NATIONAL HEALTH FUNDING BODY FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

FINANCIAL STATEMENT CONTENTS

  • Independent auditor’s report
  • Statement by the Accountable Authority and Chief Financial Officer
  • Statement of Comprehensive Income
  • Statement of Financial Position
  • Statement of Changes in Equity
  • Cash Flow Statement
  • Notes to and forming part of the Financial Statements

Independent auditor's report

Independent auditor's report

STATEMENT BY THE ACCOUNTABLE AUTHORITY AND CHIEF FINANCIAL OFFICER

In our opinion, the attached financial statements for the year ended 30 June 2017 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.

In our opinion, at the date of this statement, there are reasonable grounds to believe that the National Health Funding Body will be able to pay its debts as and when they fall due.

Signed

Signature of LYNTON NORRIS CHIEF EXECUTIVE OFFICER

LYNTON NORRIS
CHIEF EXECUTIVE OFFICER

22 September 2017

Signed

Signature of KARIN VAN LEEUWEN CHIEF FINANCIAL OFFICER

KARIN VAN LEEUWEN
CHIEF FINANCIAL OFFICER

22 September 2017

National Health Funding Body
Statement of Comprehensive Income
for the year ended 30 June 2017

Notes
2017
$
2016
$
Original Budget
$

NET COST OF SERVICES

EXPENSES

Employee benefits

2A

2,454,756

2,044,593

2,322,000

Suppliers

2B

2,207,042

2,418,216

2,036,000

Total expenses

4,661,798

4,462,809

4,358,000

OWN–SOURCE INCOME

Own–source revenue

Resources received free of charge

3A

90,000

55,000

51,000

Other

40,248

Total own–source revenue

90,000

95,248

51,000

Gains

Other

Total gains

Total own–source income

90,000

95,248

51,000

Net cost of services

4,571,798

4,367,561

4,307,000

Revenue from Government

3B

4,307,000

4,314,000

4,307,000

(Deficit) attributable to the Australian Government

(264,798)

(53,561)

OTHER COMPREHENSIVE INCOME

Total comprehensive (loss) attributable to the Australian Government

(264,798)

(53,561)

The above statement should be read in conjunction with accompanying notes.

National Health Funding Body
Statement of Comprehensive Income
for the year ended 30 June 2017

National Health Funding Body Statement of Comprehensive Income for the year ended 30 June 2017
Notes
2017
$
2016
$
Original Budget
$

ASSETS

Financial Assets

Cash and cash equivalents

4A

25,444

25,000

12,000

Trade and other receivables

4B

1,451,341

1,971,776

1,689,000

Total financial assets

1,476,785

1,996,776

1,701,000

Non–Financial Assets

Internally developed intangible asset — WIP at cost

5A

167,759

Total non–financial assets

167,759

Total assets

1,644,544

1,996,776

1,701,000

LIABILITIES

Payables

Suppliers

6A

243,203

505,531

261,000

Other payables

6B

18,177

53,973

54,000

Total payables

261,380

559,504

315,000

Provisions

Employee provisions

7A

595,020

384,330

411,000

Total provisions

595,020

384,330

411,000

Total liabilities

856,400

943,834

726,000

Net assets

788,144

1,052,942

975,000

EQUITY

Retained surplus

788,144

1,052,942

975,000

Total equity

788,144

1,052,942

975,000

The above statement should be read in conjunction with accompanying notes.

National Health Funding Body Statement of Financial Position for the year ended 30 June 2017

National Health Funding Body Statement of Financial Position for the year ended 30 June 2017
Retained earnings
Original Budget
$
Contributed equity/capital
Original Budget
$
Total equity
Original Budget
$
2017
$
2016
$
2017
$
2016
$
2017
$
2016
$

Opening balance

Balance carried forward from previous period

1,052,942

1,106,503

975,000

1,052,942

1,106,503

975,000

Adjusted opening balance

1,052,942

1,106,503

975,000

1,052,942

1,106,503

975,000

Comprehensive income

(Deficit) for the period

(264,798)

(53,561)

(264,798)

(53,561)

Total comprehensive income

(264,798)

(53,561)

(264,798)

(53,561)

Closing balance as at 30 June

788,144

1,052,942

975,000

788,144

1,052,942

975,000

Closing balance attributable to the Australian Government

788,144

1,052,942

975,000

788,144

1,052,942

975,000

The above statement should be read in conjunction with the corresponding notes.

National Health Funding Body
Statement of Changes in Equity
for the year ended 30 June 2017

National Health Funding Body Statement of Changes in Equity for the year ended 30 June 2017
Notes
2017
$
2016
$
Original Budget
$

OPERATING ACTIVITIES

Cash received

Appropriations

4,856,487

3,662,581

4,137,000

Sale of goods and rendering of services

150,000

110,000

Net GST received

175,223

215,935

152,000

Other

83,860

346,973

Total cash received

5,115,570

4,375,489

4,399,000

Cash used

Employees

2,234,978

2,006,026

2,362,000

Suppliers

2,453,306

1,859,490

1,885,000

Section 74 receipts transferred to OPA

259,083

496,973

152,000

Total cash used

4,947,367

4,362,489

4,399,000

Net cash from operating activities

168,203

13,000

INVESTING ACTIVITIES

Cash used

Purchase of intangibles

167,759

Total cash used

167,759

Net cash used by investing activities

(167,759)

Net increase in cash held

444

13,000

Cash and cash equivalents at the beginning of the reporting period

25,000

12,000

12,000

Cash and cash equivalents at the end of the reporting period

4A

25,444

25,000

12,000

The above statement should be read in conjunction with the accompanying notes.

National Health Funding Body Cash Flow Statement for the year ended 30 June 2017

TABLE OF CONTENTS — NOTES

NOTE 1: OVERVIEW

1.1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements are general purpose financial statements and are required by s. 42 of the Public Governance, Performance and Accountability Act 2013. The financial statements have been prepared in accordance with:

  1. Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2015; and
  2. Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements 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 in accordance with the historical cost convention. 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.

1.2. NEW AUSTRALIAN ACCOUNTING STANDARDS

The NHFB adopted AASB 124 Related Party Disclosures for the first time in 2016–17. There is no financial impact on the NHFB following this adoption.

No accounting standard has been adopted earlier than the application date as stated in the standard.

Other new standards, revised standards, interpretations and amending standards that were issued prior to the sign–off date and are applicable to the current reporting period did not have a material financial impact, and are not expected to have a future material financial impact on NHFB.

1.3. TAXATION

NHFB is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

1.4. EVENTS AFTER THE REPORTING PERIOD

There are no events after the reporting period affecting the financial statements.

NOTE 2: EXPENSES

2017
$
2016
$

NOTE 2A: EMPLOYEE BENEFITS

Wages and salaries

1,637,899

1,358,651

Superannuation

Defined contribution plans

215,526

178,517

Defined benefit plans

106,582

87,709

Leave and other entitlements

494,749

419,716

Total employee benefits

2,454,756

2,044,593

ACCOUNTING POLICY
The accounting policy for employee benefits is in note 7.

NOTE 2B: SUPPLIERS

GOODS AND SERVICES SUPPLIED OR RENDERED

Consumables, printing, recruitment and training

48,624

115,418

Contractors

1,612,555

1,863,433

Information technology and communications

66,490

88,852

Professional fees

126,127

60,771

Property and utilities

19,548

15,540

Travel

77,775

105,825

Other

14,500

21,959

Total goods and services supplied or rendered

1,965,619

2,271,798

OTHER SUPPLIERS

Operating lease rentals in connection with

Minimum lease payments

209,367

126,056

Workers compensation expenses

32,056

20,362

Total other supplier expenses

241,423

146,418

TOTAL SUPPLIER EXPENSES

2,207,042

2,418,216

Leasing Commitments
The NHFB in its capacity as sub–lessee has entered the following non–cancellable lease:

Lease for office accommodation

The NHFB has one current accommodation sub–lease in the ACT. The sub–lease commenced on 1 October 2016 for a period of 3 years and is for the NHFB’s present accommodation in the ACT.

There is an option to extend for a further 2 by 2 year periods and any increases in rent will be at a rate commensurate with CPI.

Commitments for minimum lease payments in relation to
non–cancellable operating leases are payable:

Within 1 year

206,189

54,725

Between 1 to 5 years

257,736

Total operating lease commitments

463,925

54,725

Accounting Policy

Operating lease payments are expensed on a straight–line basis, which is representative of the pattern of benefits derived from the leased assets.

Settlement terms for suppliers

All payables are expected to be settled within 30 days.

NOTE 3: INCOME

2017
$
2016
$

Own–Source Revenue

NOTE 3A: RESOURCES RECEIVED FREE OF CHARGE

Remuneration of auditors

90,000

55,000

Total resources received free of charge

90,000

55,000

ACCOUNTING POLICY

Resources received free of charge

Resources received free of charge are recognised as revenue when the fair value can be reliably measured at the time of service 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.

NOTE 3B: REVENUE FROM GOVERNMENT

Appropriations

Departmental appropriations

4,307,000

4,314,000

Total revenue from Government

4,307,000

4,314,000

ACCOUNTING POLICY

Revenues 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 NHFB 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.

NOTE 4: FINANCIAL ASSETS

2017
$
2016
$

NOTE 4A: CASH AND CASH EQUIVALENTS

Cash on hand or on deposit

25,444

25,000

Total cash and cash equivalents

25,444

25,000

ACCOUNTING POLICY

Cash and Cash Equivalents

Cash is recognised at its nominal amount. Cash and cash equivalents includes:

  1. cash on hand; and
  2. demand deposits in bank accounts with original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

NOTE 4B: TRADE AND OTHER RECEIVABLES

Good and Services receivables in connection with

Goods and services

18,249

Total goods and services receivables

18,249

Appropriations receivable

For existing program

1,414,434

1,963,921

Total appropriations receivable

1,414,434

1,963,921

Other receivables

GST receivable from the Australian Taxation Office

18,658

7,855

Total other receivables

18,658

7,855

Total trade and other receivables (gross)

1,451,341

1,971,776

Less impairment allowance

Goods and services

Total impairment allowance

Total trade and other receivables (net)

1,451,341

1,971,776

ACCOUNTING POLICY

Trade and Other Receivables

Trade receivables, loans and other receivables that have a fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at their nominal value less impairment. 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.

Impairment of financial assets

Financial assets are assessed for impairment at the end of each reporting period.

NOTE 5: NON–FINANCIAL ASSETS

NOTE 5A: RECONCILIATION OF THE OPENING AND CLOSING BALANCES OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLES*

Computer Software
$
Total
$

As at 1 July 2016

Gross book value

Accumulated depreciation, amortisation and impairment

Total as at 1 July 2016

Additions

Internally developed intangible asset — WIP at cost

167,759

167,759

Total as at 30 June 2017

167,759

167,759

Total as at 30 June 2017 represented by

Gross book value

167,759

167,759

Accumulated depreciation, amortisation and impairment

Total as at 30 June 2017

167,759

167,759

* NHFB has not capitalised any property, plant and equipment as all assets were provided under agreement with the Department of Health.

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.

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000 (excluding GST), which 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.

Intangibles

The NHFB’s intangibles comprise internally developed software which have a threshold of $100,000. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Work in progress

All assets not fully constructed at 30 June 2017 are recorded as work in progress and are valued at cost. Depreciation or amortisation will not commence until the project has been completed to a stage where it can provide service to the department.

Depreciation

Depreciable property, plant and equipment assets are written‐off to their estimated residual values over their estimated useful lives to the department using the straight‐line method of depreciation.

Software and other intangible assets are amortised on a straight‐line basis over its anticipated useful life. Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date. Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2017
2016

Intangible asset

2–3 years

N/A

NOTE 6: PAYABLES

2017
$
2016
$

NOTE 6A: SUPPLIERS

Trade creditors and accruals

243,203

505,531

Total supplier payables

243,203

505,531

Suppliers expected to be settled within 12 months

Related entities1

59,602

262,079

External parties

183,601

243,452

Total

243,203

505,531

Settlement was usually made within 30 days.

NOTE 6B: OTHER PAYABLES

Wages and salaries

15,595

8,672

Superannuation

2,582

958

Leave provisions payable

44,343

Total other payables

18,177

53,973

1 For the years ended 30 June 2017 and 30 June 2016, this amount relates to payables to the Department of Health under a shared services arrangement and some small payables to other Commonwealth government agencies.

Accounting Policy

Financial liabilities are recognised and derecognised upon ‘trade date’. The NHFB’s financial liabilities are measured at nominal amounts. No fair value measurement disclosures are required.

NOTE 7: PROVISIONS

2017
$
2016
$

NOTE 7A: EMPLOYEE PROVISIONS

Leave

595,020

384,330

Total employee provisions

595,020

384,330

Accounting policy

Liabilities for ‘short–term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits expected 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 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 provision 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 NHFB 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 NHFB’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for the long service leave has been determined by our best estimates based on the NHFB staff profile. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Superannuation

Staff of the NHFB are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or employee nominated superannuation funds.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and employee nominated 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 by the Department of Finance’s administered schedules and notes.

The NHFB 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 NHFB 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 final fortnight of the year.

NOTE 8: CONTINGENT ASSETS AND LIABILITIES

Quantifiable Contingencies

at 30 June 2017, the NHFB had no quantifiable contingencies.

Unquantifiable Contingencies

at 30 June 2013, the NHFB had entered into an arrangement for an indemnity with the New South Wales Health Administration Council (HAC). No change has occurred during 2013–14, 2014–15, 2015–16 and remains current as of 30 June 2017.

The HAC is a statutory body whose functions include entering into contracts to support the functions of the NSW Minister for Health. HAC has a banking contract for its Pool accounts with the RBA. HAC has provided the RBA with an indemnity that places obligations upon HAC to accept risks on persons not in its direct control, being the staff of the NHFB. The HAC has in turn sought a ‘back to back’ indemnity from the Commonwealth. The indemnity is limited to cover the actions of NHFB staff in their capacity as users of Pool account information.

The most probable cost of the indemnity if called upon would be over $20,000,000 (inclusive of GST).

A risk assessment has been undertaken in accordance with the Department of Finance’s Guidelines for Issuing and Managing Indemnities, Guarantees, Warranties and Letters of Comfort. The contingent liability includes risks which are assessed as being significant or non–remote. The NHFB will make every effort to limit the risk to the Commonwealth under the arrangement through the adoption and implementation of appropriate risk management procedures.

Under the National Health Reform Agreement (NHRA), each of the States agreed to open a Reserve Bank of Australia (RBA) account (a ‘State pool account’) for the purpose of receiving all Commonwealth and activity–based State public hospital funding. The Administrator of the National Health Funding Pool (the Administrator) is responsible for making payments from each State pool account, at the direction of each State Health Minister. This process is supported by the NHFB.

Significant Remote Contingencies

As at 30 June 2017, the NHFB had no significant remote contingencies. (2016: Nil)

Contingent Assets and Liabilities

As at 30 June 2017, the NHFB did not have any contingency assets or liabilities (2016: Nil).

Accounting Policy

Contingent assets and liabilities are not recognised in the balance sheet but are reported in this note. They may arise from uncertainty as to the existence of an asset or liability, 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.

NOTE 9: KEY MANAGEMENT PERSONNEL REMUNERATION

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the ANAO, directly or indirectly. The NHFB has determined the key management personnel to be the CEO and the Administrator.

2017
$
2016
$

Short–term employee benefits

Salary

307,355

304,527

Other

67,149

50,117

Total short–term employee benefits

374,504

354,644

Post–employment benefits

Superannuation

50,232

45,613

Total post–employment benefits

50,232

45,613

Other long–term benefits

Annual leave

24,285

21,665

Long–service leave

10,947

10,427

Total other long–term benefits

35,232

32,092

Total employment benefits

459,968

432,349

Notes
The total number of key management personnel that are included in the above table is three (2016: 2).
The number of key management personnel includes one officer with a period of acting in excess of 4 weeks.

NOTE 10: RELATED PARTY DISCLOSURES

Related parties for the NHFB are the Key Management Personnel, the Portfolio Minsters, and other Australian Government entities. Significant transactions with related entities include the purchase of goods and services and payments in relation to a Memorandum of Understanding for shared services.

No payments were made outside of the normal course of business.

There are no related party transactions by Ministers requiring disclosure.

NOTE 11: FINANCIAL INSTRUMENTS

2017
$
2016
$

Note 11A: Categories of Financial Instruments

Financial Assets

Loans and Receivables

Cash and Equivalents

25,444

25,000

Trade and other receivables

18,249

Total

43,693

25,000

Carrying amount of financial assets

43,693

25,000

Financial Liabilities

At amortised cost:

Trade creditors and accruals

243,203

505,531

Total

243,203

505,531

Carrying amount of financial liabilities

243,203

505,531

Note 11B: Net Income and Expense from Financial Assets

There is no income or expense from financial assets in 2016–17. (2015–16: Nil)

Note 11C: Net Income and Expense from Financial Liabilities

There is no net income or expense from financial liabilities in 2016–17. (2015–16: Nil)

Note 11D: Fair Value of Financial Instruments

The fair value of all financial assets and liabilities equals its carrying amount in 2016–17 and 2015–16.

ACCOUNTING POLICY

The NHFB 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 of initial recognition. Financial assets are recognised and derecognised upon trade date.

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quin an active market are classified as ‘loans and receivables’. Loans and receivables are measured at their nominal vless impairment.

Effective Interest Method

Income is recognised on an effective interest rate basis.

Impairment of financial assets

Financial assets are assessed for impairment at the end of each reporting period.

Financial liabilities

NHFB classifies its financial liabilities as other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

NOTE 12: FINANCIAL ASSETS RECONCILIATION

Notes
2017
$
2016
$

Financial assets

Total financial assets as per balance sheet

1,476,785

1,996,776

Less: non–financial instrument components:

Appropriations receivable

4B

1,414,434

1,963,921

GST Receivable from the Australian Taxation Office

4B

18,658

7,855

Total non–financial instrument components

1,433,092

1,971,776

Total financial assets as per financial instruments note

43,693

25,000

NOTE 13: APPROPRIATIONS

NOTE 13A: ANNUAL APPROPRIATIONS (RECOVERABLE GST EXCLUSIVE)

ANNUAL APPROPRIATION FOR 2017

ANNUAL APPROPRIATION FOR 2017
Annual Appropriation
$
Section 74
$
Total appropriation
$
Appropriation applied in 2017 (current and prior years)
$
Variance1
$
Section 51 determination
$

DEPARTMENTAL

Ordinary annual services

4,307,000

259,083

4,566,083

(4,856,488)

(290,405)

Total departmental

4,307,000

259,083

4,566,083

(4,856,488)

(290,405)

ANNUAL APPROPRIATION FOR 2016

ANNUAL APPROPRIATION FOR 2016
Annual Appropriation
$
Section 74
$
Total appropriation
$
Appropriation applied in 2016 (current and prior years)
$
Variance2
$
Section 51 determination
$

DEPARTMENTAL

Ordinary annual services

4,315,000

496,973

4,811,973

(4,375,488)

436,485

1,000

Total departmental

4,315,000

496,973

4,811,973

(4,375,488)

436,485

1,000

1 The variance of $290,405 is due to the NHFB drawing down on its prior year appropriation during 2016–17 to pay its 2015–16 trade creditors and accruals.

2 The variance of $436,485 is due to the NHFB drawing down on its prior year appropriation during 2015–16 to pay its 2014–15 trade creditors and accruals.

TABLE B: DEPARTMENTAL AND ADMINISTERED CAPITAL BUDGETS (RECOVERABLE GST EXCLUSIVE)

There was no Departmental Capital Budget appropriated to the NHFB in 2016–17 (2015–16: nil)

TABLE C: UNSPENT ANNUAL APPROPRIATIONS (RECOVERABLE GST EXCLUSIVE)

TABLE C: UNSPENT ANNUAL APPROPRIATIONS (RECOVERABLE GST EXCLUSIVE)
Authority
2017
$
2016
$

DEPARTMENTAL

Appropriation Act (No 1) 2016–17

135,141

Appropriation Act (No 1) 2015–16

1,279,293

1,963,921

Cash at Bank

25,444

25,000

Total

1,439,878

1,988,921

NOTE 14: BUDGETARY REPORTING — EXPLANATION OF MAJOR VARIANCES

The main variance for NHFB in 2016–17 between the original budget published in the 2016–17 Portfolio Budget Statements (PBS) and the actual results was an increase in suppliers expenses in the Statement of Comprehensive Income (9%). The increase was due to activity associated with implementation of the Addendum to the National Health Reform Agreement at the request of Government. Accordingly, the Department of Finance had approved a loss of $500,000. The eventual loss was reduced because the NHFB capitalised a large component of work in the redevelopment of the Commonwealth Contribution Model (a financial model that enables the Administrator to accurately calculate the Commonwealth funding contribution to local hospital networks). A detailed capitalisation policy was developed and this was applied to capture all costs and support the amount to be capitalised. The reported loss for the period is $264,798.

The Statement of Financial Position has the following variances:

  • Trade and other receivables is lower than budgeted reflecting the loss for the year, i.e. drawing down unused funds from prior year appropriations.
  • Under non–financial assets, internally generated software of $167,759 has been reported for the first time as work–in–progress. This amount is also reflected in cash used for investing activities in the Cash Flow Statement.
  • A reduction in other payables as at 30 June 2017 as there was no leave provision payable.
  • An increase in employee leave provisions mainly due to the increase in salaries, staff accruing more leave and new staff commencing in NHFB (this does not impact on expenses as leave was transferred from other government entities).