Evaluation of the Integrated Humanitarian Settlement Strategy (IHSS)

group of clients and may require a more flexible approach to management on the part of service
providers.
A number of service providers continue to experience problems due to the uneven flow of entrants
and the linking of income to activity (ie payment according to the number of arrivals). Grants based
funding provided certainty of income, if not certainty of numbers (and service providers were paid a
set sum regardless of whether the numbers of clients exceeded or fell short of expectations). Under
the present arrangements, providers are paid per entrant, or per entrant household, so that if numbers
go up, service providers’ incomes also rise, and conversely if numbers fall short, incomes could
potentially drop, although in practice this has not happened. In fact, service providers can and do
receive a higher level of payment under this arrangement than under grants based funding.
However the new method of payment is perceived by service providers as carrying a higher level of
risk and thus introduced a level of uncertainty for service providers. Providers felt exposed and the
lack of guaranteed income, whether or not in the end they were likely to benefit, caused considerable
unease. In response to providers’ concerns, DIMIA introduced Guaranteed Business Levels (GBLs)
in July 2002 to alleviate some of the problems. This meant that DIMIA would guarantee a level of
business for each provider and prepay 60% of the guaranteed business at the beginning of the
financial year, with the balance paid either quarterly or the following January. GBLs were designed to
minimise the business risk to providers caused by fluctuations in arrival numbers and provide some
certainty about the level of payments. Most IHSS service providers accepted the offer of GBLs,
though there were some variations in the conditions between contracts. Some service providers opted
to continue with the previous arrangement.
While there are peaks and troughs in arrivals, the reality is that under the new arrangements, service
providers are at least paid for each entrant or entrant household referred to them. In practice they are
financially better off, the problem lies in managing the uneven flow of income.
Recommendation 8
Managing Uneven Flow
DIMIA needs to examine whether there are any means by which the peaks and troughs of entrant
flows might be evened out. If peaks and troughs are unavoidable but predictable there needs to be
improved communications regarding these patterns to service providers. As well, more flexible
managerial systems need to be put in place by service providers to assist them to manage the
variations more effectively.
Data management
The Humanitarian Settlement Client Information System (HUSCI) was primarily designed as an
accountability tool for DIMIA and Finance rather than as a management tool for service providers,
albeit that it was developed at the request of various providers so they could report to the Department
as per their contract requirements. Notwithstanding this, service providers felt that there is a need to
simplify the reporting system and to tailor it better to the capacities and needs of the agencies, that is,
have it serve as both an accountability and management tool.
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Evaluation of the Integrated Humanitarian Settlement Strategy 27 May 2003