Without the viability supplement, most indigenous and indigenous-focused residential aged care providers would run at a loss, a national audit has found.
However, the targeting of viability supplements to providers under the Aboriginal and Torres Strait Islander Flexible Aged Care Program could be improved by refocusing towards remote and very remote locations.
That’s according to an Australian National Audit Office audit into the government-funded aged care for Aboriginal and Torres Strait Islander people.
Aged care services were delivered to 35,083 indigenous people at an estimated cost of $216 million last financial year, including 2,279 indigenous people in residential care and 800 indigenous Australians under the flexible program.
There were 432 indigenous-focused service providers, which are defined as those with 30 per cent or more indigenous clients.
The viability supplement is a signature government grant to small and rural aged care services, and all nine of the eligible indigenous-focused residential providers received it in 2014-15.
Without the supplement, six of these providers would have recorded a loss while for three it was the difference breaking even or at a loss, the audit found.
Similarly, all five flexible residential services would have recorded a loss without the supplement.
Of the 20 flexible services delivering mixed residential and home care, 10 would have run at a deficit without the supplement.
With the supplement, four mixed care flexible service providers reported net profits of over 15 per cent of total revenue.
In such cases, the audit suggested the department monitor whether the surplus funds are being invested in service.
Better targeting the funding
The audit found that three flexible residential services located in major cities and inner-regional Australia received a combined total of $987,832 in viability supplements and suggested the supplement could be better targeted to flexible residential service providers in remote locations.
In remote and very remote areas, the audit found the flexible program, which is funded on agreed places rather than occupancy, was more-cost effective for delivering residential services to indigenous people than the mainstream residential program.
However, it found that 69 per cent of flexible program funding for residential only aged care in 2015-16 was allocated to services operating from major city and inner regional locations and nine comparable indigenous-focused service providers in very remote locations would benefit more from the block funding arrangement.
Most indigenous-focused service providers told the audit that places and packages for indigenous people were often allocated to mainstream providers in the region on the basis of application professionalism rather than a demonstrated cultural competence in delivering services to indigenous people.
The report highlights that weak governance and risk management practices are the primary causes of poor financial results of indigenous-focused providers, which is consistent with assessment records from the quality agency.
Between 2000-01 and 2015-16, 95 per cent of indigenous-focused residential providers had a non-compliance instance mostly related to regulatory compliance, risk management and human resources, compared with 53 per cent of other residential service providers.
Indigenous people were more likely to access residential facilities in a major city and home care in inner regional and very remote areas of Australia.
Fewer than 1 per cent of residential aged care places were taken up by indigenous people.
The majority who do access residential services (78 per cent) do so from a mainstream provider because there are no indigenous-focused residential care services in any of the major cities outside of the flexible program, the audit found.
The audit found that some older indigenous Australians and particularly those living in remote areas faced challenges accessing and using My Aged Care while Regional Assessment Services reported receiving very low numbers of referrals for assessments in remote communities (read that story here).
Overall, the audit found that the flexible program was effective in increasing access to culturally appropriate aged care services for indigenous seniors and that government-funded aged care services were largely delivered effectively to indigenous people.
Read the full report here.
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