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High investments in Grants Management ICT – past, present and future

by Chris Huckstepp •
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Roughly $22 billion* in grants was allocated by the Federal Government in 2012-13, representing approximately 6 percent of total Federal expenditure, according to the National Commission of Audit (the Audit). Reflecting this key area of government activity, Intermedium’s analysis of AusTender data, shows that at least $11 million and likely much more has been spent by Federal Government agencies on grants management system development and maintenance in the past decade. 

Intermedium expects the $11million to be a substantial under-reporting because it is based only on contracts which have the term ‘grants management’ in their description.  Those contracts which have generic descriptions (such as ‘systems development’) but did relate to grants management are therefore not captured in this figure.

The figure also does not include any internal agency spend on grants management systems (i.e. grants management development or maintenance work utilising agency staff). On this basis, Intermedium estimates that the actual spend on grants management systems in Canberra over the last decade will be in the vicinity of $30 - $45 million.

This estimate may go part of the way to explaining why the government was prepared to allocate $2.1million in the 2014-15 Budget to the Department of Social Services for the development of a business case for a potentially Whole of Government (WofG) grants management system.  (A $2.1million business case would imply a much higher multiple for the actual system spend.)

The business case funding for such a grants management system has Secretaries’ ICT Governance Board (SIGB) endorsement. 

In late 2012, SIGB “asked Finance (AGIMO), in partnership with agencies managing significant grants programs, to continue business analytical work around grants management. This work involved identifying a high level set of business processes that could apply across government” according to Grants News (a quarterly Finance publication for Federal public sector grant administration staff).

Grants News added “AGIMO was also asked to compile a taxonomy, or common language, for grants management,” and went on to say “this work will help decide whether a whole-of-government feasibility study of a more coordinated grants management ICT system should be undertaken.” 

In a related but earlier Budget initiative, a WofG central register, the Grants.gov.au initiative (Australian Government Grants System) was announced in the 2013-14 Budget, with funding of $9.1 million.

When asked if the system was being built internally or externally, a Finance spokesperson replied that “Finance is building a whole-of-government grant advertising, application and reporting system (grants.gov.au). The new application will be based on the existing, similar and successful AusTender system, which is used for whole-of-government procurement advertising, online tendering and reporting.” The spokesperson also indicated that Grants.gov.au is expected to be operational in 2016-17.

Grants.gov.au “is intended to provide a single point of reference for potential grant applicants to identify, register and apply for Commonwealth grants. It will also provide for consolidated reporting on granting activities and could encourage standardisation of application processes and forms,” the National Commission of Audit report stated.

According to the inaugural December 2013 edition of Grants News, Grants.gov.au is not intended to replace agencies’ existing grants management systems, but will instead interface with these systems.

Intermedium’s analysis of the contracts which were clearly identifiable as relating to grants management indicates that in the last 10 years, a total of 63 contracts have been awarded, but only three had a value above $500,000. These were:

  1. Redback Consulting’s $2.3 million contract for ‘Delivery of Grants Management Solution’ with the Department of Immigration of Border Protection, for the period 8 August 2011 to 30 June 2012;
  2. CA Technologies’ ‘Electronic Grants Management System Implementation Services’ signed with the Department of Environment, for the period 1 July 2008 to 30 November 2010 and valued at $1.18 million; and
  3. CA Technologies’ ‘Grants Management Services’ contract with Department of Infrastructure and Regional Development, for the period 18 March 2010 to 18 March 2013, and was valued at $731,000.

The overwhelming majority of the contracts fell within the value range of $100k and $500k. In terms of the value bands with the highest numbers of contracts, 21 contracts were in the $50k-$100k value range and 21 contracts were in the $100k-$500k value range denoting a significant amount of low level activity – much of it likely to be for the engagement of contractors. 

The Department of Social Services’ 2014-15 Budget allocation of $2.1 million for grants management was “to develop a second pass business case to further scope options to replace its grants management platform with a more flexible and integrated system”.

A further $0.5 million (over four years) was allocated to Finance to apply the Gateway Review Process to the project.

Finn Pratt, Secretary of Social Services (DSS) said in the June 2014 Senate Estimates: “In terms of the $2.1 million under that measure, this is money for, effectively, a scoping study to look at what we need to do to refresh and to redesign our grants management system, FOFMS—we will have to rename it—the FaHCSIA Online Funding Management System. Maybe it will become DOFMS or something like that.”

Pratt revealed that “the FOFMS system, which has supported these programs well for many years, is now coming towards the end of its life span. It needs to be re-engineered so that it is more flexible…”

It is understood that FOFMS runs on an Oracle Siebel 8.1 platform, and is the Commonwealth’s highest use grants management system.

DSS (FaHCSIA) has recently came under criticism by the Productivity Commission for its approach to developing NDIS business ICT systems. Intermedium reported in March 2014 that the Commission’s Review of the Capabilities of the National Disability Insurance Agency (NDIA) found that the ICT system was built prior to the finalisation of the NDIS legislation with a “compromised system” provided by FaHCSIA.

 

* The figure excludes grants for foreign aid, grants to the States and local governments, and other scholarship grants

 

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