Options Paper
Establishing a Sustainable Management and Funding Structure for the Australian Q Fever Register
Prepared by Angus Cameron, AusVet Animal Health Services
Data Manager, Australian Q Fever Register
22nd May, 2003
Objective
The Australian Q Fever Register has been developed on a project basis, through MLA and AMPC funding. The project commenced in July 2001, and the Register commenced operation in September 2001 extending to national coverage in July 2002. The three year project terminates in June 2004 at which stage all existing funding for the Register will cease. In order to maintain uninterrupted operation of the Register, it is important that a mechanism for continued funding be established with adequate time to implement a sustainable management plan.
A meeting of the Q Fever Register Technical Management committee is being held on 24th June 2003. The key objectives of the meeting are:
· To develop an agreed position on the preferred mechanism for future management of the Register,
· To establish and implement a plan, with allocated responsibilities and time lines, for achieving the preferred position, and
· To develop contingency options which can be put in place to ensure uninterrupted operation of the Register, in case the preferred position cannot be achieved in time.
Current Management
The current structure of the management of the Q fever Register has three distinct tiers. The first tier is the legal entity, through which funds are channelled and which has ‘ownership’ of the Register (currently MLA).
The second tier is the representative body whose responsibility it is to monitor the performance of the Register and make decisions about its operation and future direction (the Technical Management Committee). This is a committee of stakeholder representatives with membership being drawn from:
· Meat and Livestock Australia
· NMA / AMPC / NMIC
· State Health Departments (NSW, Qld, SA, Vic, and optionally Tas, WA, NT)
· Processor Representatives
· WorkCover
· AMIEU
· CSL
The third tier is the contracted data manager, responsible for the day to operation of the Register (currently AusVet).
Management and Funding Principles
In guiding the decision of how the Register should be managed in the future, the following general principles are suggested:
1) Continuing uninterrupted operation of the Register after the termination of the current project is essential. Closing down the Register is not an option.
2) In its current form, the Register is fully meeting its original design objectives as well as user and stakeholder expectations (specifically within the meat processing industry). Based on this current success, plans for future management changes should have minimal impact on the function of the Register. One possible exception is access to the Register for people outside the meat processing industry.
3) The three tiered structure (legal entity, representative management group, and data managers) is an effective model for the operation of the Register. Current technical management and decision making is achieved through the technical management committee (TMC), the membership of which is designed to represent the different stakeholders. Future technical management should also be based on the principle of a representative management body, along the lines of the current TMC.
4) There is currently a separation between the TMC and the data managers, responsible for the day to day running of the Register. In the initial feasiblity study undertaken prior to the development of the project, a number of stakeholder organisations were suggested as potential data managers. MLA / AMPC decided on the use of an independent data manager (AusVet), to avoid a number of potential problems that may have arisen with national coverage, data ownership etc. It is suggested that the principle of the use of an independent data manager be maintained as this has worked exceptionally well and at low cost. To maintain quality and accountability, the performance of the independent data manager may be reviewed from time to time by the managing body (TMC) and they may replaced if required.
5) The current management structure involves a minimum of management overheads. The committee meets once or twice a year to review the performance of the Register and discuss current issues, and administrative overheads are born primarily by MLA (administering program funding and hosting TMC meetings). It is suggested that the approach of maintaining very low administrative and management overheads should be continued.
6) The Register is currently focused on use by the meat processing industry, and the main benefits of the Register accrue to that industry through lower costs of employment. The Register also has significant potential to provide public health benefits to at-risk groups outside the meat processing industry, such as people working with livestock or wildlife. In principle, access to the Register should be expanded to provide these broader public health benefits.
7) It is suggested that there should be ongoing equitable distribution of costs and benefits associated with the Register. This requires the identification of specific beneficiary groups including a possible ‘public good’ component. Funding for the Register may then be sought from the identified groups though this is not always simple as the proportionate benefit is difficult to quantify.
Management structure options
If it is assumed that the basic three-tiered structure of 1) legal entity, 2) management body and 3) data managers should be continued, the options for the future management structure of the Register may be considered at these three different levels.
Legal entity
The main roles of the legal entity are to act as ‘owner’ of the Register, to collect and distribute funds for the operation of the Register and to contract the data manager. The requirements for such an entity are that it:
· Has national jurisdiction (any existing state-based organisation would not have the ability to represent a national Register);
· Is able to accept funds from the potential funding sources for the register;
· Is able to transparently administer these funds in accordance with relevant laws and regulations;
· Is able to legally contract the data managers;
· Has the confidence of all stakeholders in performing these tasks;
· Should be answerable to the management body.
In addition, it is desirable that the legal entity has a reasonable degree of stability, allowing the development of corporate memory and continuity of policy.
The two main options for the legal entity are to either create a new entity, specifically for the purpose of running the Register, or to assign the responsibility to an existing organisation.
Creating a new independent legal entity
While there are a number of options available, the creation of a new legal entity specifically for the purpose of the Register could be most simply achieved in one of two ways, either by creating an incorporated entity (a company) or by creating a non-incorporated entity.
Creation of an incorporated entity, at its simplest, would involve using an off-the-shelf company, creating the Articles of Association for the company, and then meeting the requirements of the corporations laws. This would involve about $1500 to set up, and then annual costs of about $500 for ASIC returns and accountant fees. The company would have an ACN and be registered with the ATO for GST and therefore also have an ABN.
Creation of a non-incorporated entity is much simpler. The entity could be created by a minute of a meeting, signed by all members. The entity would then adopt a constitution governing the operation of the entity, appoint office bearers, register with the ATO for GST (and therefore have an ABN), and establish a bank account. As a non-incorporated entity (for example The Australian Q Fever Register Management Committee) it would then be able to accept payments from contributors to the Register (including the Commonwealth). The entity would not be bound by the corporations laws and there would be no need to submit returns to ASIC. The entity would be required to complete BAS returns to the ATO.
In either case the entity would be made up of members, (stakeholder organisations) represented by the members of the management committee. There would be two areas of responsibility of the entity, 1) management (to manage the Register, appoint a data manager, monitor performance, take policy decisions relating to the Register, determine funding formulae), and 2) functional (to support the entity, keep accounts, organise audits, organise meetings, prepare reports, complete BAS statements etc). The former responsibility is that of the membership (the management committee). There are a number of options as to how the latter functional responsibilities could be achieved. These tasks could be made the responsibility of one of the member organisations, who performs them on behalf of the entity, either as an in-kind contribution to support the Register, or as a paid service. Alternatively, they could be rolled into the contract of the appointed data manager. The advantage of this latter option would be that the data manager would have a vested interest in ensuring the continuing smooth and effective running of the entity by essentially providing secretriat services to the entity.
Financial control of the entity would be vested in the membership (management committee) as determined by the constitution. One approach would be to require that all cheques be signed by two members of the committee, including the chair and one of several other authorised members.
Whether the entity be incorporated or non-incorporated, it would be governed by a constitution. An example outline of the contents of a constitution is given in Appendix 2.
A number of other legal structures are possible, such as making members shareholders, establishing a unit trust, or creating a trust fund, but these all involve much greater complexity, cost overheads to establish and manage, with little or no added benefit in this case.
Using an existing organisation
The requirements for the legal entity, as listed above could also be met through the use of an existing organisation to house the Register. The organisation would have to have national jurisdiction, be able to accept funds from potential funding sources, and have the confidence of all stakeholders. The role of the organisation would be simply to provide the legal framework for the ongoing operation and funding of the Register. The organisation should not have any direct control over the Register, beyond its representative input into the management committee. Such an organisation would need to be in a position to provide the secretariat services, auditing, organise meetings etc, as well as operate a bank account on behalf of the membership.
Examples of possible existing organsiations include:
· Meat and Livestock Australia
· AMPC / NMIC
· Commonwealth Department of Health and Aging
· Animal Health Australia
One problem which may arise with the use of an existing organisation is a conflict between the objectives of the Register and the objectives or mandate of the organisation. For instance, if the Register developed to have a strong public health role outside the meat industry (and possibly outside the farming industry), this may not fit well with MLA’s mandate. Similarly, the current focus on the meat industry may not fit well with the Commonwealth Department of Health and Aging. While Animal Health Australia is a legal entity established largely for the purpose of housing and cooperatively funding similar health programs, the Register’s focus on human health may conflict with this organisation’s animal health focus.
Summary
There are three broad approaches to housing the Register:
· Non-incorporated legal entity
· Incorporated legal entity (company)
· Use of existing organisation
Each has its own merits. However it is suggested that the creation of a non-incorporated entity most closely meets the needs of the Register. This recommendation is based on the following factors.
· It is the less expensive and less complicated than an incorporated company;
· It ensures ongoing independent sustainable operation of the Register;
· It provides maximum flexibility for funding and management;
· An independent entity, not associated with any individual stakeholder is likely to maintain the confidence of all stakeholders in the system, and avoid any conflicts of purpose and mandate;
· It overcomes any problems that different existing organisations may have in regards to accepting specific funding for the Register from different funding sources;
· It avoids any perceptions of undue influence by a parent organisation;
· In contrast to an incorporated entity, a non-incorporated entity is not bound by national corporations law. This potential lack of answerability may be seen as a disadvantage. However, as is evidenced by the recent spate of problems with large corporations, incorporation itself does not guarantee appropriate corporate behaviour. It is the make up of the managing body itself and its adherence to governance matters contained in its constitution which determines the success or failure of an organisation, and, for the Register, this would be the same regardless of the structure of the legal entity.
· The option of contracting out the functional tasks associated with the entity (possibly to the data manager) means that there is virtually no extra burden placed on the members of the management body.
Management committee
The management committee is the core of the future Register, responsible for all decisions regarding the operation, funding and future direction of the Register. While the choice of the structure of the legal entity may impact on the name of the committee (directors, members, shareholders, etc), it is suggested that there is only one option as to the structure of this body: it should be representative of the stakeholder organisations. Given this, the membership may be either made up of individuals, or of stakeholder organisations, represented by nominated individuals.
Ideally, if the membership is made up of organisations, those organisations should be committed, as far as is possible, to maintaining continuity in representation on the body.
The management committee should also have the power to alter the structure of the committee, by inviting membership from new organisations, or removing members as required.
Data Manager
The options for the data manager are 1) to continue with the current approach of contracting the job of data manager to a specialised service provider, or 2) to assign the task to a stakeholder organisation. It is likely that a specialist service provider with low overheads will be able to perform the role of data manager more efficiently, at lower cost, and with more transparent costing than could be achieved by a stakeholder organisation. It is also easier to achieve full accountability by using a specialist service provider, as it is simpler to assign the contract to a new service provider, should the existing one not perform to the required standards. AusVet, the current data manager, is keen to continue to provide data management services, should the committee decide on this option.