Freeman Responds

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Jewish media last week reported “concerns over the commercial management” of Sydney’s Montefiore Home. President David Freeman responds…

David Freeman

“On behalf of the Board of Management of the Sir Moses Montefiore Jewish Home, I wish to respond to the article which appeared in the last edition of the Australian Jewish News (Montefiore Board challenged, AJN 03/02/12) about a claim by Mrs Phillips that she could save up to $35m per year if she were put in charge of the Montefiore Home.

In order for the Home to reduce operating expenses by $35m it would require a reduction in staffing levels in our nursing homes of more than 50%. Such a drastic reduction in staffing levels would result in the Home not being able to provide even the most basic level of care and services, placing our accreditation at risk and thereby jeopardising the care subsidies we receive annually from the Government. In order to protect our residents, their families and the elderly of our community, the Board will not contemplate anything that it considers to be irresponsible and is not prepared to compromise on staff and standards of care.

The Home has a proud tradition of providing high standards of accommodation and care to all of our residents equally, whether they are full pensioners who only contribute a portion of their pension towards their cost of care, or those who are able to contribute more. The Home cares for over 700 residents of whom more than 200 rely on the pension as their only source of income. In addition, the Home cares for around 130 Holocaust survivors who have their own special needs. This is our charitable charter and what sets us apart from commercial operators.

The Board, through good governance and on behalf of the community, has been able to provide industry-leading standards of care and accommodation to the elderly in our care whilst ensuring that the Home remains financially sustainable. This is a remarkable outcome given that the Home receives only modest annual funding from the JCA and stood back from any allocation for two years during the GFC to assist the schools.
It was prudent financial management of successive Boards of Management that enabled the Home to fund the construction of the excellent Randwick campus, which accommodates 276 elderly residents, and the refurbishment and upgrading of the Hunters Hill facilities so that they remain at the forefront of high quality residential aged care.

In the article, Mrs Phillips, in my opinion, erroneously claims that 97 cents in every dollar of income received by the Home is spent on staff. Her calculation is incorrect because she does not include all of the Home’s income in the calculation. Mrs Phillips is also incorrect in her calculation of the benchmark for labour costs. Cam Ansell, the senior partner of accounting firm Grant Thornton and who is head of their aged care division, has confirmed that the industry standard for benchmarking labour costs is to compare wages with overall expenses, not income. In this regard Montefiore’s wages represent 75% of expenses, which is within accepted benchmarks.

The Home maintains a high degree of financial governance and transparency. A review of major supplier contracts are regularly undertaken in collaboration with an independent consulting firm specialising in procurement, tender development and evaluation. The Home’s financial accounts are independently audited by respected accountants and aged care specialists, Stewart Brown & Co, who have been specifically instructed by the Board, as part of their audit brief, to review expenditure items and internal processes to ensure maximum efficiency and, where applicable, to identify areas for improvement. With this level of financial governance in place it is extremely disappointing to hear allegations, such as those made by Mrs Phillips, given the effort by the Board and the management of the Home to ensure that every dollar of expenditure is utilised to maximise the quality of life of the residents in our care. With regard to transparency, a full copy of the Home’s audited financial accounts are provided to the JCA on an annual basis. In addition, the Home publishes a summary of the financial accounts, including the balance sheet, in its Annual Report which is circulated to all members of the Home.
Given the well-publicised inadequate level of Government funding provided to aged care, which is the subject of a major review at present, the fact that the Home can operate financially successfully without being a substantial drain on the JCA is an extraordinary  achievement and unparalleled in any other Jewish community.
Finally, Mrs Phillips also suggests that funds from the Montefiore Home should be used to subsidise the Jewish Day Schools. Whilst the Board of Management acknowledges the importance of the Jewish Day Schools, the charter of the Montefiore Home is to provide services to the elderly of our community. All funds of the Home are required to meet the escalating needs of the aged in our community, particularly in the challenging area of dementia care. In this regard the Home is in the final stages of design for the construction of a 90 bed dementia wing at the Randwick campus and a major upgrade of the Hostel at Hunters Hill. This follows the recent substantial upgrading of the dementia unit and nursing homes at Hunters Hill.

In reality, the provision of high quality care and accommodation to the elderly, perhaps the most vulnerable members of our community, comes at a price. The Board believes our elderly residents deserve to receive the high standard of care and accommodation provided by the Montefiore Home.

Ian Sandler, CEO of the Jewish Communal Appeal, told J-Wire: The Montefiore Home received a $300K allocation from the JCA this year.  This is the first allocation received in the past three years as the organisation has presented as self-sufficient with a robust balance sheet.  The JCA Allocations Committee assess organisations based on need not on their size or stature.  With this in mind, often the bigger organisations stand back in order for funding to go to those that need it most.  It’s a communal principle that makes us all proud.”