2019/2020

ANNUAL REPORT

Last Updated: 16.11.2020

CONTENTS

Vision, Values, Manner of Establishment, Responsible Ministers 2 Range of Services 2 Board President and Chief Executive Officer Report 3-7 Director of Clinical Services Report 8-10 Organisational Structure 11 Board of Directors and Sub-committee Membership 12 Executive Management, Workforce Data and Employment & Conduct Principles 13 Occupational Health & Safety and Occupational Violence Statistics 14 Consultancies and Disclosures 15-16 Environmental reporting 16 Statement of Priorities 17-21 Performance Priorities, High Quality and Safe Care 22 Strong Governance, Leadership and Culture, Financial results 23 Financial Summary 24 Attestations 25-26 Disclosure Index 27 Additional Information 28

Appendix: Annual Financial Statements for the year ending 30 June 2020

Front cover photo: Mosaic Masterpiece coordinated by the Kerang District Health Partnering with Consumer’s Committee. Panels created by the following groups: Kerang Girl Guides, Kerang Christian College, NDCH - Tyipen Kwe, Kerang Men’s Shed, MDAS Kerang, Kerang Rotary, Dingwall Community Group and Kerang District Health VISION

Kerang District Health seeks to improve the health and wellbeing of the community.

VALUES

CARING: We will be person centered, show compassion and empathy

ACCOUNTABILITY: We will be transparent, trustworthy and responsible for our actions

RESPECT: We will embrace and be considerate of the differences between all people

EXCELLENCE: We will be dedicated to every person, every time

MANNER OF ESTABLISHMENT

Kerang District Health is a public hospital listed in Schedule 1 of the Health Services Act 1988. The purpose of this Act is to make provision for the development of health services in Victoria, for the carrying on of hospitals, nursing homes and other health care agencies and related matters.

The health service reports to the Department of Health and Human Services, through its Loddon Mallee Regional Office located in Bendigo.

RESPONSIBLE MINISTER

The responsible Minister for the 2019-20 period was Jenny Mikakos, MP (Minister for Health, Minister for Ambulance Services)

RANGE OF SERVICES

Kerang District Health is a small rural health service providing an integrated range of acute, sub- acute, residential aged care and community services to a population of approximately 8,000 people in the Gannawarra Shire.

The health services delivers the following acute health services within its main hospital building; acute medical services, transitional care, palliative care, oncology, an urgent care centre and an operating theatre which offers elective surgery for general surgery, gynaecology, urology and dental surgery.

Residential aged care services are provided to 30 residents in “Glenarm” our residential aged care home and our community services include district nursing, planned activity groups both centre based and mobile, an adult exercise group and a men’s shed.

The health service owns and operates one of the two GP Clinics in Kerang with five GP’s currently consulting at the clinic in Patchell Plaza, Victoria Street, Kerang.

Pathology and radiology services are provided on site by “Australian Clinical Labs” and “Bendigo Radiology” along with a number of visiting allied health professionals. BOARD PRESIDENT AND CHIEF EXECUTIVE OFFICER REPORT

We have much pleasure in providing this President and Chief Executive Officer’s report, the organisations 69th for the year ending 30 June 2020.

Strategic Planning

In September 2019 a joint tender was prepared and advertised with Swan Hill District Health for a consultant to work with both health services in the development of their next strategic plan. In November 2019 following an assessment and selection process Claire Edwards of B.School4Change was appointed to complete this task.

Throughout February and March 2020 Claire held a number of community and staff forums and also attended a Pop-Up Day organised by our Partnering with Consumers Committee in the main street of Kerang.

The arrival of COVID-19 in late March 2020 had a significant impact on this process however, work re-commenced with the board of directors in recent months and we are currently waiting on the final plan following endorsement by the Department of Health & Human Services.

COVID-19

There is no doubt that 2020 will be remembered as the year COVID-19 arrived in Australia and had a significant impact on the way Australians live and work and the way we as a health service deliver health care.

Restrictions as expected were placed on the movement of staff, inpatients, urgent care patients, residents and clients within the community along with the movement of visitors and the general community when attending the health service. All local, regional and state-wide meetings were held via telephone or video conferencing and this applied to all board meetings and sub-committee meetings.

Training and the importance of our staff being competent and confident in the use of personal protective equipment was essential.

All staff have been very supportive in working with us in dealing with COVID-19 on a daily basis over a lengthy period of time and we thank them for this.

Partnerships

Kerang District Health works with a number of other health services in delivering programs and services to our communities along with sharing clinical and non-clinical staff. Listed below is a list of health services that we work closely with;

Northern District Community Health Cohuna District Hospital Swan Hill District Health Southern Mallee Primary Care Partnership Buloke Loddon & Gannawarra Health Services Executive Network Murray Primary Health Network Loddon Mallee Health Services Partnership Loddon Mallee Health Network Murray Health Partnership Loddon Mallee Rural Health Alliance

Accreditation

Kerang District Health is accredited by The Australian Council on Healthcare (ACHS) under the National Safety and Quality Health Service Standards until November 2020. Re-accreditation of the health service was scheduled for June 2020, however, due to the current pandemic, all re- accreditation surveys have been suspended until further notice.

The primary aims of the National Safety and Quality Health Service Standards (NSQHS) are to protect the public from harm and to improve the quality of health service provision. The eight NSQHS Standards provide a nationally consistent statement about the level of care consumers can expect from health services, enabling Kerang District Health to self-monitor against the NSQHS standards and identify areas for improvement.

In July 2019, the new Aged Care Quality Standards were introduced for all residential aged care services and all surveys including re-accreditation will now be unannounced. “Glenarm” our residential aged care home has applied for re-accreditation and are awaiting a re-accreditation audit. Glenarm Nursing Home is accredited until March 2021.

The Kerang District Health district nursing and community services and our transitional care program (TCP) will undergo a Quality Review during the NSQHS audit. The last review of district and community services and TCP was undertaken in June 2017.

Partnering with Consumers Committee

The Partnering with Consumers Committee continues to meet monthly and has been actively involved in several projects over the last 12 months. The committee has focused on getting the right communication out to our community in a format that enables the community to understand.

The committee conducted a very successful “Pop Up” stall in the main street, to promote the services available at Kerang District Health and enable the community to share their knowledge and understanding of what is available. This has assisted Kerang District Health to choose the domains to work on within the Partnering in Healthcare Framework.

The Partnering in healthcare framework gives health services practical strategies to improve healthcare and outcomes for Victorians by better involving patients and their families. We know better health outcomes happen when consumers, the people that support them and communities work together with health workers.

The Partnering in healthcare framework enables Kerang District Health to identify our current strengths and challenges against each domain within the framework, identify areas in need of improvement, and work towards a goal over the coming year. In 2019 – 2020 KDH targeted two areas of the framework: Working Together and Effective Communication to further partner with our consumers. The aim of the framework for Kerang District Health is to involve consumers to deliver care that is safe, person centred and partners with the consumer.

Also during the year our Catering & Domestic Services were required to meet the requirements of a Food Safety Audit and a Cleaning Audit.

On behalf of the Board of Directors we would like to express our appreciation of the valuable contribution by management and staff in contributing to the quality improvement process at Kerang District Health and the work of Karen Transton our Quality Improvement Co-ordinator.

Partnering with Consumers Committee

During the past twelve months under the guidance of Karen Transton, our Quality Improvement Co- ordinator the Partnering with Consumers Committee and the Glenarm Consumer Committee continued to meet when possible. Kerang District Health currently has a consumer representative on the Board of Directors, the Management Quality & Risk Committee, the Infection Control Committee and the Kerang Medical Clinic Management Committee.

Building & Equipment Program

As in previous years, the Board of Directors is committed to replacing and maintaining buildings, plant and equipment at Kerang District Health and the following list is an indication of projects over $3,000 funded via government grants and donations;

Solar Panel Project $ 93,087 Air Mattress – Glenarm x 4 $ 8,844 Rear Veranda $ 65,577 Upgrade to Mains Water System $ 8,630 Toyota Kluger $ 49,115 Treadmill - Gym $ 4,500 Toyota Hilux $ 22,496 Air Mattress – Acute x 8 $ 4,428 Heating System –Mens Shed $ 12,600 Computer - KMC $ 4,341 Potwasher - Kitchen $ 10,091 Ziptrack Blinds – Glenarm $ 4,000 Kronos Time Clock x 3 $ 9,705 Upgrade to CCTV System $ 3,474

Donations & Bequests

As in previous years, Kerang District Health continues to receive very valuable financial support from residents and service clubs from the local community and surrounding district.

In 2019/20 $166,626 was received in donations and bequests with major contributions received from the Estate of the late Albert Freemen $50,000, Kerang District Health Ladies Auxiliary $86,000, Kerang Murray to Moyne Committee $12,400, Kerang Masonic Lodge $7,000 (for nursing scholarships), Lake Charm & Mystic Park Lions Club $4,000, Murrabit Lions Club $500, Kangaroo Lake Caravan Park $666 and Mr Allan & Mrs Chris McCallum and Joan Brimacombe.

Ladies Auxiliary

The Ladies Auxiliary under the chairmanship of Mrs Wilma Ellis continue their loyal support to the health service and their donation of $86,000 received by the Board of Directors in December 2019 confirms their dedication and commitment to improving facilities for patients, residents and clients at Kerang District Health. The Rita Hall Opportunity Shop in Fitzroy Street remains their main source of income.

Glenarm Family and Friends

The Glenarm Family and Friends under the chairmanship of Mrs Laney Phillips continue to raise valuable funds for improving facilities for the residents in Glenarm.

Volunteers

A health care organisation such as Kerang District Health cannot function without the dedication, support and commitment it receives from its many volunteers. Volunteers play a valuable role in the day to day operations of our health service in areas such as “Glenarm” our residential aged care home, the WD Thomas Activity Centre the Men’s Shed and the Rita Hall Opportunity Shop.

Visiting Medical Officers

The recruitment and retention of General Practitioners to Kerang remains one of the key strategic issues for Kerang District Health.

In July 2019 Dr Ashraf Takla and Dr Tobi Kupoluyi re-located to Kerang and they along with Dr John Shokry, Dr Kashif Surahio and Dr Megan Belot provide general practitioner services to our local community from the Northern District Community Health Medical Clinic.

Also in July 2019 Dr Harry Van Rensburg left the Kerang Medical Clinic to re-locate to Queensland and in June 2020 Dr Harpreet Pannu and his wife Dr Sam Gill re-located to Western Australia.

The remaining general practitioners consulting at the Kerang Medical Clinic are Dr Erin Hawkey, Dr Ian Murphy and Dr Peter Keppel.

General practitioners provide a vital acute medical and urgent care service to our local community by participating in an on-call roster 24 hours a day, 7 days a week and their dedication and commitment to both the health service and the community cannot be under-estimated.

Executive Managers, Department Heads & Staff

An organisation such as Kerang District Health with an operating budget of just over $15M providing acute care, residential aged care and community services with 160 staff cannot function without the dedication and contribution of its Executive Managers, Department Heads and Staff.

In February 2020 Kellie Byron-Gray was appointed to the position of Director of Clinical Services following the appointment of Chloe Keogh to the identical position at Swan Hill District Health in November 2019. Chloe’s contribution to Kerang District Health during her eight years of employment firstly as Nurse Unit Manager Acute and then as Director of Clinical Services was greatly appreciated and we wish her well in her role in Swan Hill.

We would like to take the opportunity in thanking Dr Craig Winter in his role as Director of Medical Services, Mr Peter Jones, Director of Corporate Services, Department Heads and Staff for their dedication and valuable contribution during 2019/20 and in a period where the lives of our staff have been greatly impacted COVID-19.

During the year the following staff members received service badges at our annual general meeting in November 2019;

10 Years Ashea Bujdoso 15 Years Kerry Callaway Lisa Beet Peter Jones Sharon Gillingham Lana Wishart Terrianne Hastie Jenny Mathews Glenice Hayes Catherine Williams

20 Years Cindy Boyd 25 Years Karyl Hewitt

30 Years Judy Henderson 35 Years Rhonda Helsham Julie Taylor

Congratulations also to Terri McKenzie on receiving the Kerang Masonic Lodge Nursing Scholarship for 2020.

Board of Directors

On 1 July 2019 both Mrs Kyra Laughlin and Mr Trevor Adams did not seek re-appointment to the Board of Directors. Kyra had been a board member since November 2003 and Trevor since February 2008 and both board directors had held positions on the board executive including the position of Board President. We thank them for their very valuable contribution.

New board directors appointed to the board are Oscar Aertssen, Deirdre Broad and Melissa Iskov and they joined remaining board directors Mr John Ginnivan, Ms Kylie Liebmann, Mrs Lauren Edwards, Mrs Melanie Lane and Dr Andrew Jeffreys.

The contribution of Board Directors needs to be acknowledged as they are responsible for providing strategic and policy direction for the health service. They attend community, regional and state-wide meetings and forums along with meetings with the Department of Health and Human Services.

We thank them for their valuable contribution.

Kylie Liebmann Robert Jarman Board President Chief Executive Officer

DIRECTOR OF CLINICAL SERVICES REPORT

Education

KDH continues to employ three graduate registered nurses each year, with rotations through all clinical areas and supported by a clinical mentoring and education program. Placements for undergraduate registered nurses and enrolled nurse students continues to ensure that our clinical workforce retains currency through providing preceptorship to support these students. We are fortunate also to provide clinical placement for the Initial Registration of Overseas Nurses (IRON) program, which enables nurses who have trained overseas to transition into the Australian healthcare system.

During the past twelve months, two registered nurses have completed further training to become endorsed as Rural and Isolated Practice Endorsed Registered Nurses (RIPERN) with a further four nurses currently enrolled in this education. One registered nurse is completing post-graduate studies in perioperative nursing with support from a DHHS scholarship.

A number of enrolled nurses are furthering their careers by undertaking a university degree to transition from the enrolled to registered nursing role.

A medium fidelity simulation lab has been established to provide clinical based education under the guidance of our nurse educator. During COVID-19, all staff have undertaken theoretical and practical training in PPE donning and doffing.

Aboriginal Health Liaison

The Aboriginal Garden was completed in 2019. The garden is situated at the front of the WD Thomas Centre, accessible from the Burgoyne Street footpath. Aunty Esther has continued to provide some remote support to community clients during the COVID-19 pandemic situation however limited face- to-face communications. The COVID-19 pandemic has seen a halt to further networking with stakeholders unless through telehealth communications.

District Nursing Services and Social Support Programs

The year 2020 has been a challenging one for District Services programming. The COVID-19 pandemic saw many changes to the way we work and how we ran our programs.

In March the Social Support Programs were closed - Centre Based/ Mobile/ Exercise and Men’s Shed.

The Opportunity Shop re-opened with the use of KDH staff for a short period before it closed again due to Stage 3 restrictions.

The Social Support Staff wearing PPE (facemasks and protective eyewear) provided vulnerable community clients with a modified service, which included weekly newsletters/ home visits and phone welfare checks. The District Nurse have remained busy and continued to provide care to those in need.

The Community Garden continued to thrive under the watchful eye of the Men’s Shed staff and members. We have been successful in securing a Shire of Gannawarra Resilience grant and have developed plans for a Five Ways to Wellbeing Garden at the WD Thomas Activity Centre.

Feedback for one of our exercise clients summed up the year ‘Many thanks for sending out all the information to us. We are grateful for your support and concern for our welfare. We look forward to going back to Social Support as soon as possible.

Theatre Services

Currently, surgeons providing surgical services to Kerang District Health are – Mr P Modak (General Surgery), Mr S Lindsay (Urology), Dr M Jalland (Gynaecology), and Dr Amiri (Dental Surgery).

Dr G Dennerstein and Dr A Gibson are no longer providing surgery at Kerang District Health. We express our thanks them for their years of service to our hospital.

Theatre Complex operations ceased temporarily in late March due to the Covid-19 pandemic situation.

KDH theatre sessions re-commenced in late June performing Category 1 and Category 2 urgent patients with a reduced list capacity, as per DHHS directives. Mr P Modak has offered extra theatre days every month to reduce waiting lists.

Our visiting anaesthetists Dr P Keppel and Dr T McCarthy have maintained our theatre scheduled day’s pre-COVID and during the reinstatement of theatre lists post June 2020.

Patient preadmission clinics have been operating mainly via the use of nurse-assisted telehealth appointments but some face-to-face appointments continue when required.

Patients are encouraged to use www.careopinion.org.au as a patient feedback portal to express their thoughts and feelings about their theatre experience. This has been a positive process and is well utilised by theatre patients to express their gratitude.

During late 2019 and early 2020, (pre-pandemic) KDH was fortunate enough to utilise the use of two skilled nursing staff members from the Swan Hill District Health Theatre team while our Nurse Unit Manager was off on extended leave. This enable KDH to continue providing a high level of surgical services for the community.

Acute Ward

The Transitional Care Program has remained busy throughout the financial year providing additional support to patients before they transition to their discharge locations. During the period of March – June 2020, community TCP was very well utilised and this increased activity has seen an ongoing focus on ensuring staff are supported.

The COVID pandemic has caused a reduction in inpatient activity since March 2020, which was experienced right across Victoria. There has been an increased emphasis on infection prevention and control and the safe management of suspected and confirmed COVID presentations. Staff have been completing face-to-face and online training throughout the first half of 2020. Urgent Care presentations have fluctuated between zero to 10 presentations per day. KDH have further extended funding arrangements with Murray PHN for My Emergency Doctor, providing specialist advice and support after-hours, along with the use of Adult Retrieval Services Victoria (ARV) and Bendigo Health ED. The Acute Ward are collaborating with Ambulance Victoria who have agreed to assist with staff education and training in emergency presentations. Dr C Winter – Director of Medical Services has been mainly working remotely from Melbourne during the first half of 2020 providing medical support to the nursing and GP team.

Oncology Services have continued to provide services throughout the pandemic and have adapted to specialist clinics via nurse-assisted telehealth via the Bendigo Health Outreach Oncology Service. Some major challenges faced throughout this time were border restrictions for Oncology patients.

Glenarm Aged Care Facility

It has certainly been a very challenging year for our aged care service with an even greater emphasis on ensuring our vulnerable residents are safe and well throughout the COVID-19 pandemic. Staff have been completing extra face-to-face and online PPE and COVID training. Some wonderful innovative ideas have come out during the pandemic with doorway bingo, gym equipment set up in Glenarm for exercise programs to continue; along with residents participating in staff activities such as Xmas in July. As accreditation has been on hold, KDH has recently submitted an application for reaccreditation.

Kerang Medical Clinic

The Kerang Medical Clinic started the year well with a great team of rural GPs and a newly established support team. In late June, we farewelled two well-respected GPs with Dr S Gill & Dr H Pannu moving to WA to be closer to family.

We have had sufficient supply of experienced Rural Locum doctors to help meet the needs of our patients and support the practice as we continue with more permanent GP recruitment strategies. The year has been dominated by COVID-19 and the practice has responded well to restrictions put in place by continuing to offer services via telehealth balanced with the needs of those requiring face-to-face visits. We are looking forward to welcoming new doctors that are committed to rural health joining the team in Kerang.

Kellie Byron-Gray Director of Clinical Services

ORGANISATIONAL STRUCTURE

Board of Directors

Chief Executive Officer

Executive Support Director Medical Director Corporate Director of Clinical Services & VMOs Services Services

Quality Improvement Corporate Services Nursing Community Kerang Medical External Providers Maintenance Hotel Services Acute Ward Glenarm Coorinator Administration Ancillary Services Theatre Clinic

Policy Control Financial Maintenance Clinical Nurse Nurse Unit Nurse Unit Nurse Unit Nurse Unit Officer Head Chef Finance Officer Allied Health Practice Manager Consultants Officer Educator Manager Manager Manager Manager

Partnering with HR Officer/Payroll Clinical Placement TCP Coordinator & Registered Nurses Consumers Pathology Maintenance Staff Catering Staff Registered Nurses Registered Nurses KMC Staff Coordinator Discharge Planning Registered Nurses

Maintenance Infection Control Enrolled Nurses Radiology Trainee Domestic Staff OH&S Officer Aboriginal Health Enrolled Nurses Enrolled Nurses Enrolled Nurses Coordinator Liaison Officer

Information Health Care Supply Officer Physiotherapy Home Care Technology workers

Health Occupational Leisure & Lifestyle Information Admin Team Therapy Coordinator Management Planned Activity Leader Groups * Day Activity External Centre Allied Health Executive Volunteers Assistants Contractors Assistant to DoCS * Mobile Daycare * Mens Shed Executive * Exercise Groups Assistant to CEO & DCS

Inpatient Clerk

Relief Clerk

Receptionist

Ward Clerk

Theatre Pre Admission Clerk

Clinical Coder BOARD OF DIRECTORS

Name Date appointed to Board and current Meetings term attended John Ginnivan Appointed July 2015 12/12

Environmental Consultant 01/07/2015-30/06/2020 Kylie Liebmann Appointed July 2015 10/12

Scientist 01/07/2015-30/06/2022 Lauren Edwards Appointed July 2016 9/12

Physiotherapist 01/07/2016-30/06/2023 Melanie Lane Appointed July 2016 9/12

Senior ATSI Coordinator 01/07/2016-30/06/2023 Dr Andrew Jeffreys Appointed July 2018 11/12 Anaesthetist 01/07/2018-30/06/2021 Oscar Aertssen Appointed July 2019 12/12 Business Owner 01/07/2019-30/06/2021 Deidre Broad Appointed July 2019 10/12 Senior Tax Accountant 01/07/2019-30/06/2022 Melissa Iskov Appointed July 2019 12/12 Legal Practitioner 01/07/2019-30/06/2022

SUB-COMMITTEE MEMBERSHIP BY BOARD DIRECTORS

Audit Committee John Ginnivan (Board President) Dale Spinks (Audit Committee Chairman)

Finance Committee Deidre Broad (Treasurer)

Management Quality & Risk Committee Oscar Aertssen Lauren Edwards

Medical & Dental Appointments Committee Dr Andrew Jeffreys

Partnering with Consumers Committee Oscar Aertssen

Glenarm Consumer Committee Oscar Aertssen

Kerang Medical Clinic Management Committee Melanie Lane

People & Culture Committee Melanie Lane

EXECUTIVE MANAGEMENT Name Responsibilities Robert Jarman Robert is responsible to the Board of Directors for strategic leadership and Chief Executive management. He is responsible for implementing policy and direction as Officer determined by the Board of Directors. Robert has served as Chief Executive Officer since December 2001 and has over 35 years’ experience as an Executive Officer within the Public Health Sector in rural Australia. Kellie Byron-Gray Kellie commenced her role as Director of Clinical Services in February Director of Clinical 2020. Kellie has responsibility for Acute Nursing, Residential Aged Care and Services Community and Allied Health Services, including District Nursing, WD Thomas Activity Centre, the Men’s Shed and the Strength Based Exercise Program. Kellie also has responsibility for the Kerang Medical Clinic. Kellie has extensive experience and qualifications in Critical Care, Infection Prevention and Control, Public Health including Disease Surveillance and Investigation and Nursing and Medical Workforce Management. Peter Jones Peter is responsible for the management of Corporate Services such as Director of Administration, Payroll, Information Technology, Catering & Domestic Services, Corporate Services Maintenance and External Contractors, Procurement, Risk Management and OHS. Peter has extensive experience as an Executive Officer within the Public Health Sector in Victoria. Dr Craig Winter Craig started with KDH in November 2015 is responsible for ensuring Visiting Director of Medical Medical Officers are credentialed and have the appropriate skills and experience Services for the privileges they have applied for at KDH. This position provides support, advice and guidance for clinical risk and medication management to Visiting Medical Officers, the Executive and the Board of Directors.

WORKFORCE DATA Labour Category JUNE - Current Month FTE Average Monthly FTE 2019 2020 2019 2020 Nursing 51.82 54.42 52.35 54.09 Administration & Clerical 19.2 17.46 18.02 18.14 Medical Support 0.00 0.00 0.00 0.00 Hotel & Allied Services 23.26 22.74 22.89 23.72 Medical Officers 0.09 0.09 0.09 0.09 Hospital Medical Officers 0.00 0.00 0.00 0.00 Sessional Clinicians 0.00 0.00 0.00 0.00 Ancillary Staff (Allied Health) 8.16 7.06 7.98 7.49 Total FTE 102.53 101.77 101.13 103.53

EMPLOYMENT AND CONDUCT PRINCIPLES

Kerang District Health is committed to applying merit and equity principles when appointing staff. Selection processes ensure that applicants are assessed and evaluated fairly and equitably on the basis of key selection criteria and other accountabilities without discrimination.

Kerang District Health acknowledges its obligations under the Public Administration Act 2004 and promotes and supports adherence to the public sector values prescribed in the Act. All employees model their behaviour in accordance with the Code of Conduct for Victorian Public Sector Employees and the specific public sector values of Responsiveness, Integrity, Impartiality, Accountability, Respect, Leadership and Human Rights, with particular reference to the Victorian Charter of Human Rights and Responsibilities, and Kerang District Health’s Values of Care, Accountability, Respect and Excellence (CARE).

OCCUPATIONAL HEALTH & SAFETY

Health and Safety Representatives have played a significant role in a number of OHS quality improvements which included staff safety, security, storage and safe patient handling. They have also dedicated time to committee meetings, consulting with colleges regarding identified risks and safety audits. Staff education has included Occupational Violence & Aggression, Fire, Evacuation and Warden Training, Hazardous Manual Handling and Safe Patient Handling. The Kerang District Health Occupational Health and Safety Committee has met regularly throughout the year.

OHS related hazards or incident reports and WorkCover claims have decreased during 2019-2020. Occupational violence related incidents have increased partly due to tensions created by the COVID- 19 management requirement, which have been challenging for staff, visitors, patient sand urgent care consumers.

Cathie Trewin Occupational Health and Safety Coordinator

Health and Safety Indicators 2019-2020 2018-2019 2017-2018 Number of reported hazards/incidents for the 26 29 50 year per 100 FTE The number of lost time standard WorkCover 0.01 0.006 0.006 claims for the year per 100 FTE

The average cost per claim for the year $6,363 $2,934 $93,023

OCCUPATIONAL VIOLENCE STATISTICS

Occupational Violence Statistics 2019-20 WorkCover accepted claims with an occupational violence cause per 100 FTE. 0 Number of accepted WorkCover claims with lost time injury with an occupational 0 violence cause per 1,000,000 hours worked. Number of occupational violence incidents reported. 25 Number of occupational violence incidents reported per 100 FTE 25 Percentage of occupational violence incidents resulting in a staff injury, illness or 0 condition. The following definitions apply:

Occupational violence – any incident where an employee is abused, threatened or assaulted in circumstances arising out of, or in the course of their employment. Incident – an event or circumstance that could have resulted in, or did result in, harm to an employee. Incidents of all severity rating must be included. Code Grey reporting is not included, however, an incident occurs during the course of a planned or unplanned Code Grey, the incident must be included. Accepted WorkCover claims – Accepted WorkCover claims that were lodger in 2018-2019. Lost time – is defined as greater than one day. Injury, illness or condition – This includes all reported harm as a result of the incident, regardless of whether the employee required time off work or submitted a claim.

CONSULTANCIES

Under and Over $10,000

Consultant Purpose of Start End Total Expenditure Future Consultant Date Date approved 2019-20 expenditure project fee (excluding (excluding (excluding GST) GST) GST) B.School4Change Strategic Plan Mar Dec $16,000 $10,000 $6,000 2020 2020

INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) DISCLOSURE

Business as Usual Non-Business as Usual (non-BAU) ICT Expenditure (BAU) ICT Expenditure Total (excluding GST) Total = Operational Operational Capital expenditure expenditure and expenditure (excluding (excluding GST) (b) Capital Expenditure GST) (a) (excluding GST) (a)+(b) $293,038 $461,348 $455,611 $5,737

FREEDOM OF INFORMATION

During 2019/2020 there were ten (10) requests for access to documents under the Freedom of Information Act compared with twelve (12) in 2018/2019 and all of these requests were for access to medical records.

All ten (10) of these requests were approved. The Chief Executive Officer is the Principal Officer to whom all requests should be forwarded.

BUILDING ACT 1993

This Act sets standards for the construction of new buildings and for the maintenance of existing buildings. It includes provisions to protect the safety and health of building users, and cost effective construction is encouraged.

All building work carried out during 2019/2020 complies with current Building Standards and to the best of our knowledge, the Health Service complies with building and maintenance provisions as per the Act.

PUBLIC INTEREST DISCLOSURES ACT 2012

Kerang District Health has policies and procedures consistent with the requirements of the Public Interest Disclosures Act 2012 which supports staff to disclose improper or corrupt conduct within the health service. In 2019/2020 there were no disclosures made to Kerang District Health under the Act.

NATIONAL COMPETITION POLICY

Kerang District Health complies with the requirements of the National Competition Policy and the Victorian Government policy statement, Competitive Neutrality Policy Victoria and subsequent reforms.

CARERS RECOGNITION ACT 2012

Kerang District Health recognises its obligations under the Carers Recognition Act 2012 by ensuring that; a. Its employees and agents have an awareness and understanding of the care relationship principles; b. All practicable measures are taken to ensure that persons who are in care relationships and who are receiving services in relation to the care relationships from the care support organisation have an awareness and understanding of the care relationship principles; c. All practicable measures are taken to ensure that the care support organisation and its employees and agents reflect the care relationship principles in developing, providing or evaluating support and assistance for persons in care relationships.

ENVIRONMENTAL PERFORMANCE

Kerang District Health strives to continually improve the health of the people in our community by endeavouring to provide health care in an environmentally sound and sustainable manner. We commit to continual improvement in energy saving initiatives to reduce our carbon foot print.

We progressively establish and maintain environmental standards in compliance with all applicable regulations and standards.

Kerang District Health’s environmental management strategy covers elements of energy reduction and sustainability from water, gas, electricity, waste and recycling to transport, procurement and service delivery. The most significant environmental initiative for the year was the installation of a solar system valued at $93,000 which will deliver cost savings after a cost payback period of five years.

Our performance is reported to the Department of Health and Human Services in the Victorian Public Healthcare Services Reporting Tool quarterly.

ENVIRONMENTAL PERFORMANCE INDICATORS

Energy & Resources Usage 2016 - 2017 2017 – 2018 2018 – 2019 2019 – 2020 Variation Gas Litres 58,563 54,234 53,750 52,798 -952 Cost $27,520 $30,396 $30,398 $28,212 -$2,186

Electricity Kwh 1,157,708 1,160,285 873,121 1,048,269 175,148 Cost $144,766 $223,724 $238,064 $210,326 -$27,738

Water Kilolitres 11,786 8,456 13,801 10,067 -3,734 Cost $26,703 $29,141 $29,092 $26,378 -$2,714

SAFE PATIENT CARE ACT 2015

Kerang District Health has no matters to report in relation to its obligations under section 40 of the Safe Patient Care Act 2015.

LOCAL JOBS FIRST ACT 2003

In 2019-2020 there were no contracts requiring disclosure under the Local Jobs First Policy

STATEMENT OF PRIORITIES – 2019/2020 Goals: Better Health A system geared to prevention as much as treatment Everyone understands their own health and risks Illness is detected and managed early Healthy neighbourhoods and communities encourage healthy lifestyles Strategies Health Service Deliverables Outcomes Reduce Complete the Potentially Avoidable Project focused on three chronic Statewide Risks Hospitalisation Project (funded health conditions; CCF, COPD and Build Healthy through the Murray Primary Health diabetes and diabetes related Neighbourhoods Network) working collaboratively with complications. Help people to Northern District Community Health Aim of the project was to identify how stay healthy looking at three chronic disease admissions could be prevented in streams these cohorts by early disease Target health management and individualised care gaps planning Project completed. Promote the healthy neighbourhoods ‘Move it Gannawarra’ program by offering and expanded exercise increased our exercise program program to the elderly via the WD however, this is on hold due to the Thomas Activity Centre strength- COVID-19 pandemic. Thai Chi based training program classes are also on hold. Gannawarra Shire Council (GSC) Community Grants Program also supported a number of ‘active’ projects at Kerang District Health for the exercise program within the gym in the WD Thomas Activity Centre. District Nursing completed a 2020 WDTC Exercise program evaluation survey with community clients with positive results. KDH Allied Health Assistant is being supported in completing a Certificate III and Cert IV in Fitness through the Australian Fitness Academy. Develop themed information each Themes changed in line with key month targeting print, radio and online DHHS messaging around COVID-19 media to provide consistent health and encouraging consumers to still messaging to the community seek medical attention for their chronic health conditions via a collaborative approach to messaging and wellbeing by group newspaper, local radio and social media. in collaboration with GSC, NDCH, CDH, VicPolice, AV, and BDH.

STATEMENT OF PRIORITIES – 2019/2020 Goals Better Access Care is always being there when people need it Better access to care in the home and community People are connected to the full range of care and support they need Equal access to care Strategies Health Service Deliverables Outcomes Plan and Complete a 12-month project with the My Emergency Doctor app was very invest Murray Primary Health Network on the successful in the 12 month pilot trial. Unlock use of the My Emergency Doctor app KDH was successful with a further innovation aimed at ensuring that urgent care funding application with Murray PHN – until 30 June 2022. Provide patients needing GP care receive that easier access care as close to home as possible Ensure fair access

Promote the use of “My Health Implementation of an Urgent Care Record” (with the patient’s permission) Module in Patient Management to ensure that urgent care System is in progress & will enable presentations at Kerang District Health upload of Urgent Care records to are entered onto the Record to ensure MyHealth Record. patients have access to enhanced care Goals Better Care Targeting zero avoidable harm Healthcare that focusses on outcomes Patients and carers are active partners in care Care fits together around people’s needs Strategies Health Service Deliverables Outcomes Put quality Implement three tangible Work on the strategies listed below is First outcomes/recommendations from the ongoing due to the pandemic crisis Join up care Potentially Avoidable Hospitalisation taking priority. Project to improve patients care or • Improve timely access to Partner with reduce unnecessary hospitalisations patients Health Professionals. Strengthen • Recognition of Chronic the workforce Disease Management as a Team Process and for the Embed patient, a lifelong process. evidence • Improve Resource underutilisation. • Improve the Referral Pathways as they are limited and patient navigation is poor. • Streamline accessing what services are available, where and when?

STATEMENT OF PRIORITIES – 2019/2020 Strategies Health Service Deliverables Outcomes Participate in the Leadership Three KDH staff members Gateway Program run by participated in the SCV Gateway Safer Care Victoria in 2019/20 Leadership Program. The Program which will look at collaboration was suspended in March 2019 due and immersive leadership that to the COVID-19 pandemic. is able to respond to a changing environment.

Specific priorities for 2019-20. In 2019-20 Kerang District Health will contribute to the achievement of the Government’s priorities by: STATEMENT OF PRIORITIES – 2019/2020 Goals: Supporting the Mental Health System Strategies Health Service Deliverables Outcomes Improve service access to Collaborate with Northern Community mental health mental health treatment to District Community Health referrals to NDCH are address the physical and Service to support referrals completed as required. mental health needs of to their Mental Health Nurse consumers for mental health plans Contribute to the KDH is a key stakeholder for development of a Registered Gannawarra Local Agency Mental Health plan for the Meeting (GLAM) along with the Loddon Mallee incorporating Buloke Loddon Gannawarra the findings of the Royal Health Executive Network Commission as led by the (BLGHEN). Primary Health Network KDH is involved in the development of the Gannawarra Community Resilience Action Plan (Drought) which has been implemented with a mental health and wellbeing focus. KDH participates and promotes 5 Ways to Wellbeing. Goals: Addressing Occupational Violence Strategies Health Service Deliverables Outcomes Foster an organisational wide Conduct monthly audits on This is complete and ongoing. occupational health and safety Occupational Violence via OV Incidents are reviewed by risk management approach, the Victorian Health Incident the KDH Incident Review & including identifying security Management System to Occupational Health & Safety risks and implementing ensure that Kerang District Committees on a monthly basis. Health’s policy on controls, with a focus on Occupational Violence training occupational violence is prevention and improved provided for all staff during followed on each occasion reporting and consultation. 2020. Implement the department’s security training principles to address identified security risks

STATEMENT OF PRIORITIES – 2019/2020 Goals: Addressing Bullying and Harassment Strategies Health Service Deliverables Outcomes Actively promote positive Introduce the Know Better, KDH People and Culture workplace behaviours, Be Better campaign Committee established in encourage reporting and action including the formation of a September 2019. Director of on all reports. People and Culture Clinical Services and a Board Committee to support this Director are members of the Implement the department’s initiative Framework for promoting a Committee. positive workplace culture: The Committee has progressed preventing bullying, harassment work on the Know Better Be and discrimination and Better principles. Workplace culture and bullying, harassment and discrimination training: guiding principles for Victorian health services Goals: Supporting Vulnerable Patients Strategies Health Service Deliverables Outcomes Partner with patients to develop Work with our Gannawarra KDH Disability Action Plan strategies that build capability Local Agency Meeting reviewed 2019. within the organisation to partners in the formation of a address the health needs of Disability Reference Group to communities and consumers at engage with people with a risk of poor access to health disability to help inform care. planning and services. Goals: Supporting Aboriginal Cultural Safety Strategies Health Service Deliverables Outcomes Improve the health outcomes of Launch an Aboriginal Garden Publically accessible Aboriginal and Torres Strait at Kerang District Health to Aboriginal Garden developed Islander people by establishing provide a welcoming in Burgoyne Street on KDH culturally safe practices across environment for Aboriginal site. all parts of the organisation to patients and visitors recognise and respect Aboriginal culture and deliver services that meet the needs, expectations and rights of Aboriginal patients, their families, and Aboriginal staff. Participate in the development Deferred due to Covid-19. of a regional plan for improved Aboriginal cultural safety and implement consistent local strategies to improve health outcomes of Aboriginal and Torres Strait Islander people

STATEMENT OF PRIORITIES – 2019/2020 Goals: Addressing Family Violence Strategies Health Service Deliverables Outcomes Strengthen responses to Improve our health service Strengthening Hospital Responses family violence in line with response to family violence by to Family Violence Committee the Multiagency Risk undertaking a census of our meetings have continued during Assessment and Risk workforce capabilities and COVID. ERH have taken lead with Management Framework aligning health service incorporating MARAM into existing (MARAM) and assist the activities to be consistent with policies and procedures which will government in the Multiagency Risk be shared across the cluster group. understanding workforce Assessment and Risk capabilities by championing Management Framework. participation in the census of workforces that intersect with family violence. Goals: Implementing Disability Action Plans Strategies Health Service Deliverables Outcomes Continue to build upon last Implement the organisation wide KDH Disability Action Plan year’s action by ensuring draft Disability Plan following reviewed in 2019. implementation and endorsement embedding of a disability action plan which seeks to reduce barriers, promote inclusion and change attitudes and practices to improve the quality of care and employment opportunities for people with disability Goals: Supporting Environmental Sustainability Contribute to improving the Install additional solar panels Solar System installation environmental sustainability to reduce electricity completed February 2020. of the health system by consumption identifying and implementing projects and/or processes to reduce carbon emissions. Establish a Sustainability The KDH Environmental Committee to develop, monitor Sustainability Committee meets and review environmental regularly. sustainability strategies. Improve our environmental A Loddon Mallee Region Hospital sustainability by participating in Waste Management Strategy has the development of a hospital not progressed during 2019-2020 waste management strategy due to Covid-19. across the Loddon Mallee region.

PERFORMANCE PRIORITIES

Key performance indicator Targets Actual Target 2019 Safety and quality performance – Accreditation Compliance with NSQHS Standards accreditation Full compliance Full compliance Compliance with the Commonwealth’s Aged Care Full compliance Full compliance Accreditation Standards Infection Prevention and Control Cleaning standards Full compliance Full compliance Compliance with the Hand Hygiene Australia program 80% 98% Percentage of healthcare workers immunised for influenza 75% 99%

HIGH QUALITY AND SAFE CARE

Key performance indicator Target Result Patient experience Victorian Healthcare Experience Survey – data submission Full compliance Full compliance Victorian Healthcare Experience Survey – percentage of 95% 97.8% positive experience – Quarter 1 Victorian Healthcare Experience Survey – percentage of 95% 94.9% positive experience – Quarter 2 Victorian Healthcare Experience Survey – percentage of 95% Full positive experience – Quarter 3 Compliance Victorian Healthcare Experience Survey – percentage of very 75% 86.3% positive responses to questions on discharge care – Quarter 1 Victorian Healthcare Experience Survey – percentage of very 75% 84.7% positive responses to questions on discharge care – Quarter 2 Victorian Healthcare Experience Survey – percentage of very 75% Full positive responses to questions on discharge care – Quarter 3 compliance Victorian Healthcare Experience Survey – patients perception 70% 97.8% of cleanliness – Quarter 1 Victorian Healthcare Experience Survey – patients perception 70% 99.0% of cleanliness – Quarter 2 Victorian Healthcare Experience Survey – patients perception 70% Full of cleanliness – Quarter 3 compliance Hand Hygiene – Quarter 4 83% 97.2% Unplanned readmission hip replacements * N/A N/A Rate of sever foetal growth restriction (FGR) in singleton N/A N/A pregnancy undelivered by 40 weeks ** * Less than 50 cases, below reporting threshold. ** No cases of severe foetal growth restriction in singleton pregnancy recorded Full compliance = Less than 42 responses were received for the period due to the relative size of the health service.

STRONG GOVERNANCE, LEADERSHIP AND CULTURE

Key performance indicator Target Result Organisational culture

People matter survey – percentage of staff with an overall 80% 95% positive response to safety and culture questions People matter survey – percentage of staff with an overall 80% 98% positive response to the question “I am encouraged by my colleagues to report any patient safety concerns I may have” People matter survey – percentage of staff with an overall 80% 97% positive response to the question “Patient care errors are handled appropriately in my work area” People matter survey – percentage of staff with an overall 80% 96% positive response to the question “My suggestions about patient safety would be acted upon if I expressed them to my manager” People matter survey – percentage of staff with an overall 80% 91% positive response to the question “The culture in my work area makes it easy to learn from the errors of others” People matter survey – percentage of staff with an overall 80% 99% positive response to the question “Management is driving us to be a safety centred organisation” People matter survey – percentage of staff with an overall 80% 92% positive response to the question “This health service does a good job of training new and existing staff” People matter survey – percentage of staff with an overall 80% 94% positive response to the question “Trainees in my discipline are adequately supervised” People matter survey – percentage of staff with an overall 80% 96% positive response to the question “I would recommend a friend or relative to be treated as a patient here”

FINANCIAL SUMMARY

COMPARATIVE FINANCIAL DATA

2020 2019 2018 2017 2016 $000 $000 $000 $000 $000 OPERATING RESULT 348 (317) (190) (66) 93 Total revenue 15,373 14,300 13,881 13,012 13,824 Total expenses 16,198 16,487 15,984 14,959 14,465 Net results from transactions (825) (2,187) (2,103) (1,947) (641) Total other economic flows (13) (847) 7,315 9,418 11,365 Net results (838) (3,034) (191) (66) 93 Total assets 40,950 41,128 36,727 38,515 37,735 Total liabilities 7,177 6,516 4,738 5,451 4,306 Net assets/Total equity 33,774 34,612 31,989 33,064 33,429

COMPARATIVE OPERATING RESULTS

2020 2019 2018 2017 2016 $000 $000 $000 $000 Net operating result 303 (317) (190) (66) 93 Capital purpose income 288 189 299 205 1,409 Specific income COVID 19 State Supply 55 N/A N/A N/A N/A Arrangements – Assets received free of charge or for nil consideration under the State Supply State supply items consumed up to (10) N/A N/A N/A N/A 30 June 2020 Assets provided free of charge N/A N/A N/A N/A N/A Assets received free of charge N/A N/A N/A N/A N/A Expenditure for capital purpose (47) (904) (51) (43) (368) Depreciation and amortisation (1,427) (2,002) (2,160) (2,053) (1,775) Impairment of non-financial assets 0 0 0 0 0 Finance costs (other) 0 0 0 0 0 Net result from transactions (838) (3,034) (2,102) (1,957) (641)

EFFECTIVE FINANCIAL MANAGEMENT INDICATORS

Key performance indicator Target 2019-20 Result Finance Operating result ($m) 348 (317) Average number of days to paying trade creditors 60 days 27 Average number of days to receiving patient fee debtors 60 days 24

Public and Private WIES1 activity performance to target 100% Adjusted current asset ratio 0.7 or 3% improvement 1.07% from health service base target Forecast number of days in a health service can maintain 14 days 14 its operations with unrestricted available cash (based on end of year forecast) Actual number of days a health service can maintain its 14 days 14 operation with unrestricted available cash, measured on the last day of each month Measures the accuracy of forecasting the Net result from Variance ≤ $250,000 Not transactions (NRFT) for the current financial year ending achieved 30 June

ACTIVITY INDICATORS

Funding type Activity Small Rural Acute 22 Small Rural Primary Health & HACC 3,535 Small Rural Residential Care 10,848

FINANCIAL RESULT

As reported on page 27 of this report under Comparative Financial Data, Kerang District Health finished the 2019/20 financial year with the Net Result being a deficit of $825,000 which is inclusive of an adjustment of $1.427M for depreciation. The operating budget result was a surplus of $348,196 which was achieved as a result of revenue for DVA and TAC, the Transitional Care Program and the Commonwealth Subsidy for aged care residents being well above budget. The health service has experienced operating deficits over the previous three years so the current year result was very pleasing.

State Government and Federal Government grants both exceeded budget forecast by $266,746 and $200,824 respectively. On the negative, inpatient and outpatient revenue totaled $189,160 less than forecast.

Expenditure exceeded budget by $139,268, the main items being wages & related costs $206,885, repairs & maintenance & maintenance contracts $73,118, administration costs $67,223, and computer services $132,401. Visiting Medical Officer expenses for hospital and medical practice patients were $254,250 less than projected.

ATTESTATIONS

Responsible Bodies Declaration

In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for Kerang District Health for the year ending 30 June 2020.

Kylie Liebmann, Board President, Kerang, 9th September 2020

Financial Management Compliance

I, Kylie Liebmann, on behalf of the Responsible body, certify that Kerang District Health has no Material Compliance Deficiency with respect to the applicable Standing Directions under the Financial Management Act 1994 and Instructions.

Kylie Liebmann, Board President, Kerang, 9th September 2020

Data Integrity

I, Robert Jarman, certify that Kerang District Health has put in place appropriate internal controls and processes to ensure that reported data accurately reflects actual performance. Kerang District Health has critically reviewed these controls and processes during the year.

Robert Jarman, Chief Executive Officer, Kerang, 9th September 2020

Integrity, Fraud and Corruption

I, Robert Jarman, certify that Kerang District Health has put in place appropriate internal controls and processes to ensure that Integrity, fraud and corruption risks have been reviewed and addressed at Kerang District Health during the year.

Robert Jarman, Chief Executive Officer, Kerang, 9th September 2020

Conflict of Interest

I, Robert Jarman, certify that Kerang District Health has put in place appropriate internal controls and processes to ensure that it has complied with the requirements of hospital circular 07/2017 compliance reporting in health portfolio entities (Revised) and has implemented a ‘Conflict of Interest’ policy consistent with the minimum accountabilities required by the VPSC. Declaration of private interest forms have been completed by all executive staff within Kerang District Health and directors of the board, and all declared conflicts have been addressed and are being managed. Conflict of interest is a standard agenda item for declaration and documenting at each executive board meeting.

Robert Jarman, Chief Executive Officer, Kerang, 9th September 2020

DISCLOSURE INDEX

The Annual Report of Kerang District Health is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the Department’s compliance with statutory disclosure requirements.

Legislation Requirement Page

Ministerial Directions Report of Operations

Charter and purpose FRD 22H Manner of establishment and the relevant ministers 2 FRD 22H Purpose, functions, powers and duties 2 FRD 22H Nature and range of services provided 2 FRD 22H Activities, programs and achievements for the reporting period 3, 17 FRD 22H Significant changes in key initiatives and expectations for the future 3, 17

Management and structure FRD 22H Organisation structure 11 FRD 22H Workforce data/employment and conduct principles 13 FRD 22H Occupational Health and Safety 14

Financial information FRD 22H Summary of the financial results for the year 23 FRD 22H Significant changes in financial position during the year 25 FRD 22H Operational and budgetary objectives and performance 24 against objectives FRD 22H Subsequent events Refer to Financial Statements FRD 22H Details of consultancies under $10,000 15 FRD 22H Details of consultancies over $10,000 15 FRD 22H Disclosure of ICT expenditure 15

Legislation FRD 22H Application and operation of Freedom of Information Act 1982 15 FRD 22H Compliance with building and maintenance provisions of Building Act 1993 15 FRD 22H Application and operation of Public Interest Disclosures Act 2012 15 FRD 22H Statement on National Competition Policy 15 FRD 22H Application and operation of Carers Recognition Act 2012 16 FRD 22H Summary of the entity’s environmental performance 16 FRD 22H Additional information available on request 28

Other relevant reporting directives FRD 25D Local Jobs First Act disclosures 16 SD 5.1.4 Financial Management Compliance Attestation 25 SD 5.2.3 Declaration in report of operations 25

Attestations Attestation on Data Integrity 25 Attestation on managing Conflicts of Interest 26 Attestation on Integrity, fraud and corruption 26

Other reporting requirements • Reporting of outcomes from Statement of Priorities 2019-20 17 • Occupational Violence Reporting 14 • Reporting obligations under the Safe Patient Care Act 2015 16 • Reporting of compliance regarding Car Parking Fees Not applicable

ADDITIONAL INFORMATION

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

(a) Declarations of pecuniary interest have been duly completed by all relevant officers. (b) Details of shares held by senior officers as nominee or held beneficially. (c) Details of publications produced by the Health Service and how these can be obtained. (d) Details of changes in prices, fees, charges, rates and levies charged by the Health Service. (e) Details of any major external reviews carried out on the Health Service. (f) Details of major research and development activities undertaken by the Health Service that are not otherwise covered either in the Report of Operations or in a document that contains the financial statements and Report of Operations. (g) Details of overseas visits undertaken including a summary of the objectives and outcomes of each visit. (h) Details of major promotional, public relations and marketing activities undertaken by the Health Service to develop community awareness of the Health Service and its services. (i) Details of assessments and measures undertaken to improve the occupational health and safety of employees. (j) General Statement on industrial relations within the Health Service and details of time lost through industrial accidents and disputes, which is not otherwise detailed in the Report of Operations. (k) A list of major committees sponsored by the Health Service, the purpose of each committee and the extent to which the purposes have been achieved. (l) Details of all consultancies and contractors including consultants/contractors engaged, services provided, and expenditure committed for each engagement.

Annual Report 2019/2020

Appendix 1

FINANCIAL STATEMENTS

For the year ended 30th June 2020

Independent Auditor’s Report To the Board of Kerang District Health

Opinion I have audited the financial report of Kerang District Health (the health service) which comprises the:

• balance sheet as at 30 June 2020 • comprehensive operating statement for the year then ended • statement of changes in equity for the year then ended • cash flow statement for the year then ended • notes to the financial statements, including significant accounting policies • board member's, accountable officer's and chief finance & accounting officer's declaration. In my opinion the financial report presents fairly, in all material respects, the financial position of the health service as at 30 June 2020 and their financial performance and cash flows for the year then ended in accordance with the financial reporting requirements of Part 7 of the Financial Management Act 1994 and applicable Australian Accounting Standards.

Basis for I have conducted my audit in accordance with the Audit Act 1994 which incorporates the Australian Opinion Auditing Standards. I further describe my responsibilities under that Act and those standards in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report.

My independence is established by the Constitution Act 1975. My staff and I are independent of the health service in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Victoria. My staff and I have also fulfilled our other ethical responsibilities in accordance with the Code.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Board’s The Board of the health service is responsible for the preparation and fair presentation of the responsibilities financial report in accordance with Australian Accounting Standards and the Financial Management for the financial Act 1994, and for such internal control as the Board determines is necessary to enable the report preparation and fair presentation of a financial report that is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Board is responsible for assessing the health service’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is inappropriate to do so.

Other The Board of the health service is responsible for the Other Information, which comprises the Information information in the health service’s annual report for the year ended 30 June 2020, but does not include the financial report and my auditor’s report thereon.

My opinion on the financial report does not cover the Other Information and accordingly, I do not express any form of assurance conclusion on the Other Information. However, in connection with my audit of the financial report, my responsibility is to read the Other Information and in doing so, consider whether it is materially inconsistent with the financial report or the knowledge I obtained during the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude there is a material misstatement of the Other Information, I am required to report that fact. I have nothing to report in this regard.

Auditor’s As required by the Audit Act 1994, my responsibility is to express an opinion on the financial report responsibilities based on the audit. My objectives for the audit are to obtain reasonable assurance about whether the for the audit of financial report as a whole is free from material misstatement, whether due to fraud or error, and to the financial issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, report but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the health service’s internal control • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board • conclude on the appropriateness of the Board’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the health service’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the health service to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

MELBOURNE Travis Derricott 14 September 2020 as delegate for the Auditor-General of Victoria

2

Kerang District Health Service Comprehensive Operating Statement For the Financial Year Ended 30 June 2020

Note 2020 2019 $ $

Income from Transactions Revenue from Operating Activities 2.1 15,028,768 14,052,785 Revenue from Non-Operating Activities 2.1 344,769 247,633 Total Income from Transactions 15,373,537 14,300,418

Expenses from Transactions Employee Expenses 3.1 11,349,148 11,285,121 Supplies and Consumables 3.1 524,426 536,453 Depreciation 4.2 1,427,405 2,002,423 Other Operating Expenses 3.1 2,897,367 2,663,106 Total Expenses from Transactions 16,198,346 16,487,103

Net Result from Transactions - Net Operating (824,809) (2,186,685) Balance

Other economic flows included in the Net Result

Revaluation of long service leave 3.2 (13,108) (18,895) Net Gain/Loss on disposal of non financial assets 3.2 - (828,574)

Total other economic flows included in net result (13,108) (847,469)

Net Result for the year (837,917) (3,034,154)

Other Comprehensive Income

Items that will not be reclassified to net result Changes in physical asset revaluation surplus 4.1(f) - 5,656,732

Total Other Comprehensive Income - 5,656,732

COMPREHENSIVE RESULT (837,917) 2,622,578

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

1 Kerang District Health Service Balance Sheet As at 30 June 2020

Note 2020 2019 $ $ Current Assets Cash and Cash Equivalents 6.2 5,905,304 5,233,066 Receivables 5.1 318,851 278,656 Inventories 4.3 130,002 13,043 Other Assets 5.4 246,508 237,376 Total Current Assets 6,600,665 5,762,141

Non-Current Assets Receivables 5.1 618,977 596,017 Property, Plant and Equipment 4.1 33,730,842 34,769,399 Total Non-Current Assets 34,349,819 35,365,416 TOTAL ASSETS 40,950,484 41,127,557

Current Liabilities Payables 5.2 1,150,608 859,669 Borrowings 6.1 20,876 - Provisions 3.4 2,802,706 2,660,744 Other Liabilities 5.3 2,608,102 2,620,945 Total Current Liabilities 6,582,292 6,141,358

Non-Current Liabilities Borrowings 6.1 193,427 - Provisions 3.4 401,172 374,688

Total Non-Current Liabilities 594,599 374,688 TOTAL LIABILITIES 7,176,891 6,516,046 NET ASSETS 33,773,593 34,611,511

EQUITY Property, Plant and Equipment Revaluation Surplus 4.1(f) 10,769,307 10,769,307 Restricted Specific Purpose Surplus SCE 105,000 105,000 Contributed Capital SCE 19,456,003 19,456,003 Accumulated Surpluses SCE 3,443,283 4,281,201 TOTAL EQUITY 33,773,593 34,611,511

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

2 Kerang District Health Service Statement of Changes in Equity For the Financial Year Ended 30 June 2020

Property, Restricted Contributions Accumulated Total Plant & Specific by owners Surpluses/ Equipment Purpose (Deficits) Revaluation Surplus Surplus

Note $ $ $ $ $ Balance at 1 July 2018 5,112,575 105,000 19,456,003 7,315,355 31,988,933

Net result for the year - - - (3,034,154) (3,034,154) Valuation Gain/(loss) recognised 4.1(f) 5,656,732 - - - 5,656,732

Balance at 30 June 2019 4.1(f) 10,769,307 105,000 19,456,003 4,281,201 34,611,511

Net result for the year - - - (837,917) (837,917) Valuation Gain/(loss) recognised 4.1(f) - - - - -

Balance at 30 June 2020 4.1(f) 10,769,307 105,000 19,456,003 3,443,283 33,773,593

This Statement should be read in conjunction with the accompanying notes

3 Kerang District Health Service Cash Flow Statement For the Financial Year Ended 30 June 2020

Note 2020 2019 $ $ Cash Flows from Operating Activities Operating Grants from Government 11,169,518 10,157,586 Capital Grants from Government 66,997 71,607 Patient and Resident Fees Received 2,777,486 2,991,752 Donations and Bequests Received 166,626 117,345 GST Received from/(paid to) ATO (16,565) 19,842 Interest Received 57,951 103,174 Other Receipts 1,021,383 810,828 Total Receipts 15,243,396 14,272,134

Employee Expenses Paid (9,655,002) (9,063,087) Workcover (163,791) (139,459) Non Salary Labour Costs (1,327,374) (1,710,427) Payments for Supplies & Consumables (281,130) (613,276) Capital Purpose (57,956) (64,036) Other Payments (2,898,516) (2,545,959) Total Payments (14,383,769) (14,136,244)

Net Cash Flows from Operating Activities 8.1 859,627 135,890

Cash Flows from Investing Activities

Sale of Investments - 1,946,563 Payments for Non-Financial Assets (283,018) (476,295) Proceeds from sale of Non-Financial Assets - 4,000 Net Cash Flows from Investing Activities (283,018) 1,474,268

Cash Flows from Financing Activities Proceeds from borrowings 108,473 - Receipt of Accommodation Deposits 271,739 1,823,386 Repayment of Accommodation deposits (284,582) (359,705)

Net Cash Flows from Financing Activities 95,630 1,463,681

Net Increase/Decrease in Cash and Cash Equivalents Held 672,239 3,073,839 Cash and Cash Equivalents at Beginning of Year 5,233,066 2,159,227

Cash and Cash Equivalents at End of Year 6.2 5,905,305 5,233,066

This Statement should be read in conjunction with the accompanying notes

4 Kerang District Health Notes to Financial Statements 30 June 2020

Basis of presentation

These financial statements are in Australian dollars and the historical cost convention is used unless a different measurement basis is specifically disclosed in the note associated with the item measured on a different basis.

The accrual basis of accounting has been applied in preparing these financial statements , whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These annual financial statements represent the audited general purpose financial statements for Kerang District Health for the period ending 30 Junes 2020. The report provides users with information about the Health Service's stewardship of resources entrusted to it.

(a) Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Financial Management Act 1994 and applicable AASB's, which include interpretations issued by the Australian Accounting Standards Board (AASB). They are prepared in a manner consistent with the requirements of AASB 101 Presentation of Financial Statements.

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

Kerang District Health is a not-for-profit entity and therefore applies the additional AUS paragraphs applicable to "not-for-profit" Health Services under the AASB's.

The annual financial statements were authorised for issue by the Board of Kerang District Health on 9th September 2020

(b) Reporting Entity

The financial statements represent the activities of Kerang District Health as a single entity.

Its principal address is: Burgoyne Street Kerang VIC 3579

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

(c) Basis of Accounting Preparation and Measurement

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The accounting policies have been applied in preparing the financial statements for the year ended 30 June 2020, and the comparative information presented in these financial statements for the year ended 30 June 2019.

The financial statements are prepared on a going concern basis.

5 Kerang District Health Notes to Financial Statements 30 June 2020

(c) Basis of Accounting Preparation and Measurement (continued)

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

Kerang District Health operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds.

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

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods that are affected by the revision. Judgements and assumptions made by management in the application of AASB's that have significant effects on the financial statements and estimates, relate to:

- The fair value of land, buildings, plant and equipment (refer to Note 4.1(c)); - Defined benefit superannuation expense (refer to note 3.5); and - Employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates (refer to Note 3.4).

Goods and Services Tax (GST)

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the Australian Taxation Office (ATO). In this case the GST payable is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with the receivables or payables in the Balance Sheet.

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

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

(d) Jointly Controlled Operations

Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

In respect of any joint interest in operations, Kerang District Health recognises in the financial statements: ○ its assets, including its share of any assets held jointly; ○ any liabilities including its share of liabilities that it had incurred; ○ its revenue from the sale of its share of the output from the joint operation; ○ its share of the revenue from the sale of the output by the operation; and ○ its expenses, including its share or any expenses incurred jointly.

6 Kerang District Health Notes to Financial Statements 30 June 2020

(d) Jointly Controlled Operations (continued)

Kerang District Health is a member of the Loddon Mallee Rural Health Alliance and retains joint control over the arrangement, which it has classified as a joint operation (refer Note 8.7 Jointly Controlled Operations).

(e) Intersegment Transactions

Transactions between segments within Kerang District Health have been eliminated to reflect the extent of Kerang District Health's operations as a group.

(f) Contributed Capital

Consistent with the requirements of AASB 1004 Contributions, contributions by owners (that is, contributed capital and its repayment) are treated as equity transactions and, therefore, do not form part of the income and expenses of Kerang District Health.

Transfers of net assets arising from administrative restructurings are treated as distributions to or contributions by owners. Transfers of net liabilities arising from administrative restructurings are treated as distributions to owners.

(g) Comparatives

Where applicable, the comparative figures have been restated to align with the presentation in the current year. Figures have been restated in the income from transactions note 2.1 with Government and State grants now shown separately.

(h) Specific Restricted Purpose Surplus

The Specific Restricted Purpose Surplus is established where Kerang District Health has possession or title to the funds but has no discretion to amend or vary the restriction and/or condition underlying the funds received.

(i) Impact from COVID-19

A state of emergency was declared in Victoria on 16 March 2020 sue to the global coronavirus pandemic, known as COVID-19. A state of disaster was subsequently declared on 2 August 2020.

To contain the spread of the virus and to prioritise the health and safety of our communities various restrictions have been announced and implemented by the state government, which in turn has impacted the manner in which businesses operate, including Kerang District Health.

In response, Kerang District Health placed restrictions on non-essential visitors, implemented reduced visiting hours, deferred theatre surgery and activity, performed COVID-19 testing and implemented work from home arrangements where appropriate.

For further details refer to Note 2.1 Funding delivery of our services.

Regional areas have generally been less impacted by the pandemic, however the changed conditions continue to provide uncertainty and a reluctance from the community to engage as regularly with the Health sector. The State Government has recognised the importance of a strong public health system and are providing ongoing support to ensure we remain financially viable and we can continue to support our staff who are at the front line of defence should the pandemic impact our community even more directly going forward.

From a financial perspective, the Health Service expects there will be a negative impact in the following areas: ● Recoveries from clinicians for use of the hospital facilities as they have not been able to provide them. ● Recoveries from clients for services normally provided directly, but are no longer able to be provided.

7 Kerang District Health Notes to Financial Statements 30 June 2020

(i) Impact from COVID 19 (cont)

The following account balances have been considered by Management but we remain satisfied that COVID-19 has not required a change to the judgement and/or assumptions in the disclosure of any balance. ● Fair value of receivable balances ● Fair value of financial assets ● Fair value of non-financial assets ● Fair impairment of non-financial assets ● Going concern

8 Kerang District Health Notes to Financial Statements 30 June 2020

Note 2: Funding delivery of our services

Kerang District Health's overall objective is to deliver programs and services that support and enhance the wellbeing of all Victorians.

To enable the hospital to fulfil its objectives it receives income based on parliamentary appropriations. The hospital also receives income from the supply of services

Structure 2.1 Income from Transactions

9 Kerang District Health Notes to Financial Statements 30 June 2020

Note 2.1: Income from Transactions

2.1(a) Income from Transactions

Total Total 2020 2019 $ $

Government Grants (State) - Operating 8,450,897 7,821,046 Government Grants (Commonwealth) - Operating 2,718,621 2,336,540 Government Grants (State) - Capital 66,997 71,607 Non cash contributions from DHHS 34,847 108,308 Patient and Resident Fees 2,778,750 2,974,761 Interest 57,951 89,312 Loddon Mallee Rural Health Alliance 426,093 331,010 Assets received free of charge 221,725 117,345 Other Revenue from Operating Activities 272,887 202,856

Total Income from Operating Activities 15,028,768 14,052,785

Catering 113,789 108,098 Property Income 118,288 127,617 Capital Purpose Income 78,733 - Other 33,959 11,918

Total Income from Non-Operating Activities 344,769 247,633

Total Income 15,373,537 14,300,418

Government Grants (Commonwealth) - Operating includes $40,500 funding received to compensate for COVID-19 impact on health service operations.

Impact of COVID-19 on revenue and income

As indicated in note 1 (i) Kerang District Health's response to the pandemic included the deferral of theatre surgery and non essential activity. This resulted in Kerang District Health incurring lost revenue as well as direct and indirect COVID-19 costs. No additional state funding was provided due to COVID-19 impacts on Kerang District Health. Kerang District Health received essential personal protective equipment free of charge under the state supply arrangement.

Government Grants

Income from grants to construct property is recognised when Kerang District Health satisfies its obligations under the transfer. This aligns with Kerang District Health's obligation to construct the asset. The progressive percentage costs incurred is used to recognise income because this most closely reflects the construction's progress as costs are incurred as the works are done.

Income from grants that are enforceable and with sufficient specific performance obligations are accounted for under AASB 15 as revenue from contracts with consumers, with revenue recognised as these performance obligations are met.

Income from grants without any sufficiently specific performance obligations, or that are not enforceable, is recognised when Kerang District Health has an unconditional right to receive the cash which usually coincides with receipt of cash. On initial recognition of the asset, Kerang District Health recognises any related contributions by owners, increases in liabilities, decreases in assets, and revenue ('related amounts') in accordance with other Australian Accounting Standards. Related amounts may take the form of: a) contributions by owners, in accordance with AASB 1004; b) revenue or a contract liability arising from a contract with a consumer, in accordance with AASB 15; c) a lease liability in accordance with AASB 16; d) a financial instrument, in accordance with AASB 9; or e) a provision, in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets.

Performance obligations

The types of Government grants recognised under AASB 15 Revenue from Contracts with Customers includes:

- Activity based funding with identifiable targets.

For activity based funding, revenue is recognised as target levels are met. These performance obligations have been selected as they align with the terms and conditions of the funding provided. For this type of funding, there is minimal judgement required, as performance is measured in accordance with DHHS Policy and Funding Guidelines.

For other grants with performance obligations Kerang District Health exercises judgement over whether the performance obligations have been met, on a grant by grant basis.

Previous accounting policy for 30 June 2019

Grant income arises from transactions in which a party provides goods and assets (or extinguishes a liability) to Kerang District Health without receiving approximately equal value in return. While grants may result in the provision of some goods or services to the transferring party, they do not provide a claim to receive benefits directly or approximately equal value (and are termed 'non-reciprocal' transfers). Receipt and sacrifice of approximately equal value may occur, but only by coincidence.

Some grants are reciprocal in nature (I.e. equal value is given back by the recipient of the grant to the provider). Kerang District Health recognises income when it has satisfied its performance obligations under the term of the grant.

For non-reciprocal grants, Kerang District Health recognises revenue when the grant is received.

Grants can be received as general purpose grants, which refer to grants which are not subject to conditions regarding their use. Alternatively, they may be received as specific purpose grants, which are paid for a particular purpose and/or have conditions attached regarding their use.

10 Kerang District Health Notes to Financial Statements 30 June 2020

Note 2.1(a): Income from Transactions (cont)

The following are transactions that Kerang District Health has determined to be classified as revenue from contracts with customers in accordance with AASB 15. Due to the modified retrospective transition method chosen in applying AASB 15, comparative information has not been restated to reflect the new requirements.

Patient and Resident Fees

The performance obligations related to patient fees are based on the delivery of service. These performance obligations have been selected as they align with the terms and conditions of providing the services. Revenue is recognised as these performance obligations are met.

Resident fees are recognised as revenue over time as Kerang District Health provides accommodation. This is calculated on a daily basis and invoiced monthly.

Private Practice Fees

The performance obligations related to private practice fees are based on the delivery of service. These performance obligations have been selected as they align with the terms and conditions agreed with the practice provider. Revenue is recognised as these performance obligations are met. Private practice fees include recoupment from the private practice for services provided.

Commercial activities

Revenue from commercial activities includes items such as provision of meals and property rental.

Other income

Other income includes recoveries for salaries and wages and external serviced provided.

2.1 (b) Fair Value of assets and services received free of charge or for nominal consideration

Total Total 2020 2019 $ $

Assets received free of charge under State supply arrangements 55,099 - Capital Donations 166,626 117,345

Total fair value of assets and services received free of charge 221,725 117,345 or for nominal consideration

In order to meet the State of Victoria's health network supply needs during the COVID-19 pandemic, arrangements were put in place to centralise the purchasing of essential personal protective equipment and essential capital items such as ventilators.

The general principles of the State Supply Agreement were that the Health Purchasing Victoria sourced, secured and agreed terms for the purchase of the products, funded by the department, while Monash Health and the department took delivery, and distributed the products to health services as resources provided free of charge.

Voluntary Services: Contributions in the form of services are only recognised when a fair value can be reliably determined, and the services would have been purchased if not donated. Kerang District Health operates with minimal volunteer services and does not consider a reliable fair value can be determined.

Non-cash contributions from the Department of Health and Human Services

The Department of Health and Human Services makes some payments on behalf of health services as follows:

● The Victorian Managed Insurance Authority non-medical indemnity insurance payments are recognised as revenue following advice from the Department of Health and Human services

● Long Service Leave (LSL) revenue is recognised upon finalisation of movements in LSL liability in lie with the long service leave funding arrangements set out in the relevant Department of Health and Human Services Hospital Circular.

Fair value of assets and services received free of charge or for nominal consideration.

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

Performance obligations and revenue recognition policies

Revenue is measured based on the consideration specified in the contract with the consumer. Kerang District Health recognises revenue when it transfers control of a good or service to the consumer i.e. revenue is recognised when, or as, the performance obligations for the sale of goods and services to the consumer are satisfied.

Customers obtain control of the supplies and consumables at a point in time when the goods are delivered to and have been accepted at their premises.

Income for the sale of goods are recognised when the goods are delivered and have been accepted by the consumer at their premises.

Revenue from the rendering of services is recognised at a point in time when the performance obligation is satisfied when the service is completed; and over time when the consumer simultaneously receives and consumes the services as it is provided.

Consideration received in advance of recognising the associated revenue from the consumer is recorded as a contract liability.

11 Kerang District Health Notes to Financial Statements 30 June 2020

Note 3: The cost of delivering our services

This section provides an account of the expenses incurred by the hospital in delivering services and outputs. In Section 2, the funds that enable the provision of services were disclosed and in this note the cost associated with provision of services are recorded.

Structure 3.1 Expenses from Transactions 3.2 Other Economic Flows 3.3 Analysis of expenses and revenue by internally managed and restricted specific purpose funds 3.4 Employee benefits in the Balance Sheet 3.5 Superannuation

12 Kerang District Health Notes to Financial Statements 30 June 2020

Note 3.1: Expenses from transactions

Total Total 2020 2019 $ $

Salary and Wages 9,823,057 9,397,300 On-costs 34,926 37,935 Fee for service Medical Officer Expenses 1,327,374 1,710,427 WorkCover Premium 163,791 139,459 Total Employee Expenses 11,349,148 11,285,121 Drug Supplies 57,187 90,893 Medical and surgical Supplies 171,605 167,703 Diagnostic and Radiology Supplies 45,242 63,694 Other Supplies and Consumables 250,392 214,163 Total Supplies and Consumables 524,426 536,453 Food supplies 242,577 236,425 Fuel, light and power 310,562 327,524 Domestic Charges & linen 196,817 203,513 Repairs and Maintenance 217,041 207,984 Maintenance Contracts 174,194 130,554 Motor Vehicle Expenses 41,304 50,893 Medical Indemnity Insurance 150,698 161,455 Loddon Mallee Rural Health Alliance 455,611 319,564 Other Administrative Expenses 1,050,607 961,158 Expenditure for Capital Purpose 57,956 64,036 Total other Operating Expenses 2,897,367 2,663,106

Depreciation (note 4.2) 1,427,405 2,002,423

Total Other Non-Operating Expenses 1,427,405 2,002,423

Total Expenses from Transactions 16,198,346 16,487,103

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

Employee Expenses Employee Expenses include:

● Salaries and wages (including fringe benefits tax, leave entitlements, termination payments); ● On-costs; ● Fee for service medical officer expenses ● Work cover premium

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

Other Operating Expenses Other operating expenses generally represent the day-to-day running costs incurred in normal operations and include such things as:

● Fuel, light and power ● Repairs and maintenance ● Other administrative expenses ● Expenditure for capital purpose (represents expenditure related to the purchase of assets that are below the capitalisation threshold).

Non-operating expenses Other non-operating expenses generally represent expenditure for outside the normal operations such as depreciation.

13 Kerang District Health Notes to Financial Statements 30 June 2020

Note 3.2: Other Economic Flows

2020 2019 $ $

Net gain/(loss) on sale of non‑financial assets

Net loss on disposal of property plant and equipment - (828,574)

Total net gain/(loss) on non‑financial assets - (828,574)

Other gains/(losses) from other economic flows

Net gain/(loss) arising from revaluation of long service liability (13,108) (18,895)

Total other gains/(losses) from other economic flows (13,108) (18,895)

Total other gains/(losses) from economic flows (13,108) (847,469)

Other economic flows are changes in the volume or value of an asset or liability that do not result from transactions.

Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses as follows: ● Revaluation gains/(losses) of non-financial physical assets (Refer to Note 4.1 Property plant and equipment.) ● Net gain/(loss) on disposal of non-financial assets

Any gain or loss on the disposal of non-financial assets is recognised at the date of disposal.

Other gains/(losses) from other economic flows

Other gains/(losses) include: ● the revaluation of the present value of the long service leave liability due to changes in the bond rate movements, inflation rate movements and the impact of changes in probability factors.

Inventories

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

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

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

14 Kerang District Health Notes to Financial Statements 30 June 2020

Note 3.3: Analysis of Expenses and Revenue by Internally Managed and Restricted Specific Purpose Funds

Expense Income 2020 2019 2020 2019 $ $ $ $ Commercial Activities Property Revenue/Expense 146,312 183,221 33,959 12,390 Provision of Accommodation 24,121 13,640 109,979 127,617 Catering Services 194,909 169,134 93,358 82,996

TOTAL 365,342 365,995 237,296 223,003

15 Kerang District Health Notes to Financial Statements 30 June 2020

Note 3.4: Employee benefits in the balance sheet

2020 2019 $ $

Current Provisions Employee Benefits (i) Annual Leave - Unconditional and expected to be settled within 12 months (ii) 705,156 608,346 - Unconditional and expected to be settled after 12 months (iii) 395,529 435,915 Long Service Leave - Unconditional and expected to be settled within 12 months (ii) 144,597 167,079 - Unconditional and expected to be settled after 12 months (iii) 1,237,214 1,151,940 Accrued ADO's - Unconditional and expected to be settled within 12 months (ii) 8,395 6,099

2,490,891 2,369,379 Provisions related to Employee Benefit On-Costs - Unconditional and expected to be settled within 12 months (ii) 165,262 154,423 - Unconditional and expected to be settled after 12 months (iii) 146,553 136,942

311,815 291,365 Total Current Provisions 2,802,706 2,660,744

Non-Current Provisions Employee Benefits (iii) 363,216 339,238 Provisions related to Employee Benefit On-Costs 37,956 35,450

Total Non-Current Provisions 401,172 374,688

Total Provisions 3,203,878 3,035,432

(a) Employee Benefits and Related On-Costs Current Employee Benefits and related on-costs Unconditional LSL Entitlements 1,526,210 1,456,856 Annual Leave Entitlements 1,267,113 1,197,096 Accrued Days Off 9,383 6,792 2,802,706 2,660,744

Non-Current Employee Benefits and related on- costs Conditional Long Service Leave Entitlements (iii) 401,172 374,688

Total Employee Benefits and Related On-Costs 3,203,878 3,035,432

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

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

2020 2019 Movement in Long Service Leave: Balance at start of year 1,831,544 1,659,913 Provision made during the year 144,248 165,228 Revaluations made during the year (13,108) (18,895) Settlement made during the year (35,302) 25,298 Balance at end of year 1,927,382 1,831,544

16 Kerang District Health Notes to Financial Statements 30 June 2020

Provisions (continued)

Employee Benefit Recognition

Provision is made for benefits accruing to employees in respect of ADO's, annual leave and long service leave for services rendered to the reporting date as an expense during the period the services are delivered.

Provisions

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

The amount recognised as a liability is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

Annual Leave and Accrued Days Off

Liabilities for annual leave and accrued days off are recognised in the provision for employee benefits as 'current liabilities' because Kerang District Health does not have an unconditional right to defer settlements of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for annual leave and accrued days off are measured at:

- Nominal value – if the health service expects to wholly settle within 12 months; or - Present Value – if the health service does not expect to wholly settle within 12 months.

Long Service Leave (LSL)

The liability for LSL is recognised in the provision for employee benefits.

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

The components of this current LSL liability are measured at:

- Nominal value – if the health service expects to wholly settle within 12 months; and - Present value – if the health service does not expect to wholly settle within 12 months.

Conditional LSL is disclosed as a non-current liability. Any gain or loss followed revaluation of the present value of the non-current liability is recognised as a transaction, except to the extent that a gain or loss arises due to changes in estimations e.g. bond rate movements and changes in probability factors which are then recognised as other economic flows.

Termination Benefits

Termination benefits are payable when employment is terminated before the normal retirement date or when an employee decides to accept an offer of benefits in exchange for the termination of employment.

On-Costs Related to Employee Expense

Provisions for on-costs such as workers compensation and superannuation are recognised together with provisions for employee benefits.

17 Kerang District Health Notes to Financial Statements 30 June 2020

Note 3.5: Superannuation

Superannuation Liabilities

Paid Contribution for the Contributions outstanding at Year Year End

2020 2019 2020 2019 $ $ $ $ (i) Defined benefit plans: First State Super 21,688 20,099 1,695 1,572

Defined contribution plans: First State Super 644,756 650,316 49,675 52,503 Hesta 172,141 95,794 14,212 8,732 Other funds 14,776 18,967 463 3,845 Total 853,361 785,176 66,045 66,652

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

Employees of Kerang District Health are entitled to receive superannuation benefits and the Health Service contributes to both the defined benefit and defined contribution plans. The defined benefit plan provides benefits based of years or service and final average salary.

Defined benefit superannuation plans The amount charged to the Comprehensive Operating Statement in respect of defined benefit superannuation plans represents the contribution made by Kerang District Health to the superannuation plans in respect of services of current Health Service staff during the reporting period. Superannuation contributions are made to the plans based on the relevant rules of each plan, and are based upon actuarial advice.

Kerang District Health does not recognise any unfunded defined benefit liability in respect of the plans because the entity has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance discloses the State's defined benefits liabilities in its disclosure for administered items.

However superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive operating statement of the Health Service.

The Name, details and amounts that have been expensed in relation to the major employee superannuation funds and contributions made by the Health Service are disclosed above.

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

18 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4: Key Assets to support service delivery

Kerang District Health controls infrastructure and other investments that are utilised in fulfilling its objectives and conducting its activities. They represent the key resources that have been entrusted to the hospital to be utilised for the delivery of those outputs.

Structure 4.1 Property, plant and equipment 4.2 Depreciation 4.3 Inventory

19 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1: Property, plant and equipment

Initial Recognition

Items of property, plant and equipment are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment loss. Where an asset is acquired for no or nominal cost, the cost is its fair value at the date of acquisition.

The initial cost for non-financial physical assets under a lease (refer to Note 6.1) is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease.

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

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

Right-of-use asset acquired by lessees (Under AASB 16 - Leases from 1 July 2019) - Initial measurement

Kerang District Health recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost which comprises the initial amount of the lease liability adjusted for:

● any lease payments made at or before the commencement date; plus ● any initial direct costs incurred; and ● an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentive received.

Subsequent measurement: Property, plant and equipment (PPE) as well as right-of-use assets under leases are subsequently measured at fair value less accumulated depreciation and impairment. Fair value is determined with regard to the asset's highest and best use (considering legal or physical restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset) and is summarised on the following page by asset category.

Right-of-use asset - Subsequent measurement

Kerang District Health depreciates the right-of-use asset on a straight line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful life of the right-of-use assets are determined on the same basis as property, plant and equipment, other than where the lease term is lower than the otherwise assigned useful life.

In addition, the right-of-use asset is periodically reduced by impairment losses, if any and adjusted for certain premeasurements of the lease liability.

Revaluations of Non-Current Physical Assets

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

20 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1: Property, plant and equipment (continued)

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

Revaluation decrements are recognised in 'Other Comprehensive Income' to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of property, plant and equipment.

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

Revaluation surplus is not transferred to accumulated funds on de-recognition of the relevant asset, except where an asset is transferred via contributed capital.

In accordance with FRD 103H, Kerang District Health's non-current physical assets were assessed

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

For the purpose of fair value disclosures, Kerang District Health has determined classes of assets on

In addition, Kerang District Health determines whether transfers have occurred between levels in

The Valuer-General (VGV) is Kerang District Health's independent valuation agency.

The estimates and underlying assumptions are reviewed on an ongoing basis.

Valuation hierarchy

In determining fair values a number of inputs are used. To increase consistency and comparability ● Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities. ● Level 2 - valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and ● Level 3 - valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Identifying unobservable inputs (level 3) fair value measurements

Level 3 fair value inputs are unobservable valuation inputs for an asset or liability. These inputs require significant judgement and assumptions in deriving fair value for both financial and non- financial assets.

Unobservable inputs shall be used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, i.e., an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability. Therefore, unobservable inputs shall reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk.

21 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1: Property, plant and equipment (continued)

Consideration of highest and best use (HBU) for non-financial physical assets

Judgements about highest and best use must take into account the characteristics of the assets concerned, including restrictions on the use and disposal of assets arising from the asset's physical nature and any applicable legislative/contractual arrangements.

In accordance with paragraph AASB 13.29, Kerang District Health has assumed the current use of a non financial physical asset is its HBU unless market or other factors suggest that a different use by market participants would maximise the value of the asset.

Specialised Land and Specialised Buildings

Specialised land includes Crown Land which is measured at fair value with regard to the property's highest and best use after due consideration is made for any legal or physical restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the assets are not taken into account until it is virtually certain that any restrictions will no longer apply. Therefore, unless otherwise disclosed, the current use of these non-financial physical assets will be their highest and best use.

During the reporting period, Kerang District Health held Crown Land. The nature of this asset means that there are certain limitations and restrictions imposed on its use and/or disposal that may impact their fair value.

The market approach is also used for specialised land and specialised buildings although it is adjusted for the community service obligation (CSO) to reflect the specialised nature of the assets being valued. Specialised assets contain significant, unobservable adjustments, therefore these assets are classified as Level 3 under the market based direct comparison approach.

The CSO adjustment is a reflection of the valuer's assessment of the impact of restrictions associated with an asset to the extent that is also equally applicable to market participants. This approach is in light of the highest and best use consideration required for fair value measurement, and takes into account the use of the asset that is physically possible, legally permissible and financially feasible. As adjustments of CSO are considered as significant unobservable inputs, specialised land would be classified as Level 3 asset.

For Kerang District Health, the depreciated replacement cost method is used for the majority of specialised buildings, adjusting for the associated depreciation. As depreciation adjustments are considered as significant and unobservable inputs in nature, specialised buildings are classified as Level 3 for fair value measurements.

Non-Specialised Land, Non Specialised Buildings

Non-specialised land and non-specialised buildings are valued using the market approach. Under this valuation method, the assets are compared to recent comparable sales or sales or comparable assets which are considered to have nominal or no added improvement value.

For non-specialised land and non-specialised buildings, an independent valuation was performed by the Valuer-General Victoria to determine the fair value using the market approach. Valuation of the assets was determined by analysing comparable sales and allowing for share, size, topography, location and other relevant factors specific to the asset being valued. An appropriate rate per square metre has been applied to the subject asset. The effective date of the valuation is 30 June 2019.

22 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1: Property, plant and equipment (continued)

An independent valuation of Kerang District Health's specialised land and specialised buildings was performed by the Valuer-General Victoria. The valuation was performed using the market approach adjusted for CSO. The effective date of the valuation is 30 June 2019.

Vehicles

Kerang District Health acquires new vehicles and at times disposes of them before completion of their economic life. The process of acquisition, use and disposal in the market is managed by the Health Service who set relevant depreciation rates during use to reflect the consumption of the vehicles. As a result, the fair value does not differ materially from the carrying amount (depreciated cost).

Plant and Equipment (including medical equipment, computers and furniture and fittings)

Plant and equipment (including medical equipment, computers and communication equipment and furniture and fittings) are held at carrying amount (depreciated cost). When plant and equipment is specialised in use, such that it is rarely sold other than as part of a going concern, the depreciated replacement cost is used to estimate the fair value. Unless there is market evidence that current replacement costs are significantly different from the original acquisition cost, it is considered unlikely that depreciated replacement cost will be materially different from the existing carrying amount.

There were no changes in valuation techniques throughout the period to 30 June 2020.

For all assets measured at fair value, the current use is considered the highest and best use.

23 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1 (a): Property, Plant and Equipment - Gross carrying amount and accumulated depreciation

(a) Gross carrying amount and accumulated depreciation

2020 2019 $ $ Land Land at Fair Value 1,894,000 1,894,000

Total Land 1,894,000 1,894,000

Buildings Buildings at Fair Value 31,881,077 31,815,500 Less Accumulated Depreciation 1,025,096 -

Total Buildings 30,855,981 31,815,500

Plant and Equipment Plant and Equipment at Fair Value 1,065,586 913,835 Less Accumulated Depreciation 731,136 626,866 Total Plant and Equipment 334,450 286,969

Medical Equipment Medical Equipment at Fair Value 1,574,636 1,557,785 Less Accumulated Depreciation 1,231,223 1,078,096 Total Medical Equipment 343,413 479,689

Computers and Communications Loddon Mallee Rural Health Alliance Assets at Fair Value 69,730 53,833 Less Accumulated Depreciation 33,004 30,536

Computers and Communication at Fair Value 573,308 563,453 Less Accumulated Depreciation 483,191 404,147

Total Computers and Communications Assets 126,843 182,603

Motor Vehicles Motor Vehicles at Fair Value 572,463 572,463 Less Accumulated Depreciation 527,799 488,441

Total Motor Vehicles 44,664 84,022

Furniture and fittings Furniture and fittings at Fair value 161,627 154,699 Less Accumulated Depreciation 135,570 128,083

Total Furniture & Fittings 26,057 26,616

Right of use vehicles Right of use vehicles 120,728 - Less Accumulated Depreciation 15,294 -

Total Right of use assets 105,434 -

TOTAL 33,730,842 34,769,399

24 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1 (b): Property, Plant and Equipment - Reconciliations of carrying amount by class of asset

Land Buildings Plant & Computers Medical Motor Furniture Right of use Total Equipment Equipment Vehicles & Fittings Vehicles Note $ $ $ $ $ $ $ $ $ Balance at 1 July 2018 780,000 29,337,580 315,069 248,509 606,040 158,494 25,677 - 31,471,369 Additions - 304,820 79,127 22,254 57,478 - 12,614 - 476,293 Assets Transferred from Work in Progress ------Disposals - (832,572) ------(832,572) Revaluation Increments/(Decrements) 1,114,000 4,542,732 ------5,656,732 Depreciation 4.2 - (1,537,060) (107,227) (88,160) (183,829) (74,472) (11,675) - (2,002,423)

Balance at 1 July 2019 4.1(a) 1,894,000 31,815,500 286,969 182,603 479,689 84,022 26,616 - 34,769,399 Additions - 65,577 151,751 27,013 16,851 - 6,928 120,728 388,848 Disposals ------Revaluation Increments/(Decrements) ------Depreciation 4.2 - (1,025,096) (104,270) (82,773) (153,127) (39,358) (7,487) (15,294) (1,427,405)

Balance at 30 June 2020 4.1(a) 1,894,000 30,855,981 334,450 126,843 343,413 44,664 26,057 105,434 33,730,842

Land and buildings carried at valuation A full revaluation of Kerang District Health's land and buildings was performed by the Valuer-General of Victoria in May 2019 in accordance with the requirements of Financial Reporting Direction (FRD) 103H Non-Financial Physical Assets. The valuation, which conforms to Australian Valuation Standards, was determined by reference to the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length transaction. The effective date of the valuation for both land and buildings was 30 June 2019.

In compliance with FRD 103H, in the year ended 30 June 2020, management conducted an annual assessment of the fair value of land and buildings. To facilitate this, management obtained from the Department of Treasury and Finance the VGV indices for the financial year ended 30 June 2020.

The VGV indices, which are based on data to March 2020, indicate an average increase of 3% across all land parcels and a 3% increase in buildings.

Management regards the VGV indices to be a reliable and relevant data set to form a basis of their estimates. Whilst these indices are applicable at 30 June 2020, the fair value of land and buildings will continue to be subjected to the impacts of COVID-19 in future accounting periods.

As the accumulative movement was less than 10% for the land and buildings no managerial revaluation was required.

The land and building balances are considered to be sensitive to market conditions.

25 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1 (c): Property, Plant and Equipment - fair value measurement hierarchy for assets

Fair value measurement at end of reporting Carrying period using: amount as at Note 30 June 2020 Level 1 (1) Level 2 (1) Level 3 (1) Land at fair value $ $ $ $

Specialised land 929,000 - - 929,000 Non Specialised land 965,000 - 965,000 -

Total of land at fair value 4.1(a) 1,894,000 - 965,000 929,000

Buildings at fair value

Specialised buildings 29,725,493 - - 29,725,493 Non Specialised buildings 1,130,488 - 1,130,488 -

Total of building at fair value 4.1(a) 30,855,981 - 1,130,488 29,725,493

Plant and equipment at fair value Plant equipment and vehicles at fair value - Vehicles 4.1(a) 44,664 - - 44,664 - Plant and equipment 4.1(a) 487,350 - - 487,350 - Medical Equipment 4.1(a) 343,413 - - 343,413 - Right of use Vehicles 4.1(a) 105,434 - - 105,434

Total of plant, equipment and vehicles at fair value 980,861 - - 980,861

33,730,842 - 2,095,488 31,635,354 i Classified in accordance with the fair value hierarchy

Fair value measurement at end of reporting Carrying period using: amount as at 30 June 2019 Level 1 (1) Level 2 (1) Level 3 (1) Land at fair value $ $ $ $

Specialised land 929,000 - - 929,000 Non Specialised land 965,000 - 965,000 -

Total of land at fair value 4.1(a) 1,894,000 - 965,000 929,000

Buildings at fair value

Specialised buildings 30,641,500 - - 30,641,500 Non Specialised buildings 1,174,000 - 1,174,000 -

Total of building at fair value 4.1(a) 31,815,500 - 1,174,000 30,641,500

Plant and equipment at fair value Plant equipment and vehicles at fair value - Vehicles 4.1(a) 84,022 - - 84,022 - Plant and equipment 4.1(a) 496,188 - - 496,188 - Medical Equipment 4.1(a) 479,689 - - 479,689

Total of plant, equipment and vehicles at 1,059,899 - - 1,059,899

34,769,399 - 2,139,000 32,630,399 i Classified in accordance with the fair value hierarchy

26 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1 (d): Property, Plant and Equipment - Reconciliation of level 3 Fair Value measurement

Plant and Furniture & Medical Right of Use Motor Note Land Buildings equipment Computers Fittings equipment Vehicles Vehicles $ $ $ $ $ $ $ $

Balance at 1 July 2018 4.1(b) 780,000 29,337,580 315,069 248,509 25,677 606,040 - 158,494 Purchases 4.1(b) - 304,820 79,127 22,254 12,614 57,478 - - Transfers in (out) 4.1(b) ------Disposals 4.1(b) - (832,572) ------Depreciation 4.2 - (1,537,060) (107,227) (88,160) (11,675) (183,829) - (74,472)

Subtotal 780,000 27,272,768 286,969 182,603 26,616 479,689 - 84,022

Items recognised in other comprehensive income - Revaluation 149,000 3,368,732 ------Subtotal 149,000 3,368,732 - - - - Balance at 30 June 2019 4.1(c) 929,000 30,641,500 286,969 182,603 26,616 479,689 - 84,022

Purchases 4.1(b) - 65,577 151,751 27,013 6,928 16,851 120,728 - Disposals 4.1(b) ------Depreciation 4.2 - (981,584) (104,270) (82,773) (7,487) (153,127) (15,294) (39,358)

Subtotal 929,000 29,725,493 334,450 126,843 26,057 343,413 105,434 44,664

Items recognised in other comprehensive income - Revaluation ------

Subtotal ------Balance at 30 June 2020 4.1(c) 929,000 29,725,493 334,450 126,843 26,057 343,413 105,434 44,664

Note There have been no transfers between levels during the period.

27 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1 (e): Property, Plant and Equipment - fair value determination

Asset class Likely valuation approach Significant inputs (level 3 only)

Specialised land Market approach - 20% CSO adjustments

Specialised buildings Depreciated replacement - Useful life - Cost per square metre cost approach - Current age of buildings

Plant & Equipment Depreciated replacement - Useful life cost approach - Cost per unit

Vehicles Depreciated replacement - Useful life cost approach - Cost per unit

Non-specialised land Market approach N/A

Non-specialised buildings Market approach N/A

28 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.1 (f): Property Revaluation Surplus

2020 2019 Note $ $ Property Revaluation Reserves Balance at the beginning of the reporting period 10,769,307 5,112,575

Revaluation Increment - Land 4.1(b) - 1,114,000 - Buildings 4.1(b) - 4,542,732 Balance at the end of the reporting period* 10,769,307 10,769,307

* Represented by: - Land 1,481,826 367,826 - Buildings 9,287,481 4,744,749 Total 10,769,307 5,112,575

29 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.2: Depreciation

2020 2019 $ $ Depreciation Buildings 1,025,096 1,537,060 Plant and equipment 104,270 107,227 LMRHA Assets 3,728 4,856 Computers and Communication 79,045 83,304 Medical Equipment 153,127 183,829 Motor Vehicles 39,358 74,472 Right of use assets - Vehicles 15,294 - Furniture and Fittings 7,487 11,675 Total Depreciation 1,427,405 2,002,423

All buildings, plant and equipment and other non-financial physical assets (excluding items under operating leases, assets held for sale, land and investment properties) that have finite useful lives are depreciated. Depreciation is generally calculated on a straight line basis at rates that allocate the asset's value, less any estimated residual value over its estimated useful life.

Right-of-use assets are depreciated over the shorter of the asset's life and the lease term. Where Kerang District Health obtains ownership of the underlying leased asset or if the cost of the right-of-use asset reflects that the entity will exercise a purchase option, the entity depreciates the right-of-use asset over its useful life.

2020 2019 Buildings - Structure Shell Building Fabric 5 to 33 years 5 to 33 years - Site Engineering Services and Central Plant 5 to 30 years 5 to 30 years - Fit Out 8 to 40 years 8 to 40 years - Trunk Reticulated Building Systems 30 to 40years 30 to 40years Plant & Equipment 3 to 10 years 3 to 7 years Medical Equipment 7 to 10 years 7 to 10 years Computers and Communication 4 years 4 years Furniture & Fittings 4 to 10 years 13 years Motor Vehicles 5 to 10 years 2 to 10 years

As part of the buildings valuation, building values were separated into components and each component assessed for its useful life which is represented above.

30 Kerang District Health Notes to Financial Statements 30 June 2020

Note 4.3: Inventories

2020 2019 $ $ Pharmaceuticals At cost 41,654 5,105 Catering Supplies At cost 4,197 794 Housekeeping Supplies At cost 6,296 1,191 Medical and Surgical Lines At cost 23,504 4,445 Engineering Stores At Cost 1,259 238 Administration Stores At Cost 6,715 1,270 Loddon Mallee Rural Health Alliance At Cost 46,377 -

TOTAL INVENTORIES 130,002 13,043

31 Kerang District Health Notes to Financial Statements 30 June 2020

Note 5: Other assets and liabilities

This section sets out those assets and liabilities that arose from the hospital's operations.

Structure 5.1 Receivables 5.2 Payables 5.3 Other liabilities 5.4 Other assets

32 Kerang District Health Notes to Financial Statements 30 June 2020

Note 5.1: Receivables

2020 2019 $ $ CURRENT Contractual

Inter Hospital Debtors 24,263 36,741 Trade Debtors 131,635 119,423 Patient Fees 18,777 17,513 Accrued Revenue - Other 98,363 58,171 Receivables - Loddon Mallee Rural Health Alliance 2,955 20,515

Less: Allowance for impairment losses of contractual receivables Allowance for Doubtful Debts (8,000) (8,000) 267,993 244,363 Statutory GST Receivable - Health Service 35,286 31,147 GST Receivable - Loddon Mallee Rural Health Alliance 15,572 3,146

50,858 34,293 TOTAL CURRENT RECEIVABLES 318,851 278,656 NON CURRENT Statutory Long Service Leave - Department of Health and Human Services 618,977 596,017

TOTAL NON-CURRENT RECEIVABLES 618,977 596,017 TOTAL RECEIVABLES 937,828 874,673

(a) Movement in the Allowance for impairment losses of contractual receivables

2020 2019 $'000 $'000 Balance at beginning of year 8,000 8,000

Increase/(decrease) in allowance recognised in net result - -

Balance at end of year 8,000 8,000

33 Kerang District Health Notes to Financial Statements 30 June 2020

Receivables (continued)

Receivables consist of:

● Contractual receivables, which includes mainly debtors in relation to goods and services, accrued investment income. These receivables are classified as financial instruments and categorised as 'financial assets at amortised costs'. They are initially recognised at fair value plus any directly attributable transaction costs. Kerang District Health holds the contractual receivables with the objective to collect the contractual cash flows and therefore subsequently measured at amortised cost using the effective interest method, less any impairment.

● Statutory receivables, which predominantly includes amounts owing from the Victorian Government and Goods and Services Tax (GST) input tax credits recoverable. Statutory receivables do not arise from contracts and are recognised and measured similarly to contractual receivables (except for impairment), but are not classified as financial instruments for disclosure purposes. Kerang District Health applies AASB 9 for initial measurement of the statutory receivables and as a result statutory receivables are initially recognised at fair value plus any directly attributable transaction cost.

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

Trade debtors are carried at nominal amounts due and due for settlement within 30 days from the date of recognition. Kerang District Health is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. Based on historical information about customer default rates, management consider the credit quality or trade receivables that are not past due or impaired to be good.

Impairment losses of contractual receivables

Refer to Note 7.1 (c) Contractual receivables at amortised costs for Kerang District Health's contractual impairment losses.

34 Kerang District Health Notes to Financial Statements 30 June 2020

Note 5.2: Payables

2020 2019 $ $ CURRENT Contractual Trade Creditors 481,625 337,358 Accrued Salaries and Wages 403,228 355,585 Payables - Loddon Mallee Rural Health Alliance 198,685 64,052 Accrued Expenses 51,023 99,641 Inter hospital creditors 16,047 3,033

1,150,608 859,669 Statutory - -

- - TOTAL CURRENT 1,150,608 859,669

Payables Recognition

Payables consist of: ● contractual payables, classified as financial instruments and measured at amortised cost. Accounts payable and salaries and wages payable represent liabilities of goods and services provided to Kerang District Health prior to the end of the financial year that are unpaid; and future payments in respect of the purchase of those goods and services.

● statutory payables, that are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from contracts.

The normal credit terms for accounts payable are usually Nett 60 days.

Maturity analysis of payables

Please refer to Note 7.1(b) for the aging analysis of payables.

35 Kerang District Health Notes to Financial Statements 30 June 2020

Note 5.3: Other Liabilities

2020 2019 $ $ CURRENT Monies Held in Trust - refundable Accommodation Deposits 2,608,102 2,620,945

Total Current 2,608,102 2,620,945

Total Monies Held in Trust Represented by the following assets: Cash Assets (refer to Note 6.2) 2,608,102 2,620,945

TOTAL 2,608,102 2,620,945

Refundable Accommodation Deposits (RAD)

RAD's are non interest bearing deposits made by some aged care residents to Kerang District Health upon admission. These deposits are liabilities which fall due and payable when the resident leaves the home. As there is no unconditional right to defer payment for 12 months, these liabilities are recorded as current liabilities.

RAD liabilities are recorded at an amount equal to the proceeds received, net of any amounts deducted from the RAD in accordance with the Aged Care Act 1997.

36 Kerang District Health Notes to Financial Statements 30 June 2020

Note 5.4: Other Assets

2020 2019 CURRENT $ $ Prepayments - Health Service 192,479 185,813 Prepayments - Loddon Mallee Rural Health Alliance 54,029 51,563 TOTAL CURRENT OTHER ASSETS 246,508 237,376

TOTAL OTHER ASSETS 246,508 237,376

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

37 Kerang District Health Notes to Financial Statements 30 June 2020

Note 6: How we finance our operations

This section provides information on the sources of finance utilised by the hospital during its operations, along with interest expenses (the cost of borrowings) and other information related to financing activities of the hospital.

This section includes disclosures of balances that are financial instruments (such as borrowings and cash balances). Note 7.1 provides additional, specific financial instrument disclosures.

Structure 6.1 Borrowings 6.2 Cash and cash equivalents 6.3 Commitments for expenditure 6.4 Non-cash financing and investing activities

38 Kerang District Health Notes to Financial Statements 30 June 2020

Note 6.1: Borrowings

2020 2019 CURRENT $ $ Lease Liability (i) 20,876 -

Total Current Borrowings 20,876 -

NON CURRENT Lease Liability (i) 84,954 - DHHS Loan (ii) 108,473 -

Total Non Current Borrowings 193,427 - Total Borrowings 214,303 -

(i) Secured by the asset leased. Finance leases are effectively secured as the rights to the leased assets revert to the lessor in the event of default (ii) This is an unsecured loan which bears no interest. The loan is repayable over 4 yearly instalments with the first repayment due 30 June 2022.

Maturity analysis of borrowings Please refer Note 7.1(c) for the maturity analysis of borrowings

Defaults and breaches During the current and prior year, there were no defaults or breaches of any of the loans.

Lease Liability

Repayments in relation to leases are payable as follows:

Present value of Minimum future lease minimum future lease payments payments 2020 2019 2020 2019 $ $ $ $ No later than one year 23,752 - 20,876 - Later than 1 year and not later than 5 years 86,835 - 84,954 - Minimum Lease payments 110,587 - 105,830 - Less future finance charges 4,757 - - - TOTAL 105,830 - 105,830 -

Included in the financial statements as: Current Borrowings - lease liability 20,876 - 20,876 - Non-current Borrowings - lease liability 84,954 - 84,954 -

105,830 - 105,830 -

The weighted average interest rate implicit in the lease is 2.87%.

39 Kerang District Health Notes to Financial Statements 30 June 2020

Note 6.1: Borrowings (cont)

Leases

A lease is a right to use an asset for an agreed period of time in exchange for payment. All leases are recognised on the balance sheet, with the exception of low value leases (less than $10,000 AUD) and short term leases of less than 12 months.

Kerang District Health leasing activities

Kerang District Health has entered into leases relating to motor vehicles and computers.

For any new contracts entered into on or after 1 July 2019, Kerang District Health considers whether a contract is, or contains to a lease. A lease is defined as a 'contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration'. To apply this definition Kerang District Health assesses whether the contract meets three key evaluations which are whether:

● the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to Kerang District Health and for for which the supplier does not have substantive substitution rights;

● Kerang District Health has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract and Kerang District Health has the right to direct the use of the identified asset throughout the period of use; and

● Kerang District Health has the right to take decisions in respect of 'how and for what purpose' the asset is used throughout the period of use.

This policy is applied to contracts entered into, or changed, on or after 1 July 2019.

Separation of lease and non-lease components

At inception or on reassessment of a contract that contains a lease component, the lessee is required to separate out and account separately for non-lease components within a lease contract and exclude these amounts when determining the lease liability and right-of-use asset amount.

Recognition and measurement of leases as a lessee (under AASB 16 from 1 July 2019)

Lease Liability - initial measurement

The lease liability is initially measured at the present value of the lease payments unpaid at the commencement date, discounted using the interest rate implicit in the lease if that rate is readily determinable or Kerang District Health's incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise of the following:

● fixed payments (including in-substance fixed payments) less any lease incentive receivable;

● Variable payments based on an index or rate, initially measured using the index or rate as at the commencement date;

● amounts expected to be payable under a residual value guarantee; and

● payments arising from purchase and termination options reasonably certain to be exercised.

40 Kerang District Health Notes to Financial Statements 30 June 2020

Note 6.1: Borrowings (cont)

Lease Liability - subsequent measurement

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is measured to reflect any reassessment or modification, or if there are changes in substance fixed payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right of use asset is already reduced to zero.

Short-term leases and leases of low value assets

Kerang District Health has elected to account for short-term leases and leases of low value assets using the practical expedients. Instead of recognising a right of use asset and lease liability, the payments in relation to these are recognised as an expense in profit and loss on a straight line basis over the lease term.

Presentation of right-of-use assets and lease liabilities

Kerang District Health presents right-of-use assets as 'property plant and equipment' unless they meet the definition of investment property, in which case they are disclosed as 'investment property' in the balance sheet. Lease liabilities are presented as 'borrowings' in the balance sheet.

Recognition and measurement of lease (under AASB 117 until 30 June 2019)

In the comparative period, leases or property, plant and equipment were classified as either finance lease or operating lease.

Kerang District Health determined whether an arrangement was or contained a lease based on the substance of the arrangement and required an assessment of whether fulfilment of the arrangement is dependent on the use of the specific asset(s); and the arrangement conveyed a right to use the asset(s).

Leases of property, plant and equipment where Kerang District Health as a lessee had substantially all of the risks and rewards of ownership were classified as finance leases. Finance lease were initially recognised as assets and liabilities at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payment, each determined at the inception of the lease. The leased asset is accounted for as a non-financial physical asset and depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Minimum finance lease payments were apportioned between the reduction of the outstanding lease liability and the periodic finance expense, which is calculated using the interest rate implicit in the lease and charged directly to the consolidated comprehensive operating statement.

Contingent rentals associated with finance leases were recognised as an expense in the period in which they are incurred.

Assets held under other leases were classified as operating leases and were not recognised in Kerang District Health's balance sheet. Operating lease payments were recognised as an operating expense in the Statement of Comprehensive Income on a straight line basis over the lease term.

Operating lease payments up until 30 June 2019 are recognised on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset.

From 1 July 2019, the following lease payments are recognised on a straight-line basis:

● Short term leases - leases with a term of less than 12 moths: and

● Low value leases - leases with the underlying asset's fair value (when new, regardless of the age of the asset being leased) is no more than $10,000.

41 Kerang District Health Notes to Financial Statements 30 June 2020

Note 6.1: Borrowings (cont)

Variable lease payments not included in the measurement of the lease liability (i.e. variable lease payments that do not depend on an index or a rate, initially measured using the index or rate as at the commencement date). These payments are recognised in the period in which the event or condition that triggers those payments occur.

Borrowings All borrowings are initially recognised at fair value of the consideration received, less direct attributable transaction costs. The measurement basis subsequent to initial recognition depends on whether Kerang District Health has categorised its liability as either 'financial liabilities designated at fair value through profit or loss', or financial liabilities at 'amortised cost'.

Non-interest bearing borrowings are measured at amortised cost.

42 Kerang District Health Notes to Financial Statements 30 June 2020

Note 6.2: Cash and Cash Equivalents

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

2020 2019 $ $ Cash on Hand (excluding Monies held in trust) 1,100 1,100 Cash at Bank (excluding Monies held in trust 2,970,900 2,379,545 Cash at Bank (Monies held in Trust) 2,666,566 2,654,117 Cash for Loddon Mallee Rural Health Alliance 266,738 198,304

Total Cash and Cash Equivalents 5,905,304 5,233,066

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

For cash flow statement presentation purposes, cash and cash equivalents include bank overdrafts, which are included as liabilities on the balance sheet. The cash flow statement includes monies held in trust.

43 Kerang District Health Notes to Financial Statements 30 June 2020

Note 6.3: Commitments

Commitments for future expenditure include operating and capital commitments arising from contracts. Any commitments would be disclosed at their nominal value and are inclusive of the goods and services tax (GST) payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised on the balance sheet.

Kerang District Health has entered into commercial leases on certain motor vehicles where it is not in the interest of Kerang District Health to purchase these assets. These leases have an average life between 1 and 5 years with renewal terms included in the contract. There are no restrictions placed upon the lessee by entering into these leases.

2020 2019 $ $ Operating Expenditure Commitments Less than 1 year 20,876 - Longer than 1 year and not later than 5 years 84,954 - 5 years or more - -

Total Operating Expenditure Commitments 105,830 -

TOTAL COMMITMENTS FOR EXPENDITURE 105,830 -

Future lease payments are recognised on the balance sheet, refer to Note 6.1 Borrowings.

Note 6.4: Non-cash financing and investing activities

2020 2019 $ $

Acquisition of plant and equipment by means of Finance Lease 120,728 -

120,728 -

120,728 -

44 Kerang District Health Notes to Financial Statements 30 June 2020

Note 7: Risks, contingencies and valuation uncertainties

Kerang District health is exposed to risk from its activities and outside factors. In addition, it is often necessary to make judgements and estimates associated with recognition and measurement of items in the financial statements. This section sets out financial instrument specific information, (including exposure to financial risks) as well as those that are contingent in nature or require a higher level of judgement to be applied, which for the health service is related mainly to fair value determination.

Structure 7.1 Financial instruments 7.2 Contingent assets and contingent liabilities

45 Kerang District Health Notes to Financial Statements 30 June 2020

Note 7.1: Financial Instruments

Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of Kerang District Health's activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation.

(a) Financial instruments: categorisation

Contractual Financial financial Assets at liabilities at Total Amortised amortised Cost cost

2020 Note $ $ $ Contractual Financial Assets Cash and cash equivalents 6.2 5,905,304 - 5,905,304 Receivables - Trade Debtors 5.1 166,675 - 166,675 - Other Receivables 5.1 101,318 - 101,318

Total Financial Assets (i) 6,173,297 - 6,173,297

Financial Liabilities Payables 5.2 - 1,150,608 1,150,608 Borrowings 6.1 - 214,303 214,303 Other financial liabilities - Monies held in trust 5.3 - 2,608,102 2,608,102 Total Financial Liabilities (i) - 3,973,013 3,973,013

Contractual Contractual financial financial assets - loans liabilities at Total and amortised receivables cost 2019 Note $ $ $ Contractual Financial Assets Cash and cash equivalents 6.2 5,233,066 - 5,233,066 Receivables - Trade Debtors 5.1 165,677 - 165,677 - Other Receivables 5.1 78,686 - 78,686 Other Financial Assets Total Financial Assets (i) 5,477,429 - 5,477,429

Financial Liabilities Payables 5.2 - 859,669 859,669 Other financial liabilities - Monies held in trust 5.3 - 2,620,945 2,620,945 Total Financial Liabilities (i) - 3,480,614 3,480,614

(i) The carrying amount excludes statutory receivables (i.e. GST receivable and DHHS receivable) and statutory payables (i.e. Revenue in Advance and DHHS payable).

46 Kerang District Health Notes to Financial Statements 30 June 2020

Financial instruments (cont)

From 1 July 2018, Kerang District Health applies AASB 9 and classifies all of its financial assets based on the business model for managing the assets and the asset's contractual terms.

Categories of financial assets under AASB 9

Financial assets at amortised costs

Financial assets are measured at amortised costs if both of the following criteria are met and the assets are not designated as fair value through net result: ● the assets are held by Kerang District Health to collect the contractual cash flows,; and ● the assets' contractual terms give rise to cash flows that are solely payments of principal and interests.

Theses assets are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method less any impairment.

Kerang District Health recognises the following assets in this category: ● cash and cash deposits; and ● receivables (excluding statutory receivables);

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

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

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

- Kerang District Health has transferred its rights to receive cash flows from the asset and either

● has transferred substantially all the risks and rewards of the asset; or

● has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

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

Categories of financial liabilities

Financial liabilities at amortised cost are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the low interest bearing liability, using the effective interest rate method. Kerang District Health recognises the following liabilities in this category: ● Payables (excluding statutory payables); and ● borrowings (including finance lease liabilities).

Derecognition of financial liabilities: A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

47 Kerang District Health Notes to Financial Statements 30 June 2020

Note 7.1 (b): Payables and Borrowings Maturity Analysis

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

Carrying Nominal Maturity Dates Amount Amount Less than 1 1-3 Months 3 Months - 1-5 Years Note Month 1 Year 2020 $ $ $ $ $ $ Financial Liabilities at amortised cost Payables 5.2 1,150,608 1,150,608 1,150,608 - - - Borrowings 6.1 214,303 214,303 1,739 3,478 15,659 193,427 Other Financials Liabilities (i) - Accommodation Deposits 5.3 2,608,102 2,608,102 - - 2,608,102 -

Total Financial Liabilities 3,973,013 3,973,013 1,152,347 3,478 2,623,761 193,427

2019 Financial Liabilities at amortised cost Payables 5.2 859,669 859,669 859,669 - - - Borrowings 6.1 ------Other Financial Liabilities (i) - Accommodation Deposits 5.3 2,620,945 2,620,945 - - 2,620,945 -

Total Financial Liabilities 3,480,614 3,480,614 859,669 - 2,620,945 -

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

48 Kerang District Health Notes to Financial Statements 30 June 2020

Note 7.1 (c): Contractual receivables at amortised cost

Less 1-3 3 1-5 1-Jul-19 Current than 1 months months years Total month -1 year $ Expected loss rate 1.09% 0% 0% 0% 100.00% Gross carrying amount of contractual receivables 211,076 6,904 8,672 12,017 5,694 244,363 Loss allowance 2,306 0 0 0 5,694 8,000

Less 1-3 3 1-5 30-Jun-20 Current than 1 months months years Total month -1 year $ Expected loss rate 0.93% 0% 0% 0% 67.65% Gross carrying amount of contractual receivables 247,682 9,953 1,497 445 8,416 267,993 Loss allowance 2,306 0 0 0 5,694 8,000

Impairment of financial assets under AASB 9

Kerang District Health records the allowance for expected credit loss for the relevant financial instruments, in accordance with AASB 9 Financial Instruments 'Expected Credit Loss' approach. Subject to AASB 9 Financial Instruments, impairment assessment includes Kerang District Health's contractual receivables, statutory receivables and its investment in debt instruments.

Equity instruments are not subject to impairment under AASB 9 Financial Instruments. Other financial assets mandatorily measured or designed at fair value through net result are not subject to impairment assessment under AASB 9 Financial Instrument. While cash and cash equivalents are also subject to the impairment requirements of AASB 9, the identified impairment loss was immaterial.

Contractual receivables at amortised cost

Kerang District Health applies AASB 9 Financial Instruments simplified approach for all contractual receivables to measure expected credit losses using a lifetime expected loss allowance based on the assumptions about risk of default and expected loss rates. Kerang District Health has grouped contractual receivables on shared credit risk characteristics and days past due and selected the expected credit loss rate based on the Department's past history, existing market conditions, as well as forward looking estimates at the end of the financial year.

Reconciliation of the movement in the loss allowance for contractual receivables

2020 2019 $ $ Balance at beginning on the year 8000 8000 opening retained earnings adjustment on adoption of AASB 9 - - Opening Loss Allowance 8000 8000 Modification of contractual cash flows on financial assets - - Increase in provision recognised in net result - - Reversal of provision of receivables written off during the year as uncollectible - - Reversal of unused provision recognised in the net result - - Balance at end of the year 8000 8000

Credit loss allowance is classified as other economic flows in the net result. Contractual receivables are written off when there is no reasonable expectation of recovery and impairment losses are classified as a transition expense. Subsequent recoveries of amounts previously written off are credited against the same line item.

49 Kerang District Health Notes to Financial Statements 30 June 2020

Note 7.1 (c): Contractual receivables at amortised cost (cont)

In prior years, a provision for doubtful debts is recognised when there is objective evidence that the debts may not be collected and bad debts are written off when identified. A provision is made for estimated irrecoverable amounts from the sale of goods when there is objective evidence that an individual receivable is impaired. Bad debts considered as written off by mutual consent.

Statutory receivables at amortised cost

Kerang District Health's non-contractual receivables arising from statutory requirements are not financial instruments. However, they are nevertheless recognised and measured in accordance with AASB 9 requirements as if those receivables are financial instruments.

Statutory receivables are considered to have low credit risk, taking into account the counterparty's credit rating, risk of default and capacity to meet contractual risk cash flow obligations in the near term. As the result, the loss allowance recognised for these financial assets during the period was limited to 12 months expected losses.

50 Kerang District Health Notes to Financial Statements 30 June 2020

Note 7.2: Contingent Assets and Contingent Liabilities There are no known contingent assets or liabilities as at the date of this report.

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

51 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8: Other disclosures

This section includes additional material disclosures required by accounting standards or otherwise, for the understanding of this financial report.

Structure 8.1 Reconciliation of net result for the year to net cash inflow/(outflow) from operating activities 8.2 Responsible persons disclosures 8.3 Remunerations of Executives 8.4 Related parties 8.5 Remuneration of Auditors 8.6 Events occurring after the balance sheet date 8.7 Joint Ventures 8.8 Economic Dependency 8.9 AASBs issued that are not yet effective

52 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8.1: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities

2020 2019 $ $ Net Result for the Year (837,917) (3,034,154)

Non Cash Movements: Depreciation 1,427,405 2,002,423 Movements included in Investing and Financing Activities: Net (Gain)/Loss from Disposal of Non Financial Physical Assets - 828,574 Movements in Assets and Liabilities: (Increase)/Decrease in Receivables (63,155) (16,477) (Increase)/Decrease in Prepayments (9,132) (16,969) Increase/(Decrease) in Payables 290,939 (9,195) Increase/(Decrease) in Provisions 168,446 323,416 Increase/(Decrease) in Inventories (116,959) 58,272

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 859,627 135,890

53 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8.2: Responsible Persons Disclosures

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994 , the following disclosures are made regarding responsible persons for the reporting period. Period Responsible Ministers: The Honourable Jenny Mikakos, Minister for Health and Minister for Ambulance Services 01/07/2019-30/06/2020 The Honourable Luke Donnellan, Minister for Child Protection, Minister for Disability, Ageing and Carers 01/07/2019-30/06/2020

Governing Boards J. Ginnivan 01/07/2019-30/06/2020 M. Lane 01/07/2019-30/06/2020 D. Broad 01/07/2019-30/06/2020 K Liebmann 01/07/2019-30/06/2020 L Edwards 01/07/2019-30/06/2020 A Jeffreys 01/07/2019-30/06/2020 O Aertssen 01/07/2019-30/06/2020 M. Iskov 01/07/2019-30/06/2020

Accountable Officer Mr R. Jarman 01/07/2019-30/06/2020

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

Responsible persons remuneration Total Remuneration

2020 2019

Income Band $ $ $0 - $9,999 8 7 $190,000 - $200,000 1 1

Total Numbers 9 8 Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to: $218,280 $223,335

Amounts relating to Responsible Ministers are reported within the Department of Parliamentary Services' Financial Report as disclosed in Note 8.4 Related Parties.

54 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8.3: Remuneration of Executives

The number of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the table below. Total annualised employee equivalent provides a measure of full time equivalent officers over the reporting period.

Remuneration of executive officers Total Remuneration

2020 2019 $ $ Short-term employee benefits 235,483 254,429 Post-employment benefits 21,094 22,810 Other long-term benefits 8,748 5,510 Termination benefits 12,773 0

Total remuneration (i) 278,098 282,749 Total number of executives 3 2 Total annualised employee equivalent (AEE) (ii) 1.8 2

Notes: (i) The total number of executive officers includes persons who meet the definition of Key Management Personnel (KMP) of Kerang District Health under AASB 124 Related Party Disclosures and are also reported within the related parties notes disclosure. (ii) Annualised employee equivalent is based on the time fraction worked over the reporting period.

Remuneration comprises employee benefits in all forms of consideration paid, payable or provided in exchange for services rendered, and is disclosed in the following categories:

Short term Employee Benefits Salaries and wages, annual leave or sick leave that are usually paid or payable on a regular basis, as well as non-monetary benefits such as allowances and free or subsidised goods or services.

Post-employment Benefits Pensions and other retirement benefits paid or payable on a discrete basis when employment has ceased.

Other Long-term Benefits Long service leave, other long-service benefit or deferred compensation

Termination Benefits Termination of employment payments, such as severance packages

55 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8.4: Related Parties

Kerang District Health is a wholly owned and controlled entity of the State of Victoria. Related parties of the hospital include: ● all key management personnel and their close family members; ● all cabinet ministers and their close family members; ● Jointly Controlled Operation - A member of the Loddon Mallee Rural Health Alliance; and ● all hospitals and public sector entities that are controlled and consolidated into the whole of state consolidated financial statements.

KMP's are those people with the authority and responsibility for planning, directly and controlling the activities of Kerang District Health and its controlled entities, directly or indirectly.

The Board of Directors and the Executive Directors of Kerang District Health and its controlled entities are deemed to be KMP's.

Entity KMPs Position Title

Kerang District Health Robert Jarman CEO Kerang District Health Peter Jones Director of Corporate Services Kerang District Health Chloe Keogh Director of Clinical Services Kerang District Health Kellie Byron- Director of Clinical Services Kerang District Health John Ginnivan Board member Kerang District Health Mel Lane Board member Kerang District Health Deirdre Broad Board member Kerang District Health Kylie Liebmann Board member Kerang District Health Lauren Edwards Board member Kerang District Health Andrew Jeffreys Board member Kerang District Health Oscar Aertssen Board member Kerang District Health Melissa Iskov Board member

The compensation detailed below excludes the salaries and benefits the Portfolio Ministers receive. The Minister's remuneration is set by the Parliamentary Salaries and Superannuation Act 1968, and is reported within the Department of Parliamentary Services' Financial Report.

Compensation - KMPs 2020 2019 $ $ Short-term employee benefits (i) 433,829 457,467 Post-employment benefits 36,885 38,964 Other long-term benefits 12,891 9,653 Termination benefits 12,773 0

Total remuneration (ii) 496,378 506,084

i) Total remuneration paid to KMPs employed as a contractor during the reporting period through accounts payable have been reported under short term employee benefits. ii) KMPs are also reported in Note 8.2 responsible Persons and Note 8.3 Remuneration of Executives.

Significant transactions with government-related entities Kerang District Health received funding from the Department of Health and Human Services of $8,450,897 (2019: $7,780,385).

Expenses incurred by Kerang District Health in delivering services and outputs are in accordance with Health Purchasing Victoria requirements. Goods and services including procurement, diagnostics and patient meals are provided by other Victorian Health Service Providers on commercial terms.

Professional medical indemnity insurance and other insurance products are obtained from the Victorian Managed Insurance Authority. 56 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8.4: Related Parties (cont)

The Standing Directions of the Minister for Finance require Kerang District Health to hold cash (in excess of working capital) in accordance with the State's centralised banking system arrangements. All borrowings are required to be sourced from Treasury Corporation Victoria unless an exemption has been approved by the Minister for Health and human Services and the Treasurer.

Transactions with key management personnel and other related parties

Given the breadth and depth of State government activities, related parties transact with the Victorian public sector in a manner consistent with other members of the public e/.g. stamp duty and other government fees and charges. Further employment of processes within the Victorian public sector occur on terms and conditions consistent with the Public Administrating Act 2004 and Codes of Conduct and Standards issued by the Victorian Public Sector Commission. Procurement processes occur on terms and conditions consistent with the Victorian Government Procurement Board requirements.

Outside of normal citizen type transactions with the Kerang District Health, there were no related party transactions that involved key management personnel, their close family members and their personal business interests. No provision has been required, nor any expense recognised, for impairment of receivables from related parties. There were no related party transactions with Cabinet Ministers required to be disclosed in 2020.

There were no related party transactions required to be disclosed for Kerang District Health Board of Directors, Chief Executive Officer and executive Directors for 2020.

Note 8.5: Remuneration of auditors

2020 2019 Victorian Auditor-General's Office $ $

Audit of the Financial Statements 16,300 15,900

16,300 15,900

Note 8.6: Events occurring after the Balance Sheet Date

The COVID-19 pandemic has created unprecedented economic uncertainty. Actual economic events and conditions in the future may be materially different from those estimated by Kerang District Health at the reporting date. As responses by government continue to evolve, management recognises that it is difficult to reliably estimate with any degree of certainty the potential impact of the pandemic after the reporting date on Kerang District Health, its operations, its future results and financial position. The state of emergency in Victoria was extended on 16 August until 13 September 2020 and the state of disaster still in place.

No other matters or circumstances have arisen since the end of the financial year which significantly affected or may affect the operations of Kerang District Health, the results of the operations or the state of affairs of Kerang District Health in the future financial years.

57 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8.7: Jointly Controlled Operations

Ownership Interest Principal Name of Entity Activity 2020 2019 % % Information Loddon Mallee Rural Health Alliance Systems 4.18 4.17

Kerang and District Health interest in assets employed in the above jointly controlled operations and assets is detailed below. The amounts are included in the financial statements and consolidated financial statements under their respective asset categories:

2020 2019 $ $

Current Assets Cash and Cash Equivalents 143,732 43,170 Other Financial Assets 123,006 155,134 Receivables 2,955 20,515 Inventory 46,377 - GST Receivable 15,572 3,146 Prepayments 54,029 51,563 Total Current Assets 385,671 273,528

Non Current Assets Property, Plant and Equipment 36,726 23,297

Total Non Current Assets 36,726 23,297 Total Assets 422,397 296,825

Current Liabilities Payables 158,827 6,022 Accrued Liabilities 23,075 58,030 Income in Advance - DHHS Capital Grants 16,783 - Total Current Liabilities 198,685 64,052 Total Liabilities 198,685 64,052 Net Assets 223,712 232,773

Kerang District Health interest in revenues and expenses resulting from jointly controlled operations and assets is detailed below:

2020 2019 $ $ Revenues Grants 426,094 322,526 Capital Revenue 24,185 8,483

Total Revenue 450,279 331,009

Expenses Information Technology and Administrative Expenses 455,611 319,564 Capital Expenses - - Depreciation 3,728 4,856 Total Expenses 459,339 324,420 Net Result (9,060) 6,589

Contingent Liabilities and Capital Commitments

58 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8.8 Economic Dependency

Kerang District Health is dependent on the Department of Health and Human Services for the majority of its revenue used to operate the entity. At the date of this report, the Board of Directors has no reason to believe the Department will not continue to support Kerang District Health.

Note 8.9: AASBs issued that are not yet effective

Certain new Australian accounting standards have been published that are not mandatory for the 30 June 2020 reporting period. DTF assesses the impact of all these new standards and advises the Health Service of their applicability and early adoption where applicable.

As at 30 June 2020, the following standards and interpretations had been issued by the AASB but were not yet effective. They become effective for the first financial statements for reporting periods commencing after the stated operative dates as detailed in the table below. Kerang District Health has not and does not intend to adopt these standards early.

Applicable for reporting Impact on Health Service's Annual Standard/Interpretation Summary periods beginning on Statements AASB 17 Insurance Contracts The new Australian standard seeks The assessment has indicated that there to eliminate inconsistencies and will be no significant impact for the public weaknesses in existing practices sector. by providing a single principle based framework to account for all types of insurance contracts, including reissuance contract that an insurer holds. It also provides 1-Jan-21 requirements for presentation and disclosure to enhance comparability between entities.

This standard currently does not apply to the not-for-profit public sector entities. AASB 2016-8 Amendments to AASB 2016-8 inserts Australian This standard clarifies the application of Australian Accounting Standards - requirements and authoritative AASB 15 and AASB 9 in a not-for-profit Australian Implementation implementation guidance for not-for- context. The areas within these standards Guidance for Not-for-Profit This Standard amends AASB 9 and that are amended for mot-for-profit Entities AASB 15 to include requirements application include: to assist not-for-profit entities in AASB 9 applying the respective standards ● Statutory receivables are recognised to particular transactions and and measured similarly to financial events. assets. AASB 15 ● The 'customer' does not need to be the recipient of goods and/or services; 1-Jan-19 ● The 'contract' could include an arrangement entered into under the direction of another party; ● Contracts are enforceable if they are enforceable by legal or 'equivalent means'; ● Contracts do not have to have commercial substance, only economic substance; and ● Performance obligations need to be 'sufficiently specific' to be able to apply AASB 15 to these transactions. 59 Kerang District Health Notes to Financial Statements 30 June 2020

Note 8.9: AASBs issued that are not yet effective (continued)

Applicable for reporting Impact on Health Service's Annual Standard/Interpretation Summary periods beginning on Statements AASB 2018-7 Amendments to This Standard principally amends The standard is not expected to have a Australian Accounting Standards - AASB 101 Presentation of significant impact on the public sector. Definition of Material Financial Statements and AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. The amendments refine and clarify the definition of material in AASB 101 and its application by improving the wording and aligning 1-Jan-20 the definition across AASB Standards and other publications. The amendments also include some supporting requirements in AASB 101 in the definition to give it more prominence and clarify the explanation accompanying the

AASB 2020-1 Amendments to This Standard amends AASB 101 The standard is not expected to have a Australian Accounting Standards - to clarify requirements for the significant impact on the public sector. Classification of Liabilities as presentation of liabilities in the Current or Non-Current statement of financial position as current or non current. A liability is 1 January 2022. However, classified as non-current if an entity ED 301 has been issued has the right at the end of the with the intention to defer reporting period to defer settlement application to 1 January of the liability for at least 12 months 2023. after the reporting period. The meaning of settlement of a liability is also clarified.

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