Impact of lockdowns on NDIS, Aged Care and Community Service Providers

At RSM we understand the difficulties that NDIS and Aged Care and Community Service Providers are facing with the recent round of lockdown measures in Australia.

With the rapidly changing and uncertain situation, there are immediate priorities for managing current risks of maintaining and upholding the welfare and safety of the participants, clients, and staff.  

In addition, organisations having limited time to step back and consider the current financial health of the organisation, or the longer-term impacts on sustainability. 

What are the key Government, Healthcare & Community industry observations or challenges?

 Some of the current changes that we have observed:

1.    The Delta variant of COVID-19, and subsequent lockdowns and measures, have left disability, aged care and community service providers facing some significant challenges, with substantial pressures on financial performance, workforce supply and retention and increases in administrative and compliance burdens.  This is compounding pressure on a sector yet to recover from the experiences of the 2020 COVID-19 outbreaks.

2.    The winter 2021 widespread lockdown measures have directly affecting service providers across NSW, Victoria, ACT and Queensland.  Challenges include:

• Workforce management - Service providers experiencing significant challenges in managing their workforce.  Many are faced with a workforce that may be unavailable to work due to restrictions on travelling between multiple sites, unwillingness to work due to carer responsibilities, fear or other personal reasons, or restrictions from working due to quarantine and testing requirements.  
• Administrative burden - In lockdown areas, providers pausing non-essential services and standing up services, or increasing resourcing to meet additional requirements generated by the lockdown, such as facilitating client/ participant access to health services, social support and connection, and managing infection control training, equipment and delivery.  The underlying administrative burden supporting these changes is complex.
• Increased demand in Aged Care workforce - In the report published by the Aged Care Quality and Safety Commission, “We saw the best in people: Lessons Learned by aged care providers experiencing outbreaks of COVID-19 in Victoria Australia 2020” noted that Aged Care service providers rostered 1.5, double or triple the usual staffing, depending on the service during an outbreak, with restrictions on workers to prevent working across facilities. There has been a heightened demand for the aged care workforce. 
• Underlying this disruption, are ongoing workforce recruitment and retention challenges.  In National Disability Services (NDS) State of the Disability Sector Report for 2020, 59% of providers found it “extremely or moderately difficult” to recruit disability support workers, with 40% of providers reporting greater difficulty in retaining disability support workers.   

These challenges are real. The recent announcement of Disability Services Australia going into Voluntary Administration, following a Fair Work Enforceable Undertaking to repay staff $1.6M in December 2020 illustrates the risks and challenges even the largest providers are facing under the current conditions.

How can RSM assist you?

 There are a number of ways RSM can assist service providers to navigate this disruption. For example:

1.    We can assist you with understanding and accessing the government industry and individual support being offered.

•  The business support being offered by Commonwealth and State / Territory governments in 2021 are substantively different with cross-border limitations on eligibility.  Navigating eligibility and applications increase the burden of operational and administrative tasks on an already stretched workforce.  
•  Contact our Business Advisory team in your local region to evaluate and assist you with applications for grants. 

2.    Our Restructure and Recovery team can assist governing boards and committees with their responsibilities and duties. 

• Directors and Committee members for provider organisations carry personal liability and risks in carrying out Director duties. These duties include making sure the financial affairs of the organisation are managed responsibly, and actively prevent insolvency. Key to exercising these duties is the expectation that you will actively seek to be informed about the financial status of the organisation. 
• If your organisation is in doubt or has concerns over the impact of COVID-19 on your financial performance, contact our R&R experts so we can map out your options to navigate through this period with a degree of comfort and protection from personal liability.

3.    Our Risk Advisory Services team can provide Assurance and Advisory support with the rapid workforce changes required to meet the many challenges of service delivery during the pandemic. 

• With significant changes in operational and training requirements to provide worker and client/ participant protection from COVID-19, we can provide assurance or advisory to ensure that people are following right processes and systems. 
• Build confidence and trust in the workplace, by ensuring that people, systems, and processes can meet the complex legislative obligations required to stand down (and up) staff consistent with Fair Work, Award and EBA requirements.
• Review systems to ensure they are working effectively, and the interpretation and application of complex EA’s and multiple changes to staffing and payroll processes are implemented accurately. 
• Improve staff retention and resilience by implementing measures to protect the health and wellbeing of your workforce.
• Contact Risk Advisory Services to help you navigate workforce management and minimise risks, during this period of disruption.  

4. Our CFO Advisory team can provide financial and technical accounting support to ensure that approved providers are complying with the recommendations made as part of the Royal Commission into Aged Care to improve accountability and transparency of the aged care sector, as well as meeting their annual reporting requirements. This includes but is not limited to:

• Prepare and/or review the changes required to consolidated parent level segment reporting, reconciliation statements required for balance sheet items and updated liquidity information.
• Prepare and/or review your organisation’s Aged Care Financial Report and/or General Purpose Financial Statements.
• Assist residential aged care providers who hold accommodation bonds, refundable deposits or entry contributions with preparing the Annual Prudential Compliance Statement.
• Contact one of our CFO Advisory specialists to help you meet your compliance obligations within the 31 October deadline.

At RSM, we understand the healthcare sector and have the technical skills and knowledge to help you navigate uncertain times.

For further information

If you have any questions regarding COVID-19 stress, get in touch with your local RSM expert.

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