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StewartBrown releases its latest Disability Services Financial Benchmark Report
26/02/2024
StewartBrown has released their second Disability Services Financial Benchmark Report [pdf]. The report, for the 12 months to 30 June 2023, gives invaluable insight into the trends and drivers of financial performance at the sector level, as well as the individual service level, and considers the impacts on the viability and sustainability of disability service providers.
It incorporates detailed financial and supporting data from 51 participating organisations, 977 SIL homes and more than 26,500 NDIS participants across Australia. This report compares the FY23 data with FY22.
Data collection for the six months to December 2023 is open, closing on Friday 22 March. We invite all NDS members to participate. To register, you'll find a Registration Kit on the StewartBrown website.
StewartBrown will also be conducting a deep-dive survey into corporate overheads. Please email StewartBrown to take part: disability.benchmark@stewartbrown.com.au.
The report’s key observations:
- 55 per cent of organisations reported an operating loss for FY23 despite a nine per cent pricing increase (FY22: 57 per cent).
- Average operating loss of $1.3M in FY23 (FY22: loss of $0.9M).
- Organisations that are making losses are making bigger losses. In FY22 those organisations that reported an operating loss made an average loss of $2.3M. For FY23 this was $2.9M.
- Continued loss-making is impacting on the balance-sheet health of the sector with an increase in debt and just under half the organisations seeing a decrease in their cash and financial assets balance.
- Operating results differ across revenue bands with the larger organisations (those over $60M in operating revenue) experiencing larger losses of $6.1M in FY23. Organisations with between $10M and $20M in operating revenue are making a surplus of $0.3M.
- Operating results differ significantly across the different service types. SIL and Daily Living (Non-SIL) made operating surpluses, while all other service types were loss-making.
The report summarises the financial performance of disability service providers at the organisational level, the service level, and highlights key metrics for the Benchmark Average and top performers. Participants can compare their own performance at an individual line-item level to the Benchmark average and the top performers (the first quartile), identifying opportunities for improvement.
The report’s analysis includes:
- Comparison of key performance indicators such as operating margin, direct staff costs as percentage of operating revenue, billable hours, corporate overheads as percentage of operating revenue and as a percentage of direct costs, and workers compensation as percentage of staff costs.
- Comparison across different service types. Service level benchmarking is grouped into: Supported Independent Living (SIL); daily living (non-SIL); social and community participation; allied health (therapy supports); employment (supported employment services, transition programs and open employment) and support coordination.
About StewartBrown and the Disability Services Financial Benchmark
StewartBrown Chartered Accountants have significant experience in the disability, aged and community care sector. We help you to understand areas of opportunity or risk, and help you respond to them. With over 40 years’ experience in the disability and not-for-profit sector, StewartBrown is one of the largest dedicated not-for-profit professional accounting, audit, and consulting firms in Australia.
StewartBrown is well known for independent financial benchmarking in the aged care sector and is now providing independent financial benchmarking for all disability services providers.
The Benchmark is used by providers to review financial performance, identify improvement opportunities, and assist with strategic and operational business decisions. The Benchmark collects financial and non-financial data giving disability service providers the ability to benchmark their data at an organisational and service level.
Participating providers receive access to the specialised StewartBrown portal with powerful BI tools and individualised reports.
Enquiries
If you have any questions about the StewartBrown Disability Services Financial Benchmark or Corporate Overhead Survey, please do not hesitate to contact Steven Toner on (02) 9412 3033 or email disability.benchmark@stewartbrown.com.au.
You can also view the StewartBrown website for further information or read the Frequently Asked Questions on the NDS website.