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Tuesday, August 16, 2022

Kiama aged care home fined after NSW Fair Trading inspection

Kiama Council’s aged care operator, Blue Haven Illawarra, has been inspected by NSW Fair Trading, resulting in a fine for failing to keep an up-to-date asset management plan.

Kiama Council CEO, Jane Stroud said while disappointing, the fine that followed the inspection of the facility’s Independent Living Units was not unexpected.

“We identified the lack of an asset management plan for our Blue Haven business as a significant issue in Kiama Council’s State of the Organisation Report in February,” Ms Stroud said.

“We immediately made it a priority in our Strategic Improvement Plan and our staff have been committed to establishing this.”

Retirement village operators must prepare and retain up-to-date asset management plans that document the purchase, maintenance, repairs and replacement of major items.

“We also engaged aged care specialists, Critical Success Solutions, to help with this audit, as well as Blue Haven’s overall performance,” said Ms Stroud.

“They have been undertaking what is a major but essential task, to establish what assets we have, and how we will manage them.”

She said Council expected to be able to present a fully-compliant asset management plan to regulators and the Blue Haven community in three months.

“Naturally we would have preferred to avoid the fine, but this work should not be rushed and has been underway for some months.”

“I have updated our Blue Haven residents about this issue as part of our ongoing consultations.”

Ms Stroud said having a “full picture” of Blue Haven’s assets was important not just to meet regulations, but to fully assess the financial challenge facing Kiama Council as owners.

“When we recently set down Council’s budget for 2022/23, we were still waiting on the audit of Blue Haven assets,” she said.

“We currently have allocated less than 1% towards asset management for Blue Haven. The industry standard is between 4 to 8%.

“Given the age of some of the assets, we will face significant challenges.”

Blue Haven was also verbally warned by NSW Fair Trading for accounts not being properly audited as well as an incorrectly formatted annual meeting agenda.

The issue of non-audited financials was highlighted in the State of the Organisation Report in February.

Establishing two separate financial ledgers for Council and Blue Haven is also part of the Strategic Improvement Plan, Ms Stroud said.

This project is being led by independent accounting firm KPMG.

“The concerns of NSW Fair Trading show how important our work is repairing Blue Haven’s financials.”

“Countless hours of work by Blue Haven and Council staff, as well as specialist consultants, has gone into separating the accounts of Blue Haven and the business of running Kiama Council.”

“This will ensure Blue Haven continues to be an important aged care service to our community and the wider region,” the Council CEO said.

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