Health Services
Annual Reporting Guidelines
for 2008-2009
Under Financial Management Act 1994




   Department of Human S...
Table of Contents




Table of Contents......................................................................................
Auditor-General’s Report...................................................................................33
Page 2.........
Introduction



These guidelines are provided to assist health services in the presentation of their annual report
as requ...
Excel to meet the AFR reporting requirements. AFR information from entities will be
consolidated by the Department of Huma...
Recent Relevant Professional Developments



Financial Reporting Directions (FRDs)

During 2008-09, the following FRDs wer...
Summary of New and Revised Accounting
Pronouncements
The AASB has issued a number of Exposure Drafts (ED) and Accounting S...
AASB 2009-2     Amendments to Australian Accounting Standards –               1 January 2009
                 Improving Di...
Yearly Timetable




Financial Statements
DHS strongly encourages entities to undertake a May hard close that involves the...
(b) Other health services (non material health services)

 Deadline*       Task
 May onwards    Confirm audit process and ...
Printing and Publication of Annual Report to be
tabled in Parliament



It is the responsibility of each entity to ensure ...
•   Entities that have expenses and obligations (liabilities and commitments) totalling less
         than $5 million are ...
Report of Operations



The following guidelines amplify the minimum requirements for the report of operations under
the F...
Reporting Comments
The following information is required under FRD 22B. Other information is also required under
FRD 11 Di...
The FTE figures required in the table above are those excluding overtime. Do not
          include contracted staff (eg. A...
(i) a statement on the extent of compliance with the building and maintenance provisions
      of the Building Act 1993. R...
Other Information
     (a) FRD 11 Disclosure of Ex-Gratia Payments requires an entity to disclose in aggregate, in
       ...
Key Financial and Service Performance Reporting


A. For Health Services which have agreed a Statement of Priorities

The ...
Part B

First section for all Entities with an SoP except Dental Health Services Victoria.

Please include SoP outcomes/re...
Quality and Safety
                                              2008-09
                                               Ac...
Elective surgery
                                                2008-09
                                                 ...
Percentage of agencies with average
waiting time for general dental care of less
than 3 years
Percentage of agencies with ...
Non-acute Inpatient
CRAFT
Rehab L1 (non DVA)
Rehab L2 (non DVA)
GEM (non DVA)
Palliative Care - Inpatient
Palliative Care ...
B. For all other Health Services

Activity
     Admitted Patient - Note (a)          Acute     Sub-     Mental   Other    ...
Attestation on Data Accuracy
I, <Donald Trump> certify that the <ABC Health Service> has put in place appropriate internal...
3. Revenue Indicators
To be completed by all health services

                            Average Collection Days

       ...
Classifying Transactions to the Health Service
Agreement (HSA) or Hospital and Community
Initiatives (H&CI)

The HSA categ...
General Issues

Reporting Entity (Consolidation)
Under AASB 127 Consolidated and Separate Financial Statements, a reportin...
Attestation on Compliance with Australian/New
Zealand Risk Management Standard
I, <Donald Trump> certify that the <ABC Hea...
Disclosure Index
The Annual Report of the <ABC Health Service> is prepared in accordance with all relevant
Victorian legis...
Legislation Requirement                                                   Page Reference
Financial Statements

Financial s...
Financial Statements and Explanatory Notes


Introduction
The following financial statements and explanatory notes have be...
Commentary – Financial Report
     Materiality and Aggregation
     Each material class of similar items shall be presente...
<ABC Health Service>
       Board member’s, accountable officer’s and
          chief finance & accounting officer’s
     ...
Auditor-General’s Report




 Please insert a copy of the VAGO’s
       original audit report.
A reproduction of the audit...
Auditor-General’s Report
                                        Page 2




                                   Operating S...
Operations” inserted into them


Recognition of Revenue
AASB 1004 Contributions draws a distinction between reciprocal and...
Balance Sheet




Commentary – Balance Sheet




N.B. Items that are not applicable or have zero values (rows and columns)...
Balance Sheet

Accounting Standard AASB 101 Presentation of Financial Statements sets out the
presentation of the Balance ...
Commentary – Statement of Changes in Equity
Accounting Standard AASB 101 Presentation of Financial Statements sets out the...
each reserve at the beginning and the end of the period, separately disclosing each
        change.
Full reconciliation of...
OLE_LINK




           Commentary - Cash Flow Statement




           N.B. Items that are not applicable or have zero va...
Accounting Standards for the Cash Flow Statement are set out in AASB 107 Cash Flow Statements.
The financial statements sh...
ABC Health Service
                                                                                       Notes to the Fin...
ABC Health Service
                                                                                 Notes to the Financial...
ABC Health Service
                                                                                  Notes to the Financia...
Annual Reporting Guidelines - Health Services 2008/09 (MS ...
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  1. 1. Health Services Annual Reporting Guidelines for 2008-2009 Under Financial Management Act 1994 Department of Human Services
  2. 2. Table of Contents Table of Contents................................................................................................i Contents................................................................................................i Introduction.......................................................................................................1 Introduction.......................................................................................................1 Recent Relevant Professional Developments...........................................................3 Developments...........................................................3 Financial Reporting Directions (FRDs)....................................................................3 Summary of New and Revised Accounting Pronouncements......................................4 AASB Accounting Standards.................................................................................4 Standards.................................................................................4 Beginning on or after..........................................................................................4 after..........................................................................................4 Exposure Drafts.................................................................................................5 Drafts.................................................................................................5 Yearly Timetable................................................................................................6 Timetable................................................................................................6 Financial Statements ..........................................................................................6 Annual Reports..................................................................................................7 Printing and Publication of Annual Report to be tabled in Parliament .........................8 .........................8 Report of Operations.........................................................................................10 Operations.........................................................................................10 Responsible Bodies Declaration...........................................................................10 Reporting Comments.........................................................................................11 Additional information (FRD 22B Appendix)..........................................................13 Other Information.............................................................................................14 Key Financial and Service Performance Reporting..................................................15 Part A.............................................................................................................15 Part B.............................................................................................................16 Part B.............................................................................................................18 Part C.............................................................................................................19 Part C.............................................................................................................20 Attestation on Data Accuracy.............................................................................22 Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Community Initiatives (H&CI)......................................................................24 General Issues.................................................................................................25 Attestation on Compliance with Australian/New Zealand Risk Management Standard. 26 Disclosure Index...............................................................................................27 Financial Statements and Explanatory Notes.........................................................29 Introduction.....................................................................................................29 Board member’s, accountable officer’s and chief finance & accounting officer’s declaration...............................................................................................31 Auditor-General’s Report...................................................................................32 i
  3. 3. Auditor-General’s Report...................................................................................33 Page 2............................................................................................................33 Operating Statement.........................................................................................33 Balance Sheet..................................................................................................35 OLE_LINK........................................................................................................39 Notes to the Financial Statements ......................................................................41 ......................................................................41 ii
  4. 4. Introduction These guidelines are provided to assist health services in the presentation of their annual report as required under the Financial Management Act 1994 (the Act), section 4.2 of the Standing Directions of the Minister for Finance under the Act and Financial Reporting Directions. The Act and Directions apply to all entities. Each annual report is to be divided into two sections: • Report of operations. • Financial statements including explanatory notes. These guidelines have been developed to illustrate as widely as possible the minimum disclosure requirements for entities. You are expected to use the guideline as a basis for preparing your financial report, subject to each entity’s individual circumstances. These guidelines provide guidance for entities to complete their financial statements, while further information can be found in the following documents: • Financial Management Act 1994. • Standing Directions of the Minister for Finance. • Financial Reporting Directions (FRDs) issued by the Department of Treasury and Finance. • Australian Accounting Standards. • Australian Interpretations. • AIMS guidelines. It is recommended that the reporting process commence in early June 2009 with a mock run using 31 May, 2009 data, incorporating June data in early July in order to meet the 24 July 2009 and 25 August 2009 deadlines for financial statements (Refer to Timetable on page 6). Balance date for entities is 30 June 2009. Submission of a June F1 for 2008-09 is required. The due date for submitting the F1 is 28 July 2009. Health Services will be required to provide an interim financial result prior to this date. Abbreviations in these guidelines refer to Australian Accounting Standards (AAS), AASB Accounting Standards (AASB), the Financial Management Act 1994 (the Act), Financial Reporting Direction (FRD) and Victorian Auditor-General’s Office (VAGO). The guidelines include all requirements that are effective for financial periods beginning on or after 1 July 2008. It is the primary responsibility of the entity’s management and governing board to ensure that these requirements are complied with. As was the case in the previous years there are separate requirements for the State’s Annual Financial Report (AFR) under the Financial Management Act 1994 (Refer s24 of the Act as results from the requirements of AASB 1049 ‘Whole of Government and General Government Sector Financial Reporting’). Each entity needs to complete the prescribed formats in Microsoft 1
  5. 5. Excel to meet the AFR reporting requirements. AFR information from entities will be consolidated by the Department of Human Services (The Department or DHS) to produce a Portfolio return to the Department of Treasury and Finance (DTF). DTF will then consolidate the Portfolio returns to produce the State’s AFR report to be tabled in Parliament. Separate AFR instructions will be issued by the Department in June 2009. Queries regarding the contents of these guidelines should be directed to DHS Manager, Financial Accounting at reporting@dhs.vic.gov.au Segment Reporting Health services that provide Commonwealth funded residential aged care services (RACS) are required to comply with AASB 114 Segment Reporting (Refer to s21.26F Para 3e Residential Care Subsidy Amendment Principles 2006 (No. 1)) as a condition of receiving the Commonwealth's Conditional Adjustment Payments. 2
  6. 6. Recent Relevant Professional Developments Financial Reporting Directions (FRDs) During 2008-09, the following FRDs were added by DTF that are operative for current and future reporting periods. FRD 103D Non-Current Physical Assets 118 Land Under Roads 119 Contribution by Owners (replacing FRD 2A) 114B/116A Financial Instruments A copy of the FRDs can be obtained from the ‘Budget and Financial Management’ section of DTF’s website address of https://www.bfm2.dtf.vic.gov.au Your user name is: DHS User/BFM Your password is: TNPPVHN1 3
  7. 7. Summary of New and Revised Accounting Pronouncements The AASB has issued a number of Exposure Drafts (ED) and Accounting Standards since 30 June 2008. A table listing the new and revised accounting pronouncements are outlined in the tables below. Entities need to be cognisant of changes and where relevant incorporate these issues into the annual reports. Beginning on Australian Interpretations or after Interpretation 15 Agreements for the Construction of Real Estate 1 January 2009 Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 October 2008 Minimum Funding Requirements and their Interaction Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2009 Interpretation 18 Transfers of Assets from Customers 1 July 2009 AASB 7 Financial Instruments: Disclosures 1 July 2007 AASB 139 Financial Instruments: Recognition and Measurement 1 July 2007 AASB 1039 Concise Financial Reports 1 January 2009 AASB 1048 Interpretation and Application of Standards 30 September 2008 AASB 2008-5 Amendments to Australian Accounting Standards arising 1 July 2008 from the Annual Improvements Project. [AASB 5, 7, 101, 102, 107, 108, 110, 116, 118, 119, 120, 123, 127, 128, 129, 131, 132, 134, 136, 138, 139, 140, 141, 1023 &1038 AASB 2008-6 Further Amendments to Australian Accounting Standards 1 Jul 2009 arising from the Annual Improvements Project [AASB 1 & 5] AASB 2008-7 Amendments to Australian Accounting Standards – Cost of 1 January 2009 an Investment in a Subsidiary, Jointly Controlled Entity or Associate. [AASB 1, 118, 121, 127 & 136] AASB 2008-8 Amendments to Australian Accounting Standards – Eligible 1 July2009 Hedged Items [AASB 139] AASB 2008-9 Amendments to AASB 1049 for Consistency with AASB 101 1 January 2009 AASB Amendments to Australian Accounting Standard – Business 1 July 2009 2008-11 Combinations Among Not-For-Profit Entities [AASB 3] AASB Amendments to Australian Accounting Standards – 1 July 2008 2008-12 Reclassification of Financial Assets – Effective Date and Transition [AASB 7, 139 & 2008-10] AASB Amendments to Australian Accounting Standards arising 1 July 2009 2008-13 from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners [AASB 5 and AASB 110] AASB 2009-1 Amendments to Australian Accounting Standards – 1 January 2009 Borrowing Costs of Not-for-Profit Public Sector Entities [AASB 1, AASB 111 & AASB 123] 4
  8. 8. AASB 2009-2 Amendments to Australian Accounting Standards – 1 January 2009 Improving Disclosures about Financial Instruments [AASB 4, AASB 7, AASB 1023 & AASB 1038] AASB 2009-3 Amendments to Australian Accounting Standards – 1 January 2009 Embedded Derivatives [AASB 139 & Interpretation 9] ED 157 Joint Arrangements ED 158 Proposed Amendments to AASB 139 Financial Instrument Recognition and Measurement – Exposures Qualifying for Hedge Accounting ED 159 Proposed Improvements to Australian Accounting Standards ED 160 Proposed Amendments to AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards and AASB 127 Consolidated and Separate Financial Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate ED 161 Proposed Amendments to AASB 2 Share-based Payment and AASB Interpretation 11 AASB 2 – Group and Treasury Share Transactions – Group Cash-Settled Share-based Payment Transactions ED164 An improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information ED165 Improvements to Australian Accounting Standards ED166 Simplifying Earnings per Share: Proposed Amendments to AASB 133 ED167 Discontinued Operations: Proposed Amendments to AASB 5 ED168 Additional Exemptions for First-time Adopters: Proposed Amendments to AASB 1 ED169 Improving Disclosures about Financial Instruments: Proposed Amendments to AASB 7 ED173 Investments in Debt Instruments (Proposed Amendments to AASB 7) ED170 Relationships with the State (Proposed Amendments to AASB 124) ED171 Consolidated Financial Statements ED172 Embedded Derivatives (Proposed Amendments to AASB Interpretation 9 and AASB 139) ED174 Amendments to Australian Accounting Standards to facilitate GAAP/GFS Harmonisation for Entities within the GGS [AASBs 101, 107 and 1052] ED175 Post Implementation Revisions to AASB Interpretation ED176 Proposed amendments to Australian Accounting Standards – Borrowing Costs of Not-For-Profit Public Sector Entities Please refer to AASB website www.aasb.com.au for updates and details to all existing AASB, AASB Interpretations and other accounting pronouncements. 5
  9. 9. Yearly Timetable Financial Statements DHS strongly encourages entities to undertake a May hard close that involves the preparation of full financial statements, for audit as at 31 May 2009 with June movements being reviewed by audit for consistency and reasonableness. Entities are also encouraged to bring forward the calculation of certain items into May 2009 provided that there are no material changes expected in June 2009 (this should be discussed with your VAGO representative) i.e. the calculation of LSL Other areas for pre reporting date work to be performed include (and should be discussed with your VAGO representative): • Contingent liabilities, contingent assets and commitments may be compiled as at 31 May provided there are no material changes expected from May to June. • Wage inflation and discount rates for Long Service Leave will be issued by 2 June, thus enabling the calculation of LSL as at 31 May. Entities are requested to discuss their plan for the preparation of their financial statements with their VAGO representative to identify and address any areas which may impede the completion of the AFR templates and annual report by the due dates. It is recommended that entities agree a timetable for the preparation and audit of their financial statements with their VAGO representative. Entities should also advise their VAGO representative of any contentious, unusual or other one-off material transactions (or accounting policies) that they are aware of as soon as possible, in order to ensure early agreement/resolution. The key dates for preparation of the 2008-09 financial statements are as follows: (a) Material health services Material health services are Austin Health, Barwon Health, Alfred Health, Eastern Health, Melbourne Health, Western Health, Southern Health and Royal Children’s Hospital. Deadline Task May onwards Confirm audit process and timeframes with VAGO representative. Note that VAGO is required to audit all controlled entities under the Audit Act 1994. 24 July Provide VAGO representative with complete final draft financial statements that have passed internal quality assurance scrutiny and AFR schedules by no later than this date (and in accordance with the timetable agreed with your VAGO representative). 24 July Submit AFR schedules templates via email to reporting@dhs.vic.gov.au. (refer to separate AFR guidelines). 12 Aug Sign audited financial statements (subject to audit clearance). The Audit Committee and Governing Board should have already adopted the audited financial statements for signing by this date. 6
  10. 10. (b) Other health services (non material health services) Deadline* Task May onwards Confirm audit process and timeframes with VAGO representative. Note that VAGO is required to audit all controlled entities under the Audit Act 1994. 24 July Submit AFR schedules templates via email to reporting@dhs.vic.gov.au. (refer to separate AFR guidelines). 25 Aug Provide VAGO representative with complete final draft financial statements that have passed internal quality assurance scrutiny by no later than this date (or earlier in accordance with the timetable agreed with your VAGO representative). 22 Sep Sign audited financial statements (subject to audit clearance). The Audit Committee and Governing Board should have already adopted the audited financial statements for signing by this date. * These deadlines are legislative requirements, which non material health services will need to improve upon to meet the annual report timelines detailed below. Annual Reports Annual reports for 2008-09 will be tabled in Parliament on or before 15 October 2009. Health services are requested to implement a plan to ensure the process of completing for tabling by that date. The key dates for preparation of the annual report are as follows: Deadline* Task From 9 May Start to prepare annual report (excluding financial statements – refer separate timing above for availability). 10 Aug 30 June financial statements submitted to VAGO (non material entities) 12 Aug onwards Advise the relevant DHS Divisional/Regional contact when VAGO signs off on financial statements. 14 Sep Prepare a final printers proof (bromide, PDF etc) of the annual report that contains an exact copy of the audited and approved (by the health service) financial statements, VAGO audit report and submit it to VAGO for final review. Once reviewed, arrange printing of annual report and forward copy of final bromide to the relevant Divisional contact. 14 to 21 Sep Check and forward 15 copies of the complete and final annual reports to Region/Division. 21 Sep Forward 60 hard copies of annual reports (including audited financial statements and VAGO audit report) that requires tabling to Region/Division. If an annual report is to be receipted then no extra copies are required (see page 8 for details). Nov Ensure that annual report is replicated on the health services website and that the VAGO audit report is attached. * These are DHS recommended timelines, if they are not met, the annual report may be tabled/ receipted late in Parliament that is, after 15 October 2009, and will require a Ministerial Briefing specifying the reason(s) why the annual report was late. NOTE: The annual report should be tabled in Parliament before the entities Annual General Meeting and before the Annual Report is made available to the public. Speaker Andrianopoulos made a ruling about the release of an annual report before it was tabled in Parliament. His ruling can be found in Hansard, Vol 452, 22-22 November 2001, pp 1777 and 1873-4. The Speaker ruled that where such a disclosure takes place, it is not a breach of privilege, but is a gross discourtesy to the House. 7
  11. 11. Printing and Publication of Annual Report to be tabled in Parliament It is the responsibility of each entity to ensure that the annual report includes the financial report and audit report issued by VAGO. It is recommended that the Report of Operations, the Financial Statements and Explanatory Notes are contained within the same bound publication, and not separate publications. • All details in the published annual report must appear exactly as per the audited financial statements and accompanying notes cleared by VAGO. - No information should be added to or removed from the financial statements, doing so would imply that the amended information has been audited by VAGO. • The format and presentation must be the same as agreed with VAGO. • VAGO’s audit report must be included in the annual report. It is important that this is an exact copy of VAGO’s audit report. Entities are therefore required to ensure that if the financial reports are provided to an external printer that they are proof read to ensure that the completed document agrees with the format, content and presentation as audited by VAGO. Failure to comply with the above will delay the tabling of the entities annual report and may necessitate an addendum, erratum or in extreme cases a reproduction and re-tabling of the entities annual report to Parliament. Any amended financial statements must be submitted to VAGO for audit review. Please note: For ease of reading the financial statements, it is recommended that a font size of no less than 10 be used in the printing of these statements and for ease of storing it is recommended that the size of the annual report should be A4 size. The financial statements must be processed in accordance with the yearly timetable to ensure compliance with the requirements under the Financial Management Act 1994. 21 September 2009 is the deadline for Regions to collect from entities and to submit to the Minister the annual report, that is (report of operations, financial statements and Audit Report). Entities should provide the required number of copies of the annual report as audited by VAGO to regional offices as per below: • Metropolitan Health Services and Denominational Health Services: Director of Finance, 13/50 Lonsdale Street, Melbourne; • Regions: Manager, Cabinet Parliament and Executive Services, 21/50 Lonsdale St, Melbourne The required number of copies each entity is to provide to their division/region is as per below: • Entities that have expenses and obligations (liabilities and commitments) totalling $5 million or more are required to submit 75 copies of their annual report (60 to be tabled in Parliament, and 15 for division/region). 8
  12. 12. • Entities that have expenses and obligations (liabilities and commitments) totalling less than $5 million are required to submit 15 copies of their annual report (for the division/region), as no copies are required for receipting in Parliament. (Annual reports are receipted in Parliament by formally presenting a letter to both Houses of Parliament informing that the Minister has received the report of operations and financial statements of the public body) The Minister is required to have the reports tabled/receipted in Parliament on or before 15 October 2009. The Minister must report to Parliament any failure to comply with the time requirements under the Act and reasons for the delay. 9
  13. 13. Report of Operations The following guidelines amplify the minimum requirements for the report of operations under the Financial Management Act 1994. Entities are to disclose this information in their annual reports and are to ensure consistency with the financial statements. Consideration should be given to the most effective way of presenting information in the context of additional disclosures made by the entity. A separate ‘statutory' report of operations required by the Act in one part of the annual report is often less effective than inclusion of the required information in the body of the non-financial section of the report. Cross-referencing can be used to ensure compliance with the minimum disclosures in the Act. The report of operations should be presented to VAGO’s representative for comparison with the financial statements. The following are the items requiring disclosure in order to provide readers with background and general information about the entity and their organisation structure. This information is required by the Standing Directions of the Minister for Finance and Financial Reporting Directions (specifically FRD 22B Standard Disclosures in the Report of Operations), and any updates from time to time. Responsible Bodies Declaration In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for the <ABC Health Service> for the year ending 30 June 2009. <Signature> <Donald Duck> Board Member Big Town 25 August 2009 Commentary – Responsible Bodies Declaration SD 4.2(j) requires the Report of Operations to be signed and dated by a member of the board of the entity. 10
  14. 14. Reporting Comments The following information is required under FRD 22B. Other information is also required under FRD 11 Disclosure of Ex-Gratia Payments, FRD 21A Responsible Person and Executive Officer Disclosures and FRD 25 Victorian Industry Participation Policy Disclosure in the Report of Operations. This information needs to be indexed in the Disclosure Index found at page 27 of these guidelines. (i) Relevant general information should include: (a) the manner in which the entity was established and its relevant Minister; (b) the objectives, functions, powers and duties of the entity. These should be linked to a summary of it activities, programs and achievements for the reporting period; (c) the nature and range of services provided by the entity including the persons or section of the community served by the entity; (d) the administrative structure of the entity including: (i) the names of the members of the governing board, Audit Committee and Chief Executive Officer; (ii) the names of occupants of senior offices and a brief description of the area of responsibility of each office; (iii) a chart setting out the organisational structure of the entity. The organisational chart should be sufficiently detailed to provide users with an understanding of the accountabilities for the entities main activities; (e) Hospitals are currently required to provide a monthly dataset of their current FTE and other payroll information to the Department under the Minimum Employee dataset (MDS). In addition, hospitals are also required to provide a Workforce dataset bi- annually. The latest specification of the MDS is available at http://www.health.vic.gov.au/accounts/payroll.htm#register. Data from the MDS is available to the Minister, to Divisions within the Department and to bodies such as the Australian Institute of Health & Welfare in Canberra and to the State Services Authority. Further, data from the MDS underpins DHS submissions to the Department of Treasury & Finance for funding of Enterprise Bargaining Agreement’s (EBAs) and other industrial matters affecting hospital budgets. To ensure consistency in annual reporting, hospitals are required, as a minimum, to report the following workforce statistics in their Annual Report in the following format: JUNE JUNE Labour Category Current Month FTE YTD FTE Nursing Administration and Clerical Medical Support Hotel and Allied Services Medical Officers Hospital Medical Officers Sessional Clinicians Ancillary Staff (Allied Health) 11
  15. 15. The FTE figures required in the table above are those excluding overtime. Do not include contracted staff (eg. Agency nurses, Fee-for-Service Visiting Medical Officers) as they are not regarded as employees. The above data should be consistent with the information provided in the MDS/F1 datasets. (ii) Relevant financial and other information in respect of a financial year should include: (a) a summary of the financial results for the year, from annual financial reports, with comparative results for the preceding four financial years. Previous years data needs to be included on the same basis for comparative purpose. Entities should footnote where changes to audited comparative information has been made to aid comparisons. This summary of the financial results needs to be included in the report of operations and not in the audited financial statements. 2009 2008 2007 2006 2005 $000 $000 $000 $000 $000 Total Revenue Total Expenses Operating Surplus/ (deficit) Retained Surplus/ (Accumulated Deficit) Total Assets Total Liabilities Net Assets Total Equity Other (list) (b) a summary of significant changes in financial position during the year. The report of operations should complement the information presented in the financial statements by providing a discussion and analysis of the entities operating results and financial position. This should include details about any significant factors that affect the entities performance. (c) the operational and budgetary objectives of the entity for the financial year and performance against those objectives including significant activities and achievements during the year; (d) a summary of major changes or factors which have affected the achievement of the operational objectives for the year; (e) events subsequent to balance date which may have a significant effect on the operations of the entity in subsequent years; (f) for consultancies (not contractors) during the year costing in excess of $100,000 (exclusive of GST) per consultancy, a schedule listing the consultants engaged, particulars of the projects involved, the total project fees approved (exclusive of GST), the total fees incurred (exclusive of GST) and future commitments in relation to each consultant; (g) for consultancies during the year costing less than $100,000 (exclusive of GST) per consultancy, the number and total cost (exclusive of GST) of engagements; (h) a statement on occupational health and safety matters, including appropriate performance indicators adopted to monitor such matters and how the entity performs under those indicators; 12
  16. 16. (i) a statement on the extent of compliance with the building and maintenance provisions of the Building Act 1993. Refer (Minister for Finance Guideline Building Act 1993/Standards for Publicly Owned Buildings/November, 1994); (j) a summary of the application and operation of the Freedom of Information Act 1982 in relation to the entity; (k) a summary of the application and operation of the Whistleblowers Protection Act 2001 (the Act), including disclosures required by the Act; (l) a disclosure index identifying the extent of compliance with statutory disclosure and other requirements (Refer FRD 10 Disclosure Index. Appendix 1 of FRD 10 contains example disclosures for the financial report); (m) a statement, to the degree applicable, on the extent of progress in implementation and compliance with National Competition Policy, including: (i) the requirements of the Government policy statement, Competitive Neutrality Policy Victoria; and (ii) subsequent reforms; Additional information (FRD 22B Appendix) In compliance with the requirements of the Standing Directions of the Minister for Finance, details in respect of the items listed below have been retained by <ABC Health Service> and are available to the relevant Ministers, Members of Parliament and the public on request (subject to the freedom of information requirements, if applicable): (a) A statement of pecuniary interest has been completed. (b) Details of shares held by senior officers as nominee or held beneficially. (c) Details of publications produced by the department about the activities of the entity and where they can be obtained. (d) Details of changes in prices, fees, charges, rates and levies charged by the entity. (e) Details of any major external reviews carried out on the entity. (f) Details of major research and development activities undertaken by the entity that are not otherwise covered either in the Report of Operations or in a document that contains the financial report and Report of Operations. (g) Details of overseas visits undertaken including a summary of the objectives and outcomes of each visit. (h) Details of major promotional, public relations and marketing activities undertaken by the entity to develop community awareness of the entity and its services. (i) Details of assessments and measures undertaken to improve the occupational health and safety of employees. (j) General statement on industrial relations within the entity and details of time lost through industrial accidents and disputes, which is not otherwise detailed in the Report of Operations. (k) A list of major committees sponsored by the entity, the purposes of each committee and the extent to which the purposes have been achieved. 13
  17. 17. Other Information (a) FRD 11 Disclosure of Ex-Gratia Payments requires an entity to disclose in aggregate, in the notes to the financial statements, the nature and amount of any ex-gratia payments incurred and written off during the reporting period. (b) FRD 21A Responsible Person and Executive Officer Disclosures prescribes the disclosure requirements and procedures in respect of Responsible Persons, Relevant Ministers and Executive Officers. (c) the following information for contracts commenced and/or completed in the financial year must be disclosed under the Victorian Industry Participation Policy (VIPP) Act 2003 (Refer to FRD 25 Victorian Industry Participation Policy Disclosure in the Report of Operations): i. the number and total value of contracts commenced and/or completed in the financial year to which the VIPP applied; ii. the regional or metropolitan split by number and value of commenced and/or completed contracts; iii. for contracts commenced during the financial year, a statement of total VIPP commitments (local content, employment and skill/technology transfer commitments) made as a result of these contracts; and iv. for contracts completed during the financial year, a statement of total VIPP outcomes (local content, employment and skill/technology transfer outcomes) achieved as a result of these contracts. 14
  18. 18. Key Financial and Service Performance Reporting A. For Health Services which have agreed a Statement of Priorities The Statement of Priorities (SoP) is the key document of accountability between the department and some entities. The SoP for each service is published annually by the department on its website. Each entity that has this form of agreement with the department must, as part of its Annual Report tabled in the Parliament, publish the outcomes it has achieved for each aspect of its SoP. This reporting, with the exception of the financial aspects, should be placed in a single location or chapter of the Annual Report. It may, if considered desirable, be interspersed at relevant points of the Annual Report at the discretion of the entity. Some data in this context is derived from unit level records by the department, entities may wish to verify final year result with the department as a precursor to publication. Instructions for reporting are set out below against each part of the SoP. Where a particular section does not appear in a particular entity’s SoP, results in that area should not be reported. Part A For this part and for all strategic / planning priorities add a column headed “Achievement” which briefly states the outcome for the year. “Completed” or “Priority deferred to 2009-10 due to departmental restructure” might be two examples of appropriate notations. Please provide information against each priority in the SoP. Sample layout: Part A Common requirements for all entities with a SoP. Strategic priorities for 2008-09 Strategic Priority Deliverables Due Achievement Date 1. Continue the Work with DHS to June implementation of implement the 2009 HealthSMART patient and client management system. Planning priorities for 2008-09 Planning priority Deliverables Achievement 1. Neurosciences Develop a ABC Health Neurosciences Service Plan 15
  19. 19. Part B First section for all Entities with an SoP except Dental Health Services Victoria. Please include SoP outcomes/results in this section. Note that where these items are expressed elsewhere in the Annual Report as an achievement/outcome, they need not be reproduced separately here. Part B: Performance priorities Financial performance Operating result 2008-09 Actual ($M) Annual operating result Cash management/liquidity 2008-09 Actual Creditors Debtors Net movement in cash balance ($m) Service performance WIES activity performance 2008-09 Actual WlES performance to target (%) Elective Surgery 2008-09 Actual Elective Surgery admissions Critical Care 2008-09 Actual lCU minimum operating capacity – <ABC Health Service> NlCU standard and flex operating capacity-<ABC Health Service> 16
  20. 20. Quality and Safety 2008-09 Actual Accreditation status (%) Cleaning standards (%) Submission of data to VICNISS (%) VICNISS Infection Surveillance Indicators Participation in the Hand Hygiene Program Maternity 2008-09 Actual Postnatal home care Mental Health 2008-09 Actual 28 day readmission rate (%) Access performance 2008-09 Actual Percentage of operating time on hospital bypass Percentage of emergency patients admitted to an inpatient bed within 8 hours Percentage of non-admitted emergency patients with length of stay of less than 4 hours Number of patients with length of stay in the emergency department greater than 24 hours Percentage of Triage Category 1 emergency patients seen immediately Percentage of Triage Category 2 emergency patients seen within 10 minutes Percentage of Triage Category 3 emergency patients seen within 30 minutes 17
  21. 21. Elective surgery 2008-09 Actual Percentage of Category 1 elective patients admitted with in 30 days Percentage of Category 2 elective surgery patients waiting less than 90 days Percentage of Category 3 elective surgery patients waiting less than 365 days Number of patients on the elective surgery waiting list Number of Hospital Initiated Postponements (HiPs) per 100 scheduled admissions Part B Dental Health Services Victoria ONLY. Financial Performance Operating result 2008-09 Actual ($M) Annual operating result Cash management/liquidity 2008-09 Actual Creditors Debtors Net movement in cash balance ($m) Service Performance Ratio of emergency to general of dental care Proportion of dental remakes within 12 months Percentage of re-treatment within 12 months following completed endodontic treatment Percentage of extraction within 12 months following completed endodontic treatment Access Performance Category 1 clients treated within 24 hours Priority denture clients receiving treatment within 3 months State-wide average waiting time for non- urgent general dental care State-wide average waiting time for non- urgent denture care 18
  22. 22. Percentage of agencies with average waiting time for general dental care of less than 3 years Percentage of agencies with average waiting time for denture care of less than 3 Years Proportion of pre-school aged children receiving care, who are dependants of eligible adults Percentage primary school children recalled in 24 months Percentage of high-risk school children recalled in 12 months Proportion of school children receiving care, who are dependants of eligible adults Percentage of high-risk young people attending 12 month recall Statewide function performance Performance measure 2008-09 Actual Implementation of Oral health promotion Implementation of the oral health workforce retention and recruitment strategy Implementation of the plan for the reduction of waiting times for general and denture care at agencies with the longest waiting times Part C First section for all Health Services with a SoP except Dental Health Services Victoria. While a budget is set against each item, this provides information on the basis upon which funds were allocated. The Annual Report should provide detail only on the activity undertaken by a service. Part C: Activity and Funding Activity and Funding Type 2008-09 Weighted Inlier Equivalent Separations Activity (WIES) Achievement WIES Public WIES Private WIES Renal Total WIES (Public, Private and Renal) WIES DVA WIES TAC WIES TOTAL Acute Non-Inpatient Emergency Services - Non-Admitted VACS - Allied Health VACS - Variable VACS - Other Non VACS Outpatients VACS Allied Health - DVA VACS Variable - DVA 19
  23. 23. Non-acute Inpatient CRAFT Rehab L1 (non DVA) Rehab L2 (non DVA) GEM (non DVA) Palliative Care - Inpatient Palliative Care - Other Rehab 2 - DVA GEM -DVA Palliative Care - DVA NHT - DVA Non-acute Ambulatory Hospital Admission Risk Program (HARP) SACS - Non DVA SACS – Paediatric Post Acute Care Transition Care (Non DVA) - Bed day Transition Care (Non DVA) - Home day SACS - DVA Post Acute Care - DVA Aged Care Aged Care Assessment Service Other Aged Care Residential Aged Care Community Health/Primary Care Community Health · Direct Care CHC - Health Promotion & Workforce Development Specified Grants Mental Health Disability Other DHS Programs Transplants - Pancreas Part C Dental Health Services Victoria ONLY. Funded activity 2008-09 Actual Community Dental Care RDHM Dental Care School Dental Care Block funded activities Report against each measure listed. 20
  24. 24. B. For all other Health Services Activity Admitted Patient - Note (a) Acute Sub- Mental Other Total Acute Health Separations Same Day Multi Day Total Separations Emergency Elective Other inc Maternity Total Separations Total WIES Total Bed Days Admitted patient data is to be sourced from the Victorian Admitted Episode Dataset (VAED) where feasible, and definitions should be in accordance with the Standards in the VAED manual Version 17. As the final VAED consolidation is scheduled to occur on 17 September and preparation of the data for the above table will be occurring before then, some estimation especially in Weighted Inlier Equivalent Separation (WIES) will be required to complete the table. Non Admitted Patients Acute Sub- Mental Other Total Acute Health Emergency Department Presentations Outpatient Services - occasions of services (VACS and Non VACS clinics) Other Services - occasions of services Total occasions of service Victorian Ambulatory Classification System - Number of encounters (applicable to health service / hospital allocated with VACS throughput targets) Non-admitted data should be in accordance with the definitions in the Victorian Emergency Minimum Dataset (VEMD) Manuals for those health service/hospitals reporting on that system or otherwise the AIMS manuals. Refer to the s2, s9 and s92 forms for the relevant programs. For mental health program, data for emergency presentations and outpatient services should be sourced from VEMD and CMI / ODS respectively. Note (a) Care Type Allocation Commentary Health services should allocate Care Types as follows: Acute (4,U); Mental (5); Sub-Acute (1,2,6,7,8,9,E,F,K,P); Other (0). Health Services should explain what services are provided under each care type in the Annual Report. 21
  25. 25. Attestation on Data Accuracy I, <Donald Trump> certify that the <ABC Health Service> has put in place appropriate internal controls and processes to ensure that the Department of Human Services is provided with data that reflects actual performance. The <ABC Health Service> has critically reviewed these controls and processes during the year. <Signature> <Donald Trump> Accountable Officer Big Town 25 August 2009 Commentary – Attestation on Data Accuracy Following adverse publicity on waiting list data, the Minister has written to Board Chairs regarding data accuracy, laying out requirements for both the statement of priorities for 2009-10 and the annual report. In that letter he states that” "I wish to reiterate that you and your board are accountable for the accuracy of data that your health service reports. I expect that each board makes this a responsibility of its Audit Committee, and ensures that data accuracy is subject to appropriate controls, including regular internal audit. In future, I will specify this responsibility in the Statement of Priorities". "In addition, I will require each health service board to provide a statement in its annual report to Parliament that it has all appropriate systems and processes in place to assure the quality of reported data, and to identify those measures". 22
  26. 26. 3. Revenue Indicators To be completed by all health services Average Collection Days 2009 2008 Private TAC VWA Other Compensable Psychiatric Residential Aged Care Debtors Outstanding as at 30 June 2009 Under 31-60 61-90 Over 90 Total Total 30 days days days 30/6/09 30/6/08 days Private TAC VWA Other Compensable Psychiatric Residential Aged Care ABBREVIATIONS: TAC Transport Accident Commission VWA Victorian WorkCover Authority 23
  27. 27. Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Community Initiatives (H&CI) The HSA category encompasses all the services that DHS funds, partly or wholly via a Health Services Agreement and/or Statement of Priorities. The HSA category also encompasses funding from third parties (eg Commonwealth) that support the operations of these services. Examples of transactions to be classified to the HSA category which have been previously treated inconsistently include: • Low care aged residential care services (hostels). Direct funding support has been provided in 2008-09 (HSUA wage increase) and indirect resources are provided by DHS to support accreditation. • Program of Aids for Disabled People. This is a service funded through the HSA. • Public hospital services provided to privately insured and other non-public patients. Unless provided directly through separate specific purpose funds established in accordance with DHS business rules, services to these patients are to be treated as a full or partial cost recovery extension of an HSA funded service. The H&CI category encompasses health expenses and revenues relating to health services that are not supported by the HSA as well as expenses and revenues for other kinds of services. Services to be classified to the H&CI category include: • Private hospitals owned by the public hospital/health service • Services provided under contract to co-located private hospitals • Separate internal and restricted specific purpose funds selling goods or services of a retail or commercial or medical nature to external parties (eg. cafeterias, food catering, car park, linen services, cleaning services, privatised clinical services) • Health services that are wholly funded by the Commonwealth, plus client co-payments (eg. CACPs, EACH, Day Therapy Centres) • Services provided to DHS under non-HSA arrangements, such as commercial contracts • Health services provided on a contractual basis to external parties (eg. public hospital beds provided to private hospitals) • Special projects and trust funds that are required to be accounted for outside the HSA category (eg. Coordinated Care trials) • Research wholly funded by the Commonwealth and other government or non-government agencies. 24
  28. 28. General Issues Reporting Entity (Consolidation) Under AASB 127 Consolidated and Separate Financial Statements, a reporting entity includes an economic entity comprising the parent entity and its controlled entities. Essentially, in the Standard, it is the control rather than ownership that provides the criterion which is fundamental to the identification of the group of related entities to be consolidated. Control is defined in AASB 127 paragraph 4 as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In AASB 127 paragraph 13, control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity unless, in exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control. Control also exists when the parent owns half or less of the voting power of an entity when there is: (a) power over more than half of the voting rights by virtue of an agreement with other investors; (b) power to govern the financial and operating policies of the entity under a statute or an agreement; (c) power to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or (d) power to cast the majority of votes at meetings of the board of directors or equivalent governing body and control of the entity is by that board or body. Further guidance on the concept of control is also provided in AASB Interpretation 112 Consolidation – Special Purpose Entities. When control is established in accordance with AASB 127 or Interpretation 112, then the operations are to be reported in the consolidated accounts. Where the gross revenue or total assets of the operations are equal to or less than five per cent of the principal entity's revenue or total assets, the operations are immaterial unless there is evidence to the contrary. Otherwise, the controlled entity information would normally be shown in aggregate with the entity total in the consolidated totals of the economic entity and not as a segment to the consolidated financial statements. Any inter/entity transactions between the entity and the controlled entity should be eliminated to avoid double counting. A majority of criteria does not need to be satisfied to qualify for consolidation. Substance over form needs to be applied in the final analysis. Comparative Figures Entities should also comply with the requirements on comparative information in AASB 101 Presentation of Financial Statements. 25
  29. 29. Attestation on Compliance with Australian/New Zealand Risk Management Standard I, <Donald Trump> certify that the <ABC Health Service> has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard and an internal control system is in place that enables the executives to understand, manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile of the <ABC Health Service> has been critically reviewed within the last 12 months. <Signature> <Donald Trump> Accountable Officer Big Town 25 August 2009 Commentary – Attestation on Compliance with Australian/New Zealand Risk Management Standard To ensure that risks are being managed in a consistent manner, entities are required to attest in annual reports that: • services have risk management processes in place consistent with the Australian/New Zealand Risk Management Standard (or equivalent designated standard); • these processes are effective in controlling the risks to a satisfactory level; and • a reasonable body or audit committee verifies that view Attestation of compliance should be made annually in the report of operations and the person making the attestation, usually the chief executive officer or accountable officer, should not make the attestation unless the audit committee or responsible body (for instance the board of a statutory authority) agrees that such an assurance can be given. Entities are strongly encouraged to read the Victorian Government Risk Management Framework published by the Department of Treasury and Finance for more information on Risk Management Standard. 26
  30. 30. Disclosure Index The Annual Report of the <ABC Health Service> is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the Department’s compliance with statutory disclosure requirements. Note: This Disclosure Index consists of 2 pages, and is not required to be completed by denominational hospitals. Legislation Requirement Page Reference Ministerial Directions Report of Operations Charter and purpose FRD 22B Manner of establishment and the relevant Ministers 11, 133 FRD 22B Objectives, functions, powers and duties 11 FRD 22B Nature and range of services provided 11 Management and structure FRD 22B Organisational structure 11 Financial and other information FRD 10 Disclosure index 13, 27 FRD 11 Disclosure of ex-gratia payments 14, 76 FRD 21A Responsible person and executive officer disclosures 14, 133, 134 FRD 22B Application and operation of Freedom of Information Act 1982 13 FRD 22B Application and operation of Whistleblowers Protection Act 2001 13 FRD 22B Compliance with building and maintenance provisions of Building 13 Act 1993 FRD 22B Details of consultancies over $100,000 12 FRD 22B Details of consultancies under $100,000 12 FRD 22B Major changes or factors affecting performance 12 FRD 22B Occupational health and safety 13 FRD 22B Operational and budgetary objectives and performance against 12 objectives FRD 22B Significant changes in financial position during the year 12 FRD 22B Statement of availability of other information 13 FRD 22B Statement of merit and equity 11 FRD 22B Statement on National Competition Policy 13 FRD 22B Subsequent events 136 FRD 22B Summary of the financial results for the year 12 FRD 22B Workforce Data Disclosures 11 FRD 25 Victorian Industry Participation Policy disclosures 11, 14 SD 4.2(j) Report of Operations, Responsible Body Declaration 10 SD 4.5.5 Attestation on Compliance with Australian/New Zealand Risk 26 Management Standard 27
  31. 31. Legislation Requirement Page Reference Financial Statements Financial statements required under Part 7 of the FMA SD 4.2(a) Compliance with Australian accounting standards and other 45 authoritative pronouncements SD 4.2(b) Operating Statement 34 SD 4.2(b) Balance Sheet 37 SD 4.2(b) Statement of Changes in Equity 39 SD 4.2(b) Cash Flow Statement 41 SD 4.2(c) Accountable officer’s declaration 31 SD 4.2(c) Compliance with Ministerial Directions 45 SD 4.2(d) Rounding of amounts 45 Legislation Freedom of Information Act 1982 13 Whistleblowers Protection Act 2001 13 Victorian Industry Participation Policy Act 2003 11, 14 Building Act 1993 13 Financial Management Act 1994 1 28
  32. 32. Financial Statements and Explanatory Notes Introduction The following financial statements and explanatory notes have been prepared to assist entities in preparing their 2008-09 annual report. The explanatory notes deal with a range of particular matters that are intended to provide guidance to entities. The formats and notes for the annual report should not be seen as restrictive; they are intended to guide entity management in determining the type and level of information required. However, to ensure consistency in report presentation, entities should not adopt a format substantially different from the format described in these guidelines. It is emphasised that the formats and notes for the annual report are the minimum requirements and entities are encouraged to provide additional information where necessary in the interests of presenting fairly their results and financial position and achieving informative disclosure. These Guidelines do not, and cannot be expected to cover all situations that may be encountered in practice. There may be unusual events or transactions that are not illustrated, where officers will need to use their professional judgement to make appropriate disclosures. On the other hand, some disclosures shown as examples may not be relevant and should be omitted where appropriate. Care should be taken to ensure that disclosures accurately represent each entity’s actual accounting policies and not repeated verbatim from these guidelines unless appropriate. Therefore, knowledge of the disclosure provisions of Australian Accounting Standards and Australian Interpretations are pre-requisites for the preparation of financial statements. These guidelines provide formats for: • Operating Statement. • Balance Sheet. • Statement of Changes in Equity. • Cash Flow Statement. • Accountable officer’s, chief finance & accounting officer’s and member of responsible body’s declaration. • Notes to the financial statements. The Consolidated column in the statements is only to be used where controlled entities (subsidiaries) are included. Health services with no controlled entities are to use the Total columns for the aggregate of health service and segment items. The Operating Statement, Balance Sheet, Statement of Changes in Equity and Cash Flow Statement must be cross- referenced to notes to explain relevant items included in those statements. VAGO’s audit report on the financial statements will be signed and dated on the basis of the final set of accounts signed by the entity. Financial statements, having been subject to an entity’s quality assurance processes, are to be submitted for audit by VAGO, by 24 July 2009 for material entities and within 8 weeks of the end of the financial year for non-material entities (s45 (2) of the Act), by 25 August 2009 (though to meet Ministerial tabling timelines non-material entities should aim for 10 August 2009). VAGO will audit the financial statements to meet annual reporting requirements under the Act. 29
  33. 33. Commentary – Financial Report Materiality and Aggregation Each material class of similar items shall be presented separately in the financial report. Items of a similar nature or function shall be presented separately unless they are immaterial. Consistency The presentation and classification of items in the financial report shall be retained from one period to the next unless: (a) it is apparent, following a significant change in the nature of the entities operations or a review of its financial report, that another presentation or classification would be more appropriate having regard to the criteria for the selection and application of accounting policies in AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors; or (b) an Australian Accounting Standard requires a change in presentation. Goods and Services Tax (GST) Interpretation 1031 Accounting for Goods and Services Tax (GST) provides that assets shall be recognised net of the amount of goods and services tax (GST), except where: • the amount of GST incurred by a purchaser that is not recoverable from the taxation authority shall be recognised as part of the cost of acquisition of an asset or as part of an item of expense. • the interpretation provides that receivables and payables shall be stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority shall be included as part of receivables or payables in the balance sheet. Offsetting Income, expenses, assets and liabilities can only be offset where required or permitted by an Accounting Standard, for example, AASB 132 Financial Instruments: Presentation and Financial Reporting Directions issued by DTF. 30
  34. 34. <ABC Health Service> Board member’s, accountable officer’s and chief finance & accounting officer’s declaration We certify that the attached financial report for <ABC Health Service> has been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards, Australian Accounting Interpretations and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes forming part of the financial report, presents fairly the financial transactions during the year ended 30 June 2009 and financial position of <ABC Health Service> at 30 June 2009. We are not aware of any circumstance which would render any particulars included in the financial report to be misleading or inaccurate. We authorise the attached financial report for issue on this day. <Signature> <Signature> <Signature> <Donald Duck> <Donald Trump> <Robin Hood> Board Member Accountable Officer Chief Finance & Accounting Officer Big Town Big Town Big Town 25 August 2009 25 August 2009 25 August 2009 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 31 ensure that their accounting policies are presented in their financial statements.
  35. 35. Auditor-General’s Report Please insert a copy of the VAGO’s original audit report. A reproduction of the audit report is not acceptable. VAGO’s report comprises 2 pages. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 32 ensure that their accounting policies are presented in their financial statements.
  36. 36. Auditor-General’s Report Page 2 Operating Statement Commentary – Operating Statement Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the Operating Statement. The Operating Statement has been developed to be consistent with existing Government, Departmental and Health Service sector requirements. The notes supporting this statement are arranged to identify services supported by Health Service Agreement and those supported by Hospital and Community Initiatives. In developing the Operating Statement, reference has been made to the AIMS F1 return. In preparing the Operating Statement, the Health Service should refer to the relevant classifications and definitions in the Finance and Accounting Manual and AIMS guidelines. The line item ‘Net Result Before Capital & Specific Items1’ must be less prominent than the line item ‘Net Result For The Period1’. Revenues / gains should be reported as a positive amount and expenses / losses should be reported as a negative amount (i.e. in brackets). ------------------------- (1) If there is a discontinued operation, then the headings mentioned above will have the words “From Continuing N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 33 ensure that their accounting policies are presented in their financial statements.
  37. 37. Operations” inserted into them Recognition of Revenue AASB 1004 Contributions draws a distinction between reciprocal and non-reciprocal transactions. The Standard states that an entity receives a non-reciprocal transfer where assets or services are provided or liabilities extinguished without the entity directly giving approximately equal value in exchange to the other party or parties to the transfer. The revenue arising from the transfer must be recognised when the entity gains control of the transfer. It follows that a reciprocal transfer can be deferred and reported as a liability. For a better understanding of AASB 1004, you are advised to familiarise yourself with the full text of this Standard and Hospital Circular 34/2008. Note 1(ad) of these guidelines, contains a broad statement in relation to revenue recognition that each entity needs to elaborate upon, in order to fully disclose material revenue recognition policy for each revenue source. Capital Purpose Income and Minor Works Grants As outlined in the financial section of the AIMS Manual, capital purpose income refers to all tied grants, donations and bequests received for the purpose of acquiring non-current assets such as capital works, plant and equipment. As such these receipts should be reported as part of Capital Purpose Income in Note 2. Similarly, the cost of equipment donated by medical practitioners should also be reported under this heading. Capital Purpose Income is further defined in section 5.6 of Chart of Accounts - Business Rules. A copy can be accessed at http://www.health.vic.gov.au/accounts/bizrules-v9-august08.pdf The Department established an annual capital equipment funding pool called Targeted Equipment Grants. From this funding pool, Health Services bid for grants towards higher-cost replacement or new items of equipment not funded under other special-purpose capital funding programs. The allocation of these grants is submission based and for the purchase of equipment only. As such funding received under this program must be reported as capital purpose income. Non-Refundable Fees Accommodation bonds received by residential aged care services may relate to future services to be provided. In that instance, the accommodation bonds should be apportioned between financial years. Accommodation bonds which are deferred to future financial years should be described as deferred revenue and be classified between current and non-current liabilities. Refundable Fees The liability which arises from refundable ingoing fees or accommodation bonds received by residential aged care services should be recorded as patients' monies held in trust and classified as current liabilities. These fees should not be classified as “Interest Bearing Liabilities”. Reporting of Capital and Specific Items The amounts for capital and specific items (eg, depreciation, capital purpose income, Specific Income, specific expense etc) must be the same as those reported in the supporting notes to the Operating Statement. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 34 ensure that their accounting policies are presented in their financial statements.
  38. 38. Balance Sheet Commentary – Balance Sheet N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 35 ensure that their accounting policies are presented in their financial statements.
  39. 39. Balance Sheet Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the Balance Sheet. Presentation of Assets and Liabilities Assets and liabilities must be categorised as either current or non-current categories, except when a presentation based on liquidity provides information that is reliable and is more relevant. Where the assets or liabilities are aggregated, amounts expected to be recovered or settled both before and after twelve months from the reporting date must be separately disclosed. Additional Disclosures Where relevant, further sub-classifications of amounts should be disclosed separately in accordance with AASB 101 (74) on either the face of the Balance Sheet or in the notes. Line items, sub-headings and sub-totals in addition to those required by AASB 101 (68, 68A) must be separately disclosed on the face of the Balance Sheet when required by an Accounting Standard, or when necessary for an understanding of the health service’s financial position. Presentation of a Non-Current Asset Classified as Held for Sale An entity shall not reclassify or re-present amounts presented for non-current assets as held for sale in the balance sheets for prior periods to reflect the classification in the balance sheet for the latest period presented. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 36 ensure that their accounting policies are presented in their financial statements.
  40. 40. Commentary – Statement of Changes in Equity Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the Statement of Changes in Equity. Information to be disclosed On the face of the statement A Statement of Changes in Equity should show the following on the face of the statement: a) profit or loss for the period; b) each item of income and expense for the period that, as required by other Standards, is recognised directly in equity, and the total of these items; c) total income and expense for the period (calculated as the sum of (a) and (b)), showing separately the total amounts attributable to equity holders of the parent and to minority interest; and d) for each component of equity, the effects of changes in accounting policies and corrections of errors recognised in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. A Statement of Changes in Equity that comprises only these items shall be titled a Statement of Recognised Income and Expense. Where an entity recognises actuarial gains and losses with respect to defined benefit plans outside profit or loss, the entity shall present a Statement of Recognised Income and Expense containing only the items listed above. The entity cannot present the more detailed statement as illustrated in these guidelines. Either on the face of the statement or in the notes An entity should also present, either on the face of the Statement of Changes in Equity or in the notes to the financial statements: a) the amounts of transactions with equity holders acting in their capacity as equity holders, showing separately distributions to equity holders; b) the balance of accumulated funds at the beginning of the period and at the reporting date, and the changes during the period; and c) a reconciliation between the carrying amount of each class of contributed equity and N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 37 ensure that their accounting policies are presented in their financial statements.
  41. 41. each reserve at the beginning and the end of the period, separately disclosing each change. Full reconciliation of each class of equity should be included in the equity note. These disclosures have not been illustrated in the example on the face of the Statement of Changes in Equity. These disclosure requirements are illustrated in Note 20 in the guide. Other Changes in an entity’s equity between two reporting dates reflect the increase or decrease in its net assets during the period. Except for changes resulting from transactions with equity holders acting in their capacity as equity holders and transaction costs directly related to such transactions, the overall change in equity during a period represents the total amount of income and expenses, including gains and losses, generated by the entities activities during that period (whether those items of income and expenses are recognised in profit or loss or directly as changes in equity). Note that where an entity has no amounts applicable to any individual line item, that line item should not be included in the Statement of Changes in Equity. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 38 ensure that their accounting policies are presented in their financial statements.
  42. 42. OLE_LINK Commentary - Cash Flow Statement N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 39 ensure that their accounting policies are presented in their financial statements.
  43. 43. Accounting Standards for the Cash Flow Statement are set out in AASB 107 Cash Flow Statements. The financial statements shall disclose by way of note, the policy adopted for determining which items are classified as cash in the Cash Flow Statement. Cash and cash equivalents Cash assets include cash on hand and cash equivalents, where; • Cash on hand means notes and coins held, and deposits held at call with a financial institution • Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. • The cash equivalents are restrictive as to maturity periods and risk of changes in value. A short period to maturity generally means that an investment qualifies as a cash equivalent only when it has a maturity of three months or less from the date of acquisition. Reporting of gross or net cash flows Gross cash inflows and outflows must be separately disclosed, except for the following items which may be reported on a net basis: • Items where the entity is, in substance, holding or disbursing cash on behalf of its customers (eg. funds held for customers by a fund manager); and • Items where turnover is quick, the amounts are large, and the maturities are short (quick turnover means that transactions occur on virtually a day-to-day basis) Furthermore, the amounts of cash at the beginning and end of the reporting period shall be shown in the Cash Flow Statement. The cash balance as at the end of the reporting year shown in the Cash Flow Statement shall be reconciled by way of note in the financial statements to the related items in the Balance Sheet of the same reporting period. A reconciliation of cash and net cash used in operating activities to net results must be disclosed as a note. If entities merge or acquire entities, the cash in bank from the acquired entities will be a cash inflow to the entity. A note to the statement will be required to describe the acquisition as a non- cash transaction if no purchase amount is paid. Acquisitions that do not involve cash, for example an asset swap or liability undertaking, must be reported as a note. Classification of cash flows Cash flows must be classified as arising from operating, investing or financing activities, as appropriate. Other classifications are not permitted. Interest and dividends As per FRD 110 Cash Flow Statements, interest paid and interest and dividends received must be classified as operating cash flows. Capital Grants Capital appropriations from Government must be presented under “Cash Flows from Operating Activities” unless the grant is an appropriation for additions to net asset base or is formally designated to be transferred as contributed capital, in which case, it must be classified as cash flows from financing activities. Refer to FRD 110 for further details. Goods and Services Tax (GST) Cash flows relating to GST must be included in the Cash Flow Statement on a gross basis in accordance with AASB 107 Cash flow statements The GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority must be, classified as operating cash flows. Additional guidance on accounting for GST is provided in Interpretation 1031 Accounting for the Goods and Services Tax (GST). N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should 40 ensure that their accounting policies are presented in their financial statements.
  44. 44. ABC Health Service Notes to the Financial Statements 30 June 2009 Notes to the Financial Statements 30 June2009 Table of Contents Note 1 Statement of Significant Accounting Policies...............................................................45 2 Revenue.................................................................................................................65 2a Analysis of Revenue by Source..................................................................................67 2b Patient and Resident Fees.........................................................................................73 2c Net Gain/(Loss) on Disposal Non-Current Assets..........................................................74 2d Assets Received Free of Charge or For Nominal Consideration.......................................74 2e Specific Income.......................................................................................................75 3 Expenses................................................................................................................76 3a Analysis of Expenses by Source.................................................................................78 3b Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services Supported by Hospital and Community Initiatives......................................................82 3c Specific Expenses....................................................................................................82 4 Depreciation and Amortisation..................................................................................84 5 Finance Costs.........................................................................................................85 6 Cash and Cash Equivalents.......................................................................................86 7 Receivables............................................................................................................87 8 Other Financial Assets..............................................................................................89 9 Inventories.............................................................................................................91 10 Non-Financial Assets Classified as Held for Sale...........................................................92 11 Other Assets...........................................................................................................93 12 Investments Accounted for Using the Equity Method....................................................94 13 Property, Plant & Equipment.....................................................................................96 14 Intangible Assets.....................................................................................................99 15 Investment Properties............................................................................................101 16 Payables...............................................................................................................102 17 Interest Bearing Liabilities......................................................................................104 18 Employee Benefits and Related On-Costs Provisions...................................................106 19 Other Liabilities.....................................................................................................109 20 Equity..................................................................................................................110 21 Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities.............................................................................................................113 22 Non-Cash Financing and Investing Activities..............................................................114 23 Financial Instruments.............................................................................................115 24 Commitments for Expenditure.................................................................................125 25 Contingent Assets and Contingent Liabilities..............................................................128 26 Segment Reporting................................................................................................129 27 Jointly Controlled Operations and Assets...................................................................132 28a Responsible Person Disclosures................................................................................133 28b Executive Officer Disclosures...................................................................................134 29 Events occurring after the Balance Sheet Date..........................................................136 30 Controlled Entities.................................................................................................137 31 Economic Dependency............................................................................................137 32 Discontinued Operations.........................................................................................138 33 Correction of Error and Revision of Estimates............................................................140 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 41 should ensure that their accounting policies are presented in their financial statements.
  45. 45. ABC Health Service Notes to the Financial Statements 30 June 2009 Commentary – Notes to the Financial Statements A contents page for notes is not mandatory; however it may assist readers to understand the financial report. Content The notes to the financial statements of an entity shall: a) Present information about the basis of preparation of the financial report and the specific accounting policies used in accordance with paragraphs 108-115 of AASB 101 Presentation of Financial Statement; b) Disclose the information required by Australian Accounting Standards that is not presented on the face of the balance sheet, operating statement, statement of changes in equity or cash flow statement; and c) Provide additional information that is not presented on the face of the balance sheet, operating statement, statement of changes in equity or cash flow statement, but is relevant to an understanding of any of them. Systematic structure Notes shall, as far as practicable, be presented in a systematic manner. Each item on the face of the balance sheet, operating statement, statement of changes in equity and cash flow statement shall be cross referenced to any related information in the notes. Notes are normally presented in the following order, which assists users in understanding the financial report and comparing them with financial reports of other entities: a) A statement that the financial statements have been prepared in accordance with Australian Accounting Standards (refer paragraph 15.2 AASB 101); b) A summary of significant accounting policies applied (refer to paragraph 108 of AASB 101); c) Supporting information for items presented on the face of the balance sheet, operating statement, statement of changes in equity and cash flow statement, in order in which each statement and each line item is presented; and d) Other disclosures, including: i. Contingent liabilities (refer to AASB 137) and unrecognised contractual commitments; and ii. Non-financial disclosures; for example, the entity’s financial risk management objectives and policies (refer to AASB 7). In some circumstances, it may be necessary or desirable to vary the ordering of specific items within the notes. For example, information on changes in fair value recognised in profit or loss may be combined with information on maturities of financial instruments, although the former disclosures relate to the operating statement and the latter relate to the balance sheet. Nevertheless, a systematic structure for the notes is retained as far as practicable. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 42 should ensure that their accounting policies are presented in their financial statements.
  46. 46. ABC Health Service Notes to the Financial Statements 30 June 2009 Note 1: Statement of Significant Accounting Policies (a) Statement of compliance The financial report is a general purpose financial report which has been prepared on an accrual basis in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards (AASs) and Australian Accounting Interpretation. AASs includes Australian equivalents to International Financial Reporting Standards. The entity is a not-for profit entity and therefore applies the additional Aus paragraphs applicable to “not-for-profit” entities under the AAS’s. (b) Basis of preparation The financial report is prepared in accordance with the historical cost convention, except for the revaluation of certain non-financial assets and financial instruments, as noted. Cost is based on the fair values of the consideration given in exchange for assets. In the application of AASs management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. The accounting policies set out below have been applied in preparing the financial report for the year ended 30 June 2009, and the comparative information presented in these financial statements for the year ended 30 June 2008. (c) Reporting Entity The financial report includes all the controlled activities of the <ABC Health Service>. (d) Rounding Of Amounts All amounts shown in the financial report are expressed to the nearest $1,000 (if total assets, or revenue, or expenses are less than $10 million, amounts must be rounded off to the nearest dollar) unless otherwise stated. (e) Principles of Consolidation The assets, liabilities, incomes and expenses of all controlled entities of the <ABC Health Service> have been included at the values shown in their audited Annual Financial Reports. Subsidiaries are entities controlled by <ABC Health Service>; control exists when <ABC Health Service> has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Any inter-entity transactions have been N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 43 should ensure that their accounting policies are presented in their financial statements.

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