6.2. Financing of services The Department plays a major role in the provision of social services. It does so either by supplying the service itself, or by acquiring services from service providers. This policy document concerns itself with the latter. The Department will finance or purchase services from service providers or non-profit organisations through a process of call for proposals. These processes will be outlined in the NPO financing guideline. The Department takes cognisance of the fact that the emerging organisations will require support in terms of capacitating them to be responsive to the policy and other related legislative frameworks. The Department will therefore provide support and capacity to the emerging organisations. 6.3. Methods of payment This section gives an outline of how the Department will transfer payments to the contracted service provider. 6.3.1. Payment in phases/tranches This payment method is used where the next payment of an allocation is dependent on results achieved in the previous phase/ tranche. 6.3.2. Payment through transfer of lump sum Consideration will be given to the transfer of the entire allocation where service providers have a proven track record of compliance, credibility and accountability. This applies where the other payment methods are inappropriate due to, amongst others, cash flow situations and the relatively low financing level. 6.3.3. Payment at regular predetermined intervals This payment method means that an annual allocation is divided into monthly/quarterly/six-monthly portions and paid in equal amounts, to assist with cash flow management and expenditure control.
6.2. Financing of services The Department plays a major role in the provision of social services. It does so either by supplying the service itself, or by acquiring services from service providers. This policy document concerns itself with the latter. The Department will finance or purchase services from service providers or non-profit organisations through a process of call for proposals. These processes will be outlined in the NPO financing guideline. The Department takes cognisance of the fact that the emerging organisations will require support in terms of capacitating them to be responsive to the policy and other related legislative frameworks. The Department will therefore provide support and capacity to the emerging organisations. 6.3. Methods of payment This section gives an outline of how the Department will transfer payments to the contracted service provider. 6.3.1. Payment in phases/tranches This payment method is used where the next payment of an allocation is dependent on results achieved in the previous phase/ tranche. 6.3.2. Payment through transfer of lump sum Consideration will be given to the transfer of the entire allocation where service providers have a proven track record of compliance, credibility and accountability. This applies where the other payment methods are inappropriate due to, amongst others, cash flow situations and the relatively low financing level. 6.3.3. Payment at regular predetermined intervals This payment method means that an annual allocation is divided into monthly/quarterly/six-monthly portions and paid in equal amounts, to assist with cash flow management and expenditure control.
PFAFINALDOC11JUN2011.docx