From 1 July 2023, large providers must report financial information, including information about revenue, profits, and leasing arrangements to the Department Of Education.
The financial reporting obligations only apply to large providers.
A large provider is one that:
- operates 25 or more services
- shares operation of 25 or more services with another provider
- plans to operate or share the operation of 25 or more services.
Providers are considered to share operations if:
- both providers have at least 25% of persons with management or control (PMCs) in common
- one provider owns 15% or more of the other
- one provider is entitled to receive 15% or more of any dividends paid by another provider.
If you operate or share the operation of, less than 25 services, these financial reporting obligations will not apply to you.
The information the Department Of Education will require from large providers will depend on their circumstances and may include:
- a balance sheet
- a profit and loss statement
- a statement of changes in equity
- a cash flow statement
- details of leasing arrangements and costs
- a Director’s report if available
- if audited for the reporting period, the Auditor’s report
- information such as if a provider has a credit facility or any debt guarantees in place from a separate entity.
Monitoring the financial health of large providers will help the Department Of Education identify and mitigate risks posed by the sudden exit of large providers from the market.
Publishing information about fees, profit and revenues will improve the transparency of childcare costs. It will also increase the amount of information available to families when choosing a service.
For more information, please read the following: Financial Reporting Obligations For Large Providers