2013 - Parliament of Victoria - Home · Matthew Richardson Emma Vogel Management and Structure 6 Rural Northwest Health - Annual Report 2013 Rural Northwest Health - Annual Report

ANNUALREPORT

2013

VISION

MISSION

CONTENTS

Moving together through

change to provide innovative

rural health care

Rural Northwest Health

will provide accessible,

efficient and excellent care

to our community within the

Wimmera Mallee Region

Board Chair & CEO Report 4

About Our Organisation 6

Management and Structure 7

Financial Overview 8

Service Performance at a Glance 9

Statement of Priorities 11

Legislative Compliance 17

Disclosure Index 18

Financial Certification 20

Auditor General’s Report 1-2

Financial Statements FS1-42

This report• Covers the period 1 July 2012 to 30 June 2013• Is prepared for the Minister for Health, the

Parliament of Victoria and the community• Is prepared in accordance with government and

legislative requirements and FRD 30 guidelines• Should also be read in conjunction with the

Quality of Care Report• Will be presented to the community at Rural

Northwest Health’s Annual General Meeting in November 2013

• Acknowledges the support of our community• Is printed with 100% recycled stock.

Rural Northwest Health - Annual Report 20132 Rural Northwest Health - Annual Report 2013 3

Board Chair and CEO Report

2012-13 has continued to be an exciting and busy year for all at Rural Northwest Health

Our financial results attest to sound financial management and good business practices. We have focussed on maximising our income by maintaining a better than average Aged Care Funding Instument daily rate for residents, maintaining bed occupancy for aged care, increasing the number of community members accessing allied health services, introducing the MBS program for improved chronic disease management, and of course accessing whatever other funds are available to support us to improve and provide innovative rural health services. Our long term supporters, Team Outpatients, the Yarriambiack Lodge Auxiliary, Warracknabeal Hospital Ladies Auxiliary and the Hopetoun Campus Auxiliary, along with family members, the newly reformed Warrack Wheelies and the hard working “Walk for Wattle” participants, have provided us with some funds which have enhanced our services significantly.

We have focussed on our expenditure and liabilities and risks and have minimised the use of agency staff, reduced waste with more effective supply management, reviewed contracts and we are satisfied with our effects. We have had no control over the increased cost of electricity and despite using less power, our costs are 32% greater than 2011-12. We have invested in our future with the Community Action Research Group (CARG) project with LaTrobe Rural Health School, the roll out of the capability model throughout aged care and community health with funding from Health Workforce Australia and improved the Beulah Campus with a $400,000 capital investment. We have had some external audits undertaken which show that we have work to do in our maintenance and asset management systems, HR and payroll and we believe that the work undertaken in the next 12 months will continue to improve our ability to be more efficient and effective in our business practices.

Rural Northwest Health is pleased to be in the financial position to contribute $1M towards the Stage 2 redevelopment at the Warracknabeal Campus and we continue to invest our funds wisely to ensure best return on investment and effective cash management. We wish to thank the Board of Management Vice Chair, Finance Audit & Compliance committee Chair, Clinical Governance Chair, Human Resources & Industrial Relations committee Chair and Hopetoun Beulah Reference Group Chair, and our other team members for their expertise, skill and good governance. The staff continue to be engaged and work with us to achieve our vision and mission and we know that all community members are grateful for their expertise and care. 2013-14 will again be challenging but Rural Northwest Health is in a strong position to combat anything that comes their way.

Leo CaseyBoard Chair

Catherine MorleyChief ExecutiveOfficer

Manner of Establishment and relevant Ministers

Rural Northwest Health is a public Agency established under the Health Services Act 1988. The responsible Ministers during the reporting period were, the Honourable David Davis MP Minister for Health and Minister for Ageing and the Honourable Mary Wooldridge MP Minister for Mental Health, Women’s Affairs and Community Services. Rural Northwest Health is authorised to provide public health ancillary services as authorised under the Act, and operate Residential Care Services under the Aged Care Act 1997.

Objectives, Functions, Powers & Duties

Rural Northwest Health is authorised to provide public health ancillary services as authorised under the Act, and operate Residential Care Services under the Aged Care Act 1997. The Board of Management consists of persons appointed by the Minister for Health under the Act who are empowered to provide strategic direction for the organisation. Whilst the board provide directions for the Agency and determines what must be done, the responsibility for determining how services are delivered is invested in the Chief Executive Officer.

The functions of the board of a public hospital are• to oversee the management of the health

service; • to set the strategic plan and vision for the

health service; and• to ensure that the services provided by the

hospital comply with the requirements of this Act and the objectives of the hospital.

The board of a public hospital has such powers as are necessary to enable it to carry out its functions, including the power to make, amend or revoke by-laws.

Responsible Bodies Declaration In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for Rural Northwest Health for the year ending 30 June 2013.

Leo Casey Board Chair

Warracknabeal

8 August 2013

1999

2001

2008

Rural Northwest Health was

created from the amalgamation of

Warracknabeal District Hospital

(including JR & AE Landt Nursing

Home), Hopetoun Bush Nursing

Hospital (including Cumming

House) and Beulah Pioneers Bush

Nursing Hospital

The two low care facilities —

Corrong Village at Hopetoun and

Landt Hostel at Warracknabeal

were subsequently amalgamated

with RNH

To modernise Rural Northwest

Health’s facilities, new campuses

have been constructed at

Hopetoun and Warracknabeal.

Hopetoun’s new campus and

ambulance station facilities were

officially opened in July 2008.

Stage One of Warracknabeal’s

redevelopment, including

new integrated aged facilities,

administration and support

services, were officially opened by

the Victorian Premier in October

2008.

OUR HISTORY


About our Organisation

Rural Northwest Health is located in the Wimmera Mallee region of Victoria in the Yarriambiack Shire and serves a population of around 7,082 across the communities of Warracknabeal, Hopetoun and Beulah. Between our three campuses we provide a comprehensive range of acute, aged, and primary health services that the community is able to access through in-patient, residential, home or community based services including:

Warracknabeal

VictoriaVictoria

MalleeWimmeraMallee

Wimmera

HopetounBeulah

After Hours ServiceGPs and nursing staff provide an After Hours On Call service 24 hours 7 days per week at Warracknabeal and Hopetoun

Acute Care

RNH has 12 acute beds at the Warracknabeal Campus and 4 acute beds at the Hopetoun Campus. Both campuses provide urgent care services• Acute medical• Palliative Care• Pharmacy• Pathology services• Accident and urgent care

Aged Care

RNH has 60 aged care places at the Warracknabeal Campus and 30 aged care places at the Hopetoun Campus• High and low care accommodation • Respite care• Memory Support Unit (Warracknabeal)• Lifestyle program

Medical Imaging (Warracknabeal)

• X-ray • Ultrasound

Specialties

• Ear, Nose and Throat

Community HealthCommunity and Allied Health services are provided across the three campuses at Warracknabeal, Beulah and Hopetoun • Ante Natal and Domiciliary midwifery services• Asthma education and health plan development• Community Health nurse• Diabetes education and health plan development• District nursing services• Health education and promotion• Hospital to home• Planned Activities Groups (Warracknabeal and

Beulah)• Post-acute care

Allied Health

• Occupational therapy• Physiotherapy• Podiatry• Counselling• Speech pathology• Dietetics• Exercise physiology• Social Work• Massage Therapy

Support Services

• Carer support services• Volunteer program

Chief Executive OfficerCatherine Morley

Board Members

Aged Care ManagerSean Lake

Community Care and Acute Care ManagerJodi Lake

Acute Unit ManagerFinance Team Leader

Quality and Risk Coordinator

Yarriambiack Lodge Unit Manager

Team Leader Social and mental health team

Maintenance Manager

Education and Quality Coordinator

Hopetoun Unit Manager

Team Leader Allied Health

Administration Team Leader

Rehabilitation Therapist

Clinical Support Nurse

Beulah Manager IT ContractorEvents and Marketing Coordinator

ACFI coordinator

Team Leader Community Nursing

Environmental Services Coordinator

Leisure and Lifestyle staff Hopetoun Campus

Hopetoun Administration

Nurse PractitionerLeisure and Lifestyle staff Yarriambiack Lodge

Infection Control Nurse

Clinical Support Nurse

Corporate Services ManagerColleen O’Connor

Innovation and Continuous Improvement ManagerWendy Walters

Consultants and PhD student

Executive AssistantSharon Murphy

Leo Casey, Board ChairChair, Hopetoun/Beulah

Reference Group

Marie AitkenChair, Clinical Governance

Committee

Glenda HewittChair, Human Resources &

Industrial Relations Continuous Improvement Committee

Janette McCabe Carolyn Morcom Patricia Kinnersly

Brian Hewitt Chair, Finance Audit &

Compliance Committee

Matthew Richardson Emma Vogel

Management and Structure

Rural Northwest Health - Annual Report 20136 7Rural Northwest Health - Annual Report 2013

Financial Overview

Rural Northwest Health is pleased to report an operating surplus of $945,972 and an entity loss of $737,359 after capital income and depreciation for the financial year ending 30 June 2013. Revenues from operating activities in 2012-2013 were $570,000 better than the previous financial year. Highlights included

• Funding from Government Grants to enable Rural Northwest Health to provide acute, community and aged care services increased by $645,000

• Funding from Health Workforce Australia for an improvement project in residential aged care to improve how services are delivered for people living with dementia

• We have continued to focus on maximising the income for the provision of care in the residential facilities and this has resulted in an overall increase of $164,711 in aged care funding from the Department of Health and Ageing

In addition to the above, revenue generated from non operating activities increased by $60,779. This growth was in part due to an increase in the amount of funds held in short term investments resulting in higher interest earnings and also due to the receipt of generous donations throughout the year for which we are

extremely grateful. Donations were received from Team Outpatients and the Hopetoun Ladies Auxiliary, the Warrack Wheelies supported by the Warracknabeal Rotary club, the Yarriambiack Lodge Ladies Auxiliary and the Warracknabeal Hospital Ladies Auxiliary and some wonderful residents and their families. Staff and the community worked together to also raise some significant funds with over $7,000 raised for the Wattle backyard with 17 staff members walking between Hopetoun and Warracknabeal. Overall, the above factors contributed to an increase on prior year revenue of $609,000. Expenses attributable to operating activities were $1,187,000 higher than the previous year. The majority of this increase can be seen in the area of employee benefits, mainly attributable to increased staffing to allow for the provision of additional services and award driven salary increases. Services have expanded significantly in the allied health area. Of the $418,546 reported as repairs and maintenance expenses in the 2012-2013 financial year, 47% relates to the replacement and maintenance of old equipment and purchases of new equipment. This expenditure is necessary to allow us to remain responsive to community needs. Administrative expenses have also

increased as we continue to focus on improving systems and maximising efficiencies and developing our largest asset and investing in the development of our employees. Major asset purchases in the 2012-2013 financial year included:

• New computers to replace obsolete units

• Refurbishment of the Beulah campus

• Improvements to the Landt Hostel for the provision of accommodation for staff and students

• Improvements to the housing stock that Rural Northwest Health hold in Warracknabeal

• New air conditioning units in the old Landt Nursing home that currently supports the local Planned Activity Group clients and our staff who attend education sessions.

Fees from privately funded patients also resulted in a $46,789 decrease in the amount of funds received from private health funds. Liabilities related to employee leave provisions continue to be Rural Northwest Health’s biggest commitment. Management continues to support staff to utilise their accrued leave to maintain both physical and mental wellbeing. The Rural Northwest Health management team remain committed to reducing the amount of leave owed to employees.

Finance Summary-5 years 2008-2009 to 2012-20132013 2012 2011 2010 2009

$’000 $’000 $’000 $’000 $’000

Total Revenue 19,084 18,560 16,842 14,933 14,711

Total Expenses 18,138 16,952 15,931 14,708 13,905

Operating Surplus/(Deficit) 946 1,608 911 225 806

Retained Surplus/(Accumulated Deficit) 12,266 13,003 12,937 13,718 15,271

Total Assets 48,945 46,725 47,039 46,004 47,383

Total Liabilities 6,733 7,495 7,875 6,048 5,885

Net Assets 42,212 39,230 39,164 39,956 41,498

Total Equity 42,212 39,230 39,164 39,956 41,498

Service Performance at a Glance

2012/2013 2011/2012 2010/2011 2009/2010 2008/2009

Inpatient Statistics (Acute)

Inpatients Treated 728 730 676 605 567

Average Complexity (DRG Weight) 1.15 1.02 1.11 0.99 0.91

Inpatient Bed Days 4,542 4,842 4477 4253 3486

Average Length of Stay (days) 6.59 7.36 8.26 6.74 7.32

Nursing Home Type (NHT) Bed Days 171 409 296 194 620

Available Bed Days 7,300 7,320 7300 7300 7300

Occupancy Rate 62.23% 62.62% 61.3% 58.3% 47.8%

Aged Care Statistics- (Aged Program)

High Care

Residents Accommodated 86 70 37 42 51

Resident Bed Days 12,792 13,592 12481 11964 12168

Low Care


Resident Bed Days 16,152 15,771 16390 15852 15415

Respite


Respite Resident Bed Days 347 348 1283 598 762

Aged Care Occupancy Rate 89.17% 90.4% 91.8% 86.5% 86.3%

Outpatient (non-admitted) Occasions of Service

Counsellor 918 738

Diabetic Educator 739 732

Dietician 1,027 989

Exercise Physiologist 1,736 1,619

Foot Care (Beulah) 337 35

Massage Therapist 446 417

Occupational Therapist 806 1,063

Physiotherapy 1,882 1,988 1941 1995 1407

Podiatry 2,595 1,263 657 447 720

Social Worker 397

Speech Therapist 799 801

Emergency Medicine 2,138 2,248 1906 1496 1293

Meals on Wheels 5,481 4,087 2950 3547 5039

No. of Emergency cases referred to other hospitals

135 128 163 164 149


Actitivy

Activity Admitted Patient Acute Sub Acute Mental Health Aged Total

Separations

Same Day 66 66

Multi Day 659 6 665

Total Separations 725 6 731

Emergency 31

Elective 35 35

Other 659 659

Total Separations 725 725

Public Separations 517 517

Total WEIS 755 755

Total Bed Days 4,606 171 4,777

Non Admitted Patients

Emergency Medicine Attendances 2,138

Attestation on Data IntegrityI, Catherine Morley certify that Rural Northwest Health has put in place appropriate internal controls and processes to ensure that reported data reasonably reflects actual performance. Rural Northwest Health has critically reviewed these controls and processes during the year.

Catherine MorleyAccountable Officer Warracknabeal

13 August 2013

Statement of Priorities (SoP)

The Statement of Priorities is the key document of accountability between the Department of Health and Health Services. The agreement is signed by the Minister for Health, Secretary or relevant Director dependant on the health service and the health service’s Board Chair.

SoP Part A:

Strategic Priorities for 2012-13

SoP Part A purpose: identifies the Victorian Government’s priorities and policy directions in the Victorian Health Priorities Framework 2012-22.

Priorities: Each SoP identifies how the individual health service will contribute to the achievement of the Government’s seven key priorities in 2012-13, through the articulation of specific Actions and Deliverables.

Outcomes: For purposes of the Annual Report, health services are required to report on the outcome of each deliverable articulated in the SoP.

Priority Action Deliverable Outcome

1 Developing a system that is responsive to people’s needs

In partnership with other providers within the local area apply existing service capability frameworks to maximise the use of available resources across the local area

Implement activities/ undertake actions as documented in the 2012–13 Wimmera Southern Mallee Health Alliance phase one implementation plan and meet the time-frames as set in the plan to 30 June 2013

Rural Northwest Health have worked with Dunmunkle Health Service, Edenhope District Memorial Hospital, West Wimmera Health Service, Wimmera Health Care Group and the Wimmera Southern Mallee Health Alliance (WSMHA) to achieve the following outcomes:• Pathways to service in the Yarriambiack

Shire Northern Region• A Region wide review of Primary and

Community Health services• A Region wide review of Mental Health

services• A region wide review of Telehealth services

and an agreed service plan implementation for 2013-14

• Representation at the Regional Nurse Unit Manager (NUM) and Clinical Service Planning Group

Work and plan with key partners and service providers to respond to local issues including issues of distance and travel time experienced by some rural and regional Victorians

In response to the Yarriambiack (LGA) Health Alliance Transport review Rural Northwest Health with its partners will:• Establish a Steering

committee by August 2012

• Develop a Terms of Reference for the Yarriambiack Transport Committee by September 2012

• Draft action plan for endorsement by October 2012

• Commencement of action plan by February 2013 with progress report in May 2013

Rural Northwest Health, along with its partners, have worked with community members to implement the transport action plan. The Steering Committee was formed with representatives from all stakeholders and they have met regularly throughout the year. Working groups driven by community members have been meeting regularly at Hopetoun, Beulah and Warracknabeal and a service has commenced in all towns.

A progress report has been developed and provided to a wide range of interested parties across the Shire and the State.


2 Improving every Victo-rian’s health status and experiences

Collaborate with key partners such as members of local PCP, the newly formed Medicare Locals, Community Health services and Aborig-inal Health service providers to support local implementation of relevant compo-nents of the Victorian Health and Wellbeing Plan 2011–2015

By July 2013 Rural Northwest Health will have engaged with the Medicare Local and Primary Care Partnership to assist in the development of an implementation plan for the Wimmera Southern Mallee region.

The WSMHA undertook a review of how all health service partners utilised telehealth across the Region and the State. The consul-tation included discussion with Ambulance Victoria, General Practitioners, Grampians Medicare Local, Private Specialists and the Regional and Metropolitan health services.

Consider new models of care and more coordinated services to respond to the specific needs of people with priority clinical conditions

In collaboration with the relevant regional and sub-regional Health Services plan, develop and implement a range of supportive care and rehabilitation services for cancer patients so that relevant aspects of care can be provided locally. Support clients to receive cancer treatment in their own home by July 2013

A report was presented at the May WSMHA CEO and Chair meeting for further action in the next financial year.

Support clients to receive cancer treat-ment in their own home by July 2013Agree referral pathways and shared treatment and care protocols for delivery of cancer care locally with regional cancer centres and/or metropolitan health services for the delivery of complex cancer care for local patients.

The WSMHA have worked with the Grampians Integrated Cancer Service (GICS) to develop a sustainable way forward for supporting community members living with cancer to have an improved health journey and enhanced quality of life. The WSMHA is currently looking at a number of proposals to ensure that any service introduced is sustain-able and evidenced based. This project has been discussed at the WSMHA CEO and Chair meeting in January, March and May 2013. The CEO has joined the GICS Committee of Management to support Rural Northwest Health to have improved access to research and evidence about cancer survivor rates and potential improvements.

3 Expanding service, workforce and system capacity

Develop collaborative approaches to deliver professional edu-cation, training and support

Implement a model of person centred care in aged care: Partnership agreement signed off with partner organisations, Dun-munkle Health Services and Health Workforce Australia by July 2012. 50 per cent of aged care staff trained in person centred care practices by May 2013.

Rural Northwest Health has progressed on the development and implementation of the capability model which has 4 principles:

• Ability and Capability• Background• Leadership and Organisational Culture and • Environment

121 staff members have undertaken the P3 and Montessori for Dementia training with excellent evaluations. The Project Manager and trainer continue to mentor and support staff to change their work practices and work according to the Capability principles.

Identify opportunities to address workforce gaps by optimising workforce capability and capacity, and exploring alternative workforce models

Rural Northwest Health will have developed and implemented a leadership and management program for the 20 middle managers across the Clinical, Environmental services, Finance and Maintenance divisions by December 2012

A leadership program began in February with staff from key operational roles and management roles invited to attend. The focus of the training has been to support the leadership team to communicate more effectively and support all staff to understand how their role and work practices contribute to Rural Northwest Health’s strategic goals. The program also includes a monthly leader-ship meeting with the CEO to ensure that the leadership team are aware of what is happen-ing at Rural Northwest Health, what the Board of Management have identified as priorities and to allow for risks and opportunities for improvement to be identified by the team and agreed actions documented.

In 2012–2013 Rural Northwest Health will have supported the Nurse Practitioner can-didate to have access to clinical mentoring and placement and leave to be successful with her studies

The Nurse Practitioner candidate submitted all the necessary paperwork to the Australian Health Practitioner Regulation Agency for endorsement in February 2013 and received confirmation of her registration in late June 2013. Plans are now underway to develop a model of care that reflects her expertise and the community’s needs. The candidate is attending conferences and training to keep her skills up to date, she has taken on a leadership role with the Grampians RIPEN project and is leading the Rural Northwest Health response for the National Standard for Recognising and Responding to Clinical Deterioration in Acute Health Care.

4 Increasing the system’s financial sustainability and produc-tivity

Identify opportunities for efficiency and better value service delivery

Rural Northwest Health will have worked with interested regional partners and imple-mented a new payroll system that removes the risk of human error, time wasting manual processes and a significant amount of rework and paper by July 2013

Rural Northwest Health has undertaken an in-depth review of the options available to us to improve and enhance the payroll function. The current system is a manual paper based system and timesheets are authorised before the work has been undertaken by the staff member. Rural Northwest Health’s preferred option is to introduce Kronos which is both a rostering and timesheet/payroll system. The ability to utilise Kronos is dependant on all the health services in the Grampians region committing to the change. The current system Chris 21 could be enhanced requiring minimal change management strategies and cost and this option is under review. This option would allow investment of capital funds into other projects and would still allow efficiencies and automation of the processes.

Develop and support alternative arrangements that drive greater financial productivity and sustainability through more efficient pur-chasing of non- clinical services

Rural Northwest Health will have introduced a new account payable system for the community health and aged care divisions that minimises the risk of error and streamlines the transfer of data to Oracle by March 2013

Rural Northwest Health undertook an in-depth review of the current systems that were in place and decided to upgrade the Community Health system. A new electronic system was developed to transfer data from the Community Health and Aged Care divisions into Oracle. The time now taken to undertake this process has reduced signifi-cantly, staff satisfaction has improved and reports can be generated seamlessly.

Examine and reduce variation in adminis-trative overheads.

Rural Northwest Health will have introduced electronic scanning of stock which will minimise stock waste and improve efficiency with ordering and dispensing of stock by March 2013

Rural Northwest Health has introduced an electronic scanning imprest system for medical equipment and maintenance spare parts. The process has decreased waste significantly as stock is managed more effectively. The 2013-14 budget includes a decrease of over $30,000 for the medical equipment line which is attributed to this improvement.


5 Implementing continuous improvements and innovation

Develop and imple-ment improvement strategies that better support patient flow and the quality and safety of hospital services Develop and implement strategies that support service innovation and redesign

Rural Northwest Health will have undertaken planning and consulta-tion with stakeholders to ensure that the new primary care and acute building will meet the ongoing needs of the community in the next 20 years by March 2013 Commence master planning and engage consultants by 30 June 2013

Rural Northwest Health have worked with the Department of Health (DoH) representatives to ensure that due process and planning is undertaken for the new Primary and Acute building. A Project Control Group has been formed with representatives from DoH and the RNH Board of Management. An operational Steering Committee was formed with representatives from all divisions at Rural Northwest Health and the Consultants to undertake the master planning. Operational staff members will be involved in the devel-opment of the detailed plans. The master plan will be presented to the community in July 2013. The Consultants were appointed in March 2013 and three Project Control Group meet-ings have been held since their appointment.

6 Increasing accountability and transpar-ency

Implement systems that support stream-lined approaches to clinical governance at all levels of the organisation

By July 2013 Rural Northwest Health will have developed an action plan to implement all required actions to ensure we are compliant against the National Standards

Rural Northwest Health has developed a National Standards Working Party that commenced meeting in February and meet monthly. The ten standards have had an internal expert appointed to undertake an audit and identify, prioritise and implement strategies to improve our systems and services and demonstrate compliance with the National Standards. These continuous improvement activities are documented on the shared National Standards improvement plan and these are reviewed at the monthly meeting and discussed at the Clinical Gover-nance meeting.

Continue to strengthen the capability of rural health service boards and senior manage-ment to ensure that ongoing stewardship obligations of rural and regional health services can be met.

By December 2012 the Latrobe Rural Health School 3 year research project will have strong governance and community ownership

Rural Northwest Health have joined with Latrobe Rural Health School, Rochester Health Service and Heathcote Health Service to roll out the Community Action Research Group (CARG) research project. A governance committee is in place with the CEO, a Board member and the local PhD student contributing as active members. The CARG group is meeting bi monthly and have met in February, April and June with over 40 community members contributing to review-ing and developing actions for improving the wellness of the Yarriambiack Shire community members.

By July 2013 Rural Northwest Health Board members will have accessed education and development sessions from a range of providers including Department of Health, Victorian Health Industry Association and private providers.

Rural Northwest Health Board members have undertaken a range of education and devel-opment opportunities which have included:• Undertaking the Company Directors

accredited course• Attending conferences on governance,

Alzheimer’s and living with dementia• Receiving operational updates from Rural

Northwest Health service divisions about the work they do and how that is related to the strategic goals

• The Chairman has joined the Regional Governance Working Group about expand-ing opportunities for Board members.

7 Improving utilisation of e-health and com-munications technology.

Maximise the use of health ICT infra-structure to better connect a broad range of health care and other health – related workforces

Rural Northwest Health will work with the Grampians Rural Health Alliance (GRHA) to develop an implementa-tion plan for telehealth by July 2013

Rural Northwest Health has worked with the Wimmera Primary Care Partnership, the Grampians Region Medicare Local, the Wimmera Southern Mallee Health Alliance and the Grampians Rural Health Alliance to develop an implementation plan for tele-health. The Wimmera Southern Mallee Health Alliance has agreed to the following action before implementing any actions: • With the duplication of existing mandated

Victorian initiatives, along with the ever changing National e-health environment, the Wimmera Southern Mallee Health Alliance needs to understand fully the work that needs to be done to align, understand and embed these initiatives across the region. Implementation of the telehealth plan in 2013-14 will include a review of the progress and successes of the Hunter New England Health Pilot when it concludes in March 2014, before deciding on any local application.

SoP Part B:

Performance Priorities

Purpose of Part B: lists financial, access and service performance indicators for Rural Northwest Health for 2012-13.

SoP Part C:

Purpose of Part C: provides an itemised list of the health service’s activity targets and corresponding funding levels.

Operating Result Target 2012-13 actuals

Annual Operating result ($m) 0.42 0.946

Funding type 2012-13 Activity Achievement

Small Rural HACC Achieved

Cash Management Target 2012-13 actuals

Creditors <60 days Achieved

Debtors <60 days Not achieved

Quality and Safety Target 2012-13 actuals

Health service accreditation Full compliance Achieved

Residential aged care accreditation Full compliance Achieved

Cleaning standards Full compliance Achieved

Submission of data to VICNISS Full compliance Achieved

Hand Hygiene (rate) 70 Achieved

Victorian Patient Satisfaction Monitor (OCI) 73 Achieved

Consumer Participation Indicator 75 Achieved

People Matter Survey Full compliance Achieved


Rural Northwest Health – Staff by Labour Category

Labour Category JUNE Current Month FTE* JUNE YTD FTE**

2012 2013 2012 2013

Nursing 74.57 86.78 70.98 81.81

Administration and Clerical 30.26 25.54 23.31 28.22

Medical Support 0 0 0 0.20

Hotel and Allied Services 60.32 46.39 57.13 50.40

Medical Officers 0 0 0 0

Hospital Medical Officers 0 0 0 0

Sessional Clinicians 0 0 0 0

Ancillary Staff (Allied Health) 13.91 15.11 9.99 14.14

Rural Northwest Health recruits high quality staff with the right skills to deliver the key objectives of the position, business unit and organisation and will comply with all legislated requirements and reflect a fair and open process with an appointment made based on merit. Rural Northwest Health is an equal opportunity employer.

Attestation for Compliance with the Australian/New Zealand Risk Management StandardI, Catherine Morley certify that Rural Northwest Health has risk management processes in place consistent with the AS/NZS ISO 31000:2009 (or an equivalent designated standard) and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile of Rural Northwest Health has been critically reviewed within the last 12 months.

Catherine MorleyChief Executive Officer

Warracknabeal

13 August 2013

Details of Consultancies under $10,000In 2012-13, Rural Northwest Health engaged 4 consultancies where the total fees payable to the consultants were less than $10,000, with a total expenditure of $24,655 (excl. GST).

Occupational Health and Safety Act 2004

Rural Northwest Health is responsible for the health and safety of all staff members in the workplace. To fulfil this responsibility we have a duty to maintain a working environment that is safe and without risks to residents, clients, visitors and our staff members health.Rural Northwest Health have ensured compliance with the OHS Act by:• Effective implementation of OH&S policy and protocols• Providing opportunities for regular discussion

between the Board, Leadership & Management team and staff members

• Conducting regular workplace inspections and audits are undertaken and appropriate follow up action is taken

• Providing information, training and supervision for all staff members in the correct use of plant, equipment, chemicals, and other substances used.

National Competition Policy

Rural Northwest Health complies with all government policies regarding competitive neutrality with respect to all tender applications.

Victorian Industry Participation Policy Rural Northwest Health abides by the principles of the Victorian Industry Participation Policy. In 2012-13 there were no contracts commenced or completed by Rural Northwest Health under this Act.

Financial Management Act 1994

In accordance with the Direction of the Minister for Finance, information requirements have been prepared in accordance and are available to the relevant Minister, Members of Parliament.

Details of Consultancies over $10,000Consultant Purpose of

consultancyStart date End date Total approved

project fee(excluding GST)

Expenditure 2012-13

(excluding GST)

Future expendi-ture

(excluding GST)

Deloittes Internal audits Feb 2013 June 2013 29,104 29,104 25,000

Clare Dewan & Associates

Human Resources / Industrial Relations Consul-tancy

July 2012 June 2013 40,560 40,560 38,000

Legislative Compliance

Freedom of Information

During the year, eight requests for information under the Freedom of Information Act 1982 were received. Each request has been processed and responded to in accordance with legislative requirements.

Building and Maintenance

All building works have been designed in accordance with the Department of Health Guidelines and comply with the Building Act 1993 and the Building Code of Australia 1996.

Attestation for compliance with the Ministerial Standing Direction 4.5.5.1 - InsuranceI, Catherine Morley certify that Rural Northwest Health has complied with Ministerial Direction 4.5.5.1 - Insurance.

Catherine Morley Chief Executive Officer

Warracknabeal

13 August 2013


Disclosure Index

The annual report of Rural Northwest Health is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the Department’s compliance with statutory disclosure requirements.

Legislation Requirement Page Reference

Ministerial Directions

Report of Operations

Charter and purpose

FRD 22D Manner of establishment and the relevant Ministers 5

FRD 22D Objectives, functions, powers and duties 5

FRD 22D Nature and range of services provided 6

Management and structureFRD 22D Organisational structure 7

Financial and other informationFRD 10 Disclosure index 19

FRD 11 Disclosure of ex-gratia payments FS43

FRD 15B Executive officer disclosures FS43

FRD 21B Responsible person and executive officer disclosures In Financial Report

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

18

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

18

FRD 22D Details of consultancies over $10,000 18

FRD 22D Details of consultancies under $10,000 18

FRD 22D Major changes or factors affecting performance 9

FRD 22D Occupational health and safety 18

FRD 22D Operational and budgetary objectives and performance against objectives

9

FRD 22D Significant changes in financial position during the year 9

FRD 22D Statement of availability of other information 20

FRD 22D Statement on National Competition Policy 18

FRD 22D Subsequent events FS44

FRD 22D Summary of the financial results for the year 9

FRD 22D Workforce Data Disclosures including a statement on the application of employment and conduct principles

17

FRD 25A Victorian Industry Participation Policy disclosures 18

SD 4.2(j) Responsible Bodies Declaration 5

SD 3.4.13 Attestation on data integrity 11

SD 4.5.5 Attestation on Compliance with Australian/New Zealand Risk Management Standard

17

Financial Statements

Financial statements required under Part 7 of the FMA

SD 4.2(a) Statement of changes in equity In Financial Report

SD 4.2(b) Comprehensive operating statement In Financial Report

SD 4.2(b) Balance sheet In Financial Report

SD 4.2(b) Cash flow statement In Financial Report

Other requirements under Standing Directions 4.2

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

In Financial Report

SD 4.2(c) Accountable officer’s declaration In Financial Report

SD 4.2(c) Compliance with Ministerial Directions In Financial Report

SD 4.2(d) Rounding of amounts In Financial Report

LegislationFreedom of Information Act 1982 18

Victorian Industry Participation Policy Act 2003 18

Building Act 1993 18

Financial Management Act 1994 18

In compliance with the requirements of FRD 22D Standard Disclosures in the Report of Operations, details in respect of the items listed below have been retained by Rural Northwest Health and are available to the relevant Ministers, Members of Parliament and the public on request (subject to the freedom of information requirements, if applicable):

a. A statement of pecuniary interest has been completed;b. Details of shares held by senior officers as nominee or held beneficially;c. Details of publications produced by the Department about the activities of the Health Service and where they can

be obtained;d. Details of changes in prices, fees, charges, rates and levies charged by the Health Service;e. Details of any major external reviews carried out on the Health Service;f. Details of major research and development activities undertaken by the Health Service that are not otherwise

covered either in the Report of Operations or in a document that contains the financial statements and Report of Operations;

g. Details of overseas visits undertaken including a summary of the objectives and outcomes of each visit;h. Details of major promotional, public relations and marketing activities undertaken by the Health Service to develop

community awareness of the Health Service and its services;i. Details of assessments and measures undertaken to improve the occupational health and safety of employees;j. General statement on industrial relations within the Health Service and details of time lost through industrial

accidents and disputes, which is not otherwise detailed in the Report of Operations; k. A list of major committees sponsored by the Health Service, the purposes of each committee and the extent to

which those purposes have been achieved;l. Details of all consultancies and contractors including consultants/contractors engaged, services provided, and

expenditure committed for each engagement.

Legislation Requirement Page Reference


Rural Northwest Health - Annual Report 201320

1

RURAL NORTHWEST HEALTH

COMPREHENSIVE OPERATING STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013

Note 2013 2012

$'000 $'000

Revenue from Operating Activities 2 18,612 18,042

Revenue from Non-Operating Activities 2 472 518

Employee Benefits 3 (13,205) (11,847)

Non Salary Labour Costs 3 (408) (733)

Supplies and Consumables 3 (934) (1,099)

Other Expenses 3 (3,591) (3,273)

Net Result Before Capital and Specific Items 946 1,608

Capital Purpose Income 2 518 661

Depreciation 4 (2,201) (2,203)

NET RESULT FOR THE YEAR (737) 66

Other Comprehensive Income

Changes in physical asset revaluation surplus 3,719 0

COMPREHENSIVE RESULT 2,982 66

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

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2 3


BALANCE SHEET

AS AT 30 JUNE 2013

Note 2013 2012$'000 $'000

Current Assets

Cash and Cash Equivalents 5 11,743 11,263Receivables 6 601 1,111Inventories 7 68 68Other Assets 8 49 37Total Current Assets 12,461 12,479

Non-Current Assets

Receivables 6 237 217Property, Plant and Equipment 9 36,247 34,029

Total Non-Current Assets 36,484 34,246

TOTAL ASSETS 48,945 46,725

Current Liabilities

Payables 10 730 866Provisions 11 3,114 3,119Other Liabilities 13 2,545 3,286Total Current Liabilities 6,390 7,271

Non-Current Liabilities

Provisions 11 343 224Total Non-Current Liabilities 343 224

TOTAL LIABILITIES 6,733 7,495

NET ASSETS 42,212 39,230

EQUITY

Property, Plant and Equipment Revaluation Surplus 14a 8,898 5,179Restricted Specific Purpose Surplus 14a 113 113Contributed Capital 14b 20,935 20,935Accumulated Surplus 14c 12,266 13,003TOTAL EQUITY 42,212 39,230

Commitments 17Contingent Assets and Contingent Liabilities 18


2


STATEMENT OF CHANGES IN EQUITY


Property, Plant Restricted Contributed Accumulated Total

and Equipment Specific Capital Supluses/

Revaluation Purpose (Deficits)

Reserve Reserve

Note $ $ $ $ $

Balance at 1 July 2011 5,179 113 20,935 12,937 39,164

Net result for the year 14c 0 0 0 66 66

Balance at 30 June 2012 5,179 113 20,935 13,003 39,230

Net result for the year 14c 0 0 0 (737) (737)

Other comprehensive income for the year 14a 3,719 0 0 0 3,719

Balance at 30 June 2013 8,898 113 20,935 12,266 42,212


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Notes to the Financial Statements

30 June 2013

NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These annual financial statements represent the audited general purpose financial statements for Rural Northwest Healthfor the period ended 30 June 2013. The purpose of the report is to provide users with information about theHealth Services' stewardship of resources entrusted to it.

(a) Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordancewith the Financial Management Act 1994, and applicable Australian Accounting Standards (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.

The Health Service is a not-for profit entity and therefore applies the additional AUS paragraphs applicable to "not-for-profit" Health Services under the AAS's.

The annual financial statements were authorised for issue by the Board of Rural Northwest Health on 30th August 2013.

(b) Basis of accounting preparation and measurement

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfiesthe concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or otherevents 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 HealthService.

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

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

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

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

Historical cost is based on the fair value of the consideration given in exchange for assets.

In the application of AASs management is required to make judgements, estimates and assumptions about carryingvalues of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptionsare based on professional judgements derived from historical experience and various other factors that are believed to bereasonable under the circumstances. Actual results may differ from these estimates.

5


CASH FLOW STATEMENT


Note 2013 2012$'000 $'000

Inflows / Inflows /CASH FLOWS FROM OPERATING ACTIVITIES (Outflows) (Outflows)

Operating Grants from Government 16,120 15,344Patient and Resident Fees Received 2,714 2,236Donations and Bequests Received 22 67GST (Paid to)/received from ATO (47) 11Interest Received 380 436Other Receipts 464 464Total Receipts 19,653 18,558

Employee Expenses Paid (13,091) (11,469)Fee for Service Medical Officers (408) (733)Payments for Supplies and Consumables (1,193) (1,007)Other Payments (3,287) (3,100)Total Payments (17,979) (16,309)

Cash Generated from Operations 1,674 2,249

Capital Grants from Government 84 0

NET CASH FLOW FROM /(USED IN) OPERATING ACTIVITIES 15 1,758 2,249

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for Non-Financial Assets (677) (345)Proceeds from sale of Non-Financial Assets 0 0

NET CASH FLOW FROM /(USED IN) INVESTING ACTIVITIES (677) (345)

NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS HELD 1,081 1,904

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 8,175 6,271

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 5 9,256 8,175


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30 June 2013

(e) Scope and presentation of financial statements (Continued)

Comprehensive operating statement

The comprehensive operating statement includes the subtotal entitled 'Net Result Before Capital and Specific Items' toenhance the understanding of the financial performance of Rural Northwest Health. This subtotal reports the resultexcluding items such as capital grants, assets received or provided free of charge, depreciation, expenditure using capitalpurpose income and items of an unusual nature and amount such as specific income and expenses. The exclusion of theseitems is made to enhance matching of income and expenses so as to facilitate the comparability and consistency of resultsbetween years and Victorian Public Health Services. The 'Net Result Before Capital and Specific Items' is used by the managementof Rural Northwest Health, the Department of Health and the Victorian Government to measure the ongoing operatingperformance of Health Services.

Capital and specific items, which are excluded from this sub-total comprise:* Capital purpose income, which comprises all tied grants, donations and bequests received for the

purpose of acquiring non-current assets, such as capital works, plant and equipment or intangible assets.It also includes donations of plant and equipment (refer note 1 (g)). Consequently the recognition of revenue as capital purpose income is based on the intention of the provider of the revenue at thetime the revenue is provided; and

* Depreciation, as described in note 1 (h).

Balance sheet

Assets and liabilities are categorised either as current or non-current (non-current being those assets or liabilities expectedto 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 the opening balance at the beginning of the reporting period to the closing balance at the end of the reporting period. It also shows separatelychanges 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 financingactivities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows .

Rounding Of Amounts

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

Figures in the financial statements may not equal due to rounding.

Comparative Information

There have been no changes to comparative information which require additional disclosure

(f) Income Recognition

Income from transactions

Income is recognised in accordance with AASB 118 Revenue and is recognised as to the extent that it is probable thatthe economic benefits will flow to Rural Northwest Health and the income can be reliably measured. Unearned incomeat 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 contributionsby owners) are recognised as income when the Health Service gains control of the underlying assets irrespective ofwhether conditions are imposed on the Health Service's use of the contributions.

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

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30 June 2013

(b) Basis of accounting preparation and measurement (Continued)

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised 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 managementin the application of AASs that have significant effects on the financial statements and estimates, with a risk of materialadjustments in the subsequent reporting period, relate to:• the fair value of land, buildings, infrastructure, plant and equipment (refer to Note 1(k);• superannuation expense (refer to Note 1(h)); and• actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates (refer to Note 1(l)).

(c) Reporting entity

The financial statements includes all the controlled activities of Rural Northwest Health.

Its principal address is: Dimboola RoadWarracknabeal 3393

A description of the nature of Rural Northwest Health's operations and its principal activities is included in thereport of operations, which does not form part of these financial statements.

Objectives and funding

Rural Northwest Health's overall objective is to provide accessible, efficient and excellent care to the community within the Wimmera Mallee Region, as well as improve the quality of life to Victorians.

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

(d) Principles of consolidation

Intersegment Transactions

Transactions between segments within Rural Northwest Health have been eliminated to reflectthe extent of Rural Northwest Health's operations as a group.

Associates and joint ventures

Associates and joint ventures are accounted for in accordance with the policy outlined in Note 1(j) Financial Assets.

Jointly controlled assets or operations

Interest in jointly controlled assets or operations are not consolidated by Rural Northwest Health, but areaccounted for in accordance with the policy outlined in Note 1(j) Financial Assets.

Details of the jointly controlled assets or operations are set out in Note 20.

(e) Scope and presentation of financial statements

Fund Accounting

The Rural Northwest Health operates on a fund accounting basis and maintains three funds:Operating, Specific Purpose and Capital Funds. Rural Northwest Health's Capital andSpecific Purpose Funds include unspent capital donations and receipts from fundraising activities conducted solelyin 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 substantiallyfunded by the Department of Health and include 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 (Non HSA) are funded by theHealth Service's own activities or local initiatives and/or the Commonwealth.

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30 June 2013

(f) Income Recognition (Continued)

Indirect Contributions from the Department of Health

- Insurance is recognised as revenue following advice from the Department of Health.- Long Service Leave (LSL) - Revenue is recognised upon finalisation of movements in LSL liability in line with

the arrangements set out in the Metropolitan Health and Aged Care Services Division Hospital Circular 05/2013.

Patient and Resident Fees

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

Private Practice Fees

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

Revenue from commercial activities

Revenue from commercial activities such as provision of meals to external users is recognised at the time the invoicesare 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 specific restricted purpose surplus.

Interest revenue

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

(g) Expense recognition

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

Employee expenses

Employee expenses include:• Wages and salaries;• Annual leave;• Sick leave;• Long service leave; and• Superannuation expenses which are reported differently depending upon whether employees are members ofdefined benefit or defined contribution plans.

Defined contribution superannuation plans

In relation to defined contributions (i.e. accumulation) superannuation plans, the associated expense is simply the employercontributions 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 superannuationplans represents the contributions made by the Health Service to the superannuation plans in respect of the services of current Health Service staff during the reporting period. Superannuation contributions are made to the plansbased on the relevant rules of each plan, and are based upon actuarial advice.

Employees of the Rural Northwest Health are entitled to receive superannuation benefits and theRural Northwest Health contributes to both the defined benefit and defined contribution plans.The defined benefit plans provide benefits based on years of service and final average salary.

The name and details of the major employee superannuation funds and contributions made by Rural NorthwestHealth are disclosed in Note 12: Superannuation.

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30 June 2013

(g) Expense recognition (Continued)

Depreciation

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

Intangible produced assets with finite lives are depreciated as an expense from transactions on a systematic basis over the asset's useful life. Depreciation is generally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over its estimated useful life. Estimates of the remaining useful lives and depreciation method for all assets are reviewed at least annually and adjustments made as 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 providedon 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 45 to 60 years 45 to 60 years- Site Engineering Services and Central Plant 20 to 30 years 20 to 30 yearsCentral Plant- Fit Out 20 to 30 years 20 to 30 years- Trunk Reticulated Building Systems 30 to 40 years 30 to 40 yearsPlant and Equipment 8 to 10 years 8 to 10 yearsMedical Equipment 3 to 5 years 3 to 5 yearsComputers and Communication 3 to 5 years 3 to 5 yearsFurniture and Fittings 3 to 5 years 3 to 5 yearsMotor Vehicles 4 to 5 years 4 to 5 years

Please note: the estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reportingperiod, and adjustments made where appropriate.As part of the buildings valuation, building values were separated into components and each component assessed for its usefullife which is represented above.

Intangible produced assets with finite lives are depreciated as an expense from transactions on a systematic basis over the asset's useful life.

Finance Costs

Finance costs are recognised as expenses in the period in which they are incurred and relate to interest on residential aged care accommodation bonds payable.

Grants and Other Transfers

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

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 service 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 expenses when distributed.

Bad and Doubtful Debts

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

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30 June 2013

(h) Other comprehensive income

Other comprehensive income measure 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 afterdeducting from the proceeds the carrying value of the asset at that time.

(i) Financial instruments

Financial instruments arise out of contractual agreements that give rise to a financial asset of one Health Service and a financial liabilityor equity instrument of another Health Service. Due to the nature of Rural Northwest Health's activities, certain financial assetsand financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet thedefinition of financial instruments in AASB 132 Financial Instruments: Presentation. For example, statutory receivablesarising 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 thatmeet 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 anactive market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequentto initial measurement, loans and receivables are measured at amortised cost using the effective interest method, lessany impairment.

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

Financial Liabilities at amortised cost

Financial instrument liabilities are initially recognised on the date they are originated. They are initially measured at fair valueplus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured atamortised cost with any difference between the initial recognised amount and the redemption value being recognised inprofit 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 heldand advances received, and interest-bearing arrangements other than those designated at fair value through profit or loss.

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30 June 2013

(j) Assets

Cash and Cash Equivalents

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

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

Receivables

Receivables consist of: - Contractual receivables, which includes of mainly debtors in relation to goods and services, loans to third parties,accrued investment income, and finance lease receivables. - Statutory receivables, which includes predominantly amounts owing from the Victorian Government and Goods and Services Tax ("GST") input tax credits recoverable; and

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

Receivables are recognised initially at fair value and subsequently measured at amortised cost, usingthe effective interest rate 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: - Financial assets at fair value through profit or loss; - Held-to-maturity; - Loans and receivables; and - Available-for-sale financial assets.

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

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

All financial assets, except for 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 nominalcost 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. Allother inventories, including land held for sale, are measured at the lower of cost and net realisable value.

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

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30 June 2013

(j) Assets (Continued)

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.

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

Land and buildings are recognised initially at cost and subsequently measured at fair value less accumulateddepreciation and impairment.

Plant, equipment and vehicles are recognised initially at cost and subsequently measured at fair value lessaccumulated depreciation and impairment. Depreciated historical cost is generally a reasonable proxy for depreciated replacement cost 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 the 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 Rural Northwest Health's non-current physical assets were assessed to determine whetherrevaluation of the non-current physical assets was required.

Prepayments

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

Disposal of non-financial assets

Any gain or loss on the sale of non-financial assets is recognised in the comprehensive operating statement. Refer tonote 1(h) - 'other comprehensive income'.

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30 June 2013


Impairment of non-financial assets

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

Apart from intangible assets with indefinite useful lives, all other assets are assessed annually for indications of impairment, except for:

• inventories.

If there is an indication of impairment, the assets concerned are tested as to whether their carryingvalue exceeds their possible recoverable amount. Where an asset's carrying value exceeds its recoverableamount, the difference is written-off as an expense except to the extent that the write-down can be debited to anan asset revaluation reserve 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 lastimpairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal ofthe impairment loss occurs only to the extent that the asset's carrying amount does not exceed the carrying amountthat would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised inprior years.

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

Investments in jointly controlled assets and operations

In respect of any interest in jointly controlled assets, Rural Northwest Health recognises in the financial statements: - its share of jointly controlled assets; - any liabilities that it had incurred; - its share of liabilities incurred jointly by the joint venture; - any income earned from the selling or using of its share of the output from the joint venture; and - any expenses incurred in relation to being an investor in the joint venture.

For jointly controlled operations Rural Northwest Health recognises: - the assets that it controls; - the liabilities that it incurs; - expenses that it incurs; and - the share of income that it earns from selling outputs of the joint venture.

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) isderecognised when: - the rights to receive cash flows from the asset have expired; or - the Health Service retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in fullwithout material delay to a third party under a 'pass through' arrangement; or - the Health Service has transferred its rights to receive cash flows from the asset and either:(a) has transferred substantially all the risks and rewards of the asset; or(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control ofthe asset.

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

13

14 15



30 June 2013


Impairment of financial assets

At the end of each reporting period Rural Northwest Health assesses whether there is objective evidence that a financialasset or group of financial assets is impaired. Objective evidence includes financial difficulties of the debtor, default payments,debts which are more than 60 days overdue, and changes in debtor credit ratings. All financial instruments 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 writtenoff and allowance for doubtful receivables are expensed. Bad debts 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 ofestimated future cash flows, discounted at the effective interest rate.

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

(k) Liabilities

Payables

Payables consist of:• contractual payables which consist predominantly of accounts payable representing liabilities for goods and services

provided to the Health Service prior to the end of the financial year that are unpaid, and arise when the Health Servicebecomes obliged to make future payments in respect of the purchase of those goods and services. The normal credit terms for accounts payable are usually Nett 30 days.

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

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

Provisions

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

The amount recognised as a provision is the best estimate of the consideration required to settlethe 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 settlethe present obligation, its carrying amount is the present value of those cash flows, using a discountrate 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 thereceivable can be measured reliably.

14



30 June 2013

(k) Liabilities (Continued)

Employee benefits

This provision arises for benefits accruing to employees in respect of wages and salaries, annual leave and long service leavefor 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 the Health Service are not expected to be settled within 12 months are recognised in the provisionfor employee benefits as current liabilities, measured at present value of the amounts expected to be paid when theliabilities 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 Rural Northwest Health does not expect to settle theliability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

The components of this current LSL liability are measured at:• present value - component that the Rural Northwest Health does not expect to settle within 12 months; and• nominal value - component that the Rural Northwest Health expects to settle within 12 months.

Non-current liability - conditional LSL (representing less than 10 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employeehas 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 departuresand periods of service. Expected future payments are discounted using interest rates of Commonwealth Governmentguaranteed 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 developedand 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, superannuation are recognised separatelyfrom provisions for employee benefits.

Superannuation liabilities

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

15

16 17



30 June 2013

(l) Leases

A lease is a right to use an asset for an agreed period of time in exchange for payment. Leases are classified at their inception as either operating or finance leases based on the 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 leasetransfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Finance leases

Entity as lessor

The Health Service does not hold any finance lease arrangements with other parties.

Operating leases

Entity as lessor

Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease.

All incentives for the agreement of a new or renewed operating lease are recognised as an integralpart of the net consideration agreed for the use of the leased asset, irrespective of the incentive's natureor form or the timing of payments.

In the event that lease incentives are given to the lessee, the aggregate cost of incentives are recognised as a reduction of rental income over the lease term, on a straight-line basis unless another systematic basis is more appropriate of the time pattern over which the economic benefit of the leased asset is diminished.

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 morerepresentative 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.

Lease incentives

All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive's nature or form or the timing of payments.

In the event that lease incentives are received by the lessee to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expenseon a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset is diminished.

Leasehold Improvements

The cost of leasehold improvements are capitalised as an asset and depreciated over the remaining term ofthe lease or the estimated useful life of the improvements, whichever is the shorter.

(m) Equity

Contributed Capital

Consistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned

Public Sector Entities and FRD 119 Contributions by Owners , appropriations for additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributionsor distributions, that have been designated as contributed capital are also treated as contributed capital.

Property, plant and equipment revaluation surplus

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

Specific restricted purpose surplus

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

16



30 June 2013

(n) Commitments

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments aredisclosed by way of a note (refer to note 24) at their nominal value and are inclusive of the goods and services tax ("GST")payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net presentvalues of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once therelated liabilities are recognised on the balance sheet.

(o) Contingent assets and contingent liabilities

Contingent assets and contingent liabilities are not recognised in the Balance Sheet, but are disclosed by way of note and, if quantifiable, are measured at nominal value. Contingent assets and contingent liabilities are presentedinclusive 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 operating cash flow.

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

(q) AASs issued that are not yet effective

Certain new Australian accounting standards and interpretations have been published that are not mandatory for the 30 June 2013 reporting period.

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 datesas detailed in the table below. Rural Northwest Health has not and does not intend to adopt these standards early.

Standard / Summary Applicable for Impact on Health

Interpretation reporting periods Service's Annual

beginning on Statements

AASB 1053 Application of Tiers This standard establishes a Beginning The Victorian Government is currentlyof Australian Accounting differential financial reporting 1 July 2013 considering the impacts of ReducedStandards framework consisting of two tiers Disclosure Requirements (RDRs) for

of reporting requirements for certain public sector entities and haspreparing general purpose not decided if RDRs will befinancial statements implemented to the Victorian Public

Sector.AASB 2011-2 Amendments to This Standard makes amendments to Beginning The Victorian Government is currentlyAustralian Accounting Standards many Australian Accounting Standards, 1 July 2013 considering the impacts of Reducedarising from Reduced Disclosure including Interpretations, to introduce Disclosure Requirements (RDRs) forRequirements reduced disclosure requirements to the certain public sector entities and has

pronouncements for application by not decided if RDRs will becertain types of entities. implemented to the Victorian Public

Sector.AASB 2012-2 Amendments to The objective of this amendment is to Beginning The Victorian Government is currentlyAustralian Accounting Standards include some additional disclosure 1 July 2013 considering the impacts of Reducedarising from the Trans-Tasman from the Trans-Tasman Convergence Disclosure Requirements (RDRs) forConvergence Project - Project and to reduce disclosure certain public sector entities and hasReduced Disclosure requirements for entities preparing not decided if RDRs will beRequirements general purpose financial statements implemented to the Victorian Public[AASB 101 & AASB 1054] under Australian Accounting Sector.

Standards - Reduced DisclosureRequirements.

17

18 19



30 June 2013

(q) AASs issued that are not yet effective (Continued)

AASB 2012-4 Further This Standard amends AASB 124 Beginning No significant impact is expected fromAmendments to Australian Related Party Disclosures by 1 July 2013 these consequential amendments onAccounting Standards to remove removing the disclosure requirements entity reporting.Individual Key Management in AASB 124 in relation to individualPersonnel disclosure key management personnel (KMP)requirements [AASB 124]

AASB 2012-6 Amendments to The objective of this Standard is to Beginning The Victorian Government is currentlyAustralian Accounting make amendments to AASB 127 1 July 2013 considering the impacts of ReducedStandards - Extending Relief Consolidated and Separate Financial Disclosure Requirements (RDRs) forfrom Consolidation, the Equity Statements , AASB 128 Investments in certain public sector entities and hasmethod and Proportionate Associates and AASB 131 Interests in not decided if RDRs will beConsolidation - Reduced Joint Ventures to extend the implemented to the Victorian PublicDisclosure Requirements circumstances in which an entity can Sector.[AASB 127, AASB 128 & obtain relief from consolidation, theAASB 131] equity method or proportionate

consolidation.AASB 2012-11 Amendments to This Standard makes amendments to Beginning The Victorian Government is currentlyAASB 119 (September 2012) AASB 119 Employee Benefits 1 July 2013 considering the impacts of Reducedarising from Reduced Disclosure (September 2012), to incorporate Disclosure Requirements (RDRs) andRequirements reduced disclosure requirements into has not decided if RDRs will be

the Standard for entities applying implemented to Victorian PublicTier 2 requirements in preparing Sector.general purpose financial statements.

(r) Category Groups

The Rural Northwest Health has used the following category groups for reporting purposes for thecurrent and previous financial years.

Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue/expenditureon admitted patient services, where services are delivered in public hospitals, or free standing day hospital facilities, or alcohol and drug treatment units or hospitals specialising in dental services, hearing and ophthalmic aids.

Aged Care comprises revenue/expenditure from 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 promotionand 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 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 newsystem, 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 psycho geriatric 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, 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.

18

Rural Northwest HealthNotes to the Financial Statements

30 June 2013

Note 2: REVENUE HSA HSA Non HSA Non HSA TOTAL TOTAL

2013 2012 2013 2012 2013 2012

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

Revenue from Operating Activities

Government Grants

- Department of Health 9,958 10,291 0 0 9,958 10,291

- Commonwealth Government 0

- Residential Aged Care Subsidy 271 4,484 0 0 271 4,484

- Other 5,874 683 0 0 5,874 683

Total Government Grants 16,103 15,458 0 0 16,103 15,458

Indirect Contributions by Department of Health

- Insurance 2 39 0 0 2 39

- Long Service Leave 20 50 0 0 20 50

Total Indirect Contributions by Department of Health 22 89 0 0 22 89

Patient and Resident Fees

- Patient and Resident Fees (refer note 2b) 617 728 0 0 617 728

- Residential Aged Care (refer note 2b) 1,271 1,223 0 0 1,271 1,223

Total Patient and Resident Fees 1,888 1,951 0 0 1,888 1,951

Grampians Rural Health Alliance 0 0 257 167 257 167

Other Revenue from Operating Activities 0 0 342 377 342 377

Total Revenue from Operating Activities 18,013 17,498 599 544 18,612 18,042

Revenue from Non-Operating Activities

Interest and Dividends 0 0 359 448 359 448

Property Income 0 0 113 70 113 70

Private Practice and Other Patient Activities 0 0 0 0 0 0

Total Revenue from Non-Operating Activities 0 0 472 518 472 518

Capital Purpose Income

State Government Capital Grants

- Targeted Capital Works and Equipment 84 0 0 0 84 0

- Other 0 0 0 0 0 0

Residential Accommodation Payments (refer note 2b) 411 583 0 0 411 583

Net Gain/(Loss) on Disposal of Non-Financial Assets (refer note 2c) 0 0 0 (1) 0 (1)

Grampians Rural Health Alliance Capital Income 0 0 1 12 1 12

Donations and Bequests 22 67 0 0 22 67

Total Capital Purpose Income 517 650 1 11 518 661

Total Revenue (refer note 2a) 18,530 18,148 1,072 1,073 19,602 19,221

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.

19

20 21


30 June 2013

Note 2a: ANALYSIS OF REVENUE BY SOURCE Admitted Residential Aged Primary Other TOTAL

Patients Aged Care Care Health

2013 2013 2013 2013 2013 2013

Revenue from Services Supported by Health $'000 $'000 $'000 $'000 $'000 $'000

Services Agreement

Government Grants 8,234 6,084 1,223 509 52 16,103

Indirect Contributions by Department of Health 0 2 0 0 20 22

Patient and Resident Fees (refer note 2b) 617 860 411 0 0 1,888

Capital Purpose Income (refer note 2) 0 411 22 0 84 517

Total Revenue from Services Supported

by Health Services Agreement 8,851 7,357 1,656 509 156 18,530

Revenue from Services Supported by Hospital

and Community Initiatives


Grampians Rural Health Alliance Operating Revenue 0 0 0 0 257 257

Total Revenue from Services Supported by

Hospital and Community Initiatives 10 21 0 171 870 1,072

TOTAL REVENUE 8,861 7,378 1,656 680 1,026 19,602


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.

20


30 June 2013

Note 2a: ANALYSIS OF REVENUE BY SOURCE(Continued) Admitted Residential Aged Primary Other TOTAL


2012 2012 2012 2012 2012 2012

Revenue from Services Supported by Health $'000 $'000 $'000 $'000 $'000 $'000

Services Agreement

Government Grants 8,225 5,858 183 735 457 15,458

Indirect Contributions by Department of Health 89 0 0 0 0 89

Patient and Resident Fees (refer note 2b) 728 1,223 0 0 0 1,951

Capital Purpose Income (refer note 2) 67 583 0 0 0 650

Total Revenue from Services Supported

by Health Services Agreement 9,109 7,664 183 735 457 18,148

Revenue from Services Supported by Hospital

and Community Initiatives

Private Practice and Other Patient Activities 0 0 0 0 1 1

Patient and Resident Fees (refer note 2b) 0 0 0 0 0 0


Grampians Rural Health Alliance Operating Revenue 0 0 0 0 179 179

Net Gain/(Loss) on Disposal of Non-Current Assets (refer note 2c) 0 0 0 0 (1) (1)

Total Revenue from Services Supported by

Hospital and Community Initiatives 12 25 61 188 787 1,073

TOTAL REVENUE 9,121 7,689 244 923 1,244 19,221


Department of Human Services 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.

21

22 23


30 June 2013

NOTE 2b: PATIENT AND RESIDENT FEES

Patient and Resident Fees Raised 2013 2012

$'000 $'000

Acute

- Inpatients * 617 728

- Outpatients 0 0

Residential Aged Care

- Residential Accommodation Payments ** 1,271 1,223

Other 0 0

Aged Care Fees 0 0

Primary Care Fees 0 0TOTAL PATIENT AND RESIDENT FEES 1,888 1,951

Capital Purpose Income:

Residential Accommodation Payments ** 411 583

TOTAL CAPITAL PURPOSE INCOME 411 583

(*) Compensable payments (such as TAC, WIES and DVA throughput) are excluded.

(**) This includes accommodation charges, interest earned on accommodation bonds and retention amount.

NOTE 2c: NET GAIN/(LOSS) ON DISPOSAL OF NON-FINANCIAL ASSETS 2013 2012

$'000 $'000

Proceeds from Disposal of Non-Current Assets

- Motor Vehicles 0 0

- Medical Equipment 0 0

Total Proceeds from Disposal of Non-Current Assets 0 0

Less: Written Down Value of Non-Current Assets Sold

- Motor Vehicles 0 (1)

- Plant and Equipment 0 0

Total Written Down Value of Non-Current Assets Sold 0 (1)

NET GAIN/(LOSS) ON DISPOSAL OF NON-FINANCIAL ASSETS 0 (1)

22


30 June 2013

Note 3: EXPENSES HSA HSA Non HSA Non HSA TOTAL TOTAL

2013 2012 2013 2012 2013 2012

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

Employee Benefits

Salaries and Wages 11,489 10,482 178 0 11,667 10,482

WorkCover Premium 163 111 0 0 163 111

Long Service Leave 334 304 0 0 334 304

Superannuation 1,041 950 0 0 1,041 950

Total Employee Benefits 13,027 11,847 178 0 13,205 11,847

Non Salary Labour Costs

Fee for Service Medical Officers 357 289 0 0 357 289

Agency Costs - Nursing 37 444 0 0 37 444

Agency Costs - Other 14 0 0 0 14 0

Total Non Salary Labour Costs 408 733 0 0 408 733

Supplies and Consumables

Drug Supplies 124 144 0 0 124 144

Medical, Surgical Supplies and Prosthesis 271 432 0 0 271 432

Food Supplies 539 523 0 0 539 523

Total Supplies and Consumables 934 1,099 0 0 934 1,099

Other Expenses

Domestic Services and Supplies 266 327 0 0 266 327

Fuel, Light, Power and Water 473 358 0 0 473 358

Insurance costs funded by the Department of Health 92 101 0 0 92 101

Motor Vehicle Expenses 103 98 0 0 103 98

Repairs and Maintenance 337 479 0 0 337 479

Maintenance Contracts 81 53 0 0 81 53

Patient Transport 123 153 0 0 123 153

Lease Expenses 80 66 0 0 80 66

Advertising Expenses 28 41 0 0 28 41

Administrative Expenses 1,796 1,409 187 171 1,983 1,580

Audit Fees 24 17 0 0 24 17

Total Other Expenses 3,404 3,102 187 171 3,591 3,273

Depreciation 2,201 2,193 0 10 2,201 2,203

Total 2,201 2,193 0 10 2,201 2,203

Total Expenses 19,974 18,974 365 181 20,339 19,155

23

24 25


30 June 2013

Note 3a: ANALYSIS OF EXPENSES BY SOURCE Admitted Residential Aged Primary Other TOTAL


2013 2013 2013 2013 2013 2013

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

Services Supported by Health Service Agreement

Employee Benefits 3,664 7,472 80 1,804 7 13,027

Non Salary Labour Costs 393 1 0 0 14 408

Supplies and Consumables 343 517 38 13 23 934

Other Expenses 1,063 1,092 147 443 659 3,404

Depreciation (refer note 4) 911 1,198 6 76 10 2,201

Total Expenses from Services Supported by

Health Services Agreement 6,374 10,280 271 2,336 713 19,974

Services Supported by Hospital and Community Initiatives

Employee Benefits 0 0 0 0 178 178

Other Expenses 0 0 0 0 187 187

Depreciation (refer note 4) 0 0 0 0 0 0

Total Expense from Services Supported by

Hospital and Community Initiatives 0 0 0 0 365 365

TOTAL EXPENSES 6,374 10,280 271 2,336 1,078 20,339

24


30 June 2013

Note 3a: ANALYSIS OF EXPENSES BY SOURCE(Continued) Admitted Residential Aged Primary Other TOTAL


2012 2012 2012 2012 2012 2012

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

Services Supported by Health Service Agreement

Employee Benefits 2,992 7,660 258 915 0 11,847

Non Salary Labour Costs 495 238 0 0 0 733

Supplies and Consumables 485 509 10 34 61 1,099

Other Expenses 1,086 1,110 345 445 116 3,102

Depreciation (refer note 4) 912 1,198 7 76 10 2,203

Total Expenses from Services Supported by

Health Services Agreement 5,992 10,715 620 1,470 187 18,984

Services Supported by Hospital and Community Initiatives

Other Expenses 0 0 0 0 171 171

Depreciation (refer note 4) 0 0 0 0 0 0

Total Expense from Services Supported by

Hospital and Community Initiatives 0 0 0 0 171 171

TOTAL EXPENSES 5,992 10,715 620 1,470 358 19,155

25

26 27


30 June 2013

NOTE 4: DEPRECIATION 2013 2012

$'000 $'000

Depreciation

Buildings 1,760 1,740

Land Improvements 105 104

Plant and Equipment 122 120

Medical Equipment 73 76

Computers and Communications 25 42

Furniture and Fittings 52 50

Motor Vehicles 64 61

Grampians Rural Health Alliance Depreciation 0 10

TOTAL DEPRECIATION 2,201 2,203

NOTE 5: CASH AND CASH EQUIVALENTS

For the purposes of the cash flow statement, cash assets includes cash on hand and

in banks, and short-term deposits which are readily convertible to cash on hand, and are 2013 2012

subject to an insignificant risk of change in value, net of outstanding bank overdrafts. $'000 $'000

Cash on Hand 2 2

Cash at Bank 3,715 4,602

Deposits at Call 8,026 6,659

TOTAL CASH AND CASH EQUIVALENTS 11,743 11,263

Represented by:

Cash for Health Service Operations (as per cash flow statement) 9,256 8,175

Cash for Monies Held in Trust

- Cash at Bank 85 603

- Short Term Money Market 2,325 2,450

- Grampians Rural Health Alliance 77 35

TOTAL CASH AND CASH EQUIVALENTS 11,743 11,263

26


30 June 2013

NOTE 6: RECEIVABLES 2013 2012

$'000 $'000

CURRENT

Contractual

Patient Fees 220 635

Accrued Investment Income 63 84

Accrued Revenue - Other 0 9

Refundable Entry Bonds Payable 135 233

Grampians Rural Health Alliance 56 71

Less Allowance for Doubtful Debts (2) (2)

472 1,030

Statutory

GST Receivable 129 82

Grampians Rural Health Alliance 0 (1)

129 81

TOTAL CURRENT RECEIVABLES 601 1,111

NON CURRENT

Statutory

Long Service Leave - Department of Health 237 217

TOTAL NON-CURRENT RECEIVABLES 237 217

TOTAL RECEIVABLES 838 1,328

(a) Movement in the Allowance for doubtful debts

Balance at beginning of the year (2) (2)

Balance at end of the year (2) (2)

(b) Ageing analysis of receivables

Please refer to note 16(b) for the ageing analysis of receivables.

(c) Nature and extent of risk arising from receivables

Please refer to note 16(b) for the nature and extent of credit risk arising from contractual receivables.

NOTE 7: INVENTORIES 2013 2012

$'000 $'000

CURRENT

Pharmaceuticals - at cost 12 11

Catering Supplies - at cost 13 14

Housekeeping Supplies - at cost 6 4

Medical and Surgical Lines - at cost 28 26

Administration Stores - at cost 9 13TOTAL INVENTORIES 68 68

Inventories held by the Health Service are held for short periods of time with regular turnover. There is no material loss of

service potential in inventories held at the end of the year.

NOTE 8: OTHER ASSETS 2013 2012

$'000 $'000

Prepayments 47 37


TOTAL OTHER ASSETS 49 37

27

28 29


30 June 2013

NOTE 9: PROPERTY, PLANT AND EQUIPMENT 2013 2012

$'000 $'000

Land

- Land at Fair Value 301 301

301 301

- Land at Cost 78 78

78 78

- Land Improvement at Valuation 1,055 1,055

Less Accumulated Depreciation (415) (338)

640 717

Total Land 1,019 1,096

Buildings

- Buildings at Cost 0 628

Less Accumulated Depreciation 0 (29)

0 599

- Buildings at Fair Value 33,866 35,993

Less Accumulated Depreciation 0 (5,115)

33,866 30,878

Assets Under Construction

- Assets Under Construction 14 34

Total Assets Under Construction 14 34

Total Buildings 33,880 31,511

Plant and Equipment

- Plant and Equipment at Fair Value 1,874 1,797

Less Accumulated Depreciation (1,394) (1,272)

- Grampians Rural Health Alliance 108 85


Total Plant and Equipment 534 564

Computers and Communications

- Computers and Communications 288 243


72 52

Medical Equipment

- Medical Equipment 957 907


303 320

Furniture and Fittings

- Furniture and Fittings at Fair Value 762 747


Total Furniture and Fittings 219 255

Motor Vehicles

- Motor Vehicles at Fair Value 777 734


Total Motor Vehicles 210 231

Assets Under Construction

- Assets Under Construction 10 0

Total Assets Under Construction 10 0

TOTAL 36,247 34,029

28


30 June 2013

NOTE 9: PROPERTY, PLANT AND EQUIPMENT (Continued)

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

Land Buildings & Plant & Computers & Medical Furniture Motor Total

Land Improv. Equipment Commun. Equipment & Fittings Vehicles

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

Balance at 1 July 2011 1,194 33,196 544 51 321 284 276 35,866

Additions 6 55 111 43 75 21 16 327

Grampians Rural Health Alliance 0 0 39 0 0 0 0 39

Net Transfers between classes 0 0 0 0 0 0 0 0

Disposals 0 0 0 0 0 0 0 0

Depreciation (104) (1,740) (130) (42) (76) (50) (61) (2,203)

Balance at 1 July 2012 1,096 31,511 564 52 320 255 231 34,029

Additions 0 448 69 45 56 16 43 677

Revaluation 0 3,719 0 0 0 0 0 3,719

Grampians Rural Health Alliance 0 0 23 0 0 0 0 23

Net Transfers between classes 28 (28) 0 0 0 0 0 0

Disposals 0 0 0 0 0 0 0 0

Depreciation (105) (1,760) (122) (25) (73) (52) (64) (2,201)

Balance at 30 June 2013 1,019 33,890 534 72 303 219 210 36,247

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 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.

Fair value of plant and equipment has been assessed by management in accordance with Financial Reporting Direction 103D.

Management have obtained second-hand values for equipment where possible, or completed an assessment of value based on depreciated

replacement cost.

The effective date of the valuation is 30 June 2009.

A managerial revaluation of all of the Health Service buildings was conducted with effect from 30 June 2013. This revaluation was required as the relevant

valuation indices issued annually by the Valuer General had increased by more than 10% on a cumulative basis since the last independent valuation. The

effect of this revaluation was to increase the total written down value of Buildings by $3,719,000. The carrying amount of these assets would have been

$30,147,684 had these assets been carried under the cost model.

NOTE 10: PAYABLES 2013 2012

CURRENT $'000 $'000

Contractual

Trade Creditors 246 296


Accrued Expenses 368 511

Accrued Audit Fees 12 17

714 866

Statutory

Department of Health - Accrued Grant Recall 17 0

17 0

TOTAL PAYABLES 730 866

(a) Maturity analysis of payables

Please refer to Note 16(c) for the ageing analysis of payables.

(b) Nature and extent of risk arising from payables

Please refer to note 16(c) for the nature and extent of risks arising payables.

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30 June 2013

NOTE 11: PROVISIONS 2013 2012

$'000 $'000

Current Provisions

Employee Benefits (i)

- unconditional and expected to be settled within 12 months (ii) 1,998 1,199

- unconditional and expected to be settled after 12 months (iii) 819 1,655

2,817 2,854

Provisions related to employee benefit on-costs

- unconditional and expected to be settled within 12 months (ii) 220 111

- unconditional and expected to be settled after 12 months (iii) 77 154

297 265Total Current Provisions 3,114 3,119

Non-Current Provisions

Employee Benefits (i) 309 204

Provisions related to employee benefit on-costs 34 20Total Non-Current Provisions 343 224

Total Provisions 3,457 3,343

(a) Employee Benefits and Related On-Costs

Current Employee Benefits and related on-costs

Unconditional Long Service Leave Entitlements 1,516 1,584

Annual Leave Entitlements 1,145 1,059

Accrued Salaries and Wages 283 428

Accrued Days Off 51 31

Superannuation 119 17

3,114 3,119

Non-Current Employee Benefits and related on-costs

Conditional Long Service Leave Entitlements (iii) 343 224

Total Employee Benefits and Related On-Costs 3,457 3,343

(b) Movements in provisions

Movement in Long Service Leave

Balance at start of year 1,808 1,759

Provision made during the year

- Revaluations 3 (89)

- Expense recognising Employee Service 331 393

Settlement made during the year (283) (255)

Balance at end of year 1,859 1,808

Notes:

(i) Provisions for employee benefits consist of amounts for annual leave and long service leave accrued by employees,

not including on-costs.

(ii) The amounts disclosed are nominal amounts.

(iii) The amounts disclosed are discounted to present values.

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30 June 2013

NOTE 12: SUPERANNUATION

Employees of the Health Service are entitled to receive superannuation benefits and the Health Service 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.

Superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive

operating statement of the Health Service. The name, details and amounts expense in relation to the major employee superannuation funds

and contributions made by the Health Services are as follows:

Fund

2013 2012 2013 2012

$'000 $'000 $ $

Defined Contribution Plans: Health Super 793 716 0 0

HESTA 248 234 0 0

1,041 950 0 0

NOTE 13: OTHER LIABILITIES 2013 2012

$'000 $'000

CURRENT

Monies Held in Trust*

- Patient Monies Held in Trust 69 72

- Accommodation Bonds (Refundable Entrance Fees) 2,476 3,214

2,545 3,286

TOTAL OTHER LIABILITIES 2,545 3,286

* Total Monies Held in Trust

Represented by the following assets:

Cash Assets (refer to Note 5) Trust Funds and Short Term Money Market 2,410 3,053

Cash Assets (refer to Note 5) Cash for Health Service Operations 0 0

Receivables (refer to Note 6) 135 233

TOTAL 2,545 3,286

Paid Contributions for

the Year

Outstanding Contributions

at Year End

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30 June 2013

NOTE 14: EQUITY 2013 2012$'000 $'000

(a) Surpluses

Property, Plant and Equipment Revaluation Surplus ¹

Balance at beginning of the reporting period

- Land 126 126

- Buildings 5,053 5,053


Revaluation Increment/(Decrement)

- Land 0 0

- Buildings 3,719 0


Transfers

- Buildings 0 0

- Plant and Equipment 0 0Balance at the end of the reporting period 8,898 5,179

Represented by:

- Land 126 126

- Buildings 8,772 5,053


8,898 5,179

(1) The property, plant and equipment asset revaluation reserve arises on the revaluation of property, plant and equipment.

Restricted Specific Purpose Surplus

Balance at the beginning of the reporting period 113 113

Balance at the end of the reporting period 113 113

Total Surpluses 9,011 5,292

(b) Contributed Capital

Balance at the beginning of the reporting period 20,935 20,935

Capital Contribution received from Victorian Government 0 0

Balance at the end of the reporting period 20,935 20,935

(c) Accumulated Surpluses/(Deficits)

Balance at the beginning of the reporting period 13,003 12,937

Net Result for the Year (737) 66

Balance at the end of the reporting period 12,266 13,003

Total Equity at end of financial year 42,212 39,230

NOTE 15: RECONCILIATION OF NET RESULT FOR THE YEAR TO NET CASH

INFLOW / OUTFLOW FROM OPERATING ACTIVITIES 2013 2012

$'000 $'000

NET RESULT FOR THE YEAR (737) 66

Non-cash movements

Depreciation 2,193 2,193

Share of Net Result from Joint Ventures 2 2

Movements included in investing and financing activities

Net (Gain)/Loss from Sale of Plant and Equipment 0 1

Movements in assets and liabilities

Change in Operating Assets & Liabilities

(Increase)/Decrease in Receivables 367 (366)

(Increase)/Decrease in Inventories 0 5

Increase/(Decrease) in Payables (181) (30)

Increase/(Decrease) in Provisions 114 378

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 1,758 2,249

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30 June 2013

NOTE 16: FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies

Rural Northwest Health's principal financial instruments comprise of:

- Cash Assets

- Receivables (excluding statutory receivables)

- 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 Rural Northwest Health

financial risk within the government policy parameters.

Categorisation of financial instruments

Carrying Carrying

Amount Amount

2013 2012

$'000 $'000

Financial Assets

Cash and cash equivalents 11,743 11,263Loans and Receivables 472 1,030

Total Financial Assets (i) 12,215 12,293

Financial Liabilities

At amortised cost 3,276 4,152

Total Financial Liabilities (ii) 3,276 4,152

(i) The total amount of financial assets disclosed here excludes GST input tax credit receivable.

(ii) The total amount of financial liabilities disclosed here excludes Taxes payables.

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

Carrying Carrying

Amount Amount

2013 2012

$'000 $'000

Financial Assets

Loans and Receivables(i) 359 448

Total Financial Assets 359 448

(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 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.

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30 June 2013

NOTE 16: FINANCIAL INSTRUMENTS (Continued)

(b) Credit Risk

Credit risk arises from the contractual financial assets of the Health Service, which comprise cash and deposits, non-statutory

receivables and available for sale contractual financial assets. The Health Service's exposure to credit risk arises from the

potential default of a counter party on their contractual obligations resulting in financial loss to the Health Service. Credit risk is

measured at fair value and is monitored on a regular basis.

Credit risk associated with the Health Service's contractual financial assets is minimal because the main debtor is the Victorian

Government. For debtors other than the Government, it is the Health Service's policy to only deal with entities with high credit

ratings of a minimum Triple-B rating and to obtain sufficient collateral or credit enhancements, where appropriate.

In addition, the Health Service does not engage in hedging for its contractual financial assets and mainly obtains contractual

financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. As with the policy for debtors,

the Health Service's policy is to only deal with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Health Service

will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts

which are more than 60 days overdue, and changes in debtor credit ratings.

Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial

statements, net of any allowances for losses, represents Rural Northwest Health Service 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 Government Government Other Total

Institutions agencies agencies (Not Rated)

(AA2 credit (AA2 credit (BBB credit

rating) rating) rating)

2013 $000 $000 $000 $000 $000

Financial Assets

Cash and Cash Equivalents 11,743 0 0 0 11,743

Receivables

- Trade Debtors 0 0 0 220 220

- Other Receivables 0 0 0 252 252Total Financial Assets 11,743 0 0 472 12,215

2012

Financial Assets

Cash and Cash Equivalents 11,263 0 0 0 11,263

Receivables

- Trade Debtors 0 0 0 635 635

- Other Receivables 0 0 0 395 395Total Financial Assets 11,263 0 0 1,030 12,293

(i) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and

GST input tax credit recoverable).

Ageing analysis of financial asset as at 30 June

Total Not Past Less than 1 - 3 3 Months 1 - 5 Impaired

Carrying due and not 1 Month Months - 1 Year Years Financial

Amount impaired Assets

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

Financial Assets

Cash and Cash Equivalents 11,743 11,743 0 0 0 0 0

Receivables

- Other Receivables 472 299 18 102 53 0 0

Total Financial Assets 12,215 12,042 18 102 53 0 0

2012

Financial Assets

Cash and Cash Equivalents 11,263 11,263 0 0 0 0 0

Receivables

- Other Receivables 1,030 389 386 16 241 0 (2)

Total Financial Assets 12,293 11,652 386 16 241 0 (2)

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30 June 2013


(b) Credit Risk (Continued)

Contractual financial assets that are neither past due or impaired

There are no material financial assets which are individually determined to be impaired. Currently the Health Service does not hold

any collateral as security nor credit enhancements relating to its financial assets.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they

are stated at their carrying amounts as indicated. The ageing analysis table above discloses the ageing only of contractual financial

assets that are past due but not impaired.

(c) Liquidity Risk

Liquidity risk is the risk that the Health Service would be unable to meet its financial obligations as and when they fall due. The Health

Service operates under the Government's fair payments policy of setting financial obligations within 30 days and in the event of a dispute,

making payments within 30 days from the date of resolution.

The Health Service's maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face

of the balance sheet. The Health Service manages its liquidity risk as follows:

- Term Deposits and cash held at financial institutions are managed with variable maturity dates and take into

consideration cashflow requirements of the Health Service from month to month.

The following table discloses the contractual maturity analysis for Rural Northwest Health Service 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

Total Nominal Less than 1 - 3 3 Months 1 - 5

Carrying Amount 1 Month Months - 1 Year Years

Amount

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


Payables (i) 730 730 730 0 0 0

Other Financial Liabilities

- Monies Held in Trust 2,545 2,545 0 0 2,545 0

Total Financial Liabilities 3,276 3,276 730 0 2,545 0

2012


Payables (i) 866 866 866 0 0 0


- Monies Held in Trust 3,286 3,286 0 0 3,286 0

Total Financial Liabilities 4,152 4,152 866 0 3,286 0

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

(d) Market Risk

Rural Northwest Health's exposures to market risk are primarily through interest rate risk with only insignificant

exposure to foreign currency and other price risks. Objectives, policies and processes used to manage each of these

risks are disclosed in the paragraphs below.

Currency Risk

Rural Northwest Health 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.

Maturity Dates

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30 June 2013


(d) Market Risk (Continued)

Interest Rate Risk

Exposure to interest rate risk's arise primarily through the Rural Northwest Health's' other financial assets.

Minimisation of risk is achieved by mainly holding fixed rate or non-interest bearing financial instruments. For

financial assets the Health Service mainly holds financial assets with relatively even maturity profiles.

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

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

that are at floating rate.

The Health Service manages this risk by mainly undertaking fixed rate or non-interest bearing financial instruments with relatively even

maturity profiles, with only insignificant amounts of financial instruments at floating rate. Management has concluded for cash at bank and bank

overdraft, as financial assets that can be left at floating rate without necessarily exposing the Health Service to significant bad risk, management

monitors movements in interest rates on a daily basis.

Other Price Risk

The Health Service is exposed to normal price fluctuations from time to time through market forces. Where adequate

notice is provided by suppliers, additional purchases are made for long term goods. Supplier contracts are also

in place for major product lines purchased by the Health Service on a monthly basis. These contracts have set price

arrangements and are reviewed on a regular basis.

Interest Rate Exposure of Financial Assets and Liabilities as at 30 June

2013 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 4.30 11,743 0 11,743 0

Receivables

- Other Receivables 0.00 472 0 0 472

Total Financial Assets 12,216 0 11,743 472


Payables 0.00 730 0 0 730


- Accommodation Bonds 0.00 2,545 0 0 2,545

Total Financial Liabilities 3,276 0 0 3,276

2012

Financial Assets

Cash and Cash Equivalents 4.50 11,263 0 11,263 0

Receivables

- Other Receivables 0.00 1,030 0 0 1,030

Total Financial Assets 12,293 0 11,263 1,030


Payables 0.00 866 0 0 866


- Accommodation Bonds 0.00 3,286 0 0 3,286

Total Financial Liabilities 4,152 0 0 4,152

Non -

Interest

Bearing

Weighted

Average

Effective

Interest

Rate (%)

Carrying

Amount

$'000

Interest Rate Exposure

Fixed Interest

Rate

Variable

Interest

Rate

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30 June 2013


(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, the Rural Northwest Health believes the following movements

are 'reasonably possible' over the next 12 months (base rates are sourced from the Reserve Bank of Australia).

- A parallel shift of +1% and -1% in market interest rates (AUD) from year-end rates of 6%; and

- A parallel shift of +1% and -1% in inflation rate from year-end rates of 2%

The following table discloses the impact on net operating result and equity for each category of interest bearing

financial instrument held by Rural Northwest Health at year end as presented to key management personnel,if changes in the relevant risk occur.

Carrying

Amount

Profit Equity Profit Equity Profit Equity Profit Equity

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

Financial Assets

Cash and Cash Equivalents 11,743 (117) (117) 117 117 0 0 0 0

Receivables

- Other Receivables 472 0 0 0 0 (5) (5) 5 5


Payables 730 0 0 0 0 (7) (7) 7 7


- Accommodation Bonds 2,545 (25) (25) 25 25 0 0 0 0

(142) (142) 142 142 (12) (12) 12 12

2012

Financial Assets

Cash and Cash Equivalents 11,263 (113) (113) 113 113 0 0 0 0

Receivables

- Other Receivables 1,030 0 0 0 0 (10) (10) 10 10


Payables 866 0 0 0 0 (9) (9) 9 9


- Accommodation Bonds 3,286 (33) (33) 33 33 0 0 0 0

(146) (146) 146 146 (19) (19) 19 19

Other Price Risk

-1% +1% -1% +1%

Interest Rate Risk

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30 June 2013

NOTE 19: OPERATING SEGMENTS RACS ACUTE OTHER SERVICES TOTAL2013 2012 2013 2012 2013 2012 2013 2012

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

REVENUEExternal Segment Revenue 7,378 7,689 8,861 9,121 3,004 1,963 19,243 18,773

Total Revenue 7,378 7,689 8,861 9,121 3,004 1,963 19,243 18,773

External Segment Expenses (10,280) (10,715) (6,374) (5,992) (3,685) (2,448) (20,339) (19,155)

Segment Result (2,902) (3,026) 2,487 3,129 (681) (485) (1,096) (382)

Net Result from ordinary activities (2,902) (3,026) 2,487 3,129 (681) (485) (1,096) (382)

Interest Income 0 0 0 0 359 448 359 448

Net Result for Year (2,902) (3,026) 2,487 3,129 (322) (37) (737) 66

OTHER INFORMATION

Segment Assets 30,809 29,411 10,975 10,477 7,162 6,837 48,945 46,725

Total Assets 30,809 29,411 10,975 10,477 7,162 6,837 48,945 46,725

Segment Liabilities 1,209 1,346 1,077 1,199 4,447 4,950 6,733 7,495

Total Liabilities 1,209 1,346 1,077 1,199 4,447 4,950 6,733 7,495

Depreciation expense 1,605 1,606 335 335 262 262 2,201 2,203

Non cash expenses other than depreciation 92 101 0 0 0 0 92 101

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

Business Segments Services

Acute Warracknabeal and Hopetoun

Aged Care services

Primary Health services

Residential Aged Care Nursing Home facilities

Hostel facilities

Other Services Allied Health Services

Primary Health Services

Yarriambiack Rural Health Alliance

District & Community Nursing

Meals on Wheels

Geographical Segment

Rural Northwest Health operates predominantly in Warracknabeal, Victoria. More than 90% of revenue,

net surplus from ordinary activities and segment assets related to operations in Warracknabeal-Hopetoun-Beulah, Victoria.

39


30 June 2013


(e) Fair Value

The Health Service considers that the carrying amount of 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

Total Fair Value Total Fair Value

Carrying Carrying

Amount Amount

2013 2013 2012 2012$'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 11,743 11,743 11,263 11,263

Receivables

- Other Receivables 472 472 1,030 1,030

Other Financial Assets

-Term Deposits 0 0 0 0Total Financial Assets 12,216 12,216 12,293 12,293


Payables (i) 730 730 866 866


-Accommodation Bonds 2,545 2,545 3,286 3,286Total Financial Liabilities 3,276 3,276 4,152 4,152

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

NOTE 17: COMMITMENTS FOR EXPENDITURE

Future Building Redevelopment - Stage Two

Rural Northwest is undertaking a redevelopment of the building site to better serve the local community. The budget for the project is $9,800,000.The Federal Government is funding $8,800,000 (90%) and the balance of $1,000,000 funded by Rural Northwest Health.Funding has been committed and approved, however no funding has been received as at June 2013.Prelimary work has already started with consultants and the building works is anticipated to commence in 2014 with a completion date in early 2015

There are no known leasing commitments at the date of this report.

NOTE 18: CONTINGENT ASSETS AND CONTINGENT LIABILITIES

There are no known contingent assets or liabilities for Rural Northwest Health at the date of this report.

38

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30 June 2013

NOTE 20: JOINTLY CONTROLLED OPERATIONS AND ASSETS

Ownership Interest

Name of Entity Principal Activity 2013 2012

% %

Grampians Rural Health Alliance Information Systems 5.61 5.13

Rural Northwest Health's interest in assets employed in the above jointly controlled operations and assets is detailed below

The amounts are included in the financial statements under their respective categories:

2013 2012

Current Assets $'000 $'000

Cash and Cash Equivalents 77 35

Receivables 56 71

Prepayments 2 0

Total Current Assets 135 106

Non Current Assets

Property Plant and Equipment 54 39

Total Non Current Assets 54 39Total Assets 189 145

Current Liabilities

Payables 88 42

Total Current Liabilities 88 42Total Liabilities 88 42

Net Assets 101 103

Rural Northwest Health's interest in revenues and expenses resulting from jointly controlled operations and assets is detailed below:

Revenues

Operating Revenue 255 167

Capital Income 1 19

Total Revenue 256 186

Expenses

Operating Expenditure 252 178

Depreciation 8 10

Total Expenses 260 188Net Result (4) (2)

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30 June 2013

NOTE 21A: RESPONSIBLE PERSONS DISCLOSURES

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

Responsible Ministers:

The Honourable David Davis, MLC, Minister for Health and Ageing 01/07/2012 - 30/06/2013

The Honourable Mary Woodridge, MLA, Minister for Mental Health 01/07/2012 - 30/06/2013

Governing Boards

Mrs Marie Aitken 01/07/2012 - 30/06/2013

Mr Leo Casey 01/07/2012 - 30/06/2013

Mr Brian Hewitt 01/07/2012 - 30/06/2013

Mrs Glenda Hewitt 01/07/2012 - 30/06/2013

Ms Patricia Kinnersly 01/07/2012 - 30/06/2013

Mrs Janette McCabe 01/07/2012 - 30/06/2013

Mrs Carolyn Morcom 01/07/2012 - 30/06/2013

Mr Matthew Richardson 01/07/2012 - 30/06/2013

Mrs Emma Vogel 01/07/2012 - 30/06/2013

Accountable Officer

Ms Catherine Morley-Nelson 01/07/2012 - 30/06/2013

Remuneration of Responsible Persons

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

Income Band 2013 2012 2013 2012

No. No. No. No.

$0 9 8 9 8

$140,000 - $149,999 0 1 0 1

$150,000 - $159,999 1 0 1 0Total Numbers 10 9 10 9

Total Remuneration 165,251 142,817 165,251 142,817

Amounts relating to Responsible Ministers are reported in the financial statements of the

Department of Premier and Cabinet

Other Transactions of Responsible Persons and their Related Parties.

No responsible person or their related parties received any remuneration or retirement benefits

during the year.

NOTE 21B: EXECUTIVE OFFICER DISCLOSURES

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

2013 2012 2013 2012

No. No. No. No.

$90,000 - $99,999 2 0 2 0

$100,000 - $109,999 1 0 1 0

$110,000 - $119,999 0 2 0 2

$120,000 - $129,999 1 0 1 1Total number of executives 4 2 4 2

Total annualised employee equivalent (AEE) 4 2 4 2(based on working 38 ordinary hours per week over the reporting period)

Total Remuneration 428,836 227,657 428,836 227,657

NOTE 22: REMUNERATION OF AUDITORS

2013 2012

$'000 $'000

Victorian Auditor-General's Office

Audit or review of financial statement 24 1724 17

Total Remuneration Base Remuneration

Period

Total Remuneration Base Remuneration

41

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30 June 2013

NOTE 23: EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

There have been no events subsequent to the reporting date which require further disclosure.

NOTE 24: ECONOMIC DEPENDENCY

Rural Northwest Health is wholly dependent on the continued financial support of the State Government and in particular, the

Department of Health. The Department of Health has provided confirmation that it will continue to provide Rural Northwest Health adequate

cash flow support to meet its current and future obligations as and when they fall due for a period up to September 2013.

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WWW.RNH.NET.AU

Warracknabeal CampusDimboola Road PO Box 386 Warracknabeal VIC 3393 Tel: (03) 5396 1200 Fax: (03) 5396 1210 Email: [email protected]

Beulah CampusCnr Henty Hwy & Bell Street

PO Box 2 Beulah VIC 3395 Tel: (03) 5396 8200 Fax: (03) 5396 8201

Email: [email protected]

Hopetoun Campus12 Mitchell Place Hopetoun VIC 3396 Tel: (03) 5083 2000 Fax: (03) 5083 2050 Email: [email protected]

Documents

2013 - Parliament of Victoria - Home · Matthew Richardson Emma Vogel Management and Structure 6 Rural Northwest Health - Annual Report 2013 Rural Northwest Health - Annual Report