The Department of Human Services (DHS) and Department of Education and Early Childhood Development (DEECD) use a range of service agreements to articulate accountability for service delivery and funding. The terms and conditions in schedule 1 of the service agreement may vary slightly depending on the type of agreement.

Links to standard terms and conditions are provided below.

DHS agreements

• Non-government organisations (RTF 409 kb)
• Housing (RTF 409 kb) (for non-government organisations where Director of Housing has principal funding responsibility)
• Victorian Indigenous funding agreement (RTF 3,805 kb)  (for Aboriginal community controlled organisations)
• Local government organisations (RTF 428 kb)
• Consortium (RTF 422 kb)
• Hospitals (RTF 462 kb)
• Memorandum of understanding (RFT 405 kb) (for organisations that are part of Victorian Government)
• Statement of priorities addendum (external website) (for health services funded through a statement of priorities)
• Multi-purpose services (RTF 400 kb) 

DEECD agreements

• Non-government organisations (RTF 415 kb)
• Victorian Indigenous funding agreement (RFT 3,805 kb) (for Aboriginal community controlled organisations)
• Local government organisations (RTF 428 kb)

Before the department can enter into a service agreement and fund an organisation, it must ensure that the organisation is a legal entity established under either an Act of Parliament or other relevant legislative framework.

Funded organisations are required to maintain their legal status, and advise the department within five business days should their status change.

An organisation's legal status is governed by one of the following Acts of Parliament:

• Associations Incorporation Act 1981: This Victorian Act enables many types of small not-for-profit organisations to incorporate with minimal cost. This type of legal incorporation is suited to organisations that do not fit the criteria for incorporation under the Corporations Act or Cooperatives Acts. In Victoria, Consumer Affairs Victoria administers this act. Similar legislation is available in other states.
• Co-operatives Act 1996: Organisations registered and incorporated under this Act are autonomous associations of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. Cooperatives are user owned businesses.
• Corporations Act 2001: This Act enables public or private companies that are normally created for profit to incorporate. A charity or other non profit organisation can also incorporate under this Act as a company limited by guarantee. A company limited by guarantee has no share capital, as no profit sharing is contemplated. The Act imposes certain filing and other obligations on these companies, including the lodgement of annual directors' reports and annual audited financial reports to the Australian Securities and Investments Commission (ASIC).
• Health Services Act 1988: This Act relates to organisations that provide health services within Victoria. It outlines standards and requirements that must be met by organisations covered under this Act. Organisations that provide services under this Act are required to enter into a health services agreement with the Department. Examples of organisations in this category are public hospitals, private or denominational hospitals, and community health centres.
• Individual Acts of Parliament: Organisations can be created by individual Acts of Parliament. These organisations are governed by their own legislation and in some cases are subject to other legislation such as the Public Administration Act 2004 and the Financial Management Act 1994.
• Local Government Act 1989: The department can enter into a service agreement with a council constituted under the Local Government Act. This includes city councils, rural city councils or shire councils.
• Trustee Act 1958: This Act governs the use and creation of trusts. A trust is a legal structure in which one or more persons (the trustee) may, for example, hold the legal title to property, shares or money on behalf of another person or persons.

The department can also fund individuals (known legally as a 'natural person'). In essence, they must be a person at least 18 years of age, with a mental capacity to understand the service agreement, not under any court order and not bankrupt.

Where a group of funded organisations form an alliance or consortium to deliver a service, the department can enter into different service agreement arrangements, depending on the circumstances.

The department encourages alliances and cooperation between organisations, particularly where these maximise service delivery effectiveness, quality and benefits to the community.

Primary Care Partnerships (PCPs) provide a good example of the successes achieved through organisations working together. PCPs are a core component of the primary health care and broader human services sector platform for integrated care and health promotion. PCPs have enabled coordination of planning and care pathways for many population groups at risk of poor health, including refugee and Indigenous groups, people facing difficulty due to severe drought, and people with chronic and complex conditions to prevent unnecessary use of hospital services.

Non-incorporated alliance/consortium

A non-incorporated alliance/consortium is made up of a group of separate legal entities, all working together to achieve common goals and deliver specific services. Each member organisation is separately established under an act of parliament or other legislative framework. The non-incorporated alliance/consortium, however, is not a legal entity in its own right.

All members in the alliance/consortium are listed as parties to the service agreement. Each member organisation agrees to the terms and conditions of the service agreement and is individually bound by them. Each member organisation is responsible to the other members and to the department for the actions of the alliance/consortium and service delivery. The governance arrangements between member organisations are determined by the alliance/consortium members.

Secure access to view service agrement and payment information via Funded Agency Channel can be provided to members of the alliance/consortium as appropriate.

There is no limit to the number of members in a non-incorporated alliance/consortium. One member, however, must be nominated to receive payments on behalf of the alliance/consortium and receive correspondence from the department. Members are to detemine arrangements for distribution of funding provided.

Incorporated consortium

An incorporated consortium is an arrangement when members of an alliance incorporate to form a new legal entity.

Under this arrangement, the department enters into a direct relationship with the new legal entity and not with each individual member.

Subcontracting

Subcontracting is where an organisation holding a service agreement with the department establishes a contract with another service provider to deliver some or all of the services in the service agreement. Subcontracting of services in the service agreement is only allowed with written consent from the department. More information about subcontracting is provided in section 4.6.

Under subcontracting arrangements, the organisation holding the service agreement has direct accountability to the department for the delivery of services in the service agreement. The sub-contractor holds a direct relationship with the organisation for the subcontracted services.

Every service agreement has at least two parties to the agreement. These are the organisation or organisations delivering the services and the department providing funding. Non-incorporated consortium agreements will have multiple organisation parties, made up of the consortium member organisations.

The service agreement contains the name and position title of the officers authorised to enter into the service agrement on behalf of the organisation and department. It is important that these details remain up to date. 

Organisation

An officer authorised to enter into the service agreement (contract) on behalf of the organisation must be listed in the service agreement. The authorised person/position is determined by the organisation, and the organisation's legal status may determined who can enter into an agreement.

Department of Human Services (DHS)

The following roles are authorised to enter into a service agreement on behalf of the Secretary to the Department of Human Services and/or the Director of Housing. These are:

• Executive Directors
• Some Directors
• Regional Directors

Department of Education and Early Childhood Development (DEECD)

The following roles are authorised to enter into a service agreement on behalf of the Department of Education and Early Childhood Development:

• Deputy Secretary
• Regional Directors