New QLD Hospital Foundations Legislation

Hospital Foundations Bill 2018 (Qld)

This alert applies to public hospitals and health services and will likely amend the QLD – Hospital Foundations module.

Please be advised that the Hospital Foundations Bill 2018 (Qld) (the Bill) passed its Third Reading in the Queensland Parliament on 21 March 2018 and is currently awaiting Royal Assent. The Bill is due to commence on a date to be proclaimed.

The primary purpose of the Bill is to repeal and replace the Hospitals Foundations Act 1982 (Qld) (the Act) with legislation that reflects contemporary drafting standards, and to deal with matters relating to the oversight of hospital foundations.

New objects of foundations

With the aim of updating the Act to reflect current practice, the Bill broadens the objects for which hospital foundations (foundations) may apply property whilst also modernising the provisions to capture all work currently being undertaken by foundations.

The Bill provides that a foundation’s registered objects will need to be consistent with the objects prescribed in the Bill, and will also need to be included on the register of foundations, available on the Department of Health’s website.

Subscribers should be aware that the Bill requires all foundations to update their objects to ensure they align with the new set of broadened objects, within 3 months of the commencement of the Bill.

Structure of foundations

The Bill expressly establishes the board of the foundation as the governing body.

The Bill also requires each foundation to have a managing executive officer, who will act as a conduit between the foundation and the board. It is important to note that these updated provisions are not intended to change the functions or duties of existing foundations, but rather to better reflect the structure and practices that foundations currently have.

Powers of foundations

Notably, the Bill provides foundations with more powers that can be exercised without the Minister of Health’s approval. Transactions that are not associated with a high level of risk, such as holding or disposing of shares or other similar financial assets, and improving, developing or leasing a foundation’s land or buildings will no longer require Ministerial approval. Further, foundations will be able to deal with property received by way of gift, devise or bequest, as well as sell, exchange or dispose of property vested in the foundation (subject to a condition or trust that is either unfit for purpose or is property of “insufficient value”) without requiring the approval of the Minister. Property of “insufficient value” is defined to mean the property is of no value or the cost of sale would likely exceed any proceeds.

The Bill also removes the application of section 64 of the Financial Accountability Act 2009 (Qld), which requires foundations to obtain the Treasurer’s approval to divest themselves of an investment gifted or bequeathed to them.

These changes recognise the capacity of foundations to use their financial expertise to manage these type of matters without Ministerial oversight, and also removes unnecessary administrative burden on foundations.

Subscribers should note however, that borrowing, and the related banking power to operate an account with an overdraft facility, will continue to be limited by the Statutory Bodies Financial Arrangements Act 1982 (Qld) and will require approval.

Powers of the Minister

Currently, the Minister has limited powers to inquire into foundations’ operations or to remedy serious governance issues. The Bill introduces new and increased Ministerial powers to ensure that the Minister has oversight where there are concerns about a foundation’s governance or financial viability. Consequentially, any issues of significant concern that relate to the foundation’s financial viability, administration or management will need to be notified to the Minister, and similarly the Minister will be able to require the board to give relevant information or documents.

The Minister will also have the power to recommend that the Governor in Council remove all members from the board of a foundation.

Contact

For further information please contact the Law Compliance team:

Phone: 1300 862 667

Email: info@lawcompliance.com.au

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