Some background information for contract negotiations

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Some background information for contract negotiations

Are you negotiating a funding agreement with DHHS which contains outcomes reporting requirements?

DHHS is introducing outcomes reporting into many of its contracts with funded organisations. It has a framework for doing this. To understand the framework and what you need to do, we suggest you first read How to understand the DHHS outcomes reporting framework.

Here is some more background information which will be useful for your contract negotiations.

Check whether you have to report on outcomes measures

Different size grants have different outcomes reporting requirements. The general rule is that if your grant is less than $50,000 ($50k) you don’t have to report on outcomes, just on what you are doing (your activities).

If your funding is $50k - $250k you have to report but you are allowed to provide information drawn from fewer clients (‘smaller samples’) or case studies as your performance indicators.

If your grant is greater than $250k you will have to report on outcomes measures and you will also be required to produce quantitative data.

NOTE: The Department also does a risk assessment of each grant of the risk posed by not having outcomes reporting. If there is a risk attached you may be required to report more.

Check whether the proposed outcomes and indicators being discussed with your Funding Agreement Manager are consistent with the principles of the Government’s framework

These are the principles paraphrased:

  • The performance indicators that you have to report on must take into account the capacity you have to collect and report on data. Your reporting requirements must be reasonable and in proportion to the level of funding and the level of risk.
  • The number of performance indicators should reflect the size and focus of your service. It isn’t mandatory for all the performance indicators set out for a whole Government program to be in every contract funded through that program.
  • The Government principles don’t say that there has to be a performance indicator for each of the Outcomes Statements levels (how much did we do; how well did we do it; did we achieve what we expected to achieve). The principles state that ‘ideally there should be at least one’ funding agreement performance indicator for each of these (TasCOSS’s italics).
  • Funding agreement performance indicators should be linked to a baseline, benchmark or target. You should be involved in the process of selecting these program outcome indicators and setting appropriate targets or benchmarks. The data from the first year of your grant could be used as the baseline for future years.
  • Year one of the transition to outcomes measurement can be a base-line year because there might be no previous data to compare with.

And a principle for the community sector

  • Keep collaborative in what we do – this is new and challenging and the Funding Agreement Managers are learning too.This is an opportunity for the Department to listen closely to how we go about what we do.

Finding evidence for your performance indicators: moving beyond “It’s the vibe, Your Honour!”

It’s possible that you might have a figure suggested to you as a target, for example 75% of clients achieving change, or 80% of the target population showing increased capacity. You might be tempted to agree because you’d like a high success rate for your program – but beware. Remember it’s a target – do you know if you will reach it or not?

Before you negotiate your performance indicators, think about whether you have any evidence to help establish what your performance indicator should be.

To help you with your thinking, see How to develop performance indicators.

Record the ”but what about …” factors (these are called qualifiers)

The framework says you have an opportunity to identify any important factors that need to be taken into account in assessing how your service is going in achieving outcomes, and to open a discussion with DHHS about these. This is an important opportunity which shouldn’t be lost.  (eg, What if the organisation you are partnering with is at risk of losing funding in six months?)


Once outcome measures are in your funding agreement you will be required to report on them to DHHS regularly. DHHS says that it hopes these discussions will be a chance to learn about what works for clients, and what doesn’t. We must hold them to a commitment to using outcomes reporting as a learning process, not a performance management tool.


The sector committed to participating in the development of this framework in the spirit of partnership. The Department is committed to a collaborative approach.  TasCOSS is prepared to advocate on behalf of organisations that feel that outcomes measures were not developed collaboratively.