www.kyhealth.org.au

ANNUAL REPORT 2016 − 2017 OUR PURPOSE

HEALTHY COMMUNITY. LOCAL CARE.

OUR VALUES

EMPATHY WELLBEING COMMUNITY

We actively listen Safety is at the forefront People experience a to understand your of everything we do. welcoming, friendly feelings. approach. People feel safe in our We show empathy by care. We embody the acknowledging others’ cohesiveness and spirit of emotions. We foster a person our communities. centred approach Individuals are included through flexible, Everyone feels connected in decisions about their individualised care. and has a sense of care and have their belonging. needs acknowledged. We support the physical, emotional, Our teamwork is We provide choices social and psychological built on cooperation, and support individual health of all. collaboration and wishes. communication.

Our actions demonstrate our compassion for others. Report of Operations

Life Governors

Mr G. Stone (dec) Miss F. M. Wallis (dec) Mr. S. Muir-Smith (dec) Mrs. D. Rowston Mr. F. Wooller Mrs. J. Stone (Ladies Auxiliary) Mr. T. J. Tehan (dec) Mr. P. Hann Mr. T. W. McMaster-Smith (dec) Mr. W. Brewster (dec) Mr. R. Tuhan Mr. F. Billings (dec) Mrs. L. N. King (dec) Mr. D. Crow Mr. A. J. Hutchinson (dec) Mr. B. A. Ruler Mrs. M. Chalker Mr. A. G. McCormick (dec) Mr. I. Purdey Mrs. R. Busch Mr. J. H. Brown (dec) Mr. E. Scott-MacKenzie (dec) Mr. Mike Sweeney

TABLE OF CONTENTS Page No.

Board members 5

Declarations and Attestations 4, 26, 29

Disclosure Index 33-34

Chair and CEO Report / Highlights 2-4

Organisational Chart 18

Senior Officers 19

Services 17

Statement of Priorities, Part A 8-16

Statutory Requirements 23, 26-27, 29-32

Workforce Data 32

KDHS Report of Operations 2016/2017 Page 1 Board Chair and Chief Executive Report In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for Kyabram District Health Service for the year ending 30 June 2017.

service review program; Kyabram District Health Service (KDHS) has  The setting of tolerance and control continued to meet the health care needs and measures for KPI reporting; and service demands of the community through the  Its determination to seek a greater focus provision of effective and high quality health towards hearing from the patient’s voice, services that achieve broad and effective health which has seen the inclusion of patient outcomes for our catchment community. stories in the Board agendas.

KDHS has an “experience” led approach to the Further to this, Board members participated in a provision of care and services through the number of clinical governance education development of key core values that underpin programs including a video link education the patient’s expectations. session with the Cleveland Clinic (Ohio, USA) to understand better how to capture and monitor The values of empathy, community and patient experience. This has resulted in a Board wellbeing are core to our approach to care. led organisational focus on experience and values led care. We acknowledge that Kyabram District Health Service is located on the traditional land of the Throughout the year, the Board has been Yorta Yorta Nation and the Bangarang people committed to a strong model of stewardship, and we pay our respects to elders both past and undertakes formal assessment and has present and thank them for their contribution to implemented a strong focus on continuing the development of our services. We also education, to ensure effective Board governance acknowledge the other many diverse cultures processes. that make up our community. This year, the Board farewelled three retiring The Board’s priorities for the 2014-2018 members: Strategic Plan year have been reviewed and re- affirmed and include improving in-patient activity  Mr Adam Basile who contributed to the levels to meet funding levels set by the Board and the Community & Cultural Department of Health & Human Services; Governance committee for 4 years, initiating and further developing the Cancer Care bringing his local knowledge to the Board; Centre; the development of a purpose built palliative care unit; the transition of our  Mrs Jean Courtney who contributed to the Campaspe Early Childhood Intervention program Board for 16½ years providing significant into the National Disability Insurance Scheme; input to the Clinical, Corporate and strengthening our clinical governance systems; Community & Cultural Governance responding to violence against women; committees and also assisting with the developing a strategic framework for future aged implementation of the Tongala Health care services; addressing occupational violence Governance Committee and served on and building our cultural response in support of the Stanhope Health Governance aboriginal health. Committee. Jean’s clinical experience and rural passion assisted greatly in The Board has remained focused on the key Board decisions; and governing areas of quality and safety, financial sustainability, risk management and community  Mrs Maureen Atkins who contributed to and cultural engagement. Board subcommittee the Board for 17½ years, including the functions are aligned with the strategic direction position of Chairperson for two years, of KDHS. providing significant input into the Clinical, Corporate, Community & Cultural KDHS has a strong commitment to ensure that Governance Committees. Maureen’s the clinical governance processes that oversight passion for representing the community our clinical service delivery are robust and saw her take a role in setting up the effective in the review and ongoing provision of Aboriginal Health Governance Committee care. This is achieved through such initiatives and supporting the Stanhope community as: on the Stanhope Health Governance  The establishment of an external clinical committee.

Page 2 KDHS Report of Operations 2016/2017 Board Chair and Chief Executive Report experienced for this service. On behalf of the Board, we wish to congratulate The vision for KDHS aged care is to provide and thank sincerely these past members for integrated programs within our services that their dedication and commitment to KDHS. meet the needs of the older members of the KDHS community in all service streams offered. We wish to acknowledge the passing of Life To achieve this vision, Sheridan residential care Governor Mr Sid Muir-Smith. Mr Muir-Smith residents, staff and volunteers have embraced volunteered on the Board for 13 years, retiring in the “Continuing My Life’s Journey” program , 1998. resulting in a more supportive environment for residents and our care staff to live through the KDHS has continued to see marked growth in experiences and challenges of residential aged demand for surgical services, while the number care in a manner that is safe, respectful and of patients requiring a hospital bed for overnight meaningful to them. stay has remained relatively stable, as has the number of patients attending our urgent care The development of the Geri-Connect, service. teleconsulting service has enabled regular specialist geriatric review and support to The renal dialysis service continues to provide residents of Sheridan, thereby increasing quality services at six days per week to both local and and timeliness of medical service provision to regional clients and has seen a significant residential aged care. increase in the number of treatments provided over the reporting period. KDHS is committed to Closing the Gap between the health outcomes and life expectancy of the We have also been very pleased with the Aboriginal and Torres Strait Islander people of continued growth of the Cancer Centre which Australia. has provided over seventy occasions of service throughout the reporting period. During this past year, we were pleased to recruit to the position of Aboriginal Health Liaison Utilisation of the consulting suites continues to Officer which has provided KDHS greater ability grow with the addition this year of specialist to better address the health needs of the local consultants in gynaecology; ear, nose and aboriginal community, commencing with a throat; general surgery and cardiology. celebration of NAIDOC week with the local community and our care team. Community and home based care services have both increased their activity through increased Our focus to be a culturally responsive service referrals and reduced waiting times for has been ably supported through the Melbourne appointment in key service areas. University, Rural Health research team.

This past year saw the seamless transition of KDHS Board and staff would like to thank the Campaspe Early Childhood Intervention Heather McLennan, Elder of the Yorta Yorta Service, and our first client, to the National tribe and representative on the Aboriginal Health Disability Support Scheme (NDIS). This Governance Committee, for her work in transition required significant planning, for which establishing this committee and the we sincerely thank those staff for their efforts. achievements made. Heather has resigned from her role on this committee. Through a collaborative approach to service planning, KDHS, with its health service partners On behalf of the community, we would like to in the Campaspe Shire, continue to work to sincerely thank our valued employees for their address the five health priorities areas of hard work and enthusiasm and for supporting Diabetes, Obesity, Mental Health, Drug & KDHS in its endeavours to meet the sometimes Alcohol and Cancer. challenging and demanding health care needs of our community. KDHS has significantly strengthened its response to addressing the prevalence of In partnership with Kyabram Regional Clinic, diabetes with the achievement of accreditation KDHS jointly hosted Kyabram’s first Medical as a Diabetes Centre and allocation of additional Intern placement under the Murray to the resources towards diabetes prevention. In Mountains Medical Intern Program. This conjunction with KDHS Endocrinologist, a ongoing agreement will see first year medical continuous glucose monitoring service has been interns undertaking a 10 week placement in established, with high demand already being Kyabram. This program has the significant

KDHS Report of Operations 2016/2017 Page 3 Board Chair and Chief Executive Report benefit of retaining young doctors in rural areas, such as Kyabram, thereby, supporting the We remain highly appreciative of the many development of our future medical workforce. volunteers, who contribute their valuable time to support health service provision. Without this We would like to acknowledge the support of our support, KDHS would not be able to provide the Visiting Medical Officer workforce, in particular level of service provision it currently enjoys. that of Kyabram Regional Clinic (KRC) who provides continuous 24 hour on-call coverage to We particularly would like to thank the Kyabram our urgent care and inpatient services. Hospital Ladies Auxiliary for not only their continued financial support of KDHS, but also Consistent with our values, we have made a their contribution to the continued success of the commitment to improving the patient, client and Courtyard Café. We also recognise the work of residents journeys and experience in accessing the Kyabram Heart Group in support of our health services at KDHS facilities. This year saw services through their financial support. the completion of the Room 12 suite and garden area; the Cancer Care Centre gardens, with the On behalf of KDHS, we thank the Department of support of Bunnings Echuca and Shepparton; Health and Human Services for their support and the purchase of a house for future on-call throughout the year. As well, we would like to medical support. acknowledge the support of our local government representatives, and local and We are appreciative of the hard work and regional political members. dedication of our health advisory groups, including the Stanhope Health Governance Kyabram District Health Service is a vibrant, Group and the Tongala Health Governance dynamic and responsive health service that is Group for their commitment to the provision of meeting its purpose to promote a healthy community health services in their communities. community through the provision of local care.

We wish to also acknowledge our consumer This report is prepared in accordance with the advocates for their support in assisting with the Financial Management Act 1994. development of a unique model that allows us to put the patients experience at the forefront of Geoffrey Cootes everything we do. Board Chair

“People choose where to go to for their Kyabram healthcare based on the experience 30th June 2017 that someone told them they had received there!”

We wish to recognise the management group for Peter Abraham their dedication and commitment to the ongoing Chief Executive success of our services and consistently working towards KDHS’ objectives. Kyabram 30th June 2017

Page 4 KDHS Report of Operations 2016/2017 Board Chair and Chief Executive Report

Pecuniary Interests Board of Directors is required in accordance with KDHS policy to declare all pecuniary interests, which may reasonably and foreseeably, be considered to create the potential for a conflict of interests with their position as a member of the Board. These interests have been recorded.

Board of Directors as at 30th June 2016 Mr Geoffrey Cootes—President Mrs Nicole Ryan—Vice Chair and Chair Clinical Governance Committee Mrs. Maureen Atkins—Chair Community Governance Committee Mr. (Graeme) Paul Jackson—Chair Corporate Governance (Audit) Committee Mr Adam Basile Mrs Jean Courtney Mr Dale Denham Ms Judith Greer Mrs Lyndal Humphris

Corporate Governance (Audit) Committee all members are independent Mr. Paul Jackson (Chair) Mrs. Jean Courtney Mr. Dale Denham Mr. Geoffrey Cootes Ms Judy Greer Mr. Robert Jackson (community representative) Mr. Kevin Livingston (community representative)

The purpose of the Corporate Governance (Audit) Committee (CGC) includes accountability and responsibility to the community and the funding bodies of KDHS for the performance of KDHS in relation to the key areas of the Finance and Audit Charter, legislative compliance, risk management, service delivery performance and internal and external report.

The CGC monitors and reviews planning processes related to corporate improvement including but not limited to strategic plans, service plans, financial plans and the Board annual priorities.

The CGC provides oversight of the quality and effectiveness of physical resources of KDHS, including equipment and building fabric through effective planning processes.

Clinical Governance Committee Mrs Nicole Ryan (Chair) Mrs. Jean Courtney Mrs Lyndal Humphris Mrs Margaret Colliver (community representative) Ms Pauline Keegan (community representative)

All Board members are invited to attend

The purpose of the Clinical Governance Committee is to ensure the patients, clients and community of Kyabram and district have access to effective, appropriate, acceptable and safe services at KDHS.

The Board is responsible for ensuring the safety and quality of service delivery across the organisation through the practice of high standards, identification of risks and adherence to relevant legislation and regulatory requirements within the clinical governance domain.

The Key objectives are aligned with the Clinical Governance Framework 2015-2018: 1. Consumer participation and engagement 2. Clinical effectiveness and appropriateness 3. Effective workforce 4. Risk management

KDHS Report of Operations 2016/2017 Page 5 Community & Cultural Governance Committee Mr. Dale Denham (Chair) Mr Adam Basile Mrs. Jean Courtney Mrs. Margaret Colliver (Tongala representative) Ms Pauline Keegan (Stanhope representative) Mrs. Heather McLennan (ATSI representative)

The purpose of the Community & Cultural Governance Committee is to have open, accountable and informed relationships with patients, residents, clients, community groups and health and government agencies in the delivery of its work.

Additionally, the Board authorises opportunities for consumers and community members to participate in the planning, improvement and advocacy of services.

Community & Cultural Governance is valued as a strategy to improve consumer health outcomes and satisfaction with services; a mechanism to ensure organisational accountability, reputation and support, and an important democratic right.

AGM Presentations

L to R: Geoffrey Cootes, Board Chair; Mike Sweeney; Ray Tuhan and his wife, Carol Judy Greer, Board member Mr Mike Sweeney was awarded a Life Governorship of Life Governor Mr Ray Tuhan was awarded a KDHS. Certificate of Appreciation for his commitment to the health of the Stanhope community. Mike joined the Board in November 2001 with a wealth of experience in business, but even more importantly a Health services were opened in Stanhope in deep knowledge of and commitment to, Kyabram and 1975 and Ray was a member of the inaugural District Communities. This laid the foundation for 15 committee, remaining on that committee until years of dedicated service to the Board which included 2016—41 years. three years as Board Vice Chair and five years as Board Ray’s fervour for the Stanhope community and Chair. his energy keep the wider community aware of local issues and concerns did not wan over the Mike’s achievements while on the Board were many, years. including:  Acquiring funding for multi-million dollar projects; In 1992 Ray said, in his President’s report:  Building a Renal Dialysis centre ...One of our responsibilities continues to be  Involving stakeholders to find solutions when guiding patients to the best possible treatment following the death of local doctor, Dr Tisdall and provide educational programs which assist  Promoting men’s health locally, nationally and people to achieve a healthier lifestyle. internationally. The Certificate of appreciation was a small Mike was awarded the Life Governorship in recognition token to recognise Ray’s drive and commitment of his commitment and contribution to KDHS. to the Stanhope community.

Page 6 KDHS Report of Operations 2016/2017 Donations In Memoriam Donations were received from the family and friends of: Lorna Armstrong Tom Donegan Judith Donoghue Thelma Mitchell Iris Newnes Max Smity Jim Stasey John Wakenshaw Russell Wright

Donations were received from the following businesses, groups and functions: Bendigo Bank Tongala Kyabram RSL Branch Bunnings Echuca & Shepparton Kyabram Hospital Ladies Auxiliary Fishers IGA Lancaster CWA Kyabram Club Lions Club, Kyabram Kyabram Club Men’s Health Lunch Patchwork Group Kyabram Community Bank St Vincent de Paul Kyabram Heart Group Tongala Post Office Kyabram Italian Bocce Club

Thanks to generous donations the following were able to be purchased / funded during the year:

Equipment / Furnishings / Support Books Air mattress—MSW Café Table & Chairs Cancer Centre garden Treatment Chair for Cancer Centre Code Grey telephone Deep Fryer—Food Services Ice Crusher—MSW Infusion Pumps—MSW and Cancer Centre Overhead Light—Urgent Care Centre Operating Theatre Equipment Sheridan furnishings

Programs Advance Care Planning District Nursing Service Sheridan Palliative Care ICE Forum funding for Kyabram Cancer Centre Men’s Health program Tongala Health community survey

No donations or bequests were used for administration costs. Tax Deductibility KDHS is endorsed by the Australian Taxation Office as a Deductible Gift Recipient. Gifts to KDHS, a public health service, qualify for a tax deduction under item 1.1.1 of section 30-B of the Income Tax Assessment Act 1997.

Heart Group members with the Oncology Chair their $5,520 donation purchased

KDHS Report of Operations 2016/2017 Page 7 2016-2017 Statement of Priorities

Part A: Strategic Priorities Priority Action Deliverable Outcomes Quality and safety Implement systems and Improve capability of Achieved processes to recognise and clinical staff to support End of Life (EOL) Care support person-centred end Advance Care Planning referral pathways developed of life care in all settings, and End of Life throughout KDHS with with a focus on providing discussions to include referrals received through the support for people who palliative care at home for Central Intake service. choose to die at home patients and clients over 65 years. Increased number of Achieved patients with an Advance KDHS has over 250 active Care Plan Advance Care Plans which represents a 30% increase on the previous reporting year. Advance Care Planning is Increase capability of Achieved included as a parameter in clinical staff to support Board and executive an assessment of outcomes Advance Care Planning reporting on the progress of including: mortality and and End of Life EOL care program in place. morbidity review reports, discussions and Advance Care Planning is patient experience and documentation for patients embedded in admission and routine data collection. over 65 years discharge processes at KDHS. Director of Medical Services reviews all mortality cases. Progress implementation of Work in partnership with Achieved a whole-of-hospital model local health providers and Family Violence policy for responding to family local organisations to endorsed. Family Violence violence develop a shared action triggers added to central plan to responding to intake process resulting in 6 family violence. identified cases of a 4 month period. Referral pathways established. KDHS works with the regional Family Violence coordinator. Develop a regional Sign Memorandum of Achieved leadership culture that Understanding with other KDHS represented at Loddon fosters multidisciplinary and health services in Loddon Mallee Clinical Governance multi-organisational Mallee Region to establish executive group and regional Clinical Regional Clinical Governance collaboration to promote governance committee. Council. learning and the provision of safe, quality care across Increased consumer rural and regional Victoria participation at Clinical Governance level. Board members have undertaken Clinical Governance education.

All Board members participants at Clinical Governance meeting.

DMS reports to Clinical Governance committee bi- monthly

Page 8 KDHS Report of Operations 2016/2017 2016-2017 Statement of Priorities

Part A: Strategic Priorities (cont.)

Priority Action Deliverable Outcomes

Quality and safety Develop a regional Collaborate with other Achieved (cont,) leadership culture that agencies in the delivery of Diabetes focus groups fosters multidisciplinary and Healthier Campaspe commenced and led by multi-organisational integrated service plan. KDHS. Joint submission to Finalise implementation of ACHSE for intern role to collaboration to promote strategies for elements of project manager Healthier learning and the provision the plan led by KDHS Campaspe successful— of safe, quality care across intern term completed. rural and regional Victoria

Use patient feedback, Implement innovative Achieved including the Victorian programs, such as café Successful funding Healthcare Experience conversation group, which application for 12 month Survey (VHES), to drive will provide patient / project “Practice Partners improved health outcomes consumer feedback and Program”. Project plan and experiences through a participation in delivering developed and strong focus on person and improved health implementation commenced. family centred care in the outcomes. Happy or Not patient planning, delivery and feedback system evaluation of services, and implemented providing real- the development of new time report on patient models for putting patients experience, and tests and first. explores areas of focus in the VHES reports. Strong patient experience focus through the value of empathy employed across KDHS. Consumer Group reviews VHES data to assist in implementation of quality improvements. Develop a whole of hospital Ensure the application of Achieved approach to reduce the use the KDHS restraint policy Organisation wide restraint of restrictive practices for and audit is compliant. policy in place. Residential patients, including seclusion aged care restraint reduction and restraint measures in place. Code Grey policy implemented with supporting staff education to support behaviour management and Occupational Violence, with further staff training scheduled. Access and Ensure the development Review referral Achieved. timeliness and implementation of a processes, patient flow Stage 1 of the Central Intake plan in specialist clinics to: and accuracy of patient model has been reviewed (1) optimise referral data in specialist clinics with approval to move to management processes compared to the Stage 2. and improve patient flow requirements of Victorian Development of reports and through to ensure patients Integrated Non-Admitted monitoring of activity and are seen in turn and within Health. waiting lists. time; and (2) ensure patient Consulting services data is recorded in a timely, commenced in Cancer accurate manner and is services. working toward meeting the requirements of the Victorian Integrated Non- Admitted Health dataset

KDHS Report of Operations 2016/2017 Page 9 2016-2017 Statement of Priorities Part A: Strategic Priorities (cont.)

Priority Action Deliverable Outcomes

Access and Identify opportunities and Evidence of increased use of Achieved timeliness (cont) implement pathways to aid telehealth service across Weekly telehealth specialist prevention and increase care health services sites. 10% of geriatrician services outside hospital walls by all specialist consultations commenced optimising appropriate use of provided by telehealth by existing programs (i.e. the June 2017 Medical Oncologist Telehealth Clinic Health Independence development in progress Program or telemedicine). for lower risk and periodic review clients, in partnership with GVH. Develop and implement a Implement a six month project Achieved strategy to ensure the officer role to support the Early Childhood preparedness of the seamless transition of Intervention Service is organisation for the National services to National Disability successfully supporting Disability and Insurance Insurance Scheme and clients with the transition to Scheme and Home and identify further opportunities NDIS. Work is occurring on Community Care program for service growth. HACC transition. transition and reform, with particular consideration to service access, service expectations, workforce and financial management. Supporting Support shared population Develop resources to support Achieved healthy health and wellbeing planning the Healthier Campaspe Diabetes Group established populations at a local level—aligning with initiative with KDHS to act as and meeting regularly. the Local Government executive sponsor on Action plan developed. Municipal Public Health and Diabetes as a key priority. Diabetes Education Wellbeing plan and working increased by 0.1EFT with other local agencies and Primary Health networks Focus on primary prevention, Actively participate in the Achieved including suicide prevention work of the Healthier CEO and DCS and relevant activities, and aim to impact Campaspe initiative in staff are actively on large numbers of people in addressing the health priority participating in the work of the places where they spend interventions related to mental the Healthier Campaspe their time adopting a place health and drug and alcohol. partnership in addressing based, whole of population all five priority areas, which approach to tackle the Include suicide prevention as are: Mental Health, Drug & multiple risk factors of poor a key priority of the Healthier Alcohol, Obesity, Cancer, health. Campaspe initiative. Diabetes. ICE forums conducted in Stanhope, Tongala and Kyabram. Combined meeting of Stanhope and Tongala Governance committees held to plan strategic direction for those communities.

Page 10 KDHS Report of Operations 2016/2017 2016-2017 Statement of Priorities cont.

Part A: Strategic Priorities cont. Priority Action Deliverable Outcomes

Supporting healthy Develop and implement Embed the Community Achieved populations (cont.) strategies that encourage and Cultural governance Stage 1 of the Melbourne cultural diversity such as model across KDHS University research project in partnering with culturally partnership with KDHS— diverse communities, Inclusive rural health care at reflecting the diversity of KDHS—has been completed your community in the following staff forums and organisational governance, workshops regarding and having culturally Aboriginal culture in a health sensitive, safe and inclusive setting. practices. KDHS had agreed to partner with Melbourne University for Stage 2 of the research project. The Quality and Safety department has been expanded to include Experience with a new position of Experience & Innovative Practice Officer. Evaluate the effectiveness Achieved of the Cultural Diversity Current year plan reviewed Plan and completed. Awaiting new DHHS guidelines for development of new plan. Improve the health Cultural safety training is Ongoing outcomes of Aboriginal and delivered as a competency Aboriginal cultural training Torres Strait Islander for Board and staff. has been scheduled in the people by establishing 2nd quarter of 2017/2018. culturally safe practices Aboriginal Health Liaison Achieved which recognise and Officer (AHLO) position is An AHLO has been appointed respect their cultural appointed and embedded and work is occurring to identities and safely meets into operations. embed the position into their needs, expectations operations. and rights

Drive improvements to Two year stepped plan to Ongoing Victoria’s mental health increase service access to Review of and submission system through focus and local and regional mental into the 2016 state wide engagement in activity health services. mental health plan. delivering on the 10 Year Plan for Mental Health and Active input into consultations on the Design, Service and Infrastructure Plan for Victoria’s Clinical mental health system Using Government’s Completion of audit Ongoing Rainbow eQuality Guide, against Rainbow Tick Gap analysis and workplan identify and adopt actions program and development completed for review, for inclusive practices and of an action plan towards consultation and action. be more responsive to the achieving the standards. health and wellbeing of Action plan completed. LGBTI individuals and communities

KDHS Report of Operations 2016/2017 Page 11 2016-2017 Statement of Priorities cont.

Part A: Strategic Priorities cont. Priority Action Deliverable Outcomes

Governance and Demonstrate Sign Memorandum of Achieved leadership implementation of the Understanding with other KDHS representative at Victorian Clinical health services in Loddon Loddon Mallee Clinical Governance Policy Mallee Region to establish Governance Executive Group Framework: Governance a Regional Clinical and Regional Clinical for the provision of safe, Governance committee. Governance Council. quality healthcare at each Increased participation at level of the organisation, Clinical Governance level. with clearly documented and understood roles and responsibilities. Ensure effective integrated Provide annual Board and Ongoing systems, processes and management governance All Board members leadership are in place to competency education. participate at Clinical support the provision of Governance meeting. safe, quality, accountable DMS reports to Clinical and person centred Governance committee bi- healthcare. It is an monthly. expectation that health Targeted approach to Board services implement to best member recruitment to meet their employees’ and strengthen Board Clinical community’s needs, and Governance skills. that clinical governance

arrangements undergo frequent and formal review, evaluation and amendment to drive continuous improvement. Lead the development and Participate in Regional Achieved and Ongoing implementation of Local Leadership Forum KDHS actively participating in Region Action Plans under involving Chief Executives the rural statewide design, the series of statewide of each public health service and infrastructure design, service and service in Loddon Mallee plan consultation process. infrastructure plans being Region. Local Campaspe Health progressively released. Leadership Forum to Alliance developed and Development of Local develop Local Regional Regional Action Plans will Action Plans in response introduction of the Healthier require partnerships and to statewide clinical Campaspe initiative, targeting active collaboration across services stream and Diabetes, Drug & Alcohol, regions to ensure plans service development plans Mental Health, Obesity and meet both regional and local as plans are published by Cancer. service needs, as the Department of Health Submission made to the State articulated in the statewide and Human Services Regional and Rural Health design, service and Infrastructure Plan for KDHS infrastructure plans. to participate in the West Hume planning sub region. Ensure that an anti-bullying KDHS Anti-Bullying and Achieved and harassment policy Harassment policy is KDHS policies meet the exists and includes the reviewed in line with the requirements in line with the identification of appropriate Department of health and Department of Health and behaviour, internal and Human Services Human Services guidelines external support guidelines and Victorian and Victorian Auditor General mechanisms for staff and a Auditor General recommendations. clear process for reporting, recommendations. investigation, feedback, consequence and appeal and the policy specifies a regular review schedule.

Page 12 KDHS Report of Operations 2016/2017 2016-2017 Statement of Priorities cont.

Part A: Strategic Priorities cont. Priority Action Deliverable Outcomes

Governance and Board and senior Occupational health and Achieved leadership (cont.) management ensure that safety risk management OH&S action plan focusing an organisational wide program is reviewed to on prevention and increased occupational health and ensure compliance with hazard monitoring developed safety risk management the Risk Management and implemented. Policy and approach is in place which standard and includes a processes in place to ensure includes: (1) A focus on focus on prevention of relevant staff members are prevention and the occupational injury. provided with relevant strategies used to manage information following risks, including the regular investigations of bullying and review of these controls; (2) harassment and/or Strategies to improve occupational violence. reporting of occupational health and safety incidents, risk and controls, with a particular focus on prevention of occupational violence and bullying and harassment, throughout all levels of the organisation, including to the Board; and (3) Mechanisms for consulting with, debriefing and communicating with all staff regarding outcomes of investigations and controls following occupational violence and bulling and harassment incidents.

Implement and monitor Review the 2015-2016 Achieved workforce plans that: KDHS Workforce Plan to Change Management improve industrial relations; ensure compliance with strategy developed to support promote a learning culture; Department of Health and person centred care model in align with the Best Practice Human Service workforce our Aged Care Services. Clinical Learning planning policy. Submission for funding for Environment Framework introduction of CDC model promote effective completed. succession planning; Aboriginal Health Liaison increase employment Officer role appointed. opportunities for Aboriginal Critical functions risk and Torres Strait Islander management tool updated. people; ensure the workforce is appropriately qualified and skilled; and support the delivery of high quality and safe person centred care

KDHS Report of Operations 2016/2017 Page 13 2016-2017 Statement of Priorities cont.

Part A: Strategic Priorities cont. Priority Action Deliverable Outcomes

Governance and Create a workforce culture 70% of all staff to Ongoing leadership (cont.) that: (1) includes staff in complete the Crucial 69% of staff completed decision making; (2) Conversations course. Crucial Conversations promotes and supports course. open communication, raising concerns and Commence Achieved respectful behaviour across implementation of the Cultural program commenced all levels of the priority components of the in Aged Care. organisation; and (3) Organisational Change Respectful behaviour includes consumers and the program. recognised through CEO community. correspondence to staff. People Matter Survey patient safety culture trigger 97%. Ensure that the Victorian All key staff are provided Ongoing Child Safe Standards are with a copy of the Child Safe policy endorsed. embedded in everyday Victorian Child Safe Implementation plan thinking and practice to Standards and are developed. better protect children from provided with education abuse, which includes the and demonstrate implementation of: competence in applying strategies to embed an the Standards. organisational culture of child safety; a child safe policy or statement of commitment to child safety; a code of conduct that establishes clear expectations for appropriate behaviour with children; screening, supervision, training and other human resources practices that reduce the risk of child abuse; processes for responding to and reporting suspected abuse of children; strategies to identify and reduce or remove the risk of abuse and strategies to promote the participation and empowerment of children. Implement policies and All policy and procedures Achieved procedures to ensure relating to staff Influenza vaccination rate of patient facing staff have immunisation are 75.6% achieved in the access to vaccination implemented and 2015/2016 reporting period, programs and are promoted to staff. exceeding the target of 75%. appropriately vaccinated and/or immunised to protect staff and prevent the transmission of infection to susceptible patients or people in their care.

Page 14 KDHS Report of Operations 2016/2017 2016-2017 Statement of Priorities cont.

Part A: Strategic Priorities cont. Priority Action Deliverable Outcomes

Financial Further enhance cash Undertake internal audit Achieved sustainability management strategies to process of cash Internal auditing reports into improve cash sustainability management strategies Fraud Management in and meet financial and make respect of cash. obligations as they are due. recommendations for Days available cash reporting improvement to the reviewed and meets DHHS system. benchmark. Treasury and Investment management policy reviewed, updated and endorsed by the Corporate Governance Committee.

Actively contribute to the Implementation plan Ongoing implementation of the developed for increased Organisation wide LED light Victorian Government’s solar infrastructure for conversion program 85% policy to be net zero carbon power generation. complete with budget savings by 2050 and improve of 10-15% for 2017-18. environmental sustainability Roof top solar proposal by identifying and completed by FutureNRG implementing projects, waiting funding from DHHS. including workforce Environmental Management education, to reduce Plan reviewed and endorsed material environmental by the Board. impacts with particular consideration of procurement and waste management, and publicly reporting environmental performance data, including measurable targets related to reduction of clinical, sharps and landfill waste, water and energy use and improved recycling.

KDHS Report of Operations 2016/2017 Page 15 2016-2017 Statement of Priorities cont.

Part B: Performance Priorities Quality and safety performance Key Performance Indicator Target Achieved

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

Compliance with cleaning standards Full compliance Full compliance

Submission of infection surveillance data to VICNISS1 Full compliance Full compliance

Compliance with the Hand Hygiene Australia program 80% 85%

Percentage of healthcare workers immunised for influenza 75% 75.6%

Patient experience

Victorian Healthcare Experience Survey—data submission Full compliance Achieved

Victorian Healthcare Experience Survey—patient 95% positive experience 98% achieved experience Quarter 1 Victorian Healthcare Experience Survey—patient 95% positive experience 98% achieved experience Quarter 2 Victorian Healthcare Experience Survey—patient 95% positive experience 100% achieved experience Quarter 3 Victorian Healthcare Experience Survey—discharge care 75% positive experience 95% achieved Quarter 1 Victorian Healthcare Experience Survey—discharge care 75% positive experience 97% achieved Quarter 2 Victorian Healthcare Experience Survey—discharge care 75% positive experience 97% achieved Quarter 3

1 VICNISS is the Victorian Hospital Acquired Infection Surveillance System

Governance and leadership

Key Performance Indicator Target Achieved

People Matter Survey—percentage of staff with a positive 80% 92% response to safety culture questions

Page 16 KDHS Report of Operations 2016/2017 About Kyabram District Health Service Objectives, Functions, Powers and Duties KDHS is a public agency established under the Health Services Act 1988. We provide public health and ancillary services as authorised under the Act, and operate residential care services under the Aged Care Act 1997.

A Board of Directors provides strategic direction to KDHS. Board members are individuals appointed by the Minister for Health under the Health Services Act. Our Chief Executive determines how services are delivered. During the period of 2016/2017 we reported to the responsible Ministers:  The Honourable Jill Hennessy MLA, Minister for Health, 1 July 2016 to 30 June 2017

Our Services KDHS serves a catchment area of 13,000 people and employs more than 300 staff members.

KDHS provides a broad range of hospital, allied and community services through the Department of Health and Human Services, Loddon Mallee Region. Locations include:  At 86-96 Fenaughty Street Kyabram there are 32 beds providing acute medical, surgical, and transitional and maintenance care. An Urgent Care Centre, a Renal Dialysis Unit and a Cancer Centre are also on this site, as are Primary and Allied Health services, District Nursing Services and a 42 bed high care Residential Care facility.  Primary Health and Planned Activity Group services are provided from 35 Birdwood Avenue, Stanhope.  Primary Health services are provided from 37 Mangan Street, Tongala.  Visiting private consultants provide a range of services to the local communities from consulting rooms at our three locations.

Following is a list of the range of services provided by KDHS Acute Hospital Primary and Allied Health 28 Acute Beds Asthma Education Medical Cardiac Rehabilitation Program Surgical Chronic & Complex Disease Management  Dental Community Health Nursing  Ear, Nose & Throat Community Transitional Care—2 places  Endoscopy Counselling Services  General Diabetes Education  Gynaecology Dietetics  Opthalmology Early Childhood Intervention Service  Orthopaedics Health Promotion  Urology NDIS Services Palliative Care Occupational Therapy 3 Renal Dialysis chairs Physiotherapy 2 Transition Care beds Speech Pathology 2 Maintenance Care beds Well Women’s Clinic Urgent Care Centre Aged Care Other Services Planned Activity Group/HACC Cancer Services District Nursing Service Residential Pregnancy care in partnership with Goulburn Valley 28 high care beds Health 12 dementia specific beds In-home post birth care 2 respite care beds Breastfeeding support Meals on Wheels

KDHS Report of Operations 2016/2017 Page 17 Page 18 KDHS Report of Operations 2016/2017 Senior Officers Chief Executive Officer Director of Clinical Services Mr Peter Abraham Ms Bernadette Wardle The Chief Executive Officer (CEO) is The Director of Clinical Services has responsible to the Board of Directors for the professional and executive responsibility for all efficient and effective management of KDHS. Prime responsibilities include the development clinical services: Patient Care, Aged / Home and implementation of operational and strategic Care and Community / Primary Health. Major planning, maximising service efficiency and areas of responsibility include clinical quality improvement, and minimizing and governance, clinical leadership and standards of managing risk. Peter represents KDHS in a practice, service and strategic planning, clinical range of broader forums at a regional and state risk management and quality improvement and level, including the Loddon Mallee Regional resource management. Bernadette represents Clinical Council Executive Group. KDHS in a range of broader forums at a regional and state level, including Chair of the Loddon Mallee Nursing and Midwifery Executive Group and Deputy Chair of the Campaspe Primary Care Partnership.

Corporate Services Director Director of Medical Services Mr David Edwards Dr Craig Winter The Corporate Services Director has The Director of Medical Services has the professional and executive responsibility for: responsibility of ensuring visiting medical officers Financial Management, Procurement, Building are credentialed and have the appropriate Project Management, Asset Management, experience for the privileges they have applied Maintenance and Fleet Services, Health for at KDHS. This position provides support, Information, Information Technology, the Client advice and guidance for clinical risk and Services team, Payroll and Contracts. medication management.

David Edwards is the Chief Purchasing Officer for KDHS.

Manager, Workplace Capability and Quality, Experience & Safety Manager Culture Mrs Bev McLaine Ms Susan Briggs The Quality, Experience & Safety Manager is The Workplace Capability and Culture Manager responsible for Quality Improvement; Patient/ is responsible for developing effective strategies Consumer Experience; Safety and Performance to ensure we attract, retain and motivate our including Health & Safety, and Emergency people to uphold our values and provide quality Management & Planning. In consultation with care and services. Included in the Workplace committees, managers and consumers, this Capability and Culture function is Employee position is responsible for formulating and Relations, Industrial Relations, Workcover, implementing a strategic and systems driven Legislative Compliance, Strategic Planning and approach to the management of Quality, Patient Leadership. Experience, Safety and Risk at KDHS.

KDHS Report of Operations 2016/2017 Page 19 Clinical Services Report This year there has been a strong focus on:  Improving access for patients and clients to safe, quality local care.  Investing in our staff and their capability to respond to our community’s needs.  Improving the health outcomes for Aboriginal and Torres Strait Islander people.  Strengthening Clinical Governance within the Health Service.  Legislative and regulatory compliance.

Improving access for patients and clients to safe, KDHS will also be the fund holders for this project quality local care over 12 months. The central intake project in the Primary Health Service has completed its 12 month timeframe. The Our midwives continue to support pregnant and project has been evaluated and commitment given to parenting families in our community in all aspects of transposing the model across the organization. care apart from birthing. We have been conducting a monthly “Breastfeeding Café” where young parents In July this year the Kyabram Cancer Care Centre can come to our Health Service, have morning tea opened and commenced treating cancer patients, with one of our midwives and ask for any advice or with 17 patients receiving regular treatment. support they may need.

An accredited Exercise Physiologist was appointed The Community of Kyabram, Stanhope and Tongala, to provide professional exercise advice to support continue to support the health service through people having cancer treatment to be as physically volunteering and fundraising. In the past year we active as their abilities and conditions allow. This have received the following significant donations service is provided at KDHS, Echuca Regional from community groups: Health and Rochester and Elmore District Health Service, as a 6-month trial project funded by Loddon  Kyabram Hospital Ladies Auxiliary donated Mallee Integrated Cancer Services (LMICS) to $23,830 to purchase: infusion pumps for the develop a service that meets patient needs, and is Cancer Centre and the acute ward, and accessible through a GP-led chronic disease furnishings for the Courtyard Café. management plan.  The Men’s Longest donated $15,000 to the Men’s Health program. We have engaged an external consultant to review  The Kyabram Heart Group donated $5,500 for our operating theatre systems, schedules and an Oncology chair. staffing to provide maximum capacity for Surgeons and their patients to be able to access our services.  Kyabram Community Bank donated $3,000 for a new overhead light for the Urgent Care Gynaecology services were audited by specialist Dr Centre. Rupert Sherwood, FRANZCOG. In the report Dr  Kyabram RSL Branch donated $2,000 for the Sherwood stated that “…is confident that the benefit of returned soldiers in Sheridan. Gynaecology Service as currently provided at  Kyabram Lions Club donated $2,000 to Kyabram District Health meets satisfactory standards purchase equipment for the operating theatre. in all criteria”. Thank you all for your generosity and support, and Recommendations of non-critical nature were thank you to everyone who made donations to the endorsed by the Board and staff are working toward organisation. All donations contribute to equipment implementing these recommendations. We would purchases and staff training that is not funded from like to thank Dr. Margreet Stegeman, credentialed any other source. Gynaecologist at KDHS for her assistance and support of this review In October 2016, KDHS participated and hosted the second Mini Field of Women, to raise the awareness Our Aged Care Service, Sheridan, continues to be a of breast cancer and breast screening, and to care facility of choice as is demonstrated by our remember women and their families who lost their occupancy rate of 99.87%. battle with Breast Cancer. It was also a time to celebrate the many Breast Cancer Survivors. Kyabram District Health Service (KDHS) has co- submitted an Expression of Interest proposal to the Investing in our staff and their capability to respond Better Care Victoria Innovation Grant funding round to our community’s needs of which, KDHS will act as executive sponsor and Our staff are our most valuable resource. KDHS lead agency. continues to invest in our staff thorough, Management Training, Crucial Conversations The Geri–Connect project was selected to proceed training to assist staff in developing the skills they to business case development. This project will be a require to live to our values of Empathy, Wellbeing joint proposal with Loddon Mallee Health Alliance and Community; with mutual purpose and respect. and Bendigo Health for regional geriatric assessment services provided via tele-consulting. ($250-500K). Our education team continues to look for

Page 20 KDHS Report of Operations 2016/2017 Clinical Services Report opportunities to engage and support placements for presenting a report to the June Board meeting. students and Graduates. Due to the positive outcomes and staff learnings In our Aged Care facility, staff are committed to from focus groups held as part of the project, KDHS ensure that every day is the best day possible for has committed to holding further staff focus groups. residents. On 29th March we had the official launch of our commitment to a model of consumer directed KDHS has also committed to participate in a further care entitled, “Continuing My Life’s Journey; My three year project of Melbourne University about self- Way”. This event was attended by Residents and reflection and why inclusivity is important. their families, staff and Senior Managers. Afternoon tea was then enjoyed by all. In consultation with local Elder, artwork has been purchased and displayed in prominent positions Improving the health outcomes for Aboriginal and within the health service. Torres Strait Islander people KDHS has implemented our “Aboriginal Health Strengthening Clinical Governance within the Health Governance Committee”. This committee’s Service. development has only been possible with the In the wake of Djerriwarrh, all Health Services have engagement and commitment of local Aboriginal been called to reflect and examine; “How would we Elders in the community who have been prepared to know we had a problem in clinical care? What do we volunteer their time to assist. KDHS would like to know? What do we know we don’t know? What don’t thank Heather McLennan, Elder of the Yorta Yorta we know we don’t know?” Interesting times; great tribe and representative on the Aboriginal Health opportunity. Governance Committee for her work in establishing this committee and the achievements made. Much work has been undertaken, and Health Heather has since resigned from her role on this Services are working closely with the Department of committee. Health and Human Services, their partner organisations and registering bodies to ensure We have employed an Aboriginal Health Liaison compliance, quality and safety. Being accredited is Officer (AHLO), 2 days per week to help Aboriginal not enough. and Torres Strait Islander (ATSI) people in our community to feel safe to come to KDHS for their Our Clinical Governance Committee in consultation health care needs and to ensure interactions in with our Board of Directors, has realized the value of hospital are respectful, effective, and hospital staff rescheduling our Clinical Governance and Board will work together to help ATSI community members’ meetings to be back to back to enable the whole of access mainstream healthcare services. Board to attend the Clinical Governance meetings. To make the information tabled meaningful for our Our AHLO will also work with health care providers Board members; we have developed a clinical and raise the cultural awareness of health dashboard report with tolerance levels built in to it. professionals to the distinct needs of ATSI patients This enables Managers to continually monitor and their. activity/outcomes, and Board Directors to be able to ask questions. We have also established an Aboriginal Health Working Party; made up of representatives of all The Board Clinical Governance meeting agenda has work groups within KDHS. We are also partnering as its first standing item; A patient journey story. This with University of Melbourne, who has funding, to may be an exemplar story; or as a result off a support and assist us with the cultural training that complaint or adverse outcome. will be required of all staff at KDHS. Legislative and regulatory compliance Our First Nation is now acknowledged at all As a Health Service we are required to meet meetings at KDHS. legislative and regulatory compliance. Over the past year we have: KDHS is committed to Closing the Gap between the health outcomes and life expectancy of the  Met full accreditation under the 10 National Aboriginal and Torres Strait Islander people of Standards from our survey in May. The Australia. surveyors were particularly impressed with our work in Infection Control, Blood Matters, We acknowledge that KDHS is located on the Mandatory Competency Achievement and traditional land of the Yorta Yorta Nation and the Patient Experience work. Bangarang people, and we pay our respects to  Achieved full compliance with our Hand elders both past and present and thank them for Hygiene, Fluvax and Antimicrobial their contribution to the development of our services. Stewardship.

Melbourne University has completed a study We have had enormous support from our Visiting Inclusive health care at KDHS: Staff Perspectives, Medical Officers, who make themselves available to with a focus on Aboriginal and Torres Strait culture, participate in meeting where they influence and

KDHS Report of Operations 2016/2017 Page 21 Clinical Services Report engage in decision making. Family Violence triggers have been added to the Throughout the year we have recognized areas for central intake process resulting in six identified cases improvement, based on our clinical data. At the end over a four month period. of last year medication safety emerged as a safety issue. In response, February was a dedicated A Child Safe implementation plan has been “Medication Safety Month”. Education was developed conducted and patient information was developed and widely distributed. We are continuing to monitor During the year, following staff training rigorous our data to measure outcomes. screening, KDHS became an Accredited Diabetes Centre. In conjunction with Endocrinologist, Esther st April 1 , was “April Falls Day”, alerting staff, patients Brigante, a Continuous Glucose Monitoring service is and families as to how to prevent falls. provided from KDHS with full uptake of the service.

Clinical Governance in a Health Service is During the year significant work occurred to ensure paramount to ensure that services being delivered the smooth transition to NDIS, initially for the Early are being done so with endorsed best practice Childhood Intervention Service (available to children scrutiny and a no blame culture, enabling open up to school age). Following the transition clients reporting and disclosure. were provided with information and those who chose to obtain services from KDHS were assisted with the We value the feedback we receive from our patients, transition. residents and clients. It enables us to review our systems and processes to ensure the best outcomes With the implementation of NDIS, and the skills of for our consumers. We have a formal review process KDHS staff, services are now available to all school that utilizes a screening tool. Recommendations are aged children. made and tabled at our Clinical Quality and Safety Committee meetings. A program has commenced where trained KDHS staff attend Childcare Centres and Kindergartens in KDHS is committed to protecting children from abuse Kyabram, Stanhope, Tongala and other district and to providing a consistent and respectful centres to assess children’s needs for speech approach to the management of family violence assistance. disclosure during routine screening and service delivery.

Patient Estelle Turnbull being visited by Cheryl Trevaskis

Page 22 KDHS Report of Operations 2016/2017 Clinical Statutory Reporting

Carers Act 2012 KDHS is an agency subject to the Carers Recognition Act 2012. The Carers Recognition Act 2012 formally recognises and values the role of carers and the importance of care relationships in the Victorian community.

The Act includes a set of principles about the significance of care relationships, and specifies obligations for State Government agencies, Local Councils, and other organisations that interct with people in care relationships.

KDHS has:  Taken all practical measures to comply with its obligations under the Act;  Promoted the principles of the Act to people in care relationships receiving our services and also to the broader community; and  Reviewed our staff employment policies to include flexible working arrangements and leave provision ensuring compliance with the statement of principles in the Act.

There were no disclosures in 2016/2017.

Safe Patient Care Act 2015 KDHS has no matters to report in relation to its obligations under section 40 of the Safe Patient Care Act 2015

Patient Arthur Whyte being cared for by Megan Rasmussen

KDHS Report of Operations 2016/2017 Page 23 Corporate Report Corporate Services comprises departments Our key financial management reporting system providing finance, health information received a number of upgrades during the year management, food, environmental services, that have assisted Managers to more effectively linen, payroll, information communications and access financial and payroll information through technology, procurement and facilities the new reporting hub, while the provision of management services. alerts on key metrics, such as employee entitlements, are driving improved leave Corporate Services employs 95 people (56 EFT) management. and has an annual budget of $6.6 million. A completely revamped Corporate Dashboard People Matters Survey has been developed providing expanded insight The Corporate and Support Services teams’ into a range of key performance drivers benchmarked performance (similar sized local encompassing financial, human resources, health services) in the recent People Matters facilities, food, cleaning, environment, Survey completed by the Victorian Public Sector procurement and occupational health and Commission was extremely satisfying. safety. The data enables more timely and effective discussion of key activity trends, while The survey annually seeks staff feedback and further informing the reasons for key impacts rates Health Service performance across a and trends in our financial performance. broad range of satisfaction, safety and wellbeing metrics. Updated Financial Management Compliance Framework (FMCF) We will work to maintain existing high standards, The Department of Treasury and Finance while targeting actions to address areas, such issued an extensive update to the FMCF as managing stress or change, where our requirements, which required a significant performance did not meet our expectations. number of changes.

Financial Management A range of policies and procedures have been Strong financial management systems have updated including: been further developed during the year through  Fraud, Corruption and Other Losses; a range of improvements.  Strategic Planning, Budgeting and Financial Performance; Budget management and development  Treasury and Investment Management; processes have been refined with department  Discretionary Financial Benefits; and Managers more specifically engaged in the  Corporate Credit Cards. process of the budget staffing roster profile development, capital and operating expenditure We have recently completed a compliance allocations. The budget’s accuracy and reliability assessment to the new Assets Management has improved as a result. Accountability Framework (AMAF). A range of improvements have been identified that will be

Gabrielle Judd Page 24 KDHS Report of Operations 2016/2017 Corporate Report addressed in the coming year, such as the Hotel Services development of an Assets Management Hotel Services includes responsibility for Strategy and improved Assets Management food, environmental and linen, as well as Information Systems. contracted services for security, pest control, chemicals and general/prescribed waste. Health Information Management We have contributed to the Loddon Mallee Achievements and highlights during the year region proof of concept and business case for included: the implementation of a region wide Electronic  100% compliance with external food Medical Record (EMR) submitted to the safety audit. Department of Treasury and Finance.  Consistent highly positive ratings for both cleanliness and food services in the Proposed timeliness for the project suggests Victorian Healthcare Experience Survey. work will begin in July 2018 and take three years to complete. During the year the Food Services team has successfully updated the Health Service’s Food Procurement Safety Plan. The new plan strengthens We have continued to support the regional processes for management food allergies, better coordination of procurement as an active documentation of safety requirements and member of the Chief Procurement Officers improved staff orientation and training systems. Forum. Facilities Management The focus of our procurement activity has been Facilities Management provides the ongoing the development and implementation of a new maintenance of physical facilities to ensure they contracts management information system. The are reliable, safe and comply with relevant system is integrated within our regional incident standards. Maintenance of our infrastructure reporting system and has enabled Contract requires long-term planning, coordination of Management to become paper less. redevelopment and refurbishment programs and preventative and reactive maintenance for Financial Management Information System essential plant and equipment at all sites. (FMIS) Upgrade The statewide upgrade of our FMIS has been a The Facilities team completed a review and key focus of activity for our finance and update of the Building Essential Safety Systems procurement teams throughout the year. Staff requirements including updated of policies and attended key user training and completed procedures, refresh of compliance multiple rounds of user acceptance testing. We documentation, scheduling of preventative anticipate the new system will “go live” in late maintenance requirements and development of September 2017. new compliance/evidence documentation process to support the annual assessment. Information and Communications Technology In response to recent cybersecurity incidents Corporate Governance Committee around the globe, we participated in the The Board Corporate Governance Committee completion of a region wide Cybersecurity continues to monitor the Health Services risk review of Health Services. The review has management, financial systems and reporting identified a range of actions that will be and compliance with statutory requirements. implemented in the coming year to address weaknesses identified. The internal audit program is undertaken by AFS and Associates under an independent contract We have completed a Wifi predictive site survey as appointed by the KDHS Board. Activities in preparation for an update to our internal Wifi undertaken by the internal auditors during the network. The work has identified the need for a year included a number of targeted reviews complete revamp of our wireless network to focusing on Residential Aged Care, Fraud, expand coverage, improve reliability and enable Human Resources and the Financial the introduction of location services throughout Management Compliance Framework. the facility.

KDHS Report of Operations 2016/2017 Page 25 Corporate Statutory Reporting

Attestation on Compliance with Health Purchasing Victoria (HPV) Health Purchasing Policies I, Peter Abraham, certify that Kyabram District Health Service has put in place appropriate internal controls and processes to ensure that it has complied with all requirements set out in the HPV Health Purchasing Policies including mandatory HPV collective agreements as required by the Health Services Act 1988 (Vic) and has critically reviewed these controls and processes during the year.

Peter Abraham Kyabram Chief Executive 30 June 2017 Freedom of Information Act Requests for access to document and records held by KDHS may be made under the Freedom of Information Act 1982. All applications are in writing are forwarded to KDHS. In the majority of cases a Freedom on Information request is to gain access to a patient’s own medical record. During the 2016/2017 financial year KDHS received 25 valid requests. National Competition Policy KDHS complied with all government policies regarding competitive neutrality with regard to tender applications.

Victorian Industry Participation Policy Act 2003 KDHS abides by the principles of the Victorian Industry Participation Policy. During the year there were no procurement or project activities above the threshold.

Building Act 1993 KDHS complies with the provisions of the Building Act 1993, in accordance with the Department of Health Capital Development Guidelines. Car Parking Fee based car parking is not applicable at KDHS Consultancies In 2016-2017 there was one consultancy where the fees payable to the consultant was $10,000 or greater. The total expenditure incurred during 2016/2017 in relation to this consultancy is $30,000 (ex GST). In 2016-2017 there were 7 consultancies where the total fees payable to the consultants were less than $10,000, with a total expenditure of $29,604 (ex GST). Consultant Purpose of Start date End date Total Expenditure Future Consultancy approved 2016/2017 expenditure project fee (excluding (excluding (excluding GST) GST) GST Health Consult Analysis of integrated 13/10/2016 12/01/2017 $30,000 $30,000 Nil Pty Ltd primary care business and service models

Cleaning Standards Achieved

Cleaning Standard Measure AQL target Outcome

Overall compliance with standards Full compliance Achieved

Very high risk (Category A) 90 points Achieved

High risk (Category B) 85 points Achieved

Moderate risk (Category C) 85 points Achieved

Page 26 KDHS Report of Operations 2016/2017 Corporate Statutory Reporting Information and Communication Technology (ICT) expenditure The total ICT expenditure incurred during 2016/2017 (excluding GST) is $842,602 with the details shown below. Business As Usual Non-Business As Usual Operational expenditure Capital expenditure (BAU) ICT expenditure (non-BAU) ICT (excluding GST) (excluding GST) expenditure

(Total) (Total=Operational (excluding GST) Expenditure and Capital Expenditure) (excluding GST) $788,530 $3,412 $791,942 $50,660

Additional information Consistent with FRD 22H (Section 6.19), details in respect of the items listed below have been retained by KDHS and are available to the relevant Ministers, Members of Parliament and the public on request (subject to the freedom of information requirements, if applicable):

 Declarations of pecuniary interest have been completed by all relevant officers;  Details of shares held by senior officers as nominee or held beneficially;  Details of publications produced by KDHS about KDHS, and how these can be obtained;  Details of changes in prices, fees, charges, rates and levies charged by the Health Service;  Details of any major external reviews carried out on the Health Service;  Details of major research and development activities undertaken by the Health Service;  Details of overseas visits undertaken including a summary of the objectives and outcomes of each visit;  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;  Details of assessments and measures undertaken to improve the occupational health and safety of employees;  A 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;  A list of major committees sponsored by the Health Service, the purposes of each committee and the extent to which the purposes have been achieved;  Details of all consultancies and contractors including: consultants/contractors engaged, services provided, and expenditure committed for each engagement. Environmental report KDHS is committed to protecting the environment. When developing or making improvements, consideration is always given to conserving energy and water, reducing greenhouse emissions and improving waste management.

The key achievements for 2016/2017 were:  Renewal of the Health Services Environmental Management Plan.  A 7% reduction in carbon emissions. Contributing factors to this reduction include the installation of LED lighting across the organisation and the installation of new ovens in the Food Service area.  A reduction in paper usage estimated to be 20,000 sheets During the year a pop-up message appears whenever a two or more page document is sent to print to single sided, asking the operator to consider duplex printing. A number of clerical computers were upgraded to dual screens, reducing the need to print a document for working purposes.

KDHS Report of Operations 2016/2017 Page 27 Quality, Experience & Safety Report

Quality Planning The funded 12 month project encourages patients, The Quality Framework was reviewed in July 2016 to carers and community members to use their reflect changes and improvements in processes for knowledge and experiences to participate in local Quality and Business planning. Departmental Quality healthcare improvements by sharing their and Business Plans are now linked to Strategic healthcare journey, experience and ideas, assisting Priorities, the KDHS Business Plan and the others to share their stories, and/or by joining our Department of Health and Human Services working party to translate the feedback into Statement of Priorities as well as capturing individual healthcare improvements. Department-identified opportunities. In the first instance, KDHS conducted information Guidelines for staff and a revised Quality and meetings and discussions with many small groups Business Plan template were developed in and individuals to gather healthcare experiences consultation with staff, approved and implemented and feedback with a focus on implementing a for the 2016-2017 financial year. "CARE" (Conversation and Reflective Experience) program. An action plan is in place and endorsed by All plans, once developed, were approved through both KDHS and the Health Issues Centre and has the Governance structure. Objectives within the been provided to the Community and Cultural plans were logged on the electronic Riskman quality Governance Committee for awareness and database and actions, progress and outcomes discussion. Community meetings have been monitored and reported to the Clinical Governance completed with approximately 200 consumers Committee. engaged in the process.

Accreditation A Steering Committee has been established, patient In May 2017 KDHS was surveyed by the Australian stories are being documented and tools developed Council of Healthcare Standards (ACHS) and to ensure systems are implemented to capture successfully achieved accreditation against the patient experience in a sustainable and National Standards for a further three year period. comprehensive program.

Quality Activities With a strong and growing focus on Patient During 2016-2017, 305 quality planned Experience across KDHS and the value of improvements and completed audits were entered partnering with consumers, KDHS has expanded into the electronic quality module, Riskman Q, with the Quality Unit to incorporate patient experience 197 completed for the year and the remaining and innovative practice commenced or proposed over coming months. Happy or Not Riskman Q provides systems to record and track all To further strengthen our quality feedback quality activities from commencement to completion mechanisms, KDHS has introduced “Happy or Not” and includes the lodging of quality improvement feedback collection units. activities, objectives of the Quality Plan and all scheduled and completed audits across all Units. These units are used to target a specific question over a designated time period and are available in The program links directly into the Riskman.net four locations across the organisation. While the incident reporting system (VHIMS), relates to answers do not provide comprehensive feedback accreditation frameworks and provides immediate information, they allow measurement of satisfaction access to reports. The program also provides and experience and are used to support areas that resources, tools and monitoring systems for the are a focus at any given time. National Standards. The results from the Units support improvement Health Information Centre Project strategies by providing reports to implement In December 2016, KDHS was one of four appropriate initiatives for improvement. The results successful recipients of first round funding from the have also been instrumental in assisting the Health Issues Centre (Melbourne) Practice Partners measurement of our empathy value and providing Program. improvement data following the introduction of the “Hello, my name is…” campaign.

Page 28 KDHS Report of Operations 2016/2017 Quality, Experience & Safety Statutory Reporting Attestation on Compliance with the Ministerial Standing Direction 3.7.1—Risk Management Framework and Processes I, Peter Abraham, certify that Kyabram District Health Service has complied with Ministerial Direction 3.7.1—Risk Management Framework Processes. The Kyabram District Health Service Governance (Audit) Committee ha verified this.

Peter Abraham Chief Executive

Kyabram 30 June 2017

Protected Disclosure Act KDHS has policies and guidelines in place to protect people against detrimental action that might betaken against them if they choose to make a protected disclosure. No disclosures have been made in the year ended 30th June 2017.

Mrs Joyce Clark, using a Happy or Not feedback collection unit to rate the service she received.

KDHS Report of Operations 2016/2017 Page 29 Quality, Experience & Safety Statutory Reporting Occupational Health & Safety Report All meetings have been held as scheduled with The Occupational Health and Safety an 80% attendance rate. Management System (OHSMS) is reviewed annually by the Health and Safety Committee and 90% of objectives for the annual OH&S action addresses all OH&S compliance areas and plan have been achieved or are in progress for functions within the organisation. the 2016-2017 period, with some substantial improvements in the scheduling and completion Within the objectives of the OHSMS, an annual of workplace inspections. There has also been a Action Plan is developed and improvements focus on improving knowledge and scheduled are monitored and evaluated to ensure understanding of risk assessments and the provision of a safe and healthy work completing either initial OH&S training or environment. refresher training for existing representatives. The outstanding actions have all commenced The Health & Safety Committee continues to be and will be carried forward to the next annual actively involved in ensuring KDHS provides a plan. healthy and safe environment for staff, patients, visitors and contractors. Incidents reported have increased for the year per 100 full-time EFT from 66 in 2015-2016 to 69 All designated work groups are represented on in 2016-2017 (4% with reported hazards the Committee by OH&S trained staff with two increasing substantially from 47 to 113 (48%) management representatives and an Executive over the same period. The increase of incidents Sponsor to assist and support the consultation is directly related to an increase of aggression in processes. Aged Care while the increase in hazards relates to improved reporting and promotion. During 2016-2017, two representative positions became vacant and new representatives Appropriate management strategies have been commenced with one Department also electing a implemented, including staff education, system Deputy OH&S representative to ensure improved review and education for Code Grey and representation to staff in Aged Care clinical areas. Occupational Violence.

Workers Compensation due to Occupational Violence

Occupational Violence Statistics 2016-17

1. Workcover accepted claims with an occupational violence cause 1.2 per 100 FTE 2. Number of accepted Workcover claims with lost time injury with an Too small to report occupational violence cause per 1,000,000 hours worked

3. Number of occupational violence incidents reported 33

4. Number of occupational violence incidents reported per 100 FTE 19

5. Percentage of occupational violence incidents resulting in a staff 6% injury, illness or condition

Definitions For the purposes of the above statistics 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: occupational health and safety incidents reported in the health service incident reporting system. Code Grey reporting is not included.

Accepted Workcover claims: accepted Workcover claims that were lodged in 2015-2016

Lost time: is defined as greater than one day.

Page 30 KDHS Report of Operations 2016/2017 Workplace Capability and Culture Report Staff Training member’s team environment. The changes and To the end of June 2017 130 Staff members have program developed were recognised in our attended our Supporting Positive Behaviour ACHS accreditation survey. training conducted by HRonTrack. People Matter Survey The Health Service continued with Crucial Our 2017 People Matter Survey had a response Conversation training across the organisation. To rate of 47% up from 34% in 2016. For the date over 69% of our staff have completed the question Considering everything, how would you two day program. rate your overall satisfaction with your organisation as an employer? We achieved 92%, We have used consultant services to provide with the industry average sitting at 73%. management development training to our After Hours Managers, Team Leaders, Coordinators EBA’s and Supervisors. Approximately 22 team During 2016/2017 there was EBA negotiations members attended the two day training workshop. across three of our four EBA’s. All of these Further development work is planned for these EBA’s have now been approved by the Fair Work team members in 2017/2018. Commission.

Staff Orientation program review In all EBA’s there have been extensive and Based on survey results from new staff members complex changes requiring detailed in the 2015 year, we have reviewed our implementation strategies. Work has orientation and induction program. The changes commenced on this. To date we have held two have resulted in us moving away from a full day Workplace Implementation Committee meetings generic orientation program and focusing on a with the ANMF and job representatives. This has more comprehensive induction into a new staff all progressed very well.

Jenny Hill Workplace Capability and Culture Statutory Reporting

Merit & Equity Principles KDHS is committed to upholding the principles of merit and equity in all aspects of the employment relationship to ensure fair and transparent processes for recruitment, selection, transfer and promotion of staff.

Policies and procedures are in place to ensure employment related decisions are based on merit, and relevant legislation is complied with. Any complaints, allegations or incidents involving discrimination, vilification, bullying or harassment are taken seriously and addressed.

KDHS Report of Operations 2016/2017 Page 31 Workplace Capability & Culture Statutory Reporting

Workforce Information

Labour Category Current Month FTE - June YTD FTE - June

2016-2017 2015-2016 2016-2017 2015-2016

Nursing 88.9 89.0 87.4 88.1

Administration and Clerical 30.0 27.6 29.3 26.4 Medical Support 7.0 6.7 6.8 6.8

Hotel and Allied Services 39.0 40.0 40.0 39.9

Medical Officers 0.2 0.2 0.2 0.1

Hospital Medical Officers 0 0 0 0

Sessional Clinicians 0 0 0 0 Ancillary Staff (Allied Health) 11.5 9.4 9.1 8.2

176.6 172.9 172.8 169.5

FTE = Full Time Equivalent

Employees have been correctly classified in workforce data collections.

Industrial Relations and Workers Compensation There was no time lost due to industrial disputes in 2016/2017. There were 310.5 days lost due to Workers Compensation claims in 2016/2017

Student Training

Page 32 KDHS Report of Operations 2016/2017 DISCLOSURE INDEX The Annual Report of Kyabram and District Health Services is prepared in accordance with all relevant legislation. This index has been prepared to facilitate identification of the Department’s compliance with statutory disclosure requirements.

Note: The Disclosure Index consists of 2 pages.

Legislation Requirement Page Ref. MINISTERIAL DIRECTIONS

REPORT OF OPERATIONS

Charter and purpose FRD 22H Manner of establishment and relevant Ministers 17 FRD 22H Purpose, functions, powers and duties Cover, 17 FRD 22H Initiatives and key initiatives 2-15 FRD 22H Nature and range of services provided 17

Management and structure FRD 22H Organisational structure 18

Financial and other information FRD 10A Disclosure index 33-34 FRD 11A Disclosure of ex-gratia payments Fin rep FRD 21C Responsible person and executive officer disclosures Fin rep FRD 22H Application and operation of Protected Disclosure Act 2012 29 FRD 22H Application and operation of Freedom of Information Act 1982 26 FRD 22H Application and operation of Carers Recognition Act 2012 23 FRD 22H Compliance with building and maintenance provisions of Building Act 1993 26 FRD 22H Details of consultancies over $10,000 26 FRD 22H Details of consultancies under $10,000 26 FRD 22H Employment and conduct principles 31 FRD 22H Information and Communication Technology Expenditure 27 FRD 22H Major changes or factors affecting performance Fin rep FRD22H Occupational Violence 30 FRD 22H Operational and budgetary objectives and performance against objectives Fin rep FRD 24C Reporting of office-based environmental impacts 27 FRD 22H Significant changes in financial position during the year Fin rep FRD 22H Statement on National Competition Policy 26 FRD 22H Subsequent events Fin rep FRD 22H Summary of the financial results for the year Fin rep FRD 22H Additional information available on request 27 FRD 22H Workforce Data Disclosures including a statement on the application of 31, 32 employment and conduct principles FRD 25C Victorian Industry Participation Policy disclosures 26

KDHS Report of Operations 2016/2017 Page 33 DISCLOSURE INDEX Legislation Requirement Page Ref. FRD29B Workforce Data disclosures 32 FRD 103F Non-Financial Physical Assets Fin Rep FRD 110A Cash Flow Statements Fin Rep FRD 112D Defined Benefit Superannuation Obligations Fin Rep SD 5.2.3 Declaration in Report of Operations 4 SD 3.7.1 Risk management framework and processes Fin Rep

Other requirements under Standing Directions 5.2 SD 5.2.2 Declaration in financial statements Fin rep SD 5.2.1(a) Compliance with Australian accounting standards and other authoritative Fin rep pronouncements SD 5.2.1(a) Compliance with Ministerial Directions Fin rep

Legislation Freedom of Information Act 1982 26 Protected Disclosure Act 2012 29 Carers Recognition Act 2012 23 Victorian Industry Participation Policy Act 2003 26 Building Act 1993 26 Financial Management Act 1994 Fin rep Safe Patient Care Act 2015 23

KEY Fin rep = refer to the Financial Report

Page 34 KDHS Report of Operations 2016/2017

FINANCE REPORT 2016 - 2017

Finance Report 2016 – 2017

Contents

Corporate Governance Chair & Corporate Service Director’s Report…………….3

Finance Summary………………………………………………………………………4

Statement of Priorities – Parts B, C…….……………………………………………..5

Accountable Officers Declaration

Independent Auditor’s Report

Financial Statements

KYABRAM DISTRICT HEALTH SERVICE

Corporate Governance Chair and Corporate Service Director’s Report

FINANCE REPORT Kyabram District Health Service’s financial goal is to deliver high quality cost efficient health services, while building capacity to meet the future health needs of our Community.

Our key financial achievements included:

 Strong growth (8.5%) in residential aged care income across all categories delivering an additional $320,247 thanks predominantly to proactive work updating resident ACFI status prior to the end of the 2015-16 financial year;  Growth in private patient activity (11%) with approximately 24% of all acute patients choosing to utilise their private health insurance cover while accessing treatment at the Health Service; and  Grant funding of $823,000 to support an Acute Services Nursing Hub and improved Urgent Care facilities with the works scheduled to be completed in 2017-18.

Financial Performance

The Department of Health and Human Services benchmark indicator for financial performance is the Net Result before Capital and Specific Items. The result in the current year was a surplus of $268,510, which was up on our original budget of $198,200. The Comprehensive Result was a deficit of $713,068, which was a slight improvement on last year’s deficit of $838,527.

Revenue growth increased by $834,508 (3.6%) due strong residential aged care income growth of $320,247 and a grant conversion of $155,424 to support outpatient clinic activity for the Oncology Service. Our complexity adjusted inpatient activity public/private performance reduced by 2% on the previous year, with our performance representing 95.5% of our target.

Expenses grew by $701,401 (3%) with the introduction of a range of new Enterprise Bargaining Agreements for the majority of staff employment contracts. The major reduction in our supplies and consumables costs was the result of a one off cost of $310,142 for an AB WIES funding swap arrangement with Echuca Regional Health in 2015-16.

Liquidity Position

During the year we generated positive cash flows from operating activities of $1,866,383 up markedly on the previous year. A capital grant of $658,544 just before year end for the new Acute Nursing Hub and Urgent Care redevelopment was

Kyabram District Health Service – Finance Report – Page | 3

KYABRAM DISTRICT HEALTH SERVICE

a major contributor to this strong cash flow growth. These funds remain unexpended at year end.

Financial Position

The financial position of the Service remains strong with our current assets ratio at 0.945 (current assets divided by current liabilities). It remains well above the Department of Health and Human Services benchmark (0.7) providing capacity to pay our debts as and when they fall due.

The Future

We are excited by the service development and expansion opportunities under the National Disability Insurance Scheme, with our early childhood intervention team expanding their support into schools throughout the region.

Paul Jackson David Edwards

Chair – Corporate Governance Committee Corporate Services Director

Finance Summary 2017 2016 2015 2014 2013 $000 $000 $000 $000 $000 Total Revenue 23,768 22,933 22,840 21,484 20,765 Total Expenses 24,481 23,772 22,605 21,526 21,487 Operating Surplus/(Deficit) 269 188 893 (230) 179 Net Result for the Year (inc. Capital and Specific (713) (839) 235 (42) (722) items)

Retained Surplus/(Accumulated 1,333 2,660 3,285 3,299 3,318 Deficit)

Total Assets 32,445 31,213 31,347 29,620 24,728 Total Liabilities 7,987 6,042 5,338 6,531 4,806 Net Assets 24,458 25,171 26,009 23,089 19,922

Total Equity 24,458 25,171 26,009 23,089 19,922

Kyabram District Health Service – Finance Report – Page | 4

KYABRAM DISTRICT HEALTH SERVICE

2016-2017 Statement of Priorities Part B: Performance Priorities

Financial Sustainability Key Performance Indicator Target 2016-2017 Actual 2016-2017 Finance Operating result ($M) 0.19 0.27 Trade Creditors 60 days 34 days Patient fee debtors 60 days 31 days Public & private WIES2 performance to target 100% 95.5% Adjusted current asset ratio 0.7 1.32 Number of days with available cash 14 days 68 days Asset management Basic asset management plan Full compliance Full Compliance

Kyabram District Health Service – Finance Report – Page | 5

KYABRAM DISTRICT HEALTH SERVICE

2016-2017 Statement of Priorities Part C: Activity and Funding

Budget Budget Activity Activity Funding type Target Achieved Target Achieved $’000 $’000 Acute Admitted WIES DVA 63 80 $310 $388 WIES Private 379 423 $1,399 $1,420 WIES Public 1,987 1805 $10,768 $9,399 WIES TAC 15 9 $62 $39 Acute Non-Admitted Emergency services $651 $651 Specialist clinics $122 $281 Aged Care Aged Care Other $30 $30 HACC 5,830 7,099 $206 $215 Residential Aged Care 15,187 15,104 $1,143 $1,143 Subacute and Non-Acute Admitted Subacute WIES – Maintenance Public 72 34 $742 $383 Subacute WIES - DVA 0 0 $4 0 Primary Health Community Health / Primary Care 8,346 8,316 $817 $817 Programs Community Health Other $266 $266 Other Other specified funding $280 $280 Health Workforce 4 4 $117 $117 Total Funding $16,916 $15,429

Kyabram District Health Service – Finance Report – Page | 6

Independent Auditor’s Report

To the Board of Kyabram District Health Service

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

balance sheet as at 30 June 2017 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 a summary of 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 2017 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 Opinion Australian Auditing Standards. My responsibilities under the Act are further described 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 Australia. 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 responsibilities the financial report in accordance with Australian Accounting Standards and the Financial for the Management Act 1994, and for such internal control as the Board determines is necessary financial to enable the preparation and fair presentation of a financial report that is free from report 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, and using the going concern basis of accounting unless it is inappropriate to do so.

Auditor’s As required by the Audit Act 1994, my responsibility is to express an opinion on the financial responsibilities report based on the audit. My objectives for the audit are to obtain reasonable assurance for the audit about whether the financial report as a whole is free from material misstatement, whether of the financial due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable report assurance is a high level of assurance, 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 our 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 Ron Mak 29 August 2017 as delegate for the Auditor-General of Victoria

2

KYABRAM DISTRICT HEALTH SERVICE COMPREHENSIVE OPERATING STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Note 2017 2016 $ $

Revenue from Operating Activities 2.1 22,452,343 21,607,292 Revenue from Non-operating Activities 2.1 606,794 590,412 Employee Expenses 3.1 (16,001,067) (15,126,835) Non Salary Labour Costs 3.1 (1,572,668) (1,533,535) Supplies and Consumables 3.1 (2,132,491) (2,471,186) Other Expenses 3.1 (3,084,401) (2,877,717) Net Result Before Capital and Specific Items 268,510 188,431

Capital Purpose Income 2.1 854,611 765,272 Expenditure Using Capital Purpose Income 3.1 (9,580) (90,738) Depreciation 4.4 (1,672,889) (1,609,060)

Net Result After Capital and Specific Items (559,348) (746,095)

Other Economic Flows Included in Net Result Net gain/(loss) on non-financial assets 7.2 (146,072) (29,808) Revaluation of Long Service Leave 3.2 (7,648) (62,624) Total Other Economic Flows Included in Net Result (153,720) (92,432)

NET RESULT FOR THE YEAR (713,068) (838,527)

Other Comprehensive Income Items that will not be reclassified to net result Changes in physical asset revaluation surplus 0 0

COMPREHENSIVE RESULT (713,068) (838,527)

This Statement should be read in conjunction with the accompanying notes. KYABRAM DISTRICT HEALTH SERVICE BALANCE SHEET AS AT 30 JUNE 2017 Note 2017 2016 $ $

Current Assets Cash and Cash Equivalents 6.1 904,941 257,657 Receivables 5.1 397,850 614,936 Investments and other Financial Assets 4.1 5,660,296 3,977,008 Inventories 5.2 26,753 30,109 Prepayments and other assets 5.4 97,465 68,266 Total Current Assets 7,087,305 4,947,976

Non-Current Assets Receivables 5.1 267,543 253,994 Property, Plant and Equipment 4.3 25,089,916 26,011,086 Total Non-Current Assets 25,357,459 26,265,080

TOTAL ASSETS 32,444,764 31,213,056

Current Liabilities Payables 5.5 1,372,281 1,132,151 Provisions 3.2 3,800,766 3,391,170 Other Liabilities 5.3 2,314,754 977,654 Total Current Liabilities 7,487,801 5,500,975

Non-Current Liabilities Provisions 3.2 499,215 541,265 Total Non-Current Liabilities 499,215 541,265

TOTAL LIABILITIES 7,987,016 6,042,240

NET ASSETS 24,457,748 25,170,816

EQUITY Property, Plant and Equipment Revaluation Surplus 8.1a 9,849,277 9,849,277 Restricted Specific Purpose Surplus 8.1a 658,544 45,000 Contributed Capital 8.1b 12,616,504 12,616,504 Accumulated Surpluses 8.1c 1,333,423 2,660,035

TOTAL EQUITY 24,457,748 25,170,816

Commitments 6.2 Contingent Assets and Contingent Liabilities 7.3

This Statement should be read in conjunction with the accompanying notes. KYABRAM DISTRICT HEALTH SERVICE CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017 Note 2017 2016 $ $ Inflows / Inflows / CASH FLOWS FROM OPERATING ACTIVITIES (Outflows) (Outflows)

Operating Grants from Government 19,878,384 18,880,257 Capital Grants from Government 803,462 700,443 Patient and Resident Fees Received 1,972,152 1,725,889 Donations and Bequests Received 70,493 77,885 GST (Paid to)/received from ATO 15,557 80,006 Interest Received 159,623 106,142 Other Receipts 1,546,318 1,461,960 Total Receipts 24,445,989 23,032,582 Employee Expenses Paid (15,641,169) (15,119,958) Non Salary Labour Costs (1,572,668) (1,533,535) Payments for Supplies and Consumables (2,261,474) (2,194,689) Other Payments (3,104,295) (2,943,825) Total Payments (22,579,606) (21,792,007)

NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES 8.2 1,866,383 1,240,575

CASH FLOWS FROM INVESTING ACTIVITIES Payments for Investments (348,280) (500,000) Proceeds from Sale of Investments 0 469,050 Recognition of Cash from LMRHA Alliance 0 1,024 Payments for Non-Financial Assets (916,109) (1,873,245) Proceeds from sale of Non-Financial Assets 43,198 69,236

NET CASH FLOW USED IN INVESTING ACTIVITIES (1,221,191) (1,833,935)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS HELD 645,192 (593,360)

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 257,592 850,952

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 6.1 902,784 257,592

This Statement should be read in conjunction with the accompanying notes. KYABRAM DISTRICT HEALTH SERVICE STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017 Property, Plant Restricted Contributed Accumulated Total and Equipment Specific Purpose Capital Surpluses Revaluation Surplus Surplus Note $ $ $ $ $

Balance at 1 July 2015 9,849,277 258,152 12,616,504 3,285,410 26,009,343

Net result for the year 8.1c 0 0 0 (838,527) (838,527) Transfer to Accumulated Surplus 8.1a 0 (213,152) 0 213,152 0

Balance at 30 June 2016 9,849,277 45,000 12,616,504 2,660,035 25,170,816

Net result for the year 8.1c 0 0 0 (713,068) (713,068) Transfer to/from Accumulated Surplus 8.1a 0 613,544 0 (613,544) 0

Balance at 30 June 2017 9,849,277 658,544 12,616,504 1,333,423 24,457,748

This Statement should be read in conjunction with the accompanying notes. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

BASIS OF PRESENTATION These financial statements are presented 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 the preparation of 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.

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

Additions to net assets which have been designated as contributions by owners are recognised as contributed capital. Other transfers that are in the nature of contributions to or distributions by owners have also been designated as contributions by owners.

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

Judgements, estimates and assumptions are required to be made about financial information being presented. The significant judgements made in the preparation of these financial statements are disclosed in the notes where amounts affected by those judgements are disclosed. 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.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and also future periods that are affected by the revision. Judgements and assumptions made by management in applying the application of AASB that have significant effect on the financial statements and estimates are disclosed in the notes under the heading: 'Significant judgement or estimates'.

NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These annual financial statements represent the audited general purpose financial statements for Kyabram District Health Service (ABN 40 003 759 225) for the period ended 30 June 2017. The purpose of the report is to provide users with information about the Health Services' 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 Australian Accounting Standards (AASs) issued by the Australian Accounting Standards Board (AASB). They are presented in a manner consistent with the requirements of AASB 101 Presentation of Financial Statements .

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

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

The annual financial statements were authorised for issue by the Board of Kyabram District Health Service on the 25th August, 2017.

(b) Reporting entity The financial statements includes all the controlled activities of Kyabram District Health Service.

Its principal address is: 88 Fenaughty Street Kyabram Vic 3620

A description of the nature of Kyabram District Health Service operations and its principal activities is included in the report of operations, which does not form part of these financial statements. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

(b) Reporting entity (Continued) Objectives and funding Kyabram District Health Service overall objective is to enhance the life of everyone in the community through a focus on health and well being, as well as improve the quality of life to Victorians.

Kyabram District Health Service is predominantly funded by accrual based grant funding for the provision of outputs.

(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 set out below have been applied in preparing the financial statements for the year ended 30 June 2017, and the comparative information presented in these financial statements for the year ended 30 June 2016.

The going concern basis was used to prepare the financial statements.

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

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

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

• Non-current physical assets, which subsequent to acquisition, are measured at a revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made and are re-assessed when new indices are published by the Valuer General to ensure that the carrying amounts do not materially differ from their fair values;

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

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.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements and assumptions made by management in the application of AASs that have significant effects on the financial statements and estimates relate to: • The fair value of land, buildings, plant and equipment, (refer to Note 4.3); • Superannuation expense (refer to Note 3.3); • Employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates (refer to Note 3.2); and

(d) Principles of consolidation Intersegment Transactions Transactions between segments within Kyabram District Health have been eliminated to reflect the extent of Kyabram District Health's operations as a group. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 2: FUNDING DELIVERY OF OUR SERVICES

The hospital’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 objective it receives income based on parliamentary appropriations. The hospital also receives income from the supply of services.

Structure 2.1 Analysis of revenue by source Kyabram District Health Service Notes to the Financial Statements 30 June 2017 NOTE 2.1: ANALYSIS OF REVENUE BY SOURCE Admitted Residential Aged Primary Other TOTAL Patients Aged Care Care Health 2017 2017 2017 2017 2017 2017 $ $ $ $ $ $

Government Grants 12,875,499 4,055,511 1,025,586 1,540,966 0 19,497,562 Indirect Contributions by Department of Health and Human Services 32,434 0 0 0 0 32,434 Patient and Client Fees 644,113 1,149,115 58,877 35,417 0 1,887,522 Loddon Mallee Rural Health Alliance 0 0 0 0 399,911 399,911 Other Revenue from Operating Activities 333,773 116,444 91,078 93,619 0 634,914

Total Revenue from Operating Activities 13,885,819 5,321,070 1,175,541 1,670,002 399,911 22,452,343

Catering 6,852 11,355 587 0 227,335 246,129 Donations and Bequests (non capital) 30,906 11,284 2,943 6,000 0 51,133 Property Income 97,391 21,518 5,741 11,993 49,610 186,253 Interest 77,512 28,298 7,382 9,843 244 123,279

Total Revenue from Non-Operating Activities 212,661 72,455 16,653 27,836 277,189 606,794

Capital Purpose Income (other than interest) 0 0 0 0 3,397 3,397 Capital Grants 0 0 0 0 803,462 803,462 Donations and Bequests (capital) 0 0 0 0 19,360 19,360 Capital Interest 0 0 0 0 28,392 28,392

Total Capital Purpose Income 0 0 0 0 854,611 854,611

Net gain/(loss) on Non-Financial Assets 0 0 0 0 (146,072) (146,072)

TOTAL REVENUE 14,098,480 5,393,525 1,192,194 1,697,838 1,385,639 23,767,676

Department of Health and Human Services makes certain payments on behalf of the Health Service . These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses. Kyabram District Health Service Notes to the Financial Statements 30 June 2017 NOTE 2.1: ANALYSIS OF REVENUE BY SOURCE (Continued) Admitted Residential Aged Primary Other TOTAL Patients Aged Care Care Health 2016 2016 2016 2016 2016 2016 $ $ $ $ $ $

Government Grants 12,260,707 3,681,755 1,018,477 1,667,576 0 18,628,515 Indirect Contributions by Department of Health and Human Services 14,331 0 0 0 0 14,331 Patient and Client Fees 726,481 1,028,468 53,504 21,330 969 1,830,752 Loddon Mallee Rural Health Alliance 0 0 0 0 442,471 442,471 Other Revenue from Operating Activities 500,674 33,123 80,763 65,121 11,542 691,223

Total Revenue from Operating Activities 13,502,193 4,743,346 1,152,744 1,754,027 454,982 21,607,292

Catering 13,374 22,128 1,147 3 192,224 228,876 Donations and Bequests (non capital) 8,757 3,197 2,324 3,624 0 17,902 Property Income 112,728 24,788 6,952 16,974 55,652 217,094 Interest 78,973 30,018 7,521 10,028 0 126,540

Total Revenue from Non-Operating Activities 213,832 80,131 17,944 30,629 247,876 590,412

Capital Purpose Income (other than interest) 0 0 0 0 700,443 700,443 Donations and Bequests (capital) 0 0 0 0 59,983 59,983 Capital Interest 0 0 0 0 4,846 4,846

Total Capital Purpose Income 0 0 0 0 765,272 765,272

Net gain/(loss) on Non-Financial Assets 0 0 0 0 (29,808) (29,808)

TOTAL REVENUE 13,716,025 4,823,477 1,170,688 1,784,656 1,438,322 22,933,168

Department of Health and Human Services makes certain payments on behalf of the Health Service . These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses. Kyabram District Health Service Notes to the Financial Statements 30 June 2017 NOTE 2.1: ANALYSIS OF REVENUE BY SOURCE (Continued) Income is recognised in accordance with AASB 118 Revenue and is recognised as to the extent that it is probable that the economic benefits will flow to Kyabram District Health Service and the income can be reliably measured at fair value. Unearned income at reporting date is reported as income received in advance.

Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties and taxes.

Government Grants and other transfers of income (other than contributions by owners) In accordance with AASB 1004 Contributions, government grants and other transfers of income (other than contributions by owners) are recognised as income when the Health Service gains control of the underlying assets irrespective of whether conditions are imposed on the Health Service's use of the contributions.

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

Indirect Contributions from the Department of Health and Human Services • Insurance is 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 line with the arrangements set out in the Metropolitan Health and Aged Care Services Division Hospital Circular 04/2017.

Patient and Client Fees Patient and client fees are recognised as revenue at the time invoices are raised.

Revenue from commercial activities Revenue from commercial activities such as provision of meals to external users and rental income, is recognised at the time the invoices are raised.

Donations and Other Bequests Donations and bequests are recognised as revenue when received. If donations are for a special purpose, they may be appropriated to a surplus, such as specific restricted purpose surplus.

Interest revenue Interest revenue is recognised on a time proportionate basis that takes in account the effective yield of the financial asset, which allocates interest over the relevant period.

Sale of investments The gain/loss on the sale of investments is recognised when the investment is realised.

Category Groups Kyabram District Health Service has used the following category groups for reporting purposes for the current and previous financial years.

- Admitted Patient Services (Admitted Patients) comprises all acute and subacute admitted patient services, where services are delivered in public hospitals.

- Aged Care comprises a range of in home, specialist geriatric, residential care and community based programs and support services, such as Home and Community Care (HACC) that are targeted to older people, people with a disability, and their carers.

- Primary, Community and Dental Health comprises a range of home based, community based, community, primary health and dental services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy and a range of dental health services.

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

- Other Services not reported elsewhere - (Other) comprises services not separately classified above, including: Public Health Services including laboratory testing, blood borne viruses / sexually transmitted infections clinical services, Kooris liaison officers, immunisation and screening services, drugs services including drug withdrawal, counselling and the needle and syringe program, Disability services including aids and equipment and flexible support packages to people with a disability, Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services. Health and Community Initiatives also falls in this category group. Kyabram District Health Service Notes to the Financial Statements 30 June 2017 NOTE 3: THE COST OF DELIVERING 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 Analysis of expenses by source 3.2 Provisions 3.3 Superannuation Kyabram District Health Service Notes to the Financial Statements 30 June 2017 NOTE 3.1: ANALYSIS OF EXPENSE BY SOURCE Admitted Residential Aged Primary Other TOTAL Patients Aged Care Care Health 2017 2017 2017 2017 2017 2017 $ $ $ $ $ $

Employee Expenses 8,162,040 4,564,341 1,030,646 1,633,772 610,268 16,001,067 Other Operating Expenses Non Salary Labour Costs 1,539,675 17,709 4,620 10,664 0 1,572,668 Supplies and Consumables 1,727,689 306,821 29,837 21,705 46,439 2,132,491 Other Expenses 1,785,762 765,265 196,992 303,713 32,669 3,084,401

Total Expenditure from Operating Activities 13,215,166 5,654,136 1,262,095 1,969,854 689,376 22,790,627

Other Non-Operating expenses Capital Purpose Expenditure 0 0 0 0 9,580 9,580 Depreciation (refer Note 4) 0 0 0 0 1,672,889 1,672,889

Total Other Expenses 0 0 0 0 1,682,469 1,682,469

TOTAL EXPENSES 13,215,166 5,654,136 1,262,095 1,969,854 2,371,845 24,473,096

Admitted Residential Aged Primary Other TOTAL Patients Aged Care Care Health 2016 2016 2016 2016 2016 2016 $ $ $ $ $ $

Employee Expenses 7,838,813 4,530,025 985,065 1,647,404 188,152 15,189,459 Other Operating Expenses Non Salary Labour Costs 1,512,421 11,260 2,937 6,917 0 1,533,535 Supplies and Consumables 1,954,408 402,693 33,945 39,175 40,965 2,471,186 Other Expenses 1,668,507 693,006 199,446 301,549 15,209 2,877,717

Total Expenditure from Operating Activities 12,974,149 5,636,984 1,221,393 1,995,045 244,326 22,071,897

Other Non-Operating expenses Capital Purpose Expenditure 0 0 0 0 90,738 90,738 Depreciation (refer Note 4) 0 0 0 0 1,609,060 1,609,060

Total Other Expenses 0 0 0 0 1,699,798 1,699,798

TOTAL EXPENSES 12,974,149 5,636,984 1,221,393 1,995,045 1,944,124 23,771,695 Kyabram District Health Service Notes to the Financial Statements 30 June 2017 NOTE 3.1: ANALYSIS OF EXPENSE BY SOURCE (Continued) Expenses are recognised as they are incurred and reported in the financial year to which they relate.

Cost of goods sold Costs of goods sold are recognised when the sale of an item occurs by transferring the cost or value of the item/s from inventories.

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

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

Other operating expenses Other operating expenses generally represent the day-to-day running costs incurred in normal operations and include:

Supplies and Consumables Supplies and service costs which are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any inventories held for distribution are expenses when distributed.

Bad and Doubtful Debts Receivables are assessed for bad and doubtful debts on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense.

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

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 4.3 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 and is the difference between proceeds and the carrying value of the asset at the time.

Net gain/ (loss) on financial instruments Net gain/ (loss) on financial instruments includes: • realised and unrealised gains and losses from revaluations of financial instruments at fair value; • impairment and reversal of impairment for financial instruments at amortised cost (refer to Note 4.1 (Investments and other financial assets) ; and • disposals of financial assets and derecognition of financial liabilities

Amortisation of non-produced intangible assets Intangible non-produced assets with finite lives are amortised as an ‘other economic flow’ on a systematic basis over the asset’s useful life. Amortisation begins when the asset is available for use that is when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Kyabram District Health Service Notes to the Financial Statements 30 June 2017 NOTE 3.1: ANALYSIS OF EXPENSE BY SOURCE (Continued)

Revaluations of financial instrument at fair value Refer to Note 7.1 Financial instruments.

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; and • transfer of amounts from the reserves to accumulated surplus or net result due to disposal or derecognition or reclassification.

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

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

NOTE 3.2: ANALYSIS OF EXPENSE AND REVENUE BY INTERNALLY MANAGED AND RESTRICTED SPECIFIC PURPOSE FUNDS 2017 2016 2017 2016 $ $ $ $ Expense Revenue Commercial Activities Provision of Meals 234,262 244,326 227,335 192,224 Property Rental 649 10,916 49,610 55,652

Other Activities Other Income 0 0 244 0

TOTAL 234,911 255,242 277,189 247,876 Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 3.2: PROVISIONS 2017 2016 $ $ Current Provisions Employee Benefits (i) Annual Leave - unconditional and expected to be settled wholly within 12 months (ii) 1,105,946 1,121,035 - unconditional and expected to be settled wholly after 12 months (iii) 210,000 100,000

Accrued Wages & ADO - unconditional and expected to be settled wholly within 12 months (ii) 285,124 205,143

Long Service Leave - unconditional and expected to be settled wholly within 12 months (ii) 140,116 250,000 - unconditional and expected to be settled wholly after 12 months (iii) 1,666,334 1,341,238

Provisions related to employee benefit on-costs - unconditional and expected to be settled within 12 months (ii) 204,450 173,695 - unconditional and expected to be settled after 12 months (iii) 188,796 200,059

Total Current Provisions 3,800,766 3,391,170

Non-Current Provisions Employee Benefits (i) 448,410 487,538 Provisions related to employee benefit on-costs 50,805 53,727

Total Non-Current Provisions 499,215 541,265

Total Provisions 4,299,981 3,932,435

(a) Employee Benefits and Related On-Costs Current Employee Benefits and related on-costs Annual Leave Entitlements 1,504,521 1,395,277 Accrued Salaries and Wages 267,825 209,150 Accrued Days Off 17,299 20,151 Unconditional Long Service Leave Entitlements 2,011,121 1,766,592 Non-Current Employee Benefits and related on-costs Conditional Long Service Leave Entitlements (ii) 499,215 541,265 Total Employee Benefits and related on-costs 4,299,981 3,932,435

Notes: (i) Provisions for employee benefits consist of amounts for annual leave and long service leave accrued by employees, not including on-costs. (ii) The amounts disclosed are nominal amounts (iii) The amounts disclosed are discounted to present values

Movements in provisions

Movement in Long Service Leave: Balance at start of year 2,307,857 2,068,018 Provision made during the year - Revaluations 7,648 62,624 - Expense Recognising Employee Service 398,155 368,510 Settlement made during the year (203,324) (191,295)

Balance at end of year 2,510,336 2,307,857 Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 3.2: PROVISIONS (Continued) Provisions Provisions are recognised when the Health Service has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a liability is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using a discount rate that reflects the time value of money and risks specific to the provision.

When some or all of the economic benefits required to settle a provision are expected to be received from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

Employee Benefits This provision arises for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.

Wages and Salaries, Annual Leave and Accrued Days Off Liabilities for wages and salaries, including non-monetary benefits and annual leave are all recognised in the provision for employee benefits as ‘current liabilities’, because the health service does not have an unconditional right to defer settlements of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for wages and salaries and annual leave are measured at: • Undiscounted 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) Liability for LSL is recognised in the provision for employee benefits.

Unconditional LSL is disclosed in the notes to the financial statements as a current liability, even where the health service 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: • Undiscounted 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. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current LSL liability is measured at present value.

Any gain or loss followed revaluation of the present value of non-current LSL 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, inflation rate movements and changes in probability factors which are then recognised as other economic flow.

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.

The health service recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

On-Costs Provisions for on-costs including workers compensation and superannuation are recognised together with the provision for employee benefits. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 3.3: SUPERANNUATION

Paid Contributions for Outstanding Contributions Fund the Year at Year End 2017 2016 2017 2016 $ $ $ $ Defined Benefit Plans: Health Super 33,650 30,690 0 0

Defined Contribution Plans: Health Super 1,013,348 1,005,069 0 0 HESTA 246,242 206,792 0 0 TOTAL 1,293,240 1,211,861 0 0

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

The Health Service does not recognise any defined benefit liability in respect of the plan(s) because the entity has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance discloses the State's defined benefits liabilities in tis 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 expensed in relation to the major employee superannuation funds and contributions made by the Health Services are detailed in the table 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.

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

Superannuation liabilities Kyabram District Health does not recognise any unfunded defined benefit liability in respect of the superannuation plans because the Health Service 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. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4: KEY ASSETS TO SUPPORT SERVICE DELIVERY

The hospital 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 delivery of those outputs.

Structure 4.1 Investments and other financial assets 4.2 Jointly controlled operations and assets 4.3 Property, plant & equipment 4.4 Depreciation and amortisation Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.1: INVESTMENTS AND OTHER FINANCIAL ASSETS Operating Fund Total CURRENT 2017 2016 2017 2016 Loans and Receivables $ $ $ $ Term Deposit Australian Dollar Term Deposits > 3 months (i) 5,640,296 3,957,008 5,640,296 3,957,008 Equity Investments 20,000 20,000 20,000 20,000 TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS 5,660,296 3,977,008 5,660,296 3,977,008

Represented by: Health Service Investments 3,148,545 2,742,411 3,148,545 2,742,411 Loddon Mallee Rural Health Alliance 199,154 257,008 199,154 257,008 Investments Held in Trust 2,312,597 977,589 2,312,597 977,589 TOTAL 5,660,296 3,977,008 5,660,296 3,977,008

(i) Term deposits under 'investments and other financial assets' class include only term deposits with maturity greater than 90 days.

(a) Ageing analysis of other financial assets Please refer to note 7.1 for the ageing analysis of other financial assets. (b) Nature and extent of risk arising from other financial assets Please refer to note 7.1 for the nature and extent of credit risk arising from other financial assets.

Investments and other financial assets Hospital investments must be in accordance in Standing Direction 3.7.2 – Treasury and Investment Risk Management. Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Investments are classified in the following categories: • Financial assets at fair value through profit or loss; • Held-to-maturity; • Loans and receivables; and • Available-for-sale financial assets.

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

Kyabram District Health Service assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

All financial assets, except those measured at fair value through profit and loss are subject to annual review for impairment.

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 • the Health Service 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 • the Health Service has transferred its rights to receive cash flows from the asset and either: (a) has transferred substantially all the risks and rewards of the asset; or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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

Impairment of financial assets At the end of each reporting period, the Department assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

The allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. 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.

Doubtful debts Receivables are assessed for bad and doubtful debts on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for doubtful debts are classified as other economic flows in the net result. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.2: JOINTLY CONTROLLED OPERATIONS AND ASSETS

Ownership Interest Name of Entity Principal Activity 2017 2016 % % Loddon Mallee Rural Health Alliance Information Systems 5.24 5.21

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

2017 2016 $ $ Current Assets Cash and Cash Equivalents 93,091 10,550 Investments 199,154 257,008 Receivables 16,367 14,600 Inventory 2,295 1,099 Prepayments 33,826 28,893 Total Current Assets 344,733 312,150

Non-Current Assets Property, Plant and Equipment 7,920 11,037 Total Non-Current Assets 7,920 11,037 Total Assets 352,653 323,187

Current Liabilities Creditors 58,078 54,586 Accrued Expenses 7,684 5,601 Total Current Liabilities 65,762 60,187

Total Liabilities 65,762 60,187 Net Assets 286,891 263,000

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

Revenues Grants 399,911 442,471 Capital Purpose Income 592 0 Total Revenue 400,503 442,471

Expenses Information Technology and Administrative Expenses 361,031 383,501 Expenditure using Capital Purpose Income 8,931 79,822 Depreciation 6,651 14,288 Total Expenses 376,613 477,611 Net Result 23,890 (35,140)

Contingent Liabilities and Capital Commitments There are no known contingent liabilities for Loddon Mallee Rural Health Alliance as at the date of this report.

Investments in joint operations In respect of any interest in joint operations, Kyabram 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 of any expenses incurred jointly. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.3: PROPERTY, PLANT AND EQUIPMENT 2017 2016 (a) Gross carrying amount and accumulated depreciation $ $

Land - Land at Fair Value 1,089,000 1,005,000 Total Land 1,089,000 1,005,000

Land Improvements - Land Improvements at Fair Value 33,841 33,841 Less Accumulated Depreciation 7,387 4,122 Total Land Improvements 26,454 29,719

Buildings & Improvements - Buildings Under Construction at Cost 12,380 791,817

- Buildings at Fair Value 25,368,427 19,467,000 Less Accumulated Depreciation 3,197,826 1,969,733 - Buildings at Cost 0 4,807,574 Less Accumulated Depreciation 0 97,723 Total Buildings 22,182,981 22,998,935

Plant and Equipment - Loddon Mallee Rural Health Alliance at Fair Value 43,124 46,800 Less Accumulated Depreciation 35,204 35,763 - Plant and Equipment at Fair Value 4,019,188 3,954,606 Less Accumulated Depreciation 2,422,437 2,219,700 Total Plant and Equipment 1,604,671 1,745,943

Motor Vehicles - Motor Vehicles at Fair Value 412,230 415,465 Less Accumulated Depreciation 225,420 183,976 Total Motor Vehicles 186,810 231,489

TOTAL 25,089,916 26,011,086

(b) Reconciliation of the carrying amounts of each class of asset Land Land Buildings Plant & Motor Total Improve. Equipment Vehicles $ $ $ $ $ $ Balance at 1 July 2015 1,005,000 43,051 22,860,698 1,684,940 252,256 25,845,945

Additions 0 0 1,221,322 516,543 134,605 1,872,470 Loddon Mallee Rural Health Alliance 0 0 0 775 0 775 Disposals 0 (9,015) (1,228) (6,359) (82,442) (99,044) Depreciation 0 (4,317) (1,081,857) (449,956) (72,930) (1,609,060)

Balance at 1 July 2016 1,005,000 29,719 22,998,935 1,745,943 231,489 26,011,086

Additions 84,000 0 454,417 328,208 70,830 937,455 Loddon Mallee Rural Health Alliance 0 0 0 3,534 0 3,534 Disposals 0 0 (129,500) (20,801) (38,969) (189,270) Depreciation 0 (3,265) (1,140,871) (452,213) (76,540) (1,672,889)

Balance at 30 June 2017 1,089,000 26,454 22,182,981 1,604,671 186,810 25,089,916

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

The effective date of the valuation is 30 June 2014. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.3: PROPERTY, PLANT AND EQUIPMENT (Continued) (c) Fair value measurement hierarchy for assets Fair value measurement at end of reporting Carrying amount as period using: at 30 June 2017 Level 1 (1) Level 2 (1) Level 3 (1) Land at fair value $ $ $ $ Specialised land 1,089,000 0 0 1,089,000

Total of land at fair value 1,089,000 0 0 1,089,000

Buildings at fair value Specialised buildings 22,170,601 0 0 22,170,601

Total of building at fair value 22,170,601 0 0 22,170,601

Plant and equipment at fair value Plant and equipment at fair value 1,604,671 0 0 1,604,671

Total of plant and equipment at fair value 1,604,671 0 0 1,604,671

Motor Vehicles - Motor Vehicles at fair value 186,810 0 0 186,810

Total motor vehicles 186,810 0 0 186,810 TOTAL 25,051,082 0 0 25,051,082

Note (i) Classified in accordance with the fair value hierarchy

There have been no transfers between levels during the period.

Fair value measurement hierarchy for assets Fair value measurement at end of reporting Carrying amount as period using: at 30 June 2016 Level 1 (1) Level 2 (1) Level 3 (1) Land at fair value $ $ $ $ Specialised land 1,005,000 0 0 1,005,000

Total of land at fair value 1,005,000 0 0 1,005,000

Buildings at fair value Specialised buildings 22,207,118 0 0 22,207,118

Total of building at fair value 22,207,118 0 0 22,207,118

Plant and equipment at fair value Plant and equipment at fair value 1,745,943 0 0 1,745,943

Total of plant and equipment at fair value 1,745,943 0 0 1,745,943

Motor Vehicles - Motor Vehicles at fair value 231,489 0 0 231,489

Total motor vehicles 231,489 0 0 231,489 TOTAL 25,189,550 0 0 25,189,550

Note (i) Classified in accordance with the fair value hierarchy

There have been no transfers between levels during the period. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.3: PROPERTY, PLANT AND EQUIPMENT (Continued) (c) Fair value measurement hierarchy for assets (Continued)

Consistent with AASB 13 Fair Value Measurement, Kyabram District Health determines the policies and procedures for both recurring fair value measurements such as property, plant and equipment, investment properties and financial instruments, and for non-recurring fair value measurements such as non-financial physical assets held for sale, in accordance with the requirements of AASB 13 and the relevant FRDs.

Health Services need to use valuation techniques that are appropriate for the circumstances and where there is sufficient data available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • 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 • Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, Kyabram District Health has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

In addition, Kyabram District Health determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

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

Kyabram District Health, in conjunction with VGV monitors the changes in the fair value of each asset and liability through relevant data sources to determine whether revaluation is required.

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. The fair value measurement is based on the following assumptions: • that the transaction to sell the asset or transfer the liability takes place either in the principal market (or the most advantageous market, in the absence of the principal market), either of which must be accessible to the Health Service at the measurement date; • that the Health Service uses the same valuation assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.3: PROPERTY, PLANT AND EQUIPMENT (Continued) (c) Fair value measurement hierarchy for assets (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 considering the HBU for non-financial physical assets, valuers are probably best placed to determine highest and best use (HBU) in consultation with Health Services. Health Services and their valuers therefore need to have a shared understanding of the circumstances of the assets. A Health Service has to form its own view about a valuer’s determination, as it is ultimately responsible for what is presented in its audited financial statements. In accordance with AASB 13 paragraph 29, Health Services can assume 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. Therefore, an assessment of the HBU will be required when the indicators are triggered within a reporting period, which suggest the market participants would have perceived an alternative use of an asset that can generate maximum value. Once identified, Health Services are required to engage with VGV or other independent valuers for formal HBU assessment.

These indicators, as a minimum, include: External factors: • Changed acts, regulations, local law or such instrument which affects or may affect the use or development of the asset; • Changes in planning scheme, including zones, reservations, overlays that would affect or remove the restrictions imposed on the asset’s use from its past use; • Evidence that suggest the current use of an asset is no longer core to requirements to deliver a Health Service’s service obligation; • Evidence that suggests that the asset might be sold or demolished at reaching the late stage of an asset’s life cycle.

In addition, Health Services need to assess the HBU as part of the 5-year review of fair value of non-financial physical assets. This is consistent with the current requirements on FRD 103F Non-financial physical assets.

(d) Reconciliation of Level 3 fair value

30 June 2017 Buildings & Plant and Motor Land Improvements equipment Vehicles $ $ $ $ Opening Balance 1,005,000 22,207,118 1,745,943 231,489 Purchases (sales) & Reclassifications 84,000 1,104,354 310,941 31,861 Transfers in (out) of Level 3 0 0 0 0

Gains or losses recognised in net result - Depreciation 0 (1,140,871) (452,213) (76,540) Subtotal 1,089,000 22,170,601 1,604,671 186,810

Items recognised in other comprehensive income - Revaluation 0 0 0 0 Subtotal 0 0 0 0 Closing Balance 1,089,000 22,170,601 1,604,671 186,810

Unrealised gains/(losses) on non-financial assets 0 0 0 0

1,089,000 22,170,601 1,604,671 186,810 There have been no transfers between levels during the period. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.3: PROPERTY, PLANT AND EQUIPMENT (Continued) (d) Reconciliation of Level 3 fair value (Continued)

30 June 2016 Buildings & Plant and Motor Land Improvements equipment Vehicles $ $ $ $ Opening Balance 1,005,000 18,522,295 1,684,940 252,256 Purchases (sales) & Reclassifications 0 4,766,680 510,959 52,163 Transfers in (out) of Level 3 0 0 0 0

Gains or losses recognised in net result - Depreciation 0 (1,081,857) (449,956) (72,930) Subtotal 1,005,000 22,207,118 1,745,943 231,489

Items recognised in other comprehensive income - Revaluation 0 0 0 0 Subtotal 0 0 0 0 Closing Balance 1,005,000 22,207,118 1,745,943 231,489

Unrealised gains/(losses) on non-financial assets 0 0 0 0 1,005,000 22,207,118 1,745,943 231,489 There have been no transfers between levels during the period.

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.

Assumptions about risk include the inherent risk in a particular valuation technique used to measure fair value (such as a pricing risk model) and the risk inherent in the inputs to the valuation technique. A measurement that does not include an adjustment for risk would not represent a fair value measurement if market participants would include one when pricing the asset or liability i.e., it might be necessary to include a risk adjustment when there is significant measurement uncertainty. For example, when there has been a significant decrease in the volume or level of activity when compared with normal market activity for the asset or liability or similar assets or liabilities, and the Health Service has determined that the transaction price or quoted price does not represent fair value.

A Health Service shall develop unobservable inputs using the best information available in the circumstances, which might include the Health Service’s own data. In developing unobservable inputs, a Health Service may begin with its own data, but it shall adjust this data if reasonably available information indicates that other market participants would use different data or there is something particular to the Health Service that is not available to other market participants. A Health Service need not undertake exhaustive efforts to obtain information about other market participant assumptions. However, a Health Service shall take into account all information about market participant assumptions that is reasonably available. Unobservable inputs developed in the manner described above are considered market participant assumptions and meet the object of a fair value measurement.

Specialised land and specialised buildings

The market approach is also used for specialised land and specialised buildings although 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 assets.

For the health services, 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.

An independent valuation of the Health Service’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 2014. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.3: PROPERTY, PLANT AND EQUIPMENT (Continued) (d) Reconciliation of Level 3 fair value (Continued) Vehicles The Health Service 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.

Plant and equipment Plant and equipment is held at carrying value (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 value.

There were no changes in valuation techniques throughout the period to 30 June 2017.

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

(e) Description of significant unobservable inputs to Level 3 valuations: Sensitivity of fair value Significant Range (weighted measurement to changes in Valuation technique unobservable inputs average) significant unobservable inputs Specialised land Community 20% A significant increase or Service decrease in the CSO (2016: No Market Approach Obligation Change) adjustment would result in a (CSO) significantly lower (higher) fair value Specialised Buildings Direct cost per $303 - $2019 A significant increase or square metre ($1,406) decrease in direct cost per square metre adjustment (2016: No Change) would result in a significantly higher or lower fair value Depreciated Replacement Useful life of 20 - 52 Years A significant increase or Cost specialised decrease in the estimated (2016: No buildings Change) useful life of the asset would result in a significantly higher or lower valuation

Plant and equipment at fair value Cost per Unit $10 - $40,000 A significant increase or ($2,300) decrease in cost per unit would result in a (2016: No Change) significantly higher or lower Depreciated Replacement fair value. Cost Useful life of 3-37 Years A significant increase or Plant and (14 Years) decrease in the estimated Equipment useful life of the asset (2016: No Change) would result in a significantly higher or lower valuation Vehicles Cost per Unit $18,840 - $67,962 A significant increase or ($27,212) decrease in cost per unit would result in a significantly higher or lower Depreciated Replacement fair value. Cost Useful life of vehicles 5-10 Years A significant increase or (5.25 Years) decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation

Refer to Note 7.4 for guidance on fair value measurement indicative expectations. The significant unobservable inputs have remained unchanged from 2016. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.3: PROPERTY, PLANT AND EQUIPMENT (Continued) (e) Description of significant unobservable inputs to Level 3 valuations: (Continued) Property, plant and equipment All non-current physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or nominal cost, the cost is its fair value at the date of acquisition. Assets transferred as part of a merger / machinery of government are transferred at their carrying amount.

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

Crown land 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 asset(s) are not taken into account until it is virtually certain that any restriction will no longer apply. Therefore, unless otherwise disclosed, the current use of these non-financial physical assets will be their highest and best uses.

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

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

Revaluations of non-current physical assets Non-Current physical assets are measured at fair value and are revalued in accordance with FRD103F Non-current physical assets. This revaluation process normally occurs at least every five years, based upon the asset's Government Purpose Classification but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct these scheduled revaluations and any interim revaluations are determined in accordance with the requirements of the FRDs. Revaluation increments or decrements arise from differences between an asset's carrying value and fair value.

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

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

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

Revaluation surplus is not transferred to accumulated funds on derecognition of the relevant asset.

In accordance with FRD103F Kyabram District Health Service non-current physical assets were assessed to determine whether revaluation of the non-current physical assets was required. This assessment did not identify any significant movements that would require a revaluation. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 4.4: DEPRECIATION 2017 2016 $ $ Depreciation Land Improvements 3,265 4,317 Buildings 1,140,871 1,081,857 Plant and Equipment - Plant 445,562 435,668 - Joint Operation 6,651 14,288 Motor Vehicles 76,540 72,930

TOTAL DEPRECIATION 1,672,889 1,609,060

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

Depreciation is generally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over its estimated useful life. Estimates of the remaining useful lives and depreciation method for all assets are reviewed at least annually and adjustments made where appropriate. This depreciation charge is not funded by the Department of Health and Human Services. Assets with a cost in excess of $1,000 are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives.

The following table indicates the expected useful lives of non-current assets on which the depreciation charges are based.

2017 2016 Buildings - Structure Shell Building Fabric 38 to 52 years 38 to 52 years - Site Engineering Services and Central Plant 20 to 23 years 20 to 23 years Central Plant - Fit Out 21 to 24 years 21 to 24 years - Trunk Reticulated Building Systems 23 to 37 years 23 to 37 years Plant and Equipment 3 to 10 years 3 to 10 years Medical Equipment 7 to 10 years 7 to 10 years Computers and Communication 3 years 3 years Furniture and Fittings 13 years 13 years Motor Vehicles 5 to 10 years 5 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. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

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 Inventories 5.3 Other liabilities 5.4 Prepayments and other non-financial assets 5.5 Payables Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 5.1: RECEIVABLES 2017 2016 $ $ CURRENT Contractual Trade Debtors 125,682 200,763 Patient & Resident Fees 150,227 234,857 Accrued Investment Income 37,547 45,499 Accrued Revenue - Other 15,801 23,815 Loddon Mallee Rural Health Alliance Receivables 16,367 8,986 Less Allowance for Doubtful Debts - Patient Fees (7,688) (7,688) 337,936 506,232 Statutory Department of Health (Commonwealth) 12,808 46,041 GST Receivable - Health Service 47,106 62,663 59,914 108,704

TOTAL CURRENT RECEIVABLES 397,850 614,936

NON CURRENT Statutory Long Service Leave - Department of Health and Human Services 267,543 253,994

TOTAL NON-CURRENT RECEIVABLES 267,543 253,994

TOTAL RECEIVABLES 665,393 868,930

(a) Movement in the allowance for doubtful debts 2017 2016 $ $ Balance at beginning of year 7,688 7,688 Increase/(decrease) in allowance recognised in net result 251 0 Amounts recovered during the year (251) 0 Balance at end of year 7,688 7,688

(b) Ageing analysis of receivables Please refer to note 7.1 for the ageing analysis of receivables.

(c) Nature and extent of risk arising from receivables Please refer to note 7.1 for the nature and extent of credit risk arising from receivables.

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

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

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest rate method, less any accumulated impairment.

Trade debtors are carried at nominal amounts due and are due for settlement within 30 days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts which are known to be uncollectible are written off. A provision for doubtful debts is recognised when there is objective evidence that the debts may not be collected and bad debts are written off when identified. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 5.2: INVENTORIES 2017 2016 $ $

Pharmaceuticals - at cost 24,458 29,010 Loddon Mallee Rural Health Alliance 2,295 1,099 TOTAL INVENTORIES 26,753 30,109

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

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

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

The bases used in assessing loss of service potential for inventories held for distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 5.3: OTHER LIABILITIES 2017 2016 $ $ CURRENT Monies Held in Trust* - Patient Monies Held in Trust 0 (2,092) - Men's Shed Trust 2,157 2,157 - Refundable Accommodation Bonds 2,312,597 977,589

TOTAL CURRENT 2,314,754 977,654

* Total Monies Held in Trust Represented by the following assets: Cash Assets (refer to Note 6.1) 2,157 65 Investments and Other Financial Assets (refer to Note 4.1) 2,312,597 977,589

TOTAL 2,314,754 977,654

Note 5.4: PREPAYMENTS AND OTHER NON-FINANCIAL ASSETS 2017 2016 $ $ CURRENT Health Service Prepayments 63,640 39,373 Loddon Mallee Rural Health Alliance Prepayments 33,825 28,893 TOTAL CURRENT OTHER ASSETS 97,465 68,266

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.

NOTE 5.5: PAYABLES 2017 2016 $ $ CURRENT Contractual Trade Creditors (i) 522,949 723,979 Capital Purpose Creditors 24,880 0 Accrued Audit Fees 15,760 15,480 Accrued Expenses 78,000 15,164 Loddon Mallee Rural Health Alliance Payables 65,762 60,187 707,351 814,810 Statutory Department of Health and Human Services (ii) 664,930 309,980 Department of Health and Ageing 0 7,361 664,930 317,341

TOTAL 1,372,281 1,132,151

(i) The average credit period is 30 days. No interest is charged on payables.

(ii) Terms and conditions of amounts payable to the Department of Health and Human Services vary according to the particular agreement with the Department.

(a) Maturity analysis of payables Please refer to Note 7.1 for the ageing analysis of payables.

(b) Nature and extent of risk arising from payables Please refer to note 7.1 for the nature and extent of risks arising payables.

Payables consist of: • contractual payables which consist predominantly of accounts payable representing liabilities for goods and services provided to the Health Service prior to the end of the financial year that are unpaid, and arise when the Health Service becomes obliged to make future payments in respect of the purchase of those goods and services. The normal credit terms for accounts payable are usually Nett 30 days. • statutory payables, such as goods and services tax and fringe benefits tax payables.

Contractual payables are classified as financial instruments and are initially recognised at fair value, and then subsequently carried at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

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 Cash and cash equivalents 6.2 Commitments for expenditure Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 6.1: CASH AND CASH EQUIVALENTS 2017 2016 $ $

Cash on Hand 2,180 2,180 Cash at Bank 199,670 69,927 Cash at Bank - Loddon Mallee Regional Health Alliance 93,091 10,550 Deposits at Call 610,000 175,000

TOTAL CASH AND CASH EQUIVALENTS 904,941 257,657

Represented by: Cash for Health Service Operations (as per cash flow statement) 902,784 257,592 Cash for Monies Held in Trust (Note 5.3) 2,157 65

TOTAL 904,941 257,657

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.

NOTE 6.2: COMMITMENTS FOR EXPENDITURE 2017 2016 (a) Commitments other than public private partnerships $ $ Capital Expenditure Commitments Payable: Land and Buildings 0 67,430

Total Capital Expenditure Commitments 0 67,430

(b) Commitments payable Land and Buildings Not later than one year 0 67,430

TOTAL 0 67,430

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of a note 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. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7: RISKS, CONTINGENCIES & VALUATION UNCERTAINTIES

The hospital 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 exposures to financial risks) as well as those items that are contingent in nature or require a higher level of judgement to be applied, which for the hospital is related mainly to fair value determination.

Structure 7.1 Financial instruments 7.2 Net gain/ (loss) on disposal of non-financial assets 7.3 Contingent assets and contingent liabilities 7.4 Fair value determination Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.1: FINANCIAL INSTRUMENTS Financial risk management objectives and policies Kyabram District Health Service principal financial instruments comprise of: - Cash Assets - Term Deposits - Receivables (excluding statutory receivables) - Payables (excluding statutory payables) - Refundable Accommodation Bonds

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed throughout notes to the financial statements. The Health Service's main financial risks include credit risk, liquidity risk and interest rate risk. The Health Service manages these financial risks in accordance with its financial risk management policy. The Health Service uses different methods to measure and manage the different risks to which it is exposed. Primary responsibility for the identification and management of financial risks rests with the financial risk management committee of the Health Service. The main purpose in holding financial instruments is to prudentially manage Kyabram District Health Service financial risks within the government policy parameters. Categorisation of financial instruments

Contractual Contractual financial financial assets - loans and liabilities at receivables amortised cost Total 2017 $ $ $ Contractual Financial Assets Cash and cash equivalents 904,941 0 904,941 Receivables - Trade Debtors 275,909 0 275,909 - Other Receivables 62,027 0 62,027 Other Financial Assets - Term Deposits 5,660,296 0 5,660,296 Total Financial Assets (i) 6,903,173 0 6,903,173

Financial Liabilities Payables 0 707,351 707,351 Other Financial Liabilities - Accommodation Bonds 0 2,312,597 2,312,597 - Other 0 2,157 2,157 Total Financial Liabilities(ii) 0 3,022,105 3,022,105

Contractual Contractual financial financial assets - loans and liabilities at receivables amortised cost Total 2016 $ $ $ Contractual Financial Assets Cash and cash equivalents 257,657 0 257,657 Receivables - Trade Debtors 435,620 0 435,620 - Other Receivables 70,612 0 70,612 Other Financial Assets - Term Deposits 3,977,008 0 3,977,008 Total Financial Assets (i) 4,740,897 0 4,740,897 Financial Liabilities Payables 0 814,810 814,810 Other Financial Liabilities - Accommodation Bonds 0 977,589 977,589 - Other 0 65 65 Total Financial Liabilities(ii) 0 1,792,464 1,792,464

(i) The total amount of financial assets disclosed here excludes statutory receivables (i.e. GST input tax credit recoverable) (ii) The total amount of financial liabilities disclosed here excludes statutory payables (i.e. Taxes payable) Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.1: FINANCIAL INSTRUMENTS (Continued) Financial risk management objectives and policies (Continued) (b) Net holding gain/(loss) on financial instruments by category Total interest income/ (expense) Total $ $ 2017 Financial Assets Cash and cash equivalents(i) 17,418 17,418 Loans and Receivables(i) 134,253 134,253 Total Financial Assets 151,671 151,671

Financial Liabilities At amortised cost (ii) 0 0 Total Financial Liabilities 0 0

2016 Financial Assets Cash and cash equivalents(i) 28,155 28,155 Loans and Receivables(i) 123,966 123,966 Total Financial Assets 152,121 152,121

Financial Liabilities At amortised cost (ii) 0 0 Total Financial Liabilities 0 0

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

(ii) For financial liabilities measured at amortised cost, the net gain or loss is calculated by taking the interest expense, plus or minus foreign exchange gains or losses arising from the revaluation of financial liabilities measured at amortised cost.

(c) Credit Risk Credit risk arises from the contractual financial assets of the Health Service, which comprise cash and deposits and non-statutory receivables. The Health Service's exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Health Service. Credit risk is measured at fair value and is monitored on a regular basis.

Credit risk associated with the Health Service's contractual financial assets is minimal because the main debtor is the Victorian Government. For debtors other than the Government, it is the Health Service's policy to only deal with entities with high credit ratings of a minimum Triple-B and to obtain sufficient collateral or credit enhancements, where appropriate.

In addition, the Health Service does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. As with the policy for debtors, the Health Service's policy is to only deal with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Health Service will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings.

Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents Kyabram District Health's maximum exposure to credit risk without taking account of the value of any collateral obtained. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.1: FINANCIAL INSTRUMENTS (Continued) (c) Credit Risk (Continued) Credit quality of contractual financial assets that are neither past due nor impaired Financial Government Government Other Total Institutions agencies agencies (Unrated) (Min BBB (AAA credit (BBB credit credit rating) rating) rating) 2017 $ $ $ $ $ Financial Assets Cash and Cash Equivalents 294,941 610,000 0 0 904,941 Loans and Receivables - Trade Debtors 0 0 0 275,909 275,909 - Other Receivables (i) 0 0 0 62,027 62,027 - Term Deposit 4,128,022 1,532,274 0 0 5,660,296 Total Financial Assets 4,422,963 2,142,274 0 337,936 6,903,173

2016 Financial Assets Cash and Cash Equivalents 82,657 175,000 0 0 257,657 Loans and Receivables - Trade Debtors 0 0 0 435,620 435,620 - Other Receivables (i) 0 0 0 70,612 70,612 - Term Deposit 2,477,008 1,500,000 0 0 3,977,008 Total Financial Assets 2,559,665 1,675,000 0 506,232 4,740,897

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

Ageing analysis of financial assets as at 30 June Past Due But Not Impaired Not Past Less than 1 - 3 3 Months 1 - 5 Impaired Carrying due and not 1 Month Months - 1 Year Years Financial Amount impaired Assets 2017 $ $ $ $ $ $ $ Financial Assets Cash and Cash Equivalents 904,941 904,941 0 0 0 0 0 Loans and Receivables (i) - Trade Debtors 275,909 153,039 58,088 37,096 19,998 0 7,688 - Other Receivables 62,027 62,027 0 0 0 0 0 - Term Deposit 5,660,296 5,660,296 0 0 0 0 0

Total Financial Assets 6,903,173 6,780,303 58,088 37,096 19,998 0 7,688

2016 Financial Assets Cash and Cash Equivalents 257,657 257,657 0 0 0 0 0 Loans and Receivables (i) - Trade Debtors 435,620 350,076 56,792 10,823 7,666 2,575 7,688 - Other Receivables 70,612 70,612 0 0 0 0 0 - Term Deposit 3,977,008 3,977,008 0 0 0 0 0

Total Financial Assets 4,740,897 4,655,353 56,792 10,823 7,666 2,575 7,688

(i) Ageing analysis of financial assets excludes the types of statutory financial assets (i.e. GST input tax credit)

Contractual financial assets that are either past due or impaired There are no other material financial assets which are individually determined to be impaired. Currently the Health Service does not hold any collateral as security nor credit enhancements relating to its financial assets.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at their carrying amounts as indicated. The ageing analysis table above discloses the ageing only of contractual financial assets that are past due but not impaired. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.1: FINANCIAL INSTRUMENTS (Continued) (d) Liquidity Risk Liquidity risk is the risk that the Health Service would be unable to meet its financial obligations as and when they fall due. The Health Service operates under the Government's fair payments policy of setting financial obligations within 30 days and in the event of a dispute, making payments within 30 days from the date of resolution.

The Health Service's maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet. The Health Service manages its liquidity risk as follows:

- Term Deposits and cash held at financial institutions are managed with variable maturity dates and take into consideration cash flow requirements of the Health Service from month to month.

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

Maturity analysis of financial liabilities as at 30 June Maturity Dates Total Nominal Less than 1 - 3 3 Months 1 - 5 Carrying Amount 1 Month Months - 1 Year Years Amount 2017 $ $ $ $ $ $ Financial Liabilities At amortised cost Payables 707,351 707,351 707,351 0 0 0 Other Financial Liabilities (i) 2,314,754 2,314,754 2,314,754 0 0 0 Total Financial Liabilities 3,022,105 3,022,105 3,022,105 0 0 0

2016 Financial Liabilities At amortised cost Payables 814,810 814,810 814,810 0 0 0 Other Financial Liabilities (i) 977,654 977,654 977,654 0 0 0 Total Financial Liabilities 1,792,464 1,792,464 1,792,464 0 0 0

(i) Ageing analysis of financial liabilities excludes the types of statutory financial liabilities (i.e. GST Payable). Accommodation bonds are likely to be repaid over 1-5 years, but are classified as current liabilities as there is no unconditional right to defer repayment.

(e) Market Risk Kyabram District Health Service exposures to market risk are primarily through interest rate risk with only insignificant exposure to foreign currency and other price risks. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraphs below.

Currency Risk Kyabram District Health Service is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.1: FINANCIAL INSTRUMENTS (Continued) (e) Market Risk (Continued) Interest Rate Risk Exposure to interest rate risk might arise primarily through Kyabram District Health Service's interest bearing assets. Minimisation of risk is achieved by mainly holding fixed rate or non-interest bearing financial instruments. For financial liabilities the Health Service mainly holds financial liabilities with relatively even maturity profiles.

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

The Health Service has minimal exposure to cash flow interest rate risks through its cash and deposits and term deposits that are at floating rate.

The Health Service manages this risk by mainly undertaking fixed rate or non-interest bearing financial instruments with relatively even maturity profiles, with only insignificant amounts of financial instruments at floating rate. Management has concluded for cash at bank and bank overdraft, as financial assets that can be left at floating rate without necessarily exposing the Health Service to significant bad risk, management monitors movements in interest rates on a daily basis.

Other Price Risk The Health Service is exposed to normal price fluctuations from time to time through market forces. Where adequate notice is provided by suppliers, additional purchases are made for long term goods. Supplier contracts are also in place for major product lines purchased by the Health Service on a monthly basis. These contracts have set price arrangements and are reviewed on a regular basis.

Interest Rate Exposure of Financial Assets and Liabilities as at 30 June Weighted Carrying Amount Interest Rate Exposure Average Effective Interest Rate Fixed Interest Variable Non - Interest (%) $ Rate Interest Rate Bearing 2017 $ $ $ Financial Assets Cash and Cash Equivalents 1.05 904,941 0 902,761 2,180 Loans and Receivables (i) - Trade Debtors 275,909 0 0 275,909 - Other Receivables 62,027 0 0 62,027 - Term Deposit 2.49 5,660,296 5,660,296 0 0 Total Financial Assets 6,903,173 5,660,296 902,761 340,116

Financial Liabilities At amortised cost Payables (i) 707,351 0 0 707,351 Other Financial Liabilities 2,314,754 0 0 2,314,754 Total Financial Liabilities 3,022,105 0 0 3,022,105 2016 Financial Assets Cash and Cash Equivalents 1.80 257,657 0 256,257 1,400 Loans and Receivables (i) - Trade Debtors 435,620 0 0 435,620 - Other Receivables 70,612 0 0 70,612 - Term Deposit 2.68 3,977,008 3,977,008 0 0 Total Financial Assets 4,740,897 3,977,008 256,257 507,632

Financial Liabilities At amortised cost Payables (i) 814,810 0 0 814,810 Other Financial Liabilities 977,654 0 0 977,654 Total Financial Liabilities 1,792,464 0 0 1,792,464

(i) The carrying amount excludes types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable) Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.1: FINANCIAL INSTRUMENTS (Continued) (e) Market Risk (Continued) Sensitivity Disclosure Analysis Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, the Kyabram District Health Service believes the following movements are 'reasonably possible' over the next 12 months (base rates are sourced from the Reserve Bank of Australia). - A shift of 100 basis points up and down in market interest rates (AUD) from year-end rates of 2.5%; and - A parallel shift of +1% and -1% in inflation rate from year-end rates of 2%.

The following table discloses the impact on net operating result and equity for each category of interest bearing financial instrument held by Kyabram District Health Service at year end as presented to key management personnel, if changes in the relevant risk occur.

Carrying Interest Rate Risk Amount -1% +1% Profit Equity Profit Equity 2017 $ $ $ $ $ Financial Assets Cash and Cash Equivalents 904,941 (9,049) (9,049) 9,049 9,049 Loans and Receivables (i) - Trade Debtors 275,909 0 0 0 0 - Other Receivables 62,027 0 0 0 0 - Term Deposit 5,660,296 (56,603) (56,603) 56,603 56,603

Financial Liabilities At amortised cost Payables 707,351 0 0 0 0 Other Financial Liabilities (ii) 2,314,754 0 0 0 0 (65,652) (65,652) 65,652 65,652 2016 Financial Assets Cash and Cash Equivalents 257,657 (2,577) (2,577) 2,577 2,577 Loans and Receivables (i) - Trade Debtors 435,620 0 0 0 0 - Other Receivables 70,612 0 0 0 0 - Term Deposit 3,977,008 (39,770) (39,770) 39,770 39,770

Financial Liabilities At amortised cost Payables 814,810 0 0 0 0 Other Financial Liabilities (ii) 977,654 0 0 0 0 (42,347) (42,347) 42,347 42,347

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

(f) Fair Value The fair values and net fair values of financial instrument assets and liabilities are determined as follows: • Level 1 - the fair value of financial instrument with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices; • Level 2 - the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability, either directly or indirectly; and • Level 3 - the fair value is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using unobservable market inputs.

The Health Service considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.1: FINANCIAL INSTRUMENTS (Continued) (f) Fair Value (Continued) The following table shows that the fair values of most of the contractual financial assets and liabilities are the same as the carrying amounts.

Comparison between carrying amount and fair value Carrying Fair Value Carrying Fair Value Amount Amount

2017 2017 2016 2016 $ $ $ $ Financial Assets Cash and Cash Equivalents 904,941 904,941 257,657 257,657 Loans and Receivables (i) - Trade Debtors 275,909 275,909 435,620 435,620 - Other Receivables 62,027 62,027 70,612 70,612 -Term Deposit 5,660,296 5,660,296 3,977,008 3,977,008 Total Financial Assets 6,903,173 6,903,173 4,740,897 4,740,897

Financial Liabilities At amortised cost Payables 707,351 707,351 814,810 814,810 Other Financial Liabilities (i) 2,314,754 2,314,754 977,654 977,654 Total Financial Liabilities 3,022,105 3,022,105 1,792,464 1,792,464

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

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 Kyabram District Health Service activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation. For example, statutory receivables arising from taxes, fines and penalties do not meet the definition of financial instruments as they do not arise under contract.

Where relevant, for note disclosure purposes, a distinction is made between those financial assets and financial liabilities that meet the definition of financial instruments in accordance with AASB 132 and those that do not.

The following refers to financial instruments unless otherwise stated.

Categories of non-derivative financial instruments

Reclassification of financial instruments at fair value through profit or loss Financial instrument assets that meet the definition of loans and receivables may be reclassified out of the fair value through profit and loss category into the loans and receivables category, where they would have met the definition of loans and receivables had they not been required to be classified as fair value through profit and loss. In these cases, the financial instrument assets may be reclassified out of the fair value through profit and loss category, if there is the intention and ability to hold them for the foreseeable future or until maturity.

Loans and receivables Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted on an active market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Loans and receivables category includes cash and deposits, term deposits with maturity greater than three months, trade receivables, loans and other receivables, but not statutory receivables.

Reclassification of available-for-sale financial assets Available-for sale financial instrument assets that meet the definition of loans and receivables may be classified into the loans and receivables category if there is the intention and ability to hold them for the foreseeable future or until maturity. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.1: FINANCIAL INSTRUMENTS (Continued) (f) Fair Value (Continued) Financial liabilities at amortised cost Financial instrument liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest-bearing liability, using the effective interest rate method.

Financial instrument liabilities measured at amortised cost include all of the Health Service's contractual payables, deposits held and advances received, and interest-bearing arrangements other than those designated at fair value through profit or loss.

Net gain/(loss) on financial instruments Net gain/(loss) on financial instruments includes: • realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading; • impairment and reversal of impairment for financial instruments at amortised cost; and • disposals of financial assets and derecognition of financial liabilities.

Revaluations of financial instruments at Fair Value The revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets.

Note 7.2: NET GAIN/(LOSS) ON DISPOSAL OF NON-FINANCIAL ASSETS 2017 2016 $ $ Proceeds from Disposal of Non-Current Assets - Motor Vehicles 43,198 69,236 Total Proceeds from Disposal of Non-Current Assets 43,198 69,236

Less: Written Down Value of Non-Current Assets Sold - Motor Vehicles 38,969 82,442 - Buildings 129,500 1,228 - Plant & Equipment 20,801 6,359 - Land Improvements 0 9,015 Total Written Down Value of Non-Current Assets Sold 189,270 99,044

NET GAIN/(LOSS) ON DISPOSAL OF NON FINANCIAL ASSETS (146,072) (29,808)

Disposal of non-financial assets Any gain or loss on the sale of non-financial assets is recognised in the comprehensive operating statement.

Impairment of Non-Financial Assets All non-financial assets are assessed annually for indications of impairment, except for: • inventories; • assets arising from construction contracts.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset's carrying value exceeds its recoverable amount, the difference is written-off as an expense except to the extent that the write-down can be debited to an an asset revaluation reserve amount applicable to that same class of asset.

If there is an indication that there has been a reversal in the estimate of an asset's recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 7.3: CONTINGENT ASSETS AND CONTINGENT LIABILITIES There are no known contingent assets or contingent liabilities for Kyabram District Health Service at 30 June 2017. (2016:Nil)

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.

Note 7.4: FAIR VALUE DETERMINATION

Asset Class Examples of types of Expected fair value Likely valuation approach Significant inputs (Level 3 only) assets level

Land subject to restrictions as to use and/or sale Specialised land Level 3 Market approach CSO adjustments Land in areas where there is not an active market

Specialised buildings with limited alternative uses Cost per square metre Depreciated replacement cost Specialised buildings (i) and/or substantial Level 3 approach customisation e.g. Useful life prisons, hospitals, and schools Specialised items with limited alternative uses and/or Cost per unit substantial Depreciated replacement cost Plant and equipment (i) customisation Level 3 approach Useful life

If there is an active resale market available; Level 2 Market approach N/A Vehicles If there is no active Cost per unit resale market Depreciated replacement cost available Level 3 approach Useful life

(i) Newly built / acquired assets could be categorised as Level 2 assets as depreciation would not be a significant unobservable input (based on the 10% materiality threshold) Kyabram District Health Service Notes to the Financial Statements 30 June 2017

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 Equity 8.2 Reconciliation of net result for the year to net cash inflow/(outflow) from operating activities 8.3 Operating segments 8.4 Responsible persons disclosures 8.5 Executive officer disclosures 8.6 Related parties 8.7 Remuneration of auditors 8.8 AASBs issued that are not yet effective 8.9 Events occurring after the balance sheet date 8.10 Alternative presentation of comprehensive operating statement Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 8.1: EQUITY 2017 2016 $ $ (a) Surpluses

Property, Plant and Equipment Revaluation Surplus ¹ Balance at beginning of the reporting period 9,849,277 9,849,277 Revaluation Increments/(Decrements) - Land 0 0 - Buildings 0 0

Balance at the end of the reporting period 9,849,277 9,849,277

Represented by: - Land 885,000 885,000 - Buildings 8,964,277 8,964,277 9,849,277 9,849,277

(¹) The property, plant & equipment revaluation surplus arises on the revaluation of property, plant and equipment.

Restricted Specific Purpose Surplus Balance at the beginning of the reporting period 45,000 258,152 Transfer to and from Restricted Specific Purpose Surplus 613,544 (213,152) Balance at the end of the reporting period 658,544 45,000

Total Surpluses 10,507,821 9,894,277

(b) Contributed Capital Balance at the beginning of the reporting period 12,616,504 12,616,504

Balance at the end of the reporting period 12,616,504 12,616,504

(c) Accumulated Surpluses Balance at the beginning of the reporting period 2,660,035 3,285,410 Net Result for the Year (713,068) (838,527) Transfer to and from Surplus (613,544) 213,152

Balance at the end of the reporting period 1,333,423 2,660,035

Total Equity at end of financial year 24,457,748 25,170,816

Contributed capital Consistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD119A Contributions by Owners , appropriations for additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions to or distributions by owners, that have been designated as contributed capital are also treated as contributed capital.

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

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

Specific restricted purpose surplus A specific restricted purpose surplus is established where the Health Service has possession or title to the funds but has no discretion to amend or vary the restriction and/or condition underlying the funds received. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 8.2: RECONCILIATION OF NET RESULT FOR THE YEAR TO NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES 2017 2016 $ $

NET RESULT FOR THE PERIOD (713,068) (838,527)

Non-cash movements Depreciation 1,672,889 1,609,060

Movements included in investing and financing activities Net (Gain)/Loss from Sale of Plant and Equipment 146,072 29,808

Movements in assets and liabilities Change in Operating Assets and Liabilities (Increase)/Decrease in Receivables 203,537 (186,609) (Increase)/Decrease in Prepayments (29,199) 3,364 (Increase)/Decrease in Inventories 3,356 35,122 Increase/(Decrease) in Payables 215,250 518,856 Increase/(Decrease) in Provisions 367,546 69,501

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 1,866,383 1,240,575

NOTE 8.3: OPERATING SEGMENTS

OTHER SERVICES RACS TOTAL 2017 2016 2017 2016 2017 2016 $ $ $ $ $ $ REVENUE External Segment Revenue 18,279,170 18,013,169 5,365,227 4,793,459 23,644,397 22,806,628 Total Revenue 18,279,170 18,013,169 5,365,227 4,793,459 23,644,397 22,806,628

EXPENSES External Segment Expenses 18,826,608 18,134,711 5,654,136 5,636,984 24,480,744 23,771,695

Net Result from ordinary activities (547,438) (121,542) (288,909) (843,525) (836,347) (965,067)

Interest Income 94,981 96,522 28,298 30,018 123,279 126,540 Net Result for Year (452,457) (25,020) (260,611) (813,507) (713,068) (838,527)

OTHER INFORMATION Segment Assets 182,802 175,862 4,031,805 3,878,744 4,214,607 4,054,607 Unallocated Assets 0 0 0 0 28,230,157 27,158,449 Total Assets 182,802 175,862 4,031,805 3,878,744 32,444,764 31,213,056

Segment Liabilities 105,692 79,957 13,803 10,442 119,495 90,399 Unallocated Liabilities 0 0 0 0 7,867,521 5,951,841 Total Liabilities 105,692 79,957 13,803 10,442 7,987,016 6,042,240

Acquisition of property, plant and equipment and intangible assets 937,455 1,860,402 0 12,068 937,455 1,872,470 Depreciation expense 1,333,722 1,269,893 339,167 339,167 1,672,889 1,609,060 Non cash expenses other than depreciation 18,885 14,331 0 0 18,885 14,331

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

Business Segments Services Acute Acute Hospital services Aged Care services Primary Health services

Residential Aged Care Services (RACS) Nursing Home facilities

Geographical Segment Kyabram District Health Service operates predominantly in Kyabram, Victoria. More than 90% of revenue, net surplus from ordinary activities and segment assets relate to operations in Kyabram, Victoria. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 8.4: RESPONSIBLE PERSON 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 Jill Hennessy, Minister for Health, Minister for Ambulance Services 01/07/2016 - 30/06/2017 The Honourable Martin Foley, Minister for Housing, Disability and Ageing, Minister for Mental Health 01/07/2016 - 30/06/2017

Governing Boards Mr G. Cootes 01/07/2016 - 30/06/2017 Mrs N. Ryan 01/07/2016 - 30/06/2017 Ms J Greer 01/07/2016 - 30/06/2017 Mrs J. Courtney 01/07/2016 - 30/06/2017 Mr P. Jackson 01/07/2016 - 30/06/2017 Mrs M. Atkins 01/07/2016 - 30/06/2017 Mr D. Denham 01/07/2016 - 30/06/2017 Mr A. Basile 01/07/2016 - 30/06/2017 Ms L. Humphris 01/07/2016 - 30/06/2017

Accountable Officer Mr Peter Abraham 01/07/2016 - 30/06/2017

Remuneration of Responsible Persons Remuneration received or receivable by responsible persons was in the range: $230,000 - $239,999 ($250,000 - 259,999 in 2015-16).

Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Parliamentary Services.

Refer to Note 8.6 for further analysis of remuneration and transactions with Key Management Personnel. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 8.5: EXECUTIVE OFFICER DISCLOSURES 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 executive officers 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 include amounts such as wages, salaries, 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 include pensions and other retirement benefits paid or payable on a discrete basis when employment has ceased.

Other long-term benefits include long service leave, other long-service benefit or deferred compensation.

Termination benefits include termination of employment payments, such as severance packages.

Share-based payments are cash or other assets paid or payable as agreed between the health service and the employee, provided specific vesting conditions, if any, are met.

Remuneration of executive officers Total Remuneration 2017 2016(a) $ $ Short-term employee benefits 259,912 Post-employment benefits 23,457 Other long-term benefits 6,172 Termination benefits 0 Share-based payments 0 Total Remuneration (b) 289,541 Total Number of executives (c) 2 Total annualised employee equivalent (AEE) (d) 2

Notes: (a) No comparatives have been reported because remuneration in the prior year was determined in line with the basis and definition under FRD 21B. Remuneration previously excluded non-monetary benefits and comprised any money, consideration or benefit received or receivable, excluding reimbursement of out-of-pocket expenses, including any amount received or receivable from a related party transaction. Refer to the prior year's financial statements for executive remuneration for the 2015-16 reporting period. (b) Remuneration represents the expenses incurred by the entity in the current reporting period for the employee, in accordance with AASB 119 Employee benefits (c) The total number of executive officers includes persons who meet the definition of Key Management Personnel (KMP) of the entity under AASB 124 Related Party Disclosures and are also reported within the related parties note disclosure (Note 8.6). (d) Annualised employee equivalent is based on the time fraction worked over the reporting period. This is calculated as the total number of days the employee is engaged to work during the week by the total number of full-time working days per week (this is generally five full working days per week). Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 8.6: RELATED PARTIES The hospital 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; and • all hospitals and public sector entities that are controlled and consolidated into the whole of state consolidated financial statements.

All related party transactions have been entered into on an arm’s length basis.

Key management personnel (KMP) of the hospital include the Portfolio Ministers and Cabinet Ministers and KMP as determined by the hospital. The compensation detailed below excludes the salaries and benefits the Portfolio Ministers receive. The Minister’s remuneration and allowances is set by the Parliamentary Salaries and Superannuation Act 1968 , and is reported within the Department of Parliamentary Services’ Financial Report.

Key management personnel consist of Ministers, the board of management and accountable officers as detailed in Note 8.4.

2017 COMPENSATION $ Short term employee benefits 209,831 Post-employment benefits 19,459 Other long-term benefits 3,151 Termination benefits 0 Share based payments 0 Total 232,441

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 Administration 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 department, related party transactions that involved key management personnel and their close family members are reported below. No provision has been required, nor any expense recognised, for impairment of receivables from related parties.

2017 2016 Other Transactions of Responsible Persons and their Related Parties $ $

A director, Mr Michael Sweeney, is the Manager of the Kyabram Club and has provided services to the Health Service on normal commercial terms and conditions. 0 1,019

A director, Mr Dale Denham, is the principal of Denham Design which provided building design services to the Health Service on normal commercial terms and conditions. 2,200 0

Significant transactions with government-related entities Kyabram District Health Service received funding from the Department of Health and Human Services of $15,335,391 (2016: $16,213,407).

During the year, Kyabram District Health Service had the following other government-related entity transactions: - Commonwealth Government funding received for health related programs totalling $3,677,413 (2016 $2,705,061). - Department of Education and Training for childrens services totalling $433,329 (2016 $424,820).

NOTE 8.7: REMUNERATION OF AUDITORS 2017 2016 Victorian Auditor-General's Office $ $ Audit or review of financial statements 15,760 15,200 15,760 15,200 Other Providers Internal Audit Services 22,273 28,295 22,273 28,295 Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 8.8: AASBs ISSUED THAT ARE NOT YET EFFECTIVE Certain new Australian accounting standards and interpretations have been published that are not mandatory for 30 June 2017 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 2017, 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. Timboon and District Healthcare Service has not and does not intend to adopt these standards early.

Standard / Summary Applicable for Impact on Health Interpretation reporting periods Service's Annual beginning on Statements AASB 9 Financial Instruments The key changes include the simplified 1 January 2018 While the preliminary assessment has requirements for the classification and not identified any material impact arising measurement of financial assets, a from AASB 9, it will continue to be new hedging accounting model and a monitored and assessed. revised impairment loss model to recognise impairment losses earlier, as opposed to the current approach that recognises impairment only when incurred.

AASB 2010-7 The requirements for classifying and 1 January 2018 The assessment has identified that the Amendments to Australian measuring financial liabilities were amendments are likely to result in earlier Accounting Standards arising added to AASB 9. The existing recognition of impairment losses and at from AASB 9 (December 2010) requirements for the classification of more regular intervals. financial liabilities and the ability to use the fair value option have been retained. However, where the fair value option is used for financial liabilities the change in fair value is accounted for as follows: - The change in fair value attributable to changes in credit risk is presented in other comprehensive income (OCI); and - Other fair value changes are presented in profit and loss. If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss.

AASB 15 Revenue from The core principle of AASB 15 requires 1 January 2018 The changes in revenue recognition Contracts with Customers an entity to recognise revenue when requirements in AASB 15 may result in the entity satisfies a performance changes to the timing and amount of obligation by transferring a promised revenue recorded in the financial good or service to a customer. statements. The Standard will also require additional disclosures on service revenue and contract modifications.

A potential impact will be the upfront recognition of revenue from licenses that cover multiple reporting periods. Revenue that was deferred and amortised over a period may now need to be recognised immediately as a transitional adjustment against the opening returned earnings if there are no former performance obligations outstanding. Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 8.8: AASBs ISSUED THAT ARE NOT YET EFFECTIVE (Continued) Standard / Summary Applicable for Impact on Health Interpretation reporting periods Service's Annual beginning on Statements AASB 2014 ‑1 Amendments to Amends various AASs to reflect the 1 January 2018 This amending standard will defer the Australian Accounting Standards AASB's decision to defer the mandatory application period of AASB 9 to the [Part E Financial Instruments] application date of AASB 9 to annual 2018-19 reporting period in accordance reporting periods beginning on or after with the transition requirements. 1 January 2018 as a consequence of Chapter 6 Hedge Accounting, and to amend reduced disclosure requirements. AASB 2014-7 Amends various AASs to incorporate 1 January 2018 The assessment has indicated there Amendments to Australian the consequential amendments arising will be no significant impact for the public Accounting Standards arising from the issuance of AASB 9. sector. from AASB 9

AASB 2016-8 This standards defers the mandatory 1 January 2018 This amending standard will defer the Amendments to Australian effective date of AASB 15 from application period of AASB 15 to the Accounting Standards - 1 January 2017 to 1 January 2018. 2018-19 reporting period in accordance Effective Date of AASB 15 with the transition requirements. AASB 16 Leases The key changes introduced by AASB 16 1 January 2019 The assessment has indicated that as include the recognition of most most operating leases will come on operating leases (which are currently balance sheet, recognition of lease assets not recognised) on balance sheet. and lease liabilities will cause net debt to increase. Depreciation of lease assets and interest on lease liabilities will be recognised in the income statement with marginal impact on the operating surplus. The amounts of cash paid for the principal portion of the lease liability will be presented within financing activities and the amounts paid for the interest portion will be presented within operating activities in the cash flow statement. No change for lessors. AASB 2015-8 Amendments to This standard defers the mandatory effective date 1 January 2018 This amending standard will defer the Australian Accounting of AASB 15 from 1 January 2017 to application period of AASB 15 to the Standards - Effective Date of 1 January 2018. 2018-19 reporting period. AASB 15 AASB 2016-7 Amendments to This standard defers the mandatory effective date 1 January 2019 This amending standard will defer the Australian Accounting Standards - of AASB 15 for not-for-profit entities from application period of AASB 15 to the Deferral of AASB 15 for Not-for- 1 January 2018 to 1 January 2019 2018-19 reporting period. Profit Entities

AASB 1058 Income of Not-for- This Standard will replace AASB 1004 1 January 2019 The impact of this Standard is yet to be Profit Entities Contributions and establishes principles for fully assessed. transactions that are not within the scope of AASB 15, where the consideration to acquire an asset is significantly less than fair value to enable not-for-profit entities to further their objectives

In addition to the new standards and amendments above, the AASB has issued a list of other amending standards that are not effective for the 2016-17 reporting period (as listed below). In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on public sector reporting. • AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses [AASB 112] • AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107 • AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurements of Share-based Payment Transactions • AASB 2016-6 Amendments to Australian Accounting Standards – Applying AASB 9 Financial Instruments with AASB 4 Insurance Contracts • AASB 2017-1 Amendments to Australian Accounting Standards – Transfers of Investment Property, Annual Improvements 2014-16 Cycle and Other Amendments • AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-16 Cycle Kyabram District Health Service Notes to the Financial Statements 30 June 2017

NOTE 8.9: EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

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

NOTE 8.10: ALTERNATIVE PRESENTATION OF COMPREHENSIVE OPERATING STATEMENT

2017 2016 $ $

Grants Operating 19,529,996 18,642,846 Capital 803,462 0 Interest 151,671 131,386 Sales of goods and services 2,133,651 2,059,628 Other 1,294,968 2,129,116

Revenue from Transactions 23,913,748 22,962,976

Employee expenses 16,001,067 15,126,835 Depreciation 1,672,889 1,609,060 Other operating expenses 6,799,140 6,973,176

Expenses from Transactions 24,473,096 23,709,071

Net result from transactions (559,348) (746,095)

Other economic flows included in net result Net gain/ (loss) on sale of non-financial assets (146,072) (29,808) Other gains / (losses) from other economic flows (7,648) (62,624)

Total Other economic flows included in net result (153,720) (92,432)

NET RESULT FOR THE YEAR (713,068) (838,527)

Items that may be reclassified subsequently to net result Changes to financial assets available-for-sale revaluation surplus 0 0

Total other comprehensive income 0 0

Comprehensive Result (713,068) (838,527) VALE MR. SID MUIR-SMITH 9th June 1929 – 15th February 2017

Sid had a long career as a Field Officer for Nestle. He was also a member of the Board of the Kyabram Hospital for 13 years, retiring in November 1998.

Sid was a wonderful Ambassador for the hospital especially in the major role he played in the hospital redevelopment appeal.

During the redevelopment, the Project Control Group benefited greatly from Sid’s keen interest and attention to detail in ensuring that the best possible facility was built. He also represented the hospital as a member of the Board at numerous external functions.

Sid was awarded a Life Governorship of the Hospital in 1998.

If the Financial Statements are not attached and you would like a copy, please contact the office of the CEO

Phone: (03) 5857 0250 Email: [email protected] www.kyhealth.org.au

Fenaughty Street PO Box 564 Kyabram VIC 3620 Phone: (03) 5857 0200 Email: [email protected]

37 Mangan Street Tongala VIC 3621

Phone: (03) 5857 0245 Email: [email protected]

35 Birdwood Avenue Stanhope VIC 3623

Phone: (03) 5857 0451 Email: [email protected]