ITA Application Guide - Major Capital Fund

This application guide will help you complete a strong Start Strong Capital Works Grant application for Stage 2 Invitation to apply for the Major Capital Fund.

Applicants shortlisted in stage 1 Expression of Interest (EOI) will be invited to submit a detailed application at Stage 2 Invitation to apply (ITA) to further demonstrate their alignment to the assessment criteria and the viability of their project.

The Department has agreed to fund 17 hours of qualified support to assist ITA applicants with prescribed elements of their Stage 2 ITA application. Applicants that opt-in will have to agree to the Terms of Use to access this service, which can be found on the website.

General information: Applicant details

You are required to confirm the key details provided in your EOI application. If your circumstances have changed, you must notify the Department so your proposal can be properly assessed.

Among other things, you must confirm your:

  • Provider Approval ID
  • Service Approval ID
  • Key contact details of primary contact
  • Capital works address.

What is the capital works address?

The Capital Works address is the site where your proposed project will take place. It is crucial for the Department to understand this address and whether a preschool is currently operating on the site.

ITA professional support

The Department has engaged Community Connections Solutions Australia (CCSA) to provide up to 17 hours of prescribed support (funded by the Department) to ITA Applicants on an opt-in basis. ITA Applicants will be asked to confirm that they opted in to use this service, and will be prompted to attach the written attestation they received from CCSA. This written attestation should be attached to the ITA application as supporting evidence prior to application submission.

Assessment criteria: Capacity and capability for delivery

Applicants need to demonstrate their capacity and capability for delivery by providing detailed evidence of their project. Some of the elements assessed under this parameter are:

Applicants are required to provide a detailed description of the final project design and scope of works, and the number of preschool places to be created as a direct result of the proposed project.

You must also provide a detailed project plan and timeline for your project, as evidence of your ability to finalise the project within 24 months. The project plan and timeline should include the expected start and finish dates, timeframes to achieve milestones and the estimated opening date of the service once capital works are completed.

You must also provide evidence to demonstrate you have approval and support from all relevant parties (for example, your landlord, council, committee, Schools Infrastructure NSW) to proceed with the capital works project on your site. This may include preliminary minutes from discussions with your board or council, letters of support from your landlord, other funding bodies contributing to the project or partners, a Development Approval (DA) application lodged or approved, or any other related documents.

You need to provide evidence that indicates you have a suitable project site, and that the site will remain available for the provision of a preschool service for the 10-year period following completion of the capital works. Evidence can include a Certificate of Title if you own the land, a current 10-year lease, or a license to operate on a school site or equivalent. Please note you must secure a site before applying for this grant.

If your current land arrangements are not valid for 10 years, you will be required to demonstrate how you and your landlord will meet the 10-year requirement. For example, you may provide a lease for a shorter tenure and a letter of support from your lessor indicating you are a longstanding tenant and that they intend to extend your lease upon the expiry of your current one.

If you operate on a public school site, you are required to provide a letter of support from School Infrastructure NSW indicating that they support your project and intend to operate a preschool on the school site for 10 years. Please discuss licensing arrangements and your intent to proceed with the project with the school principal and School Infrastructure NSW (SINSW) before applying.

The provision of a security instrument will be a precondition for funding. Applicants are required to consent to this requirement should they be successful with their Stage 2 application:

  • If you own the land, you must confirm you understand you will be required to enter into a mortgage.
  • If you have a 10-year lease, you and your landlord will be required to consent to a mortgage of lease.
  • If you have a license on a school site, you must discuss licensing and the project requirements with Schools Infrastructure NSW , and that they support your project.
  • If you have any other land arrangements or circumstances, you agree to consent to an appropriate security instrument as advised by the Department .

You are encouraged to submit evidence to confirm your intent, such as a letter from you and your landlord or SINSW. If you, your lessor or any parties have any concerns or restrictions in regards to the security instrument, please provide details on your application

Please see the security instrument information for further details.

Applicants will be required to provide a risk assessment for their project. We encourage you to think carefully about the risks that may impact your project and what strategies you can implement to mitigate them and deliver your project with minimal disruptions.

Risks Likelihood Impact Mitigation Strategies
Describe the risks identified in regards to your capital works project Indicate the likelihood of risk occurring: Rare, Unlikely, Moderate, Likely, Certain Indicate impact the risk would have in your project Low, Moderate, High, Extreme Outline mitigation strategies you will implement to prevent the risk from occurring and/or reduce the impact if it does occur
EXAMPLE: When assessing the DA, the council requests a change to plans, which may lead to an increase in project costs and time to complete Moderate High Contingency funding has been factored into budget

Examples of risks

  • Cost overruns supply chain disruptions, increase in cost materials, unforeseen expenditure or other reasons. Note that, under the Funding Agreement, any cost overruns will be the approved provider’s responsibility. To mitigate the risk of cost overrun, you are encouraged to discuss financial risks with suppliers when obtaining quotes. You should also ensure your budget and quotes reflect the final scope of works with all design features you intend to deliver. You should also include contingency within your budget.
  • Project delays due to natural disasters, COVID-19, or other unforeseen operational reasons.
  • DA approval is not obtained or requires a change in design/scope to be compliant. To mitigate this risk, we encourage you and your suppliers to carefully review all relevant regulations that apply to your project, including but not limited to the Building Code of Australia and the regulations that apply to childcare-centres (State Environmental Planning Policy - Educational Establishments and Child Care Facilities 2017).
  • Service Approval is not obtained or is obtained for a lower number of places per day. To mitigate this risk, you should engage a licensed building practitioner with relevant accreditation or registration with their relevant body to provide you with plans and calculations of unencumbered space, to support your forecasted increase in places and to ensure your build will be compliant with all relevant regulations applicable to childcare centres.
  • Difficulty in negotiating a security instrument based on special circumstances of your service affecting your land, which can result in delays and jeopardise the viability of your project. To mitigate this risk, we encourage you to discuss security requirements with all parties involved before submitting your application and communicate any issues or concerns regarding the security requirement on your application.

Risk likelihood

  • Rare – less than 10% chance of event occurring over life of a project
  • Unlikely – 10% - 40% chance of event occurring over life of a project
  • Possible – 41% - 60% chance of an event occurring over life of a project
  • Likely – 61% - 90% chance of an event occurring over like of a project
  • Certain – More than 90% chance of an event occurring over life of a project.

Risk impact

Impact refers to the consequence on your capital works project, if the risks occurs. Refer to the table below to assess the consequence and level of impact on project delivery.



Category
Low Insignificant/minor consequences Moderate Medium consequences High Major/substantial consequences Extreme Critical/significant consequences
Change of scope or variation to project outome (increase in preschool places) Very minor impact on project scope or project quality, or up to 5% of the intended places not delivered Moderate impact on project scope or project quality, which may impact service approval, or between 5-20% of the intended places are not delivered Major impact on project scope or project quality, which will impact service approval, or between 20-80% of the intended places are not delivered Significant impact on project scope or project quality, which will cause service approval to not be issued, or majority (over 80%) of the promised places are not delivered
Off tracked or delayed Project is within expected timeframe Expected timeframe has exceeded up to 6 months Expected timeframe has exceeded between 6 months to 1 year Expected timeframe has exceeded by more than 1 year
Project budget Very minor variances to project budget (up to 5%), that do not impact project delivery Moderate variance to project budget (between 5-40%), that negatively impacts the provider or potentially affects project delivery Major variance to project budget (between 40-80%), causing serious shortfall that negatively impacts the provider or affects project delivery Significant variance to project budget (over 80%), causing severe shortfall and negative impact to the provider or project delivery

Assessment criteria: Increase in preschool places in areas of need and demand

Applicants must provide evidence to demonstrate there is need and demand for preschool places in the area they intend the service to operate, and must confirm the forecast increase in preschool places that will occur as a direct result of the project, based on the project’s final scope of works.

Need and demand

The Department will conduct data analysis to assess need and demand for preschool places in the area you intend to service, and will also consider the Socio-Economic Index for Areas (SEIFA) and Accessibility and Remoteness Index of Australia (ARIA). The Department will also consider other elements such as the percentage of Not-For-Profit services and equity children in your area.

To complement the Department’s analysis, applicants are requested to submit evidence to demonstrate need and demand, such as:

  • An overview of demand for community preschool places, including a waiting list for the service and community feedback.
  • Evidence of significant growth in the number of children and families in the area due to population growth, new industries or residential development.
  • Evidence of an identified shortage of community preschool places in the area.
  • Other significant factors which indicate a new demand or shortage in the local area. For example, closure of other early childhood services that were delivering community preschool programs.

Your project must increase the number of places your service offers per day, and these need to be allocated exclusively to community preschool. If you are creating places for any other age-group or service type, please note that these cannot count towards the increase in places that you input in your application. If you are a multipurpose service, please note that this grant can only fund the portion of your build resulting in an increase in places allocated exclusively to community preschool.

You must confirm or adjust the forecasted increase in places you had previously provided on your EOI, based on your project's final scope of work. Your updated forecast must be supported by plans and unencumbered space calculations prepared by a licensed building practitioner with adequate accreditation or registration with their relevant body. You will also be asked to demonstrate how you have calculated your proposed increase in line with regulations 107 and 108.

Please consider all relevant space and regulatory requirements for centre-based services. See Preschool Places Regulatory Requirements for more information.

Also note that the Regulatory Authority considers your compliance history when you apply for Service Approval to increase the number of approved places.

Guidance on preschool places by applicant service type

Relocating an existing service to a new site

There will be an increase in places if your licence at the new site is for more preschool places a day than the licence you hold at your current site.

Only count the places that will be additional to the number of places your service currently has (for example, if you have 20 places per day in your current site, and will have 30 at the new site, your increase in preschool places is 10).

For example:

Current places: 20
New place/increase: 10
Expected total place: 30

Expected total places

Your expected total places are the number of community preschool places per day you expect to have as a result of the project.

This number should be the sum of your current community preschool places and the number of community preschool places you intend to create with your project or new preschool places (please see example above).

Multipurpose preschools

An increase in places means that the project creates new places that are exclusively allocated to community preschool.

Places allocated to a preschool program within a Long Day Care setting are not community preschool places and do not count for the purposes of the increase.

Your current multipurpose preschool places are the number of places within your existing licence that are exclusively allocated to community preschool (excluding the places used for long day care or preschool program within long day care). Your current number of preschool places will be different to the number of per day licensed places recorded in NQAITS, as that number would include your Long Day Care places.

Your increase in places is the number of places allocated exclusively to community preschool that you intend to create with your project.

For example:

Multipurpose ABC has 50 licenced/per day places recorded in NQAITS. Of these 50, 20 places are allocated exclusively to community preschool, and 30 are allocated to Long Day Care or a preschool program within the Long Day Care. Therefore, this service has 20 existing community preschool places.

The multipurpose intends to create 30 new places with this project, 10 of which will be allocated exclusively for community preschool, and 20 will be allocated exclusively for Long Day Care or for a preschool program within the Long Day Care setting. Therefore, the increase in preschool places for this applicant is 10.

After the capital works, Multipurpose ABC will have 80 places per day as per NQAITS, however only 30 of these will be allocated exclusively to community preschool:

The information provided by Multipurpose ABC in their application would be:  

Current places: 20
New places: 20
Expected total places: 30

Expected total places

Your expected total places should be the number of places allocated exclusively to community preschool at the end of the capital works project. Following the example above, the total number of community preschool places for Multipurpose ABC will be 30 (20 existing and 10 new).

The service’s licence as per NQAITS in this example will be 80 places post capital works, however this is not the number we are looking for as it includes the Long Day Care places.

Your responses should always only focus on places allocated exclusively to community preschool for the purposes of this application.

Existing services undertaking capital works at their preschool centre

For existing community preschools, your current places refer to the number of places per day you are licensed for as per NQAITS.

Only count the places that will be additional to the number of places your service currently has (for example, if you currently offer 20 places per day and intend to build a new classroom for 15 children per day with the project, your increase would be those 15 places).

For example: 

Current places: 20
New places/increase: 15
Expected total places: 35

Expected total places

Your expected total places are the number of community preschool places per day you expect to have as a result of the project.

This number should be the sum of your current community preschool places and the number of community preschool places you intend to create with your project or new preschool places (please see examples above).

New services

Your current preschool places should be zero.

The increase in preschool places will be the total number of licenced or places per day offered at the new service.

For example:

Current places: 0 (service not yet operational)
New places/increse: 30
Expected total: 30

Expected total places

Your expected total number of places will be the same as the number of new places.

Assessment criteria: Accessibility and inclusion

You must submit evidence that your Capital Works project will provide and/or improve the provision of a culturally safe, accessible and inclusive educational setting for equity children. Equity children include Aboriginal and/or Torres Strait Islander children, children from low income backgrounds and children with disability and additional needs.

Evidence may include a description of the NSW Government Policies regarding diversity and inclusion that your service observes or any other internal policies or programs the preschool may have.

Letters of support from consultation with your local Aboriginal Community or any other equity group may also be provided as evidence. You should also mention if you are an Aboriginal Business, Australian Disability Enterprise or other Social Enterprise, or how this project will impact these communities (for example if you employ or intend to employ staff from these groups or businesses operated by them, etc).

Assessment criteria: Value for money (budget)

As part of the Start Strong Capital Works Program, the NSW Government has committed $62.1 million in funding to deliver 7,100 additional community preschool places across NSW. This budget is considered as part of the grant assessment process and the value for money of your proposal is a key assessment criterion.

Several elements are considered when assessing value for money, including the cost per place of your project. Cost per place is calculated by dividing the grant amount requested (excluding GST) by the number of preschool places you will create.

The more funding a provider contributes, either directly or via other funding sources, the lower the cost per place will be and the better the value for money.

You must submit at least two quotes obtained in the past six months that reflect the final design and scope of your project to substantiate your budget, and confirm your income and expenditure.

The project income is comprised of the grant amount, the provider contribution, and any other external sources of funding. All financial figures must be provided excluding GST throughout your application.

You must complete another income table with updated figures to reflect any changes to your funding sources. You must also confirm the availability of these funds and provide evidence in this regard.

The Grant amount (mandatory field)

These are the funds requested from the NSW Government under the Start Strong Capital Works Grant (ex GST).

If the grant amount requested on your stage 2 (ITA) application differs from the amount requested during the Stage 1 (EOI), due to changes in your project's final cost, please note that the Value for Money of your application will be re-assessed. The same applies if the proposed increase in places has changed, as these two elements impact the cost per place of your project.

If you are a multipurpose service, please note that this grant can only fund the portion of your build resulting in an increase in places allocated exclusively to community preschool.

Provider contribution (mandatory field)

This is your organisation’s contribution to the project and must be at least 5% of the project’s total cost (ex GST). It can be comprised of preschool funds and/or loans. To demonstrate the availability of preschool funds you may provide a recent bank statement, balance sheet or letter from your CFO committing the funds. To demonstrate the availability of a loan, you should include a letter of offer from your lending entity specifying the amount in the offer (ex GST).

If you are a multipurpose service, please note that the provider contribution mentioned on this application must be allocated to the portion of the build that will increase in community preschool places.

Other external sources of funding

This is any funding contributed to the project by parties other than the Start Strong Capital Works Grant and the provider contribution (ex GST). It can include other grants from State, Federal or Local Government, donations from private or public organisations or in-kind services.

The applicant is responsible for confirming the availability and amount of funds contributed by other sources or in-kind services. These amounts will not be funded by the Department.

You will be required to provide evidence to prove the availability and exact amount contributed by these external income sources, such as a letter from your funding entity with these details. For in-kind services, formal correspondence should confirm the offer of services detailing the scope of the offer. In-kind services can be quantified as $0 on your budget.

If an income source has not been confirmed, the applicant must provide an expected timeframe for the confirmation of funding, with evidence to support this.

You must update your expenditure table with detailed information about your project expenses, and nominate an appropriate source of funding for each one of them.

You must submit a minimum of two quotes obtained in the past six months that reflect the final design of your capital works project to substantiate your budget. All expenses should be supported by a quote.

When preparing your budget and expenditure table, please make sure that:

  • Your quotes are recent, itemised and reflect the final scope of works and final design for your project. Further funding will not be provided for any design additions or alterations not present on the current budget and quotes.
  • You are including all relevant expenses related to your project, including administrative or professional fees, project management, etc
  • You are nominating an adequate funding source to cover each expense. Please review the Program Guidelines to understand which components can be funded by this grant.
  • If you identify elements that cannot be funded with this grant, such as playground equipment, maintenance works, rooms that will be used primarily for purposes other than preschool education (for example, health or community services, or rooms for the delivery of any age-group or service type other than community preschool), please identify these costs on your expenditure table and nominate an appropriate funding source.
  • You are including contingency in your budget.
  • Your total expenditure (i.e. total cost of the project) matches your total income, meaning you have sourced enough funding to cover the forecast costs of your project.

Example

Project Expense Amount ex GST Source(s) of Funding
Site readiness and management $7,000 Provider Contribution
Site clearing and waste $6,000 Provider Contribution
Extension Capital Works - main build/ extension cost

$150,000

$250,000

Start Strong Capital Works Grant

Federal Government Grant

Plumbing $25,000 Start Strong Capital Works Grant
Electricity $25,000 Start Strong Capital Works Grant
Fit out $2,000 Provider Contribution
Landscaping and roadworks $10,000 Start Strong Capital Works Grant
Frames and trusses $40,000 Start Strong Capital Works Grant
Project management $50,000 Provider Contribution
Professional fees (i.e. legal fees) $0 In-kind services
Professional fees (i.e. architects and other specialists) $20,000 Provider Contribution
Administrative expenses (e.g. Council approvals, Development Approval) $20,000 Provider Contribution
Contingency $57,000 Federal Government Grant
TOTAL COST OF PROJECT (ex GST) $662,000
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