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Service Agreement Information Kit for Funded Organisations

2.7 Management of Service Agreements

When entering into a Service Agreement, the organisation and the department acknowledge the partnering approach to working together and they commit to acting reasonably and in good faith to achieve objectives under the Service Agreement.

When negotiating and managing the Service Agreement the department and organisation are to consider the partnership principles, reflected in the applicable Partnership Agreement or Partnership in Practice Memorandum of Understanding described within chapter 1.

Role of departmental Service Agreement contacts

Each organisation is assigned a departmental Service Agreement contact who is responsible for overseeing the Service Agreement and variation processes for the department.

These departmental Service Agreement contacts are also responsible for monitoring an organisation's performance and adherence to departmental policy and program guidelines and requirements. They play an important role in building collaborative relationships and advising an organisation on local service planning.

Calendar of Service Agreement events

The calendar of Service Agreement events sets out key dates and actions that organisations and department staff should be aware of. This includes:

  • when Service Agreement variations are processed
  • when financial reporting requirements are due
  • information on the release of the Victorian budget and publication of policy and funding plans/guidelines
  • annual price indexation processing.

In the standard Service Agreement business cycle, variations to Service Agreements will be processed on a monthly basis, where required, to ensure that organisations receive funding for new or revised services in a timely manner.

Late June

Annual Service Agreement transition

Current year funding cannot be changed after the first week of June. A new future year of funding can be viewed on Funded Agency Channel website (where applicable). At the end of each three year business cycle, Agreements with approved future year funding are rolled over for the next four year Agreement cycle.

1 July

Policy and funding guidelines

Policy and funding plans/guidelines published online.


Annual Price Indexation

Annual Price Indexation applied to eligible activities for the new financial year and future years. Increases are backdated to 1 July and paid on or before the next scheduled payment. No action is required by organisations. Advice of increased funding provided to organisations.


First Tuesday of each month

Monthly Payments

Regular monthly payment is made.

Second Tuesday of each month Health services are paid their health related funding on the second Tuesday of the month.

1st of month

Monthly Variations

Variations Open: Changes that have been negotiated with an organisation are entered into the Service Agreement Management System.
Organisations can view and check changes when finance approval is completed by the department. Variations are not normally made in July or June and a shorter window is available in December due to pay equity indexation processing.

18th of month

Variations Published: Organisations can view proposed changes on the Funded Agency Channel website. Email advice sent to department and organisation signatories to undertake final check of changes.

Note: If 18th of the month falls on a weekend, variations will be published on the next business day.

23rd of month

Variation becomes effective as long as department signatory has approved. Where funding increases are backdated, any applicable funding arrears payments are processed.

Early May

State and federal Budget

Release of state and federal budget

30 September

(or other date agreed)

Fire safety certification

Organisations that provide bed based services are required to complete Fire Safety Certification annually by 30 September or at a time agreed by the department.

As required (dependant on reporting cycle)

Annual Financial Accountability Requirements

Financial Accountability Requirements (FAR) reporting dates are based on the financial cycle an organisation operates on and the organisation's legal status.

The Financial Accountability Requirements are to be submitted to the department within three months of the end of the organisations reporting cycle, or within a week of the organisation's AGM.

FAR reporting is being consolidated into the Service Agreement Compliance Certification (SACC) for reporting periods 1 July 2015 to 30 June 2016 and later. The initial SACC will be due from 30 September 2016.

As required (dependant on reporting cycle)

Annual Risk Management Attestation

Risk Management Attestation reporting dates are based on the financial cycle on organisation operates on and the organisation's legal status. They coincide with FAR reporting dates. 

Risk Management Attestation is also being consolidated into the Service Agreement Compliance Certification (SACC).

As required (dependant on reporting cycle)

Annual Service Agreement Compliance Certification

Commencing with the reporting period 1 July 2015 to 30 June 2016, the Service Agreement Compliance Certification (SACC) will consolidate Financial Accountability Reporting, Risk Management Attestation, Safety Screening Certification and Privacy and Data Protection Certification.

The due date for the SACC is three months after the end of an organisation’s reporting period, or seven days after an organisation’s AGM.

Organisations can update their AGM date via the Service Agreement Module on the Funded Agency Channel and the due date for their SACC will be automatically updated.

Negotiating Service Agreements

The department and the organisation are to act reasonably and in good faith when negotiating changes to services and funding under the Service Agreement. This includes:

  • ensuring that both parties discuss proposed changes to services being delivered, funding under the Service Agreement and local service planning
  • working collaboratively to ensure service delivery issues are adequately addressed, including looking at the service mix where necessary
  • being transparent and open regarding policy and service delivery developments and performance in the delivery of services
  • acting to resolve any dispute arising out of the Service Agreement in good faith and in a timely manner.

Changes to Applicable Departmental Policies

Schedule 1 of the Service Agreement provides organisations with a list of applicable departmental policies. Some of these are contained with in Chapter 4 of the Service Agreement Information Kit. Program and service specific policies are held on other websites.

Organisations can view a list of program and service specific applicable departmental policies in the Service Standard Guidelines tab in the Service Agreement Module on the Funded Agency Channel.

Whenever applicable departmental policies are updated, the department will provide notification to organisations through an email from the Funded Agency Channel. The notification will provide a summary of the change and the suggested audience. The notification will also provide a direct link to the changed policy. A similar process is applied for any new policies.

Meetings between the organisation and the department

To effectively manage Service Agreements, the representatives of the organisation and the department need to maintain a strong working relationship which enables open communication.

Annual whole-of-agreement meetings

It is recommended that organisations and the department meet at least once annually to discuss the Service Agreement. These meetings should:

  • provide organisations and the department with opportunities for discussion and feedback from a whole-of-agreement perspective on the Service Agreement, service delivery and performance in meeting client needs, including discussion of Desktop Review outcomes (where applicable)
  • provide an opportunity for immediate response or timely follow up of any issues identified in the discussions
  • allow for strategic discussions relating to emerging trends, organisational priorities and service developments to support local service planning
  • increase the department's understanding of current or anticipated challenges faced by the organisation to meet the requirements of the Service Agreement over the coming year
  • increase the department's understanding of successes achieved by the organisation
  • improve the organisation's knowledge of the priorities of the department and current Victorian Government initiatives
  • include discussions on relevant topics determined by the organisation and the department
  • be conducted in accordance with partnering principles set out through the department and the organisation's relevant partnering agreement (opens in a new window)
  • cover content that is not already discussed through other mechanisms.

In general the lead division/group/region for the Service Agreement will be responsible for organising the meeting with the organisation and for ensuring relevant information is collected from all other relevant areas for the meeting.

The organisation and the department should appoint representatives that are best able meet the objectives of the meeting and to make decisions as required.

Other communication

The organisation and the department throughout the Service Agreement period should meet or communicate as required regarding the Service Agreement requirements and the delivery of services. Requests of either the organisation or the department should be, where possible, responded to in a timely manner. An organisation and the department can agree to meet more regularly throughout the year regarding particular service plans due to the nature of the services being delivered.

Monitoring of Service Agreements

When departmental staff monitor Service Agreements they apply the Funded Organisation Performance Monitoring Framework. The framework applies risk management principles to monitor organisation service sustainability and quality. It assists the Department of Health and Human Services and the Department of Education and Training in early identification of risks to ensure the ongoing provision of quality services and avoid the consequences of service failure. Further information can be found in Chapter 4.10.