Process for Preparing CFA Variations

Last updated October 2019

Contents

INTRODUCTION.................................................................................................................................2PURPOSE..............................................................................................................................................2WHY IS THIS PROCESS IMPORTANT?.......................................................................................................2VARIATION TO THE CFA OR DIRECT CONTRACTING?..............................................................................2WHY DO I HAVE TO VARY THE CFA?......................................................................................................3HOW DO I KNOW IF I AM ABLE TO CHANGE THE CFA?.............................................................................3EXCEPTIONS TO THE CFA VARIATION.....................................................................................................4IMPLEMENTING CHANGES IN GOVERNMENT POLICY WHERE THERE IS NO NEW FUNDING ASSOCIATED WITH THE CHANGE..........................................................................................................................................4IMPACTS OF POPULATION BASED FUNDING (PBF) ON FUNDING FOR NEW PROGRAMMES..........................4

OMNIBUS VARIATION ROUNDS......................................................................................................5FOUR VARIATION ROUNDS......................................................................................................................5HOW LONG DOES THE PROCESS TAKE?..................................................................................................5TIMEFRAMES.........................................................................................................................................5MAY OMNIBUS VARIATION ROUND...........................................................................................................5

FIRST STEPS.....................................................................................................................................6NEGOTIATING WITH DHBS PRIOR TO STARTING THE CFA VARIATION.......................................................6CONTACT PERSON IN THE DHB..............................................................................................................6WHAT WOULD HAPPEN IF YOU DID NOT GET AN AGREEMENT FROM THE DHB?.........................................6SERVICE SPECIFICATIONS......................................................................................................................6WOULD YOU HAVE TO DESIGN YOUR SERVICE SPECIFICATION FIRST, OR THE CFA VARIATION?.................7

NEXT STEPS......................................................................................................................................7TEMPLATES...........................................................................................................................................7LEGAL CONSIDERATIONS........................................................................................................................8PAYMENTS/FUNDING..............................................................................................................................8REPORTING REQUIREMENTS...................................................................................................................9

FINAL STEPS...................................................................................................................................10GAIN REQUIRED SIGN OFFS..................................................................................................................10DHB SIGN OFF PROCESS.....................................................................................................................11PRE-ISSUE OMNIBUS BRIEFING FOR RELATIONSHIP MANAGERS.............................................................11

CFA VARIATION PROCESS FLOW CHART...................................................................................13CFA VARIATION TRACKING DATABASE.....................................................................................13APPENDIX 1: SERVICE SPECIFICATIONS....................................................................................18WHAT DO YOU NEED TO KNOW IN THIS CASE?.......................................................................................18

APPENDIX 2: EXCEPTIONS............................................................................................................19APPENDIX 3: RELATIONSHIP BETWEEN A CFA VARIATION AND DHB CONTRACTS WITH NGOS................................................................................................................................................20APPENDIX 4: DEEDS OF ASSIGNMENT........................................................................................21

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INTRODUCTION

Purpose

To describe the process which staff of the Ministry of Health should follow when seeking to either:

add a service schedule to a Crown Funding Agreement (CFA), or vary a signed CFA.

Why is this process important?

Following the process ensures that:

the Ministry policy (on restricting the number of variations and recording all DHB funding and all DHB obligations in one place) is followed1;

payments to DHBs are legal - payments can only be made to a DHB pursuant to an executed Crown Funding Agreement; and

Different Business Units within the Ministry hold service budgets that can be passed onto DHBs through the CFA. However, the overall management of the CFA resides with the Variation Owners and CFA coordinator.

Variation to the CFA or Direct Contracting?

One of the first things that you need to determine is whether you need to vary the CFA to devolve the funding to the DHB or whether you can direct contract with a service provider of choice. Ask yourself the questions below to assist you in establishing the appropriate tool:

1) Is the funding for operational rather than service provision; for example, for research or equipment?

2) Is the funding and responsibility not devolved to the DHB, such as Public Health and part of Disability Services?

3) Does the Ministry wish to maintain key control and monitoring responsibility; for example, run the tender through to the decision-making?

If ‘yes’ to the above questions, then direct contracting would be the best method to release the funding.

See the Decision Tree below

1 Note: For the time being, non-devolved Public Health and National Screening Unit agreements are stand alone and not covered by this policy.

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Why do I have to vary the CFA?

Section A.6 of the Principal Agreement requires both parties to change the CFA only by written agreement. Copies of the original and changed Agreements will be held by both Parties and will be publicly available.

If you wish to devolve money to a DHB for a new service, an appropriate service schedule template must be completed to accompany the release of the funding. This is because you are placing obligations on the DHB that are not covered in other documents such as the Service Coverage Schedule. 2

When you want to release funding to a DHB for an existing service, it is important from an audit and monitoring perspective that appropriate documentation/references are included in the CFA variation to accompany the change to Schedule B (the payments schedule). This is to ensure that obligations in relation to this money are noted in the CFA.

Overall, the CFA variation process ensures that the payments are legal, and that the DHB is clear on their obligations with regard to service requirements, description and the funding that is attached to it.

How do I know if I am able to change the CFA?

You can vary the CFA only if you have delegated authority from a Manager.

2 The CFA obligates the DHB to comply with the Service Coverage Schedule, Operational Policy Framework and the Indicators of DHB Performance.

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Exceptions to the CFA variation

With the exception of Public Health, all DHB obligations should, as a general rule, be included in the CFA. It is understood that there are some side agreements with DHBs that sit alongside the CFA. These side agreements can be maintained only where a service is:

1) not devolved; and2) the Business Unit believes there may be necessary to exit a service during the term; and3) provides unilateral exit.

Implementing changes in Government policy where there is no new funding associated with the change

Sometimes a change to Government policy settings is required part way through the financial year (after the Planning Package has been released), such as a change to service coverage expectations or operational policy requirements. Even when there is no new funding associated with the policy change, implementation of the new expectation should occur through a CFA variation to ensure transparency and accountability are maintained.

The standard CFA variation process outlined below should be followed with the exception that Purchase Board sign off will not be required. DHBs will need to be consulted if formal consultation has not been part of the policy development process.

Impacts of Population Based Funding (PBF) on funding for new programmes

Each year DHBs will receive new funding to keep them at their PBFF share. This means that where a DHB has been given additional revenue during the year for a CFA variation, that additional revenue will reduce the amount of new funding they receive in the following year.

Currently the only exceptions to this are:1) PHO funding streams which are treated as a top slice to PBFF; 2) short term funding paid on invoice.

New funding for programmes will work better if it is either short term establishment, short term trial programmes or paid out to all DHBs under the PBFF system.

Any other approach may not be effective as DHBs could lose the funding after the first year.

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OMNIBUS VARIATION ROUNDSFour variation rounds

The CFA variation process can comprise of four ‘omnibus’ rounds in the financial year with the execution dates of 1 July, 1 October, 1 February and 1 May. The 1 May round however, is essentially just for rollovers of existing service schedules, not for the inclusion of new service schedules3 (these are done in the July, October, and February rounds). In other words, one omnibus variation for each DHB (essentially a covering document), with separate schedules for all varied services sitting beneath the omnibus.

If no new CFA variations are registered or “rolled over” at each round, there will be no Omnibus for that quarter. Instead there may be ad-hoc CFA variations by way of a Letter of Agreement which may start at any time throughout the year.

The execution date the date on which the variation has been signed by both parties, ie. the DHB Chief Executive and the Director General of Health (or his delegate).

How long does the process take?

Normally the process takes 3 months from initiation through to execution. The Business Unit wanting to release the funding or change the funding/reporting requirement will work with the CFA Variation Coordinator to meet the timeframes and legal requirements.

Timeframes

The quarterly timeframes for the omnibus variation process have been mandated by the Ministry’s Executive Leadership Team (ELT). Agreement to complete a variation outside the four omnibus rounds (Letter of Agreement) will only be granted in exceptional circumstances4 and with the approval of Health Legal and Finance. It is the Business Unit’s responsibility to ensure it plans ahead to work within the omnibus variation process.

The most lengthy part of the process (about 3-4 weeks) is obtaining the requisite sign offs on the omnibus; (Variation Coordinator, Health Legal, Finance, Reporting Requirements Coordinator), before the omnibus can be sent to the DHB for sign off. These sign offs are done electronically via the CFA Variation Tracking database and the CFA Variation Coordinator is responsible for sign off completion.

You then need to allow approximately four weeks for the DHB to receive and sign the omnibus variation. This means the omnibus must be sent out to DHBs at least one month prior to the intended execution date (eg. 1 May execution therefore the omnibus must be sent to the DHB no later than 1 April).

May omnibus variation round

3 New service schedules can be included in the May update, but only under exceptional circumstances and by prior discussion with the CFA Variation Coordinator.4 See Appendix 2 for an explanation of ‘exceptional circumstance’.

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This is the last omnibus variation round with an execution date prior to the end of the financial year (30 June). Therefore any budget underspends or remaining monies to DHBs for a new/existing service need to be included in this round. Notify the CFA Variation Coordinator no later than 1 March of your intent to include a variation in this round.

To reiterate, the 1 May omnibus round is only for the rollover of existing schedules, and only in exceptional circumstances will additional service schedules be included.

FIRST STEPS

Negotiating with DHBs prior to starting the CFA variation

It is important that the non-binding discussions are held between the DHB and the Ministry to agree the basis for the service before starting the variation. The Ministry should give no promises or guarantees to the DHB unless there has been explicit authorisation.

Without this early discussion, the process takes longer, relationships become more difficult to manage, and it holds up the funding release.

Contact person in the DHB

It is very important that you notify the CFA Variation Coordinator the name of the contact person in each DHB (this will be noted on the CFA Variation Tracking database).

What would happen if you did not get an agreement from the DHB?

If agreement cannot be gained between the Business Unit and the DHB then the CFA Coordinator and possible Relationship Manager should be requested to assist in the negotiation process. If agreement is still not forthcoming then enforcement could be through the Operational Policy Framework (OPF). If this is not possible, the Minister may need to be approached to provide direction. Consultation with the sector will need to be maintained.

Service specifications

Your proposed service will require the development of a specific service specification for the funding of services to be purchased in the CFA variation agreement. This will clarify the purpose of the service, its components, quality requirements and reporting requirements as per the template.

You will be helped to gain the requisite sign-off from DHBs and the Ministry of Health.

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Would you have to design your service specification first, or the CFA variation?

Ideally, it would be better to get the service specification completed first; however funding may need to be devolved out prior to completion of the service specification. Irrespective of whether a standard service specification has been developed, the service must be described in sufficient detail for the Ministry to enforce compliance.

For further information, please refer to Appendix 1.

NEXT STEPSTemplates

Complete the standard CFA variation template. This template is available on the NSFL at https://nsfl.health.govt.nz/system/files/documents/pages/variation_request_form.docx

The template contains generic statements that do not necessarily require changing. The key clauses that you need to complete are written in red within the template, and include:

Commencement date for the Service Expiry date of the Service Service description Service requirements Funding arrangements (level of funding and payment terms) Reporting requirements

The CFA Variation Coordinator will set up your chosen template in the CFA Variation Tracking database and you should complete all the drafting/editing work on your schedule from this document. The database is the central repository for schedule information and this will ensure multiple versions of the schedule are not created. If you have already drafted your schedule in a Business Unit Filing Cabinet, please ensure you send the CFA Variation Coordinator a link, so that it can be attached next to the schedule documentation in the CFA Variation Tracking database.

Note: It is not a Health Legal or Relationship Manager role to draft schedules for you – this is your responsibility. While various people in the process can provide advice/guidance, the primary accountability for the quality of the schedule rests with you, the owner.

Further drafting advice

It is not best contractual practice to attach appendices, project plans, proposals or application forms to the variation. The variation should be self-contained, in that the service description and service requirements are within the variation itself. This reduces any ambiguity about what the Ministry is funding the DHB to do.

Health Legal will assist you to develop standard clauses that link the variation with the other documents, which you may wish to refer. This could be through varying the main CFA, incorporating components into the variation, developing generic statements (if the appended documents are of an appropriate standard), or using appendices.

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Legal considerations

It is the role of Health Legal to ensure that any contract (including the CFA) the Ministry has with the DHB or other provider (including the CFA) is sufficiently robust, unambiguous and does not expose the Ministry to legal risk.

To that end, when drafting your schedules make sure that the service description (what) and the service requirement (how) are specific and succinct. This reduces the possibility of different interpretations by relevant parties.

Payments/Funding

Invoice versus Schedule B (the payment schedule)

If funding for a new initiative is for a fixed duration, funding to DHBs should be by invoice and therefore not included in Schedule B (the payments schedule) of the CFA. If you do make it payable on invoice, you need to decide what payment intervals you wish to apply.

Business Units will be required to process and ensure payment is made to the DHB in a timely manner on receipt of a valid invoice and signed CFA variation.

If funding for an initiative is ongoing, payment should be via Schedule B. Funding will only be incorporated at the next scheduled update of Schedule B once a Purchase/Funding Board has approved it and the CFA variation is signed.

If the CFA variation has not been signed in time, the DHB will be required to wait until the next round (unless it is an exception as described in Appendix 2).

Clause A.4.3 of the 2012/13 Principal CFA allows the parties to continue the terms of the Agreement in absence of the execution of a new Agreement. In order to confirm that the rollover arrangement does not apply to funding under your additional Service Schedule (if this is what you want) the following wording should be inserted:

"For the avoidance of doubt, the parties agree that the rollover arrangements set out in clause A.4.3 of the Principal Agreement do not apply to this Schedule X"

Please note: any funding agreed to be paid from the Minister’s fund also requires Corporate Finance approval. Please contact them for further information and guidance.

GST Exclusive Figures

The amount of funding to be provided must be stated as a GST exclusive figure.

Wash Ups

Finally, include any clawback or wash-up arrangements for non-performance that are necessary in the funding section of your schedule.

Supplementary Estimates

Around February each year all appropriations become fixed and the Ministry is unable to make amendments. The Business Unit must clearly state where funding is sitting for the variation, in

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order that it be tagged against correct appropriations should it be intended that funding be devolved to DHBs after March.

Appropriation rules

The Crown (including Government departments) cannot spend any public money, or incur any expenses without the authority of Parliament. This longstanding feature of our constitutional arrangements is enshrined in the Constitution Act 1996 and the Public Finance Act 1989. Such an authority is generally called an appropriation, and the Government and its departments must spend money (including contracting) within the relevant appropriation. Therefore, if you want to complete a variation to the CFA with funding spanning over the current financial year then the following clause will need to be included into the funding section of your schedule.

“Notwithstanding this Variation, in accordance with section 10 of the Public Finance Act 1989 (and any subsequent amendment to it which is of the same effect), both Parties acknowledge that future agreements and payments to the DHB for services of the type covered by this Variation beyond the 2011/12 financial year is contingent upon the appropriation of adequate levels of funding under an Act of Parliament for that financial year.”

DSS Clause Reference

For Disability Support Services schedules adding funding for any of the omnibus rounds, changes must be relayed to Agreement Administration, Sector Services (by the DSS owner varying the schedule) by way of a signed Agreement Request Form. No document is to be generated by Agreement Administration, but CMS must be updated to reflect the extra service, and to provide mechanism for payment. Clause 4.3 in the Variation Schedule should make reference to the CMS contract number as follows.

"4.3 Invoices must be addressed to [title of responsible Business Unit finance manager], quoting CMS agreement number xxxxxx-xx."

Reporting requirements

Reporting requirements are an important part of the variation as they essentially set out how the Ministry will monitor DHB delivery of the services in the variation. You may wish the DHB to provide you with reports such as quarterly updates on progression of the initiative, or in any manner that is most appropriate for the service. Without some measure of feedback, it may be difficult to formally ascertain how the DHB is performing in respect of your initiative/service. However, reporting requirements should be balanced against the need to keep the compliance costs for DHBs to a minimum.

If reports are required reporting should be through the Quarterly Reporting process administered by the Monitoring Team, DHB Performance. This ensures that a formal reporting is clearly documented by way of the Quarterly Reporting database. Performance failures are also easier to highlight via this process.

If the reporting requirements are to be via Sector Services, you need to check whether this will be standard reporting or new reporting is to be created. DHBs may incur a cost to obtain the information required to report on your variation.

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FINAL STEPSGain required sign offs

Once you have completed the draft schedule template, all appropriate sign offs must be completed.

Once sign offs are completed, all the approved individual schedules for each DHB are then collated and the omnibus template attached to the front. The complete omnibus document will then be moved through a high level sign off process by the CFA Variation Coordinator.

Where possible, the sign off process has been automated via the electronic authorisation process on the CFA variation tracking process. Variation owners are also encouraged to keep copies of all their schedule documentation, authorisations and supporting correspondence for their records.

Note that no one in the approval trail below is under any obligation to assist you if they cannot see from the database/your paper trail that the authoriser prior to them in the approval process has authorised your schedule. While various people in the process can provide advice/guidance to you, the primary accountability for the quality and completeness of the schedule sits with you, the owner.

The CFA Variation Coordinator will ensure that a signed original of the variation is filed with the principal CFA. You are responsible for your own Business Unit filing.

Further explanation:

Schedule sign offsSign-off from this person … … means that:1) CFA Variation Coordinator the correct template has been used

the change sits with the appropriate signed CFA the service descriptions are specific enough; the reporting

requirements relate to the service descriptions.2) Variation/schedule owner the variation has been thoroughly spell checked and

proofed for errors, quality, accuracy and completeness. the detail in the schedule adequately reflects the service

and funding requirements. the DHB has been involved in the negotiation of this

variation.3) Health Legal any legal risks to the Ministry are accounted for.4) The appropriate Business Unit

Finance person the payment terms in the template are correct. the funding has been allocated to this service.

5) The appropriate Business Unit Manager

the variation’s final wording is approved for signing the additional expenditure is accounted for.

Omnibus sign offs (organised by CFA Variation Coordinator)1) Variation Coordinator the correct omnibus template has been used

variation and schedule numbers are appropriately assigned

the schedules sit within the appropriate omnibus for each DHB.

2) Variation/schedule owner the variation has been thoroughly spell checked and proofed for errors, quality, accuracy and completeness.

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the detail in the schedule adequately reflects the service and funding requirements.

the funding has gone through a Purchase/Funding Board, has gained approval and a minute of the meeting is attached (if applicable).

the DHB has been involved in the negotiation of this variation.

3) Health Legal any legal risks to the Ministry are accounted for and the omnibus documentation is legally robust.

4) DHB Finance the payment terms in the omnibus are correct and the DHB cash profiles can be correctly updated and tracked.

5) Reporting Requirements Coordinator

the reporting requirements are appropriate and are noted for inclusion in the Quarterly Reporting process (where applicable).

6) DHB’s Relationship Manager they are satisfied that the omnibus appropriately accounts for any impacts on the Principal Agreement and they are aware of any new services the DHB is obligating itself to deliver.

7) DHB Chief Executive the DHB agrees to deliver on the obligations outlined in the omnibus in exchange for the funding.

8) DG of Health this sign off occurs after variation is returned signed from the DHB. Sign off executes the CFA variation.

The NHB Manager signing on behalf of the DG has delegated authority on behalf of the Minister of Health to sign both Main Principal CFAs and also subsequent CFA Variations

DHB Sign off process

Should any queries regarding your schedule be made in the process of the DHB signing the omnibus variation, the CFA Coordinator will be available for advice.

As the Variation Owner, it is your responsibility for the accuracy and completeness of the information in your schedule.

Pre-issue omnibus briefing for Relationship Managers

It may be necessary to have a pre-issue omnibus briefing due to issues with individual schedules that may arise during the DHB sign off stage. These will be organised as required.

If appropriate, Relationship Managers can receive a briefing on the background/content of the schedules in the omnibus, any potential issues/risks to note and who the contact people are for individual schedules. This will enable better management of any ad-hoc issues arising during DHB sign off on the schedules in the omnibus, should these arise.

EXPIRATION OF CFA VARIATIONS

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CFA variations eventually expire and it is the Variation Owner’s responsibility to ensure that DHBs and the CFA Coordinator are informed of what will happen to the service/funding.

The Variation Owner needs to ensure that funding allocations and service requirements of DHBs are resolved upon expiry of the CFA Variation (ie, funding is properly devolved, a new variation is executed, or services will no longer be funded or required).

Service Coverage Schedule

Once a CFA variation term is completed and it is decided the service will be devolved to the DHBs to manage and fund, the Service Coverage Schedule needs to be updated to reflect this so that the obligations for DHBs to fund the service is clear.

Devolving CFA variations

Early communication with the DHBs around proposed devolution is the best policy. Funding should ideally be devolved from the start of a financial year (from 1 July). Note that the complete process could take between 1-2 months so Variation Owners need to start this process as early as April/May.

Note: If the funding being devolved relates to mental health and/or addiction services, then you need to inform the Mental Health Team so ring-fence calculations can occur as required.

To start the devolution process, please contact:

CFA Coordinator – Michelle Goh

DHB Funding Advisors – Philip McConville/Byron Gill

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CFA VARIATION PROCESS FLOW CHART

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1. Variation Owner gains Business Unit approval for expenditure (if applicable).

2. Variation Owner negotiates with DHBs for provision of service.

3. Referral to CFA Variation Coordinator.4. Schedule Owner engages with service specifications

advisors.

5. Variation Owner is sent schedule template for drafting and completion.

6. Variation Owner refers completed draft to Health Legal.

Variation – First Steps

15. Omnibus variation with DHB for signing.

16. DHB return omnibus variation to Ministry for signing.17. DDG sign off and execution.

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Variation – Next Steps

Omnibus – sign offs

Omnibus – execution

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CFA VARIATION TRACKING DATABASEThe CFA Variation Tracking database has been designed to a clear and logical process for sign off and easy access to reports and monitoring tools. The database simplifies the movement of the whole omnibus variation, and supporting schedules, reducing the time for sign off process.

Step 1

CFA Variation Coordinator configures a new omnibus variation by completing the new omnibus screen. Once this is set up, the CFA Variation Coordinator then configures a new schedule (which forms part of the omnibus) by completing the new variation screen. This schedule will either be in the standard template form, or as a tailored schedule template (if available). All the necessary people, including the Variation Owner will be maintainers of this document.

The CFA Variation Coordinator must have all the relevant information for your schedule at the outset, such as the DHB contact person, funding amount etc.

Step 2

The CFA Variation Coordinator sends the new schedule on to the Variation Owner in the Business Unit. The Variation Owner will receive email notification of this variation and the requirement to complete it.

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7. Health Legal edits draft schedule.8. Health Legal signs off on schedule documentation9. Business Unit Finance sign off schedule documentation.

11. CFA Variation Coordinator sign off and collation of all schedules into omnibus.

12. Health Legal sign off on omnibus.13. Finance sign off on omnibus.14. Reporting Requirements Coordinator sign off on

omnibus.

Variation – Final Steps

Omnibus – with DHB

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The doc-link will take the Variation Owner into the CFA Variation Tracking database. It is at this time that the Word document is opened and the schedule drafted. It is important that all work on the schedule is completed from this link, to prevent multiple versions being created. In instances where the draft schedule is already contained in a Business Unit Filing Cabinet, you will need to send the CFA Variation Coordinator a link to your schedule, so that it can be attached alongside the schedule documentation in the CFA Variation Tracking database.

Step 3

Once this is completed, the Variation Owner needs to access the authorisation tab in the database and sign off as appropriate. This will automatically forward the schedule to Health Legal for review. Health Legal will make edits to the schedule where necessary. They may authorise the schedule (in which instance it is automatically emailed on to the Business Unit Finance person for authorisation), or they will decline it, in which case it returns to the Variation Owner for further editing. This process continues until all three schedule sign offs are completed.

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STEP 4

Once the CFA Variation Coordinator is satisfied that all the schedules are fully authorised in the database, the CFA Variation Coordinator will collate this schedule into the omnibus document. The omnibus will then be electronically processed through the high level sign offs in the database. Once all required omnibus sign offs are complete, the CFA Variation Coordinator authorises the omnibus on the database and the omnibus is automatically emailed to the DHB for signing.

STEP 5

Upon receipt of the hard copy DHB signed omnibus, the CFA coordinator prints out and gives this to the appropriate DDG for signing. When the DDG has signed the omnibus variation, this is loaded to the CFA Tracking database and an electronic copy is sent back to the DHB for their records.

Note: For DSS agreements, a copy of the signed CFA variation also needs to be sent to scannedagreements@health.govt.nz and providerinvoices@health.govt.nz so these can be activated in CMS and invoices can be processed.

STEP 6

At each stage of the sign off process, there is opportunity to search the database for status reports. You can search by DHB, by Status etc. All information pertaining to a particular variation for a specific DHB can be accessed.

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APPENDIX 1: SERVICE SPECIFICATIONSThe definitions and language in service specifications are useful for supporting:

Quality improvement – making comparisons of aspects of service delivery Equity – demonstration of intra and inter regional comparisons of service availability Service planning – consistent analysis of service utilisation and provision thus facilitating

inter service, and inter DHB planning as well as informing national policy planning Service integration – further work towards common understanding of the components of

service and linkages between them Safe service delivery – a mechanism for ensuring that minimum service specific standards

are universally understood and are consistent throughout the sector.

What do you need to know in this case?

1) DHBs already have access to standard contract documentation: long form, short form and letter of agreement. These are available on the NSFL website: https://nsfl.health.govt.nz/service-specifications/current-service-specifications

2) DHBs have access to standard service specifications, which are worked into the standard contract forms to complete the full contract. These are also available on the NSFL website.

3) The stewardship of the NSFL rests with the Accountability Team. One of the ongoing programmes of work within the NSF is the development of service specifications.

4) The project work for developing service specifications is coordinated by the Service Specification Project Executive, with a secretariat provided by the Accountability Team.

5) When developing a service specification, guidance and assistance will be provided by the Ministry Contact. When this is done, the NCG will ratify and promulgate on the library.

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APPENDIX 2: EXCEPTIONSAs the CFA variation process aims to ensure consistency and predictability for all stakeholders, the process should be followed wherever possible. There will be times when exceptions are made and this will be on a case-by-case basis, through the CFA Variation Coordinator.

An example of an exception to the process might be where the funding variation cannot be funded through DHB management of their funds or cash advances.

All exceptions need to be signed off by the DDG and the DDG from the initiating Business Unit. All exceptions will be tracked, monitored and reported at the end of the financial year. This will enable trend analysis and ongoing continuous improvement strategies to be developed and initiated.

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APPENDIX 3: RELATIONSHIP BETWEEN A CFA VARIATION AND DHB CONTRACTS WITH NGOs

When a CFA is varied to include new or additional service funding, that funding will either be spent by the DHB’s provider arm, or the DHB will contract with an NGO for service delivery.

For the DHB provider arm the CFA Variation only is required.

When contracting with an NGO, there may be situations where it is appropriate for the Ministry to be involved in helping the DHB in determining the service specification (see service specification section) that will form part of the NGO contract. This will especially be so where funding is part of a nationwide programme, involving multiple DHBs and a number of providers. If left to the DHBs, there may be confusion created for payment agencies eg Sector Services, and providers, as well as by DHBs.

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APPENDIX 4: DEEDS OF ASSIGNMENTFirst scenario – DHB to MOH

Third Party has a current agreement/contract with the DHB Agreement/contract to be transferred/assigned to the Ministry

Second scenario – MOH to DHB

Ministerial direction and Ministry ELT decision that multiple contracts and attached funding is to be devolved to DHBs

If numerous contracts then assignment instrument usually will be Order In Council (OIC) (eg. DSS for Older People)

Step One: Negotiation

Negotiation between all parties is required i.e. the Contractor, Ministry and DHB Usual contractual requirement that parties to the agreement consent to assignment

Step Two: Reaching agreement

All parties agree whereby one party to the contract assigns to non-contracting party Once agreement is reached it is best to document it in an email or letter to all parties to ensure

that an accurate record is kept

Step Three: Choosing an assignment tool

OIC – only if there are numerous contracts to devolve (such as Disability Support Services)Lengthy drafting process with Parliamentary Counsel Office

Deeds – are more commonly used Advantage of being faster and without needing the involvement of Cabinet, Ministerial or

ELT decisions on OICs

Step Four: Deed execution

Once all parties have signed (with a witness) Deeds are executed Usually signed by Board Chairpersons, DDGs or other senior office holders Ensure enough time is allocated for delays

Process thereafter

Only once the deed is signed do you need to consider how this needs to be reflected in the CFA (whether it is adding more obligations to the DHB or taking some off them).

The CFA variation is a tool to transfer the money from the assignor to the assignee. This may require the preparation of an additional service schedule to the CFA, or in some

instances, a reference in the CFA to the obligations and funding contained in the deed. This will depend largely on whether your service has published service specifications on the Nationwide Service Framework Library.

Contact the CFA Variation Coordinator and initiate the process – you will need to work to the timeframes for the next omnibus variation round.

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