Overview
The link between the financial health of providers and the delivery of safe high-quality care is well known. The financial and prudential reporting responsibilities ensure providers are transparent about their finances and the management of refundable accommodation deposits.
Any approved provider of residential or flexible care that holds at least one refundable accommodation deposit must meet the requirements of the four Prudential Standards:
The Commission works with providers to improve their financial situation, to anticipate issues and apply strategies to reduce financial risk. The Government uses this information to improve visibility of emerging financial risks that may impact provider viability or service quality.
The Commission also works to ensure all providers are using refundable deposits for permitted uses only.
When you meet the Prudential Standards, your organisation can grow, and can continue to improve aged care and services. They work together to make best practice financial governance and operations your everyday standard.
Reforming Financial and Prudential Regulation
On 1 July 2023, financial monitoring of approved aged care providers transferred from the Department of Health and Aged Care to the Aged Care Quality and Safety Commission.
The change gives the Commission a better understanding of the risks across the aged care sector affecting financial viability and quality of care. Hear from the Commissioner, Janet Anderson PSM on the transfer of this responsibility and how it will enhance our existing functions as the prudential regulator.
Please see Financial viability support for aged care providers for further information.
Further, as part of the proposed new Aged Care Act the Commission will be developing Financial and Prudential Standards. This includes a new Liquidity Standard for residential providers. We will consult with industry on the drafting of this new Standard in the coming months.
Please see the Liquidity webpage for further information on this reform.
Provider obligations
All aged care approved providers have a number of reporting obligations under the Accountability Principles 2014. These obligations can be found in the aged care financial reports calendar which details due dates and auditing requirements for 2023.
Approved providers of residential and flexible aged care who hold a refundable deposit are required to comply with prudential responsibilities that are set out in the Aged Care Act 1997 (the Aged Care Act) and the Fees and Payments Principles 2014 (No.2) (the Fees and Payments Principles). In particular:
- responsibilities of approved providers (section 56-1 and section 56-2 of the Aged Care Act)
- managing refundable deposits (Part 3A.3 of the Aged Care Act and Parts 6 and 7 of the Fees Principles).
- the Prudential Standards (Part 3A.3 of the Aged Care Act and Part 5 of the Fees and Payments Principles.
Engaging with the Commission
Stay up to date with financial and prudential regulation information by subscribing to Financial and Prudential Regulatory Insights.
We can assist you in identifying and managing risk and your finances so you can sustainably deliver high quality care and services. In this video we meet some of the Financial and Prudential team and outline how they work together, and with providers, to support quality outcomes for older Australians.
See the Targeted Review & Audit webpage for more detail on these activities.
If you require support, please contact:
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Email address |
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Prudential compliance Financial reporting obligations |
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Financial viability support Targeted reviews and audits |
Resources
- Prudential Standards - Permitted uses of Refundable Accommodation Deposits
- Prudential Standards – Records Standard
- Prudential Standards – quick reference poster
- Aged care financial reports calendar 2024 - A3 poster and 2023 financial reports calendar
- Prudential Compliance – provider obligations of refundable deposits video
- Prudential targeted campaign – national compliance report
- Governance Standard fact sheet
- Investment management strategy fact sheet
- Liquidity Standard fact sheet
- Disclosure Standard fact sheet
- Financial and Prudential Reporting Responsibilities fact sheet
- Department of Health and Aged Care financial reports