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COOINDA LODGEA G E D C A R E R E S I D E N C E

R E S I D E N T I A L A G E D C A R E S E R V I C E S

R E S I D E N T I A L A G E D C A R E

We s t G i p p s l a n d H e a l t h c a r e G r o u p

W E S T G I P P S L A N D

C a r i n g f o r o u r C o m m u n i t y


H E A L T H C A R E G R O U PW E S T G I P P S L A N D



H E A L T H C A R E G R O U PRAWSON COMMUNITY

West Gippsland Healthcare Group

H E A L T H C E N T R E

H E A L T H C A R E G R O U P

W E S T G I P P S L A N DH E A L T H C A R E G R O U P

WEST GIPPSLAND HEALTHCARE GROUP


W E S T G I P P S L A N D H E A L T H C A R E G R O U P R AW S O N C O M M U N I T Y H E A L T H C E N T R E

R AW S O N C O M M U N I T Y H E A L T H C E N T R E

W E S T G I P P S L A N D H E A L T H C A R E G R O U P























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West GippslandHealthcare Group

Improving the health and wellbeingof our community.

We Value:

Head office:West Gippsland Hospital41 Landsborough StreetWarragul Victoria 3820Phone: 03 5623 0611Fax: 03 5623 0896Email: [email protected]

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www.wghg.com.au

12/13Annual Report

acknowledgements:

Photography by Kylie Gaffney

Design and Print Management - Kage Design & Photography

Thank you to the staff, volunteers and patients of the West Gippsland Healthcare Group

Registered Midwife and Lactation Consultant Leanne Pollard on her way to a patient home visit.

West Gippsland Healthcare Group | Annual Report 2012/13 Page 1

Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Chair & Chief Executive Officer Report. . . . . . . . . 2

Our Hospital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

History

Services

Our Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Strategic Priorities

Performance Priorities

Activity and Funding

Our Achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Financial Report

Key Performance Indicators

Nursing & Midwifery Report

Medical Services Report

Community Services Report

Corporate Services Report

Warragul Linen Service Report

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Ministers and Governance

Board of Directors

Organisation Chart

Our People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Resources

Occupational Health & Safety

Service Awards

Our Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Volunteers

Donations and Fundraising

Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 32

Attestations and Declarations

Financial Declaration

Auditor General’s Report

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Financial Index

Financial notes and reports

Disclosure Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Contents

West Gippsland Healthcare Group | Annual Report 2012/13

We are pleased to provide this report of operations for West Gippsland Healthcare Group (WGHG) for the period ended 30th June 2013 in accordance with the Financial Management Act, 1994.

The Chair and Chief Executive Officer’s report highlights the major achievements and events that have occurred during the year and acknowledges the critical support of the entire community for WGHG.

The results and performance of the WGHG is the total sum effort of all who participate in the organisation, from the volunteers, dedicated medical and nursing staff, highly skilled executive, valued business units such as the Linen Service, to the support departments, local members and members of the community who are both patients and donors.

This was a year where a considerable amount of time and effort was invested in reviewing the level of services that can be appropriately provided and consolidating the role of WGHG as a major sub-regional health service. The year also experienced significant growth in demand in obstetrics, and celebrated the completion of building works and opening of the new Emergency Department.

Following a significant financial deficit in 2012, associated with undertaking medical procedures above that funded by the Department of Health, 2012/13 was a year where there was considerable effort by WGHG to work with the Department of Health to determine the reasons for the additional activity and develop strategies to manage this into the future. Two independent reviews were undertaken to develop a shared understanding of the role and demand of WGHG. A financial management recovery plan was developed and implemented. As a result of the rigorous approach to financial management there has been a significant improvement in the financial position, with a much

smaller deficit of $419,000 at year end, an improvement of almost $900,000 over the previous year. This is a very pleasing result and places WGHG in a good position for the coming year.

During the year, there was a significant increase in the number of babies born, with a total of 1020 at 30th June. This is a significant increase on last year’s previous record of 881. The staff and doctors are to be congratulated on managing this record demand without compromising the quality of the service.

The Emergency Department construction works were completed in March and it was with considerable pride that the new department was formally opened by the Minister for Health, the Honourable David Davis on the 17th May. Despite the interruption of the building works occurring within the department, a record 20,071 patients were treated for the year.

There is a great sense of enthusiasm as we look forward to the coming year. The Department of Health has awarded further growth funding in 2013/14, allowing the surgical program to be increased, which should result in a reduction in the waiting list. It is also anticipated that WGHG will once again return to a small surplus, ensuring that WGHG can live within its means. 2013/14 will not be an easy year despite the improvements made this year; funding is still tight and the demands for increased services and facilities will be ever present. However, we have a wonderful health facility, staffed by dedicated and highly skilled people and supported by a generous community, all the right ingredients for success.

On behalf of the Board of Directors, thank you to the staff, the volunteers, donors and the community for their support throughout a year that has been transformational for WGHG.

Chair and Chief Executive Officer Report

Dan Weeks Brian DaveyChief Executive Officer Chair


West Gippsland Healthcare Group (WGHG) is a customer focused health organisation providing acute care, residential care and community health services to 45,000 people in the rural, urban residential, agricultural and industrial areas located within the Baw Baw Shire and beyond.

Our Vision:

West Gippsland Healthcare Group is committed to the provision of high quality, integrated health care that meets the changing needs of individuals and our community.

Our Mission:

We value:

Our Customers be committed to continuity of care for individuals whilst recognising rights, responsibilities and participation

Our Community be a responsible corporate citizen and neighbour in caring for our community and environment

Our Staff we are committed to our staff’s wellbeing and ongoing development

Leadership be a role model in the planning and delivery of health services

Improving ensure continuous qualityPerformance improvement.

1888 The community established a hospital on land donated by Mary Sargeant to service the area between Melbourne and Sale

1895 Warragul District Hospital completed1908 Warragul District Hospital officially opened1924 The Board of Management changed the name to West Gippsland

Hospital (WGH) in recognition of the wider area serviced1936 The original wooden hospital building redeveloped1939 The foundation stone of the new brick hospital we see today was laid

by Mr Dunstan1940 The new hospital opened by Sir Winston Duggan1970 Eastern extensions to the hospital opened. The hospital expanded to

144 beds1978 Stage 1 of Cooinda Lodge nursing home built, accommodating 28

residents1986 Stage 2 of Cooinda Lodge added, accommodating 56 residents. The

Warragul Linen Service moved into purpose-built premises in Ley Street behind the hospital

1996 A Community Services Centre was established in the township of Warragul. Stage 1 Redevelopment of West Gippsland Hospital completed

1997 The various health services provided across the community were brought together under the umbrella name of West Gippsland Healthcare Group (WGHG). Rawson Community Health Centre incorporated into WGHG. Andrews House opened, accommodating 30 residents

1998 Baw Baw Health and Community Care Centre opened in Drouin, a joint venture with the Shire of Baw Baw

Stage 2 Redevelopment of West Gippsland Hospital officially opened2005 Extensions to Andrews House in Trafalgar completed, accommodating

50 residents. Queen Street Community Services building redeveloped. Extensions to Warragul Linen Service completed to accommodate new continuous batch washing system

2006 Community Rehabilitation Centre relocation project commenced. Stage 3 Redevelopment of West Gippsland Hospital, incorporating the High Dependency and Midwifery Units completed

2007 Community Health and Community Mental Health project completed2008 Community Rehabilitation Centre redevelopment underneath Cooinda

Lodge completed. Centenary of opening of first Warragul District Hospital celebrated. Centenary history book ‘Of the People...For the People’ and Centenary quilt launched

2009 WGHG awarded Premier’s Award for Regional Health Service of the Year

2010 WGH Drouin Auxiliary 50th anniversary celebrated. Permanent home purchased for Trafalgar Community Health Services. Extensions to Drouin Opportunity Shop completed

2011 Feasibility study for redevelopment of West Gippsland Hospital site commenced

2012 Building extension works commenced to the Emergency Department. New physicians consulting rooms, education facilities, tele-conferencing facilities and a new home for the District Nursing Service completed. Feasibility Study identifies Lardners Track as preferred site for a new hospital

2013 Emergency Department redevelopment completed and officially opened by The Hon. David Davis MP 17th May. A record breaking 1020 babies born at WGH

Our HospitalOur History


Aged CareAged Care AssessmentAndrews House Aged Care facilityCooinda Lodge Aged Care facilityHome & Community Care ServicesRespite Care

Community Health ServicesAboriginal Support ServiceAdolescent HealthAsthma EducationCounsellingDiabetes EducationEmergency ReliefFalls PreventionFamily CounsellingHealth PromotionRural Allied Health ServiceSelf Help and Support GroupFacilitationWomen’s and Men’s HealthWorker Health Check ProgramYouth Services

Allied HealthCardiac RehabilitationChronic Obstructive AirwaysDisease (COAD) ProgramDiabetesNutrition and DieteticsOccupational TherapyPharmacyPhysiotherapyPodiatryRehabilitation in the Home Social WorkSpeech Pathology

Home Nursing ServiceDistrict Nursing ServiceHospital in the HomePalliative Care Nursing/Volunteers

Support ServicesAdministrationEngineeringEnvironmental ServicesFinanceFood ServicesHealth InformationInfection ControlInformation TechnologyLibraryOccupational Health and SafetyPayrollPublic RelationsQuality & Customer ServiceStaff DevelopmentSupply

Business UnitsConsulting SuitesSalary PackagingWarragul Linen Service

Diagnostic Services(Contract Services)BreastScreenEndoscopyLung Function TestingMedical ImagingPathologyStress Electro CardiographsStress Echo Cardiographs

Our Services

Hospital (acute)AnaesthesiaBreast SurgeryCommunity Rehabilitation CentreDay SurgeryDental SurgeryDiabetes EducationEar Nose and Throat SurgeryEmergencyEndoscopyGeneral MedicineGeneral PracticeGeneral SurgeryHaemodialysisHigh DependencyMidwiferyNeurologyObstetrics/GynaecologyOncologyOpthamologyOrthopaedic SurgeryPaediatricsPaediatric SurgeryPlastic SurgeryPost Acute CarePre-admissionRheumatologyStomal TherapyUrology and Urodynamics

Sub-acuteCognitive Dementia and MemoryService (CDAMS)ContinenceGeriatric Evaluation andManagement (GEM)Hospital Admission Risk Program (HARP) Interim CarePalliative CareRestorative CareTransition Care


Part A: Strategic PrioritiesVictoria Health Priorities Framework priority areas Deliverables Outcomes

Developing a system that is responsive to people’s needs

Improving every Victorian’s health status and experiences

Expanding service, workforce and system capacity

• Partner with Neerim District Health Service to perform public cataract surgery

• Partner with Neerim District Health Service to deliver bed based Restorative Care and Transition Care Programs

• Partner with Baw Baw Shire Council to enable youth counselling program

• Continue to support HeadSpace through the Gippsland Medical Local

• Undertake a Strategic Services review to ensure services are best aligned to future needs and role as a sub-regional health service

• Develop and expand home based rehabilitation program

• Implement National Health Service “Releasing Time to Care” to increase staff time available for patient care

• Restructure medical workforce in the Emergency Department to enhance seniority levels

• Continue Front Line Management course

• Investigate feasibility of establishing Nurse Practitioner roles

• Undertake medical workforce plan for health service

• Develop Aboriginal Employment Plan in accordance with Karreeta Yirramboi – Aboriginal Public Sector Employment and Career Development Action Plan 2010-2015

• Neerim continues to provide public cataract surgery

• 708 bed days of Restorative Care and 851 bed days of Transition Care delivered by NDHS under contract

• The youth counselling program has continued to provide a necessary service, thanks to the support of Baw Baw Shire Council

• HeadSpace continues to be supported

• Two reviews were undertaken focussing on the role and function and systems of WGHG. Both reviews recognised the growth and capacity of WGHG to expand services in its role as a large sub-regional provider

• Home based rehabilitation program is now fully implemented with additional EFT and 430 client service events delivered

• Releasing time to care was implemented and baseline data collected. Areas of focus are: patients experience; safety and reliability of care; staff wellbeing; and efficiency of care

• A Fellow of the College of Emergency Medicine was appointed as Director of the Emergency Department and senior medical staff rostered each shift

• The Front Line Management Course was run for the fourth consecutive year with a further 20 participants successfully completing the training

• Two Nurse Practitioner candidates nominated in palliative care and clinical sponsorship and mentoring with metropolitan specialist centres achieved

• Medical workforce plan was completed in February. Recruitment of additional anaesthetists, emergency physicians and registrar positions identified

• Aboriginal Employment Plan in accordance with Karreeta Yirramboi completed and signed in July 2013

Our Performance STATEMENT OF PRIORITIES AND HEALTH SERVICE AGREEMENT


Victoria Health Priorities Framework priority areas Deliverables Outcomes

Increasing the system’s financial sustainability and productivity

Implementing continuous improvements and innovation

Increasing accountability & transparency

Improving utilisation of e-health and communications technology

• Implement ‘no gaps’ private patient scheme to improve financial position by achieving 15% private patients

• Broaden Hospital in the Home program

• Maintain membership with Health Round Table (HRT) to benchmark and improve results in high cost and high volume areas of activity

• Continue reductions in WorkCover claims and premiums

• Implement NEPTune software to manage ambulance transfers and reduce ambulance costs

• Benchmark administrative overheads with peer organisations to identify opportunities for cost savings

• Complete expansion of Emergency Department to double capacity and improve patient flow

• Introduce Medical Emergency Team (MET) calls in the Emergency Department

• Introduce paper free electronic Board environment

• Review and restructure Board sub-committees to strengthen Clinical Governance processes

• Develop clinical scope of practice guidelines for medical staff in the Emergency Department

• Implement HATTRIX e-prescribing medication management system

• Participate in implementation of CHARM medication management system for oncology patients

• Introduce PROMPT document management system to enhance accessibility of clinical policies

• Implement IPM across Community Health and sub-acute ambulatory care services

• Continue rollout of BOSSnet system to enhance ordering and reporting of pathology and radiology examinations

• No Gaps scheme implemented in June 2012. Total private patients fee revenue was $670,000 with 684 private patients (5% of total)

• The Hospital in the Home program increased by 19.5%

• HRT data used to reduce LOS for hip replacement and identified cardiac patients as next focus

• WorkCover claims costs reduced by 34.4% and the premium reduced by 30.8%

• New non-emergency patient transport provider ‘Gomed’ appointed in February 2013 resulting in improved pricing. Ambulance bookings are now managed electronically via the service provider’s booking platform

• Benchmarking with peer organisations has been deferred pending a formalised approach being trialled by the Department of Health

• Emergency Department expansion completed and Department formally opened in May 2013

• MET calls implemented successfully into the Emergency Department

• All Board information is distributed and managed via i-pads

• Board reviewed and restructured sub-committees, with a focus on consumer and external expert participation contributing to a philosophy of open and transparent review of quality and safety issues

• Introduction of clinical practice guidelines has occurred in the Emergency Department, using a combination of local and evidence based tertiary hospital policies

• Commencement of HATTRIX implementation has occurred, with a planned roll-out program developed

• CHARM medication management system is being introduced as part of a Gippsland project

• PROMPT document system implemented with all clinical policies migrated into the new environment

• Project commenced in March 2013 with completion due June 2014

• BOSSnet system roll-out completed to provide a vehicle for ordering all pathology and radiology examinations

Our Performance STATEMENT OF PRIORITIES AND HEALTH SERVICE AGREEMENT(CONTINUED)


Tania from VIHSP Hearing, performs an infant hearing test on baby Serenity before she leaves hospital.


Part B: Performance Priorities

Financial Performance

(1)WIES is a Weighted Inlier Equivalent Separation. (2) The target shown is the number of patients on the elective surgery waiting list as at 30 June 2013.

Access Performance

Key PeRFORMANCe INDICAtOR tARGet ACtUAL

OPeRAtING ReSULt

Annual operating result ($m) -0.937m -0.419m

WIeS (1) ACtIVIty PeRFORMANCe

Percentage of WIES (public & private) performance to target 100% 101%

CASH MANAGeMeNt

Creditors < 60 days 27 days

Debtors < 60 days 25 days


eMeRGeNCy CARe

Percentage of ambulance transfers within 40 minutes 90% 93%

NEAT - Percentage of emergency presentations to physically leave the emergency department for admission to hospital, be referred to another hospital for treatment, or be discharged within four hours (July – December 2012) 70% 72%

NEAT - Percentage of emergency presentations to physically leave the emergency department for admission to hospital, be referred to another hospital for treatment, or be discharged within four hours (January - June 2013) 75% 72%

Number of patients with a length of stay in the emergency department greater than 24 hours 0 63

Percentage of Triage Category 1 emergency patients seen immediately 100% 100%

Percentage of Triage Category 1 to 5 emergency patients seen within clinically recommended times 80% 76%

eLeCtIVe SURGeRy

Percentage of Urgency Category 1 elective patients treated within 30 days 100% 100%

NEST - Percentage of Urgency Category 2 elective surgery patients treated within 90 days (July – December 2012) 75% 56%

NEST - Percentage of Urgency Category 2 elective surgery patients treated within 90 days (January – June 2013) 80% 45%

NEST - Percentage of Urgency Category 3 elective surgery patients treated within 365 days (July – December 2012) 93% 77%

NEST - Percentage of Urgency Category 3 elective surgery patients treated within 365 days (January – June 2013) 94.5% 81%

Number of patients on the elective surgery waiting list (2) 1,100 973

Number of Hospital Initiated Postponements (HiPs) per 100 scheduled admissions 8 10.6



Service Performance

(3) VICNISS is the Victorian Hospital Acquired Infection Surveillance System.(4) The target for the Victorian Patient Satisfaction Monitor is the Overall Care Index (OCI) which comprises six categories(5) The Consumer Participation Indicator is a category of the Victorian Patient Satisfaction Monitor


eLeCtIVe SURGeRy

Number of patients admitted from the elective surgery waiting list – quarter 1 601 580




QUALIty AND SAFety

Health service accreditation Full compliance Full compliance

Residential aged care accreditation Full compliance Full compliance

Cleaning standards Full compliance Full compliance

Submission of data to VICNISS (3) Full compliance Full compliance

Hand Hygiene (rate) 70 Achieved

Victorian Patient Satisfaction Monitor (OCI) (4) 73 81.5

Consumer Participation Indicator (5) 75 84

People Matter Survey Full compliance Partially achieved

MAteRNIty

Percentage of women with prearranged postnatal home care 100 98

Natalie Hickman with son Michael, in consultation with Dr Michael Nowotny and Midwife Di Matthews.


Actual target % Variance

ACUte INPAtIeNt

WIES Public 6,448 6455 -0.12%

WIES Private 462 387 19.32%

WIES Public & Private 6,909 6842 0.98%

WIES Renal 221 266 -16.86%

WIES DVA 126 192 -34.27%

WIES TAC 26 38 -32.08%

WIES TOTAL 7,282 7,338 -0.76%

SUBACUte INPAtIeNt

GEM Public 1,099 1,034 6.29%

GEM DVA 48 130 -63.08%

Palliative Care Public 749 730 2.60%

Palliative Care DVA 9 11 -18.18%

Restorative Care 611 730 -16.30%

AMBULAtORy

SACS 9,734 8,650 12.53%

SACS DVA 65 435 -85.06%

Post Acute Care 1,427 1,187 20.22%

Post Acute Care DVA 36 40 -10.00%

AGeD CARe

Residential Aged Care 37,951 39,337 -3.52%

HACC 21,140 21,465 -1.51%

PRIMARy HeALtH

Community Health / Primary Care Programs 7,065 6,495 8.78%

Part C: Activity and funding



Financial ReportWest Gippsland Healthcare Group reported total revenue of $85.16m, an increase of 6.88% on 2011/12 ($79.68m).

Operating revenue of $78.41m was up 5.56% on 2011/12 ($74.27m). This was due to additional growth target WIES gratefully received from the Department of Health plus a change in the funding policy for renal capitation grant payments.

Non-operating revenue of $6.76m was up 25% on 2011/12 and included $1.24m in State Government capital grant funding for the Emergency Department expansion and $350k funding to replace the PABX telephone system to VOIP.

Donations and bequests from the community increased by 65.4% to $865k which is a very pleasing result.

$54.18m in operating grants and $2.486m in capital grants was received from The Victorian State Government, via the Department of Health and Department of Human Services.

Total Expenditure for the Group was $87.5m, an increase of 3.82% on 2011/12 of $84.31m.

Employee expenses increased 4.4% for the year whilst other expenses increased 9.3% (due largely to the change in funding policy for renal capitation payments from 1 July 2012, whereby the direct service provider now receives the grant funding and pays an agreed amount set by the Department of Health to the hub service provider).

Non Salary labour costs and supplies and consumables both decreased 2% for the year, largely on the back of the Group’s strategies in the second half of 2012/13 in

response to the mid-year Federal Government funding cuts of $679k to WGHG. These measures included reductions to the elective surgery program and flexible bed staffing on weekends to suit required patient demand.

The net operating result for the Group was a deficit of $419k, a significant improvement on the $1.31m deficit recorded in 2011/12. The result was also $518.5k better than the agreed Statement of Priority budget for a $937.5k loss.

The loss for 2012/13 reflects the Public/Private WIES throughput exceeding funded target levels by 67 WIES (0.96%) plus the expected recall of funding within Renal, DVA and compensable WIES due to underperformance against targets.

The net result after capital items was a loss of $2.37m compared to a loss of $4.63m in 2011/12. Depreciation and amortisation expenses totalled $5.921 million.

Despite recording an operating deficit for the year, the Group was able to yet again generate a cash surplus from operations of $725k ($1.594m in 2011/12). After allowing for capital acquisitions of $5.34m, the overall cash position declined $545k to $11.63m. The majority of cash payments for the Emergency Department redevelopment were paid in 2012/13, whilst the majority of funding for these works was received in 2010/11 from the Commonwealth Government ($2m).

The Group’s overall financial position declined by $2.37m to $59m, reflecting that funding policy does not provide for depreciation expenses.

Our Achievements


Anaesthetist Rob Sinnett preparing for surgery.


Key Performance Indicators

5 year Financial Comparison

2013 2012 2011 2010 2009 $000 $000 $000 $000 $000

Total Revenue 81,109 77,079 73,401 71,341 67,114

Total Expenditure 81,528 78,392 73,431 70,102 65,287

Operating Surplus (Deficit) (419) (1,313) (30) 1,239 1,827

Net Capital & Specific Items (1,950) (3,321) (1,360) (4,351) (1,569)

Net Result for the year Surplus / (Deficit) (2,369) (4,634) (1,390) (3,112) 258

Retained Surplus / (Accumulated Deficit) (981) 1,388 6,022 7,412 10,524

total Assets 81,714 82,944 85,081 85,043 87,803

total Liabilities 22,707 21,568 19,710 18,282 17,930

Net Assets 59,007 61,376 65,371 66,761 69,873

total equity 59,007 61,376 65,371 66,761 69,873* Previous Year’s data is included on the same basis for comparative purposes. 2011 net result has been changed from the audited comparative to aid comparisons

5 year total WIeS

7,600

7,500

7,400

7,300

7,200

7,100

7,000

6,900

6,800

2008/09 2009/10 2010/11 2011/12 2012/13

7,1987,128

7,245

7,045

7,291

7,085

7,325

7,572

7,3387,282

Target Actual


Midwife Leanne Pollard prepares to weigh 3 day old Serenity.


Patient Debtors (Aged) Outstanding as at 30 June 2013

Under 31-60 61-90 Over total total 30 Days Days Days 90 Days 2013 2012

Private 52,195 8,657 521 33,679 95,052 6,971

Ineligible 0 0 0 4,100 4,100 5,437

Workcover 1,627 3,611 0 3,236 8,474 14,317

total Inpatients 53,823 12,268 521 41,014 107,626 26,725

Nursing Home 1,960 2,366 -356 15,237 19,207 17,267

Hostel 7,714 3,826 -8,559 15,941 18,921 16,322

total Aged Care 9,674 6,192 -8,915 31,178 38,128 33,589

total 63,496 18,460 -8,394 72,192 145,754 60,314

Key Performance Indicators (CONTINUED)

Separations by top 10 Diagnostic Related Group

A Renal Dialysis 2,096B Neonatal 883C Vaginal Delivery 558D Chemotherapy 496E Digestive Malignancy 219F Caesarean Delivery 186G Other Knee Procedures 134H Hernia Procedures 132I Diagnostic Curettage or Hysteroscopy 119J Red Blood Cell Disorders 118

AB

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Director of Nursing and Midwifery

Report by Anne Curtin RN RM CorCareCert GradDipHSM MRCNA

The Director of Nursing & Midwifery has extensive experience overseeing a diverse range of services. Responsible for all wards in the hospital, same day services such as dialysis and oncology and onsite allied health services, community district nursing, HARP and other home based sub-acute services as well as two aged care residential homes.

Key achievements during 2012-13 include:

• Recruitedandstrengthenedthemidwiferyskilledworkforce to meet the 9% growth in women birthing at WGHG and in the provision of a 24 hour Level 2 special care nursery service

• MaintainedanEmergencyDepartmentserviceforthecommunity during the refurbishment program

• Developedstrategiestoreducehospitalinitiatedpostponement of surgical elective patients through rescheduling theatre sessions

• Improvementsinpatientflowprocessesinpreadmission,day surgery and operating theatres

• Implementedanurseran“ReleasingTimetoCare”program streamlining processes and increased the direct care hours provided to our community

• GooduptakeofpregnantwomenwithhighBMIforthedieticians Positive Pregnancy Program and ongoing care post natally

• Establishedapaediatricalliedhealthservice

• RedesignoftheStrengthandBalanceAssessmentprocess with improved patient flow and efficiency of service

• Expandedthebreastcarenurseserviceandsecuredfunding for four years with McGrath Foundation

• Strengthenedthepalliativecareprogramwiththeappointment of two nominated palliative care nurse practitioner candidates with the support of a specialist service

• Improvementtothefunctionalmaintenanceprogramand improved access to hospital with the funding from Improving Care for Older People

• PartnershipwithLCHSintheimplementationofaresearch project in mobile wound management with district nursing services and implementation of best practice evidence wound management to improve healing

• EnhancedqualityoflifeforagedcareresidentsinAndrews House with the purchase of a bus for outings, an activity garden and air-conditioning in all residents’ rooms

• BuiltanalfrescoareaforCooindaresidentstoenjoyactivities on an enclosed deck with access to the garden.

Our Achievements


• Identificationofnineclinicalareas(perioperative,medical,perinatal, paediatrics, emergency, HITH, clinical support, aged care and community care) to assist in robust and regular clinical review

• EnhancementofclinicalauditwithuseofcomparativeHealth Round Table data

• OnsitepathologytestingintheEmergencyDepartmenttoprovide immediate 24/7 access to pathology testing

• Supportfromsurgeonsandanaesthetistsinassistingtomanage the elective surgery program

• Appointmentofafourthphysicianandinfectiousdiseasesspecialist

• Openingofthespecialcarepaediatricnursery.

Director of Medical Services

Report by Dr Liz Mullins MBBS BScHons FRACMA

The Director of Medical Services provides oversight of the junior and senior medical staff; oversight of safety and quality processes and outcomes; provides high level advice on medical matters; assists in fostering optimal working relationships between medical staff and the Executive in achieving the common goal of high quality patient care within a responsible financial reality. Mullins Health Consulting provides DMS services under a contractual arrangement.

Achievements in medical services during 2012/13 include:

• AppointmentsofnewseniormedicalstaffinEmergencyMedicine, Anaesthetics and General Medicine

• Expansionoftheseniorregistrarprogramtoincludecollege-accredited positions in General Surgery, General Medicine, Paediatrics, Obstetrics and Gynaecology and General Practice Anaesthetics

| Annual Report 2012/13

Director of Community Services

Report by Linda McCoy BA GradDipMgt FCHSM CHE FAIM

The Director of Community Services has a pivotal role in the delivery of services in West Gippsland, advising on issues related to Community Care. The role also requires a continuing involvement in Community based networks both within Baw Baw Shire and on a regional and state wide basis.

Achievements in community services during 2012/13 include:

• ImplementedanAboriginaltraineeshipprogramresulting in the successful employment of five Aboriginal community members

• Commencedworktoimplementasinglepointofcontact for the community to access the community and outpatient services at WGHG. This is expected to be completed by December 2013

• ConductedareviewofRawsonCommunityHealthCentreservices and reconfigured nursing services to three days a week to reflect demand

• ImplementedtheFOODcentsprograminconjunctionwith Baw Baw Shire’s Healthy Communities Project, to develop skills to learn smart ways of eating healthily and balancing the budget

• Growthofreferralsby50%intheCognitiveDementiaand Memory Service (CDAMS) that provides specialist diagnostic assessment throughout the Gippsland region

• Involvementinregionaleducationprogramswithclosepartners Alzheimer’s Australia.

Our Achievements (CONTINUED)

West Gippsland Healthcare Group | Annual Report 2012/13 Page 19New mum Claudia Banaddio with her one day old baby boy.


Director of Corporate Services

Report by Justin Walsh CPA BBus(Acct) BBus (Bank&Fin)

The Director of Corporate Services provides business and corporate services to the operations of the Group to support the delivery of agreed outcomes.

Achievements in corporate services during 2012/13 include:

• CompletionoftheEmergencyDepartmentcapitalworks expansion, including eight new cubicles and two procedure rooms and a re-fit of the original department

• CompletionoftenderforInternalAuditServicesandnewprovider appointed to 2015

• FiveyearlyFireSafetyauditundertakenbyanindependent fire safety engineer

• Redesignofthesupplywarehouseresultinginimprovedefficiencies and reduction in OH&S risks

• ParticipationintheGovernmentgreenerinitiative‘EnergyPerformance Contracting’ (EPC), which aims to achieve substantial cost and greenhouse gas emission savings

• ContinuedreductioninWorkCoverclaimsandpremiumcosts through early intervention programs and return to work processes. Premium costs have reduced by 41% over the past two years

• Successfulfundingsubmissionof$450kundertheSecuring of Health System (SOHS) program to upgrade the PABX system to VOIP

• Successfulfundingsubmissionof$160.9kundertheRural Capital Support Fund initiative to upgrade the accommodation facilities to support specialists in training

• Privatepatientrevenueincreaseof$650kwithinthefirstyear of the Private Patient initiative

• EstablishedacentralisedHumanResourcesdepartment,including the recruitment of specialised staff and the standardisation of a number of HR functions, policies and processes

• Purchasedanindustrialsteamcleanertoimprovesteamcleaning of drapes and infectious rooms

• Relocationandfit-outofanITtrainingroom

• Commencedreplacementofanaloguetelevisionswithdigital televisions for use by inpatients.

Our Achievements (CONTINUED)


General Manager of Warragul Linen Service

Report by Bill Crotty DipBus(Acc) GradDipMgt IPAA

The General Manager of Warragul Linen Service (WLS) oversees all functions and operations of the linen service operations. WLS operates as a business unit of WGHG and is one of the largest linen services in Victoria.

Achievements in Linen Service during 2012/13 include:

• Successfultwoyearcontractextensionforthelinensupply agreement with Mecwacare Aged Care facilities

• Theacquisitionofanewstateoftheartsinglelaneironer

• Achievedacustomersatisfactionscoreof88%bycustomers who rated WLS as ‘very good’ or ‘excellent’. Order fulfilment scorecard achieved a 98.87% rating

• On-goingreductioninwaterusagewitha9.1%improvement over the previous year’s water consumption

• Kilogramsperproductionhourscontinuedtoexceedthetarget of 36.5

• Annual‘highuse’itemsprocessedandsuppliedincluded;1.76m sheets, 2.69m towels, 743k blankets and 2.59m face washers

• AchievedauditcompliancewithISO9001QualityCertification maintained

• AchievedcompliancewiththeCodesofPracticeforPublic Healthcare Operated Laundries and Linen Services.

The new start of the art single lane ironer


Ministers and Governance

During 2012/13, the Victorian Minister for Health was The Honourable David Davis, MP Minster for Health and Ageing and The Honourable Mary Wooldridge, MLA, Minister for Mental Health.

The functions of the Board of Directors as determined by the Health Services Act 1988 are:

- to oversee and manage the Group; and

- to ensure the services provided by the Group comply with the requirements of the Act and aims of the Group.

Governance by the Board is achieved through:

- strategic planning

- effective management of the Chief Executive Officer

- funding of service agreements

- local policy setting

- regular reviews of the Group’s by-laws and strategic plans.

The Board Directors met eleven times throughout the year and are active members of various Board Sub-Committees, set up to assist in monitoring the Groups various operations.

These Sub-Committees and Working Groups include:

- Audit & Risk Committee

- Community Advisory Council

- Credentialing Committee

- Human Research Ethics Committee

- Remuneration & Board Performance Committee

- Clinical Governance Committee

- Appointments Committee

- Project Control Accommodation Working Group

- Accommodation Fundraising Working Group

- Lardners Track Working Group

Corporate Governance


6 day old Chase Miller in the Level 2 special care nursery


Brian Davey BA DipEd

Management Consultant

Position: Chair

Commenced as a Board Director in November 2005.

Member of Remuneration & Board Performance and Appointments Committees.

Board meetings attended 10 of 11.

Joanne Campbell GAICD BEd GradDipBuss GradCertInstrDesign, MEd(Research)

Instructional Design Consultant

Position: Vice Chair

Commenced as a Board Director in July 2009.

Member of the Audit & Risk; Remuneration & Board Performance and Human Research Ethics Committees.


Duncan Smith DipBus (ACCT) FCPA CTA AIMM CFP

Accountant/Certified Financial Planner

Position: treasurer

Commenced as a Board Director in June 1998.

Member of the Audit & Risk and Remuneration & Board Performance Committees.


John Davine BComm LLB

Solicitor

Position: Director

Commenced as a Board Director in 1998.

Member of the Community Advisory Committee.


Board of Directors


John Anderson Cert EDP MAICD

IT Consultant Director

Position: Director


Board Liaison Rep to Victorian Healthcare Association (VHA).

Member of the Credentialing and Appointments Committees.


Leanne Coupland BA(Hons)AppSc DipSocWork MASocWork GAICD

Director

Position: Director


Member of the Clinical Governance; Remuneration & Board Performance Committees.

Board meetings attended 6 of 11 (Granted leave of absence for 4 meetings).

Peter Kingwill BEng MACS FGCLP FAICD

Company Director

Position: Director


Member of the Clinical Governance Committee and Project Control (Accommodation) Working Group and Board Liaison Rep to Warragul Linen Service.


Jane Leslie BBus

Company Director and Business Consultant

Position: Director


Member of the Clinical Governance Committee and Remuneration & Board Performance Committees.



Peter Marx AssocDipSurveying Assoc DipCartography

Licensed Land Surveyor

Position: Director


Member of the Audit & Risk Committee and the Project Control (Accommodation) Working Group. Board meetings attended 11 of 11.

Board Directors also rotate as Board Liaison Representatives to the Warragul Linen Service and participate in a number of Board Working Groups.

Margaret Robbins BEd (AdultEd) TITC

University Lecturer

Position: Director


Member of the Human Research & Ethics Committee.


Barry Rogers BEd (TLib)MAICD

Company Director, Manager, Consultant

Position: Director


Member of the Community Advisory Council; Clinical Governance, Credentialing and Appointments Committees.

Board meetings attended 7 of 11 (Granted leave of absence for 3 meetings).

Nathan Voll BComm GradCertBusMgt MBA CPA MAICD

Finance and Administration Manager/Company Director

Position: Director


Member of the Audit & Risk Committee.


Board of Directors (CONTINUED)


Organisation Chart

Endoscopy

Pharmacy

Medical Imaging

Pathology

Occupational TherapyPhysiotherapySpeech TherapyNutrition and DieteticsSocial Work

Reception

Aged Care Manager

Acute Team

Complaints

Human Resources - Nursing

Aged Care

Projects

Breast Feeding Support

Diabetes

Infection Control

Stomal

Urology

Aboriginal Liaison

Cognitive Dementia andMemory Service

Continence Service

Family Counselling

Community Health Program

Home and Community Care Services

Worker Health Check

Youth Services

Elective Surgery Access Coordinator

Consulting Suites

Hospital Medical Officers

Diagnostic (Contracts)

Allied Health CRC

Health Information Services

Visiting Medical Staff

Residential Aged Care

Patient Services Manager

Associate Director of Nursing

Library

Staff Development

District Nursing Services

Clinical Nurse Consultants

Hospital in the Home

Palliative Care

Post Acute Care

Interim Care

Community-based Services

FinancePayrollSupplyConsulting SuitesEngineering ServicesEnvironmental ServicesFood ServicesInformation TechnologyOccupational Health and Safety

Salary Packaging

Warragul Linen Service (WLS)

AdministrationCustomer Service and QualityPublic Relations

Director ofMedicalServices

Director ofNursing andMidwifery

Director ofCommunity

Services

Director ofCorporateServices

General Manager

WLS

Customers

Board ofDirectors

BoardCommittees

Community AdvisoryCouncil

ChiefExecutive

Officer

OperationalCommittees


Our People

Occupational Health & Safety (OH&S)

The safety and welfare of our clients, visitors, residents, staff, volunteers and contractors remains a top priority of the Occupational Health & Safety Department and WGHG. With the establishment of the Human Resources Department, OH&S has been given a new home and additional support to make sure as an Organisation we maintain a safe environment for all.

To validate our performance, and our commitment to follow legislative requirements and industry best practice, OH&S engaged an external agency to undertake a gap analysis of our Safety Management System. This resulted in WGHG demonstrating compliance against the Management System Standard, relevant health and safety legislations and showed our ongoing commitment to continuous improvement.

The OH&S Committee meets bi-monthly to monitor OHS issues in the workplace and has a strong leadership role in the prevention on workplace injuries. This is demonstrated in the review of safety policies and process, emergency training for all staff and its commitment to reducing risks.

The WorkCover performance of WGHG has improved significantly over the last twelve months. This is a result of the implementation of strategies to prevent staff injuries, including the ongoing appointment of specialist consultants who work with injured staff to ensure a safe and timely return back to the workplace. Overall, this has resulted in lower claim costs and reduced WorkCover premiums for the 2012/13 period.

employment Statistics as at 30 June 2013

total Number of Staff employed equivalent Full time StaffLabour Category Female % Male % total 30.06.13 30.06.12

Nursing Sevices 504 94.7% 28 5.3% 532 282.2 274.3

Hotel & Allied Services 117 81.3% 27 18.8% 144 97.6 96.4

Administration & Clerical 103 89.6% 12 10.4% 115 70.3 63.3

Medical Support Services 21 56.8% 16 43.2% 37 11.5 11.9

Hospital Medical Officers 21 56.8% 16 43.2% 37 28.9 23.9

Medical 104 46.2% 121 53.8% 225 6.7 6.5

Ancillary Support 74 96.1% 3 3.9% 77 40.8 39.8

Sessional Clinicians 0 0.0% 4 100.0% 4 2.6 0.0

Warragul Linen Service 131 69.3% 58 30.7% 189 145.4 145.9

total 1,075 79.0% 285 21.0% 1,360 686.2 661.9All employees at WGHG are correctly classified in the above workforce data and are required to abide by the WGHG Code of Conduct and all WGHG policies under their employment agreement.

Annual Report 2012/2013 New Workcover Claims

30.06.11 30.06.12 30.06.13

Below Threshold Hospital 0 3 1

Above Threshold Hospital 12 2 5

Below Threshold Linen Service 0 0 0

Above Threshold Linen Service 5 4 2

Below Threshold Andrews House 0 1 1

Above Threshold Andrews House 0 0 4

Work Hours Lost

30.06.11 30.06.12 30.06.13

Hospital 2904 330 680

Linen Service 1869 637.5 1053

Andrews House 0 56 879


Service Awards

WGHG recognises staffs are our greatest asset. We acknowledge their dedication and commitment each year at the Annual General Meeting. This year Long Service Awards were awarded to:

30 yearsNanette Gilligan Sheryl Hibbert Heather McDonough Janet Moore Lina Nicholls Leesa Ryrie Danny Websdale

25 yearsAnne Ballantyne Kim Barnes Pauline Bridger Jeanette Dyason Julie Gundry Annette Hobgen Karen Johnson Maureen Kelly Wilma Wallace Donna Ablett Susan Cock Elizabeth Fenwick Teresa Holgate Tina Jans Helen Magyar Kerry OToole Dianne Telford Coralie Tyrrell Joyce Williams

20 yearsGeralyn Backman Anthonia Byers Julie Eastham Mark Fox Suzanne Hammond Antoinette Byrne Mariette Damsma Trevor Forrest Jennifer Goodchild Stephanie Ives Dianne Matthews Jean Nielsen Pamela Owen Gary Smart Andrew Sperring Wendy Tilling Julie Vanderlinden Margaret Waterston Robin Websdale

15 yearsJulie Brock Lynda Crotty Laraine Jinks Veneikia Smith Leanne Beecher Robyn Brown Linda Brown Margaret Carter Anne Curtin Emily Eade Lynette Gardner Phillip Hall Bruce James Gregory McBean Julie McLaughlin Pauline Peters Michelle Shand Debbie Sibley

Life Governor AwardsEach year, the Board of Directors consider people who have given meritorious service to an Auxiliary of the hospital for more than 10 years and/or who as an employee of the Group, has given duty over and above that required of the position, as well as employees who have reached 30 years of Long Service.

2012/13 Life Governor Awards recipients include:

Cath Milner – Drouin AuxiliaryMargaret Goodson – Drouin AuxiliaryCathy Griscti – Drouin AuxiliaryJean Hicks – Cooinda Lodge Support GroupJan Wakefield – Cooinda Lodge Support GroupElizabeth Logue – Cooinda Lodge Support GroupVal Szewczuk – Cooinda Lodge Support GroupAnnette Bloomfield – Rawson VolunteerAudrey Campbell - DonorOrmond Pearson – Past WGHG CEO

Caption: Staff presented with Long Service Award Certificates and Badges at the AGM in October 2012.

Life Governor recipients were awarded with Certificates and Badges at the AGM in October 2012.


Our Community

WGHG has a strong volunteer base of dedicated individuals who give their time freely to assist the Group to enhance programs and services we provide. We are grateful to the following volunteer groups for their continued support:

•Cooinda Lodge Support Group

•Drouin Auxiliary

•Palliative Care Service

•Rawson Auxiliary

•Trafalgar & District Community Opportunity Shop

•Mobile Book Trolley Service

•Past Nursing Graduates Archive Department

•Andrews House

•Community Rehabilitation Centre

•Community Health

We acknowledge each member and group within our community who contributed financially to WGHG during the year. WGHG received an impressive $864,508 through the generous donations, fundraising activities, events and bequests.

Page 30 West Gippsland Healthcare Group | Annual Report 2012/13


Cam supports his partner Amy March, along with Post Graduate Nurse Laura Baschin and Clinical Educator Sue Crosby.


Reporting Requirements

Statement of fees and charges

West Gippsland Healthcare Group charges fees in accordance with Department of Health Victoria directives issued under Regulation 8 of the Hospital and Charities (Fees) Regulations, 1986 as amended.

Freedom of Information

The Freedom of Information officer is the Manager, Health Information Services, with final approval by the Director of Medical Services. Consumers wishing to access documents may contact the Freedom of Information officer on 03 5623 0611 and access details will be provided. During 2012/13 year, 100 requests for information under the regulations of the Freedom of Information Act 1982 were received. Access was granted in full to 75 applicants.

Full Access 75

Partial Access 5

Denied 1

Withdrawn 1

No Documents 7

Not yet finalised 11

total 100

% Full or Part Access 80%

Availability of Other Information

Information listed in FRD 22C Appendix is available on request by relevant Ministers, Melbourne of Parliament and the public.

Victorian Industry Participation Policy Disclosures

West Gippsland Healthcare Group did not award contracts to Victorian Industry Participation Policy for the year 2012/13.

Overseas travel

There was no overseas travel taken during the year 2011/2012.

National Competitive Policy

It is Government policy that the costing policies of publicly funded organisations should reflect any competitive advantage available to the private sector. During 2012/13 all competitive neutrality requirements were met.

Conformity & Building Maintenance

All renovations to existing buildings conform to the Building Act 1993. All existing buildings complete with regulations in force at the time of construction. There are no orders to cease occupancy or to undertake urgent works. All sites are subject to a Fire Safety Audit and Risk Assessment according to revised standards as directed by the Department of Health.

Buildings

Buildings certified for approval 1

Constructions subject to mandatory inspections 1

Certificate of final inspection 1

Maintenance

Notice for urgent rectification, attention or major expenditure were received Nil

All renovations to existing buildings comply with Regulations and standards including the Building Code of Australia Yes

Orders to cease occupancy Nil


Consultants Purpose of Start end total expenditure FutureConsultant Consultancy date date Approved 2012-13 expenditure Fee Over 10k

Suters Architects Pty Ltd Project Consultants - ED Redevelopment Jun-11 May-13 148 148 Nil

P2 Group Human Resource Management Oct-11 Ongoing Ongoing 154 Ongoing

Craig Winter Human Resource Management Oct-12 Oct-12 16 16 Nil

Mullins Consulting Strategic Management Feb-13 Ongoing 23 23 Nil

Under 10k

In 2012-13 West Gippsland Healthcare Group engaged 11 consultants where the total fees payable to the consultants were less than $10,000, with a total expenditure of $48,497

Financial Management

The information requirements listed in the Financial Management Act 1994 (the Act), the Standing Directions of the Minister for Finance under the Act (Section 4 Financial Management Reporting) and Financial Reporting Directions have been prepared and are available to the relevant Minister, Members of Parliament and the public upon request.


Attestations

Attestation for Compliance with Australian/New Zealand Risk Management Standard

I, Dan Weeks, certify that the West Gippsland Healthcare Group has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard and an internal control system is in place that enables the executives to understand, manage and satisfactorily control risk exposures. The Audit and Risk Committee verifies this assurance and that the risk profile of the West Gippsland Healthcare Group has been critically reviewed within the last 12 months.

Dan Weeks Chief Executive Officer

Warragul29 August, 2013

Attestation for Compliance with the Ministerial Standing Direction

4.5.5.1 – Insurance

I, Dan Weeks, certify that the West Gippsland Healthcare Group has complied with Ministerial Direction 4.5.5.1 – Insurance.



Attestation on Data Integrity

I, Dan Weeks, certify that the West Gippsland Healthcare Group has put in place appropriate internal controls and processes to ensure that the Department of Health is provided with data that reflects actual performance. The West Gippsland Healthcare Group has critically reviewed these controls and processes during the year.



Responsible Bodies Declaration

In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for West Gippsland Healthcare Group for the year ending 30 June 2013.

Brian DaveyChair of BoardWarragul29 August, 2013


Declaration Letter


Financial Statements

Financial Index

Notes Contents Page

Comprehensive Operating Statement ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Balance Sheet ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Statement of Changes in Equity ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Cash Flow Statement ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

1 Summary of Significant Accounting Policies ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43

2 Revenue .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

2a Analysis of Revenue by Source ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

2b Private and Resident Fees ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

2c Net Gain/ (Loss) on Disposal of Non-Financial Assets ... . . . . . . . . . . . . . . . . . . . . . . . . . . 62

2d Assets Received Free of Charge or For Nominal Consideration ... . . . . . . . . . . . . 62

3 Expenses ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

3a Analysis of Expenses by Source ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64

4 Depreciation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66

5 Cash and Cash Equivalents ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66

6 Receivables ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

7 Investments and other Financial Assets ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

8 Inventories ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

9 Other Assets ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

10 Property, Plant & Equipment ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

11 Payables ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

12 Provisions ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

13 Superannuation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

14 Other Liabilities ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

15 Equity ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

16 Reconciliation of Net Result for the Year to Net Cash Inflow from Operating Activities ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

17 Financial Instruments ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

18 Commitments ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

19 Contingent Assets and Contingent Liabilities ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

20 Operating Segments ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83

21 Jointly Controlled Operations and Assets ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84

22a Responsible Persons Disclosures ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85

22b Executive Officer Disclosures ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86

22c Other Personnel ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86

23 Remuneration of Auditors ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

24 Events Occurring after the Balance Sheet ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

25 Economic Dependency ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87


Comprehensive Operating StatementFOR THE YEAR ENDED 30 JUNE 2013


Note 2013 2012 $’000 $’000

Revenue from operating activities 2 78,406 74,273Revenue from non-operating activities 2 2,703 2 ,806Employee expenses 3 (56,661) (54,250)Non salary labour costs 3 ( 5,119) ( 5,221)Supplies & consumables 3 ( 8,108) ( 8,270)Other expenses 3 (11,640) (10,651)

Net result before capital & specific items (419) (1,313)

Capital purpose income 2 4,055 2 ,601Depreciation 4 ( 5,921) ( 5,753)Expenditure using capital purpose income 3 ( 84) (169)

NET RESULT FOR THE YEAR (2,369) (4,634)

COMPREHENSIVE RESULT FOR THE YEAR (2,369) (4,634)

This Statement should be read in conjunction with the accompanying notes.


Balance SheetAS AT 30 JUNE 2013


Note 2013 2012 $’000 $’000

Current assetsCash and cash equivalents 5 11,628 12,173Receivables 6 2,565 2,632Investments and other financial assets 7 4,014 3,658Inventories 8 249 244Other assets 9 199 174Total current assets 18,655 18,881

Non-current assetsReceivables 6 144 456Investments and other financial assets 7 90 90Property, plant & equipment 10 62,825 63,517Total non-current assets 63,059 64,063TOTAL ASSETS 81,714 82,944

Current liabilitiesPayables 11 4,016 3,151Provisions 12 12,198 13,368Other current liabilities 14 4,014 3,658Total current liabilities 20,228 20,177

Non-current liabilitiesProvisions 12 2,479 1,391Total non-current liabilities 2,479 1,391TOTAL LIABILITIES 22,707 21,568NET ASSETS 59,007 61,376

EQUITYProperty, plant & equipment revaluation surplus 15a 27,466 27,466Contributed capital 15b 32,522 32,522Accumulated surpluses/(deficits) 15c (981) 1,388TOTAL EQUITY 15 59,007 61,376

Contingent assets and contingent liabilities 19 - -Commitments 18 643 1,826

This Statement should be read in conjunction with the accompanying notes.


Statement of Changes in EquityFOR THE YEAR ENDED 30 JUNE 2013


Property, Contributed Accumulated Total Plant & Capital Surpluses/ Equipment (Deficits) Revaluation Surplus Note $’000 $’000 $’000 $’000

Balance at 1 July 2011 27,466 32,522 6,022 66,010Net result for the year 15a - - (4,634) (4,634)

Balance at 30 June 2012 27,466 32,522 1,388 61,376

Net result for the year - - (2,369) (2,369)

Balance at 30 June 2013 27,466 32,522 (981) 59,007

This Statement should be read in conjunction with the accompanying notes


Cash Flow StatementFOR THE YEAR ENDED 30 JUNE 2013


Note 2013 2012 $’000 $’000

CASH FLOWS FROM OPERATING ACTIVITIESOperating grants from government 61,433 58,447 Patient and resident fees received 2,954 2,855 Private practice fees received 414 107 GST received from/(paid to) ATO 1,085 1,223 Interest received 617 848 Dividend received 10 10 Other receipts 16,212 15,388 Total receipts 82,725 78,878

Employee expenses paid (56,816) (52,319) Non salary labour costs (5,119) (5,221) Payments for supplies & consumables (20,066) (19,744) Total payments (82,001) (77,284)

Cash generated from operations 724 1,594

Capital grants from government 2,809 1,077 Capital donations and bequests received 770 523 Other capital receipts 392 - Other capital expenidure - (100)

NET CASH FLOW FROM OPERATING ACTIVITIES 16 4,695 3,094

CASH FLOWS FROM INVESTING ACTIVITIESPayments for non-financial assets (5,341) (4,531) Proceeds from sale of non-financial assets 101 197 NET CASH USED IN INVESTING ACTIVITIES (5,240) (4,334)

NET DECREASE IN CASH AND CASH EQUIVALENTS HELD (545) (1,240) Cash and cash equivalents at beginning of financial year 12,173 13,413 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 5 11,628 12,173

This Statement should be read in conjunction with the accompanying notes


Notes to the Financial Statements30 JUNE 2013


Note 1: Summary of significant accounting policiesThese annual financial statements represent the audited general purpose financial statements for West Gippsland Healthcare Group for the period ending 30 June 2013. The purpose of the report is to provide users with information about the Group’s 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 AASs, which include interpretations issued by the Australian Accounting Standards Board (AASB). They are presented in a manner consistent with the requirements of AASB 101 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.

West Gippsland Healthcare Group 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 West Gippsland Healthcare Group on 29th August 2013.

(b) Basis of accounting preparation and measurementAccounting 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 2013, and the comparative information presented in these financial statements for the year ended 30 June 2012.

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 Group.

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-currentphysicalassets,whichsubsequenttoacquisition,aremeasuredatarevaluedamountbeingtheirfairvalueatthe date of the revaluation less any subsequent accumulated depreciation and subsequent 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;

• thefairvalueofassetsotherthanlandisgenerallybasedontheirdepreciatedreplacementvalue.

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 and assumptions 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:

• thefairvalueofland,buildings,infrastructure,plantandequipment(refertoNote1(j);

• superannuationexpense(refertonote1(g));and

• actuarialassumptionsforemployeebenefitprovisionsbasedonlikelytenureofexistingstaff,patternsofleaveclaims,future salary movements and future discount rates (refer to Note 1(k))




(c) Reporting entityThe financial statements include all the controlled activities of West Gippsland Healthcare Group.

Its principal address is:

41 Landsborough StreetWarragulVictoria 3820

A description of the nature of the Group’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

West Gippsland Healthcare Group’s overall objective is to improve the health and wellbeing of our community, as well as improve the quality of life to Victorians.

West Gippsland Healthcare Group is predominantly funded by accrual based grant funding for the provision of outputs.

(d) Principles of consolidationJointly controlled assets or operations

Interests in jointly controlled assets or operations are not consolidated by West Gippsland Healthcare Group, but are accounted for in accordance with the policy outlined in Note 1(j) Financial Assets.

(e) Scope and presentation of financial statementsFund Accounting

The Group operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds. The Group’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) and 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 Group’s own activities or local initiatives and/or the Commonwealth.

Residential Aged Care Service

The Cooinda Lodge Nursing Home (on site) and Andrew’s House Hostel (Trafalgar) are an integral part of the Group and shares its resources. An apportionment of land and buildings has been made based on floor space. The results of the two operations have been segregated based on actual revenue earned and expenditure incurred by each operation in Note 2b to the financial statements.

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 the Group. 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 West Gippsland Healthcare Group, the Department of Health and the Victorian Government to measure the ongoing operating performance of Health Services.

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

• capitalpurposeincome,whichcomprisesalltiedgrants,donationsandbequestsreceivedforthepurposeofacquiringnon-current assets, such as capital works, plant and equipment or intangible assets. It also includes donations of plant and equipment (refer Note 1 (f)). 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.




• specificincome/expense,comprisesthefollowingitems,wherematerial:

o Non-current asset revaluation increments/decrements

o Write down of inventories

• Impairmentoffinancialandnon-financialassets,includesallimpairmentlosses(andreversalofpreviousimpairmentlosses), which have been recognised in accordance with Notes 1(j)

• depreciation,asdescribedinNote1(g);

• assetsprovidedorreceivedfreeofcharge(refertoNotes1(f)and(g));and

• expenditureusingcapitalpurposeincome,comprisesexpenditurewhicheitherfallsbelowtheassetcapitalisationthreshold 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.

Statement of changes in equity

The statement of changes in equity presents reconciliations of each non-owner and owner changes in equity from 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.

For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as current borrowings in the balance sheet.

Rounding

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

Minor discrepancies in tables between totals and sum of components are due to rounding.

(f) Income from transactionsIncome 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 the Group and the income can be reliably measured. 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 Group gains control of the underlying assets irrespective of whether conditions are imposed on the Group’s use of the contributions.

Contributions are deferred as income in advance when the Group 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 (update for 2012-13).

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.

Revenue from commercial activities

Revenue from commercial activities such as the laundering of linen is recognised 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.

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.

Fair value of assets and services 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 service would have been purchased if not received as a donation.

Other income

Other income includes non-property rental, dividends, forgiveness of liabilities, and bad debt reversals.

(g) Expense recognitionExpenses are recognised as they are incurred and reported in the financial year to which they relate.

Employee expenses

Employee expenses include:

• wagesandsalaries;

• annualleave;

• sickleave;

• longserviceleave;and

• superannuationexpenseswhicharereporteddifferentlydependinguponwhetheremployeesaremembersofdefinedbenefit 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 Group to the superannuation plans in respect of the services of current Group’s staff during the reporting period. Superannuation contributions are made to the plans based on the relevant rules of each plan, and are based upon actuarial advice.

Employees of West Gippsland Healthcare Group are entitled to receive superannuation benefits and the Group 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 (refer to note 13).




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.

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.

2013 2012

Buildings- Structure Shell Building Fabric 40 years 40 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 8 years 8 years

Leasehold Improvements 2 to 10 Years 2 to 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 separated into components and each component assessed for its useful life which is represented above.

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 (j) 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.




(h) Other comprehensive incomeOther 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(j) Revaluations of non-financial physical assets.

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 determined after deducting from the proceeds the carrying value of the asset at that 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 (j)); and

o disposals of financial assets and derecognition of financial liabilities

Revaluations of financial instrument at fair value

Refer to Note 1 (i) Financial instruments.

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.

(i) Financial instrumentsFinancial instruments arise out of contractual agreements that give rise to a financial asset of one Health Service and a financial liability or equity instrument of another Health Service. Due to the nature of the Group’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 financial 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

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 directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

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




Held-to-maturity investments

If the Group has the positive intent and ability to hold nominated investments to maturity, then such financial assets may be classifies as held-to-maturity. Held-to-maturity financial assets are recognised initially as fair value plus any directly attributable transaction costs. Subsequent to initial recognition held-to-maturity financial assets are measured at amortised cost using the effective interest method, less any impairment losses.

The Group makes limited use of this classification because any sale or reclassification of more than an insignificant amount of held-to-maturity investments not close to their maturity, would result in the whole category being reclassified as available-for-sale. The group would also be prevented from classifying investment securities as held-to-maturity for the current and the following two financial years.

The held-to-maturity category includes certain term deposits and debt securities for which the Group intends to hold until maturity.

Available-for-sale financial assets

Available-for-sale financial instrument assets are those designated as available-for-sale or not classified in any other category of financial instrument asset. Such assets are initially recognised at fair value. Subsequent to initial recognition, gains and losses arising from changes in fair value are recognised in ‘other comprehensive income’ until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in net result for the period. Fair value is determined in the manner described in Note 17.

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.

(j) AssetsCash and Cash Equivalents

Cash and cash equivalents 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.

For cash flow statement presentation purposes, cash and cash equivalents include bank overdrafts, which are included as liabilities on the balance sheet.

Receivables

Receivables consist of:

- contractual receivables, which includes mainly debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease receivables; 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.

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:

- loans and receivables;

- held-to-maturity investments; and

- available-for-sale financial assets.

The Group 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.

West Gippsland Healthcare Group 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.

Inventories acquired for no cost or nominal considerations are measured at current replacement cost at the date of acquisition.

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 its fair value at the date of acquisition. Assets transferred as part of a merger/machinery of government are transferred at their carrying amount.

The initial cost for non-financial physical assets under finance lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease.

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 103D 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 recognised in ‘other comprehensive income’ and 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 in ‘other comprehensive income’ to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of property, plant and equipment.




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 103D, the Group’s non-current physical assets were assessed to determine whether revaluation of the non-current physical assets was required.

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 note 1(h) – ‘comprehensive income’.

Impairment of non-financial assets

Goodwill and intangible assets with indefinite lives (and intangible assets not yet available for use) are tested annually for impairment (as described below) and whenever there is an indication that the asset may be impaired.

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

• inventories;

• non-currentphysicalassetsheldforsale;and

• assetsarisingfromconstructioncontracts.

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.

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.

Investments in jointly controlled assets and operations

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

• itsshareofjointlycontrolledassets;

• anyliabilitiesthatithadincurred;

• itsshareofliabilitiesincurredjointlybythejointventure;

• anyincomeearnedfromthesellingorusingofitsshareoftheoutputfromthejointventure;and

• anyexpensesincurredinrelationtobeinganinvestorinthejointventure.

For jointly controlled operations the Group recognises:

• theassetsthatitcontrols;

• theliabilitiesthatitincurs;

• expensesthatitincurs;and

• theshareofincomethatitearnsfromsellingoutputsofthejointventure.

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:

• therightstoreceivecashflowsfromtheassethaveexpired;or

• theGroupretainstherighttoreceivecashflowsfromtheasset,buthasassumedanobligationtopaytheminfullwithoutmaterial delay to a third party under a ‘pass through’ arrangement; or




• theGrouphastransferreditsrightstoreceivecashflowsfromtheassetandeither:

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

(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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

Impairment of financial assets

At the end of each reporting period West Gippsland Healthcare Group 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 allowances for doubtful receivables are expensed. Bad debt written off by mutual consent and the allowance for doubtful debts are classified as ‘other comprehensive income’ in the net result.

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 2013 for its portfolio of financial assets, the Group obtained a valuation based on the best available advice using an estimations through a reputable financial institution. This value was compared against valuation methodologies provided by the issuer as at 30 June 2013. These methodologies were critiqued and considered to be consistent with standard market valuation techniques.

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.

(k) LiabilitiesPayables

Payables consist of:

• contractualpayableswhichconsistpredominantlyofaccountspayablerepresentingliabilitiesforgoodsandservicesprovided to the Group prior to the end of the financial year that are unpaid, and arise when the Group 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 net 30 days.

• statutorypayables,suchasgoodsandservicestaxandfringebenefitstaxpayables.

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 Group 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 liability 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.

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 the Group 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:

• presentvalue–componentthattheGroupdoesnotexpecttosettlewithin12months;and

• nominalvalue–componentthattheGroupexpectstosettlewithin12months.

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

The Group does not recognise any unfunded defined benefit liability in respect of the superannuation plans because the Group 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.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an expense in the consolidated comprehensive operating statement.




(l) LeasesA 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 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

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.

(m) EquityContributed 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.

Transfers of net assets arising from administrative restructurings are treated as contributions by owners. Transfers of net liabilities arising from administrative restructures are to go through the comprehensive operating statement.

Property, plant & equipment revaluation surplus

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

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

(o) Contingent assets and contingent liabilitiesContingent 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.

(p) Goods and Services 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, the GST payable 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.




(q) AASs issued that are not yet effectiveCertain new Australian accounting standards have been published that are not mandatory for the 30 June 2013 reporting period. Department of Treasury and Finance assesses the impact of all these new standards and advises the Group of their applicability and early adoption where applicable.

As at 30 June 2013, 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. West Gippsland Healthcare Group has not and does not intend to adopt these standards early.

Standard/Interpretation

AASB 9 Financial Instruments

AASB 12 Disclosure of Interests in Other Entities

Summary

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).

This Standard requires the 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. The exposure draft ED 238 proposes to add some implementation guidance to AASB 12, explaining and illustrating the definition of a ‘structured entity’ from a not-for-profit perspective.

Applicable for annual reporting periods beginning or ending on

1 Jan 2015

1 Jan 2014

Impact on financial statements

Subject to AASB’s further modifications to AASB 9, together with the anticipated changes resulting from the staged projects on impairments and hedge accounting, details of impacts will be assessed.

Not-for-profit entities are not permitted to apply this Standard prior to the mandatory application date. Impacts on the level and nature of the disclosures will be assessed based on the eventual implications arising from AASB 10, AASB 11 and AASB 128 Investments in Associates and Joint Ventures.




Standard/Interpretation

AASB 13 Fair Value Measurement

AASB 119 Employee Benefits

AASB 128 Investments in Associates and Joint Ventures

Summary

This Standard outlines the requirements for measuring the fair value of assets and liabilities and replaces the existing fair value definition and guidance in other Australian accounting standards. AASB 13 includes a ‘fair value hierarchy’ which ranks the valuation technique inputs into three levels using unadjusted quoted prices in active markets for indentical assets or liabilities; other observable inputs; and unobservable inputs.

In this revised Standard for defined benefit superannuation plans, there is a change to the methodology in the calculation of superannuation expenses, in particular there is now a change in the split between superannuation interest expense (classified as transactions) and actuarial gains and losses (classified as ‘Other economic flows – other movements in equity’) reported on the comprehensive operating statement.

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

Applicable for annual reporting periods beginning or ending on

1 Jan 2013

1 Jan 2013

1 Jan 2014

Impact on financial statements

Disclosure for fair value measurements using unobservable inputs are relatively detailed compared to disclosure for fair value measurements using observable inputs. Consequently, the Standard may increase the disclosures required assets measured using depreciated replacement cost.

Not-for-profit entities are not permitted to apply this Standard prior to the mandatory application date. While the total superannuation expense is unchanged, the revised methodology is expected to have a negative impact on the net result from transactions a few Victorian public sector entities that report superannuation defined benefit plans.

Not-for profit entities are not permitted to apply this Standard prior to the mandatory application date. The AASB is assessing the applicability of principles in AASB 128 in a not-for-profit context. As such, the impact will be assessed after the AASB’s deliberation.




In addition to the new standards above, the AASB has issued a list of amending standards that are not effective for the 2012-13 reporting period (as listed below). In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on public sector reporting. The two AASB Interpretations in the list below are also not effective for the 2012-13 reporting period and considered to have insignificant impacts on public sector reporting.

• AASB2009-11Amendments to Australian Accounting Standards arising from AASB 9.

• AASB2010-2Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements.

• AASB2010-7Amendments to Australian Accounting Standards arising from AASB 9 (December 2010).

• AASB2010-10Further Amendments to Australian Accounting Standards – Removal of Fixed Dates for First-time Adopters.

• AASB2011-2Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project – Reduced Disclosure Requirements.

• AASB2011-4Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements.

• AASB2011-6Amendments to Australian Accounting Standards – Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation – Reduced Disclosure Requirements.

• AASB2011-7Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards.

• AASB2011-8Amendments to Australian Accounting Standards arising from AASB 13.

• AASB2011-10Amendments to Australian Accounting Standards arising from AASB 119 (September 2011).

• AASB2011-11Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements.

• AASB2011-12Amendments to Australian Accounting Standards arising from Interpretation 20.

• 2012-1Amendments to Australian Accounting Standards - Fair Value Measurement - Reduced Disclosure Requirements.

• 2012-2Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities.

• 2012-3Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities.

• 2012-5Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle.

• 2012-7Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements.

• 2012-9Amendment to AASB 1048 arising from the Withdrawal of Australian Interpretation 1039.

• 2012-10Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments.

• 2012-11Amendments to Australian Accounting Standards – Reduced Disclosure Requirements and Other Amendments.

• 2013-1Amendments to AASB 1049 – Relocation of Budgetary Reporting Requirements.

• 2013-2Amendments to AASB 1038 – Regulatory Capital.

• 2013-3Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets.

• AASBInterpretation20Stripping Costs in the Production Phase of a Surface Mine.

• AASBInterpretation21Levies.




(r) Category groupsThe Group 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.

Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure on public hospital type outpatient services, where services are delivered in public hospital outpatient clinics, or free standing day hospital facilities, or rehabilitation facilities, or alcohol and drug treatment units, or outpatient clinics specialising in ophthalmic aids or palliative care.

Emergency Department Services (EDS) comprises all recurrent health revenue/expenditure on emergency department services that are available free of charge to public patients.

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.

Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health revenue/expenditure on public hospital type services including palliative care facilities and rehabilitation facilities, as well as services provided under the following agreements: Services that are provided or received by hospitals (or area Health Services) but are delivered/received outside a hospital campus, services which have moved from a hospital to a community setting since June 1998, services which fall within the agreed scope of inclusions under the new system, which have been delivered within hospital’s i.e. in rural/remote areas.

Residential Aged Care including Mental Health (RAC incl. Mental Health) referred to in the past as psychogeriatric residential services, comprises those Commonwealth-licensed residential aged care services in receipt of supplementary funding from DH under the mental health program. It excludes all other residential services funded under the mental health program, such as mental health funded community care units (CCUs) and secure extended care units (SECs).

Other Services excluded from Australian Health Care Agreement (AHCA) (Other) comprises revenue/expenditure for services not separately classified above, including: Public Health Services including Laboratory testing, Blood Borne Viruses / Sexually Transmitted Infections clinical services, Kooris liaison officers, immunisation and screening services, Drugs services including drug withdrawal, counselling and the needle and syringe program, Dental Health services including general and specialist dental care, school dental services and clinical education, Disability services including aids and equipment and flexible support packages to people with a disability, Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services. Health and Community Initiatives also falls in this category group.




Note 2: Revenue

HSA HSA H&CI H&CI Total Total 2013 2012 2013 2012 2013 2012 $’000 $’000 $’000 $’000 $’000 $’000

Revenue from Operating ActivitiesGovernment Grants - Department of Health 26,025 51,402 - - 26,025 51,402 - Victorian Health Funding Pool 25,642 - - - 25,642 - - Department of Human Services 252 251 - - 252 251 - State Government - Other 99 99 - - 99 99 - Commonwealth Government Residential Aged Care Subsidy 5,561 5,175 - - 5,561 5,175 Commonwealth Grant - Health Network Funding Adjustment 676 - - - 676 - Other 1,551 1,309 - - 1,551 1,309 Total Government Grants 59,806 58,236 - - 59,806 58,236

Indirect Contributions by Department of Health - Insurance 1,586 114 - - 1,586 114 - Long Service Leave (312) 72 - - (312) 72 Total Indirect Contributions by Department of Health 1,274 186 - - 1,274 186

Patient and Resident Fees - Patient and Resident Fees (refer note 2b) 1,350 620 - - 1,350 620 - Residential Aged Care (refer note 2b) 1,775 1,720 - - 1,775 1,720 Total Patient & Resident Fees 3,125 2,340 - - 3,125 2,340

Commercial Activities & Specific Purpose Funds - Private Practice and Other Patient Activities Fees - - 414 107 414 107 - Pharmacy Services 158 202 - - 158 202 - Laundry - - 11,679 11,705 11,679 11,705 - Cafeteria - - 489 475 489 475 - Property Income 533 502 - - 533 502 - Other (Salary Packaging) 153 135 - - 153 135 Total Commercial Activities & Specific Purpose Funds 844 839 12,582 12,287 13,426 13,126 Other Revenue from Operating Activities 775 385 - - 775 385 Total Revenue from Operating Activities 65,824 61,986 12,582 12,287 78,406 74,273

Revenue from Non-Operating ActivitiesInterest & Dividends - - 617 876 617 876 Other Revenue from Non-Operating Activities - - 2,086 1,930 2,086 1,930 Total Revenue from Non-Operating Activities - - 2,703 2,806 2,703 2,806

Capital Purpose IncomeState Government Capital Grants - Targeted Capital Works and Equipment 2,375 912 - - 2,375 912 - Other - 165 - - - 165 Residential Accommodation Payments (refer note 2b) 594 625 - - 594 625 Assets Received Free of Charge (refer note 2d) - - - 200 - 200 Net Gain/(Loss) on Disposal of Non-Financial Assets (refer note 2c) - - (11) 27 (11) 27 Capital Dividends - - 10 10 10 10 Donations & Bequests - - 865 523 865 523 Other Capital Purpose Income - - 222 139 222 139 Total Capital Purpose Income 2,969 1,702 1,086 899 4,055 2,601

Total Revenue (refer to note 2a) 68,793 63,688 16,371 15,992 85,164 79,680

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.




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Note 2b: Private and Resident Fees 2013 2012 $’000 $’000

Patient and Resident FeesAcute (incl rehabilitation, GEM and other acute care types)– Inpatients 742 83– Outpatients 284 333Residential Aged Care– Residential Accommodation Payments 1,775 1,720Aged Care- Outpatients 263 165Other 61 39Total Patient and Resident Fees 3,125 2,340

Capital Purpose Income:Residential Accommodation Payments 594 625Total Capital Purpose Income 594 625

Note 2c: Net Gain/(Loss) on Disposal of Non-Financial Assets 2013 2012 $’000 $’000

Proceeds from Disposals of Non-Current AssetsPlant and Equipment 1 58Motor Vehicles 100 139Total Proceeds from Disposal of Non-Current Assets 101 197

Less: Written Down Value of Non-Current Assets SoldPlant and Equipment - 8Motor Vehicles 112 162Total Written Down Value of Non-Current Assets Sold 112 170

Net gain/(loss) on Disposal of Non-Financial Assets (11) 27

Note 2d: Assets Received Free of Charge or For Nominal Consideration

2013 2012 $’000 $’000

During the reporting period, the fair value of assets received free of charge, was as follows:

Building refurbishment - 200

TOTAL - 200

Monash Univeristy provided funding received direct from DH for the refurbishment of Mary Sergeant lecture room, paediatric and physicians rooms. West Gippsland Healthcare Group made a significant contribution to the project costs.




Note 3: Expenses HSA HSA H&CI H&CI Total Total 2013 2012 2013 2012 2013 2012 $’000 $’000 $’000 $’000 $’000 $’000

Employee ExpensesSalaries & Wages 41,769 39,267 7,687 7,745 49,456 47,012 WorkCover Premium 1,062 1,388 284 302 1,346 1,690 Departure Packages 13 4 - - 13 4 Long Service Leave 970 1,221 147 112 1,117 1,333 Superannuation 4,023 3,513 706 698 4,729 4,211 Total Employee Expenses 47,837 45,393 8,824 8,857 56,661 54,250

Non Salary Labour CostsFees for Visiting Medical Officers 3,494 3,772 - - 3,494 3,772 Agency Costs - Other 1,625 1,449 - - 1,625 1,449 Total Non Salary Labour Costs 5,119 5,221 - - 5,119 5,221

Supplies & Consumables

Drug Supplies 1,747 1,675 - - 1,747 1,675 S100 Drugs 432 462 - - 432 462 Medical, Surgical Supplies and Prosthesis 2,719 2,729 124 127 2,843 2,856 Pathology Supplies 650 663 - 3 650 666 Radiology 1,549 1,591 - 1 1,549 1,592 Food Supplies 669 792 218 227 887 1,019 Total Supplies & Consumables 7,766 7,912 342 358 8,108 8,270

Other ExpensesDomestic Services & Supplies 366 361 452 444 818 805 Fuel, Light, Power and Water 703 454 788 662 1,491 1,116 Insurance costs funded by the Department of Health 1,586 1,385 - - 1,586 1,385 Linen production/transport costs - - 336 253 336 253 Motor Vehicle Expenses 153 166 - 254 153 420 Repairs & Maintenance 644 566 272 141 916 707 Maintenance Contracts 311 257 34 18 345 275 Patient Transport 996 993 - - 996 993 Bad & Doubtful Debts 23 39 4 11 27 50Lease Expenses 37 11 - - 37 11 Advertising Expenses 20 13 - - 20 13 Other Administrative Expenses 3,866 3,668 396 341 4,262 4,009 Other 332 501 222 47 554 548 Audit Fees - VAGO - Audit of Financial Statements 36 36 - - 36 36 - Other 63 30 - - 63 30 Total Other Expenses 9,136 8,480 2,504 2,171 11,640 10,651 Expenditure using Capital Purpose IncomeOther Expenses - Other - - 84 169 84 169 Total Other Expenses - - 84 169 84 169 Total Expenditure using Capital Purpose Income - - 84 169 84 169 Depreciation 4,255 4,148 1,666 1,605 5,921 5,753 Total Impairment of Assets 4,255 4,148 1,666 1,605 5,921 5,753

Total Expenses 74,113 71,154 13,420 13,160 87,533 84,314

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




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Note 4: Depreciation 2013 2012 $’000 $’000

DepreciationBuildings 3,410 3,346Plant & Equipment 2,012 1,965Medical Equipment 499 442Total Depreciation 5,921 5,753

Note 5: Cash and Cash EquivalentsFor 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.

2013 2012 $’000 $’000

Cash on hand 3 3Cash at bank 5,830 5,890Bank overdrafts (1,833) (2,223)Deposits at call 7,032 7,943GHA 596 560Total Cash and Cash Equivalents 11,628 12,173

Represented by:Cash for Health Service Operations (as per Cash Flow Statement) 11,628 12,173Total Cash and Cash Equivalents 11,628 12,173




Note 6: Receivables 2013 2012 $’000 $’000

CURRENTContractualInter Hospital Debtors 789 742 Trade Debtors 858 867 Patient Fees 358 198 GHA 261 222 Accrued Investment Income 86 134 Accrued Revenue - Other 60 81 Less Allowance for Doubtful DebtsTrade Debtors (23) (41) Patient Fees (25) (15) 2,364 2,188

StatutoryGST Receivable 201 184Accrued Revenue - Department of Health - 260 201 444

TOTAL CURRENT RECEIVABLES 2,565 2,632

NON CURRENTStatutoryLong Service Leave - Department of Health 144 456 TOTAL NON-CURRENT RECEIVABLES 144 456 TOTAL RECEIVABLES 2,709 3,088

(a) Movement in the Allowance for doubtful debts

2013 2012 $’000 $’000

Balance at beginning of year (56) (31) Amounts written off during the year (27) (51) Increase/(decrease) in allowance recognised in net result 35 26 Balance at end of year (48) (56)

(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 Specific Operating Fund Purpose Fund Total 2013 2012 2013 2012 2013 2012 $’000 $’000 $’000 $’000 $’000 $’000

CURRENTTerm Deposit Aust. Dollar Term Deposits > 3 months - - 3,712 3,346 3,712 3,346Others < 3 months - Salary Packaging - - 302 312 302 312Total Current - - 4,014 3,658 4,014 3,658

NON CURRENTEquities and Managed Investment Schemes Australian Listed Equity Securities 90 90 - - 90 90Total Non Current - 90 - - 90 90TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS 90 90 4,014 3,658 4,104 3,748

Represented by:Health Service Investments 90 90 - - 90 90Monies Held in Trust Patient Monies - - 4,014 3,658 4,014 3,658TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS 90 90 4,014 3,658 4,104 3,748

(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

Note 8: Inventories 2013 2012 $’000 $’000

Pharmaceuticals At cost 127 118

Housekeeping Supplies At cost 5 5

Medical and Surgical Lines At cost 89 92

Administration Stores At Cost 28 29

TOTAL INVENTORIES 249 244

Note 9: Other Assets 2013 2012 $’000 $’000

CURRENTPrepayments 142 118GHA 55 47Other 2 9

TOTAL CURRENT OTHER ASSETS 199 174




Note 10: Property, plant & equipment 2013 2012 $’000 $’000

LandLand at Fair Value 7,171 7,171 Total Land 7,171 7,171

BuildingsBuildings Under Construction at cost 20 1,711

Buildings at Fair Value 56,024 52,175 Less Acc’d Depreciation 13,658 10,247 Total Buildings 42,386 43,639

Plant and EquipmentPlant and Equipment at Fair Value 15,582 16,010 Less Acc’d Depreciation 6,752 7,297 Total Plant and Equipment 8,830 8,713

Medical EquipmentMedical Equipment at Fair Value 7,263 6,529 Less Acc’d Depreciation 2,841 2,554 Total Medical Equipment 4,422 3,975

GHAWritten Down Value 16 19 Total Assets under construction 16 19

TOTAL 62,825 63,517




Note 11: Payables 2013 2012 $’000 $’000

CURRENTContractualTrade Creditors - Hospital 2,182 1,752 - GHA 18 26 Accrued Expenses - Hospital 751 937 - GHA 85 83 Other - Hospital 5 - - GHA 295 177 3,336 2,975

StatutoryGST Payable 85 95 Department of Health 582 53 FBT 13 28 680 176 TOTAL CURRENT 4,016 3,151

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

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

Note 10: Property, plant & equipment (continued)

Reconciliations of the carrying amounts of each class of asset for the consolidated entity at the beginning and end of the previous and current financial year is set out below.

Land Buildings Plant & Medical Assets Total Equipment Equipment Under & GHA Construction $’000 $’000 $’000 $’000 $’000 $’000

Balance at 1 July 2011 7,171 45,273 8,199 3,810 256 64,709 Additions - 225 2,567 615 1,324 4,731 Disposals - - (162) (8) - (170) Net Transfers between Classes - (224) 93 - 131 - Depreciation (note 4) - (3,346) (1,965) (442) - (5,753) Balance at 1 July 2012 7,171 41,928 8,732 3,975 1,711 63,517 Additions - 2,137 2,229 955 20 5,341 Disposals - - (103) (9) - (112) Net Transfers between Classes - 1,711 - - (1,711) - Depreciation (note 4) - (3,410) (2,012) (499) - (5,921) Balance at 30 June 2013 7,171 42,366 8,846 4,422 20 62,825

Land and buildings carried at valuation

An independent valuation of the Health Service’s land and buildings was performed by the Valuer-General Victoria to determine the fair value of the land and buildings. The valuation, which conforms to Australian Valuation Standards, was determined by reference to the amounts for which assets could be exchanged between knowledgeable willing parties in an arm’s length transaction. The valuation was based on independent assessments. The effective date of the valuation is 30 June 2009.

In addition, a Managerial review was performed on land in accordance with FRD103D at 30 June 2011 using indices provided by the Valuer-General. As a consequence of this review, land was revalued as at 30 June 2011.




Note 12: Provisions 2013 2012 $’000 $’000

Current Provisions Employee Benefits - Unconditional and expected to be settled within 12 months 750 736- Unconditional and expected to be settled after 12 months 11,001 12,314 11,751 13,050Provisions related to Employee Benefit On-Costs- Unconditional and expected to be settled within 12 months 83 81- Unconditional and expected to be settled after 12 months 364 237 447 318Total Current Provisions 12,198 13,368

Non-Current ProvisionsEmployee Benefits 2,479 1,391 Total Non-Current Provisions 2,479 1,391

Total Provisions 14,677 14,759

(a) Employee Benefits and Related On-CostsCurrent Employee Benefits and related on-costsUnconditional LSL Entitlement 5,654 6,585 Annual Leave Entitlements 4,521 4,260 Accrued Wages and Salaries 1,925 2,439 Accrued Days Off 98 84 Non-Current Employee Benefits and related on-costsConditional Long Service Leave Entitlements 2,479 1,391 Total Employee Benefits and Related On-Costs 14,677 14,759

(b) Movements in provisions

Movement in Long Service Leave:Balance at start of year 7,976 7,260 Provision made during the year - Revaluations 893 1,420 Settlement made during the year (736) (704) Balance at end of year 8,133 7,976


Note 13: SuperannuationEmployees of the Group are entitled to receive superannuation benefits and the Group contributes to both defined benefit and defined contribution plans. The defined benefit plan(s) provides benefits based on years of service and final average salary.

The Group does not recognise any defined benefit liability in repect of the plan(s) because the entity 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. The Department of Treasury and Finance discloses the State’s defined benefits liabilities in its disclosure for administered items.

However superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive operating statement of the Group. The name, details and amounts of expense in relation to the major employee superannuation funds and contributions made by the Group are as follows:

Paid Contribution Contribution Outstanding for the Year at Year End 2013 2012 2013 2012 $’000 $’000 $’000 $’000

(i) Defined benefit plans:First State super 176 168 - -

Defined contribution plans:First State super 3,281 3,507 - -Other 1,272 536 - -

Total 4,729 4,211 - -

(i) The bases for determining the level of contributions is determined by the various actuaries of the defined benefit superannuation plans.

Note 14: Other Liabilities 2013 2012 $’000 $’000

CURRENTMonies Held in Trust - Accommodation Bonds (Refundable Entrance Fees) 3,712 3,346Salary Packaging 302 312Total Current 4,014 3,658

Total Other Liabilities 4,014 3,658

Total Monies Held in TrustRepresented by the following assets:Investments and Other Financial Assets (refer to Note 7) 4,014 3,658TOTAL 4,014 3,658






Note 15: Equity 2013 2012 $’000 $’000

(a) Surpluses

Property, Plant & Equipment Revaluation Surplus1

Balance at the beginning of the reporting period 27,466 27,466 Balance at the end of the reporting period* 27,466 27,466

* Represented by: - Land 4,915 4,915 - Buildings 22,551 22,551 27,466 27,466

(b) Contributed CapitalBalance at the beginning of the reporting period 32,522 32,522 Balance at the end of the reporting period 32,522 32,522

(c) Accumulated Surpluses/(Deficits)Balance at the beginning of the reporting period 1,388 6,022 Net Result for the Year (2,369) (4,634) Balance at the end of the reporting period (981) 1,388

Total Equity at end of financial year 59,007 61,376 (1) The property, plant & equipment asset revaluation surplus arises on the revaluation of property, plant & equipment.

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

2013 2012 $’000 $’000

Net result for the period (2,369) (4,634)

Non-cash movements:Depreciation 5,921 5,753 Provision for doubtful debts 8 - Resources/assets received free of charge - (200)

Movements included in investing and financing activitiesNet (gain)/loss from disposal of non financial physical assets 11 (27)

Movements in assets and liabilities:Change in operating assets and liabilities (Increase)/decrease in receivables 379 996 (Increase)/decrease in other assets (389) 29 Increase/(decrease) in payables 868 (788) Increase/(decrease) in provisions (84) 1,931 Increase/(decrease) in other liabilities 355 - Change in inventories (5) 34

NET CASH INFLOW FROM OPERATING ACTIVITIES 4,695 3,094




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

West Gippsland Healthcare Group’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

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 Health Service’s main financial risks include credit risk, liquidity risk and interest rate risk. The Health Service manages these financial risks in accordance with its financial risk management policy.

The Health Service uses different methods to measure and manage the different risks to which it is exposed. Primary responsibility for the identification and management of financial risks rests with the financial risk management committee of the Health Service.

The main purpose in holding financial instruments is to prudentially manage West Gippsland Healthcare Group’s financial risks within the government policy parameters.

Categorisation of financial instruments

Carrying Carrying Amount Amount 2013 2012 $’000 $’000

Financial AssetsCash and cash equivalents 11,628 12,173Loans and Receivables 6,378 5,846Available for Sale 90 90Total Financial Assets (i) 18,096 18,109

Financial LiabilitiesAt Amortised Cost 7,350 6,633Total Financial Liabilities (ii) 7,350 6,633

(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)

Net holding gain/(loss) on financial instruments by category

Net holding Net holding gain/(loss) gain/(loss) 2013 2012 $’000 $’000

Financial AssetsCash and Cash Equivalents (i) 617 876Available for Sale (i) 10 10Total Financial Assets 627 886

(i) For cash and cash equivalents, loans or receivables and available-for-sale financial assets, the net gain or loss is calculated by taking the movement in the fair value of the asset, interest revenue, plus or minus foreign exchange gains or losses arising from revaluation of the financial assets, and minus any impairment recognised in the net result.


Note 17: Financial Instruments (continued)

(b) Credit risk

Credit risk arises from the contractual financial assets of the Group, which comprise cash and deposits, non-statutory receivables and available for sale contractual financial assets. The Group’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 Group’s contractual financial assets is minimal because the main debtor is the Victorian Government. For debtors other than the Government, it is the Group’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 Group 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 c ash at bank. As with the policy for debtors, the Group’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 Group 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 West Gippsland Healthcare Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

Credit quality of contractual financial assets that are neither past due nor impaired Financial Financial Companies Other Total institutions institutions (A-1 credit (min BBB (A credit (BBB+ credit rating) credit rating) rating) rating) 2013 $’000 $’000 $’000 $’000 $’000

Financial Assets

Cash and Cash Equivalents 7,227 4,401 - - 11,628Receivables - Trade Debtors (i) - - - 2,364 2,364Other Financial Assets - - Term Deposit 4,014 - - - 4,014 - Shares in Other Entities - - 90 - 90

Total Financial Assets 11,241 4,401 90 2,364 18,096

2012

Financial Assets

Cash and Cash Equivalents 7,201 4,972 - - 12,173Receivables - Trade Debtors (i) - - - 2,188 2,188Other Financial Assets - - Term Deposit 3,658 - - - 3,658 - Shares in Other Entities - - 90 - 90

Total Financial Assets 10,859 4,972 90 2,188 18,109

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






Note

17:

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2013

$’

000

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000

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Cas

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11

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(i)

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tors

2,

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18,0

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3,

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90

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-





(c) Liquidity risk

Liquidity risk is the risk that the Group would be unable to meet its financial obligations as and when they fall due. The Group 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 Group’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet. The Group manages its liquidity risk by ensuring that term deposit maturity dates are spaced for regular access to cash when required.

The following table discloses the contractual maturity analysis for West Gippsland Healthcare Group’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 Maturity Dates Carrying Nominal Less than 1-3 3 months 1-5 Amount Amount 1 Month Months -1 Year Years2013 $’000 $’000 $’000 $’000 $’000 $’000

Financial Liabilities

Payables 3,336 3,336 3,336 - - - Other Financial Liabilities (i) - Accommodation Bonds 3,712 3,712 - - 3,712 - - Other 302 302 302 - - -

Total Financial Liabilities 7,350 7,350 3,638 - 3,712 -

2012

Financial Liabilities

Payables 2,975 2,975 2,975 - - - Other Financial Liabilities (i) - Accommodation Bonds 3,346 3,346 - - 3,346 - - Other 312 312 - - 312 -

Total Financial Liabilities 6,633 6,633 2,975 - 3,658 -

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

(d) Market risk

West Gippsland Healthcare Group’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.

Currency risk

West Gippsland Healthcare Group is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement.

Interest rate risk

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 Group 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 Group 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 cash at bank as financial assets that can be left at floating rate without necessarily exposing the Group to significant bad risk, manage-ment monitors movement in interest rates on a daily basis.





Interest rate exposure of financial assets and liabilities as at 30 June

Weighted Carrying Interest Rate Exposure Average Amount Fixed Variable Non- Effective Interest Interest Interest Interest Rate Rate Bearing2013 Rate (%) $’000 $’000 $’000 $’000

Financial AssetsCash and Cash Equivalents 4.02 11,628 4,401 7,227 -Receivables(i)

- Trade Debtors - 1,647 - - 1,647 - Other Receivables - 717 - - 717Other Financial Assets - Term Deposit 4.02 4,014 4,014 - - - Shares in Other Entities - 90 - - - 18,096 8,415 7,227 2,364

Financial LiabilitiesPayables(i) - 3,336 - - 3,336Other Financial Liabilities - Accommodation Bonds - 3,712 - - 3,712 - Other - 302 - - 302 7,350 - - 7,350

2012

Financial AssetsCash and Cash Equivalents 5.29 12,173 7,253 4,920 -Receivables(i)

- Trade Debtors - 1,609 - - 1,609 - Other Receivables - 579 - - 579Other Financial Assets - Term Deposit 5.29 3,658 3,658 - - - Shares in Other Entities - 90 - - 90 18,109 10,911 4,920 2,278

Financial LiabilitiesPayables(i) - 2,975 - - 2,975Other Financial Liabilities - Accommodation Bonds - 3,346 - - 3,346 - Other - 312 - - 312 6,633 - - 6,633(i) The carrying amount excludes types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)





(d) Market risk (continued)

Sensitivity disclosure analysis

Taking into account past performance, future expectations, economic forecasts, and management’s knowledge and experience of the financial markets, West Gippsland Healthcare Group believes the following movements are ‘reasonably possible’ over the next 12 months.

- A shift of +1% and -1% in market interest rates (AUD) from year-end rates of 4.02%

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

Carrying Interest Rate Risk Amount -1% +1% Profit Equity Profit Equity2013 $’000 $’000 $’000 $’000

Financial AssetsCash and Cash Equivalents 11,628 (72) (72) 72 72 Receivables - Trade Debtors 1,647 - - - - - Other Receivables 717 - - - - Other Financial Assets - Term Deposit 4,014 - - - - - Shares in Other Entities 90 - - - -

Financial Liabilities Payables 3,336 - - - - Other Financial Liabilities - - - - - - Accommodation Bonds 3,712 - - - - - Other 302 - - - -

(72) (72) 72 72

2012

Financial Assets

Cash and Cash Equivalents 12,173 (49) (49) 49 49 Receivables - Trade Debtors 1,609 - - - - - Other Receivables 579 - - - - Other Financial Assets - Term Deposit 3,658 - - - - - Shares in Other Entities 90 - - - -

Financial LiabilitiesPayables 2,975 - - - - Other Financial Liabilities - Accommodation Bonds 3,346 - - - - - Other 312 - - - -

(49) (49) 49 49





(e) Fair value

The fair values and net fair values of financial instrument assets and liabilities are determined as follows:

•Level1-thefairvalueoffinancialinstrumentwithstandardtermsandconditionsandtradedinactiveliquidmarketsaredetermined with reference to quoted market prices;

•Level2-thefairvalueisdeterminedusinginputsotherthanquotedpricesthatareobservableforthefinancialassetorliability,either directly or indirectly; and

•Level3-thefairvalueisdeterminedinaccordancewithgenerallyacceptedpricingmodelsbasedondiscountedcashflowanalysis using unobservable market inputs.

The Group 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 the expectation 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.

Comparison between carrying amount and fair value

Consol’d Fair Consol’d Fair Carrying value Carrying value Amount Amount 2013 2013 2012 2012 $’000 $’000 $’000 $’000

Financial AssetsCash and Cash Equivalents 11,628 11,628 12,173 12,173 Receivables - Trade Debtors 1,647 1,647 1,609 1,609 - Other Receivables 717 717 579 579 Other Financial Assets - Term Deposit 4,014 4,014 3,658 3,658 - Shares in Other Entities 90 90 90 90Total Financial Assets 18,096 18,096 18,109 18,109

Financial LiabilitiesPayables 3,336 3,336 2,975 2,975 Other Financial Liabilities - Accommodation Bonds 3,712 3,712 3,346 3,346 - Other 302 302 312 312 Total Financial Liabilities 7,350 7,350 6,633 6,633

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





(e) Fair value (continued)

Financial assets measured at fair value

Carrying Fair value measurement at end of Amount as reporting period using: at 30 June Level 1* Level 2* Level 3*2013 $’000 $’000 $’000 $’000

Financial assets at fair value through profit & lossAvailable for sale financial assets - Equities and managed funds 90 90 - -Total Financial Assets 90 90 - -

2012

Financial assets at fair value through profit & lossAvailable for sale financial assets- Equities and managed funds 90 90 - -Total Financial Assets 90 90 - -

*There is no significant transfer between level 1 and level 2




Note 18: Commitmentsa) Commitments other than public private partnerships

2013 2012 $’000 $’000

Capital expenditure commitmentsPayable:Land and buildings - 1,639 Plant and Equipment 438 - Total capital expenditure commitments 438 1,639

Land and buildings: Not later than one year - 1,639 Plant and Equipment:Not later than one year 438 - 438 1,639

Operating leasesLease for medical laprascopic equipment payable as follows:CancellableNot later than one year 40 40 Later than 1 year and not later than 5 years 99 147 Sub Total 139 187

Leases for computer equipment payable as follows:CancellableNot later than one year 22 20 Later than 1 year and not later than 5 years 44 87 Sub Total 66 107 Total operating lease commitments 205 294

Total Commitments (inclusive of GST) 643 1,933 less GST recoverable from the Australian Tax Office (58) (166) Total Commitments (inclusive of GST) 585 1,767

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

Note 19: Contingent Assets and Contingent LiabilitiesThere were no Contingent Assets or Contingent Liabilities for the year ended 30th June 2013.




Note

20:

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Note 21: Jointly Controlled Operations and Assets Ownership InterestName of Entity Principal Activity 2013 2012 % %

Gippsland Health Alliance Information Technology 13.9 14.2

West Gippsland Healthcare Group’s interest in assets employed in the above jointly controlled operations and assets is detailed below. The amounts are included in the financial statements and consolidated financial statements under their respective asset categories:

2013 2012 $’000 $’000

Current AssetsCash and Cash Equivalents 596 560 Receivables 261 222 Other Current Assets 55 47 Total Current Assets 912 829

Non Current AssetsProperty, Plant and Equipment 16 19 Total Non Current Assets 16 19 Total Assets 928 848

Current LiabilitiesPayables 102 109 Other Current Liabilities 295 177 Total Current Liabilities 397 286Total Liabilities 397 286 Net Assets 531 562

Reconciliation of jointly controlled assets:Share of funds at beginning of report 563 503Contributions made in current reporting period 967 977Share of current year surplus/(deficit) (999) (917) Share of funds at end of reporting period 531 563

West Gippsland Healthcare Group’s interest in revenues and expenses resulting from jointly controlled operations and assets is detailed below:

2013 2012 $’000 $’000

RevenuesGHA Revenue 250 250 Total Revenue 250 250

ExpensesInformation Technology and Administrative Expenses 1,248 1,160 Depreciation 1 7 Total Expenses 1,249 1,167 Net result (999) (917)

There were no Contingent Liabilities or Capital Commitments arising in the Jointly Controlled Operation as at 30th June 2013.




Note 22a: Responsible Persons DisclosuresIn 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 Responsible Ministers:

The Honourable David Davis, MLC, Minister for Health and Ageing 1/7/2012 - 30/6/2013The Honourable Mary Wooldridge, MLA, Minister for Mental Health 1/7/2012 - 30/6/2013

Governing Boards

Mr J Anderson 1/7/2012 - 30/6/2013Ms J Campbell 1/7/2012 - 30/6/2013Mrs L Coupland 1/7/2012 - 30/6/2013Mr B Davey 1/7/2012 - 30/6/2013Mr J Davine 1/7/2012 - 30/6/2013Mr P Kingwill 1/7/2012 - 30/6/2013Ms J Leslie 1/7/2012 - 30/6/2013Mr P Marx 1/7/2012 - 30/6/2013Ms M Robbins 1/7/2012 - 30/6/2013Mr B Rogers 1/7/2012 - 30/6/2013Mr D Smith 1/7/2012 - 30/6/2013Mr N Voll 1/7/2012 - 30/6/2013

Accountable Officers

Mr D Weeks 1/7/2012 - 30/6/2013

Remuneration of Responsible Persons

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

2013 2012 No. No.Income Band

$0 - $9,999 12 11 $140,000 - $149,000 - 1 $220,000 - $229,999 1 - $250,000 - $259,999 - 1

Total Numbers 13 13

The Board of Directors are honorary (non-paid) directors

Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to: $228,607 $392,281

Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet $’000 $’000

Other Transactions of Responsible Persons and their Related Parties.

Mr P Kingwill is a shareholder of both Sage Computer Support Pty Ltd and Viatek Sage IT Services Pty Ltd which provide information technology hardware and software to West Gippsland Healthcare Group 41 9

Mr D Smith is a trustee of the Andrews Foundation which makes donations to West Gippsland Healthcare Group - -

Mr D Smith is a partner of Smith McCarthy Wilson who act as agents for the Bendigo Bank. Smith McCarthy Wilson receive commissions on some of the deposits with Bendigo Bank. No commissions are received on deposits held with the Bedigo (Community) Bank and interest rates achieved are not reduced by any commissions - -

Mr N Voll is on the board of management of Latrobe Health Services (private health insurer). West Gippsland Healthcare Group has a commercial arrangement whereby it receives private inpatient income from Latrobe Health Services. 201 -




Note 22b: Executive Officer DisclosuresExecutive Officers’ Remuneration

The 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.

The position of Director of Medical Services was vacated in November 2012 and filled January 2013 under an independent contractor arrangement. As such 2013 Executive Officer’s remuneration does not incorporate a full year effect of remuneration and the payments made under contact are disclosed under note 22c.

Total Remuneration Base Remuneration 2013 2012 2013 2012 No. No. No. No.

$70,000 - $79,000 - 2 - -$80,000 - $89,999 - - - -$90,000 - $99,999 - - - -$100,000 - $109,999 - - 1 1$110,000 - $119,999 - - - 3$120,000 - $129,999 1 1 2 1$130,000 - $139,999 - 1 1 -$140,000 – $149,999 2 1 - -$150,000 – $159,999 1 - - -$160,000 – $169,999 - - - -$170,000 – $179,999 - - - 1$180,000 – $189,999 - - - -$190,000 – $199,999 - 1 - -$200,000 - $209,999 - - 1 -$210,000 - $219,999 - - - -$220,000 - $229,000 1 - - -Total 5 6 5 6

Total annualised employee equivalents (AEE) 5.10 4.90 5.10 4.90

Total Remuneration $571,303 $747,309 $487,240 $659,544

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

Note 22c: Other PersonnelPayments to other personnel (i.e. contractors with significant management responsibilities)

2013 2012 No. No.

Expense Band

$90,000 - $99,999 2 -

Total expenses (exclusive of GST) $185,422 $ -

In accordance with FRD 21B the following disclosures are made in relation to other personnel of the Group, i.e. contractors charged with significant responsibilities.

Payments have been made to a number of contractors with significant management responsibilities, which are disclosed within the $10,000 expense band. These contractors are responsible for planning, directing and controlling, directly or indirectly, of the Group’s activities.

The change in the total expenses from the 2012 to 2013 reporting period was mainly driven by new functions being undertaken by the Group in the 2013 reporting period.




Note 23. Remuneration of auditors 2013 2012 $’000 $’000

Victorian Auditor-General’s Office

Audit or review of financial statement 36 36

36 36

Note 24: Events Occurring after the Balance Sheet DateThere were no significant events occuring after balance date for the year ended 30th June 2013.

Note 25: Economic DependencyWest Gippsland Healthcare Group is wholly dependent on the continual financial support of the State Government and in particular, the Department of Health.


The annual report of the West Gippsland Healthcare Group 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 Reference CHARTER AND PURPOSE FRD 22C Manner of establishment and the relevant Ministers ........................................................................................................22FRD 22C Objectives, functions, powers and duties ........................................................................................................................22FRD 22C Nature and range of services provided ..............................................................................................................................4 MANAGEMENT AND STRUCTURE FRD 22C Organisational structure ................................................................................................................................................27 FINANCIAL AND OTHER INFORMATION FRD 10 Disclosure index ............................................................................................................................................................88FRD 11 Disclosure of ex gratia payments ...................................................................................................................................n/aFRD 15B Executive officer disclosures ..........................................................................................................................................86FRD 21B Responsible person and executive officer disclosures ......................................................................................................85FRD 22C Application and operation of Freedom of Information Act 1982 ........................................................................................32FRD 22C Application and operation of Whistleblowers Protection Act 2001 ....................................................................................n/aFRD 22C Compliance with building and maintenance provisions of Building Act 1993 .....................................................................32FRD 22C Details of consultancies over $10,000 ...........................................................................................................................33FRD 22C Details of consultancies under $10,000 .........................................................................................................................33FRD 22C Major changes or factors affecting performance ...............................................................................................................2FRD 22C Occupational health and safety ......................................................................................................................................28FRD 22C Operational and budgetary objectives and performance against objectives .......................................................................11FRD 22C Significant changes in financial position during the year ..................................................................................................11FRD 22C Statement of availability of other information ..................................................................................................................32FRD 22C Statement on National Competition Policy ......................................................................................................................32FRD 22C Subsequent events ........................................................................................................................................................87FRD 22C Summary of the financial results for the year .................................................................................................................13FRD 22C Workforce Data Disclosures including a statement on the application of employment and conduct principles .....................28FRD 25A Victorian Industry Participation Policy disclosures ............................................................................................................32SD 4.2(j) Sign-off requirements ....................................................................................................................................................34SD 3.4.13 Attestation on data integrity ...........................................................................................................................................34SD 4.5.5.1 Attestation on data insurance .........................................................................................................................................34SD 4.5.5 Attestation on Compliance with Australian/New Zealand Risk Management Standard ........................................................34

Ministerial DirectionsReport of Operations

Financial StatementsLegislation Requirement Page Reference FINANCIAL STATEMENTS REQUIRED UNDER PART 7 OF THE FMA SD 4.2(a) Statement of changes in equity ......................................................................................................................................41SD 4.2(b) Comprehensive operating statement ..............................................................................................................................39SD 4.2(b) Balance sheet ...............................................................................................................................................................40SD 4.2(b) Cash flow statement ......................................................................................................................................................42 OTHER REQUIREMENTS UNDER STANDING DIRECTIONS 4.2 SD 4.2(a) Compliance with Australian accounting standards and other authoritative pronouncements................................................43SD 4.2(c) Accountable officer’s declaration ....................................................................................................................................35SD 4.2(c) Compliance with Ministerial Directions ............................................................................................................................43SD 4.2(d) Rounding of amounts ....................................................................................................................................................45 LEGISLATION Freedom of Information Act 1982 ...................................................................................................................................32 Whistleblowers Protection Act 2001 ..............................................................................................................................n/a Victorian Industry Participation Policy Act 2003 ...............................................................................................................32 Building Act 1993 .........................................................................................................................................................32 Financial Management Act 1994 ....................................................................................................................................33

Disclosure Index

acknowledgements:

Photography by Kylie Gaffney

Design and Print Management - Kage Design & Photography

Thank you to the staff, volunteers and patients of the West Gippsland Healthcare Group

Registered Midwife and Lactation Consultant Leanne Pollard on her way to a patient home visit.











































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West GippslandHealthcare Group

Improving the health and wellbeingof our community.

We Value:

Head office:West Gippsland Hospital41 Landsborough StreetWarragul Victoria 3820Phone: 03 5623 0611Fax: 03 5623 0896Email: [email protected]

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www.wghg.com.au

12/13Annual Report