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Drowning in bureaucracy

The bureaucratic demands placed on NGO services by DHBs are excessive and a waste of tax payer money. They absorb too much time and resource that would be much better directed to frontline service.

The contracting environment needs to be improved

DHBs purchase mental health and addiction services from the NGO sector, in addition to funding and delivering mental health and addiction services themselves.

In New Zealand, 90 per cent of people experiencing mental health and/or addiction issues are cared for in the community. Because of this, successive governments have had an agreed policy to increase funding to the NGO sector, ensuring more people can receive the support they need.  

This funding ratio reached a peak of 30 per cent going to NGO services with 70 per cent going to DHB services. The ratio to NGO’s community services is steadily being eroded. 

DHBs often contract NGOs on short term one year contracts for crucial services. This makes it incredibly difficult to plan ahead and discourages service improvement. It is also unsettling for staff who never know if they’ll have a job from year to year. And the very people who use the services are left wondering if their support will be taken away from them.  

On top of all this, NGOs are required to regularly retender for these contracts. This is a costly and time consuming process that puts additional financial and resource pressure on NGOs, the sector group that already receives the least amount of funding. In contrast, DHBs, who receive comparably higher levels of funding, are not required to retender for the mental health and addiction services they provide. 

The Government recognises that the current contracting environment could be significantly improved. The Ministry of Business Innovation and Employment (MBIE) recently developed new Streamlined Contracting Practises and The New Zealand Treasury also released guidelines for contracting with the NGO sector. They’re great but are routinely ignored by DHBs.

Auditing – multiple times, multiple agencies, multiple frustrations

In one year, NGO service providers are often audited on the same aspects of their services, multiple times, by multiple agencies. Each audit collects the same information and the audits are never integrated. There appears to be no sharing of information between different government agency audits or across different DHBs.

Total auditing cost to one non-government mental health and addiction organisation 
To give an example of the amount of money being unnecessarily spent on compliance, the total auditing cost to just one NGO mental health and addiction service provider (who has multiple government contracts) in one year was close to $300,000.

Audits are an important part of ensuring service quality and effectiveness, however the current audit framework and process is an area of resource intensity and frustration for NGOs.

Reporting needs to focus on outcomes

NGOs are required to report to a level of micro-detail that DHB services are not. Reporting is necessary but it is not useful when the focus is on activities rather than outcomes or the ‘social value’ that NGOs provide to people, families/whanau, communities and society as a whole. 

What needs to happen?

  • DHBs need to establish, efficient, streamlined auditing and contracting processes.
  • The compliance burden on NGOs engaging with multiple government agencies needs to be reduced 
  • Government needs to share audit information across agencies to stop costly multiple audits and wasting taxpayer money. 
  • DHBs need to recognise that reporting on outcomes is far more effective than reporting on activities.
  • DHBs need to adhere to The Ministry of Business Innovation and Employments (MBIEs) Streamlined Contracting Practices. And Treasury Guidelines for Contracting with the Non-Government sector.