annual financial & performance report 2013/2014

HEALTH

Annual Financial &Performance Report

2013/2014

1Yarrawonga Health Annual Financial & Performance Report 2013/14

Report of Operations 1. Responsible Bodies Declaration 1

2. Reporting Comments 1

2.1 Establishment & Relevant Minister 1

2.2 Objectives, Functions, Powers & Duties 1

2.3 Nature and Range of Services Provided 1

3. Administrative Structure 2

3.1 Board of Management 2

3.2 Advisory & Subcommittees 2

3.3 Auditors 2

3.4 Audit Committee 2

3.5 Bankers 2

3.6 Senior Officers 2

3.7 Departments 2-3

3.8 Workforce Data Disclosures 5

3.9 Organisational Structure 5

3.10 Visiting Medical Officers 6

4. Relevant Financial and Other Information 7

4.1 Summary of Financial Results 7

4.2 Significant Changes in Financial Position 7

4.3 Operational & Budgetary Objectives & Performance Against Objectives 7

4.4 Major Changes & Factors Affecting Achievement of Operational Objectives 7

4.5 Events Occurring After Balance Sheet Date 7

4.6 Consultancies (under $100,000) 7

4.7 Consultancies (over $100,000) 8

4.8 Financial Analysis of Operating Revenues and Expenses 8

4.9 Service, Activity and Efficiency Measures 9

4.10 Attestation on Data Accuracy 9

4.11 Revenue Indicators 10

4.12 Outstanding Debtors at 30 June 2014 11

4.13 Occupational Health & Safety Matters 11

4.14 Compliance with Building Act 1993 11

4.15 Freedom of Information, Information Privacy & Health Records Acts 11

4.16 Whistleblowers Protection Act 2001 11

4.17 National Competition Policy 11

4.18 Directions of the Minister for Finance / Additional Information 11

4.19 Statement of Merit and Equity 12

4.20 Victorian Industry Participation Policy 12

4.21 Attestation on Compliance with Australian / New Zealand Risk Management

Standard 12

Disclosure Index 13

Table of Contents Financial Statements and Explanatory Notes 15

2 Yarrawonga Health Annual Financial & Performance Report 2013/14

1. Responsible Bodies Declaration

In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for Yarrawonga Health for the year ending 30 June 2014.

Margaret Hauser

President Board of Management

Yarrawonga

22/08/2014

2. Reporting Comments

2.1 Establishment & Relevant Minister Yarrawonga Health (YH) is incorporated as a

public hospital under the Health Services Act

1988, and came into operation on the 1 July 1999 through the amalgamation of three

independent organisations:

• Yarrawonga District Hospital;

• Yarrawonga Nursing Home Inc.; and • Yarrawonga Community Health Centre

Inc.

The Minister for Health approved the name

change of Yarrawonga District Health

Service to Yarrawonga Health – this was gazetted on 22nd September 2011.

Yarrawonga Health is established under the

Health Services Act 1988 and the

responsible Minister during the reporting period is the Honourable David Davis, MP.

2.2 Objectives, Functions, Powers & Duties

Objectives, Functions, Powers and Duties of

Yarrawonga Health are described in the By-laws and Statement of Rules of the

organisation.

2.3 Nature & Range of Services

Provided Yarrawonga Health consists of 26 Acute

beds, 30 High Care Residential Aged Care

beds, 30 Dementia Specific Hostel beds and 28 low care Residential Aged Care beds, all

located on the same site, with an adjacent

Community Health Centre.

Home Nursing is also provided by the District Nursing Service, and supply of Meals

on Wheels by our Catering Department in

partnership with the Moira Healthcare Alliance.

The acute hospital services include medical/surgical services, low risk obstetric

services, lactation and parenting support

services, paediatric, dialysis and emergency services.

Yarrawonga Health is fortunate to have

medical services provided by two General

Practice Clinics in Yarrawonga. In addition, Specialist Consultants visit the Hospital on a

regular scheduled basis broadening the

range of medical services provided to the community.

A wide range of community services are on offer through the Yarrawonga Health

Community Health Centre. These include Community Nursing, Allied Health

(Occupational Therapy, Physiotherapy,

Speech Pathology, Dietetics and Podiatry), Welfare, Counselling and Housing Support,

and Health Education and Promotion.

Yarrawonga Health services the communities

of Yarrawonga and surrounding areas of

Mulwala, Bundalong and Tungamah which have a combined catchment population of

13,527 people.


3. Administrative Structure 3.1 Board of Management

Yarrawonga Health Board of Management members are appointed for a two to three

year term by the Governor-in-Council, upon

the recommendation of the Minister for Health.

There are 12 Board of Management positions. As of 30 June 2014, membership

comprised of:

Chair

Mrs M Hauser, RN, RM, BApplSc (NAdmin)

Senior Vice-Chair

Dr J Charles, BDSc (Melb), LDS (Vic)

Junior Vice-Chair Mrs J Dight, RN, GradDip Nursing (Palliative

Care)

Treasurer

Mr B Pigdon

Members Mrs P Boucher, TITC

Mr E D Evans, JP

Mr P. Flavel, B. App. S.; Chem. En; Diploma

Management Development.

Mr W Hidson

Mr G Page, B. App Sc(Chemistry), DipEd,

Diploma Financial Planning.

Mr A Spilva, LLB

Mr J Sterkenburg, Dip CE

Mr B Walsh, B.Business (Management Studies),

DipEd.Admin, Higher DipTeaching (Secondary)

3.2 Advisory & Sub-Committees There are a number of Advisory and Sub-

Committees reporting to the Board as

follows:

• Finance • Audit • Clinical Governance – Quality & Risk • Cultural, Diversity & Consumer • Medical Appointments Advisory • Planning

3.3 Auditors

Crowe Horwath (Agents for Auditor General

Victoria)

3.4 Audit Committee Mrs M Hauser (Chair Board of Management)

Mr B Pigdon (Treasurer Finance Committee)

Mr G Page (Board Member)

Mr P Nieuwenhout (External Member)

Mr C Howe (External Member)

In Attendance

Mr T Welch (Chief Executive Officer)

Mr R Moore (Financial Services)

3.5 Bankers

National Australia Bank

3.6 Senior Officers

Principle senior officers are listed below. Areas of responsibility of these officers are

described in the organisational chart at 3.9

Executive Management

Chief Executive Officer Mr T Welch, MBA, BApplSc (Nursing), Certificate of

Coronary Care, GradDip Health Service Management,

MRNCA, GAICD, ACHSE

Director of Clinical Services Mrs E Mallows, RN, RM, MPH

Director of Medical Services Dr J Best, AO, MD, PhD, Hon DSc, FAFPHM, FRACMA,

FRACP (Hon), FACRRM (Hon), FAMA

Senior Management

Finance Manager Mr R Moore, BBus(Acc), CPA

Ms R Pund, BBus(Acc), CPA

Facilities Manager

Mr J Flanagan

Manager Corporate Residential Business

Services Mrs M Murfitt, Dip Management

3.7 Departments Allied & Community Health

Community Services Manager

Ms K Cummins, RN, BNursing, PGDip Health

Promotion

Allied Health Assistant & Foot Care Nurse

Ms C Partington, EN, Diversional Therapist, Cert IV

Allied Health

Health & Wellbeing Facilitator/Diabetes

Educator

Mrs J Tregenza, RN, Grad Cert Diabetes

Dietetics Ms R McKee, BA Health Science (Nutrition &

Dietetics)


Child, Youth & Family Community Health

Nurse

Ms T Knott, RN

Ms K Cummins, BHealth Science (OT)

Housing Support

Ms R O’Connor, Dip Welfare Studies

Occupational Therapy Mrs J Buerckner, BAOcc Therapy

Ms S Leslie, BAHealth Science (OT)

Physiotherapy

Ms E Gray, BASc (Physio)

Podiatry

Ms L Sandral, BA Podiatry

Speech Pathologist

Ms J Sweeting, BASpPath

Intake Worker

Ms K Chant, BA Social Work, AssDipWelfare

Mrs J O’Brien, RN

Community Health Centre Administration

Mrs D Poll

Ms K Kennedy

Residential Aged Care

ADON Residential Care Services

Mrs K Andrews, RN, BA Health Science

(Nursing) MRH, Cert IV Training & Assessment

Unit Managers

Allawah Hostel: Ms G Duncan, RN Warrina Hostel: Mrs J Towt, RN

Karana: Ms J Roadley, RN

Nursing

ADON Clinical Support Manager Ms M McKenzie, RN, GradDip Ad Nurs

Unit Managers/Coordinators

General: Mrs J Purchase, RN

Maternity: Mrs M Welch, RN District Nursing:Mrs S Robinson, RN, BA

Nursing Mrs B Young, RN,

Stomaltherapy Nur Operating Suits:Ms Y Saunders, RN

ADMINSTRATION & SUPPORT SERVICES

Compliance & Risk Manager Mrs F Stevens, RN, Diversional Therapist

Information Governance

Coordinator/Grants Officer

Ms P Nagle, BASci(medical); GradDip

Management

Executive Assistant – CEO/DCS Mrs J Sonneman

Administrative Assistant – CEO/DCS Mrs. N. Clarke

Discharge Planner/Privacy Officer

Mrs C Febey

Health Information Manager

Ms L Jones, AssocDipMRA

Hotel Services

Mr L Crynes – Executive Chef

Mrs J Duncan – Domestic Services Manager

Pharmacist Acute Services/Residential Aged Care –

Terry White Pharmacy


3.8 Workforce Data Disclosures including Statement on the application of

employment and conduct principles The following table represents actual staff employed within the Health Service at 30 June 2014.

Yarrawonga Health has policies and procedures in place to promote a high standard of employment and conduct principles. These include policies on employment and HR practices,

and are complemented by a Code of Conduct which provides more detailed guidance on the

rights, responsibilities, accountabilities and delegations as well as matters of ethics and transparency expected of employees and representatives of the Health Service. The Health

Service operates a Human Resources Committee which develops, reviews and monitors policies and procedures in relation to Human Resource matters including processes for

appointment and selection. The Health Service upholds and adheres to the Code of Conduct of

Public Sector Employees issued by the Public Sector Standard Commissioner made under the

Public Administration Act 2004.

3.9 Organisational Structure

Labour Category June

Current Month FTE

June YTD FTE

Nursing 71.00 69.44

Administration and Clerical 12.90 12.08

Hotel and Allied Services 55.30 57.41

Ancillary Support (Allied Health) 6.21 6.22

TOTAL 145.44 145.15

CHIEF EXECUTIVE OFFICER

Terry Welch

DIRECTOR OF CLINICAL

SERVICES

Elaine Mallows

ACUTE SERVICES COMMUNITY AND

ALLIED HEALTH

CLINICAL

COORDINATOR

MATERNITY SERVICES

Mel Welch

OPERATING SUITE

NUM

Yvette Saunders

COMMUNITY SERVICES

MANAGER

Kaitlyn Cummins

PHARMACY

SERVICES

Terry White Chemist

ACUTE

SERVICES NUM

Jennifer Purchase

ADON CLINICAL

SUPPORT MANAGER

Marg McKenzie

INFECTION CONTROL

COORDINATOR

ADON RESIDENTIAL

CARE SERVICES

Kris Andrews

KARANA NUM

Jacqueline Roadley

ALLAWAH HOSTEL NUM

Gaye Duncan

WARRINA HOSTEL NUM

Judith Towt

Grade 5

COORDINATORS

MANAGER CORPORATE & RESIDENTIAL

BUSINESS SERVICES MANAGER

Melissa Murfitt

FACILITIES MANAGER

James Flanagan

DIRECTOR OF

MEDICAL SERVICES

Dr John Best

EXECUTIVE CHEF

Leigh Crynes Maintenance / Safety

Officer / Waste

Management

DNS NUM’s

Bernie Young/

Sharon Robinson

ADMINISTRATIVE

ASSISTANT CEO/DCS

Nedean Clarke

HEALTH INFORMATION

MANAGER

Lucinda Jones

DIALYSIS

Melissa Moat

URGENT CARE

CENTRE

EXECUTIVE ASSISTANT

CEO/DCS

Jen Sonneman

FINANCIAL

SERVICES

Northeast Health

Wangaratta

Residential Services Business

Management

Catering Services Supervisor

Domestic Services Supervisor

Reception / Administration / Supply /

Payroll/ Personnel / WorkCover /

Information Technology

Fleet Management

INFORMATION

GOVERNANCE

COORDINATOR

GRANTS OFFICER

Paula Nagle

COMPLIANCE & RISK

MANAGER

Fiona Stevens


3.10 Visiting Medical Officers

General Practitioners

Dr John Emery, MBBS, Dip (Obst), RCOG Dr Tania Jones, MBBS, FRACGP, DRANZCOG

Dr Peter Keppel, MBBS, FRACGP, DipObs, RACOG, DA, FACRRM, DipFamMed

Dr Kyaw Lynn, MBBS

Dr Lin Naing, MBBS

Dr Murali Ooruthiran, MBBS

Dr Grace Reynolds, MBBS

Dr Sanwar Sawdagar, MBBS

Dr Anura Sivapiragasam, MBBS

Dr Khing Aung, MBBS

Dr Rasheed Huq, MBBS

Dr Myint Lwin, MBBS

Dr Clyde Ronan, MBBS, DA, DRANZCOG

Dr The Nu Phyoe Wai, MBBS

Consultant Surgeons

Mr Neil Bright, MBBS, FRACS

Dr Mark Landy, MBBS, FRACS Dr Liu-Ming Schmidt, MBBS, FRACS

Mr. Peter Van Gelderen, MBBS, FRACS

Consultant Physicians

Dr Les Bolitho, MBBS, FRACP

Dr Andreas Baisch, FRACP

Consultant Obstetricians & Gynaecologists

Dr Colin Pearse, MBBS, FRANZCOG

Dr Judith Krones

Consultant Orthopaedic Surgeons Mr Richard Kjar, MBBS, FRACS (Ortho)

Consultant Urologist Mr Jonathon Lewin, MBBS, FRCS

Consultant Paediatricians Dr Peter Dewez, MBBS, FRACP (Gen Paeds)

Dr Terry Stubberfield, MBBS

Consultant Radiologist

Regional Imaging Border

Pathologist Dorevitch Pathology Service


4. Relevant Financial and Other Information

4.1 Summary of Financial Results

4.2 Significant Changes in Financial Position

The net result for the year was a deficit of $556K after capital items, including depreciation of $2M. This result was a $300K improvement on the prior year. Throughout the year YH received

a rural capital support grant of $513K and continued with it’s implementation of the

environmental sustainability program.

4.3 Operational & Budgetary Objectives & Performance Against Objectives The organisation budgeted for a surplus of $15K before capital items and depreciation for the 2013/14 financial year. The final result was better than this, with an operating surplus of

$331K being achieved. This represents a $200K improvement over the previous financial year.

The organisation and the Department of Health (DoH) both focus on the result before capital and depreciation, as depreciation is not a funded item.

The variance between actual and budgeted result was due to several occurrences, including increase in renal and TAC WIES activity and improved Residential Aged Care revenues.

The organisation implemented a financial management improvement plan to better analyse, monitor and improve its financial position. Considerable savings were achieved with salaries

and wages through efficient rostering across weekends and public holidays. We will continue to

monitor and seek to achieve further and ongoing improvements in the overall financial position while maintaining quality service delivery.

4.4 Major Changes & Factors Affecting Achievement of Operational

Objectives There were no major changes or factors that materially or significantly affected achievement of

Operational Objectives.

4.5 Events Occurring After Balance Sheet Date There were no events at the date of this report that may have a significant effect on the

operations of Yarrawonga Health in subsequent years.

4.6 Consultancies (under $100,000) The Health Service engaged two major external consultant during the year at a total cost of

$66,680.

2013/2014

$000’s 2012/2013

$000's 2011/2012

$000's 2010/2011

$000's 2009/2010

$000's

Total Revenue 16,633 16,270 15,579 15,642 14,339

Total Expenses 16,301 16,139 15,799 15,497 14,472

Operating Surplus (Deficit) 331 131 (220) 145 (133)

Retained Surplus /

(Accumulated Deficit) (5,366) (4,810) (3,954) (2,294) (1,463)

Total Assets 33,734 30,945 30,970 31,625 31,382

Total Liabilities 9,664 10,160 11,317 10,312 9,279

Net Assets 24,070 20,785 19,653 21,313 22,103

Total Equity 24,070 20,785 19,653 21,313 22,103


4.7 Consultancies (over $100,000) The Health Service engaged no major external consultants over $100,000 during the year.

4.8 Financial Analysis of Operating Revenues and Expenses

2014

$000

2013

$000

REVENUES

SERVICES SUPPORTED BY HEALTH SERVICES AGREEMENT

Government Grants 10,123 9,822 Indirect Contributions by Human Services 156 (78)

Commonwealth Government-Residential Aged Care 3,736 3,445

Patient Fees (Incl Residential Accommodation Payments) 2,172 2,218 Donations & Bequests 60 52

Other Revenue 269 371

16,516 15,816

SERVICES SUPPORTED BY HOSPITAL & COMMUNITY

INITIATIVES

Business Units

Donations & Bequests

114

3

110

- Interest - 330

117 440

16,633 16,270

EXPENSES

SERVICES SUPPORTED BY HEALTH SERVICES AGREEMENT Employee Entitlements 11,858 11,670

Fee for Service Medical Officers 542 571

External Contract Staff 287 313

Supplies & Consumables 937 890 Other Expenses 2,666 2,690

16,290 16,134

SERVICES SUPPORTED BY HOSPITAL & COMMUNITY

INITIATIVES

Employee Entitlements 4 5 Supplies & Consumables 3 -

Other Expenses 5 -

12 5 16,302 16,139

SURPLUS/(DEFICIT) FOR THE YEAR BEFORE CAPITAL

PURPOSE INCOME, DEPRECIATION, AMORTISATION AND SPECIFIC REVENUES AND EXPENSES

331

131

Capital Purpose Income 801 892 Capital Interest

Net Gain/(Loss) from Disposal of Non-current assets

325

44

23

Depreciation and Amortisation (2,057) (1,902)

Specific Expenses -

(887) ( 987)

NET SURPLUS /(DEFICIT) (556) (856)


4.9 Service, Activity and Efficiency Measures Service Level

The population in the Yarrawonga/Mulwala Catchment is approximately 12,500, however a major increase in population to 25,000 generally occurs during the Easter and Summer holiday

periods.

Activity

ACUTE NURSING HOME TYPE

2013/2014 2012/2013 2013/2014 2012/2013

Admitted Patients

Same Day Separations 2318 2,187

Multi Day Separations 889 852

Total Separations 3207 3,039 1 4

Same Day Emergency 45 37

Same Day Elective 2262 2,145

Same Day Other 10 5

Total Same Day Separations 2317 2,187

Total Births 72 71

Total WIES 1258 1,260

Total Bed Days 6904 6,850 21 40

Non Admitted Patients

Urgent Care Presentations 2422 2,769

4.10 Attestation on Data Integrity

I, Terry Welch certify that Yarrawonga Health has put in place appropriate internal controls and

processes to ensure that reported data reasonably reflects actual performance. Yarrawonga Health has critically reviewed these controls and processes during the year.

Terry Welch

Accountable Officer

Yarrawonga

22/08/2014


4.11 Attestation for compliance with Ministerial Standing Direction 4.5.5.1-

Insurance

I, Terry Welch certify that Yarrawonga Health has complied with Ministerial Directions 4.5.5.1 -

Insurance.

Terry Welch Accountable Officer

Yarrawonga 22/08/2014

4.11 Revenue Indicators

Average Collection Days

2013/2014 2012/2013

Private Inpatient Fees 180 358

Nursing Home Type Fees

District Nursing & Community Health

27

40

42

46

Sundry Debtors 164 73

HRHA Debtor n/a n/a

TOTAL 68 117

4.12 Debtors Outstanding Debtors at 30 June 2014

Under

30 Days

31 to 60

Days

61 to 90

Days

Over

90 Days

Total

30/06/14

Total

30/06/13

Private Inpatient Fees 103,278 26,244 23,346 20,951 173,819 262,699

Nursing Home Type

Fees

34,189 86,026 1,860 4,027 126,102 110,881

District Nursing &

Community Health

9,845 - - - 9,845 12,641

Sundry Debtors 53,821 2,580 447 21,349 78,199 120,528

HRHA Debtor 87,756 - - - 87,756 69,633

TOTAL 288,889 114,850 25,653 46,327 475,721 576,381

ABBREVIATIONS: VWA - Victorian WorkCover Authority

TAC – Transport Accident Commission


4.13 Occupational Health & Safety Matters Yarrawonga Health attaches a high priority to the safety and wellbeing of its employees and is

committed to facilitating an organizational culture that actively seeks to improve work

practices and to foster attitudes which sustain healthy and safe work environments, whilst aiming to ensure the safety of its workforce, contractors, volunteers, the public and others who

are on its premises.

The organization’s Occupational Health & Safety Management Systems provide the structural

framework within which OHS is managed and includes the responsibilities of management, supervisors, employees and their representatives and promotes the integration of early

intervention and prevention strategies in incident reporting, injury management, hazard and

risk identification and control into day-to-day business.

Key elements of our approach to workplace health, safety and wellbeing include an

increase in staff training and awareness in identifying and recognizing –

• safe work practices as an integral part of business and workplace culture;

• effective prevention programs; • major health and safety risks and strategies for mitigating these risks with an emphasis

on the importance of appropriate consultation.

A strong focus on reducing manual handling injuries and risks remains a priority and has been

maintained through staff training and consultation in trialling and evaluating equipment.

4.14 Compliance with Building and Maintenance Provisions of the Building

Act 1993 The Minister for Finance has issued instructions in accordance with the Building Act 1993 stating that all public entities are to ensure that buildings under their control are: safe and fit

for occupation, comply with statutory requirements and are maintained to a standard where they remain fit for occupancy.

Yarrawonga Health reports annually on the measures taken to comply with the provision of the Act.

4.15 Freedom of Information, Information Privacy & Health Records Acts The Freedom of Information Act 1982, Information Privacy Act 2000 and Health Records Act

2001 provides for members of the public access to their medical records for the purpose of

viewing, amending incorrect notations or copying parts of the record. During the year there were 12 requests for Yarrawonga Health under the Act.

4.16 Whistleblowers Protection Act 2001 Yarrawonga Health has policies and procedures in place to enable total compliance with the

Whistleblowers Protection Act. The Chief Executive Officer has been appointed as the ‘Protected Disclosure Coordinator’ to manage the process. During the 2013/2014 Financial

Year Yarrawonga Health had no disclosures made under this Act.

4.17 National Competition Policy The Health Service complies with all government policies regarding competitive neutrality in

regard to tender applications.

4.18 Directions of the Minister for Finance / Additional Information In compliance with the requirements of the Standing Directions for the Minister of Finance, additional information is available to relevant Ministers, Members of Parliament and the public

on request (subject to Freedom of Information Requirements, if applicable).


4.19 Statement of Merit and Equity Yarrawonga Health is committed to the application of the public sector employment principles.

It has reviewed employment processes to ensure that employment decisions are based on merit, employees are treated fairly and reasonably, equal employment opportunities are

provided and employees have a reasonable avenue of redress against unfair or unreasonable

treatment.

4.20 Victorian Industry Participation Policy

Yarrawonga Health abides by the principles of the Victoria Industry Participation Policy. This

applies to all tenders in regional Victoria over $1 million. The Department of Health (DoH)

Capital Management Branch reports VIPP Disclosures for those projects managed by DoH. In 2013/2014 there were no contracts commenced or completed that were managed by the

Health Service to which this Act applied.

4.21 Attestation on Compliance with Australian/New Zealand Risk

Management Standard

I, Margaret Hauser certify that Yarrawonga Health has risk management processes in place

consistent with Australian/New Zealand Risk Management Standards and an internal control

system in place that enables the executive to understand, manage and satisfactorily control risk exposures. The board of management verifies this assurance and that the risk profile of

Yarrawonga Health has been critically reviewed within the last 12 months.

Margaret Hauser

President Board of Management

Yarrawonga 22/08/2013


DISCLOSURE INDEX

The Annual Report of Yarrawonga Health 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.

Legislation Requirement Page

MINISTERIAL DIRECTIONS

Report of Operations

Charter and purpose

FRD 22B Manner of establishment and relevant minister 2

FRD 22B Objectives, functions, powers and duties 2 FRD 22B Nature and range of services provided 2

Management and Structure FRD 22B Organisational structure 5

Financial & Other Information

FRD 10 Disclosure index 13 FRD 11A Disclosure of ex-gratia payments n/a

FRD 21B Responsible person and executive officer disclosures 81-82 FRD 22D Application and operation of Protected Disclosure 2012 11

FRD 22D Application and operation of Freedom of Information Act 1982 11

FRD 22D Compliance with building and maintenance provisions of the Building Act 1993 11

FRD 22D Details of consultancies under $100,000 7

FRD 22D Details of consultancies over $100,000 8 FRD 22D Major changes or factors affecting performance 7

FRD 22D Occupational health and safety 11 FRD 22D Operational and budgetary objectives and performance against

objectives 7

FRD 22D Significant changes in financial position during the year 7 FRD 22D Statement of availability of other information 11

FRD 22D Statement on National Competition Policy 11

FRD 22D Subsequent events 7 FRD 22D Summary of the financial results for the year 7

FRD 22D Workforce Data Disclosures including a statement on the application

of employment and conduct principles 5 FRD 25B Victorian Industry Participation Policy disclosures 12

FRD 29 Workforce Data disclosures 5 SD 4.2(g) Specific information requirements n/a

SD 4.2(j) Sign-off requirements 2

SD 3.4.13 Attestation on Data Integrity 9 SD 4.5.5.1 Ministerial Standing Direction 4.5.5.1 compliance attestation 10

SD 4.5.5 Risk management compliance attestation 12

FINANCIAL STATEMENTS

Financial Statements Required under Part 7 of the Financial Management Act

SD 4.2(a) Statement of Changes in Equity 21 SD 4.2(b) Operating Statement 19

SD 4.2(b) Balance Sheet 20

SD 4.2(b) Cash Flow Statement 22


Other requirements under Standing Directions 4.2

SD 4.2(a) Compliance with Australian accounting standards and other

authoritative pronouncements 23

SD 4.2(c) Accountable officer’s declaration 16

SD 4.2(c) Compliance with Ministerial Directions 21

SD 4.2(d) Rounding of amounts 25

LEGISLATION

Freedom of Information Act 1982 9

Protected Disclosure Act 2001 9

Victorian Industry Participation Policy Act 2003 10

Building Act 1993 9

Financial Management Act 1994 23


Financial Statements and Explanatory Notes

Accountable Officer’s, Chief Finance & Accounting Officer’s & Member of Responsible

Body’s Declaration 16

Auditor-General's Report 17-18

Operating Statement 19

Balance Sheet 20

Statement of Changes in Equity 21

Cash Flow Statement 22

Notes to and Forming Part of the Financial Statements:

Table of Contents

1 Statement of Significant Account Policies 21-43

2 Revenue 44

2a Analysis of Revenue by Source 45-46

2b Patient and Resident Fees 47

2c Net Gain / (Loss) on Disposal of Non-Financial Assets 48

3 Expenses 49

3a Analysis of Expenses by Source 50-51

3b Analysis of Expenses by Internal and Restricted Specific Purpose Funds

Supported by Hospital and Community Initiatives 52

4 Depreciation and Amortisation 55

5 Cash and Cash Equivalents 54

6 Receivables 55

7 Investments and other Financial Assets 56

8 Inventories 57

9 Other Assets 58

10 Property, Plant & Equipment 59-63

11 Payables 64

12 Provisions 65

13 Superannuation 66

14 Other Liabilities 67

15 Reserves 68

16 Reconciliation of Net Result for the Year to Net cash Inflow/(Outflow)

from Operating Activities 69

17 Financial Instruments 70-77

18 Commitments for Expenditure 78

19 Operating Segments 79-80

20 Jointly Controlled Operations and Assets 81

21a Responsible Persons Disclosures 82

21b Executive Officer Disclosures 83

22 Remuneration of auditors 84

23 Events Occurring after the Balance Sheet Date 85


Board Member’s, accountable officer’s and chief finance &

accounting officer’s declaration

We certify that the attached financial statements for Yarrawonga Health have 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 Comprehensive Operating

Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes to and forming part of the financial statements, presents fairly the financial transactions during

the year ended 30 June 2013 and financial position of Yarrawonga Health at 30 June 2014. At the time of signing, we are not aware of any circumstances which would render any

particulars included in the financial statements to be misleading or inaccurate.

We authorise the attached financial reports for issue on this day.

Margaret Hauser Terry Welch Ross Moore President Board Accountable Officer Financial Services

of Management

Yarrawonga Yarrawonga Yarrawonga

22/08/2014 22/08/2014 22/08/2014


Yarrawonga Health Annual Report 2013/2014

Note 2014 2013$'000 $'000

Revenue from operating activities 2 16,618 15,926 Revenue from non-operating activities 2 - 330 Employee expenses 3 (11,862) (11,675) Non salary labour costs 3 (829) (884) Supplies and consumables 3 (940) (890) Other expenses 3 (2,671) (2,690) Share of net result of associates and joint ventures accounted for using the Propotionate Method

20 15 14

Net result before capital and specific items* 331 131

Capital purpose income 2(a) 1,170 915 Depreciation and amortisation 4 (2,057) (1,902)

NET RESULT FOR THE YEAR^ (556) (856) Other comprehensive incomeItems that will not be reclassified to net result

Changes in physical asset revaluation surplus 15 3,841 1,988 Total other comprehensive income 3,841 1,988

Comprehensive result 3,285 1,132

Yarrawonga HealthComprehensive Operating StatementFor the Year Ended 30 June 2014

This Statement should be read in conjunction with the accompanying notes



Note 2014 2013$'000 $'000

Current assetsCash and cash equivalents 5 674 693 Receivables 6 817 972 Investments and other financial assets 7 6,441 6,096 Inventories 8 113 103 Other assets 9 214 10 Total current assets 8,259 7,874

Non-current assetsReceivables 6 684 542 Property, plant & equipment 10 24,791 22,529 Total non-current assets 25,475 23,071 TOTAL ASSETS 33,734 30,945

Current liabilitiesPayables 11 452 673 Provisions 12 3,216 2,988 Other current liabilities 14 5,709 6,181 Total current liabilities 9,377 9,842

Non-current liabilitiesProvisions 12 287 318 Total non-current liabilities 287 318 TOTAL LIABILITIES 9,664 10,160 NET ASSETS 24,070 20,785

EQUITYProperty, plant & equipment revaluation surplus 15a 12,848 9,007 Contributed capital 15b 16,588 16,588 Accumulated surpluses/(deficits) 15c (5,366) (4,810) TOTAL EQUITY 15c 24,070 20,785

Commitments 18

Balance SheetAs at 30 June 2014

Yarrawonga Health



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Note 2014 2013$'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIESOperating grants from government 13,843 13,288 Patient and resident fees received 2,214 1,749 Donations and bequests received 63 59 GST received from/(paid to) ATO 303 296 Interest received 325 284 Other receipts 456 224 Total receipts 17,204 15,900 Employee expenses paid (11,665) (11,836) Non salary labour costs (592) (579) Payments for supplies & consumables (1,434) (1,124) External contractor costs (290) (313) Other payments (2,826) (2,763) Total payments (16,807) (16,615) Cash generated from operations 397 (715)

Capital grants from government 757 461 Capital grants from non-government - - Capital donations and bequests received 44 314

NET CASH FLOW FROM/(USED IN) OPERATING ACTIVITIES

161,198 60

CASH FLOWS FROM INVESTING ACTIVITIESPayments for non-financial assets (478) (720) Proceeds from sale of non-financial assets 44 37 Proceeds from sale of investments - 633 Payment for purchase of investments (783)

NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES (1,217) (50)

CASH FLOWS FROM FINANCING ACTIVITIESContributed capital from government - -

NET CASH FLOW FROM/(USED IN) FINANCING ACTIVITIES - - NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS HELD (19) 10

Cash and cash equivalents at beginning of financial year 693 683 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 5 674 693

Cash Flow Statement For the Year Ended 30 June 2014

Yarrawonga Health



YARRAWONGA HEALTH Notes the Financial Statements

30 June 2014

22

Note 1: Statement of Significant Accounting Policies

These annual financial statements represent the audited general purpose financial statements for Yarrawonga Health for the period ending 30 June 2014. The purpose of the report is to provide users with information about the Health Services’ stewardship of resources entrusted to it.

(a) Statement of Compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards AASs, which include interpretations issued by the by the Australian Accounting Standards Board (AASB). They are presented in a manner consistent with the requirements of AASB Presentation of Financial Statements.

The financial statements also comply with relevant Financial Reporting Directions (FRDs) issued by the Department of Treasury and Finance, and relevant Standing Directions (SDs) authorised by the Minister for Finance.

The Health Service is a not-for-profit entity and therefore applies the additional Aus paragraphs applicable to “not-for-profit” Health Services under the AASs.

The annual financial statements were authorised for issue by the Board of Yarrawonga Health on 22 August 2014.

(b) Basis of accounting preparation and measurement

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 statements for the year ended 30 June 2014, and the comparative information presented in these financial statements for the year ended 30 June 2013.

The going concern basis was used to prepare the financial statements.

These financial statements are presented in Australian dollars, the functional and presentation currency of the Health Service.

The financial statements, except for cash flow information, have been prepared using the accrual basis of accounting. Under the accrual basis, items are recognised as assets, liabilities, equity, income or expenses when they satisfy the definitions and recognition criteria for those items, that is they are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

The financial statements are prepared in accordance with the historical cost convention, except for:

non-current physical assets, which subsequent to acquisition, are measured at a revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made and are re-assessed with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair values;



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23

derivative financial instruments, managed investment schemes, certain debt securities, and investment properties after initial recognition, which are measured at fair value with changes reflected in the comprehensive operating statement (fair value through profit and loss);

available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised (i.e. other comprehensive income – items that may be reclassified subsequent to net result); and

the fair value of assets other than land is generally based on their depreciated replacement value.

Historical 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 professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. 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. Judgements made by management in the application of AASs that have significant effects on the financial statements and estimates, with a risk of material adjustments in the subsequent reporting period, relate to:

the fair value of land, buildings, infrastructure, plant and equipment (refer to Note 1(k);

superannuation expense (refer to note 1(h)); and

actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates (refer to Note 1(l)).

Consistent with AASB 13 Fair Value Measurement, Yarrawonga Health determines the policies and procedures for both recurring fair value measurements such as property, plant and equipment, investment properties and financial instruments, and for non-recurring fair value measurements such as non-financial physical assets held for sale, in accordance with the requirements of AASB 13 and the relevant FRDs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, Yarrawonga Health has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.



30 June 2014

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In addition, Yarrawonga Health determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Valuer-General Victoria (VGV) is Yarrawonga Health’s independent valuation agency.

Yarrawonga Health, in conjunction with VGV monitors the changes in the fair value of each asset and liability through relevant data sources to determine whether revaluation is required.

(c) Reporting entity

The financial statements include all the controlled activities of Yarrawonga Health.

Its principal address is:

33 Piper Street Yarrawonga, Victoria, 3730

ABN: 32983213307

A description of the nature of Yarrawonga Health’s operations and its principal activities is included in the report of operations, which does not form part of these financial statements.

Objectives and funding

Yarrawonga Health’s overall objective is to maintain and develop quality health services to meet the needs of the community, as well as improve the quality of life to Victorians.

Yarrawonga Health is predominantly funded by accrual based grant funding for the provision of outputs.

(d) Principles of Consolidation

Jointly controlled assets or operations

Interests in jointly controlled assets or operations are not consolidated by Yarrawonga Health, but are accounted for in accordance with the policy outlined in Note1(k) Financial Assets.

(e) Scope and presentation of financial statements

Fund Accounting

Yarrawonga Health operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds. Yarrawonga Health’s Capital and Specific Purpose Funds include unspent capital donations and receipts from fund-raising activities conducted solely in respect of these funds.

Services Supported By Health Services Agreement and Services Supported By Hospital and Community Initiatives

Activities classified as Services Supported by Health Services Agreement (HSA) are substantially funded by the Department of Health and includes Residential Aged Care Services (RACS) which are also funded from other sources such as the Commonwealth, patients and residents, while Services Supported by Hospital and Community Initiatives (H&CI) are funded by the Health Service's own activities or local initiatives and/or the Commonwealth.



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Residential Aged Care Services

Karana Nursing Home, Allawah Hostel and Warrina Hostel Residential Aged Care Service operations are an integral part of Yarrawonga Health and shares its resources. An apportionment of land and buildings has been made based on floor space. The results of these operations have been segregated based on actual revenue earned and expenditure incurred by each operation in Note 2a and 3a to the financial statements.

Yarrawonga Health’s three Residential Aged Care Services are substantially funded from Commonwealth bed-day subsidies.

Comprehensive operating statement

The Comprehensive operating statement includes the subtotal entitled ‘Net Result Before Capital & Specific Items’ to enhance the understanding of the financial performance of Yarrawonga Health. This subtotal reports the result excluding items such as capital grants, assets received or provided free of charge, depreciation, expenditure using capital purpose income and items of an unusual nature and amount such as specific income and expenses. The exclusion of these items is made to enhance matching of income and expenses so as to facilitate the comparability and consistency of results between years and Victorian Public Health Services. The ‘Net result Before Capital & Specific Items’ is used by the management of Yarrawonga Health, the Department of Health and the Victorian Government to measure the ongoing performance of Health Services in operating hospital services.

Capital and specific items, which are excluded from this sub-total, comprise:

Capital purpose income, which comprises all tied grants, donations and bequests received for the purpose of acquiring non-current assets, such as capital works or plant and equipment. It also includes donations of plant and equipment (refer Note 1 (g)). Consequently the recognition of revenue as capital purpose income is based on the intention of the provider of the revenue at the time the revenue is provided.

Specific income/expense, comprises the following items, where material:

o Non-current asset revaluation increments/decrements

Impairment of financial and non-financial assets, includes all impairment losses (and reversal of previous impairment losses), which have been recognised in accordance with Note 1 (k).

Depreciation, as described in Note 1 (h).

Assets provided or received free of charge (refer to Note 1 (g) and (h).

Expenditure using capital purpose income, comprises expenditure which either falls below the asset capitalisation threshold or doesn’t meet asset recognition criteria and therefore does not result in the recognition of an asset in the balance sheet, where funding for that expenditure is from capital purpose income.

Balance sheet

Assets and liabilities are categorised either as current or non-current (non-current being those assets or liabilities expected to be recovered/settled more than 12 months after reporting period), are disclosed in the notes where relevant.



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Statement of changes in equity

The statement of changes in equity presents reconciliations of each non-owner and owner equity opening balance at the beginning of the reporting period to the closing balance at the end of the reporting period. It also shows separately changes due to amounts recognised in the comprehensive result and amounts recognised in other comprehensive income.

Cash flow statement

Cash flows are classified according to whether or not they arise from operating activities, investing activities, or financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows.

Rounding

All amounts shown in the financial statements are expressed to the nearest $1,000 unless otherwise stated.

Comparative Information

There was no reclassification of prior year amounts required for comparative purposes.

(f) Change in accounting policies

AASB 13 Fair Value Measurement

AASB 13 establishes a single source of guidance for all fair value measurements. AASB 13 does not change when a health service is required to use fair value, but rather provides guidance on how to measure fair value under Australian Accounting Standards when fair value is required or permitted. The health service has considered the specific requirements relating to highest and best use, valuation premise, and principal (or most advantageous) market. The methods, assumptions, processes and procedures for determining fair value were revised and adjusted where applicable. In light of AASB 13, the health service has reviewed the fair value principles as well as its current valuation methodologies in assessing the fair value, and the assessment has not materially changed the fair values recognised.

AASB 13 has predominantly impacted the disclosures of the health service. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards, including AASB 7 Financial Instruments: Disclosures.

The disclosure requirements of AASB 13 apply prospectively and need not to be provided for comparative periods, before initial application. Consequently, comparatives of these disclosures have not been provided for 2012-13, except for financial instruments, of which the fair value disclosures are required under AASB 7 Financial Instruments Disclosures.

AASB 119 Employee Benefits

In 2013-14, the health service has applied AASB 119 Employee Benefits (Sep 2011, as amended), and related consequential amendments for the first time.

The revised AASB 119 changes the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligation and plan assets. As the current accounting policy is for the Department of Treasury and Finance to recognise and disclose the State’s defined benefit liabilities in its financial statements, changes in defined benefit obligations and plan assets will have limited impact on the health service.



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The revised standard also changes the definition of short-term employee benefits. These were previously benefits that were expected to be settled within 12 months after the end of the reporting period in which the employees render the related service, however, short-term employee benefits are now defined as benefits expected to be settled wholly within 12 months after the end of the reporting period in which the employees render the related service. As a result, accrued annual leave balances which were previously classified as short-term employee benefits no longer meet this definition and are now classified as long-term employee benefits. This has resulted in a change of measurement for the annual leave provision from an undiscounted to discounted basis.

Yarrawonga Health has determined that the change in classification has not materially altered its measurement of the annual leave provision.

(g) Income from transactions

Income is recognised in accordance with AASB 118 Revenue and is recognised as to the extent that it is probable that the economic benefits will flow to Yarrawonga Health and the income can be reliably measured at fair value. Unearned income at reporting date is reported as income received in advance.

Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties and taxes.

Government Grants and other transfers of income (other than contributions by owners)

In accordance with AASB 1004 Contributions, government grants and other transfers of income (other than contributions by owners) are recognised as income when the Health Service gains control of the underlying assets irrespective of whether conditions are imposed on the Health Service’s use of the contributions.

Contributions are deferred as income in advance when the health service has a present obligation to repay them and the present obligation can be reliably measured.

Indirect Contributions from the Department of Health

– Insurance is recognised as revenue following advice from the Department of Health.

– Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in LSL liability in line with the arrangements set out in the Metropolitan Health and Aged Care Services Division Hospital Circular 05/2013.

Patient and Resident Fees

Patient fees are recognised as revenue at the time invoices are raised.

Private Practice Fees

Private practice fees are recognised as revenue at the time invoices are raised.

Donations and Other Bequests

Donations and bequests are recognised as revenue when received. If donations are for a special purpose, they may be appropriated to a surplus, such as the specific restricted purpose surplus.

Dividend Revenue

Dividend revenue is recognised when the right to receive payment is established.



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Interest Revenue

Interest revenue is recognised on a time proportionate basis that takes in account the effective yield of the financial asset.

Sale of investments

The gain/loss on the sale of investments is recognised when the investment is realised.

Resources Received Free of Charge or for Nominal Consideration

Resources received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions, unless received from another Health Service or agency as a consequence of a restructuring of administrative arrangements. In the latter case, such transfer will be recognised at carrying value. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

(h) Expense Recognition

Expenses are recognised as they are incurred and reported in the financial year to which they relate.

Cost of Goods Sold

Costs of goods sold are recognised when the sale of an item occurs by transferring the cost or value of the item/s from inventories.

Employee expenses

Employee expenses include:

• wages and salaries;

• annual leave;

• sick leave;

• long service leave; and

• superannuation expenses which are reported differently depending upon whether employees are members of defined benefit or defined contribution plans.

Defined contribution superannuation plans

In relation to defined contribution (i.e. accumulation) superannuation plans, the associated expense is simply the employer contributions that are paid or payable in respect of employees who are members of these plans during the reporting period. Contributions to defined contribution superannuation plans are expensed when incurred.

Defined benefit superannuation plans

The amount charged to the comprehensive operating statement in respect of defined benefit superannuation plans represents the contributions made by the Health Service to the superannuation plans in respect of the services of current Health Service staff during the reporting period. Superannuation contributions are made to the plans based on the relevant rules of each plan, and are based on actuarial advice.



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29

Employees of Yarrawonga Health are entitled to receive superannuation benefits and Yarrawonga Health contributes to both the defined benefit and defined contribution plans. The defined benefit plan(s) provide benefits based on years of service and final average salary.

The name and details of the major employee superannuation funds and contributions made by Yarrawonga Health are disclosed in Note 13: Superannuation.

Depreciation

All infrastructure assets, buildings, plant and equipment and other non-financial physical assets that have finite useful lives are depreciated (i.e. excludes land assets held for sale, and investment properties). Depreciation begins when the asset is available for use, which is when it is in the location and condition necessary for it to be capable of operating in a manner intended by management.

Intangible produced assets with finite lives are depreciated as an expense from transactions on a systematic basis over the asset’s useful life. Depreciation is generally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over its estimated useful life. Estimates of the remaining useful lives and depreciation method for all assets are reviewed at least annually, and adjustments made where appropriate. This depreciation charge is not funded by the Department of Health. Assets with a cost in excess of $1,000 are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives.

The following table indicates the expected useful lives of non current assets on which the depreciation charges are based.

2014 2013

Buildings

- Structure Shell Building Fabric 45 to 60 years 45 to 60 years

- Site Engineering Services and Central Plant 20 to 30 years 20 to 30 years

Central Plant

- Fit Out 20 to 30 years 20 to 30 years

- Trunk Reticulated Building Systems 30 to 40 years 30 to 40 years

Plant & Equipment 3 to 7 years 3 to 7 years

Medical Equipment 7 to 10 years 7 to 10 years

Computers and Communication 3 years 3 years

Furniture and Fitting 13 years 13 years

Motor Vehicles 10 years 10 years

Please note: the estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate. As part of the Buildings valuation, building values were componentised and each component assessed for its useful life which is represented above.

Grants and other transfers

Grants and other transfers to third parties (other than contribution to owners) are recognised as an expense in the reporting period in which they are paid or payable. They include transactions such as: grants, subsidies and personal benefit payments made in cash to individuals.



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Other operating expenses

Other operating expenses generally represent the day-to-day running costs incurred in normal operations and include:

Supplies and consumables

Supplies and services costs which are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any inventories held for distribution are expensed when distributed.

Bad and doubtful debts

Refer to Note 1 (k) Impairment of financial assets.

Fair value of assets, services and resources provided free of charge or for nominal consideration

Contributions of resources provided free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions, unless received from another agency as a consequence of a restructuring of administrative arrangements. In the latter case, such a transfer will be recognised at its carrying value.

Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

(i) Other comprehensive income

Other comprehensive income measures the change in volume or value of assets or liabilities that do not result from transactions.

Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses as follows:

Revaluation gains/ (losses) of non-financial physical assets

Refer to Note 1(k) Revaluations of non-financial physical assets.

Net gain/ (loss) on disposal of non-financial assets

Any gain or loss on the disposal of non-financial assets is recognised at the date of disposal and is the difference between the proceeds and the carrying value of the asset at the time.

Net gain/ (loss) on financial instruments

Net gain/ (loss) on financial instruments includes:

o realised and unrealised gains and losses from revaluations of financial instruments at fair value;

o impairment and reversal of impairment for financial instruments at amortised cost (refer to Note 1 (k)); and

o disposals of financial assets and derecognition of financial liabilities



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Amortisation of non-produced intangible assets

Intangible non-produced assets with finite lives are amortised as an other economic flow on a systematic basis over the asset’s useful life. Amortisation begins when the asset is available for use, that is when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

Impairment of non-financial assets

Goodwill and intangible assets with indefinite useful lives (and intangible assets not available for use) are tested annually for impairment and whenever there is an indication that the asset may be impaired. Refer to Note 1 (k) Assets.

Share of net profits/ (losses) of associates and joint entities, excluding dividends.

Refer to Note 1 (d) Basis of consolidation.

Other gains/ (losses) from other comprehensive income

Other gains/ (losses) include:

a. the revaluation of the present value of the long service leave liability due to changes in the bond interest rates; and

b. transfer of amounts from the reserves to accumulated surplus or net result due to disposal or derecognition or reclassification.

(j) Financial Instruments

Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of Yarrawonga Health’s activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation. For example, statutory receivables arising from taxes, fines and penalties do not meet the definition of financial instruments as they do not arise under contract.

Where relevant, for note disclosure purposes, a distinction is made between those financial assets and liabilities that meet the definition of financial instruments in accordance with AASB 132 and those that do not.

The following refers to financial instruments unless otherwise stated.

Categories of non-derivative financial instruments

Financial assets and liabilities at fair value through profit or loss

Financial assets are categorised as fair value through profit or loss at trade date if they are classified as held for trading or designated as such upon initial recognition. Financial instrument assets are designated at fair value through profit or loss on the basis that the financial assets form part of a group of financial assets that are managed by the entity concerned based on their fair values, and have their performance evaluated in accordance with documented risk management and investment strategies.

Financial instruments at fair value through profit and loss are initially measured at fair value and attributable transaction costs are expensed as incurred. Subsequently, any changes in fair value are recognised in the net result.



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Loans and Receivables

Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted on an active market. These assets are initially recognised at fair value plus any attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less and impairment.

Loans and receivables category includes cash and deposits (refer Note 1(k) &(l)), term deposits with maturity greater than three months, trade receivables, loans and other receivables, but not statutory receivables.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Financial Liabilities at amortised cost

Financial instrument liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest-bearing liability, using the effective interest rate method.

Financial instrument liabilities measured at amortised cost include all of the Health Service’s contractual payables, deposits held and advances received, and interest bearing arrangements other than those designated at fair value through profit or loss.

(k) Assets

Cash and Cash Equivalents

Cash and cash equivalents recognised on the balance sheet comprise cash on hand and cash at bank, deposits at call and highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for investment purposes, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

Receivables

Receivables consist of:

- Contractual receivables, which includes mainly debtors in relation to goods and services and accrued investment income; and

- Statutory receivables, which includes predominantly amounts owing from the Victorian Government and Goods and Services Tax (“GST”) input tax credits recoverable.

Receivables that are contractual are classified as financial instruments and categorised as loans and receivables. Statutory receivables are recognised and measured similarly to contractual receivables (except for impairment), but are not classified as financial instruments because they do not arise from a contract.

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less any accumulated impairment.



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Trade debtors are carried at nominal amounts due and are due for settlement within 30 days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts which are known to be uncollectible are written off. A provision for doubtful debts is recognised when there is objective evidence that the debts may not be collected and bad debts are written off when identified.

Investments and Other Financial Assets

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Investments are classified in the following categories:

- Financial assets at fair value through profit or loss; - Loans and receivables; and - Available-for-sale financial assets.

Yarrawonga Health classifies its other financial assets between current and non-current assets based on the purpose for which the assets were acquired. Management determines the classification of its other financial assets at initial recognition.

Yarrawonga Health assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

All financial assets, except those measured at fair value through profit or loss are subject to annual review for impairment.

Inventories

Inventories include goods and other property held either for sale, consumption or for distribution at no or nominal cost in the ordinary course of business operations. It includes land held for sale and excludes depreciable assets.

Inventories held for distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured at the lower of cost and net realisable value.

The bases used in assessing loss of service potential for inventories held for distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

Cost for all other inventory is measured on the basis of weighted average cost.

Property, Plant and Equipment

All non-current physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or nominal cost, the cost is fair value at the date of acquisition. Assets transferred as part of a merger/machinery of government are transferred at their carrying amount.

More details about the valuation techniques and inputs used in determining the fair value of non-financial physical assets are discussed in Note 10 Property, plant and equipment.



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Crown Land is measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset(s) are not taken into account until it is virtually certain that any restrictions will no longer apply.

Land and Buildings are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment.

Plant, Equipment and Vehicles are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Depreciated historical cost is generally a reasonable proxy for fair value because of the short lives of the assets concerned.

Revaluations of Non-current Physical Assets

Non-current physical assets are measured at fair value and are revalued in accordance with FRD 103E Non-current physical assets. This revaluation process normally occurs at least every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct these scheduled revaluations and any interim revaluations are determined in accordance with the requirements of the FRDs. Revaluation increments or decrements arise from differences between an asset’s carrying value and fair value.

Revaluation increments are credited directly to the asset revaluation surplus, except that, to the extent that an increment reverses a revaluation decrement in respect of that same class of asset previously recognised as an expense in net result, the increment is recognised as income in the net result.

Revaluation decrements are recognised immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of assets, they are debited directly to the asset revaluation surplus.

Revaluation increases and revaluation decreases relating to individual assets within an asset class are offset against one another within that class but are not offset in respect of assets in different classes.

Revaluation surplus is not transferred to accumulated funds on derecognition of the relevant asset.

In accordance with FRD 103E, Yarrawonga Health’s non-current physical assets were assessed to determine whether revaluation of the non-current physical assets was required.

Prepayments

Other non-financial assets include prepayments which represent payments in advance of receipt of goods or services or that part of expenditure made in one accounting period covering a term extending beyond that period.

Disposal of Non-Financial Assets

Any gain or loss on the sale of non-financial assets is recognised in the comprehensive operating statement. Refer to note1(h) – ‘comprehensive income’.



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Impairment of Non-Financial Assets

All non-financial assets are assessed annually for indications of impairment, except for:

inventories;

non-current physical assets held for sale.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written-off as an expense except to the extent that the write-down can be debited to an asset revaluation surplus amount applicable to that same class of asset.

If there is an indication that there has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognised in prior years.

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

Investments in jointly controlled assets and operations

In respect of any interest in jointly controlled assets, Yarrawonga Health recognises in the financial statements:

its share of jointly controlled assets;

any liabilities that it had incurred;

its share of liabilities incurred jointly by the joint venture;

any income earned from the selling or using of its share of the output from the joint venture; and

any expenses incurred in relation to being an investor in the joint venture.

Details of the jointly controlled asset and operation are set out in Note 20.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired; or

the Health Service retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or



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the Health Service has transferred its rights to receive cash flows from the asset and either:

(a) has transferred substantially all the risks and rewards of the asset; or

(b) has neither transferred or retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Health Service has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of the Health Service’s continuing involvement in the asset.

Impairment of Financial Assets

At the end of each reporting period Yarrawonga Health assesses whether there is objective evidence that a financial asset or group of financial asset is impaired. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

Receivables are assessed for bad and doubtful debts on a regular basis. Bad debts considered as written off and allowance for doubtful receivables are expensed.

The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

Where the fair value of an investment in an equity instrument at balance date has reduced by 20 percent or more than its cost price or where its fair value has been less than its cost price for a period of 12 or more months, the financial asset is treated as impaired.

In order to determine an appropriate fair value as at 30 June 2014 for its portfolio of financial assets, Yarrawonga Health based these at invested value as all investments are in term deposits with reputable financial institutions. Therefore invested face value represents fair value.

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

Net Gain / (Loss) on Financial Instruments

Net gain / (loss) on financial instruments includes:

- realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading;

- impairment and reversal of impairment for financial instruments at amortised cost; and

- disposals of financial assets.

Revaluations of Financial Instruments at Fair Value

The revaluation gain / (loss) on financial instruments excludes dividends or interest earned on financial assets.



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(l) Liabilities

Payables

Payables consist of:

contractual payables which consist predominately of accounts payable representing liabilities for goods and services provided to the Health Service prior to the end of the financial year that are unpaid, and arise when the Health Services becomes obliged to make future payments in respect of the purchase of those goods and services.

The normal credit terms for accounts payable are usually Nett 30 days.

statutory payables, such as goods and services tax and fringe benefits tax payables.

Contractual payables are classified as financial instruments and are initially recognised at fair value, and then subsequently carried at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

Provisions

Provisions are recognised when the Health Service has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using a discount rate that reflects the time value of money and risks specific to the provision.

When some or all of the economic benefits required to settle a provision are expected to be received from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

Employee Benefits

This provision arises for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.

Wages and Salaries, Annual Leave, Sick Leave and Accrued Days Off

Liabilities for wages and salaries, including non-monetary benefits, annual leave, accumulating sick leave and accrued days off which are expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee’s services up to the reporting date, and are classified as current liabilities and measured at their nominal values.

Those liabilities that are not expected to be settled within 12 months are also recognised in the provision for employee benefits as current liabilities, but are measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.



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Long Service Leave

The liability for long service leave (LSL) is recognised in the provision for employee benefits.

Current Liability – unconditional LSL (representing 10 or more years of continuous service) is disclosed in the notes to the financial statements as a current liability even where Yarrawonga Health does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

The components of this current LSL liability are measured at:

present value – component that the Yarrawonga Health does not expect to settle within 12 months; and

nominal value – component that Yarrawonga Health expects to settle within 12 months.

Non-Current Liability – conditional LSL (representing less than 10 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. Conditional LSL is required to be measured at present value.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates of Commonwealth Government guaranteed securities in Australia.

Termination Benefits Termination benefits are payable when employment is terminated before the normal retirement date or when an employee accepts voluntary redundancy in exchange for these benefits.

Liabilities for termination benefits are recognised when a detailed plan for the termination has been developed and a valid expectation has been raised with those employees affected that the terminations will be carried out. The liabilities for termination benefits are recognised in other creditors unless the amount or timing of the payments is uncertain, in which case they are recognised as a provision.

On-Costs

Employee benefit on-costs, such as payroll tax, workers compensation and superannuation are recognised together with provisions for employee benefits.

Superannuation liabilities

Yarrawonga Health does not recognise any unfunded defined benefit liability in respect of the superannuation plans because the Health Service has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

(m) Leases

A lease is a right to use an asset for an agreed period of time in exchange for payment. Leases are classified at their inception as either operating or finance leases based on the



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economic substance of the agreement so as to reflect the risks and rewards incidental to ownership.

Leases of property, plant and equipment are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

All other leases are classified as operating leases.

Operating Leases

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset.

Entity as lessee

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet.

(n) Equity

Contributed Capital

Consistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 119 Contributions by Owners, appropriations for additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions or distributions that have been designated as contributed capital are also treated as contributed capital.

Property, Plant & Equipment Revaluation Surplus

The asset revaluation surplus is used to record increments and decrements on the revaluation of non-current physical assets.

Financial Asset Available-for-Sale Revaluation Surplus

The available-for-sale revaluation surplus arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold that portion of the reserve which relates to that financial asset is effectively realised, and is recognised in the comprehensive operating statement. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in the comprehensive operating statement.

Specific Restricted Purpose Reserve

A specific restricted purpose reserve is established where the Health Service has possession or title to the funds but has no discretion to amend or vary the restriction and/or condition underlying the funds received.

(o) Commitments

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of a note (refer to note 18) at their nominal value and are inclusive of the goods and services tax (“GST”) payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures



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cease to be disclosed as commitments once the related liabilities are recognised on the balance sheet.

(p) Contingent assets and contingent liabilities

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of note and, if quantifiable, are measured at nominal value. Contingent assets and contingent liabilities are presented inclusive of GST receivable or payable respectively.

Yarrawonga Health has no known contingent assets or liabilities as at 30 June 2014.

(q) Goods and Service Tax (“GST”)

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority are presented as an operating cash flow.

Commitments for expenditure and contingent assets and liabilities are presented on a gross basis.

(r) AASs issued that are not yet effective

As at 30 June 2014, the following standards and interpretations had been issued by the AASB but were not yet effective. They become effective for the first financial statements for reporting periods commencing after the stated operative dates as detailed in the table below. Yarrawonga Health has not and does not intend to adopt these standards early.

Standard/ Interpretation

Summary Applicable for annual reporting periods beginning on

Impact on public sector entity financial statements

AASB 9 Financial Instruments

This standard simplifies requirements for the classification and measurement of financial assets resulting from Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement).

1 Jan 2017 The preliminary assessment has identified that the financial impact of available for sale (AFS) assets will now be reported through other comprehensive income (OCI) and no longer recycled to the profit and loss.

While the preliminary assessment

has not identified any material impact arising from AASB 9, it will continue to be monitored and assessed.



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Standard/ Interpretation

Summary Applicable for annual reporting periods beginning on

Impact on public sector entity financial statements

AASB 11 Joint Arrangements

This Standard deals with the concept of joint control, and sets out a new principles-based approach for determining the type of joint arrangement that exists and the corresponding accounting treatment. The new categories of joint arrangements under AASB 11 are more aligned to the actual rights and obligations of the parties to the arrangement.

1 Jan 2014 (not-for-profit

entities)

Based on current assessment, entities already apply the equity method when accounting for joint ventures. It is anticipated that there would be no material impact. Ongoing work is being done to monitor and assess the impact of this standard.

AASB 12 Disclosure of Interests in Other Entities

This Standard requires disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with, interests in other entities and the effects of those interests on the financial statements. This Standard replaces the disclosure requirements in AASB 127 Separate Financial Statements and AASB 131 Interests in Joint Ventures.


entities)

The new standard is likely to require additional disclosures and ongoing work is being done to determine the extent of additional disclosure required.

AASB 127 Separate Financial Statements

This revised Standard prescribes the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements.


entities)

Current assessment indicates that there is limited impact on Victorian Public Sector entities. Ongoing work is being done to monitor and assess the impact of this standard.

AASB 128 Investments in Associates and Joint Ventures

This revised Standard sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures.


entities)

Current assessment indicates that there is limited impact on Victorian Public Sector entities. Ongoing work is being done to monitor and assess the impact of this standard.

AASB 1055 Budgetary Reporting

AASB 1055 extends the scope of budgetary reporting that is currently applicable for the whole of government and general government sector (GGS) to NFP entities within the GGS, provided that these entities present separate budget to the parliament.

1 July 2014 This Standard is not applicable as no budget disclosure is required.



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(s) Category Groups Yarrawonga Health has used the following category groups for reporting purposes for the current and previous financial years. Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue/expenditure on admitted patient services, where services are delivered in public hospitals, or free standing day hospital facilities, or alcohol and drug treatment units or hospitals specialising in dental services, hearing and ophthalmic aids. Aged Care comprises revenue/expenditure form Home and Community Care (HACC) programs, Allied Health, Aged Care Assessment and support services. Primary Health comprises revenue/expenditure for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy. Residential Aged Care comprises those Commonwealth-licensed residential aged care services. Other Services excluded from Australian Health Care Agreement (AHCA) (Other) comprises revenue / expenditure for services not separately classified above including the provision of external Meals Service. Health and Community Initiatives also falls in this category group.


Notes To and Forming Part of the Financial Statements Yarrawonga Health Annual Report 2013/2014

Note 2: Revenue

HSA HSA H&CI H&CI Total Total

2014 2013 2014 2013 2014 2013

$'000 $'000 $'000 $'000 $'000 $'000Revenue from Operating Activities

Government Grants - Department of Health 9,876 9,636 - - 9,876 9,636 - Department of Human Services 89 85 - - 89 85 - Commonwealth Government Residential Aged Care Subsidy 3,736 3,445 - - 3,736 3,445 Other 158 101 - - 158 101 Total Government Grants 13,859 13,267 - - 13,859 13,267

Indirect Contributions by Department of Health - Insurance 14 18 - - 14 18 - Long Service Leave 142 (96) - - 142 (96)

Total Indirect Contributions by Department of Health 156 (78) - - 156 (78)

Patient and Resident Fees - Patient and Resident Fees (refer note 2b) 454 589 - - 454 589 - Residential Aged Care (refer note 2b) 1,718 1,629 - - 1,718 1,629 Total Patient & Resident Fees 2,172 2,218 - - 2,172 2,218

Business units

- Diagnostic Imaging - - - - - -

Commercial Activities & Specific Purpose Funds - Catering - - 114 110 114 110

Total Commercial Activities & Specific Purpose Funds - - 114 110 114 110 Donations & Bequests 60 52 3 - 63 52 Recoupment from Private Practice for Use of Hospital Facilities 33 47 - - 33 47 Other Revenue from Operating Activities 221 310 - - 221 310

Total Revenue from Operating Activities 16,501 15,816 117 110 16,618 15,926

Revenue from Non-Operating ActivitiesInterest & Dividends - 330 - - - 330

Total Revenue from Non-Operating Activities - 330 - - - 330

Capital Purpose IncomeState Government Capital Grants - Targeted Capital Works and Equipment - - 713 550 713 550 - Other - - - 27 - 27 Commonwealth Government Capital Grants - 44 44 - Net Gain/(Loss) on Disposal of Non-Financial Assets (refer note 2c) - - 44 23 44 23 Capital Interest - 325 - 325 - Donations & Bequests - - 44 314 44 314

Total Capital Purpose Income - - 1,170 915 1,170 915

Share of Net Result of Associates & Joint Ventures Accounted for using the Proportionate Method (refer note 20) 15 14 - - 15 14

Total Revenue (refer to note 2a) 16,516 16,160 1,287 1,025 17,803 17,185

Indirect contributions by Department of Health: Department of Health makes certain payments on behalf of the Health Service. These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.

This note relates to revenues above the net result line only, and does not reconcile to comprehensive income



Note 2a: Analysis of Revenue by Source(based on the consolidated view of note 2)

Other Total

2014 2014 2014 2014 2014 2014

$'000 $'000 $'000 $'000 $'000 $'000Revenue from Services Supported by Health Services AgreementGovernment Grants 7,543 4,994 384 783 155 13,859

Indirect contributions by Department of Health 146 10 - - - 156

Patient & Resident Fees (refer note 2b) 442 1,627 91 12 - 2,172

Donations & Bequests (non capital) 26 11 - 7 16 60

Recoupment from Private Practice for Use of Hospital Facilities - - - - 33 33

Other Revenue from Operating Activities 83 14 11 9 104 221

Interest & Dividends - - - - - -

Share of Net Result of Associates & Joint Ventures Accounted for using the Proportionate Method (refer note 20)

- - - - 15 15

Total Revenue from Services Supported by Health Services Agreement 8,240 6,656 486 811 323 16,516

Revenue from Services Supported by Hospital and Community Initiatives*

Donations & Bequests (non capital) - - - - 3 3

Commercial Activities and Specific Purpose Funds - - - - 114 114

Total Revenue from Services Supported by Hospital and Community Initiatives - - - - 117 117

Capital Purpose Income (refer note 2) - - - - 1,170 1,170

Total Revenue 8,240 6,656 486 811 1,610 17,803

Indirect contributions by Department of Health:

Department of Health makes certain payments on behalf of the Health Service. These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.

Primary Health

Admitted Patients RACS Aged Care



Note 2a: Analysis of revenue by source (continued)(based on the consolidated view of note 2)

Other Total

2013 2013 2013 2013 2013 2013

$'000 $'000 $'000 $'000 $'000 $'000

Revenue from Services Supported by Health Services Agreement

Government Grants 7,178 3,445 1,577 724 343 13,267

Indirect contributions by Department of Health (85) 6 - - 1 (78)

Patient & Resident Fees (refer note 2b) 567 1,512 117 21 1 2,218

Donations & Bequests (non capital) 31 9 1 4 7 52

Recoupment from Private Practice for Use of Hospital Facilities - - - - 47 47

Other Revenue from Operating Activities 90 5 7 40 168 310

Interest & Dividends - 11 - - 319 330 Share of Net Result of Associates & Joint Ventures Accounted for using the proportionate method (refer note 20)

- - - - 14 14

Total Revenue from Services Supported by Health Services Agreement 7,781 4,988 1,702 789 900 16,160

Revenue from Services Supported by Hospital and Community Initiatives*

Commercial Activities & Specific Purpose Funds - - - - 110 110

Capital Purpose Income (refer note 2) - - - - 915 915

Total Revenue from Services Supported by Hospital and Community Initiatives - - - - 1,025 1,025

Total Revenue 7,781 4,988 1,702 789 1,925 17,185

Indirect contributions by Department of Health: Department of Health makes certain payments on behalf of the Health Service. These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.

RACSPrimary HealthAged Care

Admitted Patients



Note 2b: Private and Resident Fees

2014 2013$'000 $'000

Patient and Resident Fees^Acute (incl rehabilitation, GEM and other acute care types) – Inpatients(*) 442 567 Residential Aged Care – Residential Accommodation Payments(**) 1,718 1,629 Other 12 22 Total Patient and Resident Fees 2,172 2,218



2014 2013$'000 $'000

Proceeds from Disposals of Non-Current Assets*Motor Vehicles 73 36 Other 3 1 Total Proceeds from Disposal of Non-Current Assets 76 37

Less: Written Down Value of Non-Current Assets Sold*Motor Vehicles 32 8 Other - 5 Total Written Down Value of Non-Current Assets Sold 32 13

Net gain/(loss) on Disposal of Non-Financial Assets 44 23

Note 2c: Net Gain/(Loss) on Disposal of Non-Financial Assets



Note 3: Expenses

HSA HSA H&CI H&CI Total Total

2014 2013 2014 2013 2014 2013

$'000 $'000 $'000 $'000 $'000 $'000

Employee ExpensesSalaries & Wages 10,396 10,199 4 5 10,400 10,204 WorkCover Premium 153 139 - - 153 139 Departure Packages - 35 - - - 35 Long Service Leave 286 277 - - 286 277 Superannuation 1,023 1,020 - - 1,023 1,020 Total Employee Expenses 11,858 11,670 4 5 11,862 11,675

Non Salary Labour CostsFees for Visiting Medical Officers* 542 571 - - 542 571 Contractors and consultants 287 313 - - 287 313 Total Non Salary Labour Costs 829 884 - - 829 884

Supplies & ConsumablesDrug Supplies 57 78 - - 57 78 S100 Drugs 90 96 - - 90 96 Medical, Surgical Supplies and Prosthesis 378 318 - - 378 318 Pathology Supplies 29 43 - - 29 43 Food Supplies 383 355 3 - 386 355 Total Supplies & Consumables 937 890 3 - 940 890

Other ExpensesDomestic Services & Supplies 279 296 - - 279 296 Fuel, Light, Power and Water 292 319 - - 292 319 Insurance costs funded by the Department of Health 179 174 - - 179 174 Motor Vehicle Expenses 53 56 - - 53 56 Repairs & Maintenance 228 182 4 - 232 182 Maintenance Contracts 113 127 - - 113 127 Patient Transport 175 121 - - 175 121 Bad & Doubtful Debts - 12 - - - 12 Lease Expenses 147 84 - - 147 84 Advertising Expenses 48 44 - - 48 44 Other Administrative Expenses 751 921 1 - 752 921 Other Patient Costs 373 325 - - 373 325 Audit Fees - VAGO - Audit of Financial Statements 26 24 - - 26 24 - Other 2 5 - - 2 5

Total Other Expenses 2,666 2,690 5 - 2,671 2,690

Impairment of AssetsDepreciation & Amortisation 2,057 1,902 - - 2,057 1,902 Total Impairment of Assets 2,057 1,902 - - 2,057 1,902

Total Expenses 18,347 18,036 12 5 18,359 18,041



Note 3a: Analysis of Expenses by Source(based on the consolidated view of Note 3)

Patients RAC Aged Care Health Other Total

2014 2014 2014 2014 2014 2014

$'000 $'000 $'000 $'000 $'000 $'000

Services Supported by Health Services Agreement

Employee Expenses 3,151 4,971 365 743 2,628 11,858

Non Salary Labour Costs 618 5 - 25 181 829

Supplies & Consumables 377 388 19 1 152 937

Other Expenses from Continuing Operations 980 487 21 113 1,065 2,666

Total Expenses from Services Supported by Health Services Agreement 5,126 5,851 405 882 4,026 16,290

Services Supported by Hospital and Community Initiatives

Employee Expenses - - - - 4 4

Supplies & Consumables - - - - 3 3

Other Expenses from Continuing Operations - - - - 5 5

Total Expenses from Services Supported by Hospital and Community Initiatives - - - - 12 12

Depreciation & Amortisation (refer note 4) - - - - 2,057 2,057

Total Expenditure from Services supported by Health Services Agreement and by Hospital and Community Initiatives - - - - 2,057 2,057

Total Expenses * 5,126 5,851 405 882 6,095 18,359



Note 3a: Analysis of expenses by source (continued)(based on the consolidated view of Note 3)

Admitted Patients RAC Aged Care

Primary Health Other Total

2013 2013 2013 2013 2013 2013

Prior Year $'000 $'000 $'000 $'000 $'000 $'000

Services Supported by Health Services Agreement

Employee Expenses 3,182 4,783 376 753 2,576 11,670

Non Salary Labour Costs 641 5 - 17 221 884

Supplies & Consumables 271 121 12 1 485 890

Other Expenses from Continuing Operations 1,212 311 10 67 1,090 2,690

Total Expenses from Services Supported by Health Services Agreement 5,306 5,220 398 838 4,372 16,134

Services Supported by Hospital and Community Initiatives

Employee Expenses - - - - 5 5

Total Expense from Services Supported by Hospital and Community Initiatives - - - - 5 5

Depreciation & Amortisation (refer note 4) - - - - 1,902 1,902 Total Expenditure from Services supported by Health Services Agreement and by Hospital and Community Initiatives - - - - 1,902 1,902

Total Expenses * 5,306 5,220 398 838 6,279 18,041



2014 2013$'000 $'000

Commercial ActivitiesCatering 12 5 TOTAL 12 5

Note 3b: Analysis of Expenses by Internally Managed and Restricted Specific Purpose Funds for Services Supported by Hospital and Community Initiatives



Note 4: Depreciation and Amortisation

2014 2013$'000 $'000

DepreciationBuildings 1,695 1,512 Plant & Equipment 85 67 Medical Equipment 162 177 Computers and Communication 25 16 Furniture and Equipment 53 61 Motor Vehicles 37 67 Other Assets - 2 Total Depreciation 2,057 1,902

Total Depreciation and Amortisation 2,057 1,902



Note 5: Cash and Cash Equivalents

2014 2013$'000 $'000

Cash on hand 1 1 Cash at bank 673 692 Total Cash and Cash Equivalents 674 693

Represented by:

Cash for Health Service Operations (as per Cash Flow Statement) 674 693 Total Cash and Cash Equivalents 674 693

For the purposes of the cash flow statement, cash assets includes cash on hand and in banks, and short-term deposits which are readily convertible to cash on hand, and are subject to an insignificant risk of change in value, net of outstanding bank overdrafts.



Note 6: Receivables

2014 2013$'000 $'000

CURRENTContractual

Trade Debtors 166 192 Patient Fees 310 386 Accrued Investment Income 103 70 Less Allowance for Doubtful Debts

Trade and Patient Fees 46 80 533 568

StatutoryGST Receivable 129 116 Accrued Revenue - Department of Health 155 288

284 404 TOTAL CURRENT RECEIVABLES 817 972

NON CURRENTStatutory

Long Service Leave - Department of Health 684 542

684 542 TOTAL NON-CURRENT RECEIVABLES 684 542 TOTAL RECEIVABLES 1,501 1,514

(a) Movement in the Allowance for doubtful debts

2014 2013$'000 $'000

Balance at beginning of year 80 84 Increase/(decrease) in allowance recognised in net result (34) (4) Balance at end of year 46 80

(b) Ageing analysis of receivablesPlease refer to note 17(b) for the ageing analysis of contractual receivables

(c) Nature and extent of risk arising from receivablesPlease refer to note 17(b) for the nature and extent of credit risk arising from contractual receivables



Note 7: Investments and other Financial Assets

2014 2013 2014 2013 2014 2013$'000 $'000 $'000 $'000 $'000 $'000

CURRENTLoans and receivables

Term DepositAust. Dollar Term Deposits >3mths - 6,441 6,096 6,441 6,096

Total Current - - 6,441 6,096 6,441 6,096

TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS - - 6,441 6,096 6,441 6,096

Represented by:Health Service Investments - - 741 - 741 - Accommodation Bonds (Refundable Entrance Fees) - - 5,700 6,096 5,700 6,096 TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS - - 6,441 6,096 6,441 6,096

(b) Ageing analysis of investments and other financial assetsPlease refer to note 17(b) for the ageing analysis of investments and other financial assets

(c) Nature and extent of risk arising from investments and other financial assetsPlease refer to note 17(b) for the nature and extent of credit risk arising from investments and other financial assets

TotalOperating FundSpecific Purpose

Fund



Note 8: Inventories

2014 2013$'000 $'000

Pharmaceuticals* At cost 10 11 Medical and Surgical Lines* At cost 103 92 TOTAL INVENTORIES 113 103



Note 9: Other Assets

2014 2013CURRENT $'000 $'000Prepayments 214 10 TOTAL CURRENT OTHER ASSETS 214 10

TOTAL OTHER ASSETS 214 10



Note 10: Property, plant & equipment(a) Gross carrying amount and accumulated depreciation

2014 2013$'000 $'000

LandLand at Fair Value 1,874 1,688 Total Land 1,874 1,688

BuildingsBuildings Under Construction at cost 18 139

Buildings at Fair Value 21,490 19,491 Less Acc'd Depreciation - -

Total Buildings 21,508 19,630

Plant and EquipmentPlant and Equipment at Fair Value 1,227 971

Less Acc'd Depreciation 499 415 Total Plant and Equipment 728 556

Medical EquipmentMedical Equipment at Fair Value 1,840 1,780

Less Acc'd Depreciation 1,513 1,407 Total Medical Equipment 327 373

Computers and CommunicationComputers and Communication at Fair Value 589 520

Less Acc'd Depreciation 487 462 Total Computers and Communication 102 58

Furniture & FittingsFurniture & Fittings at Fair Value 656 639

Less Acc'd Depreciation 550 497 Total Furniture & Fittings 106 142

Motor VehcileMotor Vehcile at Fair Value 250 265

Less Acc'd Depreciation 124 184 Total Motor Vehcile 126 81

Fixed Assets OtherFixed Assets Other at Fair Value 24 5

Less Acc'd Depreciation 4 4 Total Fixed Assets Other 20 1

TOTAL 24,791 22,529


No

te 1

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atio

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2014.

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was

per

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valu

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as b

ased

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sess

men

ts.



Note 10: Property, plant & equipment (continued)(c) Fair value measurement hierarchy for assets as at 30 June 2014

Level 1 (i) Level 2 (i) Level 3 (i)

Land at fair value

Non-specialised land 536 - 536 -

Specialised land

Acute & Residential Aged Care 1,100 - - 1,100

Communitty Health Care 238 - - 238

Total of land at fair value 1,874 - 536 1,338

Buildings at fair value

Non-specialised buildings 868 - 868 - Specialised buildings

Acute & Residential Aged Care 20,524 - - 20,524

Communitty Health Care 98 - - 98 Total of building at fair value 21,490 - 868 20,622

Plant and equipment at fair value

Plant equipment and vehicles at fair value

Plant and equipment 728 - - 728

Computers & communication 102 - - 102

Furniture & fittings 106 - - 106

Vehicles 126 - - 126

Other 20 - - 20

Total of plant, equipment and vehicles at fair value 1,082 - - 1,082

Medical equipment at fair value

Acute & Residential Aged Care 327 - - 327

Total medical equipment at fair value 327 - - 327

Assets under construction at fair value

Student accommodation - - - -

Total assets under construction at fair value - - - -

24,773 - 1,404 23,369

Note(i) Classified in accordance with the fair value hierarchy, see Note 1

Fair value measurement at end of reporting period using:

Carrying amount as at 30 June 2014

There has been transfers between levels during the period.



Note 10: Property, plant & equipment (continued)(d) Reconciliation of Level 3 fair value

2014

Opening Balance 1,216 18,402 838 373

Purchases (sales) - - 188 116

Transfers in (out) of Level 3 - 39 256 -

Gains or losses recognised in net result

- Depreciation - (1,626) (200) (162) - Impairment loss

Subtotal 1,216 16,815 1,082 327

Items recognised in other comprehensive income

- Revaluation 122 3,807 - -

Subtotal

Closing Balance 122 3,807 - -

1,338 20,622 1,082 327

Note

There have been transfers between levels during the period.

Medical equipmentLand Buildings

Plant and equipment

and Vehicles



Note 10: Property, plant & equipment (continued)(e) Description of significant unobservable inputs to Level 3 valuations:

Specialised land Market approach Community Service Obligation (CSO) adjustment

50 - 70% (60%) (ii)

A significant increase or decrease in the CSO adjustment would result in a significantly lower (higher) fair value

Specialised buildings Depreciated replacement cost

Direct cost per square metre

$1,000 - $1,500/m2 ($1,300)

A significant increase or decrease in direct cost per square meter adjustment would result in a significantly higher or lower fair value

Useful life of specialised buildings

30 - 60 years (45 years)

A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation.

Plant and equipment at fair value - Plant & Equipment - Furniture & Fittings - Computers and Communication - Other

Depreciated replacement cost

Cost per unit $9,000 - $10,000 per unit ($9,500 per unit)

A significant increase or decrease in cost per unit would result in a significantly higher or lower fair value

Useful life of PPE 5-10 years (7 years)

A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation.

Vehicles Depreciated replacement cost

Cost per unit $9000-$10000 per unit($9500 per unit)

A significant increase or decrease in cost per unit would result in a significantly higher or lower fair value

Useful life of vehicles

3-5 years (3 years) A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation.

Medical equipment at fair value

Depreciated replacement cost

Cost per unit $6,000 - $7,000 per unit ($6,500 per unit)

Increase (decrease) in gross replacement cost would result in a significantly higher (lower) fair value

Useful life of medical equipment

10-15 years (12 years)

Increase (decrease) in useful life would result in a significantly higher (lower) fair value

Sensitivity of fair value measurement to changes in

significant unobservable inputsValuation

technique (i)Range (weighted

average) (i)

Significant unobservable

inputs (i)

(i) [Illustrations on the valuation techniques, significant unobservable inputs and the related quantitative range of those inputs are indicative and should not be directly used without consultation with entities’ independent valuer.]

(ii) CSO adjustments ranging from 50% to 70% were applied to reduce the market approach value for the Department’s specialised land, with the weighted average 60% reduction applied.



Note 11: Payables

2014 2013$'000 $'000

CURRENTContractualTrade Creditors (i) 253 405 Accrued Expenses 160 203

413 608 StatutoryGST Payable (iii) 13 13 Other

Income in Advance - DoH - 7 Share of HRHA 26 45

39 65 TOTAL CURRENT 452 673

TOTAL PAYABLES 452 673

(a) Maturity analysis of payablesPlease refer to Note 17c for the ageing analysis of contractual payables

(b) Nature and extent of risk arising from payablesPlease refer to note 17c for the nature and extent of risks arising from contractual payables.



Note 12: Provisions

2014 2013$'000 $'000

Current ProvisionsEmployee Benefits (i)Annual leave

- Unconditional and expected to be settled within 12 months (ii) 506 411 - Unconditional and expected to be settled after 12 months (iii) 385 384

Long service leave- Unconditional and expected to be settled wholly within 12 months (ii)

266 255 - Unconditional and expected to be settled wholly after 12 months (iii)

1,103 1,054 Accrued Salaries and Wages 434 415 Accrued Days Off 19 13 Provisions related to Employee Benefit On-Costs

- Unconditional and expected to be settled within 12 months (ii) 205 183 - Unconditional and expected to be settled after 12 months (iii) 298 273

Total Current Provisions 3,216 2,988

Non-Current ProvisionsEmployee Benefits (i) 246 277 Provisions related to Employee Benefit On-Costs 41 41 Total Non-Current Provisions 287 318

Total Provisions 3,503 3,306

(a) Employee Benefits and Related On-Costs

Current Employee Benefits and related on-costsUnconditional LSL Entitlement 1,543 1,473 Annual Leave Entitlements 1,177 1,087 Accrued Wages and Salaries 477 415 Accrued Days Off 19 13 Non-Current Employee Benefits and related on-costsConditional Long Service Leave Entitlements (iii) 287 318 Total Employee Benefits and Related On-Costs 3,503 3,306

Notes:

(ii) The amounts disclosed are nominal amounts

(iii) The amounts disclosed are discounted to present values

2014 2013(b) Movements in provisions $'000 $'000

Movement in Long Service Leave:Balance at start of year 1,791 2,013 Provision made during the year - Revaluations - (3) - Expense recognising Employee Service 295 251 Settlement made during the year (255) (470) Balance at end of year 1,831 1,791

(i) Provisions for employee benefits consist of amounts for annual leave and long service leave accrued by employees, not including on-costs.



Note 13: Superannuation

2014 2013 2014 2013$'000 $'000 $'000 $'000

Defined benefit plans:First State Super 51 71 - - Defined contribution plans:First State Super 691 691 3 - HESTA 271 255 - - Other 1 1 - - Total 1,014 1,018 3 -

Contribution Outstanding at Year End

Paid Contribution for the Year



Note 14: Other Liabilities

2014 2013$'000 $'000

CURRENTMonies Held in Trust* - Accommodation Bonds (Refundable Entrance Fees)* 5,700 6,172 Other

- Security Equipment Deposits 9 9 Total Current 5,709 6,181

Total Other Liabilities 5,709 6,181

* Total Monies Held in TrustRepresented by the following assets:Cash Assets (refer to Note 5) - 76 Investment and other Financial Assets (refer to Note 7) 5,700 6,096 TOTAL 5,700 6,172



Note 15: Equity

2014 2013

$'000 $'000(a) SurplusesProperty, Plant & Equipment Revaluation Surplus 1

Balance at the beginning of the reporting period 9,007 7,019 Revaluation Increment/(Decrements) - Land 186 - - Buildings 3,655 1,988 Balance at the end of the reporting period* 12,848 9,007

* Represented by: - Land 449 263 - Buildings 12,399 8,744 - Plant and Equipment - -

12,848 9,007

Total Surpluses 12,848 9,007

(b) Contributed CapitalBalance at the beginning of the reporting period 16,588 16,588 Balance at the end of the reporting period 16,588 16,588

(c) Accumulated Surpluses/(Deficits)Balance at the beginning of the reporting period (4,810) (3,954) Net Result for the Year (556) (856) Balance at the end of the reporting period (5,366) (4,810)

Total Equity at end of financial year 24,070 20,785



2014 2013$'000 $'000

Net result for the period (556) (856)

Non-cash movements:Depreciation and amortisation 2,057 1,902 Provision for doubtful debts (34) -

Movements included in investing and financing activitiesNet (gain)/loss from disposal of non financial physical assets (44) (23)

Movements in assets and liabilities:Change in operating assets and liabilities (Increase)/decrease in receivables 13 (190) (Increase)/decrease in prepayments (204) 21 Increase/(decrease) in payables (221) (327) Increase/(decrease) in provisions 197 (417) Change in inventories (10) (50) NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 1,198 60

Note 16: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities



Note 17: Financial Instruments(a) Financial risk management objectives and policies

Yarrawonga Health's principal financial instruments comprise of: - cash assets - term deposits - receivables (excluding statutory receivables) - investment in equities and managed investment schemes - payables (excluding statutory payables) - accommodation bonds

Categorisation of financial instruments

Contractual financial

assets/liabilities designated at fair

value through profit/loss


assets/liabilities held-for-trading at fair value through

profit/loss

Contractual financial assets -

loans and receivables

Contractual financial assets - available for sale

Contractual financial liabilities at amortised cost Total

2014 $'000 $'000Financial AssetsCash and cash equivalents - - 674 - - 674 Receivables - - Trade Debtors - - 166 - - 166 - Other Receivables 367 367 Other Financial Assets - - Term Deposit - - 6,441 - - 6,441 Total Financial Assets (i) - - 7,648 - - 7,648

Financial LiabilitiesPayables - - - - 413 413 Other Financial Liabilities - Accommodation Bonds - - - - 5,700 5,700 - Other - - - - 9 9

Total Financial Liabilities (ii) - - - - 6,122 6,122


assets/liabilities designated at fair

value through profit/loss


assets/liabilities held-for-trading at fair value through

profit/loss

Contractual financial assets -

loans and receivables

Contractual financial assets - available for sale

Contractual financial liabilities at amortised cost Total

2013 $'000 $'000Financial AssetsCash and cash equivalents - - 693 - - 693 Receivables - - Trade Debtors - - 192 - - 192 - Other Receivables 376 376 Other Financial Assets - - Term Deposit 6,096 - 6,096 - - 12,192 Total Financial Assets (i) 6,096 - 7,357 - - 13,453

Financial LiabilitiesPayables - - - - 608 608 Other Financial Liabilities - Accommodation Bonds - - - - 6,172 6,172 - Other - - - - 9 9

Total Financial Liabilities (ii) - - - - 6,789 6,789

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

The main purpose in holding financial instruments is to prudentially manage Yarrawonga Health's financial risks within the government policy parameters.

(i) The total amount of financial assets disclosed here excludes statutory receivables (i.e. GST input tax credit recoverable)

(ii) The total amount of financial liabilities disclosed here excludes statutory payables (i.e. Taxes payable)


Not

es T

o an

d F

orm

ing P

art

of t

he

Finan

cial

Sta

tem

ents

Yar

raw

onga

Hea

lth A

nnual

Rep

ort

2013/2

014

Note

17

: Fin

an

cial In

stru

men

ts (

Con

tin

ued

)N

et

ho

ldin

g g

ain

/(l

oss

) o

n f

inan

cial in

stru

men

ts b

y c

ate

go

ry

Net

ho

ldin

g

gain

/(l

oss

)

To

tal in

tere

st

inco

me /

(e

xp

en

se)

Fee in

com

e /

(e

xp

en

se)

Imp

air

men

t lo

ssT

ota

l$

'00

0$

'00

0$

'00

0$

'00

0$

'00

02

01

4Fin

an

cial A

ssets

Cas

h a

nd C

ash E

quiv

alen

ts (i

)-

27

-

-

27

Des

ignat

ed a

t Fa

ir V

alue

thro

ugh P

rofit

or L

oss

(iii)

-

-

-

-

-

Hel

d-f

or-T

radin

g a

t Fa

ir V

alue

thro

ugh P

rofit

or L

oss

(iii)

-

-

-

-

-

Loan

s an

d R

ecei

vable

s (i

)-

298

-

-

298

Ava

ilable

for

Sal

e (i

)-

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-

-

-

To

tal Fin

an

cial A

ssets

-

32

5

-

-

32

5

Fin

an

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bilit

ies

Des

ignat

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-

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-

-

Hel

d-f

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alue

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-

-

-

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At

Am

ortise

d C

ost

(ii)

-

-

-

-

-

To

tal Fin

an

cial Lia

bilit

ies

-

-

-

-

-

20

13

Fin

an

cial A

ssets

Cas

h a

nd C

ash E

quiv

alen

ts (i

)-

27

-

-

27

Des

ignat

ed a

t Fa

ir V

alue

thro

ugh P

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or L

oss

(iii)

-

-

-

-

-

Hel

d-f

or-T

radin

g a

t Fa

ir V

alue

thro

ugh P

rofit

or L

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(iii)

-

-

-

-

-

Loan

s an

d R

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vable

s (i

)-

303

-

-

303

Ava

ilable

for

Sal

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-

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-

-

To

tal Fin

an

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ssets

-

33

0

-

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33

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Fin

an

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bilit

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Des

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t Fa

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(iii)

-

-

-

-

-

Hel

d-f

or-T

radin

g a

t Fa

ir V

alue

thro

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(iii)

-

-

-

-

-

At

Am

ortise

d C

ost

(ii)

-

-

-

-

-

To

tal Fin

an

cial Lia

bilit

ies

-

-

-

-

-

(iii)

For

fin

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al a

sset

s an

d lia

bili

ties

that

are

hel

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(ii)

For

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t am

ortise

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ost,

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n o

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ted b

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king t

he

inte

rest

exp

ense

, plu

s or

min

us

fore

ign



Note 17: Financial Instruments (continued)(b) Credit risk

Credit quality of contractual financial assets that are neither past due nor impaired

2014 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents - - - 674 674 Receivables

- Trade Debtors - - - 166 166 - Other Receivables (i) - - - 367 367 Other Financial Assets - Term Deposit - - - 6,441 6,441

Total Financial Assets - - - 7,648 7,648

2013Financial AssetsCash and Cash Equivalents - - - 693 693 Receivables

- Trade Debtors - - - 192 192 - Other Receivables - - - 376 376 Other Financial Assets - Term Deposit - - - 6,096 6,096

Total Financial Assets - - - 7,357 7,357

Financial Institutions (AAA credit

rating)

Other (min BBB

credit rating)

Total

(i) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and GST input tax credit recoverable).

Government agencies

(AAA credit rating)

Government agencies

(BBB credit rating)

Credit risk arises from the contractual financial assets of the Health Service, which comprise cash and deposits, non-statutory receivables and available for sale contractual financial assets. The Health Service’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Health Service. Credit risk is measured at fair value and is monitored on a regular basis.

Credit risk associated with the Health Service’s contractual financial assets is minimal because the main debtor is the Victorian Government. For debtors other than the Government, it is the Health Service’s policy to only deal with entities with high credit ratings of a minimum Triple-B rating and to obtain sufficient collateral or credit enhancements, where appropriate.

In addition, the Health Service does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. As with the policy for debtors, the Health Service’s policy is to only deal with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Health Service will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings.

Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents Yarrawonga Health’s maximum exposure to credit risk without taking account of the value of any collateral obtained.



Note 17: Financial Instruments (continued)(b) Credit Risk (continued)

Ageing analysis of Financial Assets as at 30 June

Less than 1 Month

1-3 Months

3 months - 1 Year

1-5 Years

2014 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 674 674 - - - - - Receivables (i) - Trade Debtors 166 - 142 3 - 21 - - Other Receivables 367 250 112 5 - - - Other Financial Assets - Term Deposit 6,441 6,441 - - - - -

Total Financial Assets 7,648 7,365 254 8 - 21 -

2013Financial AssetsCash and Cash Equivalents 693 693 - - - - - Receivables (i) - Trade Debtors 192 - 130 1 1 60 - - Other Receivables 376 70 217 15 26 48 - Other Financial Assets - Term Deposit 6,096 6,096 - - - - -

Total Financial Assets 7,357 6,859 347 16 27 108 -

(i) Ageing analysis of financial assets must exclude the types of statutory financial assets (i.e GST input tax credit)

Consol'd Carrying Amount

Not Past Due and

Not Impaired

Past Due But Not Impaired Impaired Financial Assets



Note 17: Financial Instruments (continued)(c) Liquidity risk

Carrying Amount

Nominal Amount

Less than 1 Month

1-3 Months 3 months - 1 Year

1-5 Years

2014 $'000 $'000 $'000 $'000 $'000 $'000

Financial Liabilities

Payables 413 413 413 - - - Other Financial Liabilities (i) - Accommodation Bonds 5,700 5,700 118 236 1,062 4,284 - Other 9 9 9 - - -

Total Financial Liabilities 6,122 6,122 540 236 1,062 4,284

2013


Payables 608 608 608 - - - Other Financial Liabilities (i) - Accommodation Bonds 6,172 6,172 118 237 1,065 4,752 - Other 9 9 9 - - -

Total Financial Liabilities 6,789 6,789 735 237 1,065 4,752

Liquidity risk is the risk that the Health Service would be unable to meet its financial obligations as and when they fall due. The Health Services operates under the Government's fair payments policy of settling financial obligations within 30 days and in the event of a dispute, making payments within 30 days from the date of resolution.

The Health Service’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed on the face of the balance sheet. The Health Service manages its liquidity risk as follows:

(i) Ageing analysis of financial liabilities excludes the types of statutory financial liabilities (i.e GST payable)

Maturity Dates

The contractual repayment for Accommodation Bonds is event based (eg. A resident leaving an Residential Aged Care facility). The maturity is not determined until the event occurs. The maturity dates below are therefore based on estimates of potential repayment dates.

The following table discloses the contractual maturity analysis for Yarrawinga Health's financial liabilities. For interest rates applicable to each class of liability refer to individual notes to the financial statements.

Maturity analysis of Financial Liabilities as at 30 June

Regular cashflow monitoring and forecasting is maintained to ensure sufficient liquidity. Liquidity risk is managed through regular monthly cash grants from the Department of Health. The Health Service also manages its term deposit maturities so that access to larger amounts are available to call on when necessary for the repayment of accommodation bonds. Trade payable contracts are entered into in accordance with Yarrawonga Health's policies for authorisation and suppliers are periodically reviewed. Yarrawonga Health aims to settle all short term payables within 30 days.

17.2 Liquidity risk



Note 17: Financial Instruments (continued)(d) Market risk

Currency risk

Interest rate risk

Other price riskThere is no exposure to other price risk.

Interest rate exposure of financial assets and liabilities as at 30 June 2014.Weighted Carrying

Average Amount Fixed Variable Non-

Effective Interest Interest Interest

Interest Rate Rate Bearing

2014 Rate (%) $'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 3.25 674 - 674 - Receivables(i)

- Trade Debtors - 166 - - 166

- Other Receivables - 367 - - 367

Other Financial Assets

- Term Deposit 3.91 6,441 6,441 - -

7,648 6,441 674 533

Financial LiabilitiesPayables(i) - 413 - - 608

Other Financial Liabilities

- Accommodation Bonds - 5,700 - - 6,172

- Other - 9 - - 9

6,122 - - 6,789

2013

Financial Assets

Cash and Cash Equivalents 3.98 693 - 693 - Receivables(i)

- Trade Debtors - 192 - - 192

- Other Receivables - 376 - - 376


- Term Deposit 4.58 6,096 6,096 - -

7,357 6,096 693 568

Financial LiabilitiesPayables(i) - 608 - - 608

Other Financial Liabilities

- Accommodation Bonds - 6,172 - - 6,172

- Other - 9 - - 9

6,789 - - 6,789

(i) The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)

Yarrawonga Health's exposures to market risk are primarily through interest rate risk with only insignificant exposure to foreign currency and other price risks. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraph below.

Interest Rate Exposure

Yarrawonga Health currently has no foreign currency risk through it payables as it carries out no purchases from overseas or in foreign currencies.

Exposure to interest rate risk might arise primarily through Yarrawonga Health's interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearing financial instruments. The Health Service has no interest bearing liabilities at 30 June 2014.

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Health Service has minimal exposure to cash flow interest rate risks through its cash and deposits, term deposits and bank overdrafts that are at floating rate.

The Health Service manages this risk by mainly undertaking fixed rate or non-interest bearing financial instruments with relatively even maturity profiles, with only insignificant amounts of financial instruments at floating rate. Management has concluded for cash at bank and bank overdraft, as financial assets that can be left at floating rate without necessarily exposing the Health Service to significant bad risk, management monitors movement in interest rates on a daily basis.



Note 17: Financial Instruments (continued)(d) Market risk (continued)

Sensitivity disclosure analysis

- A shift of +1% and -1% in market interest rates (AUD) from year-end rates of 4%;

Carrying

AmountProfit Equity Profit Equity

2014 $'000 $'000 $'000 $'000

Financial AssetsCash and Cash Equivalents(i) 674 (7) - 7 - Receivables(ii)

- Trade Debtors 166 - - - -

- Other Receivables 367 - - - -


- Term Deposit 6,441 (64) - 64 -


Payables 413 - - - - Other Financial Liabilities(ii)

- Accommodation Bonds 5,700 - - - -

- Other 9 - - - -

(71) - 71 -

2013

Financial AssetsCash and Cash Equivalents(i) 693 (7) - 7 - Receivables(ii)

- Trade Debtors 192 - - - -

- Other Receivables 376 - - - -


- Term Deposit 6,096 (61) - 61 -


Payables 608 - - - - Other Financial Liabilities(ii)

- Accommodation Bonds 6,172 - - - -

- Other 9 - - - -

(68) - 68 -

(ii) The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable).

Interest Rate Risk

Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, Yarrawonga Health believes the following movements are 'reasonably possible' over the next 12 months (Base rates are sourced from the Reserve Bank of Australia)

The following table discloses the impact on net operating result and equity for each category of financial instrument held by Yarrawonga Health at year end as presented to key management personnel, if changes in the relevant risk occur.

(i) eg. Sensitivity of cash and cash equivalents to a +1% movement in interest rates: [$22,403k*0.05]-[$22,403k*0.04] = $224k. Similar for a -1% movement in interest rate, impact = $(224k).

-1% +1%



Note 17: Financial Instruments (continued)(e) Fair value

Comparison between carrying amount and fair value

Consol'd Carrying Amount

Fair value Consol'd Carrying Amount

Fair value

2014 2014 2013 2013$'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 674 674 693 693 Receivables(i)

- Trade Debtors 166 166 192 192 - Other Receivables 310 310 386 386 Other Financial Assets - Term Deposit 6,441 6,441 6,096 6,096 Total Financial Assets 7,591 7,591 7,367 7,367

Financial LiabilitiesPayables 413 413 608 608 Other Financial Liabilities(i)

- Accommodation Bonds 5,700 5,700 6,172 6,172 - Other 9 9 9 9 Total Financial Liabilities 6,122 6,122 6,789 6,789

The fair values and net fair values of financial instrument assets and liabilities are determined as follows:• Level 1 - the fair value of financial instrument with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices;• Level 2 - the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability, either directly or indirectly; and• Level 3 - the fair value is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using unobservable market inputs.

The Health Services considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and theexpectation that they will be paid in full.

The following table shows that the fair values of most of the contractual financial assets and liabilities are the same as the carrying amounts.

(i) The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable).



Note 18: Commitments

2014 2013$'000 $'000

Other expenditure commitments Payable:Financial Service Contract 141 218 Total other expenditure commitments 141 218

Not later than one year 77 64 Later than 1 year and not later than 5 years 64 154 TOTAL 141 218

Lease commitments

Commitments in relation to leases contracted for at the reporting date:

Operating leases 61 - Total lease commitments 61 -

Operating leases

Not later than one year 22 - Later than 1 year and not later than 5 years 39 - Total operating lease commitments 61 -

Total lease commitments 61 -

Total Commitments (inclusive of GST) other than public private partnerships 202 218 less GST recoverable from the Australian Tax Office 18 20 Total Commitments (exclusive of GST) other than public private partnerships 184 198

All amounts shown in the commitments note are nominal amounts inclusive of GST.

Commitments other than public private partnerships


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Note 19: Operating segments (continued)

The major products/services from which the above segments derive revenue are:

Business Segments ServicesHospital Provider of Acute Inpatient Services and Outpatient

including Emergency Attendance and RadiologyResidential Aged Care Services (RACS) - Karana Nursing Home Provider of Residential Aged Care Services (High Care) - Allawah Special Care Hostel Provider of Residential Aged Care Services (Dementia - Warrina Hostel Provider of Residential Aged Care Services (Low Care)

Primary and Community Health Provider of Community Health and Home Care Services

Geographical SegmentYarrawonga Health operates predominantly in Yarrawonga and District in Victoria. More than 90% of revenue, net surplus from ordinary activities and segment assets relate to operations in Yarrawonga and District in Victoria.

Direct costs and revenues are allocated to the applicable unit. Shared costs are not recharged to segments. For the purpose of segment reporting, these shared costs have been allocated on the basis of proportion of external revenue received.

There has been no significant change in segment accounting policy.



Note 20: Jointly Controlled Operations and Assets

Name of Entity Principal Activity 2014 2013% %

Hume Region Health Alliance Information Systems 4.7 4.67

Yarrawonga Health interest in assets employed in the above jointly controlled operations and assets isdetailed below. The amounts are included in the financial statements under their respective assetcategories:

2014 2013$'000 $'000

Current AssetsCash and Cash Equivalents 12 66 Receivables 88 52 Other Current Assets 1 2 Total Current Assets 101 120

Non Current AssetsProperty, Plant and Equipment 18 1 Total Non Current Assets 18 1 Total Assets 119 121

Current LiablilitiesPayables 26 27 Other Current Liabilities - 18 Total Current Liabilities 26 45

Net Assets 93 76

Equity 93 76

Yarrawonga Health's interest in revenues and expenses resulting from jointly controlledoperations and assets is detailed below:

2014 2013$'000 $'000

RevenuesRevenue from Operating Activities 141 159 Revenue from Non-Operating Activities 1 1 Capital Purpose Income 12 - Total Revenue 154 160

ExpensesExpensesEmployee Benefits 89 89 Other Expenses from Continuing Operations 181 186 Expenditure Using Capital Income 14 - Depreciation and Amortisation - 1 Total Expenses 284 276

YH Share of Profit / (Loss) (131) (116) YH Contribution 146 130 YH Net Result 15 14

Contingent Liabilities and Capital CommitmentsThere are no contingent liabilities or capital commitments arising from the interest in joint ventures.

Ownership Interest



Governing BoardsMrs M Hauser (Chair)Dr J Charles (Senior Vice President)Mrs J Dight (Junior Vice President)Mr B Pigdon (Treasurer)Mrs P BoucherMr D EvansMr A SpilvaMr G PageMr J SterkenburgMr P FlavelMr W HidsonMr B WalshAccountable OfficersMr T Welch (Chief Exectutive Officer)

Remuneration of Responsible PersonsThe number of Responsible Persons are shown in their relevant income bands;

2014 2013Income Band No. No.$150,000 - $159,999 - 1 $170,000 - $179,999 1 - Total Numbers 1 1

$176,698 $157,505

Note 21a: Responsible Persons Disclosures

Responsible Ministers:

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994 , the following disclosures are made regarding responsible persons for the reporting period.

Period

1/7/2013 - 30/6/20141/7/2013 - 30/6/20141/7/2013 - 30/6/20141/7/2013 - 30/6/2014

1/7/2013 - 30/6/20141/7/2013 - 30/6/2014

The Honourable David Davis, MLC, Minister for Health and AgeingThe Honourable Mary Wooldridge, MLA, Minister for Mental Health

1/7/2013 - 30/6/2014

1/7/2013 - 30/6/2014

1/7/2013 - 30/6/20141/7/2013 - 30/6/20141/7/2013 - 30/6/2014

Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to:

Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet

1/7/2013 - 30/6/2014

1/7/2013 - 30/6/20141/7/2013 - 30/6/20141/7/2013 - 30/6/2014



Note 21b: Executive Officer Disclosures

Executive Officers' RemunerationThe numbers of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefits.

2014 2013 2014 2013No. No. No. No.

$110,000 - $119,999 - - - 1 $120,000 - $129,999 1 1 1 - Total 1 1 1 1

Total annualised employee equivalents (AEE) (i)

Total Remuneration 127,521$ 122,519$ 122,521$ 117,519$

(i) Annualised employee equivalent is based on paid working hours of 38 ordinary hours per week over the 52 weeks for a reporting period.

Total Remuneration Base Remuneration



Note 22. Remuneration of auditors

($ thousand) 2014 2013Victorian Auditor-General's OfficeAudit or review of financial statement 26 24Other non-audit services 0 0

26 24



Note 23: Events Occurring after the Balance Sheet Date

At the date of this report there were no events that have occurred after the Balance Sheet Date that would have an effect on these statements.


NOTES_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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annual financial & performance report 2013/2014

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