Part 5/5 - The funding deed process

Funding deed development

The draft funding deed template - Attachment 19 - PDF 216 KB is designed to assist applicants in understanding the funding deed development and execution processes.  When an applicant is informed of a successful funding application, applicants are expected to review this draft funding deed template, and be familiar with the funding deed development processes, including deed expectations.  Any queries that arise should be directed to the Program Leader.  

The deed template provides applicants with an overview of what is expected when presented with a draft funding deed for consideration and feedback. Applicants should be aware that the date the execution copy of the funding deed is signed by the Minister’s representative is the deed commencement date, and this is the trigger for the first instalment payment. Applicants are required to sign the deed prior to the Minister’s representative.
 
Prior to Funding Deed execution, applicants are expected to make all necessary arrangements to present any agreed outstanding application requirements to the Program Leader in order to complete the funding deed development process. Applicants are required to provide any outstanding requirements in a timely manner to prevent any unnecessary deed development and execution delays. Failure to present the required documentation, in accordance with the terms of the program guidelines and agreed consultations, may result in the approved funding being withdrawn.

The Funding Deed is developed through the Crown Solicitor’s Office, in consultation with the Program Leader. The Crown Solicitor’s Office is a separate entity to DFEEST, and therefore, the process is a formal interactive one that requires formal written instructions to present information, or request amendments to existing information.

In the event of a public school’s application being successful for Industry Skills Centre (ISC) or VET Infrastructure for Indigenous People (VIIP) funding, the school will be required to sign a Memorandum of Administrative Arrangement (MAA) in lieu of a funding deed (Draft MAA template - Attachment 20 - PDF 157 KB). All private schools will be required to execute a funding deed.

Applicants should be aware that a State Funding Deed/MAA has two key components:
 

  • Standard Ministerial clauses established to protect the reputation of the Minister
  • Specific legal requirements that must be addressed, as identified in the consultation and application processes with each applicant.  Examples of such requirements include:
    • specific land issues with a lease or land purchase
    • project commencement and completion dates
    • specific conditions imposed by the Commonwealth Funding Schedule which is a legal contract between the Commonwealth and the State. This contract may require the State to address particular guideline and application deficiency requirements the Commonwealth have identified as part of their National Evaluation and Funding Approval Process.

The Funding Deed components and key deed requirements as presented in the Quality Assurance Process will be discussed with applicants at the enquiry stage and again at the application stage.

Applicants will be asked to confirm a number of key guideline requirements, such as those listed in the information factsheets.  Discussions should have taken place to ensure that all applicants are fully aware of the legal requirements concerning funding deed execution, and may include enquiries and verification pertaining to the purchase of land as part of their funding application. These conditions may require a Ministerial Caveat.  Others include but not exclusive to leasing arrangements, the specific term/s of the lease, the prevention of debt financing to fund any part of the application and the requirements of a Memorandum of Understanding with a training provider if applicants are not a registered training provider.

The following are fundamental requirements of a funding deed, which must be adhered to by applicants for the entire duration of the deed. Failure to comply may be considered a breach of contract and legal proceedings may be established by the Crown Solicitor’s Office. To assist applicants in gaining greater insight into examples of such requirements, the following points provide a summary explanation of the fundamental requirements of a funding deed:

 

  • Transfer of assets clause – Successful applicants will be required to insert the following clause in their “Constitution/Articles of Incorporation” to ensure compliance with Clause 5.6 of the Program Guidelines:

where [Full Business Name of Organisation] ceases to operate or deliver training, any asset(s) of the Association purchased using funding derived from the Industry and Indigenous Skill Centre program, (or  a sum of money equivalent to  the amount of any funding derived by the Association from the Industry and Indigenous Skill Centre program), must be returned to the Department of Further Education, Employment, Science and Technology (DFEEST) for transfer to another like Skills Centre, in accordance with the terms and conditions of DFEEST's funding agreement with the Association in respect of the Industry and Indigenous Skill Centre program

  • Leasing Arrangements – Applicants will be requested to provide a copy of the leasing arrangement, and it is expected that the leasing term must be secured for a minimum period of 20 years
  • Caveat – Where applicants have applied for Commonwealth funding that will use the funds in some, part, or total to purchase land or a building, applicants will be required to agree to the placement of a 'Caveat' on the title deeds of the land in the Land’s Title’s Office for the entire period of the funding agreement (usually 3 years from the actual date of the project completion date) with a first option agreement for the Minister to purchase the land/building for a nominal sum, usually ($1 + GST)

Variation Requests – Under the terms of the deed, applicants are required to formally request a funding deed variation on any changes that take place that is at variance with applicants’ funding submission and/or the executed funding deed.

Examples of such formal requests include, but not exclusive to:

  • a proposed change to the project completion date
  • purchase of capital equipment not in accordance with the applicants approved application for funding
  • expend unexpended funding, or
  • any proposed change to the original application at any time throughout the life of the funding deed agreement.

Failure to comply with funding deed variation requests may result in a breach of the contract, and legal proceedings being established by the Crown Solicitor’s Office. The variation request must be in advance of the actual event, as DFEEST must first gain approval for such a variation from the Commonwealth. If a time variation is approved, this will result in a shift of all other agreed dates as specified in the funding deed, thus automatically extending the life span of the deed to the new agreed date.

  • Memorandum of Understanding – If applicants are not a registered training provider, applicants must have an agreed and signed MOU with a registered training provider. Certified registration documentation and letters of support will be required to ensure that the provider is registered and has the approval to provide the training identified in the applicants’ training plan proposal.
  • Reporting Requirements – Under the terms of the funding deed, applicants are obliged to provide a number of reporting requirements, in the prescribed format, as detailed in the Annexures of the funding deed. Examples of such reporting requirements include:
    • Final acquittal (Annexure E) – must be provided to DFEEST within 3 months of the project completion date. The final acquittal must be independently audited as specified in the funding deed agreement, and agreed to by DFEEST
    • Annual Training Reports (Annexure F) – to be provided on each anniversary date of the project completion date of the deed,  for a period of 3 years
    • Copy of renewed insurances - to be provided annually to DFEEST upon renewal.

 

  • Acquittal Requirements – The funding deed will specify the number of instalments to be made under “The Schedule”.  Applicants will be required to provide an interim acquittal after the expenditure of each instalment, up to the final instalment of 10%. Prior to receiving the final 10% instalment, applicants will be required to supply an independent audit of the project, and, upon DFEEST approving this final acquittal, the final 10% will be paid. The final acquittal must be independently audited under the terms of the funding deed.

Applicants must ensure that the following requirements are available for acquittal purposes:

  • a copy of all invoices pertaining to the project
  • all invoices must be specific to the agreed purpose of the funded project, including any variations agreed to during the project completion phase.

Applicants must acquit all funds, i.e. Commonwealth Government funds and industry/community contributions against the total project cost.

Specific funding deed development instructions will be provided to the Crown Solicitors Office by the Program leader through the Instruction Schedule Template - Attachment 21 - PDF 34 KB.