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Compliance Management Insights - April 2024

Peter Edwards, Executive Director, Financial and Prudential Regulation

Home care and governance

In this post I want to talk to you about home care, those approved aged care providers that support older people to continue to live independently in their homes. Governance is vital to delivering a positive experience for these people. I also want to discuss how this works where providers use external suppliers, contractors or third parties to deliver services.

Delivering home services can be challenging; particularly as demand for these services grows. We often find that providers struggle to make sure that their governance systems and processes keep up with that growth. This is particularly important if a provider is meeting growing demand for their services through sub-contracting.

Many home care providers find contracting third party suppliers helps them to expand the services they can offer. However, it also adds risks that a provider must manage.

Third party suppliers and provider responsibilities

Home care providers are always responsible for the quality of the services that they provide, whether the services are delivered by their own staff or a third party.

To manage third-party arrangements, providers need to develop clear performance measures and service level agreements. This makes sure expectations of the standard of care the third party must deliver are clear. Then there must be well established systems and processes to monitor the third party’s performance against that standard. This includes providers being able to directly observe some of the care the third party is providing. Providers also need to know when the needs of the people receiving care change.

Third parties can be involved in planning a person’s care. But it’s the home care provider’s responsibility to work with the person receiving care to review and keep that planning up-to-date. Developing systems and processes that regularly assess a person’s care needs, helps make sure that care is:

  • personalised
  • able to adapt quickly to their changing needs.

Providers also need to understand that when they contract third parties, they’re trusting them with critical activities. Before signing a contract with a third party, providers need to complete due diligence to make sure the third party can deliver the necessary care. For example, providers should check the third party has the necessary:

  • processes
  • procedures
  • staffing levels and skills
  • financial capacity.

When providers contract others to deliver services, they’re not contracting out their legal responsibilities as well. The Commission regulates approved providers. We expect providers to comply with all their aged care obligations no matter what service delivery arrangements they have.


Effective communication is vital when managing third parties. Providers must work out how they will communicate, such as through regular meetings and reports. They also need to make sure that key people are easily contactable. The provider needs to document and manage these processes. To make sure everyone is working towards the same objective of high-quality, safe care, you need to clearly communicate:

  • expectations
  • objectives
  • timelines.

Providers also need to be able to give constructive feedback so that third parties are continually aiming to improve their services.

I trust this has highlighted how important strong and effective governance arrangements are for home care providers. Particularly for those using sub-contracting arrangements to meet the growing demand for their services. 

Until next time….

Peter Edwards

Executive Director, Compliance Management Group

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