services. 34

This program provided financial incentives for general practice businesses to merge so as to provide a larger business that would support employment of larger numbers of nursing staff and an increased range of services. 35 This program was examined in ANAO Audit Report No.5 2010-11 Practice Incentives Program. 36

This program was examined in ANAO Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program. 37 Including the General Practice Education and Training program, which was examined in ANAO Audit Report No .34

2010-11 General Practice Education and Training. 38 Notably these include Chronic Disease Management (formerly called Enhanced Primary Care) items on the Medicare Benefit Schedule.

Introduction

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governments  have  also  adopted  a  range  of  programs  targeting  healthcare  integration. 

The GP Super Clinics policy

1.3 New Directions for Australia’s Health: Delivering GP Super Clinics to local  communities (the GP Super Clinics policy) was released by the Australian Labor  Party (ALP), then in opposition, on 24 August 2007. The policy was announced  as  part  of  the  ALP’s  $2  billion  National  Health

  and  Hospitals  Reform  Plan 

(NHHRP). Among a number of proposed initiatives in the NHHRP aimed at  improving the country’s health system, the GP Super Clinics policy outlined a  plan to fund the establishment of an unspecified number of ‘GP Super Clinics’  across the country that would provide multidisciplinary care and help reduce  pressure on Australia’s hospitals. The policy stated that: 

The  first  and  most  co mmon  contact  that  Australian  families  have  with  the  health system is through their GP. The family doctor plays a critical role in  helping treat illnesses as well as helping families keep themselves healthy and  out of hospital. 

However, as a result of workforce shortages, long‐term under‐investment in  infrastructure and a lack of strategic planning around the Medicare Schedule,  GPs are finding it harder to meet the community’s health need

s and mums 

and dads are finding it harder to get their kids or parents to the doctors. 

The  nature  of  general  practice  and  the  general  practice  workforce  are  also  changing. Increasingly, new doctors want more flexibility in their careers and  working conditions that general practice, particularly in regional areas, don’t  always allow. 

This means that young doctors and other health professionals are not being  attra

cted  to  regions  that  need  them  most.  As  a  result,  the  universality  of  Medicare is under threat - not because people arenʹt entitled to services, but  because doctor shortages and poor health infrastructure mean they canʹt access  them locally or close to home. 

And  with  an  increase  in  the  prevalence  of  many  chronic  diseases  and  the  ageing population, doctors are seeing more and more pati

ents with complex 

care  needs.  This  takes  time,  and  adds  pressure  to  a  primary  care  system  already under strain.  

Many individual Australians suffer poor health as a result. 

And it means our health system suffers too. It also puts pressure on our public  hospitals.  People  who  can’t  get  good  primary  care  in  their  community,  inevitably end up in the emergency departments of our hospitals... 

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1. Introduction

This chapter provides the context for the audit, including an overview of the GP Super  Clinics policy and subsequent grants program, and outlines the audit objective, scope,  criteria and methodology. 

Improving primary healthcare 1.1 Primary healthcare is care provided by health professionals working in  the community, as opposed to hospitals, institutions or specialist services. It is  usually considered to include general practitioners (GPs), dentists and nurses  working in private practices, community health services or Aboriginal Medical  Services, allied health professionals (such as physiotherapists, dietitians and  mental health counsellors) and pharmacists. Funding for primary healthcare is  shared between the Commonwealth and the st

ates and territories33, although 

the proportion varies according to the particular service. 

1.2 There has been considerable effort over the last two decades to improve  the degree of integration between various primary healthcare providers as well  as other parts of the healthcare sector. The aim is to foster more structured,  coordinated  and  multidisciplinary  care  and  increase  the  emphasis  on  preventative health and early detection of disease, particularly in light o

f the 

growing incidence of chronic diseases and an ageing population. Initiatives  introduced as part of this process include: the establishment of the Divisions of  General Practice and the Medicare Locals network; Commonwealth incentive  payments such as the GP Links program34 and Practice Incentives program;35  the Primary Care Infrastructure Grants program;36 and various initiatives to  fund general practice education and training37 and facilitate Medicare f unding  for  a  greater  range  of  primary  healthcare  services.38  State  and  territory 

                                                       33 The Commonwealth funds general practices (via Medicare), but the states and territories do not. Both levels of government contribute funding for community health services and Aboriginal Medical Services. 34

This program provided financial incentives for general practice businesses to merge so as to provide a larger business that would support employment of larger numbers of nursing staff and an increased range of services. 35 This program was examined in ANAO Audit Report No.5 2010-11 Practice Incentives Program. 36

This program was examined in ANAO Audit Report No .44 2011-12 Administration of the Primary Care Infrastructure Grants Program. 37 Including the General Practice Education and Training program, which was examined in ANAO Audit Report No.34

2010-11 General Practice Education and Training. 38 Notably these include Chronic Disease Management (formerly called Enhanced Primary Care) items on the Medicare Benefit Schedule.

Introduction

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

25

governments  have  also  adopted  a  range  of  programs  targeting  healthcare  integration. 

The GP Super Clinics policy

1.3 New Directions for Australia’s Health: Delivering GP Super Clinics to local  communities (the GP Super Clinics policy) was released by the Australian Labor  Party (ALP), then in opposition, on 24 August 2007. The policy was announced  as  part  of  the  ALP’s  $2  billion  National  Health

  and  Hospitals  Reform  Plan 

(NHHRP). Among a number of proposed initiatives in the NHHRP aimed at  improving the country’s health system, the GP Super Clinics policy outlined a  plan to fund the establishment of an unspecified number of ‘GP Super Clinics’  across the country that would provide multidisciplinary care and help reduce  pressure on Australia’s hospitals. The policy stated that: 

The  first  and  most  co mmon  contact  that  Australian  families  have  with  the  health system is through their GP. The family doctor plays a critical role in  helping treat illnesses as well as helping families keep themselves healthy and  out of hospital. 

However, as a result of workforce shortages, long‐term under‐investment in  infrastructure and a lack of strategic planning around the Medicare Schedule,  GPs are finding it harder to meet the community’s health need

s and mums 

and dads are finding it harder to get their kids or parents to the doctors. 

The  nature  of  general  practice  and  the  general  practice  workforce  are  also  changing. Increasingly, new doctors want more flexibility in their careers and  working conditions that general practice, particularly in regional areas, don’t  always allow. 

This means that young doctors and other health professionals are not being  attra

cted  to  regions  that  need  them  most.  As  a  result,  the  universality  of  Medicare is under threat - not because people arenʹt entitled to services, but  because doctor shortages and poor health infrastructure mean they canʹt access  them locally or close to home. 

And  with  an  increase  in  the  prevalence  of  many  chronic  diseases  and  the  ageing population, doctors are seeing more and more pati

ents with complex 

care  needs.  This  takes  time,  and  adds  pressure  to  a  primary  care  system  already under strain.  

Many individual Australians suffer poor health as a result. 

And it means our health system suffers too. It also puts pressure on our public  hospitals.  People  who  can’t  get  good  primary  care  in  their  community,  inevitably end up in the emergency departments of our hospitals... 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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•  Labor will provide capital funding for the establishment of GP Super  Clinics around the country, in areas where access to primary health  care services is poor and need is high. 

•  GP  Super  Clinics  will  provide  the  infrastructure  for  GPs  and  other  health professionals and services to come together in the one space -  to facilitate multidisciplinary te

am work and provide a greater focus 

on chronic disease prevention and management. 

•  GP Super Clinics will provide space and training facilities for medical  students and trainees. 

•  GP Super Clinics will provide greater convenience and better access to  services for patients.39 

Grant funding rounds

1.4 Following the release of the policy, the ALP progressively announced  the locations of 3240 proposed Super Clinics in the lead‐up to the  2007 federal  election, held on 24 November, along with the indicative maximum level of  grant  funding  available  for  each  location.  Another  five  proposed  locations  were announced in August 2009, taking the total of ‘first round’ clinic locations  to 37. Together, the indicative maximum grant funding amounts announced  for the first round was $176.7 million.41 Maximum funding amounts for each  location were not set according to any publicised formula o

r other criteria, and 

varied considerably from $1 million to $12.5 million.   

1.5 A  second  round  of  grant  funding,  as  part  of  the  National  Primary  Health Care Strategy, was announced by the Labor Government in the May  2010  Budget.42  The  Budget  announcement  specified  that  the  second  round 

                                                       39 Australian Labor Party, New Directions for Australia’s Health: Delivering GP Super Clinics to local communities, ALP, Canberra, 2007, pp. 3, 18. 40

Clinics announced in 2007 included a Hobart clinic (‘Hobart Eastern Shores’) which was to have branches at two locations approximately 15 kilometers apart. These locations were subsequently funded through separate grant processes and funding agreements were executed with two different recipients. For the purposes of this audit they are treated as two clinics. 41

Excluding GST. Unless otherwise noted, all grant funding figures quoted in the audit report exclude GST. 42 Department of Health and Ageing, Building a 21st Century Primary Health Care System: Australia’s First National Primary Health Care Strategy, Can

berra, May 2010.

Introduction

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would constitute ‘around’ 23 new GP Super Clinics.43  Subsequently, however,  locations for 28 new clinics were announced by the Government during the  2010 election campaign, with the total maximum indicative funding for this  round at $242 million. Maximum second round funding amounts fell into three  broad  bands,  with  eight  locations  having  maximum  funding  amounts  of  $15 million, 18 l

ocations having maximum indicative funding amounts in the  range  of  $5  million  to  $7  million,  and  another  two  being  allocated  smaller  amounts.44  

1.6 A summary of announcements, clinic numbers and maximum funding  amounts across both funding rounds at the date of announcement, is shown in  Table 1.1 below. A full list of announced clinics can be found in Appendix 1. 

Table 1.1

Announcement of

clinic locations

Round

Period when locations announced

Number of clinics Total maximum funding amount A

First Round

1 September-17 November 2007 32 $150.5 million

First Round 14-31 August 2009 5 $26.2 million

Second Round

28 July-17 August 2010 28 $242.0 million

Total 65 $418.7 million

Source: ANAO analysis of media releases and DoHA documentation.

Note: (A) The amounts reflect the available grant amount indicated at the time the relevant clinics were first announced. Additional funding, totalling $13.2 million, was announced in 2010 and 2011 for three first round clinics—Mt Isa, Wallan and Redcliffe.

1.7 The ALP’s 2007 GP Super Clinics policy d id not specify how capital  funding for the clinics would be made available. However, the subsequent GP  Super  Clinics  program  established  in  government  provided  for  a  mix  of 

                                                       43 N Roxon, (Minister for Health and Ageing), ‘More GP Super Clinics and Extra GP Infrastructure’, media release, Canberra, 11 May 2010. The qualifier ‘around’ which appeared in the media release did not appear in the relevant

budget papers, also released on 11 May 2010. See 2010-11 Australian Government Budget — Budget Paper No.2, which stated that ‘The Government will...improve access to p

rimary health care by establishing an additional 23 GP

Super Clinics’; p. 228. Neither the media release nor the Budget papers identified the total funding amount that would be dedicated to GP Super Clinics only - rather they specified a combined figure of $355.2 million covering both the expansion of the GP Super Clinics program and the establishment of the new Primary Care Infrastructure Grants Program. 44

The proposed clinics with maximum funding amounts of $15 million were intended to include the provision of specialised services such as renal dialysis, palliative care, chemotherapy, hospital-in-the-home support and/or Home and Community Care.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

26

•  Labor will provide capital funding for the establishment of GP Super  Clinics around the country, in areas where access to primary health  care services is poor and need is high. 

•  GP  Super  Clinics  will  provide  the  infrastructure  for  GPs  and  other  health professionals and services to come together in the one space -  to facilitate multidisciplinary te

am work and provide a greater focus 

on chronic disease prevention and management. 

•  GP Super Clinics will provide space and training facilities for medical  students and trainees. 

•  GP Super Clinics will provide greater convenience and better access to  services for patients.39 

Grant funding rounds

1.4 Following the release of the policy, the ALP progressively announced  the locations of 3240 proposed Super Clinics in the lead‐up to the  2007 federal  election, held on 24 November, along with the indicative maximum level of  grant  funding  available  for  each  location.  Another  five  proposed  locations  were announced in August 2009, taking the total of ‘first round’ clinic locations  to 37. Together, the indicative maximum grant funding amounts announced  for the first round was $176.7 million.41 Maximum funding amounts for each  location were not set according to any publicised formula o

r other criteria, and 

varied considerably from $1 million to $12.5 million.   

1.5 A  second  round  of  grant  funding,  as  part  of  the  National  Primary  Health Care Strategy, was announced by the Labor Government in the May  2010  Budget.42  The  Budget  announcement  specified  that  the  second  round 

                                                       39 Australian Labor Party, New Directions for Australia’s Health: Delivering GP Super Clinics to local communities, ALP, Canberra, 2007, pp. 3, 18. 40

Clinics announced in 2007 included a Hobart clinic (‘Hobart Eastern Shores’) which was to have branches at two locations approximately 15 kilometers apart. These locations were subsequently funded through separate grant processes and funding agreements were executed with two different recipients. For the purposes of this audit they are treated as two clinics. 41

Excluding GST. Unless otherwise noted, all grant funding figures quoted in the audit report exclude GST. 42 Department of Health and Ageing, Building a 21st Century Primary Health Care System: Australia’s First National Primary Health Care Strategy, Canberra, May 2010.

Introduction

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would constitute ‘around’ 23 new GP Super Clinics.43  Subsequently, however,  locations for 28 new clinics were announced by the Government during the  2010 election campaign, with the total maximum indicative funding for this  round at $242 million. Maximum second round funding amounts fell into three  broad  bands,  with  eight  locations  having  maximum  funding  amounts  of  $15 million, 18 l

ocations having maximum indicative funding amounts in the  range  of  $5  million  to  $7  million,  and  another  two  being  allocated  smaller  amounts.44  

1.6 A summary of announcements, clinic numbers and maximum funding  amounts across both funding rounds at the date of announcement, is shown in  Table 1.1 below. A full list of announced clinics can be found in Appendix 1. 

Table 1.1

Announcement of

clinic locations

Round

Period when locations announced

Number of clinics Total maximum funding amountA

First Round

1 September-17 November 2007 32 $150.5 million

First Round 14-31 August 2009 5 $26.2 million

Second Round

28 July-17 August 2010 28 $242.0 million

Total 65 $418.7 million

Source: ANAO analysis of media releases and DoHA documentation.

Note: (A) The amounts reflect the available grant amount indicated at the time the relevant clinics were first announced. Additional funding, totalling $13.2 million, was announced in 2010 and 2011 for three first round clinics—Mt Isa, Wallan and Redcliffe.

1.7 The ALP’s 2007 GP Super Clinics policy did not specify how capital  funding for the clinics would be made available. However, the subsequent GP  Super  Clinics  program  established  in  government  provided  for  a  mix  of 

                                                       43 N Roxon, (Minister for Health and Ageing), ‘More GP Super Clinics and Extra GP Infrastructure’, media release, Canberra, 11 May 2010. The qualifier ‘around’ which appeared in the media release did not appear in the relevant

budget papers, also released on 11 May 2010. See 2010-11 Australian Government Budget — Budget Paper No.2, which stated that ‘The Government will...improve access to primary health care by establishing an additional 23 GP Super Clinics’; p. 228. Neither the media release nor the Budget papers identified the total funding amount that would be dedicated to GP Super Clinics only - rather they specified a combined figure of $355.2 million covering both the expansion of the GP Super Clinics program and the establishment o

f the new Primary Care Infrastructure Grants

Program. 44 The proposed clinics with maximum funding amounts of $15 million were intended to include the provision of specialised services such as renal dialysis, palliative care, chemotherapy, hospital-in-the-home support and/or Home

and Community Care.

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

28

competitive and non‐competitive grant processes. Under the non‐competitive  grant process subsequently established by DoHA for specified locations, only  the entity specified by the Minister for Health and Ageing was eligible to apply  for  the  available  grant  for  the  relevant  location.  Typically,  non‐competitive  grant processes were adopted where a clinic was to be built by a state health  department,  regional  or  community  health  service,  Division  of  General  Practice or local council. Applications submitted under non‐competitive grant  process  were  subject  to  the  same  assessment  procedures  as  those  for  competitive grants. A number of the clinics, under both competitive and non‐ competitive  grant  processes,  were  also  to  be  jointly  funded  by  state  governments.  

Program Objectives and grant funding conditions

1.8 The  overarching  objective  of  the  GP  Super  Clinics  program  is  to  facilitate access to high quality, affordable, team based primary healthcare.45   More specifically, the program has ten objectives, which constitute the ‘core  characteristics’ that each of the clinics is expected to demonstrate. These reflect  key points of the GP Super Clinics policy, including: providing accessible and  affordable multidisciplinary care that is responsive to local community health  needs, having a greater focus on chronic disease prevention and management,  and providing education and training opportunities for medical students and  trainees. 

1.9 Under  the  GP  Super  Clinics  program,  the  grants  provided  for  individual clinics could incorporate up to three elements: 

 capital funding—for the purchase of land, construction, refurbishment,  and  building  fit‐out  costs;  and  the  purchase  of  medical,  information  technology and computing equipment. Up to five per cent of the total  grant  funds  could  also  be  used  for  preparatory  purposes,  including  costs  incurred  in  establishing  the  clinic  business  and  operating  structure; 

                                                       45 Department of Health and Ageing, GP Super Clinics national program guide 2008, DoHA, Canberra, 2008, p. 5.

Introduction

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 recurrent funding—up to 12.5 per cent of the total grant funds could be  spent  on  administrative  support,  records  management,  centre  managers and nursing staff46; and  

 relocation incentives—subject to certain conditions, to assist GPs, allied  health professionals, nurses and pharmacy services relocate to the new  facilities.47  

1.10 A further condition of the funding was that the clinics had to operate  for  20  years—known  as  the  ‘designated  use  period’.  The  Commonwealth’s  interests  in  ensuring  compliance  with  this  condition  are  protected  mainly  through  a  combination  of  financial  or  similar  securities  over  the  clinic  premises, along with ‘step‐in’ rights that enable it, either directly or via a third  party,  to  take  control  of  a  clinic.    In  this  respect,  the  program  leaves  an  administrative role for the Department of Health and Ageing (DoHA) which  will continue long after the clinics are established and grant funds disbursed. 

Administering agency

1.11 DoHA is responsible for administering the GP Super Clinics program.  The  department’s  program  responsibilities  have  included  the:  provision  of  policy and program advice; development of program guidelines; assessment of  grant  applications;  selection  of  a  preferred  applicant  for  each  location;  negotiation of funding agreements; administration of funding agreements; and  reporting. 

Progress in implementing the GP Super Clinics program

1.12 As  at  5  April  2013,  funding  agreements  for  all  of  the  first  round  locations had been executed and 29 of the 36 clinics48 were operational, with a  further  two  providing  so-called  ‘early  services’.49  For  the  second  round,  funding agreements for 24 of the 28 clinic locations have been executed and  one  clinic  is  operational,  with  early  services  being  provided  from  existing 

                                                       46 Grant funds could not be used for ongoing costs such as rent, maintenance costs or the purchase of consumables. All funds, whether for capital, recurrent or relocation purposes, were required to be spent within four years of the award of

the grant. 47 Up to $15 000 per general practitioner, with lesser amounts to assist allied health professionals, nurses and pharmacy

services to relocate to the new facilities. The general practitioner relocation payment was discontinued in the second round. Payments were made to the GP Super Clinic, not to the individual relocating to the clinic. 48 While 37 clinics were announced in the first round, the Commonwealth withdrew funding from the proposed Sorell clinic

in Tasmania, leaving 36 clinics. 49 DoHA advised the ANAO that, to be classified as ‘early services’, these must be ‘additional to the services previously

available to the community and form part of the services at the GP Super Clinic when it is operational’.

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28

competitive and non‐competitive grant processes. Under the non‐competitive  grant process subsequently established by DoHA for specified locations, only  the entity specified by the Minister for Health and Ageing was eligible to apply  for  the  available  grant  for  the  relevant  location.  Typically,  non‐competitive  grant processes were adopted where a clinic was to be built by a state health  department,  regional  or  community  health  service,  Division  of  General  Practice or local council. Applications submitted under non‐competitive grant  process  were  subject  to  the  same  assessment  procedures  as  those  for  competitive grants. A number of the clinics, under both competitive and non‐ competitive  grant  processes,  were  also  to  be  jointly  funded  by  state  governments.  

Program Objectives and grant funding conditions

1.8 The  overarching  objective  of  the  GP  Super  Clinics  program  is  to  facilitate access to high quality, affordable, team based primary healthcare.45   More specifically, the program has ten objectives, which constitute the ‘core  characteristics’ that each of the clinics is expected to demonstrate. These reflect  key points of the GP Super Clinics policy, including: providing accessible and  affordable multidisciplinary care that is responsive to local community health  needs, having a greater focus on chronic disease prevention and management,  and providing education and training opportunities for medical students and  trainees. 

1.9 Under  the  GP  Super  Clinics  program,  the  grants  provided  for  individual clinics could incorporate up to three elements: 

 capital funding—for the purchase of land, construction, refurbishment,  and  building  fit‐out  costs;  and  the  purchase  of  medical,  information  technology and computing equipment. Up to five per cent of the total  grant  funds  could  also  be  used  for  preparatory  purposes,  including  costs  incurred  in  establishing  the  clinic  business  and  operating  structure; 

                                                       45 Department of Health and Ageing, GP Super Clinics national program guide 2008, DoHA, Canberra, 2008, p. 5.

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 recurrent funding—up to 12.5 per cent of the total grant funds could be  spent  on  administrative  support,  records  management,  centre  managers and nursing staff46; and  

 relocation incentives—subject to certain conditions, to assist GPs, allied  health professionals, nurses and pharmacy services relocate to the new  facilities.47  

1.10 A further condition of the funding was that the clinics had to operate  for  20  years—known  as  the  ‘designated  use  period’.  The  Commonwealth’s  interests  in  ensuring  compliance  with  this  condition  are  protected  mainly  through  a  combination  of  financial  or  similar  securities  over  the  clinic  premises, along with ‘step‐in’ rights that enable it, either directly or via a third  party,  to  take  control  of  a  clinic.    In  this  respect,  the  program  leaves  an  administrative role for the Department of Health and Ageing (DoHA) which  will continue long after the clinics are established and grant funds disbursed. 

Administering agency

1.11 DoHA is responsible for administering the GP Super Clinics program.  The  department’s  program  responsibilities  have  included  the:  provision  of  policy and program advice; development of program guidelines; assessment of  grant  applications;  selection  of  a  preferred  applicant  for  each  location;  negotiation of funding agreements; administration of funding agreements; and  reporting. 

Progress in implementing the GP Super Clinics program

1.12 As  at  5  April  2013,  funding  agreements  for  all  of  the  first  round  locations had been executed and 29 of the 36 clinics48 were operational, with a  further  two  providing  so-called  ‘early  services’.49  For  the  second  round,  funding agreements for 24 of the 28 clinic locations have been executed and  one  clinic  is  operational,  with  early  services  being  provided  from  existing 

                                                       46 Grant funds could not be used for ongoing costs such as rent, maintenance costs or the purchase of consumables. All funds, whether for capital, recurrent or relocation purposes, were required to be spent within four years of the award of

the grant. 47 Up to $15 000 per general practitioner, with lesser amounts to assist allied health professionals, nurses and pharmacy

services to relocate to the new facilities. The general practitioner relocation payment was discontinued in the second round. Payments were made to the GP Super Clinic, not to the individual relocating to the clinic. 48 While 37 clinics were announced in the first round, the Commonwealth withdrew funding from the proposed Sorell clinic

in Tasmania, leaving 36 clinics. 49 DoHA advised the ANAO that, to be classified as ‘early services’, these must be ‘additional to the services previously

available to the community and form part of the services at the GP Super Clinic when it is operational’.

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30

premises at another seven locations.   Eight second round clinics are currently  under construction. The progress made in implementing the GP Super Clinics  program is set out in Table 1.2. 

Table 1.2

Progress in establishing

the GP Super Clinics program

Progress

First round locations Second round locations

Clinic fully operational 29 1

Under construction 6(A) 8(B)

Funding agreement executed, construction not yet started 1 15

(C)

No funding agreement executed 0 4

Total 36 28

Notes: (A) Early services are being provided at two of these locations.

(B) Early services are being provided at two of these locations.

  (C) Early services are being provided at five of these locations.

1.13 The geographic locations and corresponding operational status of all  clinics are shown in the following map. 

Introduction

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Figure 1.1

Location of GP Super Clinics

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premises at another seven locations.   Eight second round clinics are currently  under construction. The progress made in implementing the GP Super Clinics  program is set out in Table 1.2. 

Table 1.2

Progress in establishing

the GP Super Clinics program

Progress

First round locations Second round locations

Clinic fully operational 29 1

Under construction 6

(A)

8(B)

Funding agreement executed, construction not yet started 1 15

(C)

No funding agreement executed 0 4

Total 36 28

Notes: (A) Early services are being provided at two of these locations.

(B) Early services are being provided at two of these locations.

  (C) Early services are being provided at five of these locations.

1.13 The geographic locations and corresponding operational status of all  clinics are shown  in the following map. 

Introduction

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Figure 1.1

Location of GP Super Clinics

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Grants administration framework 1.14 Grants  administration  is  an  important  activity  for  many  Australian  Government agencies, involving the payment of billions of dollars of public  funds each year. Commencing in December 2007, at the time the GP Super  Clinics program was under development, significant enhancements were made  to the Australian Governmentʹs grants administration framework in light of  significant  parliamentary  and  ANAO  concerns  with  the  administration  of  various  grants  programs  over  a  number  of  y

ears.  The  initial  enhancements 

included  the  introduction,  through  Finance  Minister’s  Instructions,  of  requirements for guidelines to be developed for any new discretionary grant  programs50  (such  as  the GP  Super  Clinics  program),  and  considered  by  the  Expenditure Review Committee of Cabinet (ERC). The December 2007 Finance  Minister’s Instructions further required: 

 agencies  to  have  adequate  arrangements  in  place  to  manage  grant  programs  in  accordance  with  re

levant  legislation,  regulations  and 

guidance; and 

 Ministers  to  receive  departmental  advice  on  the  merits  of  grant  applications relative to the guidelines for the relevant program before  making any decisions on discretionary grants (where funding decisions  are made by Ministers).51 

1.15 Revised Finance Minister’s Instructions issued in January 2009 retained  these requirements and expanded their coverage to all types of grant programs  (rather  than  being  limited  to  di

scretionary  grant  programs).  These  revised 

Instructions  were  introduced  to  reflect  government  decisions  made  in  December 2008 in response to the July 2008 report of the Strategic Review of  the  Administration  of  Australian  Government  Grant  Programs  (Strategic  Review). Also consistent with the recommendations of the Strategic Review,  with effect from 1 July 2009, the Commonwealth Grant Guidelines (CGGs)52 were 

                                                       50 Discretionary grants were defined as: ‘grants where the Minister or agency has discretion in determining whether or not a particular application receives funding and may or may not impose conditions in return for the funding’ and not

including ‘entitlement-based and demand-driven payments or rebates.’ 51 In the case of the GP Super Clinics program, the financial approver under the FMA Act and Regulations was a DoHA official, not the Minister. 52

The CGGs issued under Regulation 7A of the FMA Regulations, represent the whole-of-government policy framework for grants administration and apply to all departments and agencies subject to the Financial Management and Accountability Act 1997 (FMA Act). The CGGs also stipulate a number of policy and statutory requiremen

ts with which

Ministers must comply when performing the role of financial approver in relation to grants. The second edition of the CGGs was released in March 2013, with effect from 1 June 2013.

Introduction

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issued  and  related  changes  were  made  to  the  Financial  Management  and  Accountability Regulations 1997 (FMA Regulations). The CGGs: 

 outline the legislative and policy framework for grants administration,  including certain mandatory process requirements;  

 set out seven key principles for grants administration53; and 

 provide  guidance54  on  sound  practice  in  grants  administration  that  agencies should have regard to in implementing gr ant programs.  

1.16 During  election  campaigns  political  parties  typically  release  policy  statements and may make announcements of their intention to provide certain  benefits, services or facilities in the event the party is elected or re‐elected to  government. In the case of the proposed GP Super Clinics announced by the  ALP in the lead‐up to the November 2007 election, the election commitments  were co

nfirmed by the Strategic Budget Committee of Cabinet in December  2007. In the lead‐up to the 2010 election, the bulk of the second round funding  (for 23 clinics) was considered in the May 2010 Budget and funding identified,  while the specific clinic locations and the increased funding to cover the five  additional  locations  announced  during  the  August  2010  election  campaign  (making  a  total  of  28  clinics)  we

re  confirmed  by  the  Expenditure  Review 

Committee of Cabinet in October 2010.  

1.17 Whilst 16 first‐round GP Super Clinic grants were awarded before the  CGGs and associated FMA Regulations amendments came into force on 1 July  2009, the enhancement to the grants framework introduced between 2007 and  2009 applied to the program, as did the financial framework requirement for  the ‘proper use’ of public money, which pre‐

dated the CGGs and applied to all 

GP Super Clinic grants.55 

                                                       53 The seven key principles are: (1) Robust planning and design; (2) An outcomes orientation; (3) Proportionality; (4) Collaboration and partnership; (5) Governance and accountability; (6) Probity and transparency; and (7) Achieving

value with public money. 54 This guidance is supplemented by associated Finance Circulars issued by the Department of Finance and Deregulation and complemented by the ANAO Better Practice Guide, Implementing Better Practice Grants Administration, which was

revised and reissued in June 2010 following the promulgation of the CGGs. A previous version of the 2010 Better Practice Guide was published in 2002. 55 FMA Regulation 9 prohibits the approval of a spending proposal unless the approver is satisfied, after making

reasonable inquiries, that it would be a proper use of Commonwealth resources. ‘Proper use’ in this context means the ‘efficient, effective, economical and ethical use of Commonwealth resources that is not inconsistent with the policies of the Commonwealth’. Often, this is referred to as a ‘value for money’ test. Since 1 July 2009, the enhanced grants administration framework has also required decision-makers to record the basis upon which they were satisfied that a proposed grant represents proper use of public money. Prior to that date, the recording of reasons for decisions was recognised as better practice but was not a statutory requirement.

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Grants administration framework 1.14 Grants  administration  is  an  important  activity  for  many  Australian  Government agencies, involving the payment of billions of dollars of public  funds each year. Commencing in December 2007, at the time the GP Super  Clinics program was under development, significant enhancements were made  to the Australian Governmentʹs grants administration framework in light of  significant  parliamentary  and  ANAO  concerns  with  the  administration  of  various  grants  programs  over  a  number  of  y

ears.  The  initial  enhancements 

included  the  introduction,  through  Finance  Minister’s  Instructions,  of  requirements for guidelines to be developed for any new discretionary grant  programs50  (such  as  the GP  Super  Clinics  program),  and  considered  by  the  Expenditure Review Committee of Cabinet (ERC). The December 2007 Finance  Minister’s Instructions further required: 

 agencies  to  have  adequate  arrangements  in  place  to  manage  grant  programs  in  accordance  with  re

levant  legislation,  regulations  and 

guidance; and 

 Ministers  to  receive  departmental  advice  on  the  merits  of  grant  applications relative to the guidelines for the relevant program before  making any decisions on discretionary grants (where funding decisions  are made by Ministers).51 

1.15 Revised Finance Minister’s Instructions issued in January 2009 retained  these requirements and expanded their coverage to all types of grant programs  (rather  than  being  limited  to  di

scretionary  grant  programs).  These  revised 

Instructions  were  introduced  to  reflect  government  decisions  made  in  December 2008 in response to the July 2008 report of the Strategic Review of  the  Administration  of  Australian  Government  Grant  Programs  (Strategic  Review). Also consistent with the recommendations of the Strategic Review,  with effect from 1 July 2009, the Commonwealth Grant Guidelines (CGGs)52 were 

                                                       50 Discretionary grants were defined as: ‘grants where the Minister or agency has di scretion in determining whether or not a particular application receives funding and may or may not impose conditions in return for the funding’ and not

including ‘entitlement-based and demand-driven payments or rebates.’ 51 In the case of the GP Super Clinics program, the financial approver under the FMA Act and Regulations was a DoHA official, not the Minister. 52

The CGGs issued under Regulation 7A of the FMA Regulations, represent the whole-of-government policy framework for grants administration and apply to all departments and agencies subject to the Financial Management and Accountability Act 1997 (FMA Act). The CGGs also stipulate a number of policy and statutory requirements with which Ministers must comply when performing the role of financial approv

er in relation to grants. The second edition of the

CGGs was released in March 2013, with effect from 1 June 2013.

Introduction

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issued  and  related  changes  were  made  to  the  Financial  Management  and  Accountability Regulations 1997 (FMA Regulations). The CGGs: 

 outline the legislative and policy framework for grants administration,  including certain mandatory process requirements;  

 set out seven key principles for grants administration53; and 

 provide  guidance54  on  sound  practice  in  grants  administration  that  agencies should have regard to in implementing gr ant programs.  

1.16 During  election  campaigns  political  parties  typically  release  policy  statements and may make announcements of their intention to provide certain  benefits, services or facilities in the event the party is elected or re‐elected to  government. In the case of the proposed GP Super Clinics announced by the  ALP in the lead‐up to the November 2007 election, the election commitments  were co

nfirmed by the Strategic Budget Committee of Cabinet in December  2007. In the lead‐up to the 2010 election, the bulk of the second round funding  (for 23 clinics) was considered in the May 2010 Budget and funding identified,  while the specific clinic locations and the increased funding to cover the five  additional  locations  announced  during  the  August  2010  election  campaign  (making  a  total  of  28  clinics)  we

re  confirmed  by  the  Expenditure  Review 

Committee of Cabinet in October 2010.  

1.17 Whilst 16 first‐round GP Super Clinic grants were awarded before the  CGGs and associated FMA Regulations amendments came into force on 1 July  2009, the enhancement to the grants framework introduced between 2007 and  2009 applied to the program, as did the financial framework requirement for  the ‘proper use’ of public money, which pre‐

dated the CGGs and applied to all 

GP Super Clinic grants.55 

                                                       53 The seven key principles are: (1) Robust planning and design; (2) An outcomes orientation; (3) Proportionality; (4) Collaboration and partnership; (5) Governance and accountability; (6) Probity and transparency; and (7) Achieving

value with public money. 54 This guidance is supplemented by associated Finance Circulars issued by the Department of Finance and Deregulation and complemented by the ANAO Better Practice Guide, Implementing Better Practice Grants Administration, which was

revised and reissued in June 2010 following the promulgation of the CGGs. A previous version of the 2010 Better Practice Guide was published in 2002. 55 FMA Regulation 9 prohibits the approval of a spending proposal unless the approver is satisfied, after making

reasonable inquiries, that it would be a proper use of Commonwealth resources. ‘Proper use’ in this context means the ‘efficient, effective, economical and ethical use of Commonwealth resources that is not inconsistent with the policies of

the Commonwealth’. Often, this is referred to as a ‘value for money’ test. Since 1 July 2009, the enhanced grants administration framework has also required decision-makers to record the basis upon which they were satisfied that a proposed grant represents proper use of public money. Prior to that date, the recording of reasons for decisions was recognised as better practice but was not a statutory requirement.

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1.18 The GP Super Clinics program is an executive grants scheme without a  legislative basis.56 

Audit objective, scope, criteria and methodology

Audit objective

1.19 The objective of the audit was to assess the effectiveness of DoHA’s  administration  of  the  GP  Super  Clinics  program  to  support  improved  community access to integrated GP and primary health care services.  

Audit scope

1.20 The audit examined DoHA’s compliance with the mandatory aspects of  the CGGs and the extent to which DoHA adopted sound practices in relation  to  the  CGG  key  principles  for  grants  administ

ration.  In  cases  where grants 

were  approved  prior  to  the  CGGs  coming  into  effect  the  audit  examined  compliance  with  the  applicable  parts  of  the  relevant  Finance  Minister’s  Instructions of December 2007 and January 2009. 

1.21 Under the GP Super Clinics program guidelines, clinics funded by the  program ‘must complement and enhance existing health services’.57 While the  audit examined whether DoHA had considered the issue of local health n

eeds 

in its administration of the program, it did not assess whether GP Super Clinics  had  a  direct  business  or  economic  impact  on  existing  primary  healthcare  facilities. 

Audit criteria

1.22 The audit criteria examined whether DoHA: 

                                                       56 The Financial Framework Legislation Amendment Act (No. 3) 2012 (the Act), which commenced on 28 June 2012, was enacted in response to the High Court decision of 20 June 2012 in Williams v Commonwealth, which related to the

validity of Commonwealth spending programs not supported by legislation other than an appropriation Act. The Act amended the Financial Management and Accountability Act 1997 (the FMA Act) with the purpose of establishing legislative authority for the Commonwealth to make payments in relation to particular programs, grants and arrangements; and transitional provisions were included in the Act with the purpose of protecting programs, grants and arrangements in place before the Act commenced. The Act also amended the Financial Management and Accountability Regulations 1997 (FMA R

egulations) to include a new schedule which specifies relevant grants and

programs drawing legislative authority from the FMA Act for payments, where such authority does not otherwise exist. Schedule 1AA, Part 4 (item 415.033) of the FMA Regulations specified ‘Health Infrastructure’ and government spending intended to ‘invest in the renewal and refurbishment of acute and primary care facilities, medical technology equipment, and major medical research facilities and health related projects’. 57

Department of Health and Ageing, GP Super Clinics national program guide 2008, p. 14 and p. 35 Department of Health and Ageing, GP Super Clinics national program guide 2010, p. 24.

Introduction

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 established and initiated the program so that it was fit for the purpose  of  delivering  infrastructure  grants  intended  to  improve  community  access to integrated GP and primary healthcare services; 

 established  an  appropriate  application  and  assessment  process,  including  with  respect  to  the  provision  of  Ministerial  advice  on  assessment outcomes; 

 appropriately  managed  the  negotiation  and  financial  approval  of  fundi

ng agreements;  

 effectively  managed  clinic  roll‐outs  from  execution  of  funding  agreements through to clinics becoming fully operational; and 

 evaluated  and  reported  on  clinic  performance  and  compliance  with  relevant  funding  agreements,  and  has  an  appropriate  program  evaluation strategy in place. 

Audit methodology

1.23 The  audit  methodology  was  designed  to  ensure  that  there  was  sufficient and appropriate evidence to form a reliable audit opinion. The audit  methodology included: 

 interviewin

g  key  personnel  at  DoHA’s  Central  Office  regarding  the  development, roll‐out and evolution of the program; 

 interviewing medical advisers who sat on the application assessment  panels; 

 contacting  a  range  of  stakeholders  and  inviting  comments  on  the  program and its administration by DoHA; 

 reviewing  relevant  DoHA  documentation,  including  policies,  procedures, agreements, briefings, advice and correspondence; 

 visiting 12 projects funded under the first round and interviewing the  relevant g

rant recipients, and clinic directors where possible; 

 examining the hard copy and electronic files for a sample of 36 of the 65  proposed  clinic  locations,  including  the  documents  relating  to  the  assessment of applications, the awarding of grants, the administration  of the roll‐out, and the operational performance of the clinics; and 

 examining patient presentation data trends across all of the operational  clinics. 

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1.18 The GP Super Clinics program is an executive grants scheme without a  legislative basis.56 

Audit objective, scope, criteria and methodology

Audit objective

1.19 The objective of the audit was to assess the effectiveness of DoHA’s  administration  of  the  GP  Super  Clinics  program  to  support  improved  community access to integrated GP and primary health care services.  

Audit scope

1.20 The audit examined DoHA’s compliance with the mandatory aspects of  the CGGs and the extent to which DoHA adopted sound practices in relation  to  the  CGG  key  principles  for  grants  administ

ration. In  cases  where grants 

were  approved  prior  to  the  CGGs  coming  into  effect  the  audit  examined  compliance  with  the  applicable  parts  of  the  relevant  Finance  Minister’s  Instructions of December 2007 and January 2009. 

1.21 Under the GP Super Clinics program guidelines, clinics funded by the  program ‘must complement and enhance existing health services’.57 While the  audit examined whether DoHA had considered the issue of local health n

eeds 

in its administration of the program, it did not assess whether GP Super Clinics  had  a  direct  business  or  economic  impact  on  existing  primary  healthcare  facilities. 

Audit criteria

1.22 The audit criteria examined whether DoHA: 

                                                       56 The Financial Framework Legislation Amendment Act (No. 3) 2012 (the Act), which commenced on 28 June 2012, was enacted in response to the High Court decision of 20 June 2012 in Williams v Commonwealth, which related to the

validity of Commonwealth spending programs not supported by legislation other than an appropriation Act. The Act amended

the Financial Management and Accountability Act 1997 (the FMA Act) with the purpose of establishing legislative authority for the Commonwealth to make payments in relation to particular programs, grants and arrangements; and transitional provisions were included in the Act with the purpose of protecting programs, grants and arrangements in place before the Act commenced. The Act also amended the Financial Management and Accountability Regulations 1997 (FMA Regulations) to include a new schedule which specifies relevant grants and programs drawing legislative authority from the FMA Act for payments, where such authority does not otherwise exist. Schedule 1AA, Part 4 (item 415.033) of the FMA Regulations specified ‘Health Infrastructure’ and government spending intended to ‘invest in the renewal and refurbishment of acute and primary care facilities,

medical technology equipment,

and major medical research facilities and health related projects’. 57 Department of Health and Ageing, GP Super Clinics national program guide 2008, p. 14 and p. 35 Department of Health and Ageing, GP Super Clinics national program guide 2010, p. 24.

Introduction

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 established and initiated the program so that it was fit for the purpose  of  delivering  infrastructure  grants  intended  to  improve  community  access to integrated GP and primary healthcare services; 

 established  an  appropriate  application  and  assessment  process,  including  with  respect  to  the  provision  of  Ministerial  advice  on  assessment outcomes; 

 appropriately  managed  the  negotiation  and  financial  approval  of  fundi

ng agreements;  

 effectively  managed  clinic  roll‐outs  from  execution  of  funding  agreements through to clinics becoming fully operational; and 

 evaluated  and  reported  on  clinic  performance  and  compliance  with  relevant  funding  agreements,  and  has  an  appropriate  program  evaluation strategy in place. 

Audit methodology

1.23 The  audit  methodology  was  designed  to  ensure  that  there  was  sufficient and appropriate evidence to form a reliable audit opinion. The audit  methodology included: 

 interviewin

g  key  personnel  at  DoHA’s  Central  Office  regarding  the  development, roll‐out and evolution of the program; 

 interviewing medical advisers who sat on the application assessment  panels; 

 contacting  a  range  of  stakeholders  and  inviting  comments  on  the  program and its administration by DoHA; 

 reviewing  relevant  DoHA  documentation,  including  policies,  procedures, agreements, briefings, advice and correspondence; 

 visiting 12 projects funded under the first round and interviewing the  relevant g

rant recipients, and clinic directors where possible; 

 examining the hard copy and electronic files for a sample of 36 of the 65  proposed  clinic  locations,  including  the  documents  relating  to  the  assessment of applications, the awarding of grants, the administration  of the roll‐out, and the operational performance of the clinics; and 

 examining patient presentation data trends across all of the operational  clinics. 

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Previous audit coverage 1.24 The ANAO has not previously audited DoHA’s administration of the  GP  Super  Clinics  program.  The  ANAO  has,  however,  examined  DoHA’s  administration  of  other  health  care  infrastructure  grants  programs  in  Audit  Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants  Program  and  Audit  Report  No.45  2011-12  Administration  of  the  Health  and  Hospitals Fund. 

Audit standards and cost

1.25 The  audit  was  conducted  in  accordance  with  ANAO  auditing  standards, at a cost to the A NAO of around $560 000. 

Structure of the audit report 1.26 The structure of the audit report is outlined in Table 1.3. 

Table 1.3

Structure

of the audit report

Chapter 2

From Policy to Program

This chapter examines DoHA’s role in developing the GP Super Clinics program based on the August 2007 GP Super Clinics policy and subsequent decisions by the Government and the Minister for Health and Ageing.

Chapter 3

Selection Processes

This chapter examines DoHA’s process for assessing applications to select a preferred applicant to receive funding under the GP Super Clinics program.

Chapter 4  

Rolling Out the Clinics

This chapter examines how DoHA administered the program from the completion of the assessment process to getting clinics into operation. It focuses on the major issues that arose during this period and DoHA’s response to manage risk, including issues that potentially led to financial risks and delays.

Chapter 5

Reporting and Assessing Clinic and Program Outcomes

This chapter examines how DoHA developed and implemented a program evaluation framework, including key performance indicators. It also includes the ANAO’s assessment of the performance of some aspects of the operational clinics in the ANAO’s sample, as well as looking at patient presentation trends across the program as a whole. Finally it examines how DoHA is using the information submitted by operational clinics, both in the context of individual clinics and the program as a whole.

 

From Policy to Program

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2. From Policy to Program

This chapter examines DoHA’s role in developing the GP Super Clinics program based  on  the  August  2007  GP  Super  Clinics  policy  and  subsequent  decisions  by  the  Government and the Minister for Health and Ageing. 

Introduction 2.1 The GP Super Clinics program was one of the first infrastructure grants  programs  focussed  on  privately  provided  healthcare  services  to  be  administered by DoHA. As a relatively new function for the department, there  were many challenges in progressing the policy from an election commitment  to a government funded grants program. 

2.2 As outlined in chapter 1, the GP Super Clinics policy was set out in the  document New Directi

ons for Australia’s Health: Delivering GP Super Clinics to  local communities released in August 2007. The policy provided the basis for  implementing  the  program  once  the  ALP  formed  government.  Under  the  policy, clinics were intended to help get ‘doctors and other health professionals  into  areas  that  need  them  most’.  The  policy  also  placed  a  high  priority  on  communicating with key stakeholders and engaging local health professional

so that clinics were tailored to local health needs. 

2.3 From the early stages of its announcement and implementation, the GP  Super Clinics policy and program has been subject to significant stakeholder  interest.  The  Australian  Medical  Association  (AMA),  for  example,  while  supporting some elements of the program such as the provision of additional  clinical  training  facilities  through  the  clinics58,  viewed  the  policy  as  lacking  detail59,  and  the  selection  of  clinic  locations  as  lacking  transparency  and  consultation  with  the  medical  profession.60  The  AMA  also  made  representations  to  the  Auditor-General  in  October  2011  to  consider  commencing an audit of the program. 

2.4 This  chapter  examines  the  progression  of  GP  Super  Clinics  from  an  election policy commitment to inception as a program by considering: 

                                                       58 AMA, ‘Labor’s GP Super Clinics—More Questions than Answers’, media release, 27 August 2007. 59

Ibid.

60 AMA, ‘GP Super Clinics—Another example of failing to consult with the medical profession’, media release, 9 February 2011; AMA, ‘GP Super Clinics not so super—need for a proper audit’, media release, 12 October 2011.

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Previous audit coverage 1.24 The ANAO has not previously audited DoHA’s administration of the  GP  Super  Clinics  program.  The  ANAO  has,  however,  examined  DoHA’s  administration  of  other  health  care  infrastructure  grants  programs  in  Audit  Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants  Program  and  Audit  Report  No.45  2011-12  Administration  of  the  Health  and  Hospitals Fund. 

Audit standards and cost

1.25 The  audit  was  conducted  in  accordance  with  ANAO  auditing  standards, at a cost to the A NAO of around $560 000. 

Structure of the audit report 1.26 The structure of the audit report is outlined in Table 1.3. 

Table 1.3

Structure

of the audit report

Chapter 2

From Policy to Program

This chapter examines DoHA’s role in developing the GP Super Clinics program based on the August 2007 GP Super Clinics policy and subsequent decisions by the Government and the Minister for Health and Ageing.

Chapter 3

Selection Processes

This chapter examines DoHA’s process for assessing applications to select a preferred applicant to receive funding under the GP Super Clinics program.

Chapter 4  

Rolling Out the Clinics

This chapter examines how DoHA administered the program from the completion of the assessment process to getting clinics into operation. It focuses on the major issues that arose during this period and DoHA’s response to manage risk, including issues

that

potentially led to financial risks and delays.

Chapter 5

Reporting and Assessing Clinic and Program Outcomes

This chapter examines how DoHA developed and implemented a program evaluation framework, including key performance indicators. It also includes the ANAO’s assessment of the performance of some aspects of the operational clinics in the ANAO’s sample, as well as looking at patient presentation trends across the program as a whole. Finally it examines how DoHA is using the information submitted by operational clinics, both in the context of individual clinics and the program as a whole.

 

From Policy to Program

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2. From Policy to Program

This chapter examines DoHA’s role in developing the GP Super Clinics program based  on  the  August  2007  GP  Super  Clinics  policy  and  subsequent  decisions  by  the  Government and the Minister for Health and Ageing. 

Introduction 2.1 The GP Super Clinics program was one of the first infrastructure grants  programs  focussed  on  privately  provided  healthcare  services  to  be  administered by DoHA. As a relatively new function for the department, there  were many challenges in progressing the policy from an election commitment  to a government funded grants program. 

2.2 As outlined in chapter 1, the GP Super Clinics policy was set out in the  document New Directi

ons for Australia’s Health: Delivering GP Super Clinics to  local communities released in August 2007. The policy provided the basis for  implementing  the  program  once  the  ALP  formed  government.  Under  the  policy, clinics were intended to help get ‘doctors and other health professionals  into  areas  that  need  them  most’.  The  policy  also  placed  a  high  priority  on  communicating with key stakeholders and engaging local health professional

so that clinics were tailored to local health needs. 

2.3 From the early stages of its announcement and implementation, the GP  Super Clinics policy and program has been subject to significant stakeholder  interest.  The  Australian  Medical  Association  (AMA),  for  example,  while  supporting some elements of the program such as the provision of additional  clinical  training  facilities  through  the  clinics58,  viewed  the  policy  as  lacking  detail59,  and  the  selection  of  clinic  locations  as  lacking  transparency  and  consultation  with  the  medical  profession.60  The  AMA  also  made  representations  to  the  Auditor-General  in  October  2011  to  consider  commencing an audit of the program. 

2.4 This  chapter  examines  the  progression  of  GP  Super  Clinics  from  an  election policy commitment to inception as a program by considering: 

                                                       58 AMA, ‘Labor’s GP Super Clinics—More Questions than Answers’, media release, 27 August 2007. 59

Ibid.

60 AMA, ‘GP Super Clinics—Another example of failing to consult with the medical profession’, media release, 9 February 2011; AMA, ‘GP Super Clinics not so super—need for a proper audit’, media release, 12 October 2011.

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 how the clinic locations were announced and the factors that influenced  those locations; 

 DoHA’s actions in developing the program, including the scope of its  advice to the Government and Minister for Health and Ageing; 

 grant funding arrangements; and 

 the location of clinics and distribution of funding. 

Announcement of the 32 initial clinic locations 2.5 The  ALP’s  GP  Super  Clinics  policy  stated  that  a  Labor  government  would ‘work with the states and territories to identify areas most in need of  services, as well as areas which would benefit from co‐location of government  funded services’. As to the specific location of clinics, the policy provided that  the ‘factors that will be taken into account will include’ areas: 

 where there is currently p

oor access to services, particularly where this 

is due to shortages of doctors; 

 where there is currently poor health infrastructure; 

 where  a  clinic  could  help  take  the  pressure  off  local  public  hospital  services; and 

 with  high  levels  of  chronic  disease  and/or  demographics  with  high  needs, such as large numbers of children or elderly residents.  

2.6 The ALP progressively announced the locations of 3261 proposed clinics  in the lead‐up to the November 2007 federal election, along with the indicative  maximum level of Commonwealth grant funding available for each location.  Maximum indicative funding amounts in the first round varied significantly,  ranging from $1 million to $12.5 million. 

2.7  The  relevant  ALP  media  releases  typically  made  broad  mention  of  some of the proposed services that would be available through the clinics, and  stated

  that  a  Labor  government  would  work  with  local  doctors,  health  professionals, and the local community to finalise the details of the services.  The  announcements  also  generally  gave  a  reason  or  reasons  for  selecting  a 

                                                       61 Clinics announced in 2007 included a Hobart clinic (‘Hobart Eastern Shores’) which was to have branches at two locations approximately 15 kilometres apart. These locations were subsequently funded through separate grant

processes, and funding agreements were executed with two different recipients. For the purposes of this audit they are treated as two clinics.

From Policy to Program

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particular location—that there was a shortage of GPs in the area, that it was an  area of high population growth, or that the clinic would help take pressure off  the local hospital.  

2.8 Most  locations  announced  were  identified  by  reference  to  a  town,  regional city, suburb, or occasionally an electorate62, although some were very  specific (s

uch as in the grounds of a nominated local hospital) or alternatively  were fairly broad (such as ‘Brisbane Southside’). 

Developing the program 2.9 During  election  campaigns  political  parties  typically  release  policy  statements and may make announcements of their intention to provide certain  benefits, services or facilities in the event the party is elected or re‐elected to  government. As part of the process for implementing election commitments  following  an  election,  agencies  are  responsible  for  assessing  and  providing  early advice to government on options for seeking to fund the commitments.  Where election commitments are

 intended to be implemented through grants, 

it is necessary to consider the most appropriate administrative arrangements  for  considering  those  proposals,  including  the  source  of  funding  for  commitments  that  may  later  be  approved  to  receive  payments  of  public  money. Any significant risks to the implementation of the policy should also  be identified together with advice on appropriate mitigation strategies. 

2.10 In less than four weeks f

ollowing the election of the new government in 

2007, DoHA developed a new policy proposal (NPP) for implementation of the  GP  Super  Clinics  policy  through  the  establishment  of  a  dedicated  grants  program to fund clinics in the announced locations. This was done against the  backdrop of the development of an enhanced grants administration framework  by  the  incoming  government.  The  initial  enhancements,  introduced  in  December  2007  through  Finance  Minister’s

  Instructions,  included  the 

requirements for program guidelines to be developed for new discretionary  grant  programs,  and  consideration  of  these  guidelines  by  the  Expenditure  Review Committee (ERC) of Cabinet.  

2.11 From this early stage, DoHA recognised that there were a number of  risks  to  successful  implementation  of  the  program.  These  risks  included  attracting appropriate workforces to the clinics, ensuring the financial viability 

                                                       62 Examples of electorates identified we re Charlton and Riverina, both in New South Wales.

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 how the clinic locations were announced and the factors that influenced  those locations; 

 DoHA’s actions in developing the program, including the scope of its  advice to the Government and Minister for Health and Ageing; 

 grant funding arrangements; and 

 the location of clinics and distribution of funding. 

Announcement of the 32 initial clinic locations 2.5 The  ALP’s  GP  Super  Clinics  policy  stated  that  a  Labor  government  would ‘work with the states and territories to identify areas most in need of  services, as well as areas which would benefit from co‐location of government  funded services’. As to the specific location of clinics, the policy provided that  the ‘factors that will be taken into account will include’ areas: 

 where there is currently p

oor access to services, particularly where this 

is due to shortages of doctors; 

 where there is currently poor health infrastructure; 

 where  a  clinic  could  help  take  the  pressure  off  local  public  hospital  services; and 

 with  high  levels  of  chronic  disease  and/or  demographics  with  high  needs, such as large numbers of children or elderly residents.  

2.6 The ALP progressively announced the locations of 3261 proposed clinics  in the lead‐up to the November 2007 federal election, along with the indicative  maximum level of Commonwealth grant funding available for each location.  Maximum indicative funding amounts in the first round varied significantly,  ranging from $1 million to $12.5 million. 

2.7  The  relevant  ALP  media  releases  typically  made  broad  mention  of  some of the proposed services that would be available through the clinics, and  stated

  that  a  Labor  government  would  work  with  local  doctors,  health  professionals, and the local community to finalise the details of the services.  The  announcements  also  generally  gave  a  reason  or  reasons  for  selecting  a 

                                                       61 Clinics announced in 2007 included a Hobart clinic (‘Hobart Eastern Shores’) which was to have branches at two locations approximately 15 kilometres apart. These locations were subsequently funded through separate grant

processes, and funding agreements were executed with two different recipients. For the purposes of this audit they are treated as two clinics.

From Policy to Program

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

39

particular location—that there was a shortage of GPs in the area, that it was an  area of high population growth, or that the clinic would help take pressure off  the local hospital.  

2.8 Most  locations  announced  were  identified  by  reference  to  a  town,  regional city, suburb, or occasionally an electorate62, although some were very  specific (s

uch as in the grounds of a nominated local hospital) or alternatively  were fairly broad (such as ‘Brisbane Southside’). 

Developing the program 2.9 During  election  campaigns  political  parties  typically  release  policy  statements and may make announcements of their intention to provide certain  benefits, services or facilities in the event the party is elected or re‐elected to  government. As part of the process for implementing election commitments  following  an  election,  agencies  are  responsible  for  assessing  and  providing  early advice to government on options for seeking to fund the commitments.  Where election commitments are

 intended to be implemented through grants, 

it is necessary to consider the most appropriate administrative arrangements  for  considering  those  proposals,  including  the  source  of  funding  for  commitments  that  may  later  be  approved  to  receive  payments  of  public  money. Any significant risks to the implementation of the policy should also  be identified together with advice on appropriate mitigation strategies. 

2.10 In less than four weeks f

ollowing the election of the new government in 

2007, DoHA developed a new policy proposal (NPP) for implementation of the  GP  Super  Clinics  policy  through  the  establishment  of  a  dedicated  grants  program to fund clinics in the announced locations. This was done against the  backdrop of the development of an enhanced grants administration framework  by  the  incoming  government.  The  initial  enhancements,  introduced  in  December  2007  through  Finance  Minister’s

  Instructions,  included  the 

requirements for program guidelines to be developed for new discretionary  grant  programs,  and  consideration  of  these  guidelines  by  the  Expenditure  Review Committee (ERC) of Cabinet.  

2.11 From this early stage, DoHA recognised that there were a number of  risks  to  successful  implementation  of  the  program.  These  risks  included  attracting appropriate workforces to the clinics, ensuring the financial viability 

                                                       62 Examples of electorates identified were Charlton and Riverina, both in New South Wales.

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of clinics and the potential construction delays associated with capital works  projects.   DoHA’s advice to the new government was that these risks could be  addressed  through  a  variety  of  means,  such  as  economic  incentives,  grant  assessment processes and contract management measures.    

2.12 A  further  risk  identified  by  DoHA  in  its  advice  was  the  degree  of  ‘acceptance and support’ for the an

nounced clinics by local communities and 

health  professionals,  including  possible  concerns  about  impacts  on  existing  health services. The department proposed that this risk be managed through  consultations with stakeholders both nationally and at the local level, with the  latter focussing on ensuring that proposals address local needs and priorities,  and complement existing services. However, while the department provided  the Minister with some general background information on the

 Divisions of 

General Practice in which the announced clinics were located, its advice did  not  address  whether  it  was  aware  of  any  particular  implementation  risks  applying  to  the  specific  locations  announced  in  the  context  of  the  2007  election.63 A range of options were potentially available for doing so, including  some analysis, in the time available64, of the extent to which the announced  locations po

tentially satisfied some or all of the four factors outlined in the  incoming government’s GP Super Clinics policy.  However, the department  advised  the  ANAO  that  it  considered  there  was  insufficient  and  unsophisticated  data  available  at  the  time  to  draw  conclusions  on  location  issues.  

2.13 A  broad  analysis  of  the  proposed  clinic  locations  (that  is,  the  32  announced  in  2007  and  the  33  announced  subsequently)  against  the  four  factors outlined in the

 ALP’s policy was eventually undertaken and released  by  DoHA  in  early  2011  in  response  to  a  question  on  notice  at  Senate 

                                                       63 In this context, the ANAO’s 2002 Better Practice Guide — Administration of Grants noted that: ‘Even where the Government does take a specific decision regarding the establishment of a program, agencies should still consider

whether further needs analysis would assist in targeting the areas or projects most in need of funding assistance, consistent with the Government’s objectives. For example, the Government may establish a program to improve regional Australia’s access to information technology. In these circumstances, the relevant agency should consider conducting analysis to determine those regions in greatest need or those services needed most’, p.8. The same sentiment is expressed in the ANAO’s 2010 Better Practice Guide-Implementing Better Practice Grants Administration: ‘it is advisable that agencies consider, as part of t

he implementation process, whether further needs analysis would

assist in ensuring the available funding will be directed towards funding recipients or projects that will maximise the effectiveness of, and value for money achieved by, the program’, p. 21. 64 The time available included the caretaker period as well as the period immediately after the 2007 election and the

deadline for the NPP.

From Policy to Program

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Estimates.65   This post-hoc analysis is reproduced in summary form in Table  2.1.  

Table 2.1

Number of

clinics meeting GP Super Clinic location factors

Number of clinics (first round) Number of clinics (second round)

Total across both rounds

Meeting all five factors 0 4 4

Meeting four factors 1 7 8

Meeting three factors 5 9 14

Meeting two factors 25 8 33

Meeting one factor 6 0 6

Source: ANAO analysis.

2.14 DoHA’s 2011 analysis is against five factors,  not four, with the fifth  being  ‘high  population  growth’.  Population  growth  was  mentioned  in  the  ALP’s  2007  GP  Super  Clinics  po

licy66,  and  a  number  of  ALP  press  releases 

announcing  proposed  clinics  in  2007  made  explicit  reference  to  population  growth  as  an  important  consideration  in  choosing  the  respective  locations.  These  references  provided  the  basis  for  the  inclusion  of  high  population  growth in DoHA’s 2011 analysis alongside the four specific location factors  contained in the ALP’s 2007 GP Super Clinics policy.   

2.15 DoHA’s 2011 analysis indicates t

hat a high proportion (83.8 per cent) of 

first round clinic locations met one or two of the five factors. Of the six first  round  clinics  that  met  one  factor,  five  of  these  met  the  ‘high  population  growth’  factor.  Conversely,  a  reasonably  high  proportion  (71.4  per  cent)  of  second round clinics met three or more factors. 

2.16 The 2007 NPP, which included the list of 32

 announced locations and 

their  respective  funding  amounts,  was  agreed  by  the  Strategic  Budget  Committee of Cabinet on 17 December 2007. Following government approval,  DoHA  immediately  provided  the  Minister  with  advice  on  a  suggested  approach for implementing the policy. This advice, which was partly informed  by previous discussions between the Minister and the department, canvassed a 

                                                       65 Answer to question on notice, E11-149, Senate Community Affairs Committee. Additional Estimates 2010-11, 23 February 2011.

66 The policy noted that ‘fast growing outer suburbs…tend[ed] to be under serviced by health professionals’.

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of clinics and the potential construction delays associated with capital works  projects.   DoHA’s advice to the new government was that these risks could be  addressed  through  a  variety  of  means,  such  as  economic  incentives,  grant  assessment processes and contract management measures.    

2.12 A  further  risk  identified  by  DoHA  in  its  advice  was  the  degree  of  ‘acceptance and support’ for the an

nounced clinics by local communities and 

health  professionals,  including  possible  concerns  about  impacts  on  existing  health services. The department proposed that this risk be managed through  consultations with stakeholders both nationally and at the local level, with the  latter focussing on ensuring that proposals address local needs and priorities,  and complement existing services. However, while the department provided  the Minister with some general background information on the

 Divisions of 

General Practice in which the announced clinics were located, its advice did  not  address  whether  it  was  aware  of  any  particular  implementation  risks  applying  to  the  specific  locations  announced  in  the  context  of  the  2007  election.63 A range of options were potentially available for doing so, including  some analysis, in the time available64, of the extent to which the announced  locations po

tentially satisfied some or all of the four factors outlined in the  incoming government’s GP Super Clinics policy.  However, the department  advised  the  ANAO  that  it  considered  there  was  insufficient  and  unsophisticated  data  available  at  the  time  to  draw  conclusions  on  location  issues.  

2.13 A  broad  analysis  of  the  proposed  clinic  locations  (that  is,  the  32  announced  in  2007  and  the  33  announced  subsequently)  against  the  four  factors outlined in the

 ALP’s policy was eventually undertaken and released  by  DoHA  in  early  2011  in  response  to  a  question  on  notice  at  Senate 

                                                       63 In this context, the ANAO’s 2002 Better Practice Guide — Administration of Grants noted that: ‘Even where the Government does take a specific decision regarding the establishment of a program, agencies should still consider

whether further needs analysis would assist in targeting the areas or projects most in need of funding assistance, consistent with the Government’s objectives. For example, the Government may establish a program to improve regional Australia’s access to information technology. In these circumstances, t

he relevant agency should consider

conducting analysis to determine those regions in greatest need or those services needed most’, p.8. The same sentiment is expressed in the ANAO’s 2010 Better Practice Guide-Implementing Better Practice Grants Administration: ‘it is advisable that agencies consider, as part of the implementation process, whether further needs analysis would assist in ensuring the available funding will be directed towards funding recipients or projects that will maximise the effectiveness of, and value for money achieved by, the program’, p. 21. 64

The time available included the caretaker period as well as the period immediately after the 2007 election and the deadline for the NPP.

From Policy to Program

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Estimates.65   This post-hoc analysis is reproduced in summary form in Table  2.1.  

Table 2.1

Number of

clinics meeting GP Super Clinic location factors

Number of clinics (first round) Number of clinics (second round)

Total across both rounds

Meeting all five factors 0 4 4

Meeting four factors 1 7 8

Meeting three factors 5 9 14

Meeting two factors 25 8 33

Meeting one factor 6 0 6

Source: ANAO analysis.

2.14 DoHA’s 2011 analysis is against five factors,  not four, with the fifth  being  ‘high  population  growth’.  Population  growth  was  mentioned  in  the  ALP’s  2007  GP  Super  Clinics  policy66,  and  a  number  of  ALP  press  releases  announcing  proposed  clinics  in  2007  made  explicit  reference  to  population  growth  as  an  important  consideration  in  choosing  the  respective  locations.  These  references  provided  the  basis  for  the  inclusion  of  high  population  growth in DoHA’s 201

1 analysis alongside the four specific location factors  contained in the ALP’s 2007 GP Super Clinics policy.   

2.15 DoHA’s 2011 analysis indicates that a high proportion (83.8 per cent) of  first round clinic locations met one or two of the five factors. Of the six first  round  clinics  that  met  one  factor,  five  of  these  met  the  ‘high  population  growth’  factor.  Conversely,  a  reas

onably  high  proportion  (71.4  per  cent)  of 

second round clinics met three or more factors. 

2.16 The 2007 NPP, which included the list of 32 announced locations and  their  respective  funding  amounts,  was  agreed  by  the  Strategic  Budget  Committee of Cabinet on 17 December 2007. Following government approval,  DoHA  immediately  provided  the  Minister  with  advice  on  a  suggested  approach for implementing the policy. This advice, which was

 partly informed 

by previous discussions between the Minister and the department, canvassed a 

                                                       65 Answer to question on notice, E11-149, Senate Community Affairs Committee. Additional Estimates 2010-11, 23 February 2011. 66

The policy noted that ‘fast growing outer suburbs…tend[ed] to be under serviced by health professionals’.

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range of matters, including: developing the grant program guidelines, seeking  the  views  of  health  sector  stakeholders;  engaging  with  state  and  territory  governments  about  program  implementation;  funding  processes,  including  assessment  of  grant  applications;  and  consulting  with  local  communities  in  areas where the proposed clinics were intended to be located. On 27 December  2007, the Minister formally endorsed DoHA’s implementation approach.  

2.17 As discussed in paragraph

 2.45, while some information and analysis 

was provided to the Minister’s office by DoHA on a number of factors that  might inform the choice of clinic locations in the second round in 2010, that  information was of a relatively informal nature and did not take the form of  advice to the Minister. As in the first round, the Minister did not recei

ve advice 

as  to  whether  the  department  was  aware  of  any  particular  implementation  risks applying to specific locations. The ANAO has previously observed that  departments should advise Ministers on any measures considered necessary to  manage risks to the Commonwealth in achieving value for money when acting  on election commitments67, and there would have been benefit in providing  specific advice to the Minister on whether the department was aw

are of any 

particular implementation risks applying to clinic locations announced in the  2007 and 2010 election context.68 

Recommendation No.1 2.18 To inform the development and administration of infrastructure grants  activities,  the  ANAO  recommends  that  DoHA  advise  Ministers  of  any  measures  considered  necessary  in  managing  any  significant  risks  to  the  effective implementation of election policy commitments. 

DoHA respons

e: 

2.19 Agreed. 

                                                       67 ANAO Audit Report No.14 2007-08, Performance Audit of the Regional Partnerships Program, Volume 2, p.148. 68

The ANAO similarly observed in a previous grants administration audit that there was scope for DoHA to better assist the Health Minister through more comprehensive advice: ANAO Audit Report No.45 2011-12 Administration of the Health and Hospitals Fund, p. 86.

From Policy to Program

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Developing program guidelines

2.20 The Minister approved draft program guidelines in late January 2008.69   The guidelines were intended to provide guidance to potential applicants on  the context and objectives of the program, the amount of available funding,  conditions  of  funding,  expectations  about  the  content  and  format  of  applications, and an outline of the assessment process.  

2.21 Following  the  Minister’s  approval,  DoHA  disseminated  the  draft  guidelines to stakeholder groups—including those representing key sectors of  the  healthcare  workforce,  training  organisations,  medical  students  and  healthcare co

nsumers—for comment and feedback. DoHA provided copies of  comments  to  the  Minister,  and  after  making  some  amendments  to  the  guidelines  in  light  of  the  comments,  provided  the  amended  version  for  Ministerial approval.  

2.22 Input  on  the  draft  guidelines  was  also  received  from  the  states  and  territories via a senior officials’ inter‐jurisdictional working group established  by DoHA. In addition, this group provided a conduit for DoHA to pro

vide 

advice  to  the  Minister  about  implementation  issues  at  specific  locations,  including state and territory preferences about funding processes, integration  of clinics with state‐funded services, and prioritising the establishment of sites.   A GP Super Clinics implementation plan was also approved by the Health and  Ageing Working Group of the Council of Australian Governments (COAG) in  March 2008. 

2.23 The program guidelines were approved by the Minister in April 2008.   However, the DoHA brief seeking the Minister’s approval for the guidelines  did  not  advise  the  Minister  about  the  then  requirement  under  the  relevant  Finance  Minister’s  Instructions70  for  the  guidelines  to  be  considered  by  the  Expenditure  Review  Committee  of  Cabinet  (ERC).  As  a  consequence,  the  guidelines  were  not  submitted  for  ERC  consideration  prior  to  their  public  release.  

                                                       69 The December 2007 Finance Minister’s Instructions, introduced by the new government, required guidelines to be developed

for any new discretionary grant programs. Discretionary grants were defined in the Instructions as: ‘grants where the minister or agency has discretion in determining whether or not a particular application receives funding and may or may not impose conditions in return for the funding’ and not including ‘entitlement-based and demand-driven payments or rebates guidelines’. 70

Department of Finance and Deregulation, Finance Minister’s Instructions of 14 December 2007.

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range of matters, including: developing the grant program guidelines, seeking  the  views  of  health  sector  stakeholders;  engaging  with  state  and  territory  governments  about  program  implementation;  funding  processes,  including  assessment  of  grant  applications;  and  consulting  with  local  communities  in  areas where the proposed clinics were intended to be located. On 27 December  2007, the Minister formally endorsed DoHA’s implementation approach.  

2.17 As discussed in paragraph

 2.45, while some information and analysis 

was provided to the Minister’s office by DoHA on a number of factors that  might inform the choice of clinic locations in the second round in 2010, that  information was of a relatively informal nature and did not take the form of  advice to the Minister. As in the first round, the Minister did not recei

ve advice 

as  to  whether  the  department  was  aware  of  any  particular  implementation  risks applying to specific locations. The ANAO has previously observed that  departments should advise Ministers on any measures considered necessary to  manage risks to the Commonwealth in achieving value for money when acting  on election commitments67, and there would have been benefit in providing  specific advice to the Minister on whether the department was aw

are of any 

particular implementation risks applying to clinic locations announced in the  2007 and 2010 election context.68 

Recommendation No.1 2.18 To inform the development and administration of infrastructure grants  activities,  the  ANAO  recommends  that  DoHA  advise  Ministers  of  any  measures  considered  necessary  in  managing  any  significant  risks  to  the  effective implementation of election policy commitments. 

DoHA respons

e: 

2.19 Agreed. 

                                                       67 ANAO Audit Report No.14 2007-08, Performance Audit of the Regional Partnerships Program, Volume 2, p.148. 68

The ANAO similarly observed in a previous grants administration audit that there was scope for DoHA to better assist the Health Minister through more comprehensive advice: ANAO Audit Report No.45 2011-12 Administration of the Health and Hospitals Fund, p. 86.

From Policy to Program

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Developing program guidelines

2.20 The Minister approved draft program guidelines in late January 2008.69   The guidelines were intended to provide guidance to potential applicants on  the context and objectives of the program, the amount of available funding,  conditions  of  funding,  expectations  about  the  content  and  format  of  applications, and an outline of the assessment process.  

2.21 Following  the  Minister’s  approval,  DoHA  disseminated  the  draft  guidelines to stakeholder groups—including those representing key sectors of  the  healthcare  workforce,  training  organisations,  medical  students  and  healthcare co

nsumers—for comment and feedback. DoHA provided copies of  comments  to  the  Minister,  and  after  making  some  amendments  to  the  guidelines  in  light  of  the  comments,  provided  the  amended  version  for  Ministerial approval.  

2.22 Input  on  the  draft  guidelines  was  also  received  from  the  states  and  territories via a senior officials’ inter‐jurisdictional working group established  by DoHA. In addition, this group provided a conduit for DoHA to pro

vide 

advice  to  the  Minister  about  implementation  issues  at  specific  locations,  including state and territory preferences about funding processes, integration  of clinics with state‐funded services, and prioritising the establishment of sites.   A GP Super Clinics implementation plan was also approved by the Health and  Ageing Working Group of the Council of Australian Governments (COAG) in  March 2008. 

2.23 The program guidelines were approved by the Minister in April 2008.   However, the DoHA brief seeking the Minister’s approval for the guidelines  did  not  advise  the  Minister  about  the  then  requirement  under  the  relevant  Finance  Minister’s  Instructions70  for  the  guidelines  to  be  considered  by  the  Expenditure  Review  Committee  of  Cabinet  (ERC).  As  a  consequence,  the  guidelines  were  not  submitted  for  ERC  consideration  prior  to  their  public  release.  

                                                       69 The December 2007 Finance Minister’s Instructions, introduced by the new government, required guidelines to be developed for any new discretionary grant programs. Discretionary grants were defined in the Instructions as: ‘grants

where the minister or agency has discretion in determining whether or not a particular application receives funding and may or may not impose conditions in return for the funding’ and not including ‘entitlement-based and demand-driven payments or rebates guidelines’. 70

Department of Finance and Deregulation, Finance Minister’s Instructions of 14 December 2007.

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Community consultation

2.24 DoHA’s  advice  to  the  Minister  of  December  2007  suggested  that  a  program of: 

locally based consultation/briefing sessions [be held] in each area identified for  a clinic...which would serve the dual purpose of briefing interested parties on  the program parameters and submission process and allowing input on local  community needs on priorities.  

2.25 DoHA subsequently conducted community consultation sessions for all  of the 32 initially announced locations. The first session was held in Ballan,  Victoria, in May 2008. Sessions were held in all but three locations by February  2009.71  Meetings were advertised in the local press, and attracted between 60  and 160 people depending on the location, with local health professionals often  being the largest group.    

2.26 Feedback  received  by  the  ANAO  from  a  relatively  small  sample  of  funding recipients, during visits to twelve operational clinics, indicated that  perceptions of the usefulness of these sessions to applicants varied. There were  a number of positive comments72, but in relation to two of the earlier sessions,  recipients considered that DoHA did not clearly explain the objectives of the  Commonwealth  in establishing  the  clinics,  or  th

at  the  views  of  peak  group 

stakeholders invited to the session ‘crowded out’ the opportunity for members  of  the  local  community  to  provide  their  views.   However,  judging  by  the  attendance  levels  noted  above,  the  sessions  provided  a  vehicle  for  raising  awareness of the proposal for a clinic in the area, and of the funding process to  be  applied  for  that  location.  DoHA  also  advised  the  ANAO  that  senior  departmental  officials  met,  or  offered  to  meet,  with  AMA  representatives  immediately before each of the first round consultation sessions. 

2.27 The main points raised in these se

ssions were compiled in short reports 

and a one‐page summary. One‐page summaries were posted on the DoHA GP  Super Clinics website and DoHA advised the ANAO that ‘themes from the  consultations were contained in the [invitation to apply (ITA)] documentation’  for the relevant location. However, the ANAO’s review of the ITA document  against these consultation reports, based on the 21 first round projects in its 

                                                       71 The Berwick, Brisbane Southside and Gladstone consultation sessions were delayed for various reasons. 72

More particularly, positive comments were made by funding recipients about the community consultation sessions conducted in two clinic locations in Queensland and one in Victoria.

From Policy to Program

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overall  sample  of  36  clinics,  indicates  that  key  information  from  feedback/consultation  sessions  was  not  always  included  in  the  ITA  documentation. The ITA documentation for those second round locations that  were  subject  to  consultative  processes  did  however  contain  weblinks  to  consultation session summaries.  

Risk management

2.28 Risk management should form part of the design and planning of a  grants  program.73  Risk  management  involves  the  systematic  identification,  analysis, and treatment of risks on a dynamic and continual basis, given that  risks may emerge at different stages in grants administration.74 

2.29  DoHA developed risk management plans on two main levels: at the  program level and the project level. 

Program level risk management plans

2.30 From  the  earliest  stages  of  the  program’s  development in  December  2007,  DoHA  prepar

ed  broad,  program  level  risk  management  plans,  called  enterprise  level  risk  management  plans.  The  sources  of  risk  to  the  timely  implementation  of  the  GP  Super  Clinics  program  identified  in  those  plans,  along with the (then) current and proposed responses to those risks, are shown  in Table 2.2. These risks were consistent with DoHA’s advice provided to the  Government through the NPP process. 

   

                                                       73 ANAO 2002 Better Practice Guide—Administration of Grants, op. cit., p 10. The importance of risk management in the design and planning stage of grants programs is also recognised in the Commonwealth Grant Guidelines, op. cit., p 15. 74

ibid.

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Community consultation

2.24 DoHA’s  advice  to  the  Minister  of  December  2007  suggested  that  a  program of: 

locally based consultation/briefing sessions [be held] in each area identified for  a clinic...which would serve the dual purpose of briefing interested parties on  the program parameters and submission process and allowing input on local  community needs on priorities.  

2.25 DoHA subsequently conducted community consultation sessions for all  of the 32 initially announced locations. The first session was held in Ballan,  Victoria, in May 2008. Sessions were held in all but three locations by February  2009.71  Meetings were advertised in the local press, and attracted between 60  and 160 people depending on the location, with local health professionals often  being the largest group.    

2.26 Feedback  received  by  the  ANAO  from  a  relatively  small  sample  of  funding recipients, during visits to twelve operational clinics, indicated that  perceptions of the usefulness of these sessions to applicants varied. There were  a number of positive comments72, but in relation to two of the earlier sessions,  recipients considered that DoHA did not clearly explain the objectives of the  Commonwealth  in establishing  the  clinics,  or  th

at  the  views  of  peak  group 

stakeholders invited to the session ‘crowded out’ the opportunity for members  of  the  local  community  to  provide  their  views.   However,  judging  by  the  attendance  levels  noted  above,  the  sessions  provided  a  vehicle  for  raising  awareness of the proposal for a clinic in the area, and of the funding process to  be  applied  for  that  location.  DoHA  also  advised  the  ANAO  that  senior  departmental  officials  met,  or  offered  to  meet,  with  AMA  representatives  immediately before each of the first round consultation sessions. 

2.27 The main points raised in these se

ssions were compiled in short reports 

and a one‐page summary. One‐page summaries were posted on the DoHA GP  Super Clinics website and DoHA advised the ANAO that ‘themes from the  consultations were contained in the [invitation to apply (ITA)] documentation’  for the relevant location. However, the ANAO’s review of the ITA document  against these consultation reports, based on the 21 first round projects in its 

                                                     

 

71 The Berwick, Brisbane Southside and Gladstone consultation sessions were delayed for various reasons. 72 More particularly, positive comments were made by funding recipients about the community consultation sessions

conducted in two clinic locations in Queensland and one in Victoria.

From Policy to Program

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overall  sample  of  36  clinics,  indicates  that  key  information  from  feedback/consultation  sessions  was  not  always  included  in  the  ITA  documentation. The ITA documentation for those second round locations that  were  subject  to  consultative  processes  did  however  contain  weblinks  to  consultation session summaries.  

Risk management

2.28 Risk management should form part of the design and planning of a  grants  program.73  Risk  management  involves  the  systematic  identification,  analysis, and treatment of risks on a dynamic and continual basis, given that  risks may emerge at different stages in grants administration.74 

2.29  DoHA developed risk management plans on two main levels: at the  program level and the project level. 

Program level risk management plans

2.30 From  the  earliest  stages  of  the  program’s  development in  December  2007,  DoHA  prepar

ed  broad,  program  level  risk  management  plans,  called  enterprise  level  risk  management  plans.  The  sources  of  risk  to  the  timely  implementation  of  the  GP  Super  Clinics  program  identified  in  those  plans,  along with the (then) current and proposed responses to those risks, are shown  in Table 2.2. These risks were consistent with DoHA’s advice provided to the  Government through the NPP process. 

   

                                                       73 ANAO 2002 Better Practice Guide—Administration of Grants, op. cit., p 10. The importance of risk management in the design and planning stage of grants programs is also recognised in the Commonwealth Grant Guidelines, op. cit., p 15. 74

ibid.

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Table 2.2

Initial identi

fication and responses to program level risks

Sources of risk to GP Super Clinics program implementation Program level responses

• Insufficient clarity of program description and definition of the role of the Commonwealth and State and Territory Governments.

• Failure to engage the support of local communities and health professionals. • No suitable proposals received from the call for submission process. • Clinics once established may not attract

or retain the necessary workforce. • Threat to competitive neutrality could produce grievances for particular sites. • Delays in building construction /

refurbishment may delay establishment of the clinics.

• Advice is being sought from the Minister’s Office with regard to the preferred arrangements for the roll-out of the initiative. • Regular reporting to the Division Head on

progress on implementation. • Initial stakeholder consultation on Program Guidelines. • Establishment of a senior cross-

jurisdictional governance group to oversee the implementation of the GP Super Clinics program. • Development of a consultation strategy targeting primary care health professionals and community members in all areas where GP Super Clinics have been announced. Local consultation will focus on ensuring that the clinics meet local needs and priorities, and complement existing services. • Appropriate technical expertise engaged to support the submission for funding process to ensure detailed analysis of business cases and workforce strategies as part of the assessment process. • Development of clear, transparent and fair app

lication and assessment processes within a nationally agreed framework that allows local flexibility.

Source: DoHA Enterprise Risk Management Plan December 2007

2.31 As  the  program  matured  and  DoHA  gained  more  experience  in  the  assessment,  roll‐out  and  operational  performance  of  clinics,  it  identified  additional program level risks. These risks included: 

 delays  due  to  state  or  local  government  approval  processes  or  unavailability of suitable land; 

 poor project management by recipients; 

 clinics not being financially viable or sustainable; 

 unrealistic political or public expectations about the clinic

s, including 

timeframes for delivery of services; and 

From Policy to Program

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 insufficient  appropriately  skilled  DoHA  staff  to  manage  the  volume  and complexity of infrastructure projects. 

2.32 Later  versions  of  these  risk  management  plans,  from  2010  on,  also  contained DoHA’s assessment of whether the relevant risk was rated as low,  medium or high.75 A comparison of ‘current risk rating’ to ‘target risk rating’ in  the program level ri

sk management plans indicates that the assessed risk level  remained above the target risk rating for the majority of identified risks. Whilst  various risk treatments were included in the plans, the ratings suggest that  DoHA had difficulties, at the program level, in reducing risks to its preferred  level, although all risk ratings were nonetheless stated in the plans as being  ‘acceptable’. 

2.33 In 2012, as part of a department‐wide

 administrative change, DoHA 

introduced revised risk templates for the assessment and management of risks,  resulting in the reclassification of various risk ratings in the program. Risks  rated as ‘likely’ or ‘possible’ to occur, with ‘major’ consequences, included: 

 clinics not being financially viable; 

 clinics failing to recruit or retain the necessary workforce; and 

 insufficient skilled staff in DoHA’s GP Super Clinic Branch to manag

the value and complexity of the program.76 

2.34 DoHA advised the ANAO in March 2013 that ‘an executive level risk  management session’ is planned in the near future.  

2.35 The need to engage external technical expertise during program design  and  administration  was  identified  in  the  successive  program  level  risk  management plans. As at March 2013, approximately $5.1 million (or just over  1 per cent of total GP Super Clinic grant funding) has been spent or committed  for external expertise, including $2.8 million on legal advice for both program‐ wide and clinic‐specific issues.  

Project level risk m

anagement

2.36 Individual,  formal  risk  management  plans  were  developed  for  all  proposed clinics at the start of the grant invitation to apply process. The plans  were considered for updating at key decision‐making points, specifically: the 

                                                       75 These ratings have been derived from combining the likelihood of the risk event occurring with the consequence of such an occurrence. 76

DoHA, GPSC Risk Management Plan, Assessment and Evaluation, December 2012.

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Table 2.2

Initial identi

fication and responses to program level risks

Sources of risk to GP Super Clinics program implementation Program level responses

• Insufficient clarity of program description and definition of the role of the Commonwealth and State and Territory Governments.

• Failure to engage the support of local communities and health professionals. • No suitable proposals received from the call for submission process. • Clinics once established may not attract

or retain the necessary workforce. • Threat to competitive neutrality could produce grievances for particular sites. • Delays in building construction /

refurbishment may delay establishment of the clinics.

• Advice is being sought from the Minister’s Office with regard to the preferred arrangements for the roll-out of the initiative. • Regular reporting to the Division Head on

progress on implementation. • Initial stakeholder consultation on Program Guidelines. • Establishment of a senior cross-

jurisdictional governance group to oversee the implementation of the GP Super Clinics program. • Development of a consultation strategy targeting primary care health professionals and community members in all areas where GP Super Clinics have been announced. Local consultation will focus on ensuring that the clinics meet local

needs and priorities, and complement existing services. • Appropriate technical expertise engaged to support the submission for funding

process to ensure detailed analysis of business cases and workforce strategies as part of the assessment process. • Development of clear, transparent and fair application and assessment processes within a nationally agreed framework that allows local flexibility.

Source: DoHA Enterprise Risk Management Plan December 2007

2.31 As  the  program  matured  and  DoHA  gained  more  experience  in  the  assessment,  roll‐out  and  operational  performance  of  clinics,  it  identified  additional program level risks. These risks included: 

 delays  due  to  state  or  local  government  approval  processes  or  unavailability of suitable land; 

 poor project management by recipients; 

 clinics not 

being financially viable or sustainable; 

 unrealistic political or public expectations about the clinics, including  timeframes for delivery of services; and 

From Policy to Program

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 insufficient  appropriately  skilled  DoHA  staff  to  manage  the  volume  and complexity of infrastructure projects. 

2.32 Later  versions  of  these  risk  management  plans,  from  2010  on,  also  contained DoHA’s assessment of whether the relevant risk was rated as low,  medium or high.75 A comparison of ‘current risk rating’ to ‘target risk rating’ in  the program level ri

sk management plans indicates that the assessed risk level  remained above the target risk rating for the majority of identified risks. Whilst  various risk treatments were included in the plans, the ratings suggest that  DoHA had difficulties, at the program level, in reducing risks to its preferred  level, although all risk ratings were nonetheless stated in the plans as being  ‘acceptable’. 

2.33 In 2012, as part of a department‐wide

 administrative change, DoHA 

introduced revised risk templates for the assessment and management of risks,  resulting in the reclassification of various risk ratings in the program. Risks  rated as ‘likely’ or ‘possible’ to occur, with ‘major’ consequences, included: 

 clinics not being financially viable; 

 clinics failing to recruit or retain the necessary workforce; and 

 insufficient skilled staff in DoHA’s GP Super Clinic Branch to manag

the value and complexity of the program.76 

2.34 DoHA advised the ANAO in March 2013 that ‘an executive level risk  management session’ is planned in the near future.  

2.35 The need to engage external technical expertise during program design  and  administration  was  identified  in  the  successive  program  level  risk  management plans. As at March 2013, approximately $5.1 million (or just over  1 per cent of total GP Super Clinic grant funding) has been spent or committed  for external expertise, including $2.8 million on legal advice for both program‐ wide and clinic‐specific issues.  

Project level risk m

anagement

2.36 Individual,  formal  risk  management  plans  were  developed  for  all  proposed clinics at the start of the grant invitation to apply process. The plans  were considered for updating at key decision‐making points, specifically: the 

                                                       75 These ratings have been derived from combining the likelihood of the risk event occurring with the consequence of such an occurrence. 76

DoHA, GPSC Risk Management Plan, Assessment and Evaluation, December 2012.

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approval of assessment reports; when offering funding agreements; and the  acceptance  of  milestones  under  funding  agreements  during  the  pre‐ construction, construction and operational phases.  

2.37 Significant  effort  was  also  devoted  to  managing  risk  through  the  development of a standard form GP Super Clinics grant funding agreement.  External legal advisers were retained to undertake drafting and provide advice  on  options  to  protect  the  Commonwealth’

s  interests  in  the  planning, 

construction  and  operation  of  each  clinic,  including  during  the  20  year  designated  use  period.77  Funding  agreements  also  went  through  extensive  modifications from mid‐2008 to better manage the Commonwealth’s risks. This  was done mainly by increasing the obligations placed on recipients in respect  of construction budgeting and planning, operational planning, and progress  and  performance  reporting.  In  the  se

cond  round,  enhanced  due  diligence 

requirements  were  introduced,  particularly  relating  to  land  acquisition  and  development approval, and the provisions regarding sufficiency of funds to  complete clinic construction were strengthened.  

2.38 Overall,  risk  management  considerations  appropriately  informed  DoHA’s  development  and  administration  of  the  program  from  the  outset.  However,  DoHA’s  ability  to  identify  and  effectively  manage  all  significant  risks, particularly at an early stage, was hampered due to limited pre

vious 

experience in planning and administering infrastructure designed to facilitate  the delivery of multidisciplinary primary healthcare services in a competitive  private sector environment. There was consequently a need to revise program  arrangements  in  response  to  the  ongoing  assessment  of  risks.  Further,  the  department had to contend with expectations about timeframes for delivery  that  in  some  cases  were  difficult  to  meet,  particularly  when  complications  arose  in  assessment,  funding  agreement  ne

gotiation,  land  acquisition, 

development approval or construction processes.  

                                                       77 As mentioned in chapter 1, a condition of being awarded a GP Super Clinic grant was that the recipient must operate the clinic over the designated use period. More specifically, the clinic must provide ‘multidisciplinary care services that

are responsive to local community needs and priorities and that operate so as to best achieve the Program Objectives’. Should the recipient wish to sell the clinic or the property on which it is located, this requires the permission of the Commonwealth. The buyer must also enter into a legal agreement with the Commonwealth to continue to operate the clinic for whatever remains of the designated use period.

From Policy to Program

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Announcement of additional clinic locations 2.39 Following  the  announcement  of  the  initial  32  clinics  in  2007,  the  Government made two further announcements about program locations and  funding. These related to: 

 five additional locations announced in August 2009; and 

 a second round of funding for 28 additional locations announced in  2010. 

Announcement of five additional locations

2.40   In  late  2008  and  early  2009,  DoHA  received  five  unsolicited78  proposals  from  various  organisations  for  the  establishment  of  clinics  in  l

ocations not included in the group announced in 2007. The locations were  Gunnedah (NSW), Cockburn (Western Australia), and Wodonga, Portland and  South Morang (all in Victoria). The 2008 program guidelines were silent on  whether unsolicited proposals would be considered. However, they stated that  ‘GP  Super  Clinics  will  be  rolled  out  progressively  ...  at  31  locations  across  Australia  identified  in  Attachment  A’79,  suggesting  t hat  the  program  was  restricted to applications for locations specified at that time.  

2.41 DoHA briefed the Minister on the unsolicited proposals,  including the  extent  to  which  they  satisfied  the  four  ‘location’  factors  outlined  in  paragraph 2.580, noting in particular that all five locations were in areas of poor  access  to  health  services.  DoHA  advised  that  the  proposals  would  require  further information from the applicants specifically addressing the

 program 

guidelines  before  they  could  be  considered  for  funding.  The  department’s  advice did not address the issue of whether, in the absence of any analysis  against other areas of poor access to health services, and the reference in the  program guidelines to the specified locations, it was equitable or appropriate  that the new locations be considered for potential funding. DoHA did note  however  that  it  was  awar

e  of  ‘wider  interest  in  seeking  grant  funding  to 

                                                       78 The proposals were described as ‘unsolicited’ in DoHA’s advice to the Minister: DoHA, Minute to the Minister-Potential to fund additional sites under the GP Super Clinics Program, 12 January 2009. 79

Department of Health and Ageing, GP Super Clinics national program guide 2008, DoHA, Canberra, 2008, p. 3. As noted earlier in this audit, clinics announced in 2007 included a Hobart clinic (‘Hobart Eastern Shores’) which was to have branches at two locations approximately 15 kilometres apart. These locations were subsequently funded through separate grant processes, and funding agreements were executed with two different recipients. For the pu

rposes of this

audit they are treated as two clinics, giving a total of 32 clinics announced in 2007. 80 As discussed earlier in this chapter, this had not been done in respect to the 32 proposals announced following the release of the Government’s 2007 election policy.

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approval of assessment reports; when offering funding agreements; and the  acceptance  of  milestones  under  funding  agreements  during  the  pre‐ construction, construction and operational phases.  

2.37 Significant  effort  was  also  devoted  to  managing  risk  through  the  development of a standard form GP Super Clinics grant funding agreement.  External legal advisers were retained to undertake drafting and provide advice  on  options  to  protect  the  Commonwealth’

s  interests  in  the  planning, 

construction  and  operation  of  each  clinic,  including  during  the  20  year  designated  use  period.77  Funding  agreements  also  went  through  extensive  modifications from mid‐2008 to better manage the Commonwealth’s risks. This  was done mainly by increasing the obligations placed on recipients in respect  of construction budgeting and planning, operational planning, and progress  and  performance  reporting.  In  the  se

cond  round,  enhanced  due  diligence 

requirements  were  introduced,  particularly  relating  to  land  acquisition  and  development approval, and the provisions regarding sufficiency of funds to  complete clinic construction were strengthened.  

2.38 Overall,  risk  management  considerations  appropriately  informed  DoHA’s  development  and  administration  of  the  program  from  the  outset.  However,  DoHA’s  ability  to  identify  and  effectively  manage  all  significant  risks, particularly at an early stage, was hampered due to limited pre

vious 

experience in planning and administering infrastructure designed to facilitate  the delivery of multidisciplinary primary healthcare services in a competitive  private sector environment. There was consequently a need to revise program  arrangements  in  response  to  the  ongoing  assessment  of  risks.  Further,  the  department had to contend with expectations about timeframes for delivery  that  in  some  cases  were  difficult  to  meet,  particularly  when  complications  arose  in  assessment,  funding  agreement  ne

gotiation,  land  acquisition, 

development approval or construction processes.  

                                                       77 As mentioned in chapter 1, a condition of being awarded a GP Super Clinic grant was that the recipient must operate the clinic over the designated use period. More specifically, the clinic must provide ‘multidisciplinary care services that

are responsive to local community needs and priorities and that operate so as to best achieve the Program Objectives’. Should the recipient wish to sell the clinic or the property on which it is located, this requires the permission of the Commonwealth. The buyer must also enter into a legal agreement with the Commonwealth to continue to operate the clinic for whatever remains of the designated use period.

From Policy to Program

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Announcement of additional clinic locations 2.39 Following  the  announcement  of  the  initial  32  clinics  in  2007,  the  Government made two further announcements about program locations and  funding. These related to: 

 five additional locations announced in August 2009; and 

 a second round of funding for 28 additional locations announced in  2010. 

Announcement of five additional locations

2.40   In  late  2008  and  early  2009,  DoHA  received  five  unsolicited78  proposals  from  various  organisations  for  the  establishment  of  clinics  in  l

ocations not included in the group announced in 2007. The locations were  Gunnedah (NSW), Cockburn (Western Australia), and Wodonga, Portland and  South Morang (all in Victoria). The 2008 program guidelines were silent on  whether unsolicited proposals would be considered. However, they stated that  ‘GP  Super  Clinics  will  be  rolled  out  progressively  ...  at  31  locations  across  Australia  identified  in  Attachment  A’79,  suggesting  t hat  the  program  was  restricted to applications for locations specified at that time.  

2.41 DoHA briefed the Minister on the unsolicited proposals,  including the  extent  to  which  they  satisfied  the  four  ‘location’  factors  outlined  in  paragraph 2.580, noting in particular that all five locations were in areas of poor  access  to  health  services.  DoHA  advised  that  the  proposals  would  require  further information from the applicants specifically addressing the

 program 

guidelines  before  they  could  be  considered  for  funding.  The  department’s  advice did not address the issue of whether, in the absence of any analysis  against other areas of poor access to health services, and the reference in the  program guidelines to the specified locations, it was equitable or appropriate  that the new locations be considered for potential funding. DoHA did note  however  that  it  was  awar

e  of  ‘wider  interest  in  seeking  grant  funding  to 

                                                       78 The proposals were described as ‘unsolicited’ in DoHA’s advice to the Minister: DoHA, Minute to the Minister-Potential to fund additional sites under the GP Super Clinics Program, 12 January 2009. 79

Department of Health and Ageing, GP Super Clinics national program guide 2008, DoHA, Canberra, 2008, p. 3. As noted earlier in this audit, clinics announced in 2007 included a Hobart clinic (‘Hobart Eastern Shores’) which was to have branches at two locations approximately 15 kilometres apart. These locations were subsequently funded through separate grant processes, and funding agreements were executed with two different recipients. For the purposes of this audit they are treated as two clinics, giving a total of 32 clinics announced in 2007. 80

As discussed earlier in this chapter, this had not been done in respect to the 32 proposals announced following the release of the Government’s 2007 election policy.

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support  integrated  multidisciplinary  care’  and  suggested  that  the  Minister  consider  the  development  of  a  separate  competitive  grants  program  that  would fund smaller health infrastructure projects.81  

2.42 The Minister subsequently wrote to the Prime Minister in January 2009  regarding the five unsolicited projects, and additional funding was identified  through the 2009-10 Budget process.82 Cabinet approval was given in July 2009   for inclusion of these locations, subject to the usual assessment process, in the  GP Super Clinics program.   

2.43 The treatment of these five unsolicited locations can be contrasted with  at least one other unsolicited proposal received by the Minister in early 2008.  This involved a proposed clinic in the Australian Capital Territory (ACT), with  the proponent providing some evidence of consistency between the proposal  and the GP Super Clinic

s policy. Evidence of support from local stakeholders,  and recently prepared feasibility, business and construction plans were also  referred to. In February 2008 the Minister wrote to the proponent, advising  that  a  GP  Super  Clinic  ‘was  not  planned  for  the  [ACT]  at  this  time’.83  In  preparing  this  response  for  the  Minister,  DoHA  did  not  provide  any  accompanying  advice  about  how  any  future  unsolicited  GP  Super  Clinic  proposals might be ha

ndled.  Following further contact from the proponent,  the  Minister  subsequently  agreed  to  provide  funding  of  $220  000  for  the  proposal under the General Practice Infrastructure Training Support program. 

Second round of GP Super Clinics funding and 28 additional locations

2.44 The  Government  released  its  response  to  the  National  Health  and  Hospitals Reform Commission report, and the National Primary Health Care  Strategy  process,  in  the  context  of  the  11  May  2010  Budget.  In  relation  to  primary healthcare i

nfrastructure, that response included an expansion of the  existing GP Super Clinics program:  

                                                       81 The advice does not, on its face, record any written response by the Minister to this suggestion. The Government announced the establishment of the Primary Care Infrastructure Grants program in 2010. This $117 million program

provided grants of up to $500 000 to individual existing practices. This program was examined in ANAO Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program. 82 DoHA was in possession of preliminary cost estimates for these proposals, and maximum funding amounts identified in

the 2009-10 Budget process correlated closely with these estimates. 83 The ACT was included in the locations for proposed clinics in the second round, and a funding agreement for a $15 million grant was executed in April 20

12.

From Policy to Program

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The  Rudd  Government  will...construct  around  23  new  dedicated  GP  Super  Clinics. .... 

Of the new GP Super Clinics, around nine large clinics will be built where  doctors, nurses and allied health professionals will be supplemented by more  specialised  services  such  as  renal  dialysis,  minor  surgical  procedures,  rehabilitation services and radiology. ... 

The  remaining  new  GP  Super  Clinic

s  will  be  built  along  the  lines  of  the 

36 clinics already under construction.84 

2.45 As in the first round85, DoHA did not provide advice to the Minister as  to whether it was aware of any particular implementation risks applying to  specific locations. While some information and analysis was provided to the  Minister’s office by DoHA on a number of factors that might inform the choice  of clini

c locations in the second round, that information was of a relatively  informal nature through emails to ministerial staff rather than a formal briefing  to the Minister.86  

2.46 The Government did not announce, in the May 2010 budget context,  where the proposed additional clinics would be located, or provide any details  about when or how the locations would be decided.  However, funding of  $355.2 million was an

nounced in the budget papers for both the expansion of  the GP Super Clinics program as well as the establishment of the new Primary  Care Infrastructure Grants program.87  

2.47 Immediately following the 2010 budget, DoHA revised the first round  guidelines.  While  there  was  some  additional  detail  and  explanatory  information,  the  changes  were  modest,  and  the  guidelines  were  considered  and approved by the ERC on 14 July 2010. However, due to the calling o

f the 

2010 election88, the guidelines were not publicly released until November 2010. 

                                                       84 N Roxon, (Minister for Health and Ageing), ‘More GP Super Clinics and Extra GP Infrastructure’, media release, 11 May 2010. 85

See paragraph 2.12 and Recommendation 1 (paragraph 2.18). 86 While DoHA was able to provide elements of this advice to the ANAO in the form of an email dated 10 May 2010 and an attachment, the records provided to the ANAO could not be retrieved from DoHA’s records management system and

the link between the documents could

not be established.

87 2010-11 Australian Government Budget—Budget Paper No.2, p. 228. As noted in chapter 1, the qualifier ‘around’ that was contained in the Minister’s 11 May 2010 press release regarding the number of new GP Super Clinics did not appear in Budget Paper No.2, also released on 11 May 2010.

88 The caretaker period took effect from 19 July 2010 and the election was held on 21 August 2010.

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support  integrated  multidisciplinary  care’  and  suggested  that  the  Minister  consider  the  development  of  a  separate  competitive  grants  program  that  would fund smaller health infrastructure projects.81  

2.42 The Minister subsequently wrote to the Prime Minister in January 2009  regarding the five unsolicited projects, and additional funding was identified  through the 2009-10 Budget process.82 Cabinet approval was given in July 2009   for inclusion of these locations, subject to the usual assessment process, in the  GP Super Clinics program.   

2.43 The treatment of these five unsolicited locations can be contrasted with  at least one other unsolicited proposal received by the Minister in early 2008.  This involved a proposed clinic in the Australian Capital Territory (ACT), with  the proponent providing some evidence of consistency between the proposal  and the GP Super Clinic

s policy. Evidence of support from local stakeholders,  and recently prepared feasibility, business and construction plans were also  referred to. In February 2008 the Minister wrote to the proponent, advising  that  a  GP  Super  Clinic  ‘was  not  planned  for  the  [ACT]  at  this  time’.83  In  preparing  this  response  for  the  Minister,  DoHA  did  not  provide  any  accompanying  advice  about  how  any  future  unsolicited  GP  Super  Clinic  proposals might be ha

ndled.  Following further contact from the proponent,  the  Minister  subsequently  agreed  to  provide  funding  of  $220  000  for  the  proposal under the General Practice Infrastructure Training Support program. 

Second round of GP Super Clinics funding and 28 additional locations

2.44 The  Government  released  its  response  to  the  National  Health  and  Hospitals Reform Commission report, and the National Primary Health Care  Strategy  process,  in  the  context  of  the  11  May  2010  Budget.  In  relation  to  primary healthcare i

nfrastructure, that response included an expansion of the  existing GP Super Clinics program:  

                                                       81 The advice does not, on its face, record any written response by the Minister to this suggestion. The Government announced the establishment of the Primary Care Infrastructure Grants program in 2010. This $117 million program

provided grants of up to $500 000 to individual existing practices. This program was examined in ANAO Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program. 82 DoHA was in possession of preliminary cost estimates for these proposals, and maximum funding amounts identified in

the 2009-10 Budget process correlated cl osely with these estimates. 83

The ACT was included in the locations for proposed clinics in the second round, and a funding agreement for a $15 million grant was executed in April 2012.

From Policy to Program

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The  Rudd  Government  will...construct  around  23  new  dedicated  GP  Super  Clinics. .... 

Of the new GP Super Clinics, around nine large clinics will be built where  doctors, nurses and allied health professionals will be supplemented by more  specialised  services  such  as  renal  dialysis,  minor  surgical  procedures,  rehabilitation services and radiology. ... 

The  remaining  new  GP  Super  Clinic

s  will  be  built  along  the  lines  of  the 

36 clinics already under construction.84 

2.45 As in the first round85, DoHA did not provide advice to the Minister as  to whether it was aware of any particular implementation risks applying to  specific locations. While some information and analysis was provided to the  Minister’s office by DoHA on a number of factors that might inform the choice  of clini

c locations in the second round, that information was of a relatively  informal nature through emails to ministerial staff rather than a formal briefing  to the Minister.86  

2.46 The Government did not announce, in the May 2010 budget context,  where the proposed additional clinics would be located, or provide any details  about when or how the locations would be decided.  However, funding of  $355.2 million was an

nounced in the budget papers for both the expansion of  the GP Super Clinics program as well as the establishment of the new Primary  Care Infrastructure Grants program.87  

2.47 Immediately following the 2010 budget, DoHA revised the first round  guidelines.  While  there  was  some  additional  detail  and  explanatory  information,  the  changes  were  modest,  and  the  guidelines  were  considered  and approved by the ERC on 14 July 2010. However, due to the calling o

f the 

2010 election88, the guidelines were not publicly released until November 2010. 

                                                       84 N Roxon, (Minister for Health and Ageing), ‘More GP Super Clinics and Extra GP Infrastructure’, media release, 11 May 2010. 85

See paragraph 2.12 and Recommendation 1 (paragraph 2.18). 86 While DoHA was able to provide elements of this advice to the ANAO in the form of an email dated 10 May 2010 and an attachment, the records provided to the ANAO could not be retrieved from DoHA’s records management system and

the link between the documents could not be established. 87 2010-11 Australian Government Budget—Budget Paper No.2, p. 228. As noted in chapter 1, the qualifier ‘around’ that was contained in the Minister’s 11 May 2010 press release regarding the number of new GP Super

Clinics did not

appear in Budget Paper No.2, also released on 11 May 2010. 88 The caretaker period took effect from 19 July 2010 and the election was held on 21 August 2010.

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2.48 During the 2010 election campaign, the Government announced 28 new  locations89,  five  more  than  referred  to  in  the  May  2010  budget  papers.90  Following the return of the Government, a new policy proposal (NPP) was  prepared by DoHA on the expanded list of 28 locations. Consistent with the  approach adopted by DoHA for the 2007 NPP and before the

 2010 Budget91, no 

advice  was  provided  to  the  Government  or  the  Minister  as  to  whether  the  department was aware of any particular implementation risks applying to the  specific locations announced in the 2010 context. Notably, however, the NPP  stated that the ‘implementation risk [of the second round] has been assessed as  low’. The NPP, which included additional funding for the expanded list of  locations,  was  approved

  by  Cabinet  on  26  October  2010.  Subsequently,  the  Minister  announced  that,  based  on  feedback  she  had  received  from  the  relevant  local  Federal  members,  community  consultation  sessions  would  be  held in 13 of these locations.92  These consultation sessions were undertaken by  DoHA from December 2010 through to July 2011. 

Grant funding processes 2.49 Grant  funding  in  the  two  rounds  was  determined  through  a  mix  of  competitive  and  non‐competitive  processes.  The  ANAO  observed  that  typically, non‐competitive grant processes were adopted where a clinic was to  be built by a state health department, regional or community health service,  Division of General Practice or local council. 

2.50 In  total,  non‐competitive  processes  were  adopted  in  22  of  the  65 locations, or 34 pe

r cent of locations.93 A summary of the funding processes  that applied to each of the locations is presented in Table 2.3.   

                                                       89 A further announcement was made relating to Redcliffe, a first round location, which received a $5 million grant in the first round. It received a further $5 million under the second round of funding. 90

Of the 28 locations announced in the 2010 election, eight locations had maximum indicative funding amounts of up to $15 million, with eighteen locations having maximum indicative funding amounts in the range of $5 million to $7 million, and another two being allocated smaller amounts. 91

Discussed in paragraph 2.45. 92 N Roxon, (Minister for Health and Ageing), ‘Process Commences for the Next 28 GP Super Clinics’, media release, 28 October 2010. 93

The general issue of high proportions of non-competitive Commonwealth grant schemes has been noted as a matter of ‘significant concern’ by the Joint Standing Committee on Public Accounts and Audit (JCPAA), and the committee has expressed the view that it considers competitive processes to constitute ‘best practice’: JCPAA Report 430, Review of Auditor-General’s Reports Nos. 47 (2010-11) to 9 (2011-12) and Reports Nos.10 to 23 (2011-12), p. 55.

From Policy to Program

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Table 2.3

Funding application

process, competitive and non-competitive

Round Competitive

Non-competitive (invitation to apply issued to a State Health Department)

Non-competitive (invitation to apply issued to an entity other than a State Health Department)

First round (includes the five clinics announced in 2009) - total of 37 clinics

24 4 9

Second round - total of 28 clinics

19

1 8

Note: There were some instances where an initial process failed to identify a preferred applicant, or the preferred applicant or funding recipient subsequently withdrew from the grants process. In such cases, subsequent processes for the relevant location were sometimes altered from competitive to non-competitive or vice-versa.

However, only the initial process is counted for the purposes of this table.

Source: ANAO analysis.

2.51 The  2010  ANAO  Better  Practice  Guide  on  grants  administration  suggests that ‘in establishing the form of application and selection process to  be  applied  to  a  particular  grant  program,  it  is  advisable  for  agencies  to  document  consideration  of  the  risks,  costs  and  benefits  of  the  available  options’.94 Further, the Commonwealth Grant Guidelines, which were introduced  in July 2009 and applied to the

 second funding round, provide that ‘in the case 

of  grant  programs,  unless  specifically  agreed  otherwise,  competitive,  merit  based selection processes should be used, based upon clearly defined selection  criteria’.95  

2.52 In the first round, a total of 13 clinic locations were funded under non‐ competitive processes, including the five locations announced in 2009. These  five  locations  were  added  to  the  program  as  a  result  of  specific  proposals  d

eveloped by local organisations being submitted to DoHA and the Minister.  For  all  other  first  and  second  round  locations,  the  choice  of  competitive or  non‐competitive processes was informed primarily by the media statements  released  in  the  election  context.96    As  such,  the  use  of  non‐competitive  processes for certain clinics was an elaboration of the original 2007 election 

                                                       94 Better Practice Guide—Implementing Better Practice Grants Administration, op. cit., p. 60. 95

Commonwealth Grant Guidelines, op. cit., p. 29. 96 A number of media statements released by the ALP and the Government in the context of the 2007 and 2010 elections referred to whether selection processes would be competitive or not.

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2.48 During the 2010 election campaign, the Government announced 28 new  locations89,  five  more  than  referred  to  in  the  May  2010  budget  papers.90  Following the return of the Government, a new policy proposal (NPP) was  prepared by DoHA on the expanded list of 28 locations. Consistent with the  approach adopted by DoHA for the 2007 NPP and before the

 2010 Budget91, no 

advice  was  provided  to  the  Government  or  the  Minister  as  to  whether  the  department was aware of any particular implementation risks applying to the  specific locations announced in the 2010 context. Notably, however, the NPP  stated that the ‘implementation risk [of the second round] has been assessed as  low’. The NPP, which included additional funding for the expanded list of  locations,  was  approved

  by  Cabinet  on  26  October  2010.  Subsequently,  the  Minister  announced  that,  based  on  feedback  she  had  received  from  the  relevant  local  Federal  members,  community  consultation  sessions  would  be  held in 13 of these locations.92  These consultation sessions were undertaken by  DoHA from December 2010 through to July 2011. 

Grant funding processes 2.49 Grant  funding  in  the  two  rounds  was  determined  through  a  mix  of  competitive  and  non‐competitive  processes.  The  ANAO  observed  that  typically, non‐competitive grant processes were adopted where a clinic was to  be built by a state health department, regional or community health service,  Division of General Practice or local council. 

2.50 In  total,  non‐competitive  processes  were  adopted  in  22  of  the  65 locations, or 34 pe

r cent of locations.93 A summary of the funding processes  that applied to each of the locations is presented in Table 2.3.   

                                                       89 A further announcement was made relating to Redcliffe, a first round location, which received a $5 million grant in the first round. It received a further $5 million under the second round of funding. 90

Of the 28 locations announced in the 2010 election, eight locations had maximum indicative funding amounts of up to $15 million, with eighteen locations having maximum indicative funding amounts in the range of $5 million to $7 million, and another two

being allocated smaller amounts.

91 Discussed in paragraph 2.45. 92 N Roxon, (Minister for Health and Ageing), ‘Process Commences for the Next 28 GP Super Clinics’, media release, 28

October 2010. 93 The general issue of high proportions of non-competitive Commonwealth grant schemes has been noted as a matter of ‘significant concern’ by the Joint Standing Committee on Public Accounts and Audit (JCPAA), and the committee has

expressed the view that it considers competitive processes to constitute ‘best practice’: JCPAA Report 430, Review of Auditor-General’s Reports Nos. 47 (2010-11) to 9 (2011-12) and Reports Nos.10 to 23 (2011-12), p. 55.

From Policy to Program

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Table 2.3

Funding application

process, competitive and non-competitive

Round Competitive

Non-competitive (invitation to apply issued to a State Health Department)

Non-competitive (invitation to apply issued to an entity other than a State Health Department)

First round (includes the five clinics announced in 2009) - total of 37 clinics

24 4 9

Second round - total of 28 clinics

19

1 8

Note: There were some instances where an initial process failed to identify a preferred applicant, or the preferred applicant or funding recipient subsequently withdrew from the grants process. In such cases, subsequent processes for the relevant location were sometimes altered from competitive to non-competitive or vice-versa. However, only the initial process is counted for the purposes of this table.

Source: ANAO analysis.

2.51 The  2010  ANAO  Better  Practice  Guide  on  grants  administration  suggests that ‘in establishing the form of application and selection process to  be  applied  to  a  particular  grant  program,  it  is  advisable  for  agencies  to  document  consideration  o

f  the  risks,  costs  and  benefits  of  the  available 

options’.94 Further, the Commonwealth Grant Guidelines, which were introduced  in July 2009 and applied to the second funding round, provide that ‘in the case  of  grant  programs,  unless  specifically  agreed  otherwise,  competitive,  merit  based selection processes should be used, based upon clearly defined selection  criteria’.95  

2.52 In the first round, a tota

l of 13 clinic locations were funded under non‐

competitive processes, including the five locations announced in 2009. These  five  locations  were  added  to  the  program  as  a  result  of  specific  proposals  developed by local organisations being submitted to DoHA and the Minister.  For  all  other  first  and  second  round  locations,  the  choice  of  competitive or  non‐competitive processes was informed primarily by the media statements  released  in  the  electio

n  context.96    As  such,  the  use  of  non‐competitive  processes for certain clinics was an elaboration of the original 2007 election 

                                                       94 Better Practice Guide—Implementing Better Practice Grants Administration, op. cit., p. 60. 95

Commonwealth Grant Guidelines, op. cit., p. 29. 96 A number of media statements released by the ALP and the Government in the context of the 2007 and 2010 elections referred to whether selection processes would be competitive or not.

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policy.  Based  on  these  considerations,  DoHA  sought  and  received  confirmation from the Minister for both rounds as to which process should  apply  to  the  individual  clinics  announced  by  the  Government.  While  most  decisions relating to the adoption of a non‐competitive process were informed  by statements made in the election context, there were some exceptions to this.  In one

 first round location, Palmerston, the Minister did not decide that the  funding process would be non‐competitive until late 2008: up until that point  the  funding  process  was  unclear.  In  the  second  round,  there  were  three  locations97  where,  following  community  consultation  sessions,  and  after  receiving advice from DoHA, the Minister decided to change the process from  competitive to non‐competitive. 

2.53 Consistent with the Minister’s decision to adopt a hybrid of competitive  and non

‐competitive processes, the program guidelines for both the first and  second  rounds  specified  that  differing  grant  funding  processes  would  potentially apply to certain locations. 

2.54 However, DoHA’s advice to the Minister on program implementation,  including in relation to the development of the guidelines, did not address the  risks  to  be  managed98  in  adopting  a  non‐competitive  process  for  specific  locations. In this respect

, the approach to advising Ministers on risk, proposed  in Recommendation 1, is also relevant. 

Location of clinics and the distribution of funding 2.55 As outlined in the ANAO’s Better Practice Guide on the administration  of grant programs: 

A measure of achieved grant program outcomes that is frequently the subject  of public and parliamentary scrutiny is the distribution of funding awarded  under the program. In this respect, the geographic and political distribution of  grants may be seen as indicators of the general equity of access to a program,  as well as its effectivene

ss in targeting funding in accordance with the stated  policy objectives of the program.99 

                                                       97 Lower Hunter, Emerald, and Townsville (Northern Beaches). 98

Footnote 12 outlines a number of the potential risks. 99 Better Practice Guide—Implementing Better Practice Grants Administration, op. cit., p. 100. Similarly, the ANAO’s 2002 Administration of Grants: Better Practice Guide observed that: ‘Grant administrators should be aware that geographic

and political distribution of grants may be seen as indicators of the general equity of the program,’ op. cit., p. 22.

From Policy to Program

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2.56 The ANAO assessed the distribution of GP Super Clinics with respect  to which party held the electorate at the time the relevant clinic locations were  announced,  and  whether  the  electorate  was  classified  by  the  Australian  Electoral  Commission  as  a  marginal  electorate.100  The  ANAO  also  assessed  whether  a  clinic  was  in  an  area  of  unmet  heal

thcare  need  at  the  time  its 

location was announced, based on whether the clinic was located in a District  of Workforce Shortage (DWS). Tables showing key elements of the distribution  of clinics and funding discussed below are in Appendix 3. It should be noted  that  the  ANAO’s  analysis  has  been  undertaken  based  on  the  locations/expected  locations  of  the  clinics,  and  does  not  account  for  the  potential of ca

tchment populations from neighbouring areas to use a clinic. For  example, based on the electorate boundaries for the 2007 election, while the  Berwick clinic is located in the La Trobe electorate in Melbourne, it is adjacent  to the neighbouring Holt electorate.  At the time the Berwick GP Super Clinic  was  announced,  La  Trobe  was  a  marginal  electorate  held  by  the  Coalition,  whereas  Holt  was  a  marginal  electorate  he

ld  by  the  ALP.  Similarly,  the 

Noarlunga GP Super Clinic, on the southern fringes of Adelaide, was not in a  DWS, but residential areas less than 1 kilometre away were. 

2.57 Analysis  of  the  distribution  of  the  clinic  locations  announced  in  the  2007  election  context  shows  that  54.8  per  cent  of  clinics  were  located  in  marginal  electorates;  these  clinics  also  accounted  for  65.7  per  cent  of  announced indicative fundi

ng. This compares with 31 per cent of electorates 

being classified as marginal at the 2007 election. In relation to the remaining  clinics—the five announced in 2009101 and those announced in the 2010 election  context—43.8  per  cent  were  in  marginal  electorates;  these  clinics  also  accounted  for  43.7  per  cent  of  announced  funding.  This  compares  with  37 per cent of electorates being marginal at the 2010 election. Further a

nalysis 

of clinics announced in 2007 marginal electorates, on the basis of DWS status,  shows that 82.4 per cent of the clinics announced in 2007 were in a DWS. For  the  remaining  clinics  announced  in  2009  and  2010  that  were  in  marginal  electorates, 57.1 per cent were also in a DWS. 

                                                       100 The analysis is based on 63, rather than 65, clinics. The clinics in Gladstone (announced in 2007) and Karratha (announced in 2010) were excluded from the

analyses as the relevant electorates in which the clinics were located were

newly created for the 2007 and 2010 elections and as such were not held by any political party at the time the proposed clinic was announced. 101 Whilst this audit report generally treats the five clinics announced in 2009 as ‘first round’ clinics alongside the

32 announced in 2007, for the purposes of the electoral analysis it is necessary to group them together with the 28 ‘second round’ clinics announced in 2010 as they were announced in the lead-up to the 2010 election.

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policy.  Based  on  these  considerations,  DoHA  sought  and  received  confirmation from the Minister for both rounds as to which process should  apply  to  the  individual  clinics  announced  by  the  Government.  While  most  decisions relating to the adoption of a non‐competitive process were informed  by statements made in the election context, there were some exceptions to this.  In one

 first round location, Palmerston, the Minister did not decide that the  funding process would be non‐competitive until late 2008: up until that point  the  funding  process  was  unclear.  In  the  second  round,  there  were  three  locations97  where,  following  community  consultation  sessions,  and  after  receiving advice from DoHA, the Minister decided to change the process from  competitive to non‐competitive. 

2.53 Consistent with the Minister’s decision to adopt a hybrid of competitive  and non

‐competitive processes, the program guidelines for both the first and  second  rounds  specified  that  differing  grant  funding  processes  would  potentially apply to certain locations. 

2.54 However, DoHA’s advice to the Minister on program implementation,  including in relation to the development of the guidelines, did not address the  risks  to  be  managed98  in  adopting  a  non‐competitive  process  for  specific  locations. In this respect

, the approach to advising Ministers on risk, proposed  in Recommendation 1, is also relevant. 

Location of clinics and the distribution of funding 2.55 As outlined in the ANAO’s Better Practice Guide on the administration  of grant programs: 

A measure of achieved grant program outcomes that is frequently the subject  of public and parliamentary scrutiny is the distribution of funding awarded  under the program. In this respect, the geographic and political distribution of  grants may be seen as indicators of the general equity of access to a program,  as well as its effectivene

ss in targeting funding in accordance with the stated  policy objectives of the program.99 

                                                       97 Lower Hunter, Emerald, and Townsville (Northern Beaches). 98

Footnote 12 outlines a number of the potential risks. 99 Better Practice Guide—Implementing Better Practice Grants Administration, op. cit., p. 100. Similarly, the ANAO’s 2002 Administration of Grants: Better Practice Guide observed that: ‘Grant administrators should be aware that geographic

and political distribution of grants may be seen as indicators of the general equity of the program,’ op. cit., p. 22.

From Policy to Program

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2.56 The ANAO assessed the distribution of GP Super Clinics with respect  to which party held the electorate at the time the relevant clinic locations were  announced,  and  whether  the  electorate  was  classified  by  the  Australian  Electoral  Commission  as  a  marginal  electorate.100  The  ANAO  also  assessed  whether  a  clinic  was  in  an  area  of  unmet  heal

thcare  need  at  the  time  its 

location was announced, based on whether the clinic was located in a District  of Workforce Shortage (DWS). Tables showing key elements of the distribution  of clinics and funding discussed below are in Appendix 3. It should be noted  that  the  ANAO’s  analysis  has  been  undertaken  based  on  the  locations/expected  locations  of  the  clinics,  and  does  not  account  for  the  potential of ca

tchment populations from neighbouring areas to use a clinic. For  example, based on the electorate boundaries for the 2007 election, while the  Berwick clinic is located in the La Trobe electorate in Melbourne, it is adjacent  to the neighbouring Holt electorate.  At the time the Berwick GP Super Clinic  was  announced,  La  Trobe  was  a  marginal  electorate  held  by  the  Coalition,  whereas  Holt  was  a  marginal  electorate  he

ld  by  the  ALP.  Similarly,  the 

Noarlunga GP Super Clinic, on the southern fringes of Adelaide, was not in a  DWS, but residential areas less than 1 kilometre away were. 

2.57 Analysis  of  the  distribution  of  the  clinic  locations  announced  in  the  2007  election  context  shows  that  54.8  per  cent  of  clinics  were  located  in  marginal  electorates;  these  clinics  also  accounted  for  65.7  per  cent  of  announced indicative fundi

ng. This compares with 31 per cent of electorates 

being classified as marginal at the 2007 election. In relation to the remaining  clinics—the five announced in 2009101 and those announced in the 2010 election  context—43.8  per  cent  were  in  marginal  electorates;  these  clinics  also  accounted  for  43.7  per  cent  of  announced  funding.  This  compares  with  37 per cent of electorates being marginal at the 2010 election. Further a

nalysis 

of clinics announced in 2007 marginal electorates, on the basis of DWS status,  shows that 82.4 per cent of the clinics announced in 2007 were in a DWS. For  the  remaining  clinics  announced  in  2009  and  2010  that  were  in  marginal  electorates, 57.1 per cent were also in a DWS. 

                                                       100 The analysis is based on 63, rather than 65, clinics. The clinics in Gladstone (announced in 2007) and Karratha (announced in 2010) were excluded from the analyses as the relevant electorates in which the clinics were located were

newly created for the 2007 and 2010 elections and as such were not held by any political party at the time the proposed clinic was announced. 101 Whilst this audit report generally treats the five clinics announced in 2009 as ‘first round’ clinics alongside the

32 announced in 2007, for the purposes of the electoral analysis it is necessary to group them together with the 28 ‘second round’ clinics announced in 2010 as they were announced in the lead-up to the 2010 election.

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2.58 Clinic  locations  announced  in  the  2007  election  context  were  substantially weighted towards Coalition-held electorates, with 74.2 per cent  of clinics in such electorates; these clinics also accounted for 78.4 per cent of  announced funding. ALP-held electorates accounted for 22.6 per cent of clinics  and  19.9  per  cent  of  announced  funding.  There  was  only  one  clinic  in  an  independen

t-held  electorate,  accounting  for  1.7  per  cent  of  the  announced  funding.  The  proportion  of  both  clinics  and  allocated  funding  to  Coalition  electorates announced in the 2007 election context was high; at the relevant  time the Coalition held 58 per cent of seats across Australia compared to the  ALP’s 40 per cent. 

2.59   In  contrast,  clinic  locations  announced  in  relation  to  the  remaining  clinics—the five announced in 2009

 and those announced in the 2010 election 

context—were  more  weighted  towards  ALP-held  electorates,  with  56.2 per cent  of  clinics  in  such  electorates;  these  clinics  also  accounted  for  66.0 per cent of announced funding. Coalition-held electorates accounted for  37.5 per cent of clinics announced and 29.7 per cent of announced indicative  funding.  There  were  two  clinics  in  independent  electorates,  accounting  for  4.3 per  cent  of  announced  funding.  In  terms  o

f  the  number  of  clinics,  the 

relative proportion of clinics in ALP and Coalition-held electorates broadly  reflects the distribution of seats across parties; at the relevant time the ALP  held  55 per cent  of  seats  across  Australia  compared  to  the  Coalition’s  43 per cent. 

2.60 Across both funding rounds, 39.7 per cent of announced clinics were  located  in  ALP-held  electorates,  55.5  per  cent  in  Coalition-held  electorates,  and 4.8 per ce

nt in independent-held electorates. In terms of funding, this was  almost evenly split between the ALP-held (49.5 per cent) and Coalition-held  (47.1 per cent) electorates, with independent-held electorates accounting for  3.4 per cent. The relatively even split was a consequence of the average value  of grants announced in 2010 being substantially higher than those announced  in  2007,  and  the  fact  that  ALP-held  electorates  received  seven  o

f  the  eight 

highest‐value  ($15  million)  grants  announced  in  the  context  of  the  2010  election. 

2.61 In terms of DWS status, 64.0 per cent of clinics in ALP-held electorates  were  also  in  DWS  areas.  This  compares  with  57.1  per  cent  for  clinics  in  Coalition-held  electorates.  Two  of  the  three  clinics  in  independent-held  electorates were also in DWS areas. 

From Policy to Program

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Conclusion 2.62 The ANAO has previously observed that departments should advise  Ministers  on  any  measures  considered  necessary  to  manage  any  significant  risks to the Commonwealth achieving value for money when acting on election  commitments.    In  the  lead  up  to  the  2007  election,  the  ALP  announced  32  proposed  locations  for  GP  Super  Clinics.    Following  the  election,  DoHA  provided  advice  to  the  Minister  that  a  ‘key’  implementation  risk  was  the  degree  o

f  ‘acceptance  and  support’  for  the  announced  clinics  by  local  communities  and  health  professionals—including  possible  concerns  about  impacts on existing health services—and proposed that this risk be managed  through consultations.  

2.63 However, the department did not advise the Minister whether it was  aware of any particular implementation risks applying to the specific locations  announced in the context of the incoming government’s 2007 election policy. A  range  of  options  were  p

otentially  available  for  doing  so,  including  some 

analysis, in the time available, of the extent to which the announced locations  potentially satisfied some or all of the four factors outlined in the incoming  government’s GP Super Clinics policy.  The department advised the ANAO  that it considered there was insufficient and unsophisticated data available at  the time to draw conclusions on location issues. While some information and  analysis was provided to the Minist

er’s office by DoHA on a number of factors 

that might inform the choice of clinic locations in the second round in 2010,  that  information  was  of  a  relatively  informal  nature  through  emails  to  ministerial staff rather than a formal briefing to the Minister. 

2.64 In response to a question on notice at Senate Estimates in early 2011  regarding  the  65  locations  a

nnounced  across  the  two  rounds,  DoHA 

commissioned  a  broad  post-hoc  analysis  against  the  four  factors  in  the  2007 election policy, plus an additional fifth factor of high population growth.  The  analysis  indicated  that  a  high  proportion  (83.8  per  cent)  of  first  round  clinic locations met one or two of the five factors. Conversely, a reasonably  high  proportion  (71.4  per  cent)  of  second  round  clinics  met  three  or  more  factors.  

2.65 Over  one‐

third  of  locations  were  subject  to  non‐competitive  grant  processes. The use of non‐competitive processes for specific clinics announced  in  2007  and  2010  generally  reflected  election  policy  commitments,  although  there were some exceptions to this. In one first round location, Palmerston, the  Minister did not decide that the funding would be a non‐competitive process 

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2.58 Clinic  locations  announced  in  the  2007  election  context  were  substantially weighted towards Coalition-held electorates, with 74.2 per cent  of clinics in such electorates; these clinics also accounted for 78.4 per cent of  announced funding. ALP-held electorates accounted for 22.6 per cent of clinics  and  19.9  per  cent  of  announced  funding.  There  was  only  one  clinic  in  an  independen

t-held  electorate,  accounting  for  1.7  per  cent  of  the  announced  funding.  The  proportion  of  both  clinics  and  allocated  funding  to  Coalition  electorates announced in the 2007 election context was high; at the relevant  time the Coalition held 58 per cent of seats across Australia compared to the  ALP’s 40 per cent. 

2.59   In  contrast,  clinic  locations  announced  in  relation  to  the  remaining  clinics—the five announced in 2009

 and those announced in the 2010 election 

context—were  more  weighted  towards  ALP-held  electorates,  with  56.2 per cent  of  clinics  in  such  electorates;  these  clinics  also  accounted  for  66.0 per cent of announced funding. Coalition-held electorates accounted for  37.5 per cent of clinics announced and 29.7 per cent of announced indicative  funding.  There  were  two  clinics  in  independent  electorates,  accounting  for  4.3 per  cent  of  announced  funding.  In  terms  of  the

  number  of  clinics,  the 

relative proportion of clinics in ALP and Coalition-held electorates broadly  reflects the distribution of seats across parties; at the relevant time the ALP  held  55 per cent  of  seats  across  Australia  compared  to  the  Coalition’s  43 per cent. 

2.60 Across both funding rounds, 39.7 per cent of announced clinics were  located  in  ALP-held  electorates,  55.5  per  cent  in  Coalition-held  electorates,  and 4.8 per ce

nt in independent-held electorates. In terms of funding, this was  almost evenly split between the ALP-held (49.5 per cent) and Coalition-held  (47.1 per cent) electorates, with independent-held electorates accounting for  3.4 per cent. The relatively even split was a consequence of the average value  of grants announced in 2010 being substantially higher than those announced  in  2007,  and  the  fact  that  ALP-held  electorates  received  seven  o

f  the  eight 

highest‐value  ($15  million)  grants  announced  in  the  context  of  the  2010  election. 

2.61 In terms of DWS status, 64.0 per cent of clinics in ALP-held electorates  were  also  in  DWS  areas.  This  compares  with  57.1  per  cent  for  clinics  in  Coalition-held  electorates.  Two  of  the  three  clinics  in  independent-held  electorates were also in DWS areas. 

From Policy to Program

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Conclusion 2.62 The ANAO has previously observed that departments should advise  Ministers  on  any  measures  considered  necessary  to  manage  any  significant  risks to the Commonwealth achieving value for money when acting on election  commitments.    In  the  lead  up  to  the  2007  election,  the  ALP  announced  32  proposed  locations  for  GP  Super  Clinics.    Following  the  election,  DoHA  provided  advice  to  the  Minister  that  a  ‘key’  implementation  risk  was  the  degree  o

f  ‘acceptance  and  support’  for  the  announced  clinics  by  local  communities  and  health  professionals—including  possible  concerns  about  impacts on existing health services—and proposed that this risk be managed  through consultations.  

2.63 However, the department did not advise the Minister whether it was  aware of any particular implementation risks applying to the specific locations  announced in the context of the incoming government’s 2007 election policy. A  range  of  options  were  p

otentially  available  for  doing  so,  including  some 

analysis, in the time available, of the extent to which the announced locations  potentially satisfied some or all of the four factors outlined in the incoming  government’s GP Super Clinics policy.  The department advised the ANAO  that it considered there was insufficient and unsophisticated data available at  the time to draw conclusions on location issues. While some information and  analysis was provided to the Minis

ter’s office by DoHA on a number of factors 

that might inform the choice of clinic locations in the second round in 2010,  that  information  was  of  a  relatively  informal  nature  through  emails  to  ministerial staff rather than a formal briefing to the Minister. 

2.64 In response to a question on notice at Senate Estimates in early 2011  regarding  the  65  locations  a

nnounced  across  the  two  rounds,  DoHA 

commissioned  a  broad  post-hoc  analysis  against  the  four  factors  in  the  2007 election policy, plus an additional fifth factor of high population growth.  The  analysis  indicated  that  a  high  proportion  (83.8  per  cent)  of  first  round  clinic locations met one or two of the five factors. Conversely, a reasonably  high  proportion  (71.4  per  cent)  of  second  round  clinics  met  three  or  more  factors.  

2.65 Over  one‐

third  of  locations  were  subject  to  non‐competitive  grant  processes. The use of non‐competitive processes for specific clinics announced  in  2007  and  2010  generally  reflected  election  policy  commitments,  although  there were some exceptions to this. In one first round location, Palmerston, the  Minister did not decide that the funding would be a non‐competitive process 

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until  late  2008:  up  until that  point  the  funding  process  was  unclear.  In  the  second  round,  there  were  three  locations102  where,  following  community  consultation sessions, and receiving advice from DoHA, the Minister decided  to change the process from competitive to non‐competitive.103 DoHA’s advice  to the Minister on program implementation did not address the risks to be  managed104 in adopting a non‐competitive process for specific locations. The  ANAO observed that typically, non‐competitive grant processes were adopted  where  a  clinic  was  to  be  built  by  a  state  health  department,  regional  or  community health service, Division of General Practice or local council. 

2.66 Analysis  of  the  distribution  of  the  clinic  locations  announced  in  the  2007  election  context  shows  that  54.8  per  cent  of  clinic

s  were  located  in 

marginal  electorates;  these  clinics  also  accounted  for  65.7  per  cent  of  the  announced indicative funding. This compares with 31 per cent of electorates  being marginal in the 2007 election. In relation to the remaining clinics—the 

five announced in 2009 and those announced in the 2010 election context— 43.8 per  cent  were  in  marginal  electorates;  these  clinics  also  accounted  for  43.7 per  cent  of  the  announced  indicati

ve  funding.  This  compares  with 

37 per cent of electorates being marginal in the 2010 election. Further analysis  of  clinics  announced  in  marginal  electorates,  on  the  basis  of  District  of  Workforce  Shortage  (DWS)  status,  shows  that  82.4  per  cent  of  the  clinics  announced in 2007 were in a DWS. For the remaining clinics announced in  2009 and 2010 that were in marginal electorates, 57.1 per cent were al

so in 

a DWS. 

                                                       102 Lower Hunter, Emerald, and Townsville (Northern Beaches). 103

The five clinic locations announced in 2009 were funded under non-competitive process, as these locations were added to the GP Super Clinics program as a result of specific proposals developed by local organisations being submitted to DoHA and the Minister. 104

Footnote 12 outlines a number of the potential risks.

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3. Selection Processes

This chapter examines DoHA’s process for assessing applications to select a preferred  applicant to receive funding under the GP Super Clinics program.  

Introduction 3.1 A key consideration in the administration of grant programs is whether  decision‐makers have equitably and transparently selected applicants that best  represent value for public money in the context of the program objectives and  outcomes.105  In  this  context,  a  well  designed  and  robust  assessment  and  selection process will help mitigate risks to achieving program objectives.  

3.2 To  determine  whether  DoHA  established  an  appropriate  process  to  assess applicat

ions and select a preferred applicant to receive funding under  the GP Super Clinics program, this chapter examines:  

 the overall framework for assessing applications; 

 how  applications  were  assessed  to  determine  whether  they  appropriately addressed key local healthcare needs; 

 how value for money was assessed; and  

 DoHA’s approach where initial assessment processes failed to identify  a preferred applicant. 

Framework for assessing applications 3.3 Separate Invitation to Apply (ITA) and assessment processes were run  for  each  location,  irrespective  of  whether  they  were  to  be  funded  under  a  competitive  or  non‐competitive  process.  The  opening  of  ITA  processes  was  advertised in the national and regional press and on both the Department’s GP  Super Clinics webpage and tenders and grants webpage. DoHA also generated  ‘interested parties’ email lists through local consultation processes at most GP  Super Clini

c locations, and the relevant local list was used to notify potential  applicants. Competitively funded locations attracted a varied and sometimes  sizeable number of applications, although on two occasions no applications 

                                                       105 Department of Finance and Deregulation, Commonwealth Grant Guidelines: Policies and Principles for Grants Administration, July 2009, p. 29.

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until  late  2008:  up  until that  point  the  funding  process  was  unclear.  In  the  second  round,  there  were  three  locations102  where,  following  community  consultation sessions, and receiving advice from DoHA, the Minister decided  to change the process from competitive to non‐competitive.103 DoHA’s advice  to the Minister on program implementation did not address the risks to be  managed104 in adopting a non‐competitive process for specific locations. The  ANAO observed that typically, non‐competitive grant processes were adopted  where  a  clinic  was  to  be  built  by  a  state  health  department,  regional  or  community health service, Division of General Practice or local council. 

2.66 Analysis  of  the  distribution  of  the  clinic  locations  announced  in  the  2007  election  context  shows  that  54.8  per  cent  of  clinic

s  were  located  in 

marginal  electorates;  these  clinics  also  accounted  for  65.7  per  cent  of  the  announced indicative funding. This compares with 31 per cent of electorates  being marginal in the 2007 election. In relation to the remaining clinics—the 

five announced in 2009 and those announced in the 2010 election context— 43.8 per  cent  were  in  marginal  electorates;  these  clinics  also  accounted  for  43.7 per  cent  of  the  announced  indicati

ve  funding.  This  compares  with 

37 per cent of electorates being marginal in the 2010 election. Further analysis  of  clinics  announced  in  marginal  electorates,  on  the  basis  of  District  of  Workforce  Shortage  (DWS)  status,  shows  that  82.4  per  cent  of  the  clinics  announced in 2007 were in a DWS. For the remaining clinics announced in  2009 and 2010 that were in marginal electorates, 57.1 per cent were al

so in 

a DWS. 

                                                       102 Lower Hunter, Emerald, and Townsville (Northern Beaches). 103

The five clinic locations announced in 2009 were funded under non-competitive process, as these locations were added to the GP Super Clinics program as a result of specific proposals developed by local organisations being submitted to DoHA and the Minister. 104

Footnote 12 outlines a number of the potential risks.

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3. Selection Processes

This chapter examines DoHA’s process for assessing applications to select a preferred  applicant to receive funding under the GP Super Clinics program.  

Introduction 3.1 A key consideration in the administration of grant programs is whether  decision‐makers have equitably and transparently selected applicants that best  represent value for public money in the context of the program objectives and  outcomes.105  In  this  context,  a  well  designed  and  robust  assessment  and  selection process will help mitigate risks to achieving program objectives.  

3.2 To  determine  whether  DoHA  established  an  appropriate  process  to  assess applicat

ions and select a preferred applicant to receive funding under  the GP Super Clinics program, this chapter examines:  

 the overall framework for assessing applications; 

 how  applications  were  assessed  to  determine  whether  they  appropriately addressed key local healthcare needs; 

 how value for money was assessed; and  

 DoHA’s approach where initial assessment processes failed to identify  a preferred applicant. 

Framework for assessing applications 3.3 Separate Invitation to Apply (ITA) and assessment processes were run  for  each  location,  irrespective  of  whether  they  were  to  be  funded  under  a  competitive  or  non‐competitive  process.  The  opening  of  ITA  processes  was  advertised in the national and regional press and on both the Department’s GP  Super Clinics webpage and tenders and grants webpage. DoHA also generated  ‘interested parties’ email lists through local consultation processes at most GP  Super Clini

c locations, and the relevant local list was used to notify potential  applicants. Competitively funded locations attracted a varied and sometimes  sizeable number of applications, although on two occasions no applications 

                                                       105 Department of Finance and Deregulation, Commonwealth Grant Guidelines: Policies and Principles for Grants Administration, July 2009, p. 29.

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were received106, which required DoHA run a further ITA process. In total, 216  applications  were  received  across  the  65  clinic  locations,  with  the  competitively‐funded locations accounting for 195 of the applications.  

3.4 Apart from some slight variation between the first and second rounds,  essentially the same assessment framework and methodology was applied to  all locations, irrespective of whether the funding process was competitive or  non‐competitive.  While  the  program  guidelines  for  both  rounds  required  applicants  to  identify  other  funding  sources,  including  State  or  Commonwealth  grants,  the  ANAO  did  not  observe  any  formal  checks  to  prevent  double  dipping  or  any  re

ferences  to  the  issue  in  assessment  plans, 

assessment outcome reports or FMA Regulation 9 approval documentation.107    DoHA  advised  the  ANAO  that  enquiries  were  made  by  assessment  panel  members or panel secretariat staff to areas of the department that potentially  funded  health  infrastructure  projects,  but  as  these  enquiries  revealed  no  instances of double dipping, no records were kept of this process. A better  practice approach would have been to retain a written or electronic record of  the enquiries that had been made and briefly no

te the completion of the checks 

in the assessment outcome report and subsequent FMA Regulation 9 advice to  the financial approver. 

3.5 Following  a  compliance  check  to  determine  whether  applications  complied  with  mandatory  requirements108,  applications  were  assessed  by  a  three  to  four  member  panel  convened  for  each  location.  The  panels  were  chaired at SES level109, and included a medical adviser.  All applications were  reviewed  by  an  independent

  financial  adviser  and  a  written  report  was 

provided to the relevant panel by the adviser.110 

                                                       106 There was also one instance in which no application was received in the initial non-competitive process. 107

Double dipping refers to grant recipients being able to obtain grant funding for the same project purpose from more than one source. Agencies have long been required to specifically manage this risk, with the (then) Department of Finance and Administration maintaining a register of discretionary grants for this purpose until December 2008 and later through the Commonwealth Grant Guidelines, see Department of Finance and Deregulation, Commonwealth Grant Guidelines: Policies and Principles for Grants Administration, July 2009, p.16; ANAO Better Practice Guide Implementing Better Practice Grants Administration, June 2010, Canberra, p.47; and ANAO Administration of Grants: Better Practice Guide, May 2002. 108

In the first round three applications were deemed to be non-compliant and excluded from assessment; other instances of non-compliance were considered minor and not grounds for excluding an application. In the second round, there were no instances where applications were excluded on the basis of non-compliance. 109

The chair was usually the Assistant Secretary of the GP Super Clinics Branch, who provided a high degree of ‘corporate memory’ across the assessments of different locations, thus promoting consistency of assessment approach. 110 The report assessed applications against various factors including the proposed healthcare services, underlying

management and business structures, the experience and capacity of the proponent, and financial and budget information.

Selection Processes

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3.6 Applications  were  assessed  against  selection  criteria  and  given  a  numerical score out of 100. On occasion, further information was sought by the  panel  from  applicants  in  order  to  complete  assessments  and  score  the  application. In the case of non‐competitive processes, such requests could go  beyond  minor  clarification  issues  and  involve  the  collection  of  significant  amounts of information. Before mak

ing such requests, the panel sought advice 

from DoHA probity advisers. 

3.7 Following the completion of assessments, the panel provided a written  recommendation  to  the  decision‐maker  (Division  Head)  as  to  whether  a  preferred  applicant  for  the  clinic  location  had  been  identified,  along  with  copies  of  individual  application  assessment  sheets,  comparative  assessment  summaries, a project‐specific risk management plan and a covering minute of  advice  drafte

d  by  the  DoHA  officers  who  sat  on  the  panel.111  The  Division  Head, who was also the departmental delegate authorised to give financial  approval of  GP Super Clinic grants under FMA Regulation 9, approved each  of  the  panel’s  recommendations  for  the  36  clinics  in  the  ANAO’s  sample.  Where a preferred applicant was identified and approved, the Minister was  notified of the assessment outcome. In the majo

rity of cases in the ANAO’s 

sample  this  was  done  via  a  short  information  brief  for  the  relevant  clinic,     although DoHA advised the ANAO that on some occasions this information  was instead provided to the Minister’s office verbally, via email, or through  general program update reports provided to the Minister’s office.  

3.8 Based on the numerical assessment score given by the panel, the extent  to which the ‘top‐ranked’112 applications met selection criteria varied greatly.  The ANAO’s analysis of top‐ranked application scores for all lo

cations where 

assessments  were  completed,  found  that  scores  for  these  top‐ranked  applications ranged from a low of 36 out of 100 in the first round through to a  maximum of 100 in the second round. In terms of the average scores given in  the  initial  scoring  of  applications,  top‐ranked  non‐competitive  applications  were  scored  lower  (average  of  60)  compared  to  those  applications  for 

                                                       111 On a number of occasions the panel reached a view that no applications were acceptable as they failed to score a minimum of 50 out of 100, and hence did not recommend a preferred candidate. As discussed later in this chapter, in

such cases advice was provided to the DoHA Division Head on alternative courses of action. 112 The ‘top-ranked’ application was that with the highest numerical score assigned by the assessment panel. The term ‘preferred applicant’ was used only when the assessment process resulted in an application that DoHA recommended

for a potential funding agreement.

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were received106, which required DoHA run a further ITA process. In total, 216  applications  were  received  across  the  65  clinic  locations,  with  the  competitively‐funded locations accounting for 195 of the applications.  

3.4 Apart from some slight variation between the first and second rounds,  essentially the same assessment framework and methodology was applied to  all locations, irrespective of whether the funding process was competitive or  non‐competitive.  While  the  program  guidelines  for  both  rounds  required  applicants  to  identify  other  funding  sources,  including  State  or  Commonwealth  grants,  the  ANAO  did  not  observe  any  formal  checks  to  prevent  double  dipping  or  any  re

ferences  to  the  issue  in  assessment  plans, 

assessment outcome reports or FMA Regulation 9 approval documentation.107    DoHA  advised  the  ANAO  that  enquiries  were  made  by  assessment  panel  members or panel secretariat staff to areas of the department that potentially  funded  health  infrastructure  projects,  but  as  these  enquiries  revealed  no  instances of double dipping, no records were kept of this process. A better  practice approach would have been to retain a written or electronic record of  the enquiries that had been made and briefly no

te the completion of the checks 

in the assessment outcome report and subsequent FMA Regulation 9 advice to  the financial approver. 

3.5 Following  a  compliance  check  to  determine  whether  applications  complied  with  mandatory  requirements108,  applications  were  assessed  by  a  three  to  four  member  panel  convened  for  each  location.  The  panels  were  chaired at SES level109, and included a medical adviser.  All applications were  reviewed  by  an  independent

  financial  adviser  and  a  written  report  was 

provided to the relevant panel by the adviser.110 

                                                       106 There was also one instance in which no application was received in the initial non-competitive process. 107

Double dipping refers to grant recipients being able to obtain grant funding for the same project purpose from more than one source. Agencies have long been required to specifically manage this risk, with the (then) Department of Finance and Administration maintaining a register of discretionary grants for this purpose until December 2008 and later through the Commonwealth Grant Guidelines, see Department of Finance and Deregulation, Commonwealth Grant Guidelines: Policies and

Principles for Grants Administration, July 2009, p.16; ANAO Better Practice Guide Implementing Better Practice Grants Administration, June 2010, Canberra, p.47; and ANAO Administration of Grants: Better Practice Guide, May 2002. 108

In the first round three applications were deemed to be non-compliant and excluded from assessment; other instances of non-compliance were considered minor and not grounds for excluding an application. In the second round, there were no instances where applications were excluded on the basis of non-compliance. 109

The chair was usually the Assistant Secretary of the GP Super Clinics Branch, who provided a high degree of ‘corporate memory’ across the assessments of different locations, thus promoting consistency of assessment approach. 110 The report assessed applications against various factors including the proposed healthcare services, underlying

management and business structures, the experience and capacity of the proponent, and financial and budget information.

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3.6 Applications  were  assessed  against  selection  criteria  and  given  a  numerical score out of 100. On occasion, further information was sought by the  panel  from  applicants  in  order  to  complete  assessments  and  score  the  application. In the case of non‐competitive processes, such requests could go  beyond  minor  clarification  issues  and  involve  the  collection  of  significant  amounts of information. Before mak

ing such requests, the panel sought advice 

from DoHA probity advisers. 

3.7 Following the completion of assessments, the panel provided a written  recommendation  to  the  decision‐maker  (Division  Head)  as  to  whether  a  preferred  applicant  for  the  clinic  location  had  been  identified,  along  with  copies  of  individual  application  assessment  sheets,  comparative  assessment  summaries, a project‐specific risk management plan and a covering minute of  advice  drafte

d  by  the  DoHA  officers  who  sat  on  the  panel.111  The  Division  Head, who was also the departmental delegate authorised to give financial  approval of  GP Super Clinic grants under FMA Regulation 9, approved each  of  the  panel’s  recommendations  for  the  36  clinics  in  the  ANAO’s  sample.  Where a preferred applicant was identified and approved, the Minister was  notified of the assessment outcome. In the majo

rity of cases in the ANAO’s 

sample  this  was  done  via  a  short  information  brief  for  the  relevant  clinic,     although DoHA advised the ANAO that on some occasions this information  was instead provided to the Minister’s office verbally, via email, or through  general program update reports provided to the Minister’s office.  

3.8 Based on the numerical assessment score given by the panel, the extent  to which the ‘top‐ranked’112 applications met selection criteria varied greatly.  The ANAO’s analysis of top‐ranked application scores for all lo

cations where 

assessments  were  completed,  found  that  scores  for  these  top‐ranked  applications ranged from a low of 36 out of 100 in the first round through to a  maximum of 100 in the second round. In terms of the average scores given in  the  initial  scoring  of  applications,  top‐ranked  non‐competitive  applications  were  scored  lower  (average  of  60)  compared  to  those  applications  for 

                                                       111 On a number of occasions the panel reached a view that no applications were acceptable as they failed to score a minimum of 50 out of 100, and hence did not recommend a preferred candidate. As discussed later in this chapter, in

such cases advice was provided to the DoHA Division Head on alternative courses of action. 112 The ‘top-ranked’ application was that with the highest numerical score assigned by the assessment panel. The term ‘preferred applicant’ was used only when the assessment process resulted in an application that DoHA recommended

for a potential funding agreement.

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competitively  funded  locations  (average  of  70)113,  suggesting  that  overall,  competitive processes resulted in higher quality applications being considered.  

Addressing local needs 3.9 The  importance  of  tailoring  each  GP  Super  Clinic  to  address  local  health needs was a key aspect of the 2007 GP Super Clinic policy. It is also a  central  consideration  in  assessing  value  for  money,  as  each  clinic  should  represent an effective use of grant funds to support improved local access to  multidisciplinary  and  integrated  primary  healthcare,  especially  where  there  are recognised gaps in local services or facilities.114 

3.10 The issue of local need was recognised, in part, in one of the program  objectives—that  clinics  were  required  to  demonstrate  that  they  were  ‘responsive’  to  local  community  needs  and  priorities.  Information  on  the  nature  of  local  needs  was  available  to  applicants  and  the  panel  through  a  number of sources: 

 DoHA provided local demographic and health statistics and guidance  to applicants as part of its ITA documentation process. This data wa

readily  available  and  was  considered  by  DoHA  to  reflect  unmet  demand for healthcare services;     

 where  DoHA  had  undertaken  local  consultation  sessions  before  opening  the  ITA,  reports  from  these  sessions  provided  relevant  information.  However, DoHA did not provide the reports from local  consultation sessions to all members of the assessment panels nor were  the reports explicitly discussed in panel deliberations115;  

 letters of support accompanying applications from organisations within  the local community provided a potential source of information on the  appropriateness of part

icular proposals, although the quality of letters  provided by applicants varied widely; and 

                                                       113 The ANAO also calculated the median numerical scores of the top-ranked applicant for the competitive and non-competitive processes across both rounds. These broadly corroborated the observed difference in the average scores

between the two processes, with competitive processes having a median score of 69 compared to 62 for non-competitive processes. 114 The Commonwealth Grant Guidelines emphasise that a fundamental appraisal criterion is that a grant should add value

by achieving something worthwhile that would not occur without grant assistance. See Commonwealth Grant Guidelines, op. cit., p. 30. See also 2002 ANAO Better Practice Guide—Administration of Grants, op. cit., p.39 and 2010 ANAO Better Practice Guide—Implementing Better Practice Grants Administration, op. cit., p.64. 115

Specifically, it w as noted by a medical adviser that while having these reports was not critical for undertaking the assessments, as other panel members were aware of the issues raised in them, these reports would have been helpful in the context of better understanding local needs and how the applications addressed them.

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 some  applications  provided  information  on  consultations  between  applicants and health providers relating to community need as well as  indicating opportunities for an integrated approach to service planning  and delivery.   

3.11 The ITA documents and applicant responses relating to the program  objective discussed above were the basis for panels to assess and decide on  whether an applicant would be responsive to local needs.   In the sample of  applications examined by the ANAO, significant variability was observed in  applicant  responses  to  this  issue.  Similarly,  the  panel  medical  advisers  interviewed by the ANAO indicated that the amount of relevant information  contained in applications varied and they sometimes attempted to extrapolate  information  to  distinguish  whether  the  services  proposed  in  applications  genuinely reflected the needs of the relevant local community rather than just  ‘looking good on paper’.  

3.12 The panel chairperson would sometimes contact applicants to clarify  information.  However,  panels  rarely  attempted  to  test  the  claims  or  information  provided  in  applications  by  interviewing  applicants  or  local  stakeholders. 

Considering the impacts of GP Super Clinics on existing health services

3.13 Public commentary on the GP Super Clinics program has raised the  issue of adverse impacts on existing GP practices.116 Criticisms have included  that Commonwealth funding has provided a subsidy to recipients t

hat gives 

them a financial advantage over their local competitors. 

3.14 The program guidelines required that applications ‘insofar as possibleʹ,  detail ‘the extent to which the proposed GP Super Clinic could have an impact  on  these  existing  services’.117  However,  the  application  assessment  process,  including assessment panel deliberations, did not explicitly consider the issue  of whether a proposed clinic would impact on existing GP practices. 

                                        

              

116 N Bita, ‘Doctor dearth: why super surgeries are clinically dead’, The Australian, 13 August, 2011. Australian Medical Association, ‘GP Super Clinics—Another example of failing to consult with the medical profession’, media release, 9 February 2011.

117 Department of Health and Ageing, GP Super Clinics national program guide 2008, p. 15. Department of Health and Ageing, GP Super Clinics national program guide 2010, p. 25.

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competitively  funded  locations  (average  of  70)113,  suggesting  that  overall,  competitive processes resulted in higher quality applications being considered.  

Addressing local needs 3.9 The  importance  of  tailoring  each  GP  Super  Clinic  to  address  local  health needs was a key aspect of the 2007 GP Super Clinic policy. It is also a  central  consideration  in  assessing  value  for  money,  as  each  clinic  should  represent an effective use of grant funds to support improved local access to  multidisciplinary  and  integrated  primary  healthcare,  especially  where  there  are recognised gaps in local services or facilities.114 

3.10 The issue of local need was recognised, in part, in one of the program  objectives—that  clinics  were  required  to  demonstrate  that  they  were  ‘responsive’  to  local  community  needs  and  priorities.  Information  on  the  nature  of  local  needs  was  available  to  applicants  and  the  panel  through  a  number of sources: 

 DoHA provided local demographic and health statistics and guidance  to applicants as part of its ITA documentation process. This data wa

readily  available  and  was  considered  by  DoHA  to  reflect  unmet  demand for healthcare services;     

 where  DoHA  had  undertaken  local  consultation  sessions  before  opening  the  ITA,  reports  from  these  sessions  provided  relevant  information.  However, DoHA did not provide the reports from local  consultation sessions to all members of the assessment panels nor were  the reports explicitly discussed in panel deliberations115;  

 letters of support accompanying applications from organisations within  the local community provided a potential source of information on the  appropriateness of part

icular proposals, although the quality of letters  provided by applicants varied widely; and 

                                                       113 The ANAO also calculated the median numerical scores of the top-ranked applicant for the competitive and non-competitive processes across both rounds. These broadly corroborated the observed difference in the average scores

between the two processes, with competitive processes having a median score of 69 compared to 62 for non-competitive processes. 114 The Commonwealth Grant Guidelines emphasise that a fundamental appraisal criterion is that a grant should add value

by achieving something worthwhile that would not occur without grant assistance. See Commonwealth Grant Guidelines, op. cit., p. 30. See also 2002 ANAO Better

Practice Guide—Administration of Grants, op. cit., p.39 and 2010

ANAO Better Practice Guide—Implementing Better Practice Grants Administration, op. cit., p.64. 115 Specifically, it was noted by a medical adviser that while having these reports was not critical for undertaking the assessments, as other panel members were aware of the issues raised in them, these reports would have been helpful

in the context of better understanding local needs and how the applications addressed them.

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 some  applications  provided  information  on  consultations  between  applicants and health providers relating to community need as well as  indicating opportunities for an integrated approach to service planning  and delivery.   

3.11 The ITA documents and applicant responses relating to the program  objective discussed above were the basis for panels to assess and decide on  whether an applicant would be responsive to local needs.   In the sample of  applications examined by the ANAO, significant variability was observed in  applicant  responses  to  this  issue.  Similarly,  the  panel  medical  advisers  interviewed by the ANAO indicated that the amount of relevant information  contained in applications varied and they sometimes attempted to extrapolate  information  to  distinguish  whether  the  services  proposed  in  applications  genuinely reflected the needs of the relevant local community rather than just  ‘looking good on paper’.  

3.12 The panel chairperson would sometimes contact applicants to clarify  information.  However,  panels  rarely  attempted  to  test  the  claims  or  information  provided  in  applications  by  interviewing  applicants  or  local  stakeholders. 

Considering the impacts of GP Super Clinics on existing health services

3.13 Public commentary on the GP Super Clinics program has raised the  issue of adverse impacts on existing GP practices.116 Criticisms have included  that Commonwealth funding has provided a subsidy to recipients t

hat gives 

them a financial advantage over their local competitors. 

3.14 The program guidelines required that applications ‘insofar as possibleʹ,  detail ‘the extent to which the proposed GP Super Clinic could have an impact  on  these  existing  services’.117  However,  the  application  assessment  process,  including assessment panel deliberations, did not explicitly consider the issue  of whether a proposed clinic would impact on existing GP practices. 

                                        

              

116 N Bita, ‘Doctor dearth: why super surgeries are clinically dead’, The Australian, 13 August, 2011. Australian Medical Association, ‘GP Super Clinics—Another example of failing to consult with the medical profession’, media release, 9 February 2011.

117 Department of Health and Ageing, GP Super Clinics national program guide 2008, p. 15. Department of Health and Ageing, GP Super Clinics national program guide 2010, p. 25.

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3.15 DoHA advised the ANAO that the department did not have access to  independent data on which to reach a conclusion on the impacts of a proposed  clinic  on  existing  services,  as  confidential  information  regarding  privately  owned  general  practices  was  either  not  available  or  unlikely  to  be  made  available.  As a consequence, DoHA did not attempt to collect information on  existing GP practices (or allied health facilities and services) in the selected  localities.    DoHA  further  advised  the  ANAO  that  proposed  clinic  locations  were in areas where health and demographic data indicated there was ‘unmet  demand in relation to access to multidisciplinary, team‐based services focussed  on chronic disease that are at the core of the purpose of GP Supe

r Clinics. The 

inference of impact on existing GP services is not sustainable as they are not  meeting  population  health  needs  in  relation  to  the  management  of  chronic  disease.’ However, this ‘no impact’ position assumes that there will be minimal  overlap between the types of services provided by existing GP practices and  GP Super Clinics. The ANAO does not consider that there is any GP Super  Clinic  repo

rting  information  that  corroborates  this  assumption.  Providing  more  comprehensive  information  on  existing  health  services  to  assessment  panels would have reduced the potential that GP Super Clinics would have  unintended impacts on existing services. 

3.16 On  occasions,  GP  Super  Clinics  were  built  close  to  existing  GP  practices.  Whilst  the  audit  did  not  assess  the  direct  business  or  economic  impacts of these clinics on existing healthcare services, the A

NAO’s attention 

was drawn to the Palmerston GP Super Clinic in the Northern Territory, which  was  built  less  than  50 metres  from  the  existing  Farrar  Medical  Centre.  The  question  of  direct  competition  with  established  local  practices  was  raised  during  public  consultation,  including  the  risk  that  GPs  would  move  from  existing practices to the GP Super Clinic.118 

3.17 The  ANAO  was  informed  by  the  principal  GP  and  the  practice  manager o

f the Farrar Medical Centre that during the approximately 10 month  construction period for the GP Super Clinic, access to the practice had been  severely hampered and it had experienced a significant loss of earnings during  this period. Further, with the completion of the Palmerston GP Super Clinic in  2010, the main pedestrian access to the Farrar Medical Centre from the central  carpark se

rvicing the area is now via the waiting area of the GP Super Clinic. 

                                                       118 It has since been reported by the Northern Territory Department of Health that the majority of GPs at this GP Super Clinic had come from outside the Northern Territory.

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The GP practice advised the ANAO that this has made it more difficult for  injured,  elderly  and  disabled  patients  to  access  their  premises.  Whilst  the  practice supported four GPs before the start of construction of the GP Super  Clinic in late 2010, it now has one GP. The remaining GP advised the ANAO  that the practice’s loss of physical vi

sibility from the street and carpark due to 

the positioning of the GP Super Clinic meant that the practice was not able to  generate enough ‘walk in’ patients to enable it to grow. This issue had led to  one newly recruited GP to leave the practice in May 2011, while another GP  had  transferred  to  the  GP  Super  Clinic.  Figure  3.1  is  a  site  plan  of  the  Palmerston GP Super Cl

inic showing the layout of the Super Clinic in relation  to the Farrar Medical Centre. 

Figure 3.1

Site Map

of Palmerston GP Super Clinic

Source: Based on DoHA information.

Notes: The Farrar Medical Centre is now known as the Palmerston Work Injury and GP Clinic.

In 2013, the operators of the Palmerston GP Super Clinic are planning to undertake an internal refit of the Allied Health facility shown immediately to the right of the Farrar Medical Centre in the above site map.

   

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The GP practice advised the ANAO that this has made it more difficult for  injured,  elderly  and  disabled  patients  to  access  their  premises.  Whilst  the  practice supported four GPs before the start of construction of the GP Super  Clinic in late 2010, it now has one GP. The remaining GP advised the ANAO  that the practice’s loss of physical visibil

ity from the street and carpark due to 

the positioning of the GP Super Clinic meant that the practice was not able to  generate enough ‘walk in’ patients to enable it to grow. This issue had led to  one newly recruited GP to leave the practice in May 20 11, while another GP  had  transferred  to  the  GP  Super  Clinic.  Figure  3.1  is  a  site  plan  of  the  Palmerston GP Super Clinic showing the layout of the Super Clinic in relation  to the Farrar Medical Centre. 

Figure 3.1

Site Map of Palmerston GP Super Clinic

Source: Based on DoHA information.

Notes: The Farrar Medical Centre is now known as the Palmerston Work Injury and GP Clinic.

In 2013, the operators of the Palmerston GP Super Clinic are planning to undertake an internal refit of the Allied Health facility shown immediately to the right of the Farrar Medical Centre in the above site map.

   

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3.18 The assessment panel for the Palmerston clinic noted ‘the location of  the  proposed  clinic  was  adjacent  to  a  number  of  existing...private  health  providers’.    However,  the  issue  of  potential  impacts  on  these  providers,  including  the  Farrar  Medical  Centre,  was  not  substantively  addressed  or  identified as a significant issue in the panel’s advice to the delegate.  Rather,  the focus of relevant risks highlight

ed in the advice was the integration of the 

clinic with the local Aboriginal Medical Service, and ensuring that appropriate  levels of privately practising GPs and allied health professionals would work  at the clinic. DoHA’s risk management plan did provide that a local workshop  with existing healthcare providers be held to discuss the mix of services to be  offered  at  the  GP  Super  Clinic.   Whilst  a  representative  of  the  Northern  Territory  General  Practice  Network  did  attend  this  meeting  at  DoHA’s  invitation, no representatives from existing GP practices were invited.  

Assessment of value for money 3.19 The GP Super Clinics program is subject to the Commonwealth Grant  Guidelines (CGGs), which state that achieving value with public money should  be  a  prime  consideration  in  all  aspects  of  grants  administration.  This  key  principle  reflects  the  requirement  of  the  Australian  Government’s  financial  management  framework,  which  provides  for  the  ‘proper  use’  of  Commonwealth  resources.119  The  requirement  for  proper  use  predates  the  introduction of the CGGs in July 2009, an

d applies to all spending proposals 

under the GP Super Clinics Program.  

Guidance on value for money

3.20 The  assessment  plans  for  each  GP  Super  Clinic  location  included  guidance on the factors to be considered by the assessment panel in reaching a  view on the value for money offered by an application. This guidance changed  between the two rounds.  The ‘whole of life construction cost’ and ‘risk’ fact

ors 

that featured in the first round guidance were merged in the second round into  a broader concept incorporating the efficiency and effectiveness of the capital  works. Table 3.1 provides a summary.  

   

                                                       119 ‘Proper use’ in this context means the ‘efficient, effective, economical and ethical use of Commonwealth resources that is not inconsistent with the policies of the Commonwealth’, as specified in section 44 of the Financial Management and

Accountability Act 1997 and FMA Regulation 9. Often, this is referred to as a ‘value for money’ test.

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Table 3.1

Value for

money—factors to be considered in assessing applications

First Round Second Round

‘Contribution made towards the program objectives’ ‘Meeting the program objectives’

‘Whole of life construction costs’ ‘How the capital works project will promote the use of resources in an efficient, effective and ethical manner for whole of life costs’

‘Risks e.g. the capacity of the applicant to deliver on time and on budget, including the whole of life construction costs’

No specific guidance was provided in application assessment plans on assessing risk as part of value for money considerations

Source: ANAO analysis of DoHA information.

3.21 The ANAO examined the panel’s advice to the Division Head  on value  for  money,  including  the  individual  assessment  sheet  for  the  preferred  applicant120, the assessment outcome report121 and the covering minute to the  Division Head. The ANAO also reviewed the independent financial adviser’s  report.122 

Physical infrastructure

3.22 DoHA’s  approach  to  assessing  the  value  for  money  of  physical  infrastructure construction was based on the expectation that applicants would  not  necessarily  provide  a  fully‐costed  proposal  to  professional  stan

dards. 

DoHA advised the ANAO that one of the reasons for adopting this approach  was  to  not  deter  potential  applicants  from  applying  by  demanding  precise  costings and drawings that required a potentially considerable financial outlay  on  professional  advice.  Applicants  were  only  required  to  submit  indicative  floor  and  site  plans.  DoHA  further  advised  that  it  was  reluctant  to impose  additional  costs  on  applicants  as  it  was  mindf

ul  that  many  proposals  were 

subject to a range of processes which had yet to take place; such as council  planning and development approval processes or possible land purchases.   

                                                       120 The individual assessment sheets contained detailed comments and a numerical score against each selection criterion, as well as noting the grant amount applied for. 121

The assessment report summarised the main points of each application, the overall numerical score given to each, a summary of the financial adviser’s report on the preferred applicant, and a summary of why the assessment panel considered the preferred candidate’s application represented the best value for money. 122

The ANAO sample comprised 36 of the 65 clinic locations. It was a targeted, non-statistical sample, consisting of 22 clinics from the first round (including one of the clinics announced in 2009) and 14 from the second round. Further details of the sample are in Appendix 2.

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3.18 The assessment panel for the Palmerston clinic noted ‘the location of  the  proposed  clinic  was  adjacent  to  a  number  of  existing...private  health  providers’.    However,  the  issue  of  potential  impacts  on  these  providers,  including  the  Farrar  Medical  Centre,  was  not  substantively  addressed  or  identified as a significant issue in the panel’s advice to the delegate.  Rather,  the focus of relevant risks highlight

ed in the advice was the integration of the 

clinic with the local Aboriginal Medical Service, and ensuring that appropriate  levels of privately practising GPs and allied health professionals would work  at the clinic. DoHA’s risk management plan did provide that a local workshop  with existing healthcare providers be held to discuss the mix of services to be  offered  at  the  GP  Super  Clinic.   Whilst  a  representative  of  the  Northern  Territory  General  Practice  Network  did  attend  this  meeting  at  DoHA’s  invitation, no representatives from existing GP practices were invited.  

Assessment of value for money 3.19 The GP Super Clinics program is subject to the Commonwealth Grant  Guidelines (CGGs), which state that achieving value with public money should  be  a  prime  consideration  in  all  aspects  of  grants  administration.  This  key  principle  reflects  the  requirement  of  the  Australian  Government’s  financial  management  framework,  which  provides  for  the  ‘proper  use’  of  Commonwealth  resources.119  The  requirement  for  proper  use  predates  the  introduction of the CGGs in July 2009, an

d applies to all spending proposals 

under the GP Super Clinics Program.  

Guidance on value for money

3.20 The  assessment  plans  for  each  GP  Super  Clinic  location  included  guidance on the factors to be considered by the assessment panel in reaching a  view on the value for money offered by an application. This guidance changed  between the two rounds.  The ‘whole of life construction cost’ and ‘risk’ fact

ors 

that featured in the first round guidance were merged in the second round into  a broader concept incorporating the efficiency and effectiveness of the capital  works. Table 3.1 provides a summary.  

   

                                                       119 ‘Proper use’ in this context means the ‘efficient, effective, economical and ethical use of Commonwealth resources that is not inconsistent with the policies of the Commonwealth’, as specified in section 44 of the Financial Management and

Accountability Act 1997 and FMA Regulation 9. Often, this is referred to as a ‘value for money’ test.

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Table 3.1

Value for

money—factors to be considered in assessing applications

First Round Second Round

‘Contribution made towards the program objectives’ ‘Meeting the program objectives’

‘Whole of life construction costs’ ‘How the capital works project will promote the use of resources in an efficient, effective and ethical manner for whole of life costs’

‘Risks e.g. the capacity of the applicant to deliver on time and on budget, including the whole of life construction costs’

No specific guidance was provided in application assessment plans on assessing risk as part of value for money considerations

Source: ANAO analysis of DoHA information.

3.21 The ANAO examined the panel’s advice to the Division Head on value  for  money,  including  the  individual  assessment  sheet  for  the  preferred  applicant120, the assessment outcome report121 and the covering minute to the  Division Head. The ANAO also reviewed the independent financial adviser’s  report.122 

Physical infrastructure

3.22 DoHA’s  approach  to  assessing  the  value  for  money  of  physical  infrastructure construction was based on the ex

pectation that applicants would 

not  necessarily  provide  a  fully‐costed  proposal  to  professional  standards.  DoHA advised the ANAO that one of the reasons for adopting this approach  was  to  not  deter  potential  applicants  from  applying  by  demanding  precise  costings and drawings that required a potentially considerable financial outlay  on  professional  advice.  Applicants  were  only  required  to  submit  indicative  floor  and  site  plans.  DoHA  further  advised  th

at  it  was  reluctant  to impose 

additional  costs  on  applicants  as  it  was  mindful  that many  proposals  were  subject to a range of processes which had yet to take place; such as council  planning and development approval processes or possible land purchases.   

                                                       120 The individual assessment sheets contained detailed comments and a numerical score against each selection criterion, as well as noting the grant amount applied for. 121

The assessment report summarised the main points of each application, the overall numerical score given to each, a summary of the financial adviser’s report on the preferred applicant, and a summary of why the assessment panel considered the preferred candidate’s application represented the best value for money. 122

The ANAO sample comprised 36 of the 65 clinic locations. It was a targeted, non-statistical sample, consisting of 22 clinics from the first round (including one of the clinics announced in 2009) and 14 from the second round. Further details of the sample are in Appendix 2.

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3.23 In  their  assessment  of  value  for  money  of  physical  infrastructure,  DoHA advised the ANAO that panel members and panel secretariat support  officers  had  access  to  guidance  provided  by  DoHA’s  Independent  Construction Adviser on average per square metre construction costs and ‘any  applications  that  included  indicative  costs  that  fell  outside  the  guide  were  highlighted  to  the  panel’.  However,  the  construction  adviser  was

  only 

contracted by DoHA in mid 2009, by which time the assessment process for  almost  all  of  the  32  initially  announced  clinics  was  complete.  The  ANAO  observed  that  issues  of  building  costs,  scale  and  design  elements  were  considered by the panels in their deliberations, although there was no specific  reference in the assessment documentation to the square metre construction  costs guidance material provided by the Independent C

onstruction Adviser. 

DoHA  also  advised  the  ANAO  that  no  records  were  kept  of  any  advice  provided to the assessment panel that ‘highlighted’ construction costs that fell  outside the relevant costs contained in the guidance material. Some financial  advisers’  reports  included  commentary  on  construction  costs  or  building  design, which the relevant panels took into account in their assessments.  

3.24 In  the  sample  of  36  clinics  examined  by  the  AN

AO,  the  assessment 

panels  expressed  concerns  on  four  occasions  about  high  construction  costs  contained in the proposals of preferred applicants.   In all four cases, the issue  was  noted  in  the  assessment  outcome  documentation  for  approval  by  the  Division  Head,  although  it  was  not  evident  in  the  documentation  whether  these concerns were reflected in the numerical score given to the proposal.  

3.25 Across the 36 locations in the sample used by the ANAO, there was  variable treatment in the assessment documentation of whether construction  costs  represented  value  for  money,  often  with  little  or  only  rudim

entary 

analysis of the issue.  The ‘value for money’ summary in the covering minute  to the Division Head tended to be very formulaic. In some assessment outcome  reports, commentary on construction costs sometimes appeared in the value  for money section, while in other cases an assessment was found elsewhere in  the  report—such  as  the  financial  assessment  or  summary  of  assessment.  In  some  cases,  there  was  no  substantive  assessment  at  all,  just  a  de

scriptive 

statement about the proposed cost of, and/or the timeframe for, the project.  

Service delivery

3.26 Assessing value for money in service delivery was a demanding task  for assessment panels, not least because each location presented a unique set of  circumstances and needs. The broad approach taken by assessment panels was 

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to  consider  advice  from  the  independent  financial  adviser  as  an  input  to  a  more extensive consideration of the applicants’ representations, including: 

 an  overall  assessment  of  whether  a  proposed  business  model  and  clinical governance structure was likely to be viable, sustainable and  efficient;  

 the proposed service mix; 

 the  degree  to  which  additional,  multidisciplinary  services  would  be  provided;

 and 

 whether  integration  of  services  would  be  achieved,  including  with  existing services. 

3.27 In  the  assessment  process,  the  panel  sought  to  determine  which  proposals  were  capable  of  establishing  a  viable  clinic  delivering  integrated,  multidisciplinary  primary  health  care  while  also  providing  increased  education  and  training  placements  in  that  setting.  The  reports  of  the  independent  financial  adviser,  in  particular,  examined  the  clinical  service  model and whether it would be workable in practical

 terms, how appropriate 

the clinical strategy and service mix was in terms of the health needs of the  community, whether the model was viable in terms of delivering the program  objectives, and whether there was likely to be a workforce to implement the  model. These inputs added value to the assessment process.  

Assessing larger grants

3.28 There was an added dimension to achieving value for money, as grant  amounts  varied.  Notably,  in  the  second  round  of  funding,  eight  proposed  clinic locations were eligible for larger grants of up to $15 million. For these  grants,  the  program  guidelines  specified  that  applications  had  to  include  information on the specialised services to be delivered.123 

3.29 As  part  of  its  sample,  the  ANAO  examined  the  proposals  o

f  the 

preferred applicants for six $15 million locations.124 While the application form  referred to the need to provide information on specialised services and each of 

                                                       123 Illustrative examples of these specialised services were described in the guidelines as including renal dialysis, palliative care, chemotherapy, hospital in the home support and/or home and community care services. GP Super Clinics national

program guide 2010, pp. 24-25. 124 There were a total of eight locations in the second round where the maximum grant amount was $15 million.

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3.23 In  their  assessment  of  value  for  money  of  physical  infrastructure,  DoHA advised the ANAO that panel members and panel secretariat support  officers  had  access  to  guidance  provided  by  DoHA’s  Independent  Construction Adviser on average per square metre construction costs and ‘any  applications  that  included  indicative  costs  that  fell  outside  the  guide  were  highlighted  to  the  panel’.  However,  the  construction  adviser  was

  only 

contracted by DoHA in mid 2009, by which time the assessment process for  almost  all  of  the  32  initially  announced  clinics  was  complete.  The  ANAO  observed  that  issues  of  building  costs,  scale  and  design  elements  were  considered by the panels in their deliberations, although there was no specific  reference in the assessment documentation to the square metre construction  costs guidance material provided by the Independent C

onstruction Adviser. 

DoHA  also  advised  the  ANAO  that  no  records  were  kept  of  any  advice  provided to the assessment panel that ‘highlighted’ construction costs that fell  outside the relevant costs contained in the guidance material. Some financial  advisers’  reports  included  commentary  on  construction  costs  or  building  design, which the relevant panels took into account in their assessments.  

3.24 In  the  sample  of  36  clinics  examined  by  the  AN

AO,  the  assessment 

panels  expressed  concerns  on  four  occasions  about  high  construction  costs  contained in the proposals of preferred applicants.   In all four cases, the issue  was  noted  in  the  assessment  outcome  documentation  for  approval  by  the  Division  Head,  although  it  was  not  evident  in  the  documentation  whether  these concerns were reflected in the numerical score given to the proposal.  

3.25 Across the 36 locations in the sample used by the ANAO, there was  variable treatment in the assessment documentation of whether construction  costs  represented  value  for  money,  often  with  little  or  only  rudim

entary 

analysis of the issue.  The ‘value for money’ summary in the covering minute  to the Division Head tended to be very formulaic. In some assessment outcome  reports, commentary on construction costs sometimes appeared in the value  for money section, while in other cases an assessment was found elsewhere in  the  report—such  as  the  financial  assessment  or  summary  of  assessment.  In  some  cases,  there  was  no  substantive  assessment  at  all,  just  a  de

scriptive 

statement about the proposed cost of, and/or the timeframe for, the project.  

Service delivery

3.26 Assessing value for money in service delivery was a demanding task  for assessment panels, not least because each location presented a unique set of  circumstances and needs. The broad approach taken by assessment panels was 

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to  consider  advice  from  the  independent  financial  adviser  as  an  input  to  a  more extensive consideration of the applicants’ representations, including: 

 an  overall  assessment  of  whether  a  proposed  business  model  and  clinical governance structure was likely to be viable, sustainable and  efficient;  

 the proposed service mix; 

 the  degree  to  which  additional,  multidisciplinary  services  would  be  provided;

 and 

 whether  integration  of  services  would  be  achieved,  including  with  existing services. 

3.27 In  the  assessment  process,  the  panel  sought  to  determine  which  proposals  were  capable  of  establishing  a  viable  clinic  delivering  integrated,  multidisciplinary  primary  health  care  while  also  providing  increased  education  and  training  placements  in  that  setting.  The  reports  of  the  independent  financial  adviser,  in  particular,  examined  the  clinical  service  model and whether it would be workable in practical

 terms, how appropriate 

the clinical strategy and service mix was in terms of the health needs of the  community, whether the model was viable in terms of delivering the program  objectives, and whether there was likely to be a workforce to implement the  model. These inputs added value to the assessment process.  

Assessing larger grants

3.28 There was an added dimension to achieving value for money, as grant  amounts  varied.  Notably,  in  the  second  round  of  funding,  eight  proposed  clinic locations were eligible for larger grants of up to $15 million. For these  grants,  the  program  guidelines  specified  that  applications  had  to  include  information on the specialised services to be delivered.123 

3.29 As  part  of  its  sample,  the  ANAO  examined  the  proposals  o

f  the 

preferred applicants for six $15 million locations.124 While the application form  referred to the need to provide information on specialised services and each of 

                                                       123 Illustrative examples of these specialised services were described in the guidelines as including renal dialysis, palliative care, chemotherapy, hospital in the home support and/or home and community care services. GP Super Clinics national

program guide 2010, pp. 24-25. 124 There were a total of eight locations in the second round where the maximum grant amount was $15 million.

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the proposals made provision for the delivery of specialised services, the issue  did not consistently receive any attention in assessment documentation.125 

3.30 For one of the $15 million locations considered in the second round, the  preferred  applicant  revised  their  proposal  during  funding  agreement  negotiations. DoHA recognised that as a consequence of these amendments  specialised services envisaged for the site

 may not be incorporated. The matter 

was raised with the Minister’s office, which indicated that it was appropriate  to proceed nonetheless. However, information about not providing specialised  services at this location was not contained in the written advice to the decision‐ maker with responsibility for approving the grant under FMA Regulation 9,  nor is there any indication on the face of the approval that the delegate was  a

ware of this matter.  

3.31 DoHA  advised  the  ANAO  that  ‘the  Guidelines  note  the  expectation  that applicants for larger clinics ($15 million) must include information on the  specialised services to be delivered in these facilities however this was not a  key factor in approving these grants.  Assessment panels viewed the provision  of  a  greater  level  and  range  of  general  health  services  (as  opposed  to  specialised services), that were consistent with the local com

munity’s needs, as 

equally  important.’   However,  the  second  round  guidelines,  having  been  approved  by  the  ERC,  represented  government  policy  in  respect  of the  GP  Super Clinics program. The Government’s 2010 budget announcements also  indicated that specialised services were an important part of the rationale to  provide larger grants.126  From this perspective, it was inappropriate for DoHA  to  effectively  downgrade  the  issue  of  specialised  services  in  its  assessment  process  without  Ministerial  agreement;  which  was

  not  evident  in  the  cases 

sampled by the ANAO. Overall, DoHA did not explicitly assess whether the  value  added  by  the  proposed  specialised  services  justified  the  higher  ($15 million) grant amount in the sampled locations. 

                                                       125 This included the relevant application assessment plan, individual assessment sheets, outcome assessment reports, and minute of advice to the expenditure delegate (DoHA Division Head). 126

N Roxon, (Minister for Health and Ageing), ‘More GP Super Clinics and Extra GP Infrastructure’, media release, Canberra, 11 May 2010.

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A way forward in considering value for money

3.32 Value  for  money  was  considered  in  the  August  2012  report  on  the  Evaluation of the GP Super Clinics Program 2007‐2008 commissioned by DoHA.127 It was recommended that:  

the  Department  should  commission  a  review  of  existing  templates  and  the  preparation of specific value for money criteria for future use in assessment of  funding applications for GP Super Clinics.128 

3.33 This  recommendation  applied  to  the  first  round  of  GP  Super  Clinic  funding. To address these issues in the longer term, the evaluation proposed  that: 

The Department should consider longer‐term approaches for assess ing value  for money in the context of primary care.129 

3.34 DoHA’s September 2012 response to the evaluation recommendations  did  not  commit  to  any  action  in  response  to  the  two  recommendations  concerning  value  for  money  or  indicate  whether  the  recommendations  had  otherwise been addressed by the department. While noting that the assessment  processes for all GP Super Clinic locations have now been completed, there  would  be  merit  in  DoHA  considering  the  above  recommendation  in  the  context of any future or ongoing health infrastructure grant programs.130 

3.35 Administering  health  infrastructure  grants  programs  has  been  an  increasingly significant activity for DoHA in recent times. DoHA advised the  ANAO that their capital works reporting portal indicates that the depar

tment 

has  funded  over  1300  capital  works  projects,  with  total  DoHA  funding  exceeding $8 billion. The ANAO has observed in previous audits131 that DoHA  has over time strengthened its capacity to effectively administer infrastructure  grant programs, informed by practical experience and initiatives such as the  establishment  of  the  Centre  for  Capital  Excellence  within  the  department, 

                                                       127 Consan Consulting, Evaluation of the GP Super Clinics Program 2007-2008. August 2012. The value for money methodology used in the evaluation focused on physical infrastructure, and included: location, construction type and

complexity and timing. 128 Evaluation of the GP Super Clinics Program 2007-2008, o p. cit., p. 66. 129

ibid.

130 The ANAO’s recent audit report on the administration of the Primary Care Infrastructure Grants Program also made a recommendation regarding more consistently applying better practice regarding the assessment of value for money in health infrastructure grant applications. That recommendation was accepted by DoHA. ANAO Audit Report No.44 2011-

12 Administration of the Primary Care Infrastructure Grants Program, p.66 131 ANAO Audit Report No. 45 2011-12 Administration of the Health and Hospitals Fund, p.18; ANAO Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program, p.15.

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the proposals made provision for the delivery of specialised services, the issue  did not consistently receive any attention in assessment documentation.125 

3.30 For one of the $15 million locations considered in the second round, the  preferred  applicant  revised  their  proposal  during  funding  agreement  negotiations. DoHA recognised that as a consequence of these amendments  specialised services envisaged for the site

 may not be incorporated. The matter 

was raised with the Minister’s office, which indicated that it was appropriate  to proceed nonetheless. However, information about not providing specialised  services at this location was not contained in the written advice to the decision‐ maker with responsibility for approving the grant under FMA Regulation 9,  nor is there any indication on the face of the approval that the delegate was  a

ware of this matter.  

3.31 DoHA  advised  the  ANAO  that  ‘the  Guidelines  note  the  expectation  that applicants for larger clinics ($15 million) must include information on the  specialised services to be delivered in these facilities however this was not a  key factor in approving these grants.  Assessment panels viewed the provision  of  a  greater  level  and  range  of  general  health  services  (as  opposed  to  specialised services), that were consistent with the local com

munity’s needs, as 

equally  important.’   However,  the  second  round  guidelines,  having  been  approved  by  the  ERC,  represented  government  policy  in  respect  of the  GP  Super Clinics program. The Government’s 2010 budget announcements also  indicated that specialised services were an important part of the rationale to  provide larger grants.126  From this perspective, it was inappropriate for DoHA  to  effectively  downgrade  the  issue  of  specialised  services  in  its  assessment  process  without  Ministerial  agreement;  which  was

  not  evident  in  the  cases 

sampled by the ANAO. Overall, DoHA did not explicitly assess whether the  value  added  by  the  proposed  specialised  services  justified  the  higher  ($15 million) grant amount in the sampled locations. 

                                                       125 This included the relevant application assessment plan, individual assessment sheets, outcome assessment reports, and minute of advice to the expenditure delegate (DoHA Division Head). 126

N Roxon, (Minister for Health and Ageing), ‘More GP Super Clinics and Extra GP Infrastructure’, media release, Canberra, 11 May 2010.

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A way forward in considering value for money

3.32 Value  for  money  was  considered  in  the  August  2012  report  on  the  Evaluation of the GP Super Clinics Program 2007‐2008 commissioned by DoHA.127 It was recommended that:  

the  Department  should  commission  a  review  of  existing  templates  and  the  preparation of specific value for money criteria for future use in assessment of  funding applications for GP Super Clinics.128 

3.33 This  recommendation  applied  to  the  first  round  of  GP  Super  Clinic  funding. To address these issues in the longer term, the evaluation proposed  that: 

The Department should consider longer‐term approaches for assess ing value  for money in the context of primary care.129 

3.34 DoHA’s September 2012 response to the evaluation recommendations  did  not  commit  to  any  action  in  response  to  the  two  recommendations  concerning  value  for  money  or  indicate  whether  the  recommendations  had  otherwise been addressed by the department. While noting that the assessment  processes for all GP Super Clinic locations have now been completed, there  would  be  merit  in  DoHA  considering  the  above  recommendation  in  the  context of any future or ongoing health infrastructure grant programs.130 

3.35 Administering  health  infrastructure  grants  programs  has  been  an  increasingly significant activity for DoHA in recent times. DoHA advised the  ANAO that their capital works reporting portal indicates that the depar

tment 

has  funded  over  1300  capital  works  projects,  with  total  DoHA  funding  exceeding $8 billion. The ANAO has observed in previous audits131 that DoHA  has over time strengthened its capacity to effectively administer infrastructure  grant programs, informed by practical experience and initiatives such as the  establishment  of  the  Centre  for  Capital  Excellence  within  the  department, 

                                                       127 Consan Consulting, Evaluation of the GP Super Clinics Program 2007-2008. August 2012. The value for money methodology used in the evaluation focused on physical infrastructure, and included: location, construction type and

complexity and timing. 128 Evaluation of the GP Super Clinics Program 2007-2008, op. cit., p. 66. 129

ibid.

130 The ANAO’s recent audit report on the administration of the Primary Care Infrastructure Grants Program also made a recommendation regarding more consistently applying better practice regarding the assessment of value for money in health infrastructure grant applications. That recommendation was accepted by DoHA. ANAO Audit Report No.44 2011-

12 Administration of the Primary Care Infrastructure Grants Program, p.66 131 ANAO Audit Report No. 45 2011-12 Administration of the Health and Hospitals Fund, p.18; ANAO Audit Report No.44 2011-12 Administration of the Primary Care Infrastructure Grants Program, p.15.

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comprising staff with expertise in infrastructure project management. In light  of  the  experience  gained  by  the  department  in  the  administration  of  infrastructure  projects  over  some  years,  there  is  scope  to  draw  on  that  experience to document a better practice approach for the assessment of value  for money for health infrastructure projects. 

Recommendation No.2 3.36 To maximise the benefit from DoHA’s experience in the administration  of  health  infrastructure  grant  programs,  the  ANAO  recommends  that  the  department document a better practice approach for the assessment of value  for money for health infrastructure projects. 

DoHA respons

e: 

3.37 Agreed. 

Treatment of unsuccessful Invitation to Apply processes 3.38 It  is  better  practice  for  applications  to  be  assessed  using  a  common  appraisal process—where there is a departure from this process the reasons  should be documented.132 DoHA’s assessment documentation recognised that  the ITA process may not be successful in identifying a preferred applicant, and  this was reflected in assessment plans which stated that successful applications  must score a minimum numerical score of 50 per cent. Where this wa

s not 

achieved,  the  assessment  plans  in  place  for  each  clinic  included  a  range  of  options  for  DoHA  to  consider.  These  options  included  negotiating  with  an  applicant  and/or  brokering  a  local  solution  by  engaging  with  local  stakeholders.   The possibility of adopting one of these options was explicitly  noted in the publicly available guidelines for the second round, but not for the  first.133 

                                                       132 ANAO 2002 Grants Administration—Better Practice Guide, p.43; ANAO 2010 Better Practice Guide—Implementing Better Practice Grants Administration, p. 70; Commonwealth Grant Guidelines, op. cit.,, p. 29. 133

Department of Health and Ageing, GP Super Clinics national program guide 2010, p. 25.

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3.39 The ANAO identified 11 cases across the entire population of 65 clinic  locations  where  the  initial  ITA  process  was  unsuccessful  in  producing  a  preferred applicant. These included: 

 one  case  in  which  the  only  application  for  the  location  was  non‐compliant  with  the  ITA  requirements  due  to  lack  of  key  information; 

 three cases where the location failed to attract any a

pplications; and 

 seven  cases  where  the  top‐ranked  candidate  failed  to  score  above  50 per cent or was otherwise assessed as ‘marginal’.134  

3.40 There was one further case in which funding agreement negotiations  failed, resulting in the preferred applicant withdrawing their proposal. DoHA  closed the ITA and attempted to broker a local solution, as all of the other  applications  in  th

at  competitive  process  scored  less  than  50  per  cent.  This  approach resulted in a revised proposal being submitted by an applicant that  was previously unsuccessful for the location.  

3.41 In cases where the assessment panel considered the ITA process did not  produce  a  suitable  proposal  that  they  could  recommend  as  a  preferred  applicant, DoHA took the step of first briefing the decision‐maker (Division  Head) on the views of th

e assessment panel and any risks or issues identified  through the assessment process. This advice also identified a range of options  for  next  steps,  such  as:  closing  the  ITA  process  and  approving  the  commencement of negotiations with the top‐ranked applicant135, and/or other  local stakeholders—such as local councils, local Divisions of General Practice  and  existing  local  or  regional  healthcare  service  providers—in  order  to  generate  a  new  o

r  substantially  revised  application.  In  some  cases  this  approach involved offering an interim funding agreement to the top‐ranked  candidate or another party to facilitate a new or substantially revised proposal,  or re‐running the ITA process from the beginning.  

3.42 There was evidence that DoHA took steps to ensure that in developing  these  options  it  received  probity  advice  that  assessment  processes  and 

                                                       134 In one further case in the first round, the proposal went ahead despite not being scored by the panel. The panel considered that the information was insufficient to provide a numerical score, but recommended that the department

enter into funding agreement negotiations to resolve identified risks. The recommendation was accepted and following further negotiations, an agreement was signed. 135 A top-ranked applicant differs from a preferred applicant in that the latter refers to an application that DoHA

recommends for a potential funding agreement.

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comprising staff with expertise in infrastructure project management. In light  of  the  experience  gained  by  the  department  in  the  administration  of  infrastructure  projects  over  some  years,  there  is  scope  to  draw  on  that  experience to document a better practice approach for the assessment of value  for money for health infrastructure projects. 

Recommendation No.2 3.36 To maximise the benefit from DoHA’s experience in the administration  of  health  infrastructure  grant  programs,  the  ANAO  recommends  that  the  department document a better practice approach for the assessment of value  for money for health infrastructure projects. 

DoHA respons

e: 

3.37 Agreed. 

Treatment of unsuccessful Invitation to Apply processes 3.38 It  is  better  practice  for  applications  to  be  assessed  using  a  common  appraisal process—where there is a departure from this process the reasons  should be documented.132 DoHA’s assessment documentation recognised that  the ITA process may not be successful in identifying a preferred applicant, and  this was reflected in assessment plans which stated that successful applications  must score a minimum numerical score of 50 per cent. Where this wa

s not 

achieved,  the  assessment  plans  in  place  for  each  clinic  included  a  range  of  options  for  DoHA  to  consider.  These  options  included  negotiating  with  an  applicant  and/or  brokering  a  local  solution  by  engaging  with  local 

stakeholders.   The possibility of adopting one of these options was explicitly  noted in the publicly available guidelines for the second round, but not for the  first.133 

                                                       132 ANAO 2002 Grants Administration—Better Practice Guide, p.43; ANAO 2010 Better Practice Guide—Implementing Better Practice Grants Administration, p. 70; Commonwealth Grant Guidelines, op. cit.,, p. 29. 133

Department of Health and Ageing, GP Super Clinics national program guide 2010, p. 25.

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3.39 The ANAO identified 11 cases across the entire population of 65 clinic  locations  where  the  initial  ITA  process  was  unsuccessful  in  producing  a  preferred applicant. These included: 

 one  case  in  which  the  only  application  for  the  location  was  non‐compliant  with  the  ITA  requirements  due  to  lack  of  key  information; 

 three cases where the location failed to attract any a

pplications; and 

 seven  cases  where  the  top‐ranked  candidate  failed  to  score  above  50 per cent or was otherwise assessed as ‘marginal’.134  

3.40 There was one further case in which funding agreement negotiations  failed, resulting in the preferred applicant withdrawing their proposal. DoHA  closed the ITA and attempted to broker a local solution, as all of the other  applications  in  th

at  competitive  process  scored  less  than  50  per  cent.  This  approach resulted in a revised proposal being submitted by an applicant that  was previously unsuccessful for the location.  

3.41 In cases where the assessment panel considered the ITA process did not  produce  a  suitable  proposal  that  they  could  recommend  as  a  preferred  applicant, DoHA took the step of first briefing the decision‐maker (Division  Head) on the views of th

e assessment panel and any risks or issues identified  through the assessment process. This advice also identified a range of options  for  next  steps,  such  as:  closing  the  ITA  process  and  approving  the  commencement of negotiations with the top‐ranked applicant135, and/or other  local stakeholders—such as local councils, local Divisions of General Practice  and  existing  local  or  regional  healthcare  service  providers—in  order  to  generate  a  new  o

r  substantially  revised  application.  In  some  cases  this  approach involved offering an interim funding agreement to the top‐ranked  candidate or another party to facilitate a new or substantially revised proposal,  or re‐running the ITA process from the beginning.  

3.42 There was evidence that DoHA took steps to ensure that in developing  these  options  it  received  probity  advice  that  assessment  processes  and 

                                                       134 In one further case in the first round, the proposal went ahead despite not being scored by the panel. The panel considered that the information was insufficient to provide a numerical score, but recommended that the department

enter into funding agreement negotiations to resolve identified risks. The recommendation was accepted and following further negotiations, an agreement was signed. 135 A top-ranked applicant differs from a preferred applicant in that the latter refers to an application that DoHA

recommends for a potential funding agreement.

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recommended  procedural  options  complied  with  probity  and  transparency  requirements.  

3.43 In the first round, the decision whether to close the ITA and pursue  alternative options was made by the department, generally by the Division  Head, although on one occasion the decision was elevated to the departmental  Secretary. Once DoHA had made the decision, the Minister was provided with  an information brief on steps taken by the Department.   

3.44 In the second round, the Minister was involved earlier, particularly in  the case of non‐competitive processes that had received a poor or marginal  quality  application.  In  these  cases  DoHA,  after  assessing  the  proposals,  advised the Minister on the risks identified and provided options on a way  forward for a decision by the Minister. The options canvassed in the advice  differed depending on the circumstances, but variously incl

uded offering an 

interim funding agreement to the applicant, running the process again as a  competitive process, or withdrawing funding for the relevant location. 

3.45 The provision of limited funds under an interim funding agreement to  further  develop  proposals  was  adopted  on  several  occasions  as  a  way  to  manage  risk. Typically  under  such  agreements  up  to  10  per  cent  of  total  funding was provided to applicants and/or local stakeholders to support the  development and refinement of proposals for resubmission to DoHA before  considering  entering  into  an  agreement  for  the  remaining  funding  amount.   The specific requirements of such interim funding agreements varied but often  required recipients to provide more project and budgetary detail than would  otherwise be expected of initial GP Super Clinic applications.  

Assessment of revised or new applications following unsuccessful ITA processes

3.46 Once  a  revised  or  new  application  was  provided  to  DoHA,  it  was  forwarded to the financial adviser for a report in the usual manner. Following  this,  a  variety  o

f  strategies  and  responses  were  used  by  DoHA  to  assess  applications.  In  both  the  first  and  second  rounds,  these  ranged  from  reconvening  the  relevant  assessment  panel  to  DoHA  internally  assessing  applications.  This latter option meant the proposal was not scored, and the  assessment  did  not  have  the  benefit  of  input  from  a  medical  adviser.  Nonetheless, the ANAO found that, based on its sample, there was evidence  that  the  shortcomings  and  risks  identified  in  the  original  assessments  were  scrutinised as part of the assessment of revised or new proposals, and this was  reflected in the advice to the expenditure delegate and Minister as to w

hether 

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the  application  represented  value  for  money  and  would  achieve  program  objectives.  In one second round case in the ANAO’s sample, the assessment  outcome  advice  provided  to  the  Minister  noted  that  entering  into  a  full  funding  agreement  on  the  basis  of  the  revised  proposal  carried  substantial  risks.  In view of this, one option proposed in the advice was closing the ITA  and  withdrawing  the  announced  funding. The  Minister  approved  an  alternative option of seeking to mitigate the risks through DoHA negotiating  directly with the applicant. After several months of negotiations, a funding  agreement was executed. 

Conclusion 3.47 DoHA established a generally sound and well documented framework  for  assessing  applications.    The  department  made  extensive  use  of  relevant  expertise  from  medical  and  independent  financial  advisers  and  accessed  probity  advice  to  align  its  approach  with  better  practice  in  grants  administration. 

3.48 While the GP Super Clinics program guidelines required applications  to  address  the  extent  to  which  a  proposed  clinic  could  impact  on  existing  health services, this issue was not

 explicitly or substantively considered in the 

overall  application  assessment.  In  one  case  in  the  ANAO’s  sample,  the  positioning  and  design  of  a  now  operational  GP  Super  Clinic  in  2010  has  resulted in the main pedestrian access to a pre‐existing GP practice being via  the  waiting  area  of  the  new  GP  Super  Clinic.  DoHA  faced  challenges  in  determining  whether  applications  for  funding  would  meet  local  needs  and  whether  a  proposed  cl

inic  would  affect  existing  health  services.  There  was  limited, if any, specific information from independent sources about existing  health  services  available  to  assessment  panels,  which  had  to  rely  almost  entirely  on  information  contained  in  applications,  which  was  of  variable  quality. Providing more comprehensive information on existing health services  to assessment panels would have reduced the potential that GP Super Clinics  would have unintended impacts on exis

ting services.   

3.49 The ANAO observed a number of opportunities for DoHA to improve  how  it  assessed  value  for  money.  In  respect  of  the  assessment  of  physical  infrastructure, assessment panels were not asked to use commercially available  ‘cost  per  square  metre  calculation’  tools  during  the  first  round.  The  consideration of value for money was also hampered by a lack of clear and  specific guidance to a

ssessment panels on assessing the value for money of  physical infrastructure, resulting in a lack of clarity and consistency in how the 

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recommended  procedural  options  complied  with  probity  and  transparency  requirements.  

3.43 In the first round, the decision whether to close the ITA and pursue  alternative options was made by the department, generally by the Division  Head, although on one occasion the decision was elevated to the departmental  Secretary. Once DoHA had made the decision, the Minister was provided with  an information brief on steps taken by the Department.   

3.44 In the second round, the Minister was involved earlier, particularly in  the case of non‐competitive processes that had received a poor or marginal  quality  application.  In  these  cases  DoHA,  after  assessing  the  proposals,  advised the Minister on the risks identified and provided options on a way  forward for a decision by the Minister. The options canvassed in the advice  differed depending on the circumstances, but variously incl

uded offering an 

interim funding agreement to the applicant, running the process again as a  competitive process, or withdrawing funding for the relevant location. 

3.45 The provision of limited funds under an interim funding agreement to  further  develop  proposals  was  adopted  on  several  occasions  as  a  way  to  manage  risk. Typically  under  such  agreements  up  to  10  per  cent  of  total  funding was provided to applicants and/or local stakeholders to support the  development and refinement of proposals for resubmission to DoHA before  considering  entering  into  an  agreement  for  the  remaining  funding  amount.   The specific requirements of such interim funding agreements varied but often  required recipients to provide more project and budgetary detail than would  otherwise be expected of initial GP Super Clinic applications.  

Assessment of revised or new applications following unsuccessful ITA processes

3.46 Once  a  revised  or  new  application  was  provided  to  DoHA,  it  was  forwarded to the financial adviser for a report in the usual manner. Following  this,  a  variety  o

f  strategies  and  responses  were  used  by  DoHA  to  assess  applications.  In  both  the  first  and  second  rounds,  these  ranged  from  reconvening  the  relevant  assessment  panel  to  DoHA  internally  assessing  applications.  This latter option meant the proposal was not scored, and the  assessment  did  not  have  the  benefit  of  input  from  a  medical  adviser.  Nonetheless, the ANAO found that, based on its sample, there was evidence  that  the  shortcomings  and  risks  identified  in  the  original  assessments  were  scrutinised as part of the assessment of revised or new proposals, and this was  reflected in the advice to the expenditure delegate and Minister as to w

hether 

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the  application  represented  value  for  money  and  would  achieve  program  objectives.  In one second round case in the ANAO’s sample, the assessment  outcome  advice  provided  to  the  Minister  noted  that  entering  into  a  full  funding  agreement  on  the  basis  of  the  revised  proposal  carried  substantial  risks.  In view of this, one option proposed in the advice was closing the ITA  and  withdrawing  the  announced  funding. The  Minister  approved  an  alternative option of seeking to mitigate the risks through DoHA negotiating  directly with the applicant. After several months of negotiations, a funding  agreement was executed. 

Conclusion 3.47 DoHA established a generally sound and well documented framework  for  assessing  applications.    The  department  made  extensive  use  of  relevant  expertise  from  medical  and  independent  financial  advisers  and  accessed  probity  advice  to  align  its  approach  with  better  practice  in  grants  administration. 

3.48 While the GP Super Clinics program guidelines required applications  to  address  the  extent  to  which  a  proposed  clinic  could  impact  on  existing  health services, this issue was not

 explicitly or substantively considered in the 

overall  application  assessment.  In  one  case  in  the  ANAO’s  sample,  the  positioning  and  design  of  a  now  operational  GP  Super  Clinic  in  2010  has  resulted in the main pedestrian access to a pre‐existing GP practice being via  the  waiting  area  of  the  new  GP  Super  Clinic.  DoHA  faced  challenges  in  determining  whether  applications  for  funding  would  meet  local  needs  and  whether  a  proposed  cl

inic  would  affect  existing  health  services.  There  was  limited, if any, specific information from independent sources about existing  health  services  available  to  assessment  panels,  which  had  to  rely  almost  entirely  on  information  contained  in  applications,  which  was  of  variable  quality. Providing more comprehensive information on existing health services  to assessment panels would have reduced the potential that GP Super Clinics  would have unintended impacts on exis

ting services.   

3.49 The ANAO observed a number of opportunities for DoHA to improve  how  it  assessed  value  for  money.  In  respect  of  the  assessment  of  physical  infrastructure, assessment panels were not asked to use commercially available  ‘cost  per  square  metre  calculation’  tools  during  the  first  round.  The  consideration of value for money was also hampered by a lack of clear and  specific guidance to a

ssessment panels on assessing the value for money of  physical infrastructure, resulting in a lack of clarity and consistency in how the 

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concept was applied in the assessment and selection process. In terms of the  services to be delivered by clinics, of the six locations in the ANAO’s sample  where a grant of up to $15 million was available to establish a GP Super Clinic,  DoHA did not explicitly assess whether the specialised services required under  the program guidelines for these l

ocations were appropriately addressed in the 

applications. 

3.50 In  instances  where  the  initial  Invitation  to  Apply  process  did  not  identify  a  successful  applicant,  DoHA  used  a  variety  of  strategies  and  processes  to  generate  new  or  substantially  revised  applications  and  subsequently assess the merits of those applications. The processes adopted in  these  cases  were  generally  adequate  and  there  was  a  positive  trend  in  the  second round where DoHA involve

d the Minister earlier in advising on risks 

and  options,  especially  where  non‐competitive  processes  were  involved.  However, the absence of a full panel assessment in some instances meant that  the expertise of a medical adviser was not used in assessing some applications. 

  

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4. Rolling out the Clinics

This chapter examines how DoHA administered the program from the completion of  the assessment process to getting clinics into operation. It focuses on the major issues  that arose during this period and DoHA’s response to manage risk, including issues  that potentially led to financial risks and delays 

Introduction 4.1 As  discussed  in  chapter  three,  the  majority  of  applicant  assessment  processes  resulted  in  the  assessment  panel  recommending  a  preferred  applicant.136  On  nine  occasions  across  all  clinic  locations  the  panel  recommended  that  the  preferred  applicant  be  immediately  offered  a  grant  funding agreement by DoHA.  However, in 44 locations, the panel identified  one or more issues that had arisen in the assessment process, and which it  considered as requiring resolution or clarification with the preferred applicant  before a funding agreement could be offered. In these instances, DoHA sought  to deal with outstanding issues in ‘without prejudice’ negotiations with the  applicant.   

4.2 The  time  taken  to  conclude  negotiations  with  preferred  applicants  varied considerably. In the ANAO’s sample, negotiations for four clinics took  over six months before a funding agreement was executed.   On a number of  occasions, external legal advisers were asked to provide advice to DoHA on  complex  property,  commercial,  contract  and  taxation  matters  that  arose  in  negotiations.  The  resolution  of  these  matters,  when  they  arose,  generally  added to the time taken to conclude negotiations.  

Financial approval of grants

4.3 Where  the  assessment  panel  recommended  the  immediate  offer  of  a  funding  agreement,  the  departmental  decision-maker  (the  Division  Head)  gave financial approval under Regulation 9 o

f the Financial Management and 

Accountability Regulations 1997 (FMA Regulation 9).137 Where the assessment 

                                                       136 Exceptions occurred where either no applications were received or where no application was assessed as having sufficient merit / carrying acceptable risks to potentially fund. 137

Regulation 9 requires the decision maker to be satisfied, after making reasonable inquiries, that giving effect to the spending proposal would be a proper use of Commonwealth resources. Under the Commonwealth’s financial framework, the overall test for the ‘proper use’ of public money is the ‘efficient, effective, economical and ethical use of Commonwealth resources that is not inconsistent wi

th the policies of the Commonwealth’. Often, this is referred to as a

‘value for money’ test.

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concept was applied in the assessment and selection process. In terms of the  services to be delivered by clinics, of the six locations in the ANAO’s sample  where a grant of up to $15 million was available to establish a GP Super Clinic,  DoHA did not explicitly assess whether the specialised services required under  the program guidelines for these l

ocations were appropriately addressed in the 

applications. 

3.50 In  instances  where  the  initial  Invitation  to  Apply  process  did  not  identify  a  successful  applicant,  DoHA  used  a  variety  of  strategies  and  processes  to  generate  new  or  substantially  revised  applications  and  subsequently assess the merits of those applications. The processes adopted in  these  cases  were  generally  adequate  and  there  was  a  positive  trend  in  the  second round where DoHA involve

d the Minister earlier in advising on risks 

and  options,  especially  where  non‐competitive  processes  were  involved.  However, the absence of a full panel assessment in some instances meant that  the expertise of a medical adviser was not used in assessing some applications. 

  

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4. Rolling out the Clinics

This chapter examines how DoHA administered the program from the completion of  the assessment process to getting clinics into operation. It focuses on the major issues  that arose during this period and DoHA’s response to manage risk, including issues  that potentially led to financial risks and delays 

Introduction 4.1 As  discussed  in  chapter  three,  the  majority  of  applicant  assessment  processes  resulted  in  the  assessment  panel  recommending  a  preferred  applicant.136  On  nine  occasions  across  all  clinic  locations  the  panel  recommended  that  the  preferred  applicant  be  immediately  offered  a  grant  funding agreement by DoHA.  However, in 44 locations, the panel identified  one or more issues that had arisen in the assessment process, and which it  considered as requiring resolution or clarification with the preferred applicant  before a funding agreement could be offered. In these instances, DoHA sought  to deal with outstanding issues in ‘without prejudice’ negotiations with the  applicant.   

4.2 The  time  taken  to  conclude  negotiations  with  preferred  applicants  varied considerably. In the ANAO’s sample, negotiations for four clinics took  over six months before a funding agreement was executed.   On a number of  occasions, external legal advisers were asked to provide advice to DoHA on  complex  property,  commercial,  contract  and  taxation  matters  that  arose  in  negotiations.  The  resolution  of  these  matters,  when  they  arose,  generally  added to the time taken to conclude negotiations.  

Financial approval of grants

4.3 Where  the  assessment  panel  recommended  the  immediate  offer  of  a  funding  agreement,  the  departmental  decision-maker  (the  Division  Head)  gave financial approval under Regulation 9 o

f the Financial Management and 

Accountability Regulations 1997 (FMA Regulation 9).137 Where the assessment 

                                                       136 Exceptions occurred where either no applications were received or where no application was assessed as having sufficient merit / carrying acceptable risks to potentially fund. 137

Regulation 9 requires the decision maker to be satisfied, after making reasonable inquiries, that giving effect to the spending proposal would be a proper use of Commonwealth resources. Under the Commonwealth’s financial framework, the overall test for the ‘proper use’ of public money is the ‘efficient, effective, economical and ethical use of Commonwealth resources that is not inconsistent with the policies of the Commonwealth’. Often, this is referred to as a ‘value for money’ test.

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panel recommended that specified issues required resolution or clarification, in  all  but  three  cases  DoHA  deferred  financial approval  until  the  negotiations  were completed.138  

4.4 In the first round, the advice to the decision-maker accompanying the  FMA Regulation 9 recommendation generally lacked any information on how  the  negotiated  issues  had  been  resolved.  Updated  project-specific  risk  management plans were attached to the Regulation 9 advice, but these

 did not 

always record the specific issues that were the subject of funding agreement  negotiations.  DoHA  advised  the  ANAO  that  the  decision‐maker  ‘was  constantly advised verbally and in writing about all matters impacting on the  funding decision...and how negotiation issues were resolved.’  However, it has  long been recognised that it is sound practice to document the basis on which  an  approver  has  made  a  decision  in  respect  to  grant  funding  under  FMA  Regulation 9.139 In addition, since 1 July 2009, FMA Regulation 12 has explicitly  required the approver of a grant to make a written record of the basis on which  they are satisfied that the spending proposal complies with FMA Reg

ulation 9. 

4.5 In  the  case  of  the  Redcliffe  project,  the  relevant  assessment  panel  identified  risks  to  the  preferred  applicant’s  capacity  to  finance  the  project. While DoHA had raised these issues in an initial negotiating teleconference  with  the  preferred  applicant,  the  Redcliffe  Hospital  Foundation,  the  subsequent advice to the Regulation 9 decision‐maker of January 2009 made no  specific reference to these issues and the approval was given for a grant of  $5 million in the first round. In the event, the recipient was unable to secure a  loan  to  fund  the  remainder  of  the

  Redcliffe  project140,  notwithstanding  the 

receipt  of  an  additional  $5  million  in  grant  funding  in  the  second  round.  Ultimately  DoHA  provided  a  third  grant  of  $3.2  million  to  complete  construction at a total cost of $13.2 million.141 

4.6 There was a change of approach in the second round. Advice to the  Regulation 9 decision‐maker included a summary of the issues that had been 

                                                       138 In these cases, which were all first round clinics, conditional Regulation 9 financial approval was given before DoHA started funding agreement negotiations. 139

ANAO 2002 Better Practice Guide—Administration of Grants, p. 22. 140 The funding recipient, the Redcliffe Hospital Foundation, was created under, and subject to specific Queensland legislation, and therefore required approval from the Queensland Government to take out loans that were intended to

co-finance the construction of the Super Clinic. 141 Completion of the base building was achieved in January 2012. Partly due to complications over the selection of a third-party clinic operator, which was a condition of the Commonwealth’s $3.2 million ‘top-up’ grant, the clinic was not

expected to open until mid 2013.

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negotiated with the preferred applicant, and importantly, how these matters  had  been  resolved.  This  improved  the  transparency  of  DoHA’s  project  risk  management  and  provided  additional  information  to  the  decision‐maker  to  more  fully  inform  them  in  reaching  a  view  on  whether  offering  a  funding  agreement  to  the  preferred  applicant  would  constitute  a  proper  use  of  Commonwealth resources. 

4.7 Wi

th  one  exception,   where  an  FMA  Regulation  10142  approval  was  necessary, it was obtained before giving Regulation 9 approval as required by  the  financial  framework.  This  instance  of  non‐compliance  was  reported  in  DoHA’s 2010-2011 Certificate of Compliance.143  However, there were at least  seven clinics in the first round where funding agreement negotiations resulted  in different funding profiles144 to that in the Regulation 10 approval. In such  circumstances, these ap

provals should have been varied.145 This oversight was  subsequently remedied by DoHA. In the second round, rather than seeking  individual Regulation 10 approvals for each clinic, DoHA adopted the practice  of obtaining a ‘bulk’ Regulation 10 approval covering all clinics. This approval  was  subsequently  varied  a  number  of  times  in  2011  and  2012  to  reflect  a  changed  program  funding  profile  resulting  from  delays  in  establishing  relevant clinics.  

4.8 Regulation 8 of the financial framework prohibits the Commonwealth  from executing a gr

ant funding agreement unless Regulation 9 approval has  been  obtained.  In  all  cases,  Regulation  9  approval  was  obtained  before  execution of the funding agreement. 

Mandatory public reporting of the GP Super Clinics grants

4.9 The  Commonwealth  Grant  Guidelines  include  a  mandatory  public  reporting  requirement  for  grants,  specifying  that  information  on  individual  grants must be published on the relevant administering agency’s website no  later than seven working days after the funding agreement for the

 grant takes 

                                                       142 Regulation 10 of the Australian Government’s financial management framework requires the prior approval of the Finance Minister or a delegate to a proposed commitment of public money where there is no current appropriation. It is

typically required for multi-year spending proposals, or where a commitment is entered into in one year and payments are due in a subsequent year. 143 The Certificate of Compliance is an annual report prepared by all FMA agencies advising the responsible Minister (and

copied to the Finance Minister) of the agency’s compliance with the financial management framework. 144 Where grant funds were to be paid in multiple instalments over two or more financial years, the term ‘funding profile’ me

ans the various total amounts that were to be paid in each successive financial year. 145 In the first round, Regulation 10 approvals were generally sought just before the start of the ITA process, which was

often several months before any funding agreement negotiations.

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panel recommended that specified issues required resolution or clarification, in  all  but  three  cases  DoHA  deferred  financial approval  until  the  negotiations  were completed.138  

4.4 In the first round, the advice to the decision-maker accompanying the  FMA Regulation 9 recommendation generally lacked any information on how  the  negotiated  issues  had  been  resolved.  Updated  project-specific  risk  management plans were attached to the Regulation 9 advice, but these

 did not 

always record the specific issues that were the subject of funding agreement  negotiations.  DoHA  advised  the  ANAO  that  the  decision‐maker  ‘was  constantly advised verbally and in writing about all matters impacting on the  funding decision...and how negotiation issues were resolved.’  However, it has  long been recognised that it is sound practice to document the basis on which  an  approver  has  made  a  decision  in  respect  to  grant  funding  under  FMA  Regulation 9.139 In addition, since 1 July 2009, FMA Regulation 12 has explicitly  required the approver of a grant to make a written record of the basis on which  they are satisfied that the spending proposal complies with FMA Reg

ulation 9. 

4.5 In  the  case  of  the  Redcliffe  project,  the  relevant  assessment  panel  identified  risks  to  the  preferred  applicant’s  capacity  to  finance  the  project. While DoHA had raised these issues in an initial negotiating teleconference  with  the  preferred  applicant,  the  Redcliffe  Hospital  Foundation,  the  subsequent advice to the Regulation 9 decision‐maker of January 2009 made no  specific reference to these issues and the approval was given for a grant of  $5 million in the first round. In the event, the recipient was unable to secure a  loan  to  fund  the  remainder  of  the

  Redcliffe  project140,  notwithstanding  the 

receipt  of  an  additional  $5  million  in  grant  funding  in  the  second  round.  Ultimately  DoHA  provided  a  third  grant  of  $3.2  million  to  complete  construction at a total cost of $13.2 million.141 

4.6 There was a change of approach in the second round. Advice to the  Regulation 9 decision‐maker included a summary of the issues that had been 

                                                     

 

138 In these cases, which were all first round clinics, conditional Regulation 9 financial approval was given before DoHA started funding agreement negotiations.

139 ANAO 2002 Better Practice Guide—Administration of Grants, p. 22. 140 The funding recipient, the Redcliffe Hospital Foundation, was created under, and subject to specific Queensland

legislation, and therefore required approval from the Queensland Government to take out loans that were intended to co-finance the construction of the Super Clinic. 141 Completion of the base building was achieved in January 2012. Partly due to complications over the selection of a third-

party clinic operator, which was a condition of the Commonwealth’s $3.2 million ‘top-up’ grant, the clinic was not expected to open until mid 2013.

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negotiated with the preferred applicant, and importantly, how these matters  had  been  resolved.  This  improved  the  transparency  of  DoHA’s  project  risk  management  and  provided  additional  information  to  the  decision‐maker  to  more  fully  inform  them  in  reaching  a  view  on  whether  offering  a  funding  agreement  to  the  preferred  applicant  would  constitute  a  proper  use  of  Commonwealth resources. 

4.7 Wi

th  one  exception,   where  an  FMA  Regulation  10142  approval  was  necessary, it was obtained before giving Regulation 9 approval as required by  the  financial  framework.  This  instance  of  non‐compliance  was  reported  in  DoHA’s 2010-2011 Certificate of Compliance.143  However, there were at least  seven clinics in the first round where funding agreement negotiations resulted  in different funding profiles144 to that in the Regulation 10 approval. In such  circumstances, these ap

provals should have been varied.145 This oversight was  subsequently remedied by DoHA. In the second round, rather than seeking  individual Regulation 10 approvals for each clinic, DoHA adopted the practice  of obtaining a ‘bulk’ Regulation 10 approval covering all clinics. This approval  was  subsequently  varied  a  number  of  times  in  2011  and  2012  to  reflect  a  changed  program  funding  profile  resulting  from  delays  in  establishing  relevant clinics.  

4.8 Regulation 8 of the financial framework prohibits the Commonwealth  from executing a gr

ant funding agreement unless Regulation 9 approval has  been  obtained.  In  all  cases,  Regulation  9  approval  was  obtained  before  execution of the funding agreement. 

Mandatory public reporting of the GP Super Clinics grants

4.9 The  Commonwealth  Grant  Guidelines  include  a  mandatory  public  reporting  requirement  for  grants,  specifying  that  information  on  individual  grants must be published on the relevant administering agency’s website no  later than seven working days after the funding agreement for the

 grant takes 

                                                       142 Regulation 10 of the Australian Government’s financial management framework requires the prior approval of the Finance Minister or a delegate to a proposed commitment of public money where there is no current appropriation. It is

typically required for multi-year spending proposals, or where a commitment is entered into in one year and payments are due in a subsequent year. 143 The Certificate of Compliance is an annual report prepared by all FMA agencies advising the responsible Minister (and

copied to the Finance Minister) of the agency’s compliance with the financial management framework. 144 Where grant funds were to be paid in multiple instalments over two or more financial years, the term ‘funding profile’ means the various total amounts that were to be p

aid in each successive financial year.

145 In the first round, Regulation 10 approvals were generally sought just before the start of the ITA process, which was often several months before any funding agreement negotiations.

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effect.  Before  the  guidelines  were  introduced  in  July  2009,  Commonwealth  agencies  were  subject  to  similar  mandatory  public  reporting  requirements  under  the  Finance  Minister’s  instructions  of  19  December  2007146  and  16  January 2009.147 

4.10 DoHA  did  not  comply  with  these  public  reporting  requirements  for  around 50 per cent of all GP Super Clinics grants,  including several grants  awarded in 2012. The extent of the non‐compliance was discovered by DoHA  after  the  ANAO  sought  information  in  the  course  of  the  audit,  although  23 breaches of the public reporting requirement for GP Super Clinics grants  were  also  recorded  in  DoHA’s  2011-12  Certificate  of  Compliance. DoHA  advised the ANAO that it has, both at a departmental and divisional level,   ‘implemented  revised  processes  to  increase  awareness  of  the  reporting  requirements and to minimise the potential for future non‐compliance with  grant reporting’.  

Managing the clinic roll-out 4.11 Across the program as a whole, management of the clinic roll‐out once  funding agreements were executed took considerable effort by DoHA. At a  minimum,  DoHA  was  required  to  verify  the  achievement  of  a  number  of  milestones by the recipient, some of which triggered progress payments.  The  number  and  complexity  of  the  milestones  increased  substantially  as  the  standard  form  funding  agreement  was  amended  six  times  over  200

8-2012. 

Under the current (August 2012) version of the funding agreement, approval  from  DoHA  to  commence  clinic  construction  is  the 8th  milestone,  while  the  commencement of clinic operations is the 13th and final milestone.148 A range of  pre- and post-commencement progress reports must also be submitted by the  recipient. 

4.12 The  changes  made  to  the  standard  funding  agreement  over  time  reflected the experience acquired by DoHA, and were intended to respond to  specific

 issues that arose in the course of the roll‐out as more clinics passed  through  the  funding  negotiation,  construction,  and  operational  stages.  The  more significant issues, and DoHA’s response, are outlined below. 

                                                       146 These required reporting within two days of the announcement of the grant. 147

These required reporting within seven days of the execution of the grant funding agreement. 148 These milestones include reports on property acquisition, and would not be required if the recipient already owned the relevant property.

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Potential funding shortfalls

4.13 Financial issues mainly arose where recipients were unable to secure  contributions or loans that had been anticipated in their proposals, or where  capital costs (construction or land acquisition) were greater than anticipated in  original applications.  

Contributions or loans

4.14 From  the  outset,  in  the  first  standard  form  funding  agreement,  recipients were required to warrant th

at the grant funds, in combination with 

any other contributions to be made or received by them, would be sufficient to  complete the project. In some instances, applicants intended to source these  contributions primarily or partly through loans. This was the case for instance  in the Redcliffe project. As the recipient, the Redcliffe Hospital Foundation was  created  under,  and  subject  to  specific  Queensland  legislation,  it  required  approval for loans

 from the Queensland Government. It had not secured the  necessary Queensland approvals at the time of the execution of the initial (first  round) or subsequent (second round) GP Super Clinic funding agreement149,  and  ultimately  the  Queensland  Government  refused  to  provide  approval,  citing serviceability concerns amongst others.150 The recipient was thus unable  to  complete  construction  of  the  clinic—which  had  remained  broadly  on  budget—until the Comm

onwealth made a third, ‘top‐up’ grant of $3.2 million  in October 2011, outside of the regular merit‐based GP Super Clinic process.  The third grant was made in the context of the threat of legal action by the  builders against the grant recipient for unpaid bills.151  

                                                       149 The financial risk to the Redcliffe project arising from the lack of confirmed loan funding was clearly flagged in the assessment panel’s advice regarding the proposed second round grant. The panel recommended the applicant ‘provide

a

sound financial strategy’ as part of funding agreement negotiations. The subsequent advice accompanying the Regulation 9 recommendation stated that those risks had been addressed by requiring the applicant to deliver a financial action plan shortly after the execution of the funding agreement. That plan was subsequently delivered, triggering a progress payment of $1.1 million. 150

The Redcliffe Hospital Foundation was subject to a ‘qualified opinion’ by the Queensland Auditor-General in respect of its 2011 financial statements: Auditor-General of Queensland, Report to Parliament No. 11 for 2011, p. 34. The opinion related to the Auditor-General’s finding that the Foundation breached its procurement obligations in the manner it awarded the building contract (it did not go to open tender), and that the fund

ing shortfall in the GP Super Clinic project

raised significant uncertainty over the organisation’s financial position. A qualified opinion was likewise issued in respect of the Foundation’s financial position contained in 2012 financial statements: Auditor-General of Queensland, Report to Parliament No. 5 for 2012-13, p. 72. 151 DoHA provided advice to the Minister outlining a number of options in respect of the funding shortfall at Redcliffe. The Minister approved the option of reallocating $3.2 million of existing GP Super Clinic program funds to allow for the completion of the project. The subsequent FMA Regulation 9 approval by DoHA of 12 October 2011 does not explicitly record the basis on which the additional funds represent a proper use of Commonwealth resources. As such, the approval

is not consistent with the requirements of the Commonwealth financial framework under FMA Regulation 12, which requires the basis of all grant approvals to be documented.

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effect.  Before  the  guidelines  were  introduced  in  July  2009,  Commonwealth  agencies  were  subject  to  similar  mandatory  public  reporting  requirements  under  the  Finance  Minister’s  instructions  of  19  December  2007146  and  16  January 2009.147 

4.10 DoHA  did  not  comply  with  these  public  reporting  requirements  for  around 50 per cent of all GP Super Clinics grants,  including several grants  awarded in 2012. The extent of the non‐compliance was discovered by DoHA  after  the  ANAO  sought  information  in  the  course  of  the  audit,  although  23 breaches of the public reporting requirement for GP Super Clinics grants  were  also  recorded  in  DoHA’s  2011-12  Certificate  of  Compliance. DoHA  advised the ANAO that it has, both at a departmental and divisional level,   ‘implemented  revised  processes  to  increase  awareness  of  the  reporting  requirements and to minimise the potential for future non‐compliance with  grant reporting’.  

Managing the clinic roll-out 4.11 Across the program as a whole, management of the clinic roll‐out once  funding agreements were executed took considerable effort by DoHA. At a  minimum,  DoHA  was  required  to  verify  the  achievement  of  a  number  of  milestones by the recipient, some of which triggered progress payments.  The  number  and  complexity  of  the  milestones  increased  substantially  as  the  standard  form  funding  agreement  was  amended  six  times  over  200

8-2012. 

Under the current (August 2012) version of the funding agreement, approval  from  DoHA  to  commence  clinic  construction  is  the 8th  milestone,  while  the  commencement of clinic operations is the 13th and final milestone.148 A range of  pre- and post-commencement progress reports must also be submitted by the  recipient. 

4.12 The  changes  made  to  the  standard  funding  agreement  over  time  reflected the experience acquired by DoHA, and were intended to respond to  specific

 issues that arose in the course of the roll‐out as more clinics passed  through  the  funding  negotiation,  construction,  and  operational  stages.  The  more significant issues, and DoHA’s response, are outlined below. 

                                                       146 These required reporting within two days of the announcement of the grant. 147

These required reporting within seven days of the execution of the grant funding agreement. 148 These milestones include reports on property acquisition, and would not be required if the recipient already owned the relevant proper

ty.

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Potential funding shortfalls

4.13 Financial issues mainly arose where recipients were unable to secure  contributions or loans that had been anticipated in their proposals, or where  capital costs (construction or land acquisition) were greater than anticipated in  original applications.  

Contributions or loans

4.14 From  the  outset,  in  the  first  standard  form  funding  agreement,  recipients were required to warrant th

at the grant funds, in combination with 

any other contributions to be made or received by them, would be sufficient to  complete the project. In some instances, applicants intended to source these  contributions primarily or partly through loans. This was the case for instance  in the Redcliffe project. As the recipient, the Redcliffe Hospital Foundation was  created  under,  and  subject  to  specific  Queensland  legislation,  it  required  approval for loans

 from the Queensland Government. It had not secured the  necessary Queensland approvals at the time of the execution of the initial (first  round) or subsequent (second round) GP Super Clinic funding agreement149,  and  ultimately  the  Queensland  Government  refused  to  provide  approval,  citing serviceability concerns amongst others.150 The recipient was thus unable  to  complete  construction  of  the  clinic—which  had  remained  broadly  on  budget—until the Comm

onwealth made a third, ‘top‐up’ grant of $3.2 million  in October 2011, outside of the regular merit‐based GP Super Clinic process.  The third grant was made in the context of the threat of legal action by the  builders against the grant recipient for unpaid bills.151  

                                                       149 The financial risk to the Redcliffe project arising from the lack of confirmed loan funding was clearly flagged in the assessment panel’s advice regarding the proposed second round grant. The panel recommended the applicant ‘provide

a sound financial strategy’ as part of funding agreement negotiations. The subsequent advice accompanying the Regulation 9 recommendation stated that those risks had been addressed by requiring the applicant to deliver a financial action plan shortly after the execution of the funding agreement. That plan was subsequently delivered, triggering a progress payment of $1.1 million. 150

The Redcliffe Hospital Foundation was subject to a ‘qualified opinion’ by the Queensland Auditor-General in respect of its 2011 financial statements: Auditor-General of Queensland, Report to Parliament No. 11 for 2011, p. 34. The opinion

related to the Auditor-General’s finding that the Foundation breached its procurement obligations in the manner it awarded the building contract (it did not go to open tender), and that the funding shortfall in the GP Super Clinic project raised significant uncertainty over the organisation’s financial position. A qualified opinion was likewise issued in respect of the Foundation’s financial position contained in 2012 financial statements: Auditor-General of Queensland, Report to Parliament No. 5 for 2012-13, p. 72. 151

DoHA provided advice to the Minister outlining a number of options in respect of the funding shortfall at Redcliffe. The Minister approved the option of reallocating $3.2 million of existing GP Super Clinic program funds to allow for the completion

of the project. The subsequent FMA Regulation 9 approval by DoHA of 12 October 2011 does not explicitly record the basis on which the additional funds represent a proper use of Commonwealth resources. As such, the approval is not consistent with the requirements of the Commonwealth financial framework under FMA Regulation 12, which requires the basis of all grant approvals to be documented.

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recipient entity was attempting to find supplementary funding for the project  due to its concerns over the adequacy of the $2.4 million grant.  However, the  advice provided to the departmental decision-maker, for the purposes of FMA  Regulation 9 approval of the $2.4 million grant, did not indicate that potential  funding shortfalls constituted a risk to the project. 

4.19 In  May  2010,  the  Sorell  grant  recipient  informed  DoHA  that  the  recently  received  architect’s  capital  cost  estimates  for  the  project  were  considerably in excess of the $2.4 million grant. Whilst reiterating that the

were seeking other funds to supplement the grant, the recipient’s advice to  DoHA  stated  that  they  would  look  to  ‘move  back  to  a  balanced  budget’.   Submittal of the clinic operational plan to DoHA by the recipient triggered a  potential  milestone  progress  payment  of  some  $516 000,  subject  to  DoHA’s  approval of the plan. The plan clearly highlighted a budget shortfall of at least  $880  000  due  to  the  capital  cost  escalations.  While  DoHA  undertook  an  analysis of the plan,  the analysis made no comment about the budget shortfall,  and no formal written advice was provided to any senior departmental officer  as to whether the plan should be accepted. In the event, the $516 000 milestone  payment  was  goods  receipted  by  an  Executive  Level  1  officer  following  approval of the milestone by an Executive Level 2 officer (Director) without  any evidence that DoHA was in a position to effectively mitigate the financial  risk. Subsequently,  DoHA  amended  its  GP  Super  Clinics  risk  management  plan to provide that ‘all milestones to be signed off at Director level or above’. 

4.20 Ultimately  the  budget  shortfall  issue  resulted  in  the  recipients  concluding  that  they  were  ‘unable  to  establish  a  viable  GP  Super  Clinic  in  Sorell  within  remaining  grant  funds.’ After  receiving  DoHA  advice,  the  Minister decided that the unallocated funds153 of approximately $1.68 million  should be used for alternative primary healthcare infrastructure purposes. The  grant  was  subsequently  terminated  and  $574  000  of  unused  funds154  was  returned by the recipient to DoHA. The bulk of the unallocated funds plus  $574 000  of  uncommitted  program  funds  were  used  by  DoHA  for  primary  health  care  infrastructure  grants  projects  in  Sorell  and  Brighton  a

nd  the 

surrounding region.155  However, the failure of the Sorell project meant that 

                                                       153 In this context, the unallocated funds constituted the remaining balance of the total grant amount that had not yet been transferred by DoHA to the Sorell grant recipient, as the relevant funding agreement milestones had not yet been met. 154

In this context, the unused funds constituted the amount that had been transferred by DoHA to the Sorell grant recipient but had not yet been spent by the recipient. 155 Brighton is approximately 30km from the Sorell area.

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4.15 In early 2012, in the light of experience, DoHA amended the standard  form funding agreement to provide that before acquiring land or awarding a  construction  contract,  the  recipient  must  declare  it  has,  or  has  unconditional  access to, funds sufficient to complete the project. 

Managing project budgets

4.16 The  major  capital  cost  item  in  the  majority  of  projects  was  clinic

 

construction, and where land was being purchased, land. From the inception  of the program, the standard form funding agreement made it clear that the  recipient carried the risk of any cost escalation once the funding agreement  was executed. Funding agreements also required a detailed project plan and  budget as an early milestone. Whilst these were initially assessed solely by  departmental officers, from mid 2009 these documents w

ere also referred to an 

external  construction  adviser  for  assessment.   The  project  plan  and  budget  required DoHA’s approval before the project could proceed. 

4.17 In order to assess the scope of any capital cost escalations, the ANAO  reviewed  the  24  clinic  final  construction  reports  submitted  to  DoHA  as  at  December 2012.152 While the comprehensiveness of the budget information in  these reports varied, overall they indicated a relatively low level of variance  between the projected budget costs and the final construction c

osts. There were 

only  three  instances  where  the  increases  between  the  projected  and  actual  construction costs was reported as exceeding 10 per cent.  In the case of one  clinic  DoHA  was  unable  to  locate  the  construction  report  and  could  not  demonstrate that it had been received by the department. 

4.18 Escalation of capital costs led to the termination of one grant - Sorell in  Tasmania.  The  initial  competitive  ITA  funding  process  attracted  two  applications, but neither scored above 50 per cent at assessment. DoHA then  brokered a ‘local solution’, subsequently awarding a $275

 000 grant to the local 

Division of General Practice under an interim funding agreement, to amongst  other things, develop a building design for the proposed clinic. The eventual  funding agreement for Sorell, for $2.4 million, required the development by the  recipient  of  full  building  plans  to  a  standard  that  could  be  lodged  for  the  purposes of development approval and obtaining construction quotes. At the  time

 the agreement was executed in February 2010, DoHA was aware that the 

                                                       152 Recipients were required to submit final construction reports to DoHA within three months of the completion of clinic construction.

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recipient entity was attempting to find supplementary funding for the project  due to its concerns over the adequacy of the $2.4 million grant.  However, the  advice provided to the departmental decision-maker, for the purposes of FMA  Regulation 9 approval of the $2.4 million grant, did not indicate that potential  funding shortfalls constituted a risk to the project. 

4.19 In  May  2010,  the  Sorell  grant  recipient  informed  DoHA  that  the  recently  received  architect’s  capital  cost  estimates  for  the  project  were  considerably in excess of the $2.4 million grant. Whilst reiterating that the

were seeking other funds to supplement the grant, the recipient’s advice to  DoHA  stated  that  they  would  look  to  ‘move  back  to  a  balanced  budget’.   Submittal of the clinic operational plan to DoHA by the recipient triggered a  potential  milestone  progress  payment  of  some  $516 000,  subject  to  DoHA’s  approval of the plan. The plan clearly highlighted a budget shortfall of at least  $880  000  due  to  the  capital  cost  escalations.  While  DoHA  undertook  an  analysis of the plan,  the analysis made no comment about the budget shortfall,  and no formal written advice was provided to any senior departmental officer  as to whether the plan should be accepted. In the event, the $516 000 milestone  payment  was  goods  receipted  by  an  Executive  Level  1  officer  following  approval of the milestone by an Executive Level 2 officer (Director) without  any evidence that DoHA was in a position to effectively mitigate the financial  risk. Subsequently,  DoHA  amended  its  GP  Super  Clinics  risk  management  plan to provide that ‘all milestones to be signed off at Director level or above’. 

4.20 Ultimately  the  budget  shortfall  issue  resulted  in  the  recipients  concluding  that  they  were  ‘unable  to  establish  a  viable  GP  Super  Clinic  in  Sorell  within  remaining  grant  funds.’ After  receiving  DoHA  advice,  the  Minister decided that the unallocated funds153 of approximately $1.68 million  should be used for alternative primary healthcare infrastructure purposes. The  grant  was  subsequently  terminated  and  $574  000  of  unused  funds154  was  returned by the recipient to DoHA. The bulk of the unallocated funds plus  $574 000  of  uncommitted  program  funds  were  used  by  DoHA  for  primary  health  care  infrastructure  grants  projects  in  Sorell  and  Brighton  a

nd  the 

surrounding region.155  However, the failure of the Sorell project meant that 

                                                       153 In this context, the unallocated funds constituted the remaining balance of the total grant amount that had not yet been transferred by DoHA to the Sorell grant recipient, as the relevant funding agreement milestones had not yet been met. 154

In this context, the unused funds constituted the amount that had been transferred by DoHA to the Sorell grant recipient but had not yet been spent by the recipient. 155 Brighton is approximately 30km from the Sorell area.

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4.15 In early 2012, in the light of experience, DoHA amended the standard  form funding agreement to provide that before acquiring land or awarding a  construction  contract,  the  recipient  must  declare  it  has,  or  has  unconditional  access to, funds sufficient to complete the project. 

Managing project budgets

4.16 The  major  capital  cost  item  in  the  majority  of  projects  was  clinic

 

construction, and where land was being purchased, land. From the inception  of the program, the standard form funding agreement made it clear that the  recipient carried the risk of any cost escalation once the funding agreement  was executed. Funding agreements also required a detailed project plan and  budget as an early milestone. Whilst these were initially assessed solely by  departmental officers, from mid 2009 these documents w

ere also referred to an 

external  construction  adviser  for  assessment.   The  project  plan  and  budget  required DoHA’s approval before the project could proceed. 

4.17 In order to assess the scope of any capital cost escalations, the ANAO  reviewed  the  24  clinic  final  construction  reports  submitted  to  DoHA  as  at  December 2012.152 While the comprehensiveness of the budget information in  these reports varied, overall they indicated a relatively low level of variance  between the projected budget costs and the final construction c

osts. There were 

only  three  instances  where  the  increases  between  the  projected  and  actual  construction costs was reported as exceeding 10 per cent.  In the case of one  clinic  DoHA  was  unable  to  locate  the  construction  report  and  could  not  demonstrate that it had been received by the department. 

4.18 Escalation of capital costs led to the termination of one grant - Sorell in  Tasmania.  The  initial  competitive  ITA  funding  process  attracted  two  applications, but neither scored above 50 per cent at assessment. DoHA then  brokered a ‘local solution’, subsequently awarding a $275

 000 grant to the local 

Division of General Practice under an interim funding agreement, to amongst  other things, develop a building design for the proposed clinic. The eventual  funding agreement for Sorell, for $2.4 million, required the development by the  recipient  of  full  building  plans  to  a  standard  that  could  be  lodged  for  the  purposes of development approval and obtaining construction quotes. At the  time

 the agreement was executed in February 2010, DoHA was aware that the 

                                                       152 Recipients were required to submit final construction reports to DoHA within three months of the completion of clinic construction.

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$490 000 of GP Super Clinic grant funds were spent without any construction  commencing  or  the  achievement  of  any  of  the  program  objectives,  in  the  three years between the initial ITA process and the termination of the grant. 

4.21 In other cases, where building quotes or potential land acquisition costs  were  higher  than  anticipated,  recipients  sought  permission  from  DoHA  to  increase the level o

f their commercial loans. DoHA advised the ANAO that its  most  recent  practice  was  to  refer  proposals  by  recipients  for  dealing  with  potential cost increases to both the independent construction adviser and the  independent financial adviser prior to being considered for acceptance by the  Department.   

4.22 DoHA also amended the standard form funding agreement in 2010 to  require  both  a  ‘preliminary  project’  plan  and  budget  (including  a  r

isk 

management  plan)  and  a  ‘construction  ready’  project  plan  and  budget  (including  an  updated  risk  management  plan). The  ‘construction  ready’  documentation  required  approval  by  DoHA  before  the  recipient  sought  building quotes.  

Increases in grant funding amounts

4.23 There have been two occasions across all GP Super Clinics locations in  which  the  initial  funding  amount  announced  by  the  Government  has  been  subsequently increased.  

4.24 In June 2009, following a non‐competitive ITA process, DoHA executed  a funding agreement for $2.5 million to construct a GP Super Clinic at Mt Isa.  However,  in  February  2010  th

e  recipient  advised  that  it  could  no  longer 

establish a clinic for this amount without taking on an ‘unmanageable risk to  [its] viability’, and indicated that a grant of $5 million was required to establish  a GP Super Clinic.  The recipient subsequently withdrew from the funding  agreement. Increased funding up to $5 million was approved by the Minister  in June 2010,  and following the Prime Minister’s agreement to the increase,   the Minister elected to re‐run the Mt Isa ITA process from scratch, this time as  a  competitive  process.    A  $5 million  funding  agreement was  subsequently  executed with a new organisation in June 2011.  

4.25 In  mid  2009,  an  initial  competitive  ITA  process  for  Wallan  failed  to  produce  any  applications  for  the  $1  million  available  grant.  DoHA  subsequently brokered a local solution with the Mitchell Community Health  Service (MCHS). Before formally offering the grant to MCHS, DoHA advised  the Minister that the MCHS proposal involved the r

efurbishment of the local 

multipurpose centre, which ‘may not meet local expectations of a GP Super 

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Clinic’.156   The brief reported on the views expressed by the local Division of  General Practice that an amount of $3.5 million was required to construct a  clinic that would be consistent with the program objectives and recommended  that the Minister approve an increase in funding to MCHS from $1 million to  $3.5 million. The increase was agreed and a revised proposal, for a purpose‐ built facility of 800 sq

uare metres, was submitted by MCHS in October 2010  and assessed by DoHA.  

4.26 Funding  agreement  negotiations  regarding  the  $3.5  million  grant  commenced with MCHS in December 2010. During these negotiations, DoHA  became aware that MCHS had also submitted a $2.6 million grant application  under round three of DoHA’s Health and Hospitals Fund (HHF) program in  December  2010.  The  application  was  for  the  construction  of  an  ‘integrated  primary  healthcare  centre’  at  Wallan,  which

  would  result  in  an  expanded 

facility of 1300 square metres. DoHA originally expressed some concerns as to  whether the larger facility would result in co‐location, rather than integration  of  services.  Overall,  however,  the  department  concluded  that  the  HHF  application was ‘largely complementary’ to the GP Super Clinic proposal and  approved the funding and integration of both proposals.  

4.27 A  funding  agreement  for  the

  Wallan  GP  Super  Clinic  was  executed 

with  MCHS  in  April  2011  for  $3.5  million.  However,  the  advice  to  the  departmental  decision‐maker  regarding  the  financial  approval  and  the  execution of the agreement did not make any reference to MCHS’s HHF grant  application,  and  in  that  respect  did  not  fully  inform  the  decision-maker  of  issues relevant to the exercise of the approval.    

4.28 In May 2012, MCHS was successful in securing a further  $1 million  grant under round four of the HHF program.  The grant was for the purchase  of  land  for  the  combined  GP  Super  Clinic  /  integrated  primary  healthcare  centre.    In  January  2013,  DoHA  gave  approval  to  start  construction  of  the  combined facility. The total combined grant funding for the integrated centre is  now  $7.1  million,  with  the  currently  estimated  total  project  cost  around  $9.3 million. 

                                                       156 DoHA’s assessment noted that the refurbishment would provide five multi-purpose consulting rooms and a nurse’s treatment room.

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$490 000 of GP Super Clinic grant funds were spent without any construction  commencing  or  the  achievement  of  any  of  the  program  objectives,  in  the  three years between the initial ITA process and the termination of the grant. 

4.21 In other cases, where building quotes or potential land acquisition costs  were  higher  than  anticipated,  recipients  sought  permission  from  DoHA  to  increase the level o

f their commercial loans. DoHA advised the ANAO that its  most  recent  practice  was  to  refer  proposals  by  recipients  for  dealing  with  potential cost increases to both the independent construction adviser and the  independent financial adviser prior to being considered for acceptance by the  Department.   

4.22 DoHA also amended the standard form funding agreement in 2010 to  require  both  a  ‘preliminary  project’  plan  and  budget  (including  a  r

isk 

management  plan)  and  a  ‘construction  ready’  project  plan  and  budget  (including  an  updated  risk  management  plan). The  ‘construction  ready’  documentation  required  approval  by  DoHA  before  the  recipient  sought  building quotes.  

Increases in grant funding amounts

4.23 There have been two occasions across all GP Super Clinics locations in  which  the  initial  funding  amount  announced  by  the  Government  has  been  subsequently increased.  

4.24 In June 2009, following a non‐competitive ITA process, DoHA executed  a funding agreement for $2.5 million to construct a GP Super Clinic at Mt Isa.  However,  in  February  2010  th

e  recipient  advised  that  it  could  no  longer 

establish a clinic for this amount without taking on an ‘unmanageable risk to  [its] viability’, and indicated that a grant of $5 million was required to establish  a GP Super Clinic.  The recipient subsequently withdrew from the funding  agreement. Increased funding up to $5 million was approved by the Minister  in June 2010,  and following the Prime Minister’s agreement to the increase,   the Minister elected to re‐run the Mt Isa ITA process from scratch, this time as  a  competitive  process.    A  $5 million  funding  agreement was  subsequently  executed with a new organisation in June 2011.  

4.25 In  mid  2009,  an  initial  competitive  ITA  process  for  Wallan  failed  to  produce  any  applications  for  the  $1  million  available  grant.  DoHA  subsequently brokered a local solution with the Mitchell Community Health  Service (MCHS). Before formally offering the grant to MCHS, DoHA advised  the Minister that the MCHS proposal involved the r

efurbishment of the local 

multipurpose centre, which ‘may not meet local expectations of a GP Super 

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Clinic’.156   The brief reported on the views expressed by the local Division of  General Practice that an amount of $3.5 million was required to construct a  clinic that would be consistent with the program objectives and recommended  that the Minister approve an increase in funding to MCHS from $1 million to  $3.5 million. The increase was agreed and a revised proposal, for a purpose‐ built facility of 800 sq

uare metres, was submitted by MCHS in October 2010  and assessed by DoHA.  

4.26 Funding  agreement  negotiations  regarding  the  $3.5  million  grant  commenced with MCHS in December 2010. During these negotiations, DoHA  became aware that MCHS had also submitted a $2.6 million grant application  under round three of DoHA’s Health and Hospitals Fund (HHF) program in  December  2010.  The  application  was  for  the  construction  of  an  ‘integrated  primary  healthcare  centre’  at  Wallan,  which

  would  result  in  an  expanded 

facility of 1300 square metres. DoHA originally expressed some concerns as to  whether the larger facility would result in co‐location, rather than integration  of  services.  Overall,  however,  the  department  concluded  that  the  HHF  application was ‘largely complementary’ to the GP Super Clinic proposal and  approved the funding and integration of both proposals.  

4.27 A  funding  agreement  for  the

  Wallan  GP  Super  Clinic  was  executed 

with  MCHS  in  April  2011  for  $3.5  million.  However,  the  advice  to  the  departmental  decision‐maker  regarding  the  financial  approval  and  the  execution of the agreement did not make any reference to MCHS’s HHF grant  application,  and  in  that  respect  did  not  fully  inform  the  decision-maker  of  issues relevant to the exercise of the approval.    

4.28 In May 2012, MCHS was successful in securing a further  $1 million  grant under round four of the HHF program.  The grant was for the purchase  of  land  for  the  combined  GP  Super  Clinic  /  integrated  primary  healthcare  centre.    In  January  2013,  DoHA  gave  approval  to  start  construction  of  the  combined facility. The total combined grant funding for the integrated centre is  now  $7.1  million,  with  the  currently  estimated  total  project  cost  around  $9.3 million. 

                                                       156 DoHA’s assessment noted that the refurbishment would provide five multi-purpose consulting rooms and a nurse’s treatment room.

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Problems in securing land tenure or development approval

4.29 The GP Super Clinic program guidelines did not require applicants to  have secure tenure over a specific site—either through a freehold or leasehold  arrangement—at the time applications were submitted. This was to minimise  any financial disincentives for grant applicants.   

4.30 Demonstration of tenure sufficient for the recipient to operate a clinic at  the  relevant  site

  for  20  years  was  required  as  the  first  milestone  after  the  signing of the funding agreement. In some cases, recipients have been unable  to satisfy this requirement. In the case of the Mt Isa clinic, which was referred  to earlier, the preferred applicant in the initial funding process intended to  refurbish  an  existing  building  owned  by  the  Queensland  Department  of  Housing. The assessment panel’s advice, dated 23 June 2

009, noted that the 

possibility of unsuccessful lease negotiations represented a risk to the project  and  recommended  that  the  preferred  risk  mitigation  strategy  was  for  the  applicant to provide evidence of positive negotiations with the Department of  Housing before a funding agreement was offered.157 While this advice on risk  mitigation was accepted by the Division Head,  the funding agreement was  offered the very next day (24 June 2009),  and formally executed by DoHA on  25 June 2009.  In the event, the negotiations with the Queensland Department  of  Housing  were  unsuccessful,  and  the  recipient  could  not  find  alternative  premises  to  establish  a  clinic  within  the  $2.5  million  grant  amount.  As  a  consequence, the recipient decided to withdraw from the funding agreement. 

4.31 The  2012  evaluation  report158  into  the  GP  Super  Clinics  program,  discussed  in  chapter  3,  found  that  both  DoHA  and  funding  recipients  considered  land  acquisit

ion  issues  as  the  most  common  source  of  delay  to  establishment of the clinics, with development approval rated a close second.  

4.32 In  light  of  the  issues  experienced  around  tenure  and  development  approval, DoHA amended the standard form funding agreement to include: 

 a requirement for the submission of property pre‐acquisition  reports,  under which the recipient  provides an opinion of: the suitability of the  property to construct the works

 and the property for the designated 

use, whether the property represents value for money, and whether the 

                                                       157 There were also other risks listed requiring resolution in the funding agreement negotiations. 158

Evaluation of the GP Super Clinics Program 2007-2008, op. cit.

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property  will  enable  the  funding  recipient  to  meet  the  program  objectives;  

 notification that the recipient has discussed with the relevant authority  (usually  the  local  Council  but  sometimes  the  utilities  companies  or  roads  authority)  the  requirements  for  development  (or  planning)  approval; and 

 information about any variations necessary to the project plan and/or  budget as a result of obt

aining the development (or planning) approval. 

4.33 The introduction of these further requirements reflected an increased  emphasis  on  project‐specific  risk  management  of  land  acquisition  and  pre‐ construction issues by DoHA during the second round. The implementation of  these risk management processes has proven to be a complex process in some  cases. In one instance in the ANAO’s sample, the proposed clinic site was to be  purchased from a third party who had h

eld the land in anticipation that the 

recipient  would  use  it  for  the  construction  of  the  clinic.  The  vendor  was  pressing that the sale go ahead, but DoHA, following the review of the pre‐ acquisition  documentation,  initially  refused  permission  for  the  purchase  because of perceived development approval risk and conflicting valuations of  the property. DoHA had also required the recipient to commission a consultant  to locate and evaluate possible alternative sites.159  Whilst the issues were later  resolved  through  agreement  to  a  ‘conditional’  purchase  of  the  land,  DoHA  maintained  close  contact  with  the  recipient  with  a  view  to  minimising  any  slippage to the original clinic completion timeframes.  

Ensuring that recipients maintain a commitment to the GP Super Clinic model

4.34 It was not the Government’s intent that the program focus solely on  increasing access to healthcare, even in areas that were poorly serviced. One of  the  three  expected  program  outcomes  was  ‘improved  access  to  integrated,  multidisciplinary primary care health services’.160 The nature of the services, and 

                                                       159 The report was considered by DoHA. One of the sites contained in the report was adjacent to a medical centre that was recently upgraded through a $500 000 DoHA grant under the Primary Care Infrastructure Grants program. The site was

rejected as it was considered too close to that medical centre. 160 Department of Health and Ageing, GP Super Clinics national program guide 2010, p. 3. Emphasis added by the ANAO.

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Problems in securing land tenure or development approval

4.29 The GP Super Clinic program guidelines did not require applicants to  have secure tenure over a specific site—either through a freehold or leasehold  arrangement—at the time applications were submitted. This was to minimise  any financial disincentives for grant applicants.   

4.30 Demonstration of tenure sufficient for the recipient to operate a clinic at  the  relevant  site

  for  20  years  was  required  as  the  first  milestone  after  the  signing of the funding agreement. In some cases, recipients have been unable  to satisfy this requirement. In the case of the Mt Isa clinic, which was referred  to earlier, the preferred applicant in the initial funding process intended to  refurbish  an  existing  building  owned  by  the  Queensland  Department  of  Housing. The assessment panel’s advice, dated 23 June 2

009, noted that the 

possibility of unsuccessful lease negotiations represented a risk to the project  and  recommended  that  the  preferred  risk  mitigation  strategy  was  for  the  applicant to provide evidence of positive negotiations with the Department of  Housing before a funding agreement was offered.157 While this advice on risk  mitigation was accepted by the Division Head,  the funding agreement was  offered the very next day (24 June 2009),  and formally executed by DoHA on  25 June 2009.  In the event, the negotiations with the Queensland Department  of  Housing  were  unsuccessful,  and  the  recipient  could  not  find  alternative  premises  to  establish  a  clinic  within  the  $2.5  million  grant  amount.  As  a  consequence, the recipient decided to withdraw from the funding agreement. 

4.31 The  2012  evaluation  report158  into  the  GP  Super  Clinics  program,  discussed  in  chapter  3,  found  that  both  DoHA  and  funding  recipients  considered  land  acquisit

ion  issues  as  the  most  common  source  of  delay  to  establishment of the clinics, with development approval rated a close second.  

4.32 In  light  of  the  issues  experienced  around  tenure  and  development  approval, DoHA amended the standard form funding agreement to include: 

 a requirement for the submission of property pre‐acquisition  reports,  under which the recipient  provides an opinion of: the suitability of the  property to construct the works

 and the property for the designated 

use, whether the property represents value for money, and whether the 

                                                       157 There were also other risks listed requiring resolution in the funding agreement negotiations. 158

Evaluation of the GP Super Clinics Program 2007-2008, op. cit.

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property  will  enable  the  funding  recipient  to  meet  the  program  objectives;  

 notification that the recipient has discussed with the relevant authority  (usually  the  local  Council  but  sometimes  the  utilities  companies  or  roads  authority)  the  requirements  for  development  (or  planning)  approval; and 

 information about any variations necessary to the project plan and/or  budget as a result of obt

aining the development (or planning) approval. 

4.33 The introduction of these further requirements reflected an increased  emphasis  on  project‐specific  risk  management  of  land  acquisition  and  pre‐ construction issues by DoHA during the second round. The implementation of  these risk management processes has proven to be a complex process in some  cases. In one instance in the ANAO’s sample, the proposed clinic site was to be  purchased from a third party who had h

eld the land in anticipation that the 

recipient  would  use  it  for  the  construction  of  the  clinic.  The  vendor  was  pressing that the sale go ahead, but DoHA, following the review of the pre‐ acquisition  documentation,  initially  refused  permission  for  the  purchase  because of perceived development approval risk and conflicting valuations of  the property. DoHA had also required the recipient to commission a consultant  to locate and evaluate possible alternative sites.159  Whilst the issues were later  resolved  through  agreement  to  a  ‘conditional’  purchase  of  the  land,  DoHA  maintained  close  contact  with  the  recipient  with  a  view  to  minimising  any  slippage to the original clinic completion timeframes.  

Ensuring that recipients maintain a commitment to the GP Super Clinic model

4.34 It was not the Government’s intent that the program focus solely on  increasing access to healthcare, even in areas that were poorly serviced. One of  the  three  expected  program  outcomes  was  ‘improved  access  to  integrated,  multidisciplinary primary care health services’.160 The nature of the services, and 

                                                       159 The report was considered by DoHA. One of the sites contained in the report was adjacent to a medical centre that was recently upgraded through a $500 000 DoHA grant under the Primary Care Infrastructure Grants program. The site was

rejected as it was considered too close to that medical centre. 160 Department of Health and Ageing, GP Super Clinics national program guide 2010, p. 3. Emphasis added by the ANAO.

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the way these are delivered through multidisciplinary teams, is fundamental to  the program.161   

4.35  From the inception of the GP Super Clinics program, recipients have  been  required  under  the  terms  of  their  funding  agreements  to  provide  multidisciplinary health care services, consistent with the program objectives,  for  a  period  of  20  years.162    However,  the  agreements  do  not  contain  any  specifics of clinic services or how they would be provided by the recipient.163  From January 2009, the standard form funding agreement was ame

nded to 

include a requirement to develop, during the roll‐out period, an operations  plan (later named an operational plan). The operational plan requirement was  introduced in an attempt to ensure that the clinics’ operational arrangements— the  services  and  training  opportunities  they  would  deliver,  and  how  they  would do it—were consistent with grant recipients’ applications and had the  potential to meet the program objectives. Operational plans were a positive  initiative by DoHA as they improved the transparency of how clinics would  deliver on their commitments to provide multidisciplinary health care services  consistent with the GP Super Clinic program objectives. The delivery of an  operational plan is a milestone and thus requires acceptance by DoHA. 

4.36 Achieving an acceptable operational plan sometimes took considerable  time on the part of the recipient and often involved extensive negotiatio

ns with 

DoHA, including several iterations of the plans. In the case of the three grants  awarded  to  State  government  health  departments  under  which  operational  plans  were  required, final  operational  plans  were  only  accepted  by  DoHA  between 12 and 18 months after they were originally targeted for submission.  

4.37  In  light  of  the  problems  experienced  in  obtaining  acceptable  operational plans, DoHA again amended the standard funding agreement to  require the submission of a draft operational plan and then a final plan. This  allowed  DoHA  to  provide  feedback  on  interim  plans  and  reflected  an  understanding by DoHA th

at funding recipients needed time to develop their 

plans and negotiate with potential service providers. This two stage approach 

                                                       161 DoHA advised the ANAO that it considers the GP Super Clinics model is concerned with ‘transforming the primary care services so that GPs’ time is more efficiently used by the delivery of appropriate non-diagnostic services by non-GP

health services providers’. 162 The recipient can potentially sell the clinic or the property on which it is located during this 20 year period, but only with the permission of the Commonwealth. The buyer must also enter into a legal agreement with the Commonwealth to

continue to operate the clinic for whatever remains of the period. 163 This remains the case for the most recent (August 2012) standard form funding agreement reviewed by the ANAO for the purposes of this audit.

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also  assisted  in  avoiding  delays  in  making  progress  payments  because  of  unsatisfactory operational plans, since acceptance of the plans by DoHA could  be a key milestone. 

Difficulties with third party operators

4.38 In  most  cases  recipients  managed  delivery  of  the  clinic’s  healthcare  services themselves by employing staff, contracting individuals or adopting  other arrangements. In a small number of instances, more typically when th

recipient  was  a  state  health  department,  or  occasionally  a  university,  the  recipients entered into contracts with so‐called ‘third party operators’ (TPOs)  who then managed delivery of the services. In some cases, TPO arrangements  with the private sector involved the provision of GP Super Clinic services to be  delivered within a larger health facility where the bulk of healthcare services  were publicly funded.  

4.39 TPO

  arrangements  encountered  problems  in  a  number  of  instances,  notably in the case of first round clinics at Palmerston, Modbury, Noarlunga  and Redcliffe.   

4.40 In  the  case  of  Palmerston,  where  the  grant  was  awarded  to  the  Northern Territory Department of Health, TPO management personnel were  in place only five weeks before the clinic opening, leaving very little time to  recruit  staff,  particularly  GPs.    After  opening  in  October  2010,  the

  clinic 

operated for several months staffed largely by locum GPs, which were very  costly to employ.  By mid 2011, financial projections commissioned by the TPO  raised  concerns  that  the  clinic  operations  may  be  unsustainable  and  could  exhaust its recurrent GP Super Clinic funding early in 2012.   Amongst a range  of  responses  to  these  concerns,  an  officer  from  the  Northern  Territory  Department  of  Health

  was  seconded  to  the  clinic  to  take  over  its  business  management. Operational reports from the clinic indicated that as at December  2012  it  was  operating  on  a  financially  sustainable  basis,  with  a  significant  workforce of GPs and practice nurses, and a range of largely part-time allied  health professionals.      

4.41 In the case of Modbury, the GP Super Clinic grant was awarded to the  South Australian Department of Health, which co‐funded two large facilities  under  a  ‘hub  and  spoke’  model.  The  Australian  and  South  Australian  Governments  each  contributed  50  per  cent  of  the  total  cost  of  $25  million.  Whilst  the  great  majority  of  staff  at  the  facilities  were  State  Government  employees,  the  GP  Super  Clinic  gr

ant  required  that,  consistent  with  the 

program  guidelines,  private  healthcare  providers  must  also  operate  at  the 

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the way these are delivered through multidisciplinary teams, is fundamental to  the program.161   

4.35  From the inception of the GP Super Clinics program, recipients have  been  required  under  the  terms  of  their  funding  agreements  to  provide  multidisciplinary health care services, consistent with the program objectives,  for  a  period  of  20  years.162    However,  the  agreements  do  not  contain  any  specifics of clinic services or how they would be provided by the recipient.163  From January 2009, the standard form funding agreement was ame

nded to 

include a requirement to develop, during the roll‐out period, an operations  plan (later named an operational plan). The operational plan requirement was  introduced in an attempt to ensure that the clinics’ operational arrangements— the  services  and  training  opportunities  they  would  deliver,  and  how  they  would do it—were consistent with grant recipients’ applications and had the  potential to meet the program objectives. Operational plans were a positive  initiative by DoHA as they improved the transparency of how clinics would  deliver on their commitments to provide multidisciplinary health care services  consistent with the GP Super Clinic program objectives. The delivery of an  operational plan is a milestone and thus requires acceptance by DoHA. 

4.36 Achieving an acceptable operational plan sometimes took considerable  time on the part of the recipient and often involved extensive negotiatio

ns with 

DoHA, including several iterations of the plans. In the case of the three grants  awarded  to  State  government  health  departments  under  which  operational  plans  were  required, final  operational  plans  were  only  accepted  by  DoHA  between 12 and 18 months after they were originally targeted for submission.  

4.37  In  light  of  the  problems  experienced  in  obtaining  acceptable  operational plans, DoHA again amended the standard funding agreement to  require the submission of a draft operational plan and then a final plan. This  allowed  DoHA  to  provide  feedback  on  interim  plans  and  reflected  an  understanding by DoHA th

at funding recipients needed time to develop their 

plans and negotiate with potential service providers. This two stage approach 

                                                       161 DoHA advised the ANAO that it considers the GP Super Clinics model is concerned with ‘transforming the primary care services so that GPs’ time is more efficiently used by the delivery of appropriate non-diagnostic services by non-GP

health services providers’. 162 The recipient can potentially sell the clinic or the property on which it is located during this 20 year period, but only with the permission of the Commonwealth. The buyer must also enter into a legal agreement with the Commonwealth to

continue to operat

e the clinic for whatever remains of the period. 163 This remains the case for the most recent (August 2012) standard form funding agreement reviewed by the ANAO for the purposes of this audit.

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also  assisted  in  avoiding  delays  in  making  progress  payments  because  of  unsatisfactory operational plans, since acceptance of the plans by DoHA could  be a key milestone. 

Difficulties with third party operators

4.38 In  most  cases  recipients  managed  delivery  of  the  clinic’s  healthcare  services themselves by employing staff, contracting individuals or adopting  other arrangements. In a small number of instances, more typically when th

recipient  was  a  state  health  department,  or  occasionally  a  university,  the  recipients entered into contracts with so‐called ‘third party operators’ (TPOs)  who then managed delivery of the services. In some cases, TPO arrangements  with the private sector involved the provision of GP Super Clinic services to be  delivered within a larger health facility where the bulk of healthcare services  were publicly funded.  

4.39 TPO

  arrangements  encountered  problems  in  a  number  of  instances,  notably in the case of first round clinics at Palmerston, Modbury, Noarlunga  and Redcliffe.   

4.40 In  the  case  of  Palmerston,  where  the  grant  was  awarded  to  the  Northern Territory Department of Health, TPO management personnel were  in place only five weeks before the clinic opening, leaving very little time to  recruit  staff,  particularly  GPs.    After  opening  in  October  2010,  the

  clinic 

operated for several months staffed largely by locum GPs, which were very  costly to employ.  By mid 2011, financial projections commissioned by the TPO  raised  concerns  that  the  clinic  operations  may  be  unsustainable  and  could  exhaust its recurrent GP Super Clinic funding early in 2012.   Amongst a range  of  responses  to  these  concerns,  an  officer  from  the  Northern  Territory  Department  of  Health

  was  seconded  to  the  clinic  to  take  over  its  business  management. Operational reports from the clinic indicated that as at December  2012  it  was  operating  on  a  financially  sustainable  basis,  with  a  significant  workforce of GPs and practice nurses, and a range of largely part-time allied  health professionals.      

4.41 In the case of Modbury, the GP Super Clinic grant was awarded to the  South Australian Department of Health, which co‐funded two large facilities  under  a  ‘hub  and  spoke’  model.  The  Australian  and  South  Australian  Governments  each  contributed  50  per  cent  of  the  total  cost  of  $25  million.  Whilst  the  great  majority  of  staff  at  the  facilities  were  State  Government  employees,  the  GP  Super  Clinic  gr

ant  required  that,  consistent  with  the 

program  guidelines,  private  healthcare  providers  must  also  operate  at  the 

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main facility. Initially five GPs operated out of the facility from late 2011 under  a  TPO  contract  between  the  South  Australian  Government  and  a  corporate  GP provider.  However,  the  provider  ceased  providing  GP  services  in  April  2012.164 Following the withdrawal of the corporate GP provider, limited locum  GP services were provided, with another corporate GP provider in place from  September  2012.  As  at  January  20

13,  privately  provided  healthcare  services 

remained at a low level, with around 2.2 full‐time equivalent (FTE) GPs and  one FTE nurse operating out of the Modbury clinic.  

4.42 At  the  Noarlunga  clinic,  the  Australian  and  South  Australian  Governments again each contributed 50 per cent of the total cost of $25 million.  Private GP services were provided from the time it op

ened in March 2012. 

These services were provided at the Noarlunga clinic under an interim contract  with a large GP practice located nearby, which had insufficient space at its  existing premises to properly service its patient demand. Privately provided  staffing at Noarlunga was initially two GPs, growing incrementally by the end  of  2012  to  around  2.5  FTE  GPs  and  one  FTE  nurse,  with  some  part‐time  privately provided allie

d health professional services in place.165  

4.43 At  Redcliffe,  one  of  the  conditions  of  the  Australian  Government’s  $3.2 million  ‘top‐up’  grant  in  October  2011  was  that  the  Redcliffe  Hospital  Foundation identify, via a separate consultancy arrangement, a TPO to operate  the  clinic. Appointment  of  the  TPO  required  the  approval  of  both  the  Commonwealth  and  Queensland  Health  departments.  However,  as  at  February 2013, action was being taken to novate the funding agreement to a  new  party, with  another  TPO  tendering  process  not  expected  to  take  place  until the novation was finalised. The delay in the appointment of the TPO was  expected to delay the clinic’s opening to mid 2013, around 18 months after the  base building was completed.   

4.44 From February 2012, the standard form funding agreement included  extensive provisions on TPOs. It required TPOs to enter into a tripartite deed  (with DoHA and the grant recipient b

eing the other parties) to comply with all 

relevant aspects of the main funding agreement. The funding agreement also  required  DoHA  to  be  given  security  over  the  TPO’s  assets  ‘to  ensure  the  performance’ of the TPO’s service obligations at the clinic. DoHA also reserved 

                                                       164 No privately provided allied health services operated from the facility during the period that the corporate GP provider was in place. 165

Similar to the Modbury facility, the great majority of staff at Noarlunga are state-funded staff.

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the right to direct the grant recipient to terminate the service contract between  the recipient and the TPO if the latter had breached that contract. 

The completion of clinics 4.45 The  time  taken  from  the  execution  of  funding  agreements  to  the  completion of clinics varied considerably. The reasons for this included some  of the previously discussed issues, particularly those relating to land tenure or  development  approval.  Other  reasons  related  to  the  complexity  of  the  construction works and delays experienced during the construction phase of  individual  clinics. Table 4.1 illustrates the time taken for the 29 first roun

clinics completed as at 5 April 2013.166 

Table 4.1

Time

from execution of funding agreement to clinic completion—first round clinics

Time Number of clinics

Up to 12 months 3

12-18 months 5

18-24 months 7

24-30 months 5

30-36 months 6

More than 36 months 3

Total 29

 Source:  ANAO analysis of DoHA documentation. 

4.46 Clinics generally became operational on practical completion, or within  one or two months after that.167 

4.47 In some cases, issues that arose before or during construction could be  managed with

out impact on anticipated completion dates (the date recorded  on the relevant funding agreement as originally executed) but it most cases,  they  caused  delays.  Likely  delays  to  completion  would  result  in  DoHA  extending the practical completion date in the funding agreement by a formal  deed  of  variation.  These  variations  were  approved  by  SES‐level  officers. 

                                                       166 DoHA has advised that a further clinic was open for business as at 31 May 2013. 167

As noted earlier, Redcliffe is a notable exception to this, with the clinic opening expected to be at least 18 months after the exterior of the building was completed.

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main facility. Initially five GPs operated out of the facility from late 2011 under  a  TPO  contract  between  the  South  Australian  Government  and  a  corporate  GP provider.  However,  the  provider  ceased  providing  GP  services  in  April  2012.164 Following the withdrawal of the corporate GP provider, limited locum  GP services were provided, with another corporate GP provider in place from  September  2012.  As  at  January  20

13,  privately  provided  healthcare  services 

remained at a low level, with around 2.2 full‐time equivalent (FTE) GPs and  one FTE nurse operating out of the Modbury clinic.  

4.42 At  the  Noarlunga  clinic,  the  Australian  and  South  Australian  Governments again each contributed 50 per cent of the total cost of $25 million.  Private GP services were provided from the time it op

ened in March 2012. 

These services were provided at the Noarlunga clinic under an interim contract  with a large GP practice located nearby, which had insufficient space at its  existing premises to properly service its patient demand. Privately provided  staffing at Noarlunga was initially two GPs, growing incrementally by the end  of  2012  to  around  2.5  FTE  GPs  and  one  FTE  nurse,  with  some  part‐time  privately provided allie

d health professional services in place.165  

4.43 At  Redcliffe,  one  of  the  conditions  of  the  Australian  Government’s  $3.2 million  ‘top‐up’  grant  in  October  2011  was  that  the  Redcliffe  Hospital  Foundation identify, via a separate consultancy arrangement, a TPO to operate  the  clinic. Appointment  of  the  TPO  required  the  approval  of  both  the  Commonwealth  and  Queensland  Health  departments.  However,  as  at  February 2013, action was being taken to novate the funding agreement to a  new  party, with  another  TPO  tendering  process  not  expected  to  take  place  until the novation was finalised. The delay in the appointment of the TPO was  expected to delay the clinic’s opening to mid 2013, around 18 months after the  base building was completed.   

4.44 From February 2012, the standard form funding agreement included  extensive provisions on TPOs. It required TPOs to enter into a tripartite deed  (with DoHA and the grant recipient b

eing the other parties) to comply with all 

relevant aspects of the main funding agreement. The funding agreement also  required  DoHA  to  be  given  security  over  the  TPO’s  assets  ‘to  ensure  the  performance’ of the TPO’s service obligations at the clinic. DoHA also reserved 

                                                       164 No privately provided allied health services operated from the facility during the period that the corporate GP provider was in place. 165

Similar to the Modbury facility, the great majority of staff a t Noarlunga are state-funded staff.

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the right to direct the grant recipient to terminate the service contract between  the recipient and the TPO if the latter had breached that contract. 

The completion of clinics 4.45 The  time  taken  from  the  execution  of  funding  agreements  to  the  completion of clinics varied considerably. The reasons for this included some  of the previously discussed issues, particularly those relating to land tenure or  development  approval.  Other  reasons  related  to  the  complexity  of  the  construction works and delays experienced during the construction phase of  individual  clinics. Table 4.1 illustrates the time taken for the 29 first roun

clinics completed as at 5 April 2013.166 

Table 4.1

Time

from execution of funding agreement to clinic completion—first round clinics

Time Number of clinics

Up to 12 months 3

12-18 months 5

18-24 months 7

24-30 months 5

30-36 months 6

More than 36 months 3

Total 29

 Source:  ANAO analysis of DoHA documentation. 

4.46 Clinics generally became operational on practical completion, or within  one or two months after that.167 

4.47 In some cases, issues that arose before or during construction could be  managed without impact on anticipated completion dates (the date recorded  on the relevant funding agreement as originally executed) but it most cases,  they  caused  delays.  Likely  delays  to  completion  would  result  in  DoHA  extending the practical

 completion date in the funding agreement by a formal  deed  of  variation.  These  variations  were  approved  by  SES‐level  officers. 

                                                       166 DoHA has advised that a further clinic was open for business as at 31 May 2013. 167

As noted earlier, Redcliffe is a notable exception to this, with the clinic opening expected to be at least 18 months after the exterior of the building was completed.

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extending the practical completion date in the funding agreement by a formal  deed  of  variation.  These  variations  were  approved  by  SES‐level  officers.  Table 4.2 shows that of the currently operational first round clinics, around  half were completed no more than three months late while the other half were  completed over three months late. 

Table 4.2

Operational first round

clinics—delays to anticipated clinic completion

Time Number of clinics

Early or on time 3

Less than 3 months late 11

3-6 months late 6

6-12 months late 5

12-18 months late 2

More than 18 months late 2

Total 29

Source: ANAO analysis of DoHA documentation.

4.48 As  Table  4.3  shows,  as  at  5  April  2013,  the  other  seven  first  round  clinics that have yet to become operational are all late, some considerably so. 

Table 4.3

Non-operational

first round clinics—delays on anticipated clinic completion

Time Number of clinics

Early or on time Nil

Less than 3 months late 2

3-6 months late Nil

6-12 months late 1

12-18 months late Nil

More than 18 months late 3

Unknown 1

Source: ANAO analysis of DoHA documentation.

   

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Administering grant milestones and payments

4.49 As noted earlier, the number of milestones established by the funding  agreements  is  large,  and  has  grown  over  time.  The  assessment  of  documentation submitted by recipients has created a significant challenge for  DoHA, particularly where the documents are complex. DoHA has responded  by  using  substantial  external  advice,  as  well  as  commissioning  the  development o

f a toolkit designed to improve the efficiency and consistency of  the administration of key milestones.168 

4.50 DoHA has sought external advice on the administration of the financial  reporting requirements under funding agreements. Recipients are required to  provide both financial acquittals of grant expenditure and audited financial  statements. KPMG was retained during 2012 to assess these documents across  a  sample  of  first  round  clinics  and  provide  advice  to  DoHA  on  its  administration.

 A number of the assessments highlighted apparent ‘outside of  (funding  agreement)  scope’  expenditure  of  matters  such  as  overseas  recruitment, meetings, books or coffee machines, as well as questions being  raised about payments between related parties. In most cases, the assessments  noted that further information is pending or should be requested from grant  recipients. In terms of DoHA’s general administration of re

cipients’ financial 

reporting under funding agreements, KPMG noted a lack of formal procedures  for analysing information provided in the reports, varying degrees of financial  literacy amongst program staff, and lack of consistency between staff across  the  responsible  branch  in  resolving  common  issues  arising  in  financial  reporting.  DoHA advised the ANAO that action ‘had not been finalised on all  KPMG findings’. 

4.51 The lack of appropriately skilled DoHA staff to manage the complex  infrastructure aspects of the program has been noted in successive GP Super  Clinics program risk management plans. In recent years the department has  administered a range of health infrastructure programs, including the Primary  Care  Infrastructure  Grants  program  and  the  Health  and  Hospitals  Fund  program. While ma

intaining access to sufficient appropriately skilled staff may  be  challenging,  it  is  reasonable  to  expect  that  DoHA’s  past  experience,  if 

                                                       168 A ‘GP Super Clinic program toolkit’ was developed over late 2012 and early 2013. It is intended to provide guidance material on program administration, focusing on seven priority segments. These segments incorporate key steps in the

administration of GP Super Clinic grants, including improving the scrutiny of key funding agreement milestone documentation, such as the acquisition of property reports, tender reports, budgets, insurance certificates, construction reports, risk management plans as well as financial reporting. DoHA anticipates that some mate

rial will be suitable for

use by other capital works programs within DoHA, potentially including the Health and Hospitals Fund.

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extending the practical completion date in the funding agreement by a formal  deed  of  variation.  These  variations  were  approved  by  SES‐level  officers.  Table 4.2 shows that of the currently operational first round clinics, around  half were completed no more than three months late while the other half were  completed over three months late. 

Table 4.2

Operational first round

clinics—delays to anticipated clinic completion

Time Number of clinics

Early or on time 3

Less than 3 months late 11

3-6 months late 6

6-12 months late 5

12-18 months late 2

More than 18 months late 2

Total 29

Source: ANAO analysis of DoHA documentation.

4.48 As  Table  4.3  shows,  as  at  5  April  2013,  the  other  seven  first  round  clinics that have yet to become operational are all late, some considerably so. 

Table 4.3

Non-operational

first round clinics—delays on anticipated clinic completion

Time Number of clinics

Early or on time Nil

Less than 3 months late 2

3-6 months late Nil

6-12 months late 1

12-18 months late Nil

More than 18 months late 3

Unknown 1

Source: ANAO analysis of DoHA documentation.

   

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Administering grant milestones and payments

4.49 As noted earlier, the number of milestones established by the funding  agreements  is  large,  and  has  grown  over  time.  The  assessment  of  documentation submitted by recipients has created a significant challenge for  DoHA, particularly where the documents are complex. DoHA has responded  by  using  substantial  external  advice,  as  well  as  commissioning  the  development o

f a toolkit designed to improve the efficiency and consistency of  the administration of key milestones.168 

4.50 DoHA has sought external advice on the administration of the financial  reporting requirements under funding agreements. Recipients are required to  provide both financial acquittals of grant expenditure and audited financial  statements. KPMG was retained during 2012 to assess these documents across  a  sample  of  first  round  clinics  and  provide  advice  to  DoHA  on  its  administration.

 A number of the assessments highlighted apparent ‘outside of  (funding  agreement)  scope’  expenditure  of  matters  such  as  overseas  recruitment, meetings, books or coffee machines, as well as questions being  raised about payments between related parties. In most cases, the assessments  noted that further information is pending or should be requested from grant  recipients. In terms of DoHA’s general administration of re

cipients’ financial 

reporting under funding agreements, KPMG noted a lack of formal procedures  for analysing information provided in the reports, varying degrees of financial  literacy amongst program staff, and lack of consistency between staff across  the  responsible  branch  in  resolving  common  issues  arising  in  financial  reporting.  DoHA advised the ANAO that action ‘had not been finalised on all  KPMG findings’. 

4.51 The lack of appropriately skilled DoHA staff to manage the complex  infrastructure aspects of the program has been noted in successive GP Super  Clinics program risk management plans. In recent years the department has  administered a range of health infrastructure programs, including the Primary  Care  Infrastructure  Grants  program  and  the  Health  and  Hospitals  Fund  program. While ma

intaining access to sufficient appropriately skilled staff may  be  challenging,  it  is  reasonable  to  expect  that  DoHA’s  past  experience,  if 

                                                       168 A ‘GP Super Clinic program toolkit’ was developed over late 2012 and early 2013. It is intended to provide guidance material on program administration, focusing on seven priority segments. These segments incorporate key steps in the

administration of GP Super Clinic grants, including improving the scrutiny of key funding agreement milestone documentation, such as the acquisition of property reports, tender reports, budgets, insurance certificates, construction reports, risk management plans as well as financial reporting. DoHA anticipates that some material will be suitable for use by other capital works programs within DoHA, potentially including the Health and Hospitals Fund.

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appropriately documented, can contribute to the mitigation of program risks.  In  particular,  ensuring  that  relevant  program  management  tools  and  procedures are in place early in program rollouts would mitigate the risks of  program outcomes not being met in a timely and cost‐effective manner. The  development  of  the  GP  Super  Clinic  program  toolkit,  as  well  as  broader  departmental  capacity-building  ini

tiatives  such  as  the  Centre  for  Capital 

Excellence169, are positive steps in this regard. 

Conclusion 4.52 In establishing the program, DoHA assessed and planned for a range of  program  implementation  risks.  During  the  first  funding  round,  there  were  nonetheless  occasions  when  DoHA’s  risk  management  approach  in  the  awarding of grants, and subsequently managing risks in the early stages of  clinic  roll‐out,  lacked  rigour.  This  contributed  to  the  eventual  inability  to  establish a clinic at Sorell, where the estimated cost of constructing a clinic  exceeded available gr

ant funding by around $880 000, as well as being a factor  in the long delay in opening the Redcliffe clinic.   

4.53 In  the  case  of  Sorell,  DoHA  took  six  months  to  fully  recognise  and  respond to the risks of a budget shortfall after the funding recipient advised  the  department  that  it  had  concerns  about  the  adequacy  of  the  amount  available under the GP Super Clinic

s grant. While the department responded 

appropriately once the shortfall was confirmed (after the receipt of building  quotes), earlier engagement with the funding recipient on building design and  construction costs would have enabled the department to better manage the  risk.  In  the  case  of  the  Redcliffe  project,  while  the  department  identified  a  number of financial risks during the assessment stage of the initial $5 million  grant, and a mitigation strategy was proposed (including finding

 a financial 

guarantor  for  the  project  and  /  or  reducing  its  capital  cost),  the  FMA  Regulation 9 documentation did not refer to whether the identified risks had in  fact been treated, and a funding agreement for $5 million was subsequently  signed without explicit provisions relating to those risks.  In the event,  the  recipient was unable to secure a loan to fund any o

f the project’s cost, resulting 

in  a  significant  increase  in  the  Commonwealth  contribution  towards  construction works; from $5 million to $13.2 million.  

                                                       169 The Centre was discussed in ANAO Audit Report No.45 2011-12 Administration of the Health and Hospitals Fund, p.18.

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4.54 Overall,  DoHA’s  compliance  with  the  requirements  of  the  Commonwealth financial management framework in the awarding of grants  has  been  generally  sound.  Exceptions  related  to  the  FMA  Regulation  9  documentation for Redcliffe, discussed above, and non‐compliance (identified  during the audit) with the mandatory public reporting of grants as required  under the Finance Minister’s Instructions and later by the Co

mmonwealth Grant 

Guidelines. 

4.55 As at 5 April 2013, twenty-nine of the clinics announced in the first  round (either 2007 or 2009) are now fully operational, with one second round  clinic operational.  Three (10.3 per cent) of operational first round clinics were  completed within the timeframe originally specified in the funding agreement.  However, four clinics (13.8 per cent) were completed at least 12 months

 late. Of 

the seven first round clinics that have yet to become operational, four are either  at  least  18  months  late  or  subject  to  unknown  completion  dates.  Land  acquisition and development approval issues have been reported as the most  common  source  of  delay.    As  part  of  changes  introduced  to  its  risk  management  approach  in  the  second  round,  DoHA  has  responded  to  the  acquisition and approval issues by requir

ing grant recipients to provide it with 

property  pre‐acquisition  reports  and  information  on  its  discussions  of  development  approval  requirements  with  relevant  regulatory  authorities.  While it is too early to fully gauge the extent to which these changes have  helped reduce delays to getting clinics to construction‐ready stage, 19 out of  the  28  second  round  clinics  have  not  yet  started  construction  as  at  5 April 2013.170 

                                                       170 See table 1.2 in chapter 1.

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appropriately documented, can contribute to the mitigation of program risks.  In  particular,  ensuring  that  relevant  program  management  tools  and  procedures are in place early in program rollouts would mitigate the risks of  program outcomes not being met in a timely and cost‐effective manner. The  development  of  the  GP  Super  Clinic  program  toolkit,  as  well  as  broader  departmental  capacity-building  ini

tiatives  such  as  the  Centre  for  Capital 

Excellence169, are positive steps in this regard. 

Conclusion 4.52 In establishing the program, DoHA assessed and planned for a range of  program  implementation  risks.  During  the  first  funding  round,  there  were  nonetheless  occasions  when  DoHA’s  risk  management  approach  in  the  awarding of grants, and subsequently managing risks in the early stages of  clinic  roll‐out,  lacked  rigour.  This  contributed  to  the  eventual  inability  to  establish a clinic at Sorell, where the estimated cost of constructing a clinic  exceeded available gr

ant funding by around $880 000, as well as being a factor  in the long delay in opening the Redcliffe clinic.   

4.53 In  the  case  of  Sorell,  DoHA  took  six  months  to  fully  recognise  and  respond to the risks of a budget shortfall after the funding recipient advised  the  department  that  it  had  concerns  about  the  adequacy  of  the  amount  available under the GP Super Clinic

s grant. While the department responded 

appropriately once the shortfall was confirmed (after the receipt of building  quotes), earlier engagement with the funding recipient on building design and  construction costs would have enabled the department to better manage the  risk.  In  the  case  of  the  Redcliffe  project,  while  the  department  identified  a  number of financial risks during the assessment stage of the initial $5 million  grant, and a mitigation strategy was proposed (including finding

 a financial 

guarantor  for  the  project  and  /  or  reducing  its  capital  cost),  the  FMA  Regulation 9 documentation did not refer to whether the identified risks had in  fact been treated, and a funding agreement for $5 million was subsequently  signed without explicit provisions relating to those risks.  In the event, the  recipient was unable to secure a loan to fund any o

f the project’s cost, resulting 

in  a  significant  increase  in  the  Commonwealth  contribution  towards  construction works; from $5 million to $13.2 million.  

                                                       169 The Centre was discussed in ANAO Audit Report No.45 2011-12 Administration of the Health and Hospitals Fund, p.18.

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4.54 Overall,  DoHA’s  compliance  with  the  requirements  of  the  Commonwealth financial management framework in the awarding of grants  has  been  generally  sound.  Exceptions  related  to  the  FMA  Regulation  9  documentation for Redcliffe, discussed above, and non‐compliance (identified  during the audit) with the mandatory public reporting of grants as required  under the Finance Minister’s Instructions and later by the Co

mmonwealth Grant 

Guidelines. 

4.55 As at 5 April 2013, twenty-nine of the clinics announced in the first  round (either 2007 or 2009) are now fully operational, with one second round  clinic operational.  Three (10.3 per cent) of operational first round clinics were  completed within the timeframe originally specified in the funding agreement.  However, four clinics (13.8 per cent) were completed at least 12 months

 late. Of 

the seven first round clinics that have yet to become operational, four are either  at  least  18  months  late  or  subject  to  unknown  completion  dates.  Land  acquisition and development approval issues have been reported as the most  common  source  of  delay.    As  part  of  changes  introduced  to  its  risk  management  approach  in  the  second  round,  DoHA  has  responded  to  the  acquisition and approval issues by requir

ing grant recipients to provide it with 

property  pre‐acquisition  reports  and  information  on  its  discussions  of  development  approval  requirements  with  relevant  regulatory  authorities.  While it is too early to fully gauge the extent to which these changes have  helped reduce delays to getting clinics to construction‐ready stage, 19 out of  the  28  second  round  clinics  have  not  yet  started  construction  as  at  5 April 2013.170 

                                                       170 See table 1.2 in chapter 1.

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5. Reporting and Assessing Clinic and Program Outcomes

This chapter examines how DoHA developed and implemented a program evaluation  framework,  including  key  performance  indicators.  It  also  includes  the  ANAO’s  assessment of the performance of some aspects of the operational clinics in the ANAO’s  sample, as well as looking at patient presentation trends across the program as whole.  Finally  it  examines  how  DoHA  is  using  the  information  submitted  by  operational  clinics, both in the context of individual clinics and the progra

m as a whole. 

Development of program key performance indicators and evaluation framework 5.1 The  Parliament  and  the  public’s  consideration  of  a  program’s  performance,  in  relation  to  impact  and  cost  effectiveness,  rely  heavily  on  accurate  and  appropriate  performance  information.  Adequate  performance  information, particularly in relation to program effectiveness, allows managers  to provide sound advice on the appropriateness, success, shortcomings and/or  future directions of programs. This information allows for informed decisions  to be made on the allocation and use of program re

sources.171 

5.2 Well‐designed key performance indicators (KPIs) can provide valuable  information  on  the  effectiveness  of  programs  in  achieving  the  objectives  in  support  of  desired  outcomes  (in  the  case  of  grants  programs  these  are  the  intended  results,  impacts  or  actions  of  the  grants  on  the  Australian  community). This is done within the context of the Australian Government’s  Outcomes and Programs Framework, released by the Department of Finance  and De

regulation in 2009. A key requirement is entity reporting designed to  clearly demonstrate achievement against pre‐defined program objectives.  

Key performance Indicators

Externally reported KPIs

5.3 Since  the  establishment  of  the  GP  Super  Clinics  program  in  2008,  DoHA has publicly reported against a single program KPI in both its annual  reports and portfolio budget statements. Initially this KPI was the number of 

                                                       171 ANAO Audit Report No.5 2011−12 Development and Implementation of Key Performance Indicators to Support the Outcomes and Programs Framework, p. 13.

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grants made, but as clinics became operational, the KPI became the number of  clinics that commenced delivery of services, while the number of grants made  was reported as a ‘quantitative deliverable’.  

5.4 While the KPI has, appropriately, been reviewed and amended as the  program moved from one phase to the next, it currently demonstrates progress  only  against  the

  first  of  the  program’s  three  intended  outcomes—increased  primary health care infrastructure. The KPI does not address the other key  program outcomes: improved access to integrated, multidisciplinary primary  care  health  services;  and  increased  education  and  training  placements  in  a  multidisciplinary care setting for the future primary care workforce. 

Program KPIs

5.5 DoHA  has  developed  more  specific  KPIs  relating  to  each  of  the  program’s ten objectives. Ho

wever these are not formally reported on a ‘whole 

of program’ basis.172 The form of these KPIs has been the subject of discussion  and debate since the program’s earliest days.  

5.6 In March 2008, while the program was still under development, the  Health  and  Ageing  Working  Group  (HAWG)  of  the  Council  of  Australian  Governments (COAG) adopted a ‘GP Super Clinic Implementation Plan’.  A  key element of this plan was the development of an evaluation framework  which  would  ‘help  define  the  performance  indicators  in  relation  to  the  program’s  core  characteristics’.173  The  plan  indicated  that  the  evaluation  framework was to be developed by August 2008, with the actual evaluation of  the program to be completed in 2010-11.174  However, the framework was not  developed until 2011. 

5.7 Recommendations  regarding  the  design  of  the

  program’s  evaluation 

framework  and  development  of  KPIs  were  also  provided  to  DoHA  by  the  Cabinet Implementation Unit (CIU) of the Department of the Prime Minister  and  Cabinet  (PM&C).      The  CIU  undertook  an  initial  assessment  of  the  program’s  implementation  progress  in  mid  2009,  with  a  second  report 

                                                       172 Edited versions of ‘implementation progress sheets’ of individual clinics are placed on the DoHA website and periodically updated. These list the range of services provided by the clinic, operating hours, availability of bulk billi

ng,

whether clinic staff do home and aged care facility visits, and provide general information on clinic training activities. 173 HAWG GP Super Clinic Implementation Plan, p. 3. 174

Consistent with this intention, the program guidelines for the both of the GP Super Clinic funding rounds indicate that funding recipients would be expected to participate in the evaluation as well as ‘report[ing] at regular intervals on operational activities’.

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5. Reporting and Assessing Clinic and Program Outcomes

This chapter examines how DoHA developed and implemented a program evaluation  framework,  including  key  performance  indicators.  It  also  includes  the  ANAO’s  assessment of the performance of some aspects of the operational clinics in the ANAO’s  sample, as well as looking at patient presentation trends across the program as whole.  Finally  it  examines  how  DoHA  is  using  the  information  submitted  by  operational  clinics, both in the context of individual clinics and the progra

m as a whole. 

Development of program key performance indicators and evaluation framework 5.1 The  Parliament  and  the  public’s  consideration  of  a  program’s  performance,  in  relation  to  impact  and  cost  effectiveness,  rely  heavily  on  accurate  and  appropriate  performance  information.  Adequate  performance  information, particularly in relation to program effectiveness, allows managers  to provide sound advice on the appropriateness, success, shortcomings and/or  future directions of programs. This information allows for informed decisions  to be made on the allocation and use of program re

sources.171 

5.2 Well‐designed key performance indicators (KPIs) can provide valuable  information  on  the  effectiveness  of  programs  in  achieving  the  objectives  in  support  of  desired  outcomes  (in  the  case  of  grants  programs  these  are  the  intended  results,  impacts  or  actions  of  the  grants  on  the  Australian  community). This is done within the context of the Australian Government’s  Outcomes and Programs Framework, released by the Department of Finance  and De

regulation in 2009. A key requirement is entity reporting designed to  clearly demonstrate achievement against pre‐defined program objectives.  

Key performance Indicators

Externally reported KPIs

5.3 Since  the  establishment  of  the  GP  Super  Clinics  program  in  2008,  DoHA has publicly reported against a single program KPI in both its annual  reports and portfolio budget statements. Initially this KPI was the number of 

                                                       171 ANAO Audit Report No.5 2011−12 Development and Implementation of Key Performance Indicators to Support the Outcomes and Programs Framework, p. 13.

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grants made, but as clinics became operational, the KPI became the number of  clinics that commenced delivery of services, while the number of grants made  was reported as a ‘quantitative deliverable’.  

5.4 While the KPI has, appropriately, been reviewed and amended as the  program moved from one phase to the next, it currently demonstrates progress  only  against  the

  first  of  the  program’s  three  intended  outcomes—increased  primary health care infrastructure. The KPI does not address the other key  program outcomes: improved access to integrated, multidisciplinary primary  care  health  services;  and  increased  education  and  training  placements  in  a  multidisciplinary care setting for the future primary care workforce. 

Program KPIs

5.5 DoHA  has  developed  more  specific  KPIs  relating  to  each  of  the  program’s ten objectives. Ho

wever these are not formally reported on a ‘whole 

of program’ basis.172 The form of these KPIs has been the subject of discussion  and debate since the program’s earliest days.  

5.6 In March 2008, while the program was still under development, the  Health  and  Ageing  Working  Group  (HAWG)  of  the  Council  of  Australian  Governments (COAG) adopted a ‘GP Super Clinic Implementation Plan’.  A  key element of this plan was the development of an evaluation framework  which  would  ‘help  define  the  performance  indicators  in  relation  to  the  program’s  core  characteristics’.173  The  plan  indicated  that  the  evaluation  framework was to be developed by August 2008, with the actual evaluation of  the program to be completed in 2010-11.174  However, the framework was not  developed until 2011. 

5.7 Recommendations  regarding  the  design  of  the

  program’s  evaluation 

framework  and  development  of  KPIs  were  also  provided  to  DoHA  by  the  Cabinet Implementation Unit (CIU) of the Department of the Prime Minister  and  Cabinet  (PM&C).      The  CIU  undertook  an  initial  assessment  of  the  program’s  implementation  progress  in  mid  2009,  with  a  second  report 

                                                       172 Edited versions of ‘implementation progress sheets’ of individual clinics are placed on the DoHA website and periodically updated. These list the range of services provided by the clinic, operating hours, availability of bulk billing,

whether clinic staff do home and aged care facility visits, and provide general information on clinic training activities. 173 HAWG GP Super Clinic Implementation Plan, p. 3. 174

Consistent with this intention, the program guidelines for the both of the GP Super Clinic funding rounds indicate that funding recipients would be expected to participate in the evaluation as well as ‘report[ing] at regular intervals on operational activities’.

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completed in mid 2010.  Both assessments recommended the development of  KPIs that were ‘measurable and linked to the program objectives’.  

5.8 By March 2011, DoHA had developed a set of detailed and measurable  KPIs, and sought the Minister’s formal endorsement of these. DoHA’s advice  to the Minister noted the draft KPIs had been agreed with PM&C, and the draft  KPIs were included in the evaluation framework approved by the Minister in  May 2011. The KPIs addressed four of the programs key objectives—improved  access  to  affordable  primary  healthcare,  an  integrated  multidisci

plinary 

approach,  responsiveness  to  local  health  needs,  and  providing  vocational  placements  and  other  education  and  training  opportunities—with  the  intention to add more KPIs as clinic ‘operational arrangements mature’. 

5.9 The  Minister  subsequently  decided  that  the  draft  KPIs  should  be  revised, and  the  revised  KPIs  addressing  all  ten  program  objectives  were  approved  by  the  Minister  in  November  2011  and  provided  to  the  Prime  Minister as part of the Minister’s response to the recommendations of the CIU.  While  the  original  (March  2011)  draft  KPIs  were  generally  measurable  and  capable of an objective ‘yes’ or ‘no’ response to whether they had been met,  most  of  the  revised  KPIs  are  framed  in  a  more  qualitative  and  descriptive  manner. Other t

han an annotated comment by the Minister on the March 2011  brief from DoHA (returned to the department in November 2011) that the draft  KPIs ‘need[ed] more work’, no further advice or other material was provided  by DoHA which indicates the rationale for the significant change in the nature  of the program KPIs made between March and November 2011. 

5.10 The internal debate ove

r program KPIs indicates that there is scope to 

introduce  measurable  KPIs  for  the  GP  Super  Clinics  program.  Further,  as  discussed in paragraph 1.10, the designated use period of 20 years, which is a  condition  of  funding,  means  that  the  program  will  continue  long  after  the  clinics are established and the grant funds disbursed. There would be benefit  in reviewing the program reporting framework to include m

easurable KPIs as 

a basis for reporting, in the longer term, on the extent to which the program is  achieving its intended outcomes, particularly those relating to the longer term  outcomes:  improved  access  to  integrated,  multidisciplinary  primary  care  health  services;  and  increased  education  and  training  placements  in  a  multidisciplinary care setting for the future primary care workforce. 

   

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Recommendation No.3 5.11 To improve longer‐term reporting on program outcomes, the ANAO  recommends  that  DoHA  revise  the  GP  Super  Clinics  performance  and  reporting framework to include measurable KPIs on the extent to which the  program is achieving its key intended outcomes. 

DoHA respons

e: 

5.12 Agreed. 

External evaluation of the GP Super Clinics program 5.13 Following  the  Minister’s  endorsement  of  the  program  evaluation  framework, an evaluation was undertaken by consultants from late 2011 to  early 2012. The full report, entitled Evaluation of the GP Super Clinics Program  2007-2008 (the evaluation report), along with DoHA’s response to its various  recommendations, was published in August 2012. 

5.14 The focus of the evaluation report  was the first funding round. The  report included an examination of three aspects o

f the program: 

 administration of the program by DoHA; 

 the planning and construction of the clinics; and 

 the operation of seven clinics175, particularly in relation to their progress  towards the objectives of the program. 

5.15 The  evaluation  was  not  an  ‘in‐depth’  examination  of  all  significant  aspects of DoHA’s administration of the program. There was little examination  of  the  application  as

sessment  process  in  the  report  and  in  general,  the  treatment  of  much  of  DoHA’s  earlier‐stage  administration  was  largely  descriptive rather than analytical. 

Construction costs

5.16 The planning and construction section of the evaluation report focussed  on the issue of delays in clinic roll‐out and whether the construction costs of  first round clinics were reasonable in terms of representing value for money.  As discussed in chapter 3, these w

ere significant issues in the context of the 

program, including in terms of DoHA’s administrative performance.   

                                                       175 These clinics had been operating for more than six months, as at mid-2011.

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completed in mid 2010.  Both assessments recommended the development of  KPIs that were ‘measurable and linked to the program objectives’.  

5.8 By March 2011, DoHA had developed a set of detailed and measurable  KPIs, and sought the Minister’s formal endorsement of these. DoHA’s advice  to the Minister noted the draft KPIs had been agreed with PM&C, and the draft  KPIs were included in the evaluation framework approved by the Minister in  May 2011. The KPIs addressed four of the programs key objectives—improved  access  to  affordable  primary  healthcare,  an  integrated  multidisci

plinary 

approach,  responsiveness  to  local  health  needs,  and  providing  vocational  placements  and  other  education  and  training  opportunities—with  the  intention to add more KPIs as clinic ‘operational arrangements mature’. 

5.9 The  Minister  subsequently  decided  that  the  draft  KPIs  should  be  revised, and  the  revised  KPIs  addressing  all  ten  program  objectives  were  approved  by  the  Minister  in  November  2011  and  provided  to  the  Prime  Minister as part of the Minister’s response to the recommendations of the CIU.  While  the  original  (March  2011)  draft  KPIs  were  generally  measurable  and  capable of an objective ‘yes’ or ‘no’ response to whether they had been met,  most  of  the  revised  KPIs  are  framed  in  a  more  qualitative  and  descriptive  manner. Other t

han an annotated comment by the Minister on the March 2011  brief from DoHA (returned to the department in November 2011) that the draft  KPIs ‘need[ed] more work’, no further advice or other material was provided  by DoHA which indicates the rationale for the significant change in the nature  of the program KPIs made between March and November 2011. 

5.10 The internal debate ove

r program KPIs indicates that there is scope to 

introduce  measurable  KPIs  for  the  GP  Super  Clinics  program.  Further,  as  discussed in paragraph 1.10, the designated use period of 20 years, which is a  condition  of  funding,  means  that  the  program  will  continue  long  after  the  clinics are established and the grant funds disbursed. There would be benefit  in reviewing the program reporting framework to include me

asurable KPIs as 

a basis for reporting, in the longer term, on the extent to which the program is  achieving its intended outcomes, particularly those relating to the longer term  outcomes:  improved  access  to  integrated,  multidisciplinary  primary  care  health  services;  and  increased  education  and  training  placements  in  a  multidisciplinary care setting for the future primary care workforce. 

   

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Recommendation No.3 5.11 To improve longer‐term reporting on program outcomes, the ANAO  recommends  that  DoHA  revise  the  GP  Super  Clinics  performance  and  reporting framework to include measurable KPIs on the extent to which the  program is achieving its key intended outcomes. 

DoHA respons

e: 

5.12 Agreed. 

External evaluation of the GP Super Clinics program 5.13 Following  the  Minister’s  endorsement  of  the  program  evaluation  framework, an evaluation was undertaken by consultants from late 2011 to  early 2012. The full report, entitled Evaluation of the GP Super Clinics Program  2007-2008 (the evaluation report), along with DoHA’s response to its various  recommendations, was published in August 2012. 

5.14 The focus of the evaluation report  was the first funding round. The  report included an examination of three aspects o

f the program: 

 administration of the program by DoHA; 

 the planning and construction of the clinics; and 

 the operation of seven clinics175, particularly in relation to their progress  towards the objectives of the program. 

5.15 The  evaluation  was  not  an  ‘in‐depth’  examination  of  all  significant  aspects of DoHA’s administration of the program. There was little examination  of  the  application  as

sessment  process  in  the  report  and  in  general,  the  treatment  of  much  of  DoHA’s  earlier‐stage  administration  was  largely  descriptive rather than analytical. 

Construction costs

5.16 The planning and construction section of the evaluation report focussed  on the issue of delays in clinic roll‐out and whether the construction costs of  first round clinics were reasonable in terms of representing value for money.  As discussed in chapter 3, these w

ere significant issues in the context of the 

program, including in terms of DoHA’s administrative performance.   

                                                       175 These clinics had been operating for more than six months, as at mid-2011.

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5.17 Only  18  of  the  36  first  round  clinics,  including  some  that  were  still  under  construction,  responded  to  the  relevant  information  request  by  the  report’s authors. The evaluation concluded that of these 18, six clinics were  determined to have not achieved value for money in the capital component of  their  project.    However,  the  evaluation  report  also  noted  that  when  ‘extra‐

ordinary  circumstances’  were  taken  into  account,  only  three  of  the  surveyed projects would have failed to meet the value for money criteria.176 

5.18 The  evaluation  report  advised  that  because  of  a  lack  of  data,  its  assessment of value for money was unable to consider significant components  of  development  costs,  namely  professional  fees  and  land  purchase  costs.177  Incorporation of these project costs would have enabled a m

ore comprehensive 

evaluation  of  value  for  money  issues  in  respect  of  the  establishment  of  GP  Super Clinics. 

5.19 Under  the  requirement  for  pre‐acquisition  of  property  reports  introduced by DoHA in the second round, recipients were required to provide  a  documented  assessment  confirming  that  the  proposed  acquisition  represented value for money. As well as addressing the purchase price or lease  cost,  the  documentation  requires  the  as

sessment  of  any  risks  such  as  any 

conditions  of  the  purchase  or  lease.  The  new  requirements  should  provide  DoHA  with  a  firmer  basis  for  assessing  value  for  money  before  the  grant  recipient commits grant funds towards the land or building acquisition, which  under  the  GP  Super  Clinics  program  can  potentially  involve  millions  of  dollars. As such, it represents an improvement in DoHA’s administration of  the program as compared to the first round.

 

Operational issues

5.20 The final part of the program evaluation, relating to the operational  aspect, was informed by an in‐depth analysis. The main conclusions were that  the program has increased access to primary health care in a multidisciplinary  setting and supported the retention and potentially the recruitment of GPs into  clinics which have the potential to be at the forefront of primary care reform.178 

                                                       176 These circumstances were: (i) soil contamination requiring remediation; (ii) the clinic being located in a heritage-listed building; and (iii) construction was halted on two occasions. 177

This latter point was also identified through ANAO’s discussions with the medical advisers sitting on the assessment panels. In the course of these discussions, it was noted that a difficulty that the panels faced when undertaking assessments was how to compare land costs in urban and regional / rural areas. 178

Evaluation of the GP Super Clinics Program 2007¬2008, p. 6.

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The  evaluation  noted  that  progress  on  some  operational  aspects  related  to  program objectives was limited, and identified a number of areas for further  service development. These areas included: 

 the development of guidelines for multidisciplinary team based care; 

 development  and  utilisation  of  a  multidisciplinary  team  based  skills  assessment and skills development programs;  

 greater  focus

  within  the  GP  Super  Clinics  on  primary  prevention  services; 

 greater use of electronic health records as a record for patient care and  as  a  facilitator  of  multidisciplinary  care  through  organisational,  administrative or quality improvement roles;  

 greater  focus  on  ongoing  and  strategically  focused  approaches  to  community  engagement,  to  meet  the  needs  of  the  community  and  specific groups with significant health risks; and 

 greater  emphasis  o

n  a  progression  to  an  integrated  approach  to  planning, to facilitate the ability of GP Super Clinics to support a range  of services in meeting local health needs.179   

5.21 However, the evaluation also noted that the real return on investment  in  primary  health  care  could  only  be  adequately  assessed  as  the  program  matured.180  

ANAO assessment of the GP Super Clinics program 5.22 In  assessing  how  the  program  has  performed  against  its  stated  objectives  and  intended  outcomes,  the  ANAO  considered  both  the  performance  of  individual  clinics  in  the  ANAO’s  sample  and  the  program  more  broadly.    The  ANAO  utilised  a  number  of  operational  reporting  documents provided to DoHA by grant recipients: the regular clinic reports  (four‐monthly Implementation Progress Sheets (IPSs) and two‐monthly Patient  Presentation data); clinic operational plans181 supplemented by clinic annual  operational reports; interviews conducted by the ANAO during its visits to  12 operational clinics; as well as the findings of the program evaluation.  

                                                       179 Ibid, pp. 66-75. 180

Ibid., p 6.

181 Clinic grant funding agreements require the preparation of an operational plan before a clinic opens.

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5.17 Only  18  of  the  36  first  round  clinics,  including  some  that  were  still  under  construction,  responded  to  the  relevant  information  request  by  the  report’s authors. The evaluation concluded that of these 18, six clinics were  determined to have not achieved value for money in the capital component of  their  project.    However,  the  evaluation  report  also  noted  that  when  ‘extra‐

ordinary  circumstances’  were  taken  into  account,  only  three  of  the  surveyed projects would have failed to meet the value for money criteria.176 

5.18 The  evaluation  report  advised  that  because  of  a  lack  of  data,  its  assessment of value for money was unable to consider significant components  of  development  costs,  namely  professional  fees  and  land  purchase  costs.177  Incorporation of these project costs would have enabled a m

ore comprehensive 

evaluation  of  value  for  money  issues  in  respect  of  the  establishment  of  GP  Super Clinics. 

5.19 Under  the  requirement  for  pre‐acquisition  of  property  reports  introduced by DoHA in the second round, recipients were required to provide  a  documented  assessment  confirming  that  the  proposed  acquisition  represented value for money. As well as addressing the purchase price or lease  cost,  the  documentation  requires  the  as

sessment  of  any  risks  such  as  any 

conditions  of  the  purchase  or  lease.  The  new  requirements  should  provide  DoHA  with  a  firmer  basis  for  assessing  value  for  money  before  the  grant  recipient commits grant funds towards the land or building acquisition, which  under  the  GP  Super  Clinics  program  can  potentially  involve  millions  of  dollars. As such, it represents an improvement in DoHA’s administration of  the program as compared to the first round.

 

Operational issues

5.20 The final part of the program evaluation, relating to the operational  aspect, was informed by an in‐depth analysis. The main conclusions were that  the program has increased access to primary health care in a multidisciplinary  setting and supported the retention and potentially the recruitment of GPs into  clinics which have the potential to be at the forefront of primary care reform.178 

                                                       176 These circumstances were: (i) soil contamination requiring remediation; (ii) the clinic being located in a heritage-listed building; and (iii) construction was halted on two occasions. 177

This latter point was also identified through ANAO’s discussions with the medical advisers sitting on the assessment panels. In the course of these discussions, it was noted that a difficulty that the panels faced when undertaking assessments was how to compare land costs in urban and regional / rural areas. 178

Evaluation of the GP Super Clinics Program 2007¬2008, p. 6.

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The  evaluation  noted  that  progress  on  some  operational  aspects  related  to  program objectives was limited, and identified a number of areas for further  service development. These areas included: 

 the development of guidelines for multidisciplinary team based care; 

 development  and  utilisation  of  a  multidisciplinary  team  based  skills  assessment and skills development programs;  

 greater  focus

  within  the  GP  Super  Clinics  on  primary  prevention  services; 

 greater use of electronic health records as a record for patient care and  as  a  facilitator  of  multidisciplinary  care  through  organisational,  administrative or quality improvement roles;  

 greater  focus  on  ongoing  and  strategically  focused  approaches  to  community  engagement,  to  meet  the  needs  of  the  community  and  specific groups with significant health risks; and 

 greater  emphasis  o

n  a  progression  to  an  integrated  approach  to  planning, to facilitate the ability of GP Super Clinics to support a range  of services in meeting local health needs.179   

5.21 However, the evaluation also noted that the real return on investment  in  primary  health  care  could  only  be  adequately  assessed  as  the  program  matured.180  

ANAO assessment of the GP Super Clinics program 5.22 In  assessing  how  the  program  has  performed  against  its  stated  objectives  and  intended  outcomes,  the  ANAO  considered  both  the  performance  of  individual  clinics  in  the  ANAO’s  sample  and  the  program  more  broadly.    The  ANAO  utilised  a  number  of  operational  reporting  documents provided to DoHA by grant recipients: the regular clinic reports  (four‐monthly Implementation Progress Sheets (IPSs) and two‐monthly Patient  Presentation data); clinic operational plans181 supplemented by clinic annual  operational reports; interviews conducted by the ANAO during its visits to  12 operational clinics; as well as the findings of the program evaluation.  

                                                       179 Ibid, pp. 66-75. 180

Ibid., p 6.

181 Clinic grant funding agreements require the preparation of an operational plan before a clinic opens.

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Clinic operational reporting - progress towards program objectives

5.23 DoHA  provides  clinics  with  a  template  for  IPS  reporting  of  their  progress  against  the  ten  program  objectives,  which  represent  the  ‘core  characteristics’ expected of all GP Super Clinics. Guidance contained in the  templates as to the matters that should be reported on under the respective  objectives  are  consistent  with  the  November  2011  KP

Is.  Edited  versions  of 

these  IPSs  are  placed  on  the  DoHA  website.  These  public  versions  list  the  range of services provided by the clinic, operating hours, availability of bulk  billing, whether clinic staff do home and aged care facility visits, and provide  general  information  on  clinic  training  activities.  They  do  not  include  information on staff or patient numbers or other operational matters as these  are considered to be of a p

otentially commercially sensitive nature. 

5.24 The  IPSs  require  reporting  through  a  mix  of  qualitative  and  quantitative  information.  To  assess  aspects  of  the  performance  of  the  18 operational clinics in its overall sample of 36 clinics, the ANAO compared  the most recent IPSs with the equivalent information provided in operational  plans.182  To allow for an objective assessment, the ANAO restricted its analysis  to where the i

nformation in both the operations plan and IPS reporting was in  a reasonably quantifiable form or was otherwise generally expressed in a clear,  non-descriptive manner. The specific ‘indicator’ issues for which the ANAO  analysed performance were: 

 operating hours; 

 bulk billing policy; 

 staff numbers and mix183; 

 service mix; 

 future medical workforce training; 

 shared electronic patient records; and 

 financial viability. 

                                                       182 Operational plans are intended to provide detailed information on proposed services, staffing levels and composition, operating hours, clinical and organisational arrangements, financial modeling of clinic operations, workforce and student

training arrangements, and strategies to foster coordination with existing public and private health providers. Where the operational plan indicated that staffing levels, service mix and other operational factors would be expanded over an indicated timeframe, the ANAO analysis attempted to match the appropriate point in the timeframe. 183

The ANAO examined whether clinics had the numbers and range of staff across three broad categories—GPs, nurses and allied health professionals—that they estimated they would have in the operational plan.

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5.25 The  ANAO’s  analysis  addresses  a  number  of  the  key  factors  that  directly impact on the range, accessibility and affordability of services to the  community,  as  well  the  important  issue  of  training  the  future  medical  workforce. The results of the ANAO’s analysis are summarised in Table 5.1. 

Table 5.1

Performance

of 18 operational clinics against selected indicators

Indicators

Number of clinics meeting or making good progress towards

achievement

Number of clinics not meeting or lack of evidence of good progress towards

achievement

Insufficient information in operational plan or IPS to make

assessment

Operating hours 13 (72.2%) 1 (5.6%) 4 (22.2%)

Bulk billing policy 13 (72.2%) 1 (5.6%) 4 (22.2%)

Staff numbers and mix (numbers of GPs, nurses and allied health professionals)

10 (55.6%) 4 (22.2%) 4 (22.2%)

Service mix (range of healthcare services provided) 14 (77.8%) 1 (5.6%) 3 (16.7%)

Future medical workforce training (medica

l / nursing /

allied health professional students / GP Registers)

12 (66.7%) 1 (5.6%) 5 (27.8%)

Shared electronic patient records

14 (77.8%) 0 (0%) 4 (22.2%)

Indications of financial viability issues 9 (50%) 0 (0%) 9 (50%)

Source: ANAO analysis of GP Super Clinic Operational Plans and/or grant applications, Clinic IPSs (available as at February 2012). The analysis relates to the 18 operational clinics in the ANAO’s sample of 36 clinics; it includes 17 clinics from the first round and the only operational clinic from the second round.

5.26 Overall, the sample of IPSs analysed by the ANAO indicated that a  majority of clinics have achieved,  or are making good progress towards the  achievement, of the measures in their operational plans, relating to: operating  hours,  bulk  billing  patients, service  mix,  future  medical  workforce  training,  and the adoption of electronic shared patient records.  

5.27 The results in relation to staff numbers and mix were somewhat more  variable—the  ANAO’s  analysis  indicates  that  attracting  and  retaining  clinic  staff was, by far, the

 most significant challenge in establishing the clinics and 

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Clinic operational reporting - progress towards program objectives

5.23 DoHA  provides  clinics  with  a  template  for  IPS  reporting  of  their  progress  against  the  ten  program  objectives,  which  represent  the  ‘core  characteristics’ expected of all GP Super Clinics. Guidance contained in the  templates as to the matters that should be reported on under the respective  objectives  are  consistent  with  the  November  2011  KP

Is.  Edited  versions  of 

these  IPSs  are  placed  on  the  DoHA  website.  These  public  versions  list  the  range of services provided by the clinic, operating hours, availability of bulk  billing, whether clinic staff do home and aged care facility visits, and provide  general  information  on  clinic  training  activities.  They  do  not  include  information on staff or patient numbers or other operational matters as these  are considered to be of a p

otentially commercially sensitive nature. 

5.24 The  IPSs  require  reporting  through  a  mix  of  qualitative  and  quantitative  information.  To  assess  aspects  of  the  performance  of  the  18 operational clinics in its overall sample of 36 clinics, the ANAO compared  the most recent IPSs with the equivalent information provided in operational  plans.182  To allow for an objective assessment, the ANAO restricted its analysis  to where the i

nformation in both the operations plan and IPS reporting was in  a reasonably quantifiable form or was otherwise generally expressed in a clear,  non-descriptive manner. The specific ‘indicator’ issues for which the ANAO  analysed performance were: 

 operating hours; 

 bulk billing policy; 

 staff numbers and mix183; 

 service mix; 

 future medical workforce training; 

 shared electronic patient records; and 

 financial viability. 

                                                       182 Operational plans are intended to provide detailed information on proposed services, staffing levels and composition, operating hours, clinical and organisational arrangements, financial modeling of clinic operations, workforce and student

training arrangements, and strategies to foster coordination with existing public and private health providers. Where the operational plan indicated that staffing levels, service mix and other operational factors would be expanded over an indicated timeframe, the ANAO analysis attempted to match the appropriate point in the timeframe. 183

The ANAO examined whether clinics had the numbers and range of staff across three broad categories—GPs, nurses and allied health professionals—that they estimated they would have in the operational plan.

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5.25 The  ANAO’s  analysis  addresses  a  number  of  the  key  factors  that  directly impact on the range, accessibility and affordability of services to the  community,  as  well  the  important  issue  of  training  the  future  medical  workforce. The results of the ANAO’s analysis are summarised in Table 5.1. 

Table 5.1

Performance

of 18 operational clinics against selected indicators

Indicators

Number of clinics meeting or making good progress towards

achievement

Number of clinics not meeting or lack of evidence of good progress towards

achievement

Insufficient information in operational plan or IPS to make

assessment

Operating hours 13 (72.2%) 1 (5.6%) 4 (22.2%)

Bulk billing policy 13 (72.2%) 1 (5.6%) 4 (22.2%)

Staff numbers and mix (numbers of GPs, nurses and allied health professionals)

10 (55.6%) 4 (22.2%) 4 (22.2%)

Service mix (range of healthcare services provided) 14 (77.8%) 1 (5.6%) 3 (16.7%)

Future medical workforce training (medical / nursing / allied health professional students / GP Registers)

12 (66.7%) 1 (5.6%) 5 (27.8%)

Shared electronic patient records

14 (77.8%) 0 (0%) 4 (22.2%)

Indications of financial viability issues 9 (50%) 0 (0%) 9 (50%)

Source: ANAO analysis of GP Super Clinic Operational Plans and/or grant applications, Clinic IPSs (available as at February 2012). The analysis relates to the 18 operational clinics in the ANAO’s sample of 36 clinics; it includes 17 clinics from the first round and the only operational clinic from the second round.

5.26 Overall, the sample of IPSs analysed by the ANAO indicated that a  majority of clinics have achieved, or are making good progress towards the  achievement, of the measures in their operational plans, relating to: operating  hours,  bulk  billing  pa

tients, service  mix,  future  medical  workforce  training,  and the adoption of electronic shared patient records.  

5.27 The results in relation to staff numbers and mix were somewhat more  variable—the  ANAO’s  analysis  indicates  that  attracting  and  retaining  clinic  staff was, by far, the most significant challenge in establishing the clinics and 

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providing  the  full  range  of  anticipated  services.  Whilst  some  existing  GP  practices that have received GP Super Clinic funding to expand their premises  have only recorded modest increases in the number of general practitioners,  there  have  often  been  significant  increases  in  the  numbers  of  allied  health  professionals operating at the expanded facility, allowing for a broader range  of services to be offered,

 including relating to preventative care.184 

5.28 Performance regarding the financial viability of individual clinics was  less  clear,  and  in  a  number  of  cases,  there  was  insufficient  information  in  operational  plans  or  the  IPS  to  make  an  assessment.  DoHA  introduced  measures in 2012 to improve reporting on the financial viability of clinics.185  

Clinic operational reporting - Patient Presentations

5.29 In addition to collecting information on the pe rformance of individual  clinics through their IPSs, DoHA requires clinics to report every two months  on the number of patient presentations at the clinic. Numbers are separately  reported as presentations to GPs, allied health professionals and nurses.186 The  ANAO analysis is based on patient presentation data from fully operational  clinics,  starting  from  April  2011  through  to  December  2012.  Ten  fully  operational clinics were providing patient presentation data as at April

 2011, 

rising to 29 in December 2012. 

Service level (patient numbers)

5.30 In assessing program performance, especially in relation to whether a  particular clinic location reflected a need within that community, one approach  is to look at the growth in services being provided by clinics over time. As at  April 2011, the ten fully operational clinics averaged 2360 patient presentations  per month. By December 2012, with the

 number of fully operational clinics 

increasing to 29, each clinic was averaging around 3740 patient presentations 

                                                       184 Expansions of existing GP practices has also resulted in new or enlarged treatment or surgical theatre rooms, case conferencing and training facilities. 185

From 2012, the annual operational reports have required a statutory declaration that the clinic is operating a viable, sustainable and efficient business model. The declaration also states the funding recipient has undertaken an assessment of any threats to the viability and sustainability of the operations of the GP Super Clinic for the forthcoming year, with any threats brought to DoHA’s attention and risk management strategies implemented. This is potentially a sound risk management strategy. DoHA also advised the ANAO that financial viability is a key focus of regular teleconferences between the Department and funding recipients. 186

Broadly speaking, a patient presentation is where a patient has a consultation with a clinic staff member. Where a patient has a consultation with a nurse immediately after seeing a GP, this would count as two presentations. A group session with a nurse involving five patients, such as a lifestyle or preventative health education session, counts as five presentations. At one site visit, the practice manager commented that they had submitted reports on Medicare Benefit Schedule item numbers, rather than patient presentations, and as a consequence fluctuations in presentation numbers could result from changes to the Medicare Benefit Schedule rather than actual services delivered at the clinic.

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per month, although there was a wide range between clinics. Some clinics were  reporting less than 1000 presentations per month, with the upper end being  around  10  000  presentations  per  month.  Figure  5.1  shows  the  accumulated  growth in patient presentations over time. 

Figure 5.1

Patient presentations

0

10

20

30

40

50

60

0

200

400

600

800

1000

1200

1400

1600

Patients per GPSC ('000)

Total accumulated patient presentations ('000)

Total patient presentations Patient per clinics

 

Source: ANAO analysis of DoHA Patient Presentation data.

5.31 There have been different rates of growth in patient presentations over  the reporting period across the various clinics. The different rates of growth  across clinics reflected a number of factors including: how long the clinic has  been  operating;  whether  the  project  was  a  new  clinic  or  an  expansion  of  existing facilities; and clinic size, which affects the base leve

l of patients and 

hence the rate of growth. Patient presentations could also vary over time, even  where the general trend was up. Some clinics noted that seasonal fluctuations,  including  where  these  related  to  matters  such  as  flu  vaccinations,  could  significantly  impact  on  patient  presentation  numbers. Staffing  changes,  particularly  for  smaller  clinics,  could  also  significantly  affect  presentation  numbers. 

Delivery of services by GPs, nurses and allied health professionals

5.32 Whilst the overall proportions of total patient presentations across GPs,  nurses and allied health professionals has fluctuated somewhat over time, the  current proportions are broadly similar to April 2011. As at December 2012, 

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providing  the  full  range  of  anticipated  services.  Whilst  some  existing  GP  practices that have received GP Super Clinic funding to expand their premises  have only recorded modest increases in the number of general practitioners,  there  have  often  been  significant  increases  in  the  numbers  of  allied  health  professionals operating at the expanded facility, allowing for a broader range  of services to be offered,

 including relating to preventative care.184 

5.28 Performance regarding the financial viability of individual clinics was  less  clear,  and  in  a  number  of  cases,  there  was  insufficient  information  in  operational  plans  or  the  IPS  to  make  an  assessment.  DoHA  introduced  measures in 2012 to improve reporting on the financial viability of clinics.185  

Clinic operational reporting - Patient Presentations

5.29 In addition to collecting information on the pe rformance of individual  clinics through their IPSs, DoHA requires clinics to report every two months  on the number of patient presentations at the clinic. Numbers are separately  reported as presentations to GPs, allied health professionals and nurses.186 The  ANAO analysis is based on patient presentation data from fully operational  clinics,  starting  from  April  2011  through  to  December  2012.  Ten  fully  operational clinics were providing patient presentation data as at April

 2011, 

rising to 29 in December 2012. 

Service level (patient numbers)

5.30 In assessing program performance, especially in relation to whether a  particular clinic location reflected a need within that community, one approach  is to look at the growth in services being provided by clinics over time. As at  April 2011, the ten fully operational clinics averaged 2360 patient presentations  per month. By December 2012, with the

 number of fully operational clinics 

increasing to 29, each clinic was averaging around 3740 patient presentations 

                                                       184 Expansions of existing GP practices has also resulted in new or enlarged treatment or surgical theatre rooms, case conferencing and training facilities. 185

From 2012, the annual operational reports have required a statutory declaration that the clinic is operating a viable, sustainable and efficient business model. The declaration also states the funding recipient has undertaken an assessment of any threats to the viability and sustainability of the operations of the GP Super Clinic for the forthcoming year, with any threats brought to DoHA’s attention and r

isk management strategies implemented. This is potentially a

sound risk management strategy. DoHA also advised the ANAO that financial viability is a key focus of regular teleconferences between the Department and funding recipients. 186 Broadly speaking, a patient presentation is where a patient has a consultation with a clinic staff member. Where a

patient has a consultation with a nurse immediately after seeing a GP, this would count as two presentations. A group session with a nurse involving five patients, such as a lifestyle or preventative health education session, counts as five presentations. At one site visit, the practice manager commented that they had submitted reports on Medicare Benefit Schedule item numbers, rather than patient presentations, and as a consequence fluctuations in presentation numbers could re

sult from changes to the Medicare Benefit Schedule rather than actual services delivered at the clinic.

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per month, although there was a wide range between clinics. Some clinics were  reporting less than 1000 presentations per month, with the upper end being  around  10  000  presentations  per  month.  Figure  5.1  shows  the  accumulated  growth in patient presentations over time. 

Figure 5.1

Patient presentations

0

10

20

30

40

50

60

0

200

400

600

800

1000

1200

1400

1600

Patients per GPSC ('000)

Total accumulated patient presentations ('000)

Total patient presentations Patient per clinics

 

Source: ANAO analysis of DoHA Patient Presentation data.

5.31 There have been different rates of growth in patient presentations over  the reporting period across the various clinics. The different rates of growth  across clinics reflected a number of factors including: how long the clinic has  been  operating;  whether  the  project  was  a  new  clinic  or  an  expansion  of  existing facilities; and clinic size, which affects the base leve

l of patients and 

hence the rate of growth. Patient presentations could also vary over time, even  where the general trend was up. Some clinics noted that seasonal fluctuations,  including  where  these  related  to  matters  such  as  flu  vaccinations,  could  significantly  impact  on  patient  presentation  numbers. Staffing  changes,  particularly  for  smaller  clinics,  could  also  significantly  affect  presentation  numbers. 

Delivery of services by GPs, nurses and allied health professionals

5.32 Whilst the overall proportions of total patient presentations across GPs,  nurses and allied health professionals has fluctuated somewhat over time, the  current proportions are broadly similar to April 2011. As at December 2012, 

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GP presentations are around 72 per cent of total presentations as compared to  73 per cent in April 2011. Nursing presentations are at 14 per cent, down from  15 per cent; while allied health professional presentations are at 14 per cent, up  from 12 per cent.  

5.33 The  overall  proportions  vary  significantly  between  clinics.  Based  on  December 2012 reporting figures, s

ome clinics had over 90 per cent of patient 

presentations attributable to GPs.   At the other extreme, one clinic that has  only been open since mid 2012, had only 30 per cent attributable to GPs, with  over 50 per cent  of presentations attributable to nursing staff.  

5.34 The ANAO also examined whether the service mix varied according to  how long clinics had been open, as one

 intention of the program was to make 

greater use of nurses and allied health professionals to deliver health services.  This  is  implicit  in  the  program’s  objective  to  provide  well  integrated  multidisciplinary patient centred care. The results are shown in Figure 5.2.  

Figure 5.2

Share of

patient presentations by service type

 

Source: ANAO analysis of DoHA Patient presentation data. 187

                                                       187 It should be noted that as the data set is from April 2011, the information does not include presentations from the earliest times for those clinics that were fully operational in 2010 and early 2011.

0

10

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60

70

80

90

Share of total patient presentations (%)

GP Allied Nurse

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5.35 Both  the  proportion  of  nurse  and  allied  health  professional  presentations appear to have had discernable ‘dips’ at specific (but different)  stages, but there is some evidence they have since recovered. Conversely, the  somewhat increased proportion of GP presentations during these dips has now  declined.  Overall,  an  analysis  of  patient  presentations  does  not  show  any  particular  trend,  at  this

  stage,  in  support  of  DoHA’s  objective  to  achieve  a  significant  shift  towards  an  increasing  proportion  of  overall  services  at  GP Super Clinics being delivered by nurses and allied health professionals. 

Management information and clinic operational reporting 5.36 Considerable  operational  reporting  is  required  under  the  program  grant funding agreements, which provides DoHA with sufficient information  to  effectively  monitor  clinic  operations  during  the  ramp‐up  stage.  This  emphasis was appropriate given the various challenges clinics faced during  this  stage,  including,  as  previously  discussed,  attracting  and  retaining  sufficient  staff  to  progressively  deliver  a  full  range  of  multidisciplinary  healthcare  services  consistent  with  program  objectives.  DoHA  provided  substantive  fe

edback  to,  or  sought  further  information  from,  at  least  some  clinics on its reporting, including where DoHA had potential concerns about  slow  ramp‐up  or  significant  ‘dips’  in  the  number  of  patient  presentations.   However,  whilst  the  ANAO  found  records  of  teleconferences  on  some  electronic files, DoHA does not appear to keep a consolidated record of these  communications that could be used to monitor relevant issues over time.  A  number of clinics visited by the ANAO also considered that they received little  or no feedback on their reporting. 

5.37 To date, DoHA has not attempted to use the information it collects fo

the  purpose  of  assessing  trends  in  clinic  performance,  potential  barriers  to  improving services, or conversely, approaches that have assisted performance  of clinics across the program as a whole. There are also no formal mechanisms  in place for the verification of any of the operational reporting. 

5.38 During site visits by the ANAO, some clinics also suggested that the  guidance in the current template for the four-monthly IP

S reports led to the 

provision of repetitive information in each successive report. They suggested  that  the  template  should  be  adapted  to  allow  for  more  sophisticated  information to be reported once clinics have been operational for some time.  This is likely to be an ongoing issue as some clinics will have been in operation  for up to 5 years by the time the last clinics from the s

econd round start to 

ramp‐up their operations in 2014 and 2015. 

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GP presentations are around 72 per cent of total presentations as compared to  73 per cent in April 2011. Nursing presentations are at 14 per cent, down from  15 per cent; while allied health professional presentations are at 14 per cent, up  from 12 per cent.  

5.33 The  overall  proportions  vary  significantly  between  clinics.  Based  on  December 2012 reporting figures, s

ome clinics had over 90 per cent of patient 

presentations attributable to GPs.   At the other extreme, one clinic that has  only been open since mid 2012, had only 30 per cent attributable to GPs, with  over 50 per cent  of presentations attributable to nursing staff.  

5.34 The ANAO also examined whether the service mix varied according to  how long clinics had been open, as one

 intention of the program was to make 

greater use of nurses and allied health professionals to deliver health services.  This  is  implicit  in  the  program’s  objective  to  provide  well  integrated  multidisciplinary patient centred care. The results are shown in Figure 5.2.  

Figure 5.2

Share of

patient presentations by service type

 

Source: ANAO analysis of DoHA Patient presentation data. 187

                                                       187 It should be noted that as the data set is from April 2011, the information does not include presentations from the earliest times for those clinics that were fully operational in 2010 and early 2011.

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10

20

30

40

50

60

70

80

90

Share of total patient presentations (%)

GP Allied Nurse

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5.35 Both  the  proportion  of  nurse  and  allied  health  professional  presentations appear to have had discernable ‘dips’ at specific (but different)  stages, but there is some evidence they have since recovered. Conversely, the  somewhat increased proportion of GP presentations during these dips has now  declined.  Overall,  an  analysis  of  patient  presentations  does  not  show  any  particular  trend,  at  this

  stage,  in  support  of  DoHA’s  objective  to  achieve  a  significant  shift  towards  an  increasing  proportion  of  overall  services  at  GP Super Clinics being delivered by nurses and allied health professionals. 

Management information and clinic operational reporting 5.36 Considerable  operational  reporting  is  required  under  the  program  grant funding agreements, which provides DoHA with sufficient information  to  effectively  monitor  clinic  operations  during  the  ramp‐up  stage.  This  emphasis was appropriate given the various challenges clinics faced during  this  stage,  including,  as  previously  discussed,  attracting  and  retaining  sufficient  staff  to  progressively  deliver  a  full  range  of  multidisciplinary  healthcare  services  consistent  with  program  objectives.  DoHA  provided  substantive  fe

edback  to,  or  sought  further  information  from,  at  least  some  clinics on its reporting, including where DoHA had potential concerns about  slow  ramp‐up  or  significant  ‘dips’  in  the  number  of  patient  presentations.   However,  whilst  the  ANAO  found  records  of  teleconferences  on  some  electronic files, DoHA does not appear to keep a consolidated record of these  communications that could be used to monitor relevant issues over time.  A  number of clinics visited by the ANAO also considered that they received little  or no feedback on their reporting. 

5.37 To date, DoHA has not attempted to use the information it collects fo

the  purpose  of  assessing  trends  in  clinic  performance,  potential  barriers  to  improving services, or conversely, approaches that have assisted performance  of clinics across the program as a whole. There are also no formal mechanisms  in place for the verification of any of the operational reporting. 

5.38 During site visits by the ANAO, some clinics also suggested that the  guidance in the current template for the four-monthly IP

S reports led to the 

provision of repetitive information in each successive report. They suggested  that  the  template  should  be  adapted  to  allow  for  more  sophisticated  information to be reported once clinics have been operational for some time.  This is likely to be an ongoing issue as some clinics will have been in operation  for up to 5 years by the time the last clinics from the s

econd round start to 

ramp‐up their operations in 2014 and 2015. 

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5.39 The  annual  operational  reporting  requirement,  introduced  from  April 2012, contains some potentially useful aspects. It requires information on  planned service delivery for the forthcoming year, and the template notes that  this information ‘may be considered in the context of the next Annual Report  in  12  months  time’—indicating  that  DoHA  may  use  the  information  for  benchmarking progress of service d

elivery. The annual report allows clinics to 

provide  commentary  on  specific  achievements  against  operational  and  business  plans,  and  importantly,  on  any  barriers  preventing  or  hindering  achievement. This could provide useful information on barriers to achieving  aspects  of  program  objectives  across  clinics  as  a  whole.  However,  this  reporting  requirement  was  only  introduced  in  April 2012,  and  it  is  unclear  whether the information will be used on more than a clinic

‐specific basis. 

5.40 The  annual  operational  report  requires  clinics  to  provide  anecdotal  examples  of  the  provision  of  both  integrated  multidisciplinary  team  based  primary care for a patient with a chronic condition, and of primary and/or  secondary preventative health services. However, no information is collected  by DoHA from either clinics or other organisations such as the Department of  Human Services188 on the number of patients rece iving these types of care, or  the number of relevant Medicare Benefit Schedule claimable services (such as  Chronic  Disease  Management  items),  that  the  clinic  has  provided  over  set  reporting periods.  It is therefore not possible to determine how significant  these types of services are as a proportion of a clinic’s operations as a whole. In  the  absence  of  that  information,  it  is  not  possible  to  make  a  judgment

  on 

whether the clinics, and more particularly those which have been operational  for some reasonable amount of time, are delivering meaningful volumes of the  types of services contemplated in the GP Super Clinics policy. 

   

                                                       188 The Department of Human Services administers healthcare-related financial payments made by the Commonwealth.

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Recommendation No.4 5.41 To support a more outcome-focused performance reporting framework  for the GP Super Clinics program, it is recommended that DoHA put in place  arrangements with the Department of Human Services to obtain information  on claimable services provided by  operational GP Super Clinics, as well as  information regarding vocational placements, medical education and training  for GP Registrars and allied health professionals. 

DoHA respons

e:  

5.42 Agreed,  noting  that  DoHA  will  also  work  with  other  agencies  and  bodies  (eg regional training placement organisations and Health Workforce Australia), other  than the Department of Human Services, as highly relevant sources of information  regarding vocational placements, medical education and training for GP Registrars  and allied health professionals. 

Conclusion 5.43 The ANAO’s analysis of the operational reports of the 18 clinics in its  sample indicates that the majority of these clinics are making good progress  towards  achieving  some  key  service  delivery  expectations.  Recruiting  and  retaining  sufficient  staff  have  been  the  biggest  challenges  for  most  clinics.  However, an analysis of patient presentations does not show any particular  trend, at this stage, in support of DoHA’s objective to achieve a significant

 shift 

towards an increasing proportion of overall services at GP Super Clinics being  delivered by nurses and allied health professionals. 

5.44 The development of Key Performance Indicators (KPIs) for the ten GP  Super  Clinic  program  objectives  was  originally  to  occur  in  2008,  but  this  process was not commenced by the department until 2010.  A set of detailed  and measurable KPIs were agreed between DoHA and the D

epartment of the 

Prime Minister and Cabinet (PM&C) and DoHA sought the Minister’s formal  endorsement of these in March 2011.  The Minister directed that the KPIs be  reworked, and a revised set of KPIs, now framed in a more qualitative manner,  was approved by the Minister in November 2011. As discussed below there 

remains scope for revised KPIs to support longer term reporting on the extent  to which the program is a

chieving its intended outcomes. 

5.45 With the maturing of an increasing number of clinics, it is timely for  DoHA  to  consider  whether  more  quantifiable  information  on  the  services  provided  by  clinics—focusing  particularly  on  those  that  involve  integrated, 

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5.39 The  annual  operational  reporting  requirement,  introduced  from  April 2012, contains some potentially useful aspects. It requires information on  planned service delivery for the forthcoming year, and the template notes that  this information ‘may be considered in the context of the next Annual Report  in  12  months  time’—indicating  that  DoHA  may  use  the  information  for  benchmarking progress of service d

elivery. The annual report allows clinics to 

provide  commentary  on  specific  achievements  against  operational  and  business  plans,  and  importantly,  on  any  barriers  preventing  or  hindering  achievement. This could provide useful information on barriers to achieving  aspects  of  program  objectives  across  clinics  as  a  whole.  However,  this  reporting  requirement  was  only  introduced  in  April 2012,  and  it  is  unclear  whether the information will be used on more than a clinic

‐specific basis. 

5.40 The  annual  operational  report  requires  clinics  to  provide  anecdotal  examples  of  the  provision  of  both  integrated  multidisciplinary  team  based  primary care for a patient with a chronic condition, and of primary and/or  secondary preventative health services. However, no information is collected  by DoHA from either clinics or other organisations such as the Department of  Human Services188 on the number of patients rece iving these types of care, or  the number of relevant Medicare Benefit Schedule claimable services (such as  Chronic  Disease  Management  items),  that  the  clinic  has  provided  over  set  reporting periods.  It is therefore not possible to determine how significant  these types of services are as a proportion of a clinic’s operations as a whole. In  the  absence  of  that  information,  it  is  not  possible  to  make  a  judgment

  on 

whether the clinics, and more particularly those which have been operational  for some reasonable amount of time, are delivering meaningful volumes of the  types of services contemplated in the GP Super Clinics policy. 

   

                                                       188 The Department of Human Services administers healthcare-related financial payments made by the Commonwealth.

Reporting and Assessing Clinic and Program Outcomes

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Recommendation No.4 5.41 To support a more outcome-focused performance reporting framework  for the GP Super Clinics program, it is recommended that DoHA put in place  arrangements with the Department of Human Services to obtain information  on claimable services provided by  operational GP Super Clinics, as well as  information regarding vocational placements, medical education and training  for GP Registrars and allied health professionals. 

DoHA respons

e:  

5.42 Agreed,  noting  that  DoHA  will  also  work  with  other  agencies  and  bodies  (eg regional training placement organisations and Health Workforce Australia), other  than the Department of Human Services, as highly relevant sources of information  regarding vocational placements, medical education and training for GP Registrars  and allied health professionals. 

Conclusion 5.43 The ANAO’s analysis of the operational reports of the 18 clinics in its  sample indicates that the majority of these clinics are making good progress  towards  achieving  some  key  service  delivery  expectations.  Recruiting  and  retaining  sufficient  staff  have  been  the  biggest  challenges  for  most  clinics.  However, an analysis of patient presentations does not show any particular  trend, at this stage, in support of DoHA’s objective to achieve a significant

 shift 

towards an increasing proportion of overall services at GP Super Clinics being  delivered by nurses and allied health professionals. 

5.44 The development of Key Performance Indicators (KPIs) for the ten GP  Super  Clinic  program  objectives  was  originally  to  occur  in  2008,  but  this  process was not commenced by the department until 2010.  A set of detailed  and measurable KPIs were agreed between DoHA and the D

epartment of the 

Prime Minister and Cabinet (PM&C) and DoHA sought the Minister’s formal  endorsement of these in March 2011.  The Minister directed that the KPIs be  reworked, and a revised set of KPIs, now framed in a more qualitative manner,  was approved by the Minister in November 2011. As discussed below there  remains scope for revised KPIs to support longer term reporting on the extent  to which the program is a

chieving its intended outcomes. 

5.45 With the maturing of an increasing number of clinics, it is timely for  DoHA  to  consider  whether  more  quantifiable  information  on  the  services  provided  by  clinics—focusing  particularly  on  those  that  involve  integrated, 

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multidisciplinary  team  based  care  and  preventative  care—should  be  collected189 and publicly reported on an aggregated basis. Similarly, aggregated  public reporting of the numbers of vocational placements and other education  and  training  activities  for  medical,  nursing  and  allied  health  professional  students, including GP registrars, could be commenced. This reporting would  usefully  be  supported  by  analysis  of  whether  the  more  mature  clinics  are  providing vocational placements an

d educational activities at proportionally 

higher levels than other comparable primary healthcare facilities. In addition  to information provided by the clinics, reporting could be informed by data  collected by the Department of Human Services as part of its administration of  healthcare-related financial payments. 

5.46 As already noted, the GP Super Clinics program will have an effective  life  of  twenty  years,  and  a  revised  performa

nce  and  reporting  framework 

would  provide  an  improved  basis  for  assessing  the  extent  to  which  the  program  is  achieving  its  key  intended  outcomes:  improved  access  to  integrated,  multidisciplinary  primary  care  health  services;  and  increased  education and training placements in a multidisciplinary care setting for the  future primary care workforce. 

 

                                                       189 The frequency of reporting for mature clinics could also be reduced.

Ian McPhee 

Auditor‐General 

Canberra ACT 

20 June 2013 

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Appendices

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multidisciplinary  team  based  care  and  preventative  care—should  be  collected189 and publicly reported on an aggregated basis. Similarly, aggregated  public reporting of the numbers of vocational placements and other education  and  training  activities  for  medical,  nursing  and  allied  health  professional  students, including GP registrars, could be commenced. This reporting would  usefully  be  supported  by  analysis  of  whether  the  more  mature  clinics  are  providing vocational placements and educational activities at proportionally  higher levels than other comparable primary healthcare facilities. In addition  to information provided by the clinics, reporting could be informed by data  collected by the Department of Human Services as part of its administration of  healthcare-related financial payments. 

5.46 As already noted, the GP Super Clinics program will have an effective  life  of  twenty  years,  and  a  revised  performance  and  reporting  framework  would  provide  an  improved  basis  for  assessing  the  extent  to  which  the  program  is  achieving  its  key  intended  outcomes:  improved  access  to  integrated,  multidisciplinary  primary  care  health  services;  and  increased 

education and training placements in a multidisciplinary care setting for the  future primary care workforce. 

 

                                                       189 The frequency of reporting for mature clinics could also be reduced.

Ian McPhee 

Auditor‐General 

Canberra ACT 

20 June 2013 

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Appendices

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Appendix 1: Announced GP Super Clinics

First Round (37 clinics) Second Round (28 clinics)

Location

Total GP Super Clinic grant ($ million)

Location

Total GP Super Clinic grant ($ million)

ACT ACT

No Clinic 0 Canberra 15

NSW NSW

Blue Mountains 5 Blacktown 15

Grafton 5 Broken Hill 7

Gunnedah (announced 2009)

4.3 Coffs Harbour 7

North Central Coast 2.5 Jindabyne 5

Port Stephens 2.5 Lismore 7

Queanbeyan 5 Liverpool 15

Riverina 1 Lower Hunter 7

Shellharbour 2.5 Nowra 7

Southern Lake Macquarie 2.5 Port Macquarie 7

Northern Territory Southern Central Coast 7

Palmerston 10 Tweed Heads 7

Queensland Northern Territory

Brisbane Southside 7.5 Darwin 5

Bundaberg 5 Queensland

Cairns 5 Caboolture 15

Gladstone 5 Emerald 5

Ipswich 2.5 Gold Coast 7

Mount Isa 5 Mackay 7

Redcliffe 13.2 Sunshine Coast 15

Strathpine 2.5

Townsville (Northern Beaches)

5

Townsville 5 Wynnum 15

South Australia South Australia

Modbury 12.5 Adelaide 15

Noarlunga 12.5 Mt Barker 7

Playford North 7.5 Tasmania

Appendix 1

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First Round (37 clinics) Second Round (28 clinics)

Tasmania No clinic 0

Burnie 2.5 Victoria

Devonport 5 Cobram 1

Sorell (grant terminated) 2.5 Hume City 7

Clarence 5.5 Melbourne West 15

Victoria Western Australia

Ballan 1 Karratha 7

Bendigo 5 Northam 3

Berwick 2.5 Rockingham 7

Geelong 7

Portland (announced 2009) 4.9

South Morang (announced 2009) 3.7

Wallan 3.5

Wodonga

(announced 2009) 6.65

Western Australia

Cockburn (announced 2009) 6.65

Midland 5

Wanneroo 5

Source: ANAO analysis of DoHA documentation.

Note: Funding amounts reflect any subsequent increase in grant funding from that originally announced. Redcliffe increased from $5 million to $13.2 million; Wallan from $1 million to $3.5 million; and Mt Isa from $2.5 million to $5 million. All amounts exclude GST.

 

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Appendix 1: Announced GP Super Clinics

First Round (37 clinics) Second Round (28 clinics)

Location

Total GP Super Clinic grant ($ million)

Location

Total GP Super Clinic grant ($ million)

ACT ACT

No Clinic 0 Canberra 15

NSW NSW

Blue Mountains 5 Blacktown 15

Grafton 5 Broken Hill 7

Gunnedah (announced 2009)

4.3 Coffs Harbour 7

North Central Coast 2.5 Jindabyne 5

Port Stephens 2.5 Lismore 7

Queanbeyan 5 Liverpool 15

Riverina 1 Lower Hunter 7

Shellharbour 2.5 Nowra 7

Southern Lake Macquarie 2.5 P

ort Macquarie 7

Northern Territory Southern Central Coast 7

Palmerston 10 Tweed Heads 7

Queensland Northern Territory

Brisbane Southside 7.5 Darwin 5

Bundaberg 5 Queensland

Cairns 5 Caboolture 15

Gladstone 5 Emerald 5

Ipswich 2.5 Gold Coast 7

Mount Isa 5 Mackay 7

Redcliffe 13.2 Sunshine Coast 15

Strathpine 2.5

Townsville (Northern Beaches)

5

Townsville 5 Wynnum 15

South Australia South Australia

Modbury 12.5 Adelaide 15

Noarlunga 12.5 Mt Barker 7

Pl

ayford North 7.5 Tasmania

Appendix 1

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First Round (37 clinics) Second Round (28 clinics)

Tasmania No clinic 0

Burnie 2.5 Victoria

Devonport 5 Cobram 1

Sorell (grant terminated) 2.5 Hume City 7

Clarence 5.5 Melbourne West 15

Victoria Western Australia

Ballan 1 Karratha 7

Bendigo 5 Northam 3

Berwick 2.5 Rockingham 7

Geelong 7

Portland (announced 2009) 4.9

South Morang (announced 2009) 3.7

Wallan 3.5

Wodonga (announced 2009) 6.65

Western Australia

Cockburn (announced 2009) 6.65

Midland 5

Wanneroo 5

Source: ANAO analysis of DoHA documentation.

Note: Funding amounts reflect any subsequent increase in grant funding from that originally announced. Redcliffe increased from $5 million to $13.2 million; Wallan from $1 million to $3.5 million; and Mt Isa from $2.5 million to $5 million. All amounts exclude GST.

 

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Appendix 2: ANAO methodology to assess effectiveness of program administration

Number of clinics announced by the Government

From 2007 th

rough to 2010, the ALP announced a total of 65 proposed clinics  to be funded under the GP Super Clinics program. Thirty-two of these were  announced  whilst  in  opposition  shortly  before  or  during  the  2007  election  campaign  and  another  five  in  2009  in  response  to  unsolicited  proposals.  A  further 28 were announced during the 2010 election campaign. 

ANAO samp

ling methodology: round one

Wh

ilst  some  audit  findings  are  based  on  the  entire  population  of  65  clinic  locations, the ANAO also undertook an in-depth analysis of key issues in a  targeted, non‐statistical sample of 36 locations. The sample for the first round  comprised a total of 22 clinics and included 21 of the 32 clinics announced in  2007  and  one  of  the  five  clinics  announced  in  2009.  The  ANAO  sample  co

mprised: 

 a selection of 17 clinics nationally; 

 four  clinics  that  had  experienced  significant  delays  and  were  not  operational (Redcliffe, Mt Isa, Wanneroo and Wallan); and 

 the one clinic which was cancelled (Sorell). 

This relative weighting of 22 clinics was intended to ensure that a sufficient  number  of  operational  clinics  were  included  in  the  sample  to  enable  an  assessment of clinics’ progress towards meeting the program objectives. 

ANAO samp

ling methodology: round two

The  sample  fo

r  the  second  round  comprised  a  total  of  14  of  the  28  clinics  announced in 2010 and included: 

 a selection of 8 clinics nationally; and 

 six  of  the  eight  $15  million  grants  made  in  round  two  (Canberra,  Liverpool,  Caboolture,  Sunshine  Coast,  Adelaide,  and  Melbourne  West).  

Assessing competitive and

non-competitive processes

Twenty of the 65 clinic

s have involved exclusively non‐competitive funding  processes. Another five have involved both competitive and non‐competitive 

Appendix 2

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processes—in most cases this has occurred where an initial invitation to apply  process has had to be re‐run.  

The ANAO sample includes 18 clinics that have exclusively or partly involved  a non‐competitive process.190  

The following table provides a breakdown of the number of clinics in each  jurisdiction that were included in the ANAO’s sample. 

Table A.1

Distribution

of clinic locations included in the ANAO sample

State or Territory Number of proposed clinics in sample

ACT 1 (Canberra)

New South Wales 5 (Queanbeyan, Shellharbour, Jindabyne Liverpool, Lower Hunter

Northern Territory 2 (Palmerston, Darwin)

Queensland 8 (Mount Isa, Redcliffe, Strathpine, Brisbane Southside, Bundaberg, Caboolture, Sunshine Coast, Townsville (Northern Beaches))

South Australia 5 (Modbury, Playford North, Noarlunga, Adelaide, Mt Barker)

Tasmania 3 (Hobart Eastern Shores-Sorell, Hobart Eastern Shores- Clarence, Devonport)

Victoria 8 (Ballan, Berwick, Bendigo, Geelong, Wallan, Wodonga,

Cobram, Melbourne West)

Western Australia 4 (Midland, Wanneroo, Rockingham, Northam)

36 (22 in first round and 14 in second round)

Source: ANAO.

 

                                                       190 The general i ssue of high proportions of non-competitive Commonwealth grant schemes has been noted as a matter of ‘significant concern’ by the Joint Standing Committee on Public Accounts and Audit as the committee considered that

competitive processes constituted ‘best practice’: see Report 430, Review of Auditor-General’s Reports Nos. 47 (2010-11) to 9 (2011-12) and Reports Nos. 10 to 23 (2011-12) pp. 55.

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Appendix 2: ANAO methodology to assess effectiveness of program administration

Number of clinics announced by the Government

From 2007 th

rough to 2010, the ALP announced a total of 65 proposed clinics  to be funded under the GP Super Clinics program. Thirty-two of these were  announced  whilst  in  opposition  shortly  before  or  during  the  2007  election  campaign  and  another  five  in  2009  in  response  to  unsolicited  proposals.  A  further 28 were announced during the 2010 election campaign. 

ANAO samp

ling methodology: round one

Wh

ilst  some  audit  findings  are  based  on  the  entire  population  of  65  clinic  locations, the ANAO also undertook an in-depth analysis of key issues in a  targeted, non‐statistical sample of 36 locations. The sample for the first round  comprised a total of 22 clinics and included 21 of the 32 clinics announced in  2007  and  one  of  the  five  clinics  announced  in  2009.  The  ANAO  sample  co

mprised: 

 a selection of 17 clinics nationally; 

 four  clinics  that  had  experienced  significant  delays  and  were  not  operational (Redcliffe, Mt Isa, Wanneroo and Wallan); and 

 the one clinic which was cancelled (Sorell). 

This relative weighting of 22 clinics was intended to ensure that a sufficient  number  of  operational  clinics  were  included  in  the  sample  to  enable  an  assessment of clinics’ progress towards meeting the program objectives. 

ANAO samp

ling methodology: round two

The  sample  fo

r  the  second  round  comprised  a  total  of  14  of  the  28  clinics  announced in 2010 and included: 

 a selection of 8 clinics nationally; and 

 six  of  the  eight  $15  million  grants  made  in  round  two  (Canberra,  Liverpool,  Caboolture,  Sunshine  Coast,  Adelaide,  and  Melbourne  West).  

Assessing competitive and

non-competitive processes

Twenty of the 65 clinic

s have involved exclusively non‐competitive funding  processes. Another five have involved both competitive and non‐competitive 

Appendix 2

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processes—in most cases this has occurred where an initial invitation to apply  process has had to be re‐run.  

The ANAO sample includes 18 clinics that have exclusively or partly involved  a non‐competitive process.190  

The following table provides a breakdown of the number of clinics in each  jurisdiction that were included in the ANAO’s sample. 

Table A.1

Distribution

of clinic locations included in the ANAO sample

State or Territory Number of proposed clinics in sample

ACT 1 (Canberra)

New South Wales 5 (Queanbeyan, Shellharbour, Jindabyne Liverpool, Lower Hunter

Northern Territory 2 (Palmerston, Darwin)

Queensland 8 (Mount Isa, Redcliffe, Strathpine, Brisbane Southside, Bundaberg, Caboolture, Sunshine Coast, Townsville (Northern Beaches))

South Australia 5 (Modbury, Playford North, Noarlunga, Adelaide, Mt Barker)

Tasmania 3 (Hobart Eastern Shores-Sorell, Hobart Eastern Shores- Clarence, Devonport)

Victoria 8 (Ballan, Berwick, Bendigo, Geelong, Wallan, Wodonga,

Cobram, Melbourne West)

Western Australia 4 (Midland, Wanneroo, Rockingham, Northam)

36 (22 in first round and 14 in second round)

Source: ANAO.

 

                                                       190 The general issue of high proportions of non-competitive Commonwealth grant schemes has been noted as a matter of ‘significant concern’ by the Joint Standing Committee on Public Accounts and Audit as the committee considered that

competitive processes constituted ‘best practice’: see Report 430, Review of Auditor-General’s Reports Nos. 47 (2010-11) to 9 (2011-12) and Reports Nos. 10 to 23 (2011-12) pp. 55.

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Appendix 3: Distribution of GP Super Clinics and funding based on electoral type

Approach

There are 150 Federal electoral divisions. The Australian Electoral Commission  (AEC)  reports  on  the  outcome  of  each  Federal  election,  including  the  percentage  of  votes  on  a  two‐party  preferred  basis  by  division.  The  ‘two  parties’ that the Australian Electoral Commission uses for its classification are:  the  Australian  Labor  Party  (ALP)  and  the  Liberal/National  Coalition  (Coalition). 

The AEC also determines the ‘seat status’ of each division, classifying seats a

s: 

‘safe’; ‘fairly safe’ and ‘marginal’. Where a winning party receives less than 56  per cent of the vote, the Commission classifies the seat as ‘marginal’, 56-60  per cent as ‘fairly safe’ and more than 60 per cent as ‘safe’. 

The ANAO identified the electoral division in which each announced project  was located and its electoral status (based on the party that held the seat and  margin on a two‐party

 preferred basis), at the time that the announcement was  made. The clinics in Gladstone and Karratha were excluded from the analysis  in this appendix as the relevant electorates in which the clinics were located  were newly created for the 2007 and 2010 elections and as such were held by  any  political  party  at  the  time  the  proposed  clinic  was  announced.  The  Redcliffe  cli

nic,  which  received  grants  through  both  the  first  and  second  rounds, is only included in the first round figures. 

The  location  analysis  has  been  undertaken  based  on  the  locations/expected  locations of the clinics, and does not account for the potential of catchment  populations  from  neighbouring  electorates  accessing  a  clinic.  For  example,  based on the electorate boundaries for the 2007 election, the Berwick clinic is  located in the La Trobe electorate, but is adjacent to the

 neighbouring Holt 

electorate.  At the time of the announcement of the Berwick GP Super Clinic,  La Trobe was a marginal electorate held by the Coalition, whereas Holt was a  marginal electorate held by the ALP. 

 

Appendix 3

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Table A.2

Distribution

of GP Super Clinic locations, by electorate

Round

Proposed clinics in ALP-held electorates

Proposed clinics in Coalition-held electorates

Proposed clinics in Independent-held electorates

First round (31 clinics)

7 (22.6%) 23 (74.2%) 1 (3.2%)

Second round (32) clinics)

18 (56.2%) 12 (37.5%) 2 (6.3%)

Total (63 clinics) 25 (39.7%) 35 (55.5%) 3 (4.8%)

Source: ANAO analysis. For the purposes of this analysis, the clinics in Gladstone and Karratha are excluded as the relevant electorates in which the clinics were located were newly created for the 2007 and 2010 elections respectively and as such were not held by any political party at the time the proposed

clinic was announced. The five 2009 clinics (Gunnedah, South Morang, Portland, Wodonga and Cockburn) are included in the second round as these were announced after the 2007 election.

 

Table A.3

Distribution

of GP Super Clinic funding as announced, by electorate

Round

Funding in ALP-held electorates

Funding in Coalition-held electorates

Funding in Independent-held electorates

Total funding across all electorates

First round (31 clinics)

$29 million (19.9%)

$114 million (78.4%)

$2.5 million (1.7%)

$145.5 million

Second round (32) clinics) $172.35 million (66.0%)

$77.55 million (29.7%) $11.3 million (4.3%)

$261.2 million

Total (63 clinics)

$201.35 million (49.5%) $191.55 million (47.1%)

$13.8 million (3.4%) $406.7 million

Source: ANAO analysis. For the purposes of this analysis, the clinics in Gladstone and Karratha are excluded as the relevant electorates in which the clinics were located were newly created for the

2007 and 2010 elections respectively and as such were not held by any political party at the time the proposed clinic was announced. The five 2009 clinics (Gunnedah, South Morang, Portland, Wodonga and Cockburn) are included in the second round as these were announced after the 2007 election. The figures do not take into account increases at Mt Isa and Wallan or second/third grants for Redcliffe (the total increase in grant funding for these three clinics was $13.2 million).

   

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Appendix 3: Distribution of GP Super Clinics and funding based on electoral type

Approach

There are 150 Federal electoral divisions. The Australian Electoral Commission  (AEC)  reports  on  the  outcome  of  each  Federal  election,  including  the  percentage  of  votes  on  a  two‐party  preferred  basis  by  division.  The  ‘two  parties’ that the Australian Electoral Commission uses for its classification are:  the  Australian  Labor  Party  (ALP)  and  the  Liberal/National  Coalition  (Coalition). 

The AEC also determines the ‘seat status’ of each division, classifying seats a

s: 

‘safe’; ‘fairly safe’ and ‘marginal’. Where a winning party receives less than 56  per cent of the vote, the Commission classifies the seat as ‘marginal’, 56-60  per cent as ‘fairly safe’ and more than 60 per cent as ‘safe’. 

The ANAO identified the electoral division in which each announced project  was located and its electoral status (based on the party that held the seat and  margin on a two‐party

 preferred basis), at the time that the announcement was  made. The clinics in Gladstone and Karratha were excluded from the analysis  in this appendix as the relevant electorates in which the clinics were located  were newly created for the 2007 and 2010 elections and as such were held by  any  political  party  at  the  time  the  proposed  clinic  was  announced.  The  Redcliffe  cli

nic,  which  received  grants  through  both  the  first  and  second  rounds, is only included in the first round figures. 

The  location  analysis  has  been  undertaken  based  on  the  locations/expected  locations of the clinics, and does not account for the potential of catchment  populations  from  neighbouring  electorates  accessing  a  clinic.  For  example,  based on the electorate boundaries for the 2007 election, the Berwick clinic is  located in the La Trobe electorate, but is adjacent to the

 neighbouring Holt 

electorate.  At the time of the announcement of the Berwick GP Super Clinic,  La Trobe was a marginal electorate held by the Coalition, whereas Holt was a  marginal electorate held by the ALP. 

 

Appendix 3

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Table A.2

Distribution

of GP Super Clinic locations, by electorate

Round

Proposed clinics in ALP-held electorates

Proposed clinics in Coalition-held electorates

Proposed clinics in Independent-held electorates

First round (31 clinics)

7 (22.6%) 23 (74.2%) 1 (3.2%)

Second round (32) clinics)

18 (56.2%) 12 (37.5%) 2 (6.3%)

Total (63 clinics) 25 (39.7%) 35 (55.5%) 3 (4.8%)

Source: ANAO analysis. For the purposes of this analysis, the clinics in Gladstone and Karratha are excluded as the relevant electorates in which the clinics were located were newly created for the 2007 and 2010 elections respectively and as such were not held by any political party at the time the proposed clinic was announced. The five 2009 clinics (Gunnedah, South Morang, Portland, Wodonga and Cockburn) are included in the second round as these were announced after the 2007 election.

 

Table A.3

Distribution

of GP Super Clinic funding as announced, by electorate

Round

Funding in ALP-held electorates

Funding in Coalition-held electorates

Funding in Independent-held electorates

Total funding across all electorates

First round (31 clinics)

$29 million (19.9%)

$114 million (78.4%)

$2.5 million (1.7%)

$145.5 million

Second round (32) clinics) $172.35 million (66.0%)

$77.55 million (29.7%) $11.3 million (4.3%)

$261.2 million

Total (63 clinics)

$201.35 million (49.5%) $191.55 million (47.1%)

$13.8 million (3.4%) $406.7 million

Source: ANAO analysis. For the purposes of this analysis, the clinics in Gladstone and Karratha are excluded as the relevant electorates in which the clinics were located were newly created for the 2007 and 2010 elections respectively and as such were not held by any political party at the time the proposed clinic was announced. The five 2009 clinics (Gunnedah, South Morang, Portland, Wodonga and Cockburn) are included in the second round as these were announced after the 2007 election. The figures do not take into account increases at Mt Isa and Wallan or second/third grants for Redcliffe (the total increase in grant funding for these three clinics was $13.2 million).

   

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Table A.4

Distribution

of GP Super Clinic locations, by marginal electorate

Round

Proposed clinics in ALP-held marginal electorates

Proposed clinics in Coalition-held marginal electorates

Proposed clinics in Independent-held marginal electorates

First round (31 clinics)

4 (12.9%) 13 (41.9%) Nil

Second round (32) clinics)

9 (28.1%) 5 (15.6%) Nil

Total (63 clinics) 13 (20.6%) 18 (28.6%) Nil

Notes The percentages in the table above relate to the total number of clinics included in the analysis for the relevant funding round: 31 in the first round and 32 in the second round.

Source: ANAO analysis. For the purposes of this analysis, the clinics in Gladstone and Karratha are excluded as the relevant electorates in which the clinics were located were newly created for the 2007 and 2010 elections respectively and as such were not held by any political party at the time the proposed clinic was announced. The five 2009 clinics (Gunnedah, South Morang, Portland, Wodonga and Cockburn) are included in the second round as these were announced after the 2007 election.

 

Table A.5

Distribution

of GP Super Clinic funding as announced, by marginal electorate

Round

Funding in ALP- held marginal electorates

Funding in Coalition-held marginal electorates

Funding in all marginal electorates

First round (31 clinics)

$13.5 million (9.3%) $82 million (56.4%) $95.5 million (65.7%)

Second round (32) clinics) $73 million (28.0%) $41 million (15.7%) $114 million (43.7%)

Total (63 clinics) $86.5 million (21.3%) $123 million (30.2%) $209.5 million (51.5%)

Notes The percentages in the table above relate to the total funding across all electorates: $145.5 million for the first round; $261.2 million for the second round.

Source: ANAO analysis. For the purposes of this analysis, the clinics in Gladstone and Karratha are excluded as the relevant electorates in which the clinics were located were newly created for the 2007 and 2010 elections respectively and as such were not held by any political party at the time the proposed clinic was announced. The five 2009 clinics (Gunnedah, South Morang, Portland, Wodonga and Cockburn) are included in the second round as these were announced after the 2007 election. The figures do not take into account increases at Mt Isa and Wallan or second/third grants for

Redcliffe (the total increase in grant funding for these three clinics was $13.2 million).

 

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Index A 

Audit—scope, 34 

Audit—conclusion, 10 

Audit—methodology, 35 

Audit—objective, 10, 34 

Audit—recommendations, 22, 51 

Clinic construction costs, 68, 99 

Clinic roll‐out—difficulties with  third party operators, 89, 90 

Clinic roll‐out—potential funding  shortfalls, 81, 82 

Clinic roll‐out—problems in  securing land tenure or  development approval, 12, 48, 82,  86, 87 

Clinics—analysis of locations, 41,  53, 55, 66, 71, 116 

Clinics—announcement of  locations, 8, 13, 14, 16, 26, 27, 38,  49, 51, 55

, 118 

Clinics—Berwick, 55 

Clinics—distribution of funding,  16, 54, 55, 56, 58, 116, 117, 118 

Clinics—Emerald, 54, 58 

Clinics—factors underlying  locations, 8, 14, 15, 38, 40, 41, 49,  57, 102, 103 

Clinics—Gunnedah, 49, 118 

Clinics—list of all clinics, 112 

Clinics—Lower Hunter, 54, 58 

Clinics—map of locations, 30 

Clinics—Modbury, 89, 90 

Clinics—Mt Isa, 27, 84, 86, 118 

Clinics—Noarlunga, 55, 89, 90 

Clinics—operational performance,  13, 20, 1

02, 103, 109 

Clinics—Palmerston, 54, 64, 65, 66,  89 

Clinics—Portland, 49, 118 

Clinics—Redcliffe, 18, 19, 27, 52, 78,  81, 89, 90, 91, 94, 95, 118 

Clinics—Sorell, 18, 82, 83, 94 

Clinics—Townsville (Northern  Beaches), 54, 58 

Clinics—Wallan, 27, 84, 85, 118 

Clinics—Wodonga, 49, 118 

Commonwealth grant guidelines,  10, 12, 19, 32, 45, 53, 62, 66, 72, 79,  95 

Community consultation, 44, 52, 54,  58, 104 

Completion of clinics—de

lays, 13, 

19, 79, 92, 95, 99 

Completion of clinics—time to  completion, 91 

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Table A.4

Distribution

of GP Super Clinic locations, by marginal electorate

Round

Proposed clinics in ALP-held marginal electorates

Proposed clinics in Coalition-held marginal electorates

Proposed clinics in Independent-held marginal electorates

First round (31 clinics)

4 (12.9%) 13 (41.9%) Nil

Second round (32) clinics)

9 (28.1%) 5 (15.6%) Nil

Total (63 clinics) 13 (20.6%) 18 (28.6%) Nil

Notes The percentages in the table above relate to the total number of clinics included in the analysis for the relevant funding round: 31 in the first round and 32 in the second round.

Source: ANAO analysis. For the purposes of this analysis, the clinics in Gladstone

and Karratha are

excluded as the relevant electorates in which the clinics were located were newly created for the 2007 and 2010 elections respectively and as such were not held by any political party at the time the proposed clinic was announced. The five 2009 clinics (Gunnedah, South Morang, Portland, Wodonga and Cockburn) are included in the second round as these were announced after the 2007 election.

 

Table A.5

Distribution

of GP Super Clinic funding as announced, by marginal electorate

Round

Funding in ALP- held marginal electorates

Funding in Coalition-held marginal electorates

Funding in all marginal electorates

First round (31 clinics)

$13.5 million (9.3%) $82 million (56.4%) $95.5 million (65.7%)

Second round (32) clinics) $73 million (28.0%) $41 million (15.7%) $114 million (43.7%)

Total (63 clinics) $86.5 million (21.3%) $123 million (30.2%) $209.5 million (51.5%)

Notes The percentages in the table above relate to the total funding across all electorates: $145.5 million for the first round; $261.2 million for the second round.

Source: ANAO analysis. For the purposes of this

analysis, the clinics in Gladstone and Karratha are

excluded as the relevant electorates in which the clinics were located were newly created for the 2007 and 2010 elections respectively and as such were not held by any political party at the time the proposed clinic was announced. The five 2009 clinics (Gunnedah, South Morang, Portland, Wodonga and Cockburn) are included in the second round as these were announced after the 2007 election. The figures do not take into account increases at Mt Isa and Wallan or second/third grants for Redcliffe (the total increase in grant funding for these three clinics was $13.2 million).

 

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Index A 

Audit—scope, 34 

Audit—conclusion, 10 

Audit—methodology, 35 

Audit—objective, 10, 34 

Audit—recommendations, 22, 51 

Clinic construction costs, 68, 99 

Clinic roll‐out—difficulties with  third party operators, 89, 90 

Clinic roll‐out—potential funding  shortfalls, 81, 82 

Clinic roll‐out—problems in  securing land tenure or  development approval, 12, 48, 82,  86, 87 

Clinics—analysis of locations, 41,  53, 55, 66, 71, 116 

Clinics—announcement of  locations, 8, 13, 14, 16, 26, 27, 38,  49, 51, 55

, 118 

Clinics—Berwick, 55 

Clinics—distribution of funding,  16, 54, 55, 56, 58, 116, 117, 118 

Clinics—Emerald, 54, 58 

Clinics—factors underlying  locations, 8, 14, 15, 38, 40, 41, 49,  57, 102, 103 

Clinics—Gunnedah, 49, 118 

Clinics—list of all clinics, 112 

Clinics—Lower Hunter, 54, 58 

Clinics—map of locations, 30 

Clinics—Modbury, 89, 90 

Clinics—Mt Isa, 27, 84, 86, 118 

Clinics—Noarlunga, 55, 89, 90 

Clinics—operational performance,  13, 20, 1

02, 103, 109 

Clinics—Palmerston, 54, 64, 65, 66,  89 

Clinics—Portland, 49, 118 

Clinics—Redcliffe, 18, 19, 27, 52, 78,  81, 89, 90, 91, 94, 95, 118 

Clinics—Sorell, 18, 82, 83, 94 

Clinics—Townsville (Northern  Beaches), 54, 58 

Clinics—Wallan, 27, 84, 85, 118 

Clinics—Wodonga, 49, 118 

Commonwealth grant guidelines,  10, 12, 19, 32, 45, 53, 62, 66, 72, 79,  95 

Community consultation, 44, 52, 54,  58, 104 

Completion of clinics—de

lays, 13, 

19, 79, 92, 95, 99 

Completion of clinics—time to  completion, 91 

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Department of Health and  Ageing—health infrastructure  funding, 10, 71, 93 

Funding —funding amounts, 9, 11,  26, 56, 97, 112 

GP Super Clinics policy, 8, 25, 40 

GP Super Clinics program— program guidelines, 11, 12, 43,  49, 63, 97 

GP Super Clinics program— program objectives, 96 

GP Super Clinics program— program outcomes, 54 

Grant funding process— competitive and non‐ c

ompetitive, 9, 12, 52, 53, 54, 57,  61, 62 

Health and Hospitals Fund, 85 

New Policy Proposal, 11, 39, 52 

Patient presentations, 20, 104, 105,  106, 107, 109 

Performance management  framework—External evaluation  of the program, 99 

Performance management  framework—key performance  indicators, 13, 20, 96, 97, 98, 99,  102, 109 

Performance management  framework—operational  reporting, 101, 102, 104, 107, 108 

Program Objectives, 28 

Risk ma

nagement—program  implementation risks, 11, 14, 18,  40, 52, 57, 94 

Risk management—risk  management plans, 45, 47, 61, 66,  78, 83, 93 

Selection processes— assessment of  local health needs, 10, 34, 101 

Selection processes—assessment  framework, 17, 59, 75 

Selection processes—assessment of  impacts on existing services, 64,  75 

Selection processes—assessment of  value for money, 13, 14, 17, 33,  40, 57, 66, 67, 68, 69, 71, 72, 75, 77,  86 

Structure o

f the audit report, 36 

Value for money, 13, 14, 15, 17, 33,  40, 57, 66, 67, 68, 69, 71, 72, 75, 77,  86, 99, 100 

 

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Series Titles

ANAO Audit Report No.1 2012-13  Administration of the Renewable Energy Demonstration Program  Department of Resources, Energy and Tourism 

ANAO Audit Report No.2 2012-13  Administration of the Regional Backbone Blackspots Program  Department of Broadband, Communications and the Digital Economy 

ANAO Audit Report No.3 2012-13  The Design and Conduct of the First Application Round for the Regional Development  Australia Fund  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Aud

it Report No.4 2012-13 

Confidentiality in Government Contracts: Senate Order for Departmental and Agency  Contracts (Calendar Year 2011 Compliance)  Across Agencies 

ANAO Audit Report No.5 2012-13  Management of Australia’s Air Combat Capability—F/A‐18 Hornet and Super  Hornet Fleet Upgrades and Sustainment  Department of Defence  Defence Materiel Organisation 

ANAO Audit Report No.6 2012-13  Management of Australia’s Air Combat Capability—F‐35A Joint Strike Fighter  Acquisition   Department of Defence  Defence Materiel Organisation 

ANA

O Audit Report No.7 2012-13  Improving Access to Child Care—the Community Support Program  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No.8 2012-13  Australian Government Coordination Arrangements for Indigenous Programs  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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Department of Health and  Ageing—health infrastructure  funding, 10, 71, 93 

Funding —funding amounts, 9, 11,  26, 56, 97, 112 

GP Super Clinics policy, 8, 25, 40 

GP Super Clinics program— program guidelines, 11, 12, 43,  49, 63, 97 

GP Super Clinics program— program objectives, 96 

GP Super Clinics program— program outcomes, 54 

Grant funding process— competitive and non‐ c

ompetitive, 9, 12, 52, 53, 54, 57,  61, 62 

Health and Hospitals Fund, 85 

New Policy Proposal, 11, 39, 52 

Patient presentations, 20, 104, 105,  106, 107, 109 

Performance management  framework—External evaluation  of the program, 99 

Performance management  framework—key performance  indicators, 13, 20, 96, 97, 98, 99,  102, 109 

Performance management  framework—operational  reporting, 101, 102, 104, 107, 108 

Program Objectives, 28 

Risk ma

nagement—program  implementation risks, 11, 14, 18,  40, 52, 57, 94 

Risk management—risk  management plans, 45, 47, 61, 66,  78, 83, 93 

Selection processes— assessment of  local health needs, 10, 34, 101 

Selection processes—assessment  framework, 17, 59, 75 

Selection processes—assessment of  impacts on existing services, 64,  75 

Selection processes—assessment of  value for money, 13, 14, 17, 33,  40, 57, 66, 67, 68, 69, 71, 72, 75, 77,  86 

Structure o

f the audit report, 36 

Value for money, 13, 14, 15, 17, 33,  40, 57, 66, 67, 68, 69, 71, 72, 75, 77,  86, 99, 100 

 

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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Series Titles

ANAO Audit Report No.1 2012-13  Administration of the Renewable Energy Demonstration Program  Department of Resources, Energy and Tourism 

ANAO Audit Report No.2 2012-13  Administration of the Regional Backbone Blackspots Program  Department of Broadband, Communications and the Digital Economy 

ANAO Audit Report No.3 2012-13  The Design and Conduct of the First Application Round for the Regional Development  Australia Fund  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Aud

it Report No.4 2012-13 

Confidentiality in Government Contracts: Senate Order for Departmental and Agency  Contracts (Calendar Year 2011 Compliance)  Across Agencies 

ANAO Audit Report No.5 2012-13  Management of Australia’s Air Combat Capability—F/A‐18 Hornet and Super  Hornet Fleet Upgrades and Sustainment  Department of Defence  Defence Materiel Organisation 

ANAO Audit Report No.6 2012-13  Management of Australia’s Air Combat Capability—F‐35A Joint Strike Fighter  Acquisition   Department of Defence  Defence Materiel Organisation 

ANA

O Audit Report No.7 2012-13  Improving Access to Child Care—the Community Support Program  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No.8 2012-13  Australian Government Coordination Arrangements for Indigenous Programs  Department of Families, Housing, Community Services and Indigenous Affairs 

Series Titles

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

123

ANAO Audit Report No.17 2012-13  Design and Implementation of the Energy Efficiency Information Grants Program  Department of Climate Change and Energy Efficiency 

ANAO Audit Report No.18 2012-13  Family Support Program: Communities for Children  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.19 2012-13  Administration of New Income Management in the Northern Territory  Department of Human Services 

ANAO Audit Report No.20 2012-13  Administration of the Domestic Fishing Compliance Program  Australian Fisheries Management Authority 

ANAO Audit Report No.21 2012-13  Individual Management Services Provided to People in Immigration Detention  Department of Immigration and Citizenship 

ANAO Audit Report No.22 2012-13  Administration of the Tasmanian Forests Intergovernmental Contractors Voluntary  Exit Grants Program  Department of Agriculture, Fisheries and Forestry 

ANAO Audit Report No.23 2012-13  The Australian Government Reconstruction Inspectorate’s Conduct of Value for  Money Reviews of Flood Reconstruction Projects in Victoria  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Audit Report No.24 2012-13  The Preparation and Delivery of the Natural Disaster Recovery Work Plans for  Queensland and Victoria  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Audit Report No.25 2012-13  Defence’s Implementation of Audit Recommendations  Department of Defence 

   

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

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ANAO Audit Report No.9 2012-13  Delivery of Bereavement and Family Support Services through the Defence  Community Organisation  Department of Defence  Department of Veterans’ Affairs 

ANAO Audit Report No.10 2012-13  Managing Aged Care Complaints  Department of Health and Ageing 

ANAO Audit Report No.11 2012-13  Establishment, Implementation and Administration of the Quarantined Heritage  Component of the Local Jobs Stream of the Jobs Fund  Department of Sustainability, Environment, Water, Population and  Communities 

ANAO Audit Report No.12 2012-13  Administration of Commonwealth Responsibilities under the National Partnership  Agreement on Preventive Health  Australian National Preventive Health Agency  Department of Health and Ageing 

ANAO Audit Report No.13 2012-13  The Provision of Policing Services to the Australian Capital Territory  Australian Federal Police 

ANAO Audit Report No.14 2012-13  Delivery of Workplace Relations Services by the Office of the Fair Work Ombudsman  Department of Education, Employment and Workplace Relations  Office of the Fair Work Ombudsman 

ANAO Audit Report No.15 2012-13  2011-12 Major Projects Report   Defence Materiel Organisation 

ANAO Audit Report No.16 2012-13  Audits of the Financial Statements of Australian Government Entities for the Period  Ended 30 June 2011  Across Agencies 

Series Titles

ANAO Audit Report No.50 2012-13 Administration of the GP Super Clinics Program

123

ANAO Audit Report No.17 2012-13  Design and Implementation of the Energy Efficiency Information Grants Program  Department of Climate Change and Energy Efficiency 

ANAO Audit Report No.18 2012-13  Family Support Program: Communities for Children  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.19 2012-13  Administration of New Income Management in the Northern Territory  Department of Human Services 

ANAO Audit Report No.20 2012-13  Administration of the Domestic Fishing Compliance Program  Australian Fisheries Management Authority 

ANAO Audit Report No.21 2012-13  Individual Management Services Provided to People in Immigration Detention  Department of Immigration and Citizenship 

ANAO Audit Report No.22 2012-13  Administration of the Tasmanian Forests Intergovernmental Contractors Voluntary  Exit Grants Program  Department of Agriculture, Fisheries and Forestry 

ANAO Audit Report No.23 2012-13  The Australian Government Reconstruction Inspectorate’s Conduct of Value for  Money Reviews of Flood Reconstruction Projects in Victoria  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Audit Report No.24 2012-13  The Preparation and Delivery of the Natural Disaster Recovery Work Plans for  Queensland and Victoria  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Audit Report No.25 2012-13  Defence’s Implementation of Audit Recommendations  Department of Defence 

   

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ANAO Audit Report No.9 2012-13  Delivery of Bereavement and Family Support Services through the Defence  Community Organisation  Department of Defence  Department of Veterans’ Affairs 

ANAO Audit Report No.10 2012-13  Managing Aged Care Complaints  Department of Health and Ageing 

ANAO Audit Report No.11 2012-13  Establishment, Implementation and Administration of the Quarantined Heritage  Component of the Local Jobs Stream of the Jobs Fund  Department of Sustainability, Environment, Water, Population and  Communities 

ANAO Audit Report No.12 2012-13  Administration of Commonwealth Responsibilities under the National Partnership  Agreement on Preventive Health  Australian National Preventive Health Agency  Department of Health and Ageing 

ANAO Audit Report No.13 2012-13  The Provision of Policing Services to the Australian Capital Territory  Australian Federal Police 

ANAO Audit Report No.14 2012-13  Delivery of Workplace Relations Services by the Office of the Fair Work Ombudsman  Department of Education, Employment and Workplace Relations  Office of the Fair Work Ombudsman 

ANAO Audit Report No.15 2012-13  2011-12 Major Projects Report   Defence Materiel Organisation 

ANAO Audit Report No.16 2012-13  Audits of the Financial Statements of Australian Government Entities for the Period  Ended 30 June 2011  Across Agencies 

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ANAO Audit Report No.26 2012-13  Remediation of the Lightweight Torpedo Replacement Project  Department of Defence;  Defence Material Organisation 

ANAO Audit Report No.27 2012-13  Administration of the Research Block Grants Program  Department of Industry, Innovation, Climate Change, Science, Research and  Tertiary Education 

ANAO Report No.28 2012-13  The Australian Government Performance Measurement and Reporting Framework:  Pilot Project to Audit Key Performance Indicators  Across Agencies 

ANAO Audit Report No.29 2012-13  Administration of the Veterans’ Children Education Schemes  Department of Veterans’ Affairs 

ANAO Audit Report No.30 2012-13  Management of Detained Goods  Australian Customs and Border Protection Service 

ANAO Audit Report No.31 2012-13  Implementation of the National Partnership Agreement on Homelessness  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.32 2012-13  Grants for the Construction of the Adelaide Desalination Plant  Department of Sustainability, Environment, Water, Population and  Communities  Department of Finance and Deregulation  Department of the Prime Minister and Cabinet 

ANAO Audit Report No.33 2012-13  The Regulation of Tax Practitioners by the Tax Practitioners Board  Tax Practitioners Board  Australian Taxation Office 

Series Titles

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ANAO Audit Report No.34 2012-13  Preparation of the Tax Expenditures Statement  Department of the Treasury  Australian Taxation Office 

ANAO Audit Report No.35 2012-13  Control of Credit Card Use  Australian Trade Commission  Department of the Prime Minister and Cabinet  Geoscience Australia 

ANAO Audit Report No.36 2012-13  Commonwealth Environmental Water Activities  Department of Sustainability, Environment, Water, Population and  Communities 

ANAO Audit Report No.37 2012-13  Administration of Grants from the Education Investment Fund  Department of Industry, Innovation, Climate Change, Science, Research and  Tertiary Education 

ANAO Audit Report No.38 2012-13  Indigenous Early Childhood Development: Children and Family Centres  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No.39 2012-13  AusAID’s Management of Infrastructure Aid to Indonesia  Australian Agency for International Development (AusAID) 

ANAO Audit Report No. 40 2012-13  Recovery of Centrelink Payment Debts by External Collection Agencies  Department of Human Services 

ANAO Audit Report No.41 2012-13  The Award of Grants Under the Supported Accommodation Innovation Fund  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.42 2012-13  Co‐location of the Department of Human Services’ Shopfronts  Department of Human Services 

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ANAO Audit Report No.26 2012-13  Remediation of the Lightweight Torpedo Replacement Project  Department of Defence;  Defence Material Organisation 

ANAO Audit Report No.27 2012-13  Administration of the Research Block Grants Program  Department of Industry, Innovation, Climate Change, Science, Research and  Tertiary Education 

ANAO Report No.28 2012-13  The Australian Government Performance Measurement and Reporting Framework:  Pilot Project to Audit Key Performance Indicators  Across Agencies 

ANAO Audit Report No.29 2012-13  Administration of the Veterans’ Children Education Schemes  Department of Veterans’ Affairs 

ANAO Audit Report No.30 2012-13  Management of Detained Goods  Australian Customs and Border Protection Service 

ANAO Audit Report No.31 2012-13  Implementation of the National Partnership Agreement on Homelessness  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.32 2012-13  Grants for the Construction of the Adelaide Desalination Plant  Department of Sustainability, Environment, Water, Population and  Communities  Department of Finance and Deregulation  Department of the Prime Minister and Cabinet 

ANAO Audit Report No.33 2012-13  The Regulation of Tax Practitioners by the Tax Practitioners Board  Tax Practitioners Board  Australian Taxation Office 

Series Titles

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ANAO Audit Report No.34 2012-13  Preparation of the Tax Expenditures Statement  Department of the Treasury  Australian Taxation Office 

ANAO Audit Report No.35 2012-13  Control of Credit Card Use  Australian Trade Commission  Department of the Prime Minister and Cabinet  Geoscience Australia 

ANAO Audit Report No.36 2012-13  Commonwealth Environmental Water Activities  Department of Sustainability, Environment, Water, Population and  Communities 

ANAO Audit Report No.37 2012-13  Administration of Grants from the Education Investment Fund  Department of Industry, Innovation, Climate Change, Science, Research and  Tertiary Education 

ANAO Audit Report No.38 2012-13  Indigenous Early Childhood Development: Children and Family Centres  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No.39 2012-13  AusAID’s Management of Infrastructure Aid to Indonesia  Australian Agency for International Development (AusAID) 

ANAO Audit Report No. 40 2012-13  Recovery of Centrelink Payment Debts by External Collection Agencies  Department of Human Services 

ANAO Audit Report No.41 2012-13  The Award of Grants Under the Supported Accommodation Innovation Fund  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.42 2012-13  Co‐location of the Department of Human Services’ Shopfronts  Department of Human Services 

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ANAO Audit Report No.43 2012-13  Establishment, Implementation and Administration of the General Component of the  Local Jobs Stream of the Jobs Fund  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No. 44 2012-13  Management and Reporting of Goods and Services Tax and Fringe Benefits Tax  Information  Australian Taxation Office 

ANAO Audit Report No. 45 2012-13  Cross‐

Agency Coordination of Employment Programs  Department of Education, Employment and Workplace Relations  Department of Human Services 

ANAO Audit Report No. 46 2012-13  Compensating F‐111 Fuel Tank Workers  Department of Veterans’ Affairs  Department of Defence 

ANAO Audit Report No. 47 2012-13  AUSTRAC’s Administration of its Financial Intelligence Function  Australian Transaction Reports and Analysis Centre 

ANAO Audit Report No.48  Management of the Targeted Community Care (Mental Health) Program  Department of Families, Housing, Community Services and Indigenous Affairs 

ANA

O Audit Report No.49  Interim Phase of the Audits of the Financial Statements of Major General Government  Sector Agencies for the year ending 30 June 2013  Across Agencies 

 

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Current Better Practice Guides

The following Better Practice Guides are available on the ANAO website. 

Preparation of Financial Statements by Public Sector Entities  Jun 2013 

Human Resource Information Systems - Risks and Controls  Jun 2013 

Public Sector Internal Audit  Sept 2012 

Public Sector Environmental Management  Apr 2012 

Developing and Managing Contracts - Getting the right  outcome, achieving value for money  Feb 2012 

Public Sector Audit Committees  Aug 2011 

Fraud Control in Australian

 Government Entities  Mar 2011 

Strategic and Operational Management of Assets by Public  Sector Entities - Delivering agreed outcomes through an  efficient and optimal asset base 

Sept 2010 

Implementing Better Practice Grants Administration  Jun 2010 

Planning and Approving Projects - an Executive Perspective  Jun 2010 

Innovation in the Public Sector - Enabling Better Performance,  Driving New Directions  Dec 2009 

SAP ECC 6.0 - Security and Control  Jun 2009 

Business Co

ntinuity Management - Building resilience in public  sector entities  Jun 2009 

Developing and Managing Internal Budgets  Jun 2008 

Agency Management of Parliamentary Workflow  May 2008 

Fairness and Transparency in Purchasing Decisions - Probity in  Australian Government Procurement  Aug 2007 

Administering Regulation  Mar 2007 

Implementation of Program and Policy Initiatives - Making  implementation matter  Oct 2006   

   

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ANAO Audit Report No.43 2012-13  Establishment, Implementation and Administration of the General Component of the  Local Jobs Stream of the Jobs Fund  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No. 44 2012-13  Management and Reporting of Goods and Services Tax and Fringe Benefits Tax  Information  Australian Taxation Office 

ANAO Audit Report No. 45 2012-13  Cross‐

Agency Coordination of Employment Programs  Department of Education, Employment and Workplace Relations  Department of Human Services 

ANAO Audit Report No. 46 2012-13  Compensating F‐111 Fuel Tank Workers  Department of Veterans’ Affairs  Department of Defence 

ANAO Audit Report No. 47 2012-13  AUSTRAC’s Administration of its Financial Intelligence Function  Australian Transaction Reports and Analysis Centre 

ANAO Audit Report No.48  Management of the Targeted Community Care (Mental Health) Program  Department of Families, Housing, Community Services and Indigenous Affairs 

ANA

O Audit Report No.49  Interim Phase of the Audits of the Financial Statements of Major General Government  Sector Agencies for the year ending 30 June 2013  Across Agencies 

 

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Current Better Practice Guides

The following Better Practice Guides are available on the ANAO website. 

Preparation of Financial Statements by Public Sector Entities  Jun 2013 

Human Resource Information Systems - Risks and Controls  Jun 2013 

Public Sector Internal Audit  Sept 2012 

Public Sector Environmental Management  Apr 2012 

Developing and Managing Contracts - Getting the right  outcome, achieving value for money  Feb 2012 

Public Sector Audit Committees  Aug 2011 

Fraud Control in Australian

 Government Entities  Mar 2011 

Strategic and Operational Management of Assets by Public  Sector Entities - Delivering agreed outcomes through an  efficient and optimal asset base 

Sept 2010 

Implementing Better Practice Grants Administration  Jun 2010 

Planning and Approving Projects - an Executive Perspective  Jun 2010 

Innovation in the Public Sector - Enabling Better Performance,  Driving New Directions  Dec 2009 

SAP ECC 6.0 - Security and Control  Jun 2009 

Business Co

ntinuity Management - Building resilience in public  sector entities  Jun 2009 

Developing and Managing Internal Budgets  Jun 2008 

Agency Management of Parliamentary Workflow  May 2008 

Fairness and Transparency in Purchasing Decisions - Probity in  Australian Government Procurement  Aug 2007 

Administering Regulation  Mar 2007 

Implementation of Program and Policy Initiatives - Making  implementation matter  Oct 2006   

   

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