Responsibility on public sector entities to achieve their objectives, with regard to reliability of financial reporting, effectiveness and efficiency of operations, compliance with applicable laws, and reporting to interested parties.
Method of funding allocation based on unit prices for each activity undertaken, and the number of that activity to be performed by an entity.
Figure C1 shows the indicators used in assessing the financial sustainability risks of public hospitals in Part 2 of this report. These indicators should be considered collectively, and are more useful when assessed over time as part of a trend analysis.
Figure C1
Financial sustainability risk indicators
|
Indicator |
Formula |
|---|
Figure B1 shows the risk ratings applied to management letter points raised during an audit review.
Figure B1
Risk definitions applied to issues reported in audit management letters
|
Rating |
Definition |
Management action required |
|---|---|---|
|
Extreme |
As detailed in Part 1, to assist with our analysis of the public health sector, the 87 consolidated public hospitals have been split into four cohorts, based on the definitions shown in Figure 1C.
Figure A1 lists the public hospitals that make up each category.
Figure A1
Public hospital categories
|
Hospital category |
|
|---|---|
|
Metro—18 public hospitals |
This Part reviews seven public hospitals across the four cohorts to ascertain how they manage their liquidity and cash flow.
Five of the seven public hospitals made a net operating deficit in 2014–15. This contributed to cash shortfalls when they could not cover operational costs with operational revenue.
This Part looks at the 30 June 2015 financial performance and position of the 87 public hospitals and their controlled entities. It details the main drivers behind the net results achieved, and analyses the sector against five financial sustainability risk indicators.
The public hospital sector has generated a net deficit from operations of more than $700 million each year for the past five financial years.
This report details the outcome of the financial audits of the 87 public hospitals in Victoria, and their 19 controlled entities, for the financial year ending 30 June 2015.
Figure 1A outlines the structure of this report.
Figure 1A
Report structure
|
Part |
Description |
|---|---|
|
Part 1: Context |
This report details the outcome of the financial audits of the 87 public hospitals in Victoria, and their 19 controlled entities, for the financial year ending 30 June 2015.
|
Dr Peter Frost
Acting Auditor-General |
Audit team Ronald Mak—Engagement Leader Helen Grube—Team Leader Bryce Martin—Team member Peter Georgiou—Team member Melisa Kuru—Team member Engagement Quality Control Reviewer Timothy Maxfield |
In accordance with section 16(3) of the Audit Act 1994, relevant extracts from the report were provided to all universities, the Department of Treasury and Finance and the Department of Education and Early Childhood Development with a request for submissions or comments.
The submission and comments provided are not subject to audit nor the evidentiary standards required to reach an audit conclusion. Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.