Skip to main content

Compliance Management Insights - March 2024

Peter Edwards, Executive Director, Financial and Prudential Regulation

Strong, independent governance: the secret ingredient to quality care

I want to use this post to reflect on one of the most important ingredients helping providers deliver ongoing improvement. In our experience, it’s usually when this key component is missing that providers struggle to address compliance and performance issues in a sustainable manner.

That secret ingredient is strong, independent provider governance!

It’s because of this special ingredient’s importance that the Royal Commission into Aged Care Quality and Safety dedicated a good portion of its final report to recommendations on improving governance capability. It’s also why we have invested heavily in the Governing for Reform in Aged Care Program.  

It’s a timely topic, as the strengthened governance responsibilities have been enforceable in relation to all approved providers since December 2023.

These responsibilities apply to approved providers of:

  • residential aged care
  • home care packages
  • short-term restorative care in residential aged care settings and the home
  • multi-purpose services
  • transition care.

These responsibilities don’t apply to the Commonwealth Home Support Program or National Aboriginal and Torres Strait Islander Flexible Aged Care Program.

Governance responsibilities

So, what governance arrangements do providers need to have in place? And why are they important to delivering quality and safe care?

To comply with the strengthened governance responsibilities, all providers must:

  • assess the suitability of their key personnel at least once a year
  • submit material changes and notifications to us within 14 days, this includes key personnel changes
  • submit their completed annual Provider Operations Report to the Department of Health and Aged Care by 31 October each year 
  • make sure their governing body has a majority of independent non-executive members and at least one member with experience in providing clinical care
  • set up and continue a quality care advisory body
  • annually offer to set up a consumer advisory body
  • prioritise older Australians (not the holding company) if the organisation is a wholly owned subsidiary.

The responsibilities are focused on making sure that a provider’s governing body is equipped and capable to oversight the management of operational, financial and  clinical risks and set the provider’s strategic direction to support to the delivery of sustainable safe, quality care.

This involves having the right people with the right skills, supported by the right committee structure. People who feel empowered to question and challenge the actions and decisions of the provider when needed.

The governance responsibilities help lift provider performance across the sector. The Commission is taking a greater interest in whether providers are complying with what is expected of them. Where we are case managing a provider due to identified risk, we will be looking for evidence to see that the provider is complying. We are also planning to expand our current prudential audit program to include checks around compliance with the governance responsibilities. 

Where we discover non-compliance, we will be asking the provider to swiftly fix the situation.  However, where a provider is reluctant or resistant, we may need to use our formal powers to enforce compliance. Though we expect this will be the exception to the rule.

I hope you have found this useful and if you would like to read more about the governance responsibilities you can visit our Strengthening governance webpage.

Until next time.

Peter Edwards

Executive Director, Compliance Management Group

Was this page useful?
Why not?