Federal Government’s new requirements for residential care providers’ financial performance

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The Federal Government has announced it will implement the Royal Commission into Aged Care, Quality and Safety’s recommendations to introduce more stringent reporting requirements and strengthen prudential requirements of providers.

These recommendations will be implemented through a new Financial and Prudential Monitoring, Compliance and Intervention Framework, phased in over three years, to improve accountability and transparency of the sector, the Department of Health said.

Phase 1 will introduce new mandatory reporting requirements and an expansion of the information collected in the 2020-21 Aged Care Financial Report (ACFR).

Major changes to the ACFR include:

  • detailed residential segment income and expense statement at the facility level
  • enhanced approved provider reporting
  • consolidated parent level segment report
  • permitted uses reconciliation.

The Health Department has conducted targeted and sector wide consultations on the above changes to the ACFR. Feedback from these consultations has been incorporated in the revised ACFR and transitional arrangements will be available with the commencement of the new reporting requirements.

The due date for the 2020-21 ACFR is 31 October 2021.

More information on phase 2 will be provided ahead of its expected implementation from 1 July 2022. Phase 3 of the framework (expected implementation from 1 July 2023) will be informed by future consultations with the sector.