Financial Framework for Disability Services Launched

A National Costing and Pricing Framework for Disability Services has been released to help mission driven organisations understand the cost of service delivery and to help them plan effectively for the NDIS.

The Framework has been developed by National Disability Services (NDS), the peak industry association for disability services, representing 950 non-government organisations around Australia, in conjunction with WA’s Curtin University.

Chief Executive of NDS Dr Ken Baker said that the National Costing and Pricing Framework for Disability Services would provide a much needed foundation for disability service providers and others with a role in funding, purchasing services from, overseeing or auditing the provision of disability services to build capacity in costing and pricing.

“Unit prices have traditionally been set by Government departments based largely on how much money they have to spend on disability services. Too often, the rationale for the calculation of unit price has been lost in the history of Government budget processes. As a result, the state of knowledge of costing and pricing practice in the disability sector has suffered,” Dr Baker said.

“With the move to individualised funding, which the National Disability Insurance Scheme is accelerating, a set of principles and definitions is needed that can be applied to achieve a mature approach to costing and pricing practice that is relevant to the diverse locations and circumstances in which disability services are provided.”

Curtin University Not-for-profit Initiative Director and author of the National Costing and Pricing Framework for Disability Services, Professor David Gilchrist said; “Acknowledged by the Institute of Chartered Accountants Australia and New Zealand, the Framework sets out an approach that is consistent with management accounting in the broader economy.”

“Sustainability for disability service providers is essential not only for the organisation, but also for Government, and to maintain diversity, choice and continuity of service for participants. The long term financial effects of deciding to offer unfunded or under-funded services must be clearly understood so that decisions for achieving cost recovery in other ways can be taken,” Professo Gilchrist said.

“The Framework has been developed in response to the significant changes occurring in disability services but its key messages are applicable to community services in general with many Australian jurisdictions implementing new funding and procurement models which place greater financial risk on non-government service providers.

“In his call for CEOs and boards of disability service providers to adopt and share the National Costing and Pricing Framework for Disability Services Dr Ken Baker said “This will support greater understanding between service providers, service users and funding bodies about how costs and prices are calculated and the implications for the supply and quality of disability service provision.

NDS says it is developing an online learning program aligned to the Framework to help disability service providers develop practices appropriate to their needs.