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Hands off residents' funds, says Nursing Board to aged care providers

Newsletter 21 September 2016

A Registered Nurse who was a director of a residential aged care facility has recently been found to have committed “professional misconduct” by the Victorian Civil and Administrative Tribunal regarding unauthorised dealings with a resident’s funds.


The executive director of a residential aged care facility in Melbourne was also a Registered Nurse. She had cared for a particular resident of that facility for many years. That resident had an acquired brain injury resulting from a car accident, cognitive impairments and was wheelchair bound. Other than a transaction account used to receive her pension and to make payments required for her day-to-day care, the resident’s finances were managed by an external trustee.

The director asked the facility’s financial controller for an update on the balance of the resident’s account, claiming that she was rearranging the resident’s affairs to ensure more appropriate investments. The director requested a cheque from the resident’s account that was made out to the director, supposedly in order to open a new account for the resident. A cheque was drawn for almost the entire amount in the resident’s account and was payable to the director. A short time later the director also arranged for the resident to sign an Enduring Power of Attorney in favour of the director. The director retained the funds for over a year without depositing them into an account in the resident’s name.

A new financial controller at the provider became aware of the cheque written to the director, informed the provider’s Board and a notification was made to AHPRA. A successful application was also made to VCAT to have the Power of Attorney revoked. Shortly after the notification to AHPRA the director repaid the money, plus interest. At the time of VCAT’s decision the director was working at another residential aged care facility, occasionally in a nursing role.

VCAT’s decision

The Nursing & Midwifery Board commenced proceedings in VCAT. The director admitted the conduct, therefore VCAT was only asked to determine the appropriate penalty. In its decision VCAT commented that the director’s conduct had “violated the boundaries that ought to be in place between … nurses and residents”, also noting that:

“At a time when financial abuse of the vulnerable elderly is a front-page and front of mind issue for government, policy makers, health care providers and advocates, and those at risk, it is astonishing that a nurse of [the director’s] experience did not apparently think twice about what she was doing. No nurse should do what she did.”

VCAT commented that the director’s conduct was so severe that suspension of her registration as a nurse may have been warranted. Ultimately VCAT decided that an alternative arrangement would be suitable in which the director remains able to continue with her current employment, but has no contact with patients or residents for 6 months (whether in a nursing role or otherwise) unless in an emergency.

Significantly, VCAT provided the following warning to providers of aged care and to health practitioners working at aged care facilities:

It is not apparently an express rule of conduct that registered nurses may not take or seek to exercise control over the finances of a patient or a resident in their direct or indirect care.  In our view, it certainly comes within the requirement to observe professional boundaries …

It might be wise for aged care facilities to consider having an express prohibition on a nurse (or other employee) seeking to take or exercising control over the financial affairs of a vulnerable resident, if they do not do so already.

Lessons for providers

This decision serves as a reminder to providers to ensure that they have strong protections around any dealings with residents’ financial affairs. Decisions regarding a resident’s financial affairs are best left to their family or guardian, rather than direct involvement of staff. Where necessary, any involvement by a provider or its staff should be on an ‘arm’s length’ basis and should include suggestions to obtain independent advice. As suggested by VCAT, providers should review their policies and employment contracts to ensure that staff are prevented from assuming control of a resident’s financial affairs.

With many aged care providers having senior staff that are registered health practitioners under the national registration scheme, this decision is a reminder that conduct in a management or other role can have consequences for registration as a health practitioner. As employers, providers should also be aware that conduct as part of an individual’s management or non-clinical role can be ‘notifiable conduct’ under the health practitioner registration law, and may require a notification to AHPRA.

Our Health & Aged Care team are able to assist providers to review their policies regarding these issues and advise on issues relating to registration of practitioners.

Cindy Tucker, Partner

Newsletter 21 September 2016
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