Eziplan has identified an issue with the way Services Australia reconciles a client account upon a clients exit from the Home Care Package Program.
This issue occurs when (i) an adjustment is made to a client account for a retrospective claim period, and (ii) the adjustment amount is remitted to a provider in the same month that the reported Commonwealth Unspent Funds are withheld by Services Australia.
As a result of this issue, a surplus amount remains in the bank account of the provider that (a) cannot be paid back to Services Australia via the Aged Care Provider Portal, and (b) does not need to be paid to the client.
In the below listed example:
The provider reported Commonwealth Unspent funds of $4,523.55 upon the clients exit in February 2022.
In the month of February, Services Australia have determined that the Department underpaid the provider by $1,308.71 in the month of December 2021.
Because of the adjustment, the payment determination amounted to an adjustment of $3,214.84.
As a result of the above, there is a surplus balance of $1,308.71 that has been retained in the providers bank account.
The $4,523.55 reported (correctly) by the provider is based on a lower payment being received in December 2021.
Had the adjustment been made earlier, the provider would have simply reported the CW Unspent Amount as $5,832.26 ($4,523.55 +$1,308.71).
We have sought advice from Services Australia as to how this amount should be treated. We have not yet received a clear answer.
Proposed treatment of these funds
Eziplan have developed the following business process as a means of advising providers as to how these funds should be treated.
Eziplan suggests that providers move the surplus amount out of their trust account to their normal expenses account. You could alternatively consult your bookkeeper / accountant and create a separate balance sheet account, to act as an additional trust account for these amounts so you can keep track of them separately.
Using the above example:
To recognise the adjustment in Eziplan providers will add an expense item on the clients Consumer Statement. This will permit the provider to reconcile the cash deposited into the providers bank account with the remittance advice provided by Services Australia.
It is suggested that providers use the following description for entries: Surplus Subsidies not withdrawn by PRODA - due to December Adjustment
Using a standard description for these surplus items will assist Providers to track these movements in the future.
Providers should then process the corresponding entry in their general ledger to reflect the above entry, ensuring that these funds are ‘quarantined’ and are maintained separately from ‘ordinary income’.
As the balances are now $0 you can lock the month and then reconcile the client in the following month.
Providers may then wish to contact the Services Australia Aged Care Providers enquiry line on 1800 195 206, or via email at aged.care.liaison@servicesaustralia.gov.au to discuss how Services Australia wish to handle these monies.
Services Australia may elect to process further adjustments to the providers payment remittance in future months. If this does occur, the provider can recognise the return of these monies via an entry to the newly created balance sheet account.