Victorian Auditor-General's Office

Appendix E. Glossary

Accountability

Responsibility of 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.

Asset useful life

The period over which an asset is expected to provide the entity with economic benefits. Depending on the nature of the asset, the useful life can be expressed in terms of time or output.

Asset valuation

The fair value of a non-current asset on a particular date.

Appendix D. Financial sustainability indicators and criteria

Indicators of financial sustainability

This Appendix sets out the financial indicators used in this report. The indicators should be considered collectively and are more useful when assessed over time, as part of a trend analysis. The indicators have been applied to the published financial information of the 87 public hospitals for the five-year period 2008–09 to 2012–13.

4 Internal controls at public hospitals

At a glance

Background

This Part presents the results of our assessment of general internal controls, risk management and controls over private patient revenue at public hospitals.

Findings

Some rural hospitals put at risk the accuracy of financial reporting and increase their exposure to fraud because of inadequate controls over key account reconciliations and changes to masterfiles.

3 Financial sustainability

At a glance

Background

To be financially sustainable, entities need to be able to meet current and future expenditure as it falls due. They also need to absorb foreseeable changes and risks without significantly changing their revenue and expenditure policies.

This Part provides an insight into the financial sustainability of the 87 public hospitals based on an analysis of the trends in their key financial indicators over the past five years.

1 Background

1.1 Introduction

Public hospitals provide a range of services across metropolitan, regional and rural areas. Metropolitan and regional public hospitals typically provide acute health services, as well as a mix of mental health, subacute, community health and aged care services. Rural public hospitals generally offer a higher proportion of aged care and community health services.

Audit summary

The Victorian public hospital sector consists of 112 entities—comprising 87 public hospitals and 25 associated entities. The 112 entities provide a range of public health services across metropolitan, regional and rural Victoria.

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