Services to Review Communities Shared Cost Model

Background Shared Services Cost Model The Department of Communities (the Department) currently operates a shared services and overhead allocation model to allocate such costs, for reporting purposes and charging regimes between entities, between the three major business areas (i.e. Child Protection, Disability Services Commission and Housing) that came together to form the Department as part of Machinery of Government changes in 2017. This allocation model allocates (circa) $350 million of shared services costs, including the allocation of over 1,000 staff. The model has been in operation for several years and key stakeholders would like it reviewed to consider: How the allocation model currently operates, both from the perspective of its methodology and the impact on divisional and Departmental budgeting.The comparison of the current allocation model against best practice.If other options exist for a more efficient, effective, and transparent model.Recommendations for an improved model. Full-Time Equivalent (FTE) Allocation Tool The Department currently operates a separate FTE allocation tool to accommodate certain reporting requirements, including allocation of FTE for preparation of Budget papers. This tool is independent of the shared cost model; however, it is used for apportioning FTE. The Department seeks for this tool to be reviewed to determine: If the tool is currently operating effectively.Whether the tool can be enhanced.If any processes and amendments should be put in place.How the tool compares with the HR database, and if they can be aligned for consistent reporting of FTEs for the Department. Outcome Based Management (OBM) Model The Department operates a separate OBM model that allocates expenses by services for Key Performance Indicator reporting that is used for preparation of budget papers and annual report reporting. The Department is seeking to strengthen the alignment between financial cost data and service performance reporting under its OBM framework. Several costs currently remain unattributed or pooled at a corporate level, limiting the granularity and transparency of reporting against approved OBM Key Performance Indicators. The Department seeks to have this model reviewed to: Evaluate current cost attribution practices.Develop more granular mapping of costs to OBM Key Performance Indicator’s (KPIs).Support the establishment of robust, auditable allocation methodologies for ongoing performance reporting.