Annual Report 2016-17 Planning for a new hospital – Update

Following on from the West Gippsland Baw Baw Strategic Services Plan, this year we completed comprehensive Masterplan and Feasibility studies to develop detailed proposals for a new hospital on the current site or a new hospital on the greenfields site in Drouin East. The studies show that both sites offer viable and functional options for a new hospital. Our work continues into 2017-18 on the next stage of planning.

Existing urban area

Future urban growth (zoned)

Future urban growth (planned)

Commercial centre Existing hospital New hospital site

New site or current site? Feasibility plans to choose a site for the re-development of a new hospital are being considered.

Acknowledgements: Photography: Karyn O’Brien Design and Print: Kage Design & Photography West Gippsland Healthcare Group acknowledges the funding support provided by the Victorian Government.

Thank you to the staff, volunteers, patients and supporters of the West Gippsland Healthcare Group. ABN: 49 261 883 406

Front cover photo: Nurse Danielle and Alan Woollard in the Haemodialysis Unit at Warragul Contents

Chair & Chief Executive Officer Report...... 2-3 Corporate Governance...... 29 Our Hospital...... 4 Ministers & Governance History Board of Directors Services Organisation Chart Our Performance...... 7 Our People...... 35 Strategic Priorities Staff Performance Priorities Occupational Health & Safety Activity and Funding Service Awards Environmental Performance Our Community...... 41 Key Performance Indicators Donations & Fundraising Our Achievements...... 22 Reporting Requirements...... 42 Financial Report Attestations & Declarations Nursing & Midwifery Report Financial Declaration Medical Services Report Auditor General’s Report Allied and Community Health Report Financial Statements...... 50 Corporate Services Report Financial Index Warragul Linen Service Report Financial Notes & Reports Disclosure Index ...... 137

WGHG CEO Dan Weeks and Board Chair Jane Leslie with the new hospital Masterplans outside West Gippsland hospital campus

West Gippsland Healthcare Group Annual Report 2017 1 Report from the Chair and Chief Executive

Dan Weeks RN BBus(Acc) MHA GAICD ACHSM Jane Leslie BBus Chief Executive Officer Board Chair

On behalf of the Board and was successful, with 855 births Planning for our future staff of West Gippsland a much more manageable level. Meeting the healthcare needs of Healthcare Group and in Managing the quality of services in the context of growing demand and our community while planning for accordance with the Financial a new hospital continues to be Management Act 1994, it is capacity constraints is a constant challenge and we were thrilled when our priority. Following on from the our pleasure to provide this the Positive Pregnancy Program West Gippsland Baw Baw Strategic report of operations for the received the Excellence in Women’s Services Plan that was released period ended 30th June 2017. Health award at the last year, this year we completed Sector Awards ceremony. comprehensive Masterplan and It was another busy and exciting Feasibility studies to develop year at West Gippsland Healthcare Delivering Quality Care detailed proposals for a new hospital Group, as we continue to deliver on the current site or a new hospital our services whilst planning for our The community based programs on the greenfields site in Drouin future. 2016-17 proved to be a year and residential aged care services East. The studies show that both of records and achievements on at Cooinda Lodge and Andrews sites offer viable and functional many fronts. House continue to provide options for a new hospital to meet essential roles in supporting the Managing growth the planning and service objectives. hospital and maintaining people in The work continues into 2017-18 The demand for services continues the community. Neerim District as we partner with the Department to grow as the population within Health Services has also played an of Health and Human Services Baw Baw Shire expands at a rate important role in meeting demand and Government to continue the greater than the state average. The by providing an option for increased planning. number of acute in hospital-patients and hosting our Restorative increased by 4% and the number of Care program for patients requiring Emergency Department attendances additional support following their increased by 3% to set a new record acute episode. of just over 22,000 presentations. The strategy advised last year to work with neighbouring hospitals to reduce the demand in maternity

2 Our Community is growing We continued to care for more people than ever before as population within Baw Baw Shire expands at a rate greater than the state average. Our hospital admissions increased by 4% and the number of Emergency Department attendances increased by 3% to set a new record of just over 22,000 presentations.

Undertaking major works Our generous community Finally we would also like to acknowledge the contribution of our While a future new hospital is still We have also continued to benefit many community partners, including some years away, it is important we from the amazing generosity shown our local members of parliament at expand our current capacity in the by the community. Our annual both the state and commonwealth short term. We were delighted when hospital equipment appeal is a levels, the Department of Health and Minister Hennessey announced testament to this generosity, with Human Services and the Committee $9.3million in funding to build a over $80,000 raised to purchase for Gippsland. Your support is short stay unit in the emergency much needed equipment. The greatly appreciated and we look department and a third operating ongoing support from our auxiliaries, forward to working with you over the theatre. We have also commenced volunteers, community groups, coming year as we continue to serve planning to build another businesses and donors is very much our community. accommodation unit in Sargeant appreciated and makes a significant Street to help house visiting contribution to the services provided. clinicians Thank you Financial Sustainability Operating a health care service is 2016/17 was the second year in a team effort and we would like to Jane Leslie a 3 year financial recovery plan to acknowledge the dedication and Board chair reduce dependence on the Warragul skills of our Board, Executive and Linen Service. The operating surplus staff. They work hard each day to achieved is a pleasing result when deliver the quality care we are known there has been a constant growth for and to cope with record demand in service delivery and expansion of for our services. As the reporting the organisation. The strategy to period draws to a conclusion, we ensure that revenue grows faster say farewell to three long standing Dan Weeks than expenses continues to meet board directors, John Davine, Chief Executive Officer the Groups financial objectives. Brian Davey and Joanne Campbell. Together they have made a significant contribution to our service and we wish them well for the future.

West Gippsland Healthcare Group Annual Report 2017 3 Our Hospital

West Gippsland Healthcare Group (WGHG) is a customer-focused health organisation providing acute care, residential care and community health services to over 48,000 people in the rural, urban residential, agricultural and industrial areas located within the Baw Baw Shire and beyond.

Our Vision: To improve the health and wellbeing of our community.

Our Mission: West Gippsland Healthcare Group is committed to the provision of high quality, integrated health care that meets the changing needs of individuals and our community.

We Value: OUR CUSTOMERS be committed to continuity of care for individuals whilst recognising rights, responsibilities and participation OUR COMMUNITY be a responsible corporate citizen and neighbour in caring for our community and environment OUR STAFF we are committed to our staff’s wellbeing and ongoing development LEADERSHIP be a role model in the planning and delivery of health services IMPROVING PERFORMANCE ensure continuous quality improvement

4 Our History

1888 The community established a 1998 Baw Baw Health and 2012 Building extension works Hospital on land donated by Community Care Centre commenced to the Mary Sargeant to service the opened in Drouin, a joint emergency department area between Melbourne and venture with the Baw Baw New consulting Sale Shire. Stage 2 Redevelopment rooms, education facilities, 1895 Warragul District Hospital of the Hospital officially teleconferencing facilities and completed opened a new home for the District Nursing Service completed 1908 Warragul District Hospital 2005 Extensions to Andrews officially opened House in Trafalgar completed, Feasibility Study identifies accommodating 50 residents. Lardners Track as preferred 1924 Name change to West Queen Street Community site for a new Hospital Gippsland Hospital (WGH) Services building redeveloped. in 1936.The original wooden 2013 Emergency department Hospital building redeveloped Extensions to Warragul redevelopment completed Linen Service completed and officially opened by The 1939 The foundation stone of the to accommodate new Hon. David Davis MP 17th new brick Hospital laid by Mr continuous batch washing May Dunstan system A record breaking 1020 1940 The new Hospital opened by 2006 Community Rehabilitation babies born at WGH Sir Winston Duggan Centre relocation project 2014 The first self-funded research 1970 Eastern extensions to the commenced. program announced, with Hospital opened. The Hospital Stage 3 Redevelopment of $100,000 made available expanded to 144 beds the Hospital, incorporating to support clinical staff to 1978 Stage 1 of Cooinda the High Dependency and undertake research programs Lodge nursing home built, Midwifery Units completed 2015 Relocated High Dependency accommodating 28 residents 2007 Community Health and Unit within Medical Unit to 1986 Stage 2 of Cooinda Lodge Community Mental Health expand the number of post- added, accommodating 56 project completed natal and medical unit beds. residents 2008 Community Rehabilitation 2016 Constructed five units in The Warragul Linen Service Centre redevelopment Sargeant Street Warragul, moved into purpose-built underneath Cooinda Lodge to provide on-site premises in Ley Street completed. Centenary of accommodation for visiting 1996 A Community Services Centre opening of first Warragul clinicians. Completed $5.8m was established in Warragul District Hospital celebrated. Energy Performance Contract Centenary history book ‘Of (EPC) asset refresh and major Stage 1 Redevelopment of refurbishment of Cooinda Hospital completed the People...For the People’ and Centenary quilt launched Lodge 1997 The various health services 2009 WGHG awarded Premier’s 2017 WGHG awarded Excellence provided across the in Women’s Health award for community were brought Award for Regional Health Service of the Year Positive Pregnancy Program. together under the umbrella Completed masterplan and name of West Gippsland 2010 WGH Drouin Auxiliary 50th feasibility studies to develop Healthcare Group (WGHG). anniversary celebrated detailed proposals for a new Rawson Community Health Permanent home purchased hospital on the current site Centre incorporated into for Trafalgar Community or a new hospital on the WGHG. Health Services greenfields site in Drouin Andrews House opened, Extensions to Drouin East. Secured funding to accommodating 30 residents Opportunity Shop completed build a short stay unit in the emergency department and a 2011 Feasibility study for third operating theatre redevelopment of West Gippsland Hospital site commenced

West Gippsland Healthcare Group Annual Report 2017 5 Our Services as at 30 June 2017

Hospital (acute) Allied Health Home Nursing Service Anaesthesia Cardiac Rehabilitation District Nursing Service Breast Surgery Chronic Obstructive Airways - Hospital in the Home (HITH) Disease (COAD) Program - Nursing/Volunteers Day Surgery Dietetics - McGrath Breast Care Nurse Dental Surgery Occupational Diabetes Education Physiotherapy Business Units Ear Nose and Throat Surgery Consulting Suites Emergency Social Work Salary Packaging Speech Warragul Linen Service General Medicine General Practice Allied & Community Health Diagnostic Services Services (Contract Services) Aboriginal Hospital Liaison Officer BreastScreen Haemodialysis Cognitive Dementia and Memory Endoscopy High Dependency Care Service (CDAMS) Medical Imaging Infectious Diseases Medicine Community Health Nurse Pathology Midwifery Continence - Urodynamics Service Stress Electro Cardiographs - Children’s Disability Service - Children’s Service Support Services Orthopaedic Surgery - Adult Continence Service Administration Paediatric Medicine - Pelvic Floor Physiotherapy Business Support Services Paediatric Surgery Diabetes Education Education Dietetics Engineering First Call – Central Intake Service Environmental Services Counselling Finance Pre-Admission - Generalist Food Services Stomal Therapy - Family Violence Counselling and Health Information Case Management and Urodynamics Human Resources - Integrated Family Services Renal Medicine Infection Control Counselling and Case Information Technology Management Continuing and Complex Care Library Health Promotion Geriatric Evaluation and Occupational Health and Safety Management (GEM) Rawson Community Health Centre Payroll Hospital Admission Risk Program Rural and Community Allied Health Performance Improvement Unit (HARP) Service Public Relations Palliative Care - Dietetics Supply Post-Acute Care - Occupational Therapy WorkCover Residential In Reach - Physiotherapy Transitional Care Packages - Podiatry - Speech Pathology Aged Care - Counselling Aged Care Assessment Young Mums Andrews House Aged Care Facility Cooinda Lodge Aged Care Facility Home & Community Care Services Respite Care

6 Our Performance Statement of Priorities and Health Service Agreement

West Gippsland Healthcare Group Annual Report 2017 7 Part A: Strategic Priorities

Domain Action Deliverables Outcomes Monitor the quality of end of life care for Every death is reviewed and reported to all patients and report through relevant the Clinical Governance committee, which committee structure including local General includes local GP’s. Implement systems and processes to Practitioners. recognise and support person-centred end Policies have been reviewed in conjunction Review current policy and procedures to of life care in all settings, with a focus on with Gippsland Regional Palliative Care ensure they are reflective of current practice. providing support for people who choose to Consortia. die at home. Consider the use of the Care Plan for the The Care plan for the Dying has been Dying Person – Victoria, supported through adopted by WGHG and an implementation the Centre for Palliative Care at St Vincent’s plan developed. Hospital. Appoint a project person to lead the implementation of the Advance Care A project person was appointed to lead the Planning - have the conversation: A strategy implementation and staff education has for Victorian health services 2014-18 at the occurred. Advance Care Planning is included as a health service. parameter in an assessment of outcomes Achieve a target of 50% of patients over 70 including: mortality and morbidity review The target was not achieved by 30 June years of age have a documented Advance reports, patient experience and routine data and work continues to improve processes to Care directive or plan as part of their medical collection. document Advance Care directives. record. Mortality reviews to include assessment as Mortality reviews from Sept 2016-March to whether an Advance Care Plan was in 2017 found 37% had an Advance Care Plan place and whether it was followed. in place and had been followed. Child and Family Violence project manager Deliver a training package and present has been appointed and training package Quality and Progress implementation of a whole-of- policies that have been developed for is under development using best practice safety hospital model for responding to family responding to family violence using the guidelines from the Royal Women’s Hospital. violence. Strengthening Hospital Response to Family Polices and protocols are being developed Violence model. concurrently. Actively support and participate in regional projects and committees such as Chief Develop a regional leadership culture Executive Officer forum; Director of Nursing CEO and Executive and Senior staff actively that fosters multidisciplinary and multi- and Midwifery forum; Regional Maternity participate in a variety of regional projects organisational collaboration to promote and Perinatal Morbidity and Mortality and committees including all of those listed learning and the provision of safe, quality committees; Gippsland Regional Integrated and many more. care across rural and regional Victoria. Cancer Services, and Gippsland Health Alliance Matrix of Foetal Surveillance Education Foetal Surveillance training requirements Establish a foetal surveillance competency Program training requirements required for have been determined for all levels of staff policy and associated procedures for all staff levels of clinical involvement and patient in maternity to ensure 24 hour coverage of providing maternity care that includes the management, including remedial strategies the labour ward by appropriately skilled staff. minimum training requirements, safe staffing where required, to be developed by March Training records are actively monitored and arrangements and ongoing compliance 2017. Monitoring of Foetal Surveillance managed but have not yet transitioned to monitoring arrangements. Education Program training levels to be e-Credentialing. managed within e-Credentialing program. Use patient feedback, including the Victorian Healthcare Experience Survey to drive The Community Advisory Council actively Involve Community Advisory Council in improved health outcomes and experiences reviews the results of the Victorian review of Victorian Healthcare Experience through a strong focus on person and family Healthcare Experience Survey and Survey results to identify and address centred care in the planning, delivery and recommends required actions to the Board opportunities for improvement. evaluation of services, and the development for consideration. of new models for putting patients first.

8 Domain Action Deliverables Outcomes Review of current policy and practice to Code Grey policy and practice have been Develop a whole of hospital approach to ensure best practice. reviewed and training developed. Quality and reduce the use of restrictive practices for 450 staff have received Code Grey training, safety Continue training of all staff in Code Grey patients, including seclusion and restraint. including refresher training for high risk staff. practice. Training for Code Grey is ongoing. Ensure the development and implementation Implement a “Do not attend" policy and “Do Not Attend” policy and guidelines have of a plan in specialist clinics to: (1) optimise guidelines by December 2016. been developed and endorsed. referral management processes and improve The First Call central intake process has patient flow through to ensure patients are Through centralised intake develop a developed a consistent approach to prioritise seen in turn and within time; and (2) ensure consistent approach to identifying priority patients and manage the wait list by using Victorian Integrated Non-admitted Health patients and waitlist parameters under the service guides which have been developed data accurately reflects the status of waiting centralised intake process patients. and are in place for each program. Investigate the introduction of a short $3.3m funding awarded from the Regional stay model of care as one strategy to Health Infrastructure Fund Round 1 to build improve patient flow from the Emergency a short stay unit. Project Manager and Department. Submit application to build architects have been appointed to oversee Short Stay Unit under Regional Health the project. A short stay model of care has Infrastructure Fund. been drafted in readiness. Ensure the implementation of a range of The governance of Hospital in the Home was strategies (including processes and service Explore feasibility of moving Hospital In The reviewed and determined not to relocate it models) to improve patient flow, transfer Home under the Emergency Department to the Emergency Department. However times and efficiency in the emergency management to increase admissions directly greater HiTH presence and closer working department, with particular focus on patients from the Emergency Department. relationships have resulted in direct HiTH who did not wait for treatment and/or admissions from ED. patients that re-presented within 48 hours. Guidelines for cellulitis have resulted in Review Hospital In The Home Guidelines direct HiTH admissions from ED. Review Access and for Pneumonia, Cellulitis and Uro-sepsis by of Pneumonia and uro-sepsis guidelines timeliness March 2017 to increase early transfer to the have not resulted in direct admission but program or direct admission to assist with encourage early transfer to HiTH. patient flow within the organisation. HiTH activity has increased by over 60% in 2016/17 Establish telephone secondary consults Secondary consults by telephone have been for the Health Independence Program established for the continence program to Continence Program by December 2016 to improve access. Identify opportunities and implement improve access to the service. pathways to aid prevention and increase Explore options for telemedicine in Dementia Support Australia is utilised to care outside hospital walls by optimising and Dementia Care to reduce offer telephone advice and assessments in appropriate use of existing programs (i.e. impost of travel on clients and improve psychiatry and dementia but telemedicine is the Health Independence Program or service access. not available. telemedicine). Participate on Steering Committee for Chief Executive Officer is a member of the Gippsland Primary Health Network Clinical Gippsland Primary Health Network Clinical Pathways project. Pathways project. Review current practice of referral to surgical The process for referral to the surgical Increase the proportion of patients (locally waiting list by December 2016. wait list, performance indicators and pre- and across the state) who receive treatment Review data management and develop key admission clinic processes have all been within the clinically recommended time for performance indicator reports to better reviewed, resulting in improved performance surgery and implement ongoing processes to manage waiting list by December 2016. in the elective surgery access performance ensure patients are treated in turn and within Review current Pre Admission Clinic indicators. The number of patients waiting clinically recommended timeframes. processes to maximise patients’ readiness for surgery at 30th June was below target. for care by December 2016.

West Gippsland Healthcare Group Annual Report 2017 9 Part A: Strategic Priorities

Domain Action Deliverables Outcomes Develop and implement a strategy to ensure the preparedness of the organisation for WGHG has worked with other providers the National Disability Insurance Scheme Work in partnership with other Gippsland in Gippsland to develop a response to the Access and and Home and Community Care program public health services to develop a response National Disability and Insurance Scheme. timeliness transition and reform, with particular strategy to the roll out of the National A preparedness strategy is currently being consideration to service access, service Disability and Insurance Scheme. developed as details of the scheme emerge. expectations, workforce and financial management. Support shared population health and WGHG is a member of the Baw Baw Shire’s Participate in the development of the Baw wellbeing planning at a local level - aligning Healthy Baw Baw Advisory Committee and Baw Shire Municipal Public Health and with the Local Government Municipal Public continues to participate in the Public Health Wellbeing Plan and align the West Gippsland Health and Wellbeing plan and working with and Wellbeing plan. The WGHG Health Healthcare Group Integrated Health other local agencies and Primary Health Promotion activities are aligned with the Promotion activities to the plan. Networks. plan. WGHG is a partner in the Municipal Public Focus on primary prevention, including Develop health promotion and prevention Health Plan and Wellbeing Plan in Baw Baw suicide prevention activities, and aim to activities in conjunction with regional primary Shire. impact on large numbers of people in the health provider and interested stakeholders, The target areas are initiatives that build places where they spend their time adopting with the aim of tackling the multiple risk a healthy, accessible food system and to a place based, whole of population approach factors of poor health through a whole increase physical activity through the Heart to tackle the multiple risk factors of poor of population approach and consistent Foundation walking groups and the Schools health. communication themes. Achievement program. Community Health staff attend Ramahyuck District Aboriginal Corporation to deliver services. In partnership with local Aboriginal Director of Allied & Community Health chairs communities, identify opportunities to deliver the Aboriginal Employment plan meeting in Supporting Develop and implement strategies culturally sensitive services. partnership with the elders and community healthy that encourage cultural diversity such members. Aboriginal health gap analysis was populations as partnering with culturally diverse completed with local elders and an action communities, reflecting the diversity of your plan developed from the analysis. community in the organisational governance, A Commonwealth Home Support Program and having culturally sensitive, safe and Develop and implement the identified working group has been established and inclusive practices. strategies in the West Gippsland Healthcare monitors the Diversity Plan as well as use of Group Home and Community Care and interpreters and access to written materials Commonwealth Home Support Program in other languages. An extension of the Diversity Plan to improve access to services cultural awareness education package to by culturally diverse community members. focus on the CALD community is under development. Phase 2 of the Reconnect project has Complete Phase 2 of Reconnect project to been implemented and referral pathways Improve the health outcomes of Aboriginal implement strategies to increase access to for Aboriginal patients (in patients and and Torres Strait Islander people by West Gippsland Healthcare Group services to outpatients) are in place and completed by establishing culturally safe practices which the Aboriginal community. the Aboriginal Health Liaison Officer. This recognise and respect their cultural identities has improved access to services. and safely meets their needs, expectations Provide “Be Deadly, Get Healthy” outreach and rights. exercise program to Aboriginal community to Program delivered and continues to be well provide an environment to encourage healthy attended by the local community. lifestyles.

10 Domain Action Deliverables Outcomes Drive improvements to Victoria’s mental health system through focus and engagement in activity delivering on the 10 Contribute at local and state-wide level WGHG continues to participate and has 2 Year Plan for Mental Health and active input through Primary Health Network clinical members on the Primary Health Network into consultations on the Design, Service council and stakeholder consultations. Clinical Counsel. Supporting and Infrastructure Plan for Victoria’s Clinical healthy mental health system. populations Using the Government’s Rainbow eQuality Guide, identify and adopt ‘actions for Rainbow eQuality Gap analysis was Undertake a gap analysis against the inclusive practices’ and be more responsive completed in July. Action plan developed Rainbow eQuality Guide and develop to the health and wellbeing of lesbian, from analysis and policies under strategies to address any identified gaps. gay, bisexual, transgender and intersex development. individuals and communities. Demonstrate implementation of the Victorian Review Q-Dash (Key Performance Q-Dash report has been reviewed and Clinical Governance Policy Framework: Indicator dashboard) ensuring appropriate Clinical Governance will continue to refine Governance for the provision of safe, benchmarks and data targeted to and review KPIs and report structure. quality healthcare at each level of the appropriate level (Board Clinical governance External benchmark reports are utilised organisation, with clearly documented versus Executive & Department) by June where available. Internal KPIs are compared and understood roles and responsibilities. 2017. to a relevant benchmark if available. Ensure effective integrated systems, processes and leadership are in place to support the provision of safe, quality, accountable and person centred healthcare. e-Credentialing has been installed and It is an expectation that health services Implement software to support implemented. e-Recruitment module implement to best meet their employees’ e-Credentialing and e-Recruitment by implementation remains a work in progress and community’s needs, and that clinical February 2017. governance arrangements undergo at 30 June 2017. frequent and formal review, evaluation and amendment to drive continuous improvement. Governance Transition plan has been developed for and Contribute to the development and Develop a transition plan in partnership the West Gippsland Baw Baw Strategic leadership implementation of Local Region Action with the Department of Health and Human Services Plan. Significant progress has Plans under the series of state-wide Services and neighbouring health services been achieved in a number of key areas design, service and infrastructure plans commence implementation of the West (eg. successful short stay and 3rd theatre being progressively released from 2016 Gippsland Baw Baw Strategic Service Plan submission; increasing partnership and 17. Development of Local Region Action recommendations. surgical capacity with Neerim District Health Plans will require partnerships and active Service). collaboration across regions to ensure plans WGHG is an active participant in the meet both regional and local service needs, Actively participate in and implement the Gippsland Maternity Plan working party and as articulated in the state-wide design, outcomes of the Gippsland Maternity Plan has implemented a number of the outcomes service and infrastructure plans. Implementation Working Party. (eg. endorsed the Body Mass Index policy). Ensure that an anti-bullying and harassment Review of Bullying and Harassment Policy policy exists and includes the identification against stated requirements by February The policy has been reviewed and an action of appropriate behaviour, internal and 2017. Implement any identified gaps in plan developed to address the gaps. external support mechanisms for staff and existing policy by April 2017. a clear process for reporting, investigation, feedback, consequence and appeal and the Employee Assistance Program awareness to The promotion of the Employee Assistance policy specifies a regular review schedule. be ongoing. Program is ongoing.

West Gippsland Healthcare Group Annual Report 2017 11 Part A: Strategic Priorities

Domain Action Deliverables Outcomes Ensure progress against implementation plan OHS Safety Management System approved Board and senior management ensure that for actions from the Occupational Health and by Audit & Risk Committee and progress an organisational wide occupational health Safety Management Plan is reported to the is reviewed and overseen by the OHS and safety risk management approach Audit and Risk Committee quarterly. Committee. is in place which includes: (1) A focus Occupational Health and Safety Key Occupational Health and Safety KPI’s are on prevention and the strategies used to Performance Indictors to be monitored and monitored by the Audit & Risk Committee manage risks, including the regular review reported to Board. and Board monthly. of these controls; (2) Strategies to improve reporting of occupational health and safety Designated work areas have been risk incidents, risks and controls, with a particular assessed to determine frequency of safety focus on prevention of occupational violence inspections. Smart lift policy was updated in Oct 2016 with co-ordinator training and bullying and harassment, throughout all Preventative training targeted for delivered. Training on assessing and levels of the organisation, including to the Occupational Health and Safety hot spots, controlling hazardous manual handling risks board; and (3) Mechanisms for consulting for example manual handling and falls, to be has been provided to relevant Managers. with, debriefing and communicating with all delivered by June 2017. staff regarding outcomes of investigations A system for mapping and targeting and controls following occupational violence Occupational Health and Safety hot spots and bullying and harassment incidents. at the Warragul Linen Service has been developed and implemented. Implement and monitor workforce plans that: improve industrial relations; promote a learning culture; align with the Best Practice Education restructure almost completed Clinical Learning Environment Framework; Implement actions scheduled for 2016 from resulting to an organisation wide approach promote effective succession planning; the West Gippsland Healthcare Group People to Learning & Development. Staff culture increase employment opportunities for and Culture Plan 2016-2019 including program commenced and Acceptable Aboriginal and Torres Strait Islander people; staff learning program, e-recruitment and behaviours brochure developed. Governance ensure the workforce is appropriately e-credentialing. e-credentialing has been implemented but and qualified and skilled; and support the e-learning program has not commenced. leadership delivery of high-quality and safe person centred care. Create a workforce culture that: (1) includes staff in decision making; (2) promotes and Utilise results from 2016 People Matters Engaged Studer Group and launched “LEAD” supports open communication, raising Survey to develop appropriate responses program to drive organisational culture and concerns and respectful behaviour across all to address identified opportunities for respond to opportunities for improvement levels of the organisation; and (3) includes improvement. identified in People Matters results. consumers and the community. Ensure that the Victorian Child Safe Standards are embedded in everyday thinking and practice to better protect children from abuse, which includes the implementation of: strategies to embed an organisational culture of child Develop a training package by December Training package developed and delivered to safety; a child safe policy or statement 2016 to be delivered to all high priority staff key areas. Child and Family Violence Project of commitment to child safety; a code of June 2017. Manager recruited. conduct that establishes clear expectations This training will be delivered using Child Wise engaged to perform a gap for appropriate behaviour with children; a multifaceted approach with formal analysis and assist with implementation screening, supervision, training and other presentation, online content and group strategies to ensure compliance with Child human resources practices that reduce the format. Safe Standards. 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.

12 Domain Action Deliverables Outcomes Review of all current staff health policies by Implement policies and procedures to All staff health policies have been reviewed. ensure patient facing staff have access to June 2017. Governance vaccination programs and are appropriately Implement process to ensure mandatory and Processes to collect vaccination status for vaccinated and/or immunised to protect staff vaccination status is collected and leadership new employees have been implemented, and prevent the transmission of infection to documented on commencement of with 63% compliance demonstrated. susceptible patients or people in their care. employment at the health service. Continue progress on achieving the Further enhance cash management three year Financial Improvement Plan to Year 2 of the three year plan is ahead of strategies to improve cash sustainability and actively manage expenditure growth to target, with a forecast operating profit of meet financial obligations as they are due. ensure all service streams to be financially approximately $1.2m expected. independent. Actively contribute to the implementation of the Victorian Government’s policy to be net zero carbon by 2050 and improve Financial environmental sustainability by identifying sustainability and implementing projects, including Ensure Energy Performance Contract Energy savings are being achieved against workforce education, to reduce material reductions in greenhouse gas emissions and baseline of 30% electricity and 15% gas. environmental impacts with particular usage are being achieved through the annual Energy provider has issued the 2017 consideration of procurement and waste measurement and verification process. measurement and verification report. management, and publicly reporting environmental performance data, including measureable targets related to reduction of clinical, sharps and landfill waste, water and energy use and improved recycling.

West Gippsland Healthcare Group Annual Report 2017 13 Part B: Performance priorities

Quality and Safety

Key performance indicator Target 2016-17 Result Compliance with NSQHS Standards accreditation Full compliance Full compliance Compliance with the Commonwealth’s Aged Care Accreditation Standards Full compliance Full compliance Overall Compliance with cleaning standards Full compliance Full compliance Very high risk (category A) Full compliance Full compliance High risk (category B) Full compliance Full compliance Moderate risk (category C) Full compliance Full compliance Submission of infection surveillance data to VICNISS1 Full compliance Full compliance Compliance with the Hand Hygiene Australia program 80% 83.5% Percentage of healthcare workers immunized for influenza 75% 78.5%

Patient experience and outcomes performance

Key performance indicator Target 2016-17 Result Victorian Healthcare Experience Survey - data submission Full compliance Achieved Victorian Healthcare Experience Survey - patient experience Quarter 1 95% positive experience 96% Victorian Healthcare Experience Survey - patient experience Quarter 2 95% positive experience 96% Victorian Healthcare Experience Survey - patient experience Quarter 3 95% positive experience 93% Victorian Healthcare Experience Survey - discharge care Quarter 1 75% very positive experience 76% Victorian Healthcare Experience Survey - discharge care Quarter 2 75% very positive experience 76% Victorian Healthcare Experience Survey - discharge care Quarter 3 75% very positive experience 77% Maternity and Newborn 2 Maternity - Percentage of women with prearranged postnatal home care 100% 99% Rate of singleton term infants without birth anomalies with APGAR Score <7 to 5 ≤1.6% 0.9% Rate of severe foetal growth restriction in singelton pregnancy undelivered by 40 weeks ≤28.6% 28.6% Continuing care Functional independence gain from admission to discharge, relative to length of stay ≥0.39 (GEM) 0.63

1VICNISS is the Victorian Hospital Acquired Infection Surveillance System 2Perinatal Service Performance Indicator (PSPI) reports should be consulted for a description on the utility and business rules for these indicators. Note that data for 2016 and 2017 is provisional

Governance and leadership

Key performance indicator Target 2016-17 Result People Matter Survey - % of staff with a positive response to safety culture questions 80% 87.4%

14 Access and timeliness

Key performance indicator Target 2016-17 Result Emergency care Percentage of ambulance patients transferred within 40 minutes 90% 93% Percentage of Triage Category 1 emergency patients seen immediately 100% 100% Percentage of Triage Category 1 to 5 emergency patients seen within clinically recommended times 80% 75% Percentage of emergency patients with a length of stay less than four hours 81% 69% Number of patients with a length of stay in the emergency department greater than 24 hours 0 78 Elective surgery Percentage of Urgency Category 1 elective patients removed within 30 days 100% 100% Percentage of Urgency Category 1, 2 and 3 elective patients admitted within clinically recommended timeframes 94% 91% 20% longest waiting Category 2 and 3 removals from the elective surgery waiting list 100% 100% Number of patients on the elective surgery waiting list3 445 338 Number of hospital initiated postponements per 100 scheduled admissions ≤8 7.9 Number of patients admitted from the elective surgery waiting list- annual total 2,640 2,641 Specialist Clinics Percentage of urgent patients referred by a GP or external specialist who attended a first appointment within 30 days. 100% 86.4% Percentage of routine patients referred by a GP or external specialist who attended a first appointment within 365 days. 90% 98.1%

Financial sustainability

Key performance indicator Target 2016-17 Result Finance Operating result ($m) 0.75 1.21 Trade creditors < 60 days 52 days Patient fee debtors < 60 days 28 days Public & private WIES4 performance to target 100% 100.6% Adjusted current asset ratio 0.7 1.13 Number of days with available cash 14 days 51.5 days Asset management Basic asset management plan Full compliance Full compliance

3 The target shown is the number of patients on the elective surgery waiting list as at 30 June 2017 4 WIES is a Weighted Inlier Equivalent Separation

West Gippsland Healthcare Group Annual Report 2017 15 Part C: Activity and funding

Acute Admitted Actual Target Variance WIES Public 9,045 8,600 445 WIES Private 432 791 -359 WIES Public & Private 9,477 9,391 86 WIES DVA 169 129 40 WIES TAC 20 26 -6 WIES TOTAL 9,666 9,546 120

Acute Non-Admitted Home Enteral Nutrition 110 73 37

Subacute Admitted GEM Public & Private WIES 105 101 4 Palliative Care Public & Private WIES 38 49 -11 Subacute Public & Private 143 150 -7 GEM & Palliative Care DVA WIES 6 20 -14 Subacute Admitted TOTAL 149 170 -21

Subacute Non-Admitted Health Independence Program 18,136 16,848 1,288

Aged Care Residential Aged Care 37,066 38,691 -1,625 HACC 6,573 4,991 1,582

Primary Health Community Health / Primary Care Programs 6,844 6,401 443

16 West Gippsland Healthcare Group Annual Report 2017 17 2016/17 Environmental Performance Summary

Energy consumption

Total energy consumption by energy type (GJ) 2014-15 2015-16 2016-17 Electricity 14,438 12,397 11,276 Natural gas and LPG 82,865 79,763 74,956 Other energy types (e.g. steam, diesel) - - - Total 97,303 92,160 86,232

Energy consumption relates to the main hospital site only and includes the Linen Service and Cooinda Aged Care Facility.

Total energy consumption has decreased a further 6.4% for the 2016-17 financial year. This blended rate comprises a 9% reduction in electricity consumption and a 6% reduction in gas for the year. The reduction in consumption follows a full year of operational savings following the $5.8m completion of major energy and infrastructure asset replacements under the Energy Performance Contract (EPC) in May 2016.

Normalised energy consumption 2014-15 2015-16 2016-17 Energy per unit of floor space (GJ/m2) 5.00 4.74 4.43 Energy per unit of activity (GJ/activity) 2.26 2.24 1.92

Activity measure denominator is acute inpatient bed days plus Cooinda Residential Aged Care bed days.

Energy Intensity continues to decrease due to new energy efficient assets commissioned under the EPC Project in May 2016.

Greenhouse gas emissions

Total greenhouse gas emissions (tonnes CO2e) 2014-15 2015-16 2016-17 Scope 1 - Direct Emissions n/a n/a n/a Scope 2 - Indirect Emissions 9,104 8,259 7,635 Total 9,104 8,259 7,635

Normalised greenhouse gas emissions 2014-15 2015-16 2016-17 Emissions per unit of floor space (kgCO2e/m2) 0.47 0.42 0.39 Emissions per unit of activity (kgCO2e/activity) 0.21 0.20 0.17

18 Water consumption

Total water consumption by type (kL) 2014-15 2015-16 2016-17 Potable water 30,899 31,420 31,411 Re-used / recycled water n/a n/a n/a Total 30,899 31,420 31,411

Water usage has remained at the same level as last year despite increased patient activity including within theatre/CSSD (large users). NB Warragul Linen Service usage is excluded.

Normalised water consumption 2014-15 2015-16 2016-17 Water per unit of floor space (kL/m2) 1.59 1.62 1.61 Water per unit of activity (kL/activity) 0.72 0.76 0.70

Activity measure denominator is acute inpatient bed days plus Cooinda Residential Aged Care bed days.

Water consumption per bed day has improved due to usage being at the same level as last year despite an extra 3,828 occupied bed days for 2016-17.

Water re-use and cycling 2014-15 2015-16 2016-17 Re-use / recycling rate (percentage) n/a n/a n/a

Waste generation

Total waste generation by type (Tonnes) 2014-15 2015-16 2016-17 Clinical waste 15.6 16.4 16.0 General waste 142.9 175.8 174.4 Recycled waste 47.4 58.7 51.8 Total 235.2 250.9 242.2

Waste data is as provided by the respective contractor and refers to all sites for general and recycled and the main hospital for clinical waste.

Waste consumption overall reduced by 8.7 tonnes or 3.5% which included a 2.3% reduction in clinical waste.

Recycling rates continue to be an improvement opportunity area. Waste fill diversion rates declined 8.5% to 22.9% (refer waste recycling data below). NB: 2014-15 and 2015-16 waste data by type previously reported has been corrected, including recycling data in 2014-15 revised from 69.3 to 40.1, due to incorrect inclusion of grease trap waste in the contractors reporting data from March to June.

Normalised waste generation 2014-15 2015-16 2016-17 Waste per activity (kg/activity) 5.47 6.09 5.38

Activity measure denominator is acute inpatient bed days plus Cooinda (Aged Care) bed days.

Waste recycling 2014-15 2015-16 2016-17 Waste recycling rate (percentage) 34.9% 25.0% 22.9%

West Gippsland Healthcare Group Annual Report 2017 19 Key Performance Indicators

5 Year Financial Comparison

2017 2016 2015 2014 2013 $000 $000 $000 $000 $000 Total Revenue 101,515 94,102 90,008 86,749 81,109 Total Expenditure 100,301 93,771 91,293 86,687 81,528 Operating Result 1,214 331 (1,285) 62 (419) Net Capital & Specific Items (206) (4,500) (4,743) (3,634) (1,950) Other Operating Flows included in the net result 91 - - - - Net Result for the year 1,099 (4,169) (6,028) (3,572) (2,369)

Total Assets 101,417 94,571 95,929 98,118 81,714 Total Liabilities 34,212 30,354 28,033 24,253 22,707 Net Assets 67,205 64,217 67,896 73,865 59,007 Total Equity 67,205 64,217 67,896 73,865 59,007

5 Year WIES Comparison

10,000

9666 9500 9546

9000 8997 8824 8500 8397 8000 8147 8172 7991 7500 7282 7000 7072

6500

6000 2012/13 2013/14 2014/15 2015/16 2016/17

Target WIES Actual WIES

20 Inpatient Debtors (Aged) Outstanding as at 30 June 2017

Under 31 - 60 61 - 90 Over 90 Total Total 30 Days days days days 2017 2016 Private Inpatient Fees 21,876 22,290 317 27,019 71,502 131,520 Ineligible 15,000 - 1,138 662 16,800 2,770 Workcover - - 6,571 132 6,703 15,263 Total Inpatient Fees 36,876 22,290 8,026 27,813 95,005 149,553

Nursing Home 46,419 4,687 1,791 11,631 64,527 72,830 Hostel 28,293 3,265 - 2,536 34,094 109,458 Total Aged Care 74,711 7,951 1,791 14,167 98,621 182,288

Total 111,587 30,241 9,818 41,980 193,626 271,823

Separations by Top 10 Diagnostic Related Group 2016/2017

9 10 8 1 Renal Dialysis 2,012 7 2 Neonatal 732 6 3 Vaginal Delivery 635

5 4 OR Procedures for 1 Diabetic Complications 532 5 Chemotherapy 351 6 Lens Procedures 189 4 7 Respiratory Infections / Inflammations 182 8 Red Blood Cell Disorders 169 9 Other Skin, Subcutaneous Tissue Procedures 168 3 10 Inflammatory Bowel Disease 139 2

West Gippsland Healthcare Group Annual Report 2017 21 Our Achievements

22 Financial Report

West Gippsland Healthcare Total expenditure before capital The comprehensive result for 2016- Group delivered a very and specific items increased 17 was an overall profit of $2.99m, strong financial result for the 6.96% to $100.3m, which included which included a revaluation gain 2016-17 financial year and unbudgeted extra resources in of $1.89m against the Group’s land has pleasingly exceeded its delivering the additional 200 WIES holdings. This managerial revaluation awarded mid-year. Employee undertaken at June 2017 was a financial targets in the first expenses increased 6.28%, which mandatory requirement under the two years of its three year included an additional 16.66 FTE Financial Reporting Directions due financial recovery plan. compared to 2015-16 or 2.35%, to more than a 10% cumulative During 2016-17, the Group built and higher wage costs due to the increase in the land indices since the on its sustained improvement in outcomes of enterprise bargaining June 2014 independent land and financial performance, recording agreements settled during 2016-17. buildings valuation. The Group received supplementary an operating profit before capital Cash reserves for the year nearly and specific items of $1.214m - an funding from DHHS of $0.553m towards these EBA costs. doubled, increasing $7.09m increase of $0.883m on 2015-16 to $14.53m. Cash flows from and $0.464m higher than the budget The net result for the year after operating activities were very strong, profit of $0.75m for 2016-17. The capital and specific items, increasing by $9.38m. This reflected strengthened result was largely depreciation and other economic additional funding from DHHS but attributable to continued growth flows was a profit of $1.09m. This was also inflated by the receipt of funding from DHHS, including compared to a loss of $4.17m $4.8m capital funding from DHHS an additional 200 Weighted Inlier in 2015-16. Contributing to this (the asset purchases of which will Equivalent Separation (WIES) net profit result for 2016-17 flow under investing activities in received in the second half of 2016- was additional capital funding future years). 17. The Group was able to achieve received from DHHS, most notably its full Public/ Private (PP) WIES $2.9m under the Regional Health The liquidity ratio for the Group target of 9,391 WIES for the year. Infrastructure Fund (RHIF Round improved on the back of positive cash flows to 0.89:1, up from 0.72:1 Total revenue from operations for the 1) for the Short Stay Unit and third theatre capital projects and in 2015-16 and above the DHHS year was $101.5m, up an impressive benchmark of 0.7:1. $7.4m or 7.88%. Government $0.276m to upgrade the main public grant revenue increased $7.99m to lift. The Group also recognised Net assets for the Group increased $80.81m of which State Funding $0.470m as specific income from its by $2.99m to $67.2m. from DHHS increased $5.36m or interest in the Gippsland Health IT The strong sustained financial 8.3% to $70m. This included an Alliance (GHA). This specific income performance positions the Group extra 739 PP WIES funding on represented WGHG’s share of DHHS well as it enters its final year of the 2015-16. funding received by GHA towards an Electronic Medical Records and 2016-2018 financial recovery plan. Community Health (EMRCH) project.

West Gippsland Healthcare Group Annual Report 2017 23 Director of Nursing & Midwifery

Report by Kathy Kinrade RN GradDipCCareN DipMgt MNurs

The Director of Nursing & Key achievements during 2016-17 • Completed a review of Education Midwifery is an extensive role, include: Services and implemented new overseeing a diverse range of whole of organisation model • Excellent results in treatment time review. services. Responsible for all for stroke patients requiring clot- Units in the Hospital, same dissolving medication • Introduction of Aseptic Non- day services such as dialysis Touch Technique (ANTT) training and oncology, home based • Participated in the state wide for all clinical staff ViCTOR project for the trial of an sub-acute services as well observation chart specifically for • Completion of a minor as two aged care residential the Special Care Nursery refurbishment project at Andrews facilities. House and replaced the call bell system

Refurbishment of Cooinda Lodge including establishing a hair dresser salon was completed during 2016-17

24 Director of Medical Services Director of

Report by Dr Gary Campain MBBS, FACEM, Grad Cert Management

The Director of Medical Key achievements during 2016-17 • Successfully recruited to increase Services and Emergency include: the number and range of specialist clinicians Medicine provides oversight •  Implemented Mercury of the junior and senior e-Credentialing system to • Tendered for urology to improve medical staff; provides manage medical workforce access and volume of service oversight of safety and quality processes and • Implemented a new Maternity Model of Care outcomes; provides high level advice on medical • Improved workflow and matters; assists in fostering monitoring within the Emergency optimal working relationships Department to improve access between medical staff and performance the Executive in achieving • Developed extra bed capacity in the common goal of high medical ward by engaging with quality patient care within a Neerim District Health Service to responsible financial reality. provide GEM beds

West Gippsland Healthcare Group Annual Report 2017 25 Director of Allied & Community Health

Report by Audra Fenton RN, GradDip MN, Grad Dip Bus Man, CMHN, MNurs (Mental health), ACMHN

The Director of Allied and Key achievements during 2016-17 • Winner of the Excellence in Community Health has a include: Women’s Health Award for Positive Pregnancy Program pivotal role in the delivery • enhanced service delivery model of community and hospital to address newly established • Expanded Geriatric Evaluation based services for West funding streams, Commonwealth and Management Service and Gippsland, advising on issues Home Support Program (CHSP) trialling nurse care coordination in related to primary, allied and and Program for Younger People Emergency Department community care services. Program (PYP) formerly known as HACC • Reviewed Aboriginal Employment The role also requires a continuing Plan and established a Steering development and involvement in • Transitioned to My Aged Care Committee strategic alliances and partnerships, (MAC), a newly established • Conducted Diversity Gap and community-based networks referral portal for clients over 65 Analysis to enhance service both within Baw Baw Shire and on a years age to access community- provision for Lesbian, Gay, regional and state-wide basis. based services Transgender, Bisexual and Allied & Community Health have • Expanded First Call (central Intersex (LGBTI) and Aboriginal faced the biggest changes to intake service) due to increasing and Torres Strait Islander (ATSI) service delivery and funding in more demand consumers than 30 years. Our achievements • Established Stay Active and • Achieved significant progress have involved significant service Independent (Occupational towards compliance with redesign and data collection projects Therapy) and Strong and Active Strengthening Hospital that have enabled us to transition (Physiotherapy) Groups to Responses to Family Violence smoothly to the new models. service aging clients – a growing (SHRFV) and Child Safe demographic in Baw Baw region Standards (CSS)

26 Director of Corporate Services

Report by Justin Walsh CPA BBus (Acct)/BBus (Bank&Fin)

The Director of Corporate • Secured funding for the following • Successfully tendered for Stage Services (DCS) oversees key capital projects: 2 Accommodation project to the business and corporate develop additional units on-site - $9.3m under the Regional on Sargeant Street operations of the Group that Health Infrastructure Fund support the delivery of agreed (Round 1) for the construction • Installed a new CCTV system at outcomes. The position of an 8 bed short stay unit the hospital site and additional also provides financial and and third operating theatre on carpark LED lighting to improve procurement leadership as site. These two projects will security and help prevent the CFO and CPO (Chief commence in 2017-18 and are Occupational Violence and Procurement Officer) for the expected to be completed by Aggression (OVA) early 2019 Group. • Completed a security risk self- - Upgrade of the lift cage to assessment and achieved 90% Key achievements during 2016-17 the visitor lift. Works to be compliance rating against AS include: completed in 2017-18 4485.1&2. Actions arising from • Successfully tendered for the the audit findings will be a key • Replaced the WGHG core switch provision of Services. focus in 2017-18 and in doing so was able to A new contract with the successfully test the business • Maintained full compliance incumbent provider commenced continuity plans to ensure no with cleaning standards, food on 1 July 2017 providing for unexpected loss of critical safety standards and fire risk extended on site radiology services and implement a new management standards for coverage for patients and the ICT cable management strategy Victorian Health Services community

A new Learning and Development unit has been established to oversee and support education to all staff across the organisation

West Gippsland Healthcare Group Annual Report 2017 27 General Manager - Warragul Linen Service

Report by Alan Hollensen BEng(Hons) DipPracMgt

The General Manager of • Team engaged in LEAN • Implemented key capital Warragul Linen Service (WLS) manufacturing training with projects within plant to increase oversees all functions and all members graduating with capacity by 5 tonnes per week operations. WLS operates a qualification. The project for the same resource inputs, as a business unit of WGHG delivered a 15% capacity maintaining quality and improving increase in the towel finishing ergonomic outcomes for team. and is one of the largest linen area as well as significantly services in Victoria. improving ergonomic outcomes • Developed equipment register for team members. and auditing web portal and Key achievements during 2016-17 worked with key customers to include: • Leveraged LEAN project further develop cutting edge on- • Awar ded contracts for several outcomes to move another 8% line reporting processes and linen new aged care and health care of linen items from post-sort to tracking systems. groups and sites throughout pre-sort process; also improving ergonomics in work areas. • Completed senior management Gippsland and the metropolitan mentoring, leadership and area. Successfully extended • Identified multiple Occupational engagement program and contracts for numerous existing Health and Safety projects and commenced second phase of customers. initiatives, investing capital and supervisory team mentoring, • Maintained Delivery in Full on training resources to lower risk leadership and engagement Time to customer wards at above and improve safety outcomes. program. 99%.

Quality certification was maintained due to achieving audit compliance with ISO 9001.

28 Corporate Governance

West Gippsland Healthcare Group Annual Report 2017 29 Ministers and Governance

The Hon. Jill Hennessy MP Governance by the Board is The Board establishes Working Minister for Health achieved through: Groups for appropriate projects on an ‘as needs’ basis. Minister for Ambulance Services • strategic planning • effective management of the Chief Executive Officer The Hon. Martin Foley MP Audit & Risk Committee • funding of service agreements members Minister for Housing, Disability and Ageing • local policy setting Duncan Smith (Treasurer /Chair) Minister for Mental Health • regular reviews of the Group’s by- Sally Stannard laws and strategic plans. Joanne Campbell The Board Directors met eleven Peter Marx The Hon. Jenny Mikakos MP times throughout the year and were Brian Davey Minister for Families and Children active members of various Board Heather Stacy (July - October 2016) Minister for Youth Affairs Sub-Committees, set up to assist in monitoring the Groups various operations. The functions of the Board of These Sub-Committees include: Directors as determined by the • Appointments Committee Health Services Act 1988 are: • Audit & Risk Committee • to oversee and manage the Group; and • Clinical Governance Committee • to ensure the services provided • Community Advisory Council by the Group comply with the • Credentialing Committee requirements of the Act and aims • Human Research Ethics of the Group. Committee • Remuneration & Board Performance Committee

30 Board of Directors

Jane Leslie BBus GAICD Company Director and Business Consultant Position: Chair Commenced as a Board Director in July 2012. Member of the Appointments Committee, Remuneration & Board Performance Committee, Community Advisory Council and Project Control Group – Feasibility & Masterplan Working Group. Board meetings attended 10 of 11.

Peter Kingwill BEng FGCLP FAICD Company Director Position: Vice Chair Commenced as a Board Director in 2002. Member of the Clinical Governance Committee, Remuneration & Board Performance, and Project Control Group (Accommodation). Board meetings attended 8 of 11.

Duncan Smith DipBus (ACCT) FCPA CTA AIMM CFP Accountant/Certified Financial Planner Position: Treasurer Commenced as a Board Director in June 1998. Member of the Audit & Risk Committee and the Remuneration & Board Performance Committee. Board meetings attended 11 of 11.

Brian Davey BA DipEd Management Consultant Position: Director Commenced as a Board Director in November 2005. Member of Audit & Risk Committee, Community Advisory Council and Project Control Group Feasibility & Masterplan Working Group. Board meetings attended 10 of 11.

West Gippsland Healthcare Group Annual Report 2017 31 Board of Directors

John Davine BComm LLB Solicitor Position: Director Commenced as a Board Director in 1998. Member of the Appointments Committee, Credentials Committee, Clinical Governance Committee and Community Advisory Council. Board meetings attended 10 of 11.

Joanne Campbell BEd GradDipBuss GradCertInstrDesign, MEd (Research), GAICD Instructional Design/Knowledge Management Consultant Position: Director Commenced as a Board Director in July 2009. Member of the Audit & Risk Committee, Clinical Governance Committee, Human Research Ethics Committee and Community Advisory Council. Board meetings attended 9 of 11.

Christine Holland FAICD HR and Career Consultant Position: Director Commenced as a Board Director in July 2014. Member of the Credentials Committee and Remuneration & Board Performance Committee. Board meetings attended 10 of 11.

Peter Marx AssocDipSurveying Assoc DipCartography Licensed Land Surveyor Position: Director Commenced as a Board Director in November 1996. Member of the Audit & Risk Committee, Appointments Committee and the Project Control (Accommodation) Working Group. Board meetings attended 10 of 11.

32 Board of Directors

John Monagle MB BS MSc FANZC FCHSM Anaesthetist. Director Medical Services Position: Director Commenced as a Board Director in August 2015. Member of the Appointments Committee, and Clinical Governance Committee. Board meetings attended 8 of 11.

Gaye Britt MBA B AppSci Manager of Strategy & Communications Position: Director Commenced as Board Director in July 2016. Member of the Clinical Governance Committee. Board meetings attended 9 of 11.

Sally Stannard Company Principal Position: Director Commenced as Board Director in July 2016. Member of the Audit & Risk Committee and the Human Research Ethics Committee. Board meetings attended 7 of 11.

Heather Stacy Dip App Sci (Ag) MBA GAICD ARLP Company Director and Agribusiness Executive Position: Director Commenced as a Board Director in August 2015. Member of the Audit & Risk Committee, Board Performance & Remuneration Committee and the Project Control Group (Strategic Services Plan) Working Group. Board meetings attended 3 of 11. Heather resigned from the Board in December 2016.

West Gippsland Healthcare Group Annual Report 2017 33

CEO Executive Assistant BOARD OF DIRECTORS WEST GIPPSLAND HEALTHCARE GROUP ORGANISATIONAL CHART AS AT JUNE 2017

Public Relations Chief Executive Officer Fundraising/Donation Organisational Chart

Director of Medical Services Director of Nursing & Midwifery Director of Allied & Community Health Director of Corporate Services General Manager - Warragul Linen Service

Executive Assistant DON&M CLINICAL SERVICES AGED CARE ALLIED & COMMUNITY HEALTH CORPORATE SERVICES WARRAGUL LINEN SERVICE RESIDENTIAL

PERFORMANCE IMPROVEMENT UNIT

EDUCATION- STAFF DEVELOPMENT UNIT BUSINESS SUPPORT

Medical Educator Nursing & Mi dwi fery Educators Administration Data & Business Analysis Medical Students EXECUTIVE ASSISTANT Customer services & Quality COOINDA Health Information Services Public Relations ADULT LODGE Reception Clerical Staff

Acute Medical Ward - Medical FINANCE SERVICES - GEM HEALTH IMPROVEMENT PROGRAM ANDREWS - Palliative Care HOUSE Senior Medical Staff - High Dependency Finance Interns/ HMOs & Registrars - Cardiology Salary Packaging Payroll - Infectious Diseases Community Rehabilitation Oncology Supply & Purchasing Services Centre Continuing Care Haemodialysis Diabetes Education Continuing & Complex Care Cognitive Dementia & Memory - HARP and RIR Service CORPORATE SERVICES HOSPITAL IN THE HOME PAC/GEM Continence Service

Information Technology PERIOPERATIVE SERVICES – SURGERY & ANAESTHETICS Engineering Services

ALLIED HEALTH Food Services ESAC / Pre-Admissions Environmental Services Senior Medical Staff Operating Theatre / Day Surgery Occupational Therapy Interns/ HMOs & Registrars Surgical Ward Physiotherapy SUPPORT SERVICES Stomal Therapist/Urology Nurse Speech Pathology

Blood Transfusion Nurse Dietetics Social Work OBSTETRICS & GYNAECOLOGY Human Resources PRIMARY HEALTH - Workcover / OH&S Senior Medical Staff Maternity/Gynaecology Ward Obstetrics & Gynaecology Community Health Know Your Midwife Unit Rural Allied Health Service GP Obstetrics Diabetes Education Domiciliary Midwifery Service Occupational Therapy HMOs & Registrars Counselling Breast Feeding Service Physiotherapy First Call Speech Pathology Health Promotion Team Dietetics PAEDIATRICS & SPECIAL CARE NURSERY Aboriginal Services Counselling Young Mums Group Podiatry Senior Medical Staff Special Care Nursery Community Health Nurse Advanced / Junior HMOs & Registrars Paediatric Unit

EMERGENCY SERVICES RAWSON COMMUNITY HEALTH CENTRE

Senior Medical Staff Nursing Intern/HMOs & Registrars

CLINICAL SUPPORT SERVICES

DIAGNOSTIC SERVICES Infection Control

Pathology Deputy Director of Nursing Radiology After Hours Hospital Coordinator Library Breast Care Support Nurse PHARMACY Ward Desk Clerks

Consulting Rooms

PRIMARY COMMUNITY CARE As at 30/06/2017 District Nursing

Our People Equivalent Full Time Staff

June Current Month June Year to Date Labour Category 2016 2017 2016 2017 Nursing Services 299.61 306.90 298.47 302.00 Hotel & Allied Services 217.50 214.28 215.63 217.80 Administration & Clerical 86.74 94.98 85.22 91.11 Medical Support Services 16.11 20.30 17.99 19.34 Hospital Medical Officers 35.48 34.63 34.57 33.83 Medical Officers 3.16 5.34 3.20 3.32 Ancillary Support 47.65 52.98 46.40 49.53 Sessional Clinicians 6.43 7.15 6.39 7.60 Total 712.68 736.56 707.87 724.53

All employees at WGHG are correctly classified in the above workforce data and are required to abide by the WGHG Code of Conduct and all WGHG policies under their employment agreement.

Occupational Health & Safety

West Gippsland Healthcare Within this last year we engaged employment. Performance indicators Group is firmly committed an external contractor to train introduced in the previous year show to providing a safe and staff in how to manage exposure an improvement on staff returning healthy workplace for to occupational violence and to their workplace without further staff, contractors, visitors, aggression (OVA) from patients injury and within shorter timeframes. and/or their family members, in a WGHG is pleased that staff are more patients and residents. We safe and supportive manner, not engaged with their rehabilitation and aim to ensure compliance only for the staff member but the noted a reduction in lost time per with all legislative standards patient/family member as well. This injury for the more serious injuries. and to ensure that hazards has resulted in better reporting of are identified and all risks incidents and a reduction in OVA WGHG has strengthened its controlled so far as is related injuries. WorkCover team through more trained staff to provide better liaison reasonably practicable. Within the last twelve months, the between WGHG and injured staff In 2016-17 key focus points of number of OHS related incidents per members. This included continued OH&S have remained the prevention 100 FTE has trended downwards by engagement of external consultants of incidents involving occupational 20% which includes better training to assist with return to work violence and aggression, the of staff in OH&S matters, with a opportunities and early intervention prevention of musculoskeletal vast majority of staff completing on initiatives to address minor injuries disorders and slips and falls as line and face to face Emergency to help prevent them from becoming highlighted in our Occupational Management training packages. larger. We have strengthened our Health and Safety Management WGHG continues to align prevention processes to make sure that WGHG System (OHSMS). WGHG has been and injury management programs is compliant with all WorkCover able to undertake audits in relation for the betterment of staff. obligations in line with best practice to these focus points and has to be an industry leader and to help WGHG strives to continually developed processes to help further reduce injuries to staff and lost time. improve the outcomes for staff that reduce incidents. are injured in the course of their

36 Our OH&S Committee continues to have strong involvement from its delegates who volunteer their time to look at and strengthen our OH&S policies and procedures ensuring that we strive towards maintaining best practice and a safe workplace.

OH&S Statistics 2014/15 2015/16 2016/17 No. of reported hazards/incidents for the year per 100 full-time equivalent staff members 23.6 24.3 12 No. of ‘lost time’ standard claims for the year per 100 full-time equivalent staff members 0.09 0.13 0.29 Average cost per claim for the year (including payments to date and an estimate of outstanding claim costs as advised by WorkSafe) $48,561 $18,273 $37,743

Occupational Violence Statistics 2016-17

1. Workcover accepted claims with an occupational violence cause per 100 FTE 0.14 2. Number of accepted Workcover claims with lost time injury with an occupational violence cause per 1,000,000 hours worked. 0.02 3. Number of occupational violence incidents reported 89 4. Number of occupational violence incidents reported per 100 FTE 12.28 5. Percentage of occupational violence incidents resulting in a staff injury, illness or condition 20%

Definitions: For the purposes of the above Incident – an event or circumstance Accepted Workcover claims – statistics the following definitions that could have resulted in, or did accepted Workcover claims that apply: result in, harm to an employee. were lodged in 2016-17. Incidents of all severity rating must Occupational violence - any be included. Code Grey reporting is Lost time – is defined as greater incident where an employee is not included, however, if an incident than one day. abused, threatened or assaulted in occurs during the course of a Injury, illness or condition – this circumstances arising out of, or in planned or unplanned Code Grey, the course of their employment. includes all reported harm as a result the incident must be included. of the incident, regardless of whether the employee required time off work or submitted a claim.

West Gippsland Healthcare Group Annual Report 2017 37 Service Awards

At the Annual General meeting the Board recognises staff who have achieved significant employment milestones. At the 2016 AGM, the following awards were presented: 40 Years 25 Years 15 Years Maria Kraszewskis Sue Aberdeen Di Gribic Jeanette Heywood Mark Walkinshaw Jan Bennett Sharyn Lineham Dianne Hurst Patricia Blair April Morton Jane Law Anne Boyle Lynn Pallot Allan Lennard 35 Years Irene Hoskins Kate Palmer Sheridan Lovelock Judith Darcy Anne Johnson Nicole Van Hoof Patricia Lyons Fiona O’Brien Joanne Mifsud Maria Attwell Julie McLeod Lyndal Sandy Jillian Cooper Janet McPhie Rhonda Crellin Brenda Morrison 30 Years Garry Crowley Margaret Nicol 20 Years Troy Dobson Maxwell Pugliese Robyn Bennett Robyn Barr Nareena Dunkley Debra Sim Lynne Bowman Beverlie Elliot Benita Tayler Cat Duncanson Suzanne Candappa Suzanne Allen Dona Grantham Alicia Teague Shirley Gleeson Helen Harris Suzanne Hatfield Melissa Baker Christine Hogan Kerri Duncan Bev Hogan Lillian Gaffney Jenny Winterton Carolyn Little Katrina Davis Nicole O’Brien Cheryl Morrison Susan Olsen Rhonda Russell

WGHG Staff presented with Long Service Award Certificates and Badges at the AGM in November 2016.

38 Medical Staff Awards

In 2016, the Board introduced a new award for Medical Staff that have achieved 20 years of service. This includes medical staff employed at WGHG and the many who visit and provide services to the community as contractors. At the 2016 AGM, service awards were presented to:

Dr James Brown Dr Mort Fitzgerald Dr Harold McLennan Dr Geoff Campbell Dr Brett Forge Dr Ian Brooker Dr Roberto Celada Mr David Merenstein Mr George Owen Dr Robert Crameri Dr Mark Rayner Mr Malcolm Thomas Dr Charlie Hamilton Dr Trish Kerbi Mr Philip Harris Prof John Hutson Dr Lindsay Bishop Dr Malcolm McKelvie

West Gippsland Healthcare Group Annual Report 2017 39 Life Governor Awards

Each year, the Board of Directors consider people who are worthy recipients for a Life Governorship Award. The criterion is stringent and reflects first and foremost meritorious service, with a secondary length of service requirement. Three Life Governor awards were Joe Oppedisano was the inaugural Dr Harold McLennan provided issued at the 2016 AGM: IT Manager, serving 27 years until Obstetrics & Gynaecology services retirement in 2016. Joe provided at WGHG for over twenty-seven Roma Rippon has worked as outstanding service to WGHG and years and for many of those years a volunteer with WGHG for over never hesitated to respond to calls he provided the backbone of the thirty years in numerous roles from after hours to help staff in a crisis service and on-call. He has assisted landscaping gardens to more in the training of medical students. recently working as a palliative care Many followed him into a career volunteer. She has been a tireless in Obstetrics & Gynaecology or as supporter of WGHG. General Practitioner Obstetricians.

From left: Joe Oppedisano and Roma Rippon were presented with Life Governor Awards. Dr Harold McLennan was absent.

40 Volunteer Recognition of Service Awards

Volunteers and Auxiliary The following volunteers were Sharmaine Pierson members with 10 years or presented with an award at the 2016 Drouin Auxiliary Opp Shop more of volunteer service Annual General Meeting: Joyce Aitken to WGHG are recognised Sue Murphy Drouin Auxiliary Opp Shop under the award category Trafalgar & Community District Opp Mary Aitken of Volunteer Recognition of Shop Drouin Auxiliary Opp Shop Service Award. Beryl Olsson Joan Naylor Drouin Auxiliary Opp Shop Drouin Auxiliary Opp Shop

Our Generous Community

WGHG is fortunate to receive generous support from the community. During 2016-17, WGHG received an impressive $719,250 through donations, fundraising activities, events and bequests. We acknowledge each member and group within our community who contributed financially to WGHG during the year. First Annual Equipment Appeal • Hallora Hall Committee WGHG gratefully acknowledges • Mobile Book Trolley Service the support received through Trusts During 2016-17 we ran our first and Bequests in particular the • Palliative Care Service Annual Equipment Appeal to ongoing generous support of the support our hospital and aged care • Past Nursing Graduates Archive Andrews Foundation, Pethard Tarax residences. The campaign was a Department Charitable Trust, William Joseph first for WGHG where specific pieces • Rawson Auxiliary Payne Trust, Charles Haworth Trust of equipment needed were identified • Trafalgar & District Community Estate, Una Alice Kemp Trust Estate and options provided for people to Opp Shop and many others who choose to donate to each item. The fundraiser donate to us privately. was well received by the community • The Board of Directors and exceeded its target raising $81,940 during May and June and attracting many new donors.

Our Dedicated Volunteers WGHG is fortunate to have a dedicated team of long serving volunteers who give their time freely to assist the Group to enhance programs and services that we provide. We are grateful to the following volunteer groups for their continued support: • Andrews House Volunteers • Community Rehabilitation Centre • Community Health Services • Community Advisory Council • Cooinda Lodge Volunteers • Drouin Auxiliary and Drouin Opp Shop

West Gippsland Healthcare Group Annual Report 2017 41 Reporting Requirements

Statement of fees and Victorian Industry National Competitive Policy charges Participation Policy It is Government policy that the West Gippsland Healthcare Group Disclosures costing policies of publicly funded charges fees in accordance with the West Gippsland Healthcare Group organisations should reflect any Department of Health and Human complies with the intent of the competitive advantage available to Services Victoria directives issued Victorian Government’s Industry the private sector. During 2016/17 all under Regulation 8 of the Hospital Participation Policy Act 2003 which competitive neutrality requirements and Charities (Fees) Regulations, requires, wherever possible, local were met. 1986 as amended. industry participation in supplies, Conformity & Building Freedom of Information taking into consideration the Maintenance principle of value for money and The Freedom of Information officer transparent tendering processes. All renovations to existing buildings is the Manager, Health Information conform to the Building Act 1993. Services, with final approval by Under the VIPP Act, WGHG is All existing buildings complied the Director of Medical Services. required to ensure tenderers with regulations in force at the Consumers wishing to access undergo a VIPP Assessment where time of construction. There are no documents may contact the required. orders to cease occupancy or to Freedom of Information Officer on 03 Contract name: Stage 2 Student undertake urgent works. All sites 5623 0611 and access details will and Staff Accommodation are subject to a Fire Safety Audit be provided. Value: $1.207M and Risk Assessment according to revised standards as directed by the During the 2016-17 year, 219 Status: under construction requests for information under Department of Health and Human the regulations of the Freedom of In May 2017, WGHG participated Services. Information Act 1982 were received. in a ‘VIPP Local Jobs First Buildings Assessment’ for the project meeting Access was granted in full to 204 Buildings certified for approval None applicants. VIPP criteria. The Industry Capability Network (ICN) found 85.4% of Local Constructions subject to Content has been proposed toward mandatory inspections None Full Access 204 (93%) the construction of the Stage 2 Certificate of final inspection None Partial Access 1 Student and Staff Accommodation. ICN deem a good level of local Maintenance Denied 0 content has been committed by the Notice for urgent rectification, Withdrawn 0 awarded builder and passed the attention or major assessment with a low risk rating. No Documents 14 expenditure were received None

Not yet finalised 3 All renovations to existing (Processed to be given full access but no Local content committed: 62% buildings comply with Regulations payment received) and standards including the Existing jobs to be retained: 32% TOTAL 219 Building Code of Australia None Existing apprenticeships Orders to cease occupancy None Total includes 21 police fax requests to be retained: 4% and 13 coroners. New apprenticeships to be created: 1% New local jobs to be created: 1% Status: under construction WGHG can confirm there are no international contracts undertaken. Three (3) contracts – Urology, Endoscopy and Radiology did not require a VIPP plan due to nil or limited contestibility. A VIPP Assessment was not performed for the said contracts.

42 Details of Information and Carers Recognition Act 2012 Safe Patient Care Act 2015 Communication Technology As a care support organisation, West West Gippsland Healthcare Group (ICT) Expenditure Gippsland Healthcare Group takes complies with the Safe Patient Care ICT expenditure represents an all practicable measures to ensure (Nurse to Patient and Midwife to entity’s costs in providing business- that its employees and agents have Patient Ratios) Act. The legislation enabling ICT services and consists an awareness and understanding of ensures the number of nurses and of the following cost elements: the care relationship principles. midwives per patient is preserved and protected. • Operating and capital The Carers Recognition Act 2012 expenditure (including includes principles relating to carers, During 2016-17, WGHG had no depreciation); the people being cared for, and the matters to report in relation to its care relationship to ensure they are obligations under section 40 of the • ICT services – internally and respected and recognised. Safe Patient Care Act 2015. externally sourced; West Gippsland Healthcare Group Financial Management • Cost in providing ICT services takes all practicable measures to (including personnel & facilities) The information requirements ensure that employees and agents across the organisation. listed in the Financial Management reflect the care relationship principles Act 1994 (the Act), the Standing Total ICT expenditure is made up in developing, providing or evaluating Directions of the Minister for Finance of Business as Usual (BAU) and support and assistance for persons under the Act (Section 4 Financial Non Business as usual (NBAU) in care relationships. Management Reporting) and expenditure: Protected Disclosure Act 2012 Financial Reporting Directions have a. Business As Usual (BAU) West Gippsland Healthcare Group been prepared and are available expenditure – includes all remaining complies with the Protected to the relevant Minister, Members ICT expenditure other than Non-BAU Disclosure Act 2012. There were of Parliament and the public upon ICT expenditure and typically relates no complaints made under the Act request. to ongoing activities to operate and against West Gippsland Healthcare maintain the current ICT capability. Group or its staff for 2016-17. b. Non-Business As Usual (Non- BAU) expenditure – is a subset of ICT expenditure that relates to extending or enhancing current ICT capabilities and are usually run as projects. The total ICT expenditure incurred during 2016-17 is $2.166m (excluding GST) with the details shown below. This includes WGHG’s annual membership contribution to core and non core services of the Gippsland Health ICT Alliance (GHA). Expenditure $’000 Business As Usual (BAU) ICT 2,028 Non-BAU ICT 138 Operational 46 Capital 92

West Gippsland Healthcare Group Annual Report 2017 43 Consultancies Disclosure

Over $10,000 In 2016-17, there were five consultancies where the total fees payable to the consultants were $10 000 or greater. The total expenditure incurred during 2016-17 in relation to these consultancies is $214,393 (excl. GST).

2016-17 Future Consultant Purpose of Consultancy Start date End date Expenditure Expenditure Inc.GST Inc.GST

P2 Group Workcover Management Jul-16 Ongoing 111,000

AECOM Aust P/L Engineering Consultant - Energy Oct-16 Oct-16 35,000 Nil Performance Contracting Project

Johnstaff Pty Ltd Project Manager (PM), Principal Architect Jun-17 TBC 14,000 750,000 (PM), Lyons (PA), (PA), Quantity Surveyor (QS), Building Altus Group (QS), Surveyor (BS) Consultant team (Regional BSA Building Health Infrastructure Fund Round 1) 8 Bed Surveyors (BS) Short stay and Theatre Development Projects

D'Accord Pty Ltd Counselling service - Employee Assist Jul-16 Ongoing 20,000 Program (EAP)

Provider Assist Cooinda Lodge Funding Review Dec-16 Dec-16 34,000 Nil

Details of consultancies under $10,000 In 2016-17, there were two consultancies where the total fees payable to the consultants were less than $10 000. The total expenditure incurred during 2016-17 in relation to these consultancies is $17,772 (excl. GST).

44 Additional Information available on request

Consistent with FRD 22H (Section (e) Details of any major external (j) General statement on industrial 6.19) the report of operations reviews carried out on the Health relations within the Health Service confirms that details in respect Service and details of time lost through of the items listed below have industrial accidents and disputes, been retained by West Gippsland (f) Details of major research which is not otherwise detailed in Healthcare Group and are available and development activities the report of operations to the relevant Ministers, Members undertaken by the Health Service of Parliament and the public on that are not otherwise covered (k) A list of major committees request (subject to the Freedom either in the report of operations sponsored by the Health Service, of Information requirements, if or in a document that contains the purposes of each committee applicable): the financial statements and and the extent to which those report of operations purposes have been achieved (a) Declarations of pecuniary interests completed by all (g) Details of overseas visits (l) Details of all consultancies relevant officers undertaken including a summary and contractors including of the objectives and outcomes consultants/contractors (b) Details of shares held by senior of each visit engaged, services provided, and officers as nominee or held expenditure committed for each beneficially (h) Details of major promotional, engagement public relations and marketing (c) Details of publications produced activities undertaken by the by the entity about itself, and Health Service to develop how these can be obtained community awareness of the Health Service and its services (d) Details of changes in prices, fees, charges, rates and levies (i) Details of assessments and charged by the Health Service measures undertaken to improve the occupational health and safety of employees

West Gippsland Healthcare Group Annual Report 2017 45 Attestations

Standing Direction 3.7.1- Risk Responsible Bodies Compliance with Health Management Framework and Declaration Purchasing Victoria (HPV) Processes Health Purchasing Policies In accordance with the Financial I, Dan Weeks certify that the West Management Act 1994, I am I, Dan Weeks, certify that the West Gippsland Healthcare Group pleased to present the Report of Gippsland Healthcare Group has put has complied with the Ministerial Operations for West Gippsland in place appropriate internal controls Standing Direction 3.7.1 – Risk Healthcare Group for the year and processes to ensure that it has Management Framework and ending 30 June 2017. complied with all requirements set Processes. The West Gippsland out in the HPV Health Purchasing Healthcare Group Audit Committee Policies including mandatory HPV verifies this. collective agreements as required by the Health Services Act 1988 (Vic) and has critically reviewed these controls and processes during the year.

Dan Weeks Jane Leslie Dan Weeks Chief Executive Officer Board Chair Chief Executive Officer Warragul Warragul Warragul 29 August 2017 29 August 2017 29 August 2017

46 Board members, accountable officer’s and chief finance and accounting officer’s declaration

West Gippsland Healthcare Group Annual Report 2017 47

Auditor’s As required by the Audit Act 1994, my responsibility is to express an opinion on the financial VAGOIndependent Auditor’s Report 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 To the Board of West Gippsland Healthcare Group 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 Opinion I have audited the financial report of West Gippsland Healthcare Group (the health service) accordance with the Australian Auditing Standards will always detect a material which comprises the: misstatement when it exists. Misstatements can arise from fraud or error and are  balance sheet as at 30 June 2017 considered material if, individually or in the aggregate, they could reasonably be expected  comprehensive operating statement for the year then ended to influence the economic decisions of users taken on the basis of this financial report.  statement of changes in equity for the year then ended As part of an audit in accordance with the Australian Auditing Standards, I exercise  cash flow statement for the year then ended professional judgement and maintain professional scepticism throughout the audit. I also:  notes to the financial statements, including a summary of significant accounting policies  identify and assess the risks of material misstatement of the financial report, whether  board member's, accountable officer's and chief finance & accounting officer's due to fraud or error, design and perform audit procedures responsive to those risks, declaration. 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 In my opinion the financial report presents fairly, in all material respects, the financial higher than for one resulting from error, as fraud may involve collusion, forgery, position of the health service as at 30 June 2017 and their financial performance and cash intentional omissions, misrepresentations, or the override of internal control. flows for the year then ended in accordance with the financial reporting requirements of  obtain an understanding of internal control relevant to the audit in order to design Part 7 of the Financial Management Act 1994 and applicable Australian Accounting audit procedures that are appropriate in the circumstances, but not for the purpose Standards. of expressing an opinion on the effectiveness of the health service’s internal control Basis for I have conducted my audit in accordance with the Audit Act 1994 which incorporates the  evaluate the appropriateness of accounting policies used and the reasonableness of Opinion Australian Auditing Standards. My responsibilities under the Act are further described in the accounting estimates and related disclosures made by the Board Auditor’s Responsibilities for the Audit of the Financial Report section of my report.  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 My independence is established by the Constitution Act 1975. My staff and I are uncertainty exists related to events or conditions that may cast significant doubt on independent of the health service in accordance with the ethical requirements of the the health service’s ability to continue as a going concern. If I conclude that a Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for material uncertainty exists, I am required to draw attention in my auditor’s report to Professional Accountants (the Code) that are relevant to my audit of the financial report in the related disclosures in the financial report or, if such disclosures are inadequate, Australia. My staff and I have also fulfilled our other ethical responsibilities in accordance to modify my opinion. My conclusions are based on the audit evidence obtained up with the Code. to the date of my auditor’s report. However, future events or conditions may cause I believe that the audit evidence I have obtained is sufficient and appropriate to provide a the health service to cease to continue as a going concern. basis for my opinion.  evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying Board’s The Board of the health service is responsible for the preparation and fair presentation of transactions and events in a manner that achieves fair presentation. 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 I communicate with the Board regarding, among other matters, the planned scope and financial to enable the preparation and fair presentation of a financial report that is free from timing of the audit and significant audit findings, including any significant deficiencies in report material misstatement, whether due to fraud or error. internal control that I identify during my audit. 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.

MELBOURNE Ron Mak 5 September 2017 as delegate for the Auditor-General of Victoria

2

Auditor’s As required by the Audit Act 1994, my responsibility is to express an opinion on the financial Independent Auditor’s Report VAGOresponsibilities 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 To the Board of West Gippsland Healthcare Group 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 Opinion I have audited the financial report of West Gippsland Healthcare Group (the health service) accordance with the Australian Auditing Standards will always detect a material which comprises the: misstatement when it exists. Misstatements can arise from fraud or error and are  balance sheet as at 30 June 2017 considered material if, individually or in the aggregate, they could reasonably be expected  comprehensive operating statement for the year then ended to influence the economic decisions of users taken on the basis of this financial report.  statement of changes in equity for the year then ended As part of an audit in accordance with the Australian Auditing Standards, I exercise  cash flow statement for the year then ended professional judgement and maintain professional scepticism throughout the audit. I also:  notes to the financial statements, including a summary of significant accounting policies  identify and assess the risks of material misstatement of the financial report, whether  board member's, accountable officer's and chief finance & accounting officer's due to fraud or error, design and perform audit procedures responsive to those risks, declaration. 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 In my opinion the financial report presents fairly, in all material respects, the financial higher than for one resulting from error, as fraud may involve collusion, forgery, position of the health service as at 30 June 2017 and their financial performance and cash intentional omissions, misrepresentations, or the override of internal control. flows for the year then ended in accordance with the financial reporting requirements of  obtain an understanding of internal control relevant to the audit in order to design Part 7 of the Financial Management Act 1994 and applicable Australian Accounting audit procedures that are appropriate in the circumstances, but not for the purpose Standards. of expressing an opinion on the effectiveness of the health service’s internal control Basis for I have conducted my audit in accordance with the Audit Act 1994 which incorporates the  evaluate the appropriateness of accounting policies used and the reasonableness of Opinion Australian Auditing Standards. My responsibilities under the Act are further described in the accounting estimates and related disclosures made by the Board Auditor’s Responsibilities for the Audit of the Financial Report section of my report.  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 My independence is established by the Constitution Act 1975. My staff and I are uncertainty exists related to events or conditions that may cast significant doubt on independent of the health service in accordance with the ethical requirements of the the health service’s ability to continue as a going concern. If I conclude that a Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for material uncertainty exists, I am required to draw attention in my auditor’s report to Professional Accountants (the Code) that are relevant to my audit of the financial report in the related disclosures in the financial report or, if such disclosures are inadequate, Australia. My staff and I have also fulfilled our other ethical responsibilities in accordance to modify my opinion. My conclusions are based on the audit evidence obtained up with the Code. to the date of my auditor’s report. However, future events or conditions may cause I believe that the audit evidence I have obtained is sufficient and appropriate to provide a the health service to cease to continue as a going concern. basis for my opinion.  evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying Board’s The Board of the health service is responsible for the preparation and fair presentation of transactions and events in a manner that achieves fair presentation. 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 I communicate with the Board regarding, among other matters, the planned scope and financial to enable the preparation and fair presentation of a financial report that is free from timing of the audit and significant audit findings, including any significant deficiencies in report material misstatement, whether due to fraud or error. internal control that I identify during my audit. 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.

MELBOURNE Ron Mak 5 September 2017 as delegate for the Auditor-General of Victoria

2 Financial Index West Gippsland Healthcare Group

Comprehensive Operating Statement For the financial year ended 30 June 2017 Notes Contents Note 2017 2016 Comprehensive Operating Statement 51 $'000 $'000 Balance Sheet 52 Revenue from operating activities 2.1 100,028 92,146 Statement of Changes in Equity 53 Revenue from non-operating activities 2.1 1,487 1,956 Cash Flow Statement 54 Employee expenses 3.1 (69,452) (65,345) Non salary labour costs 3.1 (6,384) (5,749) Notes to the financial statements 30 June 2017 Supplies and consumables 3.1 (15,119) (13,949) Other expenses 3.1 (9,346) (8,728) Note Contents Page Net result before capital and specific items 1,214 331 Note 1 Summary of significant accounting policies 56 Note 2 Funding delivery of our services 60 Capital purpose income 2.1 6,094 2,249 Note 2.1 Analysis of revenue by source 61 Specific Income 2.3 470 - Note 2.2 Assets received free of charge or for nominal consideration 65 Depreciation and Amortisation 4.4 (6,518) (6,391) Note 2.3 Specific income 65 Assets provided free of charge 2.2 5 - Note 3 The Cost of delivering services 66 Expenditure for Capital Purpose 3.1 (257) (406) Net Result after capital and specific items 1,008 (4,217) Note 3.1 Analysis of expenses by Source 67 Other economic flows included in net result Note 3.2 Analysis of expense and revenue by internally managed and restricted specific purpose funds 70 Net gain/(loss) on non-financial assets 2.1 180 (29) Note 3.3 Employee benefits in the balance sheet 71 Net gain/(loss) on financial instruments 2.1 - 77 Note 3.4 Superannuation 74 Revaluation of Long Service Leave (89) - Note 4 Key Assets to support service delivery 76 Total other economic flows included in net result 91 48 Note 4.1 Investments and other financial assets 77 NET RESULT FOR THE YEAR 1,099 (4,169) Note 4.2 Investments accounted for using the equity method 79 Note 4.3 Property, plant & equipment 80 Other comprehensive income Note 4.4 Depreciation and amortisation 91 Items that will not be reclassified to net result Note 5 Other assets and liabilities 92 Changes in physical asset revaluation surplus 8.1 1,889 - Note 5.1 Receivables 93 Total other comprehensive income 1,889 - Comprehensive result 2,988 (4,169) Note 5.2 Inventories 95 Note 5.3 Other liabilities 96 This Statement should be read in conjunction with the accompanying notes. Note 5.4 Non-financial physical assets classified as held for sale including disposal groups and directly associated liabilities 97 Note 5.5 Prepayments and other non-financial assets 98 Note 5.6 Payables 99 Note 6 How we finance our operations 100 Note 6.1 Borrowings 101 Note 6.2 Cash and cash equivalents 102 Note 6.3 Commitments for expenditure 103 Note 7 Risks, contingencies & valuation uncertainties 104 Note 7.1 Financial instruments 105 Note 7.2 Net gain/ (loss) on disposal of non-financial assets 114 Note 7.3 Contingent assets and contingent liabilities 115 Note 7.4 Fair value determination 115 Note 8 Other disclosures 116 Note 8.1 Equity 117 Note 8.2 Reconciliation of net result for the year to net cash inflow/(outflow) from operating activities 119 Note 8.3 Operating segments 120 Note 8.4 Responsible persons disclosures 122 Note 8.5 Executive officer disclosures 123 Note 8.6 Related parties 124 Note 8.7 Remuneration of auditors 125 Note 8.8: AASs issued that are not yet effective 126 Note 8.9: Events occurring after the balance sheet date 129 Note 8.11: Alternative presentation of comprehensive operating statement 130

50 ComprehensiveWest Gippsland Healthcare Operating Group Statement

For the financial year ended 30 June 2017 Comprehensive Operating Statement For the financial year ended 30 June 2017

Note 2017 2016 $'000 $'000

Revenue from operating activities 2.1 100,028 92,146 Revenue from non-operating activities 2.1 1,487 1,956 Employee expenses 3.1 (69,452) (65,345) Non salary labour costs 3.1 (6,384) (5,749) Supplies and consumables 3.1 (15,119) (13,949) Other expenses 3.1 (9,346) (8,728) Net result before capital and specific items 1,214 331

Capital purpose income 2.1 6,094 2,249 Specific Income 2.3 470 - Depreciation and Amortisation 4.4 (6,518) (6,391) Assets provided free of charge 2.2 5 - Expenditure for Capital Purpose 3.1 (257) (406) Net Result after capital and specific items 1,008 (4,217) Other economic flows included in net result Net gain/(loss) on non-financial assets 2.1 180 (29) Net gain/(loss) on financial instruments 2.1 - 77 Revaluation of Long Service Leave (89) - Total other economic flows included in net result 91 48 NET RESULT FOR THE YEAR 1,099 (4,169)

Other comprehensive income Items that will not be reclassified to net result Changes in physical asset revaluation surplus 8.1 1,889 - Total other comprehensive income 1,889 - Comprehensive result 2,988 (4,169)

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

West Gippsland Healthcare Group Annual Report 2017 51 BalanceWest Gippsland Sheet Healthcare Group AsBalance at 30 June Sheet 2017 As at 30 June 2017

Note 2017 2016 $'000 $'000 Current assets Cash and cash equivalents 6.2 13,030 7,435 Receivables 5.1 2,669 3,032 Investments and other financial assets 4.1 9,422 6,457 Inventories 5.2 201 208 Non-financial assets classified as held for sale 5.4 - 383 Prepayments and Other assets 5.5 438 316 Total current assets 25,760 17,831

Non-current assets Receivables 5.1 475 262 Property, plant & equipment 4.3 75,182 76,478 Total non-current assets 75,657 76,740 TOTAL ASSETS 101,417 94,571

Current liabilities Payables 5.6 5,153 4,730 Borrowings 6.1 629 629 Provisions 3.3 15,259 14,219 Other current liabilities 5.3 7,927 4,966 Total current liabilities 28,968 24,544

Non-current liabilities Borrowings 6.1 2,760 3,390 Provisions 3.3 2,484 2,420 Total non-current liabilities 5,244 5,810 TOTAL LIABILITIES 34,212 30,354 NET ASSETS 67,205 64,217

EQUITY Property, plant & equipment revaluation surplus 8.1a 47,786 45,897 Contributed capital 8.1b 32,522 32,522 Accumulated surpluses/(deficits) 8.1c (13,103) (14,202) TOTAL EQUITY 8.1c 67,205 64,217 Contingent assets and contingent liabilities 7.3 Commitments 6.3

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

52 West Gippsland Healthcare Group StatementStatement of Changes of Changes in Equity in Equity ForFor thethe financialfinancial yearyear endedended 3030 JuneJune 20172017

Property, Plant Contributions Accumulated Total & Equipment by Owners Surpluses/ Revaluation (Deficits) Surplus

Note $'000 $'000 $'000 $'000 Balance at 1 July 2015 45,897 32,522 (10,033) 68,386 Net result for the year - - (4,169) (4,169)

Balance at 30 June 2016 45,897 32,522 (14,202) 64,217

Net result for the year - - 1,099 1,099 Other comprehensive income for the year 8.1a 1,889 - - 1,889 Transfer to accumulated surplus 8.1a,8.1c - - -

Balance at 30 June 2017 47,786 32,522 (13,103) 67,205

This Statement should be read in conjunction with the accompanying notes

West Gippsland Healthcare Group Annual Report 2017 53 CashWest Gippsland Flow Statement Healthcare Group West Gippsland Healthcare Group ForCash the Flowfinancial Statement year ended 30 June 2017 Notes to the financial statements For the financial year ended 30 June 2017 30 June 2017

Note 2017 2016 Basis of Preparation $'000 $'000 CASH FLOWS FROM OPERATING ACTIVITIES These financial statements are presented in Australian dollars and the historical cost Operating grants from government 80,531 72,488 convention is used unless a different measurement basis is specifically disclosed in the note Capital grants from government 4,812 1,530 associated with the item measured on a different basis. Patient and resident fees received 4,228 2,852 Private practice fees received 688 699 The accrual basis of accounting has been applied in the preparation of these financial Donations and bequests received - (3) statements whereby assets, liabilities, equity, income and expenses are recognised in the GST received from/(paid to) ATO 1,128 - reporting period to which they relate, regardless of when cash is received or paid. Interest received 409 344 Other capital receipts 714 720 Other receipts 16,939 16,432 Consistent with the requirements of AASB 1004 Contributions (that is contributed capital Total receipts 109,449 95,062 and its repayment) are treated as equity transactions and, therefore, do not form part of the income and expenses of the West Gippsland Healthcare Group. Employee expenses paid (68,347) (63,069) Non salary labour costs (6,316) (5,678) Additions to net assets which have been designated as contributions by owners are Payments for supplies & consumables (25,408) (22,151) recognised as contributed capital. Other transfers that are in the nature of contributions to Other payments - - Total payments (100,071) (90,898) or distributions by owners have also been designated as contributions by owners.

NET CASH FLOW FROM/(USED IN) OPERATING ACTIVITIES Judgements, estimates and assumptions are required to be made about financial information 8.2 9,378 4,164 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 CASH FLOWS FROM INVESTING ACTIVITIES disclosed. Estimates and associated assumptions are based on professional judgements Purchase of investments - (1,500) derived from historical experience and various other factors that are believed to be Payments for non-financial assets (3,904) (7,734) reasonable under the circumstances. Actual results may differ from these estimates. Proceeds from sale of non-financial assets 752 84 Proceeds from sale of investments - 167 Revisions to accounting estimates are recognised in the period in which the estimate is Other - - revised and also future periods that are affected by the revision. Judgements and NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES assumptions made by management in applying the application of AASB that have significant (3,152) (8,983) effect on the financial statements and estimates are disclosed in the notes under the heading: 'Significant judgement or estimates'. CASH FLOWS FROM FINANCING ACTIVITIES Repayment of borrowings (630) (387) Repayment of finance leases - - Contributed capital from government - - NET CASH FLOW FROM/(USED IN) FINANCING ACTIVITIES (630) (387) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS HELD 5,596 (5,206) Cash and cash equivalents at beginning of financial year 7,434 12,641 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 6.2 13,030 7,435

This Statement should be read in conjunction with the accompanying notes

54 West Gippsland Healthcare Group Notes to the financial statements 30 June 2017

Basis of Preparation

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 West Gippsland Healthcare Group.

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.

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'.

West Gippsland Healthcare Group Annual Report 2017 55 West Gippsland Healthcare Group West Gippsland Healthcare Group Notes to the financial statements Notes to the financial statements 0 une 2017 30 June 2017

Note 1: Summary of significant accounting policies (c) Basis of accounting preparation and measurement

These annual financial statements represent the audited general purpose financial Accounting policies are selected and applied in a manner which ensures that the resulting statements for West Gippsland Healthcare Group (the Group) for the period ending 30 June financial information satisfies the concepts of relevance and reliabilit thereb ensuring 2017. The report provides users with information about the Group’s stewardship of that the substance of the underling transactions or other events is reported. resources entrusted to it. The accounting policies set out below have been applied in preparing the financial (a) Statement of compliance statements for the ear ended 0 une 2017 and the comparative information presented in these financial statements for the ear ended 0 une 201. These financial statements are general purpose financial statements which have been prepared in accordance with the Financial Management Act 1994 and applicable AASBs, The going concern basis was used to prepare the financial statements. which include interpretations issued by the Australian Accounting Standards Board (AASB). They are presented in a manner consistent with the requirements of AASB 101 Presentation These financial statements are presented in Australian dollars the functional and of Financial Statements. presentation currenc of the West Gippsland Healthcare Group. The financial statements also comply with relevant Financial Reporting Directions (FRDs) issued by the Department of Treasury & Finance, and relevant Standing Directions (SDs) The financial statements ecept for cash flow information have been prepared using the authorised by the Minister for Finance. accrual basis of accounting. nder the accrual basis items are recognised as assets The Group is a not-for profit entity and therefore applies the additional Aus paragraphs liabilities euit income or epenses when the satisf the definitions and recognition applicable to “not-for-profit” Health Services under the AASBs. criteria for those items that is the are recognised in the reporting period to which the relate regardless of when cash is received or paid. The annual financial statements were authorised for issue by the Board of West Gippsland Healthcare Group on 29th August 2017 The financial statements are prepared in accordance with the historical cost convention ecept for (b) Reporting entity • non-current physical assets, which subsequent to acquisition, are measured at a revalued The financial statements include all the controlled activities of the West Gippsland amount being their fair value at the date of the revaluation less an subseuent Healthcare Group. accumulated depreciation and subseuent impairment losses. evaluations are made and are re-assessed when new indices are published b the aluer General to ensure that the Its principal address is: carring amounts do not materiall differ from their fair values 41 Landsborough Street Warragul • available-for-sale investments which are measured at fair value with movements reflected Victoria 3820 in equity until the asset is derecognised (i.e. other comprehensive income – items that may be reclassified subseuent to net result. A description of the nature of West Gippsland Healthcare Group’s operations and its • the fair value of assets other than land is generally based on their depreciated principal activities is included in the report of operations, which does not form part of these replacement value. financial statements. udgements estimates and assumptions are reuired to be made about the carring amounts of assets and liabilities that are not readil apparent from other sources. The Objectives and funding estimates and associated assumptions are based on professional judgements derived from West Gippsland Healthcare Group’s overall objective is to improve the health and wellbeing historical eperience and various other factors that are believed to be reasonable under the of it's community, as well as improve the quality of life to Victorians. circumstances. Actual results ma differ from these estimates.

West Gippsland Healthcare Group is predominantly funded by accrual based grant funding udgements and assumptions made b management in the application of AASs that have for the provision of outputs. significant effects on the financial statements and estimates relate to • the fair value of land, buildings, infrastructure, plant and equipment (refer Note 4); • superannuation expense (refer Note 3.4); • actuarial assumptions for employee benefit provisions based on likely tenure of existing staff patterns of leave claims future salar movements and future discount rates efer ote .

56 West Gippsland Healthcare Group Notes to the financial statements 0 une 2017

(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 reliabilit thereb ensuring that the substance of the underling transactions or other events is reported.

The accounting policies set out below have been applied in preparing the financial statements for the ear ended 0 une 2017 and the comparative information presented in these financial statements for the ear ended 0 une 201.

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

These financial statements are presented in Australian dollars the functional and presentation currenc of the West Gippsland Healthcare Group.

The financial statements ecept for cash flow information have been prepared using the accrual basis of accounting. nder the accrual basis items are recognised as assets liabilities euit income or epenses when the satisf the definitions and recognition criteria for those items that is the are recognised in the reporting period to which the relate regardless of when cash is received or paid.

The financial statements are prepared in accordance with the historical cost convention ecept 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 an subseuent accumulated depreciation and subseuent impairment losses. evaluations are made and are re-assessed when new indices are published b the aluer General to ensure that the carring amounts do not materiall differ from their fair values

• available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised (i.e. other comprehensive income – items that may be reclassified subseuent to net result. • the fair value of assets other than land is generally based on their depreciated replacement value.

udgements estimates and assumptions are reuired to be made about the carring amounts of assets and liabilities that are not readil apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical eperience and various other factors that are believed to be reasonable under the circumstances. Actual results ma differ from these estimates.

udgements and assumptions made b management in the application of AASs that have significant effects on the financial statements and estimates relate to • the fair value of land, buildings, infrastructure, plant and equipment (refer Note 4); • superannuation expense (refer Note 3.4); • actuarial assumptions for employee benefit provisions based on likely tenure of existing staff patterns of leave claims future salar movements and future discount rates efer ote .

West Gippsland Healthcare Group Annual Report 2017 57 West Gippsland Healthcare Group West Gippsland Healthcare Group Notes to the financial statements Notes to the financial statements 3 une une

(d) Principles of consolidation Statement of changes in equity The statement of changes in euity presents reconciliations of each non-owner and owner Intersegment Transactions changes in euity from opening balance at the beginning of the reporting period to the ransactions between segments within the est ippsland ealthcare roup have been closing balance at the end of the reporting period. t also shows separately changes due to eliminated to reflect the extent of the est ippslands ealthcare roups operations as a amounts recognised in the comprehensive result and amounts recognised in other group. comprehensive income. Cash flow statement Jointly controlled assets or operations Cash flows are classified according to whether or not they arise from operating activities nterests in ointly controlled assets or operations are not consolidated by est ippsland investing activities or financing activities. This classification is consistent with reuirements ealthcare roup, but are accounted for in accordance with the policy outlined in Note 4. under AAS Statement of Cash Flows.

(e) Scope and presentation of financial statements For the cash flow statement presentation purposes cash and cash euivalents includes bank overdrafts which are included as current borrowings in the balance sheet. Fund Accounting he est ippsland ealthcare roup operates on a fund accounting basis and maintains Rounding three funds perating, pecific urpose and apital unds. he est ippsland ealthcare All amounts shown in the financial statements are epressed to the nearest unless Group’s Capital and Specific Purpose Funds include capital donations and receipts from fund- otherwise stated. raising activities conducted solely in respect of these funds.

Services Supported By Health Services Agreement and Services Supported By inor discrepancies in tables between totals and sum of components are due to rounding. Hospital and Community Initiatives lows of funds classified as ervices upported by ealth ervices greement () are activities undertaken at the behest of government and are substantially funded by the epartment of ealth and uman ervices, while flow of funds classified as ervices upported by ospital and ommunity nitiatives () are funded by the ealth ervices own activities or local initiatives andor the ommonwealth.

Residential Aged Care Service The Cooinda Lodge Nursing Home (on main site) and Andrew’s House (Trafalgar) are an integral part of the est ippsland ealthcare roup and shares its resources. n apportionment of land and buildings has been made based on floor space. he results of the two operations have been segregated based on actual revenue earned and expenditure incurred by each operation in Note .4 to the financial statements.

Presentation of comprehensive operating statement he comprehensive operating statement presents income and expense items separated by whether or not they arise from ordinary activities or ‘other economic flows included in the net result’. ‘Other economic flows’ are changes arising from market remeasurements. They include: • gains and losses from disposals of non-financial assets; • revaluations and impairments of non-financial physical and intangible assets; • remeasurement arising from defined benefit superannuation plans; and • fair value changes of financial instruments.

Balance sheet ssets and liabilities are categorised either as current or non-current (non-current being those assets or liabilities expected to be recoveredsettled more than months after reporting period), are disclosed in the notes where relevant.

58 West Gippsland Healthcare Group Notes to the financial statements une

Statement of changes in equity The statement of changes in euity presents reconciliations of each non-owner and owner changes in euity from opening balance at the beginning of the reporting period to the closing balance at the end of the reporting period. t also shows separately changes due to amounts recognised in the comprehensive result and amounts recognised in other comprehensive income.

Cash flow statement Cash flows are classified according to whether or not they arise from operating activities investing activities or financing activities. This classification is consistent with reuirements under AAS Statement of Cash Flows.

For the cash flow statement presentation purposes cash and cash euivalents includes bank overdrafts which are included as current borrowings in the balance sheet.

Rounding All amounts shown in the financial statements are epressed to the nearest unless otherwise stated.

inor discrepancies in tables between totals and sum of components are due to rounding.

West Gippsland Healthcare Group Annual Report 2017 59 West Gippsland Healthcare Group Notes to the financial statements une

Note 2: Funding Delivery of our services

The Group’s overall objective is to deliver programs and services that support and enhance the wellbeing of all ictorians.

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

Structure . Analysis of revenue by source . Assets received free of charge or for nominal consideration . Specific ncome

60

1,487 6,094

Total 2017 $'000 100,028 108,259

une

4,826

2017

Other $'000

13,486 19,033

-

1,334 1,404

2017 $'000 Health 541

Primary Primary

Notes to the financial statements to the financial Notes West Gippsland Healthcare Group Healthcare West Gippsland

1

564

3,332 3,897

Care 2017 Aged Aged $'000 70

11

704

10,956 11,671

2017 $'000 RAC incl. incl. RAC

Mental Health Mental -

65

EDs 7,021 7,086

2017 $'000

- 78

4,322 4,400 Non- 2017 $'000

Admitted

- 721

2017 59,577 60,768 $'000

Patients

Admitted Admitted Note 2.1: Analysis of Analysis Revenue2.1: by SourceNote Total Revenue from Operating Activities from Operating Revenue Total from Revenue Non-Operating Total Activities Income Purpose Capital Total Revenue Total Government Grant Government ndirect contributionsb ealthepartment o and uman ervices atient esident ees ommerical ctivities perating ctivities rom evenue ther nterest onperating rom ctivities evenue ther ecludingapital ncome nterest urpose apitalnterest gainlosset noninancial on assets ote see peciic ncome

West Gippsland Healthcare Group Annual Report 2017 61 West Gippsland Healthcare Group

Notes to the financial statements

une 1,956 2,249

92,146 96,399

Total 2016 $'000

une Note 2.1: Analysis of Revenue by Source (continued)

719

2016

Other $'000 Recognition of Income

13,593 14,862

ncome is recognised in accordance ith evenue and is recognised as to the -

etent that it is probable that the economic beneits ill lo to the Group and the

40 income can be reliabl measured at air value nearned income at reporting date is

reported as income received in advance 1,392 1,432

2016 $'000 Health 550 mounts disclosed as revenue are here applicable net o returns alloances and Primary Primary

Notes to the financial statements to the financial Notes

West Gippsland Healthcare Group Healthcare West Gippsland duties and taes -

n accordance ith ontributions government grants and other transers o 2,886 2,929

Care 2016 Aged Aged income other than contributions b oners are recognised as income hen the Group $'000

gains control o the underling assets irrespective o hether conditions are imposed on the Health Service’s use of the contributions.

5

43 ontributions are deerred as income in advance hen the Group has a present

525

obligation to repa them and the present obligation can be reliabl measured

10,804 11,334

2016 $'000

RAC incl. incl. RAC Indirect Contributions from the Department of Health and Human Services

Mental Health Mental • Insurance is recognised as revenue following advice from the Department of Health and uman ervices -

• Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in 68 liabilit in line ith the arrangements set out in the etropolitan ealth and ged EDs 5,958 6,026

2016 $'000 are ervices ivision ospital ircular update or

- Patient and resident fees are recognised as revenue at the time invoices are raised 71

Private practice fees are recognised as revenue at the time invoices are raised

4,031 4,102 Non- 2016 $'000

Admitted Revenue from commercial activities such as laundr o linen is recognised at the time invoices are raised Donations and Other bequests are recognised as revenue hen received donations

1,179 1,005 2016 53,482 55,666 $'000

are or a special purpose the ma be appropriated to a surplus such as the speciic Patients

Admitted Admitted restricted purpose surplus

Interest revenue is recognised on a time proportionate basis that taes in account the eective ield o the inancial asset hich allocates interest over the relevant period

The gain/loss on the sale of investments is recognised hen the investment is realised

Other income includes nonpropert rental dividends orgiveness o liabilities and bad debt reversals Note 2.1: Analysis of Analysis Revenue2.1: by SourceNote (continued) Total Revenue from Operating Activities from Operating Revenue Total from Revenue Non-Operating Total Activities Income Purpose Capital Total Revenue Total Government Grant Government ndirect contributionsb ealthepartment o and uman ervices atient esident ees ommerical ctivities perating ctivities rom evenue ther nterest onperating rom ctivities evenue ther ecludingapital ncome nterest urpose apitalnterest gainlosset noninancial on assets gainlosset inancial on instruments epartment o ealth and uman ervices maes certain paments on behal o the ealth ervice insurance long service leave These the result have amounts leave operating been determining broughtservice account in to long the insurance ealth o ervice behal on epartmentpaments certain ealth and maes uman o ervices epenses and revenue as them recording b ear the or

62 West Gippsland Healthcare Group Notes to the financial statements une

Note 2.1: Analysis of Revenue by Source (continued)

Recognition of Income ncome is recognised in accordance ith evenue and is recognised as to the etent that it is probable that the economic beneits ill lo to the Group and the income can be reliabl measured at air value nearned income at reporting date is reported as income received in advance mounts disclosed as revenue are here applicable net o returns alloances and duties and taes

n accordance ith ontributions government grants and other transers o income other than contributions b oners are recognised as income hen the Group gains control o the underling assets irrespective o hether conditions are imposed on the Health Service’s use of the contributions. ontributions are deerred as income in advance hen the Group has a present obligation to repa them and the present obligation can be reliabl measured

Indirect Contributions from the Department of Health and Human Services • Insurance is recognised as revenue following advice from the Department of Health and uman ervices • Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in liabilit in line ith the arrangements set out in the etropolitan ealth and ged are ervices ivision ospital ircular update or

Patient and resident fees are recognised as revenue at the time invoices are raised

Private practice fees are recognised as revenue at the time invoices are raised

Revenue from commercial activities such as laundr o linen is recognised at the time invoices are raised

Donations and Other bequests are recognised as revenue hen received donations are or a special purpose the ma be appropriated to a surplus such as the speciic restricted purpose surplus

Interest revenue is recognised on a time proportionate basis that taes in account the eective ield o the inancial asset hich allocates interest over the relevant period

The gain/loss on the sale of investments is recognised hen the investment is realised

Other income includes nonpropert rental dividends orgiveness o liabilities and bad debt reversals

West Gippsland Healthcare Group Annual Report 2017 63 West Gippsland Healthcare Group Notes to the financial statements une

Note 2.1: Analysis of Revenue by Source (continued)

Category groups

he roup has used the following categor groups for reporting purposes for the current and previous financial ears.

• Admitted Patient Services comprises all acute and subacute admitted patient services where services are delivered in public hospitals.

• Non Admitted Services comprises acute and subacute non admitted services where services are delivered in public hospital clinics and provide models of integrated communit care which significantl reduces the demand for hospital beds and supports the transition from hospital to home in a safe and timel manner.

• Emergency Department Services (Ds) comprises all emergenc department services.

• Aged Care comprises a range of in home specialist geriatric residential care and communit based programs and support services such as Home and ommunit are (H) that are targeted to older people people with a disabilit and their carers.

• Primary and Community Health comprises a range of home based communit based communit primar health and dental services including health promotion and counselling phsiotherap speech therap podiatr and occupational therap and a range of dental health services

• Residential Aged Care including Mental Health (R incl. ental Health) comprises those ommonwealthlicensed residential aged care services in receipt of supplementar funding from the department under the mental health program. It ecludes all other residential services funded under the mental health program such as mental health funded communit care units and secure etended care units.

• Other Services not reported elsewhere - (ther) comprises services not separatel classified above including ublic Health Services including laborator testing blood borne viruses seuall transmitted infections clinical services oori liaison officers immunisation and screening services drugs services including drug withdrawal counselling and the needle and sringe program Disabilit services including aids and euipment and fleible support pacages to people with a disabilit ommunit are programs including seual assault support earl parenting services parenting assessment and sills development and various support services. Health and ommunit Initiatives also falls in this categor group.

64 West Gippsland Healthcare Group Notes to the financial statements West Gippsland Healthcare Group Notes to the financial statements Note 2.2: Assets received free of charge or for nominal Noteconsideration 2.2: Assets received free of charge or for nominal consideration

2017 2016 $'000 $'000 2017 2016 $'000 $'000 West Gippsland Healthcare Group WestNotes Gippsland to the financial Healthcare statements Group TOTAL Notes to the 5financial statements - TOTAL 5 - Note 2.3: Specific income Note 2.3: Specific income

2017 2016 $'0002017 $'0002016 $'000 $'000

Specific Income Specific - GHA Income TOTAL - GHA 470 - TOTAL 470 -

West Gippsland Healthcare Group Annual Report 2017 65 West Gippsland Healthcare Group Notes to the financial statements

Note 3: The Cost of Delivering our Services

66

6,775

2017 Total $'000 107,076 100,301 100,301

6,775 2017 $'000 Other 18,398 11,623

- -

1,507 1,507 1,507 2017 $'000

Health

Primary Primary Notes to the financial statements to the financial Notes West Gippsland Healthcare Group Healthcare West Gippsland

- -

Care 2,800 2,800 2,800 2017 Aged Aged $'000

- -

2017 10,073 10,073 $'000

Health Mental Mental

RAC incl. incl. RAC

- -

EDs 2017 $'000

13,428

- -

1,217 1,217 Non- 2017 $'000

13,428

Admitted

- -

2017 59,653 59,653

$'000 Patients

Admitted Admitted

Note 3.1: Analysis of Analysis Expenses3.1: Note by Source Total Expenditure from Operating from Operating Expenditure Total Activities expenses other Total Expenses Total

West Gippsland Healthcare Group Annual Report 2017 67 West Gippsland Healthcare Group Notes to the financial statements

Note 3.1: Analysis of Expenses by Source (continued)

6,797

2016 Total 93,771 $'000 100,568

Employee expenses • wages and salaries;

• fringe benefits tax;

6,797 • leave entitlements; 2016 $'000 Other 17,562 10,765

• termination payments; • workcover premiums; and

-

• superannuation expenses which are reported differently depending upon whether employees

1,307 1,307 1,307 2016 $'000

Health

Primary Primary Grants and other transfers Notes to the financial statements to the financial Notes West Gippsland Healthcare Group Healthcare West Gippsland

-

Care 2,740 2016 Aged Aged $'000

- Other operating expenses

9,284 9,284 2016 $'000 Health Mental Mental Supplies and consumables costs

2,740

RAC incl. incl. RAC

-

EDs 2016 $'000

11,923 Bad and doubtful debts

- Borrowing costs of qualifying assets

1,155 1,155 Non- 2016 $'000

11,923

Admitted

-

Other economic flows

2016 56,597 56,597

$'000 Patients

Admitted Admitted

Note 3.1: Analysis of Analysis Expenses3.1: Note by Source (continued) Total Expenditure from Operating from Operating Expenditure Total Activities expenses other Total Expenses Total The have 2015-16 comparatives been the restated in of consistency theexpenditureper (as 2016-17). for methodology fundedprograms allocations across

68 West Gippsland Healthcare Group Notes to the financial statements

Note 3.1: Analysis of Expenses by Source (continued)

Employee expenses • wages and salaries; • fringe benefits tax; • leave entitlements; • termination payments; • workcover premiums; and • superannuation expenses which are reported differently depending upon whether employees

Grants and other transfers

Other operating expenses

Supplies and consumables costs

Bad and doubtful debts

Borrowing costs of qualifying assets

Other economic flows

West Gippsland Healthcare Group Annual Report 2017 69 West Gippsland Healthcare Group Notes to the financial statements une

Note 3.1: Analysis of Expenses by Source (continued)

Net gain/ (loss) on non-financial assets et gain loss on nonfinancial assets and liabilities includes realised and unrealised gains and losses as follows

Revaluation gains/ (losses) of non-financial physical assets refer to ote roperty plant and euipment

Net gain/ (loss) on disposal of non-financial assets ny gain or loss on the disposal of nonfinancial assets is recognised at the date of disposal and is the difference between the proceeds and the carrying amount of the asset at the time

Net gain/ (loss) on financial instruments et gain loss on financial instruments includes o realised and unrealised gains and losses from revaluations of financial instruments at fair value; o impairment and reversal of impairment for financial instruments at amortised cost refer to ote nvestments and other financial assets; and o disposals of financial assets and derecognition of financial liabilities

Other gains/(losses) from other economic flows ther gains losses include a 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 b transfer of amounts from the reserves to accumulated surplusWest or Gippsland net result Healthcaredue to disposal Group Notes to the financial statements or derecognition or reclassification une

Note 3.2: Analysis of expense and revenue by internally managed and restricted specific purpose funds

Expense Revenue

2017 2016 2017 2016 $'000 $'000 $'000 $'000 Commercial Activities rivate ractice and ther atient ctivities harmacy ervices aundry afeteria roperty xpenseevenue ther

TOTAL 11,623 10,775 13,173 13,333

70 West Gippsland Healthcare Group Notes to the financial statements une

Note 3.3: Employee benefits in the balance sheet

2017 2016 $'000 $'000 Current Provisions mployee enefits i nnual leave nconditional and expected to be settled wholly within months ii nconditional and expected to be settled wholly after months iii ong service leave nconditional and expected to be settled wholly within months ii nconditional and expected to be settled wholly after months iii ther ccrued ages and alaries ther rovisions related to mployee enefit nosts nconditional and expected to be settled within months ii nconditional and expected to be settled after months iii Total Current Provisions 15,259 14,219

Non-Current Provisions mployee enefits i rovisions related to mployee enefit nosts Total Non-Current Provisions 2,484 2,420 Total Provisions 17,743 16,639

(a) Employee Benefits and Related On-Costs Current Employee Benefits and related on-costs nconditional ntitlement nnual eave ntitlements ccrued ages and alaries ccrued ays ff Non-Current Employee Benefits and related on-costs onditional ong ervice eave ntitlements ii Total Employee Benefits and Related On-Costs 17,743 16,639

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

West Gippsland Healthcare Group Annual Report 2017 71 West Gippsland Healthcare Group Notes to the financial statements une

Note 3.3: Employee benefits in the balance sheet (cont'd)

2017 2016 Movements in provisions $'000 $'000

Movement in Long Service Leave: Balance at start of year 9,760 8,906 rovision made during the year evaluations xpense recognising mployee ervice ettlement made during the year Balance at end of year 10,263 9,760

Provisions rovisions are recognised when the roup has a present obligation the future sacrifice of economic benefits is probable and the amount of the provision can be measured reliably he amount recognised as a liability is the best estimate of the consideration reuired to settle the present obligation at reporting date taking into account the risks and uncertainties surrounding the obligation here 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 hen some or all of the economic benefits reuired 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 his 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 iabilities for wages and salaries including nonmonetary benefits and annual leave are all recognised in the provision for employee benefits as ‘current liabilities’, because the Group does not have an unconditional right to defer settlements of these liabilities epending 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) iability for is recognised in the provision for employee benefits nconditional 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 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within months n unconditional right arises after a ualifying period he components of this current liability are measured at • Undiscounted value – if the health service expects to wholly settle within 12 months; and • Present value – where the entity does not expect to settle a component of this current liability within months onditional is disclosed as a noncurrent liability here is an unconditional right to defer the settlement of the entitlement until the employee has completed the reuisite years of service his noncurrent liability is measured at present value

72 West Gippsland Healthcare Group Notes to the financial statements une 21

Note 3.3: Employee benefits in the balance sheet (cont'd)

Long service leave (continued) ny gain or loss following revaluation of the present value of noncurrent 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 ermination 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. he 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.

On-costs related to employee expense Provision for oncosts, such as worers compensation and superannuation are recognised together with provisions for employee benefits.

West Gippsland Healthcare Group Annual Report 2017 73 West Gippsland Healthcare Group Notes to the financial statements une 21

Note 3.4: Superannuation Contribution Paid Contribution Outstanding at for the Year Year End

2017 2016 2017 2016 $'000 $'000 $'000 $'000 (i) Defined benefit plans: irst tate uper 1 1 12 Defined contribution plans: irst tate uper ,2 , 2 1 ther 1,1 1,2 12 1 Total 5,290 5,017 431 204

i he bases for determining the level of contributions is determined by the various actuaries of the defined benefit superannuation plans.

mployees of the Group are entitled to receive superannuation benefits and the Group contributes to both defined benefit and defined contribution plans. he defined benefit plan provides benefits based on years of service and final average salary.

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

owever superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive operating statement of the ealth ervice. he name, details and amounts expense in relation to the maor employee superannuation funds and contributions made by the ealth ervices are as follows

Defined contribution superannuation plans n relation to defined contribution 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. ontributions to defined contribution superannuation plans are expensed when incurred.

74 West Gippsland Healthcare Group Notes to the financial statements une

Note 3.4: Superannuation (continued)

Defined benefit superannuation plans The amount chared to the comprehensie operatin statement in respect of defined benefit superannuation plans represents the contributions made by The roup to the superannuation plans in respect of the serices of current staff durin the reportin period Superannuation contributions are made to the plans based on the releant rules of each plan and are based upon actuarial adice mployees of The roup are entitled to receie superannuation benefits and The roup contributes to both the defined benefit and defined contribution plans The defined benefit plans proide benefits based on years of serice and final aerae salary The name and details of the maor employee superannuation funds and contributions made by The roup are disclosed in ote Superannuation

Superannuation liabilities The roup does not reconise any unfunded defined benefit liability in respect of the superannuation plans because the ealth Serice has no leal or constructie obliation to pay future benefits relatin to its employees its only obliation is to pay superannuation contributions as they fall due

West Gippsland Healthcare Group Annual Report 2017 75 West Gippsland Healthcare Group Notes to the financial statements une

Note 4: Key Assets to support service delivery

The roup controls infrastructure and other inestments that are utilised in fulfillin its obecties and conductin its actiities They represent the ey resources that hae been entrusted to The roup to be utilised for deliery of those outputs

Structure nestments and other financial assets nestments accounted for usin the euity method roperty plant & euipment Depreciation and amortisation

76 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.1: Investments and other financial assets

Operating Specific Purpose Fund Fund Total 2017 2016 2017 2016 2017 2016 $'000 $'000 $'000 $'000 $'000 $'000 CURRENT Loans and receivables Term Deposit ust Dollar Term Deposits months i thers months Salary acain Total Current TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS - - 9,422 6,457 9,422 6,457 Represented by: ealth Serice nestments onies eld in Trust ccommodation onds efundable ntrance Fees Salary acain TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS - - 9,422 6,457 9,422 6,457

Notes: i Term deposits under inestments and other financial assets class include only term deposits ith maturity reater than days

(a) Ageing analysis of investments and other financial assets lease refer to ote for the aein analysis of inestments and other financial assets (b) Nature and extent of risk arising from investments and other financial assets lease refer to ote for the nature and etent of credit ris arisin from inestments and other financial assets Investments and other financial assets The Group investments must be in accordance in Standing Direction 3.7.2 – Treasury and nestment is anaement nestments are reconised and dereconised on trade date here purchase or sale of an inestment is under a contract hose terms reuire deliery of the inestment ithin the timeframe established by the maret concerned and are initially measured at fair alue net of transaction costs nestments are classified in the folloin cateories heldtomaturity and loans and receiables The roup classifies its other financial assets beteen current and noncurrent assets based on the purpose for hich the assets ere acuired anaement determines the classification of its other financial assets at initial reconition The roup assesses at each balance sheet date hether a financial asset or roup of financial assets is impaired ll financial assets ecept those measured at fair alue throuh profit or loss are subect to annual reie for impairment

West Gippsland Healthcare Group Annual Report 2017 77 West Gippsland Healthcare Group Notes to the financial statements 3 une 27

Note 4.1: Investments and other financial assets (cont'd)

Derecognition of financial assets inancia asset or here appicabe a part o a inancia asset or part o a group o simiar inancia assets is derecognised hen • the rights to receive cash flows from the asset have expired; or • the Group 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 Group has transferred its rights to receive cash flows from the asset and either: a has transerred substantiay a the riss and reards o the asset or b has neither transerred nor retained substantiay a the riss and reards o the asset but has transerred contro o the asset. here the Group has neither transerred nor retained substantiay a the riss and reards or transferred control, the asset is recognised to the extent of the Group’s continuing involvement in the asset.

Impairment of financial assets t the end o each reporting period the Department assesses hether there is obective evidence that a inancia asset or group o inancia assets is impaired. inancia instrument assets ecept those measured at air vaue through proit or oss are subect to annua revie or impairment.

The allowance is the difference between the financial asset’s carrying amount and the present vaue o estimated uture cash os discounted at the eective interest rate. n assessing impairment o statutory noncontractua inancia assets hich are not inancia instruments proessiona udgement is appied in assessing materiaity using estimates averages and other computationa methods in accordance ith S 3 mpairment o ssets.

Doubtful debts eceivabes are assessed or bad and doubtu debts on a reguar basis. Those bad debts considered as ritten o by mutua consent are cassiied as a transaction epense. ad debts not ritten o by mutua consent and the aoance or doubtu debts are cassiied as other economic os in the net resut.

78 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.2: Investments accounted for using the equity method

Ownership Interest Principal Country of 2017 2016 Name of Entity Activity Incorporation % % Associates

Joint Operations nformation Gippsland Health Alliance Technology ustralia

ummarised financial information in respect of The Groups interest in oinly controlled operations is set below n respect of any interest in oint operations, est Gippsland ealthcare Group recognises in the financial statements: • it's assets, including it's share of any assets held jointly; • any liabilities including its share of liabilities that it had incurred; • it's revenue from the sale of its share of the output from the joint operation; • it's share of the revenue from the sale of the output by the operation; and • it's expenses, including it's share of any expenses incurred jointly

Summarised financial information for the Gippsland Health Alliance joint operations

2017 2016 $'000 $'000 Summarised balance sheet:

urrent ssets , onurrent ssets Total Assets 1,268 738

urrent iabilities onurrent iabilities Total Liabilities 78 65

Net Assets 1,190 673

Summarised operating statement Total income from transactions , , Total expenses from transactions , ,

Net Result 517 (1,014)

Movements in carrying amount of interests in the associate

2017 2016 $'000 $'000 arrying amount at the beginning of the year , et result , Carrying amount at the end of the year 1,190 673

Contingent Liabilities and Capital Commitments There were no ontingent iabilities or apital ommitments arising from the ointly ontrolled perations as at th une : il

West Gippsland Healthcare Group Annual Report 2017 79 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.3: Property, plant & equipment

(a) Gross carrying amount and accumulated depreciation

2017 2016 $'000 $'000 Land and at air alue , , Total Land 10,270 8,381

Buildings uildings nder onstruction at cost

uildings at air alue , , ess cc'd epreciation , ,

Total Buildings 47,685 51,134

Plant and Equipment lant and uipment nder onstruction at cost

lant and uipment at air alue , , ess cc'd epreciation , , Total Plant and Equipment 13,101 13,055

Medical Equipment edical uipment at air alue , , ess cc'd epreciation , , Total Medical Equipment 4,106 3,893

GHA ritten on alue Total GHA 20 15

TOTAL 75,182 76,478

80 WestWest Gippsland Gippsland Healthcare Healthcare Group Group NotesNotes to to the the financial financial statements statements une une

NoteNote 4.3: 4.3: Property, Property, plant plant & &equipment equipment (continued) (continued)

(b)(b) Reconciliations Reconciliations of theof the carrying carrying amounts amounts of ofeach each class class of of asset asset

LandLand BuildingsBuildings PlantPlant & & MedicalMedical AssetsAssets Under Under TotalTotal EquipmentEquipmentEquipmentEquipmentConstructionConstruction & &GHA GHA $'000$'000 $'000$'000 $'000$'000 $'000$'000 $'000$'000 $'000$'000 BalanceBalance at 1at July 1 July 2015 2015 8,681 8,681 52,629 52,629 8,424 8,424 4,163 4,163 1,734 1,734 75,631 75,631 dditionsdditions , , , , , , isposalsisposals lassifiedlassified as eldas eld or or ale ale mpairmentmpairment osses osses recognisedreversed recognisedreversed in inet et esultesult eclassifiedeclassified as inventoryas inventory etet ransfers ransfers beteen beteen lasses lasses , , , , , , epreciationepreciation ote ote , , , , , , BalanceBalance at 1at July 1 July 2016 2016 8,381 8,381 50,722 50,722 12,794 12,794 3,893 3,893 688 688 76,478 76,478 dditionsdditions , , , , isposalsisposals mpairmentmpairment osses osses recognisedreversed recognisedreversed in inet et esultesult evaluationevaluation ncrementsecrements ncrementsecrements , , , , etet ransfers ransfers beteen beteen lasses lasses epreciationepreciation ote ote , , , , , , BalanceBalance at 30at 30June June 2017 2017 10,270 10,270 47,409 47,409 12,970 12,970 4,106 4,106 427 427 75,182 75,182

LandLand and and buildings buildings carried carried at atvaluation valuation

n independentn independent valuation valuation of theof the ealth ealth ervice's ervice's land land and and buildings buildings as as performed performed by by the the Valuer-General Valuer-General Victoria Victoria to to determine determine the thefair fair value value of theof the land land and and buildings buildings he he valuation, valuation, hich hich conforms conforms to to ustralian ustralian aluation aluation tandards, tandards, as as determined determined by by referencereference to theto the amounts amounts for forhich hich assets assets could could be be exchanged exchanged beteen beteen noledgeable noledgeable illing illing parties parties in in an an arm's arm's length length transactiontransaction he he valuation valuation as as based based on onindependent independent assessments assessments hehe effective effective date date of theof the valuation valuation is 30is 30June June 2014 2014 managerial managerial revaluation revaluation of andof and as as undertaen undertaen on on ay ay due due to to a amaterial material increase increase in in the the land land indices indices of of from from the the latestlatest independent independent valuation valuation A fullA fullrevaluation revaluation normally normally occurs occurs every every 5 years,5 years, based based on on the the asset’s asset’s government government purpose purpose classification, classification, but but may may occur occur more more freuentlyfreuently if fair if fair value value assessments assessments indicate indicate material material changes changes in invalues values

West Gippsland Healthcare Group Annual Report 2017 81 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.3: Property, plant & equipment (continued)

(c) Fair value measurement hierarchy for assets

Fair value measurement at end of Carrying reporting period using: amount as at (i) (i) (i) 30 June 2017 Level 1 Level 2 Level 3 Land at fair value pecialised land , , otal of land at fair value , ,

Buildings at fair value pecialised buildings , , otal of building at fair value , ,

Plant and equipment at fair value lant euipment and vehicles at fair value ehicles ii , , lant and euipment , , otal of plant, euipment and vehicles at fair value , ,

Medical equipment at fair value otal medical euipment at fair value , ,

Assets under construction at fair value otal assets under construction at fair value

75,182 - 427 74,755

here have been no transfers beteen levels during the period

82 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.3: Property, plant & equipment (continued)

Fair value measurement at end of Carrying reporting period using: amount as at (i) (i) (i) 30 June 2016 Level 1 Level 2 Level 3 Land at fair value pecialised land , , otal of land at fair value , ,

Buildings at fair value pecialised buildings 5, 5, otal of building at fair value 5, 5,

Plant and equipment at fair value lant euipment and vehicles at fair value ehicles ii lant and euipment , , otal of plant, euipment and vehicles at fair value , ,

Medical equipment at fair value otal medical euipment at fair value , ,

Assets under construction at fair value otal assets under construction at fair value

76,478 - 688 75,790

Note

i lassified in accordance ith the fair value hierarchy

ii ehicles are categorised to evel assets if the depreciated replacement cost is used in estimating the fair value here have been no transfers beteen levels during the period

West Gippsland Healthcare Group Annual Report 2017 83 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.3: Property, plant & equipment (continued)

onsistent ith AA air alue easurement, est ippsland ealthcare roup determines the policies and procedures for both recurring fair value measurements such as property, plant and euipment, investment properties and financial instruments, and for non recurring fair value measurements such as nonfinancial physical assets held for sale, in accordance ith the reuirements of AA and the relevant s or the purpose of fair value disclosures, est ippsland ealthcare roup has determined classes of assets and liabilities on the basis of the nature, characteristics and riss of the asset or liability and the level of the fair value hierarchy as eplained above n addition, the est ippsland ealthcare roup determines hether transfers have occurred beteen levels in the hierarchy by reassessing categorisation based on the loest level input that is significant to the fair value measurement as a hole at the end of each reporting period

The Valuer-General Victoria (VGV) is the Group’s independent valuation agency. est ippsland ealthcare roup, in conunction ith monitors the changes in the fair value of each asset and liability through relevant data sources to determine hether revaluation is reuired

Fair value measurement air value is the price that ould be received to sell an asset or paid to transfer a liability in an orderly transaction beteen maret participants at the measurement date he fair value measurement is based on the folloing assumptions • that the transaction to sell the asset or transfer the liability takes place either in the principal maret or the most advantageous maret, in the absence of the principal maret, either of hich must be accessible to the roup at the measurement date • that the Group uses the same valuation assumptions that market participants would use hen pricing the asset or liability, assuming that maret 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 maret participant that ould use the asset in its highest and best use

Consideration of highest and best use (HBU) for non-financial physical assets udgements about highest and best use must tae 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.

n considering the for nonfinancial physical assets, valuers are probably best placed to determine highest and best use in consultation ith roup he roup and their valuers therefore need to have a shared understanding of the circumstances of the assets A Group has to form its own view about a valuer’s determination, as it is ultimately responsible for hat is presented in its audited financial statements

n accordance ith paragraph AA , the roup can assume the current use of a non financial physical asset is its unless maret or other factors suggest that a different use by maret participants ould maimise the value of the asset

84 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.3: Property, plant & equipment (continued)

Therefore, an assessment of the will be reuired 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 maimum value. nce identified, the Group are reuired to engage with VGV or other independent valuers for formal assessment. These indicators, as a minimum, include ternal 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. n addition, the Group need to assess the as part of the -year review of fair value of non-financial physical assets. This is consistent with the current reuirements on on-financial physical assets and nvestment properties.

Valuation hierarchy The Group need to use valuation techniues that are appropriate for the circumstances and where there is sufficient data available to measure fair value, maimising the use of relevant observable inputs and minimising the use of unobservable inputs. ll assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy. t is 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.

West Gippsland Healthcare Group Annual Report 2017 85 West Gippsland Healthcare Group Notes to the financial statements 3 une 21

Note 4.3: Property, plant & equipment (continued) (d) Reconciliation of Level 3 fair value

Plant and Medical 30 June 2017 Land Buildings equipment equipment Total

Opening Balance ,31 ,22 12, 3,3 75,790 Purchases (sales) 1, 12 2,775 Transfers in (out) of Level 3 3 1 822

ains or losses recognised in net result epreciation (3,21) (2,1) () (6,517) mpairment loss () (4)

tems recognised in other comprehensive income evaluation 1, 1,889

Closing Balance 10,270 47,409 12,970 4,106 74,755

Plant and Medical 30 June 2016 Land Buildings equipment equipment Total

Opening Balance ,1 2,2 ,2 ,13 73,897 Purchases (sales) 2 1,33 32 1,689 Transfers in (out) of Level 3 (3) 1, ,1 6,595

ains or losses recognised in net result epreciation (3,3) (2,1) () (6,391)

Closing Balance 8,381 50,722 12,794 3,893 75,790

86 West Gippsland Healthcare Group Notes to the financial statements 3 une 21

Note 4.3: Property, plant & equipment (continued) Identifying unobservable inputs (level 3) fair value measurements Level 3 fair value inputs are unobservable valuation inputs for an asset or liability. hese inputs require significant judgement and assumptions in deriving fair value for both financial and nonfinancial assets.

nobservable inputs shall be used to measure fair value to the etent 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 eit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability. herefore, unobservable inputs shall reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk.

ssumptions 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. 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. or eample, 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 roup has determined that the transaction price or quoted price does not represent fair value.

he roup shall develop unobservable inputs using the best information available in the circumstances, which might include the Group’s own data. In developing unobservable inputs, the roup 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 roup that is not available to other market participants. he roup need not undertake ehaustive efforts to obtain information about other market participant assumptions. However, the roup shall take into account all information about market participant assumptions that is reasonably available. nobservable 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 he market approach is also used for specialised land and specialised buildings although is adjusted for the community service obligation (CS) 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 etent that is also equally applicable to market participants. his 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. s adjustments of CS are considered as significant unobservable inputs, specialised land would be classified as Level 3 assets.

West Gippsland Healthcare Group Annual Report 2017 87 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.3: Property, plant & equipment (continued)

or the Group, the depreciated replacement cost method is used for the majorit of specialised buildings, adjusting for the associated depreciation. s depreciation adjustments are considered as significant and unobservable inputs in nature, specialised buildings are classified as evel for fair value measurements. An independent valuation of the Group’s specialised land and specialised buildings was performed b the aluerGeneral ictoria. The valuation was performed using the maret approach adjusted for CSO. The effective date of the valuation is une .

Vehicles The Group acuires new vehicles and at times disposes of them before completion of their economic life. The process of acuisition, use and disposal in the maret is managed b the Group who set relevant depreciation rates during use to reflect the consumption of the vehicles. s a result, the fair value of vehicles does not differ materiall from the carring amount depreciated cost.

Plant and equipment lant and euipment is held at carring amount depreciated cost. hen plant and euipment is specialised in use, such that it is rarel sold other than as part of a going concern, the depreciated replacement cost is used to estimate the fair value. nless there is maret evidence that current replacement costs are significantl different from the original acuisition cost, it is considered unliel that depreciated replacement cost will be materiall different from the eisting carring amount.

There were no changes in valuation techniues throughout the period to une .

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

88 West Gippsland Healthcare Group Notes to the financial statements 30 June 2017

Note 4.3: Property, plant & equipment (continued)

(e) Description of significant unobservable inputs to Level 3 valuations:

Valuation technique (i) Significant unobservable inputs (i) Specialised land

and andsborough t arragul aretirect oparison approach ounit ervice bligation adustent

and chool oad rafalgar aretirect oparison approach ounit ervice bligation adustent ales evidence nit of value b coparative and ardners rac arragul aretirect oparison approach basis per and oruburraarragul oad ales evidence nit of value b coparative arragul aretirect oparison approach basis per ales evidence nit of value b coparative and andsborough t arragul aretirect oparison approach basis per ales evidence nit of value b coparative and andsborough t arragul aretirect oparison approach basis per ales evidence nit of value b coparative and Gladstone t arragul aretirect oparison approach basis per ales evidence nit of value b coparative and ontingent treet rafalgar aretirect oparison approach basis per ales evidence nit of value b coparative and nit A innacle rive awson aretirect oparison approach basis per ales evidence nit of value b coparative and innacle rive awson aretirect oparison approach basis per ales evidence nit of value b coparative and rinces a rouin aretirect oparison approach basis per

Specialised buildings uilding osts ost approach using best available evidence fro recognised building cost epreciated replaceent cost indicators and or uantit urveors and uildings andsborough t arragul eaples of current costs seful ife of pecialised uildings uilding osts ost approach using best available evidence fro recognised building cost epreciated replaceent cost indicators and or uantit urveors and uildings chool oad rafalgar eaples of current costs seful ife of pecialised uildings ales evidence nit of value b coparative uildings ardners rac arragul aretirect oparison approach basis per uildings oruburraarragul oad ales evidence nit of value b coparative arragul aretirect oparison approach basis per ales evidence nit of value b coparative uildings andsborough t arragul aretirect oparison approach basis per

Specialised buildings (cont'd) ales evidence nit of value b coparative uildings andsborough t arragul aretirect oparison approach basis per ales evidence nit of value b coparative uildings Gladstone t arragul aretirect oparison approach basis per ales evidence nit of value b coparative uildings ontingent treet rafalgar aretirect oparison approach basis per ales evidence nit of value b coparative uildings nit A innacle rive awson aretirect oparison approach basis per ales evidence nit of value b coparative uildings innacle rive awson aretirect oparison approach basis per ales evidence nit of value b coparative uildings rinces a rouin aretirect oparison approach basis per

Plant and equipment at fair value lant and uipent epreciated replaceent cost ost per unit seful life of Vehicles otor ehicles epreciated replaceent cost ost per unit seful life of vehicles Medical equipment at fair value edical euipent epreciated replaceent cost ost per unit seful life of edical euipent (i) CSO adjustments of 20% were applied to reduce the market approach value for the Department’s specialised land. he significant unobservable inputs have reain unchanged fro

West Gippsland Healthcare Group Annual Report 2017 89 West Gippsland Healthcare Group Notes to the financial statements 0 une 20

Note 4.3: Property, plant & equipment (continued)

(e) Description of significant unobservable inputs to Level 3 valuations:

Property, plant and equipment ll noncurrent phsical assets are measured initiall at cost and suseuentl revalued at fair value less accumulated depreciation and accumulated impairment loss. here an asset is acuired for no or nominal cost the cost is its fair value at the date of acuisition. ssets transferred as part of a merermachiner of overnment are transferred at their carrin amount. ore details aout the valuation techniues and inputs used in determinin the fair value of nonfinancial phsical assets are discussed in ote . ropert plant and euipment.

Land and buildings are reconised initiall at cost and suseuentl measured at fair value less accumulated depreciation and accumulated impairment loss.

Plant, equipment and vehicles are reconised initiall at cost and suseuentl measured at fair value less accumulated depreciation and accumulated impairment loss. Depreciated historical cost is enerall a reasonale pro for fair value ecause of the short lives of the assets concerned.

Revaluations of non-current physical assets oncurrent phsical assets are measured at fair value and are revalued in accordance with D 0 oncurrent phsical assets. his revaluation process normall occurs at least every five years, based upon the asset’s Government Purpose Classification, but may occur more freuentl if fair value assessments indicate material chanes in values. ndependent valuers are used to conduct these scheduled revaluations and an interim revaluations are determined in accordance with the reuirements of the Ds. evaluation increments or decrements arise from differences between an asset’s carrying amount and fair value.

Revaluation increments are recognised in ‘other comprehensive income’ and are credited directl in euit to the asset revaluation surplus ecept that to the etent that an increment reverses a revaluation decrement in respect of that same class of asset previousl reconised as an epense in net result the increment is reconised as income in the net result.

Revaluation decrements are recognised in ‘other comprehensive income’ to the extent that a credit alance eists in the asset revaluation surplus in respect of the same class of propert plant and euipment. evaluation increases and revaluation decreases relatin to individual assets within an asset class are offset aainst one another within that class ut are not offset in respect of assets in different classes.

evaluation surplus is not normall transferred to accumulated funds on dereconition of the relevant asset. n accordance with D 0 est ippsland ealthcare roups noncurrent phsical assets were assessed to determine whether revaluation of the noncurrent phsical assets was reuired.

90 West Gippsland Healthcare Group Notes to the financial statements une

Note 4.4: Depreciation and amortisation

2017 2016 $'000 $'000 Depreciation uildings , , Plant uipment , , edical uipment Total Depreciation 6,518 6,391

ll infrastructure assets, buildings, plant and euipment and other nonfinancial physical assets that have finite useful lives are depreciated i.e. excludes land assets held for sale, and investment properties. epreciation 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. epreciation 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. stimates of the remaining useful lives, residual value and depreciation method for all assets are reviewed at least annually, and adustments made where appropriate. his depreciation charge is not funded by the epartment of ealth and uman ervices. ssets with a cost in excess of , are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives.

he following table indicates the expected useful lives of noncurrent assets on which the depreciation charges are based.

2017 2016 uildings tructure hell uilding abric to years to years ite ngineering ervices and Central Plant to years to years Central Plant it ut to years to years run Reticulated uilding ystems to years to years Plant uipment to years to years edical uipment to years to years Computers and Communication to years to years urniture and itting to years to years otor ehicles to years to years easehold mprovements to ears to ears

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

West Gippsland Healthcare Group Annual Report 2017 91 West Gippsland Healthcare Group Notes to the financial statements une

Note 5: Other Assets and Liabilities

his section sets out those assets and liabilities that arose from the Groups operations.

tructure . Receivables . nventories . ther liabilities . on financial physical assets classified as held for sale including disposal groups and directly associated liabilities . Prepayments and other assets . Payables

92 West Gippsland Healthcare Group Notes to the financial statements une

Note 5.1: Receivables

2017 2016 $'000 $'000 CURRENT Contractual nter ospital ebtors rade ebtors Patient ees G ccrued nvestment ncome ccrued Revenue ther Less llowance for oubtful ebts rade ebtors Patient ees 2,144 2,158 Statutory G Receivable ccrued Revenue epartment of ealth and uman ervices 525 874 TOTAL CURRENT RECEIVABLES 2,669 3,032

NON CURRENT Statutory ong ervice eave epartment of ealth and uman ervices 475 262 TOTAL NON-CURRENT RECEIVABLES 475 262 TOTAL RECEIVABLES 3,144 3,294

West Gippsland Healthcare Group Annual Report 2017 93 West Gippsland Healthcare Group Notes to the financial statements une

Note 5.1: Receivables

(a) Movement in the Allowance for doubtful debts

2017 2016 $'000 $'000 alance at beginning of year mounts written off during the year Reversal of receivable written off mounts recovered during the year ncreasedecrease in allowance recognised in net result Balance at end of year (44) (41)

(b) Ageing analysis of receivables Please refer to ote . for the ageing analysis of contractual receivables (c) Nature and extent of risk arising from receivables

Please refer to ote . for the nature and extent of credit ris arising from contractual receivables

Receivables consist of contractual receivables, which includes mainly debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease receivables and statutory receivables, which includes predominantly amounts owing from the ictorian 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. tatutory 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 subseuently measured at amortised cost, using the effective interest method, less any accumulated impairment.

rade debtors are carried at nominal amounts due and are due for settlement within days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts which are nown to be uncollectible are written off. provision for doubtful debts is recognised when there is obective evidence that the debts may not be collected and bad debts are written off when identified.

94 West Gippsland Healthcare Group Notes to the financial statements une

Note 5.2: Inventories

2017 2016 $'000 $'000 Pharmaceuticals t cost Housekeeping Supplies t cost Medical and Surgical Lines t cost Administration Stores t ost Linen and Laundry t ost TOTAL INVENTORIES 201 208

nventories include oods and oter propert eld eiter or sale consuption or or distribution at no or noinal cost in te ordinar course o business operations. t excludes depreciable assets. nventories eld or distribution are easured at cost adusted or an loss o service potential. ll oter inventories includin land eld or sale are easured at te loer o cost and net realisable value.

nventories acuired or no cost or noinal considerations are easured at current replaceent cost at te date o acuisition. Te bases used in assessin loss o service potential or inventories eld or distribution include current replaceent cost and tecnical or unctional obsolescence. Tecnical obsolescence occurs en an ite still unctions or soe or all o te tass it as oriinall acuired to do but no loner atces existin tecnoloies. unctional obsolescence occurs en an ite no loner unctions te a it did en it as irst acuired. ost is assined to land or sale (undeveloped under developent and developed) and to oter i value lo volue inventor ites on a speciic identiication o cost basis (identi classes).

ost or all oter inventor is easured on te basis o eited averae cost.

West Gippsland Healthcare Group Annual Report 2017 95 West Gippsland Healthcare Group Notes to the financial statements une

Note 5.3: Other liabilities

2017 2016 $'000 $'000 CURRENT onies eld in Trust ccoodation onds (eundable ntrance ees) Salar acain ental onds Total Current 7,927 4,966

Total Other Liabilities 7,927 4,966

* Total Monies Held in Trust Represented by the following assets: nvestent and oter inancial ssets (reer to ote .) TOTAL 7,922 4,957

96 West Gippsland Healthcare Group Notes to the financial statements une

Note 5.4: Non-Financial Physical Assets Classified as Held For Sale including Disposal Group Assets Classified as Held for Sale

Non-financial physical assets including disposal group assets classified as held for sale

2017 2016 $'000 $'000 reeold and (i) uildins TOTAL NON-FINANCIAL PHYSICAL ASSETS CLASSIFIED AS HELD FOR SALE - 383

(i) Te ealt Service sold its reeold land and buildins on . o ipairent loss as reconised on reclassiication o te reeold land as eld or sale or at te end o te reportin period.

Fair value measurement at end of Carrying amount reporting period using: 2016 Level 1 (1) Level 2 (1) Level 3 (1) $'000 reeold and eld or sale (ii) uildins TOTAL NON-FINANCIAL PHYSICAL ASSETS CLASSIFIED AS HELD FOR SALE 383 - - 383 otes () lassiied in accordance it te air value iearc (ote ) (ii) reeold land eld or sale is carried at air value less costs to disposal.

Non-financial physical assets classified as held for sale oninancial psical assets and disposal roups and related liabilities are treated as current and are classiied as eld or sale i teir carrin aount ill be recovered trou a sale transaction rater tan trou continuing use. This condition is regarded as met only when the sale is highly probable, the asset’s sale (or disposal roup) is expected to be copleted itin onts ro te date o classiication and te asset is available or iediate use in te current condition.

oninancial psical assets (includin disposal roups) classiied as eld or sale are treated as current and are easured at te loer o carrin aount and air value less costs o disposal and are not subect to depreciation or aortisation.

West Gippsland Healthcare Group Annual Report 2017 97 West Gippsland Healthcare Group Notes to the financial statements une

Note 5.5: Prepayments and other non-financial assets

2017 2016 CURRENT $'000 $'000 repayments ther TOTAL CURRENT OTHER ASSETS 438 316

TOTAL OTHER ASSETS 438 316

ther noninancial assets include prepayments which represent payments in adance o receipt o goods or serices or that part o ependiture made in one accounting period coering a term etending beyond that period.

98 West Gippsland Healthcare Group Notes to the financial statements une

Note 5.6: Payables

2017 2016 $'000 $'000 CURRENT Contractual Trade reditors (i , , Trade reditors ccrued penses , , ccrued penses ther ther 3,964 4,609 Statutory T ayable ithholding mounts payable to oernment T 1,189 121 TOTAL CURRENT 5,153 4,730

TOTAL PAYABLES 5,153 4,730

(i The aerage credit period is days. o interest is charged on the other payables.

(a) Maturity analysis of payables lease reer to ote . or the ageing analysis o contractual payables (b) Nature and extent of risk arising from payables lease reer to note . or the nature and etent o riss arising rom contractual payables

ayables consist o • contractual payables which consist predominantly of accounts payable representing liabilities or goods and serices proided to the ealth erice prior to the end o the inancial year that are unpaid, and arise when the ealth erice becomes obliged to mae uture payments in respect o the purchase o those goods and serices. The normal credit terms or accounts payable are usually ett days. • statutory payables, such as goods and services tax and fringe benefits tax payables.

ontractual payables are classiied as inancial instruments and are initially recognised at air alue, and then subseuently carried at amortised cost. tatutory payables are recognised and measured similarly to contractual payables, but are not classiied as inancial instruments and not included in the category o inancial liabilities at amortised cost, because they do not arise rom a contract.

West Gippsland Healthcare Group Annual Report 2017 99 West Gippsland Healthcare Group Notes to the financial statements une

Note 6: How We Finance Our Operations

his section provides information on the sources of finance utilised by he roup during its operations, along with interest expenses the cost of borrowings and other information related to financing activities of the roup

his section includes disclosures of balances that are financial instruments such as borrowings and cash balances ote provides additional, specific financial instrument disclosures

tructure orrowings ash and cash euivalents ommitments for expenditure

100 West Gippsland Healthcare Group Notes to the financial statements une

Note 6.1: Borrowings

2017 2016 $'000 $200,651

CURRENT ustralian ollar orrowings dvances from government i Total Australian Dollars Borrowings 629 629

Total Current 629 629

NON CURRENT ustralian ollar orrowings dvances from government i , , Total Australian Dollars Borrowings 2,760 3,390

Total Non-Current 2,760 3,390

Total Borrowings 3,389 4,019

i his is an unsecured loan with the epartment of ealth and uman ervices he loan bears no interest

(a) Maturity analysis of borrowings lease refer to ote for the ageing analysis of borrowings

(b) Nature and extent of risk arising from borrowings

lease refer to ote for the nature and extent of riss arising from borrowings

(c) Defaults and breaches uring the current and prior year, there were no defaults and breaches of any of the borrowings

ll borrowings are initially recognised at fair value of the consideration received, less directly attributable transaction costs he measurement basis subseuent to initial recognition depends on whether the ealth ervice has categorised its borrowings as either, financial liabilities designated at fair value through profit or loss, or financial liabilities at amortised cost ny difference between the initial recognised amount and the redemption value is recognised in net result over the period of the borrowings using the effective interest method he classification depends on the nature and purpose of the borrowing he ealth ervice determines the classification of its borrowing at initial recognition

West Gippsland Healthcare Group Annual Report 2017 101 West Gippsland Healthcare Group Notes to the financial statements une

Note 6.2: Cash and Cash Equivalents

or the purposes of the cash flow statement, cash assets includes cash on hand and in bans, and shortterm deposits which are readily convertible to cash on hand, and are subect to an insignificant ris of change in value, net of outstanding ban overdrafts

2017 2016 $'000 $'000 ash on hand ash at ban , , eposits at call , , refer note Total Cash and Cash Equivalents 13,030 7,435

Represented by: ash for ealth ervice perations as per ash low tatement , , Total Cash and Cash Equivalents 13,030 8,935

ash and cash euivalents recognised on the balance sheet comprise cash on hand and cash at ban, deposits at call and highly liuid 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 nown amounts of cash with an insignificant ris of changes in value

or cash flow statement presentation purposes, cash and cash euivalents include ban overdrafts, which are included as liabilities on the balance sheet

102 West Gippsland Healthcare Group Notes to the financial statements une

Note 6.3: Commitments for expenditure

a) Commitments other than public private partnerships

2017 2016 $'000 $'000 Capital expenditure commitments ayable lant and euipment Total capital expenditure commitments 825 39

Lease commitments ommitments in relation to leases contracted for at the reporting date perating leases Total lease commitments 209 282

Total Commitments (inclusive of GST) 1,034 321 West Gippsland Healthcare Group ll amounts shown in the commitments note are nominal amountsNotes inclusive to the of financial statements une

Note 6.3: Commitments (continued)

(b ) Commitments payable

ominal alues 2017 2016 Capital expenditure commitments payable ess than year Total capital expenditure commitments Lease commitments payable ess than year onger than year but not longer than years Total lease commitments Total commitments (inclusive of GST) 1034 321 ess recoverable from the ustralian ax ffice Total commitments (exclusive of GST) 940 289

ommitments for future expenditure include operating and capital commitments arising from contracts hese commitments are disclosed by way of a note at their nominal value and are inclusive of the payable n addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual proects are sated hese future expenditures cease to be disclosed as commitments once the related liabilities are recognised on the balance sheet

West Gippsland Healthcare Group Annual Report 2017 103 West Gippsland Healthcare Group Notes to the financial statements une

Note 7: Risks, Contingencies & Valuation Uncertainties

ntroduction

he roup is exposed to ris from its activities and outside factors n addition, it is often necessary to mae udgements and estimates associated with recognition and measurement of items in the financial statements his section sets out financial instrument specific information, including exposures to financial riss as well as those items that are contingent in nature or reuire a higher level of udgement to be applied, which for the roup is related mainly to fair value determination

tructure inancial instruments et gain loss on disposal of nonfinancial assets ontingent assets and contingent liabilities air value determination

104 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.1: Financial Instruments

Financial risk management objectives and policies The West Gippsland Healthcare Group's principal financial instruments comprise of: - cash assets - term deposits - receivables (excluding statutory receivables) - payables (excluding statutory payables) - accommodation bonds

etails 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 euity instrument are disclosed in note to the financial statements he roups main financial riss include credit ris, liuidity ris and interest rate ris he roup manages these financial riss in accordance with its financial ris management policy

he roup uses different methods to measure and manage the different riss to which it is exposed rimary responsibility for the identification and management of financial riss rests with the financial ris management committee of the roup

he main purpose in holding financial instruments is to prudentially manage the Group financial riss within the government policy parameters

Categorisation of financial instruments

Contractual Contractual financial assets - financial loans and liabilities at receivables amortised cost Total 2017 $'000 $'000 $'000 Contractual Financial Assets ash and cash euivalents , , eceivables rade ebtors , , ther eceivables ther inancial ssets erm eposit , , hares in ther ntities Total Financial Assets (i) 24,596 - 24,596

Financial Liabilities ayables , , orrowings , , ther inancial iabilities ccomodation bonds , , ther Total Financial Liabilities (ii) - 15,280 15,280

West Gippsland Healthcare Group Annual Report 2017 105 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.1: Financial Instruments (continued)

Contractual Contractual financial assets - financial loans and liabilities at receivables amortised cost Total 2016

$'000 $'000 $'000 Contractual Financial Assets ash and cash euivalents , , eceivables rade ebtors , , ther eceivables ther inancial ssets erm eposit , , hares in ther ntities Total Financial Assets (i) 16,050 - 16,050

Financial Liabilities ayables , , orrowings , , ther inancial iabilities ccomodation bonds , , ther Total Financial Liabilities (ii) - 13,594 13,594 (i) The total amount of financial assets disclosed here excludes statutory receivables (ii) The total amount of financial liabilities disclosed here excludes statutory payables (i.e. Taxes payable)

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

Total interest income / (expense) Total

$'000 $'000 2017 Financial Assets ash and ash uivalents i Total Financial Assets 403 403

2016 Financial Assets ash and ash uivalents i Total Financial Assets 408 408

i or cash and cash euivalents, loans or receivables and availableforsale financial assets, the net gain or loss is calculated by taing the movement in the fair value of the asset, 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

106 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.1: Financial Instruments (continued)

(c) Credit risk

redit ris arises from the contractual financial assets of the roup, which comprise cash and deposits, non statutory receivables and available for sale contractual financial assets. The Group’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the roup redit ris is measured at fair value and is monitored on a regular basis

Credit risk associated with the Group’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 riple rating and to obtain sufficient collateral or credit enhancements, where appropriate

n addition, the roup 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 ban s with the policy for debtors, the Group’s policy is to only deal with banks with high credit ratings.

rovision of impairment for contractual financial assets is recognised when there is obective evidence that the roup will not be able to collect a receivable bective evidence includes financial difficulties of the debtor, default payments, debts which are more than days overdue, and changes in debtor credit ratings

xcept 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 the Group’s maximum exposure to credit ris without taing account of the value of any collateral obtained

Credit quality of contractual financial assets that are neither past due nor impaired

Financial Government Companies (A- Other Total institutions agencies 1 credit (min BBB (AA credit (AA credit rating) credit rating) rating) rating)

2017 $'000 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents , , , Loans and Receivables rade ebtors , , ther eceivables i erm eposit , , Available for sale hares in ther ntities

Total Financial Assets 5,582 7,600 9,265 2,149 24,596

2016 Financial Assets ash and ash uivalents , , , Loans and Receivables rade ebtors , , ther eceivables erm eposit , , Available for sale hares in ther ntities

Total Financial Assets 1,946 5,600 6,342 2,162 17,550

i he total amounts disclosed here exclude statutory amounts eg amounts owing from ictorian overnment and input tax credit recoverable

West Gippsland Healthcare Group Annual Report 2017 107 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.1: Financial Instruments (continued) (c) Credit Risk (continued) est Gippsland Healthcare Groups exposure to credit risk and effective weighted average interest rate by ageing periods is set out in the following table. For interest rates applicable to each class of asset refer to individual notes to the financial statements.

Ageing analysis of Financial Assets as at 30 June

Carrying Not Past Due Past Due But Not Impaired Amount and Not Less than 1 1-3 Months 3 months - 1 1-5 Years Impaired Month Year

2017 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents , , Loans and Receivables Trade ebtors , , ther eceivables Term eposit , ,

Total Financial Assets 24,596 22,452 1,881 148 104 11

2016 Financial Assets Cash and Cash Equivalents , , Loans and Receivables Trade ebtors , ther eceivables Term eposit , , Available for sale Shares in ther ntities

Total Financial Assets 16,050 17,056 105 255 75 59

i geing analysis of financial assets must exclude the types of statutory financial assets i.e GST input tax credit There are no material financial assets which are individually determined to be impaired. Currently the Group does not hold any collateral as security nor credit enhancements relating to any of 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 the carrying amounts as indicated. The ageing analysis table above discloses the ageing only of contractual financial assets that are past due but not impaired.

108 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.1: Financial Instruments (continued)

(d) Liquidity risk

iuidity risk is the risk that the Group would be unable to meet its financial obligations as and when they fall due. The Group operates under the Governments fair payments policy of settling financial obligations within days and in the event of a dispute, making payments within days from the date of resolution. The Group’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet. The Group manages its liuidity risk by ensuring that term deposit maturity dates are spaced for regular access to cash when reuired.

The following table discloses the contractual maturity analysis for the Groups 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 Less than 1-3 3 months - 1-5 Years Greater Carrying Nominal 1 Month Months 1 Year than 5 Amount Amount Years 2017 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial Liabilities At amortised cost ayables , , , orrowings , , , ther Financial iabilities i ccommodation onds , , , , ther

Total Financial Liabilities 15,280 15,280 9,819 226 2,475 2,566 194

2016 Financial Liabilities At amortised cost ayables , , , orrowings , , , ther Financial iabilities i ccommodation onds , , , ther

Total Financial Liabilities 13,594 13,594 4,733 - 5,471 2,518 872

i geing analysis of financial liabilities excludes the types of statutory financial liabilities i.e GST payable

West Gippsland Healthcare Group Annual Report 2017 109 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.1: Financial Instruments (continued)

(e) Market risk

The Groups exposures to market risk are primarily through interest rate risk ith only insignificant exposure to foreign currency and other price risks becties policies and processes used to manage each of these risks are disclosed in the paragraph belo Currency risk The Group is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from oerseas This is because of a limited amount of purchases denominated in foreign currencies and a short timeframe beteen commitment and settlement Interest rate risk

xposure to interest rate risk might arise primarily through the Group's interest bearing liabilities inimisation of risk is achieed by mainly undertaking fixed rate or noninterest bearing financial instruments or financial liabilities the Group mainly undertake financial liabilities ith relatiely een maturity profiles

ash flo interest rate risk is the risk that the future cash flos of a financial instrument ill fluctuate because of changes in market interest rates

The Group has minimal exposure to cash flo interest rate risks through its cash and deposits term deposits and bank oerdrafts that are at floating rate

The Group manages this risk by mainly undertaking fixed rate or noninterest bearing financial instruments ith relatiely een maturity profiles ith only insignificant amounts of financial instruments at floating rate anagement has concluded for cash at bank and bank oerdraft as financial assets that can be left at floating rate ithout necessarily exposing the Group to significant bad risk management monitors moement in interest rates on a daily basis

Interest rate exposure of financial assets and liabilities as at 30 June Weighted Carrying Interest Rate Exposure Average Amount Fixed Variable Non- Effective Interest Interest Interest Interest Rate Rate Bearing 2017 Rate (%) $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents Loans and Receivables (i) Trade ebtors ther eceiables Term eposit 24,596 9,422 13,025 2,149 Financial Liabilities At amortised cost i ayables orroings ther inancial iabilities ccommodation onds ther 15,280 - - 15,280 2016 Financial Assets Cash and Cash Equivalents Loans and Receivables (i) Trade ebtors ther eceiables Term eposit Available for sale 16,050 6,457 8,931 2,162 Financial Liabilities At amortised cost i ayables orroings ther inancial iabilities ccommodation onds ther 13,594 - - 13,594

i The carrying amount must exclude types of statutory financial assets and liabilities ie GT input tax credit and GT payable

110 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.1: Financial Instruments (continued)

(e) Market risk (continued) Sensitivity disclosure analysis

Taking into account past performance future expectations economic forecasts and managements knoledge and experience of the financial markets the Group beliees the folloing moements are reasonably possible oer the next months ase rates are sourced from the esere ank of ustralia

shift of basis points up and don in market interest rates from yearend rates of

The folloing table discloses the impact on net operating result and equity for each category of financial instrument held by the Group at year end as presented to key management personnel if changes in the releant risk occur

Carrying Interest Rate Risk Amount -1% +1% Profit Equity Profit Equity 2017 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents (i) Loans and Receivables (i) Trade ebtors ther eceiables Term eposit Financial Liabilities At amortised cost ayables orroings ther inancial iabilitiesii ccommodation onds ther (225) (225) 225 225 2016 Financial Assets Cash and Cash Equivalents (i) Loans and Receivables (i) Trade ebtors ther eceiables Term eposit Financial Liabilities At amortised cost ayables orroings ther inancial iabilitiesii ccommodation onds ther (139) (139) 139 139

i eg ensitiity of cash and cash equialents to a moement in interest rates k k k imilar for a moement in interest rate impact k ii The carrying amount must exclude types of statutory financial assets and liabilities ie GT input tax credit and GT payable

West Gippsland Healthcare Group Annual Report 2017 111 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.1: Financial Instruments (continued)

(f) Fair value

The fair alues and net fair alues of financial instrument assets and liabilities are determined as follos • Level 1 - the fair value of financial instrument with standard terms and conditions and traded in active liquid markets are determined ith 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 flo analysis using unobserable market inputs

The Group considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approximation of their fair alues because of the shortterm nature of the financial instruments and the expectation that they ill be paid in full

The folloing table shos that the fair alues 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 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents Loans and Receivables (i) Trade ebtors ther eceiables Term eposit Total Financial Assets 24,596 24,596 16,050 16,050

Financial Liabilities At amortised cost ayables orroings ther inancial iabilitiesi ccommodation onds ther Total Financial Liabilities 15,280 15,280 13,594 13,594

i The carrying amount must exclude types of statutory financial assets and liabilities ie GT input tax credit and GT payable

inancial instruments arise out of contractual agreements that gie rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of the Group’s actiities certain financial assets and financial liabilities arise under statute rather than a contract uch financial assets and financial liabilities do not meet the definition of financial instruments in inancial nstruments resentation or example statutory receiables arising from taxes fines and penalties do not meet the definition of financial instruments as they do not arise under contract here releant for note disclosure purposes a distinction is made beteen those financial assets and financial liabilities that meet the definition of financial instruments in accordance ith and those that do not The folloing refers to financial instruments unless otherise stated

112 West Gippsland Healthcare Group Notes to the financial statements 3 une 21

Note 7.1: Financial Instruments (continued)

Loans and receivables Loans and receivables are financial instrument assets with fied and determinable payments that are not quoted on an active maret. hese assets are initially recognised at fair value plus any directly attributable transaction costs. ubsequent to initial measurement loans and receivables are measured at amortised cost using the effective interest method less any impairment. Held-to-maturity investments f the ealth ervice has the positive intent and ability to hold nominated investments to maturity then such financial assets may be classified as held to maturity. eld to maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs. ubsequent to initial recognition held to maturity financial assets are measured at amortised cost using the effective interest method less any impairment losses. he ealth ervice maes limited use of this classification because any sale or reclassification of more than an insignificant amount of held to maturity investments not close to their maturity would result in the whole category being reclassified as available for sale. he ealth ervice would also be prevented from classifying investment securities as held to maturity for the current and the following two financial years. he held to maturity category includes certain term deposits and debt securities for which the ealth ervice concerned intends to hold to maturity.

Financial liabilities at amortised cost inancial instrument liabilities are initially recognised on the date they are originated. hey are initially measured at fair value plus any directly attributable transaction costs. ubsequent 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 or 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 Group’s contractual payables deposits held and advances received and interest-bearing arrangements other than those designated at fair value through profit or loss.

West Gippsland Healthcare Group Annual Report 2017 113 West Gippsland Healthcare Group Notes to the financial statements une

Note 7.2: Net gain/(loss) on disposal of non-financial assets

2017 2016 $'000 $'000 Proceeds from Disposals of Non-Current Assets* lant and uipment edical uipment otor ehicles uildins Total Proceeds from Disposal of Non-Current Assets 752 84

Less: Written Down Value of Non-Current Assets Sold* lant and uipment otor ehicles uildins and Total Written Down Value of Non-Current Assets Sold 572 113

Net gain/(loss) on Disposal of Non-Financial Assets 180 (29)

Disposal of non-financial assets n ain or loss on the sale of nonfinancial assets is reconised in the comprehensie operatin statement. Refer to Note 8.1 – ‘comprehensive income’.

Impairment of non-financial assets

ll other nonfinancial assets are assessed annuall for indications of impairment ecept for • inventories; • non-current physical assets held for sale; and • assets arising from construction contracts. f there is an indication of impairment the assets concerned are tested as to hether their carrin amount exceeds their possible recoverable amount. Where an asset’s carrying amount exceeds its recoerable amount the difference is rittenoff as an epense ecept to the etent that the rite don can be debited to an asset realuation surplus 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 as reconised the carrin amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrin amount does not eceed the carrin amount that ould hae been determined net of depreciation or amortisation if no impairment loss had been reconised in prior ears t is deemed that in the eent of the loss or destruction of an asset the future economic benefits arisin from the use of the asset ill be replaced unless a specific decision to the contrar has been made he recoerable amount for most assets is measured at the hiher of depreciated replacement cost and fair alue less costs of disposal ecoerable amount for assets held primaril to enerate net cash inflos is measured at the hiher of the present alue of future cash flos epected to be obtained from the asset and fair alue less costs of disposal

114 West Gippsland Healthcare Group Notes to the financial statements une 1

Note 7.3: Contingent assets and contingent liabilities

There ere no ontingent ssets or ontingent iabilities for the yearWest ended Gippsland th une Healthcare Group Notes to the financial statements 1. 1 Nil une 1

Note 7.4 Fair value determination

Likely valuation Significant inputs Asset class Examples of types of assets Expected fair value level approach (Level 3 only) and subect to restrictions as to use andor sale

and in areas here there is not an pecialised land active maret evel aret approach adustments pecialised buildings ith limited ost per suare alternative uses andor substantial epreciated metre customisation e.g. prisons hospitals replacement cost pecialised buildings i and schools evel approach seful life

ocialpublic housingemployee evel here there is an ellings i housing active maret in the area aret approach N ost per suare epreciated metre evel here there is no replacement cost active maret in the area approach seful life ost per suare pecialised items ith limited epreciated metre alternative uses andor substantial replacement cost lant and euipment i customisation evel approach seful life If there is an active resale maret ehicles available; evel aret approach N ost per suare epreciated metre If there is no active resale maret replacement cost available evel approach seful life

i Nely built acuired assets could be categorised as evel assets as depreciation ould not be a significant unobservable input based on the 1 materiality threshold

West Gippsland Healthcare Group Annual Report 2017 115 West Gippsland Healthcare Group Notes to the financial statements une 1

Note 8: Other Disclosures

This section includes additional material disclosures reuired by accounting standards or otherise for the understanding of this financial report.

tructure 8.1 uity 8. Reconciliation of net result for the year to net cash inflooutflo from operating activities 8. perating segments 8. Responsible persons disclosures 8. xecutive officer disclosures 8. Related parties 8. Remuneration of auditors 8.8 s issued that are not yet effective 8. vents occurring after the balance sheet date 8.1 conomic dependency 8.11 lternative presentation of comprehensive operating statement 8.1 lossary of terms and style conventions

116 West Gippsland Healthcare Group Notes to the financial statements une 1

Note 8.1: Equity

2017 2016 $'000 $'000 (a) Surpluses Property, Plant & Equipment Revaluation Surplus 1 alance at the beginning of the reporting period 8 8 Revaluation Incrementecrements - and 188 - Balance at the end of the reporting period* 47,786 45,897

Represented by - and 81 - uildings - lant and uipment - - 47,786 45,897

1 The property plant euipment asset revaluation surplus arises on the revaluation of property plant euipment. The financial assets available-for-sale revaluation surplus arises on the revaluation of available-for- sale financial assets. Where a revalued financial asset is sold that portion of the reserve hich relates to the financial asset and is effectively realised is recognised in the net result. Where a revalued financial asset is impaired that portion of the reserve hich relates to that financial asset is recognised in net result.

West Gippsland Healthcare Group Annual Report 2017 117 West Gippsland Healthcare Group Notes to the financial statements une 1

Note 8.1: Equity

2017 2016 $'000 $'000

(b) Restricted Specific Purpose Surplus Balance at the end of the reporting period - - Total Surpluses 47,786 45,897

Contributed Capital alance at the beginning of the reporting period alance at the end of the reporting period 32,522 32,522

(c) Accumulated Surpluses/(Deficits) alance at the beginning of the reporting period 1 1 Net Result for the ear 1 1 Balance at the end of the reporting period (13,103) (14,202)

Total Equity at end of financial year 67,205 64,217

Contributed capital onsistent ith ustralian ccounting Interpretation 18 ontributions by ners ade to Wholly-ned ublic ector ntities and R 11 ontributions by ners appropriations for additions to the net asset base have been designated as contributed capital. ther transfers that are in the nature of contributions to or distributions by oners 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 oners. Transfers of net liabilities arising from administrative restructures are to go through the comprehensive operating statement.

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

118 West Gippsland Healthcare Group Notes to the financial statements une 1

Note 8.2: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities

2017 2016 $'000 $'000 Net result for the period 1 1

Non-cash movements: epreciation and amortisation 18 1 Impairment of financial and non financial assets - - rovision for doubtful debts 1 Resourcesassets received free of charge -

Movements included in investing and financing activities Net gainloss from disposal of non financial physical assets 18 Net gain from disposal of financial assets -

Movements in assets and liabilities: hange in operating assets and liabilities ecreaseIncrease in receivables 1 1 ecreaseIncrease in other assets 1 ecrease in prepayments 1 1 Increase in payables 8 Increase in provisions 11 ecrease in other liabilities - ecreaseIncrease in inventories 8 NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 9,378 4,164

West Gippsland Healthcare Group Annual Report 2017 119 - -

8 8 1

1

(4,577) (4,169) 96,020 94,571 30,354

1 $'000

(100,597)

- - une 1

Consol'd

696 11 18

1,099 1

34,212 181 111

18 107,681 101,417 $'000

(106,985)

------

553

(553)

$'000

------

Notes to the financial statements West Gippsland Healthcare Group Healthcare Gippsland West

564

Eliminations (564)

$'000

$'000 2,616 2,616 12,139 12,139 (9,523) 14,576 1,979 118 - - 1 1 Linen ServiceLinen $'000 516 516 12,412 12,412 (11,896) 15,543 2,072 1188 118 - - 1 $'000 735 735 5,359 5,359 (4,624) 4,729 1,518 - - 118 RAC Andrews RAC $'000 403 403 5,331 5,331 (4,928) 5,036 1,709 1 - 8 - 1 $'000 1,045 1,045 5,975 5,975 (4,930) 7,566 2,429 - 8 8 - $'000 RAC Cooinda Lodge 1,239 1,239 6,987 6,987 (5,748) 6,043 2,051 8 - 8 - 1 $'000 (8,565) 73,100 73,100 (82,073) 67,700 24,428 1 - 81 18 8 8 Hospital 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 $'000 (1,462) (8,973) 1,239 1,045 403 735 (1,059) 516 2,616 83,515 83,515 (84,977) 74,795 28,380 81 - 8 88 11 1 1 1 11 1 1 Note 8.3: Operating segments REVENUE Total Revenue EXPENSES Total Expenses Net Result from ordinary activities Year Net Result for OTHER INFORMATION Assets Total Total Liabilities xternal egment Revenue egment xternal Intersegment Revenue xpenses egment xternal Intersegment xpenses Interest ividend Income ssets egment iabilities egment cuisition of roperty lant anduipment and Intangible ssets epreciation mortisation xpense

120 West Gippsland Healthcare Group Notes to the financial statements une 1

Note 8.3: Operating segments (continued)

The maor productsservices from hich the above segments derive revenue are

Business Segments Services ospital rovider of cute ged and rimary are ervices R ooinda odge Nursing ome rovider of Residential ged are ervices R ndres ouse ostel rovider of Residential ged are ervices Warragul inen ervice W aundering of inen

uring the 11 financial year transactions beteen W and W have been eliminated.

Geographical Segment

West ippsland ealthcare roup operates predominantly in Warragul ictoria. ore than of revenue net surplus from ordinary activities and segment assets relate to operations in Warragul ictoria.

West Gippsland Healthcare Group Annual Report 2017 121 West Gippsland Healthcare Group Notes to the financial statements une 1

Note 8.4: Responsible persons disclosures

In accordance ith the inisterial irections issued by the inister for inance under the Financial Management Act 1994 the folloing disclosures are made regarding responsible persons for the reporting period.

Period Responsible Ministers: The onourable ill ennessy inister for ealth inister for mbulance ervices 11 - 1 The onourable artin oley inister for ousing isability and geing inister for ental ealth 11 - 1

Governing Boards s ampbell 11 - 1 r avey 11 - 1 r avine 11 - 1 rs olland 11 - 1 r ingill 11 - 1 s eslie 11 - 1 r arx 11 - 1 r onagle 11 - 1 r mith 11 - 1 rs ritt 11 - 1 rs tannard 11 - 1 s tacy 11 - 11 Accountable Officers r. Wees 11 - 1 Remuneration

Remuneration received or receivable by responsible persons was in the range: $370,000 – $379,999 for 2016/17.

122 West Gippsland Healthcare Group West Gippsland Healthcare Group Notes to the financial statements Notes to the financial statements une 1 30 une 2017

Note 8.4: Responsible persons disclosures Note 8.5: Executive officer disclosures

In accordance ith the inisterial irections issued by the inister for inance under the Financial Management Act 1994 the folloing disclosures are made regarding responsible persons for the reporting period. Executive Officers' Remuneration

Period Responsible Ministers: Remuneration of executives The onourable ill ennessy inister for ealth inister for mbulance ervices 11 - 1 he number of eecutive officers, other than inisters and ccountable fficers, and their total The onourable artin oley inister for ousing isability and geing inister for ental ealth remuneration during the reporting period are shown in the table below. otal annualised employee 11 - 1 euivalent provides a measure of full time euivalent eecutive officers over the reporting period. Governing Boards s ampbell 11 - 1 Remuneration comprises employee benefits in all forms of consideration paid, payable or provided in r avey 11 - 1 echange for services rendered, and is disclosed in the following categories. r avine 11 - 1 rs olland 11 - 1 Short-term employee benefits include amounts such as wages, salaries, annual leave or sic leave r ingill 11 - 1 that are usually paid or payable on a regular basis, as well as nonmonetary benefits such as allowances s eslie 11 - 1 and free or subsidised goods or services. r arx 11 - 1 r onagle 11 - 1 Post-employment benefits include pensions and other retirement benefits paid or payable on a r mith 11 - 1 discrete basis when employment has ceased. rs ritt 11 - 1 rs tannard 11 - 1 Other long-term benefits include long service leave, other longservice benefit or deferred s tacy 11 - 11 compensation. Accountable Officers r. Wees 11 - 1 Remuneration of Executive Officers Total Remuneration Remuneration 2017 2016(i) Remuneration received or receivable by responsible persons was in the range: $370,000 – $379,999 for 2016/17. $'000 $'000 hortterm employee benefits 7 ostemployee benefits 1 ther longterm benefits 1 Total remuneration 883 - Total Number of Executives .00 (iii) Total annualised employee equivalent (AEE) .33

Notes: i o comparatives have been reported because remuneration in the prior year was determined in line with the basis and definition under R 21. Remuneration previously ecluded nonmonetary benefits and comprised any money,consideration or benefit received or receivable, ecluding reminbursement of outofpocet epenses, including any amount received or receivable from a related party transaction. Refer to prior years financial statements for eecutive remuneration for the 20116 reporting period. ii he total number of eecutives officers includes persons who meet the definition of ey anagement ersonnel of the entity under 12 Related arty isclosures and are also reported within the related parties note disclosure ote .6.

iii nnualised employee euivalent is based on the time fraction wored over the reporting period.

West Gippsland Healthcare Group Annual Report 2017 123 West Gippsland Healthcare Group Notes to the financial statements 30 une 2017

Note 8.6: Related parties he roup is a wholly owned and controlled entity of the tate of ictoria. Related parties of the roup 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. ey management personnel of the hospital include the ortfolio inisters and abinet inisters and and those persons identified and listed under ote . Responsible ersons. he compensation detailed below ecludes the salaries and benefits the ortfolio inisters 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’ inancial Report.

2017 Compensation ($’000) hort term employee benefits 3 ostemployment benefits 20 ther longterm benefits 7 ermination benefits 0 hare based payments 0 Total 371

Transactions with key management personnel and other related parties

utside of normal citien type transactions with the roup, there were no related party transactions or balances that involved ey management personnel, their close family members and their personal business interests.

Significant transactions with government-related entities

est ippsland ealthcare roup received funding from the epartment of ealth and uman ervices of $7.1 million 2016: $6.72 million.

uring the year, est ippsland ealthcare roup had the following significant government related entity transactions: Funding Entity Desciption of Service Received $'000 onash ealth rovision of linen ervices $6,761 lfred ealth rovision of linen ervices $3,36 atrobe Regional ospital ransition are rogram funding $60

Payments Entity made $'000 ictorian anaged nsurance uthority nnual nsurance premium $1,766 mbulance ictoria rovision of patient transport services $1,261 Renal capitation payments and onash ealth doctors on rotation $7 atrobe Regional ospital octors on rotation $12

124 une 1

thousand 0 0 Audit of financial statement 0

West Gippsland Healthcare Group Annual Report 2017 125 une 1

ertain new Australian accounting standards have been published that are not mandatory for the une 1 reporting period. Department of Treasury and inance assesses the impact of all these new standards and advises the roup of their applicability and early adoption where applicable.

As at une 1, the following standards and interpretations had been issued by the AAS 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. est ippsland ealthcare roup has not and does not intend to adopt these standards early.

AAS 9 inancial The key changes include the simplified 1 an 18 The assessment has identified nstruments reuirements for the classification and that the amendments are likely measurement of financial assets, a new to result in earlier recognition of hedging accounting model and a revised impairment losses and at more impairment loss model to recognise regular intervals. impairment losses earlier, as opposed to hile there will be no significant the current approach that recognises impact arising from AAS 9, impairment only when incurred there will be a change to the way financial instruments are disclosed. AAS 1 The reuirements for classifying and 1 an 18 The assessment has identified Amendments to measuring financial liabilities were added that the financial impact of Australian Accounting to AAS 9. The eisting reuirements for available for sale AS assets Standards arising from the classification of financial liabilities and will now be reported through AAS 9 December the ability to use the fair value option other comprehensive income 1 have been retained. owever, where the and no longer recycled to fair value option is used for financial the profit and loss. liabilities the change in fair value is hanges in own credit risk in accounted for as follows respect of liabilities designated • The change in fair value attributable to at fair value through profit and changes in credit risk is presented in loss will now be presented other comprehensive income ; and within other comprehensive • Other fair value changes are presented income . in profit and loss. f 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. AAS 1 1 Amends various AASs to reflect the 1 an 18 This amending standard will Amendments to AASs decision to defer the mandatory defer the application period of Australian Accounting application date of AAS 9 to annual AAS 9 to the 1819 Standards Part reporting periods beginning on or after 1 reporting period in accordance inancial nstruments anuary 18 as a conseuence of with the transition hapter 6 edge Accounting, and to reuirements. amend reduced disclosure reuirements. AAS 1 Amends various AASs to incorporate the 1 an 18 The assessment has indicated Amendments to conseuential amendments arising from that there will be no significant Australian Accounting the issuance of AAS 9. impact. Standards arising from AAS 9 AAS 1 evenue from The core principle of AAS 1 reuires an 1 an 18 The changes in revenue ontracts with entity to recognise revenue when the recognition reuirements in ustomers entity satisfies a performance obligation AAS 1 may result in changes by transferring a promised good or to the timing and amount of service to a customer. revenue recorded in the financial statements. The Standard will also reuire additional disclosures on service revenue and contract modifications.

126 une

()

evenue fro ends the easureent of trade an ecept The assessent has indicated ontracts ith receivables and the recognition of aendents to that there ill be no significant ustoers dividends ec ipact for the public sector Trade receivables that do not have a and ec endents to significant financing coponent are to appl fro ustralian ccounting be easured at their transaction price at an tandards arising fro initial recognition ividends are recognised in the profit and loss onl hen • the entity’s right to receive payment of the dividend is established • it is probable that the economic benefits associated ith the dividend ill flo to the entit and • the amount can be measured reliably. This tandard defers the andator an This aending standard ill endents to effective date of fro anuar defer the application period of ustralian ccounting to anuar to the Standards – Effective reporting period in accordance ate of ith the transition reuireents This tandard defers the andator an This aending standard ill endents to effective date of for notfor defer the application period of ustralian ccounting profit entities fro anuar to for notforprofit Standards – Deferral of anuar entities to the for otfor reporting period rofit ntities

This tandard aends to clarif an The assessent has indicated endents to the reuireents on identifing that there ill be no significant ustralian ccounting perforance obligations principal versus ipact for the public sector Standards – agent considerations and the tiing of other than the ipact identified larifications to recognising revenue fro granting a in licence The aendents reuire • A promise to transfer to a customer a good or service that is ‘distinct’ to be recognised as a separate perforance obligation • For items purchased online, the entity is a principal if it obtains control of the good or service prior to transferring to the custoer and or licences identified as being distinct fro other goods or services in a contract entities need to deterine hether the licence transfers to the custoer over tie right to use or at a point in tie right to access ncoe of This standard replaces an The assessent has indicated otforrofit ntities ontributions and establishes revenue that revenue fro capital grants recognition principles for transactions that are provided under an here the consideration to acuire an enforceable agreeent that asset is significantl less than fair value have sufficientl specific to enable to notforprofit entit to obligations ill no be deferred further its obectives and recognised as perforance obligations are satisfied s a result the tiing recognition of revenue ill change

West Gippsland Healthcare Group Annual Report 2017 127 une

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AAS his Standard amends AAS and AAS an he assessment has indicated Amendments to to include reuirements to assist not that there ill be no significant Australian Accounting forprofit entities in applying the impact for the public sector, Standards – Australian respective standards to particular other than the impacts identified mplementation transactions and events. he for AAS and AAS above. uidance for otfor amendments rofit Entities • require non-contractual receivables arising from statutory reuirements i.e. taes, rates and fines to be initially measured and recognised in accordance ith AAS as if those receivables are financial instruments and • clarifies circumstances when a contract ith a customer is ithin the scope of AAS . AAS eases he ey changes introduced by AAS an he assessment has indicated include the recognition of most operating that as most operating leases leases hich are current not recognised ill come on balance sheet, on balance sheet. recognition of the rightofuse assets and lease liabilities ill cause net debt to increase. ather than epensing the lease payments, depreciation of right ofuse assets and interest on lease liabilities ill be recognised in the income statement ith marginal impact on the operating surplus. o change for lessors. AAS he standard amends AAS an he assessment has indicated Amendments to mpairment of Assets to remove that there is minimal impact. Australian Accounting references to using depreciated iven the specialised nature and Standards – replacement cost D as a measure of restrictions of public sector ecoverable Amount of value in use for notforprofit entities. assets, the eisting use is onashenerating presumed to be the highest and Specialised Assets of best use , hence current otforrofit Entities replacement cost under AAS Fair alue easurement is the same as the depreciated replacement cost concept under AAS .

n addition to the ne standards and amendments above, the AAS has issued a list of other amending standards that are not effective for the reporting period as listed belo. n general, these amending standards include editorial and references changes that are epected to have insignificant impacts on public sector reporting. • AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised osses 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 ther Amendments • AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-16 Cycle

otes . For the current year, given the number of conseuential amendments to AAS Financial nstruments and AAS evenue from ontracts ith ustomers, the standardsinterpretations have been grouped together to provide a more relevant vie of the upcoming changes.

128 une

here were no sinificant events occurrin after balance date for the ear ended th une

West Gippsland Healthcare Group Annual Report 2017 129 une 0 0

0 0 $000 $000

rants eratin aital nterest and ividends Secific ncome - Sales of oods and Services 00 mloee enses eratin enses Sulies and consumables on salar labour costs ther on-eratin enses Assets received free of chare - enditure for aital urose ereciation and Amortisation (00) (00) 00 () et ainloss on non-financial assets et ainloss on financial instruments evaluation of on Service eave - 0 () et result from discontinued oerations 0 ()

hanes in hsical asset revaluation surlus - ()

130 une

Actuarial ains or losses are chanes in the resent value of the suerannuation defined benefit liabilit resultin from a eerience adustments the effects of differences between the revious actuarial assumtions and what has actuall occurred and b the effects of chanes in actuarial assumtions Amortisation is the eense which results from the consumtion etraction or use over time of a non-roduced hsical or intanible asset

Associates are all entities over which an entit has sinificant influence but not control enerall accomanin a shareholdin and votin rihts of between er cent and er cent he net result of all items of income and eense reconised for the eriod t is the areate of oeratin result and other comrehensive income

ommitments include those oeratin caital and other outsourcin commitments arisin from non-cancellable contractual or statutor sources Amounts aable or receivable for current uroses for which no economic benefits of equal value are receivable or aable in return

ereciation is an eense that arises from the consumtion throuh wear or time of a roduced physical or intangible asset. This expense reduces the ‘net result for the year’.

he effective interest method is used to calculate the amortised cost of a financial asset or liabilit and of allocatin interest income over the relevant eriod he effective interest rate is the rate that eactl discounts estimated future cash receits throuh the eected life of the financial instrument or where aroriate a shorter eriod

mloee benefits eenses include all costs related to emloment includin waes and salaries frine benefits ta leave entitlements redundanc aments defined benefits suerannuation

West Gippsland Healthcare Group Annual Report 2017 131 une

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financial asset is any asset that is a cash b an euity instruent of another entity c a contractual or statutory right • to receive cash or another financial asset from another entity; or • to exchange financial assets or financial liabilities with another entity under conditions that are potentially faorable to the entity or (d) a contract that will or may be settled in the entity’s own equity instruments and is: • a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments; or • a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. financial instruent is any contract that gies rise to a financial asset of one entity and a financial liability or euity instruent of another entity. inancial assets or liabilities that are not contractual such as statutory receiables or payables that arise as a result of statutory reuireents iposed by goernents are not financial instruents.

financial liability is any liability that is a contractual obligation i to delier cash or another financial asset to another entity or ii to exchange financial assets or financial liabilities ith another entity under conditions that are potentially unfaorable to the entity or (b) A contract that will or may be settled in the entity’s own equity instruments and is: i a nonderiatie for hich the entity is or ay be obliged to delier a ariable nuber of the entity’s own equity instruments; or ii a deriatie that ill or ay be settled other than by the exchange of a fixed aount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose the entity’s own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the entity’s own equity instruments.

coplete set of financial stateents coprises a alance sheet as at the end of the period b oprehensie operating stateent for the period c stateent of changes in euity for the period d ash flo stateent for the period e otes coprising a suary of significant accounting policies and other explanatory inforation f oparatie inforation in respect of the preceding period as specified in paragraph of resentation of inancial tateents and g stateent of financial position at the beginning of the preceding period hen an entity applies an accounting policy retrospectiely or aes a retrospectie restateent of ites in its financial stateents or hen it reclassifies ites in its financial stateents in accordance ith paragraphs of .

132 une

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ransactions in which one unit provides goods services assets (or extinguishes a liability) or labour to another unit without receiving approximately equal value in return. rants can either be operating or capital in nature.

hile grants to governments may result in the provision of some goods or services to the transferor they do not give the transferor a claim to receive directly benefits of approximately equal value. For this reason grants are referred to by the AA as involuntary transfers and are termed non-reciprocal transfers. eceipt and sacrifice of approximately equal value may occur but only by coincidence. For example governments are not obliged to provide commensurate benefits in the form of goods or services to particular taxpayers in return for their taxes. rants can be paid as general purpose grants which refer to grants that are not subect to conditions regarding their use. Alternatively they may be paid as specific purpose grants which are paid for a particular purpose andor have conditions attached regarding their use.

he general government sector comprises all government departments offices and other bodies engaged in providing services free of charge or at prices significantly below their cost of production. eneral government services include those which are mainly non-maret in nature those which are largely for collective consumption by the community and those which involve the transfer or redistribution of income. hese services are financed mainly through taxes or other compulsory levies and user charges. efer to produced assets in this glossary.

efer to non-produced asset in this glossary. osts incurred in connection with the borrowing of funds includes interest on ban overdrafts and short-term and long-term liabilities amortisation of discounts or premiums relating to liabilities interest component of finance leases repayments and the increase in financial liabilities and non-employee provisions due to the unwinding of discounts to reflect the passage of time. nterest income includes unwinding over time of discounts on financial assets and interest received on ban term deposits and other investments.

nvestment properties represent properties held to earn rentals or for capital appreciation or both. nvestment properties exclude properties held to meet service delivery obectives of the tate of ictoria.

West Gippsland Healthcare Group Annual Report 2017 133 une

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A oint arrangement is an arrangement of which two or more parties have oint control. A oint arrangement has the following characteristics: (a) he parties are bound by a contractual arrangement. (b) he contractual arrangement gives two or more of those parties oint control of the arrangement A oint arrangement is either a oint operation or a oint venture.

iabilities refers to interest-bearing liabilities mainly raised from public liabilities raised through the reasury orporation of ictoria finance leases and other interest-bearing arrangements. iabilities also include non-interest-bearing advances from government that are acquired for policy purposes. ( ) urchases (and other acquisitions) of non-financial assets less sales (or disposals) of non-financial assets less depreciation plus changes in inventories and other movements in non-financial assets. t includes only those increases or decreases in non-financial assets resulting from transactions and therefore excludes write-offs impairment write-downs and revaluations.

et result is a measure of financial performance of the operations for the period. t is the net result of items of income gains and expenses (including losses) recognised for the period excluding those that are classified as ‘other comprehensive income’. et result from transactionsnet operating balance et result from transactions or net operating balance is a ey fiscal aggregate and is income from transactions minus expenses from transactions. t is a summary measure of the ongoing sustainability of operations. t excludes gains and losses resulting from changes in price levels and other changes in the volume of assets. Assets less liabilities which is an economic measure of wealth.

Non-financial assets are all assets that are not ‘financial assets’. It includes inventories, land, buildings infrastructure road networs land under roads plant and equipment investment properties cultural and heritage assets intangible and biological assets.

on-produced assets are assets needed for production that have not themselves been produced. hey include land subsoil assets and certain intangible assets. on-produced intangibles are intangible assets needed for production that have not themselves been produced. hey include constructs of society such as patents.

A legal or social entity that is created for the purpose of producing or distributing goods and services but is not permitted to be a source of income profit or other financial gain for the units that establish control or finance it.

134 une

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Includes short and long term trade det and accounts paale, grants, taxes and interest paale.

roduced assets include uildings, plant and euipment, inventories, cultivated assets and certain intangile assets. Intangile produced assets ma include computer softare, motion picture films, and research and development costs hich does not include the startup costs associated ith capital proects.

ulic financial corporations s are odies primaril engaged in the provision of financial intermediation services or auxiliar financial services. he are ale to incur financial liailities on their on account e.g. taing deposits, issuing securities or providing insurance services. stimates are not pulished for the pulic financial corporation sector.

he pulic non-financial corporation N sector comprises odies mainl engaged in the production of goods and services of a non-financial nature for sale in the maret place at prices that aim to recover most of the costs involved e.g. ater and port authorities. In general, Ns are legall distinguishale from the governments hich on them. Includes amounts oing from government through appropriation receivale, short and long term trade credit and accounts receivale, accrued investment income, grants, taxes and interest receivale.

efers to income from the direct provision of goods and services and includes fees and charges for services rendered, sales of goods and services, fees from regulator services and or done as an agent for private enterprises. It also includes rental income under operating leases and on produced assets such as uildings and entertainment, ut excludes rent income from the use of non-produced assets such as land. ser charges includes sale of goods and services income. upplies and services generall represent cost of goods sold and the da-to-da running costs, including maintenance costs, incurred in the normal operations of the epartment.

Taxation income represents income received from the State’s taxpayers and includes: • payroll tax; land tax; duties levied principally on conveyances and land transfers; • gambling taxes levied mainly on private lotteries, electronic gaming machines, casino operations and racing • insurance duty relating to compulsory third party, life and non-life policies; • insurance company contributions to fire brigades; • motor vehicle taxes, including registration fees and duty on registrations and transfers; • levies (including the environmental levy) on statutory corporations in other sectors of government and • other taxes, including landfill levies, license and concession fees.

West Gippsland Healthcare Group Annual Report 2017 135 une

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evised Transactions are those economic flos that are considered to arise as a result of policy decisions, usually an interaction beteen to entities by mutual agreement. They also include flos in an entity such as depreciation here the oner is simultaneously acting as the oner of the depreciating asset and as the consumer of the service provided by the asset.

Taxation is regarded as mutually agreed interactions beteen the government and taxpayers. Transactions can be in ind (e.g. assets providedgiven free of charge or for nominal consideration) or here the final consideration is cash.

Style conventions

igures in the tables and in the text have been rounded. iscrepancies in tables beteen totals and sums of components reflect rounding. ercentage variations in all tables are based on the underlying unrounded amounts. The notation used in the tables is as follos: ero, or rounded to ero (xxx.x) negative numbers x year period x-x year period

136 Disclosure Index

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

Legislation Requirement Page Ministerial Directions Report of Operations Charter and purpose FRD 22H Manner of establishment and the relevant Minister 30 FRD 22H Purpose, functions, powers and duties 30 FRD 22H Initiatives and key achievements 2, 23-28 FRD 22H Nature and range of services provided 6 Management and structure FRD 22H Organisational structure 34 Financial and other information FRD 10A Disclosure index 137 FRD 11A Disclosure of ex gratia expenses n/a FRD 21C Responsible person and executive officer disclosures 46 FRD 22H Application and operation of Protected Disclosure 2012 43 FRD 22H Application and operation of Carers Recognition Act 2012 43 FRD 22H Application and operation of Freedom of Information Act 1982 42 FRD 22H Compliance with building and maintenance provisions of Building Act 1993 42 FRD 22H Details of consultancies over $10,000 44 FRD 22H Details of consultancies under $10,000 44 FRD 22H Employment and conduct principles 36 FRD 22H Information and Communication Technology Expenditure 43 FRD 22H Major changes or factors affecting performance 2,23 FRD 22H Occupational violence 36 FRD 22H Operational and budgetary objectives and performance against objectives 23 FRD 24C Reporting of office-based environmental impacts 18-19 FRD 22H Significant changes in financial position during the year 23 FRD 22H Statement on National Competition Policy 42 FRD 22H Subsequent events n/a FRD 22H Summary of the financial results for the year 23 FRD 22H Additional information available on request 45 FRD 22H Workforce Data Disclosures including a statement on the application of employment and conduct principles 36 FRD 25C Victorian Industry Participation Policy disclosures 42 FRD 29B Workforce Data disclosures 36 FRD 103F Non-Financial Physical Assets 97 FRD 110A Cash flow Statements 54 FRD 112D Defined Benefit Superannuation Obligations 74 SD 5.2.3 Declaration in report of operations 46 SD 3.7.1 Risk management framework and processes. 46 Other requirements under Standing Directions 5.2 SD 5.2.2 Declaration in financial statements 47 SD 5.2.1(a) Compliance with Australian accounting standards and other authoritative pronouncements 47 SD 5.2.1(a) Compliance with Ministerial Directions 43 Legislation Freedom of Information Act 1982 42 Protected Disclosure Act 2012 43 Carers Recognition Act 2012 43 Victorian Industry Participation Policy Act 2003 42 Building Act 1993 42 Financial Management Act 1994 43 Safe Patient Care Act 2015 43

West Gippsland Healthcare Group Annual Report 2017 137 HEAD OFFICE: West Gippsland Hospital 41 Landsborough Street Warragul Victoria 3820 Phone: 03 5623 0611 Fax: 03 5623 0896 Email: [email protected] www.wghg.com.au