The accounting and advisory firm has warned aged care directors that the Government’s recently announced $444.6 million funding package for providers and relief from prosecution on insolvent trading over the next six months is “not a ‘get out of jail free’ card” for their responsibilities.
Grant Thornton’s Financial Advisory Partner, Phil Campbell-Wilson, and National Head of Health & Aged Care, Darrell Price say boards and directors must consider how their actions may be seen when reviewed with 20/20 hindsight in one to two years’ time.
They are recommending that boards carry out:
- An independent review of their immediate cash flow requirements.
- Develop a ‘Business As Usual’ verses COVID-19 cash flow comparison to clearly demonstrate the impacts of the pandemic on what was reasonably expected over the forecast period, without its impacts.
- Use appropriate forecasting to develop a clear action plan to address and minimise the financial impacts that their business experiences as a result of the COVID-19 pandemic.
- Create a clear and decisive stakeholder communication plan to lenders, regulators, suppliers and shareholders.
- Undertake regular reviews of the cash flows and COVID-19 plans throughout the period of the pandemic impact and until BAU is restored in full.
Critically, Phil and Darrell say these are the minimum steps boards should be taking – so there is room to take further action.
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