LATROBE REGIONAL HOSPITAL Annual Report · Summary of Financial Results 29 General Information 33...

Cover - DRAFT 1

LATROBE REGIONAL HOSPITAL

Annual Report

2018

Images on inside front and back cover: Latrobe Regional Hospital’s Stage 2A expansion delivered a more contemporary healthcare setting for staff and the Gippsland community as well as a cardiac catheterisation laboratory and larger Emergency Department.

Cover image: Dr Bernadette Spencer spent her first rotation in the new Emergency Department at Latrobe Regional Hospital as part of the Gippsland Rural Intern Training Program. A record number of interns took part in the GRIT program this year.

Annual Report 2018 | 1

ContentsOur story 2

Chair and Chief Executive Report 3

Our Year in Review 6

Board of Directors 12

Committees 14

Executive Team 16

Organisational Structure 18

Our People 20

Statement of Priorities Part A 22

Statement of Priorities Part B 25

Statement of Priorities Part C 28

Summary of Financial Results 29

General Information 33

Additional Information 34

Disclosure index 35

Attestations 37

Financial Report 40

WelcomeThis report outlines Latrobe Regional

Hospital’s activities and performance

from 1 July 2017-30 June 2018 and

provides detailed financial statements

about the organisation.

We are a public health service

established under the Health Services

Act 1988 (Vic). This was the culmination

of events commencing with the merger

of two public hospitals located in

Traralgon and Moe and a nursing home

in Morwell in 1991.

The objective of LRH, an incorporated

body, is to provide public hospital

services in accordance with the

principles of the Australian Health Care

Agreement (Medicare) and the Health

Services Act 1988 (Vic).

We are accountable through our Board

of Directors to the Hon. Jill Hennessy

MP, Minister for Health, Minister for

Ambulance Services and the Hon. Martin

Foley MP, Minister for Mental Health,

Minister for Housing, Disability and

Ageing.

This report is also available online at

www.lrh.com.auOur Values> Person-centred care

> Integrity

> Excellence

> Working together

2 | Latrobe Regional Hospital

Our storyLatrobe Regional Hospital is located 150km east of Melbourne at Traralgon West.

Our hospital has 313 beds and treatment chairs and cares for a population of more than 270,000.

We offer services such as cardiac care, elective surgery, emergency care, aged care, obstetrics, mental health, pharmacy, rehabilitation and medical and radiation oncology at the Gippsland Cancer Care Centre on site.

LRH has four operating theatres and specialises in general and orthopaedic surgery, opthalmology, gynaecology and obstetrics as well as ear, nose and throat surgery and urology. Our new cardiac catheterisation laboratory began diagnostic procedures in 2018.

LRH is the main provider of mental health services across Gippsland with community mental health teams in the Latrobe Valley, Sale, Bairnsdale, Yarram, Orbost, Korumburra, Warragul and Wonthaggi as well as an inpatient unit at the hospital.

The Macalister Unit at LRH has 10 acute beds for older people with complex needs relating to mental illness as well as 10 nursing home beds.

The Agnes Unit at the hospital is a residential program offering emotional support for parents adjusting to life with their baby.

Paediatric and adult patients are linked to consultant specialists through our telehealth programs or in person at our consulting suites.

Our visionWe will be a leading regional health care provider delivering timely, accessible, integrated and responsive services to the Gippsland community.

Highlights of our year

153,234 people treated at our hospital

36,175 people came to our Emergency Department for treatment

10,314 surgical procedures performed

68,262 outpatients

833 babies delivered


Chair and Chief Executive Report

Our community has welcomed new services and contemporary facilities which have redefined the patient experience in Gippsland.

A larger Emergency Department, new cardiac catheterisation laboratory, endoscopy suites and inpatient units are some of the features of a major expansion which was completed in 2017.

We were delighted to unveil a building which combines great design with clinical functionality – part of our quest to develop a health service that is responsive to the needs of people in Gippsland. Those needs are driven by the prevalence of chronic illnesses such as cancer, cardiovascular disease and the poor health status of our community.

The inclusion of a cardiac catheterisation laboratory, the region’s first, will greatly enhance care for people with serious heart health issues. We have formed a partnership with Alfred Health to recruit and train staff and a milestone was reached in February 2018 when the first diagnostic procedure was carried out.

The new development has also opened up career opportunities in other clinical disciplines and non-clinical professions such as clerical work, catering, security and cleaning.

We’re proud the development provided a boost to the Latrobe Valley’s economy during a challenging time for our region following the closure of the Hazelwood Power Station. It is difficult to quantify the flow-on benefits to the community from a $79 million development; the purchase of tools, fuel for the never-ending fleet of trucks which took soil away from the building site and brought back quarry materials and concrete and of course the cafes, hotels and restaurants that kept the 200-strong construction workforce fed.

It was terrific to see our painting contractor – a small local business – double his staff to eight painters and source materials in the Valley. It was also the largest commercial project for the company installing our floor coverings.

Planning is now underway for construction of Stage 3 of our master plan which focuses on critical services such as surgery and intensive care.

Delivery of regional services

Our new cardiac catheterisation laboratory complements a number of specialty services which take healthcare into homes across Gippsland.

We have expanded our telehealth program to include consultations to oncology and pre-admission clinic patients. Overall, the telehealth program has saved outpatients 66,178 kilometres in travel since December 2016.

Telehealth is also being used by our Emergency Department staff to provide after-hour support to Urgent Care centres at health services in Leongatha, Korumburra, Foster and Yarram.

We continue to develop strong partnerships across the health sector. A partnership with the Royal Flying Doctor Service is working to improve access to mental health care in remote communities in East Gippsland while our association with headspace in Morwell and Bairnsdale is connecting young people to mental health services.

Organisational change

The growth of our hospital and expansion of services across the region prompted an organisational restructure which included the creation of the Chief Operating Officer/Chief Nurse role, Executive Director People and Culture and Executive Director Regional Services. Changes were also made to the senior management structure to show leadership in regional service delivery, focus on the culture and wellbeing of our staff group and better support higher levels of patient throughput.

Photo: LRH staff have embraced the National Safety and Quality Health Service, National Mental Health and Australian Aged Care Quality Agency standards.


A quality service

The accreditation process this year included a full audit of the hospital, mental health inpatient unit and community mental health sites across Gippsland, our nursing home and sub-acute clinic.

We were pleased our Macalister nursing home met all 44 outcomes as assessed by the Australian Aged Care Quality Agency with particular credit given to the unit’s lifestyle activity program and sensory garden. The quality of our catering, cleaning and laundry services was also highlighted.

While the survey team indicated verbally they were satisfied with our governance, quality and safety, formal notification of full accreditation under the National Safety and Quality Health Service standards and National Mental Health Standards had not been received by 30 June 2018.

Thank you to our staff across the organisation who demonstrate great care and commitment in the provision of services.

Developing a safer workplace

We know a positive workplace culture will reflect in the experience of patients at our hospital. In 2017 we introduced an Executive Director of People and Culture to drive strategies focusing on staff wellbeing.

One of those strategies was the introduction of the Workplace Support Officer program. Eleven staff members have been trained in the role of Workplace Support Officers to act as the first point of contact for employees concerned about discrimination, harassment, bullying or other workplace matters. The officers are able to provide support and guidance to a staff member who may want to formalise a complaint.

Occupational violence and aggression (OVA) in the workplace continues to challenge us. Our OVA workgroup of staff and management representatives have driven a number of initiatives to keep employees safe. De-escalation, Engagement and Prevention training continues and we have been successful in securing an upgrade to our CCTV and other security systems.

Connecting with the community

We were delighted to have the support of Bunnings Warehouse stores across Gippsland, Morwell Park Primary School and students from Latrobe Valley Flexible Learning Option for the development of a garden at our hospital which reflects the culture of our local Gunaikurnai people.

The Bunnings crew joined our staff to carve out the garden over two days while the children created artwork and helped with planting.

The garden, which features artwork depicting the Gunaikurnai creation story and plants which are indigenous to the Gippsland area, has been well received by Aboriginal and Torres Strait Islander patients, families and visitors. With large eucalypt trees and a dry creek bed, it is a relaxing oasis from the clinical environment and a step towards creating welcoming spaces for our Aboriginal and Torres Strait Islander community.

Our work to improve access to health services for LGBTIQ communities continues through our Rainbow eQuality Workgroup. The group of staff and managers has begun the process of analysing our protocols to create a more inclusive health space.

We have continued our association with the Gippsland Pride Cup in the North Gippsland Football Netball League and in a first for regional Victoria, organised a community forum to take the messages of diversity and inclusion to a wider audience.

LRH also remains committed to the Latrobe Health Assembly, a community-driven approach to improving the health and wellbeing of people in the Latrobe Valley.

Our organisation is a foundation member and has played a supportive role in health initiatives rolled out by the Assembly.

Planning for the future

We have completed the framework for a strategic plan that will help to shape our health service to 2023.

The plan will focus on four key areas: Service Delivery, Our People, Education, Training and Research and Regional Leadership. It will demonstrate our commitment to working with the community, staff and other Gippsland health agencies to deliver services that are close to home.

We have also committed to a stronger education, training and research component with a focus on workforce development and practical research which improves the quality of our services and patient outcomes.

Photo: LRH took the lead role in organising a community forum aimed at educating the community about LGBTIQ issues and encouraging diversity and inclusion.


Your contribution makes a difference

Thank you to the individuals, community groups and businesses that have made a contribution to LRH in so many ways throughout the year – from the CWA ladies who sew calico dolls for our young Emergency Department patients, to the donors who support our fundraising appeals year after year.

Our appreciation also goes to our volunteers who assist our staff, patients and visitors day after day and our Community Advisory Committee which provides us with an important perspective on our services and processes.

Finally, on behalf of the Board of Directors and our Executive team, we’d like to thank our staff for their professionalism on the job and dedication to creating a health service our region can be proud of.

Linda McCoy Chair, Board of Directors

Peter Craighead Chief Executive

Responsible Bodies Declaration

In accordance with the Financial Management Act 1994, I am pleased to present the report of operations for Latrobe Regional Hospital for the year ending 30 June 2018.


Traralgon West 31 August 2018

Photo: Children from Morwell Park Primary School and Bunnings Warehouse staff helped LRH develop a garden which celebrates the culture of Gippsland’s Aboriginal community.


Our Year in Review

Critical, Inpatient and Ambulatory Services

• Recruitment of clinical staff has been ongoing following the opening of our new Emergency Department in December 2017. This has enabled the department and co-located Short Stay Observation Unit to operate at an increased capacity.

• No patient has stayed longer than 24 hours in the Emergency Department, despite a record number of presentations.

• Involvement in the Better Care Victoria (BCV) Patient Flow Partnership is providing opportunities to collaborate with other health services to identify best practice for improving the patient experience from the time of presentation to the Emergency Department through to discharge from hospital.

• Our partnership with Alfred Health and the recruitment of two cardiologists has enabled the newly opened Cardiac Catheterisation Laboratory to perform 65 angiogram procedures in the facility.

• There have been sustained high achievements in elective surgery with more patients admitted for surgery than previous years and procedure numbers exceeding our target. Opening a new endoscopy suite has resulted in improved access to the operating theatre for emergency cases.

• Access to elective surgery according to clinical need (Category 1, 2 & 3) is in line with the Department of Health and Human Services policy where the majority of patients receive treatment within the clinically recommended time for surgery.

• Our existing medical unit successfully relocated into a new 32-bed inpatient unit named Avon in December 2017.

• In May 2018 the second medical unit in our new building initially opened with 16 beds, and has since increased to 20 beds. The new Bass unit has offered employment opportunities to both new and existing senior staff.

• Our telehealth services have expanded into maternity. LRH has partnered with a local school to provide outreach antenatal care and education using telehealth. This initiative facilitated excellent antenatal care for young women without missing out on school attendance.

• Our Nurse Donation Specialist and a partnership with DonateLife Victoria have played important roles in the development of strategies and community activities leading to the identification of potential organ and tissue donors at LRH.

• The Gippsland Regional Palliative Care Consultancy Service has been enhanced and now provides an after-hours and weekend telephone consultation service to support Gippsland clinicians managing complex palliative care clients.

• To assist with the management of diabetes in children, LRH commenced a Paediatric Diabetes Clinic which provides multi-disciplinary care including medical, dietitian and diabetes input.

• We have appointed two Nurse Practitioner Candidates in Chemotherapy.

• A project to enhance oncology discharge planning has been funded by Gippsland Regional Integrated Cancer Services (GRICS).

• The introduction of Chefmax software for patient diets has increased safety and streamlined ordering of meal options and enhanced communication of food allergies to our food services department.

• Pathways are being developed for colorectal, breast, prostate and lymphoma cancers in partnership with Gippsland PHN.

Medical Services

Regional

• The Gippsland Rural Intern Training (GRIT) program was expanded from 15 to 20 interns and will increase to 25 interns in 2019 following a joint submission by LRH and Eastern Victoria General Practice Training to the Rural Doctor Training Innovation Fund. The program includes GP rotations in Heyfield, Maffra and Traralgon.

• LRH successfully received federal funding (Integrated Rural Training Pipeline) for a Senior Paediatric Registrar as part of the Gippsland training hub. This will assist with the development of a Gippsland regional training program in paediatrics.

• We have now embedded a combined telehealth project for LRH Emergency Department staff to provide after-hours support to Urgent Care centres at Gippsland Southern Health Service (Leongatha and Korumburra), South Gippsland Hospital (Foster) and Yarram and District Health Service.

• LRH was successful in obtaining funding under the Victorian Telehealth Specialist Clinic Project Initiative to further expand outpatient telehealth consultations to Oncology and Pre-admission Clinic patients in southwest Gippsland.


• The Rural Workforce Agency of Victoria (RWAV) has provided funding for obstetric outreach appointments to be conducted by telehealth.

• Jackie Churchill was appointed as the Project Officer for the Gippsland Regional Specialist Medical Workforce Plan and to set up the Director of Medical Services/Chief Medical Officer (DMS/CMO) group. The group includes all regional and sub-regional DMS/CMOs and assists smaller rural health services with clinical governance,

• The Gippsland Palliative Care Consultants commenced an after-hours telephone on-call service for the region.

• The Emergency Medicine Education and Training (EMET) program was funded for a further three years by the Australasian College for Emergency Medicine with plans to expand to south-west Gippsland. It currently involves Latrobe Regional Hospital, Central Gippsland Health and Bairnsdale Regional Health Service.

College Accreditation

• LRH was re-accredited by the Royal Australasian College of Medical Administrators for the Medical Management Registrar training position. Federal funding has been confirmed for this position for another three years (2018-20 inclusive).

• We received a three year accreditation by the Australian Orthopaedic Association in relation to our Orthopaedic Registrar Training position with no recommendations.

• LRH received five year re-accreditation from the Royal Australasian College of Physicians for advanced paediatric training with broadening of training scope to include general, acute (including perinatal care), community and developmental paediatrics.

Stage 2A and Restructure

• As a result of our expanded facilities, there has been increased Emergency Department (ED) Consultant coverage from 8am to 2am seven days a week (including a six hour overlap late afternoon and early evening).

• Junior medical staffing has been bolstered by the introduction of registrar positions and additional Hospital Medical Officers in the ED.

• We increased the number of Medical Registrars following the expansion of medical unit beds. An Advanced Trainee in General Medicine position was also created.

• A rapid assessment outpatient clinic for complex patients referred from the Emergency Department or following discharge from LRH has been introduced by the Physician Group.

• The Medical Workforce Unit was restructured with the appointment of Jennie Wood as Manager and Jodie Humphrey as Administrative Assistant.


Education, Training and Research

• LRH has introduced a combined organisation-wide multi-disciplinary education program.

E-Health

• Uploading of discharge summaries into patients’ My Health Record has commenced. Patients and their health providers will be able to access their discharge summaries.

• An electronic online transcription service has been implemented in the Gippsland Private Consulting Suites which has improved turnaround times for letters dictated by doctors.

Recruitment

• Dr Philippa (Pip) Hawkings commenced as the Deputy Chief Medical Officer.

• Anita Raymond was appointed as the General Manager Education, Training and Research and Lee Bell to the position of General Manager Governance.

• Drs Anurag Saxena and Boris Tseitkin were recruited as additional Intensivist Care Specialists.

• Dr Nilesh Shah was appointed as the Clinical Lead Intensive Care.

• Drs Nay Htun and Roshan Prakash were recruited to two new Interventional Cardiologist positions.

• Dr Reg Edwards was appointed as Specialist Anaesthetist.

• Dr Ruwei Xu was appointed as a General Surgeon and Dr Sohail Rana as a Paediatrician working between LRH and Central Gippsland Health.

• Dr Gnanasegar Swaminathan was appointed to the newly created Ortho-geriatrician position.

• Dr Beryl Tan commenced as a Plastic Surgeon and Dr Wale Ibraheem as an Obstetrician and Gynaecologist.

• Sophie Laurence was recruited to the role of Business Manager Gippsland Private Consulting Suites.

• Melissa Wangman was appointed as the Acting Consumer Liaison Coordinator.

Departures

• Daniel Webster (HMO Manager)

• Kylie Foltin (Consumer Liaison Coordinator)

• Mr Cliff Choong (Thoracic Surgeon)

• Mr Raminder Dhillon (Plastic Surgeon)

• Dr Sharanjeet Sidhu (Specialist Anaesthetist)

• Dr Oshri Bar El (Obstetrician & Gynaecologist

• Dr Holly Atkinson (Oncologist)

• Dr Fred Mattheyse ((Specialist Anaesthetist)

• Toss Player (Manager Gippsland Private Consulting Suites)

• Catherine Wilks (Medical Recruitment and Roster Coordinator)


Mental Health Services

• We achieved successful accreditation of our Mental Health Service and our Aged Care Mental Health Nursing Home by meeting all outcomes with no recommendations.

• There has been ongoing improvement in the reduction of seclusion and restraint use in our bed-based program areas. We are leading the way in delivering least restrictive care across all of our programs and we continue to have low rates of compulsory treatment orders for consumers accessing our services.

• LRH has recruited several Specialist Consultant Psychiatrists and continues to deliver a Psychiatry Training program in the Gippsland region.

• LRH partners with headspace in Morwell and Bairnsdale to support the delivery of mental health services for young people across Gippsland.

• A partnership with the Royal Flying Doctor Services in East Gippsland is supporting access to mental health care in remote communities.

• The successful Mental Health and Police Response program was implemented permanently in Wonthaggi and further expansion progressed for the Bairnsdale region.

• The new Mental Health Advice and Response Service (MHARS) was funded to provide additional support to the Latrobe Valley Court for people with mental health issues.

• We worked with Wellways and Glasshouse Gatherings to establish a new garden at the Prevention and Recovery Care Service in Bairnsdale.

• The Occupational Violence and Aggression (OVA) workgroup progressed the implementation of an action plan with a focus on incident management, reducing and eliminating risk, improving training, analysing data and supporting staff affected by OVA incidents.

• We have continued the implementation of Zero Suicide – an evidence-based global approach for organisations to change their systems to reduce rates of suicide. We have recently piloted a new training package for mental health clinicians and are building safer clinical systems for people who access our service.

• Physical Health Clinics were established at each site to improve the physical health of people living with a mental illness. Highly experienced mental health nurses are supporting our consumers to strengthen the management of their physical health concerns.

• Recommendation 85 of the Hazelwood Mine Fire Implementation Plan commenced with the delivery of a Young Persons Health Clinic. The clinic enables young people to access mental health services linked with community health programs to reduce the risks of obesity, diabetes and respiratory disease.

• The Safewards Program has expanded across our adult, aged and secure units and each unit has established a sensory room and sensory garden to enhance the patient experience.

• The Health Justice Partnership between LRH, Community Legal Aid and the Community Legal Service has further developed with a lawyer on site one day per week in our Bairnsdale office and plans to place lawyers across each LRH site by 2019.

• The Mental Health Service continues to participate in the Strengthening Hospital Responses to Family Violence education program and governance committee.

• The Optimal Health Program (OHP) has expanded into the Aged Mental Health program and all adult clinical mental health staff have received refresher training. New OHP Alcohol and Other drug training has also been completed.

• Our Peer Support program is in place and our peer staff are working with both consumers and carers to help prevent re-admission to hospital.

• The Mental Health Service participated in a range of community activities including the AFL Gippsland Mental Health Round and field days at Lardner Park and Bairnsdale to promote good mental health in our region.

• The Rainbow eQuality workgroup has been actively involved in the Proud to Be Community Forum and the Gippsland Pride Cup.

• We continue to deliver a broad range of educational programs across Gippsland for organisations and in communities including Mental Health First Aid, Teen Mental Health First Aid, Partners in Depression and Applied Suicide Intervention Skills Training.

• Four registered nurses successfully completed the Graduate Program in Mental Health Nursing.


People and Culture

Human Resources

• In conjunction with the Staff Development Unit, we developed an interactive bullying and harassment training package which will be rolled out late 2018.

• LRH implemented a program of Workplace Support Officers to support staff experiencing bullying and harassment in the workplace. Funding was secured to provide targeted training to our appointed WSOs.

• We secured funding to conduct more than 100 workplace health checks for staff. These will be conducted in July 2018.

• A Health and Safety Manager has been recruited with the responsibility of the health and safety and security requirements of the organisation.

• We have upgraded the e-Recruitment system which was integrated with our payroll system and includes electronic on-boarding and online criminal records checks prior to commencement. This has streamlined processes to improve efficiency.

• A new online e-Performance system was implemented to provide a more secure and reliable performance management platform to measure the development of staff and set objectives.

Koori Liaison

• Our Aboriginal Employment Plan and strategies are providing excellent outcomes. Our ATSI staffing fluctuated from 14-19 during 2017-18 and will increase in the next financial year with four new trainee positions budgeted for in 2018-19. We now have three Aboriginal and Torres Strait Islander (ATSI) staff in our Environmental Services team.

• Two ATSI graduate nurses successfully completed their training with one remaining at LRH and the other exploring other areas of nursing.

• Our first ever trainee completed her Certificate 3 Pharmacy Tech.

• We were successful in receiving a grant for a three year Aboriginal nursing traineeship in Mental Health, commencing later in 2018.

• There has been a 60 per cent increase in patients identifying as ATSI because of our reporting strategies such as ‘asking the question’.

• Data and alerts have increased to capture all separations and admissions into LRH. The systems utilised to record and alert our Aboriginal Health Liaison Officers (AHLOs) have improved significantly.

• Hospital-wide cultural events are now embedded into LRHs calendar of events such as Close the Gap day and NAIDOC Week.

• Cultural awareness is in the process of being included into our mandatory training. We have also built an ATSI acknowledgement into the organisation’s email signature and ensured our Aboriginal Health Liaison Officers played a significant role in the opening of the hospital’s expansion.

• As part of a community project, we have created a new garden which provides a safe and welcoming area for Aboriginal patients and their families. We have also been successful in obtaining a grant for $18,000 for the purchase of Aboriginal artwork to be displayed throughout the hospital.

• Our AHLOs have been involved in major linkages and coordination with ATSI services and programs to improve health pathways for patients. They have also been involved with major evaluations of important initiatives such as Close the Gap and Koolin Balit.

Support Services

• A new Environmental Services management structure was introduced which included a new Environmental Services Manager position.

• Our cafeteria services are now run in-house to give us greater control over healthy food options. Healthy Options Guidelines have been implemented in both of our cafés.

Business Services

• Reparation works for the LRH Main Switchboard were completed following catastrophic failure.

• Reparation works of the radiotherapy air conditioning system were undertaken following multiple failures within areas housing critical service infrastructure.


Regional Services

• The position of Executive Director Regional Services was created to facilitate Latrobe Regional Hospital’s leadership responsibilities as a designated Public Health Service. The initial focus of the role is to develop shared corporate services across the region while maintaining responsibilities relating to key LRH contract negotiations, procurement governance and risk management framework.

• A regional governance structure was established engaging senior management representation from other agencies to collectively oversee identification, development and implementation of shared services.

• An agreed principle for development, evaluation and delivery of shared corporate services was established.

• LRH managed a collective procurement process for internal audits across the region and established an agreed process and structure associated with other collective procurement opportunities.

• A working party was established to oversee implementation of a shared procurement and contract management module with West Gippsland Healthcare Group and Central Gippsland Health Services.

• LRH negotiated a contract on the provision of radiology services incorporating a new pricing structure from 2020 until 2025 and the establishment of a satellite radiology department supporting the new Emergency Department. Negotiations also included radiologist support for the new cardiac catheterisation laboratory and the introduction of PET/CT.

• LRH undertook contract documentation, tendering and the establishment of a panel of preferred providers for minor and capital works up to $3 million

• We finalised contract documentation with a radiology provider to deliver a breast screen service.

• Contract documentation was finalised with Neerim District Health Services on the delivery of public cataract services.

• The agreement relating to the provision of radiotherapy services with Alfred Health was reviewed.

• Contract documentation for tendering of outsourced facility management services was finalised.

• Our Risk Management Policy was reviewed following changes in roles and responsibilities due to an organisational restructure.

• Risk Management maturity was reviewed utilising VMIA’s online risk management assessment tool and a plan of action for improvement was developed.

• Strategic risks to LRHs strategic pillars for success were reviewed and realigned.

Photo: LRH recruited Workplace Support Officers to support staff experiencing bullying and harrassment.


Board of Directors

Linda McCoy / Chair

Linda McCoy has been involved in executive management positions in the community health and primary care sectors for more than 25 years. She was more recently Director of Community Services at the West Gippsland Healthcare Group.

Throughout her career, Linda has been involved in the development of strategic policy and has held several Ministerial-appointed roles including as a member of the final Victorian Quality Council.

Board meetings attended: 10/11

Committees: Remuneration and Executive Performance (Chair), ex-officio Finance, Audit and Risk, Appointments and Scope of Practice, Community Advisory Committee, Quality, Population Health

Ian Gibson / Deputy Chair

Ian Gibson holds qualifications in economics, arts, public policy and management.

He has extensive experience in strategic planning, local government and governance. Ian is a board member of the West Gippsland Catchment Management Authority, a sessional member of Planning Panels Victoria and a sessional academic at Federation University.


Committees: Appointments and Scope of Practice (Chair), Community Advisory Committee (Chair), Population Health (Chair), Remuneration and Executive Performance

Leah Young

Leah Young has qualifications and experience in business management and governance.

She has served on the boards of Gippsland Water, Westernport Water and the former Gippsland Medicare Local. Leah is the business manager at St Paul’s Anglican Grammar School. She has also served on several of the boards’ audit and risk management committees and has experience in local government, finance, corporate services and capital works development.


Committees: Audit and Risk (Chair), Remuneration and Executive Performance

John Rasa

John Rasa was National President of the Australasian College of Health Service Management (ACHSM) and now serves as Independent Director of ACHSM.

John is Director of Edge Management Consulting and Australian Centre for Leadership Development that assisted with the delivery of the Victorian Department of Health’s Clinical Leadership Program in Quality and Safety conducted by ACHSM and La Trobe University.

He served as Chair of the Box Hill Institute of TAFE for nine years and was on the Victorian Department of Health’s Bennett Committee in 2001 which reviewed Victorian nursing recruitment and retention strategies. John was previously Chief General Manager - Acute Services at Eastern Health, Box Hill Hospital CEO and Associate Professor and Sub-Dean of Health Services Management at Charles Sturt University in NSW.


Committees: Quality (Chair), Appointments and Scope of Practice, Population Health

John Donovan

John Donovan is the Managing Director of AFM Investment Partners, a member of Trustee Australia’s managed funds compliance committee, a responsible manager of an Australian Financial Services Licence and a former member of the Australian Centre for Financial Studies.

John is a director of V/Line and a former director of Gippsland Water and Adminpartners.


Committees: Finance (Chair), Audit and Risk, Quality


John Arranga

John is a Director of Ball+Partners Lawyers and is an experienced health and legal professional with degrees in medicine, the law and risk management and extensive experience in multiple aspects of the health care sector.

John began his professional life as medical practitioner graduating from medicine in 1984 before turning to law. He commenced legal practice in 1994 and later worked in medical indemnity insurance as a lawyer, a claims manager and senior executive before returning to private legal practice.

John has a broad experience in health law and the regulatory and disciplinary processes that impact the health system. John’s skills also lie in risk management in general and clinical risk management in particular. He has an interest in Open Disclosure having sat on the Open Disclosure Steering Committee of NSW Health as a Medical Defense Organisation representative and on the Australian Commission for Quality and Safety in Health Care Open Disclosure Advisory Group.


Committees: Finance, Quality

Chelsea Caple

Chelsea Caple was the first female Football Development Manager for AFL Victoria and AFL Gippsland and has previous experience at Tennis Australia, Exercise Research Australia and Calisthenics Victoria.

She is passionate about promoting and enhancing wellbeing to build healthy communities. Having been involved in sports administration for 10 years, Chelsea continues to build the capacity of committees and boards, through strategic consultation to ensure good governance, clear policies and procedures, knowledge of responsibilities, risk management, accountability and to equip them to effectively govern in the changing demographics of the sporting landscape.

Chelsea is a board member for Gippsland Women’s Health and the Regional Convenor for South East Gymnastics.


Committees: Population Health, Community Advisory Committee

Photo: Elder Aunty Gloria Whalan (seated) helped LRH Aboriginal Health Liaison Officers Gail Mounsey and Mark Munnich and Board Chair Linda McCoy judge our annual NAIDOC Week challenge.


Population Health Committee

The Population Health Committee provides a forum for stakeholders to develop an integrated, proactive and strategic approach to planning for population health within the Latrobe Valley and wider Gippsland community. It provides a formal link between primary care organisations in Gippsland, including local government and the LRH Board. It also promotes LRH as a health-focused environment for its stakeholders including staff.

Members: Ian Gibson (Chair), John Rasa, Chelsea Caple, Peter Craighead, Amanda Cameron, Ben Leigh (Latrobe Community Health Service CEO),

Frank Evans (Central Gippsland Health CEO), Dan Weeks (West Gippsland Healthcare Group CEO), Therese Tierney (Bairnsdale Regional Health Service CEO), Marianne Shearer (Gippsland PHN CEO), Greg Blakeley (South Division DHHS).

Community Advisory Committee

The Community Advisory Committee was established to increase consumer, carer and community partnerships within the hospital. It also aims to develop and communicate to the LRH Board a consumer perspective on hospital services and identify opportunities to improve the quality, safety, accessibility and appropriateness of services.

Members: Ian Gibson (Chair), Chelsea Caple, Lee Bell, Vicki Hamilton, John Smethurst, Ray Watson, Rita Fleming, Rika Delaney.

Appointments and Scope of Practice Committee

The Appointments and Scope of Practice Committee ensures clinical services, procedures or other interventions are carried out by competent health care practitioners within an environment which supports the provision of safe, high quality healthcare services. It is committed to facilitating a robust, merit-based and thorough appointments process for health care practitioners at Latrobe Regional Hospital, ensuring the scope of practice is within the capability frameworks for the organisation.

Members: Ian Gibson (Chair), John Rasa, Peter Craighead, Amanda Cameron, Dr Simon Fraser, Cayte Hoppner, Mark Jarred.

Committees

Audit and Risk Committee

The Audit and Risk Committee provides assurance in the key areas of statutory accounts, internal control, legislative compliance and oversight of the activities of internal and external audits. It ensures mechanisms are in place for data accuracy and integrity and that a robust risk management framework is in place which reflects the risks to the hospital and appropriate control measures.

Members: Leah Young (Chair), John Donovan, John Arranga, Peter Craighead, Amanda Cameron, Mark Wilkins, Nick Moisis.

Quality Committee

The Quality Committee ensures the quality and safety of the services delivered by the hospital and that they meet appropriate standards including those of the National Safety and Quality Health Service and the needs of consumers.

Members: John Rasa (Chair), John Donovan, John Arranga, Peter Craighead, Amanda Cameron, Dr Simon Fraser, Cayte Hoppner, Gary Gray, Mark Wilkins, Lee Bell (General Manager Governance), Kenneth Ch’ng (Pharmacy Manager), Dr Tricia Wright (snr medical staff member representative), Angela Scully (snr nursing staff member representative), Martin Allen (snr allied health staff member representative), Lucie Newberry (community representative).

Finance Committee

The Finance Committee provides assurance in financial management including but not limited to financial reporting, performance and sustainability, return on investments, property management, banking and key policies relating to management/handling of cash/working capital.

Members: John Donovan (Chair), John Arranga, Peter Craighead, Amanda Cameron, Nick Moisis.


Remuneration and Executive Performance Committee

The role of the Remuneration and Executive Performance Committee is to ensure remuneration packages appropriately reflect the competence and performance of the Chief Executive. The committee monitors the performance of the Chief Executive against the Statement of Priorities and other criteria, through regular reviews.

Members: Linda McCoy (Chair), Leah Young, Ian Gibson.


Executive Team

Amanda Cameron Chief Operating Officer / Chief Nurse

Amanda trained at St Vincent’s Hospital in Melbourne and has worked in senior management positions at Warragul, Bairnsdale and Sale hospitals.

As Chief Operating Officer and Chief Nurse, she manages a diverse healthcare environment including inpatient, ambulatory and critical services. Amanda is also responsible for LRH’s financial services, payroll operations and procurement.

Amanda is a registered nurse and has a Bachelor of Nursing, Graduate Diploma in Critical Care and holds a Master of Health Administration from La Trobe University. She is a member of the Australian College of Health Service Management and the Australian Institute of Company Directors.

Amanda Cameron resigned from the position of Chief Operating Officer / Chief Nurse effective 29 June 2018.


Peter has qualifications in nursing, midwifery and health administration. Before being appointed to Latrobe Regional Hospital, he was CEO at health services in Sale and Yarram.

He is responsible for the development and implementation of operational and strategic planning and quality improvement at LRH in consultation with staff, community and other Gippsland health services.

Peter holds an executive position with the Gippsland Health Alliance. He has experience in planning for future health needs and has consulted for the Commonwealth Government and state governments. Peter has a strong interest in the viability and sustainability of rural health services.


Dr Simon Fraser Chief Medical Officer

Simon is a newborn and general paediatrician who began work in medical administration in 2000.

After completing a Master of Public Policy and Management, Simon has worked as a medical director at a number of regional and sub-regional Victorian health services.

In 2011 Simon completed his Fellowship with the Royal Australasian College of Medical Administrators and was awarded Fellowship with the Australasian College of Health Services Management in 2017. He is a member of the neonatal death sub-committee of the Consultative Council on Obstetric and Paediatric Mortality and Morbidity, chair of the Gippsland Regional Perinatal Mortality and Morbidity Committee and chair of the Gippsland Regional Director of Medical Services Network.

As Chief Medical Officer and a member of the LRH executive, Simon provides high-level support on a range of issues including the governance and education, training and research units, medical staff, pharmacy, the health information unit and the private consulting suites.

Cayte Hoppner Executive Director Mental Health / Chief Mental

Health Nurse

Cayte is a credentialed mental health nurse and an endorsed mental health nurse practitioner.

As Executive Director Mental Health and Chief Mental Health Nurse, Cayte oversees the provision of recovery-oriented and high quality care and the implementation of key mental health reforms. She provides high-level advice as a member of the LRH executive and oversees the development of the mental health workforce.

Cayte holds a Graduate Diploma in Psychiatric Nursing, a Graduate Diploma in Occupational Health, an Advanced Certificate in Pharmacology, a Master of Nursing and a Master of Business Administration.

Cayte is a member of the Australian College of Nurse Practitioners, Australian College of Nursing, Australasian College of Health Service Management, Australian Institute of Company Directors and Australian College of Mental Health Nurses.

Mark Wilkins Executive Director People and Culture

Mark has formal qualifications in Human Resources Management and is an active member of the Australian Human Resources Institute.

Mark was a Human Resources professional for almost 30 years in the power industry. He was also a Senior Human Resources Business Partner at Hazelwood Power Station. Mark played a prominent human resources role during the closure of the Hazelwood business and has extensive experience in change management throughout an organisation.

Mark is responsible for a diverse range of divisions including Koori Liaison, Human Resources, Business and Support Services. The primary aim of his role is to develop and implement a strategic workforce approach for the promotion of a positive culture, employee engagement and ensuring LRH meets its strategic organisational and service delivery goals.

Gary Gray Executive Director Regional Services

Gary has qualifications in health administration, accounting and human resource management.

His previous appointments include several as a health service CEO, senior health care manager in New Zealand and Chief Operating Officer for The Florey Institute of Neuroscience and Mental Health.

As Executive Director Regional Services, Gary is responsible for exploring opportunities for development of shared services across the Gippsland region. He is also Chief Procurement Officer and retains a portfolio responsibility relating to risk management governance.

Gary is a former board member of the Victorian Hospitals Industrial Association and is currently a Fellow with the Australasian College of Health Service Management.


Organisational Structure

Executive Director People & Culture

• Facilities Management

• External Contracts

• Security

• Staff Accommodation

• Risk Management

• Insurance:

- Public Liability

- Industrial Special Risk

Business Services

Support Services

Human Resources

Koori Liaison

• Human Resources

• Industrial Relations

• OH&S

• WorkCover

• Food Services

• Environmental Services

• Cafe

Community Mental Health

Clinical Director

Acute & Bedbased Mental Health

Executive Director Mental Health

Chief Mental Health Nurse

• Consultant Psychiatrists

• Registrars

• Medical Officers

• Adult Mental Health Teams

• Aged Mental Health Team

• Child & Youth Mental Health Team

• Specialist and Therapeutic Programs

• Flynn Unit

• Macalister Unit

• Agnes (Mother & Baby) Unit

• CRCU

• Triage

• Acute Community Intervention Service

• PARCS

• SECU

Executive Director Information Service

Chief Information Officer

Information Technology

Gippsland Health Alliance

• Application Management

• Electronic Medical Record

• Information, communication and technology

• Bio-Medical


Corporate Counsel

Executive Director Regional Services

Community Engagement & Fundraising

Chief Medical Officer

Deputy CMOGovernance Medical Services

Education, Training & Resources

• Patient Liaison

• Governance Team

• Volunteers

• BreastScreen

• Private Consulting Suites

• Health Information

• Business Analyst

• HMO Manager

• Medical Management Registrar

• Library

• SDU

• Mental Health Professional Development

• Medical Education & Training

• Psychiatrist Education & Training

• Research

• Snr Medical Staff

• Jnr Medical Staff

• Credentialing

• Pharmacy

Ambulatory Services

In-Patient Services

Critical Services

Financial Services

Chief Operating Officer

Chief Nurse

• Allied Health

• Nurse Consultant

• Chemotherapy

• Dialysis

• Radiotherapy

• Health Independence

• Program:

- HARP

- PAC

- SAC

- GRICS

- Palliative Care

• Tyers

• Tanjil

• Thomson

• Tarra

• Bass

• Avon

• Rehabilitation

• GEM

• HITH

• Clerical Services

• CCU

• Cardiology

• Operating Theatre

• Cardio Cath

• Endoscopy

• CSSD

• DPU

• Emergency Dept.

• Tambo

• ESAC Co-ordinator

• Pre-admissions

• Patient Services

• Hospital Co-ordinators

• Finance

• Payroll

• Procurement

• Fleet Management

• Tandara Caravan Park

Chief Executive

Board ofDirectors


Our People

In 2017-18 Latrobe Regional Hospital employed a total of 2101 staff (see full-time equivalent figures below) across 10 locations throughout Gippsland. The biggest category of employees is nursing staff, which comprises approximately half of the hospital workforce.

Staffing levels by labour category 30 June 2018

LRH Labour Category JUNE Current Month FTE* JUNE YTD FTE*

2017 2018 2017 2018

Nursing 643.46 699.97 634.06 662.56

Administration and Clerical 198.12 211.01 197.09 203.54

Medical Support 83.33 88.28 79.53 86.50

Hotel and Allied Services 92.36 105.07 90.69 101.78

Medical Officers 23.36 19.65 22.05 21.82

Hospital Medical Officers 92.15 93.82 93.06 96.57

Sessional Clinicians 23.58 29.68 23.27 24.49

Ancillary Staff (Allied Health) 122.21 130.35 120.21 127.35

Total Staff Employed – FTE* 1278.57 1377.83 1259.96 1324.61

*FTE stands for full-time equivalent positions Employees have been correctly classified in workforce data collections.


Employment and Conduct Principles

LRH aligns its desired behaviours, policies and practices to public sector values and the organisation’s own core values which are approved by the Board of Directors.

Our staff are expected to adhere to the Public Sector Code of Conduct for Victorian Public Sector Employees issued by the Victorian Public Sector Commissioner. Our Workplace Conduct Policy is consistent with the Charter of Human Rights and Responsibilities Act 2006 (Vic) and promotes the principles of equal opportunity and fair and reasonable treatment of others.

Occupational Health and Safety

Health and safety is a shared responsibility at LRH involving our management team and staff.

Incident reporting and safety management are embedded in our organisation and we are committed to improving safety outcomes for patients and all of our employees.

Health and Safety Indicators

• The number of reported health and safety incidents for the year per 100 full-time equivalent staff members was 14.98.

• The number of ‘lost time’ standard WorkCover claims for the year per 100 full-time equivalent staff members was 1.49. In 2016-17 it was 0.99.

The table below highlights the average cost per claim for the year (including payments to date and an estimate of outstanding claim costs as advised by WorkSafe).

Average Claim Cost

Actual

Average Claim Cost

Estimate

Number of

claims

Total 30/06/2018

$30,751 $45,974 38

Total 30/06/2017

$22,311 $41,725 49

Total 30/06/2016

$20,278 $39,013 68

The average claim cost and average claim cost estimates at 30 June 2018 are higher than previous years. While the number of claims impacting on the premium has reduced since 30 June 2016 the number of complex claims with actual claim costs and claim cost estimates above $100,000 remains much the same.

LRH had no staff fatalities during the year.

Occupational Violence and Aggression (OVA)

Our Occupational Violence and Aggression (OVA) Working Group encourages staff to report incidents of violence and abuse. The group’s role is to develop, implement and evaluate a framework of best practice interventions to reduce the frequency and impact of occupational violence and aggression.

During 2017-18 the working group completed a 10 point action plan to address OVA issues and has commenced working through each outstanding action. The group also completed a review of the Department of Health and Human Services statewide Code Grey response.

Occupational violence statistics for 2017-18

• Workcover accepted claims with an occupational violence cause per 100 FTE: 0.45

• Number of accepted Workcover claims with lost time injury with an occupational violence cause per 1,000,000 hours worked: 2.26

• Number of occupational violence incidents reported: 324

• Number of occupational violence incidents reported per 100 FTE: 24.14

• Percentage of occupational violence incidents resulting in a staff injury, illness or condition: 7.7%

Definitions

Occupational violence Any incident where an employee is abused, threatened or assaulted in circumstances arising out of or in the course of their employment.

Incident An event or circumstance that could have resulted in or did result in harm to an employee.

Accepted Workcover claims Accepted Workcover claims that were lodged in 2016-17.

Lost time This is defined as greater than one day.

Injury, illness or condition This includes all reported harm as a result of the incident, regardless of whether the employee required time off work or submitted a claim.


Statement of Priorities Part A

Goals Strategies Health Service Deliverables

Outcome

Better Health

A system geared to prevention as much as treatment

Everyone understands their own health and risks

Illness is detected and managed early

Healthy neighbourhoods and communities encourage healthy lifestyles

Reduce Statewide Risks

Build healthy neighbourhoods

Help people to stay healthy

Target health gaps

Strengthen early intervention approaches for pregnant women through the newly developed ‘enhanced maternity clinic’ to optimise health outcomes of both the mother and baby.

Achieved. Clinic now established and operating with full complement of staff.

Expand the paediatric diabetes service to respond to new demand for continuous Blood Glucose Level monitoring in paediatric patients.

Achieved. Monthly multidisciplinary appointments available for paediatric diabetes patients. Ongoing funding received for dietitian and diabetes educator. Monthly multidisciplinary meetings are occurring.

Strengthen early intervention approaches for infant and perinatal mental health through building workforce capability to deliver specialist interventions for those in the 0-12 age group.

Achieved. Recruitment of new 0.5 specialist position to link with early intervention services in Traralgon East to implement 0-5 program for children and parents. Rollout to commence August 2018.

Support the Latrobe Health Innovation Zone – Early Detection and Screening trial of the Integrated Assessment ‘Health Check’ Tool between October 2017 and March 2018.

Achieved. Program for young people aged 15-25 has commenced. Mental health and physical health clinical pathway developed.

The Latrobe Regional Hospital Smoking Reduction Working Group will oversee the implementation of the ABCD approach to supporting people who smoke: a guide for health services to improve smoking cessation rates in patients and staff.

In progress. Clinical guidelines in development. Draft policy prepared for submission to LRH Executive.



Outcome

Better access

Care is always there when people need it

More access to care in the home and community

People are connected to the full range of care and support they need

There is equal access to care

Plan and invest

Unlock innovation

Provide easier access

Ensure fair access

Complete expansion of the Emergency Department, Short Stay Unit and Inpatient Unit beds and implement redesigned models of care to facilitate improved access to emergency care and access to definitive care.

Achieved. Emergency Department, Short Stay Unit, Avon and Bass inpatient units and cardiac catheterisation laboratory operational. Collaborating with other Victorian health services as part of the Better Care Victoria Patient Flow Partnership regarding further redesign.

In partnership with Alfred Health establish a cardiology and coronary angiography service and develop a regional cardiac referral pathway to streamline pathways for patients requiring cardiac services.

Achieved. Staff including two cardiologists recruited. Team has completed 65 angiogram procedures as of 30 June 2018. Cardiac clinical pathway submitted to regional CEO group for endorsement.

Expand the Mental Health and Police Response programs into East Gippsland to improve patient outcomes and local access to care and reduce emergency department presentations, admissions, re-admissions, police time and hospital transfers.

Achieved. Recruitment of clinical positions finalised. Awaiting sign-off from Victoria Police.

The E-Quality Working Party will oversee the implementation of the E-Quality Action Plan to ensure fair access to diverse populations including the LGBTIQ community.

In progress. Self- assessment against Rainbow Tick standards completed. Draft action plan forwarded to Chief Executive for endorsement.

Partner with the Aboriginal Community Health Organisations to promote and increase telehealth opportunities for Aboriginal patients across Gippsland.

Reduce the rates of avoidable harm by suicide through implementation of the Zero Suicide program across Latrobe Regional Hospital and participation in the suicide prevention pilot programs in Latrobe Valley and Bass Coast Shire.

Achieved. Aboriginal telehealth commenced with Lakes Entrance Aboriginal Health Association.

In progress. Zero Suicide Action Plan development. Governance committee established. Draft education package and clinical pathway developed.



Outcome

Better Care

Target zero avoidable harm

Healthcare that focuses on outcomes

Patients and carers are active partners in care

Care fits together around people’s needs

Join up care

Partner with patients

Strengthen the workforce

Embed evidence

Ensure equal care

Mandatory actions against the ‘Target zero avoidable harm’ goal: Develop and implement a plan to educate staff about obligations to report patient safety concerns.

In partnership with consumers, identify three priority improvement areas using Victorian Healthcare Experience Survey data and establish an improvement plan for each. These should be reviewed every six months to reflect new areas for implement in patient experience.

Establish and coordinate the regional Director of Medical Services network to provide clinical governance support to smaller sub-regional health services within Gippsland.

Achieved. The Gippsland Regional CMO/DMS group has been established. Work is progressing in relation to processes for collaborative review, shared learning and regional workforce planning.

Develop an action plan to educate staff regarding reducing patient safety concerns and method of reporting targeting zero avoidable harm.

Achieved. The LRH mandatory training policy has been developed to ensure staff are guided to undertake educational requirements aimed to reduce patient harm and improve the quality of care provided.

Implement a range of redesign and quality improvement activities such as intentional rounding and ‘Hello I am’ across the organisation to keep patients safe and improve their experience with key aspects of their care.

Achieved. ‘Hello My Name Is...’ campaign has prompted strong results in Oct-Dec 2017 VHES results. Intentional rounding to be included in organisation-wide bedside handover process.


Statement of Priorities Part B

Key performance indicator Target 2017-18 result

High quality and safe care

Accreditation

Accreditation against the National Safety and Quality Health Service Standards

Full compliance Achieved

Compliance with the Commonwealth’s Aged Care Accreditation Standards

Full compliance Achieved

Infection prevention and control

Compliance with the Hand Hygiene Australia program 80% 84%

Percentage of healthcare workers immunised for influenza 75% 84%

Patient experience

Victorian Healthcare Experience Survey – data submission Full compliance Achieved

Victorian Healthcare Experience Survey – positive patient experience – Q1 95% positive experience 95%



Victorian Healthcare Experience Survey – discharge care – Q1 75% positive experience 80%



Victorian Healthcare Experience Survey – patients perception of cleanliness – Q1

70% 71%


70% 85%


70% 82%

Healthcare associated infections (HAIs)

Number of patients with surgical site infection No outliers Null

Number of patients with ICU central-line-associated bloodstream infection (CLABSI)

Nil Nil

Rate of patients with Staphylococcus Aureus Bacteraemia (SAB) per occupied bed day

≤1/10,000 0

Adverse events

Number of sentinel events Nil 1

Mortality – number of deaths in low mortality DRGs2 Nil NA*

Mental Health

Percentage of adult acute mental health inpatients who are readmitted within 28 days of discharge

14% 15%

Rate of seclusion events relating to a mental health acute admission – all age groups

≤15/1,000 1

Rate of seclusion events relating to a child and adolescent acute mental health admission

≤15/1,000 NA

* This indicator was withdrawn during 2017-18 and is currently under review by the Victorian Agency for Health Information



Mental Health

Rate of seclusion events relating to an adult acute mental health admission ≤15/1,000 1.76

Rate of seclusion events relating to an aged acute mental health admission ≤15/1,000 0.79

High quality and safe care

Mental Health

Percentage of child and adolescent acute mental health inpatients who have a post-discharge follow-up within seven days

75% 87%

Percentage of adult acute mental health inpatients who have a post-discharge follow-up within seven days

75% 82%

Percentage of aged acute mental health inpatients who have a post-discharge follow-up within seven days

75% 79%

Maternity and Newborn

Rate of singleton term infants without birth anomalies with Apgar score <7 at five minutes

≤1.6%0.0115 1.2%

Rate of severe foetal growth restriction (FGR) in singleton pregnancy undelivered by 40 weeks

≤28.6% 23%

Continuing Care

Functional independence gain from an episode of Geriatric Evaluation and Management (GEM) admission to discharge relative to length of stay

>0.39 1.03

Functional independence gain from an episode of rehabilitation admission to discharge relative to length of stay

>0.645 1.582

Strong governance, leadership and culture

Organisational culture

People Matter Survey – percentage of staff with an overall positive response to safety and culture questions.

80% 88%

People Matter Survey – percentage of staff with a positive response to the question: ‘I am encouraged by my colleagues to report any patient safety concerns I may have’.

80% 95%

People Matter Survey – percentage of staff with a positive response to the question: ‘Patient care errors are handled appropriately in my work area’.

80% 93%

People Matter Survey – percentage of staff with a positive response to the question: ‘My suggestions about patient safety would be acted upon if I expressed them to my manager’.

80% 90%

People Matter Survey – percentage of staff with a positive response to the question: ‘The culture in my work area makes it easy to learn from the errors of others’.

80% 87%

People Matter Survey – percentage of staff with a positive response to the question: ‘Management is driving us to be a safety-centred organisation’.

80% 90%

People Matter Survey – percentage of staff with a positive response to the question: ‘This health service does a good job of training new and existing staff’.

80% 81%

People Matter Survey – percentage of staff with a positive response to the question: ‘Trainees in my discipline are adequately supervised’.

80% 82%

People Matter Survey – percentage of staff with a positive response to the question: ‘I would recommend a friend or relative to be treated as a patient here’.

80% 88%



Timely access to care

Emergency care

Percentage of patients transferred from ambulance to emergency department within 40 minutes

90% 86%

Percentage of Triage Category 1 emergency patients seen immediately 100% 100%

Percentage of Triage Category 1 to 5 emergency patients seen within clinically recommended time

80% 74%

Percentage of emergency patients with a length of stay in the emergency department of less than four hours

81% 65%

Number of patients with a length of stay in the emergency department greater than 24 hours

0 0

Elective surgery

Percentage of urgency category 1 elective surgery patients admitted within 30 days

100% 100%

Percentage of urgency category 1,2 and 3 elective surgery patients admitted within the clinically recommended time

94% 97%

Percentage of patients on the waiting list who have waited longer than the clinically recommended time for their respective triage category

5% or 15% proportional improvement from

prior year4%

Number of patients on the elective surgery waiting list 900 939

Number of hospital initiated postponements per 100 scheduled elective surgery admission

≤8/100 4

Number of patients admitted from the elective surgery waiting list 5,446 5,662

Specialist clinics

Percentage of urgent patients referred by a GP or external specialist who attended a first appointment within 30 days

100% 97%

Percentage of routine patients referred by GP or external specialist who attended a first appointment within 365 days

90% 98%

Effective financial management

Finance

Operating result ($M) 0.00 $15.529M

Average number of days to paying trade creditors 60 days 31 days

Average number of days to receiving patient fee debtors 60 days 39 days

Public and Private WIES activity performance to target 100% 85%*

Adjusted current asset ratio0.7 or 3% improvement

from health service base target

1.75

Number of days of available cash 14 days 94 days

* The changes arising in the WIES funding model following the introduction of AR-DRG version 8 in 2016-17 have impacted Latrobe Regional Hospital’s ability to recognise WIES activity in 2017-18. The department has acknowledged these issues at a system level and provided assurances around minimum funding levels throughput 2017-18.


Statement of Priorities Part CActivity and Funding

Funding type 2017-18 Activity Achievement

Acute Admitted

WIES Public 19,801

WIES Private 1,754

WIES DVA 256

WIES TAC 117

Acute Non-Admitted

Home Enteral Nutrition 186

Specialist Clinics – Public 22,504 WASE

Sub-Acute and Non-Acute Admitted

Sub-acute WIES – Rehabilitation Public 519

Sub-acute WIES – Rehabilitation Private 100

Sub-acute WIES – GEM Public 275

Sub-acute WIES – GEM Private 92

Sub-acute WIES – Palliative Care Public 85

Sub-acute WIES – Palliative Care Private 10

Sub-acute WIES – DVA 37

Transition Care – Bed days 7,293

Transition Care – Home days 4,837

Aged Care

Residential Aged Care – Bed days 44,115

HACC – Service hours 7,876

Mental Health and Drug Services

Mental Health Ambulatory 69,066

Mental Health Inpatient – Available bed days 17,668

Mental Health Inpatient – Secure unit 1,832

Mental Health Residential 3,950

Mental Health Service System Capacity NA

Mental Health Sub Acute 2,115

Other

Health Workforce 96


Summary of Financial Results

Summary of significant changes in financial position in 2017-18.

During the 2017-18 financial year, the Victorian Government through the Department of Health and Human Services (DHHS) provided $43.5 million in operating grants and $171.9 million from State and Commonwealth activity-based funding payments via the Victorian Health Funding Pool.

The Victorian Government also provided $15.5 million towards targeted capital works and equipment. Other Commonwealth grants through the Pharmaceutical Benefits Scheme, Department of Health and Ageing and Radiology/Oncology Equipment Replacement Program totalled $15.1 million.

Revenue from operating activities before capital and specific items showed an increase of $30.3 million - 13.9 per cent from the previous financial year. Revenue received in 2017-18 included carry-over funding totalling $4.238 million and is scheduled for disbursement in 2018-19.

Total expenses from operating activities increased by $23.7 million (10.8 per cent) from 2016-17:

• employee expenses increased by $11.3 million (7.9 per cent)

• non-salary labour costs decreased by $243,000 (1.9 per cent)

• supplies and consumables increased by $3.7 million (9.4 per cent)

• other expenses from continuing operations increased by $8.9 million (37.9 per cent).

The DHHS policy change on Public/Private WIES recall, for the current year only has bolstered LRH’s operating result. The gain has provided an opportunity to bring forward significant maintenance projects which were planned for 2018-19.

Operating activities provided a net cash inflow of $32.7 million with a net cash outflow of $21.9 million from investing activities (includes an investment of $4 million with the Victorian Funds Management Corporation (VFMC), an outflow of $50,000 as repayment of loan.

The net result was an increase of $10.7 million in cash held. Cash and cash equivalents at end of financial year totalled $28.8 million.

LRH’s current asset ratio at 30 June 2018 was 1.22, an increase from 30 June 2017. There was a decline in 2016 as our $15 million investment with VFMC was considered a non-current asset. A further $4 million was invested in 2018.

Major capital works projects continued during the year, including the completion of the Stage 2a expansion, the completion of new consulting suites (pictured below), the maternity unit refurbishment and installation of new radiotherapy equipment.

Funding for all current capital projects include Stage 2a totalled $73.1 million from the Commonwealth and Department of Health and Human Services and $4.2 million contributed from hospital reserves. Future commitments from hospital reserves total $5.6 million.

There were no events subsequent to balance date which may have had a significant effect on the operations of LRH in subsequent years.


Summary of financial results for the preceding four financial years

2017-18

$’0002016-17

$’0002015-16

$’0002014-15

$’0002013-14

$’000

Total Operating Expenses 242,833 219,144 204,163 196,481 186,482

Total Operating Revenue 258,362 226,211 209,763 200,445 192,650

Operating Result 15,529 7,067 5,600 3,964 6,168

Net Capital and Specific Items (805) 40,083 13,176 (2,519) 4,770

Net Result for the Year Surplus/(Deficit)

14,724 47,150 18,776 1,445 10,938

Retained Surplus/(Accumulated Deficit)

135,418 121,568 75,968 59,194 59,425

Total Assets 292,808 269,281 220,130 196,454 193,758

Total Liabilities 60,148 51,345 49,344 44,452 45,243

Net Assets 232,660 217,936 170,786 152,002 148,515

Total Equity 232,660 217,936 170,786 152,002 148,515

Revenue indicators

Average Collection Days

2018 2017

Private 52.86 51.95

Transport Accident Commission - 75.88

Victoria WorkCover Authority 112.03 81.85

Residential Aged Care 39.24 52.04

Patient debtors

Under 30 Days

31 -60 Days

61 -90 Days

Over 90 Days

Total 30/06/18

Total 30/06/17

Private 398,633 18,649 4,232 29,329 450,843 414,422

Transport Accident Commission

- - - - - 20,677

Victoria WorkCover Authority

72,832 15,446 2,516 4,134 94,928 95,160

Other (Ineligible)

6,551 - - 5,455 12,007 24,209

Residential Aged Care

17,741 1,158 1,455 17,662 38,016 15,525

Total 495,757 35,253 8,203 56,580 595,793 569,992


2017-18 Annual Report – ICT Expenditure Disclosure

Business As Usual

Operational including labour 2,172,668 Operational

GHA Alliance Costs 4,438,977 Operational

MS Licensing Costs 228,759 Operational

Depreciation – Computers 363,773 Capital

7,204,177

Non-Business As Usual

Capital 27,357 Capital

27,357

Total 7,231,534

Consultancies engaged during 2017-18

A number of consultants were contracted to work for Latrobe Regional Hospital in 2017-18. As required by the Victorian Industry Participation Policy Act 2003, a summary of the extent of contractual costs or consultants is provided below.

2017-18 2016-17

Number of consultants used to a value greater than $10,000 2 2

Number of consultants used to a value less than $10,000 2 2

Total cost of consultants used to a value less than $10,000 $ 13,500 $ 7,380


Details of individual consultancies

ConsultantPurpose of consultancy

Start date

End date

Total approved

project fee

Expenditure 2017-18 (ex GST)

Future expenditure

(ex GST)

Healthcare Equipment Planning Australia

Consultancy and tendering services for the Central Sterilisation Services Department (CSSD) major equipment

July-17 July-17 $8,000 $8,000 $ -

Healthcare Equipment Planning Australia

Consultancy and tendering services for the Central Sterilisation Services Department (CSSD) major equipment

Sep-17 Sep-17 $22,500 $22,500 $ -

KPMG Financial Advisory Services

Development of governance documents for the Latrobe Health Assembly

Apr-18 Apr-18 $38,823 $38,823 $ -

Nelson Sala Trust

Planning and facilitation of strategic planning workshop

Apr-18 Apr-18 $5,500 $5,500 $ -

Ex-Gratia Expenses

Latrobe Regional Hospital has not made any ex-gratia payments during 2017-18.

Financial Management Act 1994

The information requirements listed in the Financial Management Act 1994 (the Act), the Standing Directions of the Minister for Finance under the Act (Section 4 Financial Management Reporting) and financial Reporting Directions have been prepared and are available to the relevant Minister, Members of Parliament and the public upon request.


General Information

Compliance with the Building Act

Latrobe Regional Hospital complies with the building and maintenance provisions of the Building Act 1993. We obtain building permits for all new projects where required and an audit of compliance of our certificates of occupancy are completed by a registered building surveyor in June each year.

LRH controls properties located at the corner of Princes Highway and Village Avenue, Traralgon West and within the Princes Street, Washington Street and Garden Grove precinct in Traralgon. In addition to these Traralgon properties LRH also controls a property in Macleod Street, Bairnsdale. A number of administrative, residential and clinical services are provided from these properties.

LRH owns and occupies an additional five buildings located at the Traralgon West campus which operate as specialist consulting clinics and administration offices. LRH also provides non-residential health services from 10 properties not under its direct control. These are located throughout Gippsland.

LRH also controls a number of houses and units for accommodation purposes, five of which are owned by LRH and 19 leased from private vendors and not under the control of LRH. LRH ensures all buildings owned or occupied by staff or patients meet the standards for essential safety measures.

Victorian Industry Participation Policy

LRH has commenced one project that meets Victorian Industry Participation Policy (VIPP) criteria. Following assessment, there was no requirement for local content.

LRH had one conversation with the Industry Capability Network (ICN) that corresponds with the registration and issue of an Interaction Reference Number.

National Competition Policy

LRH has observed and complied with all requirements of the Victorian Government policy statement, Competitive Neutrality Policy Victoria for all significant business activities.

Procurement

No complaints against any procurement activity were registered with LRH in the period of this report.

LRH had three critical incidents where CEO powers for exempting normal procurement practices were enacted:

• reparation works for the LRH main switchboard following catastrophic failure

• reparation works of the Radiotherapy air conditioning system following multiple failures within areas housing critical service infrastructure

• replacement of fire ring main and water supply main due to multiple failures of aged infrastructure failure.

Environmental Performance

LRH has an Environmental Management Plan with targets to improve performance by minimising consumption of water and energy and encouraging the procurement of sustainable products and services.

In 2017-18 solar panels were installed at our community mental health service in Traralgon as part of a refurbishment of the site. The 40 kilowatt system consists of 124 panels configured to maximise generating capacity over the service’s two administrative buildings for 70 employees.

LRH has also progressed a number of projects aimed at assisting the organisation to meet environmental targets for reduction of energy consumption. These projects will be rolled out in 2018-19.

Protected Disclosure Act 2012

Latrobe Regional Hospital has a policy consistent with the requirements of the Protected Disclosure Act 2012 which supports staff to disclose improper or corrupt conduct.

LRH’s General Manager Human Resources was the Protected Disclosure Coordinator for the purpose of the Protected Disclosure Act in 2017-18.

LRH had no disclosures notified to the Independent Broad-based Anti-corruption Commission under section 21(2) of the Act.


Safe Patient Care Act 2015

Latrobe Regional Hospital has no matters to report in relation to its obligations under the Safe Patient Care Act 2015.

Carers Recognition Act 2012

The Carers Recognition Act 2012 acknowledges and values the role of carers and the importance of care relationships in the Victorian community.

LRH defines a carer as a consumer or patient’s next of kin, a guardian, family member, delegated community member or significant other as nominated.

LRH recognises the principles of the Act and has incorporated these into multiple policies including Person Centred Care, Family Meeting and Consumer, Carer and Community Partnerships.

We use our internal feedback systems and the Victorian Healthcare Experience Survey to monitor a carer’s experience.

Freedom of Information Act 1982

The Victorian Freedom of Information (FOI) Act 1982 gives a person the right to request information held by government agencies including public hospitals and community health centres.

Information on how to lodge an FOI to Latrobe Regional Hospital, an application form and useful links to the FOI Act and FOI website are available at www.lrh.com.au/important-info/patient-information/general-patient-information

FOI requests must be made in writing to:

The Freedom of Information Officer Latrobe Regional Hospital PO Box 424 Traralgon Vic 3844

There are two costs associated with making a FOI request – an application fee and access charges. These charges are set by government regulations.

As of 1 July 2018 the fee is $28.90. Access charges are applied under the Act for processing requests. Access charges are applied according to the nature of the request and may include: search fees ($20 per hour), photocopying (20 cents per page), providing written transcripts of a recorded document ($20 per hour), supervising an inspection of documents ($5 per quarter hour).

In 2017-18 LRH received 332 FOI requests, of which 259 were granted full access. Three requests were granted in part, 18 were withdrawn and 52 requests were outside the Act.

Additional InformationDetails in respect of the items listed below have been retained by the health service and are available to the relevant Ministers, Members of Parliament and the public on request (subject to Freedom of Information requirements, if applicable).

• Declarations of pecuniary interests have been duly completed by all relevant officers

• Details of shares held by senior officers as nominee or held beneficially

• Details of publications produced by the entity about itself and how these can be obtained

• Details of changes in prices, fees, charges, rates and levies charged by the health service

• Details of any major external reviews carried out on the health service

• Details of major research and development activities undertaken by the health service that are not otherwise covered either in the report of operations or in a document that contains the financial statements and report of operations

• Details of overseas visits undertaken including a summary of the objectives and outcomes of each visit

• Details of major promotional, public relations and marketing activities undertaken by the health service to develop community awareness of the health service and its services

• Details of assessments and measures undertaken to improve the occupational health and safety of employees

• A general statement on industrial relations within the health service and details of time lost through industrial accidents and disputes, which is not otherwise detailed in the report of operations

• A list of major committees sponsored by the health service, the purposes of each committee and the extent to which those purposes have been achieved

• Details of all consultancies and contractors including consultants/contractors engaged, services provided and expenditure committed for each engagement.


Disclosure Index

The annual report of Latrobe Regional Hospital 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 RequirementPage Reference

Charter and purpose

FRD 22H Manner of establishment and the relevant Ministers 1

FRD 22H Purpose, functions, powers and duties 1, 2

FRD 22H Initiatives and key achievements 3-11

FRD 22H Nature and range of services provided 2

Management and structure

FRD 22H Organisational structure 18-19

Financial and other information

FRD 10A Disclosure index 35

FRD 11A Disclosure of ex gratia expenses 32

FRD 21C Responsible person and executive officer disclosures 5, 37-38

FRD 22H Application and operation of Protected Disclosure 2012 33

FRD 22H Application and operation of Carers Recognition Act 2012 34

FRD 22H Application and operation of Freedom of Information Act 1982 34

FRD 22H Compliance with building and maintenance provisions of Building Act 1993 33

FRD 22H Details of consultancies over $10,000 32

FRD 22H Details of consultancies under $10,000 32

FRD 22H Employment and conduct principles 21

FRD 22H Information and Communication Technology Expenditure 31

FRD 22H Major changes or factors affecting performance 29

FRD 22H Occupational violence 21

FRD 22H Operational and budgetary objectives and performance against objectives 22-28

FRD 22H Summary of environmental performance 33

FRD 22H Significant changes in financial position during the year 29

FRD 22H Statement on National Competition Policy 33

FRD 22H Subsequent events 29

FRD 22H Summary of the financial results for the year 29

FRD 22H Additional information available on request 34


Legislation RequirementPage Reference

Financial and other information

FRD 22H Workforce Data Disclosures including a statement on the application of employment and conduct principles

20-21

FRD 25C Victorian Industry Participation Policy disclosures 33

FRD 103F Non-Financial Physical Assets 71

FRD 110A Cash flow Statements 47

FRD 112D Defined Benefit Superannuation Obligations 60

SD 5.2.3 Declaration in report of operations 5

SD 5.1.4 Financial Management Compliance 38

Other requirements under Standing Directions 5.2

SD 5.2.2 Declaration in financial statements 41

SD 5.2.1(a) Compliance with Australian accounting standards and other authoritative pronouncements

41

SD 5.2.1(a) Compliance with Ministerial Directions 32, 41

Legislation

Freedom of Information Act 1982 34

Protected Disclosure Act 2012 33

Carers Recognition Act 2012 34

Victorian Industry Participation Policy Act 2003 33

Building Act 1993 33

Financial Management Act 1994 32

Safe Patient Care Act 2015 34


Attestations

Data Integrity

I, Peter Craighead certify that Latrobe Regional Hospital has put in place appropriate internal controls and processes to ensure that reported data accurately reflects actual performance. Latrobe Regional Hospital has critically reviewed these controls and processes during the year.



Conflict of Interest

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



Compliance with Health Purchasing Victoria (HPV) Health Purchasing Policies

I, Peter Craighead certify that Latrobe Regional Hospital has put in place appropriate internal controls and processes to ensure that it has complied with all requirements set out in the HPV Health Purchasing Policies including mandatory HPV collective agreements as required by the Health Services Act 1988 (Vic) and has critically reviewed these controls and processes during the year.




Financial Management Compliance

I, Linda McCoy on behalf of the Responsible body, certify that Latrobe Regional Hospital has complied with the applicable Standing Directions of the Minister for Finance under the Financial Management Act 1994 and Instructions.




Financial Report

Declaration letter 41

Auditor General’s Report 42

Comprehensive Operating Statement 44

Balance Sheet 45

Statement of Changes in Equity 46

Cash Flow Statement 47

Notes to the Financial Statements 48

Annual Report 2018 I 41

DeclarationBoard member’s, accountable officer’s, and chief finance and accounting officer’s declaration

The attached financial statements for Latrobe Regional Hospital have been prepared in accordance with Direction

5.2 of the Standing Directions of the Minister for Finance under the Financial Management Act 1994, applicable

Financial Reporting Directions, Australian Accounting Standards including Interpretations, and other mandatory

professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement,

balance sheet, statement of changes in equity, cash flow statement and accompanying notes, presents fairly

the financial transactions during the year ended 30 June 2018 and the financial position of Latrobe Regional Hospital at 30 June 2018.

At the time of signing, we are not aware of any circumstance which would render any particulars included

in the financial statements to be misleading or inaccurate.

We authorise the attached financial statements for issue on 31 August 2018.

Linda McCoy

Chair

Peter Craighead

Chief Executive

Michael Glaubitz

Acting Chief Finance

& Accounting Officer

Latrobe Regional Hospital

Traralgon West

31 August 2018

42 I Latrobe Regional Hospital

Latrobe Regional Hospital Comprehensive Operating Statement for the Financial Year Ended 30 June 2018

TOTAL TOTAL 2018 2017

Note $'000 $'000

Revenue from operating activities 2.1 249,101 218,770

Revenue from non-operating activities 2.1 9,261 7,441

Employee expenses 3.1 (154,521) (143,195)

Non salary labour costs 3.1 (12,657) (12,900)

Supplies and consumables 3.1 (43,356) (39,636)

Other expenses 3.1 (32,299) (23,420)

Net result before capital and specific items 15,529 7,060

Capital purpose income 2.1 16,511 53,778

Depreciation and amortisation 4.3 (11,128) (8,885)

Expenditure for Capital Purpose 3.1 (6,807) (4,111)

NET RESULT AFTER CAPITAL & SPECIFIC ITEMS 14,105 47,842

Other Economic Flows Included in Net Result

Net gain/(loss) on non-financial assets 60 (891)

Net gain on financial assets 558 -

Revaluation of Long Service Leave 1 199

Total other comprehensive income 619 (692)

COMPREHENSIVE RESULT FOR THE YEAR 14,724 47,150

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



Latrobe Regional Hospital Balance Sheet as at 30 June 2018


Note $'000 $'000

ASSETS

Current Assets

Cash and Cash Equivalents 6.1 29,137 18,111

Receivables 5.1 4,906 5,120

Investments and Other Financial Assets 4.1 28,737 28,208

Inventories 5.2 1,383 1,281

Prepayments 5.4 1,010 1,174

Total Current Assets 65,173 53,894

Non-Current Assets

Receivables 5.1 4,402 3,493

Investments and Other Financial Assets 4.1 20,379 15,148

Property, Plant & Equipment 4.2 202,854 196,746

Total Non-Current Assets 227,635 215,387

TOTAL ASSETS 292,808 269,281

LIABILITIES

Current Liabilities

Payables 5.5 14,847 10,678

Provisions 3.3 37,551 34,006

Other Current Liabilities 5.3 818 236

Non Interest Bearing Liabilities 5.6 50 50

Total Current Liabilities 53,266 44,970

Non-Current Liabilities

Provisions 3.3 6,610 6,059

Non Interest Bearing Liabilities 5.6 272 316

Total Non-Current Liabilities 6,882 6,375

TOTAL LIABILITIES 60,148 51,345

NET ASSETS 232,660 217,936

EQUITY

Property, Plant & Equipment Revaluation Surplus 8.1 49,377 49,377

Restricted Specific Purpose Surplus 8.1 21,213 20,339

Contributed Capital 8.1 26,652 26,652

Accumulated Surpluses 8.1 135,418 121,568

TOTAL EQUITY 8.1 232,660 217,936

Commitments 6.2

Contingent Assets and Contingent Liabilities 7.3



Latrobe Regional Hospital Statement of Changes in Equity for the Financial Year Ended 30 June 2018

Property Plant & Restricted

Equipment Specific Accumulated Revaluation Purpose Contributions Surpluses/

Surplus Surplus by Owners (Deficits) Total Note $’000 $’000 $’000 $’000 $’000

Balance at 30 June 2016 49,377 18,789 26,652 75,968 170,786

Net result for the year - - - 47,150 47,150

Transfer to accumulated surplus 8.1 - 1,550 - (1,550) -

Balance at 30 June 2017 49,377 20,339 26,652 121,568 217,936

Net result for the year - - - 14,724 14,724

Transfer to accumulated surplus 8.1 - 874 - (874) -

Balance at 30 June 2018 49,377 21,213 26,652 135,418 232,660



Latrobe Regional Hospital Cash Flow Statement for the Financial Year Ended 30 June 2018


Note $'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIES

Operating grants from government 232,439 202,486

Capital grants from government 15,527 50,820

Patient and resident fees received 3,837 3,753

Donations and bequests received 244 123

GST received from ATO 7,968 11,004

Interest received 803 818

Capital grants from non-government 656 2,072

Capital donations and bequests received 115 174

Other receipts 23,509 19,653

Total receipts 285,098 290,903

Employee expenses paid (150,201) (141,233)

Payments for supplies & consumables (103,269) (91,111)

Total payments (253,470) (232,344)

NET CASH FLOW FROM OPERATING ACTIVITIES 8.2 31,628 58,559

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investments (4,000) (15,000)

Proceeds from impaired investments 32 -

Proceeds from sale of non-financial assets 60 7

Payments for non-financial assets (16,943) (52,352)

NET CASH FLOW USED IN INVESTING ACTIVITIES (20,851) (67,345)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of borrowings (50) (50)

NET CASH FLOW USED IN FINANCING ACTIVITIES (50) (50)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS HELD 10,727 (8,836)

Cash and cash equivalents at beginning of financial year 18,105 26,941

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 6.1 28,832 18,105


Latrobe Regional Hospital Notes to Financial Statements for the Year Ended 30 June 2018


Note 1: Summary of significant accounting policies

Basis of presentation

The financial statements are prepared in accordance with Australian Accounting Standards and relevant FRDs.

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

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

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

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

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

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

These annual financial statements represent the audited general purpose financial statements for Latrobe Regional Hospital for the period ending 30 June 2018. The report provides users with information about the Hospital’s stewardship of resources entrusted to it.

(a) Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Financial Management Act 1994 and applicable AASBs, 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 of Financial Statements.

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

The Hospital is a not-for profit entity and therefore applies the additional AUS paragraphs applicable to “not-for-profit” Hospitals under the AASBs.

The annual financial statements were authorised for issue by the Board of Latrobe Regional Hospital on 31 August 2018.

(b) Reporting entity

The financial statements include all the controlled activities of the Hospital.

Its principal address is: Cnr Princes Highway and Village Avenue Traralgon West, Victoria 3844.

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

(c) Basis of accounting preparation and measurement

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

The accounting policies have been applied in preparing the financial statements for the year ended 30 June 2018, and the comparative information presented in these financial statements for the year ended 30 June 2017.

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

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

All amounts shown in the financial statements have been rounded to the nearest thousand dollars, unless otherwise stated. Minor discrepancies in tables between totals and sum of components are due to rounding.



Note 1: Summary of significant accounting policies

The hospital operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds.

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

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

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

n The fair value of land, buildings and plant and equipment (refer to Note 4.2 Property, Plant and Equipment); n Superannuation expense (refer to Note 3.4 Superannuation); n Employee benefit provisions are based on likely tenure of existing staff, patterns of leave claims, future salary movements and future

discount rates (refer to Note 3.3 Employee Benefits in the Balance Sheet); and n Managed investment funds classified at level 2 of the fair value hierarchy (refer to Note 7.1 Financial Instruments).

Goods and Services Tax (GST)

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

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

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

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

(d) Principles of consolidation

These statements are presented on a consolidated basis in accordance with AASB 10 Consolidated Financial Statements: n The consolidated financial statements of the hospital includes all reporting entities controlled by Latrobe Regional Hospital

as at 30 June 2018. n Control exists when the hospital has the power to govern the financial and operating policies of an organisation so as to

obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The consolidated financial statements include the audited financial statements of the controlled entities.

n The parent entity is not shown separately in the notes.

Where control of an entity is obtained during the financial period, its results are included in the Comprehensive Operating Statement from the date on which control commenced. Where control ceases during a financial period, the entity’s results are included for that part of the period in which control existed. Where entities adopt dissimilar accounting policies and their effect is considered material, adjustments are made to ensure consistent policies are adopted in these financial statements.

Intersegment Transactions

Transactions between segments within the hospital have been eliminated to reflect the extent of the hospital’s operations as a group.

(e) Jointly controlled operation

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

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

Latrobe Regional Hospital is a member of the Gippsland Health Alliance.



Note 2: Funding delivery of our services

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

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

Structure:

2.1 Analysis of revenue by source

2.2 Assets received free of charge or for normal consideration

2.3 Specific income



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--

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5,75

2

Tota

l Rev

enue

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8627

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87,

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xclu

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--

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Net

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-53

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53,9

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l Rev

enue

138,

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7,03

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48,1

1994

963

,615

280,

188

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enue

has

bee

n cl

assi

fied

acro

ss p

rogr

ams

as d

efine

d in

the

Age

ncy

Info

rmat

ion

Man

agem

ent S

yste

m (A

IMS

) gui

delin

es.

Dep

artm

ent o

f Hea

lth/D

epar

tmen

t of H

ealth

and

Hum

an S

ervi

ces

mak

es c

erta

in p

aym

ents

on

beha

lf of

the

Hos

pita

l. T

hese

am

ount

s ha

ve b

een

brou

ght t

o ac

coun

t in

det

erm

inin

g th

e op

erat

ing

resu

lt fo

r th

e ye

ar b

y re

cord

ing

them

as

reve

nue

and

expe

nses

.



Note 2.1: Analysis of Revenue by Source (continued)

Revenue Recognition

Income is recognised in accordance with AASB 118 Revenue and is recognised as to the extent that it is probable that the economic benefits will flow to Latrobe Regional Hospital and the income can be reliably measured at fair value. Unearned income at reporting date is reported as income received in advance.

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

Government Grants and other transfers of income (other than contributions by owners)

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

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

Indirect Contributions from the Department of Health and Human Services - Insurance is recognised as revenue following advice from the Department of Health and Human Services. - Long Service Leave (LSL) - Revenue is recognised upon finalisation of movements in LSL liability in line with the arrangements

set out in the Department of Health and Human Services Hospital Circular 04/2017.

Patient and Resident Fees

Patient fees are recognised as revenue on an accrual basis.

Private Practice Fees

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

Revenue from commercial activities

Revenue from commercial activities such as property rental and the cafeteria are recognised on an accrual basis.

Donations and Other Bequests

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

Category groups

The Hospital has used the following category groups for reporting purposes for the current and previous financial years.

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

Mental Health Services (Mental Health) comprises all specialised mental health services providing a range of inpatient, community based residential, rehabilitation and ambulatory services which treat and support people with a mental illness and their families and carers. These services aim to identify mental illness early, and seek to reduce its impact through providing timely acute care services and support for those living with mental illness.

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

Emergency Department Services (EDS) comprises all emergency department services.

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

Primary and Community Health comprises services for Community Health including health promotion and counselling and physiotherapy.

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

Other Services excluded from National Health Care Agreement (NHCA) (Other) comprises services not separately classified above, including: sexually transmitted infections clinical services, Koori liaison officers, immunisation and screening services, drugs services and community care programs.



Note 3: The Cost of delivering services

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

Structure:

3.1 Analysis of expenses by source

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

3.3 Employee Benefits in the Balance Sheet

3.4 Superannuation



No

te 3

.1:

An

aly

sis

of

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by

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84,8

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154,

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Note 3.1: Analysis of Expenses by Source

Expense recognition

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

Employee expenses

Employee expenses include:

n wages and salaries; n fringe benefits tax; n leave entitlements; n termination payments; n workcover premiums; and n superannuation expenses

Grants and other transfers

These include transactions such as: grants, subsidies and personal benefit payments made in cash to individuals.

Other operating expenses

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

Supplies and consumables

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

Net gain/(loss) on non-financial assets

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

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

Any gain or loss on the disposal of non-financial assets is recognised at the date of disposal and is the difference between the proceeds the carrying value of the asset at that time.

Other gains/(losses) from other economic flows

Other 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; b. transfer of amounts from the reserves to accumulated surplus or net result due to disposal or derecognition or reclassification; and c. investments in managed funds are revalued to market value based on redemption price per unit.



Note 3.2: Analysis of Expense and Revenue by Internally Managed and Restricted Specific Purpose Funds

TOTAL TOTAL TOTAL TOTAL 2018 2017 2018 2017

$’000 $’000 $’000 $’000

Commercial Activities

Pharmacy Services Regional 332 347 332 347

Consulting Suites 677 680 677 680

ICT External Sales 9 11 2 69

Salary Packaging 159 136 436 420

Regional Biomedical 25 25 52 66

External Supply 53 41 45 41

Tandara Caravan Park 538 341 511 378

Lung Function Respiratory Lab 34 42 74 101

Cafeteria 784 - 808 -

Television Service 30 14 51 124

Non-Commercial Activities

Gippsland Health Alliance 1,737 1,850 1,737 1,851

BreastScreen Victoria 1,635 1,557 1,993 1,716

Private Practice Fund 56 62 566 534

William Buckland (Rad/Onc) Special Projects 81 167 337 422

Cancer Care Donor Funds - - 87 85

General Donor Funds - - 138 175

Fundraising Operations 30 4 48 5

GCCC General Donor Fund - - 51 89

Medical Library Monash Fund 31 24 49 43

Critical Care Donor Funds 3 7 22 21

Chemotherapy Donor Funds - - 11 16

Allied Health Donor Donations - - 10 10

Gipps Cancer Sup Fundraising Grp 13 11 2 8

Other SPFI's 65 11 209 54

TOTAL 6,292 5,330 8,248 7,255

EXPENSE REVENUE




$'000 $'000

Current Provisions

Employee Benefits(i)

Accrue Days Off - Unconditional and expected to be settled wholly within 12 months(ii) 496 399 Annual Leave - Unconditional and expected to be settled wholly within 12 months(ii) 11,298 10,220 - Unconditional and expected to be settled wholly after 12 months(iii) 1,541 1,244 Long Service Leave - Unconditional and expected to be settled wholly within 12 months(ii) 2,500 2,300 - Unconditional and expected to be settled wholly after 12 months(iii) 13,868 12,985 Other - Unconditional and expected to be settled wholly within 12 months(ii) 24 35

29,727 27,183 Provisions related to Employee Benefit On-Costs - Unconditional and expected to be settled within 12 months(ii)) 1,921 1,717 - Unconditional and expected to be settled after 12 months(iii) 1,703 1,606

3,624 3,323 Accrued salaries and wages 4,200 3,500 Total Current Provisions 37,551 34,006 Non-Current Provisions Employee Benefits(i) 5,969 5,471 Provisions related to Employee Benefit On-Costs 641 588 Total Non-Current Provisions 6,610 6,059 Total Provisions 44,161 40,065 (a) Employee Benefits and Related On-Costs Current Employee Benefits and related on-costs Unconditional Long Service Leave Entitlement 18,201 17,004 Annual Leave Entitlements 14,560 13,009 Accrued Wages and Salaries 4,200 3,500 Substitution Leave 27 40 Accrued Days Off 563 453 Non-Current Employee Benefits and related on-costs Conditional Long Service Leave Entitlements 6,610 6,059 Total Employee Benefits 44,161 40,065 (b) Movements in provisions Movement in Long Service Leave: Balance at start of year 23,063 21,138 Provision made during the year - Revaluations (1) (199) - Expense recognising Employee Service 4,064 3,869 Settlement made during the year (2,315) (1,745) Balance at end of year 24,811 23,063

Notes: (i) Employee benefits consist of amounts for accrued days off, 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.

Note 3.3: Employee benefits in the balance sheet



Note 3.3: Employee benefits in the balance sheet (continued) Employee Benefit Recognition Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date as an expense during the period the services are delivered.

Provisions Provisions are recognised when the Hospital has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. The amount recognised as a liability is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

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

Wages and salaries, annual leave and accrued days off Liabilities for wages and salaries, annual leave and accrued days off are all recognised in the provision for employee benefits as “current liabilities”, because the hospital does not have an unconditional right to defer settlements of these liabilities. Depending on the expectation of the timing of settlement, liabilities for wages and salaries, annual leave and accrued days off are measured at:

n Undiscounted value - if the hospital expects to wholly settle within 12 months; or n Present value - if the hospital does not expect to wholly settle within 12 months.

Long service leave (LSL) The liability for long service leave (LSL) is recognised in the provision for employee benefits. Unconditional LSL is disclosed in the notes to the financial statements as a current liability even where the Hospital does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months. An unconditional right arises after a qualifying period. The components of this current LSL liability are measured at:

n Undiscounted value - if the Hospital expects to wholly settle within 12 months; and n Present value - if the Hospital does not expect to wholly settle within 12 months.

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

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

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

TOTAL TOTAL TOTAL TOTAL 2018 2017 2018 2017

$’000 $’000 $’000 $’000

Defined contribution plans:

HESTA 6,023 5,662 187 184

First State 4,808 4,754 150 162

Other 564 369 17 19

Total 11,395 10,785 354 365

Paid contribution Contribution Outstanding for the year at Year End

Note 3.4: Superannuation

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

Defined contribution superannuation plans

In 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. Contributions to defined contribution superannuation plans are expensed when incurred.

Note 4: Key Assets to support service delivery The hospital controls infrastructure and other investments that are utilised in fulfilling its objectives and conducting its activities. They represent the key resources that have been entrusted to the hospital to be utilised for delivery of those outputs.

Structure:

4.1 Investments and other financial assets

4.2 Property, plant and equipment

4.3 Depreciation and amortisation






$'000 $'000

CURRENT

Loans and receivables

Term Deposit

Aust. Dollar Term Deposits > 3 months(i) 28,737 28,208

TOTAL CURRENT 28,737 28,208

NON CURRENT

Available-for-Sale

Equities and Managed Investment Schemes

Victorian Funds Management Corporation 19,984 15,148

Investments In Listed Shares 395 -

TOTAL NON CURRENT 20,379 15,148

TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS

Represented by:

Health Service Investments 49,116 43,356

TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS 49,116 43,356

All term investments have been placed with Treasury Corporation Victoria in compliance with the Ministerial Standing Direction 3.7.2.

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

Note 4.1: Investments and other Financial Assets



Note 4.1: Investments and Other Financial Assets (continued) Investment Recognition

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Investments are classified in the following categories: n Loans & receivables. n Available-for-sale

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

The Hospital assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

The Hospital's investments must comply with Standing Direction 3.7.2 – Treasury and Investment Risk Management. The investment portfolio of the Hospital is managed by Victorian Funds Management Corporation through specialist fund managers and a Master Custodian. The Master Custodian holds the investments and conducts settlements pursuant to instructions from the specialist fund managers.

All financial assets, except for those measured at fair value through the Comprehensive Operating Statement are subject to annual review for impairment.

De-recognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when: the rights to receive cash flows from the asset have expired; or the Hospital 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 Hospital has transferred its rights to receive cash flows from the asset and either: a) has transferred substantially all the risks and rewards of the asset; or b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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

Impairment of financial assets

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

Doubtful debts

Receivables are assessed for bad and doubtful debts on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for doubtful debts are classified as other economic flows in the net result.

Investments in joint operations

In respect of any interest in joint operations, Latrobe Regional Hospital recognises in the financial statements:

- its assets, including its share of any assets held jointly;

- any liabilities including its share of liabilities that it had incurred;

- its revenue from the sale of its share of the output from the joint operation;

- its share of the revenue from the sale of the output by the joint operation; and

- its expenses, including its share of any expenses incurred jointly.




$'000 $'000

Land

Land at Fair Value 6,142 6,142

Total Land 6,142 6,142

Buildings & Improvements

Buildings & Improvements at Fair Value 200,047 128,821

Less Acc'd Depreciation (27,410) (19,237)

172,637 109,584

Site Improvements at Fair Value 4,699 3,246

Less Acc'd Depreciation (613) (444)

4,086 2,802

Total Buildings & Improvements 176,723 112,386

Leasehold Improvements

Leasehold Improvements at cost 230 230


Total Leasehold Improvements 21 36

Plant and Equipment

Non Medical Equipment at Fair Value 5,842 4,315


2,839 1,670

Computer Equipment at Fair Value 2,471 1,644


961 497

Furniture & Fittings at Fair Value 2,350 2,048


774 593

Motor Vehicles at Fair Value 328 328


15 31

Total Plant & Equipment 4,589 2,791

Medical Equipment at Fair Value 32,391 26,469


Medical Equipment 11,373 6,476

Under Construction

Assets under construction 4,006 68,915

Total Assets Under Construction 4,006 68,915

TOTAL PROPERTY, PLANT & EQUIPMENT 202,854 196,746

Note 4.2: Property, Plant & Equipment a) Gross carrying amount and accumulated depreciation



Note 4.2: Property, Plant & Equipment (continued) b) Reconciliations of the carrying amounts of each class of asset

Assets Buildings & Plant & Medical Under Leasehold

Land Improvements Equipment Equipment Construction Improvements Total $'000 $'000 $'000 $'000 $'000 $'000 $'000

Balance at 1 July 2016 5,772 114,836 3,134 7,370 25,607 78 156,797

Additions 370 1,723 183 543 46,923 - 49,742

Transfers from Works In Progress - 3,542 73 - (3,615) - -

Disposals - (909) - - - - (909)

Depreciation and Amortisation (note 4.2) - (6,806) (599) (1,437) - (42) (8,884)

Balance at 30 June 2017 6,142 112,386 2,791 6,476 68,915 36 196,746

Additions - 11 372 773 16,081 - 17,237

Transfers from Works In Progress - 72,668 2,289 6,033 (80,990) - -

Depreciation and Amortisation (note 4.2) - (8,342) (863) (1,909) - (15) (11,129)

Balance at 30 June 2018 6,142 176,723 4,589 11,373 4,006 21 202,854

Land and buildings carried at valuation The Valuer-General Victoria undertook to re-value all of the Hospital's owned and leased land and buildings to determine their fair value. The valuation, which conforms to Australian Valuation Standards, was determined by reference to the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length transaction. The valuation was based on independent assessments. The effective date of the valuation is 30 June 2014. In compliance with FRD103F, in the year ended 30 June 2018, the Hospital's management conducted an annual assessment of the fair value of land and buildings. To facilitate this, management obtained from the Department of Treasury and Finance the Valuer General Victoria indices for the financial year ended 30 June 2018. The fair value of the land had been adjusted by a managerial revaluation in 2015. The latest indices did not require a further managerial revaluation in 2018. There was no material financial impact on change in fair value of buildings.



Carrying Fair value measurement at end amount as at of reporting period using:

30 June 2018 Level 1 (1) Level 2 (1) Level 3 (1)

Land at fair value

Non-Specialised land 2,704 - 2,704 -

Specialised land 3,438 - - 3,438

Total of land at fair value 6,142 - 2,704 3,438

Buildings at fair value

Specialised buildings 176,723 - - 176,723

Total of building at fair value 176,723 - - 176,723

Leasehold Improvements 21 21

Plant and equipment at fair value

Plant equipment and vehicles at fair value

- Vehicles 15 - - 15

- Plant and equipment 4,574 - - 4,574

Total of plant, equipment and vehicles at fair value 4,589 - - 4,589

Medical equipment at fair value

- Medical equipment 11,373 - - 11,373

Total medical equipment at fair value 11,373 - - 11,373

Assets under construction at fair value

Assets under construction 4,006 4,006 - -

Total assets under construction at fair value 4,006 4,006 - -

202,854 4,006 2,704 196,144

Note: (i) Classified in accordance with the fair value hierarchy. There have been no transfers between levels during the period.

Note 4.2: Property, Plant & Equipment (continued) (c) Fair value measurement hierarchy for assets as at 30 June 2018

(c) Fair value measurement hierarchy for assets as at 30 June 2017

Carrying Fair value measurement at end amount as at of reporting period using:

30 June 2017 Level 1 (1) Level 2 (1) Level 3 (1)

Land at fair value Non-Specialised land 2,704 - 2,704 -

Specialised land 3,438 - - 3,438 Total of land at fair value 6,142 - 2,704 3,438

Buildings at fair value Specialised buildings 112,386 - - 112,386 Total of building at fair value 112,386 - - 112,386

Leasehold Improvements 36 36

Plant and equipment at fair value Plant equipment and vehicles at fair value - Vehicles 31 - - 31 - Plant and equipment 2,760 - - 2,760 Total of plant, equipment and vehicles at fair value 2,791 - - 2,791

Medical equipment at fair value - Medical equipment 6,476 - - 6,476 Total medical equipment at fair value 6,476 - - 6,476

Assets under construction at fair value Assets under construction 68,915 68,915 - - Total assets under construction at fair value 68,915 68,915 - -

196,746 68,915 2,704 125,127

Note: (i) Classified in accordance with the fair value hierarchy. There have been no transfers between levels during the period.



Note 4.2: Property, Plant & Equipment (continued) (d) Reconciliation of Level 3 fair value

Plant and Medical Land Buildings equipment equipment 2018

Opening Balance 3,438 112,422 2,791 6,476

Purchases - 72,679 2,661 6,806

- Depreciation - (8,357) (863) (1,909)

Subtotal - 64,322 1,798 4,897

Closing Balance 3,438 176,744 4,589 11,373

2017

Opening Balance 3,438 114,729 3,134 7,370

Purchases - 5,238 256 543

Sales - (1,050) - -

- Depreciation - (6,495) (599) (1,437)

Subtotal - (2,307) (343) (894)

Closing Balance 3,438 112,422 2,791 6,476

Note Classified in accordance with the fair value hierarchy, see Note 1 There have been no transfers between levels during the period.

(i) CSO adjustments of 20% were applied to reduce the market approach value for the Department’s specialised land.

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

Expected Likely Significant

Asset Examples of Fair Value Valuation Inputs

Class Asset Types Level Approach (Level 3 Only)

Specialised Land Level 3Land subject to restriction

as to use and/or sale

Specialised Buildings Level 3Specialised buildings with

limited alternative uses

and/or substantial

customisation

Plant and Equipment

at Fair Value

Level 3

Community Service Obligation

(CSO) adjustment

Market approach

Cost per square metre/Useful

life

Depreciated replacement

cost approach

Cost per square metre/Useful

life

Depreciated replacement

cost approach

N.A.Market approach

Specialised items with

limited alternative uses

and/or substantial

customisation

Vehicles Level 2If there is an active resale

market available



Note 4.2: Property, Plant & Equipment (continued)

Initial Recognition

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

The cost of a leasehold improvement is capitalised as an asset and depreciated over the shorter of the remaining term of the lease or the estimated useful life of the improvements.

Crown land is measured at fair value with regard to the property's highest and best use after due consideration is made for any legal or physical restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset.

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

Subsequent measurement

Consistent with AASB 13 Fair Value Measurement, the hospital determines the policies and procedures for recurring property, plant and equipment fair value measurements, in accordance with the requirements of AASB 13 and the relevant FRDs.

All property, plant and equipment for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy.

For the purpose of fair value disclosures, the hospital has determined classes of assets on the basis of the nature, characteristics and risks of the asset and the level of the fair value hierarchy as explained above.

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

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

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

The Valuer-General Victoria (VGV) is the hospital's independent valuation agency.

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

Fair value measurement

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

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

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

In accordance with paragraph AASB 13.29, Hospitals can assume the current use of a non-financial physical asset is its HBU unless market or other factors suggest that a different use by market participants would maximise the value of the asset.

Therefore, an assessment of the HBU will be required when the indicators are triggered within a reporting period, which suggest the market participants would have perceived an alternative use of an asset that can generate maximum value. Once identified, Hospitals are required to engage with VGV or other independent valuers for formal HBU assessment.

These indicators, as a minimum, include:

External factors:

- Changed acts, regulations, local law or such instrument which affects or may affect the use or development of the asset;

- Changes in planning scheme, including zones, reservations, overlays that would affect or remove the restrictions imposed on the asset’s use from its past use;

- Evidence that suggest the current use of an asset is no longer core to requirements to deliver a Hospital’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.

Valuation hierarchy

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

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy.

Identifying unobservable inputs (level 3) fair value measurements

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

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

Assumptions about risk include the inherent risk in a particular valuation technique used to measure fair value (such as a pricing risk model) and the risk inherent in the inputs to the valuation technique. A measurement that does not include an adjustment for risk would not represent a fair



Note 4.2: Property, Plant & Equipment (continued)

value measurement if market participants would include one when pricing the asset or liability i.e., it might be necessary to include a risk adjustment when there is significant measurement uncertainty. For example, when there has been a significant decrease in the volume or level of activity when compared with normal market activity for the asset or liability or similar assets or liabilities, and the Health Service has determined that the transaction price or quoted price does not represent fair value.

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

Non-specialised land and non-specialised buildings

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

For non-specialised land and non-specialised buildings, an independent valuation was performed by independent valuers Opteon Victoria Specialised Pty Ltd to determine the fair value using the market approach. Valuation of the assets was determined by analysing comparable sales and allowing for share, size, topography, location and other relevant factors specific to the asset being valued. An appropriate rate per square metre has been applied to the subject asset. The effective date of the valuation is 30 June 2014.

In June 2015 a managerial valuation was carried out in accordance with FRD 103F to revalue the land to its fair value.

Specialised land and specialised buildings

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

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

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

An independent valuation of the Hospital’s specialised land and specialised buildings was performed by the Valuer-General Victoria. The valuation was performed using the market approach adjusted for CSO. The effective date of the valuation is 30 June 2014.

Vehicles

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

Plant and equipment

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

There were no changes in valuation techniques throughout the period to 30 June 2018.

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

Revaluations of Non-Current Physical Assets

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

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

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

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

Revaluation surplus is not transferred to accumulated funds on de-recognition of the relevant asset.

In accordance with FRD 103F, Latrobe Regional Hospital’s non-current physical assets were assessed to determine whether revaluation of the non-current physical assets was required.




$'000 $'000

Depreciation

Buildings 8,171 6,645

Site Improvements 171 161

Plant & Equipment

- Medical Equipment 1,909 1,437

- Non Medical Equipment 358 267

- Computers & Communication 368 212

- Furniture & Fittings 121 98

- Motor Vehicles 16 22

Total Depreciation 11,114 8,842

Amortisation

Amortisation of Leasehold Improvements 14 43

Total Amortisation 14 43

Total Depreciation and Amortisation 11,128 8,885

Note 4.3: Depreciation and Amortisation

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

Depreciation is generally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over its estimated useful life. Estimates of the remaining useful lives, residual value and depreciation method for all assets are reviewed at least annually, and adjustments made where appropriate. This depreciation charge is not funded by the Department of Health and Human Services.

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

2018 2017

Buildings

- Structure Shell Building Fabric 40 to 45 years 40 to 45 years

- Site Engineering Services and Central Plant 30 to 40 years 30 to 40 years

Central Plant

- Fit Out 20 to 25 years 20 to 25 years

- Trunk Reticulated Building Systems 20 to 25 years 20 to 25 years

Plant & Equipment 10 years 10 years

Computer Equipment 1-5 years 1-5 years

Furniture and Fittings 10 years 10 years

Motor Vehicles 5 years 5 years

Leasehold Improvements 5 to 40 Years 5 to 40 Years

Site Improvements 40 to 45 Years 40 to 45 Years

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

Note 5: Other assets and liabilities This section sets out those assets and liabilities that arose from the hospital’s operations

Structure:

5.1 Receivables

5.2 Inventories

5.3 Other liabilities

5.4 Prepayments and other non-financial assets

5.5 Payables






$'000 $'000

Note 5.1: Receivables

CURRENT

Contractual

Inter Hospital Debtors 1,053 1,468

Trade Debtors 508 896

Patient Fees 642 596

Accrued Investment Income 27 15

Sundry Debtors 1,773 1,398

Less Allowance for Doubtful Debts

Trade Debtors (13) (18)

Patient Fees (39) (38)

3,951 4,317

Statutory

GST Receivable 955 803

955 803

TOTAL CURRENT RECEIVABLES 4,906 5,120

NON CURRENT

Statutory

Long Service Leave - Department of

Health and Human Services 4,402 3,493

TOTAL NON-CURRENT RECEIVABLES 4,402 3,493

TOTAL RECEIVABLES 9,308 8,613

(a) Movement in the Allowance for doubtful debts

Balance at beginning of year 56 89

Amounts written off during the year 2 -

(Decrease) in allowance recognised in net result (6) (33)

Balance at end of year 52 56

(b) Ageing analysis of receivables

Please refer to note 7.1 for the ageing analysis of contractual receivables.

(c) Nature and extent of risk arising from receivables

Please refer to note 7.1 for the nature and extent of credit risk arising from contractual receivables.

Receivables recognition

Receivables consist of: - contractual receivables, which consists of debtors in relation to goods and services and accrued investment income; and - statutory receivables, which includes predominantly amounts owing from the Victorian Government and Goods and Services

Tax (“GST”) input tax credits recoverable.

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

Receivables are recognised initially at fair value and subsequently measured at amortised cost less any accumulated impairment.

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

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




$'000 $'000

Pharmaceuticals

At cost 1,170 1,088

Other Consumables

At cost 213 193

TOTAL INVENTORIES 1,383 1,281

Note 5.2: Inventories

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

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

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

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

Cost for inventory is measured on the basis of weighted average cost.


$'000 $'000

CURRENT

Monies Held in Trust*

- Patient Monies Held in Trust 5 6

- Accommodation Bonds (Refundable Entrance Fees) 300 -

- Employee Salary Packaging Account 513 230

Total Current 818 236

* Total Monies Held in Trust

Represented by the following assets:

Cash Assets (refer to Note 6.1) 818 236

TOTAL 818 236

Note 5.3: Other Liabilities


$'000 $'000

CURRENT ASSETS

Prepayments 1,010 1,174


Prepayments represent payments in advance of receipt of goods or services or that part of expenditure made in one accounting period covering a term extending beyond that period.

Note 5.4: Prepayments




$'000 $'000

CURRENT

Contractual

Trade Creditors 3,411 2,391

Other Creditors 366 109

Accrued Expenses 10,501 7,930

Amounts payable to governments and agencies 203 59

14,481 10,489

Statutory

GST Payable 105 128

Department of Health and Human Services (ii) 261 61

366 189

TOTAL CURRENT 14,847 10,678

Note 5.5: Payables

(i) The average credit period is 30 days. No interest is charged on the other payables. (ii) Terms and conditions of amounts payable to the Department of Health and Human Services

vary according to the particular agreement with the Department.

Payables consist of: l contractual payables, classified as financial instruments and measured at amortised cost. Accounts payable represent liabilities

for goods and services provided to the Hospital prior to the end of the financial year that are unpaid; and l statutory payables, that are recognised and measured similarly to contractual payables, but are not classified as financial

instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from contracts.

Note 5.5: (a) Maturity analysis of Financial Liabilities as at 30 June The following table discloses the contractual maturity analysis for Hospital's 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

2018

Financial Liabilities

Payables 14,481 14,481 14,481 - -

Other 1,140 1,140 513 355 272

Total Financial Liabilities 15,621 15,621 14,994 355 272

2017


Payables 10,489 10,489 10,489 - -

Other 602 602 230 56 316

Total Financial Liabilities 11,091 11,091 10,719 56 316

Ageing analysis of financial liabilities excludes the types of statutory financial liabilities (i.e. GST Payable)

Carrying Nominal Less than Less than Amount Amount 1 Month 1 Year 1-5 Years

$’000 $’000 $’000 $’000 $’000

Maturity Dates



$'000 $'000

CURRENT

Department of Health and Human Services - Funded Loan 50 50

TOTAL 50 50

NON-CURRENT

Department of Health and Human Services - Funded Loan 300 350

Department of Health and Human Services - Loan Discount (28) (34)

TOTAL 272 316

Note 5.6: Non Interest Bearing Liabilities

The Department of Health and Human Services provided the Hospital with an operating loan of $1,000,000 in 2001 to assist in the transition from a privately operated facility. Annual repayments are $50,000 with the completion date being 30 June 2025.




Note 6: How we finance our operations This section provides information on the sources of finance utilised by the hospital during its operations, along with interest expenses (the cost of borrowings) and other information related to financing activities of the hospital.

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

Structure:

6.1 Cash and cash equivalents

6.2 Commitments for expenditure




$'000 $'000

Cash on hand 28,319 17,875

Patient Trust Account 305 6

Employee Salary Packaging Account 513 230

Total Cash and Cash Equivalents 29,137 18,111

Represented by:

Cash for Health Service Operations (as per Cash Flow Statement) 28,832 18,105

Total Cash and Cash Equivalents 28,832 18,105

Note 6.1: Cash and Cash Equivalents

Cash and cash equivalents include salary packaging.

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



Note 6.2: Commitments (a) Commitments for expenditure


$'000 $'000

Capital expenditure commitments

Payable:

Land and buildings 261 5,970

Plant and equipment 517 5,316

Total capital expenditure commitments 778 11,286

Not later than one year 778 11,286

Total 778 11,286

Other expenditure commitments

Payable:

Maintenance Services Contracts 2,033 4,283

Total other expenditure commitments 2,033 4,283

Not later than one year 1,441 2,442

Later than 1 year and not later than 5 years 592 1,841

Later than 5 years - -

TOTAL 2,033 4,283

Lease commitments

Commitments in relation to leases contracted for at the reporting date:

Operating leases 330 1,542

Total lease commitments 330 1,542

Operating leases

Operating Leases- Motor Vehicles

Cancellable

Not later than one year 330 715

Later than 1 year and not later than 5 years - 358

Sub Total 330 1,073

Operating Leases- Other

Cancellable

Not later than one year 103 173

Later than 1 year and not later than 5 years 164 296

Sub Total 267 469

Total operating lease commitments 597 1,542

Total lease commitments 597 1,542

Total Commitments (inclusive of GST) other than public private partnerships 3,408 17,111

less GST recoverable from the Australian Tax Office (310) (1,556)

Total Commitments (exclusive of GST) other than public private partnerships 3,098 15,555

All amounts shown in the commitments note are nominal amounts inclusive of GST.

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

Capital commitments have decreased significantly in 2018, due to the completion of major capital works projects and expansion through the year.



Note 7: Risks, contingencies and valuation uncertainities The hospital is exposed to risk from its activities and outside factors. In addition, it is often necessary to make judgements and estimates associated with recognition and measurement of items in the financial statements. This section sets out financial instrument specific information, (including exposures to financial risks) as well as those items that are contingent in nature or require a higher level of judgement to be applied, which for the hospital is related mainly to fair value determination.

Structure:

7.1 Financial instruments

7.2 Contingent assets and contingent liabilities



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

Note 7.1: Financial Instruments

(a) Financial instruments: categorisationContractual Contractual

Financial Financial Asset - loans Liabilities at & receivables amortised cost Total

$’000 $’000 $’0002018

Contractual Financial Assets

Cash and cash equivalents 29,137 - 29,137

Trade Debtors & Other Receivables 3,951 - 3,951

Other Financial Assets- term deposit 28,737 - 28,737

Other Financial Assets- managed investment 19,984 - 19,984

Other Financial Assets- shares in listed companies 395 - 395

Total Financial Assets (i) 82,204 - 82,204


Payables & Borrowings - 15,621 15,621

Total Financial Liabilities (ii) - 15,621 15,621

2017

Contractual Financial Assets

Cash and cash equivalents 18,111 - 18,111

Trade Debtors & Other Receivables 4,317 - 4,317

Other Financial Assets- term deposit 28,208 - 28,208

Other Financial Assets- managed investment 15,148 15,148

Total Financial Assets (i) 65,784 - 65,784


Payables & Borrowings - 11,091 11,091

Total Financial Liabilities (ii) - 11,091 11,091

(i) The total amount of financial assets disclosed here excludes statutory receivables (i.e. GST input tax credit recoverable)

(ii) The total amount of financial liabilities disclosed here excludes statutory payables (i.e. Taxes payable)



Total interest

income/ (expense) Total

$’000 $’0002018

Financial Assets

Cash and Cash Equivalents (i) 1,346 1,346

Other Financial Assets 409 409

Total Financial Assets 1,755 1,755


At Amortised Cost (ii) (2) (2)

Total Financial Liabilities (2) (2)

2017

Financial Assets

Cash and Cash Equivalents (i) 1,392 1,392

Total Financial Assets 1,392 1,392


At Amortised Cost (ii) (1) (1)

Total Financial Liabilities (1) (1)

Note 7.1: Financial Instruments (continued)

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

(i) For cash and cash equivalents, loans or receivables and available-for-sale financial assets, the net gain or loss is calculated by taking 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;

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

(iii) For financial assets and liabilities that are held-for-trading or designated at fair value through profit or loss, the net gain or loss is calculated by taking the movement in the fair value of the financial asset or liability.



Note 7.1: Financial Instruments (continued)

Categories of financial instruments

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

Latrobe Regional Hospital recognises the following assets in this category: - cash & deposits - term deposits - investment in managed investment schemes - receivables (excluding statutory receivables)

Available-for-sale financial instrument assets are those designated as available-for-sale or not classified in any other category of financial instrument asset. Such assets are initially recognised at fair value. Subsequent to initial recognition, they are measured at fair value with gains and losses arising from changes in fair value, recognised in ‘Other economic flows - other comprehensive income’ until the investment is disposed. Movements resulting from impairment and foreign currency changes are recognised in the net result as other economic flows. On disposal, the cumulative gain or loss previously recognised in ‘Other economic flows - other comprehensive income’ is transferred to other economic flows in the net result.

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

Latrobe Regional Hospital recognises the following assets in this category: - payables (excluding statutory payables) - borrowings

Note 7.2: Contingent Assets and Contingent Liabilities There are no known Contingent Assets or Contingent Liabilities held by the hospital at balance date.



Note 8: Other disclosures This section includes additional material disclosures required by accounting standards or otherwise, for the understanding of this financial report.

Structure:

8.1 Equity

8.2 Reconciliation of net result for the year to net cash inflow from operating activities

8.3 Responsible persons

8.4 Remuneration of executives

8.5 Related parties

8.6 Remuneration of auditors

8.7 AASBs issued that are not yet effective

8.8 Events occuring after the balance sheet date

8.9 Controlled Entities

8.10 Alternative presentation of comprehensive operating statement




$'000 $'000

(a) Surpluses Property, Plant & Equipment Revaluation Surplus 1 Balance at the beginning of the reporting period 49,377 49,377 Balance at the end of the reporting period 49,377 49,377 Represented by: - Land 1,756 1,756 - Buildings 47,621 47,621

49,377 49,377 Restricted Specific Purpose Surplus Balance at the beginning of the reporting period 20,339 18,789 Transfer from Accumulated Surplus 874 1,550 Balance at the end of the reporting period 21,213 20,339 Represented by: Business Unit - External Supply 70 78 Business Unit - ICT External 1,123 1,130 Business Unit - Regional Biomedical Engineering 403 376 Business Unit - Salary Packaging 1,803 1,588 Business Unit - TVs 611 591 Business Unit - Tandara Caravan Park - 27 Capital Donations 332 308 Chemotherapy Donor Funds 86 92 Critical Care Donor Funds 108 89 Dialysis Donor Funds 3 2 Donor Funds 1,087 951 Emergency Donor Funds 21 21 Gippsland Cancer Support Group Donor Fund 24 35 LSL Funds Received From DH 4,180 4,180 Macalister Donor Funds 4 3 ME Cole Staff Training Fund 43 42 Medical Library Fund 207 188 Mental Health - CA Mental Health Camp Donor Funds 21 21 Mental Health - CRCU Accom & Patient Benefit Donor Fund 18 18 Mental Health - East Patient Benefit Donor Fund 5 5 Mental Health - Education Donor Funds 6 6 Mental Health - Flynn Donor Funds 8 7 Mental Health - Latrobe Valley Patient Benefit Donor Funds 14 10 Mental Health - Patient Activities Donor Funds 21 21 Mental Health - South West Patient Benefit Donor Fund 2 2 Mental Health Training Fund 5 3 Operation LRH Appeal Donor Fund 93 91 Allied Health Donor 344 334 Private Patient Scheme 2,269 1,845 Gippsland Allied Health Symposium 12 10 Lung Function 172 132 Radiation/Oncology Special Projects- Capital 1,560 2,983 Radiotherapy (WBRG) Donor Fund 29 25 Restricted Funds - BreastScreen Victoria 983 628 Restricted Funds - Latrobe Health Assembly 770 - Restricted Funds - Gippsland Cancer Care Centre 4,352 4,214 Restricted Funds - ME Cole 50 50 Sub Acute Donor Funds 68 70 Tarra Paediatric Donor Funds 79 77 Theatre Instrument Donor Funds 15 14 Thomson Special Care Nursery Donor Funds 34 18 Tyers Medical Surgical Donor Funds 23 20 Gippsland Allied Health Education Group 9 20 Cancer Research 22 - Clinical Research Fund 124 14 Total Restricted Specific Purpose Surplus 21,213 20,339 Total Surpluses 70,590 69,716

Note 8.1: Equity

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



Note 8.1: Equity (continued) TOTAL TOTAL 2018 2017

$'000 $'000

(b) Contributed Capital

Balance at the beginning of the reporting period 26,652 26,652

Balance at the end of the reporting period 26,652 26,652

(c) Accumulated Surpluses

Balance at the beginning of the reporting period 121,568 75,968

Net Result for the Year 14,724 47,150

Transfers to Restricted Special Purpose Surplus (874) (1,550)

Balance at the end of the reporting period 135,418 121,568

Total Equity at end of financial year 232,660 217,936

Contributed capital Consistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 119A Contributions by Owners, appropriations for additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions to or distributions by owners that have been designated as contributed capital are also treated as contributed capital..

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

Restricted specific purpose surplus A restricted specific purpose surplus is established where the Hospital has possession or title to the funds but has no discretion to amend or vary the restriction and/or condition underlying the funds received.


$'000 $'000

Net result for the period 14,724 47,150

Non-cash movements:

Depreciation and amortisation 11,128 8,885

Non Cash Grants (294) (849)

Write down of inventories (59) 17

Loss on Disposal of assets - 891

Provision for doubtful debts (4) (31)

Movements included in investing & financing activities:

Movement in capital payables 1,060 3,480

Interest & distributions received on long term investments (1,446) (516)

Reclassification of investment revenue (559) -

Reversal of impaired investment (32) -

Movements in assets and liabilities:

Change in operating assets and liabilities

(Increase) in receivables (695) (1,707)

(Increase)/decrease in prepayments 164 (600)

(Decrease)/increase in payables 3,109 (1,269)

Increase in provisions 4,096 3,361

(Increase)/decrease in other liabilities 538 (91)

(Increase) in inventories (102) (162)

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 31,628 58,559

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



Note 8.3: Responsible Persons Disclosures

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

Period

Responsible Ministers:

The Honourable Jill Hennessy, Minister for Health, Minister for Ambulance Services 1/7/2017 - 30/6/2018

The Honourable Martin Foley, Minister for Mental Health, Minister for Housing, Disability and Ageing 1/7/2017 - 30/6/2018

Governing Boards

Linda McCoy (Chair) 1/7/2017 - 30/6/2018

Ian Gibson (Deputy Chair) 1/7/2017 - 30/6/2018

John Rasa 1/7/2017 - 30/6/2018

John Donovan 1/7/2017 - 30/6/2018

Leah Young 1/7/2017 - 30/6/2018

Chelsea Caple 1/7/2017 - 30/6/2018

John Arranga 1/7/2017 - 30/6/2018

Accountable Officers

Peter Craighead 1/7/2017 - 30/6/2018

Income Band

$10,000 - $19,999 0 2

$20,000 - $29,999 6 5

$50,000 - $59,999 1 1

$400,000 - $409,999 1 1

Total Numbers 8 9

Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to: $615,152 $612,088

Remuneration of Responsible Persons

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

Consolidated

2018 2017

No. No.

Amounts relating to the Governing Board Members and Accountable Officer are disclosed in the Hospital’s financial statements.

Amounts relating to the Responsible Ministers are reported within the Department of Parliamentary Service’s Financial Report as disclosed in Note 8.5 Related Parties.

Total Remuneration 2018 2017

$'000 $'000

Short-term Benefits 850 1,147

Post-employment Benefits 81 100

Other Long-term Benefits 92 54

Total Remuneration i 1,023 1,301

Total Number of Executives 5 4

Total Annualised Employee Equivalent ii 4.3 4.0


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

Remuneration comprises employee benefits in all forms of consideration paid, payable or provided in exchange for services rendered, and is disclosed in the following categories: Short-term Employee Benefits Salaries and wages, annual leave or sick leave that are usually paid or payable on a regular basis, as well as non-monetary benefits such as allowances and free or subsidised goods or services.

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

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

Termination Benefits Termination of employment payments, such as severance packages. Total remuneration payable to executives during the year included additional executive officers and a number of executives who received bonus payments during the year. These bonus payments depend on the terms of individual employment contracts.

Remuneration of Executive Officers (including Key Management Personnel Disclosed in Note 8.5)

i The total number of executive officers includes persons who meet the definition of Key Management Personnel (KMP) of Latrobe Regional Hospital under AASB 124 Related Party Disclosures and are also reported within Note 8.5 Relates Parties.

ii Annualised employee equivalent is based on working 38 ordinary hours per week over the reporting period.


Note 8.4 : Remuneration of Executives



Note 8.5: Related Parties The hospital is a wholly owned and controlled entity of the State of Victoria. Related parties of the hospital include:

l all key management personnel and their close family members; l all cabinet ministers and their close family members; and l all hospitals and public sector entities that are controlled and consolidated into the whole of state consolidated financial

statements. l Jointly controlled operation- a member of the Gippsland Health Alliance

KMPs are those people with the authority and responsibility for planning, directing and controlling the activities of Latrobe Regional Hospital, directly or indirectly.

The Board of Directors and the Executive Directors of Latrobe Regional Hospital are deemed to be KMPs.

Entity Key Management Personnel Position Title

Latrobe Regional Hospital Peter Craighead Chief Executive Officer

Latrobe Regional Hospital Amanda Cameron Chief Operating Officer/Chief Nurse

Latrobe Regional Hospital Simon Fraser Chief Medical Officer

Latrobe Regional Hospital Gary Gray Executive Director of Regional Services

Latrobe Regional Hospital Cayte Hoppner Executive Director of Mental Health/Chief Mental Health Nurse

Latrobe Regional Hospital Mark Wilkins Executive Director People & Culture

Latrobe Regional Hospital Linda McCoy Board Chair

Latrobe Regional Hospital Ian Gibson Board Member

Latrobe Regional Hospital John Rasa Board Member

Latrobe Regional Hospital John Donovan Board Member

Latrobe Regional Hospital Leah Young Board Member

Latrobe Regional Hospital Chelsea Caple Board Member

Latrobe Regional Hospital John Arranga Board Member

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

2018 2017 Compensation ($’000) ($’000)

Short term employee benefits 1,430 1,333

Post-employment benefits 116 114

Other long-term benefits 92 54

Total 1,638 1,501



Note 8.5: Related Parties (continued) Transactions with key management personnel and other related parties Given the breadth and depth of State government activities, related parties transact with the Victorian public sector in a manner consistent with other members of the public e.g. stamp duty and other government fees and charges. Further employment of processes within the Victorian public sector occur on terms and conditions consistent with the Public Administration Act 2004 and Codes of Conduct and Standards issued by the Victorian Public Sector Commission. Procurement processes occur on terms and conditions consistent with the Victorian Government Procurement Board requirements. Outside of normal citizen type transactions with the Department of Health and Human Services, all other related party transactions that involved KMPs and their close family members have been entered into on an arm's length basis. Transactions are disclosed when they are considered material to the users of the financial report in making and evaluation decisions about the allocation of scare resources. There were no related party transactions with Cabinet Ministers required to be disclosed in 2018. There were no related party transactions required to be disclosed for the Board of Directors and Executive in 2018.

Significant transactions with government-related entities Latrobe Regional Hospital received funding from the Department of Health and Human Services of $233 million (2017: $240 million). Expenses incurred by the Hospital in delivering services and outputs are in accordance with Health Purchasing Victoria requirements. Goods and services including procurement, diagnostics, patient meals and multi-site operational support are provided by other Victorian Health Service Providers on commercial terms. Professional medical indemnity insurance and other insurance products are obtained from a Victorian Public Financial Corporation. Treasury Risk Management Directions require the Hospital to hold cash (in excess of working capital) and investments, and source all borrowings from Victorian Public Financial Corporations.

During the year, the hospital had the following government-related entity transactions: Revenue received from the following for 2018 ($'000)

2018 2017 Entity ($’000) ($’000) Treasury Corporation Victoria 542 678 Alfred Health 2,472 2,535 Gippsland Southern Health Service 263 313 Central Gippsland Health Service 485 414 Department of Health & Human Services (not grant related) 41 176 Monash Health 196 151 West Gippsland Healthcare Group 483 538 Transport Accident Commission 122 336 Gippsland Health Alliance 3,075 2,974

2018 2017 Entity ($’000) ($’000) Monash Health 1,495 1,507 Ambulance Victoria 605 1,302 Bairnsdale Regional Health Service 284 318 Bass Coast Regional Health Service 343 375 Central Gippsland Health Service 1,875 1,508 Department of Health & Human Services 2 100 Koo Wee Rup Regional Health Services 334 291 Omeo District Health 126 157 Orbost Regional Health 167 145 South Gippsland Hospital 418 394 West Gippsland Healthcare Group 793 691 Yarram and District Health Service 309 264 Victorian Managed Insurance Authority 3,819 3,728 Gippsland Health Alliance 8,413 6,370

Payments made to the following for 2018 ($'000)



Topic Key requirements Effective date

AASB 9 Financial Instruments

1-Jan-18The key changes introduced by AASB 9 include simplified requirements for the classification and measurement of financial assets, a new hedging accounting model and a revised impairment loss model to recognise impairment losses earlier, as opposed to the current approach that recognises impairment only when incurred.

AASB 2014‑1 Amendments to Australian Accounting Standards [Part E Financial Instruments]

1-Jan-18Amends various AASs to reflect the AASB’s decision to defer the mandatory application date of AASB 9 to annual reporting periods beginning on or after 1 January 2018, and to amend Reduced Disclosure requirements.

AASB 15 Revenue from Contracts with Customers

1-Jan-18The core principle of AASB 15 requires an entity to recognise revenue when the entity satisfies a performance obligation by transferring a promised good or service to a customer. Note that amending standard AASB 2015‑8 Amendments to Australian Accounting Standards - Effective Date of AASB 15 has deferred the effective date of AASB 15 to annual reporting periods beginning on or after 1 January 2018, instead of 1 January 2017.

AASB 2014‑5 Amendments to Australian Accounting Standards arising from AASB 15

1 January 2018, except amendments to AASB 9 (Dec 2009) and AASB 9 (Dec 2010) apply 1 January 2018.

Amends the measurement of trade receivables and the recognition of dividends as follow:

l Trade receivables, that do not have a significant financing component, are to be measured at their transaction price, at initial recognition.

l Dividends are recognised in the profit and loss only when: m the entity’s right to receive payment of the dividend is

established; m it is probable that the economic benefits associated

with the dividend will flow to the entity; and m the amount can be measured reliably.

AASB 2015-8 Amendments to Australian Accounting Standards - Effective Date of AASB 15

1-Jan-18This standard defers the mandatory effective date of AASB 15 from 1 January 2017 to 1 January 2018.

Note 8.7: AASBs issued that are not yet effective Certain new Australian accounting standards have been published that are not mandatory for the 30 June 2018 reporting period. DTF assesses the impact of all these new standards and advises the Health Service of their applicability and early adoption where applicable.

As at 30 June 2018, the following standards and interpretations had been issued by the AASB but were not yet effective. They become effective for the first financial statements for reporting periods commencing after the stated operative dates as detailed in the table below. Latrobe Regional Hospital has not and does not intend to adopt these standards early.

Note 8.6: Remuneration of auditors TOTAL TOTAL 2018 2017

$'000 $'000

Victorian Auditor-General’s Office

Audit and review of financial statements 55 53



Note 8.7: AASBs issued that are not yet effective (continued)


AASB 2016-3 Amendments to Australian Accounting Standards - Clarifications to AASB 15

1-Jan-18This Standard amends AASB 15 to clarify requirements for identifying performance obligations, principal versus agent considerations and the timing of recognising revenue from granting a licence. The amendments require:

l a promise to transfer to a customer a good or service that is ‘distinct’ to be recognised as a separate performance obligation;

l for items purchased online, the entity is a principal if it obtains control of the good or service prior to transferring to the customer; and

l for licences identified as being distinct from other goods or services in a contract, entities need to determine whether the licence transfers to the customer over time (right to use) or at a point in time (right to access).

AASB 2016-8 Amendments to Australian Accounting Standards - Australian Implementation Guidance for Not-for-Profit Entities

1-Jan-19This Standard amends AASB 9 and AASB 15 to include requirements and implementation guidance to assist not-for-profit entities in applying the respective standards to particular transactions and events. The amendments:

l require non-contractual receivable arising from statutory requirements (i.e. taxes, rates and fines) to be initially measured and recognised in accordance with AASB 9 as if those receivables are financial instruments; and

l clarifies circumstances when a contract with a customer is within the scope of AASB 15.

The key changes introduced by AASB 16 include the recognition of most operating leases (which are currently not recognised) on balance sheet which has an impact on net debt.

AASB 16 Leases 1-Jan-19The key changes introduced by AASB 16 include the recognition of most operating leases (which are currently not recognised) on balance sheet which has an impact on net debt.

AASB 1058 Income of Not-for-Profit Entities

1-Jan-19This standard will replace AASB 1004 Contributions and establishes principles for transactions that are not within the scope of AASB 15, where the consideration to acquire an asset is significantly less than fair value to enable not-for-profit entities to further their objectives. The restructure of administrative arrangement will remain under AASB 1004.

AASB 2016-7 Amendments to Australian Accounting Standards - Deferral of AASB 15 for Not-for-Profit Entities

1-Jan-19This standard defers the mandatory effective date of AASB 15 for not-for-profit entities from 1 January 2018 to 1 January 2019.



Note 8.7: AASBs issued that are not yet effective (continued)


AASB 1059 Service Concession Arrangements: Grantor

1-Jan-19This standard prescribes the accounting treatment of Public Private Partnership (PPP) arrangements involving a private sector operator providing public services related to a service concession asset on behalf of the State, for a specified period of time. For social infrastructure PPP arrangements, this would result in an earlier recognition of financial liabilities progressively over the construction period rather than at completion date. For economic infrastructure PPP arrangements, that were previously not on balance sheet, the standard will require recognition of these arrangements on-balance sheet.

AASB 17 Insurance Contracts

1-Jan-21in existing practices by providing a single principle‑based framework to account for all types of insurance contracts, including reissuance contract that an insurer holds. It also provides requirements for presentation and disclosure to enhance comparability between entities.

This standard does not currently apply to not-for-profit public sector entities. The AASB is undertaking further outreach to determine the applicability of this standard to the not-for-profit public sector.

The following accounting pronouncements are also issued but not effective for the 2017‑18 reporting period. At this stage, the preliminary assessment suggests they may have insignificant impacts on public sector reporting.

l AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share‑based Payment Transactions

l AASB 2016-6 Amendments to Australian Accounting Standards - Applying AASB 9 Financial Instruments with AASB 4 Insurance Contracts

l AASB 2017-1 Amendments to Australian Accounting Standards - Transfers of Investment Property, Annual Improvements 2014-2016 Cycle and Other Amendments

l AASB 2017-3 Amendments to Australian Accounting Standards - Clarifications to AASB 4 l AASB 2017-4 Amendments to Australian Accounting Standards - Uncertainty over Income Tax Treatments l AASB 2017-5 Amendments to Australian Accounting Standards - Effective Date of Amendments to AASB 10

and AASB 128 and Editorial Corrections l AASB 2017-6 Amendments to Australian Accounting Standards - Prepayment Features with Negative Compensation l AASB 2017-7 Amendments to Australian Accounting Standards - Long-term Interests in Associates and Joint Ventures l AASB 2018-1 Amendments to Australian Accounting Standards - Annual Improvements 2015 – 2017 Cycle l AASB 2018-2 Amendments to Australian Accounting Standards - Plan Amendments, Curtailment or Settlement

Note 8.8: Events Occurring after the Balance Sheet Date Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between the Hospital and other parties, the transactions are only recognised when the agreement is irrevocable at or before the end of the reporting period.

Adjustments are made to amounts recognised in the financial statements for events which occur between the end of the reporting period and the date when the financial statements are authorised for issue, where those events provide information about conditions which existed at the reporting date. Note disclosure is made about events between the end of the reporting period and the date the financial statements are authorised for issue where the events relate to conditions which arose after the end of the reporting period that are considered to be of material interest.

There have been no events occurring after reporting date which are likely to materially affect these financial statements.



Note 8.9: Jointly Controlled Operations and Assets

Ownership Interest Name of Entity 2018 2017

% %

Gippsland Health Alliance 21.60% 22.05%

Interest in IT Alliance

Summarised Financial information of Jointly Controlled Assets & Liabilities

During 2009/10, the Alliance members signed a new agreement, which was effective 1 July 2009, which determines the interest in the Gippsland Health Alliance as a ‘jointly controlled asset’. Accounting for a ‘jointly controlled asset’ requires the member Hospital's to now recognise its share of the Alliance’s assets and liabilities, together with any income and expenditure arising, under the respective line item in the member Hospital’s financial statements from the year ending 30 June 2010 onwards. This arrangement is now known as a Joint Operation.

The Hospital's interest in assets employed in the above jointly controlled operations and assets is detailed below. The amounts are included in the financial statements and consolidated financial statements under their respective asset and liability categories:


$'000 $'000

Current Assets

Cash and Cash Equivalents 1,968 1,257

Receivables 233 218

Other Current Assets 558 506


Non Current Assets

Property, Plant and Equipment 31 18

Total Non Current Assets 31 18

Share of Total Assets 2,790 1,999

Current Liabilities

Payables 150 221

Other Current Liabilities 1,658 842

Total Current Liabilities 1,808 1,063

Share of Total Liabilities 1,808 1,063

Net Assets 982 936

Reconciliation of jointly controlled assets:

Share of funds at beginning of the reporting period 936 859

Contributions made in current reporting period - -

Share of current year Surplus/(Deficit) 46 77

Share of funds at end of reporting period 982 936

The Latrobe Regional Hospital's interest in revenues and expenses resulting from jointly controlled operations and assets is detailed below:

Revenues

GHA revenue 2,816 2,314

Total Revenue 2,816 2,314

Expenses

Information Technology and Administrative Expenses 2,766 2,234

Depreciation 4 3

Total Expenses 2,770 2,237

Net result 46 77




$'000 $'000

Interest 1,346 1,229

Fair value of assets received free of charge 401 3

Sales of goods and services 16,185 15,190

Grants 247,596 253,185

Other Current Revenue 8,907 10,210

Total revenue 274,435 279,817

Employee expenses 153,274 142,132

Depreciation 11,129 8,885

Interest expense 7 -

Grants and other transfers 6,806 4,111

Other operating expenses 89,556 77,043

Total expenses 260,772 232,171

Net result from transactions - Net operating balance 13,663 47,646

Net gain/ (loss) on sale of non-financial assets 60 (889)

Net gain/ (loss) on financial instruments at fair value 998 163

Other gains / (losses) from other economic flows 3 230

Total other economic flows included in net result 1,061 (496)

Net result 14,724 47,150

Note 8.10: Alternative presentation of comprehensive operating statement

Note 8.11: Economic Dependency

Latrobe Regional Hospital is wholly dependent on the continued financial support of the State Government and in particular, the Department of Health and Human Services.

The Department of Health and Human Services has provided confirmation that it will continue to provide the hospital adequate cash flow support to meet its current and future obligations as and when they fall due for a period up to September 2018.

The financial statements have been prepared on a going concern basis. The State Government and the Department of Health and Human Services have confirmed financial support to settle the hospital’s financial obligations when they fall due.

Village Avenue, Traralgon West PO Box 424 Traralgon, Victoria 3844

Tel 03 5173 8000 Fax 03 5173 8444

ABN 18 128 843 652

www.lrh.com.au

Latrobe Regional Hospital is located on the traditional land of the Braiakaulung clan of the Gunaikurnai Nation.

LATROBE REGIONAL HOSPITAL Annual Report · Summary of Financial Results 29 General Information 33...

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