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Commonwealth HACC Program

Fact sheet - Financial Accountability Reporting Requirements

This fact sheet provides Commonwealth HACC service providers with information on Financial Accountability Reporting Requirements.

PDF printable version of Financial Accountability Reporting Requirements (PDF 135 KB)

Financial Accountability Reports (FARs)

The financial monitoring and acquittal requirements of the Australian Government are met through service providers’ submission of Financial Accountability Reports (FARs) at certain points in each year.

Funding for the Commonwealth HACC Program is provided on a region basis. Therefore, service providers are required to provide reports separately for each region for which they receive funding.

Typical reporting requirements include the submission of Progressive FARs at the six month mark of each financial year, and Annual FARs at the completion of each financial year.

Submission of FARs - eFAR system

It is intended that FARs will be submitted using the Department’s online eFAR system. This system is currently used for the National Respite for Carers Program (NRCP). The eFAR is currently undergoing system changes to reflect the Commonwealth HACC Program requirements.

A draft eFAR User Guide is available at Appendix H of the Commonwealth HACC Program Manual. This Guide provides detailed information about the submission requirements of FARs. The eFAR User Guide will undergo minor revision to align with the revised system and be made publically available in due course.

It is intended that the eFAR system will be accessed through the Aged Care Provider Portal. Where the Department already holds information, this information will be pre-populated into the relevant sections of the FAR in an effort to reduce reporting burden on service providers.

Reducing Reporting Burden

The frequency of submissions for FARs has been designed to reduce the reporting burden, particularly for smaller service providers, wherever possible.

Service providers are classified in the following way:

• Tier 1 Service Provider – A service provider that receives annual total Commonwealth HACC funding less than $100,000, exclusive of GST, in a single Program Schedule.
• Tier 2 Service Provider – A service provider that receives annual total Commonwealth HACC funding of $100,000 or more, exclusive of GST, in a single Program Schedule.

Tier 1 Service Providers are not required to submit a Progressive FAR at the six-month point of a financial year. Tier 1 Service Providers will only be required to submit FARs on an annual basis.

Additionally, Tier 1 Service Providers are not required to provide certification by an approved auditor by any of the methods detailed below in the Audit Requirements section. The Statement of Compliance to be submitted as a component of the FAR is sufficient and will meet the audit and monitoring requirements of the Department.

Audit Requirements

The Department has minimised audit requirements for the Commonwealth HACC Program by removing the requirement for a separate independent audit certificate for each FAR.

Transactional audits of the Statement of Income and Expenditure is not a standard requirement. Where audited statements are required as part of the FAR, audit requirements can be met by either of the following methods:

• Inclusion of a separate segment note for Commonwealth Community Aged Care Programs in service providers audited general or specific purpose financial statements; or
• Submission of extraction reports, being reports extracted from service provider’s financial information management system that are certified by an auditor as a reflection of the service provider’s financial activity.

These two methods have been previously trialled in other community care programs such as NRCP. As part of the trial, these arrangements were well received and were found to reduce auditing costs and time delays to submission of reports.

Service providers may still choose to submit an audited copy of the Statement of Income and Expenditure as an alternative to the methods above if this is the preferred option for the service provider.

Segment Reporting

Under AASB 114 (now replaced by AASB 8) service providers were required to include a segment note in their general purpose financial statements, which provided details of their income and expenditure for each business or geographic segment.

In line with this, service providers selecting this option are required to include a segment note covering the ‘Community Care Segment’, which is the funding received from the Australian Government Department of Health and Ageing through community care programs. Community care funding from other sources is not to be included, and can be included in a separate segment note of ‘Other Community Care’.

Extraction Reporting

Under the extraction reporting option, following the completion of the annual audit, service providers can provide an independent auditor with ‘extractions’ of financial information for each community care program. These extraction reports should be a comprehensive record of income and expenditure at the program level, rather than the activity level, and be reconciled with the FARs. The auditor would then provide an Independent Extraction Report for all community care programs, which is certified as a representation of the financial statements following the annual audit.

Allocating Expenses

A number of service providers will receive HACC funding from state and territory governments to deliver services to younger people, as well as Commonwealth funding for HACC services to older people.

To minimise the burden of transitioning to the new arrangements, service providers will not be expected to isolate aspects of service delivery into purely ‘older’ or ‘younger’ components. The allocation and acquittal of funding should be based on a proportion of use. Expenses should be attributed based on the proportion of their use for service delivery to older people.

This proportion can be based on the funding split between HACC for older and younger clients, or an individual split based on the use of individual assets and services by each program. The funds attributed to the Commonwealth HACC Program are then required to be reported as such in the Statement of Income and Expenditure in the FAR.

Example

A service provider’s staff are assigned to delivering HACC services, however, they are not specifically assigned to the delivery of Commonwealth HACC services to older people, and their time is split between services for younger and older persons. The direct costs relating to staff salaries to be reported in the FAR for the Commonwealth HACC Program should be apportioned based on their time spent on the delivery of HACC services to older people.

If the staff costs were $200,000 per year and the staff spent 70 per cent of their time delivering HACC services to older people and 30 per cent to younger people, then the staffing costs to be expensed against Commonwealth HACC funding would be $140,000 per year.

Further information on financial reporting requirements can be found at:

• Clauses 10 and 54 of the Terms and Conditions
• Item E of the Program Schedule
• Section 5.3.1 of the Commonwealth HACC Program Manual
• The eFAR User Guide at Appendix H of the HACC Program Manual

More information

For more information contact the HACC service provider help desk on phone 1800 057 616, or email HACC Reform.

Last updated: June 2012

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