We understand the proposed change to financial reporting is a starting point on the path to a future state for financial reporting where:
- financial reporting is simplified - cost less and easier to comply with
- only meaningful and useful financial data is collected
- financial data is drawn from the nature business data held in providers financial system
- data collected is leveraged to improve knowledge and mitigation of risk
Following RSM's (RSM) involvement in advising ACFA on this matter, we supported the consultation process by hosting a discussion forum on draft report formats on the 18th of February. The attendees were representatives from for profit and not-for profit providers and included other industry advisors (refer attached list of attendees). This paper consolidates feedback from this forum. As agreed with attendees feedback is de-identified.
We summarised the project undertaken by ACFA and work of RSM to provide attendees a context for the proposed changes and we asked attendees to consider feedback in the context of:
- whether the proposed data collection is seen as meaningful and useful from a providers' perspective?
- whether the financial reporting is simple, and by extension cost efficient to comply with in comparison to the current reporting requirements?
Where issues are identified, we have sought to provide recommendations to address the issues raised or to reduce the impact on the providers.
The feedback can be summarised as follows:
- providers are supportive to the general direction that ACFA advised the minister
- extending timeframe to FY 2015-16 for proposed reporting is supported
- the level of details required in CFRs is extensive and of concern by providers
- there are some disconnects between the data sought and how providers operate their businesses
- there is concern that providers while being asked to provide data will not get access to meaningful and valuable insights that can emerge from appropriate analysis of the data
- there is concern that the drill down approach to data collection comes from a misunderstanding of what meaningful analysis can be conducted across the widely divergent operating models employed by providers. This could result in significant effort for no real value, a progressive approach rather than an all-encompassing approach was suggested
- the new reporting framework does not pass the test of simplification and reduce effort
- providers appreciated the opportunity to meet as a group and discuss the proposals
- while smaller for profit operators will benefit from the reduction in audit requirements for many this approach and the level of detail will impose significant new costs on providerso
- one provider felt the report was dismissive of the impact on multi service providers
The key recommendations emerging from the session were:
- further review and refine the CFR to achieve simplicity/efficiency and the ultimate purpose of a minimum set of data which is useful and meaningful to the department and ACFA
- to ensure quality/consistency of data and to streamline the process the department is encouraged to engage with Medicare and develop a process to feed Medicare derived data directly into a central process
- provide additional support to smaller providers to facilitate a smooth transition to the proposed financial reporting regime