The Aged Care Quality and Safety Commission (Commission) has released a new fact sheet on residential aged care providers’ financial and prudential responsibilities, including the need to submit reports on time. The Government uses this information to monitor financial risks that may affect providers, hence the strict timeframe. The Commission also uses the information to inform regulation practices, as well as for education resources. You can access the full fact sheet here. Meanwhile, here is a quick summary of the key points that you need to know.

What Are the Prudential Standards?

Residential aged care providers are required to comply with the Prudential Standards set out in the Aged Care Act 1997 (Cth) (Aged Care Act) and the Fees and Payments Principles 2014 (No.2). The Prudential Standards outline the regulatory requirements of providers regarding their management of refundable accommodation deposits and bonds (including entry contributions). Any provider that holds refundable accommodation deposits or bonds is required to comply with the Prudential Standards.

What Are the Financial and Prudential Reporting Responsibilities?

The financial and prudential reporting responsibilities ensure transparency of approved providers’ financial management as well as the management of consumers’ refundable accommodation deposits. The Government uses this information to monitor financial risks that may impact on providers.

Approved Provider Responsibilities

Approved providers must:

• comply with Part 3A.3 of the Aged Care Act in relation to managing refundable deposits, accommodation bonds and entry contributions under Section 56-1(ga) of the Aged Care Act
• comply with responsibilities specified in the Accountability Principles 2014 (Accountability Principles), including aged care financial reporting responsibilities, under Section 63-1(m) of the Aged Care Act.

Key Reporting Dates for 2022-2023

Approved providers must also lodge their Quarterly Financial Report (QFR), Aged Care Financial Report (ACFR), Annual Prudential Compliance (APCS) and General Purpose Financial Report (GPFR) as part of their obligations. Key dates for 2022-2023, as provided by the Commission, are detailed below. All QFR reporting dates are yet to be legislated.

*31 October for most approved providers unless prior approval received from the Secretary of the Department of Health and Ageing

Reporting Extensions

Approved providers cannot receive extensions for lodging their QFR, ACFR or APCS beyond their respective due dates. An approved provider is non-compliant with their reporting obligations if they fail to lodge any of these within the legislated timeframe.

Reporting Declarations

For non-government aged care providers, an ACFR declaration must be signed by a director of the body corporate (for incorporated providers) or a member of the approved provider’s governing body (for unincorporated providers).

If the approved provider is a state, territory, authority of a state or territory, or local government authority the ACFR and QFR must be signed by an authorised member of the approved provider’s key personnel.

Aged Care Financial Report (ACFR)

Under the Accountability Principles, approved providers must prepare an ACFR and submit it through the online portal within the specified timeframe. The type of services that an approved provider delivers determines what must be reported.

Date of Annual Reporting

Approved providers who have a financial year ending 30 June:

• must complete and lodge their ACFR via the online portal by 31 October. The ACFR must be accompanied by the audited GPFR and APCS.

Approved providers who have a non-standard financial year:

• must apply to the Secretary of the Department of Health and Aged Care (Department) to report outside the standard financial year.

Annual Prudential Compliance Statement (APCS)

Approved providers who hold a refundable accommodation deposit for the reporting period:

• must lodge an APCS that shows compliance with the requirements.

Approved providers who did not hold any refundable accommodation payments during the financial year:

• must complete the first question of the APCS. The Disclosure Standard sets out the requirements of the APCS. Further information regarding the APCS is outlined in the Disclosure Standard Fact Sheet.

Quarterly Financial Report (QFR)

From 1 July 2022, the introduction of quarterly financial reports means new financial reporting and transparency requirements. As this is a new requirement, approved providers should start completing this report as soon as possible to allow enough time to report by the due date. There are four components to the QFR:

• viability and prudential compliance
• quarterly financial statements
• labour costs and hours reporting (residential and home care)
• food and nutrition financial report.

The type and classification of a provider determines which components of the QFR need to be completed. Refer to the Prudential Fact Sheet for more details.

General Purpose Financial Report (GPFR) Publication

From the 2021-2022 financial year onwards, approved providers who are required to lodge a GPFR to the Department must also publish their GPFR online. This is to increase financial transparency in the aged care sector and help consumers.

The GPFR must be published:

• within five (5) months of the provider’s end of financial year, one month after lodgement of the ACFR
• either on the provider’s website, or
• if the provider does not have a website, on a publicly accessible website.

Providers:

• should think about how they will communicate this information to their consumers or prospective consumers to ensure transparency
• who hold refundable accommodation deposits can include details of a published GPFR in the routine provision of information to consumers under the Disclosure Standard.

Conclusion

It is important that residential aged care providers understand their obligations under the Prudential Standards, and particularly their financial and prudential reporting responsibilities. The Commissioner may impose sanctions on an approved provider if it fails to comply with one or more of its aged care responsibilities, including financial reporting responsibilities.

Additional Resources

The Aged Care Quality and Safety Commission has provided the following additional information:

• Aged Care Financial Report (ACFR) Changes & Guides
• Quarterly Financial Report (QFR) Guides & FAQs
• Annual Prudential Compliance (APCS) Guidelines