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MEMORANDUM TO: Jenia Tishkina-Norman and Yvonne Gaudet, Calgary PDD Region
FROM: Calgary Service Providers
cc.
DATE: April 18, 2016
Marika Giesen, HS Contract Alignment Committee Alex Hillyard, Calgary PDD and Ann Nicol, ACDS
Thank you for meeting with the Calgary Service Providers’ Executive Committee. As promised, we are providing you with collective input on the new contract. The Calgary Service Provider Council members have significant concerns: 1. The contract fails to reflect an understanding of the realities of managing complex and varied organizations that provide dynamic and responsive services to individuals and families, and 2. The many improvements to the contract made over the past seven years by the joint Service Provider and government contract committee are not reflected. All of the changes painstakingly made over the past number of years added important consideration for the tri-partate nature of the agreement to incorporate the interests of agencies, individuals receiving services, and the government. Those changes also ensured a reasonable sharing of liability and risk while recognizing respective authorities and expertise of Service Providers and the government – an appropriate contractor-contractee relationship. These crucial principles are no longer reflected. The following pages provide more detailed concerns and you will find that these align with those from other Regions as well as ACDS. We add our voice to these same concerns. Calgary Service Providers that are non profits have also conveyed these concerns to their Boards of Directors as a required step because of the Boards’ legal duty to oversee governance, including liability, on behalf of their community organizations. Finally, we emphatically recommend – as a feasibility issue if nothing else – the implementation of the existing contract to allow for time to introduce a new contract that meets the goals of government while supporting the mutual objectives of supporting adults with developmental disabilities to have full lives with choice, in our communities. As in the past, we offer our commitment to provide our counsel in that process. Thank you for considering the voices of Calgary Service Providers. On behalf of the Calgary Service Provider Council,
Erin Waite, Chair, Calgary Service Provider Council Agency Director, Connections Counselling and Consulting Foundation erinw@connectionscounselling.ab.ca 403 209 1100
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RESTRICTED AND DEFINED EXPENDITURES Fee for Service contracts define total dollars for an outlined criteria of service. Contractors (Service Providers) then use the contracted dollars as necessary to meet the criteria. This exists in the current contract between Service Providers and the Alberta Government. This also exists in the new contracts for Child and Youth Services (Child and Youth Services Block Funding and Family Support for Children with Disabilities (FSCD) Agreements. However, the terms outlined in the new PDD Contract are more rigid and do not allow the same flexibility in use of contract dollars to deliver the services. NOTE: For all contracts, current and new, full financial reporting takes place, providing the Alberta Government with the monitoring and control of funds. REFERENCES CURRENT PDD CONTRACT CFS NEW CONTRACT CFS NEW BLOCK 18. Provided the Service FUNDING AND FSCD Schedule B: Provider is delivering the 1. Pricing: Identified Service or AGREEMENT Services in accordance with 3.3 The Contractor may Deliverable and the Fixed the Agreement, the Service allocate expenditures within Price Expenses: Provider may reallocate funds (a) The Contractor’s pricing and between existing within and between the Schedule B expenditure as specified above is Administration Expenditures, categories (Service Delivery, inclusive of all expenses Direct Service Costs and the Program costs, Facility costs, and as such the Province Service Delivery Expenditures Vehicle costs, Administration, will not be obliged to pay without prior Minister and Capital Assets), with the any expenses incurred by approval. exception of: the Contractor in the i. to/from the Capital Assets performance of the section Services. ii. if the annual cumulative reallocation exceeds 20% of the original budget for the expenditure category of which the funds are being transferred to. NEW PDD CONTRACT: With the new contract, the listing of eligible/ineligible administration items puts restrictions on a Service Provider’s ability to manage operations. It significantly limits effective management of budget and service delivery. For example, restrictions in IT equipment contradict the Government’s requirements of Service Providers for reporting. Similarly, listing eligible items by brand name is unduly restrictive and impractical, if that brand goes off market or is priced higher than equivalent items. (eg. iPhones are eligible) Annual audits and detailed invoicing are required of Service Providers providing oversight for government. The addition of a detailed list of eligible expenses does not improve controls. Impact • Service Providers, already dealing with challenges, given no increase in Service Delivery and Administration funding since April 2014, will face additional burdens with these restrictions • Discrepancy created in operations for Service Providers with multiple contracts, as these Expenditure requirements and eligible/ineligible lists are not a part of other HS Contracts
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SURPLUS Costs, including service delivery and administration, vary from month to month and are subject to unanticipated situations (i.e. resources needed in crises). Service Providers use Service Delivery and Administration allocations to cover deficits, or where possible, towards innovation in service delivery – there is no ‘surplus’ or ‘extra’ funds. For the past two years, PDD has consistently asked Service Providers to take in additional clients, approving service dollars but without adding to service delivery and administration. This is not sustainable. Service Providers have long advocated for the spirit of Fee for Service, to receive the contracted dollars and have the autonomy to allocate as needed to provide the contracted services, without restrictions and micromanagement. This new contract template goes in the opposite direction, and is not consistent with other contracts within Human Services. “It is important that institutional funders, individual donors, and other community leaders understand the need for small and midsized nonprofit organizations to build and sensibly use their unrestricted net assets to create an operating reserve that achieves financial sustainability.” White Paper: Nonprofit Operating Reserves Initiative Workgroup
REFERENCES New Contract Template – AB Human Services website FAQ Q9 Response: “If a Contractor is projecting a surplus during the term of its contract, and would like to use the excess funds to build capacity, support innovation or otherwise improve the quality of services, it may contact the Province with a proposal to renegotiate the contract. If the contract is not renegotiated, surplus funds finds will be returned to the Province at the end of the contract.” Impact • Operating reserves are a foundational financial concept that link to the sustainability of non profit and for profit organizations alike. As developmental disabilities are lifelong, agencies providing supports must focus on sustainability to ensure client safety and service continuity. • The contract allows the government to cancel at any time with 90 days notice. Agencies with long-term staff will have severance obligations that exceed 90 days and carrying reserves is the only way to cover that liability. • The government publishes statements about valuing long-term staff and expertise but the 90-day cancellation combined with no reserves results in an inability to retain long-term staff. • Increased administrative work for Service Providers with the reporting of service delivery and administration allocation usage, additional work to prepare proposals for strategic use of ‘surplus’ dollars • Delayed implementation of capacity building, innovation and improved services strategies with the wait time to have proposals ‘approved’. Reliance on Government decision discourages these initiatives. • Increased restrictions and mandated return of ‘surplus’ will make service delivery unsustainable for most Service Providers. • Government ability to assess surplus from previous fiscal years extends financial risk and potential for clawback of monies for up to 18 months later.
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DISPUTE RESOLUTION The language of this contract (examples noted previously) signifies to Service Providers an imbalance of authority vs. responsibility. Decision-making for funding allocations, risk management, and service delivery rest with the Government, without sufficient knowledge of individuals and the intricacies of service delivery. Making decisions based on limited knowledge and indirect experience could have major ramifications for Service Providers, their employees, the delivery of services, and most important, the individuals receiving service. The lack of a dispute resolution in this contract eliminates an agency’s ability to contest decisions made by Government “sole discretion” and can affect delivery of services, Agency operations and finances. Impact • If Service Providers, for legal, moral or ethical reasons, disagree with a decision made by the Government, their only recourse is to cease operations.
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CONTRACTOR vs. EMPLOYEE As contracted organizations that must meet all standards of companies (either non profit or private, for profit), we are confused by clauses within the contract that appear to convey an employer-employee relationship. This requires careful consideration of the implications for agencies and for the government. Most important, for agencies, it will challenge quality and responsiveness to depend on direct input from people further removed from the individuals, rather than the people who know individuals well and have specialized expertise and training. REFERENCE NEW PDD CONTRACT: New Contract Clause 17. RELATIONSHIP OF PARTIES: “The relationship of the Contractor to the Province in performing the Services under this Contract is that of an independent contractor, and nothing in this Contract is to be construed as creating an agency, partnership, joint venture or employment relationship between the Contractor and the Province.” Clauses with “Employee” Implication • 3.1 “… and follow any directions from the Province regarding the performance of the Services.” • 3.5 “Acknowledge and agree that the Province may provide reasonable directions to the Contractor…” • 4.4 a) “… develop and carry out an action plan approved by the Province to re-establish compliance with the Standards;” • 10.2 a) “remove any employee, volunteer, subcontractor or agent of the Contractor engaged in providing the Services upon the written request of the Providence within the time limit indicated in such request; “ • 10.2 b) “only replace such removed employee, volunteer, subcontractor or agent of the Contractor upon getting the prior written approval of the Province…” 14.3 “Should the Contractor receive an access request under the FOIP Act, the Contractor shall not respond to it, but shall immediately forward the access request to the Province for further handling.” Impact • Employee direction coming from funder is inappropriate. Decisions on supports and services need to be made as close as possible to the individual – by the people who know the individual best – not further away by those with no relationship. • Service Providers, already dealing with challenges given no increase in Service Delivery and Administration funding since April 2014, face additional burdens with these restrictions. • Discrepancy created in operations for Service Providers with multiple contracts, as these Expenditure requirements and eligible/ineligible lists are not a part of other HS Contracts
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