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Department of Health and Ageing Reports 2012-13 Volume 2
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annual report 2012-2O13 B E T T E R H E A LT H / B E T T E R C A R E / B E T T E R L I F E
VOLUME 2
DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 229
CONTENTS VOLUME TWO PART 3: MANAGEMENT AND ACCOUNTABILITY 231 3.1: CORPORATE GOVERNANCE 232
3.2: EXTERNAL LIAISON AND SCRUTINY 236
3.3: FINANCIAL MANAGEMENT 241
3.4: PEOPLE MANAGEMENT 245
3.5: STAFFING INFORMATION 250
3.6: WORK HEALTH AND SAFETY 259
3.7: CARERS RECOGNITION AND ADDRESSING DISABILITY 261
3.8: STRATEGIC INDICATORS OF SOCIAL INCLUSION 264
3.9: ECOLOGICALLY SUSTAINABLE DEVELOPMENT 268
3.10: ADVERTISING AND MARKET RESEARCH 271
PART 4: FINANCIAL STATEMENTS 275
4.1: DEPARTMENT OF HEALTH AND AGEING 277
Financial Performance (Administered and Departmental) 277
Independent Auditors Report 282
Financial Statements 285
4.2: THERAPEUTIC GOODS ADMINISTRATION 391
Independent Auditors Report 391
Financial Statements 394
APPENDICES 437
Appendix 1: Processes Leading to PBAC Consideration - Annual Report 2012-13 438 Appendix 2: Pharmaceutical Benefits Pricing Authority - Annual Report 2012-13 443
LIST OF REQUIREMENTS 450
INDEX 454
230
2012-13 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT
ISSN: 1447-8722 ISBN: 978-1-74186-043-6 Online ISBN: 978-1-74186-044-3 Publications approval number: 10225
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© Commonwealth of Australia 2013 This work is copyright. You may reproduce the whole or part of this work in unaltered form for your own personal use or, if you are part of an organisation, for internal use within your organisation, but only if you or your organisation do not use the reproduction for any commercial purpose and retain this copyright notice and all disclaimer notices as part of that reproduction. Apart from rights to use as permitted by the Copyright Act 1968 or allowed by this copyright notice, all other rights are reserved and you are not allowed to reproduce the whole or any part of this work in any way (electronic or otherwise) without first being given the specific written permission from the Commonwealth to do so. Requests and inquiries concerning reproduction and rights are to be sent to the Online, Services and External Relations Branch, Department of Health, GPO Box 9848, Canberra ACT 2601, or via e-mail to copyright@health.gov.au.
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© Commonwealth of Australia 2013 This work is copyright. You may download, display, print and reproduce the whole or part of this work in unaltered form for your own personal use or, if you are part of an organisation, for internal use within your organisation, but only if you or your organisation do not use the reproduction for any commercial purpose and retain this copyright notice and all disclaimer notices as part of that reproduction. Apart from rights to use as permitted by the Copyright Act 1968 or allowed by this copyright notice, all other rights are reserved and you are not allowed to reproduce the whole or any part of this work in any way (electronic or otherwise) without first being given the specific written permission from the Commonwealth to do so. Requests and inquiries concerning reproduction and rights are to be sent to the Online, Services and External Relations Branch, Department of Health, GPO Box 9848, Canberra ACT 2601, or via e-mail to copyright@health.gov.au.
The primary purpose of this report is to describe the Department’s activities during 2012-13, reporting on the performance and financial information presented in the 2012-13 Health and Ageing Portfolio Budget Statements, and the 2012-13 Health and Ageing Portfolio Additional Estimates Statements. Its aim is to provide readers with a useful and informative picture of the Department’s performance during the last year.
CONTACT INFORMATION
If you would like to comment on this Annual Report, or have any queries, please contact the Editor at:
The Editor, 2012-13 Annual Report Australian Government Department of Health
MDP 51 GPO Box 9848 CANBERRA ACT 2601 AUSTRALIA
Phone: +61 2 6289 7181 Fax: +61 2 6289 7177 Email: annrep@health.gov.au
This Annual Report is available online at www.health.gov.au/internet/ main/publishing.nsf/Content/ Annual+Reports-3
Further information on the Department of Health is also available online at: www.health.gov.au
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PART 3
MANAGEMENT AND ACCOUNTABILITY
3.1 CORPORATE GOVERNANCE 232
3.2 EXTERNAL LIAISON AND SCRUTINY 236
3.3 FINANCIAL MANAGEMENT 241
3.4 PEOPLE MANAGEMENT 245
3.5 STAFFING INFORMATION 250
3.6 WORK HEALTH AND SAFETY 259
3.7 CARER RECOGNITION AND ADDRESSING DISABILITY 261
3.8 STRATEGIC CHANGE INDICATORS OF SOCIAL INCLUSION 264
3.9 ECOLOGICALLY SUSTAINABLE DEVELOPMENT 268
3.10 ADVERTISING AND MARKETING RESEARCH 271
231
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3.1 CORPORATE GOVERNANCE The Department’s governance framework provides the structure for informed decision making, efficient and effective program management, risk management and accountability
The structure of high level committees, as indicated below, provides the Department with a transparent, rigorous and robust capacity for effective governance.
Executive Committee The Executive Committee is the Department’s primary decision making body. It comprises of the Secretary, Deputy Secretaries, the Therapeutic Goods Administration National Manager, the Chief Medical Officer and the Chief Financial Officer. The Committee meets weekly. It is responsible for making decisions on departmental policy and operational issues.
In 2012-13, the committee considered:
⢠key risks and mitigation strategies; ⢠strategies to reduce costs, staffing and workloads in line with budgets; ⢠high impact immediate and emerging issues; ⢠people management issues; ⢠expenditure proposals involving major investment; and ⢠recommendations from other governance and decision-making committees
in the Department.
Audit Committee The Audit Committee comprises three independent external members, one of whom is the Chair, and five departmental members. Representatives from the Australian National Audit Office also attend Committee meetings. The Committee met eight times during 2012-13 and provided independent assurance and advice to the Secretary on the Department’s risk, control and compliance framework and its external accountability responsibilities. Additionally, the Committee reviewed the Department’s financial statements and advised the Secretary regarding their signing.
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The Committee also regularly reviewed the coverage of audits throughout the Department against the Internal Audit Work Plan and provided input and feedback on performance audits undertaken by the Australian National Audit Office.
Policy Advisory Group The Policy Advisory Group was established in June 2012 to provide strategic oversight and advice to the Executive Committee on the development and implementation of major health and ageing policy reform.
The Group provides a central mechanism within the Department to respond to health and ageing policy challenges and complexities. It aims to improve linkages between policy design and program delivery to maintain the Department’s strategic directions and resourcing capability.
The Group is chaired by a Deputy Secretary, with 13 other members at both the Deputy Secretary and First Assistant Secretary level. First Assistant Secretaries who are not formal members of the Policy Advisory Group are also able to participate. The Group met four times during the year and considered issues including Aboriginal and Torres Strait Islander health, the implementation of Medicare Locals, eHealth, and the National Disability Insurance Scheme.
Finance, Risk and Security Committee The Finance, Risk and Security Committee provides advice and makes recommendations to the Executive Committee on financial and risk management, and strategic security management policies, initiatives and reviews. In 2012-13, oversight of the Department’s Work Health and Safety framework was added to the Committee’s responsibilities.
The Committee is chaired by a Deputy Secretary with 10 members representing key areas of the Department. The Committee meets at least once a quarter. The Committee met on four occasions in 2012-13.
Key activities considered by the Committee in 2012-13 included:
⢠a review of strategic risk mitigations consistent with the Department’s endorsed Risk Management Framework;
⢠progressing implementation of the Risk Management Improvement Roadmap; ⢠a review of the Department’s framework for managing work health and safety; ⢠endorsem*nt of a new business planning process and monitoring of the progress of a Budgeting and Forecasting Improvement project;
⢠consideration of key departmental financial issues impacting business unit allocations including further departmental savings announced by government;
⢠consideration of the status of departmental capital projects and associated appropriation funding; and
⢠endorsem*nt of updates on strategic security policy, framework improvements and testing programs including those associated with the Business Continuity Plan and the Disaster Recovery Plan.
People Committee The Department’s People Committee oversees implementation of activities identified in the Department’s People Strategy 2010-2015 and action plans. This includes attraction, retention, capability building, motivation and measurement. The People Committee also provides advice and recommendations to the Executive Committee on strategic people management issues.
The Committee is chaired by the Deputy Secretary responsible for corporate affairs and is comprised of seven Senior Executive Service and six APS/Executive Level staff. The Committee includes representation from state and territory offices, diversity groups, the graduate program and the Therapeutic Goods Administration. The Executive Committee determines the members of the People Committee annually. Other attendees may be invited to participate or observe in meetings of the Committee as required.
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In 2012-13, the Committee met four times. It considered items including progress against the Department’s Disability Workforce Action Plan 2011-2013, implementation of the Department’s Workforce Diversity Plan 2013-2016, implementation of the Departmental Activity Survey, ongoing management of the department-wide Aboriginal and Torres Strait Islander Cultural Awareness training and a new Middle Manager Development Program.
Information, Knowledge and Technology Committee The Information, Knowledge and Technology Committee is chaired by the Deputy Secretary, Chief Information and Knowledge Officer and has senior executive membership from across the Department. The Committee meets monthly and is accountable to the Executive Committee.
The Committee provides advice and makes recommendations to the Executive on strategic information, knowledge and technology matters. The Committee is responsible for development of the IT Strategy and the methodology for prioritising IT work within the Department, and subsequently the overall annual IT work-plan.
Matters that are considered by this committee include: the Information and Knowledge Management (IKM) Policy, Principles, Strategy, Procedures, Standards and necessary technology support; alignment of IKM delivery with agreed priorities and whole-of-government directions and standards; and setting and delivery of the IT Strategy and the overall IT delivery work-plan.
The Committee also provides advice to the Executive and the Finance, Risk and Security Committees on project proposals to ensure alignment with approved information, knowledge and technology directions, strategies and plans.
The Data Governance Council is a sub-committee of the Information, Knowledge and Technology Committee and is chaired by the Deputy Secretary, Chief Information and Knowledge Officer. The Committee makes policy recommendations on data governance issues and implements data management strategies to support the Department’s policy position. The Council was established in May 2012 and meets bi-monthly.
INTERNAL AUDIT ARRANGEMENTS Primary responsibility for internal audit arrangements within the Department rests with Audit and Fraud Control under the broad direction of the Department’s Audit Committee.
Audit and Fraud Control Audit and Fraud Control Branch conducts audits and investigations and provides independent advice and assistance to the Department’s senior management. Audit and Fraud Control Branch also provides fraud prevention and investigation services to the Department.
In 2012-13, Audit and Fraud Control Branch conducted a range of audits and reviews in line with the Audit Work Plan approved by the Audit Committee. The Audit Work Plan encompasses compliance with departmental control frameworks, grants and contract management, IT management, and departmental expenditure and procurement activities.
Fraud Minimisation Strategies During 2012-13, the Department continued its program of fraud awareness training to staff and introduced a new rolling program for the identification of fraud risks to be incorporated in the next fraud control plan.
The Department received 45 allegations of fraud during 2012-13, with some of these progressing to further assessment and investigation. The Department also referred a number of matters to the Commonwealth Director of Public Prosecutions or to departmental officers with powers authorised under the Public Service Act 1999.
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Risk Management The Department’s objective for effective risk management is to integrate its risk management practice with broader management processes and improvements.
The Department has in place a comprehensive Risk Management Framework (Framework) and associated procedures for effective identification and management of the Department’s business and financial risks.
The Framework provides the foundation and organisational arrangements for implementing, monitoring, reviewing and continually improving risk management throughout the organisation. The Framework is based on the Comcover - Better Practice Guide: Risk Management and the international standard AS/NZS ISO 31000:2009 Risk Management - Principles and Guidelines.
During 2012-13, the Department’s Enterprise Risk Management Plan and Strategic Risk Assessment were regularly discussed and reviewed with the Executive. This plan is a key component of the Framework and supports the fundamental alignment and integration of risk management across all levels of the Department.
Risk management plans have been developed for all major projects or undertakings.
The Department has updated Charter requirements to strengthen the relationship between the Audit Committee and the Finance Risk and Security Committee to ensure both committees are aligned to meet requirements of FMAR22C (4)(b).
The Department’s 2013 results in the Comcover Benchmarking Survey demonstrate the considerable progress made in embedding the Risk Management Program. The Department’s results are above the average for participating agencies.
CERTIFICATION OF DEPARTMENTAL FRAUD CONTROL ARRANGEMENTS
I, Jane Halton, certify that:
⢠the Department has prepared fraud risk assessments and fraud control plans; ⢠the Department has in place appropriate fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet the specific needs of the agency; and
⢠I have taken all reasonable measures to minimise the incidence of fraud in the Department and to investigate and recover the proceeds of fraud against the Department.
Professor Jane Halton PSM Secretary
October 2013
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3.2 EXTERNAL LIAISON AND SCRUTINY We value transparency and accountability
In 2012-13, the Department, through the Audit and Fraud Control Branch, worked with the Australian National Audit Office providing responses to proposed audit findings and recommendations prior to the Auditor-General presenting his reports in Parliament.
The Department also liaised with the Commonwealth Ombudsman on complaints relating to aspects of the Department’s administrative activities.
Information on the Auditor-General’s reports and the Commonwealth Ombudsman’s complaints is set out below.
AUSTRALIAN NATIONAL AUDIT OFFICE In 2012-13, the Australian National Audit Office (ANAO) tabled several reports in Parliament on audits involving the Department. Included were audits specific to the Department, cross-agency audits where the Department was involved and other audits where the Department was not directly involved but where recommendations were targeted at all agencies.
Audits Specific to the Department ⢠Managing Aged Care Complaints (Audit Report No.10 of 2012-13, tabled 13 November 2012).
The objective of the audit was to assess the Department’s implementation and ongoing management of the Aged Care Complaints Scheme and the effectiveness of the Department’s complaints management systems in supporting service delivery and regulatory outcomes. The Scheme was introduced in response to the Walton Review (an external review of the then Aged Care Complaints Investigation Scheme conducted in 2009), with the Government providing $50.6 million from 2010-11 to 2013-14 to reform the management of aged care complaints. Implementation of the Scheme was planned over four years and four phases.
The ANAO found that the Department made good progress to July 2012 in the implementation and ongoing management of the Scheme, with Phases 1 and 2 completed largely in line with the deliverables and timing agreed by the Australian Government in response to the Walton Review.
The ANAO issued two recommendations. The first was aimed at improving access to the Scheme for isolated care recipients and the second at increasing the level of confidence in feedback obtained from surveys of customer satisfaction with the complaints process. The Department agreed with these recommendations.
⢠Administration of Commonwealth Responsibilities under the National Partnership Agreement on Preventive Health (Audit Report No.12 of 2012-13, tabled 5 December 2012).
The objective of the audit was to assess the effectiveness of the Department and the Australian National Preventive Health Agency (ANPHA) in implementing the COAG National Partnership Agreement on Preventive Health. The Agreement’s aims include supporting all Australians to reduce their risk of chronic disease.
The ANAO found the Department and ANPHA had commenced all Australian Government initiatives under the Agreement, with some well underway. In particular, the agencies had: contributed to planning for the implementation of the Agreement; commissioned social marketing campaigns to encourage Australians to reduce the incidence of smoking and obesity; provided grants to organisations to deliver community-based healthy lifestyle programs; liaised with, and entered partnerships with, industry sectors to promote a healthy living agenda; and helped fund and arrange the expansion of the Australian Health Survey.
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The ANAO issued two recommendations. The first was directed at the Department, to give priority to progressing performance measurement against the benchmarks in the Agreement. The second, directed at ANPHA, to more clearly demonstrate the factual basis for statements appearing in campaign advertisem*nts. The Department and the ANPHA agreed with these recommendations.
⢠Administration of the GP Super Clinics Program (Audit Report No.50 of 2012-13, tabled 20 June 2013).
The objective of the audit was to assess the effectiveness of the Department’s administration of the GP Super Clinics program to support improved community access to integrated GP and primary health care services. The audit examined the Department’s compliance with the mandatory requirements of the Commonwealth Grant Guidelines (CGGs) and the extent to which the Department adopted sound practices in relation to the key principles for grants administration in the CGGs.
The GP Super Clinics program is one of several health infrastructure grant programs administered by the Department in recent years. At the time of the audit, two funding rounds had been held and funding of $418.7 million had been announced.
The ANAO found that the Department’s administration of the GP Super Clinics program was generally effective and consistent with government policy. The Department’s first round program guidelines (April 2008), addressed the key elements of the program’s operation and formed the basis for a generally sound grants application and assessment process.
The ANAO issued four recommendations. One related to providing Ministerial advice on implementation risks in the establishment phase of grant activities, one addressed better practice assessment of value for money for health infrastructure projects and two proposed improvements to the framework for reporting on program performance. The Department agreed with these recommendations.
Cross Agency Audits where the Department was Involved ⢠The Australian Government Performance Measurement and Reporting Framework - Pilot Project to Audit Key Performance Indicators (Audit Report No.28, tabled 23 April 2013).
⢠Administration of Government Advertising Arrangements: August 2011 to March 2013 (Audit Report No.54 of 2012-13, tabled 26 June 2013).
Other Audits where the Department was not Directly Involved but where Recommendations were Targeted at all Agencies ⢠Confidentiality in Government Contracts: Senate Order for Departmental and Agency Contracts (Calendar Year 2011 Compliance) - (Audit Report No.4 of 2012-13, tabled
20 September 2012).
⢠Control of Credit Card Use (Audit Report No.35 of 2012-13, tabled 16 May 2013). ⢠Agencies’ Implementation of Performance Audit Recommendations (Audit Report No.53 of 2012-13, tabled 25 June 2013).
Details of the Auditor-General’s reports, including responses to the recommendations where the Department was involved in the audits, can be found at the Australian National Audit Office website www.anao.gov.au. Other enquiries regarding the reports should be directed to the Assistant Secretary, Audit and Fraud Control Branch, in the Department.
OTHER PARLIAMENTARY SCRUTINY The Department appeared before the Senate Community Affairs Legislation Committee (Senate Estimates) on three occasions during 2012-13 for a total of 7 days:
⢠Supplementary Budget Estimates - 17 and 19 October 2012; ⢠Additional Budget Estimates - 13 and 15 February 2013; and ⢠Budget Estimates - 5, 6 and 7 June 2013. The Department also gave evidence and/or made submissions to a number of Parliamentary Committee inquiries.
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Senate Community Affairs Committee Legislation Committee ⢠Inquiry into the Private Health Insurance Legislation Amendment (Base Premium) Bill 2013.
⢠Inquiry into the Aged Care (Living Longer Living Better) Bill 2013 and associated legislation.
⢠Inquiry into the Therapeutic Goods Amendment (2013 Measures No. 1) Bill 2013.
⢠Inquiry into the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012.
References Committee ⢠Inquiry into supply of chemotherapy drugs such as Docataxel.
⢠Inquiry into the care and management of younger and older Australians living with dementia and behavioural and psychiatric symptoms of dementia.
⢠Inquiry into Australia’s domestic response to the World Health Organization’s (WHO) Commission on Social Determinants of Health.
⢠Inquiry into Palliative Care in Australia.
⢠Inquiry into the factors affecting the supply of health services and medical professionals in rural areas.
Senate Environment and Communications Committee Legislation Committee ⢠Renewable Energy (Electricity) Amendment (Excessive Noise from Wind Farms) Bill 2012.
References Committee ⢠Inquiry into recent trends in and preparedness for extreme weather events.
Senate Finance and Public Administration Committee Legislation Committee ⢠Inquiry into the Therapeutic Goods Amendment (Pharmaceutical Transparency) Bill 2013.
References Committee ⢠Inquiry into progress in the implementation of the recommendations of the 1999 Joint Expert Technical Advisory Committee on Antibiotic Resistance (JETACAR).
⢠Inquiry into the Implementation of the National Health Reform Agreement.
⢠Inquiry into Medicare Funding for Hyperbaric Oxygen Treatment.
Senate Rural and Regional Affairs Transport Committee Legislation Committee ⢠Biosecurity Bill 2012 and the Inspector-General of Biosecurity Bill 2012.
References Committee ⢠Inquiry into Beef Imports in Australia.
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Standing Committee on Health and Ageing ⢠Inquiry into Dementia: early diagnosis and intervention. ⢠Inquiry into skin cancer in Australia. ⢠Inquiry into adult dental services. ⢠Inquiry into health issues across international borders. ⢠Private briefing on issues related to the use of synthetic marijuana and other
synthetic drugs.
⢠Roundtable into adhesive Arachnoiditis.
Standing Committee on Petitions Petitions:
⢠642 - Restoration of the extended Medicare Safety-Net for Obstetrics. ⢠696 - Advanced radiotherapy treatments for Medicare Rebates. ⢠566 - National Bowel Cancer Screening Program.
Standing Committee on Social Policy and Legal Affairs ⢠Inquiry into the prevention, diagnosis and management of Fetal Alcohol Spectrum Disorders.
Joint Committee of Public Accounts and Audit ⢠Audit Report No. 45 (2011-12), Administration of Health and Hospitals Fund.
In addition, the Department had a significant workload of Parliamentary Questions with a combined total of 117 questions received on notice from the House of Representatives and the Senate, and a total of 901 questions from the three Senate Estimates hearings.
JUDICIAL DECISIONS AND DECISIONS OF ADMINISTRATIVE APPEALS TRIBUNALS During 2012-13, the Department was involved in:
⢠4 matters in the High Court; ⢠2 matters in the Full Federal Court; ⢠25 matters in the Federal Court; ⢠2 matters in the Federal Circuit Court; ⢠53 matters in the Administrative Appeals Tribunal; and ⢠1 matter in the South Australian Equal Opportunity Tribunal.
Significant issue JT International SA v Commonwealth of Australia, British American Tobacco Australasia Limited & Ors v Commonwealth of Australia.
On 5 October 2012, the High Court handed down its decision upholding the constitutional validity of the Tobacco Plain Packaging Act 2011. The Court found that the Act did not result in an acquisition of the intellectual property of the plaintiffs otherwise than on just terms of a kind to which Section 51(xxxi) of the Constitution applies.
The tobacco companies argued that the Act’s restrictions would render them unable to exploit their claimed property, especially their trademarks and product getup, on tobacco packaging and tobacco products in any meaningful or substantive way. Further, they argued that the restrictions would extinguish their proprietary rights as chattel owners to place whatever they wish on their tobacco packaging and tobacco products. The Court found that the restrictions did not operate so as to effect an acquisition of any proprietary right or interest by the Commonwealth.
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FREEDOM OF INFORMATION The Information Publication Scheme is a requirement under Part II of the Freedom of Information Act 1982 (FOI Act) that requires all agencies subject to the FOI Act to publish information about what is available to the public. The Department’s plan showing the information published in accordance with this requirement can be found at www.health.gov.au/internet/ main/publishing.nsf/Content/foi-doha-pub-scheme-agency-plan. Documents that the Department has released in response to FOI requests can be found on the Disclosure Log at: www.health.gov.au/internet/main/publishing.nsf/Content/foi-disc-log.
Decisions of the Australian Information Commissioner The Australian Information Commissioner made seven decisions on applications for review of FOI decisions by the Department. Three decisions were affirmed, three were set aside and substituted with new decisions and one decision was varied.
COMMONWEALTH OMBUDSMAN Anyone with concerns about the Department’s actions or decision-making is entitled to make a complaint with the Commonwealth Ombudsman, to determine whether the Department was wrong, unjust, discriminatory or unfair. Further information on the role of the Commonwealth Ombudsman can be obtained from the website: www.ombudsman.gov.au.
During 2012-13, the Commonwealth Ombudsman investigated 36 complaints against the Department’s administrative practices, 12 of which had carried over from 2011-12. Of the 24 new complaints investigations commenced in 2012-13, seven remain open at 30 June 2013.
REPORTING REQUIREMENTS UNDER SECTION 108 OF THE TOBACCO PLAIN PACKAGING ACT 2011
The Department, pursuant to section 108 of the Tobacco Plain Packaging Act 2011 (the “Act”), reports that in the financial year 2012-13, 59 alleged contraventions of the Act were investigated. Of those matters investigated, none have resulted in criminal prosecutions or civil penalty orders. In this period, three infringement notices and eight warning letters were issued.
A copy of this report has been provided to the Minister for Health.
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3.3 FINANCIAL MANAGEMENT We value using resources effectively
The Department’s financial accountability responsibilities are set out in Section 44 of the Financial Management and Accountability Act 1997. They are based on efficient, effective, economical and ethical use of Commonwealth allocated resources that is consistent with the policies of the Commonwealth. The Department meets these responsibilities by working within a financial control framework that supports efficient processing and recording of financial transactions, including the production of audited financial statements (the complete set of financial statements for the Department of Health and Ageing and the Therapeutic Goods Administration is provided in Part 4: Financial Statements). For an overview of the Department’s financial results for 2012-13, refer to the Chief Financial Officer’s Report in volume one.
In 2006-07, an annual financial reporting requirement known as the Certificate of Compliance was introduced. The certificate requires the Secretary to confirm the Department complied with the financial management and accountability legislation and other specified Commonwealth policies. It also confirms whether the Department is operating within the agreed resources for the current financial year.
To ensure the Department has complied with the certificate’s requirements in 2012-13, the Department has maintained effective financial processes and internal control mechanisms as well as ongoing compliance monitoring and reporting activities.
The Department’s corporate governance arrangements include a Finance, Risk and Security Committee to provide advice and make recommendations to the Executive Committee on financial management, risk management and strategic security management policies, initiatives and reviews. In addition, it is a forum for the discussion, prioritisation and planning of such matters.
Further detail on the Department’s committee structure is provided in Part 3.1: Corporate Governance.
ASSETS MANAGEMENT The Department’s asset management strategy emphasises whole-of-life asset management. The annual asset review seeks to minimise holdings of surplus and underperforming assets.
The Department’s stocktake of fixed and intangible assets in 2012-13 confirmed their location and condition.
In 2011-12, the Department conducted a revaluation of assets in accordance with the Australian Accounting Standard (AASB 116 Property, Plant and Equipment). In 2012-13, the Department obtained independent expert advice on asset values and conducted a review of assets for impairment (AASB 136 Impairment of Assets) to ensure assets are carried at no more than their recoverable amount.
Discussion relating to the assets administered by the Department in 2012-13 can be found in Part 4: Financial Statements.
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PURCHASING In 2012-13, with the exception of those instances reported in the Certificate of Compliance, the Department complied with the Commonwealth’s purchasing policies as stated in the Commonwealth Procurement Guidelines.97 The Department’s procurement framework encourages competition, value for money, transparency and accountability, and the efficient, effective and ethical use of resources.
CONSULTANTS The Department engages consultants where it lacks specialist expertise or when independent research, review or assessment is required. Consultants are typically engaged to investigate or diagnose a defined issue or problem; carry out defined reviews or evaluations; or provide independent advice, information or creative solutions to assist in the Department’s decision making. The Department also engages consultants for information technology projects.
Prior to engaging consultants, the Department takes into account the skills and resources required for the task, the skills available internally, and the cost-effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the Financial Management and Accountability Act 1997 and related regulations including the Commonwealth Procurement Guidelines and relevant internal policies.
During 2012-13, 277 new consultancy contracts were entered into involving total actual expenditure of $24.22 million. In addition, 138 ongoing consultancy contracts were active during 2012-13, involving total actual expenditure of $20.16 million. Consultancy contracts are funded from departmental and administered resources.
Table 3.3.1 Comparison of expenditure on consultancy contracts
2010-11 2011-12 2012-13
$45.33m $39.27m $44.38m
Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies greater than $10,000 is available on the AusTender website: www.tenders.gov.au.
GRANTS Information on grants awarded by the Department of Health and Ageing during the period 1 July 2012 to 30 June 2013 is available at www.health.gov.au/internet/main/publishing.nsf/ Content/pfps-grants reporting.
AUSTRALIAN NATIONAL AUDIT OFFICE ACCESS CLAUSES Three of the Department’s awarded Contracts or Deeds of Standing Offer, valued at $100,000 (GST inclusive) or greater, did not contain standard clauses granting the Auditor-General access to contractor’s premises. These contracts are identified in the table below.
97 Available at: www.finance.gov.au
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Table 3.3.2 Contracts not containing standard Auditor-General access clauses
CONTRACTOR NAME CONTRACT PURPOSE CONTRACT VALUE (GST INCLUSIVE) REASON ACCESS CLAUSE WASN’T INCLUDED
The Royal Children’s Hospital Melbourne Licence for the use of software.
$458,372 The Supplier’s contract was used and the Department did not request the inclusion of standard Commonwealth contract clauses.
Ipsos Public Affairs Pty Ltd Subscription contract. $107,505 The Supplier’s contract was used and the Department
did not request the inclusion of standard Commonwealth contract clauses.
Telstra Phone services
for BreastScreen Australia and National Cervical Screening Program.
$298,508 The Supplier’s contract was used and the Department did not request the inclusion of standard Commonwealth contract clauses.
EXEMPT CONTRACTS In 2012-13, 114 contracts were exempted from reporting on Austender on the basis that publishing contract details would disclose exempt matters under the Freedom of Information Act 1982.
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SPATIAL REPORTING
Table 3.3.3: 2012-13 Expenditure disaggregated for the Department of Health and Ageing1,2
PROGRAM
CATEGORY
BUDGET
ESTIMATE $M (A)
ACTUAL
EXPENSES $M (B)
VARIATION3 $M (A-B)
Pharmaceuticals and Benefits (Programs 2.1, 2.2, 2.3)
Regional 3,245 2,974 271
Non-regional 6,693 6,134 559
Non-specific 203 186 17
Total 10,141 9,294 847
Medical Services and Benefits (Program 3.1)
Regional 5,565 5,588 (23)
Non-regional 12,613 12,666 (52)
Non-specific 371 373 (2)
Total 18,549 18,626 (77)
Residential and Flexible Care (Program 4.4)4 Regional 2,584 2,599 (15)
Non-regional 5,672 5,706 (34)
Non-specific - - -
Total 8,256 8,305 (49)
Private Health Insurance (Program 9.1) Regional 1,336 1,349 (13)
Non-regional 3,699 3,735 (35)
Non-specific 103 104 (1)
Total 5,138 5,187 (49)
Targeted Rural Expenditure (various program numbers) Regional 2,201 2,066 135
Non-regional - - -
Non-specific - - -
Other Programs5 (various program numbers) Regional - - -
Non-regional - - -
Non-specific 7,280 7,618 (393)
Portfolio Total Regional 14,931 14,576 372
Non-regional 28,678 28,240 476
Non-specific 7,957 8,280 (379)
Portfolio Total 51,565 51,096 469
Notes: 1 Budget estimates have been updated to be consistent with the 2013-14 Portf olio Budget Statements. The regional classification and spatial reporting methodology in this Table is consistent with the Ministerial Statement. A copy of the statement is available at:
http://www.budget.gov.au/201213/content/ministerial_statements/rural_and_regional/html/rural_and_regional-11.htm.
2 Small errors may occur due to rounding.
3 The Pharmaceutical Benefits, Medical Benefits, Residential Aged Care and Private Health Insurance programs are demand driven.
4 The budget estimate and actual expense for progr am 4.4 have been reduced by the Zero Real Interest Loans concessional loan discount. The concessional loan discount is a non cash accounting expense which represents the difference between an estimate of the market rate of interest, and that recovered under the Zero Real Interest Loan agreements, over the life of the loan.
5 Data is not available to provide an allocation of regional and non-regional splits.
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3.4 PEOPLE MANAGEMENT We value the commitment, achievements and development of all staff, and our ability to apply our skills and training to the delivery of better health and ageing outcomes
WORKPLACE PLANNING AND STAFF RETENTION As at 30 June 2013, the Department employed 5,308 staff including Therapeutic Goods Administration, National Industrial Chemical Notification and Assessment Scheme, Office of the Gene Technology Regulator and Office of the Aged Care Commissioner staff. This figure includes staff on leave, secondment and inoperative staff. This compares with 5,092 as at 30 June 2012. A total of 4,739 staff were employed on an ongoing basis and 569 were non-ongoing.
During 2013, the Department of Health and Ageing Workforce Plan 2013-15 and the Information and Communication Technology (ICT) Workforce Plan 2013-2016 were agreed. Both plans identified a number of human resource strategies to be implemented that will enable the Department to take a more strategic approach to workforce planning.
During the year, workforce planning was more strongly embedded into the Department’s business planning cycle, with business units focusing on critical roles and workforce capability gaps and identifying strategies to mitigate workforce risks.
The ongoing employee retention rate remains high with 91% of ongoing employees remaining in the Department for the past 12 months. During the year, an exit survey was implemented with the results being used to inform attraction and retention strategies.
MANAGING AND DEVELOPING STAFF TO ACHIEVE DEPARTMENTAL OBJECTIVES The Department continues to improve the way it focuses on the management and development of staff towards the achievement of departmental objectives. The annual Staff Survey results show significant improvements in staff perception of the way their supervisors set performance expectations, manage people and support the development of their capabilities.
At the individual level, staff and their supervisors engage in a formal biannual Performance Development Scheme (PDS) process. The 2013 Staff Survey results showed that staff overwhelmingly reported that their PDS plan was linked to their branch business plan and that it adequately took into account their learning and development needs.
The Department has also developed a range of initiatives to progress the strategic focus on people management and capability development. The Department’s Workforce Plan 2013-15 provides a framework within which information about existing and anticipated business outcomes is mapped against current and future workforce capabilities. This will enable informed strategic workforce planning decisions at all levels of the organisation. The strategies that underpin this approach include a Learning and Capability Development Strategy, a Talent Management Strategy (to build future leadership), a Critical Role Skills Development Framework (to mitigate critical role risk), and a new program for the development of middle managers. In addition, work has commenced on a People Capability Framework, which will efficiently and effectively identify critical capability gaps that can impact on delivery of business outcomes.
In managing the performance of staff at the operational level, the Department continues to focus on developing staff capability through the ‘Optimising Performance’ initiative. This includes dedicated human resources support for managers, a comprehensive intranet portal with resources and a series of presentations designed to provide participants with practical people management techniques. This material also informs all of the core management capability development courses offered to managers.
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The Department, through the DoHA National Alignment, has embarked on a process of organisational redesign to maintain its ability to meet rising citizen and government expectations in a constrained fiscal environment. The Department is aiming to retain its pool of capable and skilled people and to build capability in new areas to deliver on the Government’s priorities. The Department has therefore implemented strategies to foster mobility, facilitating the ability of staff to transition between internal roles, thereby increasing the flexibility with which staff can be deployed. Internal movement of staff to support peak workloads and departmental priorities is a critical business enabler. More information on the DoHA National Alignment is provided in Part 1: About the Department.
WORKPLACE AGREEMENTS IN THE DEPARTMENT The Department’s agreement-making practices with its staff are consistent with the current Australian Public Service Bargaining Framework (2011) and the Fair Work Act 2009. The forms of workplace agreements available to Department staff during 2012-13 are discussed below.
Enterprise Agreement The Enterprise Agreement provides terms and conditions of employment for the Department’s non-Senior Executive Service staff. The Department’s current Enterprise Agreement took effect from 30 November 2011 with a nominal expiry date of 30 June 2014.
The Enterprise Agreement contains an individual flexibility arrangements clause, which enables the Department to make individual arrangements to provide additional or varied terms and conditions to non-Senior Executive Service staff where necessary. See Part 3.5: Staffing Information for details on the inclusions of the Enterprise Agreement.
Individual determinations Comprehensive terms and conditions of employment are provided for new Senior Executive Service staff via individual determinations made under Section 24(1) of the Public Service Act 1999. The determinations are produced following negotiations between the staff member and the Department regarding terms and conditions of employment. See Part 3.5: Staffing Information for more information on individual determinations in the Department.
Australian Workplace Agreements The Department no longer offers or varies Australian Workplace Agreements (AWAs), however there remain some Senior Executive Service staff with AWAs. Senior Executive Service staff covered by an AWA who negotiate new terms and conditions are subsequently supplemented via a Section 24(1) determination.
Common law contracts Common law contracts are not generally used by the Department, however they may be used to establish and/or supplement conditions and entitlements where necessary.
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REMUNERATION FOR SENIOR OFFICERS In 2012-13, the Department maintained a remuneration position consistent with equivalent public sector agencies. The Department ensures that base salaries, bonuses and inclusions such as the allowance paid in lieu of a motor vehicle comply with government policy and guidelines.
Individual salaries are negotiated on commencement and reviewed annually by the Department’s Executive. Total remuneration for Senior Executive Service staff can also include access to potential performance pay along with non-monetary inclusions or reimbursem*nts for mobile phones and laptops/tablets.
Performance pay Performance pay is a one off annual payment available to eligible ongoing Executive Level 2 (and equivalent) employees with an Individual Flexibility Arrangement (IFA) and Senior Executive Service (and equivalent) employees with individual agreements under the Public Service Act 1999 which provide access to performance pay. The staff member must have completed at least three months of observable performance within the Department’s performance cycle and have achieved the required Performance Development Scheme (PDS) rating at the end of the cycle for payment to be made. The quantum of performance pay received by each eligible staff member is determined by the rating received during the performance assessment period. A number of other departments have rolled performance pay into base salaries, but the Department of Health and Ageing has kept a performance pay scheme which is not guaranteed and which makes a portion of total remuneration contingent on performance.
The Department’s aim in offering performance pay includes:
⢠attracting high-performing executive employees; ⢠recognising and rewarding employee performance; ⢠encouraging a culture of innovation, continuous improvement and efficiency in delivering departmental outcomes and objectives; and
⢠encouraging current high-performing staff to build their capability and seek further development and promotion opportunities.
LEARNING AND DEVELOPMENT The Department conducts an annual Capability Needs Analysis to inform the development and delivery of learning and development activities. The Department is increasingly focusing on learning on-the-job. Training courses are designed to emphasise actions that participants can take in the workplace to further their development and to embed a culture of learning.
In 2012-13, the Department continued to offer a comprehensive national learning and development curriculum, providing regular courses addressing the capabilities most needed across the organisation as identified in the annual Capability Needs Analysis.
In the core capability development area 6,738 training places were taken up throughout the year. Core capability training was delivered in the following areas:
⢠people, management, leadership and change (29%); ⢠planning, communication and writing (30%); ⢠finance, procurement and risk (14%); ⢠information technology (12%); and ⢠other (15%).
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In addition, mandatory training in support of organisational improvement and the DoHA National Alignment projects contributed an additional 4,000 training places, amounting to a total of more than 10,000 training places.
Staff were also supported with online learning programs for cultural awareness, recordkeeping and new Work, Health and Safety Legislation. Online learning programs associated with these initiatives were accessed by 3,229 staff.
In addition, 130 staff attended corporately funded specialist or technical training.
In 2012-13, the Department supported the smaller agencies within the Health and Ageing Portfolio by providing access to in-house training, with 195 agency staff members taking part.
This year the Department initiated a new approach to the development of its management cadre through the pilot of a Middle Managers’ Development Program targeting staff at the Executive Level 2.
The Department also provided a number of other management and leadership opportunities for staff including a series of well-attended seminars for Executive Level staff, online learning through the Corporate Leadership Council, and an informal mentoring program. The Department also offered executive coaching services to Senior Executive Service staff and a number of them participated in a pilot program of cross-divisional Leadership Insight Groups.
The evaluation framework for all learning and development activities was redeveloped in 2012-13. This led to the collection of valuable information which provided insight for decision-making processes. The programs were evaluated as largely meeting the planned learning outcomes. Staff reported they were applying their learning towards meeting business outcomes in the workplace.
In 2012-13, the Department also continued its commitment to a range of entry level programs including the Graduate Development Program, Indigenous Pathways Programs, and the Information and Communications Technology (ICT) Program.
STAFF SURVEY The staff survey continues to be an important gauge of staff views and is in its tenth year. In the 2013 staff survey 82% of staff participated with 70% of those largely satisfied with the organisation and their job. While many of the Department’s results were above the APS average, the survey continues to identify areas for improvement and these will be addressed in the 2013-14 People Strategy Action Plan.
The staff survey shows an improvement in the way staff perceive their development needs are being met, with results now at or above those for comparable organisations. The majority of staff report satisfaction with the priority the Department places on learning and development and their access to relevant opportunities. About half of staff said that they have access to the formal or informal coaching and mentoring they need to perform, which supports the Department’s emphasis on workplace learning.
Productivity gains The Portfolio is expected to make significant savings in future years. These savings will be realised through the DoHA National Alignment program which is strategically targeting productivity and efficiency gains through:
⢠IT Reform (including a completed desktop refresh, the Electronic Document and Records Management System, Enterprise Data Warehouse and Parliamentary Workflow System).
⢠Grants Reform (including Flexible Funds program consolidation, Single Grant Management System, Single Enterprise Agreement and Grants Risk Framework).
⢠Administrative Reform (including Portfolio Shared Services Centre, Labour Hire Panel, correspondence streamlining and video conferencing).
⢠Ongoing Workload Reductions (including targeted process reviews).
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The Department has a goal to reduce workloads in line with reductions in resources as the Portfolio moves towards more efficient and best practice administration.
For more information on the DoHA National Alignment, refer to Part 1: About the Department.
ETHICAL STANDARDS During 2012-13 the Department continued its commitment to high ethical standards.
The Department provides new staff with a copy of the APS Values and the APS Code of Conduct, and educates staff of their responsibilities under the Public Service Act 1999 through DoHA Essentials training. This mandatory e-learning course emphasises the workplace behaviours expected of all staff.
In October 2012, a new ‘Managing Conduct’ intranet site was launched which contains the formal procedures and supporting guidelines for determining and managing suspected breaches of the APS Code of Conduct. The site includes comprehensive information for complainants, managers and respondents on all aspects of the complaints process and highlights the expectations of staff in their conduct and compliance with APS legislation. The website was supported by seminars on respect in the workplace and staff obligations in accordance with the APS Values and Code of Conduct.
Staff education continued on the APS Act amendments that came into effect on 1 July 2013. Staff across the Department were informed of the changes through all staff messages, presentations and intranet feature articles. In particular, changes to the APS Values and Code of Conduct and the introduction of the Employment Principles were highlighted.
The Department takes all alleged breaches of the APS Code of Conduct seriously and ensures processes are managed in accordance with best practice. The majority of complaints received were managed through local management action or preliminary investigation.
Five employees were formally investigated during 2012-13 for breaches of the APS Code of Conduct and three employees were found to have breached the Code. Two of those employees resigned prior to a sanction being imposed and the remaining one received a formal reprimand.
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3.5 STAFFING INFORMATION This section provides information on Australian Public Service (APS) employees engaged by the Department in 2012-13 under the Public Service Act 1999.
The following tables provide details on staff numbers, locations, and aggregated information on salary, performance pay and non-salary benefits provided to staff during the year. These figures include Therapeutic Goods Administration, National Industrial Chemical Notification and Assessment Scheme, Office of the Gene Technology Regulator and Office of the Aged Care Commissioner staff.
Table 3.5.1: Staff Numbers by Classification at 30 June 2013
CLASSIFICATION
FEMALE MALE
TOTAL FULL-TIME PART-TIME FULL-TIME PART-TIME
Secretary 1 - - - 1
Holder of Public Office 2 - 2 - 4
Senior Executive Band 3 1 - 6 - 7
Senior Executive Band 2 21 - 10 - 31
Senior Executive Band 1 61 1 55 - 117
Executive Level 2 306 53 251 14 624
Executive Level 1 728 241 421 40 1,430
APS6 855 257 363 26 1,501
APS5 453 97 172 13 735
APS4 269 43 80 5 397
APS3 77 31 41 4 153
APS2 19 20 13 23 75
APS1 1 5 7 10 23
Cadet 1 - 1 - 2
Graduate 55 - 22 - 77
Legal 2 13 3 12 1 29
Legal 1 11 3 9 - 23
Chief Medical Officer - - 1 - 1
Principal Medical Consultant - - - 1 1
Medical Officer Class 6 2 - 2 1 5
Medical Officer Class 5 6 - 7 3 16
Medical Officer Class 4 4 2 8 - 14
Medical Officer Class 3 2 1 2 1 6
Medical Officer Class 2 8 2 4 - 14
Medical Officer Class 1 - 1 - - 1
Professional 1 - - 1 - 1
Public Affairs 8 3 7 - 18
Senior Principal Research Scientist - - 1 1 2
Total 2,904 763 1,498 143 5,308
This table includes: ⢠Headcount figures of departmental staff as at 30 June 2013; ⢠Staff on leave, secondment and inoperative staff; and ⢠Staff acting at a higher level, for any period as at 30 June 2013 (i.e. these staff are listed
against their higher classification).
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Figure 3.5.1: Comparison of Staff Numbers by Gender between 30 June 2012 and 30 June 2013
3,561 1,531 5,092 3,667 1,641 5,308
1000
2000
3000
4000
5000
6000
FEMALE MALE TOTAL
HEAD COUNT
30 June 2012 30 June 2013
Table 3.5.2: Distribution of Staff at 30 June 2013
UNIT
FEMALE MALE
TOTAL ONGOING NON- ONGOING ONGOING NON-
ONGOING
Acute Care Division 140 8 46 8 202
Aged Care Commissioner 9 1 2 - 12
Ageing and Aged Care Division 313 26 116 22 477
ANZTPA Taskforce 1 1 - - 2
Audit and Fraud Control 8 2 9 2 21
Business Process Reform Unit 17 9 21 5 52
DNA Change Management Unit 10 - 5 2 17
eHealth Division 51 11 20 5 87
Executive 10 2 8 2 22
Health Workforce Division 92 14 27 6 139
ICT and Corporate Support Division 115 49 99 42 305
Legal and General Counsel 34 5 13 1 53
Medical Benefits Division 142 4 68 3 217
Mental Health and Drug Treatment Division 119 2 32 5 158
Office for Aboriginal and Torres Strait Islander Health 125 11 31 4 171
Office of Aged Care Quality and Compliance 150 6 78 7 241
Office of Health Protection 138 8 47 4 197
Office of the Chief Financial Officer 33 5 26 3 67
Office of the Chief Information and Knowledge Officer 15 5 12 3 35
People, Capability and Communication Division 130 18 40 7 195
Pharmaceutical Benefits Division 142 10 65 9 226
Population Health Division 178 4 39 3 224
Portfolio Strategies Division 97 8 49 5 159
Primary and Ambulatory Care Division 140 2 42 3 187
Regulatory Policy and Governance Division 118 16 42 6 182
Central Office Total 2,327 227 937 157 3,648
New South Wales and Australian Capital Territory Office 148 10 54 14 226
Northern Territory Office 28 11 4 2 45
Queensland Office 121 13 24 4 162
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UNIT
FEMALE MALE
TOTAL ONGOING NON-ONGOING ONGOING NON-
ONGOING
South Australia Office 58 2 22 - 82
Tasmania Office 30 1 5 1 37
Victoria Office 103 1 52 - 156
Western Australia Office 55 3 20 - 78
State Office Total 543 41 181 21 786
Core Department Total 2,870 268 1,118 178 4,434
National Industrial Chemical Notification and Assessment Scheme 36 12 25 6 79
Office of Gene Technology Regulator 23 5 23 3 54
Therapeutic Goods Administration 424 29 269 19 741
Departmental Total 3,353 314 1,435 206 5,308
This table includes the head count figures of all staff by unit as at 30 June 2013, including staff on leave, secondment and inoperative staff.
Non-ongoing figures include casual staff.
Table 3.5.3: Distribution of Staff by State and Territory at 30 June 2013
STATE
CORE
DEPARTMENT TGA* TOTAL
Australian Capital Territory** 3,652 703 4,355
New South Wales# 313 14 327
Victoria 177 20 197
Queensland 174 2 176
South Australia 85 2 87
Western Australia 80 - 80
Northern Territory 47 - 47
Tasmania 39 - 39
Total 4,567 741 5,308
* Therapeutic Goods Administration. ** Includes Central Office and the Office of the Gene Technology Regulator. # Includes the National Industrial Chemicals Notification and Assessment Scheme.
This table includes the head count figures of all staff by State and Territory as at 30 June 2013, including staff on leave, secondment, inoperative and outposted staff.
Table 3.5.4: Senior Executive Staf f and Equivalent Staff with Individual Agreements at 30 June 2013
NUMBER OF STAFF WITH APPROVED INDIVIDUAL AGREEMENTS
TOTAL NOMINAL CLASSIFICATION FEMALE MALE
SES 3 1 6 7
SES 2 18 9 27
SES 1 53 43 96
Chief Medical Officer - 1 1
Principal Medical Consultant - 1 1
Medical Officer 6 2 4 6
Medical Officer 5 6 5 11
Total 80 69 149
This table includes Senior Executive Service and equivalent staff who have Individual Agreements at their nominal classification and were employed by the Department as at 30 June 2013.
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Table 3.5.5: Non-Senior Executive Ser vice Staff covered by Individual Flexibility Arrangements and Enterprise Agreement at 30 June 2013
LEVEL
NUMBER OF STAFF COVERED BY ENTERPRISE AGREEMENT
NUMBER OF STAFF COVERED BY ENTERPRISE AGREEMENT AND AN APPROVED INDIVIDUAL FLEXIBILITY ARRANGEMENT
Non-Senior Executive Service staff 4,553 601
Table 3.5.6: APS Levels Salary Structure
CLASSIFICATION SALARY RANGES AS AT 1 JULY 2012 $
Executive Level 2 130,514
124,249
120,234
110,236
Executive Level 1 105,378
101,208
96,416
92,395
APS 6 84,823
82,965
78,834
75,187
APS 5 72,635
69,329
67,494
APS 4 66,210
64,387
62,663
APS 3 61,305
58,523
56,874
55,308
APS 2 52,227
50,775
49,296
47,860
APS 1 45,990
43,850
42,398
40,951
Staff at 20 years of age 37,265
Staff at 19 years of age 33,171
Staff at 18 years of age 28,666
Staff under 18 years of age 24,571
Table 3.5.7: Graduate APS Salary Structure - Commencement Salary
CLASSIFICATION SALARY RANGES AS AT 1 JULY 2012 $
Graduate APS 52,344
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Table 3.5.8: Professional 1 Salary Structure
LOCAL TITLE APS CLASSIFICATION SALARY RANGES AS AT 1 JULY 2012 $
Professional 1 APS 5 72,635
APS 5 69,329
APS 4 64,387
APS 4 # 62,663
APS 3 ## 58,523
APS 3 56,874
# Salary on commencement for a professional with a four year degree (or higher). ## Salary on commencement for a professional with a three year degree.
Table 3.5.9: Medical Officer Salary Structure
LOCAL TITLE SALARY RANGES AS AT 1 JULY 2012 $
Medical Officer Class 4 156,772
147,977
142,428
Medical Officer Class 3 136,746
130,605
Medical Officer Class 2 123,073
116,805
Medical Officer Class 1 106,742
96,698
89,847
82,938
Table 3.5.10: Legal Salary Structure
LOCAL TITLE APS CLASSIFICATION SALARY RANGES AS AT 1 JULY 2012 $
Legal 2 Executive Level 2 135,083
Executive Level 2 129,220
Executive Level 2 125,043
Legal 1 Executive Level 1 114,336
Executive Level 1 105,257
Executive Level 1 96,416
APS 6 82,965
APS 6 78,834
APS 6 75,187
APS 5 69,591
APS 4 65,241
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Table 3.5.11: Public Affairs Salary Structure
LOCAL TITLE APS CLASSIFICATION SALARY RANGES AS AT 1 JULY 2012 $
Senior Public Affairs 2 Executive Level 2 135,735
Executive Level 2 130,461
Senior Public Affairs 1 Executive Level 2 124,249
Public Affairs 3 Executive Level 1 113,282
Executive Level 1 107,787
Executive Level 1 101,236
Public Affairs 2 APS 6 84,910
APS 6 78,834
APS 6 75,187
Public Affairs 1 APS 5 72,635
APS 5 69,329
APS 4 66,210
APS 4* 62,663
*This level is generally reserved for staff with less than two years experience.
Table 3.5.12: Research Scientist Salary Structure
LOCAL TITLE APS CLASSIFICATION SALARY RANGES AS AT 1 JULY 2012 $
Senior Principal
Research Scientist
Executive Level 2 165,753
Executive Level 2 149,100
Principal Research Scientist
Executive Level 2 146,175
Executive Level 2 141,644
Executive Level 2 135,864
Executive Level 2 132,282
Executive Level 2 127,376
Senior Research Scientist
Executive Level 2 132,733
Executive Level 2 124,249
Executive Level 2 120,234
Executive Level 2 110,236
Research Scientist Executive Level 1 99,286
Executive Level 1 92,395
APS 6 78,980
APS 6 74,855
APS 6 72,819
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Table 3.5.13: Cadet Salary Structure
CLASSIFICATION SALARY RANGES AS AT 1 JULY 2012 $
Cadet Full-Time Study 22,901
(At 20 years) 20,840
(At 19 years) 18,550
(At 18 years) 16,031
(Under 18 years) 13,741
Cadet Practical Training (Adult) 45,808
43,351
42,212
40,842
(At 20 years) 37,166
(At 19 years) 33,082
(At 18 years) 28,590
(Under 18 years) 24,505
Table 3.5.14: Senior Executive Service and Senior Medical Officer Indicative Salary Bandwidths*
CLASSIFICATION MINIMUM $ MAXIMUM $
Senior Executive Band 3 247,200 264,494
Senior Executive Band 2 190,550 211,150
Senior Executive Band 1 144,200 185,400
Medical Officer Class 6 195,060 244,000
Medical Officer Class 5 186,269 199,323
* These are indicative as the Secretary may approve salary rates outside these bands.
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Table 3.5.15: Non-Salary Benefits
Non-Senior Executive Service Staff
Access to the Employee Assistance Program.
Extended purchased leave.
Maternity leave.
Parental leave.
Adoption leave.
Foster leave.
Leave for personal compelling reasons and exceptional circ*mstances.
Eligibility for performance based pay.
Access to paid leave at half pay.
Flextime (not all officers).
Flexible working locations and home-based work including, where appropriate, access to lap-top computers, dial-in facilities, and mobile phones.
Study assistance.
Support for professional and personal development.
Access to engage in private medical practice for Medical Officers.
Access to remote locality conditions.
Public Transport Loan Scheme.
Family care rooms.
Breastfeeding facilities.
Provision of eyesight testing and reimbursem*nt of prescribed eyewear costs specifically for use with screen based equipment.
Influenza and hepatitis B vaccinations for staff who are required to come into regular contact with members of the community classified as at increased risk with regard to influenza.
Recognition of travel time.
Annual closedown and early stand down at Easter and Christmas Eve.
Financial assistance to access financial advice for staff 54 years and older.
Access to Individual Flexibility Arrangements (IFA).
Senior Executive Service Staff
All the above benefits except flextime.
Car parking.
Airport lounge membership.
Home office equipment.
Private use of motor vehicles or an allowance in lieu in certain circ*mstances.
IT Reimbursem*nt Scheme.
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Table 3.5.16: Senior Executive Ser vice and Equivalent Staff, Performance-Based Payments, 1 July 2012 to 30 June 2013
LEVEL NUMBER
AGGREGATED AMOUNT
$
AVERAGE
$
MINIMUM
$
MAXIMUM
$
Senior Executive Band 2 and 3
41 736,035 17,952 2,742 39,750
Senior Executive Band 1 97 1,172,919 12,092 1,680 26,250
Total 138 1,908,955
This table includes figures of Senior Executive Service staff and equivalent staff who received performance pay. Due to the small numbers of staff at the Senior Executive Band 3 level, details for Senior Executive Bands 2 and 3 have been combined. Payments have been aggregated to preserve employees’ privacy.
The performance payments made in 2012-13 relate to assessments for the 2011-12 cycle.
Performance bonus payments are only available to staff with a current Individual Agreement which provides eligibility.
The level of performance pay is directly related to the individual’s performance assessment.
Performance pay has not been rolled into base salaries and is available only to eligible staff. It is subject to performance and therefore not a guaranteed payment.
Table 3.5.17: Non-Senior Executive Staff, Performance-Based Payments, 1 July 2011 to 30 June 2012
LEVEL NUMBER
AGGREGATED AMOUNT
$
AVERAGE
$
MINIMUM
$
MAXIMUM
$
Non-Senior Executive Service Staff
546 3,938,168 7,213 675 18,000
This table includes figures of Non-Senior Executive Service staff who received performance pay. Payments have been aggregated to preserve employees’ privacy. The majority of performance payments made in 2012-13 relate to assessments for the 2011-12 cycle; a small number relate to assessments for the 2012-13 cycle.
Performance bonus payments are only available to staff with an individual flexibility arrangement made under the Department’s Enterprise Agreement.
The level of performance pay is directly related to the individual’s performance assessment.
Staff with an entitlement to a performance bonus are assessed against a five point rating scale, which attracts a percentage payment.
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3.6 WORK HEALTH AND SAFETY We are committed to ensuring a safe and healthy work environment for all our workers, contractors and visitors.
The Department continues its commitment to ensuring a safe and healthy work environment for all workers, including contractors and visitors, consistent with the Work Health and Safety Act 2011 (Cth) (WHS Act) and the Safety, Rehabilitation and Compensation Act 1988. This commitment is also reflected in the Department’s Enterprise Agreement 2011-2014.
The Department actively supports injured and ill employees in their return to work and provides appropriate reasonable adjustment to working environments to achieve this, including flexible working arrangements. The commitment to provide early intervention strategies to assist injured and ill employees is supported by workplace rehabilitation assistance and/or medical examinations to determine fitness for duty.
The Department has undertaken a number of activities to implement changes resulting from the introduction of the WHS Act on 1 January 2012. During 2012-13, this included:
⢠revised national work health and safety (WHS) governance arrangements; and ⢠development of the WHS management system framework and guidance manual. This framework and manual sets out the responsibilities of all staff in maintaining effective health and safety practices via policies, guidelines and business processes. Guidance and business processes have been developed and implemented for improved risk assessment and management of travel in remote areas of Australia. Training for Health and Safety representatives (HSRs) and officers has been undertaken. An e-learning module continues to be available for all staff, including contractors and consultants, and an e-learning module for managers was also released in July 2012.
In 2013-14, further work will be undertaken to develop and embed the WHS management system and rehabilitation management system.
Initiatives Taken During the Year to Ensure Health, Safety and Welfare of Workers who Carry Out Work for the Department The Department undertook a range of initiatives under its Health and Life Strategy to increase the health and wellbeing of staff, encourage work-life balance and reduce the rate of illness and injury.
In addition, the Department continued its focus on early intervention and active case management for all employees experiencing injury and illness. A Rehabilitation Management System will be introduced during 2013-14 and initiatives such as training, education and practical tools for managers and employees will continue to be provided.
The Improving Wellness and Motivation in the Workplace: Reducing Unplanned Leave initiative is focused on supporting the Department’s commitment to: the creation, promotion and ongoing maintenance of a safe and healthy working environment; encouraging productive working relationships; and promoting and encouraging behaviours in staff and managers to assist in the management and reduction of unscheduled absence levels within the Department. The initiative complements existing departmental strategies and action plans aimed at promoting a positive work environment, preventing illness and injury, optimising performance and managing workloads and work-life balance. The average number of unplanned leave days taken by staff reduced a further one day per FTE in 2012-13, with a reduction of approximately two days per FTE over the past two financial years.
The Department provided influenza vaccinations, at no cost, to all staff interested in receiving a vaccination, as part of the Health and Wellbeing Strategy and the Enterprise Agreement.
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Health and Safety Outcomes (including the Impact on Injury Rates of Workers) Achieved as a Result of Initiatives During 2012-13, the Department maintained its workers’ compensation claim rate with 35 accepted claims compared to 34 in 2011-12.
The Department’s introduction of a Rehabilitation Management System in 2013-14 will strengthen the active commitment to early intervention and rehabilitation. This commitment will assist with minimising the periods of time off work to support a sustainable return to work outcomes for injured and ill employees.
Statistics of any Notifiable Incidents of which the Department Became Aware of During the Year that Arose Out of the Conduct of Business or Undertakings by the Department In 2012-13, the Department reported two serious personal injuries and two dangerous incidents to Comcare under the WHS Act. The Department reviewed and investigated all incident and hazard reports received and implemented necessary remedial action.
Any Investigations Conducted During the Year that Relate to Businesses or Undertakings Conducted by the Department, including Details of All Notices Given to the Department During the Year under Part 10 of the WHS Act No directions, notices or enforceable undertakings under the WHS Act were served on the Department during the year.
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3.7 CARER RECOGNITION AND ADDRESSING DISABILITY
3.7
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3.7 CARER RECOGNITION AND ADDRESSING DISABILITY We are committed to recognising and supporting staff that have caring responsibilities
Carer Recognition Act 2010 The Carer Recognition Act 2010 came into effect on 18 November 2010. The aim of the Act is to increase recognition and awareness of the role carers play in providing daily care and support to people with disability, medical conditions, mental illness or who are frail aged.
The criteria below measure the Department’s compliance with the Act and the responses provide an overall assessment of performance in 2012-13.
Measures Taken by the Department to Ensure Employees and Agents have an Awareness and Understanding of the Statement for Australia’s Carers [Part 3 s7(1)] The Department registered as a Care Aware Workplace under the National Carer Awareness Initiative in October 2012, reflecting its commitment to recognising and supporting carers in the workplace.
The Department provides funding and conducts information sharing activities for Carers Week each year. Carers Week aims to raise the profile of carers and the Carer Recognition Act 2010, including the Statement for Australia’s Carers. Departmental Carers Week activities included a national discussion with Departmental Carers, an information session, morning teas and display of Carers Week posters.
Department’s Internal Human Resource Policies, so far as they may Significantly Affect an Employee’s Caring Role, are to be Developed Having Due Regard to the Statement for Australia’s Carers [Part 3 s7(2)] Departmental staff may access a range of conditions, provided through the Enterprise Agreement 2011-2014 and employment guidelines, aimed at supporting them with their caring responsibilities. As a registered Care Aware Workplace under the National Carer Awareness Initiative, the provisions represent the Department’s commitment to recognising and supporting staff members caring for someone with a disability, mental illness, a chronic condition, or who is frail and dependent on them for support and attention.
Provisions available to assist staff with caring responsibilities include:
⢠paid and unpaid carers leave which may be granted for a range of reasons, including to meet family responsibilities and to provide care and support to family or household members where required;
⢠the ability to purchase up to six weeks additional leave per calendar year, with payment for the leave able to be spread over a maximum period of twelve months;
⢠ongoing delivery of the Department’s Improving Wellness and Motivation in the Workplace Initiative that, as part of its objectives, aims to help staff members to better balance their work and caring responsibilities;
⢠family care rooms to enable staff to carry out aspects of their normal duties while caring for dependants, as an alternative to taking leave;
⢠appropriate facilities to undertake breastfeeding, lactation and associated activities for mothers returning to work after maternity leave, with the Department currently an accredited Breastfeeding Friendly Workplace;
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⢠family care assistance to meet reasonable costs incurred by staff for family care arrangements where they are required by the Department to be away from their household outside of the standard working day;
⢠an Employee Assistance Program (EAP) which offers counselling for staff and their family to assist with work or personal issues; and
⢠flexible working arrangements, such as part time employment, flex-time and home-based work, to help accommodate the needs of staff members with caring responsibilities.
Measures Taken to Ensure that Employees and Agents take Action to Reflect the Principles of the Statement for Australia’s Carers in Developing, Implementing, Providing or Evaluating Care Supports [Part 3 s8(1)] In developing aged care policy and in service delivery, consideration is given to the needs of a number of vulnerable groups, including the specific needs of carers. Compliance with the Act is written into aged care service providers’ funding agreement schedules.
In 2012-13, as part of the development work for carer support centres, research was conducted to develop an evidence base on carer needs and support services. This was followed by national consultations with key carer stakeholders including carers and carer representatives to input into the development of model options.
An evaluation of the long day respite options supporting employed carers was conducted during 2012-13 as part of the Department’s commitment to carers through the National Carer Strategy. The evaluation gathered and analysed data from a broad range of sources in order to fully understand the support requirements and issues affecting carers who are in the workforce or re-entering the workforce.
In 2012-13, the National Ageing and Aged Care Strategy for people from Culturally and Linguistically Diverse (CALD) backgrounds was released. The strategy acknowledges the importance of recognising the valuable role performed by carers in providing support for older people from CALD backgrounds. The strategy aims to generate a greater awareness and understanding of the role of carers as partners in care by promoting carer specific information to aged care service providers and CALD communities.
Actions of the National Lesbian, Gay, Bisexual, Transgender and Intersex (LGBTI) Ageing and Aged Care Strategy, released in 2012-13, target LGBTI people and their carers equally. Government-funded aged care providers are supported to develop policies and organisational processes to address discrimination and prejudice; and to promote inclusion of LGBTI people, carers and staff within a best practice framework and among other residents/clients.
The Partners in Recovery (PIR) initiative promotes carers being recognised, respected and supported in providing support to people with severe and persistent mental illness with complex needs. Services and supports are made available from multiple sectors that patients and carers may come into contact with (and could benefit from) to work in a more collaborative, coordinated, and integrated way.
Consult Carers or Bodies that Represent Carers when Developing or Evaluating Care Supports [Part 3 s8(2)] Throughout 2012-13, the Department worked closely with the number of specialist advisory groups to inform design and implementation of the Living Longer Living Better aged care reforms.
Individual carers and representatives of carer organisations participated in stakeholder and community consultations undertaken during 2012-13 to:
⢠inform the strategic goals and action areas of the National Ageing and Aged Care Strategy for people from Culturally and Linguistically Diverse (CALD) backgrounds and the National Lesbian, Gay, Bisexual, Transgender and Intersex (LGBTI) Ageing and Aged Care Strategy;
⢠consult on the implementation arrangements, including the development of program guidelines for the Home Care Packages Program (to commence from 1 August 2013); and
⢠market research for the My Aged Care website (which was launched on 1 July 2013). A number of advisory groups that include carers or their representatives provided:
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⢠guidance for the overall implementation of the PIR Initiative; and ⢠advice to the Minister responsible for Ageing and the Department on issues relating to dementia programs including those affecting carers.
In addition, the Department is working closely with the Australian Bureau of Statistics to improve the evidence base for carer research, particularly through work to improve the Survey of Disability, Ageing and Carers.
The Department also funds advocacy agencies and peak bodies to represent carers issues to Government and the Department.
The National Disability Strategy Since 1994, Commonwealth departments and agencies have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In 2007-08, reporting on the employer role was transferred to the Australian Public Service Commission’s State of the Service Report and the APS Statistical Bulletin. These reports are available at www.apsc.gov.au. From 2010-11, departments and agencies have no longer been required to report on these functions.
The Commonwealth Disability Strategy has been overtaken by a new National Disability Strategy 2010-2020 which sets out a ten year national policy framework to improve the lives of people with disability, promote participation and create a more inclusive society. A high level two-yearly report will track progress against each of the six outcome areas of the Strategy and present a picture of how people with disability are faring.
The Social Inclusion Measurement and Reporting Strategy agreed by the Government in December 2009 will also include some reporting on disability matters in its regular How Australia is Faring report and, if appropriate, in strategic change indicators in agency Annual Reports. More detail on social inclusion can be found in Part 3.8: Strategic Change Indicators of Social Inclusion, in this annual report.
Agency Multicultural Plan Following extensive consultation in 2012-13 within the Health and Ageing Portfolio, the Department released its Agency Multicultural Plan 2013-15. This reaffirms The Department’s commitment to health services that are accessible and responsive to the needs of all Australians, including those from culturally and linguistically diverse backgrounds.
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3.8 STRATEGIC CHANGE INDICATORS OF SOCIAL INCLUSION
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3.8 STRATEGIC CHANGE INDICATORS OF SOCIAL INCLUSION We recognise and tackle the cause and impacts of health inequities through innovative, evidence based collaborative practices
INTRODUCTION Since 2011, Australian Government departments have been held accountable for their progress on social inclusion through reporting on strategic change indicators of social inclusion relevant to their portfolio in their annual reports. Strategic change indicators are short-term progress measures of potential progress in relevant areas of government policy and service delivery.
The Department reports against seven strategic change indicators on health risk factors for social inclusion and the outputs of government health and ageing programs designed to improve inclusion outcomes.
The indicators are reported by socio-economic status using Socio-Economic Indexes for Areas (SEIFA) and remoteness, subject to data availability. Not all data for the social change indicators can be expressed in the same categories.
INDICATORS Mortality rate Mortality rate is a summary measure of the overall health status of a population. Improvements rely not just on access to health services but on a range of factors including living conditions, and economic and social circ*mstances. This indicator will measure progress towards the Council of Australian Governments (COAG) target to close the life expectancy gap between Indigenous and non-Indigenous Australians within a generation.
Mortality rate (by Indigenous status) 2007-11 (aged standardised rate per 100,000 population)98
Non-Indigenous Australians 596
Indigenous Australians 1,151
Notes: Rates are directly age-standardised using the 2001 Australian Estimated Resident population. SEIFA and remoteness data not available.
Child mortality rate The child (0-4 years) mortality rate is an important indicator of the health of pregnant women, newborns and children. Halving the gap in mortality rates for Indigenous children under five within a decade (that is, by 2018) is one of the COAG targets to reduce disadvantage among Indigenous Australians. Indigenous child mortality rates are currently within the range required to meet the target.
98 Source: AIHW analysis of ABS Mortality Database (unpublished data). Data reported are for the jurisdictions with adequate levels of Indigenous identification (NSW, Qld, WA, SA, and NT combined).
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Child (0-4) years mortality rate (by Indigenous status), 2007-11 (rate per 100,000 population)99
Non-Indigenous Australians 95
Indigenous Australians 212
Note: SEIFA and remoteness data not available.
Obesity Obesity is a major risk factor for multiple chronic diseases which in turn are major causes of disability. There is a clear socio-economic gradient in obesity and its causes are exacerbated by social disadvantage and remoteness.
Obesity rate (by Indigenous status, SEIFA and remoteness), Australia, 2011-12100
All Australians Total Rate 27.5%
Indigenous Australians Total Rate Data not yet available101
Index of Disadvantage Quintile 1 32.8% Quintile 5 20.8%
(Most Disadvantaged) (Least Disadvantaged)
Remoteness of Residence Major Cities 25.5% Remote 33.9%
Note: Data for adults (18 years and over) and is not age standardised.
Smoking Smoking is a major risk factor for multiple chronic diseases and is thus a major cause of disability and death. There is a clear socio-economic gradient in smoking prevalence and, its causes are exacerbated by social disadvantage and remoteness.
Daily smoking rate (by Indigenous status, SEIFA and remoteness), Australia, 2011-12102
All Australians Total Rate 16.1%
Indigenous Australians Total Rate Data not yet available103
Index of Disadvantage Quintile 1 23.0% Quintile 5 9.9%
(Most Disadvantaged) (Least Disadvantaged)
Remoteness of Residence Major Cities 14.7% Outer Regional and Remote
22. 4%
Notes: Data for all Australians, index of disadvantage and remoteness of residence categories is for adults (18 years and over) and is not age standardised. The age standardised rate for all Australian adults (18 years and over) is 16.3%.
Very remote category has not been reported separately.
99 Source: AIHW analysis of ABS Mortality Database (unpublished data). Data reported are for the jurisdictions with adequate levels of Indigenous identification (NSW, Qld, WA, SA, and NT combined). 100 Source: ABS (unpublished) National Health Survey, 2011-12. 101 No new Indigenous data available (ABS Australian Aboriginal and Torres Strait Islander Health Survey 2012-13 will be released in November 2013). 102 Source: ABS 43640DO003_20112012 Australian Health Survey: Updated Results, 2011-12, Australia. 103 No new Indigenous data available (ABS Austr alian Aboriginal and Torres Strait Islander Health Survey 2012-13 will be released in November
2013). Data is for Indigenous adults and is age-standardised using the 2001 Australian Estimated Resident population.
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People deferring recommended treatment Deferring recommended treatment increases the chances that a medical condition will deteriorate. Social disadvantage contributes to treatment deferral, particularly in relation to purchasing medications.
Proportion of people deferring recommended treatment due to financial barriers (by SIEFA) 2011-12104
FINANCIAL BARRIERS TO USE OF SERVICE
General Practitioners 8.7% Lowest Decile 7.5% Highest Decile 5.6%
Specialists 9.4% Lowest Decile 8.9% Highest Decile 7.1%
Medications 9.6% Lowest Decile 11.0% Highest Decile 7.0%
Notes: Data are not available for Indigenous Australians.
Very remote data were not collected in the 2010-11 Patient Experience Survey.
Data are for persons aged 15 years and over, and age standardised to the 2001 Estimated Resident Population.
Potentially preventable hospitalisations Preventable hospitalisations can indicate that illness and treatment are poorly controlled and therefore more likely to impact on a person’s ability to participate in work and social life. Social disadvantage and remoteness are strongly associated with avoidable hospitalisations.
Rate of selected potentially preventable hospitalisations, by Indigenous status, remoteness and SEIFA, Australia, 2010-11 (aged standardised rate per 100,000 population)105
Indigenous Australians Total 11,137.8
Other Australians Total 2,672.2
Index of Disadvantage Quintile 1 3,432.2 Quintile 5 2,111.3
(Most Disadvantaged) (Least Disadvantaged)
Remoteness of Residence Major Cities 2,600.2 Very R emote 6,430.2
Treatment rates for mental illness Increasing numbers of people have received treatment for mental illness. This may indicate improved access to services and better-targeted services, or higher rates of mental illness. However, the 2011-12 Budget initiatives, which span five years, aim to build the capacity of the mental health care system so that Australians with, or at risk of mental illness receive treatment. Improving mental health contributes towards engaging socially and participating in work.
104 Source: CRC 2013 /ABS Patient Experiences in Australia: Summary of Findings 2011-12. 105 Source: CRC 2013/AIHW (unpublished) National Hospital Morbidity Database; ABS (unpublished) Estimated Resident Population, 30 June 2010; ABS (2009). Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, 1991 to 2021, 30 June 2009, Series B, Cat no. 3238.0.
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Treatment rates for mental illness (Commonwealth funded Medicare and DVA services)106
PROPORTION OF PEOPLE RECEIVING CLINICAL MENTAL HEALTH SERVICES 2010-11
Aged standardised rate Public 1.6% Private 0.1%
TYPE OF SERVICE
Psychiatrist 1.4%
Clinical Psychologist 1.1%
General Practitioner 5.4%
Other Allied Health 2.2%
Total 6.9%
REFERENCES Department of the Prime Minister and Cabinet 2010, A Stronger, Fairer Australia: National Statement on Social Inclusion.
http://www.socialinclusion.gov.au/sites/www.socialinclusion.gov.au/files/publications/pdf/ brochure_stronger_fairer_australia.pdf
COAG Reform Council (2013), Healthcare 2011-12: Comparing performance across Australia, Statistical supplement, COAG Reform Council, Sydney, 30 April 2013. http://www.coagreformcouncil.gov.au/sites/default/files/files/NHA%20Statistical%20 Supplement_FINAL.pdf
COAG Reform Council (2013), Indigenous Reform 2011-12: Comparing performance across Australia Sydney, 30 April 2013.
http://www.coagreformcouncil.gov.au/reports/indigenous-reform/indigenous-reform-2011-12-comparing-performance-across-australia
ABS Datacube: 48390DO001_201112 Patient Experiences in Australia: Summary of Findings, 2011-12. http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/4839.02011-12?OpenDocument
ABS Table 3: 43640DO003_20112012 Australian Health Survey: Updated Results, 2011-12 - Australia, released 7 June 2013. http://www.abs.gov.au/AUSSTATS/abs@.nsf/ DetailsPage/4364.0.55.0032011-2012?OpenDocument
106 Source: CRC 2013/State and Territory (unpublished) community mental health care data; Private Mental Health Alliance (unpublished) Centralised Data Management Service data; Department of Health and Ageing (DoHA) (unpublished) MBS Statistics; Department of Veterans’ Affairs (DVA) (unpublished) data; Australian Bureau of Statistics (ABS) (unpublished) Estimate Resident Population, 30 June 2009.
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3.9 ECOLOGICALLY SUSTAINABLE DEVELOPMENT We are committed to making a positive contribution to ecologically sustainable practices
Section 516A of the Environment Protection and Biodiversity and Conservation Act 1999 requires the Department to report on the following subsections of the Act in its Annual Report.
Activities of, and the Administration of Legislation by the Department during 2012-13 Accorded with ESD Principles [Section 516A(6)(a)] Of the pieces of legislation administered by the Department in 2012-13, the Gene Technology Act 2000 was relevant to, and met ecologically sustainable principles.
The Gene Technology Regulator (the Regulator) administers the Gene Technology Act 2000. The Act aims to protect the health and safety of people and the environment by identifying risks posed by gene technology and managing those risks through regulating dealings with genetically modified organisms.
Outcome Contribution to Ecologically Sustainable Development [Section 516A(6)(b)] In 2012-13, the Department, through the Office of the Gene Technology Regulator (OGTR), continued to support the Regulator in regulating activities involving live and viable genetically modified organisms. These activities ranged from contained work in certified laboratories to releases of genetically modified organisms into the environment. The Regulator imposed licence conditions to protect the environment, and used extensive powers to monitor and enforce those conditions.
In 2012-13, the Department continued its commitment to ecologically sustainable development by ensuring that it effectively delivered corporate operations with minimised environmental impact. This included adopting a methodical approach to planning, implementing and monitoring the Department’s environmental performance through programs and policies that are in accordance with current legislation, whole-of-government requirements and reflect environmental best practice.
The Effect of Departmental Activities on the Environment [Section 516A(6)(c)] In 2012-13, the Department’s key environmental management initiatives were aimed at reducing consumption of energy, minimising waste going to landfill and maximising the efficient use of resources.
The Department is committed to making a positive contribution to sustainable practices and uses whole-of-government benchmark indicators and targets to assess and monitor environmental performance.
Measures the Department is Taking to Minimise the Impact of Activities on the Environment [Section 516A(6)(d)] In 2012-13, the Department continued improvements on its Environmental Management System (EMS) in accordance with the International Standard ISO 14001:2004. The EMS tool assists the Department with monitoring and managing its environmental performance through identifying significant environmental aspects, assigning objectives and targets to control environmental impact, complying with legal requirements and developing Environmental Management Plans to manage and monitor these requirements.
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Mechanisms for Reviewing and Increasing the Effectiveness of those Measures that Minimise the Impact of the Department on the Environment [Section 516A(6)(e)]
Energy Consumption In 2012-13, the Department consumed 40,637 gigajoules of electricity compared to 43,637 gigajoules in 2011-12. This includes sites occupied by the Department, the Therapeutic Goods Administration, the Office of the Gene Technology Regulator and the Office of the Aged Care Commissioner.
The Department has continued to exceed the Energy Efficiency in Government Operations target of 7,500 megajoules per person per annum (MJ/person) for tenant light and power by achieving approximately 4,250 MJ/person in 2012-13.
Energy saving initiatives in the Department’s leased property portfolio includes T5 and movement activated sensor lighting, double glazed windows and energy efficient heating, ventilation and air-conditioning systems. This ensures that the National Australian Built Environmental Rating System (NABERS) and Greenstar ratings are achieved and upheld. As part of its strategic accommodation plan, the Department ensures it occupies buildings which meet the recommended NABERS rating of 4.5 stars and above.
The following table details the Department’s base building NABERS ratings that have achieved the recommended target:
BUILDING NABERS RATING
Sirius Building, Canberra 5.5
Elizabeth Street, Sydney 5.5
Waymouth Street, Adelaide 5.0
Woods Street, Darwin 5.0
Scarborough House, Canberra 4.5
Melville Street, Hobart 4.5
Ann Street, Brisbane 4.5
Collins Street, Melbourne 4.5
The Department accesses the whole-of-government electricity supply contract for the majority of its sites within the ACT and NSW, which includes 10% greenpower.
In 2012-13, the Department replaced physical desktop computers with hosted virtual desktops. This has resulted in the Department achieving the ICT Sustainability Plan end user target of 400kWh per user per annum (kWh/user/annum) in 2012. The Department is implementing further ICT energy savings initiatives and is confident in achieving the target of 250kWh/user/ annum in 2015.
The Department also participated in Earth Hour 2013 by switching off building lights, computers, monitors and office equipment for all its sites around Australia and encouraging staff and their families to join in at home.
Waste Management and Recourse Efficiency The Department is committed to the protection of the environment through implementation of efficient and effective waste management programs.
In the majority of the Department’s offices, segregated waste streams including general waste, commingled recycling, organic recycling and paper and cardboard recycling are in place. Further recycling efforts include printer and toner cartridges, mobile phones and battery recycling which ensures that these items do not end up in landfill.
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In 2012-13, the Department recycled more than half its total waste, with general waste sent to landfill decreasing by 15.3% and recycling increasing by 78.9% from 2011-12 to 2012-13.
WASTE (TONNES)
GENERAL WASTE
COMMINGLED RECYCLING PAPER & CARDBOARD RECYCLING
ORGANIC RECYCLING
2011-12 170.6 11.9 80.6 2.6
2012-13 144.5 42.1 125.3 2.7
The Department commenced purchasing 100% post-consumer recycled paper on 1 March 2013. The Department has decreased its paper consumption by 27.5% from 63,624 reams in 2011-12 to 46,101 reams in 2012-13.
The Department operates an excess stationary store which encourages staff to recycle and reuse existing stationary before ordering new supplies. The store aims to reduce excess waste going to landfill and helps to decrease the demand on natural resources and energy associated with producing, packaging and transporting these goods.
Vehicle Fleet and Travel During 2012-13, the Department maintained a fleet of 58 vehicles. This is a decrease from 61 vehicles the previous year. The fleet contained 56 vehicles that met the Green Vehicle Guide (GVG) score of 10.5 including 22 hybrid vehicles. The vehicles scoring below the GVG score are fit for purpose vehicles used in rural and remote areas. The Department’s vehicles procurement procedures state that all new or replacement vehicles must meet the GVG score to ensure compliance in the future.
The Department introduced video conferencing facilities nationally in 2012-13 to reduce the need for travel.
Water Conservation The Department occupies buildings which are fitted with a range of water-saving technologies including low-flow taps and showers, dual-flush cisterns and waterless or low-flow urinals and grey water systems.
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3.10
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3.10 ADVERTISING AND MARKETING RESEARCH The Department promotes community awareness of key health and ageing issues and programs by undertaking advertising campaigns. The Department also seeks the community’s views on health and ageing matters through market research activities.
In 2012-13, the Department is required to report on all payments over $12,100 (GST inclusive) to advertising agencies, market research organisations, polling organisations, media advertising organisations and direct mail organisations. These payments are set out below. The Department did not make any payments to polling organisations in 2012-13.
During 2012-13, the Department of Health and Ageing conducted the following advertising campaigns:
⢠Medicare for all ⢠National Tobacco Campaign - More Targeted Approach (Quit for You, Quit for Two campaign) ⢠Attracting More People to Work in Indigenous Health ⢠National Tobacco Campaign - Plain Packaging ⢠Victorian Health Funding advertising campaign Further information on these advertising campaigns is available at www.health.gov.au and in the reports on Australian Government advertising prepared by the Department of Finance and Deregulation. Those reports are available at www.finance.gov.au/advertising/index.html.
Table 3.10.1: Adver tising agencies (creative advertising agencies which have developed advertising campaigns)
ORGANISATION SERVICE PROVIDED
AMOUNT PAID (GST INCL)
The Trustee for the Knowles Bristow Trust trading as BCM Partnership
Creative services for the Medicare for all campaign $818,017
The Trustee for the Knowles Bristow Group trading as BCM Partnership
Creative services for the Quit for You, Quit for Two campaign $196,353
The Trustee for the Knowles Bristow Group trading as BCM Partnership
Creative services for the Attracting More People to Work in Indigenous Health campaign $37,186
The Trustee for the Knowles Bristow Group trading as BCM Partnership
Creative services for the Tobacco Plain Packaging campaign $213,495
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Table 3.10.2: Market Research Organisations
ORGANISATION SERVICE PROVIDED
AMOUNT PAID (GST INCL)
AMR Interactive Pty Ltd Concept testing of resources for Healthy Weight Guide and Physical Activity Guidelines $346,170
Blue Moon Unit Trust Developmental research for the National Drugs Campaign - 2012-2014 $393,250
Blue Moon Unit Trust Concept testing research for implementation of Tobacco Plain Packaging $69,850
Colmar Brunton Pty Ltd Concept testing research Round 3 for the National Drugs Campaign 2012-13 $110,000
Cultural Perspectives Pty Ltd, Trading as Cultural and Indigenous Research Centre Australia
Evaluation research for the Care for Kids Ears Campaign $196,375
Hall & Partners I Open Mind Consumer research testing on use and understanding of elements of a design concept for a front-of-pack label for food
$199,936
Instinct and Reason Concept testing and evaluation research for the development of educational materials for the Therapeutic Goods Administration
$70,400
Ipsos Public Affairs Pty Ltd Market research and development of materials for communication activities for the National Lead Clinicians Group
$165,396
Objective digital Concept testing and user evaluation of the online version of the Australian Regulatory Guidelines for Prescription Medicines
$34,210
ORIMA Research Pty Ltd Tobacco Social Marketing Campaigns - Special Audiences Evaluation $195,815
ORIMA Research Pty Ltd National Tobacco Campaign - More Targeted Approach Evaluation 2013 $445,900
ORIMA Research Pty Ltd National Tobacco Campaign - More Targeted Approach Evaluation - Wave 2 $143,418
ORIMA Research Pty Ltd Evaluation research for Attracting More People to Work in Indigenous Health Campaign $110,000
ORIMA Research Pty Ltd Concept testing for the Attracting More People to Work in Indigenous Health Campaign $154,423
Quantum Market Research Focus group testing of the Eat for Health consumer resources $72,050
Roy Morgan Research Research awareness of, and attitudes towards, the Aged Care Complaints Scheme $110,142
Snapcracker Research & Strategy Pty Ltd Concept testing research for the National Drugs Campaign 2013-14
$137,500
Stancombe Research & Planning Pty Ltd Evaluation of the 2013 Medicare Campaign $45,136
Taylor Nelson Sofres Provision of a research project supporting development of the My Aged Care website $150,000
The Social Research Centre Pty Ltd Evaluation research for the National HPV Vaccination Program Campaign
$93,057
Woolcott Research Pty Ltd Concept testing research for the National HPV Vaccination Program Campaign $165,880
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Table 3.10.3: Direct Mail Organisations107 (includes organisations which handle the sorting and mailing out of information material to the public.)
ORGANISATION SERVICE PROVIDED
AMOUNT PAID (GST INCL)
National Mail and Marketing Pty Ltd Tobacco Plain Packaging Part 1 $30,878
National Mail and Marketing Pty Ltd Tobacco Plain Packaging Part 2 $13,576
National Mail and Marketing Pty Ltd Better Access to Mental Health to providers $16,689
National Mail and Marketing Pty Ltd Aged Care - Living Longer Living Better Workforce $19,880
National Mail and Marketing Pty Ltd 2013 Seasonal Influenza to GP’s and Specialists $20,327
National Mail and Marketing Pty Ltd Immunisation Handbook 10th Edition $132,596
National Mail and Marketing Pty Ltd Infection Control Recourses to Aged Care facilities $30,369
National Mail and Marketing Pty Ltd Medicare for All campaign distribution to GP’s $12,765
National Mail and Marketing Pty Ltd National Bowel Cancer Screening Program resources $19,197
National Mail and Marketing Pty Ltd Immunisation - Measles, Mumps, Rubella and Varicella Vaccine
$13,922
National Mail and Marketing Pty Ltd Immunisation - Myths and Realities 5th Edition $12,289
National Mail and Marketing Pty Ltd Mail out to GPs about changes to the National Bowel Cancer Screening Program from 1 July 2013
$48,769
Table 3.10.4: Media Adv ertising Organisations (the master advertising agencies which place Government advertising in the media. This covers both campaign and non-campaign advertising.)
ORGANISATION SERVICE PROVIDED
AMOUNT PAID (GST INCL)
Adcorp Australia Ltd To advertise the release of the Invitation to Apply for funding to engage Partners in Recovery Organisations $31,133
Adcorp Australia Ltd Placing advertisem*nts regarding regulatory activities $17,487
Adcorp Australia Ltd Placing advertisem*nts for committee nominations $13,655
Adcorp Australia Ltd Advertising for the Rural Health Outreach Fund Invitation to Apply for 2013-14 to 2015-16 funding round
$64,782
107 The costs reported cover only the amount paid to the or ganisation and not the cost of postage or production of the material sent out. Where a creative agency or direct marketing agency has been used to create the direct mail materials, the amount paid to the agency is reported here.
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ORGANISATION SERVICE PROVIDED
AMOUNT PAID (GST INCL)
Adcorp Australia Ltd Advertising for the Invitation to Apply for grant funding for the expansion of the Community Visitors Scheme
$26,476
Adcorp Australia Ltd Advertising for the Invitation to Apply for grant funding under the Aged Care Service Improvement and Healthy Ageing Grants Fund
$20,923
Adcorp Australia Ltd Advertising for the Assistance with Care and Housing for the Aged Program expansion funding round $46,121
Adcorp Australia Ltd Advertising for the National Respite for Carers Program Funding Round 2012 - late cancellation fee $18,499
Adcorp Australia Ltd Advertising for the National Respite for Carers Program Funding Round 2012 - late cancellation fee $43,092
Adcorp Australia Ltd Invitation to apply - 2012-13 Aged Care Approvals Round $23,447
Adcorp Australia Ltd Advertising in professional magazines, directories and journals regarding NICNAS general awareness and registration
$17,993
Adcorp Australia Ltd Advertising for the recruitment of Australian Commission on Safety and Quality in Health Care staff $3,082
Adcorp Australia Ltd Advertising for the recruitment of Independent Hospital Pricing Authority staff $4,143
Adcorp Australia Ltd Advertising for the recruitment of National Mental Health Commission staff $1,480
Adcorp Australia Ltd Advertising for the recruitment of the Aged Care Pricing Commissioner and CEO Australian Aged Care Quality Agency
$20,554
Adcorp Australia Ltd Advertising for the recruitment of Senior Executive Staff (incl TGA) $21,029
Adcorp Australia Ltd Advertising for the recruitment of non-Senior Executive Staff (incl TGA) $38,465
Adcorp Australia Ltd Linkedin subscription $21,411
Mediabrands Australia Pty Ltd Media Buy - Tobacco Plain Packaging $746,989
Mediabrands Australia Pty Ltd Media Buy - Medicare for all campaign $4,971,578
Mediabrands Australia Pty Ltd Media Buy - Quit for You, Quit for Two campaign $5,876,996
Mediabrands Australia Pty Ltd Media Buy - Attracting More People to Work in Indigenous Health campaign $1,450,472
Mediabrands Australia Pty Ltd Media Buy - Victorian Health Funding Advertising campaign $154,885
PART 4 FINANCIAL STATEMENTS
4.1 Department of Health and Ageing 285 4.2 Therapeutic Goods Administration 394
275
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INTRODUCTION
3.1
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PART 4 FINANCIAL STATEMENTS CONTENTS
4
CONTENTS We value using resources efficiently
Part 4 contains the complete set of financial statements for the Department of Health and Ageing and the Therapeutic Goods Administration.
4.1 Department of Health and Ageing Financial Perf ormance - Administered 277
Financial Perf ormance - Departmental 278
2012-13 Financial Statements Process 281
Independent Auditor’ s Report 282
Statement by the Chief Executive and Chief Financial Officer 284
Statement of Comprehensive Income 285
Balance Sheet 286
Statement of Changes in Equit y 287
Cash Flow Statement 288
Schedule of Commitments 289
Schedule of Contingencies 291
Administered Schedule of Compr ehensive Income 292
Administered Schedule of Assets and Liabilities 293
Administered Reconciliation Schedule 294
Administered Cash Flow Statement 295
Schedule of Administer ed Commitments 297
Schedule of Administer ed Contingencies 298
Notes to and Forming P art of the Financial Statements 299
4.2 Therapeutic Goods Administration Independent Auditor’ s Report 391
Statement by the Secretary , Acting National Manager and Chief Financial Officer 393
Statement of Comprehensive Income 394
Balance Sheet 395
Statement of Changes in Equit y 396
Cash Flow Statement 397
Schedule of Commitments 398
Notes to and Forming P art of the Financial Statements 399
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FINANCIAL PERFORMANCE ADMINISTERED Income administered on behalf of Government
ADMINISTERED INCOME
Total 2012-13 administered income was $1.9 billion. Major items include:
⢠other revenue of $1.6 billion, which relates to Health and Hospital Fund receipts ($0.7 billion), collections from Private Health Insurance Administration Council (PHIAC) for private health insurance levies ($0.4 billion) and recoveries from states and territories for Residential and Care Services ($0.2 billion); and
⢠High Cost Drugs recoveries of $0.3 billion made under cost sharing arrangements with pharmaceutical companies.
Total administered expenses increased by $1.5 billion
ADMINISTERED EXPENSES
For the 2012-13 reporting period total expenses administered on behalf of the Commonwealth was $51.2 billion compared to the prior year expenses of $49.7 billion, an increase of $1.5 billion:
⢠personal benefits expense remained consistent at $33.7 billion ($33.6 billion in 2011-12). Personal benefits primarily relate to the Medicare Benefits and Pharmaceutical Benefits Schemes. These schemes fund access to medical services and medicines;
⢠subsidies expense increased by 4.2% to $9.4 billion ($9.1 billion in 2011-12). Subsidies are primarily administered by the Ageing and Aged Care Division, and relate to residential, aged and community care programs which provide support for healthy ageing for older Australians and quality and cost-effective care for older people and support of their carers;
⢠grants expense increased by 14.5% to $7.0 billion ($6.1 billion in 2011-12) in line with Budget expectations. The increase was in part due to the Home and Community Care (HACC) program moving to the Commonwealth from the states and territories other than Victoria and Western Australia and increased funding for the Victorian Local Hospital Network;
⢠supplier expenses were $0.5 billion consistent with 2011-12; and ⢠other expenses of $0.4 billion (consistent with 2011-12), the majority of which relates to the transfer of levies from the Private Health Insurance Administration Council (PHIAC) to the
Official Public Account (OPA).
Total administered assets remained constant at $1.0 billion
ASSETS AND LIABILITIES - ADMINISTERED
Total administered assets remained constant at $1.0 billion. Major administered assets comprise receivables of $0.4 billion, investments of $0.2 billion (including Health Workforce Australia) and inventories of $0.2 billion.
Total administered liabilities decreased by $0.5 billion
Total administered liabilities decreased by $0.5 billion to $2.9 billion ($3.4 billion in 2011-12) predominantly as a result of lower personal benefits payable under arrangements with the Department of Human Services, as well as lower grants payable to non-profit organisations.
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FINANCIAL PERFORMANCE DEPARTMENTAL Operating results DEPARTMENTAL OPERATING RESULT
The Department of Health and Ageing recorded a consolidated 2012-13 operating deficit of $52.1 million under the net cash appropriation model, introduced by the Commonwealth in 2010-11. On elimination of unfunded depreciation, the consolidated group recorded an operating deficit of $9.0 million primarily as a consequence of supporting a staff voluntary redundancy program.
The Department has recorded a consolidated operating surplus in eight of the last ten years.
Revenue from Government decreased by 1.8% for 2012-13
DEPARTMENTAL REVENUE
During 2012-13, revenue from Government decreased by 1.8% ($11.3 million) to $624.8 million.
The Department’s 2012-13 departmental appropriation revenue has been adjusted as a result of:
⢠prior year departmental measure movements (decrease of $23.2 million);
⢠new departmental budget funding (increase of $67.1 million); less ⢠impact of the Strategic Review ($24.4 million); ⢠additional efficiency dividends and whole of government saves measures ($17.5 million); and
⢠Section 32 transfers of funding to National Health Reform agencies ($10.5 million).
Sale of goods and rendering of services increased by 4.4% for 2012-13
During 2012-13, revenue from the sale of goods and rendering of services increased by 4.4% ($6.1 million) to $145.6 million primarily from:
⢠an increase of $3.2 million (2.8%) in Therapeutic Goods Administration; and
⢠an increase of $4.1 million (43.5%) in National Industrial Chemicals Notification and Assessment Scheme.
Other revenue decreased significantly ($13.9 million) as a result of a reduction in the recoveries for payments made on behalf of portfolio agencies under a shared services agreement.
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Total departmental expenses increased by 0.2% for 2012-13
DEPARTMENTAL EXPENSES
Operating expenses increased by a modest 0.2% ($1.8 million) during 2012-13 to $839.0 million (2011-12: $837.2 million).
The major movements included:
⢠an increase in depreciation expense of $26.0 million due to the capitalisation of departmental assets including the Enterprise Data Warehouse to support National Health Reform; offset by
⢠a decrease in employee and supplier costs of $11.5 million (1.5%) consistent with decreased revenues from Government; and
⢠a decrease in other expenses ($13.4 million) relating to payments made on behalf of portfolio agencies under a shared services agreement.
Movement in departmental assets and liabilities
DEPARTMENTAL ASSETS AND LIABILITIES
Total assets have decreased by $24.5 million to $499.9 million (2011-12: $524.4 million). The major contributors were:
⢠intangible assets increased by $15.8 million primarily due to the purchase and development of software holdings, including those related to the National Health Reform agenda; offset by
⢠a decrease in land and buildings of $11.8 million as a result of depreciating existing assets; and
⢠a decrease in receivables of $29.4 million as a result of drawdowns to fund capital expenditure.
Total liabilities have reduced by $3.6 million to $325.0 million (2011-12: $328.6 million). The major contributors were:
⢠supplier liabilities reduced by $10.0 million to $83.6 million; offset by
⢠an increase in employee provisions of $8.8 million due to the impact of annual pay increases.
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The Department’s equity position has improved over the last five years
SUSTAINABILITY
A five year summary of the Department’s assets, liabilities and equity position is provided in the graph below.
The Department’s net equity has improved over the last five years primarily through equity injections by Government to support IT software development.
Key Business Process Reform
The Department is progressing key reforms to be better placed to meet the financial challenges ahead and must continue persuing all avenues for productivity and efficiency improvement. Key reforms included automation of grants procurement and program funding in a single system, database alignment in the Department’s Enterprise Data Warehouse, improving IT Governance, expanding the number of agencies receiving services from the Department’s portfolio shared services centre and the introduction of a forecasting and budgeting tool to support improved resource management.
2008-09 2009-10 2010-11 2011-12 2012-13
Total Assets Total Liabilities Net Equity
(50)
50
100
150
200
250
300
350
400
450
500
550
600
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2012-13 F
INANCIAL
S
TATEMENTS
3.1
2012-13 FINANCIAL STATEMENTS PROCESS The Department has a robust quality assurance framework to ensure that the annual financial statements are prepared in accordance with Finance Minister’s Orders and Australian Accounting Standards.
The Audit Committee has a key role within this framework; they provide independent advice to the Secretary on the preparation and the review of the financial statements. To assist the Audit Committee with this responsibility the Department continued the Financial Statements Sub-Committee. The Audit Committee endorsed the annual financial statements prior to signing by the Secretary and Chief Financial Officer.
The Department’s financial statements were audited by the Australian National Audit Office (ANAO). An unmodified audit opinion was issued by the Auditor-General on the 13th September 2013.
Annual financial statements signing on 13th September 2013
Standing left to right:
Anthony Howatson, Office of the Chief Financial Officer; Craig Boyd, Deputy Chief Financial Officer; Oliver Winder, Chair of the Audit Committee; Nicole McLay, Chief Financial Officer, TGA; Rahul Tejani, ANAO; Puspa Dash, ANAO
Sitting left to right:
John Barbeler, Chief Financial Officer; Professor Jane Halton PSM, Centenary Medal, Secretary; Ian McPhee PSM, Auditor-General; Dr Anthony Hobbs, Principal Medical Adviser, TGA
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DEPARTMENT OF HEALTH AND AGEING STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2013
DEPARTMENT OF HEALTH AND AGEING STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2013
Notes 2013 2012
$'000 $'000
EXPENSES Employee benefits 3A 577,923 581,106
Supplier 3B 196,226 204,574
Depreciation and amortisation 3C 47,620 21,610
Write-down and impairment of assets 3D 1,680 964
Other expenses 3E 15,512 28,924
Total expenses 838,961 837,178
LESS:
OWN-SOURCE INCOME Own-source revenue Sale of goods and rendering of services 4A 145,557 139,425
Other revenue 4B 15,632 29,644
Total own-source revenue 161,189 169,069
Gains Sale of assets 4C - -
Other gains 4D 920 841
Total gains 920 841
Total own-source income 162,109 169,910
Net cost of services 676,852 667,268
Revenue from Government 4E 624,779 636,121
Deficit attributable to the Australian Government (52,073) (31,147)
OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to profit or loss Changes in asset revaluation surplus - 2,550
Total other comprehensive income - 2,550
Total comprehensive loss attributable to the Australian Government 30 (52,073) (28,597)
The above statement should be read in conjunction with the accompanying notes.
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DEPARTMENT OF HEALTH AND AGEING BALANCE SHEET as at 30 June 2013
DEPARTMENT OF HEALTH AND AGEING BALANCE SHEET as at 30 June 2013
Notes 2013 2012
$'000 $'000
ASSETS Financial assets Cash and cash equivalents 6A 3,947 7,325
Trade and other receivables 6B 265,815 283,851
Other financial assets 6C 373 2,355
Total financial assets 270,135 293,531
Non-financial assets Land and buildings 7A,C 68,594 80,408
Property, plant and equipment 7B,C 17,151 20,987
Intangibles 7D,E 136,923 121,161
Inventories 7F 186 162
Other non-financial assets 7G 6,877 8,156
Total non-financial assets 229,731 230,874
Total assets 499,866 524,405
LIABILITIES Payables Supplier payables 8A (83,560) (93,539)
Other payables 8B (70,676) (76,499)
Total payables (154,236) (170,038)
Provisions Employee provisions 9A (146,009) (137,191)
Other provisions 9B (24,740) (21,392)
Total provisions (170,749) (158,583)
Total liabilities (324,985) (328,621)
Net assets 174,881 195,784
EQUITY
Parent entity interest Contributed equity 236,739 205,569
Reserves 14,088 14,088
Accumulated deficit (75,946) (23,873)
Total parent entity interest 174,881 195,784
Total equity 174,881 195,784
The above statement should be read in conjunction with the accompanying notes.
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DEPARTMENT OF HEALTH AND AGEING STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2013
DEPARTMENT OF HEALTH AND AGEING STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2013
2013 2012 2013 2012 2013 2012 2013 2012
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Opening balance Balance carried forward from previous period (23,873) 7,274 14,088 11,538 205,569 180,168 195,784 198,980
Adjusted opening balance (23,873) 7,274 14,088 11,538 205,569 180,168 195,784 198,980
Comprehensive income Other comprehensive income - - - 2,550 - - - 2,550
Deficit for the period (52,073) (31,147) - - - - (52,073) (31,147)
Total comprehensive income (52,073) (31,147) - 2,550 - - (52,073) (28,597)
Contributions by owners Return of capital:
Reduction in equity appropriation
1
- - - - (29,324) - (29,324) -
Equity injection - appropriation - - - - 52,510 15,459 52,510 15,459
Departmental capital budget - - - - 7,984 9,942 7,984 9,942
Sub-total transactions with owners - - - - 31,170 25,401 31,170 25,401
Closing balance as at 30 June (75,946) (23,873) 14,088 14,088 236,739 205,569 174,881 195,784
Closing balance attributable to the Australian Government (75,946) (23,873) 14,088 14,088 236,739 205,569 174,881 195,784
The above statement should be read in conjunction with the accompanying notes.
Retained earnings Asset revaluation surplus Contributed equity/capital Total equity
1 Return of prior year appropriation relating to Appropriation Bill (No.2) 2010-2011.
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DEPARTMENT OF HEALTH AND AGEING CASH FLOW STATEMENT for the period ended June 2013
DEPARTMENT OF HEALTH AND AGEING CASH FLOW STATEMENT for the period ended 30 June 2013
Notes 2013 2012
$'000 $'000
OPERATING ACTIVITIES Cash received
Goods and services 159,663 138,992
Net GST received 27,450 28,907
Appropriations 702,979 693,599
Other 15,632 19,674
Total cash received 905,724 881,172
Cash used Employees (569,381) (561,766)
Suppliers (224,060) (208,682)
Cash to the Official Public Account (96,204) (72,852)
Other (15,512) (28,924)
Total cash used (905,157) (872,224)
Net cash from operating activities 10 567 8,948
INVESTING ACTIVITIES Cash received Proceeds from sales of property, plant and equipment 24 -
Total cash received 24 -
Cash used Purchase of property, plant, equipment and intangibles (64,521) (77,893)
Total cash used (64,521) (77,893)
Net cash used by investing activities (64,497) (77,893)
FINANCING ACTIVITIES Cash received Appropriations - Equity injection 49,943 59,469
Appropriations - Departmental capital budget 10,609 11,134
Total cash received 60,552 70,603
Net cash received from financing activities 60,552 70,603
Net increase/(decrease) in cash held (3,378) 1,658
Cash and cash equivalents at the beginning of the reporting period 7,325 5,667
Cash and cash equivalents at the end of the reporting period 6A 3,947 7,325
The above statement should be read in conjunction with the accompanying notes.
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DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF COMMITMENTS as at 30 June 2013
DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF COMMITMENTS as at 30 June 2013
2013 2012
$'000 $'000
BY TYPE Commitments receivable Net GST recoverable on commitments 58,387 63,912
Other commitments receivable 1,048 4,423
Total commitments receivable 59,435 68,335
Commitments payable Capital commitments Property, plant and equipment (340) (241)
Total capital commitments (340) (241)
Other commitments Operating leases (567,501) (669,775)
Research and development - (45)
Other (80,728) (74,916)
Total other commitments (648,229) (744,736)
Total commitments payable (648,569) (744,977)
Net commitments by type (589,134) (676,642)
BY MATURITY Commitments receivable One year or less 14,356 20,233
From one to five years 23,173 26,992
Over five years 21,906 21,110
Total commitments receivable 59,435 68,335
Commitments payable Capital commitments One year or less (340) (241)
Total capital commitments (340) (241)
Operating lease commitments One year or less (96,721) (114,218)
From one to five years (229,920) (323,450)
Over five years (240,860) (232,107)
Total operating lease commitments (567,501) (669,775)
Other commitments One year or less (53,123) (70,666)
From one to five years (27,595) (4,285)
Over five years (10) (10)
Total other commitments (80,728) (74,961)
Net commitments by maturity (589,134) (676,642)
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DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF COMMITMENTS as at 30 June 2013
DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF COMMITMENTS as at 30 June 2013
NOTE:
1. Commitments are GST inclusive where relevant.
3. Operating leases included are effectively non-cancellable and comprise:
Nature of leases Lease for office accommodation
Computer equipment
Office services
Security
The above schedule should be read in conjunction with the accompanying notes.
The Department has entered into a contractual arrangement to outsource the provision of office services, including file management and storage to 31 March 2014.
The Department has entered into a contractual arrangement to outsource the provision of building security to 28 February 2014.
2. The Department's capital commitments for property, plant and equipment relate to the Therapeutic Goods Administration's information technology equipment.
Lease payments are subject to reviews in accordance with the lease agreement. The reviews range from bi-annually to annually over the lease term and are either a predetermined increase or reviewed against market rentals at the time. Where offered, lease renewal options range from one to five years. A number of the Department's office accommodation leases contain lease payments that are subject to increases in accordance with movements in market rents. These contingent rent payments are not included in the commitment schedule as their value cannot be reliably estimated.
The Department has entered into a contractual arrangement to outsource the provision of IT infrastructure to 30 June 2015.
General description of leasing arrangement
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DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF CONTINGENCIES as at 30 June 2013
DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF CONTINGENCIES as at 30 June 2013
2013 2012
$'000 $'000
Contingent assets Guarantees - 86
Total contingent assets - 86
Contingent liabilities Claims for damages or costs (2,058) (465)
Guarantees (27,600) (27,600)
Total contingent liabilities (29,658) (28,065)
Net contingent assets (liabilities) (29,658) (27,979)
The above schedule should be read in conjunction with the accompanying notes.
Details of each class of contingent liabilities and contingent assets listed above are disclosed in Note 11, along with information on significant remote contingencies and contingencies that cannot be quantified.
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DEPARTMENT OF HEALTH AND AGEING ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME for the period ended 30 June 2013
DEPARTMENT OF HEALTH AND AGEING ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME for the period ended 30 June 2013
Notes 2013 2012
$'000 $'000
EXPENSES Suppliers 16A 499,420 467,704
Subsidies 16B 9,440,623 9,056,435
Personal benefits 16C 33,722,536 33,572,574
Grants 16D 7,030,094 6,138,040
Depreciation and amortisation 16E 19,141 833
Write-down and impairment of assets 16F 35,323 48,673
Foreign exchange losses (net) 16G - 9
Payments to CAC bodies 16H 34,632 37,325
Other expenses 16I 428,225 404,605
Total expenses administered on behalf of Government 51,209,994 49,726,198
LESS:
OWN-SOURCE INCOME Own-source revenue Taxation revenue Other taxes 17A 15,405 15,209
Total taxation revenue 15,405 15,209
Non-taxation revenue Sale of goods and rendering of services 17B - 188
Interest 17C 10,003 7,409
Recoveries 17D 361,736 234,501
Other revenue 17E 1,555,941 1,960,987
Total non-taxation revenue 1,927,680 2,203,085
Total own-source income administered on behalf of Government 1,943,085 2,218,294
Net cost of services 49,266,909 47,507,904
Deficit (49,266,909) (47,507,904)
OTHER COMPREHENSIVE INCOME Changes in administered investment reserves (23,990) (71,447)
Total other comprehensive income (23,990) (71,447)
Total comprehensive loss (49,290,899) (47,579,351)
The above schedule should be read in conjunction with the accompanying notes.
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DEPARTMENT OF HEALTH AND AGEING ADMINISTERED SCHEDULE OF ASSETS AND LIABILITIES as at 30 June 2013
DEPARTMENT OF HEALTH AND AGEING ADMINISTERED SCHEDULE OF ASSETS AND LIABILITIES as at 30 June 2013
Notes 2013 2012
$'000 $'000
ASSETS Financial assets Cash and cash equivalents 18A - 68,683
Personal benefits receivable 18B 123,512 147,404
Trade and other receivables 18C 423,513 254,547
Other investments 18D 193,606 217,596
Total financial assets 740,631 688,230
Non-financial assets Land and buildings 19A,B 20,460 21,292
Intangibles 19C,D 73,235 91,544
Inventories 19E 195,763 208,035
Total non-financial assets 289,458 320,871
Total assets administered on behalf of Government 1,030,089 1,009,101
LIABILITIES Payables Overdraft 20A (105,428) -
Suppliers 20B (43,777) (15,636)
Subsidies 20C (39,633) (47,835)
Personal benefits 20D (847,723) (1,217,895)
Grants 20E (358,468) (508,312)
Other payables 20F (42,396) (26,791)
Total payables (1,437,425) (1,816,469)
Provisions Subsidies 20G,I (392,000) (516,000)
Personal benefits 20H (1,064,534) (1,085,911)
Total provisions (1,456,534) (1,601,911)
Total liabilities administered on behalf of Government (2,893,959) (3,418,380)
Net liabilities (1,863,870) (2,409,279)
The above schedule should be read in conjunction with the accompanying notes.
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DEPARTMENT OF HEALTH AND AGEING ADMINISTERED RECONCILIATION SCHEDULE as at 30 June 2013
DEPARTMENT OF HEALTH AND AGEING ADMINISTERED RECONCILIATION SCHEDULE as at 30 June 2013
2013 2012
$'000 $'000
Opening administered assets less administered liabilities as at 1 July (2,409,279) (1,906,126)
Adjusted opening administered assets less administered liabilities (2,409,279) (1,906,126)
Surplus (deficit) items:
Plus: Administered income 1,943,085 2,218,294
Less: Administered expenses (non CAC) (51,175,362) (49,688,873)
Payments to CAC bodies (34,632) (37,325)
Other comprehensive income:
Administered revaluations taken to from reserves (23,990) (71,447)
Administered transfers to/from Australian Government:
Appropriation transfers from OPA:
Annual appropriations for administered expenses (non CAC) 7,196,623 5,586,254
Administered assets and liabilities appropriations 16,174 117,391
Net GST appropriations (20,327) 66,319
Annual appropriations for payment to CAC Act bodies 34,632 37,325
Special appropriations (unlimited) (non CAC) 43,648,880 42,239,221
Refund of receipts (section 28 FMA) 310 111
Transfers to OPA (1,039,984) (970,423)
Closing administered assets less administered liabilities as at 30 June (1,863,870) (2,409,279)
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DEPARTMENT OF HEALTH AND AGEING ADMINISTERED CASH FLOW STATEMENT for the perioD ended 30 June 2013
DEPARTMENT OF HEALTH AND AGEING ADMINISTERED CASH FLOW STATEMENT for the period ended 30 June 2013
2013 2012
$'000 $'000
OPERATING ACTIVITIES Cash received Sales of goods and rendering of services - 188
Interest 2,739 2,526
Taxes 15,405 15,209
Net GST received 521,673 350,892
Nation building fund receipts 729,274 1,240,852
Recoveries 377,043 221,230
Private Health Insurance Administration Council receipts 409,428 382,435
Other 206,017 360,768
Total cash received 2,261,579 2,574,100
Cash used Grants (7,636,636) (6,519,388)
Subsidies paid (9,503,033) (8,923,447)
Personal benefits (34,147,779) (33,282,418)
Suppliers (490,534) (483,969)
Payments to CAC bodies (34,632) (37,325)
Other (409,428) (382,444)
Total cash used (52,222,042) (49,628,991)
Net cash flows used by operating activities (49,960,463) (47,054,891)
INVESTING ACTIVITIES
Cash received Repayments of advances and loans 8,344 6,934
Transfers from other entities 15,605 26,931
Total cash received 23,949 33,865
Cash used Advances and loans made (73,904) (46,706)
Purchase of intangible assets - (91,544)
Total cash used (73,904) (138,250)
Net cash flows used by investing activities (49,955) (104,385)
FINANCING ACTIVITIES Cash received Administered GST appropriations 468,930 414,595
Total cash received 468,930 414,595
Cash used Return of GST appropriations to the Official Public Account (489,257) (348,276)
Total cash used (489,257) (348,276)
Net cash flows from/(used by) financing activities (20,327) 66,319
Net decrease in cash held (50,030,745) (47,092,957)
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DEPARTMENT OF HEALTH AND AGEING ADMINISTERED CASH FLOW STATEMENT for the period ended 30 June 2013
DEPARTMENT OF HEALTH AND AGEING ADMINISTERED CASH FLOW STATEMENT for the period ended 30 June 2013
Notes 2013 2,012
$'000 $'000
Cash and cash equivalents at the beginning of the reporting period 68,683 163,361
Cash from Official Public Account for:
Appropriations 50,880,445 47,862,911
Special Accounts 18,759 22,164
Capital appropriations 16,174 117,391
50,915,378 48,002,466
Cash to the Official Public Account for:
Special Accounts (18,759) (22,164)
Private Health Insurance Administration Council levies (409,428) (382,435)
Other (630,557) (599,588)
(1,058,744) (1,004,187)
Cash and cash equivalents and overdraft at the end of the reporting period 18A,20A (105,428) 68,683
This schedule should be read in conjunction with the accompanying notes.
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DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF ADMINISTERED COMMITMENTS as at 30 June 2013
DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF ADMINISTERED COMMITMENTS as at 30 June 2013
2013 2012
$'000 $'000
BY TYPE Commitments receivable Loan commitments 42,836 78,870
Net GST recoverable on commitments 739,326 605,250
Total commitments receivable 782,162 684,120
Commitments payable Other commitments Loan commitments (42,836) (78,870)
Research and development (112,935) (91,043)
Grants (10,233,048) (7,828,719)
Personal benefits (726,244) (144,633)
Subsidies (6,321) (65,162)
Other (597,127) (457,256)
Total other commitments (11,718,511) (8,665,683)
Total commitments payable (11,718,511) (8,665,683)
Net commitments by type (10,936,349) (7,981,563)
BY MATURITY Commitments receivable One year or less 443,075 385,738
From one to five years 339,087 298,382
Total commitments receivable 782,162 684,120
Commitments payable Other commitments One year or less (6,413,398) (4,493,598)
From one to five years (5,304,791) (4,171,698)
Over five years (322) (387)
Total other commitments (11,718,511) (8,665,683)
Total commitments payable (11,718,511) (8,665,683)
Net commitments by maturity (10,936,349) (7,981,563)
Note: Commitments are GST inclusive where relevant.
Other commitments comprise:
Loans
Grants
Personal benefits and subsidies
Other commitments relate to contracts for service and other supplier expenses.
Concessional loans are issued to eligible aged care providers to enable the providers to build and expand aged care homes in areas of high need. Research and development Provision of funding to enable high quality medical research and improve capacity and capability for research within Australia.
Other Amounts payable for personal benefit and subsidy schemes administered on behalf of Government.
Amounts payable under agreements in respect of which the grantee has yet to provide the services required.
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DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF ADMINISTERED CONTINGENCIES as at 30 June 2013
DEPARTMENT OF HEALTH AND AGEING SCHEDULE OF ADMINISTERED CONTINGENCIES as at 30 June 2013
2013 2012
$'000 $'000
Administered contingent liabilities
Indemnities (48,000) (46,000)
Claims for costs (167) (195)
Aged Care Accommodation Bond Guarantee Scheme (27,000) -
Total administered contingent liabilities (75,167) (46,195)
Net administered contingent liabilities (75,167) (46,195)
Details of each class of contingent liabilities and contingent assets in the above table are disclosed in Note 22, along with information on significant remote contingencies and contingencies that cannot be quantified.
The above schedule should be read in conjunction with the accompanying notes.
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DEPARTMENT OF HEALTH AND AGEING TABLE OF CONTENTS - NOTES DEPARTMENT OF HEALTH AND AGEING CONTENTS - NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 1: Summary of Significant Accounting Policies Note 2: Events After the Reporting Period Note 3: Expenses Note 4: Income Note 5: Business Operations Note 6: Financial Assets Note 7: Non-Financial Assets Note 8: Payables Note 9: Provisions Note 10: Cash Flow Reconciliation Note 11: Contingent Assets and Liabilities Note 12: Senior Executive Remuneration Note 13: Remuneration of Auditors Note 14: Financial Instruments Note 15: Financial Assets Reconciliation Note 16: Administered - Expenses Note 17: Administered - Income Note 18: Administered - Financial Assets Note 19: Administered - Non-Financial Assets Note 20: Administered - Payables, Provisions and Liabilities Note 21: Administered - Cash Flow Reconciliation Note 22: Administered - Contingent Assets and Liabilities Note 23: Administered - Financial Instruments Note 24: Administered - Financial Assets Reconciliation Note 25A: Appropriations Note 25B: Compliance with Statutory Requirements for Payments from the Consolidated Revenue Fund Note 26: Special Accounts Note 27: Compensation and Debt Relief Note 28: Reporting of Outcomes Note 29: Receipts Subject to Cost Recovery Policy Note 30: Net Cash Appropriation Arrangements
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 1: Summary of Significant Accounting Policies
1.1 Objectives of the Department of Health and Ageing
The Department of Health and Ageing (the Department) is an Australian Government controlled entity. It is a not-for-profit entity. The objective of the Department is to lead the development of Australia’s health and ageing programs to achieve a world class health and ageing system for all Australians.
The Department is structured to meet the following 14 outcomes:
Outcome 1 Population Health A reduction in the incidence of preventable mortality and morbidity in Australia, including through regulation and national initiatives that support healthy lifestyles and disease prevention
Outcome 2 Access to Pharmaceutical Services Access to cost-effective medicines, including through the Pharmaceutical Benefits Scheme and related subsidies, and assistance
for medication management through industry partnerships
Outcome 3 Access to Medical Services Access to cost-effective medical, practice nursing and allied health services, including through Medicare subsidies for clinically relevant
services
Outcome 4 Aged Care and Population Ageing Access to quality and affordable aged care and carer support services for older people, including through subsidies and grants, industry
assistance, training and regulation of the aged care sector
Outcome 5 Primary Care Access to comprehensive, community-based health care, including through first point of call services for prevention, diagnosis and treatment of ill-health, and for ongoing management of chronic disease
Outcome 6 Rural Health Access to health services for people living in rural, regional and remote Australia, including through health infrastructure and outreach services
Outcome 7 Hearing Services A reduction in the incidence and consequence of hearing loss, including through research and prevention activities, and access to hearing services and devices for eligible people
Outcome 8 Indigenous Health Closing the gap in life expectancy and child mortality rates for Indigenous Australians, including through primary health care, child and maternal health, and substance use services
Outcome 9 Private Health Improved choice in health services by supporting affordable quality private health care, including through private health insurance rebates and a regulatory framework
Outcome 10 Health System Capacity and Quality Improved long-term capacity, quality and safety of Australia’s health care system to meet future health needs, including through investment
in health infrastructure, international engagement, consistent performance reporting and research
Outcome 11 Mental Health Improved mental health and suicide prevention, including through targeted prevention, identification, early intervention and health care services
Outcome 12 Health Workforce Capacity Improved capacity, quality and mix of the health workforce to meet the requirements of health services, including through training,
registration, accreditation and distribution strategies
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 1: Summary of Significant Accounting Policies
Outcome 13 Acute Care Improved access to public hospitals, acute care services and public dental services, including through targeted strategies, and payments to state and territory governments
Outcome 14 Biosecurity and Emergency Response Preparedness to respond to national health emergencies and risks, including through surveillance, regulation, prevention, detection and
leadership in national health coordination
The continued existence of the Department in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the Department’s administration and programs.
Department activities contributing toward these outcomes are classified as either Departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the Department in its own right. Administered activities involve the management or oversight by the Department, on behalf of the Government, of items controlled or incurred by the Government.
The entity conducts the following administered activities on behalf of the Government:
ï· payment of subsidies for residential, aged care and community programs; ï· payment of personal benefits for Medicare services, pharmaceutical services and affordability and choice of health care initiatives; and ï· payment of grants, with the majority of these made to non-profit organisations.
The Australian Government continues to have regard to developments in case law, including the High Court’s most recent decision on Commonwealth expenditure in Williams v Commonwealth (2012) 288 ALR 410, as they contribute to the larger body of law relevant to the development of Commonwealth programs. In accordance with its general practice, the Government will continue to monitor and assess risk and decide on any appropriate actions to respond to risks of expenditure not being consistent with constitutional or other legal requirements.
1.2 Basis of Preparation of the Financial Statements
The financial statements are general purpose financial statements and are required by section 49 of the Financial Management and Accountability Act 1997 (FMA Act).
The financial statements and notes have been prepared in accordance with:
ï· Finance Minister’s Orders (FMOs) for reporting periods ending on or after 1 July 2011; and ï· Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.
The financial statements and notes have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
The financial statements and notes are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.
Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and liabilities are recognised in the Balance Sheet when and only when it is probable that future economic benefits will flow to the Department or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executor contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the Schedule of Commitments and the Schedule of Contingencies.
Unless an alternative treatment is specifically required by an accounting standard or the FMOs, income and expenses are recognised in the Statement of Comprehensive Income when, and only when, the flow consumption or loss of economic benefits has occurred and can be reliably measured.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 1: Summary of Significant Accounting Policies
Administered revenues, expenses, assets, liabilities and cash flows reported in the administered schedules and related notes are accounted for on the same basis and using the same policies as for Departmental items, except as otherwise stated in Note 1.20.
The Department’s combined financial statements include the financial statements of the Therapeutic Goods Administration (TGA) and two Departmental special accounts, the Office of the Gene Technology Regulator (OGTR) and the National Industrial Chemicals Notification and Assessment Scheme (NICNAS).
All transactions between these organisations have been eliminated from the combined financial statements. Where necessary, account balances of the individual reporting entities have been aligned to ensure consistency in the combined financial statements.
Comparative Figures
Comparative figures have been adjusted, where required, to conform to changes in presentation of the financial statements.
1.3 Significant Accounting Judgements and Estimates
Departmental
No accounting assumptions and estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.
Administered
The following assumptions and estimates have been identified that may have a significant risk of causing material adjustments to the carrying amounts of administered assets and liabilities within the next accounting period.
Medical Indemnity
Medical Indemnity is administered by the Department under the Medical Indemnity Act 2002 and the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010. The Department administers the following medical indemnity schemes:
ï Incurred But Not Reported Scheme (IBNRS);
ï High Cost Claims Scheme (HCCS);
ï Exceptional Claims Scheme (ECS);
ï Run-Off Cover Scheme (ROCS);
ï Premium Support Scheme (PSS);
ï Midwife Professional Indemnity (Commonwealth Contribution) Scheme (MPIS); and
ï Midwife Professional Indemnity Run-off Cover Scheme (MPIRCS).
Further detail on each of these schemes is provided at Note 20 I.
The payments for medical indemnity are managed by the Department of Human Services (DHS), the service delivery agency, on behalf of the Department through its Medicare program.
The Australian Government Actuary (AGA) estimated the provision for future payments for the medical schemes administered by the Department. At the balance date provision for future payment was recognised for IBNRS, HCCS, and ROCS. No provision was recognised for ECS, MPIS or MPIRCS as, to date, no payment has been made against these schemes and they could not be reliably measured and are reported as a contingent liability in Note 22. No provision was recognised for the PSS as the nature and timing of payments associated with this scheme are based on a relatively predictable pattern of annual payments that must be settled within 12 months of the end of a premium period.
The nature of the medical indemnity liability estimates is inherently, and unavoidably uncertain.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 1: Summary of Significant Accounting Policies
The uncertainty arises for of the following reasons:
ï it is not possible to precisely model the claim process, and random variation both in past and future claims have adverse consequences on the model;
ï there can be a long delay between incident occurrences to notification to settlement, making the projection of timing very uncertain;
ï the nature and cause of injury is difficult to determine and prove;
ï the claims experience can be very sensitive to the surrounding factors such as technology, legislation, attitudes and the economy; and
ï in general, these schemes have only a few very large claims which account for a substantial part of the overall cost. This is associated with large expected random variation. It follows that a wide range of results can be obtained with equal statistical significance which differs materially in the context of a balance sheet. This is a common situation with liabilities of this nature.
The methods used by the AGA to estimate the liability under the different schemes are as follows:
⢠General:
The AGA has relied on projections that have been prepared by the appointed actuaries to the five medical indemnity insurers (MIIs) and provided to the Commonwealth under the relevant provisions of the Medical Indemnity Act 2002 and the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010. The payments information from the Medicare program complemented the projection. Where appropriate, adjustments have been made to those projections as described below.
⢠IBNRS:
The AGA has carried out chain ladder modelling using the payments data. The results of this analysis have been compared to the projections prepared by the industry actuaries. The results closely match and as a result, the AGA has largely relied on industry projections to estimate the liability.
⢠ROCS:
The AGA has developed an independent ROCS actuarial model which estimates the total annual accruing ROCS cost to the Commonwealth. The model output is used to check against industry actuaries’ projections. For the estimate of the outstanding ROCS liability as at 30 June 2013, the AGA has relied on the projections from the actuary of each of the MIIs, but has adjusted the IBNR component on comparison with the projections from its own ROCS internal model.
⢠HCCS:
The AGA has relied on the projections of the industry actuaries but has made adjustments in respect of claims which are also eligible for the IBNRS and/or ROCS to ensure overall consistency of the estimates.
The experience of the Medical Indemnity claims cycle indicates that claims and subsequent payments can take a number of years to mature and settle. The Department has used a 4% per annum discount rate in the calculation of the estimate for the current year. The 10 year bond yield at 30 June 2013 was 3.8%, therefore, 4% appears appropriate. A discount rate of 3% was used last year as it best reflected the ten year bond rate (3.04%) at that time.
A sensitivity analysis was undertaken by moving the discount rate either up or down by 1%. Increasing the discount rate by one percentage point would result in a liability estimate which is about 5% ($22m) less than the base estimate. On the other hand, decreasing the discount rate by one percentage point would result in a liability estimate which is about 6% ($24m) higher than base estimate.
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discounted discounted discounted
3% 4%
1
5%
$'m $'m $'m
Incurred But Not Reported 44 42 40
High Cost Claims Scheme 266 254 243
Run-Off Cover Scheme 104 96 88
Total 414 392 371
1 4% was used as the basis of estimation in 2012-13, see note 20 I
Medicare Outstanding Claims
Medicare payments processed by the DHS on behalf of the Department are either reimbursem*nt to patients, made after medical services have been received from a doctor, or payments made directly to doctors through the bulk billing system. At any point in time, there are thousands of cases where a medical service has been rendered, but the Medicare payment has not yet been made. The DHS has been using the ‘Winters’ methodology to estimate the value of these outstanding claims.
Under the Winters methodology, a number of models are used to estimate the outstanding Medicare claims liabilities. The model preferred by the industry, and consistently applied in past Departmental financial statements, is Model 5. Model 5 comprises two major components: chain ladder modelling and time series modelling.
Under Model 5, user defined parameters are applied to smooth the time series observations and make predictions about future payment values. As the parameters are user defined it is reasonable to assume that different users of the model may make different choices, and therefore arrive at different estimates of the outstanding liability. In order to validate the parameters used, actual payment data has been compared to previous estimates using various parameters to predict the liability.
The AGA was engaged to analyse the monthly Medicare payment data from June 2012 to June 2013 across a range of reasonable choices for the smoothing parameters. A range of estimated liabilities from these scenarios, for each month, was then compared with the estimated liability under the Model 5 smoothing parameters. This sensitivity analysis indicates that under a reasonable range of smoothing parameter scenarios, the estimated liabilities vary by up to plus or minus 5%.
1.4 New Australian Accounting Standards
Adoption of New Australian Accounting Standard Requirements
No accounting standard has been adopted earlier than the application date as stated in the standard.
Revised standards that were issued prior to the sign-off date and are applicable to the current reporting period did not have a financial impact, and are not expected to have a future financial impact on the Department.
Future Australian Accounting Standard Requirements
No new standards, revised standards, interpretations and amending standards that were issued by the AASB prior to the sign-off date, are expected to have a financial impact on the Department for future reporting periods.
1.5 Revenue
Revenue from the sale of goods is recognised when:
ï· the risks and rewards of ownership have been transferred to the buyer; ï· the Department retains no managerial involvement or effective control over the goods; ï· the revenue and transaction costs incurred can be reliably measured; and ï· it is probable that the economic benefits associated with the transaction will flow to the Department.
Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:
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ï· the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and ï· the probable economic benefits associated with the transaction will flow to the Department.
Receivables for goods and services, which have 30 day terms (note the TGA operates on 28 day terms), are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.
Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.
Resources Received Free of Charge
Resources received free of charge are recognised as revenue when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government agency or authority as a consequence of a restructuring of administrative arrangements (refer to Note 1.7).
Revenue from Government
Amounts appropriated for Departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the Department gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.
1.6 Gains
Resources Received Free of Charge
Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.
Resources received free of charge are recorded as either revenue or gains depending on their nature.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements (refer to Note 1.7).
Sale of Assets
Gains from disposal of non-current assets are recognised when control of the asset has passed to the buyer.
1.7 Transactions with the Australian Government as Owner
Equity Injections
Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.
Restructuring of Administrative Arrangements
Net assets received from or relinquished to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity. There were no restructures under administrative arrangements during 2012-13.
Other Distributions to Owners
The FMOs require that distributions to owners be debited to contributed equity unless it is in the nature of a dividend.
1.8 Employee Benefits
Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of the end of reporting period are measured at their nominal amounts.
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The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.
Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.
(a) Leave
The liability for employee benefits includes provisions for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Department is estimated to be less than the annual entitlement for sick leave.
The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the Department’s employer superannuation contribution rates to the extent that leave is likely to be taken during service rather than paid out on termination.
The liability for long service leave has been determined by reference to the work of an actuary as at May 2011. An actuary is engaged every three years to reassess the leave liability. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
(b) Separation and Redundancy
Provision is made for separation and redundancy benefit payments. The Department recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.
(c) Superannuation
Under the Superannuation Legislation Amendment (Choice of Funds) Act 2004, staff of the Department are able to become a member of any complying superannuation fund. A complying superannuation fund is one that meets the requirements under the Income Tax Assessment Act (1997) and the Superannuation Industry (Supervision) Act 1993.
The majority of staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).
The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and other compliant superannuation funds are defined contribution schemes.
The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance and Deregulation’s administered schedules and notes.
The Department makes employer contributions to the employee superannuation schemes at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Department accounts for the contributions as if they were contributions to defined contribution plans.
The liability for superannuation recognised as at 30 June represents outstanding contributions for the number of days between the last pay period in the financial year and 30 June.
1.9 Leases
A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.
The Department does not hold any finance leases.
Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.
Surplus Lease Space
Future net outlays in respect of surplus space under non-cancellable lease agreements are expensed in the period in which the spaces are identified as becoming surplus.
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Lease Incentives
Lease incentives taking the form of ‘free’ leasehold improvements and rent holidays are recognised as liabilities. These liabilities are reduced on a straight-line basis by allocating lease payments between rental expense and reduction of the lease incentive liability.
Provision for Restoration Obligation
Where the Department has a contractual obligation to undertake remedial work upon vacating leased properties, the estimated cost of that work is recognised as a liability. An equal value asset is created at the same time and amortised over the life of the lease of the underlying leasehold property.
1.10 Borrowing Costs
All borrowing costs are expensed as incurred.
1.11 Cash
Cash is recognised at its nominal amount. Cash and cash equivalents include:
ï· cash on hand; ï· demand deposits in bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value; ï· cash held with outsiders; and ï· cash in special accounts.
Overdrafts
An overdraft occurs when the amount withdrawn from the Department’s administered bank account by the DHS, due to agreed sweeping arrangement, is greater than the original estimated payments. A debit balance of the bank account as a result of an inaccurate estimate is authorised by the Finance Ministers delegations under section 8 (3) of the FMA Act.
1.12 Financial assets
The Department classifies its financial assets in the following categories:
ï· available-for-sale financial assets; and ï· loans and receivables.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.
Effective Interest Method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts over the expected life of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss.
Available-for-Sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
Available-for-sale financial assets are recorded at fair value. Gains and losses arising from changes in fair value are recognised directly in the reserves (equity) with the exception of impairment losses. Interest is calculated using the effective interest method and foreign exchange gains and losses on monetary assets are recognised directly in profit or loss. Where the asset is disposed of, or is determined to be impaired, part (or all) of the cumulative gain or loss previously recognised in the reserve is included in surplus and deficit for the period.
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Where a reliable fair value cannot be established for unlisted investments in equity instruments, these instruments are valued at cost. The Department has no such instruments.
Loans and Receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.
Impairment of Financial Assets
Financial assets are assessed for impairment at the end of each reporting period.
Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables or held to maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.
Available-for-sale financial assets - if there is objective evidence that an impairment loss on an available-for-sale financial asset has been incurred, the amount of the difference between its cost, less principal repayments and amortisation, and its current fair value, less any impairment loss previously recognised in expenses, is transferred from equity to the Statement of Comprehensive Income.
1.13 Financial Liabilities
Financial liabilities are classified as either financial liabilities ‘at fair value through profit and loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon trade date.
The Department does not hold any financial liabilities at ‘fair value through profit and loss’.
Other financial liabilities are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability or, where appropriate, a shorter period.
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).
1.14 Contingent Liabilities and Contingent Assets
Contingent liabilities and contingent assets are not recognised in the Balance Sheet but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain, and contingent liabilities are disclosed when settlement is greater than remote.
1.15 Acquisition of Assets
Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.
Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.
1.16 Property, Plant and Equipment Asset Recognition Threshold
Purchases of property, plant and equipment by the Department, OGTR and NICNAS are recognised initially at cost in the Balance Sheet, except for information technology equipment purchases costing less than $500, leasehold
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improvements costing less than $50,000, and all other purchases costing less than $2,000, which are expensed in the year of acquisition (other than when they form part of a group of similar items which are significant in total).
The TGA recognises purchases of property, plant and equipment initially at cost in the Balance Sheet, except for purchases costing less than $2,000 and leasehold improvements to properties costing less than $10,000. Purchases below these thresholds are expensed in the year of acquisition (other than when they form part of a group of similar items which are significant in total).
The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by the Department where there exists an obligation to restore the property to prescribed conditions. These costs are included in the value of the Department’s leasehold improvements with a corresponding provision for the ‘make good’ recognised.
Revaluations
Fair values for each class of asset are determined as shown below:
Asset class Fair value measured at:
Land Market selling price
Buildings excluding leasehold improvements Market selling price
Leasehold improvements Depreciated replacement cost
Property, plant and equipment Depreciated replacement cost
Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.
An independent valuation of all property, plant and equipment was carried out by the Australian Valuation Office on 30 June 2012.
Revaluation adjustments are made on a class basis. Any revaluation increment was credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset is restated to the revalued amount.
Administered land and buildings were not revalued this year, refer Note 19A.
Depreciation
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Department using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease, including any applicable lease options available.
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are made in the current, or current and future reporting periods, as appropriate.
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Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
2013 2012
Buildings on freehold land 20 to 25 years 20 to 25 years
Leasehold improvements Lease term Lease term
Plant and equipment 3 to 20 years 3 to 20 years
Impairment
All assets were assessed for impairment at 30 June 2013. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Department were deprived of the asset, its value in use is taken to be its depreciated replacement cost.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
1.17 Intangibles
The Department’s intangibles comprise internally developed software for internal use and purchased software. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. The Department (excluding TGA) recognises internally developed software costing more than $100,000 and purchased software costing more than $500. TGA recognises internally generated and purchased software costing more than $100,000.
Software is amortised on a straight-line basis over its anticipated useful life.
The useful lives of the Department’s software are:
2013 2012
Internally developed software 2 to 10 years 2 to 10 years
Purchased software 2 to 7 years 2 to 7 years
The useful lives of the TGA’s software are:
2013 2012
Internally developed software 3 to 10 years 3 to 10 years
Purchased software 3 to 10 years 3 to 10 years
All software assets were assessed for indications of impairment as at 30 June 2013.
1.18 Inventories
Inventories held for sale are valued at the lower of cost and net realisable value.
Inventories held for distribution are valued at cost, adjusted for any loss of service potential.
Costs incurred in bringing each item of inventory to its present location and condition are assigned as follows:
ï· raw materials and stores - purchase cost on a first-in-first-out basis; and ï· finished goods and work-in-progress - cost of direct materials and labour plus attributable costs that can be allocated on a reasonable basis.
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Inventories acquired at no cost or nominal consideration are initially measured at current replacement cost at the date of acquisition.
1.19 Taxation
The Department is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Revenues, expenses, assets and liabilities are recognised net of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office; and for receivables and payables.
1.20 Reporting of Administered Activities
Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.
Except where otherwise stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.
(a) Administered Cash Transfers to and from the Official Public Account
Revenue collected by the Department for use by the Government rather than the Department is administered revenue. Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance and Deregulation. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by the Department on behalf of the Government and are reported as such in the Administered Cash Flow Statement and in the Administered Reconciliation Schedule.
(b) Revenue
All administered revenues are revenues relating to the course of ordinary activities performed by the Department on behalf of the Australian Government. As such, administered appropriations are not revenues of the individual entity that oversees distribution or expenditure of the funds as directed.
Recoveries are recognised on an accrual basis and relate to:
ï recoveries under the Medical Benefits, Pharmaceutical Benefits and Health Rebate schemes after settlement of personal injury claims; and ï rebates associated with high cost drug recoveries.
(c) Loans and Receivables
The Department measures its loans and receivables at ‘amortised cost’. All loans and receivables are recognised initially at fair value. Subsequent to initial measurement, loans and receivables are measured at amortised cost.
Loans and receivables are assessed for indicators of impairment (including collectability) at each balance date. An allowance (expense) is made for loans which are assessed as being impaired. Interest is credited to income as it accrues.
Where loans and receivables are not subject to concessional treatment, they are carried at amortised cost using the effective interest method. Gains and losses due to impairment derecognition and amortisation are recognised through the profit and loss.
The Department’s administered loans and receivables relate to zero real interest loans to residential aged care providers to build or expand residential aged care facilities in areas of high need. This program is delivered by the Department on behalf of the Australian Government. The objective of the program is to encourage providers of residential aged care, through the provision of low cost finance, to establish residential aged care services in areas where they have previously been less likely to invest.
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(d) Administered Investments
Administered investments in subsidiaries, joint ventures and associates are not combined because their consolidation is only relevant at the Whole of Government level.
Administered investments other than those held for sale are classified as available-for-sale and are measured at their fair value as at 30 June 2013. Fair value has been taken to be the net assets contained in the management accounts of each organisation as at the end of the reporting period.
(e) Personal Benefits
The Department administers a number of personal benefits programs on behalf of the Government that provide a range of entitlements to individuals. These include, but are not limited to:
ï Pharmaceutical Benefits; ï Medical Benefits; ï Private Health Insurance Rebate; ï Primary Care Practice Incentives; ï Targeted Assistance; and ï Hearing Services.
Personal benefits are assessed, determined and paid by the DHS in accordance with provisions of the relevant legislation under delegation from the Department.
(f) Contingent Liabilities and Contingent Assets
Contingent liabilities and contingent assets are not recognised in the Balance Sheet but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain, and contingent liabilities are disclosed when settlement is greater than remote.
(g) Grants and Subsidies
The Department administers a number of grant and subsidy schemes on behalf of the Government.
Grant and subsidy liabilities are recognised to the extent that (i) the services required to be performed by the grantee have been performed or (ii) the grant eligibility criteria have been satisfied, but payments due have not been made. A commitment is recorded when the Government enters into an agreement to make these grants but services have not been performed or criteria satisfied.
(h) Payments to Commonwealth Authorities and Companies Act (CAC) Bodies
Payments to CAC Act bodies from amounts appropriated for that purpose are classified as administered expenses, equity injections or loans of the relevant portfolio Department. The appropriation to the Department is disclosed in Table A of Note 25A. Payments to CAC bodies are disclosed in Note 16H.
(i) Medical Indemnity
The Department has responsibility for policy and legislative control of medical indemnity under the Medical Indemnity Act 2002 and the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010, while DHS has responsibility for making payments under various Government medical indemnity schemes.
Further detail on each of these schemes is provided at Note 20 I.
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Note 2: Events After the Reporting Period
An amount of $2,963,268.75 relating to Appropriation Act 2 2009-10 will lapse on 1 July 2013 when the Statute Stocktake (Appropriation) Act 2013 becomes effective.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 3: Expenses
2013 2012
$'000 $'000
Note 3A: Employee benefits Wages and salaries 418,784 398,441
Superannuation:
Defined contribution plans 28,200 25,496
Defined benefit plans 48,183 45,719
Leave and other entitlements 72,803 87,884
Separation and redundancies 5,928 19,439
Other employee benefits 4,025 4,127
Total employee benefits 577,923 581,106
Note 3B: Supplier Goods and services Consultants 20,142 22,798
Property 16,441 16,147
Travel 10,643 12,169
Information Technology costs 25,195 19,115
Other 41,109 49,300
Total goods and services 113,530 119,529
Goods and services are made up of:
Provision of goods - related entities 163 7
Provision of goods - external parties 5,821 8,400
Rendering of services - related entities 17,717 27,070
Rendering of services - external parties 89,829 84,052
Total goods and services 113,530 119,529
Other supplier expenses Operating lease rentals - external parties:
Minimum lease payments 66,555 71,113
Contingent rentals 6,539 7,194
Workers compensation premiums 9,602 6,738
Total other supplier expenses 82,696 85,045
Total supplier expenses 196,226 204,574
Note 3C: Depreciation and amortisation Depreciation:
Property, plant and equipment 6,543 1,820
Buildings - leasehold improvements 12,489 10,886
Total depreciation 19,032 12,706
Amortisation:
Computer software - internally developed 28,088 8,434
Computer software - purchased 500 470
Total amortisation 28,588 8,904
Total depreciation and amortisation 47,620 21,610
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 3: Expenses
2013 2012
$'000 $'000
Note 3D: Write-down and impairment of assets Asset write-downs and impairments from:
Impairment on financial instruments 905 920
Impairment of property, plant and equipment 384 43
Impairment on intangibles 391 1
Total write-down and impairment of assets 1,680 964
Note 3E: Other expenses Payments made on behalf of Portfolio agencies 1 15,475 28,644
Act of Grace payments 5 14
Other 32 266
Total other expenses 15,512 28,924
1 Payments made on behalf of Portfolio agencies are recovered, refer Note 4B.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 4: Income
2013 2012
$'000 $'000
OWN-SOURCE REVENUE
Note 4A: Sale of goods and rendering of services
Provision of goods - external parties 21 51
Provision of goods - related entities - 110
Rendering of services - related entities 9,508 6,440
Rendering of services - external parties 136,028 132,824
Total sale of goods and rendering of services 145,557 139,425
Note 4B: Other revenue
Recoveries received from Portfolio agencies 1
15,475 28,644
Other revenue 157 1,000
Total other revenue 15,632 29,644
GAINS
Note 4C: Sale of assets Land and buildings:
Proceeds from sale 24 -
Carrying value of assets sold (24) -
Total gain from sale of assets - -
Note 4D: Other gains Resources received free of charge 920 820
Other gains - 21
Total other gains 920 841
REVENUE FROM GOVERNMENT
Note 4E: Revenue from Government Appropriations:
Departmental appropriation 1
624,779 636,121
Total revenue from Government 624,779 636,121
1
For payments made on behalf of Portfolio agencies refer Note 3E.
The sale of assets relates to the lease transfer to the Australian National Preventative Health Agency and the associated sale of fitout at book value.
1
Departmental appropriations include $1,617,000 of revenue agreed by Government since Appropriation Bill (No.3) 2012-13.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 5: Business Operations
TGA operates via a special account and prepares a set of annual financial statements, which are audited, as required by the Finance Minister's Orders. The TGA 2012-13 financial statements are included in the Department's 2012-13 Annual Report.
Pursuant to Regulation 5A of the Financial Management and Accountability Act 1997 , the Chief Executive of the Department of Finance and Deregulation has determined the Therapeutic Goods Administration (TGA) to be a business operation within the Department.
The balance of the special account represents a standing appropriation from which payments are made for the purposes of the business operation.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 6: Financial Assets
2013 2012
$'000 $'000
Note 6A: Cash and cash equivalents Special Accounts 2,948 2,399
Cash on hand or on deposit 999 4,926
Total cash and cash equivalents 3,947 7,325
Note 6B: Trade and other receivables Goods and services receivable:
Goods and services - related entities 13,882 19,247
Goods and services - external parties 10,007 12,082
Total receivables for goods and services 23,889 31,329
Appropriations receivable:
For existing programs 114,273 100,979
Undrawn equity injection 51,983 78,742
Departmental capital budget 1,726 4,351
Total appropriations receivable 167,982 184,072
Other receivables:
GST receivable from the Australian Taxation Office 3,046 2,009
Receivable from Official Public Account for Special Accounts 72,537 67,827
Total other receivables 75,583 69,836
Total trade and other receivables (gross) 267,454 285,237
Less impairment allowance account:
Goods and services (1,639) (1,386)
Total impairment allowance account (1,639) (1,386)
Total trade and other receivables (net) 265,815 283,851
Receivables are expected to be recovered in:
No more than 12 months 265,815 283,851
Total trade and other receivables (net) 265,815 283,851
Receivables are aged as follows:
Not overdue 258,234 268,720
Overdue by:
0 to 30 days 5,839 13,230
31 to 60 days 678 678
61 to 90 days 337 619
More than 90 days 2,366 1,990
Total receivables (gross) 267,454 285,237
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 6: Financial Assets
2013 2012
$'000 $'000
Note 6B: Trade and other receivables The impairment allowance account is aged as follows:
Not overdue - -
Overdue by:
0 to 31 days - -
31 to 60 days - -
61 to 90 days (127) -
More than 90 days (1,512) (1,386)
Total impairment allowance account (1,639) (1,386)
Reconciliation of the impairment allowance account:
Movements in relation to 2013
Goods and services Total
$'000 $'000
Opening balance (1,386) (1,386)
Amounts written off 174 174
Amounts recovered and reversed 383 383
Increase recognised in net surplus (810) (810)
Closing balance (1,639) (1,639)
Movements in relation to 2012
Goods and services Total
$'000 $'000
Opening balance (981) (981)
Amounts written off 153 153
Amounts recovered and reversed 381 381
Increase recognised in net surplus (939) (939)
Closing balance (1,386) (1,386)
2013 2012
$'000 $'000
Note 6C: Other financial assets Accrued revenue 373 2,355
Total other financial assets 373 2,355
Total other financial assets are expected to be recovered in:
No more than 12 months 373 2,355
Total other financial assets 373 2,355
Credit terms for goods and services were within 30 days (2012: 30 days). Appropriations receivable undrawn, are appropriations controlled by the Department but held in the Official Public Account under the Government's just-in-time drawdown arrangement.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 7: Non-Financial Assets
2013 2012
$'000 $'000
Note 7A: Land and buildings Leasehold improvements:
Work in progress 599 1,922
Fair value 80,760 78,915
Accumulated depreciation (12,765) (429)
Total leasehold improvements 68,594 80,408
Total land and buildings 68,594 80,408
Note 7B: Property, plant and equipment Other property, plant and equipment:
Fair value 23,685 21,029
Accumulated depreciation (6,534) (42)
Total other property, plant and equipment 17,151 20,987
Total property, plant and equipment 17,151 20,987
No indicators of impairment were found for land and buildings or property, plant and equipment.
No land and buildings and property, plant or equipment are expected to be sold or disposed of within the next 12 months.
All revaluations are conducted in accordance with the revaluation policy stated at Note 1. The Australian Valuation Office conducts the revaluation for property, plant and equipment. In 2013, there was no change in valuation for property, plant and equipment (2012: $2,550,000 increase to the asset revaluation reserve) as shown in the Statement of Changes in Equity.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 7: Non-Financial Assets
Land and buildings Property, plant and equipment
TOTAL
$'000 $'000 $'000
As at 1 July 2012
Gross book value 80,837 21,030 101,867
Accumulated depreciation/amortisation and impairment (429) (43) (472)
Net book value 1 July 2012 80,408 20,987 101,395
Additions:
By purchase or internally developed 982 1,133 2,115
Impairments recognised in the operating result (292) (92) (384)
Revaluations recognised in other comprehensive income - - -
Depreciation expense (12,489) (6,543) (19,032)
Reclassification 9 1,666 1,675
Disposals:
Other disposals (24) - (24)
Net book value 30 June 2013 68,594 17,151 85,745
Net book value as of 30 June 2013 represented by:
Gross book value 81,359 23,685 105,044
Accumulated depreciation/amortisation and impairment (12,765) (6,534) (19,299)
68,594 17,151 85,745
Note 7C: Reconciliation of the opening and closing balances of land and buildings and property, plant and equipment 2013
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 7: Non-Financial Assets
Land and buildings Property, plant and equipment
TOTAL
$'000 $'000 $'000
As at 1 July 2011 Gross book value 106,039 13,762 119,801
Accumulated depreciation/amortisation and impairment (22,686) (6,162) (28,848)
Net book value 1 July 2011 83,353 7,600 90,953
Additions:
By purchase or internally developed 5,256 15,329 20,585
Impairments recognised in the operating result (12) (31) (43)
Revaluations recognised in other comprehensive income 2,697 (147) 2,550
Depreciation expense (10,886) (1,820) (12,706)
Reclassification - 56 56
Net book value 30 June 2012 80,408 20,987 101,395
Net book value as of 30 June 2012 represented by Gross book value 80,837 21,030 101,867
Accumulated depreciation/amortisation and impairment (429) (43) (472)
80,408 20,987 101,395
Note 7C: Reconciliation of the opening and closing balances of land and buildings and property, plant and equipment 2012
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 7: Non-Financial Assets
2013 2012
$'000 $'000
Note 7D: Intangibles Computer software:
Internally developed - in progress 48,858 100,059
Internally developed - in use 178,527 83,971
Purchased 5,936 5,079
Accumulated amortisation (96,398) (67,948)
Total computer software 136,923 121,161
Total intangibles 136,923 121,161
During 2013, $391,000 of impairment was identified for intangible assets (2012: $1,000).
No intangibles are expected to be sold or disposed of within the next 12 months.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 7: Non-Financial Assets
Note 7E: Reconciliation of the opening and closing balances of intangibles 2013
Computer Software - Internally Developed Computer Software - Purchased
TOTAL
$'000 $'000 $'000
As at 1 July 2012
Gross book value 184,031 5,078 189,109
Accumulated amortisation and impairment (63,953) (3,995) (67,948)
Net book value 1 July 2012 120,078 1,083 121,161
Additions:
By purchase or internally developed 45,550 864 46,414
Impairments recognised in the operating result (391) - (391)
Revaluations recognised in other comprehensive income - - -
Reclassifications (1,675) - (1,675)
Amortisation expense (28,088) (500) (28,588)
Other 1 1 2
Disposals:
Other disposals - - -
Net book value 30 June 2013 135,475 1,448 136,923
Net book value as of 30 June 2013 represented by:
Gross book value 227,385 5,936 233,321
Accumulated amortisation and impairment (91,910) (4,488) (96,398)
Net book value 30 June 2013 135,475 1,448 136,923
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 7: Non-Financial Assets
Note 7E: Reconciliation of the opening and closing balances of intangibles 2012
Computer Software - Internally Developed Computer Software - Purchased
TOTAL
$'000 $'000 $'000
As at 1 July 2011 Gross book value 110,734 5,355 116,089
Accumulated amortisation and impairment (60,003) (3,859) (63,862)
Net book value 1 July 2011 50,731 1,496 52,227
Additions:
By purchase or internally developed 77,780 118 77,898
Impairments recognised in the operating result 1 (2) (1)
Reclassifications - (59) (59)
Amortisation expense (8,434) (470) (8,904)
Net book value 30 June 2012 120,078 1,083 121,161
Net book value as of 30 June 2012 represented by:
Gross book value 184,031 5,078 189,109
Accumulated amortisation and impairment (63,953) (3,995) (67,948)
Net book value 30 June 2012 120,078 1,083 121,161
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 7: Non-Financial Assets
2013 2012
$'000 $'000
Note 7F: Inventories Inventories held for sale:
Finished goods 12 9
Total inventories held for sale 12 9
Inventories held for distribution 174 153
Total inventories 186 162
During 2013, $21,789 of inventory held for sale was recognised as an expense (2012: $67,908).
During 2013, $3,497 of inventory held for distribution was recognised as an expense (2012: $96,896).
Note 7G: Other non-financial assets Prepayments 6,877 8,156
Total other non-financial assets 6,877 8,156
Total other non-financial assets are expected to be recovered in: No more than 12 months 5,361 6,663
More than 12 months 1,516 1,493
Total other non-financial assets 6,877 8,156
Inventory held for sale of $12,200 is recognised at fair value less cost to sell (2012: $8,600).
All inventory is expected to be sold or distributed in the next 12 months.
No indicators of impairment were found for other non-financial assets.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 8: Payables
2013 2012
$'000 $'000
Note 8A: Supplier Trade creditors and accruals (81,069) (85,326)
Operating lease rentals (2,491) (8,213)
Total supplier payables (83,560) (93,539)
Supplier payables expected to be settled within 12 months:
Related entities (31,623) (25,148)
External parties (51,937) (68,391)
Total supplier payables (83,560) (93,539)
Settlement is usually made within 30 days.
Wages and salaries (18,296) (15,876)
Superannuation (3,410) (2,658)
Separations and redundancies (2,486) (5,866)
Other employee payables (35) (80)
Lease incentives (27,681) (30,655)
Unearned income (18,768) (21,364)
Total other payables (70,676) (76,499)
Other payables are expected to be settled in:
No more than 12 months (42,991) (44,005)
More than 12 months (27,685) (32,494)
Total other payables (70,676) (76,499)
Note 8B: Other payables
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 9: Provisions
2013 2012
$'000 $'000
Note 9A: Employee provisions Leave (141,931) (137,191)
Separations and redundancies (4,078) -
Total employee provisions (146,009) (137,191)
Employee provisions are expected to be settled in:
No more than 12 months (15,405) (48,635)
More than 12 months (130,604) (88,556)
(146,009) (137,191)
Note 9B: Other provisions Restoration obligations (4,163) (4,464)
Provision for lease increases (19,754) (15,880)
Other provisions1 (823) (1,048)
Total other provisions (24,740) (21,392)
Other provisions are expected to be settled in:
No more than 12 months (3,647) (5,013)
More than 12 months (21,093) (16,379)
(24,740) (21,392)
Restoration obligations Provision for lease increases
Other
provisions Total
$'000 $'000 $'000 $'000
Carrying amounts 1 July 2012 (4,464) (15,880) (1,048) (21,392)
Additional provisions made (36) (4,325) (823) (5,184)
Amounts used 337 541 - 878
Amounts reversed - (90) 1,048 958
Closing balance 30 June 2013 (4,163) (19,754) (823) (24,740)
1
The Department's other provisions all related to the TGA, including the provision for low value turnover scheme.
Total other provisions
Total employee provisions
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 10: Cash Flow Reconciliation
2013 2012
$'000 $'000
Reconciliation of cash and cash equivalents as per Balance Sheet to Cash Flow Statement
Report cash and cash equivalents as per:
Cash Flow Statement 3,947 7,325
Balance Sheet 3,947 7,325
Difference - -
Reconciliation of net cost of services to net cash from operating activities:
Net cost of services (676,852) (667,268)
Add revenue from Government 624,779 636,121
Adjustment for non-cash items Depreciation and amortisation 47,620 21,610
Net write-down of assets 1,680 964
Resources received free of charge 920 820
Changes in assets/liabilities Decrease/(increase) in net receivables (12,253) (27,048)
Decrease/(increase) in other financial assets 1,982 731
Decrease/(increase) in inventories (24) 164
Decrease/(increase) in other non-financial assets 1,279 (1,476)
Increase/(decrease) in employee provisions 8,818 12,364
Increase/(decrease) in supplier payables 5,093 18,837
Increase/(decrease) in other payables (5,823) 8,152
Increase/(decrease) in other provisions 3,348 4,977
Net cash from operating activities 567 8,948
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2013 2012 2013 2012 2013 2012
$'000 $'000 $'000 $'000 $'000 $'000
Contingent assets Balance from previous period 86 - - - 86 -
Assets recognised - 86 - - - 86
Expired (86) - - - (86) -
Total contingent assets - 86 - - - 86
Contingent liabilities Balance from previous period 27,600 - 465 350 28,065 350
New - 27,600 1,940 365 1,940 27,965
Re-measurement - - 3 - 3 -
Liabilities recognised - - (90) (150) (90) (150)
Obligations expired - - (260) (100) (260) (100)
Total contingent liabilities 27,600 27,600 2,058 465 29,658 28,065
Net contingent liabilities (27,600) (27,514) (2,058) (465) (29,658) (27,979)
Note 11: Contingent Assets and Liabilities
Total Claims for damages or costs Guarantees
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 11: Contingent Assets and Liabilities
Quantifiable Contingent Assets
Quantifiable Contingent Liabilities Claims for damages and costs
Guarantees
Unquantifiable Contingent Assets
Unquantifiable Contingent Liabilities
Significant Remote Contingencies
There were no quantifiable contingent assets as at 30 June 2013 (2012: $86,000).
The Schedule of Contingencies reports contingent liabilities in respect of claims for damages or costs of $2,058,000 (2012: $465,000). The amount represents an estimate of the Department’s liability based on precedent cases. The Department is defending the claims.
The Department has provided an indemnity to its transactional bankers in relation to any claims made against the bank resulting from errors in the Department’s payment files. There were no claims made during the year.
The Department does not have any significant remote contingencies (2012: Nil).
The Schedule of Contingencies reports a contingent liability in respect of claims for payments made for Expanded and Accelerated Price Disclosure of $27,600,000 (2012: $27,600,000). This represents the maximum exposure to the Commonwealth in the event that the current contractor fails to deliver.
At 30 June 2013, the Department was involved in a number of litigation cases before the courts. The Department has been advised by its solicitors that it is not possible to quantify amounts relating to these cases. Therefore, in accordance with Accounting Standard AASB 137 Provisions, Contingent Liabilities and Contingent Assets , the information usually required by the Standard is not disclosed on the grounds that it may seriously prejudice the outcomes of these cases.
At 30 June 2013, the Department was involved in a number of litigation cases before the courts. The Department has been advised by its solicitors that it is not possible to quantify amounts relating to these cases. Therefore, in accordance with Accounting Standard AASB 137 Provisions, Contingent Liabilities and Contingent Assets , the information usually required by the Standard is not disclosed on the grounds that it may seriously prejudice the outcomes of these cases.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 12: Senior Executive Remuneration
Note 12A: Senior Executive Remuneration Expense for the Reporting Period
2013 2012
$ $
Short-term employee benefits:
Salary 24,850,554 22,320,553
Annual leave accrued 2,255,909 1,976,453
Performance bonuses 1,881,591 1,773,965
Other 4,318,418 3,778,294
Total short-term employee benefits
33,306,472 29,849,265
Post-employment benefits:
Superannuation 5,070,673 4,138,479
Total post-employment benefits 5,070,673 4,138,479
Other long-term benefits:
Long service leave 1,114,249 906,839
Total other long-term benefits 1,114,249 906,839
Termination benefits:
Voluntary redundancy payments 167,636 280,818
Total employment benefits 167,636 280,818
Total senior executive remuneration expenses 39,659,030 35,175,401
Notes:
1. Note 12A is prepared on an accrual basis (therefore the performance bonus expenses disclosed above may differ from the cash 'Bonus Paid' in Note 12B).
2. Note 12A excludes acting arrangements and part year service where total remuneration expensed for a senior executive was less than $180,000.
332 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 333
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEINGNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 12: Senior Executive Remuneration
Average annual reportable remuneration paid to substantive senior executives in 2013
Average annual reportable remuneration 1
Substantive senior executives
Reportable salary 2
Contributed superannuation 3
Reportable allowances 4 Bonus paid 5
Total
reportable remuneration
No. $ $ $ $ $
Total remuneration (including part-time arrangements): Less than $180,000 23 77,904 11,986 - 2,303 92,193
$180,000 to $209,999 27 167,717 25,939 11 7,667 201,334
$210,000 to $239,999 45 185,460 28,265 54 9,215 222,994
$240,000 to $269,999 37 208,002 32,206 85 14,771 255,064
$270,000 to $299,999 12 226,435 36,353 39 18,429 281,256
$300,000 to $329,999 10 253,789 43,048 136 17,228 314,201
$330,000 to $359,999 2 278,351 44,065 - 23,055 345,471
$360,000 to $389,999 3 297,955 49,537 - 28,916 376,408
$390,000 to $419,999 1 316,209 52,628 - 28,438 397,275
$420,000 to $449,999 2 336,028 63,015 1,462 29,613 430,118
$450,000 to $479,999 1 406,900 58,132 931 - 465,963
$510,000 to $539,999 1 446,911 65,363 - - 512,274
$630,000 to $659,999 1 577,726 79,574 - - 657,300
Total 165
Average annual reportable remuneration paid to substantive senior executives in 2012
Average annual reportable remuneration 1
Substantive senior executives
Reportable salary 2
Contributed superannuation 3
Reportable allowances 4 Bonus paid 5
Total
reportable remuneration
No. $ $ $ $ $
Total remuneration (including part-time arrangements): Less than $180,000 42 78,493 13,061 5 5,791 97,350
$180,000 to $209,999 41 162,400 23,669 32 8,851 194,952
$210,000 to $239,999 44 183,224 30,283 46 10,419 223,972
$240,000 to $269,999 24 202,106 34,787 44 14,365 251,302
$270,000 to $299,999 13 221,791 45,875 1,461 15,461 284,588
$300,000 to $329,999 4 242,445 49,921 366 21,659 314,391
$330,000 to $359,999 5 286,374 45,096 - 17,305 348,775
$360,000 to $389,999 2 293,019 52,483 - 28,232 373,734
$480,000 to $509,999 1 423,564 63,567 - - 487,131
$510,000 to $539,999 1 469,911 64,470 - - 534,381
Total 177
Notes
5. 'Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the entity during the financial year.
Note 12B: Average Annual Reportable Remuneration Paid to Substantive Senior Executives During the Reporting Period
1. This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for individuals in the band.
2. 'Reportable salary' includes the following: a) gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column); and b) reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits). c) exempt foreign employment income; and d) salary sacrificed benefits.
3. The 'contributed superannuation' amount is the average cost to the Department for the provision for superannuation benefits to substantive senior executives in that reportable remuneration band during the reporting period. 4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on the individuals' payment summaries.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEINGNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 12: Senior Executive Remuneration
Note 12C: Other Highly Paid Staff
Average annual reportable remuneration paid to highly paid staff in 2013
Average annual reportable remuneration 1
Other highly paid staff Reportable salary
2
Contributed superannuation 3
Reportable allowances 4
Bonus paid 5
Total
reportable remuneration
No. $ $ $ $ $
Total remuneration (including part-time arrangements):
$180,000 to $209,999 26 154,965 28,247 17 7,145 190,374
$210,000 to $239,999 3 185,217 28,575 239 5,965 219,996
Total 29
Average annual reportable remuneration paid to highly paid staff in 2012
Average annual reportable remuneration 1
Other highly paid staff Reportable salary
2
Contributed superannuation 3
Reportable allowances 4
Bonus paid 5
Total
reportable remuneration
No. $ $ $ $ $
Total remuneration (including part-time arrangements):
$180,000 to $209,999 22 151,758 24,768 83 8,463 185,072
$210,000 to $239,999 2 190,730 21,739 - 4,285 216,754
Total 24
Notes
a) gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column); b) reportable fringe benefits (at the net amount prior to 'grossing up' for tax purposes); c) exempt foreign employment income; and d) salary sacrificed benefits.
4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.
2. 'Reportable salary' includes the following:
5. 'Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with, or leaving the entity during the financial year.
3. The 'contributed superannuation' amount is the average cost to the entity for the provision of superannuation benefits to other highly paid staff in that reportable remuneration band during the reporting period.
Each row is an averaged figure based on headcount for individuals in the band.
A number of staff were part of a Voluntary Redundancy Program. This has lead to increased payments to employees on termination resulting in a higher number of highly paid staff for 2012.
1. This table reports staff: a) who were employed by the entity during the reporting period; b) whose reportable remuneration was $180,000 or more for the reporting period; and c) were not required to be disclosed in Table B or director disclosures.
334 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 335
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 13: Remuneration of Auditors
2013 2012
$'000 $'000
The fair value of services provided was:
Financial statement audit services - Department 775 710
Financial statement audit services - TGA 145 110
Total 920 820
No other services were provided by the auditors of the financial statements.
Financial statement audit services were provided free of charge to the Department by the Australian National Audit Office (ANAO).
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 14: Financial Instruments
2013 2012
$'000 $'000
Note 14A Categories of Financial Instruments Financial Assets Loans and receivables:
Cash and cash equivalents 3,947 7,325
Goods and services receivable 22,250 29,943
Total 26,197 37,268
Carrying amount of financial assets 26,197 37,268
Financial Liabilities At amortised cost:
Trade creditors (81,069) (85,326)
Total (81,069) (85,326)
Carrying amount of financial liabilities (81,069) (85,326)
Note 14B Net Income and Expense from Financial Assets Loans and receivables:
Impairment expense 905 920
Net expense from loans and receivables 905 920
Net expense from financial assets 905 920
There was no interest income from financial assets not at fair value through profit or loss in the year ending 2013.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 14: Financial Instruments
Note 14C Credit risk
2013 2013 2012
$'000 $'000 $'000
Financial assets Goods and services receivable 23,889 23,889 31,329
Total 23,889 23,889 31,329
The Department holds no collateral to mitigate against risk.
Credit quality of financial instruments not past due or individually determined as impaired
2013 2012 2013 2012
$'000 $'000 $'000 $'000
Loans and receivables
Goods and services receivable 14,669 14,812 9,220 16,517
Total 14,669 14,812 9,220 16,517
Ageing of financial assets that are past due but not impaired for 2013
0 to 30 days 31 to 60 days 61 to 90 days 90+ days Total
$'000 $'000 $'000 $'000 $'000
Goods and services receivable 5,839 678 210 854 7,581
Total 5,839 678 210 854 7,581
Ageing of financial assets that are past due but not impaired for 2012
0 to 30 days 31 to 60 days 61 to 90 days 90+ days Total
$'000 $'000 $'000 $'000 $'000
Goods and services receivable 13,230 678 619 604 15,131
Total 13,230 678 619 604 15,131
Not past due nor impaired Not past due nor impaired
Past due or impaired
The Department was exposed to minimal credit risk as loans and receivables are cash and trade receivables. The maximum exposure to credit risk was the risk that arises from potential default of a debtor. The amount was equal to the total amount of trade receivables $23,889,000 (2012: $31,329,000). The Department had assessed the risk of default on payment and had allocated $1,639,000 in 2013 (2012: $1,386,000) to an allowances for impairment account. The entity managed its credit risk by establishing policies and procedures with regard to debt management and recovery techniques that were to be applied.
The following table illustrates the Department's gross exposure to credit risk, excluding any collateral or credit enhancements.
Past due or impaired
Loans and receivables
Loans and receivables
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 14: Financial Instruments
Note 14D Liquidity risk
Maturities for non-derivative financial liabilities 2013
$'000 $'000 $'000
Other liabilities
Trade creditors (81,069) - (81,069)
Total (81,069) - (81,069)
Maturities for non-derivative financial liabilities 2012
$'000 $'000 $'000
Other liabilities
Trade creditors (85,326) - (85,326)
Total (85,326) - (85,326)
The Department has no derivative financial liabilities in both the current and prior year.
Note 14E Market Risk
The Department's financial instruments are of a nature that does not expose the Department to certain market risks.
The Department is not exposed to 'currency risk' or 'other price risk'.
The Department has no interest bearing items on the Balance Sheet.
within 1 year 1 to 2 years Total
within 1 year 1 to 2 years Total
The Department's financial liabilities are payables. The exposure to liquidity risk is based on the notion that the Department will encounter difficulty in meeting it's obligations associated with financial liabilities.
This is highly unlikely due to appropriation funding and mechanisms available to the Department (e.g. Advance to the Finance Minister) and internal policies and procedures put in place to ensure there are appropriate resources to meet its financial obligations. The Department has no prior experience of default.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note15: Financial Assets Reconciliation
Financial Assets Notes 2013 2012
$'000 $'000
270,135 293,531
Less: non-financial instruments components
GST receivable from the Australian Taxation Office 6B 3,046 2,009
Appropriations receivable 6B 167,982 184,072
Receivable from Official Public Account for Special Accounts 6B 72,537 67,827
Accrued revenue 6C 373 2,355
Total non-financial instrument components 243,938 256,263
Total financial assets as per financial instruments note 14A 26,197 37,268
Total financial assets as per balance sheet
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 16: Administered - Expenses
2013 2012
$'000 $'000
Note 16A: Suppliers Goods and services Consultants 32,040 27,103
Contract for services 417,664 391,879
Travel 501 857
Communications and publications 16,217 26,992
Committee related expenses 3,508 3,271
Other 29,490 17,602
Total goods and services 499,420 467,704
Goods and services are made up of: Rendering of services - related entities 54,401 58,715
Rendering of services - external parties 445,019 408,989
Total goods and services 499,420 467,704
Total suppliers expenses 499,420 467,704
Note 16B: Subsidies Payments to external parties:
Aged care 9,402,846 8,868,623
Medical indemnity - 172,426
Workforce Development and Innovation 35,286 -
Other 2,491 15,386
Total subsidies 9,440,623 9,056,435
Note 16C: Personal benefits Indirect:
Medical services 18,637,253 17,904,643
Pharmaceuticals and pharmaceutical services 8,645,506 9,056,851
Private health insurance 5,184,345 5,473,209
Primary care practice incentives 298,275 304,463
Hearing services 372,513 375,232
Targeted assistance 422,217 391,549
Other 162,427 66,627
Total personal benefits 33,722,536 33,572,574
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 16: Administered - Expenses
2013 2012
$'000 $'000
Note 16D: Grants Public sector:
Australian government entities (related entities) 1,136,242 1,097,654
Health and hospital fund 460,037 809,520
State and territory governments - 84
Local governments 14,981 25,792
Private sector:
Non-profit organisations 4,657,176 3,760,333
Health and hospital fund 269,237 431,332
Victorian local hospital network 105,739 -
Home and community care grants 370,538 -
Other 1,561 2,893
Overseas 14,583 10,432
Total grants 7,030,094 6,138,040
Note 16E: Depreciation and amortisation Depreciation:
Buildings 832 833
Total depreciation 832 833
Amortisation:
Intangibles 18,309 -
Total amortisation 18,309 -
Total depreciation and amortisation 19,141 833
Note 16F: Write-down and impairment of assets Asset write-downs and impairments from:
Impairment on financial instruments 291 974
Write-off of inventories 35,032 47,699
Total write-down and impairment of assets 35,323 48,673
Note 16G: Foreign exchange losses (net) Non-speculative - 9
Total foreign exchange losses (net) - 9
Note 16H: Payments to CAC bodies Australian Institute of Health and Welfare 15,912 17,389
Food Standards Australia New Zealand 18,720 19,936
Total payments to CAC bodies 34,632 37,325
Note 16I: Other expenses Act of Grace payments 26 5
Cost of inventory distributed - 1
Transfers to Private Health Insurance Administration Council 409,428 382,435
Payments to Special Accounts 18,759 22,164
Other 12 -
Total other expenses 428,225 404,605
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 17: Administered - Income
2013 2012
$'000 $'000
OWN-SOURCE REVENUE
Taxation revenue
Note 17A: Other taxes Medical indemnity levy 13,708 13,506
Other 1,697 1,703
Total other taxes 15,405 15,209
Non-taxation revenue
Note 17B: Sale of goods and rendering of services Provision of goods - external parties - 188
Total sale of goods and rendering of services - 188
Note 17C: Interest Loans 10,003 7,409
Total interest 10,003 7,409
Note 17D: Recoveries Medical and pharmaceutical benefits and health rebate schemes 33,568 40,908
High cost drug recoveries 328,168 193,593
Total recoveries 361,736 234,501
Note 17E: Other revenue Private Health Insurance Administration Council levy 409,428 382,435
Health and hospital fund 729,274 1,240,852
Residential care services and packaged care services receipts 247,777 252,210
Medical indemnity 70,552 -
Other 98,910 85,490
Total other revenue 1,555,941 1,960,987
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 18: Administered - Financial Assets
2013 2012
$'000 $'000
Note 18A: Cash and cash equivalents Cash on hand or on deposit - 68,683
Total cash and cash equivalents - 68,683
Note 18B: Personal benefits receivable Pharmaceutical benefits 100,658 114,622
Medicare benefits 22,476 32,117
Other personal benefits 378 665
Total personal benefits receivable 123,512 147,404
Note 18C: Trade and other receivables Goods and Services:
Goods and services receivable - related entities 36,844 480
Goods and services receivable - external parties 229,092 99,535
Total receivables for goods and services 265,936 100,015
These amounts represent receivables for:
Subsidies - -
Residential and flexible care 21,250 21,161
Medical indemnity 4,989 4,204
State and territory governments 75,001 -
Other - recoveries and miscellaneous receivables 164,696 74,650
Total receivables for goods and services 265,936 100,015
Advances and loans:
Aged care facilities 131,498 85,273
Total advances and loans 131,498 85,273
Other receivables:
GST receivable from the Australian Taxation Office 51,603 104,346
Total other receivables 51,603 104,346
Total trade and other receivables (gross) 449,037 289,634
Less impairment allowance account:
Goods and services (25,524) (35,087)
Total impairment allowance account (25,524) (35,087)
Total trade and other receivables (net) 423,513 254,547
Receivables are expected to be recovered in:
No more than 12 months 301,759 176,439
More than 12 months 121,754 78,108
Total trade and other receivables (net) 423,513 254,547
Receivables are aged as follows:
Not overdue 238,818 137,337
Overdue by:
0 to 30 days 70,819 53,409
31 to 60 days 13,360 18,975
61 to 90 days 1,107 7,582
More than 90 days 124,933 72,331
Total receivables (gross) 449,037 289,634
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 18: Administered - Financial Assets
2013 2012
$'000 $'000
The impairment allowance account is aged as follows:
Not overdue - -
Overdue by:
0 to 31 days - -
31 to 60 days - -
61 to 90 days - -
More than 90 days (25,524) (35,087)
Total impairment allowance account (25,524) (35,087)
Reconciliation of the Impairment Allowance Account:
Movement in relation to 2013
Goods and Services Receivable Total
$'000 $'000
Opening balance (35,087) (35,087)
Amounts written off 7,826 7,826
Increase recognised in net deficit 1,737 1,737
Closing balance (25,524) (25,524)
Movement in relation to 2012
Goods and Services Receivable Total
$'000 $'000
Opening balance (37,327) (37,327)
Amounts written off 3,214 3,214
Amounts recovered and reversed 3,907 3,907
Increase recognised in net deficit (4,881) (4,881)
Closing balance (35,087) (35,087)
Note 18D: Other investments Aged Care Standards and Accreditation Agency Ltd (i) 14,846 15,485
Australian Institute of Health and Welfare (ii) 4,673 5,642
Food Standards Australia New Zealand (iii) 6,732 6,574
General Practice Education and Training Ltd (iv) 18,253 42,109
Private Health Insurance Administration Council (v) 4,912 4,744
Health Workforce Australia (vi) 143,227 142,270
Australian Commission on Safety and Quality in Health Care (vii) 963 772
Total other investments 193,606 217,596
Other investments are expected to be recovered in:
More than 12 months 193,606 217,596
Total other investments 193,606 217,596
Credit terms for goods and services were net 30 days (2012: 30 days).
Loans were made to approved providers under the Aged Care Act 1997 for an estimated period of 12 years. No security is generally required. Principal is repaid in full at maturity. Interest rates are linked to the Consumer Price Index. Interest payments are due on the 21 st
day of each calendar month.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 18: Administered - Financial Assets
Note 19: Administered - Non-Financial Assets
2013 2012
$'000 $'000
Note 19A: Land and buildings Freehold land at fair value 1,760 1,760
Buildings on freehold land: Fair value 20,365 20,365
Accumulated depreciation (1,665) (833)
Total buildings on freehold land 18,700 19,532
Total land and buildings 20,460 21,292
No formal revaluation was undertaken for land and buildings (2012: Nil).
No indications of impairment were found for land and buildings.
(v) Private Health Insurance Administration Council regulates the financial performance of the private health industry, calculates the reinsurance pool, reviews pricing applications, registers health insurance organisations, and provides information relating to membership in private health insurance and the benefits paid by the industry. The Department classifies this investment as ‘available for sale’ and it was measured at fair value as at 30 June 2013. Fair value has been taken to be the unaudited net assets of the entity as at the end of the reporting period.
(vi) Health Workforce Australia aims to ensure that Australia has the health workforce necessary to meet future needs through integrated clinical training, workforce planning and reform. The Department classifies this investment as ‘available for sale’ and it was measured at fair value as at 30 June 2013. Fair value has been taken to be the unaudited net assets of the entity as at the end of the reporting period.
(iii) Food Standards Australia New Zealand protects and informs consumers through the development of effective food standards, in a way that helps stimulate and support growth and innovation in the food industry. The Department classifies this investment as ‘available for sale’ and it was measured at fair value as at 30 June 2013. Fair value has been taken to be the unaudited net assets of the entity as at the end of the reporting period.
No land and buildings are expected to be sold or disposed of within the next 12 months.
(vii) Australian Commission on Safety and Quality in Health Care works to lead and coordinate national improvements in safety and quality in health care across Australia. The Department classifies this investment as ‘available for sale’ and it was measured at fair value as at 30 June 2013. Fair value has been taken to be the unaudited net assets of the entity as at the end of the reporting period.
(i) Aged Care Standards and Accreditation Agency Ltd accredits, monitors and promotes high quality care through information, education and training for Australian Government funded aged care homes. The Department classifies this investment as ‘available for sale’ and it was measured at fair value as at 30 June 2013. Fair value has been taken to be the unaudited net assets of the entity as at the end of the reporting period.
(ii) Australian Institute of Health and Welfare informs community discussion and decision making through national leadership and collaboration in developing and providing health and welfare statistics and information. The Department classifies this investment as ‘available for sale’ and it was measured at fair value as at 30 June 2013. Fair value has been taken to be the unaudited net assets of the entity as at the end of the reporting period.
(iv) General Practice Education and Training Ltd works to ensure general practice education and training meet the needs of communities, individuals and general practitioners across Australia. The Department classifies this investment as ‘available for sale’ and it was measured at fair value as at 30 June 2013. Fair value has been taken to be the unaudited net assets of the entity as at the end of the reporting period.
All revaluations are conducted in accordance with the revaluation policy stated in Note 1. AON Risk Services Australia Ltd conducted the valuation of land and buildings at 30 June 2011.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 19B: Reconciliation of the opening and closing balances of land and buildings (2013) Item Land Buildings Total Land and
Buildings
$'000 $'000 $'000
As at 1 July 2012 Gross book value 1,760 20,365 22,125
Accumulated depreciation - (833) (833)
Net book value 1 July 2012 1,760 19,532 21,292
Depreciation expense - (832) (832)
Net book value 30 June 2013 1,760 18,700 20,460
Net book value as of 30 June 2013 represented by:
Gross book value 1,760 20,365 22,125
Accumulated depreciation - (1,665) (1,665)
1,760 18,700 20,460
Note 19B: Reconciliation of the opening and closing balances of land and buildings (2012) Item Land Buildings Total Land and
Buildings
$'000 $'000 $'000
As at 1 July 2011 Gross book value 1,760 20,365 22,125
Net book value 1 July 2011 1,760 20,365 22,125
Depreciation expense - (833) (833)
Net book value 30 June 2012 1,760 19,532 21,292
Net book value as of 30 June 2012 represented by:
Gross book value 1,760 20,365 22,125
Accumulated depreciation - (833) (833)
1,760 19,532 21,292
Note 19: Administered - Non-Financial Assets
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 19: Administered - Non-Financial Assets
2013 2012
$'000 $'000
Note 19C: Intangibles Computer software: Internally developed - in progress - 91,544
Internally developed - in use 91,544 -
Accumulated amortisation (18,309) -
Total computer software 73,235 91,544
Total intangibles 73,235 91,544
No indicators of impairment were found for intangible assets.
No intangibles are expected to be sold or disposed of within the next 12 months.
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Note 19D: Reconciliation of the opening and closing balances of intangibles (2013) Item Computer software
internally developed
Total
$'000 $'000
As at 1 July 2012 Gross book value 91,544 91,544
Net book value 1 July 2012 91,544 91,544
Amortisation expense (18,309) (18,309)
Net book value 30 June 2013 73,235 73,235
Net book value as of 30 June 2013 represented by:
Gross book value 91,544 91,544
Accumulated amortisation and impairment (18,309) (18,309)
73,235 73,235
Note 19D: Reconciliation of the opening and closing balances of intangibles (2012) Item Computer software
internally developed
Total
$'000 $'000
Net book value 1 July 2011 - -
Additions:
By purchase or internally developed - recognised at 30 June 2012 91,544 91,544
Net book value 30 June 2012 91,544 91,544
Net book value as of 30 June 2012 represented by:
Gross book value 91,544 91,544
91,544 91,544
Note 19: Administered - Non-Financial Assets
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 19: Administered - Non-Financial Assets
2013 2012
$'000 $'000
Note 19E: Inventories Inventories held for distribution 195,763 208,035
Total inventories 195,763 208,035
During 2013, $37,104,152 of inventory held for distribution was recognised as an expense (2012: $48,451,227) of which $35,032,081 was obsolete stock (2012: $47,698,546).
During 2013, there was no inventory held for sale. During 2012, $208,565 of inventory held for sale was recognised as an expense, of which $20,614 was obsolete stock.
No items of inventory were recognised at fair value less cost to sell.
$4,360,839 of inventory held in the National Medical Stockpile will pass its expiry date during the period July to September 2013.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 20: Administered - Payables
2013 2012
$'000 $'000
Note 20A: Overdraft Overdraft (105,428) -
Total overdraft (105,428) -
Note 20B: Suppliers Trade creditors and accruals (43,777) (15,636)
Total suppliers (43,777) (15,636)
Supplier payables expected to be settled within 12 months:
Related entities (3,684) -
External parties (40,093) (15,636)
Total suppliers (43,777) (15,636)
Settlement is usually made within 30 days.
Payable to external entities (39,633) (47,835)
Total subsidies (39,633) (47,835)
Total subsidies - are expected to be settled in:
No more than 12 months (39,633) (47,835)
Total subsidies (39,633) (47,835)
Indirect (847,723) (1,217,895)
Total personal benefits (847,723) (1,217,895)
Total personal benefits - are expected to be settled in:
No more than 12 months (847,723) (1,217,895)
Total personal benefits (847,723) (1,217,895)
Public sector:
Australian Government entities (related entities) (7,281) (26,902)
State and Territory Governments (2,433) (17,054)
Local Governments (1,205) (613)
Private sector:
Non-profit organisations (347,549) (463,743)
Total grants (358,468) (508,312)
Total grants - are expected to be settled in:
No more than 12 months (358,468) (508,312)
Total grants (358,468) (508,312)
Note 20C: Subsidies
Note 20D: Personal benefits
Note 20E: Grants
Settlement is made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 20: Administered - Payables
2013 2012
$'000 $'000
Department of Veterans' Affairs (42,396) (26,791)
Total other payables (42,396) (26,791)
Total other payables are expected to be settled in: No more than 12 months (42,396) (26,791)
Total other payables (42,396) (26,791)
Note 20: Administered - Provisions
Notes 2013 2012
$'000 $'000
Medical Indemnity provision:
Incurred But Not Reported Scheme 20 I (42,000) (67,000)
High Cost Claims Scheme 20 I (254,000) (362,000)
Run-Off Cover Scheme 20 I (96,000) (87,000)
Total subsidies (392,000) (516,000)
Subsidies are expected to be settled in:
No more than 12 months (29,667) (48,009)
More than 12 months (362,333) (467,991)
Total subsidies (392,000) (516,000)
The reconciliation of this provison is disclosed in 20I
Indirect (1,064,534) (1,085,911)
Total personal benefits (1,064,534) (1,085,911)
Personal benefits are expected to be settled in: No more than 12 months (1,064,534) (1,085,911)
Total personal benefits (1,064,534) (1,085,911)
Note 20G: Subsidies
Note 20H: Personal benefits
Note 20F: Other payables
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 20: Administered - Liabilities
Note 20 I: Medical Indemnity Provision
Balance as at 30 June 2012 Claims paid Administered Statement of Comprehensive Income
Impact
Balance as at 30 June 2013
$'000 $'000 $'000 $'000
Medical Indemnity Liabilities Incurred But Not Reported Scheme (67,000) 3,719 21,281 (42,000)
High Cost Claims Scheme (362,000) 33,413 74,587 (254,000)
Run-Off Cover Scheme (87,000) 5,344 (14,344) (96,000)
Total (516,000) 42,476 81,524 (392,000)
⢠Incurred But Not Reported Scheme (IBNRS); ⢠High Cost Claims Scheme (HCCS); ⢠Exceptional Claims Scheme (ECS); ⢠Run-Off Cover Scheme (ROCS); ⢠Midwife Professional Indemnity (Commonwealth Contribution) Scheme (MPIS); and ⢠Midwife Professional Indemnity Run-off Cover Scheme (MPIRCS).
The table below provides a summary of the movement of medical indemnity provisions in the Department’s Schedule of Administered Items for the financial year ended 30 June 2013.
Medical Indemnity is administered by the Department under the Medical Indemnity Act 2002 and the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 . The Department administers the following medical indemnity schemes:
Incurred But Not Reported Scheme (IBNRS) The IBNRS provides for the Department of Human Services to make payments to Avant Mutual Group for claims made in relation to its IBNR liability at 30 June 2002. An actuarial assessment is performed to arrive at a reasonable estimate of the liability based on assumptions that are valid at the time of the assessment. Some claims that will be payable under the IBNRS may also be eligible for payment under the HCCS.
High Cost Claims Scheme (HCCS)
A summary of each of the schemes is provided below:
Under HCCS, the Government pays 50% of the cost of claims made to all Medical Indemnity Insurers (MIIs) that exceed a specified threshold, up to the limit of the practitioner’s insurance. The threshold to be applied depends on the date of notification of the claim, as follows: - from 1 January 2003 to 21 October 2003 - $2,000,000; - from 22 October 2003 to 31 December 2003 - $500,000; and - on or after 1 January 2004 - $300,000.
Exceptional Claims Scheme (ECS) The ECS provides coverage for practitioners for the cost of medical indemnity claims that exceed the limit of their contract of insurance. To be covered by the ECS, the practitioner must have medical indemnity insurance cover to at least $15,000,000 for the period 1 January to 30 June 2003 and $20,000,000 from 1 July 2003.
Run-Off Cover Scheme (ROCS) ROCS provides free run-off cover for specific groups of medical practitioners including those retired and over 65, on maternity leave, retired for more than three years, retired due to permanent disability or the estates of those that have died. This scheme is funded through the collection of support payments imposed as a tax on MIIs.
Midwife Professional Indemnity (Commonwealth Contribution) Scheme (MPI) Under this scheme, Medical Insurance Australia Pty Ltd (MIGA) is reimbursed for part of the costs of claims notified to MIGA on or after 1 July 2010. MIGA will pay the first $100,000 of each eligible claim, plus 20 cents in the dollar for claims costs between $100,000 and $2 million. The Government will contribute the remaining 80 cents in the dollar for claims costs between $100,000 and $2 million (i.e. Level 1 Commonwealth contributions) and will meet 100% of that part of the cost of any claim which exceeds the $2 million threshold (i.e. Level 2 Commonwealth contributions).
Midwife Professional Indemnity Run-off Scheme (the ROC Scheme) Under this scheme, MIGA is fully reimbursed for the costs of claims made by midwives who have ceased practice. The ROC scheme applies to claims (including incidents) notified to MIGA on or after 1 July 2010 by midwives.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 21: Administered - Cash Flow Reconciliation
2013 2012
$'000 $'000
Reconciliation of cash and cash equivalents as per Administered Schedule of Assets and Liabilities to Administered Cash Flow Statement
Cash and cash equivalents and overdraft as per:
Administered Cash Flow Statement (105,428) 68,683
Administered Schedule of Assets and Liabilities (105,428) 68,683
Difference - -
Reconciliation of net cost of services to net cash from operating activities:
Net cost of services 49,266,909 47,507,904
Adjustment for non-cash items Depreciation and amortisation 19,141 833
Net write-down of assets 35,323 48,673
Concessional loans discount 22,368 16,254
Special accounts consolidation adjustment - 11,600
Remeasurement of prior year concessional loans discount - (449)
Changes in assets/liabilities (Increase)/decrease in net receivables (102,173) (135,655)
(Increase)/decrease in inventories (22,760) (28,841)
Increase/(decrease) in suppliers payable 28,142 4,206
Increase/(decrease) in subsidies payable (8,202) (4,814)
Increase/(decrease) in personal benefits payable (370,172) 480,460
Increase/(decrease) in grants payable (149,844) 17,683
Increase/(decrease) in subsidies provision (124,000) 131,000
Increase/(decrease) in personal benefits provision (21,377) (87,937)
Net cash used by operating activities (49,960,463) (47,054,891)
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Contingent Assets
There were no quantifiable administered contingent assets as at 30 June 2013 (2012: Nil).
2013 2012 2013 2012 2013 2012 2013 2012
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Contingent liabilities Balance from previous period (46,000) (39,000) (195) (159) - - (46,195) (39,159) New contingent liabilities recognised - - (63) (85) (27,000) - (27,063) (85) Re-measurement (2,000) (7,000) - - - - (2,000) (7,000) Liabilities recognised - - 2 - - - 2 - Obligations expired - - 89 49 - - 89 49 Total contingent liabilities (48,000) (46,000) (167) (195) (27,000) - (75,167) (46,195) Net contingent liabilities (48,000) (46,000) (167) (195) (27,000) - (75,167) (46,195) Note 22: Administered - Contingent Assets and Liabilities
Indemnities
Claims for costs
Total
Aged Care Accommodation Bond
Guarantee Scheme
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Financial Year 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Total
Payments made $ million - 0.6 8.4 15.5 - - - 24.5
Number of times scheme activated - 1 2 2 - - - 5
Note 22: Administered - Contingent Assets and Liabilities
Claims for Costs The Schedule of Administered contingencies reports a contingent liability in respect of claims for costs payments related to medical benefits of up to $167,000 (2012: $195,000).
Quantifiable Contingent Liabilities
Indemnities The Schedule of Administered Contingencies reports a contingent liability in respect of medical indemnity payments under the High Cost Claims Scheme of up to $48,000,000 (2012: $46,000,000).
For the period ended 30 June 2013 no claims have been made (2012: Nil).
General Practice Education and Training (GPET) Limited
Compensation from Sanofi-Aventis
Diagnostic Products Agreement
Aged Care Accommodation Bond Guarantee Scheme
GPET indemnifies the Commonwealth, its officers, employees and agents from and against any and all loss or liability incurred by the Commonwealth; loss of or damage to the property of the Commonwealth; or loss or expense incurred by the Commonwealth in dealing with any claim against it, arising from any act or omission by GPET in connection with this Agreement, where there was fault on the part of the person whose conduct gave rise to that liability, loss, damage or expense; or any breach by GPET of its obligations or warranties under this Agreement.
Aged Care Accommodation Bond Guarantee Scheme The Department is currently aware of the potential for the accommodation bond scheme to be activated. If this occurs, the maximum payments required to be made by the Commonwealth under the scheme is estimated at $27 million.
Compensation from Wyeth
Unquantifiable Contingent Liabilities
Unquantifiable Contingent Assets
The Australian Government has provided an indemnity to a review of certain matters in relation to the Diagnostics Products Agreement. The indemnity provides certain specified members of the review the same level of indemnity as Australian Government officers for the purpose of the review. For the period ended 30 June 2013 no claims have been made (2012: Nil).
The Department has implemented risk mitigation strategies which should reduce the risk of default and thereby activation of the Guarantee
The Department has initiated legal action to seek compensation from Sanofi-Aventis, the original patent owner of clopidogrel (Plavix®), for additional costs to the Pharmaceutical Benefits Scheme (PBS) resulting from a delay in listing a generic version of clopidogrel. Listing a generic form of clopidogrel on the Australian market in 2008 would have triggered an automatic reduction to the price paid by the Government for clopidogrel through the PBS and is likely to have resulted in a Price Disclosure reduction in 2010. The first generic version of this medicine was listed in 2010 and the first Price Disclosure reduction occurred in 2012.
The Department has initiated legal action to seek compensation from Wyeth, the original patent owner of venlafaxine (Efexor®), for additional costs to the Pharmaceutical Benefits Scheme (PBS) resulting from a delay in listing a generic version of venlafaxine. Listing a generic form of venlafaxine on the Australian market in 2009 would have triggered an automatic reduction to the price paid by the Government for venlafaxine through the PBS. The first generic version of this medicine was listed in 2012.
A Guarantee Scheme has been established through the Aged Care (Bond Security) Act 2006 and Aged Care (Bond Security) Levy Act 2006 . Under the Guarantee Scheme, if a provider becomes insolvent or bankrupt and is unable to repay outstanding bond balances to aged care residents, the Australian Government will step in and repay the bond balances owing to each resident. In return, the residents' rights to pursue the defaulting provider to recover the accommodation bond money transfer to the Government. In the event the Government cannot recover the full amount from the defaulting provider, it may levy all providers holding accommodation bonds to recoup the shortfall. It is not possible to quantify the Australian Government's contingent liability in the event that the Guarantee Scheme is activated. From the latest available information, the maximum contingent liability, in the unlikely event that all providers defaulted, is $13 billion. Since the scheme was introduced it has been activated 5 times requiring payment of $25m (as outlined in the table below). It is difficult to predict if the past patterns of payments are indicative of future payments.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 22: Administered - Contingent Assets and Liabilities
Under certain conditions the Australian Government has provided an indemnity for the supply of certain vaccines to the suppliers of the vaccines. For the period ended 30 June 2013 no claims have been made (2012: Nil). Contract under which the contingent liability is recognised has now expired. However, until replacement stock is sourced the contingent liability for use of the vaccine currently held remains with the Commonwealth.
Under certain conditions the Australian Government, States and Territories jointly provide indemnity for the Blood Service through a cost-sharing arrangement in relation to the National Managed Fund claims, both current and potential, regarding personal injury and loss or damages suffered by a recipient of certain blood and blood products where other available mitigation or cover is not available. Under a Memorandum of Understanding between governments and the Blood Service, the blood and blood products liability cover for the Blood Service remains in force until all parties agree to terminate the arrangements from an agreed date. For the period ended 30 June 2013 no claims have been made (2012: Nil).
Significant Remote Contingencies
Vaccines
The Department did not have any significant remote contingencies this year or prior year.
The Australian Medical Association This is an agreement between the Australian Medical Association Ltd (AMA), the Commonwealth, Australian Private Hospitals Association Ltd, Australian Health Insurance Association and Beyond Blue Ltd for participation in and support of the Private Mental Health Alliance. In respect of identified information collected, held or exchanged by the parties in connection with the National Model for the Collection and Analysis of a Minimum Data Set with Outcome Measures in Private, Hospital-based Psychiatric Services each party has agreed to indemnify each other in respect of any loss, liability, cost, claim or expense, misuse of Confidential Information or breach of the Privacy Act. The AMA's liability to indemnify the other parties will be reduced proportionally to the extent that any unlawful or negligent act or omission of the other parties or their employees or agents contributed to the loss or damage. For the period ended 30 June 2013 no claims have been made (2012: Nil).
Human Pituitary Hormone Program Under certain conditions the Australian Government has provided indemnity for the supply of growth hormones manufactured from human pituitary glands and human pituitary gonadotrophin manufactured before 31 December 1985. For the period ended 30 June 2013 no claims have been made (2012: Nil).
Australian Red Cross Blood Service The Deed of Agreement between the Commonwealth and the Australian Red Cross Society (ARCS) and the National Blood Authority (NBA) in relation to the operations of the Blood Service, includes certain indemnities and limited liability in favour of ARCS. These cover a defined set of potential business, product and employee risks and liabilities arising from the operation of the Blood Service. The indemnities and limitation of liability only operate in the event of the expiry and non-renewal, or the early termination of the Deed, and only within a certain scope. They are also subject to appropriate limitations and conditions including in relation to mitigation, contributory fault, and the process of handling relevant claims.
The Australian Government has indemnified CSL Ltd for a specific range of events that occurred during the Plasma Fractionation Agreement from 1 January 1994 to 31 December 2004, where alternative cover was not arranged by CSL Ltd. For the period ended 30 June 2013 no claims have been made (2012: Nil).
CSL Ltd Under existing agreements, the Australian Government has indemnified CSL Ltd for certain existing and potential claims made for personal injury, loss or damage suffered through therapeutic and diagnostic use of certain products manufactured by CSL Ltd.
The Department of Human Services delivers the Incurred But Not Reported Scheme (IBNRS) on behalf of the Australian Government. Eligibility for claim payments under this scheme is dependent on whether the Medical Indemnity Insurer (MII) is deemed to be a participating Medical Defence Organisation under the Medical Indemnity Act 2002 and the Midwife Professional indemnity (Commonwealth Contribution) Scheme Act 2010 .
The Department of Human Services also delivers the Exceptional Claims Scheme (ECS) on behalf of the Australian Government. Under this scheme, the Australian Government will be liable for the cost of medical indemnity claims that exceed certain thresholds. The Consolidated Revenue Fund is appropriated to make payments under this scheme. To be covered by the ECS, practitioners must have medical indemnity insurance cover to at least a threshold of $15 million for claims arising from incidents notified between 1 January to 30 June 2003 and $20 million for claims notified from 1 July 2003. At 30 June 2013, the Department had received no notification of any incidents that would give rise to claims under this scheme. However, the nature of these claims is such that there is usually an extended period between the date of the medical incident and notification to the insurer. For the period ended 30 June 2013 no claims have been made or notified (2012: Nil).
Medical Indemnity
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2013 2012
$'000 $'000
Note 23A: Categories of financial instruments Financial Assets Loans and receivables:
Cash and cash equivalents - 68,683
Personal benefits receivable 89,364 82,071
Goods and services receivable 214,173 39,563
Loans receivable 131,498 85,273
Total loans and receivables 435,035 275,590
Available for sale:
Shares in - Aged Care Standards and Accreditation Agency Ltd 14,846 15,485
Shares in - Australian Institute of Health and Welfare 4,673 5,642
Shares in - Food Standards Australia New Zealand 6,732 6,574
Shares in - General Practice Education and Training Ltd 18,253 42,109
Shares in - Private Health Insurance Administration Council 4,912 4,744
Shares in - Health Workforce Australia 143,227 142,270
Shares in - Australian Commission on Safety and Quality in Health Care 963 772
Total available for sale 193,606 217,596
Carrying amount of financial assets 628,641 493,186
Financial Liabilities At amortised cost:
Overdraft (105,428) -
Trade creditors (43,777) (15,636)
Grants payable (358,468) (508,312)
Other payables (42,396) (26,791)
Total financial liabilities at amortised cost (550,069) (550,739)
Carrying amount of financial liabilities (550,069) (550,739)
Note 23B: Net income and expense from financial assets Loans and receivables Interest revenue 10,003 7,409
Impairment (291) (974)
Net gain loans and receivables 9,712 6,435
Net gain from financial assets 9,712 6,435
Note 23C: Net income and expense from financial liabilities Financial liabilities - at amortised cost Exchange loss - (9)
Net loss financial liabilities - at amortised cost - (9)
Net loss from financial liabilities - (9)
Note 23: Administered - Financial Instruments
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Note 23D: Credit risk
2013 2012
$'000 $'000
Financial Assets Personal benefits receivable 89,364 82,071
Goods and services receivable 214,173 39,563
Advances and loans 131,498 85,273
Shares in - Aged Care Standards and Accreditation Agency Ltd 14,846 15,485
Shares in - Australian Institute of Health and Welfare 4,673 5,642
Shares in - Food Standards Australia New Zealand 6,732 6,574
Shares in - General Practice Education and Training Ltd 18,253 42,109
Shares in - Private Health Insurance Administration Council 4,912 4,744
Shares in - Health Workforce Australia 143,227 142,270
Shares in - Australian Commission on Safety and Quality in Health Care 963 772
Total 628,641 424,503
The following table illustrates the Department's gross exposure to credit risk.
Note 23: Administered - Financial Instruments
The Administered activities of the Department are not exposed to a high level of credit risk as the majority of financial assets are goods and services receivables and shares in Government controlled and funded entities. The Department has policies and procedures that outline the debt recovery techniques to be applied. The Department has assessed the risk of default on payment and has allocated $25,524,000 in 2013 (2012: $35,087,000) to an allowance for impairment account.
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 23D (Continued): Credit risk Credit quality of financial instruments not past due or individually determined as impaired
2013 2012 2013 2012
$'000 $'000 $'000 $'000
Personal benefits receivable 89,364 82,071 - -
123,678 - 90,495 39,563
131,498 85,273 - -
14,846 15,485 - -
4,673 5,642 - -
6,732 6,574 - -
18,253 42,109 - -
4,912 4,744 - -
143,227 142,270 - -
963 772 - -
Total 538,146 384,940 90,495 39,563
Ageing of financial assets that are past due but not impaired for 2013
0 to 30 days 31 to 60 days 61 to 90 days 90+ days Total
$'000 $'000 $'000 $'000 $'000
53,003 5,952 1,107 4,909 64,971
Total 53,003 5,952 1,107 4,909 64,971
Ageing of financial assets that are past due but not impaired for 2012
0 to 30 days 31 to 60 days 61 to 90 days 90+ days Total
$'000 $'000 $'000 $'000 $'000
- 319 2,000 2,157 4,476
Total - 319 2,000 2,157 4,476
Shares in - Food Standards Australia New Zealand
Past due or impaired
Advances and loans Shares in - General Practice Education and Training Ltd Shares in - Health Workforce Australia Goods and services receivable Note 23: Administered - Financial Instruments Shares in - Private Health Insurance Administration Council
Not past due nor impaired
Goods and services receivable
Not past due nor impaired
Past due or impaired
Shares in - Aged Care Standards and Accreditation Agency Ltd Shares in - Australian Institute of Health and Welfare Goods and services receivable Shares in - Australian Commission on Safety and Quality in Health Care
360 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 23: Administered - Financial Instruments Note 23E: Liquidity risk Maturities for non-derivative financial liabilities 2013
1 to 2 years 2 to 5 years > 5 years Total
$'000 $'000 $'000 $'000 $'000 $'000
Overdraft 105,428 - - - - 105,428
Trade creditors - 43,777 - - - 43,777
Grants payable - 358,468 - - - 358,468
Other payables - 42,396 - - - 42,396
Total 105,428 444,641 - - - 550,069
Maturities for non-derivative financial liabilities 2012
1 to 2 years 2 to 5 years > 5 years Total
$'000 $'000 $'000 $'000 $'000 $'000
Trade creditors - 15,636 - - - 15,636
Grants payable - 508,312 - - - 508,312
Other payables - 26,791 - - - 26,791
Total - 550,739 - - - 550,739
The Department had no derivative financial liabilities in both the current and prior financial year.
Note 23F: Market risk
Interest rate risk
Other price risk
The Department’s administered activities are not exposed to ‘Other Price Risk’. Its administered investments are not traded on the Australian Stock Exchange. It does not hold any other financial instruments that would be exposed to price risk.
The Department's administered financial liabilities are overdrafts, suppliers payable, grants payable and other payables. The exposure to liquidity risk is based on the notion that the Department will encounter difficulty in meeting its obligations associated with its administered financial liabilities. This is highly unlikely due to appropriation funding and mechanisms available to the Department (e.g. Advance to the Finance Minister) and internal policies and procedures put in place to ensure there are appropriate resources to meet its financial obligations. The Department has no past experience of default.
within 1 year
Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The only interest bearing items in the Administered Schedule of Assets and Liabilities are loans receivable. The loans have an interest rate linked to Consumer Price Index and will not fluctuate for changes in market interest rate. The Department holds financial instruments that are of a nature that do not expose the Department to certain market risks. The Department is not exposed to ‘Currency risk’.
On demand
within 1 year
On demand
360 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 361
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DEPARTMENT
OF HEALTH
AND
AGEING
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2013 2012
Notes $'000 $'000
Note 23G: Concessional Loans Aged care facilities Nominal value 176,227 114,898
Less: Unexpired discount (44,729) (29,625)
Carrying value 131,498 85,273
Total 18C 131,498 85,273
Note 23: Administered - Financial Instruments
The movement in the unexpired discount provision represents the value of the concessional loans discount recognised during the year.
362 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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DEPARTMENT
OF HEALTH
AND
AGEING
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Notes 2013 2012
$'000 $'000
Total financial assets as per administered schedule of assets and liabilities 740,631 688,230
Less: non-financial instrument components GST receivable from the Australian Taxation Office 18C 51,603 104,346
Subsidies receivable 18C 26,239 25,365
Personal benefits receivable (statutory component) 18B 34,148 65,333
Total non-financial instrument components 111,990 195,044
Total financial assets as per financial instruments note 628,641 493,186
Note 24: Administered - Financial Assets Reconciliation
362 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 363
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DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Table A: Annual Appropriations ('Recoverable GST exclusive')
Annual
appropriation $'000
Appropriations
reduced
1
$'000
AFM
2
$'000
Section 30 $'000
Section 31 $'000
Section 32
3
$'000
Total
appropriation $'000
Appropriation applied in 2013 (current and prior years)
$'000
Variance
4
$'000
DEPARTMENTAL Ordinary annual services
631,146 - - - 80,738 - 711,884 712,069 (185)
Other services Equity
52,510 - - - - - 52,510 49,943 2,567
Total departmental
683,656 - - - 80,738 - 764,394 762,012 2,382
ADMINISTERED Ordinary annual services Administered items
7,281,008 (332,455) 121,700 29,318 - (35,471) 7,064,100 7,209,467 (145,367)
Payments to CAC Act bodies
34,748 - - - - - 34,748 34,632 116
Other services State, ACT, NT and Local government
15,226 (246) - - - - 14,980 17,736 (2,756)
Administered assets and liabilities
19,793 - - - - - 19,793 16,174 3,619
Total administered
7,350,775 (332,701) 121,700 29,318 - (35,471) 7,133,621 7,278,009 (144,388)
Notes: 3. The following was transferred from Appropriation Act 1 Administered Ordinary Services: $29,951,499 for the National Health Performance Authority and $5,520,000 for the National Health Funding Body. 4. The variance of $185,000 for departmental annual services primarily represents the timing difference of payments to suppliers or employees. The variance of $2,567,000 for departmental equity primarily represents the timing difference of payments on asset acquisition. The administered ordinary annual services items variance of $145,367,000 relates to the difference in 2011-12 and 2012-13 section 11 amounts. The administered payments to CAC Act bodies item variance relates to a reduction expected to be formally approved during 2013-14. The administered other services specific payments to States, ACT, NT and Local Governments variance of $2,756,000 is due to the value 2011-12 grant accruals paid during 2012-13. The administered other services assets and liabilities variance of $3,619,000 relates to funding for the National Medical Stockpile. 5. The Department of Human Services spent money from the CRF on behalf of the Department of Health and Ageing under drawing rights. The money spent has been included in the table above. 1. Appropriations reduced under Appropriation Acts (Nos. 1 & 3) 2012-13: sections 10, 11, 12 and 15 and under Appropriation Acts (Nos. 2 & 4) 2012-13: sections 12, 13, 14 and 17. Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request that the Finance Minister reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament. In 2013, there was no reduction in departmental appropriations for ordinary annual services.
Appropriation Act
FMA Act
Note 25A: Appropriations
2013 Appropriations
As with departmental appropriations, the responsible Minister may decide that part or all of an administered appropriation is not required and request that the Finance Minister reduce that appropriation. For administered appropriations reduced under section 11 of Appropriation Acts (Nos. 1 & 3) 2012-13 and section 12 of Appropriation Acts (Nos. 2 & 4) 2012-13, the appropriation is taken to be reduced to the required amount specified in Table F of this note once the annual report is tabled in Parliament. All administered appropriations may be adjusted by a Finance Minister’s determination, which is disallowable by Parliament. 2. Advance to the Finance Minister (AFM) - Appropriation Acts (Nos. 1&3) 2012-13: section 13. An AFM was provided for Outcome 13 for $107,000,000 and a further AFM for Outcomes 10 and 14 for $12,500,000 and $2,200,000 respectively.
364 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Table A: Annual Appropriations ('Recoverable GST exclusive') Note 25A: Appropriations
Annual
appropriation $'000
Appropriations
reduced
1
$'000
AFM $'000
Section 30 $'000
Section 31 $'000
Section 32
2
$'000
Total
appropriation $'000
Appropriation applied in 2012 (current and prior years)
$'000
Variance
3
$'000
DEPARTMENTAL Ordinary annual services
637,601 - - - 61,190 (333) 698,458 678,499 19,959
Other services Equity
24,613 - - - - - 24,613 58,440 (33,827)
Total departmental
662,214 - - - 61,190 (333) 723,071 736,939 (13,868)
ADMINISTERED Ordinary annual services Administered items
6,245,553 (593,997) - 87,769 - (32,720) 5,706,605 5,646,304 60,301
Payments to CAC Act bodies
37,325 - - - - - 37,325 37,325 -
Other services State, ACT, NT and Local government
25,793 - - - - - 25,793 27,719 (1,926)
Administered assets and liabilities
120,462 - - - - - 120,462 117,391 3,071
Total administered
6,429,133 (593,997) - 87,769 - (32,720) 5,890,185 5,828,739 61,446
Notes: 4. The Department of Human Services spent money from the CRF on behalf of the Department of Health and Ageing under drawing rights. The money spent has been included in the table above. 3. The variance of $19,959,000 for departmental annual services predominately reflects variance due to timing differences associated with the payment of suppliers and receipts from debtors. The variance of $33,827,000 for departmental equity represents additional expenditure on capital projects in 2011-12 which takes into account prior period equity. The administered ordinary annual services items variance of $60,301,000 relates to the difference in 2010-11 and 2011-12 section 11 amounts. The administered other services specific payments to States, ACT, NT and Local Governments variance of $1,926,000 is due to the value 2010-11 grant accruals paid during 2011-12. The administered other services assets and liabilities variance of $3,071,000 relates predominantly to the funding for the National Medical Stockpile.
2012 Appropriations
Appropriation Act
FMA Act
2. In departmental, $333,134 was transferred for the Independent Hospital Pricing Authority. In administered the following was transferred: $12,303,000 for Australian National Preventive Health Agency, $450,000 for National Mental Health Commission and $19,967,430 for Independent Hospital Pricing Authority. 1. Appropriations reduced under Appropriation Acts (Nos. 1,3&5) 2011-12: sections 10, 11, 12 and 15 and under Appropriation Acts (Nos. 2,4&6) 2011-12: sections 12, 13, 14 and 17. Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request that the Finance Minister reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament. In 2012, there was no reduction in departmental and non-operating departmental appropriations. As with departmental appropriations, the responsible Minister may decide that part or all of an administered appropriation is not required and request that the Finance Minister reduce that appropriation. For administered appropriations reduced under section 11 of Appropriation Acts (Nos. 1,3&5) 2011-12 and section 12 of Appropriation Acts (Nos. 2,4&6) 2011-12, the appropriation is taken to be reduced to the required amount specified in Table F of this note once the annual report is tabled in Parliament. All administered appropriations may be adjusted by a Finance Minister’s determination, which is disallowable by Parliament.
364 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 365
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Table B: Departmental and Administered Capital Budgets ('Recoverable GST exclusive')
FMA Act
Annual Capital Budget $'000
Appropriations
reduced
2
$'000
Section 32 $'000
Total Capital Budget
Appropriations $'000
Payments for non-financial assets
3
$'000
Payments for other purposes $'000
Total
payments $'000
Variance $'000
DEPARTMENTAL Ordinary annual services - Departmental Capital Budget
1
7,984 - - 7,984 8,063 2,546 10,609 (2,625)
Notes:
FMA Act
Annual Capital
Budget $'000
Appropriations
reduced
2
$'000
Section 32 $'000
Total Capital Budget
Appropriations $'000
Payments for non-financial assets
3
$'000
Payments for other purposes $'000
Total
payments $'000
Variance $'000
DEPARTMENTAL Ordinary annual services - Departmental Capital Budget
1
9,942 - - 9,942 8,615 2,515 11,130 (1,188)
Notes:
2012 Capital Budget Appropriations
Capital Budget Appropriations applied in 2012 (current and prior years)
1. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No. 1, 3,5). They form part of ordinary annual services and are not separately identified in Appropriation Acts. For more information on ordinary annual services appropriations, please see Table A: Annual appropriations. 2. Appropriations reduced under Appropriation Acts (No. 1,3,5) 2011-12: sections 10, 11, 12 and 15 or via a determination by the Finance Minister. 3. Payments made on non-financial assets include purchases of assets, expenditure on assets which have been capitalised, costs incurred to make good an asset to its original condition and the capital repayment component of finance leases.
Appropriation Act
3. Payments made on non-financial assets include purchases of assets, expenditure on assets which have been capitalised, costs incurred to make good an asset to its original condition and the capital repayment component of finance leases.
Note 25A: Appropriations
Appropriation Act
1. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No. 1, 3). They form part of ordinary annual services and are not separately identified in Appropriation Acts. For more information on ordinary annual services appropriations, please see Table A: Annual appropriations. 2. Appropriations reduced under Appropriation Acts (No. 1, 3) 2012-13: sections 10, 11, 12 and 15 or via a determination by the Finance Minister.
2013 Capital Budget Appropriations
Capital Budget Appropriations applied in 2013 (current and prior years)
366 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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DEPARTMENT
OF HEALTH
AND
AGEING
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 25A: Appropriations
Table C: Unspent Annual Appropriations ('Recoverable GST exclusive')
2013 2012
Authority $'000 $'000
DEPARTMENTAL Appropriation Act (No. 2) 2005-06 - 3,209
Appropriation Act (No. 4) 2005-06 - 1,604
Appropriation Act (No. 4) 2006-07 - 11,879
Appropriation Act (No. 6) 2006-07 - 625
Appropriation Act (No. 1) 2007-08 - 12,573
Appropriation Act (No. 1) 2008-09 - 9,903
Appropriation Act (No. 4) 2008-09 - 1,217
Appropriation Act (No. 1) 2009-10 - 9,679
Appropriation Act (No. 2) 2009-10 - 1,787
Appropriation Act (No. 3) 2009-10 - 6,035
Appropriation Act (No. 4) 2009-10 - 683
Appropriation Act (No. 1) 2010-11 2,567 15,906
Appropriation Act (No. 1) 2010-11 - Departmental Capital Budget (DCB) - 3,886
Appropriation Act (No. 2) 2010-11 721 57,386
Appropriation Act (No. 4) 2010-11 - 352
Appropriation Act (No. 1) 2011-12 - 38,088
Appropriation Act (No. 1) 2011-12 - Cash at Bank1 - 4,926
Appropriation Act (No. 1) 2011-12 - Departmental Capital Budget (DCB) - 464
Appropriation Act (No. 3) 2011-12 - 451
Appropriation Act (No. 3) 2011-12 - Departmental Capital Budget (DCB) - 1
Appropriation Act (No. 5) 2011-122 4,845 8,342
Appropriation Act (No. 1) 2012-13 93,286 -
Appropriation Act (No. 1) 2012-13 - Cash at Bank1 999 -
Appropriation Act (No. 1) 2012-13 - Departmental Capital Budget (DCB) 1,726 -
Appropriation Act (No. 2) 2012-133 51,262 -
Appropriation Act (No. 3) 2012-13 11,959
Total 167,365 188,996
ADMINISTERED Appropriation Act (No. 1) 2007-08 - 678
Appropriation Act (No. 2) 2008-09 - SPP - 1,404
Appropriation Act (No. 2) 2009-104,5 2,963 16,968
Appropriation Act (No. 1) 2010-11 - 73
Appropriation Act (No. 3) 2010-11 - 36
Appropriation Act (No. 1) 2011-12 - 1,019,367
Appropriation Act (No. 2) 2011-12 6 6
Appropriation Act (No. 2) 2011-12 - SPP - 3,155
Appropriation Act (No. 3) 2011-12 - 5,155
Appropriation Act (No. 5) 2011-12 - 35,800
Appropriation Act (No. 6) 2011-12 13,930 13,930
Appropriation Act (No. 1) 2012-13 683,073 -
Appropriation Act (No. 2) 2012-13 17,623 -
Appropriation Act (No. 2) 2012-13 - SPP 646 -
Appropriation Act (No. 3) 2012-13 43,338 -
Total 761,579 1,096,572
1 Cash at bank mainly relates to deposits made on 30 June that are subject to Section 31 of the Financial Management and Accountability Act 1997.
5 This balance will lapse on 1 July 2013 when the Statute Stocktake (Appropriations) Act 2013 becomes effective.
4 The comparative amount included an amount of $16,400,000 relating to the release of quarantined National Medical Stockpile funding.
3 This balance includes an amount of $7,374,000 which will be reduced on 5 August 2013 when the Instrument to Reduce Appropriations (No. 1 of 2013-2014) becomes effective.
2 This balance includes an amount of $1,072,064 which will be reduced on 5 August 2013 when the Instrument to Reduce Appropriations (No. 1 of 2013-2014) becomes effective.
366 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 367
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEINGNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 25A: Appropriations
Table D: Special Appropriations ('Recoverable GST exclusive')
2013 2012
Authority Type Purpose $'000 $'000
Aged Care Act 1997, Administered Unlimited Amount - to provide for the Commonwealth to give financial support for the provision of aged care.
9,407,646 8,824,217
Aged Care (Bond Security) Act 2006, Administered Unlimited Amount
- to provide for the Commonwealth to give financial support for the provision of aged care. - -
Health Insurance Act 1973, Administered
Unlimited Amount - an Act providing for payments by way of medical benefits and payments for hospital services and for other purposes.
18,565,706 17,652,132
National Health Act 1953, Administered Unlimited Amount - an Act relating to the provision of pharmaceutical, sickness and hospital benefits and of medical and dental services.
9,825,652 10,250,985
Medical Indemnity Act 2002, Administered Unlimited Amount
- to provide Commonwealth funding to assist medical practitioners in obtaining affordable and secure medical indemnity cover. 54,249 41,199
Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007, Administered
Unlimited Amount - to enable payments of Government funds to be made to people who claim the Government 30% rebate on private health
insurance.
5,508,608 5,137,441
Dental Benefits Act 2008, Administered Unlimited Amount - sets up a framework for provision of dental benefits. 59,634 58,031
Private Health Insurance Act 2007, Administered Unlimited Amount
- shares the cost of claims within the private health insurance industry. 403,202 377,069
Private Health Insurance Act 2007, Administered Unlimited Amount
- levies private health insurance to meet general operating costs of PHIAC 6,226 5,366
Aged or Disabled Persons Care Act 1954, Administered Unlimited Amount
- an Act to provide for assistance by the Commonwealth towards the provision of care for aged persons or disabled persons. - -
Aged Care (Consequential Provisions) Act 1997, Administered Unlimited Amount
- an Act to enact transitional provisions, and make consequential amendments, in connection with the enactment of the Aged Care Act 1997.
- -
Health and Other Services (Compensation) Care Charges Act 1995, Administered
Unlimited Amount - an Act relating to the consequences of certain compensation payments.
- -
Medical Indemnity Agreement (Financial Assistance - Binding Commonwealth Obligations) Act 2002, Administered
Unlimited Amount - an Act about binding Commonwealth obligations to provide financial assistance under indemnity agreements relating to
Australasian Medical Insurance Limited and United Medical Protection Limited.
- -
Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010, Administered
Unlimited Amount - an Act to make provision in relation to professional indemnity cover for certain midwives, and for related purposes
- -
Fairer Private Health Insurance Incentives Act 2012, Administered Unlimited Amount
- an Act to provide for fairer private health insurance incentives, and for related purposes - -
National Health Amendment (Continence Aids Payment Scheme) Act 2010, Administered
Unlimited Amount - an Act to amend the law relating to health, and for related purposes
- -
Financial Management and Accountability Act 1997 s.28(2), Administered
Refund - to provide an appropriation where an Act or other law requires or permits the repayment of an amount received by the Commonwealth and apart from this section there is no specific appropriation for the repayment.
310 111
Total 43,831,233 42,346,551
Private Health Insurance Act 2007.
Note: the Department of Human Services also drew money from the CRF on behalf of the Department against the following special appropriations:
Appropriation applied
Aged Care Act 1997; Health Insurance Act 1973; National Health Act 1953; Medical Indemnity Act 2002; Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007;
Dental Benefits Act 2008; and
368 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 25A: Appropriations
Table E: Disclosure by Agent in Relation to Annual and Special Appropriations ('Recoverable GST exclusive')
Department of Families, Housing, Community Services and Indigenous
Affairs
2013 $'000
Total receipts 2,359
Total payments (2,359)
The Department did not make any agency payments in 2012.
The Department made wage supplementation payments from the Social and Community Services Pay Equity Special Account administered by FaHCSIA to the eligible social and community services workers.
368 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 369
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEINGNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Table F: Reduction in Administered Items ('Recoverable GST exclusive')
2013
Total amount required 3 Total amount appropriated 4
Total reduction 5
Ordinary Annual Services Act (No. 1) Act (No. 3) Act (No. 5) $ $ $ $ $ $
Outcome 1 344,364,015.44 0.00 0.00 344,364,015.44 366,036,000.00 21,671,984.56
Outcome 2 643,592,026.87 0.00 0.00 643,592,026.87 675,571,000.00 31,978,973.13
Outcome 3 107,594,571.44 0.00 0.00 107,594,571.44 115,171,000.00 7,576,428.56
Outcome 4 1,867,773,940.03 0.00 0.00 1,867,773,940.03 2,027,190,000.00 159,416,059.97
Outcome 5 833,526,000.00 0.00 0.00 833,526,000.00 866,574,000.00 33,048,000.00
Outcome 6 87,141,448.73 0.00 0.00 87,141,448.73 87,480,000.00 338,551.27
Outcome 7 373,300,947.49 0.00 0.00 373,300,947.49 404,257,000.00 30,956,052.51
Outcome 8 694,926,289.08 0.00 0.00 694,926,289.08 705,659,000.00 10,732,710.92
Outcome 9 2,505,409.05 0.00 0.00 2,505,409.05 5,091,000.00 2,585,590.95
Outcome 10 157,148,851.58 0.00 0.00 157,148,851.58 160,399,000.00 3,250,148.42
Outcome 11 378,847,984.99 0.00 0.00 378,847,984.99 386,596,000.00 7,748,015.01
Outcome 12 1,308,381,000.00 787,000.00 0.00 1,309,168,000.00 1,321,168,000.00 12,000,000.00
Outcome 13 201,651,501.31 9,317,362.26 0.00 210,968,863.57 221,961,501.31 10,992,637.74
Outcome 14 23,438,247.97 485,000.00 0.00 23,923,247.97 24,083,000.00 159,752.03
Total 7,024,192,233.98 10,589,362.26 0.00 7,034,781,596.24 7,367,236,501.31 332,454,905.07
Other Services Act (No. 2) Act (No. 4) Act (No. 6)
$ $ $ $ $ $
Specific payments to States, ACT, NT and Local government Outcome 1 14,980,315.00 0.00 0.00 14,980,315.00 15,226,000.00 245,685.00
Outcome 2 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 3 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 4 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 5 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 6 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 7 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 8 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 9 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 10 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 11 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 12 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 13 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 14 0.00 0.00 0.00 0.00 0.00 0.00
Total 14,980,315.00 0.00 0.00 14,980,315.00 15,226,000.00 245,685.00
Notes:
Note 25A: Appropriations
Amount required 3 - by Appropriation Act
2. Administered items for 2013 are reduced to these amounts when these financial statements will be tabled in Parliament as part of the Department's 2013 annual report. This reduction is effective in 2014, but the amounts are reflected in Table A in the 2013 financial statements in the column 'Appropriations reduced' as they were adjustments to 2013 appropriations.
1. Numbers in this section of the table must be disclosed to the cent and covers administered appropriations except for payments to State, ACT, NT and Local Government. Acts (no.2) (no.4) and (no.6) are non operating appropriations.
3. Amounts required as per Appropriation Act (Act 1 s. 11; Act 2 s.12).
4. Total amount appropriated in 2013.
5. Total reduction effective in 2014.
370 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEINGNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Table F: Reduction in Administered Items ('Recoverable GST exclusive')
Note 25A: Appropriations
2012
Total amount required 3 Total amount appropriated 4
Total reduction 5
Ordinary Annual Services Act (No. 1) Act (No. 3) Act (No. 5) $ $ $ $ $ $
Outcome 1 324,119,995.53 0.00 0.00 324,119,995.53 359,623,000.00 35,503,004.47
Outcome 2 617,666,863.75 0.00 0.00 617,666,863.75 657,838,000.00 40,171,136.25
Outcome 3 107,374,000.00 500,000.00 0.00 107,874,000.00 107,874,000.00 0.00
Outcome 4 546,405,875.45 0.00 0.00 546,405,875.45 800,052,000.00 253,646,124.55
Outcome 5 829,845,000.00 0.00 24,384,843.11 854,229,843.11 918,628,000.00 64,398,156.89
Outcome 6 92,437,000.00 0.00 7,621,435.38 100,058,435.38 101,637,000.00 1,578,564.62
Outcome 7 378,047,930.56 0.00 0.00 378,047,930.56 410,660,000.00 32,612,069.44
Outcome 8 684,911,038.26 0.00 0.00 684,911,038.26 722,824,000.00 37,912,961.74
Outcome 9 3,654,752.86 0.00 0.00 3,654,752.86 3,913,000.00 258,247.14
Outcome 10 530,028,617.23 0.00 0.00 530,028,617.23 554,285,000.00 24,256,382.77
Outcome 11 254,650,672.29 0.00 0.00 254,650,672.29 292,482,000.00 37,831,327.71
Outcome 12 1,103,405,450.69 0.00 0.00 1,103,405,450.69 1,120,888,000.00 17,482,549.31
Outcome 13 88,102,781.24 0.00 0.00 88,102,781.24 135,849,570.00 47,746,788.76
Outcome 14 25,679,000.00 0.00 0.00 25,679,000.00 26,279,000.00 600,000.00
Total 5,586,328,977.86 500,000.00 32,006,278.49 5,618,835,256.35 6,212,832,570.00 593,997,313.65
Other Services Act (No. 2) Act (No. 4) Act (No. 6)
$ $ $ $ $ $
Specific payments to States, ACT, NT and Local government Outcome 1 25,793,000.00 0.00 0.00 25,793,000.00 25,793,000.00 0.00
Outcome 2 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 3 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 4 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 5 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 6 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 7 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 8 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 9 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 10 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 11 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 12 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 13 0.00 0.00 0.00 0.00 0.00 0.00
Outcome 14 0.00 0.00 0.00 0.00 0.00 0.00
Total 25,793,000.00 0.00 0.00 25,793,000.00 25,793,000.00 0.00
Notes:
Amount required 3 - by Appropriation Act
4. Total amount appropriated in 2012.
5. Total reduction effective in 2013.
3. Amounts required as per Appropriation Act (Act 1 s. 11; Act 2 s.12).
1. Numbers in this section of the table must be disclosed to the cent and covers administered appropriations except for payments to State, ACT, NT and Local Government. Acts (no.2) (no.4) and (no.6) are non operating appropriations.
2. Administered items for 2012 were reduced to these amounts when these financial statements were tabled in Parliament as part of the Department's 2012 annual report. This reduction was effective in 2013, but the amounts are reflected in Table A in the 2012 financial statements in the column 'Appropriations reduced' as they were adjustments to 2012 appropriations.
370 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 371
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DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 25B: Compliance with Statutory Requirements for Payments from the Consolidated Revenue Fund Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. The Department has primary responsibility for administering legislation related to health and aged care. Approximately 500 million payments totalling around $43.8 billion each year are authorised against Special Appropriations by the Department in accordance with a range of frequently complex legislation. Most of the payments are administered by the DHS under the Medicare program, on behalf of the Department. In the vast majority of cases DHS relies on information or estimates provided by customers and medical providers to calculate and pay entitlements. Despite future payments being adjusted to recover any overpayment, a breach of section 83 could nevertheless result. In addition, simple administrative errors can also lead to breaches of section 83. Due to the number of payments made, the reliance that must be placed on external control frameworks and the complexities of the legislation governing these payments, the risk of a section 83 breach cannot be fully mitigated. However, the reported section 83 breaches represent only a very small portion of payments, both in number and in value, and the Department is committed to implementing measures to ensure that the risk of unintentional breaches of section 83 is as low as possible. In 2011-12, the Department developed an approach for assessing the alignment of payment processes with legislation. This approach is reviewed annually. During 2012-13, the Department: ï· reviewed legislation (including administrative processes) enacted since 1 July 2012 that creates or modifies payment eligibility as to whether processes are in place to minimise the risk of breaches of section 83; ï· received assurance from the DHS that action has been undertaken to detect and prevent any potential breaches of section 83; ï· continued its ongoing reviews of special accounts by internal audit as part of its rolling compliance program; ï· obtained legal advice as appropriate to resolve questions of potential non-compliance; and ï· identified legislative/procedural changes to reduce the risk of non-compliance in the future. Special Accounts Currently the Department has nine Special Accounts and they have all been assessed as low risk for non-compliance with section 83. No breaches of section 83 have been identified by the Department during the year in the Special Accounts. Special Appropriations The Department administers 16 pieces of legislation as having Special Appropriations involving statutory requirements for payments. Health Insurance Act 1973 The Department has had cause to review parts of the Health Insurance Act 1973 (the Health Insurance Act) and instruments made under it and has identified actual breaches of section 83 of the Constitution. In 2012-13, there were 6,248 payments totalling $12,177,426.40 have breached section 83. These breaches relate to 6,209 Medicare payments being made without legal authority totalling $139,381.00 and 39 cases of non-compliance under the Chronic Disease Dental Scheme (CDDS) totalling $12,038,045.40. These breaches have been confirmed by the Australian Government Solicitor (AGS) and the related debts have been waived on the basis that it would be inequitable to recover the debts owed by various patients and providers of medical services, as they received the payments in good faith and would have been eligible for the benefit had the intended amendments to the legislation been correctly implemented. Refer to Note 27: Compensation and Debt Relief for the amount waived. Corrective action involving regulatory amendments and the enactment of legislative instruments has been implemented where appropriate. In addition to the above, 46,450 overpayments resulting in potential breaches of the Health Insurance Act of $11,273,475 (or approximately 0.06% of total payments under this Act) have been recognised for recovery by the Department. These in the main reflect debt recovery action following adjustments to data made by customers or medical providers after the initial payment has been made. These potential breaches may not result in a loss to the Commonwealth as they are generally recovered or offset against future payments. Amounts recovered total $8,123,240.
372 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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DEPARTMENT
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AND
AGEING
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 25B: Compliance with Statutory Requirements for Payments from the Consolidated Revenue Fund In addition, the Department has identified a number of overpayments during 2012-13, under other Special Appropriation, many involving small sums. Given it is highly resource intensive to confirm whether individual overpayments have breached section 83 of the Constitution, we have listed the overpayments made under the following legislation as potential breaches: Private Health Insurance Act 2007 These relate to payments made to health insurers prior to a registration of an application from the claimant. DHS are introducing changes to its systems and internal processes, as well as seeking legislative remedies, to prevent further potential breaches. During 2012-13: ï· potential breaches identified total $3,793,433 (0.06% of total payments under this Act); and ï· amounts recovered total $3,507,318. National Health Act 1953 DHS has identified overpayments as part of its compliance process. Debts have been raised due to incorrect concessional status being provided by patients, duplicate claims being made by patients and assessment of Pharmaceutical Benefits Scheme items against eligibility requirements. During 2012-13: ï· potential breaches identified total $691,936 (less than 0.01% of total payments under this Act); and ï· amounts recovered total $581,305. Aged Care Act 1997 DHS has identified overpayments occurred for a number of residential aged care facilities due to a system error. During 2012-13: ï· potential breaches identified total $1,198,082 (0.01% of total payments under this Act); and ï· amounts recovered total $1,138,315. No potential breaches have been identified, as part of the 2012-13 review process, under the remaining Special Appropriations. Continued Focus The Department will continue to review legislation (including any related administrative processes) that creates or modifies payment eligibility as it is enacted to determine whether process are in place to minimise the risk of breaches of section 83. It will continue with an ongoing review program that involves reviewing legislation, New Policy Proposals, business rules and payment processes. In addition, the Department will continue ongoing reviews of special accounts by internal audit as part of its rolling compliance program. During 2012-13 additional legal advice was received that indicated there could be breaches of section 83 under certain circ*mstances with payments for long service leave, goods and services tax and payments under determinations of the Remuneration Tribunal. The Department will review its processes and controls over payments for these items to minimise the possibility for future breaches as a result of these payments.
372 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 373
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DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 25B:
Compliance with Statutory Requirements for Payments from the Consolidated Revenue Fund
Appropriations identified as subject to conditions Actuals $000
Potential $000
Recovered $000
S pecial Appropriations Aged Care Act 1997 9,407,646 Yes - 1,198 1,138 Yes DM Health Insurance Act 1973 18,565,706 Yes 12,177 11,273 8,123 Yes LDM National Health Act 1953 9,825,652 Yes - 692 581 Yes DM Private Health Insurance Act 2007 5,918,036 Yes - 3,793 3,507 Yes DM
43,717,040 12,177 16,956 13,349
2 L=Legislative Change; S=Systems Change; D=Debt Recovery; M =M ade; PR=Planned Review 3 Recoveries can relate to prior periods
Expenditure in 2012-13 $000
Review
complete?
1
(Yes/No)
Breaches identified to date
3
Potential breaches yet to be resolved Yes/No
Remedial action taken
or proposed
2
1 Reviewed legislation (including any administrative processes) enacted since 1 July 2012 that creates or modifies payment eligibility as to whether processes are in place to
minimise the risk of breaches of section 83
374 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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AGEING
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance brought forward from previous period 18,893 39,107 5,064 6,052 3,137 3,303 - 4,444 Increases: Appropriation credited to special account 27,313 8,698 3,047 4,595 - - - - Receipts from State Governments 12,773 14,986 3,580 3,593 - - - - Industry contributions 2,144 475 - - - - - - Transfer from Safety and Quality in Health Care - 1,836 - - - - - - Other receipts - 2,327 - - - - - 338 Cash to the Official Public Account - - - - - - - - Total increases 42,230 28,322 6,627 8,188 - - - 338 Available for payments 61,123 67,429 11,691 14,240 3,137 3,303 - 4,782 Decreases: Departmental Payments made - - - - - - - - Total departmental decreases - - - - - - - - Administered Payments made - - 9,174 9,176 150 166 - 2,947 Transfer of balance subject to AAO changes - - - - - - - - Total administered decreases - - 9,174 9,176 150 166 - 2,947 Special Public Money Payments made 34,542 48,536 Transfer to Services for Other Entities and Trust Moneys Account - - - - - - - 1,835 Total special public money decreases 34,542 48,536 - - - - - 1,835
Total decreases 34,542 48,536 9,174 9,176 150 166 - 4,782 Total balance carried to the next period 26,581 18,893 2,517 5,064 2,987 3,137 - - DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 26: Special Accounts Note 26: Special Accounts ('Recoverable GST exclusive')
Services for Other Entities and Trust
Moneys
1
Australian Childhood Immunisation Register
Account
2
Human Pituitary Hormones Account
3
Safety and Quality in
Health Care
4
374 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 375
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 26: Special Accounts 1 Establishing Instrument: Financial Management and Accountability Act 1997; section 20 Appropriation: Financial Management and Accountability Act 1997; section 20 2
Establishing Instrument: Financial Management and Accountability Act 1997; section 20 Appropriation: Financial Management and Accountability Act 1997; section 20 Purpose: for expenditure relating to the operations of the Australian Childhood Immunisation Register, including payments to providers for the provision of information. 3 Establishing Instrument: Financial Management and Accountability Act 1997; section 20 Appropriation: Financial Management and Accountability Act 1997; section 20 Purpose: for expenditure through grants and other payments for: - counselling and support services to recipients of pituitary-derived hormones and their families; and
- medical and other care to people treated with pituitary-derived hormones should they contract Creutzfeldt-Jakob disease as a result of the treatment; and
4 Establishing Instrument: Financial Management and Accountability Act 1997; section 20 Appropriation: Financial Management and Accountability Act 1997; section 20 The Safety and Quality in Health Care special account was abolished on 31 December 2011. - one-off payments for the children of recipients of pituitary-derived hormones who can demonstrate that they have suffered a psychiatric illness as a consequence of the death of their parent from Creutzfeldt-Jakob disease. Purpose: to receive payments from the States, Territories and the Commonwealth and to pay out moneys for expenditure relating to the administration of the Australian Council for Safety and Quality in Health
Care and national programs to improve quality and safety in health care. - one-off payments for recipients of pituitary-serviced hormones who can demonstrate that they have suffered a psychiatric illness prior to 1 January 1998 due to their having been informed that they are at a greater risk of contracting Creutzfeldt-Jakob disease; and Purpose: to disburse amounts held on trust or otherwise for the benefit of a person other than the Commonwealth; disburse amounts in connection with services performed on behalf of other government bodies that are not FMA Act agencies; to repay amounts where an Act or other law requires or permits the repayment of an amount received; to reduce the balance of the special account (and, therefore the available appropriation for the special account) without making a real or notional payment.
376 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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DEPARTMENT
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance brought forward from previous period 56,509 46,154 6,606 6,238 7,129 5,923 - - - - Increases: Appropriation credited to special account 3,634 7,303 7,840 8,026 380 427 - - 107,000 - Receipts from State Governments - - - - - - - - - - Industry contributions - - - - - - - - - - Transfer from Safety and Quality in Health Care - - - - - - - - - - Other receipts 117,741 112,158 230 77 15,996 9,504 729,274 1,240,852 - - Cash to the Official Public Account - - - - - - - - - - Total increases 121,375 119,461 8,070 8,103 16,376 9,931 729,274 1,240,852 107,000 - Available for payments 177,884 165,615 14,676 14,341 23,505 15,854 729,274 1,240,852 107,000 - Decreases: Departmental Payments made 119,543 109,106 7,848 7,735 13,186 8,725 - - - - Total departmental decreases 119,543 109,106 7,848 7,735 13,186 8,725 - - - - Administered Payments made - - - - - - 729,274 1,240,852 105,739 - Transfer of balance subject to AAO changes - - - - - - - - - - Total administered decreases - - - - - - 729,274 1,240,852 105,739 -
Total decreases 119,543 109,106 7,848 7,735 13,186 8,725 729,274 1,240,852 105,739 - Total balance carried to the next period 58,341 56,509 6,828 6,606 10,319 7,129 - - 1,261 - Note 26: Special Accounts ('Recoverable GST exclusive') DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 26: Special Accounts
Local Hospitals Network Special Account
9
Therapeutic Goods Administration Account
5
Office of the Gene Technology Regulator
6
National Industrial Chemicals Notification and Assessment Scheme Account
7
Health and Hospitals Fund Special Account
8
376 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 377
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DEPARTMENT
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 26: Special Accounts 5 Establishing Instrument: Therapeutic Goods Act 1989 Appropriation: Financial Management and Accountability Act 1997; section 21 Purpose: for the receipt of all moneys and payment of all expenditures and disbursem*nts related to all operations of the Therapeutic Goods Administration. 6
Establishing Instrument: Gene Technology Act 2000 Appropriation: Financial Management and Accountability Act 1997; section 21 Purpose: for the receipt of all moneys and payment of all expenditures and disbursem*nts related to all operations of the Gene Technology Regulator. 7 Establishing Instrument: Industrial Chemicals (Notification and Assessment) Act 1989 Appropriation: Financial Management and Accountability Act 1997; section 21 8
Establishing Instrument: Nation Building Funds Act 2008 Appropriation: Financial Management and Accountability Act 1997; section 21 Purpose: the main purpose of the Health and Hospitals Fund Special Account is to make payments in relation to the creation or development of health and infrastructure. 9 Establishing Instrument: Financial Management and Accountability Act 1997; section 20 Appropriation: Financial Management and Accountability Act 1997; section 20 The Local Hospitals Network Special Account was established on 13 March 2013. Purpose: to make grants of financial assistance to Local Hospital Networks, in accordance with agreements entered into between them and the Commonwealth, for the provision of hospital and pharmaceutical benefits, and medical and dental services. Purpose: for the receipt of all moneys and payment of all expenditures and disbursem*nts related to all operations of the National Industrial Chemicals Notification and Assessment Scheme.
378 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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DEPARTMENT
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AGEING
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEINGNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 27: Compensation and Debt Relief
2013 2012
$ $
Compensation and Debt Relief - Departmental
One 'Act of Grace payment' was made during the reporting period (2012: one payment). 4,720 14,081
None of the above payments were made on a periodic basis (2012: Nil).
No waivers of amounts owing to the Commonwealth were made pursuant to Section 34(1) of the Financial Management and Accountability Act 1997 (2012: Nil). - -
No payments were made under the Compensation for Detriment caused by Defective Administration (CDDA) Scheme during the reporting period (2012: Nil). - -
No ex-gratia payments were made during the reporting period (2012: Nil). - -
No payments were made in special circ*mstances relating to APS employment pursuant to section 73 of the Public Service Act 1999 during the reporting period (2012: Nil). - -
Compensation and Debt Relief - Administered
Four ‘Act of Grace payments’ were made during the reporting period (2012: four payments). 25,792 5,380
None of the above payments were made on a periodic basis (2012: one payment amounting to $3,000).
Forty three waivers of amounts owing to the Australian Government were made pursuant to subsection 34(1) of the Financial Management and Accountability Act 1997 (2012: 7,823,187 waivers). 12,186,426 189,423,167
No payments were made under the Compensation for Detriment caused by Defective Administration (CDDA) Scheme during the reporting period (2012: Nil). - -
No ex-gratia payments were made during the reporting period (2012: Nil). - -
378 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 379
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes The Department allocates shared items to outcomes in proportion to the employee costs directly assigned to outcomes in the 2012-13 financial year.
Note 28A: Net Cost of Outcome Delivery
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Departmental Expenses (212,331) (209,109) (52,712) (55,357) (34,589) (42,469) (229,280) (205,804) Own-source income 133,744 127,552 575 636 258 696 1,695 1,321 Administered Expenses (448,561) (397,706) (9,576,902) (9,938,089) (18,725,938) (17,991,078) (11,272,409) (9,387,773) Own-source income 6,611 9,844 334,055 205,450 38,716 68,471 261,630 264,728
Net cost of outcome delivery (520,536) (469,419) (9,294,984) (9,787,360) (18,721,553) (17,964,380) (11,238,364) (9,327,528)
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Departmental Expenses (32,037) (36,249) (12,386) (13,870) (12,804) (12,728) (47,546) (60,192) Own-source income 431 709 99 98 95 81 379 415
Administered Expenses (851,549) (835,623) (86,946) (100,350) (372,652) (377,490) (693,057) (682,090) Own-source income 37,283 2,068 624 247 543 498 22,126 13,423 Net cost of outcome delivery (845,872) (869,095) (98,609) (113,875) (384,818) (389,639) (718,098) (728,444)
Outcome 1
Outcome 2
Outcome 4 Outcome 8
Outcome 3
Outcome 5
Outcome 6
Outcome 7
380 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
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DEPARTMENT
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AGEING
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DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes The Department allocates shared items to outcomes in proportion to the employee costs directly assigned to outcomes in the 2012-13 financial year. Note 28A: Net Cost of Outcome Delivery
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Departmental Expenses (11,922) (10,201) (39,659) (27,573) (19,648) (19,451) (24,611) (28,374) Own-source income 4,472 4,395 829 690 157 137 196 199
Administered Expenses (5,596,354) (5,859,258) (907,142) (1,783,927) (377,380) (255,183) (1,322,122) (1,103,423) Own-source income 411,685 386,493 729,096 1,248,308 (706) 418 6,697 4,097 Net cost of outcome delivery (5,192,118) (5,478,571) (216,878) (562,502) (396,165) (274,079) (1,339,840) (1,127,501)
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Departmental Expenses (69,041) (60,262) (24,920) (26,895) (15,475) (28,644) (838,961) (837,178) Own-source income 628 1,033 3,076 3,304 15,475 28,644 162,109 169,910 Administered Expenses (884,908) (901,510) (59,445) (75,373) (34,632) (37,325) (51,209,994) (49,726,198) Own-source income 84,612 13,650 8,700 599 - - 1,943,085 2,218,294
Net cost of outcome delivery (868,709) (947,089) (72,589) (98,365) (34,632) (37,325) 49,943,761 (48,175,172)
Total
Outcome 11
Outcome 12
Outcome 13
Outcome 14
Outcome 9
Payments to CAC Act Bodies /
Not attributed
1
Outcome 10
Outcomes 1 to 14 are described in Note 1.1. Net costs shown include intra-government costs that are eliminated in calculating the actual Budget Outcome. Refer to Outcome Resourcing Tables in the performance reporting section of this Annual Report. 1 Administered payments to CAC Act bodies are not related to outcomes. They are included here for completeness and agreement to resourcing tables. Also included are minor amounts that cannot be attributed to outcomes. Departmental payments made on behalf of portfolio agencies and recoveries from portfolio agencies are not allocated to outcomes.
380 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 381
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes Note 28B. Major Classes of Departmental Expenses, Income, Assets and Liabilities by Outcome
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Expenses Employees (147,805) (145,468) (31,454) (33,553) (25,830) (31,605) (169,643) (147,891) Suppliers (56,796) (57,850) (19,017) (20,566) (7,671) (10,041) (45,763) (50,016) Depreciation and amortisation (6,855) (4,841) (2,205) (1,202) (1,065) (803) (13,685) (7,806) Other (875) (950) (36) (36) (23) (20) (189) (91) Total (212,331) (209,109) (52,712) (55,357) (34,589) (42,469) (229,280) (205,804) Income Revenue from Government 75,721 82,507 49,314 52,327 32,760 39,849 210,566 191,428 Sales of goods and services 133,355 126,365 525 579 216 649 1,424 1,098 Other non-taxation revenues 157 993 - 7 - - - - Gains 232 194 50 50 42 47 271 223
Total 209,465 210,059 49,889 52,963 33,018 40,545 212,261 192,749 Assets Cash and cash equivalents 2,948 2,399 - - - - - - Trade and other receivables 81,442 75,711 1,199 1,791 984 1,687 6,468 7,895 Other financial assets 373 2,355 - - - - - - Land and buildings 12,121 14,427 4,130 5,129 3,391 4,831 22,273 22,606 Infrastructure, plant and equipment 6,410 8,157 449 1,002 364 934 2,365 4,381 Intangibles 9,042 8,150 11,112 10,974 2,127 2,611 47,024 33,127 Inventories 174 150 - 9 - 3 - - Other non-financial assets 1,662 1,714 381 501 313 472 2,056 2,207 Total 114,172 113,063 17,271 19,406 7,179 10,538 80,186 70,216 Liabilities Suppliers (14,490) (13,332) (5,051) (6,234) (4,148) (5,872) (27,241) (27,483) Other payables (27,477) (28,607) (3,159) (3,723) (2,594) (3,507) (17,037) (16,406) Employee provisions (40,107) (39,241) (7,532) (6,925) (6,643) (7,776) (41,424) (32,675) Other provisions (3,923) (3,758) (1,522) (1,371) (1,250) (1,291) (8,211) (6,042)
Total (85,997) (84,938) (17,264) (18,253) (14,635) (18,446) (93,913) (82,606)
Outcome 4
Outcome 3
Outcome 1
Outcome 2
382 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes Note 28B. Major Classes of Departmental Expenses, Income, Assets and Liabilities by Outcome
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Expenses Employees (25,547) (29,194) (9,875) (11,174) (9,537) (9,339) (37,843) (47,623) Suppliers (5,411) (6,305) (2,094) (2,409) (2,866) (3,150) (8,109) (11,348) Depreciation and amortisation (1,054) (730) (407) (279) (393) (233) (1,559) (1,188) Other (25) (20) (10) (8) (8) (6) (35) (33) Total (32,037) (36,249) (12,386) (13,870) (12,804) (12,728) (47,546) (60,192) Income Revenue from Government 30,051 33,773 11,686 13,096 12,129 12,082 44,867 56,897 Sales of goods and services 390 665 83 81 80 67 318 344 Other non-taxation revenues - - - - - - - - Gains 41 44 16 17 15 14 61 71
Total 30,482 34,482 11,785 13,194 12,224 12,163 45,246 57,312 Assets Cash and cash equivalents - - - - - - - - Trade and other receivables 973 1,558 376 596 363 498 1,442 2,542 Other financial assets - - - - - - - - Land and buildings 3,354 4,462 1,297 1,708 1,252 1,427 4,969 7,279 Infrastructure, plant and equipment 361 872 143 337 152 288 533 1,418 Intangibles 4,403 1,730 790 1,180 10,212 3,225 3,029 2,823 Inventories - - - - - - - - Other non-financial assets 310 436 120 167 116 139 459 711 Total 9,401 9,058 2,726 3,988 12,095 5,577 10,432 14,773 Liabilities Suppliers (4,102) (5,424) (1,586) (2,076) (1,532) (1,735) (6,077) (8,848) Other payables (2,566) (3,239) (992) (1,240) (958) (1,036) (3,801) (5,284) Employee provisions (7,181) (8,373) (1,524) (1,373) (2,086) (1,770) (9,026) (12,845) Other provisions (1,236) (1,193) (478) (456) (462) (381) (1,831) (1,945)
Total (15,085) (18,229) (4,580) (5,145) (5,038) (4,922) (20,735) (28,922)
Outcome 7
Outcome 8
Outcome 5
Outcome 6
382 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 383
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes Note 28B. Major Classes of Departmental Expenses, Income, Assets and Liabilities by Outcome
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Expenses Employees (8,226) (7,326) (29,765) (20,672) (15,727) (15,644) (19,586) (22,793) Suppliers (2,944) (2,687) (8,641) (6,372) (3,259) (3,374) (4,183) (4,971) Depreciation and amortisation (339) (183) (1,226) (516) (648) (423) (825) (596) Other (413) (5) (27) (13) (14) (10) (17) (14) Total (11,922) (10,201) (39,659) (27,573) (19,648) (19,451) (24,611) (28,374) Income Revenue from Government 6,950 5,362 37,019 25,634 18,534 18,334 23,207 26,770 Sales of goods and services 4,459 4,384 781 659 132 114 165 165 Other non-taxation revenues - - - - - - - - Gains 13 11 48 31 25 23 31 34
Total 11,422 9,757 37,848 26,324 18,691 18,471 23,403 26,969 Assets Cash and cash equivalents - - - - - - - - Trade and other receivables 313 391 1,134 1,103 599 835 746 1,217 Other financial assets - - - - - - - - Land and buildings 1,080 1,120 3,908 3,160 2,065 2,391 2,572 3,484 Infrastructure, plant and equipment 114 224 412 612 218 463 273 676 Intangibles 1,736 943 2,383 1,225 1,259 927 1,568 1,369 Inventories - - - - - - - - Other non-financial assets 100 109 361 309 191 233 237 340 Total 3,343 2,787 8,198 6,409 4,332 4,849 5,396 7,086 Liabilities Suppliers (1,321) (1,361) (4,780) (3,841) (2,526) (2,907) (3,145) (4,235) Other payables (826) (813) (2,990) (2,294) (1,580) (1,736) (1,967) (2,529) Employee provisions (2,030) (682) (4,990) (3,956) (4,915) (4,156) (5,306) (5,152) Other provisions (398) (299) (1,441) (845) (761) (639) (948) (931)
Total (4,575) (3,155) (14,201) (10,936) (9,782) (9,438) (11,366) (12,847)
Outcome 9
Outcome 10
Outcome 11
Outcome 12
384 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes Note 28B. Major Classes of Departmental Expenses, Income, Assets and Liabilities by Outcome
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Expenses Employees (28,248) (40,173) (18,837) (18,651) - - (577,923) (581,106) Suppliers (24,807) (19,104) (4,665) (6,381) - - (196,226) (204,574) Depreciation and amortisation (15,960) (962) (1,399) (1,848) - - (47,620) (21,610) Other (26) (23) (19) (15) (15,475) (28,644) (17,192) (29,888) Total (69,041) (60,262) (24,920) (26,895) (15,475) (28,644) (838,961) (837,178) Income Revenue from Government 51,900 56,981 20,075 21,081 - - 624,779 636,121 Sales of goods and services 583 979 3,046 3,276 - - 145,557 139,425 Other non-taxation revenues - - - - 15,475 28,644 15,632 29,644 Gains 45 54 30 28 - - 920 841
Total 52,528 58,014 23,151 24,385 15,475 28,644 786,888 806,031 Assets Cash and cash equivalents - - - - 999 4,926 3,947 7,325 Trade and other receivables 1,076 1,932 718 995 167,982 185,100 265,815 283,851 Other financial assets - - - - - - 373 2,355 Land and buildings 3,709 5,533 2,473 2,851 - - 68,594 80,408 Infrastructure, plant and equipment 5,097 1,072 260 551 - - 17,151 20,987 Intangibles 40,730 51,654 1,508 1,223 - - 136,923 121,161 Inventories - - 12 - - - 186 162 Other non-financial assets 343 540 228 278 - - 6,877 8,156 Total 50,955 60,731 5,199 5,898 168,981 190,026 499,866 524,405 Liabilities Suppliers (4,536) (6,726) (3,025) (3,465) - - (83,560) (93,539) Other payables (2,837) (4,016) (1,892) (2,069) - - (70,676) (76,499) Employee provisions (8,070) (7,728) (5,174) (4,539) - - (146,009) (137,191) Other provisions (1,367) (1,479) (912) (762) - - (24,740) (21,392)
Total (16,810) (19,949) (11,003) (10,835) - - (324,985) (328,621)
Not Attributed
Total
Outcome 13
Outcome 14
384 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 385
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes Note 28C: Major Classes of Administered Expenses, Income, Assets and Liabilities by Outcome
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Expenses Suppliers (174,712) (112,072) (17,573) (12,414) (15,002) (4,579) (113,128) (22,607) Subsidies (11,165) (15,227) - - - (158) (9,393,673) (8,868,624) Personal benefits (1) - (9,071,868) (9,448,408) (18,698,416) (17,907,394) (71,970) (8,525) Grants (252,331) (258,345) (487,432) (477,259) (12,519) (78,934) (1,693,040) (486,086) Other (10,352) (12,062) (29) (8) (1) (13) (598) (1,931) Total (448,561) (397,706) (9,576,902) (9,938,089) (18,725,938) (17,991,078) (11,272,409) (9,387,773) Income Taxation revenue - - - - - - - - Goods and services - - - - - - - - Other 6,611 9,844 334,055 205,450 38,716 68,471 261,630 264,728
Total 6,611 9,844 334,055 205,450 38,716 68,471 261,630 264,728 Assets Cash and cash equivalents - - - - - - - - Personal benefits receivable - - 100,658 114,622 22,482 32,117 - - Trade and other receivables 2,710 2,250 53,806 21,806 258 2,875 263,825 106,457 Other investments 11,405 12,216 - - - - 14,845 15,484 Land and buildings - - - - - - - - Intangibles - - - - - - - - Inventories 1,285 1,247 2 2 16 - 623 782 Total 15,400 15,713 154,466 136,430 22,756 34,992 279,293 122,723 Liabilities Overdraft - - - - - - - - Suppliers payable (9,328) (545) (535) (313) (346) (298) (19,316) (7,318) Subsidies payable - - - - - - (36,421) (47,835) Personal benefits payable - (476) (39,415) (78,437) (316,515) (325,889) (696) (2,076) Grants payable (24,137) (64,187) (40,895) (56,976) (8,928) (8,986) (33,400) (38,997) Other payables - - - - - - (42,396) (26,791) Subsidies provision - - - - - - - - Personal benefits provision - - (265,903) (261,244) (798,631) (824,667) - -
Total (33,465) (65,208) (346,748) (396,970) (1,124,420) (1,159,840) (132,229) (123,017)
Outcome 4
Outcome 3
Outcome 1
Outcome 2
386 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes Note 28C: Major Classes of Administered Expenses, Income, Assets and Liabilities by Outcome
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Expenses Suppliers (13,490) (12,996) (20) (168) (52) - (43,119) (36,475) Subsidies - - - - - - - - Personal benefits (298,275) (304,463) - - (372,513) (375,232) (18,325) (21,710) Grants (539,784) (517,994) (86,926) (100,182) (69) (2,256) (628,354) (622,773) Other - (170) - - (18) (2) (3,259) (1,132) Total (851,549) (835,623) (86,946) (100,350) (372,652) (377,490) (693,057) (682,090) Income Taxation revenue - - - - - - - - Goods and services - - - - - - - - Other 37,283 2,068 624 247 543 498 22,126 13,423
Total 37,283 2,068 624 247 543 498 22,126 13,423 Assets Cash and cash equivalents - - - - - - - - Personal benefits receivable 86 82 - - - - - - Trade and other receivables 36,647 568 69 87 777 630 2,314 6,256 Other investments 18,253 42,109 - - - - - - Land and buildings - - - - - - - - Intangibles - - - - - - - - Inventories - - - - - - - 1 Total 54,985 42,759 69 87 777 630 2,314 6,257 Liabilities Overdraft - - - - - - - - Suppliers payable (168) (338) (8) - - - (190) (898) Subsidies payable - - - - - - - - Personal benefits payable (47,732) (32,219) - - (10,933) (13,859) (5) - Grants payable (32,113) (58,125) (8,122) (12,010) (1,799) (2,134) (24,771) (50,665) Other payables - - - - - - - - Subsidies provision - - - - - - - - Personal benefits provision - - - - - - - -
Total (80,013) (90,682) (8,130) (12,010) (12,732) (15,993) (24,966) (51,563)
Outcome 7
Outcome 8
Outcome 5
Outcome 6
386 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 387
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes Note 28C: Major Classes of Administered Expenses, Income, Assets and Liabilities by Outcome
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Expenses Suppliers (811) (1,914) (65,795) (217,258) (17,254) (8,604) (11,392) (12,507) (11,303) (10,581) Subsidies - - - - (500) - (35,286) - - (172,426) Personal Benefits (5,184,345) (5,473,209) - (28,790) (3) - - - (6,821) (4,843) Grants (1,700) (1,700) (822,688) (1,532,328) (359,623) (246,579) (1,275,302) (1,090,906) (861,776) (710,557) Other (409,498) (382,435) (18,659) (5,551) - - (142) (10) (5,008) (3,103) Total (5,596,354) (5,859,258) (907,142) (1,783,927) (377,380) (255,183) (1,322,122) (1,103,423) (884,908) (901,510) Income Taxation revenue 1,697 1,703 - - - - - - 13,707 13,506 Goods and services - - - - - - - - - - Other 409,988 384,790 729,096 1,248,308 706 418 6,697 4,097 70,905 144
Total 411,685 386,493 729,096 1,248,308 706 418 6,697 4,097 84,612 13,650 Assets Cash and cash equivalents - - - - - - - - - - Personal benefits receivable 286 583 - - - - - - - - Trade and other receivables 581 570 4,283 4,164 84 143 487 504 4,989 3,870 Other investments 4,912 4,744 964 773 - - 143,227 142,270 - - Land and buildings - - - - - - - - 20,460 21,292 Intangibles - - 73,235 91,544 - - - - - - Inventories 28 39 105 150 - - - - - - Total 5,807 5,936 78,587 96,631 84 143 143,714 142,774 25,449 25,162 Liabilities Overdraft - - - - - - - - - - Suppliers payable - (4) - (1,442) (13) (10) - (2) (3,237) (305) Subsidies payable - - - - - - (3,213) - - - Personal benefits payable (430,042) (764,647) - - - - - - (2,386) (292) Grants payable (1) (1,772) (4,574) (34,822) (11,544) (39,503) (154,628) (131,985) (6,603) (2,373) Other payables - - - - - - - - - - Subsidies provision - - - - - - - - (392,000) (516,000) Personal benefits provision - - - - - - - - - -
Total (430,043) (766,423) (4,574) (36,264) (11,557) (39,513) (157,841) (131,987) (404,226) (518,970)
Outcome 9
Outcome 10
Outcome 13
Outcome 11
Outcome 12
388 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 28: Reporting of Outcomes Note 28C: Major Classes of Administered Expenses, Income, Assets and Liabilities by Outcome
2013 2012 2013 2012 2013 2012 2013 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Expenses Suppliers (15,769) (15,529) - - - - (499,420) (467,704) Subsidies - - - - - - (9,440,623) (9,056,435) Personal Benefits - - - - - - (33,722,536) (33,572,574) Grants (8,548) (12,141) - - - - (7,030,094) (6,138,040) Other (35,128) (47,703) (34,632) (37,325) - - (517,321) (491,445) Total (59,445) (75,373) (34,632) (37,325) - - (51,209,994) (49,726,198) Income Taxation revenue - - - - - - 15,405 15,209 Goods and services - 188 - - - - - 188 Other 8,700 411 - - - - 1,927,680 2,202,897
Total 8,700 599 - - - - 1,943,085 2,218,294 Assets Cash and cash equivalents - - - - - 68,683 - 68,683 Personal benefits receivable - - - - - - 123,512 147,404 Trade and other receivables 1,418 18 - - 51,266 104,349 423,513 254,547 Other investments - - - - - - 193,606 217,596 Land and buildings - - - - - - 20,460 21,292 Intangibles - - - - - - 73,235 91,544 Inventories 193,704 205,814 - - - - 195,763 208,035 Total 195,122 205,832 - - 51,266 173,032 1,030,089 1,009,101 Liabilities Overdraft - - - - (105,428) - (105,428) - Suppliers payable (10,634) (4,163) - - - - (43,777) (15,636) Subsidies payable - - - - - - (39,633) (47,835) Personal benefits payable - - - - - - (847,723) (1,217,895) Grants payable (6,952) (5,777) - - - - (358,468) (508,312) Other payables - - - - - - (42,396) (26,791) Subsidies provision - - - - - - (392,000) (516,000) Personal benefits provision - - - - - - (1,064,534) (1,085,911)
Total (17,586) (9,940) - - - - (2,893,959) (3,418,380)
Not Attributed
Total
Outcome 14
Payment to CAC Act
388 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 389
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 29: Receipts Subject to Cost Recovery Policy
2013 2012
$'000 $'000
Significant cost recovery arrangements
TGA 117,811 115,324
NICNAS 12,792 8,299
Prostheses Cost Recovery 4,125 4,163
Total receipts subject to cost recovery policy 134,728 127,786
390 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 390 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
DEPARTMENT
OF HEALTH
AND
AGEING
3.1
DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS DEPARTMENT OF HEALTH AND AGEING NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 30: Net Cash Appropriation Arrangements
2013 2012
$'000 $'000
Total comprehensive loss less depreciation/amortisation expenses previously funded through revenue appropriations1 (8,871) (10,253)
Plus: depreciation/amortisation expenses previously funded through revenue appropriation2 (43,202) (18,344)
Total comprehensive loss - as per the Statement of Comprehensive Income (52,073) (28,597)
1 From 2010-11, the Government introduced net cash appropriation arrangements, where revenue appropriations for depreciation/amortisation expenses ceased. Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.
2 Depreciation/amortisation expense for NICNAS and the TGA have been excluded as these agencies are not in receipt of the Departmental capital budget.
390 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 391
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
390 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
392 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
392 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 393
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
394 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2013
THERAPEUTIC GOODS ADMINISTRATION STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2013
Notes 2013 2012
$'000 $'000
EXPENSES Employee benefits 3A 80,395 77,119
Suppliers 3B 37,608 37,435
Depreciation and amortisation 3C 4,384 3,227
Write-down and impairment of assets 3D 667 581
Total expenses 123,054 118,362
LESS:
OWN-SOURCE INCOME Own-source revenue Sale of goods and rendering of services 4A 118,660 115,436
Other revenue 4B 42 993
Total own-source revenue 118,702 116,429
Gains Other gains 4C 145 110
Total gains 145 110
Total own-source income 118,847 116,539
Net cost of services 4,207 1,823
Revenue from Government 4D 3,634 6,274
(Deficit) Surplus on continuing operations (573) 4,451
OTHER COMPREHENSIVE INCOME Changes in asset revaluation surplus - 614
Total comprehensive (loss) income attributable to the Australian Government (573) 5,065
The above statement should be read in conjunction with the accompanying notes.
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THERAPEUTIC GOODS ADMINISTRATION BALANCE SHEET as at 30 June 2013
THERAPEUTIC GOODS ADMINISTRATION BALANCE SHEET as at 30 June 2013
Notes 2013 2012
$'000 $'000
ASSETS Financial Assets Cash and cash equivalents 5A 1,644 1,318
Trade and other receivables 5B 63,935 60,137
Other financial assets 5C 373 2,355
Total financial assets 65,952 63,810
Non-Financial Assets Land and buildings 6A,C 3,633 4,361
Property, plant and equipment 6B,C 5,552 6,363
Intangibles 6D,E 4,470 3,578
Other non-financial assets 6F 873 762
Total non-financial assets 14,528 15,064
Total assets 80,480 78,874
LIABILITIES Payables Suppliers 7A 4,664 4,325
Employee 7B 3,221 3,141
Other payables 7C 14,554 13,322
Total payables 22,439 20,788
Provisions Employee 8A 24,042 23,336
Other provisions 8B 1,172 1,350
Total provisions 25,214 24,686
Total liabilities 47,653 45,474
Net assets 32,827 33,400
EQUITY
Contributed equity 1,029 1,029
Asset revaluation reserve 3,369 3,369
Retained surplus 28,429 29,002
Total equity 32,827 33,400
The above statement should be read in conjunction with the accompanying notes.
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THERAPEUTIC GOODS ADMINISTRATION STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2013
THERAPEUTIC GOODS ADMINISTRATION STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2013
2013 2012 2013 2012 2013 2012 2013 2012
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Opening balance Balance carried forward from previous period 29,002 24,551 3,369 2,755 1,029 - 33,400 27,306
Adjusted opening balance 29,002 24,551 3,369 2,755 1,029 - 33,400 27,306
Comprehensive income Other comprehensive income - - - 614 - - - 614
(Deficit) Surplus for the period (573) 4,451 - - - - (573) 4,451
Total comprehensive income (573) 4,451 - 614 - - (573) 5,065
Contribution by owners Equity injection - Appropriation - - - - - 1,029 - 1,029
Sub-total transactions with owners - - - - - 1,029 - 1,029
Closing balance as at 30 June 28,429 29,002 3,369 3,369 1,029 1,029 32,827 33,400
The above statement should be read in conjunction with the accompanying notes.
Retained earnings Asset revaluation reserves Total equity Contributed equity/capital
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THERAPEUTIC GOODS ADMINISTRATION CASH FLOW STATEMENT for the period ended 30 June 2013
THERAPEUTIC GOODS ADMINISTRATION CASH FLOW STATEMENT for the period ended 30 June 2013
Notes 2013 2012
$'000 $'000
OPERATING ACTIVITIES Cash received
Sale of goods and rendering of services 117,811 115,324
Net GST received 3,827 3,703
Receipts from Government 3,634 6,274
Other 27 765
Total cash received 125,299 126,066
Cash used Employees 79,609 71,682
Suppliers 40,047 41,488
Receipts transferred to the Official Public Account 1,506 10,052
Total cash used 121,162 123,222
Net cash from operating activities 9 4,137 2,844
INVESTING ACTIVITIES Cash used Purchase of property, plant and equipment 3,811 3,569
Total cash used 3,811 3,569
Net cash used by investing activities (3,811) (3,569)
FINANCING ACTIVITIES Cash received Contributed equity - 1,029
Total cash received - 1,029
Net cash from financing activities - 1,029
Net increase in cash held 326 304
Cash and cash equivalents at the beginning of the reporting period 1,318 1,014
Cash and cash equivalents at the end of the reporting period 5A 1,644 1,318
The above statement should be read in conjunction with the accompanying notes.
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THERAPEUTIC GOODS ADMINISTRATION SCHEDULE OF COMMITTMENTS as at 30 June 2013
THERAPEUTIC GOODS ADMINISTRATION SCHEDULE OF COMMITMENTS as at 30 June 2013
2013 2012
$'000 $'000
BY TYPE Commitments receivable Net GST recoverable on commitments 4,869 5,481
Other commitments receivable 1,004 1,988
Total commitments receivable 5,873 7,469
Commitments payable Capital commitments Property, plant and equipment (340) (213)
Total capital commitments (340) (213)
Other commitments Operating leases (42,592) (50,627)
Other (10,630) (8,571)
Total other commitments (53,222) (59,198)
Total commitments payable (53,562) (59,411)
Net commitments by type (47,689) (51,942)
BY MATURITY Commitments receivable One year or less 2,722 2,726
From one to five years 3,151 4,743
Total commitments receivable 5,873 7,469
Commitments payable Capital commitments One year or less (340) (213)
Total capital commitments (340) (213)
Operating lease commitments One year or less (10,407) (10,189)
From one to five years (32,185) (40,438)
Total operating lease commitments (42,592) (50,627)
Other commitments One year or less (8,154) (7,943)
From one to five years (2,476) (628)
Total other commitments (10,630) (8,571)
Total commitments payable (53,562) (59,411)
Net commitments by maturity (47,689) (51,942)
Notes:
Commitments are GST inclusive where relevant.
Capital commitments for property, plant and equipment relate to laboratory and information technology equipment.
The above schedule should be read in conjunction with the accompanying notes.
Operating leases are effectively non-cancellable and comprise leases for office accommodation. Lease payments for the Symonston property are subject to annual adjustments for the Consumer Price Index or 3% (whichever is higher) with a Market Rent Review every third year. The initial term of the Symonston accommodation lease is still current and may be extended at the end of the lease at the Therapeutic Goods Administration's (TGA) option. Other office leases (offices located in Canberra, Melbourne, Sydney and Brisbane) are subject to annual rent adjustments of between 3.5% and 5% and can be renewed for terms of between 6 months and 5 years, at the TGA's option.
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THERAPEUTIC GOODS ADMINISTRATION CONTENTS - NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 1: Summary of Significant Accounting Policies Note 2: Events After the Reporting Period Note 3: Expenses Note 4: Income Note 5: Financial Assets Note 6: Non-Financial Assets Note 7: Payables Note 8: Provisions Note 9: Cash Flow Reconciliation Note 10: Contingent Assets and Liabilities Note 11: Senior Executive Remuneration Note 12: Remuneration of Auditors Note 13: Financial Instruments Note 14: Financial Assets Reconciliation Note 15: Special Account Note 16: Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund Note 17: Compensation and Debt Relief Note 18: Reporting of Outcomes Note 19: Cost Recovery
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THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the period ended 30 June 2013 Note 1: Summary of Significant Accounting Policies 1.1 Objective of the Therapeutic Goods Administration The Therapeutic Goods Administration (TGA) is a division of the Department of Health and Ageing which is an Australian Government controlled entity. The TGA contributes to Outcome 1 of the Department of Health and Ageing - a reduction in the incidence of preventable mortality and morbidity in Australia, including through regulation and national initiatives that support healthy lifestyles and disease prevention. Therapeutic goods are regulated to ensure that medicinal products and medical devices in Australia meet standards of safety, quality and efficacy at least equal to that of comparable countries. These products and devices should be made available in a timely manner and the regulatory impact on business kept to a minimum. This is achieved through a risk management approach to pre-market evaluation and approval of therapeutic products intended for supply in Australia, licensing of manufacturers and post market surveillance. The continued existence of the TGA in its present form and with its present programs is dependent on Government policy. TGA is reflected as a special account in the Department of Health and Ageing’s statements. On 20 June 2011, the Australian and New Zealand Prime Ministers signed a statement of intent on a plan to progressively implement a joint agency over a period of up to five years that will combine the Australian TGA and the New Zealand Medicines and Medical Devices Safety Authority (Medsafe). The Australian Government continues to have regard to developments in case law, including the High Court’s most recent decision on Commonwealth expenditure in Williams v Commonwealth (2012) 288 ALR 410, as they contribute to the larger body of law relevant to the development of Commonwealth programs. In accordance with its general practice, the Government will continue to monitor and assess risk and decide on any appropriate actions to respond to risks of expenditure not being consistent with constitutional or other legal requirements. 1.2 Basis of Preparation of the Financial Statements A determination was made under the Financial Management and Accountability Act 1997 for the TGA special account to be treated as a business operation. The financial statements and notes are therefore required by section 49 of the Financial Management and Accountability Act 1997 and are general purpose financial statements. The financial statements and notes have been prepared in accordance with: a) Finance Minister’s Orders (or FMOs) for reporting periods ending on or after 1 July 2011; and b) Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period. The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified. Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and liabilities are recognised in the Balance Sheet when and only when it is probable that future economic benefits will flow to the entity or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrealised are reported in the Schedule of Commitments or the schedule of contingencies. Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when, and only when, the flow, consumption or loss of economic benefits has occurred and can be reliably measured.
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THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1.3 Significant Accounting Judgements and Estimates
No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next reporting period.
1.4 New Australian Accounting Standards
Adoption of New Australian Accounting Standard Requirements No accounting standard has been adopted earlier than the application date as stated in the standard.
New and revised standards that were issued prior to the sign-off date and are applicable to the current reporting period did not have a financial impact, and are not expected to have a future financial impact on the TGA.
Future Australian Accounting Standard Requirements New standards, revised standards, interpretations or amending standards that were issued by the Australian Accounting Standards Board prior to the sign-off date, are not expected to have a future financial impact on the TGA.
1.5 Revenue
Revenue from the sale of goods is recognised when: a) the risks and rewards of ownership have been transferred to the buyer; b) the TGA retains no managerial involvement or effective control over the goods; c) the revenue and transaction costs incurred can be reliably measured; and d) it is probable that the economic benefits associated with the transaction will flow to the TGA.
Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when: a) the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and b) the probable economic benefits associated with the transaction will flow to the entity.
The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.
Receivables for goods and services are recognised at the nominal amounts due less any impairment allowance. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.
The TGA recovers the cost of all activities undertaken within the scope of the Therapeutic Goods Act 1989 from industry through fees and charges and recognises revenue only when it has been earned.
Annual charges for entries on the Australian Register of Therapeutic Goods and manufacturing licence charges are recognised as revenue in the financial year to which the charges relate and are non-refundable, except where exemption is given on the basis of low value turnover.
Minor application fees, evaluation fees and conformity assessment fees (less than $10,000) are recognised as revenue on receipt.
Major application fees, evaluation fees and conformity assessment fees are recognised progressively as services are performed.
Revenue from Government Revenue was provided to the TGA (through the Department of Health and Ageing) to provide interest supplementation for surplus amounts standing to the credit of the Official Public Account and for funding activity associated with progressive implementation of the joint agency.
1.6 Gains
Resources Received Free of Charge Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.
Resources received free of charge are recorded as either revenue or gains depending on their nature.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements.
Sale of Assets Gains from disposal of assets are recognised when control of the asset has passed to the buyer.
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1.7 Employee Benefits
Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits ) and termination benefits due within twelve months of the end of the reporting period are measured at their nominal amounts.
The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.
Other long-term employee benefits are measured as the net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.
Leave The liability for employee benefits includes provisions for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the TGA is estimated to be less
than the annual entitlement for sick leave.
The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will apply at the time the leave is taken, including the TGA’s employee superannuation contribution rates to the extent that leave is likely to be taken during service rather than paid out on termination.
The liability for long service leave is determined with reference to an actuarial assessment last conducted on 26 May 2011. An actuary is engaged every 3 years to reassess the leave liability. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Separation and Redundancy Provision is made for separation and redundancy benefit payments. The TGA recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.
Superannuation Under the Superannuation Legislation Amendment (Choice of Funds) Act 2004, staff of the TGA are able to become members of any complying superannuation fund. A complying superannuation fund is one that meets the requirements under the Income Tax Assessment Act 1997 and the Superannuation Industry (Supervision) Act 1993.
The majority of staff of the TGA are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap).
The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and other compliant superannuation funds are defined contribution schemes.
The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance and Deregulation’s administered schedules and notes.
The TGA makes employer contributions to the employees’ superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The TGA accounts for the contributions as if they were contributions to defined contribution plans.
The liability for superannuation recognised at 30 June 2013 represents outstanding contributions for the final fortnight of the year.
1.8 Leases
A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.
The TGA has no finance leases.
Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets.
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1.9 Cash
Cash is recognised at its nominal amount. Cash and cash equivalents includes: a) cash in TGA’s special account; b) the balance held in the Official Public Account; and c) cash held by outsiders.
1.10 Financial Assets
The TGA classifies its financial assets as loans and receivables.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.
Effective Interest Method The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an effective interest rate basis except for financial assets that are recognised ‘at fair value through profit or loss’.
Loans and Receivables Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.
Impairment of Financial Assets Financial assets are assessed for impairment at the end of each reporting period.
Financial assets carried at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.
Financial assets carried at cost - if there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets.
1.11 Financial Liabilities
Financial liabilities are classified as other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.
Other Financial Liabilities Other financial liabilities including borrowings are initially measured at fair value, net of transaction costs.
These financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).
1.12 Contingent Liabilities and Contingent Assets
Contingent liabilities and contingent assets are not recognised in the Balance Sheet but are disclosed in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.
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1.13 Acquisition of Assets
Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.
Assets acquired at no cost, or for nominal consideration are initially recognised as assets and revenues at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.
1.14 Property, Plant and Equipment
Asset Recognition Threshold Purchases of property, plant and equipment including land, buildings and infrastructure are recognised initially at cost in the Balance Sheet, except for purchases costing less than $2,000. Leasehold improvements to properties with values of $10,000 or greater are capitalised. Any purchases under the thresholds are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).
The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by the TGA where there exists an obligation to restore the property to its original condition. These costs are included in the value of the TGA’s leasehold improvements with a corresponding provision for the ‘make good’ recognised
Revaluations Fair values for each class of asset are determined as shown below:
Asset Class Fair value measured at
Leasehold improvements Depreciated replacement cost Property, plant and equipment Market selling price
Following initial recognition at cost, property, plant and equipment assets were carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not materially differ from the assets’ fair values at the reporting date. Independent valuations are conducted every three years, with desktop reviews carried out in the other years.
An independent asset revaluation was conducted in 2011-12 by the Australian Valuation Office.
Revaluation adjustments were made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.
Any accumulated depreciation at the revaluation date was eliminated against the gross carrying amount of the asset and the asset was restated to the revalued amount.
Depreciation Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the TGA using in all cases, the straight line method of depreciation.
Depreciation rates (useful lives) and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated only when assets are revalued.
Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
2012-13 2011-12
Leasehold improvements Lease term Lease term
Property, plant and equipment 3 to 20 years 3 to 20 years
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Impairment All assets were assessed for impairment at 30 June 2013. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount was less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the TGA were deprived of the asset, its value in use is taken to be its depreciated replacement cost.
Derecognition An asset is recommended for disposal if the item no longer complies with occupational health and safety standards; the item is reaching the optimum selling time to maximise returns or has reached end of life; the item contains hazardous material and the item is beyond repair. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
1.15 Intangibles
The TGA’s intangible assets comprise internally developed and purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Internally developed software and purchased software with values of $100,000 or greater are capitalised.
Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the TGA’s software assets are 3 to 10 years (2011-12: 3 to 10 years).
All software assets were assessed for indications of impairment at 30 June 2013.
1.16 Taxation
The TGA is exempt from all forms of taxation except Fringe Benefits Tax (FBT), the Goods and Services Tax (GST) and certain excise and customs duties.
Revenues, expenses, assets and liabilities are recognised net of GST, except: a) where the amount of GST incurred is not recoverable from the Australian Taxation Office; and b) for receivables and payables which are recognised inclusive of GST.
1.17 Comparative Figures
Comparative figures have been adjusted to conform to changes in presentation in these financial statements, where required.
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THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the period ended 30 June 2013 Note 2: Events After the Reporting Period
No reportable events occured after the balance date.
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THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 3: Expenses
2013 2012
$'000 $'000
Note 3A: Employee Benefits Wages and salaries 58,193 53,560
Superannuation:
Defined contribution plans 3,738 3,130
Defined benefit plans 7,536 6,906
Leave and other entitlements 10,656 13,190
Other employee benefits 272 333
Total employee benefits 80,395 77,119
Note 3B: Suppliers Goods and services Consultants 6,038 6,098
Contractors 3,073 3,318
Property 4,982 3,983
Travel 2,127 2,537
Information technology 4,380 4,662
Advertising and media 449 448
Committee expenses 906 929
Legal 1,222 1,637
Library and laboratory 1,183 1,220
Office records and general expenses 1,024 1,090
Staff related expenses 939 877
Other 1,317 1,180
Total goods and services 27,640 27,979
Goods and services are made up of:
Provision of goods - related entities 132 7
Provision of goods - external parties 2,535 2,623
Provision of services - related entities 3,044 2,927
Provision of services - external parties 21,929 22,422
Total goods and services 27,640 27,979
Other supplier expenses Operating lease rentals-external parties:
Minimum lease payments 6,341 6,105
Contingent rentals 2,687 2,509
Workers compensation expenses 940 842
Total other supplier expenses 9,968 9,456
Total supplier expenses 37,608 37,435
408 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 3: Expenses
2013 2012
$'000 $'000
Note 3C: Depreciation and Amortisation Depreciation:
Property, plant and equipment 1,655 1,258
Buildings - leasehold improvements 1,079 821
Total depreciation 2,734 2,079
Amortisation:
Intangibles:
Computer software - internally developed 1,428 1,033
Computer software - purchased 222 115
Total amortisation 1,650 1,148
Total depreciation and amortisation 4,384 3,227
Note 3D: Write-Down and Impairment of Assets Asset write-downs and impairments from:
Impairment on financial instruments 592 562
Write-down of property, plant and equipment 75 5
Write-down of leasehold improvements - 14
Total write-down and impairment of assets 667 581
408 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 409
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 4: Income
2013 2012
$'000 $'000
REVENUE
Note 4A: Sale of Goods and Rendering of Services Rendering of services - related entities 1,377 47
Rendering of services - external parties 117,283 115,389
Total sale of goods and rendering of services 118,660 115,436
Note 4B: Other Revenue Other revenue 42 993
Total other revenue 42 993
GAINS
Note 4C: Other Gains Resources received free of charge 145 110
Total other gains 145 110
REVENUE FROM GOVERNMENT
Note 4D: Revenue from Government
Revenue from Government 3,634 6,274
Total revenue from Government 3,634 6,274
410 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 5: Financial Assets
2013 2012
$'000 $'000
Note 5A: Cash and Cash Equivalents Special account 1,644 1,318
Total cash and cash equivalents 1,644 1,318
Note 5B: Trade and Other Receivables Goods and services:
Goods and services - related entities 1,454 258
Goods and services - external parties 6,572 5,236
Total receivables for goods and services 8,026 5,494
Other receivables:
Receivable from the Official Public Account 56,698 55,192
GST receivable from the Australian Taxation Office 316 423
Total other receivables 57,014 55,615
Total trade and other receivables (gross) 65,040 61,109
Less impairment allowance account:
Goods and services (1,105) (972)
Total impairment allowance account (1,105) (972)
Total trade and other receivables (net) 63,935 60,137
Receivables are expected to be recovered in:
No more than 12 months 63,935 60,137
Total trade and other receivables (net) 63,935 60,137
Receivables are aged as follows:
Not overdue 62,760 59,188
Overdue by:
0 to 30 days 533 574
31 to 60 days 332 125
61 to 90 days 127 250
More than 90 days 1,288 972
Total receivables (gross) 65,040 61,109
The impairment allowance account is aged as follows:
Not overdue - -
Overdue by:
0 to 31 days - -
31 to 60 days - -
61 to 90 days (127) -
More than 90 days (978) (972)
Total impairment allowance account (1,105) (972)
410 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 411
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 5: Financial Assets
Reconciliation of the Impairment Allowance Account:
Movements in relation to 2013
Goods and services Total
$'000 $'000
Opening balance 972 972
Amounts written off (95) (95)
Amounts recovered and reversed (270) (270)
Increase recognised in net deficit 498 498
Closing balance 1,105 1,105
Movements in relation to 2012
Goods and services Total
$'000 $'000
Opening balance 614 614
Amounts written off (86) (86)
Amounts recovered and reversed (137) (137)
Increase recognised in net surplus 581 581
Closing balance 972 972
2013 2012
$'000 $'000
Note 5C: Other Financial Assets Accrued revenue 373 2,355
Total other financial assets 373 2,355
Total other financial assets are expected to be recovered in:
No more than 12 months 373 2,355
Total other financial assets 373 2,355
412 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 6: Non-Financial Assets
2013 2012
$'000 $'000
Note 6A: Land and Buildings Leasehold improvements:
Fair value 4,865 4,513
Accumulated depreciation (1,232) (152)
Total leasehold improvements 3,633 4,361
Total land and buildings 3,633 4,361
No indicators of impairment were found for land and building assets.
No land and building assets are expected to be sold or disposed of within the next 12 months.
2013 2012
$'000 $'000
Note 6B: Property, Plant and Equipment Other property, plant and equipment Fair value 7,179 6,383
Accumulated depreciation (1,627) (20)
Total other property, plant and equipment 5,552 6,363
No indicators of impairment were found for property, plant and equipment.
No property, plant or equipment was held for sale or disposal at 30 June 2013.
All revaluations are conducted in accordance with the revaluation policy stated at Note 1. In 2011-12 the Australian Valuation Office conducted a revaluation of all assets and in 2012-13 conducted a desktop review of fair value with nil adjustments required.
All revaluations are conducted in accordance with the revaluation policy stated at Note 1. In 2011-12 the Australian Valuation Office conducted a revaluation of all assets and in 2012-13 conducted a desktop review of fair value with nil adjustments required.
412 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 413
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 6: Non-Financial Assets
Note 6C: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment 2013
Leasehold improvements Other property, plant and equipment
Total
$'000 $'000 $'000
As at 1 July 2012 Gross book value 4,513 6,383 10,896
Accumulated depreciation and impairment (152) (20) (172)
Net book value 1 July 2012 4,361 6,363 10,724
Additions:
By purchase 351 919 1,270
Depreciation expense (1,079) (1,655) (2,734)
Disposals:
Other - (75) (75)
Net book value 30 June 2013 3,633 5,552 9,185
Net book value as at 30 June 2013:
Gross book value 4,865 7,179 12,044
Accumulated depreciation and impairment (1,232) (1,627) (2,859)
Net book value as at 30 June 2013 3,633 5,552 9,185
414 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 6: Non-Financial Assets
Note 6C: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment 2012
Leasehold improvements Other property, plant and equipment
Total
$'000 $'000 $'000
As at 1 July 2011 Gross book value 6,634 8,060 14,694
Accumulated depreciation and impairment (2,228) (2,808) (5,036)
Net book value 1 July 2011 4,406 5,252 9,658
Additions:
By purchase 241 2,249 2,490
Revaluations recognised in other comprehensive income 549 65 614
Reclassification - 60 60
Depreciation expense (821) (1,258) (2,079)
Disposals:
Other disposals (14) (5) (19)
Net book value 30 June 2012 4,361 6,363 10,724
Net book value as at 30 June 2012 represented by:
Gross book value 4,513 6,383 10,896
Accumulated depreciation and impairment (152) (20) (172)
Net book value as at 30 June 2012 4,361 6,363 10,724
414 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 415
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 6: Non-Financial Assets
2013 2012
$'000 $'000
Note 6D: Intangibles Computer software:
Internally developed - in progress 1,053 1,387
Internally developed - in use 17,389 15,345
Purchased 2,707 1,879
Accumulated amortisation (16,679) (15,033)
Total intangibles 4,470 3,578
No indicators of impairment were found for intangible assets.
No intangible assets are expected to be sold or disposed of within the next 12 months.
416 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 6: Non-Financial Assets
Note 6E: Reconciliation of the Opening and Closing Balances of Intangibles 2013
Computer software - internally developed Computer software - purchased
Total
$'000 $'000 $'000
As at 1 July 2012 Gross book value 16,732 1,879 18,611
Accumulated amortisation and impairment (13,248) (1,785) (15,033)
Net book value 1 July 2012 3,484 94 3,578
Additions:
By purchase or internally developed 1,710 832 2,542
Amortisation (1,428) (222) (1,650)
Disposals:
Other - - -
Net book value 30 June 2013 3,766 704 4,470
Net book value as at 30 June 2013 represented by:
Gross book value 18,442 2,707 21,149
Accumulated amortisation and impairment (14,676) (2,003) (16,679)
Net book value as at 30 June 2013 3,766 704 4,470
416 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 417
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 6: Non-Financial Assets
Note 6E: Reconciliation of the Opening and Closing Balances of Intangibles 2012
Computer software - internally developed Computer software - purchased
Total
$'000 $'000 $'000
As at 1 July 2011 Gross book value 19,303 2,265 21,568
Accumulated amortisation and impairment (15,850) (1,996) (17,846)
Net book value 1 July 2011 3,453 269 3,722
Additions:
By purchase or internally developed 1,064 - 1,064
Reclassification - (60) (60)
Amortisation (1,033) (115) (1,148)
Net book value 30 June 2012 3,484 94 3,578
Net book value as at 30 June 2012 represented by:
Gross book value 16,732 1,879 18,611
Accumulated amortisation and impairment (13,248) (1,785) (15,033)
Net book value as at 30 June 2012 3,484 94 3,578
418 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 6: Non-Financial Assets
2013 2012
$'000 $'000
Note 6F: Other Non-Financial Assets Prepayments 873 762
Total other non-financial assets 873 762
Total other non-financial assets are expected to be recovered in: No more than 12 months 731 587
More than 12 months 142 175
Total other non-financial assets 873 762
No indicators of impairment were found for other non-financial assets.
418 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 419
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 7: Payables
2013 2012
$'000 $'000
Note 7A: Suppliers Trade creditors 4,664 4,325
Total supplier payables 4,664 4,325
Supplier payables expected to be settled within 12 months:
Related entities 616 909
External parties 4,048 3,416
Total supplier payables 4,664 4,325
Settlement was usually made within 30 days.
Salaries and wages 2,904 2,857
Superannuation 317 284
Total employee payables 3,221 3,141
Unearned income 14,554 13,322
Total other payables 14,554 13,322
Note 7C: Other Payables
Note 7B: Employee Payables
All employee payables are expected to be settled in the next 12 months.
All other payables are expected to be settled in the next 12 months.
420 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 8: Provisions
2013 2012
$'000 $'000
Note 8A: Employee Provisions Leave 24,042 23,201
Other - 135
Total employee provisions 24,042 23,336
Employee provisions are expected to be settled in:
No more than 12 months 9,018 9,403
More than 12 months 15,024 13,933
Total employee provisions 24,042 23,336
Note 8B: Other Provisions Provision for low value turnover 697 1,048
Restoration obligations 202 172
Provision for lease increases 147 130
Other provisions 126 -
Total other provisions 1,172 1,350
Other provisions are expected to be settled in:
No more than 12 months 823 1,048
More than 12 months 349 302
Total other provisions 1,172 1,350
Reconciliation of other provisions:
Provision for low value turnover 1 Restoration
obligations 2
Provision for lease increases
Other
provisions 3 Total
$'000 $'000 $'000 $'000 $'000
Carrying amount 1 July 2012 1,048 172 130 - 1,350
Additional provisions made 697 36 (73) 126 786
Amounts used - (6) - - (6)
Amounts reversed (1,048) - 90 - (958)
Closing balance 30 June 2013 697 202 147 126 1,172
1. The TGA has a provision for exemptions that are expected to be granted under the low value turnover (LVT) scheme. A sponsor can seek exemption from the liability to pay an annual charge for an entry on the Australian Register of Therapeutic Goods if the therapeutic good qualifies as LVT.
2. The TGA has agreements for the leasing of premises which have provisions requiring the entity to restore the premises to their original condition at the conclusion of the lease. The TGA has made a provision to reflect the present value of this obligation.
3. The other provision relates to the 25% refund that the TGA is required to make for conformity assessments of device design examinations that are not completed within the legislated time frame.
420 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 421
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 9: Cash Flow Reconciliation
2013 2012
$'000 $'000
Reconciliation of cash and cash equivalents as per Balance Sheet to Cash Flow Statement
Cash and cash equivalents as per:
Cash flow statement 1,644 1,318
Balance sheet 1,644 1,318
Difference - -
Reconciliation of net cost of services to net cash from operating activities:
Net cost of services (4,207) (1,823)
Add revenue from Government 3,634 6,274
Adjustment for non-cash items Depreciation / amortisation 4,384 3,227
Net write-down of non-financial assets 75 19
Changes in assets / liabilities (Increase) in net receivables and other financial assets (1,816) (9,913)
(Increase) / decrease in prepayments (111) 20
Increase in employee provisions 706 4,782
Increase / (decrease) in supplier payables 338 (557)
Increase in employee and other payables 1,312 268
Increase / (decrease) in other provisions (178) 547
Net cash from operating activities 4,137 2,844
422 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 10: Contingent Assets and Liabilities
Contingent Assets
Quantifiable Contingencies
At 30 June 2013 the TGA did not have any quantifiable contingent assets (2011-12: Nil).
Unquantifiable Contingencies
At 30 June 2013 the TGA did not have any unquantifiable contingent assets (2011-12: Nil).
Contingent Liabilities
Quantifiable Contingencies
At 30 June 2013 the TGA did not have any quantifiable contingent liabilities (2011-12: $0.1 million).
Unquantifiable Contingencies
At 30 June 2013 The TGA has provided an indemnity to its transactional banker in relation to any claims made against the bank resulting from errors in the TGA’s payment files.
At 30 June 2012 The TGA has provided an indemnity to its transactional banker in relation to any claims made against the bank resulting from errors in the TGA’s payment files.
Significant Remote Contingencies
At 30 June 2013 the TGA did not have any significant remote contingencies (2011-12: Nil).
422 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 423
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 11: Senior Executive Remuneration
Note 11A: Senior Executive Remuneration Expense for the Reporting Period
2013 2012
$'000 $'000
Short-term employee benefits:
Salary (including annual leave taken) 4,483 4,359
Annual leave accrued 368 351
Performance bonuses 249 405
Other 724 627
Total short-term employee benefits 5,824 5,742
Post-employment benefits:
Superannuation 761 765
Total post-employment benefits 761 765
Other long-term benefits:
Long service leave 161 154
Total other long-term benefits 161 154
Total 6,746 6,661
Notes:
1. Note 11A is prepared on an accrual basis (therefore the performance bonus expenses disclosed above may differ from the cash bonus disclosed in Note 11B). 2. Note 11A excludes acting arrangements and part-year service where total remuneration expensed for a senior executive was less than $180,000.
424 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 11: Senior Executive Remuneration
Average annual reportable remuneration 1 Staff No.
Reportable Salary 2
Contributed superannuation3 Reportable allowances 4
Bonus Paid 5
Total
No. $ $ $ $ $
Total remuneration (including part-time arrangements): less than $180,000 6 64,207 9,406 - 4,523 78,136
$180,000 to $209,999 6 166,755 24,839 38 5,482 197,114
$210,000 to $239,999 9 191,298 25,783 - 6,710 223,791
$240,000 to $269,999 9 210,322 30,164 - 13,769 254,255
$270,000 to $299,999 1 235,467 36,857 - 24,600 296,924
$450,000 to $479,999 1 406,900 58,132 931 - 465,963
Total 32
Average annual reportable remuneration 1 Staff No.
Reportable Salary 2
Contributed superannuation3 Reportable allowances 4
Bonus Paid 5
Total
No. $ $ $ $ $
Total remuneration (including part-time arrangements): less than $180,000 8 80,774 14,675 - 3,451 98,900
$180,000 to $209,999 5 163,160 21,191 - 3,496 187,847
$210,000 to $239,999 9 189,618 29,018 - 6,889 225,525
$240,000 to $269,999 9 203,319 34,024 - 12,383 249,726
$270,000 to $299,999 1 228,936 43,337 - 19,879 292,152
$330,000 to $359,999 1 289,402 33,707 - 33,131 356,240
Total 33
Notes:
2011-12
1. This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for individuals in the band.
2012-13
Note 11B: Average Annual Reportable Remuneration Paid to Substantive Senior Executives During the Reporting Period
2. 'Reportable salary' includes the following: (a) gross payments (less any bonuses paid, which are disclosed in the 'bonus paid' column); (b) reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits); and (c) salary sacrificed superannuation.
3. The 'contributed superannuation' amount is the average actual superannuation contributions paid to senior executives in that reportable remuneration band during the reporting period. 4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.
5. 'Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the TGA during the financial year.
424 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 425
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 11: Senior Executive Remuneration
Average annual reportable remuneration 1 Staff No.
Reportable Salary 2
Contributed superannuation3 Reportable allowances 4
Bonus Paid 5
Total
No. $ $ $ $ $
Total remuneration (including part-time arrangements): $180,000 to $209,999 9 149,298 34,152 - 3,862 187,312
$210,000 to $239,999 2 188,629 28,935 358 5,197 223,119
Total 11
Average annual reportable remuneration 1 Staff No.
Reportable Salary 2
Contributed superannuation3 Reportable allowances 4
Bonus Paid 5
Total
No. $ $ $ $ $
Total remuneration (including part-time arrangements): $180,000 to $209,999 9 151,493 27,161 44 4,618 183,316
$210,000 to $239,999 1 193,029 19,299 - 8,570 220,898
Total 10
Notes:
(a) who were employed by the TGA during the reporting period; (b) whose reportable remuneration was $180,000 or more for the financial period; and (c) were not required to be disclosed in Tables A or B. Each row is an averaged figure based on headcount for individuals in the band.
Note 11C: Other Highly Paid Staff
2012-13
1. This table reports staff:
2. 'Reportable salary' includes the following:
(a) gross payments (less any bonuses paid, which are disclosed in the 'bonus paid' column);
2011-12
TGA staff include medical officers, legal officers and scientists. Details of salary and entitlements are included in the Department of Health and Ageing Enterprise Agreement 2011-2014.
4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries. 5. 'Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the TGA during the financial year.
(b) reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits); and (c) salary sacrificed superannuation.
3. The 'contributed superannuation' amount is the average actual superannuation contributions paid to staff in that reportable remuneration band during the reporting period.
426 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 12: Remuneration of Auditors
2013 2012
$'000 $'000
Fair value of services provided Financial statement audit services 145 110
Total 145 110
No other services were provided by the ANAO.
Financial statement audit services were provided free of charge to the TGA by the Australian National Audit Office (ANAO).
426 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 427
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 13: Financial Instruments
2013 2012
$'000 $'000
Note 13A Categories of Financial Instruments Financial assets Loans and receivables Cash and cash equivalents 1,644 1,318
Goods and services receivable 6,921 4,522
Total 8,565 5,840
Carrying amount of financial assets 8,565 5,840
Financial liabilities At amortised cost:
Trade creditors 4,664 4,325
Total 4,664 4,325
Carrying amount of financial liabilities 4,664 4,325
Note 13B Net Income and Expense from Financial Assets Loans and receivables Impairment 592 562
Net loss loans and receivables 592 562
Net loss from financial assets 592 562
The movement in the impairment account reflects an increase in the impairment provision and the write-down of receivables.
428 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 13: Financial Instruments
Note 13C Credit risk
2013 2012
$'000 $'000
Financial assets Goods and services receivable (gross) 8,026 5,494
Total 8,026 5,494
The TGA holds no collateral to mitigate against risk.
Credit quality of financial instruments not past due or individually determined as impaired
2013 2012 2013 2012
$'000 $'000 $'000 $'000
Loans and receivables
Goods and services receivable 5,746 3,573 2,280 1,921
Total 5,746 3,573 2,280 1,921
Ageing of financial assets that were past due but not impaired for 2013
0 to 30 days 31 to 60 days 61 to 90 days 90+ days Total
$'000 $'000 $'000 $'000 $'000
Goods and services receivable 533 332 - 310 1,175
Total 533 332 - 310 1,175
Ageing of financial assets that were past due but not impaired for 2012
0 to 30 days 31 to 60 days 61 to 90 days 90+ days Total
$'000 $'000 $'000 $'000 $'000
Goods and services receivable 574 125 250 - 949
Total 574 125 250 - 949
TGA's maximum credit risk in each class of financial assets is the carrying amount of the assets. The total amount of trade receivables is $8.026 million (2012: $5.494 million). The TGA has assessed the risk of default on payment and allowed impairment of $1.105 million in 2013 (2012: $0.972 million).
The following table illustrates the TGA's gross exposure to credit risk, excluding any collateral or credit enhancements.
Past due or impaired
Loans and receivables
Loans and receivables
Not past due nor impaired Not past due nor impaired
Past due or impaired
428 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 429
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 13: Financial Instruments
Note 13D Liquidity Risk
Maturities for non-derivative financial liabilities 2013
within 1 year Total
$'000 $'000
Other liabilities
Trade creditors 4,664 4,664
Total 4,664 4,664
Maturities for non-derivative financial liabilities 2012
within 1 year Total
$'000 $'000
Other liabilities
Trade creditors 4,325 4,325
Total 4,325 4,325
The TGA has no derivative financial liabilities in either 2013 or 2012.
Note 13E Market Risk
The TGA has no material exposure to currency risk, interest rate risk or other price risk.
The TGA's financial liabilities are payables. The exposure to liquidity risk is based on the notion that the TGA will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely as cost recovery policies ensure there are appropriate resources to meet its financial obligations.
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PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 14: Financial Assets Reconciliation
2013 2012
$'000 $'000
Financial Assets
65,952 63,810
Less: non-financial instrument components Receivable from the Official Public Account 56,698 55,192
GST receivable from the Australian Taxation Office 316 423
Accrued revenue 373 2,355
Total non-financial instrument components 57,387 57,970
Total financial assets as per financial instruments note 8,565 5,840
Total financial assets as per Balance Sheet
430 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 431
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 15: Special Account
Balance brought forward from previous period 56,509 46,154
Increases:
Appropriation credited to special account 3,634 7,303
Costs recovered 117,714 111,393
Other receipts 27 765
Total increases 121,375 119,461
Available for payments 177,884 165,615
Decreases:
Departmental
Payments made 119,543 109,106
Total decreases 119,543 109,106
Balance carried to the next period 58,341 56,509
The TGA operates one special account established under section 21 of the Financial Management and Accountability Act 1997 . The purposes of the account are set out in section 45 of the Therapeutic Goods Act 1989 (the Act) and are; to make payments to further the objects of the Act; and to enable the Commonwealth to participate in the international harmonisation of regulatory controls on therapeutic goods and other related activities.
Therapeutic Goods Administration
2013 $'000
2012 $'000
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PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 16: Compliance with Statutory Conditions for Payments from Consolidated Revenue Fund
Section 83 of the constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. The Department of Finance and Deregulation provided information to all agencies in 2011 regarding the need for risk assessments in relation to compliance with statutory conditions on payments from special appropriations, including special accounts.
During 2012-13 additional legal advice was received by the Department of Finance and Deregulation that indicated there could be breaches of section 83 under certain circ*mstances with payments for long service leave, goods and services tax and payments under determinations of the Remuneration Tribunal. TGA will review its processes and controls over payments for these items to minimise the possibility of breaches as a result of these payments.
The TGA operates one special account established under section 21 of the Financial Management and Accountability Act 1997 . The purposes of the account are set out in section 45 of the Therapeutic Goods Act 1989 (the Act) and are; to make payments to further the objects of the Act; and to enable the Commonwealth to participate in the international harmonisation of regulatory controls on therapeutic goods and other related activities.
The broad nature of the purpose of the account has provided the TGA with confidence that the risk of non-compliance of special account payments is at an acceptably low level. The TGA will continue to ensure its compliance with statutory conditions for payment.
432 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 433
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 17: Compensation and Debt Relief
2013 2012
$ $
Departmental
No 'Act of Grace' expenses were made during the reporting period (2012: Nil). - -
No waivers of amounts owing to the Commonwealth were made pursuant to section 34(1) of the Financial Management and Accountability Act 1997 (2012: No waivers). - -
No payments were provided under the Compensation for Detriment caused by Defective Administration (CDDA) scheme during the reporting period (2012: Nil). - -
No ex-gratia payments were provided for during the reporting period (2012: Nil). - -
No payments were provided in special circ*mstances relating to APS employment pursuant to section 73 of the Public Service Act 1999 during the reporting period (2012: No payments made). - -
434 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 18: Reporting of Outcomes
The TGA is a division of the Department of Health and Ageing. The TGA contributes to Outcome 1 of the Department of Health and Ageing - a reduction in the incidence of preventable mortality and morbidity in Australia, including through regulation and national initiatives that support healthy lifestyles and disease prevention. All costs are attributable to the outcome.
434 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 435
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS THERAPEUTIC GOODS ADMINISTRATION NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2013
Note 19: Cost Recovery
2013 2012
$'000 $'000
Receipts subject to cost recovery policy:
Prescription medicines 60,780 56,650
Non-prescription medicines 6,220 6,517
Complementary medicines 14,276 9,579
Blood tissues, human cell and tissue therapies 3,187 3,427
Good manufacturing practice 10,985 12,294
Medical devices 22,363 26,857
Total receipts subject to cost recovery policy 117,811 115,324
436 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
PART 3 MANAGEMENT AND ACCOUNTABILITY
THERAPEUTIC
GOODS
ADMINISTRATION
3.2
436 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
437
436 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 436 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
APPENDICIES
APPENDIX 1: PROCESSES LEADING TO PBAC CONSIDERATION - ANNUAL REPORT 2012-13 438
APPENDIX 2: PHARMACEUTICAL BENEFITS PRICING AUTHORITY ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2013 443
437
438 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
APPENDIX
1
APPENDIX 1: PROCESSES LEADING TO PBAC CONSIDERATION - ANNUAL REPORT 2012-13 INTRODUCTION
This is the fourth annual report to the Parliament on the processes leading to the consideration by the Pharmaceutical Benefits Advisory Committee (PBAC) of applications for recommendation for listing of items on the PBS. This report covers the 2012-13 financial year.
This annual report has been prepared pursuant to subsection 99YBC (5) of the National Health Act 1953 (the Act), under which it is required that:
The Secretary must, as soon as practicable after June 30 each year, prepare an annual report on the processes leading up to Pharmaceutical Benefits Advisory Committee consideration, including:
(a) the extent and timeliness with which responsible per sons are provided copies of documents relevant to their submissions to the Pharmaceutical Benefits Advisory Committee;
(b) the extent to which responsible per sons exercise their right to comment on these documents, including appearing at hearings before the Pharmaceutical Benefits Advisory Committee; and
(c) the number of r esponsible persons seeking a review of the Pharmaceutical Benefits Advisory Committee recommendation.
PBAC COST RECOVERY REFORM Cost recovery for processes leading to PBAC consideration commenced on 1 January 2010.
Background Cost recovery policy is administered by the Department of Finance and Deregulation and is outlined in the Australian Government Cost Recovery Guidelines, July 2005, along with Finance Circular 2005/09. Finance Circular 2008/08 further clarifies the governmental oversight of cost recovery policy. The underlying principle of the policy is that agencies should set charges to recover all the costs of products or services where it is efficient and effective to do so, where services will be provided to an identified group and where charging is consistent with Australian Government policy objectives.
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APPENDIX
1
PBS Cost Recovery Regulations Section 140 of the Act provides in part, that the:
Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which by this Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Division 4C of Part VII of the Act enables fees to be charged for certain services provided by the Australian Government in order to recover the cost to the Commonwealth of providing those services. Those services relate to the exercise of certain powers of the Minister for Health under section 9B of the Act (which relates to the National Immunisation Program (NIP)) and under Part VII of the Act (which relates to the Pharmaceutical Benefits Scheme (PBS)). The services include the functions of PBAC and its sub-committees; the functions of the Pharmaceutical Benefits Pricing Authority (PBPA); and related functions performed by officers, administrative staff, contractors and sub-contractors of the Department.
Section 99YBA of the Act provides for regulations to set out the fees that are payable for those services, as well as other matters relating to the payment of those fees and the provision of those services, including some consequences of failing to pay a fee.
The regulations prescribe application categories, fees and application procedures to applicants seeking a new or amended inclusion in the PBS or NIP. The regulations also provide for the exemption from fees, waiver of fees, and for review rights and procedures. The fees and procedures are administered by the Department.
PBAC The PBAC is established under section 100A of the Act and is an independent expert body appointed by the Australian Government. Members include doctors, health professionals, health economists and a consumer representative. Its primary role is to recommend new medicines for listing on the PBS and vaccines on the NIP. No new medicine can be listed unless the committee makes a positive recommendation to the Minister for Health. The PBAC holds three scheduled meetings each year, usually in March, July and November.
When recommending a medicine for listing, the PBAC takes into account the medical condition(s) for which the medicine was registered for use in Australia and its clinical effectiveness, safety and cost-effectiveness (‘value for money’) compared with other treatments, including non medical treatments.
The PBAC has two sub-committees to assist with analysis and advice in these areas. They are:
⢠The Economics Sub-Committee (ESC) which assesses clinical and economic evaluations of medicines submitted to the PBAC for listing, and advises the PBAC on the technical aspects of these evaluations; and
⢠The Drug Utilisation Sub-Committee (DUSC) which assesses estimates on projected usage and the financial cost of medicines. It also collects and analyses data on actual use (including in comparison with different countries), and provides advice to the PBAC.
Roles of the PBAC The PBAC performs the following roles:
⢠recommends medicines and medicinal preparations to the Minister for Health for funding under the PBS;
⢠recommends vaccines to the Minister for funding under the NIP (since 2006); ⢠advises the Minister and the PBPA about cost-effectiveness; ⢠recommends maximum quantities and repeats on the basis of community use, and any restrictions on the indications where PBS subsidy is available;
⢠regularly reviews the list of PBS items; and ⢠advises the Minister about any other matters relating to the PBS, including on any matter referred to it by the Minister.
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REQUIREMENTS OF SECTION 99YBC OF THE ACT
a) Extent and Timeliness of the Provision of Relevant Documents to Responsible Persons Subsection 99YBC(5)(a) of the Act requires that the Minister report to the Parliament on the
extent and timeliness of the provision of relevant documents to responsible persons. The PBAC provides responsible persons with documents relevant to their submissions in an orderly, timely and transparent fashion. This is achieved through the well established practice of providing responsible persons with documents relevant to their submissions six weeks before the applicable PBAC meeting. These documents are referred to as “commentaries”.
The PBAC Secretariat provides applicants with the pre-subcommittee response(s) five weeks before the relevant PBAC meeting. Following the meeting of PBAC subcommittees, the PBAC Secretariat provides relevant subcommittee papers to responsible persons two weeks before the relevant PBAC meeting. Sponsors then provide their responses to the PBAC Secretariat one week before the PBAC meeting.
Following the PBAC meeting the PBAC Secretariat provides verbal advice on the outcomes of PBAC consideration to the relevant sponsor half a week after the meeting, with written advice provided three weeks after the relevant PBAC meeting.
Where requested, the PBAC Secretariat, the PBAC and its subcommittees provide informal access to departmental officers and formal access to the PBAC for responsible persons or their representative, including the option for the sponsor to appear before the PBAC in person.
b) Extent to which Responsible Persons Comment on Their Commentaries Subsection 99YBC(5)(b) of the Act requires that the Minister report to the Parliament on the:
“…extent to which responsible persons exercise their right to comment on these documents, including appearing at hearings before the Pharmaceutical Benefits Advisory Committee;”
As is usual practice, during 2012-13 PBAC held three ordinary meetings and considered a total of 69 major submissions. For the:
⢠July 2012 PBAC meeting, all 19 responsible persons who lodged major submissions responded to their commentaries.
⢠November 2012 PBAC meeting, all 25 responsible persons who lodged major submissions responded to their commentaries; and
⢠March 2013 PBAC meeting, 24 of the 25 responsible persons who lodged major submissions responded to their commentaries.
Consequently, of the 69 major submissions considered by PBAC in 2012-13, 68 responsible persons exercised their right to respond to their commentaries.
c) Number of Responsible Persons Seeking a Review of PBAC Recommendations Subsection 99YBC(5)(c) of the Act requires that the Minister report to the Parliament on:
“the number of responsible persons seeking a review of the Pharmaceutical Benefits Advisory Committee recommendation.”
During the 2012-13 financial year, there was one request to the PBAC for an Independent Review.
440 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 441
APPENDIX
1
NUMBER AND CATEGORY OF APPLICATIONS FOR EACH PBAC MEETING IN 2012-1397 July 2012 PBAC Meeting
CATEGORY NUMBER COMMENTS
Major 19 0
Minor 30 Included 6 secretariat listings109
November 2012 PBAC Meeting
CATEGORY NUMBER COMMENTS
Major 25 0
Minor 23 Included 4 secretariat listings109
March 2013 PBAC Meeting
CATEGORY NUMBER COMMENTS
Major 25 0
Minor 37 Included 8 secretariat listings109
WITHDRAWN APPLICATIONS FOR EACH PBAC MEETING IN 2012-13 BY CATEGORY AND REASONS FOR WITHDRAWAL OF APPLICATIONS FOR EACH MEETING July 2012 PBAC Meeting
CATEGORY NUMBER REASONS FOR WITHDRAWAL
Major 2 Decision by applicant - no reason provided
Minor 2 Decision by applicant - no reason provided
November 2012 PBAC Meeting
CATEGORY NUMBER REASONS FOR WITHDRAWAL
Major 2 Decision by applicant - no reason provided
Minor 0 0
March 2013 PBAC Meeting
CATEGORY NUMBER REASONS FOR WITHDRAWAL
Major 1 Decision by applicant - no reason provided
Minor 2 Decision by applicant - no reason provided
97 Figures do not include 3 minor submissions considered at Special Meetings. 98 Secretariat listings are not considered as a separate agenda item at a meeting of the Committee as they are very minor amendments to existing listings. However, all secretariat listings are still decided by the Committee on the merit of each application.
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APPENDIX
1
NUMBER OF RESPONSIBLE PERSONS THAT RESPONDED TO THEIR COMMENTARIES, INCLUDING APPEARING BEFORE PBAC MEETINGS All but one of the responsible persons who submitted a major submission to PBAC during 2012-13 responded to their commentary.
July 2012 PBAC Meeting
NUMBER OF MAJOR SUBMISSIONS NUMBER OF RESPONSIBLE PERSONS THAT RESPONDED TO THEIR
COMMENTARIES
NUMBER OF RESPONSIBLE PERSONS THAT APPEARED BEFORE PBAC
19 19 5
November 2012 PBAC Meeting
NUMBER OF MAJOR SUBMISSIONS NUMBER OF RESPONSIBLE PERSONS THAT RESPONDED TO THEIR
COMMENTARIES
NUMBER OF RESPONSIBLE PERSONS THAT APPEARED BEFORE PBAC
25 25 10
March 2013 PBAC Meeting
NUMBER OF MAJOR SUBMISSIONS NUMBER OF RESPONSIBLE PERSONS THAT RESPONDED TO THEIR
COMMENTARIES
NUMBER OF RESPONSIBLE PERSONS THAT APPEARED BEFORE PBAC
25 24 9
Number of pre-submission meetings held in 2012-1399
PRE-SUBMISSION MEETINGS PER MONTH MEETINGS HELD
2012
July 4
August 17
September 3
October 6
November 3
December 12
2013
January 11
February 3
March 6
April 20
May 9
June 0
Total 94
99 Figures do not take into account extended meetings where two or more drugs are discussed within one meeting date.
442 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 443
APPENDIX
2
APPENDIX 2: PHARMACEUTICAL BENEFITS PRICING AUTHORITY ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2013 This is the twenty-sixth annual report of the Pharmaceutical Benefits Pricing Authority (PBPA) covering the operations of the PBPA for the year ended 30 June 2013.
Pharmaceutical Benefits Pricing Authority The PBPA is an independent non-statutory body established in 1988 which is required to:
⢠review the prices of products supplied under the Pharmaceutical Benefits Scheme (PBS) and, since 2006, the vaccines on the National Immunisation Program (NIP); and
⢠advise on the pricing of new items that are recommended for listing on the PBS and the NIP.
The PBPA, along with the Pharmaceutical Benefits Advisory Committee (PBAC) and its sub-committees, evaluates all submissions from sponsors for the listing and pricing of drugs on the PBS. While the PBAC is a statutory committee that assesses the clinical benefit and cost-effectiveness of drugs, the PBPA is a non-statutory committee that recommends prices of drugs for PBS listing purposes.
The PBPA’s objective in reviewing prices of items listed under the PBS is to secure a reliable supply of pharmaceutical products at the most reasonable cost to Australian taxpayers and consumers, consistent with maintaining a sustainable pharmaceutical industry in Australia.
Under its terms of reference, the PBPA is required to recommend to the Minister for Health prices of items listed as pharmaceutical benefits or recommended by the PBAC for listing.
Final decisions on the listing of medicines and vaccines are made by the Government. Currently, all positive recommendations made by the PBAC and the PBPA which have a financial impact for the Commonwealth Budget are being considered by Cabinet.
Factors considered by the PBPA In reviewing the price of listed items and in considering the price of items recommended for listing, the PBPA takes account of the following factors:
(a) PBAC comments on clinical and cost effectiveness aspects of items;
(b) the prices of alternative brands of a drug;
(c) comparative pr ices of items containing drugs in the same Anatomical Therapeutic Classification (ATC) Group;
444 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
APPENDIX
2
(d) costs information, when provided by the responsible person or estimated by the PBPA;
(e) prescription volumes, economies of scale and other factors such as expiry dates, storage requirements, product stability and special manufacturing requirements;
(f) prices of items containing the drug in reasonably comparable overseas countries;
(g) other relevant factors which the applicant company may wish the PBPA to consider; and
(h) any directions of the Minister.
Membership The PBPA’s membership for the 2012-13 financial year was:
Chair Mr Michael Roche
Industry nominees Dr Brendan Shaw - Medicines Australia
Ms Kate Lynch - Generic Medicines Industry Association
Consumer nominee Ms Jo Watson - Consumers’ Health Forum, Australian Consumer’s Association and Australian Federation of AIDS Organisations (previous)
Ms Karen Carey - Consumers’ Health Forum (current)
Department of Health and Ageing Representative Ms Adriana Platona
Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education Representative
Mr Peter Lunn (previous)
Mr Peter Chesworth (previous)
Ms Julia Evans (current)
Secretariat Support The PBPA is serviced by a Secretariat staffed within the Pharmaceutical Evaluation Branch of the Department. The Secretariat is responsible for making logistical arrangements for PBPA meetings, preparing agenda papers, taking minutes of meetings and notifying affected parties of the outcomes of PBPA deliberations. The Secretariat also conducts negotiations with responsible persons, where necessary, on proposed prices.
Meetings PBPA meetings are held three times a year and are coordinated with meetings of the PBAC so that the PBAC outcomes can be dealt with as soon as possible, consistent with the need to collect pricing information.
Establishing prices for new listings For new or extended listings recommended by the PBAC, the PBPA may advise the price to be negotiated by the Department. The PBAC recommendation, based on economic evaluations considered by the Economics Sub-Committee, is a major consideration in determining initial prices.
Increasingly, the PBPA considers deeds of agreement containing risk sharing arrangements to contain overall costs of drugs on the PBS and to manage the financial risks to the Government resulting from uncertainty about drugs utilisation.
At 30 June 2013 ther e were 76 deeds of agreement in place or in development.
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APPENDIX
2
A comprehensive overview of the different pricing methods used by the PBPA, including cost-plus method, reference pricing and different types of risk sharing arrangements, is provided in the PBPA’s Policies, Procedures and Methods manual. This manual is available on the Department’s Pharmaceutical Benefits Schedule (PBS) website. 100
Reviewing prices for existing items The main mechanisms used by the PBPA for reviewing prices of pharmaceutical benefits supplied through the PBS are:
⢠reference pricing, i.e. comparing the prices of products that are considered by the PBAC to produce similar health benefits;
⢠further cost-effectiveness justification by the responsible persons to the PBAC; and/or ⢠a margin on the cost of manufacture, or landed cost.
These mechanisms are outlined in the PBPA Policies, Procedures and Methods manual.101
The PBPA may also request additional data from responsible persons, including drug utilisation data, so that relevant treatment costs can be independently calculated.
Therapeutic Relativities The PBPA issues relativity sheets102 that identify the basis of pricing comparisons between therapeutically similar products. These are mainly based on advice from the PBAC. If necessary, clarification can be obtained from the Secretariat, and the relativities may be changed by the presentation of further data to the PBAC.
Annual Scheduled Review of Anatomical Therapeutic Chemical (ATC) groups The PBPA reviews annually the price of each drug listed in the Schedule of Pharmaceutical Benefits by ATC groupings. responsible persons are asked to submit cost and other data that they wish the PBPA to consider in reviewing product prices.
The ATC groups reviewed in 2012-13 are as follows:
AUGUST 2012 DECEMBER 2012 APRIL 2013
D Dermatologicals A Alimentary tract &
metabolism
B Blood & blood forming organs
M Musculoskeletal system S Sensory organs C Cardiovascular system
N Nervous system V Various L Antineoplastics &
immunomodulating agents
P Antiparasitic products H Systemic hormonal preparations, excluding sex hormones
R Respiratory system
Section 100 items J General antiinfectives for systemic use G Genito urinary system & sex hormones
Vaccines
100 Available at: www.pbs.gov.au 101 Available at: www.pbs.gov.au 102 Available at: www.pbs.gov.au
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2
RESULTS OF ATC GROUP REVIEWS 2010-11 2011-12 2012-13
Number of brands reviewed 4,396 4,691 4,980
Number of brands for which price applications were received
301 6.85%
222 4.73%
87
1.75%
Number of brands for which price increases were recommended 30 0.68%
67
1.43%
35
0.70%
Number of vaccines for which price applications were received
2 0 0
Number of vaccines for which price increases were recommended
0 0 0
PBAC recommendations considered by PBPA
RECOMMENDATIONS AND LISTINGS 2010-11 2011-12 2012-13
Number of drugs recommended for listing by the PBAC(a) 130 90 63
Number of drugs listed(b) 142 100 73
Number of vaccines recommended for listing by the PBAC on the NIP 4 2 1
Estimate of additional cost of drugs for new or extensions to listings(c) $439.9 million over 5 years
$545.6 million over 5 years $673.1 million over 5 years
(a) Includes all new or extensions to listings of dr ugs with nil or some cost to Government - does not include new brand listings for existing items.
(b) Differences between ‘number of drugs recommended for listing’ and ‘number of drugs listed’ may be partially or wholly due to listing taking place in the financial year following a recommendation.
(c) Cost estimate is for the dr ugs listed in each financial year. Drugs that are approved for listing by Government in one year may be listed in the following year.
Estimated cost of price increases of existing items The general price increases granted to responsible persons in 2012-13 are collectively estimated to add $31.32 million to the cost of the PBS and Repatriation Pharmaceutical Benefits Scheme over five years based on the latest available twelve months prescription volume for each item at the time of review.
446 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 447
APPENDIX
2
Cost of the Pharmaceutical Benefits Scheme for 2012-13
CATEGORY
PROCESSED SCRIPT NUMBERS
COST TO GOVERNMENT
General 23.69 million $1,475.9 million
Concessional 173.26 million $5,707.9 million
PB Other (a) $1,812.6 million
Total 196.95 million(b) $8,996.4 million
Revenue (c) -$350.9 million
Total (incl. revenue) (c) $8,645.5 million
(a) PB Other contains diverse pr ograms. The majority of data are collected by state and territory governments and script volume is unavailable.
(b) Does not include Prescr iber’s Bag (0.35 million).
(c) Script numbers do not apply to PBS revenue.
Note: For the general public, where a pharmaceutical benefit has a dispensed price below the general patient contribution (that is, below $36.10), the consumer pays the full amount. The above figures do not include these amounts.
Special Patient Contributions (SPC) Special patient contributions may apply when a manufacturer and the Government cannot agree about the price of a product listed on the PBS. In these cases, the product continues to be listed on the PBS, but patients pay an amount in addition to the standard patient co-payment. These additional amounts are paid to the responsible persons, not to the Government. There are three types of special patient contributions, which are discussed below.
The Brand Premium Policy operates where there are a number of clinically equivalent brands available. The Government subsidises each of the available brands to the level of the lowest priced brand. responsible persons of other brands are able to set a price higher than the price of the lowest priced brand. Patients then pay the difference between the price of the lowest priced brand and the price of the brand which is dispensed to them.
The Therapeutic Group Premium Policy applies within specifically defined groups of drugs which have similar safety and health outcomes. Within these groups, the drugs can be interchanged at the patient level. The Government subsidises all drugs within a group to the level of the lowest priced drug. The difference in price between the lowest priced drug and higher priced drugs within the group is called a therapeutic group premium (TGP). The TGP is paid by the patient and goes to the responsible person, not to the Government.
In 2012-13 there were four drugs with special patient contributions other than brand or therapeutic group premiums listed on the PBS. Three of these (amoxycillin paediatric drops, naratriptan and zolmitriptan) were introduced because the responsible persons and the Minister could not agree on a new price when a price reduction was required by the 12.5% price reduction policy. The fourth, bleomycin, has had a special patient contribution for a number of years. In order to ensure that patients will not be financially disadvantaged, the treating doctor can seek an authority from Department of Human Services to waive this type of special patient contribution where there is no clinically suitable alternative listed on the PBS at the benchmark price. Bleomycin is the only drug for which the SPC cannot be waived.
448 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
APPENDIX
2
2010-11 2011-12 2012-13
Number of brands listed on the PBS(a) >3,950 >4,200 >4,500
Number of brands with a premium(a)
295 283 287
Average brand premium $3.08 $2.84 $2.86
Weighted average brand premium(b)
$2.44 $2.48 $2.41
Brand premium range $0.08 to $72.32 $0.44 to $13.59 $0.44 to $13.59
Prescriptions dispensed with a brand premium(c) 16.1 million 14.7 million 13.2 million
Prescriptions dispensed at the benchmark level(c) 52.5 million 76%
53.4 million 78%
53.9 million 80%
(a) A brand is defined as a unique combination of ‘brand name’ and ‘form and strength’.
(b) Weighted average brand premium is calculated by: scripts x premium = total premium value total premium value / total scripts = weighted average brand premium
(c) Figures only include those scripts which are subsidised by government. General scripts that fall under the co-payment are not included.
Weighted Average Monthly Treatment Cost (WAMTC) The WAMTC methodology is a form of reference pricing which applies to groups of drugs that are considered to be therapeutically similar by the PBAC. Under the evidence-based approach used for the listing and pricing of drugs, it is the practice to price these at the same level. Each WAMTC group is reviewed annually in line with PBPA meetings and may be subject to ad hoc reviews if a price reduction is offered by a responsible person of a drug in a WAMTC group. Details of the WAMTC methodology are outlined in the WAMTC Manual which can be found on the Department’s PBS website.103
The WAMTC groups reviewed in 2012-13 are as follows:
AUGUST 2012 (PRICE REDUCTIONS EFFECTIVE 1 DECEMBER 2012)
DECEMBER 2012 (PRICE REDUCTIONS EFFECTIVE 1 APRIL 2013)
APRIL 2013 (PRICE REDUCTIONS EFFECTIVE 1 AUGUST 2013)
HMG Coenzyme A reductase inhibitors higher potency group (Statins HP)
Angiotensin II Receptor Antagonists (ATRAs) Venlafaxine and Venlafaxine Derivative Therapeutic Group
Proton Pump Inhibitors (PPIs)
On 1 April 2013, two drugs, cimetidine and ranitidine, received price disclosure reductions and were consequently removed from the ‘H2-receptor antagonists’ (H2RA) therapeutic group, leaving only the drug nizatidine in that group. On 1 August 2013 one drug, fosinopril, received a price disclosure reduction and was consequently removed from the ‘ACE inhibitors, plain’ therapeutic group. This removed all drugs from that therapeutic group, resulting in the group being revoked.
The ‘Venlafaxine and Venlafaxine Derivative Therapeutic Group’ was formed in April 2013, and comprises the two drugs venlafaxine and desvenlafaxine.
103 Available at: www.pbs.gov.au
448 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 449
APPENDIX
2
Further information A detailed analysis of PBS expenditure and prescriptions for the twelve months to 30 June 2013 can be found by following the link to ‘PBS statistics’ on the Department’s website104, or by following the link under ‘useful statistics’ on the PBS website105 when this data becomes available. The data will include the following tables which were replicated in PBPA Annual Reports prior to 2011:
⢠ATC main group comparison (summary version of information provided in Table 1 of PBPA reports prior to 2011);
⢠PBS prescription volume, government cost and average government cost per script (Table 2 in PBPA reports prior to 2011);
⢠highest cost PBS drugs and highest volume PBS drugs (Table 3 in PBPA reports prior to 2011);
⢠top 20 responsible persons by total cost and by market share (Tables 4 and 5 in PBPA reports prior to 2011);
⢠significant drug groups by highest government cost and highest volume (Tables 6a and 6b in PBPA reports prior to 2011); and
⢠significant drugs by highest change to government cost and highest volume change (Tables 7a and 7b in PBPA reports prior to 2011).
104 Available at: www.health.gov.au/pbs 105 Available at: www.pbs.gov.au
450 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
LIST OF REQUIREMENTS
LIST OF REQUIREMENTS PART OF REPORT DESCRIPTION REQUIREMENT LOCATION
Letter of transmittal. Mandatory Page ix
Table of contents. Mandatory Page vii
Index. Mandatory Page 208, 454
Glossary. Mandatory Page 203
Contact officer(s). Mandatory v, 230
Internet home page address and Internet address for report. Mandatory v, 230
Review by Secretary
Review by departmental secretary. Mandatory Page 1
Summary of significant issues and developments. Suggested Page 1
Outlook for following year. Suggested Page 1
Significant issues and developments - portfolio. Portfolio departments - suggested
Page 1
Chief Financial Officer’s Report Overview of department’s performance and financial results.
Suggested Page 7, 277
Departmental Overview Role and functions. Mandatory Part 1.0
Organisational structure. Mandatory Part 1.0
Outcome and program structure. Mandatory Part 1.0
Where outcome and program structures differ from PB Statements/PAES or other portfolio statements accompanying any other additional appropriation bills (other portfolio statements), details of variation and reasons for change.
Mandatory Not
applicable
Portfolio structure. Portfolio
departments - mandatory
Part 1.0
450 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 451
LIST OF REQUIREMENTS
LIST OF REQUIREMENTS PART OF REPORT DESCRIPTION REQUIREMENT LOCATION
Letter of transmittal. Mandatory Page ix
Table of contents. Mandatory Page vii
Index. Mandatory Page 208, 454
Glossary. Mandatory Page 203
Contact officer(s). Mandatory v, 230
Internet home page address and Internet address for report. Mandatory v, 230
Review by Secretary
Review by departmental secretary. Mandatory Page 1
Summary of significant issues and developments. Suggested Page 1
Outlook for following year. Suggested Page 1
Significant issues and developments - portfolio. Portfolio departments - suggested
Page 1
Chief Financial Officer’s Report Overview of department’s performance and financial results.
Suggested Page 7, 277
Departmental Overview Role and functions. Mandatory Part 1.0
Organisational structure. Mandatory Part 1.0
Outcome and program structure. Mandatory Part 1.0
Where outcome and program structures differ from PB Statements/PAES or other portfolio statements accompanying any other additional appropriation bills (other portfolio statements), details of variation and reasons for change.
Mandatory Not
applicable
Portfolio structure. Portfolio
departments - mandatory
Part 1.0
PART OF REPORT DESCRIPTION REQUIREMENT LOCATION
Report on Performance
Review of performance during the year in relation to programs and contribution to outcomes. Mandatory Part 2.1
Actual performance in relation to deliverables and KPIs set out in PB Statements/PAES or other portfolio statements.
Mandatory Part 2.1
Where performance targets differ from the PBS/ PAES, details of both former and new targets, and reasons for the change.
Mandatory Part 2.1
Narrative discussion and analysis of performance. Mandatory Part 2.1
Trend information. Mandatory Part 2.1
Significant changes in nature of principal functions/ services. Suggested Not
applicable
Performance of purchaser/ provider arrangements.
If applicable, suggested
Not
applicable
Factors, events or trends influencing departmental performance. Suggested Part 2.1
Contribution of risk management in achieving objectives. Suggested Part 3.1
Social inclusion outcomes. If applicable,
mandatory
Part 3.8
Performance against service charter customer service standards, complaints data, and the department’s response to complaints.
If applicable, mandatory
Not
applicable
Discussion and analysis of the department’s financial performance. Mandatory Page 7, 277
Discussion of any significant changes from the prior year, from budget or anticipated to have a significant impact on future operations.
Mandatory Part 1.0
Part 4.1
Agency resource statement and summary resource tables by outcomes. Mandatory Part 2.1
Part 2.2
Management and Accountability
Corporate Governance
Agency heads are required to certify that their agency complies with the Commonwealth Fraud Control Guidelines.
Mandatory Part 3.1
Statement of the main corporate governance practices in place. Mandatory Part 3.1
Names of the senior executive and their responsibilities. Suggested Part 1.0
Senior management committees and their roles. Suggested Part 3.1
Corporate and operational planning and associated performance reporting and review. Suggested Part 3.1
Approach adopted to identifying areas of significant financial or operational risk. Suggested Part 3.1
Policy and practices on the establishment and maintenance of appropriate ethical standards. Suggested Part 3.4
How nature and amount of remuneration for SES officers is determined. Suggested Part 3.4
452 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
LIST OF REQUIREMENTS
PART OF REPORT DESCRIPTION REQUIREMENT LOCATION
External Scrutiny Significant developments in external scrutiny. Mandatory Part 3.2
Judicial decisions and decisions of administrative tribunals. Mandatory Part 3.2
Reports by the Auditor-General, a Parliamentary Committee or the Commonwealth Ombudsman. Mandatory Part 3.2
Management of Human Resources
Assessment of effectiveness in managing and developing human resources to achieve departmental objectives.
Mandatory Part 3.4
Workforce planning, staff turnover and retention. Suggested Part 3.4
Impact and features of enterprise or collective agreements, individual flexibility arrangements (IFAs), determinations, common law contracts and Australian Workplace Agreements (AWAs).
Suggested Part 3.4
Training and development undertaken and its impact. Suggested Part 3.4
Work health and safety performance. Suggested Part 3.6
Productivity gains. Suggested Part 3.4
Statistics on staffing. Mandatory Part 3.5
Enterprise or collective agreements, IFAs, determinations, common law contracts and AWAs. Mandatory Part 3.4 Part 3.5
Performance pay. Mandatory Part 3.4
Part 3.5
Assets management
Assessment of effectiveness of assets management. If applicable, mandatory
Part 3.3
Purchasing Assessment of purchasing against core policies and principles. Mandatory Part 3.3
Consultants The annual report must include a summary statement detailing the number of new consultancy services contracts let during the year; the total actual expenditure on all new consultancy contracts let during the year (inclusive of GST); the number of ongoing consultancy contracts that were active in the reporting year; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST). The annual report must include a statement noting that information on contracts and consultancies is available through the AusTender website.
Mandatory Part 3.3
Australian National Audit Office Access Clauses
Absence of provisions in contracts allowing access by the Auditor-General. Mandatory Part 3.3
Exempt contracts
Contracts exempt from the AusTender. Mandatory Part 3.3
Financial Statements
Financial Statements. Mandatory Part 4.1
Part 4.2
452 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 453
LIST OF REQUIREMENTS
PART OF REPORT DESCRIPTION REQUIREMENT LOCATION
Other Information Work health and safety (Schedule 2, Part 4 of the Work Health and Safety Act 2011). Mandatory Part 3.6
Advertising and Market Research (Section 311A of the Commonwealth Electoral Act 1918) and statement on advertising campaigns.
Mandatory Part 3.10
Ecologically sustainable development and environmental performance (Section 516A of the Environment Protection and Biodiversity Conservation Act 1999).
Mandatory Part 3.9
Compliance with the agency’s obligations under the Carer Recognition Act 2010 If applicable, mandatory
Part 3.7
Number, nature and action taken in response of any contraventions of the Tobacco Plain Packaging Act 2011
If applicable, mandatory Part 3.2
Other Grant programs. Mandatory Part 3.3
Disability reporting - explicit and transparent reference to agency level information available through other reporting mechanisms.
Mandatory Part 3.7
Information Publication Scheme statement Mandatory Part 3.2
Spatial reporting - expenditure by program between regional and non-regional Australia If applicable, mandatory
Part 3.3
Correction of material errors in previous annual report. If applicable, mandatory
Not
applicable
List of Requirements. Mandatory Page 450
454 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
INDEX
INDEX Aboriginal and Torres Strait Islander Cultural Awareness Training 233, 271-274 Administration of Commonwealth Responsibilities under the National Partnership Agreement on Preventive Health audit 236-237
Administration of Government Advertising Arrangements: August 2011 to March 2013: 237 Administration of the GP Super Clinics Program audit 237 Administrative Appeals Tribunals 239 Aged Care Complaints Scheme 236 Agency Multicultural Plan 263 Anatomical Therapeutic Chemical Groups 445-447 APS Bargaining Framework 246 APS Code of Conduct 249 APS Values 249 Attracting More People to Work in Indigenous Health campaign 271 Audit and Fraud Control Branch 234-236 Audit Committee 232, 281 Audit Work Plan 234
Australian Government Cost Recovery Guidelines 438-439 Australian Health Survey 236 Australian Information Commissioner 240 Australian National Audit Office 232, 236, 242-243, 281 Australian National Preventive Health Agency 236 Australian Public Service... see APS... Australian Workplace Agreements 246
Barbeler, John 281 Brand Premium Policy 447 breastfeeding, support for 261 Budget and Forecasting Improvement project 233 Business Continuity Plan 233
Capability Development Strategy 245 Capability Needs Analysis 247 Care Aware Workplaces 261 carer recognition 261-263 Carers Week 261 Certificate of Compliance 241 children, mortality rates 264-265
Comcover - Better Practice Guide: Risk Management 235 common law employment contracts 246 Commonwealth Disability Strategy 263 Commonwealth Grant Guidelines 237 Commonwealth Ombudsman 236, 240
Commonwealth Procurement Guidelines 242 Confidentiality in Government Contracts: Senate Order for Departmental and Agency Contracts 237 consultants 242 contact information 230
454 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 455
INDEX
Control of Credit Card Agencies’ Implementation of Performance Audit Recommendations 237 Control of Credit Card Use audit 237 copyright statements 230 corporate governance 232-235 Corporate Leadership Council 248 Critical Role Skills Development Framework 245 cross agency audits 237
Data Governance Council 234 Departmental Activity Survey 233 departmental structure, staff numbers and 251-252 development 247-248 disability, addressing 233, 261-263 Disaster Recovery Plan 233 Disclosure Log 240 DNA 246 DoHA National Alignment 246 Drug Utilisation Sub-Committee 439
Earth Hour 2013: 269 Ecologically Sustainable Development 268-270 Economics Sub-Committee 439, 444 Employee Assistance Program 262 Employment Principles 249 energy consumption 269 Enterprise Agreements 246, 253, 259, 261 Enterprise Risk Management Plan 235 Environmental Management System 268 ethical standards 249 Executive Committee 232 exempt contracts 243 expenses 277, 279 external liaison and scrutiny 236-240
Finance, Risk and Security Committee 233, 235, 241 financial management 241-244 Financial Performance 277-280 Financial Statements 281-435 Financial Statements Sub-Committee 281 Freedom of Information 240
gender, staff numbers by 251 Gene Technology Regulator 268 GP Super Clinics Program audit 237 Graduate Development Program 248 grants awarded by Department 242 Halton, Jane 235,
281
Health and Life Strategy 259 Home Care Packages Program 262 How Australia Is Faring report 263 human resource policies 261-262
456 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
INDEX
ICT Sustainability Plan 269 Improving Wellness and Motivation in the Workplace program 259, 261 Indigenous Australians, closing gap with 264-266 Indigenous Pathways Programs 248 Individual Flexibility Arrangements 247, 252-253 Information, Knowledge and Technology Committee 234 Information and Communications Technology Program 248 Information and Communications Technology Workforce Plan 245 Information Publication Scheme 240 internal audit arrangements 234-235 Internal Audit Work Plan 232 investigations 260 IT Strategy 234
Joint Committee of Public Accounts and Audit 239 judicial decisions 239
Key Business Process Reform 280
Leadership Insight Groups 248 learning and development 247-248 List of Requirements 450-453
Living Longer Living Better aged care reforms 262
Managing Aged Care Complaints audit 236 market research 271-274 McPhee, Ian 281
Medicare for All campaign 271 Mental Health Services, use of 266-267 Middle Managers’ Development Program 233, 248 mortality rates, as indicator 264-265 My Aged Care website 262
National Ageing and Aged Care Strategy for People from Culturally and Linguistically Diverse Backgrounds 262 National Australian Built Environmental Rating System 269 National Carer Awareness Initiative 261 National Carer Strategy 262 National Disability Strategy 263
National Health Act 1953: 438-440 National Immunisation Program 439, 443 National Lesbian, Gay, Bisexual, Transgender and Intersex Ageing and Aged Care Strategy 262 National Partnership Agreement on Preventive Health 236 National Tobacco Campaign 271 non-salary benefits 257 notifiable incidents 260
obesity, indicators of 265 Office of the Gene Technology Regulator 268 Optimising Performance initiative 246
456 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2 457
INDEX
parliamentary scrutiny 237-240 People Capability Framework 245-246 People Committee 233 people deferring recommended treatment 266 people management 245-249 People Strategy Action Plan 233, 248 Performance Development Scheme 245, 247 performance pay arrangements 247, 258 Pharmaceutical Benefits Scheme
cost of 447 Pharmaceutical Benefits Advisory Committee 438-443 Pharmaceutical Benefits Pricing Authority 439, 443-449 Pharmaceutical Evaluation Branch 444 processes leading to consideration for 438-442 Policy Advisory Group 233 potentially preventable hospitalisations 266 productivity gains 248-249 purchasing 242
recommended treatment, people deferring 266 Rehabilitation Management System 260 remuneration non-salary benefits 257
performance pay arrangements 247, 258 salary structures 254-256 Senior Executive Staff 246-247, 252, 257 Repatriation Pharmaceutical Benefits Scheme 446 resource efficiency 269-270 Risk Management Framework 233-235 Risk Management Improvement Roadmap 233
Safety, Rehabilitation and Compensation Act 1988: 259 salary structures 254-256 Senate Committees 238 Senior Executive Staff
non-salary benefits 257 working conditions and remuneration 246-247, 252 smoking, indicators of 265 social inclusion, indicators of 263-264 Socio-Economic Indexes for Areas 264 spatial reporting 244 Special Patient Contributions 447-448 staff retention 245 Staff Survey 245, 248-249 staffing information 250-258 Standing Committees 239 State and Territory, staff numbers by 252 Statement for Australia’s Carers 261 strategic change indicators of social inclusion 264-267 strategic risk assessment 235 sustainability 280
458 DEPARTMENT OF HEALTH AND AGEING ANNUAL REPORT 2O12-2O13 VOLUME 2
INDEX
Talent Management Strategy 245 Therapeutic Group Premium Policy 447 therapeutic relativities 445 Tobacco Plain Packaging Act 2011: 239-240 tobacco use, indicators of 265 turnover 245
vehicle fleet 270 Victorian Health Funding advertising campaign 271
Walton Review 236 waste management 269-270 water conservation 270 websites 230 work health and safety 259-260 workers’ compensation claim rate 260 Workforce Diversity Plan 233 workforce planning 245 workplace agreements 246
