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.
Method of funding allocation based on unit prices for each activity undertaken, and the number of that activity to be performed by an entity.
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 2009–10 to 2013–14.
The principal legislation governing financial reporting by public hospitals are the Financial Management Act 1994 and the Corporations Act 2001.
Figure C1 sets out the legislative framework for each type of entity within the public hospital sector.
Figure C1
Legislative framework for public hospitals and associated entities
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Audit type |
Financial report |
Finalised within statutory time frame |
||||
|---|---|---|---|---|---|---|
|
Entity |
FMA |
Non-FMA |
Clear opinion issued |
Auditor-General's report signed |
Met | |
This report is part of a suite of reports presented to Parliament covering the results of our audits of public sector financial reports. The reports are outlined in Figure A1.
Figure A1
VAGO reports on the results of the 2013–14 financial audits
|
Report |
Description |
|---|
To provide quality services at an efficient cost, public hospitals need to ensure their assets are maintained to an appropriate state of repair. At 30 June 2014, public hospitals operated assets valued at $11.9 billion ($9.6 billion at 30 June 2013) that require ongoing maintenance. In the 2013–14 financial year, public hospitals spent $232 million maintaining these assets ($212 million in 2012–13).
Internal audit is a key mechanism available to public hospital boards to support the discharge of their governance and oversight responsibilities. Internal auditors can, among other activities, review core internal controls and identify areas of risk within an entity.
This Part provides an insight into the financial results and financial sustainability risks of the 87 public hospitals based on an analysis of key financial indicators.
The overall financial sustainability risk for the public hospital sector at 30 June 2014 has been rated as medium, consistent with the prior year.
This Part covers the results of the 2013–14 audits of the 87 public hospitals and 23 associated entities. It compares the financial reporting practices in 2013–14 against better practice, and presents the results of our assessment of general internal controls across these entities.
Parliament can have confidence in the financial reports of public hospitals as all financial reports were given unmodified audit opinions.
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, sub-acute, community health services and aged care programs. Rural public hospitals generally offer a higher proportion of aged care and community health services.