Australia’s aged care reform agenda continues to shift the sector from self‑reporting to independent verification. One of the most significant upcoming changes is the requirement for external audits of Care Minutes Performance Statements, commencing with the 2025–26 Aged Care Financial Report.
For many aged care providers – particularly not‑for‑profit organisations – this represents a new and material compliance obligation, with direct implications for funding, star ratings, audit scope and governance oversight.
What Is Changing?
From the 2025–26 financial year, all residential aged care providers must:
- prepare a Care Minutes Performance Statement as part of their Annual Aged Care Financial Report (ACFR), and
- have that statement externally audited under ASAE 3000 (Assurance Engagements Other Than Audits or Reviews of Historical Financial Information).
This requirement applies to all residential aged care services, regardless of size or structure, and marks a shift away from reliance on periodic or targeted government audits to annual independent assurance across the entire sector.
What the Care Minutes Audit Covers
The Care Minutes Performance Statement brings together data providers already collect and report, but now with an expectation that it can be fully reconciled and independently verified.
The audited statement will include:
- direct care minutes delivered
- registered nurse (RN) minutes and 24/7 RN coverage
- associated labour hours and labour costs (including agency staff)
- occupied bed days.
Auditors will reconcile this information against primary source records, such as rosters, payroll systems, timesheets and financial reports. Any inconsistencies between operational and financial systems will be visible through the audit process.
Why This Matters: Funding, Compliance and Reputation
The introduction of audited care minutes reporting coincides with important funding changes.
From April 2026, a component of AN‑ACC funding for metropolitan (MMM1) non‑specialised services is replaced by a Care Minutes Supplement, which is directly linked to a provider’s delivered care minutes. Where providers under‑deliver against reported care minutes, funding can be reduced or clawed back.
In addition:
- care minutes data feeds directly into Star Ratings, amplifying reputational risk
- audit findings may trigger further regulatory attention or compliance activity
- poor record‑keeping can now have a direct financial consequence.
For NFP providers operating with limited financial buffers, these risks are particularly significant.
Audit and Governance Implications
The new audit requirement introduces a different type of assurance engagement for many providers – one that sits alongside, but is distinct from the statutory financial statement audit.
Key implications include:
- the need to engage an auditor authorised to perform ASAE 3000 engagements
- additional audit planning, testing and evidence requirements
- increased coordination between finance, HR, rostering and operations teams.
Boards and executive teams should be aware that while the Department has described the audit cost as “modest”, the internal time and effort required to prepare, reconcile and support the audit may be substantial, particularly in the first year. This also raises the bar for governance. Boards will need confidence that management can demonstrate:
- accuracy of reported care minutes
- consistency across financial, workforce and operational reporting
- clear accountability for meeting care minute targets.
Preparing Now: What Providers Should Be Doing
Although the first audited statement relates to the 2025–26 year, providers should already be preparing by:
- testing whether care minutes data reconciles cleanly across systems
- reviewing position descriptions and staff classifications to ensure roles align with care minute definitions
- confirming qualification and registration records for nursing staff
- documenting clear, consistent methodologies for calculating care minutes
- engaging early with auditors to understand evidence expectations.
Acting early will reduce the risk of adverse audit findings and help protect both funding integrity and organisational reputation.
Final Thoughts
Care minutes audits represent a clear signal from government that aged care funding and quality outcomes must be verifiable, transparent and defensible. For not‑for‑profit providers, the challenge is not only technical compliance, but maintaining trust with residents, regulators and funding bodies while managing cost and workforce pressures.
Providers who treat the Care Minutes Performance Statement as a core governance and assurance deliverable, rather than a reporting add‑on, will be best placed to navigate this next phase of reform with confidence.
How we can help
We work closely with not‑for‑profit aged care and retirement living providers. If you would like to discuss how these reforms may affect your organisation or assess your preparedness ahead of commencement please contact our team.
