2022-23 Major Capital Fund Guidelines

1. Major Capital Fund overview

The Major Capital Fund supports the creation of additional preschool places through new builds, extensions and renovations of centre-based preschool and not-for-profit long day care services in areas of need and demand across NSW.

Applications for grant funding will be received from 4 October 2022 until 14 May 2023 in three rounds.

Round 1 will be open to eligible centre-based community preschools only. The Major Capital Fund will operate with expanded eligibility from 2023 (Rounds 2 and 3), to support the creation of places allocated exclusively to the delivery of preschool education in Aboriginal Community Controlled Organisations, not-for-profit long day care settings as well as community preschools.

The 2022-23 Major Capital Fund will be open on the following dates:

Round 1: applications accepted from 4 October -14 November 2022

Round 2: applications accepted from 6 February - 19 March 2023

Round 3: applications accepted from 3 April - 14 May 2023

Purpose and Objectives

The Major Capital Fund under the Start Strong Capital Works Grant Program is part of the department’s commitment to increase the number of preschool places in NSW in areas of need and demand.

The broad objective of the Major Capital Fund is to increase the number of three, four and five year old children who can access at least 600 hours per year (or 15 hours per week) of quality preschool education. This is the recommended level of participation in a quality early childhood education program in the two years before school.

An increase in preschool places is an expected outcome of a Major Capital Fund grant.

Preschool places: In these guidelines, ‘preschool places’ refers to approved licensed places that are dedicated for enrolments of preschool-aged children participating in a preschool education program delivered by a qualified early childhood teacher. Eligible centre-based service types include community preschool and not-for-profit long day care services.

The Major Capital Fund will not fund any portion of a capital works project that relates to care for nursery and toddler-aged children.

The Major Capital Fund must also contribute to the following objectives:

  • maximise the number of preschool places available for preschool-aged children to attend at least 600 hours per year or 15 hours per week of quality preschool education.

  • ensure the continued operation of the service to deliver preschool places throughout the ten-year compliance period.

  • support ongoing management of the service in line with applicable regulatory requirements.

  • where possible, leverage funds from sources external to the department, including private finance, charitable donations and grants from other state and federal government agencies.

The department has undertaken an analysis of the demand and supply of community preschool across NSW. That analysis has considered various data sources including population projections, participation rates and historical attendance data from previous census , among other variables. The analysis resulted in identifying the following areas with a shortfall of community preschool places:

SA3 code SA3 name
12701 Bringelly - Green Valley
11401 Shoalhaven
10106 Young - Yass
11602 Blacktown - North
10801 Great Lakes
10302 Lachlan Valley
12303 Wollondilly
11503 Hawkesbury
12703 Liverpool
10702 Illawarra Catchment Reserve
11504 Rouse Hill - McGraths Hill
12402 Blue Mountains - South
10602 Maitland
10304 Orange
10804 Port Macquarie
11301 Griffith - Murrumbidgee (West)
10105 Goulburn - Mulwaree
10701 Dapto - Port Kembla
12501 Auburn
10301 Bathurst
11102 Lake Macquarie - West
12301 Camden
12702 Fairfield
10104 South Coast

Priority will be given to eligible applicants intending to undertake capital works to extend, renovate or build a community preschool in an area with a shortfall of community preschool places as identified by the analysis.

For assistance on how to determine whether your capital works site is within these areas, please refer to the Major Fund Application Guide. Applicants within these areas may also be able to access support from industry professionals to scope and plan applications as outlined in the Application Support Guidelines.

Please note this analysis of areas with a shortfall of community preschool places did not extend to an analysis of shortfall for places allocated to a preschool program in a long day care setting. Eligible not-for-profit long day care and community preschool applicants outside of these shortfall areas are still encouraged to submit an application if they meet the eligibility criteria.

2. What can (and cannot) be funded?

The Major Capital Fund will not fund projects that:

  • do not create additional preschool places;

  • are for services located outside NSW;

  • are submitted by a for-profit organisation or association, including a sole trader or a Pty Ltd company;

  • do not align with the program objectives;

  • do not meet the requirements outlined in these guidelines;

  • do not meet the assessment criteria;

  • have, at the time of assessment of the application, been completed (i.e. retrospective funding);

  • have already been funded by the Start Strong Capital Works Grants Program (i.e. the preschool places committed cannot be funded twice); or

  • duplicate project elements already funded through another source (i.e. where another grant is funding the same element(s).

There are items that you can and cannot include in project cost estimates in your Major Capital Fund application. The items that cannot be funded by the grant must be covered by the service provider or other sources of funding. The examples provided in the list below are not exclusive.

  • project management costs
  • planning and design costs
  • soil hygienist reports
  • removal of contaminates on project sites (e.g. asbestos/arsenic), as long as it is within scope of the department's financial contribution to the project
  • site preparation, including clearing or demolition
  • construction and commissioning
  • landscaping and car parking
  • fixed fittings and fixed equipment.

  • site acquisition and lease costs
  • routine or cyclical maintenance works
  • spaces not used primarily for the delivery of a preschool education program (e.g. rooms for community or health services, or rooms/outdoor areas for provision of care for nursery or toddler age groups)
  • ongoing administration or operational costs
  • staff salaries and traning
  • toys, portable equipment and consumables
  • cosmetic upgrades that do not increase capacity
  • purchase of cars, buses and other vehicles
  • additional funding due to project cost overruns
  • playground equipment (unless strictly requird for the purposes of obtaining service approval)
  • quality improvements an grades that do not lead to an increase in preschool places or are not required for the purposes of obtaining service approval for teh target number of places.

The following definitions apply for the purposes of assessing Major Capital Fund applications, and whether the proposed capital works projects will increase preschool places:

Approved number of places/licensed places: the maximum number of children that can be educated and cared for by the centre-based service at any one time, stated on the service approval and published in NQAITS.

Preschool places: Approved/licensed places dedicated for enrolments of preschool-aged children participating in a preschool education program.

Preschool-aged child: Children in the two years before school and three-year-old Aboriginal and Torres Strait Islander children or three-year-old children with disability, with additional needs, or from low-income families.

Preschool education program: An early childhood educational program delivered by a qualified early childhood teacher to children in the two years before school, for at least 600 hours per year or 15 hours per week.

The Major Capital Fund will not fund spaces that aren’t primarily used for preschool provision. This includes, but is not limited to:

  • rooms dedicated for community or allied health services,

  • rooms, facilities or spaces, both indoor and outdoor, that are utilised primarily for nursery or toddler age groups

Applicants are encouraged to refer to the Major Capital Fund Application Guide for detailed guidance on how to:

  • calculate and substantiate the number of licensed places that will be increased as a result of the capital works project

  • differentiate between licensed places and preschool places, for the purposes of applying for funding under the Start Strong Capital Works Grants Program

  • differentiate and account for project costs that are not related to an increase of preschool places.

3. Who can apply?

To be eligible for funding, applicants must meet each of the following:

  • be registered or incorporated in Australia; and

  • be a not-for-profit organisation/association, or a local government entity; and

  • operate, or intend to operate, an education and care service in NSW that delivers preschool education, as an Approved provider with a valid Service Approval.

Round 1 of the Major Capital Fund is open to eligible centre-based community preschools only. Rounds 2 and 3 will be open to not-for-profit long day care providers and Aboriginal Community Controlled Organisations who intend to increase licensed places for the delivery of a preschool program for preschool-aged children.

For-profit organisations are not eligible to apply for Major Capital Fund grants.

Only applications from eligible applicants will progress to assessment against the assessment criteria.

3.1 Service eligibility

To be eligible for funding, the Approved Provider’s service must:

  • deliver, or intend to deliver, an early childhood education program to preschool-aged children, for at least 600 hours per year, that is designed by a degree qualified early childhood teacher, in accordance with The Early Years Learning Framework; and

  • have, or intend to have, a service approval to operate in NSW under the Education and Care Services National Law Act 2010 and either:
    • operate, or intend to operate, as a centre-based service with a ‘Nature of Care’ service type of preschool, or

    • operate, or intend to operate, as a centre-based service with a ‘Nature of Care’ service type of long day care.

Out of School Hours Care (OSHC) and non-centre-based service types, such as family day care services, are not eligible for funding under the Start Strong Capital Works Grants Program.

For the purposes of applying for funding under the Major Capital Fund, an Aboriginal organisation is required to meet each of the following criteria to be considered an Aboriginal Community Controlled Organisation (ACCO). It must be:

  1. an independent, not-for-profit organisation, that’s incorporated as an Aboriginal and/or Torres Strait Islander organisation and/or is a registered community service,

  2. initiated, based, governed and operated by the local Aboriginal and/or Torres Strait Islander community,

  3. accountable to its local community, and facilitate local Aboriginal and/or Torres Strait Islander peoples to have input into service design, delivery and performance, and

  4. endorsed by the local community leadership to deliver holistic and culturally appropriate services or activities that benefit Aboriginal and/or Torres Strait Islander communities and people, including empowerment and building strength.

These criteria are based on Clause 44 of the National Agreement on Closing the Gap.

Aboriginal organisations are encouraged to refer to the Major Capital Fund Application Guide for detailed information regarding the evidence or supporting documentation required to confirm the above criteria.

4. Assessment

Applicants are required to complete a detailed application against the assessment criteria as the basis for seeking final funding approval.

Applications must be submitted via SmartyGrants by an Authorised Officer of the applicant.

An Authorised Officer must either appear as a Responsible Person on the Australian Charities and Not for Profits Commission (ACNC) charity register or provide other evidence of authority.

Applicants will be notified as soon as practicable following the assessment outcome. During the assessment process the department may request additional information from applicants. The department may, in its absolute discretion, seek information from other NSW Government agencies or other third parties (such as probity advisors) to assist with the assessment of applications.

The submission of an application does not guarantee funding. Applications for funding will be assessed on a case by case basis against the assessment criteria and in line with these guidelines and the overarching Start Strong Capital Works Program objectives. The department may, in its absolute discretion, decline to provide funding or provide part funding.

Eligible applications will be competitively assessed according to the following assessment criteria:

  1. Increase in the provision of preschool education services in areas of need and growing demand as a result of the proposed capital works project. Areas with a shortfall in community preschool places will be prioritised. Applicants must provide evidence that demonstrates the increase in preschool places resulting from their proposed capital works project.
  2. Cultural safety for Aboriginal and Torres Strait Islander Children. Applicants must demonstrate how the project will create and nurture a culturally safe and responsive educational setting for Aboriginal and Torres Strait Islander children, their families and ECE staff.

  3. Accessibility and inclusion. The project will provide and/or improve the provision of a safe and appropriate educational setting for children with disability, children with additional needs, and children from low income families.

  4. Capacity and capability for delivery. Applicants must demonstrate readiness to proceed with the project and capability to deliver the capital works with acceptable or tolerable risks.

  5. Overall quality and completeness of the application. Applicants need to present a well-developed and comprehensive proposal and put forward a suitable solution to meet the objectives of the program.

  6. Value for money. The cost of the project is within the agreed benchmarks for the funding category and any other attenuating factors that may impact the cost of the project have been considered.

The department will review an applicant’s past performance and assess whether it is likely to have an impact on successful delivery of the applicant’s project. This will include considering whether the applicant has:

  • taken appropriate steps to deliver previous projects funded through the Start Strong Capital Works Grant Program within appropriate timeframes (where applicable);

  • overdue projects funded by the department and whether extensions have been requested and approved; and/or

  • completed projects funded by the department and whether the applicant has submitted all documentation required to acquit the grant funding, including regular monthly reporting and acquittal within the contracted time frame.

As part of the assessment process the department reserves the right to have regard to information gained about applicants during its normal course of business and utilise that information during the assessment of eligible applications. This may include information regarding an applicant’s regulatory performance and compliance history with regard to their Provider Approval and any associated Service Approval/s (both current and historical).

Poor performance against these factors may result in projects not being recommended for funding or funding withdrawal.

5. Funding conditions

Applicants must review the Funding Agreement Terms and Conditions and Funding Acknowledgement Guidelines before submitting an application.

These documents clarify the obligations for applicants who are successful in receiving funding under the Start Strong Capital Works Grant Program, and are available on the department’s website.

All projects are expected to adhere to relevant building codes, guidelines and regulations.

Applicants that receive a grant of funding must:

  • agree to the requirements outlined in these guidelines. Failure to do so may result in funding being withheld or an offer of funding being withdrawn;

  • contribute a minimum of 5% of the total project cost;

  • agree to a security instrument as a precondition for funding;

  • enter into a Funding Agreement with the department. Funding Agreements must be signed by an authorised officer of the applicant no later than four weeks after receipt;

  • follow the Funding Acknowledgement Guidelines for NSW Government infrastructure grants, including liaising with the Capital Programs team on events such as openings, and erecting signage for projects;

  • submit progress reports and required supporting evidence for approval by the department upon completion of agreed milestones and completion of the project;

  • acknowledge that no additional state funding will be allocated to the proposed project, including where there are cost overruns, and if additional costs arise, they will be met by the applicant.

Applicants must not enter into a contract or commence any works proposed in an application until a Funding Agreement has been executed with the department. Applicants who are offered a grant of funding that proceed with works prior to executing the Funding Agreement do so at their own risk. The department may not fund projects that are commenced before the Funding Agreement has been executed by the department and will not fund completed projects.

The Funding Agreement cannot be executed or funds paid until a security instrument has been agreed and executed with the department (if applicable). For more information on the security instrument requirements please refer to the support preparing an application page.

  • be operated by an organisation that is approved to provide early childhood education services in NSW or that has applied to obtain necessary provider approvals. For new providers, grant award will be contingent on provider approval being obtained;

  • offer, or (where an application for necessary approvals is pending) intend to offer, a centre-based service with a valid service approval as a long day care or preschool;

  • deliver a preschool education program for at least ten years from when the project is completed. The places funded by any Major Capital Fund grant must be available to the community as preschool places for a minimum ten year period from this date; and

  • be compliant with the requirements of applicable land and state laws and regulations.

From time to time the department may request details regarding Provider/Service approval, approved/licensed places, enrolments and attendance of preschool-aged children at the service.

6. Contingency allowance

It is recommended that applicants include a contingency allowance within their project budget to allow for unforeseen increases in project expenditure during delivery of the capital works project that are outside the applicant’s control.

There are two forms of contingency that may be covered in the capital works project:

  • Builder/construction contingency: This refers to the sum set aside to cover any costs escalations and overruns related to the build, such as increased material costs and labour costs or costs associated with unforeseen construction delays. It is expected that construction contingency will be included within the builder’s quote provided in support of an application.

  • Provider contingency: This is contingency funding set aside by the applicant for other risks associated with delivery of the capital works project outside of any construction or builder expenses. These costs may be incurred at any time of the project lifecycle such as during the planning and design phase of the capital works project. Examples may include unforeseen increases in project management and/or statutory fees. Provider contingency does not include project scope changes, and an applicant must ensure that its project is fully scoped and the scope is final as at the date that the application is submitted.

A reasonable allowance for contingency can be included in the project expenditure budget within the application for grant funding.

Funding for the contingency allowance will only be made if there are unforeseen increases in project expenditure that are outside the applicant’s control. The department will assess the circumstances giving rise to the unforeseen increases before determining whether to make contingency funding available.

7. Project management requirements

A suitable project manager must be identified in the application and appointed within four weeks of the Funding Agreement execution.

The name and contact details (email, telephone number, including mobile) of the proposed project manager must be included in the application and confirmed in the Funding Agreement.

For applications with a total project cost of $500,000 (ecl GST) or above, applicants must provide evidence of their project manager’s qualifications and experience in the management of infrastructure projects. Project management costs must be included in the applicant’s budget as part of the grant application.

Failure to follow these requirements regarding a project manager could ultimately result in the department withdrawing the funding commitment.

8. Project reporting requirements

As a condition of grant funding, successful applicants must comply with project monitoring and reporting requirements, including:

  • submitting milestone progress reports and required evidence when milestones have been met;

  • advising the department in advance of key milestones including architect appointment, design completion, ground breaking, construction completion, service approval and providing opportunities for public communication of these milestones;

  • advising the department of scope changes (relating to time, cost and project scope) by informing the department in writing;

  • attending site inspections, meetings and teleconferences with department staff or representatives if required; and

  • providing copies of building contracts, receipts and/or invoices when requested.

9. Project completion

Construction works must start within 12 months of receipt of a successful Outcome Letter. Crisis Fund projects must be completed and acquitted within 24 months of the Funding Agreement being executed.

Applicants may wish to apply under later rounds if they consider that they will be unable to deliver their project in the required timeframe.

Applicants with concerns about achieving project deliver timeframes may contact the Capital Programs Team on capital.works@det.nsw.edu.au or 1800 619 113 (toll free) prior to submitting their application to discuss their project timeline. Adjustments to this timeline may be considered by the department where there is evidence of exceptional circumstances and where an adjustment will not compromise the fairness of the process.

Any requests for extension to the project timeframes after a Funding Agreement has been entered into will be managed by the department in accordance with the provisions in the Funding Agreement. At a high level, such requests will generally involve:

  • the grant recipient contacting the department immediately upon identifying that they may not meet the timeframes for project delivery; and

  • the grant recipient being required to provide detailed written evidence that explains the reason for the delay and demonstrates how the project will be completed within the additional time requested.

Grant recipients must note that timeframe extensions may not be approved, and that excessive delays may ultimately result in the department recommending to the Minister withdrawal of the funding commitment.

10. Service approvals

For all grants provided under the Major Capital Fund, service approval will need to be obtained for any increase in approved/licensed places within 12 months of project completion.

For further information on the Approvals Process please visit the department’s website or contact the department’s Quality Assessment and Regulation Services on 1800 619 113 (toll free) or by emailing ececd@det.nsw.edu.au.

11. Acquittal requirements

All successful applicants are required to complete the following requirements and submit a Final Works Report to the department to acquit their funding. The Final Works Report must be signed and dated and include the following information:

  • certificate of final completion;

    certificate of occupancy;

  • final project expenditure list;

  • letter of service approval or evidence that an application to amend service approval has been lodged;

  • photos of completed project; and

  • evidence of the authority of the signatory/ies.

12. How to apply

Applications for the Major Capital Fund will be received from 4 October 2022 until 14 May 2023 in three rounds.

Round 1 will be open to eligible centre-based community preschools only. The Major Capital Fund will operate with expanded eligibility from 2023 (Rounds 2 and 3), to support the creation of places allocated exclusively to the delivery of preschool education in Aboriginal Community Controlled Organisations, not-for-profit long day care settings as well as community preschools.

The 2022-23 Major Capital Fund will be open soon

Round 1: applications accepted from 4 October - 14 Noveber 2022

Round 2: applications accepted from 6 February - 19 March 2023

Round 3: applications accepted from 3 April - 14 May 2023

Application forms can be accessed online at: https://earlychildhoodeducationprograms.smartygrants.com.au/.

Applicants must register to use the SmartyGrants application system. Registration is a free and straightforward process.

For assistance with the online application system, please contact the Smarty Grants Support Desk by phone on (03) 9320 6888 between 9am and 5pm Monday to Friday or email service@smartygrants.com.au.

Applicants are strongly encouraged to download the sample application form from SmartyGrants and review the Major Capital Fund Application Guide for further information and guidance on submitting an application.

All sections must be completed, and the application form submitted to be considered for funding. Changes can be made to an application any time until it is submitted.

13. Projects on NSW public school sites

Applicants proposing to build or upgrade a facility on a public school site must have a current licence agreement or lease to operate the service prior to applying for the grant.

For further information in relation to your current licence agreement or lease, please contact your current licence agreement contract manager at Schools Infrastructure NSW on preschools.sinsw@det.nsw.edu.au. Your contract manager can assist in facilitating any additional contact with stakeholders, such as the school principal and the Asset Management Unit of School Infrastructure NSW, to ensure the planned project is fully supported and can be accommodated on the school site.

Please note, any enhancements to the site, assets or equipment obtained with this grant for a project on a NSW public school site vests in the department.

14. Application checklist

  • evidence of provider approval or a copy of an application to the regulatory authority.

  • a detailed project plan, risk assessment for the project and expected timeline.

  • a project description, including concept/ building design plans and final scope of works.

  • an itemised project budget, including the applicant’s contribution of a minimum of 5% of the total project cost and additional sources of funding for the project (if any).

  • at least 2 quotes obtained in the past 4 months that reflect the final design of the capital works project. Applicants should contact the department if they are unable to obtain 2 quotes. In exceptional circumstances this requirement may be waived.

  • confirmation of the number of preschool places that will be created with the final design of the capital works project.

  • a description and evidence demonstrating how the number of places to be increased has been estimated in line with regulatory requirements (e.g. floor plans referencing floor space ratios).

  • a description and evidence detailing how the proposed project will create and nurture a culturally safe and responsive educational setting for Aboriginal and Torres Strait Islander children, their families and ECE staff.

  • a description and evidence detailing how the proposed project will provide and/or improve the provision of an appropriate educational setting for children with disability, children with additional needs, and children from low-income families.

  • evidence of ability to proceed with the proposed project on the site including, but not limited to:
    • evidence the applicant owns the site or has formal lease or alternate leasing agreements with the owner of the site for a minimum ten-year period.
    • evidence the applicant has discussed the security instrument requirement as a precondition for funding with all relevant parties (your committee/board, landlord, lessor, or SINSW as applicable).
    • evidence the applicant has support from all affected stakeholders and delivery partners (your landlord, Council, committee/board, other funding bodies, etc).
    • information and evidence of other sources of funding, if any, and proof of funds for your contribution.

  • evidence that there is need an demand in your area.

Contact details

For more information about the Start Strong Capital Works Grant Program please contact the Early Childhood Education Programs Directorate by phone or email.

Ph. 1 800 619 113 (Toll Free)

Email: capital.works@det.nsw.edu.au

Applicants may request detailed feedback on the outcomes of their application.

Applicants who have complaints about any aspect of the application and assessment process may submit their issue in writing at capital.works@det.nsw.edu.au.

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