Case study: Large Aboriginal Health Service Provider (AHSP)

How RSM helped a large Aboriginal Health Service Provider improve its governance and transition to a new legal structure

Aboriginal Health Service Providers (AHSPs) are vital organisations that deliver health care and support to Aboriginal communities across Australia. However, many AHSPs face challenges and issues in terms of governance, financial management, service delivery and compliance with funding agencies and government regulations. 

These challenges can affect the sustainability and effectiveness of AHSPs and their ability to meet the health needs of their clients. 
RSM is a professional services firm with specialist expertise in providing funds administration, financial examination and business restructure services to Aboriginal corporations. RSM has extensive experience and expertise in working with AHSPs and helping them overcome their challenges and achieve their goals.

In this case study, we will describe how RSM helped a large AHSP improve its corporate governance and transition to a new legal structure under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). We will also highlight the outcomes and achievements of RSM’s engagement with the AHSP and the key takeaways for other AHSPs that may face similar challenges.

An Aboriginal Health Service Provider plagued by structural issues and poor governance

This client was a large AHSP that operated in multiple locations, providing a wide range of much-needed services to Aboriginal people, including GP clinics, child and maternal health, dental, ear and eye health and other important programs. The AHSP had a complex funding structure that involved multiple sources, such as clients (Medicare income), other government agencies, and donations.

The AHSP faced several challenges and issues, including:

• Governance disputes between some board members
• Lack of policies and procedures for director remuneration and code of conduct
• Inadequate recruitment and retention of key management personnel
• Poor staff and member engagement and communication
• Inaccurate and outdated membership register and board structure
• Breaches and non-compliance with funding agreements and government regulations
• Viability and solvency concerns and overdue financial reports
• Inappropriate corporate and administrative structure and service delivery model
• Outdated constitution and strategic plan that did not reflect the current operations and aims of the AHSP

The AHSP had tried to change its Constitution and Governance structure several times in the past but had failed due to the resistance and complexity of the process. The AHSP needed a specialist and tailored approach to help them transition to a more suitable legal structure and improve their organisational outcomes.

RSM’s specialist expertise in corporate governance for Aboriginal organisations

The Department of Health engaged RSM to address these challenges and issues, which involved providing funds administration, financial examination, and business restructure services to the AHSP. One of the Partners at RSM who leads this area of service is Andrew Bowcher, a specialist in funds administration, financial examination, and business restructure services for Aboriginal corporations. 

Andrew has extensive qualifications and expertise in corporate governance, having undertaken the Graduate Diploma of Company Secretarial Practice (Governance) through the Governance Institute of Australia and the Diploma in Company Directorship (AICD/UNE), being the youngest ever participant to be awarded the Diploma in the University’s history. Andrew has also written and presented governance training to various Aboriginal and not-for-profit organisations.

A collaborative approach built on strong client relationships

Andrew and his team worked in collaboration with the Department of Health and the National Body, a trustee organization that was responsible for the funding made available to the AHSP. RSM facilitated the effective implementation of the terms of a Deed of Agreement and a Deed of Novation between the AHSP and the National Body, which enabled the National Body to manage the day-to-day operations of the AHSP. We also developed and executed a strategy to implement the necessary changes to the AHSP's rules and appoint a strengthened board with best practice policies and procedures supporting its function. 

This was a massive undertaking that included a range of tasks and activities, such as:

• Resolving governance disputes and developing policies and procedures for director remuneration and code of conduct
• Aiding with the recruitment of key management personnel, such as a Chief Executive Officer and a Chief Financial Officer
• Developing and implementing a staff and member engagement strategy, which included conducting information meetings and facilitating general meetings
• Reviewing and updating the membership register and board structure
• Reviewing and resolving the breaches and non-compliance issues with funding agencies and government regulations
• Assisting with meeting the compliance requirements of the AHSP's funding agreements
• Assisting with the completion of the Department's Action Plan
• Reviewing and improving the corporate and administrative structure and service delivery model
• Amending the AHSP's objectives in its existing constitution to better reflect the current operations of the AHSP
• Reviewing and updating the AHSP's strategic plan
• Strengthening the director eligibility requirements and implementing an Audit and Risk committee
• Developing a new Rule Book/Constitution for the transition of the AHSP from an association under a state Department of Fair Trading to a corporation under the CATSI Act
• Holding a member meeting to accept the proposed Rule Book amendments and transition to the Office of the Registrar of Indigenous Corporations (ORIC)
• Providing a Transition Plan to the National Body of matters to be actioned

Delivering successful outcomes for our AHSP client

Within the three-month period of this engagement, RSM successfully helped the AHSP transition from an Association under a State Department of Fair Trading to a Corporation under the CATSI Act. This was a significant achievement within such a short timeframe, considering other attempts by funding agencies and government departments to change the AHSP’s Constitution and Governance structure had been unsuccessful.

RSM also helped the AHSP achieve the following outcomes:

• Improved governance and accountability, resulting in a more effective and responsible board and management team
• Enhanced staff and member engagement and satisfaction, resulting in a more cohesive and collaborative organisation
• Increased compliance and performance, resulting in a more reliable and reputable organisation
• Improved financial management and reporting, resulting in a more viable and solvent organisation
• Improved service delivery and capacity, resulting in a more efficient and responsive organisation

These outcomes and achievements were significant and remarkable, considering the short timeframe and the complexity of the challenges and issues faced by the AHSP. Andrew and his team demonstrated our capability and capacity to deliver quality results and solutions for the AHSP and its stakeholders.

Key takeaways for AHSP’s and other Aboriginal organisations 

The case study of RSM's engagement with the AHSP provides some key takeaways and lessons for other AHSPs that may face similar challenges and issues, such as:

• The importance of good corporate governance as a critical pillar of a successful Aboriginal corporation
• The benefits of engaging a professional services firm that specializes in providing funds administration, financial examination, and business restructure services to Aboriginal corporations
• The value of working in collaboration with funding agencies and government regulators to achieve mutually beneficial outcomes
• The advantages of transitioning to a corporation under the CATSI Act, which provides a more suitable and supportive legal framework for Aboriginal corporations

RSM is a trusted and experienced partner for AHSPs and other Aboriginal corporations that need assistance and support in improving their governance and operations. RSM can help AHSPs and other Aboriginal corporations achieve their goals and objectives and deliver quality health care and support to their communities.

If your organisation is also in need of expert guidance in navigating complex governance issues, reach out to your local RSM office today.

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If your organisation is also in need of expert guidance in navigating complex governance issues, reach out to your local RSM office today.