An approved provider that holds refundable deposits must implement and maintain a governance system that ensures the balances are only used for permitted uses and can be refunded as and when they fall due.
The Governance Standard, section 49-50 of the Fees and Payments Principles, requires approved providers to develop sound governance systems to ensure refundable deposits are only used for permitted uses and are refunded to residents as and when they fall due, as required under the Aged Care Act.
An approved provider that holds refundable deposits must implement and maintain an effective governance system that ensures the balances are only accessed for permitted uses and can be refunded to residents when they are due.
The Governance Standard promotes sound business practices by requiring providers to develop and implement governance arrangements in accordance with the size and complexity of their business.
These requirements are outlined in the Governance Standard, section 49-50 of the Fees and Payments Principles.
Investment management strategy
Approved providers are required to maintain a written investment management strategy (IMS) if they invest refundable deposits in certain financial products. This is outlined in S52N-1(3)(b) of the Aged Care Act and s.63(c) of the Fees and Payments Principles.
The Governance Standard only applies to the management of refundable deposits not corporate governance within a providers’ commercial business arrangements.
The common forms of evidence required to assess compliance with the Governance Standard are:
- governance policies and procedures in relation to managing and controlling refundable deposits
- job descriptions
- training documentation in relation to refundable deposits responsibilities
- policies and procedures on refunding refundable deposits
- financial delegations in relation to refunds of refundable deposits
- loan documents to related parties
- evidence of capital expenditure
- evidence of investments.