Agenda item 3.4: CFO’s reportExecutive summaryDue to year end and other commitments, the finance team have yet tofinalise the August 2020 financial results. However, in order to provide theboard with some updated financial information, I have managed to assemblea forecast set of financial results for the six months from 1 July 2020 to 31December 2020. Revenue is expected to be above budget based on increasedincome from higher RAD payments. As a result of the policy established in2019 to bring RAD payments into line with increased property values ofhousing in the metropolitan areas, most residents now entering residentialcare will be required to sell their family home in order to pay their RAD.Although RADs are individually negotiable, our sales staff have achievedRADs at the higher end of expectations. The RADs are refundable under lawonce the resident leaves or passes; however, we continue to use RAD fundsfor property purchases and development.‘Extra services’ continue to be a profitable revenue source. Residentscurrently pay $52 per day for these services, whereas the average actual perday cost is only $31. Now that GR Kare has 70% of residents receiving“extra services’, up from 50% in 2017, this has assisted our profit margins.Staff costs continue to be less than anticipated due to our internationalcarers’ training program and efficient allocation of registered nurses on site.Although staffing levels in aged care facilities are currently unregulated,GR8Kare has a policy of ensuring there is one registered nurse (RN) on dutyat each site 24 hours a day. Sites with more than 100 beds are allocated1.5RNs. GRSKare has been able to reduce staff costs by hiring trainee carersand using additional volunteers. Over 30% of carers are on training paywhich is less than 50% of the salaries of full-time carers.
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