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 |
VAGO undertakes performance audits into the economy, efficiency and effectiveness of public sector agencies and their operations to provide assurance to Parliament and drive public sector improvement. We aim to achieve this by identifying issues and making recommendations to agencies about how to address them. However, our recommendations cannot result in improvements unless they are accepted and enacted by public sector agencies.
Audit committees play a key accountability role in the governance framework of Victorian public sector agencies. While management retains ultimate accountability for operations, audit committees independently review and assess the effectiveness of key aspects of an agency's operations.
The effective planning and delivery of major capital projects is critical to governments achieving their policy objectives. If delivered well, infrastructure enhances services to the public and improves productivity. Poor management diminishes the benefits of these projects, potentially delays delivery and creates additional costs for taxpayers.