Government funds for the delivery of human services are now provided in the context of a commercial purchaser/provider relationship between the Department of Human Services and funded organisations.
In this context, government funds provided to organisations for the purchase of property and/or the construction or renovation of improvements (eg. buildings, roadways and carparks) represents an investment of public funds in facilities used for a public purpose.
The provision of such funds establishes a government financial interest in the property owned by the organisation. Departments are to ensure that the government financial interest in the property is recoverable if the property is no longer required for public purposes.
Human Services claims a financial interest in property when funds are made available for capital projects such as:
Capital projects are those which result in the creation of new facilities or which result in the upgrade of the functional performance of existing facilities.
The Human Services financial interest is a proportion of the property value. The property value is the capital improved value of the land.
The capital improved value is the sum of the value of land and of the value of improvements.
Human Services does not claim a financial interest in property when funds are made available for maintenance projects eg. repainting, carpet replacement, roof repairs, etc.
Human Services claims a financial interest in all cases where funds are provided for capital projects involving the purchase of property or the purchase of property and associated construction and/or renovation of improvements.
In regard to capital projects involving only the construction and/or renovation of improvements, Human Services claims a financial interest only where the amount of government funds is a minimum of $50,000 or represents 5% of the current capital improved value of the land (whichever is the greater amount).
A package of documents is used to identify, protect and manage the government financial interest in property purchased and/or redeveloped by organisations with funds provided by Human Services. These documents comprise a Property Deed of Charge, Supplemental Property Deed and Priority Deed.
Only organisations, which have a current Funding Agreement with Human Services, are eligible for funds for the purchase of property and/or the construction/renovation of improvements.
Under the Funding Agreement, organisations must sign a Property Deed of Charge or Supplemental Property Deed as a condition of provision of Human Services funds for property purchase, and/or construction/renovation projects.
Some organisations may have executed a Commonwealth of Australia funding agreement to secure the financial interest of the Commonwealth in property purchased and/or redeveloped with Commonwealth funds.
Some services have transferred from Commonwealth to State control in which case the prerogatives of the Commonwealth under Commonwealth of Australia funding agreements have transferred to the State of Victoria eg. Commonwealth State Disability Agreement (CSDA).
When Human Services provides funding to extend/upgrade facilities for a service transferred under the CSDA, the Commonwealth of Australia funding agreement will be replaced by a Human Services Property Deed of Charge.
The Human Services Property Deed of Charge will combine the former Commonwealth financial interest and the new Human Services financial interest into a current total government financial interest in the property.
The provision of any new Human Services funds and revision of the Human Services financial interest will be identified by way of a Supplemental Property Deed of Charge.
Human Services will apply the Property Deed of Charge retrospectively in circumstances where its financial interest in property acquired/developed with government funds in prior years is not otherwise secured.