Spokesman for the Federal Health Department In January 2020, Cooperage Capital was engaged by the Department of Health through a limited tender. Under this contract (CN3657170-A1), Cooperage Capital was engaged to: • • • • Identify residential aged care providers in financial distress, including through the development of risk indicators. Determine why the providers were experiencing financial distress, through detailed financial analyses and site visits of providers. Recommend solutions to address the needs of providers at imminent risk of failure Build ongoing capability within the Government to better identify financial risks through creating tools and processes and sharing data between agencies. This contract was awarded via limited tender and in accordance with Limited Tender Condition 10.3 (d) - an absence of competition for technical reasons. A market analysis undertaken by the Department identified Cooperage Capital, specifically Mr Barnier, was uniquely placed to deliver the services required under the contract. This was determined with consideration of the following: • • • • • Mr Barnier is a former managing director of Opal Aged Care, the largest privately owned provider of aged care in Australia Mr Barnier’s roles at the Aged Care Financing Authority (ACFA) since 2013, as a member of the Aged Care Sector Committee and as a board member of the NHMRC National Institute for Dementia Research Mr Barnier’s extensive financial experience in senior management roles across other sectors including roles such as CFO The fact that Mr Barnier is a Fellow of CPA Australia and recipient of an MBA from the Macquarie Graduate School of Management, and The facilitation, through Cooperage Capital, of the ongoing business decisions of aged care providers through the provision of debt and equity solutions. In addition to this experience, since his reappointment to ACFA in 2019, he has been engaged both through ACFA deliberations and in direct consultation with government, in strategic discussions about sector viability and sustainability and how this translates to risk at the service level. As per the requirements under the contract, Cooperage Capital delivered a report to the Department in February 2020 which outlined the findings and recommendations from the engagement, and this has subsequently been used in evidence before the Royal Commission into Aged Care Quality and Safety. This report included a set of risk indicators designed to identify residential aged care providers that are at risk of experiencing financial stress. Based on these indicators, 45 residential aged care providers have been identified as being at high risk of experiencing financial issues. Collectively, these 45 providers were holding just over $1 billion in Residential Accommodation Deposits (RADs) which are guaranteed by the taxpayer if a provider fails. Building on this report, Mr Barnier has been working with the Department to design a new Financial Monitoring Program. This program involves active outreach by the Department to residential providers at risk of experiencing financial issues. The Department has now engaged with the majority of the providers identified by Cooperage Capital, and has also expanded to include additional providers identified through other sources. This engagement allows the Department to gain a detailed understanding of providers’ circumstances and to refer them to appropriate forms of support including the Business Advisory Service and the Business Improvement Fund. The second contract (CN3657170) is an extension of the original contract and (in accordance with Limited Tender Condition 10.3.e) provides for the additional delivery of services by the original supplier. This extension was considered necessary on the basis of the increased financial challenges resulting from COVID-19 and the need for further advice to the Department on providers at risk including causes and possible solutions. Under these contracts Mr Barnier has also been directly involved in addressing the financial concerns of a number of specific providers and successfully supported business stabilisation, continuity of care for residents and protection of resident RADs which would have become a liability to the taxpayer had these businesses failed. Value for money is demonstrated by these outcomes as well as the broader enhancement of the Department’s financial monitoring and intervention capability. The Department does not consider these contracts conflict with the cited ANAO findings. The Department is aware of the story by 7.30 in 2017 regarding Mr Barnier. The Department understands the Board of Opal Aged Care commissioned an independent review by Nous Group which focused on clinical leadership, customer service, and effective complaint management. This report did not identify any wrongdoing or make any adverse findings in relation to the conduct of Mr Barnier. Since this story aired, Mr Barnier’s suitability as an adviser to government on financial matters in the aged care sector has been considered and confirmed through his reappointment as a member of ACFA in 2019. Follow up questions and responses to/from the Health Department Q: When the spokesperson referred to the "market analysis undertaken by the Department" as part of the tender process, were any other individuals and/or organisations — beyond Cooperage Capital and/or Gary Barnier — considered as part of this market analysis? If so, how many? The project required a supplier with operational and financial expertise, and a deep understanding of the challenges facing the aged care sector. The Department already had a good understanding of the market capabilities available to undertake the project. Timing was also a key factor and the Department identified that Mr Barnier could undertake the project without a protracted process to educate potential suppliers of the information they needed to be aware of when undertaking this task. Cooperage Capital was also able to prioritise this work to ensure the timely delivery of work under the contract. Q: In relation to the Nous report and the spokesperson's comment that the "report did not identify any wrongdoing or make any adverse findings in relation to the conduct of Mr Barnier". Are you referring to the public report, or the full report? Q: Have any health department public servants read the full report in full? If so, was this before or after Mr Barnier's awarding of the January 2020 contract? A: The Department reviewed Nous Group’s recommendations and Opal responses to the Independent Review of Opal Aged Care. The Department is not aware of any other report. The report had no bearing on the Department’s engagement of Mr Barnier in January 2020. Q: How many Cooperage Capital staff and/or subcontractors have performed work to fulfil each contract (please specify for each contract)? How many people in FTE terms has worked to fulfil each contract (please specify or each contract)? Or has Mr Barnier been the only Cooperage Capital representative who has performed work on these contracts (please specify for each contract)? A: Mr Barnier is the only representative of Cooperage Capital that has performed work under each contract. Q: Is Mr Barnier paid for his role on the ACFA? If so, how much? A: Mr Barnier receives remuneration of $429.00 per sitting day and Tier 2 travel allowance in accordance with Remuneration Tribunal Determination 2017-15: Official Travel By Office Holders Further follow up questions and responses to/from the Health Department Q: In your Monday afternoon response to questions two and three, a spokesperson said: "The Department reviewed Nous Group’s recommendations and Opal responses to the Independent Review of Opal Aged Care. The Department is not aware of any other report. The report had no bearing on the Department’s engagement of Mr Barnier in January 2020." Can I confirm the Department reviewed the abridged version of the Nous report (attached), which states on its cover it is the 'public report', as opposed to the full report provided by Nous to Opal? A: The Department has reviewed the attached report, as well as the full report. Q: You've said that a "market analysis" was undertaken before awarding the first contract (CN3657170-A1), and this was based on the department's "good understanding of the market capabilities available to undertake the project". Were any of the other potential suppliers and/or contractors that were considered during this process contacted by the department about this contract and/or project before it was awarded to Cooperage Capital? A: The Department conducted a desktop analysis, and no other suppliers were contacted by the Department.