Significant changes to Aged Care Financial Reporting

Business Insights

Recommendation 133 from the Royal Commission into Aged Care Quality and Safety is currently being implemented.Changes to Aged Care Financial Reporting

It will introduce more stringent reporting requirements and strengthen prudential requirements for approved providers.


What is changing?

The new reporting requirements will help the Government to monitor and support aged care providers.

This will be key to minimising the risk of business failures and protecting consumers from disruptions to the care services they receive. Measures to increase financial transparency in the sector are also being introduced to allow consumers to make informed choices about their care.

This Royal Commission’s recommendation is being implemented through a new three-phase Financial and Prudential Monitoring, Compliance, and Intervention Framework. The Framework aims to improve the sustainability, accountability, and transparency of the aged care sector.

Phase 1 commenced in July 2021 and included new mandatory reporting arrangements and an expansion of the information collected in the annual Aged Care Financial Report (ACFR).

Phase 2 commenced in July 2022 and introduced new quarterly financial reporting and transparency requirements.

  • A new Quarterly Financial Report (QFR) will enable more timely analyses of the sector’s viability, provide information to the Star Rating system and monitor direct care minutes delivered by aged care services. The first QFR was due to the Department of Health (the department) on 4 November 2022. This report captured the first quarter of the 2022-23 financial year.
  • From the 2021-22 financial year, all approved residential aged care providers who submit a General Purpose Financial Report (GPFR) to the department (excluding State and Territory Government providers), will be required to publish their GPFR online.

Recommendation 133 from the Royal Commission into Aged Care Quality and Safety is currently being implemented.


WHAT IS THE PURPOSE of QUARTERLY FINANCIAL REPORTING?

The financial data collected through the QFR will be used for a range of purposes including:

  • Financial oversight: used to track, monitor, and benchmark the sector.
  • Consumer choice and transparency: provide information to the Star Rating system where senior Australians and their families will have access to information to make informed choices.
  • Policy development: policy planning and development is informed by accurate data.
  • Funding: to inform the Australian National Aged Care Classification (AN-ACC) pricing model and pricing studies.
  • Prudential standards regulation: used to inform the regulation of providers' compliance with the Prudential Standards.
  • Quality standards regulation: used to inform the risk-based regulation of services and providers' performance against the Quality Standards and other provider responsibilities.

SCOPE of the Quarterly Financial Report

There are five parts to the QFR:

1. Viability and prudential compliance questions

  • Will be used as forward-looking indicators to identify providers who have viability and prudential concerns.

2. Quarterly Financial Statements

  • This financial information will be used by the department to understand sector performance

3. Residential care labour cost and hours reporting

  • Contributes to star ratings and inform costing studies for the new AN-ACC funding model

4. Home care labour cost and hours reporting

  • Increased reporting requirements will bring greater transparency and accountability in the home care sector by better aligning the reporting requirements with residential care.

5. Quarterly Food and Nutrition report


Quarterly Financial Report COMPLAINCE TIMELINE

The submission of Quarterly Financial Report is due to the department within 35 days after the end of each quarter. Providers will have 45 days to submit the quarter two reports due to the Christmas and New Year’s holidays. The dates of submission are outlined in the table below:

Quarters (Financial year 2022-23)

Dates of Submission

Quarter One (July to September)

4 November 2022

Quarter Two (October to December)

15 February 2023

Quarter Three (January to March)

5 May 2023

Quarter Four (April to June)

5 August 2023

 

The responsibility to prepare and submit a QFR to the Secretary, as well as publish a GPFR, will be set out in the Accountability Principles. Accordingly, compliance with these responsibilities is monitored and enforced by the Commission and its approach to non-compliance with reporting obligations is set out in its Compliance and Enforcement Policy.

Ultimately, the Aged Care Quality and Safety Commission uses information submitted in the QFR to inform its regulatory activities including risk profiling and assessment, targeted monitoring, publishing information on sector performance, and development of education and guidance resources.

For more information

Please reach out to Ray Scott (National Director – Aged Care) if you would like to discuss Aged Care Financial Reporting implications for your specific circumstances.

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