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Evaluation of the Integrated Humanitarian Settlement Strategy (IHSS)

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On <strong>the</strong> o<strong>the</strong>r hand, some smaller or less experienced agencies have experienced considerable<br />

difficulties: for example, <strong>the</strong>y did not anticipate <strong>the</strong> impact <strong>of</strong> an erratic pattern <strong>of</strong> arrivals on <strong>the</strong>ir cash<br />

flow, and may not have had o<strong>the</strong>r funding sources to rely on. They also may lack adequate<br />

administrative or managerial infrastructure to support <strong>the</strong> service. It is probably reasonable to expect<br />

that as service providers gain more experience in tendering and managing <strong>IHSS</strong> contracts, <strong>the</strong><br />

degree <strong>of</strong> uncertainty will lessen.<br />

As already noted, many agencies cited <strong>the</strong> shift to a unit costing model as <strong>the</strong> source <strong>of</strong> many<br />

problems. While unit costing might, in itself, result in difficulties in managing income, it is also<br />

important to determine whe<strong>the</strong>r <strong>the</strong> absolute dollars available are sufficient or not. For example, some<br />

services (eg IIOA, EHAI) services received a unit price per entrant ra<strong>the</strong>r than per family. This means<br />

that <strong>the</strong>re should be economies <strong>of</strong> scale in servicing families (particularly large families).<br />

On <strong>the</strong> o<strong>the</strong>r hand singles and couples would attract lower levels <strong>of</strong> funding (compared to larger<br />

families) despite, possibly, requiring equivalent levels <strong>of</strong> assistance or contact. At issue, <strong>the</strong>n is <strong>the</strong><br />

degree to which it is <strong>the</strong> method <strong>of</strong> determining income, <strong>the</strong> prices set for services or <strong>the</strong> management<br />

skills <strong>of</strong> service providers that causes <strong>the</strong> major problems.<br />

One <strong>of</strong> <strong>the</strong> most consistent findings in <strong>the</strong> evaluation was that service providers felt that unit pricing<br />

levels and structure were not appropriate for <strong>the</strong> level <strong>of</strong> service required by <strong>the</strong> entrant. It was also<br />

felt, by a number <strong>of</strong> service providers, that DIMIA has been reluctant to fully take this issue on board<br />

and openly discuss and negotiate with service provider on <strong>the</strong> issue. It was not possible, in <strong>the</strong> course<br />

<strong>of</strong> this evaluation, to conduct an in-depth analysis <strong>of</strong> <strong>the</strong> validity <strong>of</strong> <strong>the</strong> claim <strong>of</strong> under-resourcing. Any<br />

such analysis would also need to examine appropriate levels <strong>of</strong> servicing, administration practices<br />

and efficiency, among o<strong>the</strong>r matters.<br />

Recommendation 10<br />

Pricing<br />

A separate analysis needs to be undertaken <strong>of</strong> <strong>the</strong> structure and level <strong>of</strong> <strong>IHSS</strong> pricing to determine<br />

<strong>the</strong>ir appropriateness for service delivery arrangements.<br />

36<br />

<strong>Evaluation</strong> <strong>of</strong> <strong>the</strong> <strong>Integrated</strong> <strong>Humanitarian</strong> <strong>Settlement</strong> <strong>Strategy</strong> 27 May 2003

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