annual report 2015 · the opening of this new building marked an important milestone in frankston...

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Annual Report 2015

Contents

Introduction: Chairperson and Chief Executive 3

Report of Operations 7

Responsible Bodies Declaration 7

Our Health Service 7

Objectives and Functions of Peninsula Health 8

Services Provided by Peninsula Health 10

Governance and Organisational Structure 13

Strategic Priorities 2014 – 15 19

Financial Summary 29

Performance Priorities 30

Activity and Funding 35

Other Disclosures 37

Alternate Presentation of Comprehensive 47

Operating Statement

Disclosure Index 48

Financial Statements

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Fast Facts 2014 – 15

During the year a total of:

2,674 babies were born

18,425 children (0–16 years) attended our emergency departments

88,331 people attended our emergency departments

74,563 patients were admitted to our hospitals

31,515 people were admitted to hospital from our emergency departments

6,288 children (0–16 years) were admitted to hospital for treatment1

501 babies were admitted to our Special Care Nursery

17,233 people were admitted to hospital for surgery

5,058 people were admitted to hospital for emergency surgery

11,833 people were admitted to hospital for elective surgery

8,724 prescription items were dispensed by our Pharmacy

11,083 X-rays and medical imaging procedures were performed

2,557 cardiac cases were treated

4,693 cancer treatments were provided

1,153 patients were admitted to our Hospital in the Home service

29 Hospital in the Home visits were carried out daily

29,466 dental courses of care were provided through Community Health

70,743 hours of service were provided through the Home and Community Care Program

5,262 hours of service were provided through our drug & alcohol program through the Community Health and Drug Program

15,736 hours of service were provided by our Health Independence Programs based within Community Health (HARP, Residential Inreach, PAC)

5,117 occasions of service were provided at our various diabetes clinics

1. Includes same children admitted multiple time (figure is based on monthly averages)

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Introduction

Chairperson & Chief Executive

It is a pleasure to present the Annual Report 2014/15 to inform Government, the community and our staff about Peninsula Health’s operational and financial performance for the year ended 30 June 2015. It has been another year of outstanding achievement.

The Health Service operates across a number of sites providing a broad range of services including:

Acute Care at Frankston Hospital and Rosebud Hospital

Sub–Acute Care, Rehabilitation, Palliative Care and Residential services at Mornington, Frankston and Rosebud

Mental Health services at Frankston, Hastings and Rosebud

Community Health services based at Frankston, Rosebud, Mornington and Hastings

Peninsula Health staff continued to provide quality patient-centred care to more people than ever before. Our services have been enhanced and expanded, and a small financial surplus, is being reinvested in equipment.

Presentations to the Emergency Departments at Frankston and Rosebud Hospitals continued to grow, with 88,331 people attending our two emergency departments – an increase of 4,250 attendances compared to the same period last year.

Mental Health, Community Health and Sub-Acute services also continued to see more patients and performed well against state-wide targets, with many services exceeding expectations.

Capital Works

There was substantial progress on capital projects worth more than $90 million.

Projects successfully concluded during the year included:

At Frankston Hospital, the $81 million capital project to build three new wards and a

new Emergency Department was completed on time and under budget. The new

Emergency Department is significantly larger with improved workflow that enables

patients to receive quicker treatment, while the new wards offer an improved patient

care environment that is equipped with state-of-the-art technology.

In October 2014, the Government announced that the surplus from the Frankston

Hospital redevelopment project could be retained by Peninsula Health and be

reinvested into the construction of a Hybrid DSA Operating Theatre and an upgrade of

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the Frankston Hospital kitchen. Both of these projects are well advanced with the new

operating theatre scheduled to open in February 2016.

A $500,000 expansion to the Rosebud Hospital Dental Services provided two

additional dental chairs, improved patient amenities, waiting room and staff

administrative areas.

Also completed at Rosebud following a successful community fundraising program

which raised $1.6 million was the installation of a CT scanner.

A $700,000 refurbishment of Palliative Care Services at Golf Links Road made

possible by a major bequest will comprise a new bariatric bedroom, expanded family

meeting and interview room, and an expanded administration area.

New Emergency Department

Peninsula Health’s landmark $81 million expansion at Frankston Hospital was officially opened in February by Minister for Health the Hon Jill Hennessy. The expansion will inject a major health boost to one of the busiest Emergency Departments in Victoria.

The opening of this new building marked an important milestone in Frankston Hospital’s history. The last five years have seen more than $150 million invested in capital works for critical care, emergency medicine, and general medical services. Known as Frankston Stage 3, the new Building A comprises a new Emergency Department, a Coronary Care Unit and two general wards. The new four-storey addition to the hospital was delivered on time and under budget.

The development at Frankston Hospital was designed to address the acute health needs across the fast-growing Mornington Peninsula region. Not only are the facilities and equipment amongst the best available, the quality of care from a patient’s perspective remains at the heart of this project. The Emergency Department comprises 49 general treatment cubicles as well as specialist treatment rooms and consultation areas.

Advanced Technology for the new Emergency Department

Advances in technology are changing the way Emergency Services are offered to patients. The new Emergency Department at Frankston Hospital is more than double the size of the previous department, has its own separate radiology facilities including CAT scan, and features computers at every bed and treatment area.

Tablet-style computers and swipe-card access will assist medical staff in monitoring the patient’s health at the touch of a button. New digital security measures ensure multiple staff can access this information while patient confidentiality is respected. The resuscitation and treatment areas also feature mobile pendants with examination lights, cardiac monitors, and power and gas supply for critical care equipment. These highly sophisticated devices can be moved around the patient and enable more staff to access the patient at any time.

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Clinical Services Plan

The Strategic Clinical Services Plan 2015–2025 was finalised earlier this year. The plan is designed to shape the services we provide to Frankston and the Mornington Peninsula over the next 10 years. The identified gaps in clinical service capability are being addressed through partnerships with Monash Health in the area of dermatology, the Eye and Ear Hospital for ophthalmology and Alfred Health for neurosurgery. Peninsula Health has also expanded its regional profile with the rotation of two interns to Bass Coast and the establishment of a referral pathway to improve the care of acute cardiac patients.

Celebrating Research

Peninsula Health’s official research recognition program was launched in November 2014. Celebrating Research recognises the valuable research undertaken by clinicians across the Mornington Peninsula at the Peninsula Health campuses at Frankston, Mornington and Rosebud in partnership with Monash University.

The joint appointment of Dr Virginia Plummer between Monash University and Peninsula Health has been integral to the linking of research projects with facilities and clinicians. As a teaching health service, links with Monash University have contributed to the growth of Peninsula Health’s research program through the relationship they have held for more than 20 years.

Since 2007 more than 550 clinicians and students have participated. This relationship will be further enhanced following the endorsement by the Board for the development of a dedicated Research Strategy. The Research Strategy was completed in 2015 and a Professor of Medicine position has been advertised to lead the Research Strategy over the next five years. Ensuring tomorrow’s leading clinicians have the resources and facilities to undertake research into the key areas of care for residents is a key priority for Peninsula Health.

Reconciliation Action Plan

In October 2014, Peninsula Health launched a major plan to address the factors that contribute to poor health outcomes for Aboriginal and Torres Strait Islander people on the Mornington Peninsula.

The Reconciliation Action Plan is an important collaborative document, which outlines how the entire organisation will make healthcare for Aboriginal and Torres Strait Islander peoples more accessible.

Frankston Hospital has the highest percentage (42%) of all Aboriginal and Torres Strait Islander hospital admissions in the Southern Metropolitan Region. Frankston and Rosebud

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hospitals also have the highest percentage (56%) of Aboriginal and Torres Strait Islander presentations to an emergency department in the region. Considerable actions have been achieved such as establishing two Aboriginal Traineeship positions, building staff skills through broad cultural awareness training, more visibly acknowledging our Aboriginal history (through art, flags, plaques and Aboriginal celebrations), supporting the Bay Mob Indigenous Health and Education Expo, and strengthening our service delivery to Aboriginal clients.

Inaugural Award Recognises Physiotherapist

Peter Hough, was the inaugural winner of the Noosh McGrath Excellence in Physiotherapy Award. This Peninsula Health award established in 2014 recognises the dedication and commitment of the late Noosh McGrath, a senior neurological physiotherapist at Golf Links Road.

Peter, who has worked at Peninsula Health for 27 years, is a Senior Inpatient Physiotherapist at the Mornington Centre. He received the award for his commitment to patient-centred care, excellence in physiotherapy service provision, and patient and staff advocacy.

Volunteers Give Decades Towards Building a Healthy Community

Twenty-one people across the Mornington Peninsula with a combined 325 years of serving the community were recognised at the Peninsula Health Volunteer Appreciation event in May. Two volunteers celebrated 25 years of service to Peninsula Health. Norman Summers, a member of the Men’s Auxiliary and a regular at the Frankston Integrated Health Centre help desk, as well as Frankston Hospital Pink Lady Margaret Jay were the longest serving volunteers.

Peninsula Health has a strong volunteer base of more than 750 people willing to give their time and energy to make a positive difference. More than 400 volunteers attended Peninsula Health’s Volunteer Appreciation event, held annually for National Volunteers Week.

Peninsula Health Volunteer Wins 2015 Minister for Health Volunteer Award

Julian Conlon, Chair of Peninsula Health’s Gay Lesbian Bisexual Transgender Intersex and Queer (GLBTIQ) Community Advisory Group, has won the Outstanding Individual Achievement by a Volunteer: Supporting Diversity Award at the 2015 Minister for Health Volunteer Award.

Ms Nancy Hogan Ms Sue Williams Chairperson Chief Executive Peninsula Health Peninsula Health 24 August 2015 24 August 2015

Name/Department

Title/Building

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Report of Operations

Responsible Bodies Declaration

In accordance with the Financial Management Act 1994, we are please dot present the Report of Operations for Peninsula Health for the year ending 20 June 2015.

Ms Nancy Hogan Ms Sue Williams

Chairperson Chief Executive

Peninsula Health Peninsula Health

24 August 2015 24 August 2015

Our Health Service

Our Vision

Building on our strong foundations of teamwork and continuous improvement we will be a

recognised leader in the provision of person-centred care.

Our Mission

Building a healthy community, in partnership.

Our Values

Service

Caring for those in need; make a difference; being responsive; person-centred; listening.

Integrity

Open; honest; just and reasonable; ethical.

Compassion

Caring for our clients, patients, carers and families, and each other; showing empathy; being non-judgemental; accepting; taking time; showing humility.

Respect

Walking in the shoes of others; recognising individual needs; showing tolerance; treating others as equals; acknowledging worth. Excellence

Giving our best; striving for the best results; putting in that little extra; aiming for better practice; being innovative; professional; providing quality services.

Peninsula Health provides a statewide personal alarm service to 32,622 clients through our MEPACS Service. Peninsula Health employs 5,148 people and is supported by more than 800 volunteers and

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auxiliary members.

Objectives and Functions of Peninsula Health

Peninsula Health is one of 15 metropolitan public health services in Victoria. We embrace an integrated and collaborative view of health, working with community and service partners to promote health and healthy lifestyles and to plan for the future needs of the local community. It was formerly reconstituted on 1 July 2008 to amalgamate the previous Peninsula Health (originally constituted as a public health service in 2000) and the former Peninsula Community Health Service.

Peninsula Health is accountable to the:

• Minister for Health

• Minister for Aging

• Minister for Mental Health

• Minister for Community Services

• Minister for Disability Services and Reform

• Peninsula Health comprises:

• Acute Care at Frankston Hospital and Rosebud Hospital

• Sub-Acute Care, Rehabilitation, Palliative Care and Residential services at

Mornington, Seaford, Frankston and Rosebud

• Mental Health services at Frankston, Hastings and Rosebud

• Community Health services based at Frankston, Rosebud, Mornington and Hastings.

Peninsula Health is a major teaching centre, and works closely with Monash University and Deakin University to train health professionals in medicine, nursing and allied health. We also have links with other universities in postgraduate studies.

Our Catchment

The Frankston-Mornington Peninsula (F-MP) catchment is a mixed urban and semi-rural area of about 850 square kilometres stretching from Seaford, Carrum and Frankston, about an hour’s travel from the Melbourne CBD, south across the Mornington Peninsula to Sorrento and Portsea at the southern tip, and Cape Shank, Point Leo and the deep water Port of Hastings in the east. The Mornington Peninsula Shire comprises small urban areas, tourist towns, rural agricultural areas and national parks across 20 postcodes, while the City of Frankston, on the eastern shores of Port Phillip Bay, is more urban and comprises five postcodes. The area is bound by sea on three sides, with a thriving tourism industry and is a desirable retirement destination. The area also includes a number of vulnerable communities characterised by low income residents, high unemployment rates and poor access to services due to the lack of public transport, and the costs of petrol and car ownership.

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1 Keleher H. 2014. FMPML Population Health Profile and Comprehensive Needs Assessment. Frankston Mornington Peninsula Medicare

Local, Mornington.www.fmpml.org.au

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Population and Demographic Features

Peninsula Health consists of 12 main sites and close to 900 beds, two emergency departments, 24 dental chairs and more than 90 consulting spaces located across the Frankston and Mornington Peninsula local government areas.

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The population of the combined Mornington Peninsula and Frankston LGAs in 2011 was 279,621 and this is forecast to grow to 330,119 by 2026-27. Eighty-one per cent of Peninsula Health’s acute inpatients are public patients and funded by the State and Commonwealth Governments.3

Peninsula Health’s catchment has some unique demographic features including:

• low levels of forecast population growth and higher rates of population ageing;

• a mix of wealth and extreme disadvantage;

• specific local indicators of disadvantage including higher rates of vulnerable children, homelessness and family violence;

• higher risk factors such as obesity and smoking;

• higher prevalence of chronic diseases;

• higher rates of injury when compared with the Victorian average.4

High-volume Services

High-volume services provided at Peninsula Health include dental services, community health and rehabilitation services, maternity, orthopaedic, renal dialysis, chemotherapy and emergency department services. Maternity and obstetric services and orthopaedic services collectively account for 47% of all acute specialist clinics provided at Peninsula Health.

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Diverse Health Conditions

Peninsula Health emergency department performance is influenced by a range of factors. Seasonal variations impact on the health and wellbeing of elderly community members. Holidaymakers experience a range of poor health experiences, including injuries many of which are caused by drug and alcohol abuse.

The diversity of patients creates challenges in providing appropriate experiences and includes children 0–3 years, people with mental health, alcohol and drug conditions and people aged 85+. Divers conditions diagnosed on presentation include chest pain (injuries and breaks, abdominal pain, and fainting or collapse. More than 15% of presentations are for diagnosis linked to chronic and complex conditions and 3% relate to mental health and behavioural disorders.

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2 Peninsula Health, 2015 Peninsula Health Strategic Clinical Service Plan 2015-2026.

3 Ibid.

4 Ibid.

5 Ibid.

6 Ibid.

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Peninsula Health’s emergency departments are supported by after-hours GP services, Frankston Hospital is located on site and Rosebud Hospital is nearby.

Services Provided by Peninsula Health

Working in partnership with other key organisations, services and our community, Peninsula Health is committed to providing high-quality healthcare services that are integrated, easily accessible, caring, and person centred.

For further information about the services provided by Peninsula Health, see www.peninsulahealth.org.au

Aged Care Advance Care Planning Aged Care Assessment Service Cognitive, Dementia and Memory Service Continence Clinic Falls Prevention Service General Rehabilitation Review Clinic Geriatric Evaluation & Management Inpatient Services Geriatric Medicine Geriatric Medicine Clinic Restorative Care Transition Care Program

Allied Health Audiology Diversional Therapy Exercise Physiology Interpreters Neuropsychology Nutrition & Dietetics Occupational Therapy Physiotherapy Podiatry Psychology Social Work Speech Pathology

Clinical Systems (electronic medical record)

Community Health Aboriginal & Torres Strait Islander Health ACCESS Service Addiction Medicine Aged Care Services Alcohol and Other Drugs Services Children’s Services Chronic Disease Services Community Kitchens Counselling Dental Services

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Diabetes Education Dietetics Domiciliary Care Services (Physiotherapy, Occupational Therapy, Speech Pathology, Carpentry) Exercise Physiology Family Violence Services Health Promotion Home Care Packages Homeless Outreach Hospital Admission Risk Program (HARP) Needle Syringe Program Nutrition Occupational Therapy Physiotherapy Planned Activity Groups Podiatry Post Acute Care Regional Communication Service (Adult) Residential In-reach Response Access and Discharge Service (RAD) Self Help and Support Groups Sexual Health Smoking Cessation Supporting Vulnerable Victorians in Residential Services

Volunteer Services

Youth Services

Community Participation

Continuing Education and Development Unit Nursing Research

Emergency Medicine

Frankston Hospital Emergency Department Rosebud Hospital Emergency Department Emergency Department Short Stay Unit

Medical Services Acute Care of the Elderly Ambulatory Services Cardiology (Heart) Clinical Haematology (Blood) Diabetes Education Endocrinology & Diabetes (Hormones) Gastroenterology (Stomach and Intestines) General Medicine Hospital in the Home (HITH) Infectious Diseases Intensive Care Medicine Medical Oncology (Cancer) Neurology (Brain and Nerves)

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Pain Medicine Palliative Medicine Renal Medicine (Kidneys) Respiratory & Sleep Medicine Rheumatology

Mental Health Services Consultation Liaison Service Enhanced Crisis Assessment Treatment Team and Psychiatric Triage Mental Health Hospital Admission Reduction Program (MH-HARP)

Aged Aged Acute In-Patient Unit Aged Persons Mental Health Team Carinya Residential Aged Care Unit Intensive Community Treatment Team

Adult Acute Inpatient Unit Adult Prevention & Recovery Care Service (APARC) Community Care Unit Community Mental Health Service

Youth (16 to 25 years) Youth Mental Health Team Youth Prevention & Recovery Care Service (YPARC)

MEPACS Personal Alarm Call Service

Paediatrics (Children’s Health) Child & Adolescent Health Neonates (Newborn babies) Home & Community Care Asthma Education Paediatric Integrated Cancer Service

Pathology, Haematology and Microbiology

Radiology and Nuclear Medicine CT (Computerised Tomography) Fluoroscopy Interventional Radiology MRI (Magnetic Resonance Imaging) Nuclear Medicine Plain Film Ultrasound

Rehabilitation Elective Orthopaedic Pathways Program Movement Disorders Program Neuro Review Clinic

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Prosthetics Clinic Rehabilitation Inpatient Services Spasticity Clinic Stroke Detours Program Chronic Pain Management Service Community Rehabilitation Programs

Surgical and Anaesthetic Services Anaesthesia & Perioperative Medicine Gastrointestinal Endoscopy General Surgery Maxillo Facial Surgery Orthopaedic Surgery Otolaryngology and Head & Neck Surgery (Ear, Nose and Throat) Plastic & Reconstructive Surgery (Skin) Skin Integrity – Wound Care Stomal Therapy Breast care Thoracic Surgery (Chest) Urology (Bladder and Kidneys) Vascular Surgery (Veins and Arteries) Women’s Health Gynaecology Obstetrics

Services not provided by Peninsula Health

Cardiac Surgery Child Psychiatry Dermatology Major Trauma Neonatal & Paediatric Intensive Care Neuro Surgery Ophthalmology Organ Transplantation Spinal Rehabilitation Spinal Surgery

Governance and Organisational Structure

Board Governance

Peninsula Health’s Board of Directors is appointed by the Governor in Council on the recommendation of the Minister for Health. Directors are usually appointed for a term of three years, with members eligible to apply for reappointment. The Minister for Health requires the Board to develop a Strategic Plan for the Health Service and to ensure accountable and efficient provision of health services.

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The Board of Directors is responsible for the governance and strategic direction of the Health Service and is committed to ensuring that the services provided by Peninsula Health comply with the requirements of the Health Services Act 1988 and the mission, vision and goals of the service.

During 2014/15, the Minister for Health and the Chair of Peninsula Health signed a Statement of Priorities of agreed funding, activity and service performance.

The Board held 11 meetings in the financial year 1 July 2014 to 30 June 2015. At these meetings, members of the Peninsula Health Executive regularly presented reports on their areas of responsibility.

Board of Directors as at 30 June 2015

Ms Nancy Hogan BA (Hons) Poli Sci GradDipRehab Studies MBA FACHSE AAICD

Chairperson

Appointed 1 July 2008

Executive Director Health and Aged Care Galante Business Solutions; former CEO of public, not-for-profit organisations and private hospitals and aged care organisations; former President of Aged and Community Care Australia and Australian College of Health Service Executives; former Board Director HESTA and Industry Funds Management Advisory Board; current Board Chair Melbourne General Practice Network.

Mr Michael Carroll BBus (Economics and Management) DipFS (Financial Planning)


Senior Financial Advisor Perpetual Private to its high net worth clients; past Board member Big Brothers Big Sisters (Melbourne) Incorporated; specialist in aged care, estate and philanthropic planning issues; and advisor on structured giving options.

Professor Henry Ekert AM MBBS MD FRACP


Clinical paediatric haematologist/oncologist; former Director Division of Medicine, Royal Children’s Hospital; Past President Clinical Oncological Society of Australia; advisor on haematology to Commonwealth Department of Health and Ageing.

Mr Geoffrey Rankin BBus (Accountancy) FCPA


Former CEO CPA Australia; former CEO Australian Leisure and Hospitality Group; senior executive experience in listed companies and not for profit sector.

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Mr Michael Tiernan LLB


Consultant Legal Management and OHS, Rehabilitation and Risk Management; Legal Practice management consultant; Member Law Institute of Victoria; nationally accredited Specialist Mediator Law Institute of Victoria; Member Law Institute of Victoria WorkCover Committee and Accident Compensation Committee; Chair Law Institute of Victoria Practice Management Committee.

Mr Jonathan Tribe BA MAdmin


Former Chief Executive Western Hospital and Royal Melbourne Hospital; former Managing Director Delaware North Companies International; former CEO Southern Metropolitan CemeteriesTrust; currently Chief Operating Officer Victoria University.

Ms Erika Wilke BA GradDipSoc DipFinPlanning CFP®


Director PrimeCare Financial Planning; experience in aged care sector; co-author Retirement Living and Aged Care – the Australian Master Financial Planning Guide.

Dr Laurie Warfe MBBS DRANZCOG FRACGP


Chair Victorian Board of the Medical Board of Australia; member of panel of examiners for Royal Australian College of General Practitioners; Honorary Colonel Royal Australian Army Medical Corps; past President Frankston Sunrise Rotary Club.

Ms Bronwyn Lewis RN BA MA Admin MAICD MFIA

Appointed 1 October 2014

General Manager, Strategic Change and Development Carers Australia, experience in administration and marketing across government, not-for-profit and private sectors.

Board committees as at 30 June 2015

Nine committees provide specialist advice and support to the Board. The committees also assist the Board and senior management to meet all statutory, regulatory and operational requirements for the Health Service.

Finance & Resources Committee

The Finance & Resources Committee reviews all financial matters, management information and internal control systems, and considers and makes recommendations to the Board on major and minor works.

Board members: Geoffrey Rankin (Chair), Michael Carroll, Nancy Hogan, Jonathan Tribe, Erika Wilke.

Audit & Risk Committee

The Audit & Risk Committee meets quarterly and at any other time as requested by the

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Peninsula Health Board, any Committee member, the internal auditor or the Auditor-General. The Committee liaises with the internal and external auditors, reviews and approves audit programs and evaluates the adequacy and effectiveness of the overall governance framework operating within Peninsula Health. The Committee receives reports via the compliance monitoring framework and monitors all risk management activities for Peninsula Health.

Board members: Jonathan Tribe (Chair), Geoffrey Rankin, Bronwyn Lewis

Quality & Clinical Governance Committee

The Quality & Clinical Governance Committee meets regularly to monitor outcomes and improve the quality and effectiveness of the health services provided by Peninsula Health. The Committee is also responsible for the clinical risk management activities of Peninsula Health, which are integrated with its quality systems.

Board members: Michael Tiernan (Chair), Bronwyn Lewis, Henry Ekert, Nancy Hogan, Laurie Warfe.

Medical Staff Association / Board Executive

The Board Executive considers clinical matters brought forward through the Chairman of the Medical Staff Association. Meetings are held quarterly between the Board Executive and the Chair of the Medical Staff Association, with the Deputy Chair Medical Staff Association, the Chief Executive and the Executive Director Medical Services Peninsula Health, in attendance.

Board members: Nancy Hogan (Chair), Henry Ekert, Michael Tiernan.

Human Research Ethics Committee

The Human Research Ethics Committee considers and advises the Board of Peninsula Health on all ethical matters arising from relevant research activity. It considers the ethical and scientific aspects of research projects submitted for approval and monitors approved research, through regular reports submitted by researchers in relation to ongoing and completed projects.

Board members: Laurie Warfe (Chair), Henry Ekert.

Community Advisory Committee

The Community Advisory Committee brings the voices of the community and consumers into the decision-making processes of Peninsula Health to ensure that the Health Service develops services that are responsive to our diverse community. Members provide information and advice on needs, demands, and service developments from a community perspective. The Committee is supported by 13 Community Advisory Groups, including the Cultural and Linguistic Diversity Community Advisory Group and the Disability Community Advisory Group.

Board members: Michael Carroll, Bronwyn Lewis

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Primary Care & Population Health Committee

The Primary Care & Population Health Committee assists in creating effective linkages between the Health Service and other primary care providers to co-ordinate the delivery of care in the community. The committee oversees catchment-wide primary care coordination through implementation of The Peninsula Model.

Board members: Michael Tiernan (Chair), Erika Wilke.

Remuneration Committee

The Remuneration Committee meets as required to review performance and determine remuneration of executive management.

Board members: Nancy Hogan (Chair), Geoffrey Rankin, Michael Tiernan.

Senior Medical & Dental Staff Appointments Committee

The Senior Medical & Dental Staff Appointments Committee makes recommendations to the Board of Directors in relation to the appointment of senior medical or dental staff.

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Peninsula Health Organisational structure as at 30 June 2015

Senior Officers

Ms Sue Williams BBus MBA

Chief Executive Officer (CEO)

Ms Williams commenced as CEO in August 2014 and has responsibility for leading the development and execution of Peninsula Health’s long-term strategy and organisational goals.

Executive Directors

Dr Fergus Kerr MBBS FACEM FRACMA MPH

Executive Director Medical Services

Dr Fergus Kerr commenced as Executive Director Medical Services on 11 May 2015.

Dr Kerr’s operational role includes Medical Workforce; Medical Education; Simulation Centre; Library; Pharmacy; Radiology; Pathology; Research; and GP Liaison.

His strategic responsibilities include the Peninsula Clinical School and the Peninsula Health Medical Workforce Plan.

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Ms Jan Child RN GradDip(Behavioural Sc) MSc(HlthAdmin) GAICD

Chief Operating Officer

Ms Child’s operational role includes Mental Health; Aged Care; Rehabilitation; Community Health; Rosebud Hospital; Allied Health; Residential Care; Pastoral Care; Nursing Services; Palliative Care; Clinical Information System Implementation.

Her strategic responsibilities include Primary Care and Population Health; Community Participation.

Mr Brendon Gardner BAppSc(HIM) MHA UNSW AFCHSM

Chief Operating Officer

Mr Gardner’s operational role includes Frankston Hospital Acute Inpatient Services; Intensive Care Unit; Emergency Medicine; Medicine; Surgery; Women’s, Children’s & Adolescent Health; Outpatients; Health Information Services; Management Information Services.

Mr David Anderson BCom MCom FAHSFMA GAICD

Executive Director Finance

Mr Anderson’s operational role includes Finance; Payroll; Printing; MEPACS; Supply.

His strategic responsibilities include Risk Management and Strategic Procurement.

Mr Anthony Gust A MSc, Grad Dip Statistics, BSc (Hons), Dip Project Management

Executive Director of Performance, Quality & Service Improvement

Mr Gust has operational responsibility for IT, MIS, HIS, Clover, Quality and Redesign.

Mr Simon Brewin MBL Grad Dip HSM Grad Cert HE BBus FCHSM

Executive Director Planning, Infrastructure and Information Technology

Mr Brewin’s operational role includes Planning; Infrastructure; Capital Works; Facilities Management; Support Services; Information Technology & Communications; Transport; Emergency Management.

His strategic responsibilities include the development and implementation of Peninsula Health’s Strategic and Clinical Service Plan.

Ms Kelly Gillies Grad Cert HR CAHRI

Executive Director Human Resources

Ms Kelly Gillies commenced as Executive Director Human Resources on 9 March 2015.

Ms Gillies operational role includes Employee Relations; HR Services; Learning and Organisational Development; Occupational Health and Safety; Employee Health and Wellbeing; and Rehabilitation and Return to Work of injured employees.

Her strategic responsibilities include Workforce Planning.

Strategic priorities 2014–15

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The Victorian Health Priorities Framework 2012–2022 outlines the Victorian Government’s priorities and policy directions.

The seven priority areas in this framework are:

Developing a system that is responsive to people’s needs

Improving every Victorian’s health status and experiences

Expanding service, workforce and system capacity

Increasing the system’s financial sustainability and productivity

Implementing continuous improvements and innovation

Increasing accountability and transparency

Improving utilisation of e-health and communications technology.

Over the past year, Peninsula Health has worked towards achievement of these priorities as described in the 2014-15 Statement of Priorities agreed with the Minister for Health.

Our activities and achievements against these priorities are outlined as follows:

Priority Action Deliverable Progress

Developing a system that

is responsive to people’s

needs

Develop an organisational policy for

the provision of safe, high-quality

end-of-life care in acute and subacute

setting, with clear guidance about the

role of, and access to, specialist

palliative care.

Further expand the

ACP model to

increase the number

of clinicians who

complete an ACP.

Completed and ongoing.

Clinicians now trained in MEACAS,

TCP, Sub-Acute Inpatients and

HARP. Training also provided to

General Practices, Private and Not-

for-Profit Residential Care Services

and HACC workers in Local

Government.

Facilitate consumer

led training on the

Advance Care

Planning and Life

Prolonging

Treatment policies.

Completed and ongoing

Consumer stories have been

effectively incorporated into staff

education. Two consumers have

participated in the making of a short

video to promote the importance of

ACP in person–centred care. The

video will be incorporated in an online

training module currently being

developed for clinicians.

A series of talks has been delivered

to five Planned Activity and Carer

Support Consumer Groups on ACP.

Review and monitor

metrics that

evaluate policy

implementation

across the

organisation.


The Advanced Care Planning

Steering Committee regularly reviews

and monitors the ACP KPI workbook.

Relevant KPI-’s are reported up to

the Executive.

Implement a formal

‘Medical Champion’

role to support End-


There are three medical champions

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of-Life Care. who provide support in the area of end of life care. These champions work in Acute, Subacute and Hospital Admission Risk Program (HARP) / Community.

Work collaboratively with Ambulance

Victoria to achieve timely transfer of

patients.

Chair and convene

the monthly

Ambulance Liaison

meetings

(incorporating

consumer

involvement) to

review and monitor

performance.

Complete – meetings are held every

month and are Chaired by Peninsula

Health.

Facilitate a joint

review of AV data to

compare metrics and

support / improve

data accuracy.

Ambulance arrival board

implemented.

Implement STAT

model of care within

the new ED which

will maintain AV off

stretcher

performance.

Complete.

Progress partnerships with other

services to improve outcomes for

regional and rural patients.

Establish a

memorandum of

understanding with

Bass Coast Regional

Health Services and

Leongatha Health

Service to support

care of patients

requiring cardiac

investigations and

interventions.

Referral pathways for cardiac

patients established.

Engage with local service systems to

support integrated client care and

service continuity for people affected

by mental illness.

Actively participate in

the Mental Health

Alliance to facilitate

catchment–wide care

pathways for key

mental health issues.

Complete and ongoing.

The Clinical Director and Operations

Director participate in Alliance

executive meetings with other MH

staff engaged in working groups.

The Alliance has focused on

catchment–wide action plans for

Homelessness, Rooming Houses,

Youth Suicide and Peer workforce.

Review the Mental

Health model of care

and implement

recommended

changes.

Completed.

The MH Model of Care was

evaluated and resulted in an increase

in acute clinicians, decrease in

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recovery clinicians, and reduction of

four teams to three. All changes have

been successfully implemented.

Support the effective implementation of

reforms to alcohol and other drug

treatment services.

Deliver catchment-

wide intake and

assessment service

for recommissioned

adult AOD treatment

services.

Peninsula Health has worked with its

consortium partners to implement a

new AOD intake and assessment

service for the catchment which is a

component part of the new AOD

model of care. The service has

performed at 111% since

implementation in August,

demonstrating a high demand for

services. This has extended waiting

times for some clients. However

issues are constantly monitored and

addressed though the consortium

partnership.

Develop catchment-

wide metrics which

monitor Drug

Treatment Activity

Units (DTAUs).

A catchment wide AOD Working

Group continues to meet monthly to

review metrics which include

performance against targets, waiting

times and referral flows.

Develop and

implement the

Alcohol and Drug

Catchment Alliance

to facilitate strategic

planning for AOD

services.

An AOD Alliance has been

developed as part of the Peninsula

Model, and includes multi-sectorial

representation, including strong

representation from PH. The Alliance

has achieved a significant amount in

a short space to time including

delivering broad communication and

education about the reforms and

changes in the AOD sector.

Improving every

Victorian’s health status

and experiences

Use consumer feedback to improve

person and family-centred care, health

service practice and patient

experience.

Incorporate the

Person Centred Care

model as part of the

Frankston Hospital

Stage 3

commissioning

process.


Patient and Staff experience program

undertaken in the commissioning of

FS3, involving consumers. Nominee

for 2015 Minister for Health Volunteer

Awards.

Expand consumer

representative roles

to support direct

patient and carer


A model has been implemented which has expanded consumer

23


feedback into service

delivery, and clinician

training.

representative roles into specific departments or wards, targeting recruitment from recent service users.

Review and enhance

quality metrics to

better reflect person-

centred care and

patient experience.


Data continues to be reported against

the existing Community Participation

KPIs while awaiting the release of the

new DHHS consumer participation

policy.

Reduce unplanned re-admissions. Using the Dr Foster

Business Intelligence

system and redesign

principles, continue

to reduce unplanned

re-admissions to

below peer hospital

average.

For Dr Foster we have joined focus

groups for fractured neck of femur,

sepsis and stroke. These groups have

allowed us to look at the profiles of

these groups and develop better

understandings of the different

groups. For the fractured NOF

cohort, we have been able to drill

down into this group to have a better

understanding of the profile of the

patient who is most likely to readmit

to the health service.

Identify services users who are

marginalised or vulnerable to poor

health, and develop interventions that

improve their outcomes relative to

other groups, for example, Aboriginal

people, people affected by mental

illness, people at risk of elder abuse,

people with disability, homeless

people, refugees and asylum seekers.

Implement the

Diversity framework

as part of the Person

Centred Care

strategy.


Julian Conlon awarded 2015 Minister

for Health Volunteer Award –

Outstanding achievement by a

volunteer: supporting diversity.

Implement the 2014–

2015 Reconciliation

Action Plan.


Key areas of focus have included the MOU with Boonwurung Foundation, Cultural competence training, development of cultural policies and traineeships for Aboriginal students. Supporting events such as BayMob and NAIDOC week, strengthening our service delivery to Aboriginal clients.

Progress

implementation of the

2014–2016 Disability

Action Plan.


Review, re-develop

and commence

implementation of the

2015–2017 CALD


24


(Cultural and

Linguistic Diversity)

plan.

Develop and

implement strategies

with primary care

providers, to improve

service options for

homeless people.

Complete – Premier’s Award for

developing an innovative and

responsive approach to service

provision for homeless people in the

PH catchment area.

Optimise alternatives to hospital

admission.

Employ an additional

GP in the HARP

program to provide

increased clinical

support and liaison to

community GPs, and

further reduce

preventable

admissions.

Completed.

Participate in

Department of Health

& Human Services

CarePoint trial to test

the effectiveness of a

new integrated model

of care for Victorians

with chronic

conditions and

complex needs.

As at 30 June 2015 there were 969

patients active in the program.

Review PACER pilot

and implement

sustained PACER

model in

collaboration with

Victoria Police.


PACER evaluation for Frankston

complete and shows since the

commencement in April 2014 the

team has responded to a total of 656

events. Of the 656 events only 21 of

these clients have been transported

to the Emergency Department under

Section 351, which has resulted in a

saving of 635 trips to the Emergency

Department by police.

The Rosebud PACER was

introduced in November 2014; the

team has responded to a total of 103

events. Of the 103 events only 24 of

these clients have been transported

to the Emergency Department under

Section 351 which has resulted in a

saving of 79 trips to the Emergency

Department by police.

Expanding service,

workforce and system

Develop and implement a workforce

immunisation plan that includes pre-

Validate

immunisation rates

The HWC Immunisation Policy to

strengthen Immunisation

25


capacity employment screening and

immunisation assessment for existing

staff that work in high risk areas in

order to align with Australian infection

control and immunisation guidelines.

for key infection risks

in high-risk exposure

departments and

improve compliance

rates by 10%.

requirements was updated in May

2015 to include Employee

Immunisation Service approval

required to formally commence as a

HCW. Immunisation requirements are

met with Manager notification.

Immunisation and testing was

provided with additional clinics.

May 2013 – May 2015 outstanding

pre-employment immunisation

compliance increased to 91% with

ongoing actions. May 2015 – new

approval process prior to

commencement with 94%

compliance for all new employees.

High Risk areas catch up program –

Paediatrics 80% increased 100%,

Special Care Nursery 67% increased

to 94%, Rosebud Emergency Nursing

27% increased to 88% and Rosebud

Emergency Medical 87% increased to

94%. Maternity Inpatient Unit 17%

increased to 47% with ongoing

actions into 2015-2016.

Build workforce capability and

sustainability by supporting formal and

informal clinical education and training

for staff and health students, in

particular inter-professional learning.

Report to

Department of Health

& Human Services

on the six mandatory

key performance

indicators which form

part of the BPCLE

(Best Practice

Clinical Learning

Environment) action

plan.

Complete.

Optimise workforce productivity

through identification and

implementation of workforce models

that enhance individual and team

capacity and support flexibility.

Develop and

implement revised

workforce model for

Frankston Hospital

Stage 3 to enhance

efficiency of service

delivery.

Complete.

Review allocation

structures and

processes to

enhance operational

flexibility.

Complete.

Increase employment of Aboriginal

people in mainstream health services

in line with the strategic objectives of

Koolin Balit: Victorian Government

Develop and

implement local work

area training for

Managers and teams

Complete.

26


strategic directions for Aboriginal

Health 2012–2022 and Karreeta

Yirramboi workforce participation

targets.

who employ

Aboriginal staff.

Promote

opportunities and

identify positions

across Peninsula

Health departments

that can be provided

for Aboriginal

Apprenticeship and

Traineeships,

including School

Based programs.

Complete.

Review and update

relevant staff related

policies, including

leave policies, to

ensure they are

culturally sensitive to,

and meet the needs

of Aboriginal

employees.

Complete.

Increasing the system’s

financial sustainability and

productivity

Identify and implement practice change

to enhance asset management.

Further develop the

Peninsula Health

Five-year Asset

Management Plan to

prioritise capital

investment for

replacement medical

equipment,

infrastructure and

ICT.

Complete – rolling five-year plan

updated annually

Implement a

centralised

equipment store at

FH aimed at

consolidating and

improving utilisation

and tracking of

shared medical

equipment.

In progress – business case to be

reviewed

Implementing continuous

improvements and

innovation

Develop a focus on ‘systems thinking’

to drive improved integration and

networking across health care settings.

Implement the

consultation

Neurosurgical

Service with Alfred

Health.

Complete – MOU has been signed,

and commences in the 2015–16

financial year.

Explore opportunities

for development of a

new model for

Thoracic Surgery and

In progress – Thoracic surgery

commenced, transplant still to be

negotiated.

27


services for long term

follow up of lung

transplant recipients

with Alfred Health.

Drive improved health outcomes

through a strong focus on patient-

centred care in the planning, delivery

and evaluation of services, and the

development of new models for putting

patients first.

Implement the

‘productive series’ re-

design methodology

across the

organisation.

Ongoing – rolled out to 12 units

across the organisation.

Implement the

capacity building

program as part of

the Person Centred

Care strategy

Complete.

Develop and

implement consistent

Person Centred Care

strategies across the

organisation

(including patients

and carers as key

members of the care

team, hourly

rounding, patient

initiated escalation,

patient directed

visitation)

In progress – survey of consumers

involved in clinical handover being

evaluated.

Implementation of

the Commonwealth

Government

system, a centralised

audit database, to

enhance monitoring,

reporting and the

evaluation of the

safety and

effectiveness of

clinical practice.

C-Gov implementation in progress

Increasing accountability

and transparency

Undertake annual board assessment. Board assessment

completed by June

2015.

Complete.

Demonstrate strategic focus and

commitment to aged care by

responding to community need as well

as the Commonwealth Living Longer

Progress

partnerships with

external service

providers leveraging

In progress – due diligence currently

underway for a potential JV with a

private provider.

28


Living Better reforms.

from existing

capabilities of the

Mount Eliza Personal

Alarm Call Service

(MEPACS).

Commence heart

failure study in

collaboration with

CSIRO and Meditec.

In progress.

Develop service

models to support

elderly clients with

chronic diseases.

Falls and COAD service models to be

implemented in February 2016.

Improving utilisation of

e-health and

communications

technology.

Trial, implement and evaluate

strategies that use e-health as an

enabler of better patient care. Utilise

telehealth to better connect service

providers and consumers to

appropriate and timely services.

Ensure local ICT strategic plans are in

place.

Develop and submit

a business case to

progress the

implementation of

EMR through:

implementation

of a Clinical

Document

Management

system

a medical device

interface with the

clinical system,

and

a system of

voice recognition

for clinician

record taking.

Business case completed and

investigating funding options.

Deploy an

Emergency

Department

Management

Information System

(EDIS) with

associated electronic

workflows and

clinical

documentation within

the Emergency

Department at

Frankston Hospital

Complete.

Refresh the

Peninsula Health ICT

Strategic Plan.

Completed. Board presentation July

2015.

29


Upgrade ICT

storage, backup and

site recovery

systems to improve

disaster recovery

response.

Complete.

Upgrade core

infrastructure to

enable a platform for

future development

of tele health within

and outside

Peninsula Health.

In progress.

Financial Summary

2014 – 15

$000

2013 – 14*

$000

2012 – 13

$000

2011 – 12

$000

20010 – 11

$000

Total revenue 485,459 463,715 441,142 420,956 401,140

Total expenses 484,146 462,700 439,657 419,782 401,110

Net result for year (from continuing

operations

before Capital and Specific Items)

1,313 1,015 1,485 1,174 30

Retained surplus/(accumulated deficit) 54,259 50,072 7,510 9,368 9,195

Total assets 442,679 440,336 372,490 361,285 351,788

Total liabilities 126,038 127,326 112,299 100,133 85,305

Net assets 316,641 313,010 260,191 261,152 266,483

Total equity 316,641 313,010 260,191 261,152 266,483

* Comparative information for 2013/14 has been updated to account for the discontinued operation consistent with comparative information presented in the

Financial Statements.

Financial Commentary

Peninsula Health’s financial performance in 2014 – 15 was in line with financial targets set for the year, with an operating surplus (recorded before discontinued operations, capital income and depreciation) of $1,313,000. The operating surplus enabled capital items for the Health Service to be funded.

In 2014 – 15, in comparison to the previous financial year:

total revenue increased to $485.5 million from $463.7 million

total assets rose by $2.3 million to $442.7 million

liabilities decreased by $1.3 million to $126.0 million

30

equity, being the difference between assets and liabilities, increased by $3.6 millionto $316.6 million.

For full details of our financial performance, see the Financial Statements contained separately at the back of this publication.

Ex-gratia Payments

Ex-gratia payments of $25,110.65 were made by Peninsula Health during 2014–15.

Looking Ahead

Peninsula Health’s financial sustainability is critical to the ongoing provision of quality services.

Performance Priorities

Financial performance

Operating result Target 2014–15 actuals

Annual operating result ($m) $0.5 m $1.313 m

WIES1 activity performance Target 2014–15 actuals

WIES (public and private)

performance to target 2

100% 100%

1. WIES is a Weighted Inlier Equivalent Separation.

2. WIES data as reported in this publication are modelled as at 24 July 2015. Final WIES results are normally completed in September.

Cash management Target 2014–15

actuals

2013–14

actuals

Creditors (days) < 60

days

44 34

Debtors (days) < 60

days

37 41

Net movement in cash

balance ($m)

($6.081m) $16.144 m

Access Performance

Emergency Care – Frankston Hospital 2014–15

actuals

Total presentations to Emergency Department 67,576

Acuity (Triage Category 1 – 3 = most urgent

presentations)

69%

31

Target 2014–15

actuals

3% 2.10%

Percentage of ambulance transferswithin 40 minutes

90% 89%

NEAT – Percentage of emergency

presentations to physically leave the

emergency department for admission

to hospital, be referred to another

hospital for treatment, or be

discharged within four hours

81% 57%

Percentage of Triage Category 1

emergency patients seen immediately

100% 100%

Percentage of Triage Category 1 to 5

emergency patients seen within

clinically recommended times

80% 84%

Emergency Care – Rosebud Hospital 2014–15

actuals

Total presentations to Emergency Department 20,870

Acuity (Triage Category 1 – 3 = most urgent

presentations)

47%

Emergency Care – Rosebud Hospital Target 2014–15

actuals

3% 0.40%

Number of patients with length of stay

in emergency department greater than

24 hours

0 0

Percentage of operating time on hospital

bypass

Emergency Care – Frankston Hospital

Percentage of operating time on

hospital bypass

32

Percentage of ambulance patients

transferred within 40 minutes 90% 96%

NEAT – Percentage of emergency presentations to physically leave the

emergency department for admission to

hospital, be referred to another hospital

for treatment, or be discharged within

four hours

81% 83%

Number of patients with length of stay

in emergency department greater than

24 hours

0 0

Percentage of Triage Category 1

emergency patients seen immediately

100% 100%

Percentage of Triage Category 1 to 5

emergency patients seen within

clinically recommended times

80% 86%

Elective surgery Target 2014–15

actuals

NEST – Percentage of Urgency Category 1

elective surgery patients treated within

30 days

100% 100%



90 days

88% 68%



365 days

97% 91%

Peninsula Health

33

Number of patients on elective surgery

waiting list as at 30 June 20151,400 1821

Number of Hospital Initiated Postponements

(HiPs) per 100 scheduled admissions

8% 4.5%

Number of patients admitted from elective

surgery waiting list – quarter 1

1,663 1,689



1,635 1,677



1,650 1,741



1,652 1,742

TOTAL 6,600 6,849

Critical care Target 2014–15

actuals

Adult ICU number of days below the agreed minimum operating capacity

0 0

Quality and safety Target 2014–15

actuals

Health service accreditation Full

compliance

Full compliance

Residential aged care accreditation Full

compliance

Achieved

Cleaning standards (overall) Full

compliance

Full compliance

Cleaning standards (AQL-A) 90% 94%

Cleaning standards (AQL-B) 85% 96.2%

Cleaning standards (AQL-C) 85% 96.2%

Healthcare worker immunisation –

influenza

75% Not achieved 65.6%

Submission of data to VICNISS Full

compliance

Full compliance

No outliers

ICU central line associated blood stream infections (ICU CLABSI)

No outliers No outliers

Healthcare associated infection surveillance

34

Hand Hygiene (rate) – quarter 2 75% Achieved

76%


79%


80%

SAB* rate per occupied bed days < 2/10,000 Achieved

SAB 0.50

SAB MRSA 0.2

Victorian Healthcare Experience Survey**

(January – June 2015)

Full

compliance

Full compliance

* SAB is staphylococcus aureus bacteraemia.

** The Victorian Healthcare Experience Survey (VHES) was formerly known as the Victorian Health Experience Measurement Instrument (VHEMI).

Maternity Target 2014–15

actuals

100% 100%

Mental Health Target 2014–15

actuals

Mental Health 28 day readmission rate

(percentage)

14% 15%

Adult Mental Health Post-discharge

follow-up rate (percentage)

75% 89.8%

Adult Mental Health Seclusion rate per

occupied bed days

<15/1,000 0.45

Aged Mental Health 28 day

readmission rate (percentage)

14% 7.87%

Aged Mental Health Post-discharge

follow-up rate (percentage)

75% 86.68%

Aged Mental Health Seclusion rate per

occupied bed days

<15/1,000 0

Percentage of women with prearranged postnatal home care

Patient Safety Culture 80% 89%

35

Activity and Funding

Funding type

Acute Admitted 2014–15

actuals

WIES1 Public 39,740

WIES Private 7,819

Total WIES (Public and Private) 50,055

WIES Renal 1,207

WIES DVA 1,411

WIES TAC 201

WIES WorkCover 15

WIES Overseas 51

WIES TOTAL 48,857

1. WIES data as reported in this publication are modelled as at 16 July 2015.

Final WIES results are normally completed in September.

Activity Achievement

Sub-Acute and Non-Acute Admitted 2014–15

actuals

Rehab Public – weighted bed days 24,639

Rehab Private – weighted bed days 10,155

Rehab DVA – weighted bed days 2,067

GEM Public – weighted bed days 26,141

GEM Private – weighted bed days 13,181

GEM DVA – weighted bed days 4,584

Palliative Care Public – weighted bed days 5,015

Palliative Care Private – weighted bed days 2,033

Palliative Care DVA – weighted bed days 291

Transition Care – bed days 15,733

Transition Care – home days 4,808

Aged Care 2014–15

actuals

36

Residential Aged Care – bed days 16,655

Home & Community Care Program (HACC)

– hours of service

70,743

Mental Health and Drug Services 2014/15

actuals

Mental Health Inpatient – occupied bed days

Adult

Aged

Total

10,202

4,708

14,910

Mental Health Ambulatory – contacts 108,080

Mental Health Residential – occupied bed days

Community Care Unit

Carinya

6,322

9,951

Mental Health Sub Acute – occupied bed days

Adult Prevention and Recovery Care (APARC)

2,373

2,242

Dental care

Primary Health – Community Health

Alcohol and Drug Services

29,466 dental

courses were

provided through

Community Health

42,614 hours of

service

5,262 hours of

service

37

Workforce Data

Labour

category

JUNE

Current month FTE

JUNE

YTD FTE

Labour category 2014 2015 2014 2015

Nursing 1,545.39 1,567.54 1,518.27 1,543.31

Administration &

Clerical

499.40 502.2 492.01 498.15

Medical Support 311.84 313.5 302.92 302.36

Hotel & Allied

Services

358.94 358.23 361.26 369.78

Medical Officers 55.15 60.46 52.09 56.68

Hospital Medical

Officers

264.67 282.75 262.95 274.48

Sessional Clinicians 67.12 69.28 63.67 67.51

Ancillary Staff (Allied

Health)

363.23 363.01 352.62 359.51

Total 3,465.72 3,516.97 3,405.79 3,471.78

Other Disclosures

Building Act 1993 compliance

During 2014–15, Peninsula Health complied with the building and maintenance provisions of the Building Act 1993.

Carers Recognition Act 2012

Peninsula Health takes all practicable measures to ensure that:

our employees and agents have an awareness and understanding of the care relationship principles

people who are in care relationships and who are receiving services in relation to the care relationship from the care support organisation have an awareness and understanding of the care relationship principles, and

our employees and agents reflect the care relationship principles in developing, providing or evaluating support and assistance for people in care relationships.

Consultancy Information

In 2014–15, Peninsula Health engaged 10 consultancies where the total fees payable to the consultants were in excess of $10,000 (exclusive of GST) per consultancy, with a total expenditure of $463,321 (exclusive of GST).

38

Consultant Purpose of consultancy Total

approved

project fee

(ex GST)

Expenditure

2014–15

(ex GST)

Future

expenditure

(ex GST)

Improvement Resources Pty Ltd Fleet Management Consultancy $94,500 $94,500 0

Takac and Associates Project Consultant Works - Mepacs $179,400 $179,400 0

Hive Legal Project Consultant Works - Mepacs $32,250 $32,250 0

Paxton Consulting Pty Ltd Project Consultant Works – Pathology

Procurement $26,146 $26,146 0

Capital Insight Project Consultant – MEC Project $23,550 $23,550 0

KPMG Project Consultant Works – Pathology

Tender Analysis $20,693 $20,963 0

RSM Bird Cameron Project Consultant Works – Pathology

Tender Analysis $19,200 $19,200 0

McGrath Consulting OHS Performance & Structure Review $17,500 $17,500 0

DorsaVi ViSafe Health Worker Assessment Project $22,000 $22,000 0

Russell Kennedy Solicitors PSRACS Reallocation $27,812 $27,812 0

TOTAL $463,321

In 2014 – 15, Peninsula Health engaged 10 consultancies costing less than $10,000 per consultancy (exclusive of GST), with a total expenditure of $42,156 (exclusive of GST).

Contracts

During 2014 – 15, Peninsula Health did not enter into or complete any contracts under the

Victorian Industry Participation Policy Act 2003 guidelines other than those reported on

behalf of Peninsula Health by the Department of Health.

Environmental Performance

Peninsula Health is committed to reducing our environmental impact while delivering high quality healthcare. An Environmental and Sustainability Policy, part of our ongoing Environmental and Sustainability initiative, is linked to the Health Service’s Strategic Plan.

Our aim is to reduce greenhouse gas emissions and reduce our reliance on natural resources. Key objectives and targets focus on improving our environmental performance, and we monitor and report on all initiatives.

Commitment to Environmental and Sustainable Practices

The Executive Director of Planning, Infrastructure and IT oversees the Environmental and Sustainability Program. This year Peninsula Health’s “Environmental Management Plan” was reviewed and updated to reflect our achievements to date and to confirm ongoing environmental sustainable activities for the next 12 months. The “Environmental Management Plan” will be made available via the Peninsula Health Website in 2015.

39

Reporting on our Performance

Peninsula Health continued its ongoing participation in the Department of Health and Human Services (DHHS) Environmental Data Management System project. This project will introduce a new state-wide comprehensive online environmental management system that will replace the departments existing energy report. All health services with be able to download reports for internal health services reporting, annual and statutory reporting.

Progress on achieving key performance indicators for energy and water performance is reported to the Peninsula Health Board and the Department of Health & Human Services. Emissions data is reported annually to the National Greenhouse and Energy Reporting Clean Energy Regulator and the National Pollutant Inventory via the Victorian Environmental Protection Agency.

Peninsula Health has also installed Building Performance Displays into public and staff areas in the new A Block Ward and Emergency Department at Frankston Hospital. These screens provide real time metered water and energy consumption data while promoting our sustainable initiatives.

Continuous Improvement in Environmental Management

Our strategy for continuous improvement in environmental management includes:

Capital Works–Ecological Sustainable Design (ESD)

Our Facilities Management Team and the Capital Works ESD Consultant are guided by the DHHS Capital Works Guidelines, Building Code of Australia, Australian Standards, and International Standards ISO where applicable.

A list of practical ESD initiatives to be implemented where suitable includes:

energy and carbon reduction strategies including solar hot water, lighting zoning and electronicbuilding management systems with good controls

water saving initiatives from rainwater harvesting and efficient fixtures, and air-based air-conditioning systems that capture heat energy and reject it into the environment using air insteadof water

management systems for metering, maintenance, environmental plans

low environmental impact materials such as recycled, low volatile organic compounds and paints

transport infrastructure including facilities that encourage bicycle use

landscaping that encourages the use of local flora, swales, bio filtration and drought tolerant plantspecies

improved internal environmental quality through better use of daylight, solar controls, externalviews, and location of air intakes

emission reduction by avoiding ozone-depleting chemicals and sourcing recognised alternativessuch as gases used in air conditioning and thermal insulants

waste reduction targets to encourage and monitor recycling of construction waste

The Facilities Management Department and ESD consultants investigate, review and implement advanced ESD measures in major capital projects in consultation with the Department of Health and project design teams.

Smarter Transport Program

Peninsula Health encourages staff to choose sustainable travel alternatives such as walking, cycling, car-pooling or public transport while recognising public transport constraints across the Mornington Peninsula. Staff can now book Peninsula Health Myki Cards as an alternative to using Peninsula Health

40

Fleet vehicles when travelling for work purposes.

Our Smarter Transport program is promoted to staff via the ‘Greening the Peninsula’ link on our intranet which also provides walking and riding maps, information on bike, shower and dining facilities, health tips and much more.

Energy Management, Plant and Infrastructure Initiatives

Peninsula Health aims to manage energy effectively to reduce demand on non-renewable natural resources. Efficient use of plant and replacement with more efficient high-tech options is a priority.

Frankston Hospital Stage 3/Emergency Department (2015) building project included the following initiatives:

replacement of chiller number 7 with high energy efficiency Powerpax chiller

independent commissioning and building tuning

building performance displays

energy conservation with passive solar design; doubleglazing; shade devices and efficient façade

high energy efficient HVAC (heating, ventilation and cooling) system

LED lighting and sensor lighting

High efficiency hot water heating

Hot water ring main insulation.

The Mornington Centre Stage 2 had all plant items re-tuned during 2014 – 15. This ensures plant operates as designed and at maximum efficiency.

Peninsula Health’s energy usage is measured against key performance indicators and is consistently within set targets as indicated below.

CO2 emissions from energy consumed

Rate per m2 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

2014 – 15 0.019 0.020 0.018 0.019 0.018 0.019 0.021 0.020 0.020 0.018 0.019 0.019

2013 – 14 0.020 0.019 0.021 0.018 0.018 0.018 0.019 0.018 0.019 0.018 0.019 0.019

2012 – 13 0.024 0.024 0.022 0.023 0.023 0.023 0.024 0.023 0.025 0.019 0.020 0.019

Target 0.027 0.026 0.025 0.026 0.025 0.027 0.029 0.028 0.027 0.026 0.027 0.023

Data for June 2015 estimated due to billing lag.

Water Management

Ongoing implementation of water saving initiatives includes water efficient toilets, shower timers and harvested water storage tanks. Water saving strategies are incorporated into sustainability planning for major capital works.

Potable water use at Frankston Hospital increased temporarily during the year due to the water tanks used for toilet flushing being replaced to improve storage capacity.

As part of the Frankston Hospital Stage 3/Emergency Department (2015) Building Project existing water tanks were replaced to increase water storage capacity. Two by 100 kilolitre water tanks were installed to allow for A block toilets (in addition to G Block) to be supplied with harvested water; and.

41

Installation of water metres for major water users was undertaken. By providing sub-metering for hot and cold water Peninsula Health can monitor and detect leaks where they occur quickly so repairs can be undertaken. Water meters have also been installed on the new water tanks to monitor harvested water usage and allow Peninsula Health to accurately report on harvested water usage.

Peninsula Health has secured additional funding to install sub-meters to high use departments for monitoring purposes.

Water consumption

Kilolitres per

m2

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

2014 – 2015 0.085 0.084 0.074 0.079 0.069 0.076 0.079 0.078 0.069 0.063 0.071 0.070

2013 – 2014 0.075 0.078 0.073 0.078 0.081 0.090 0.096 0.086 0.093 0.082 0.085 0.085

2012 – 2013 0.088 0.082 0.083 0.091 0.089 0.085 0.098 0.082 0.097 0.072 0.077 0.068

Target 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090


Fleet Management

A number of fleet management strategies have been implemented over several years which have contributed to reduced fossil fuel consumption and minimising our carbon footprint. Peninsula Health’s fuel consumption decreased by 19,589 litres in 2014/15, reducing emissions by 19.59 tonnes (8.8%) compared with the previous year.

Implemented initiatives include:

a diesel hybrid truck is utilised for food service deliveries reducing fuel consumed by 40% over conventional vehicles

use of diesel vehicles within the fleet including all passenger buses

continued reduction of larger 6-cylinder vehicles replaced with more fuel-efficient vehicles.

further reduction in fleet by 5% in 2014/15

continued use of a fuel-efficient ‘Smart Car’ for shorter trips with a limit of two occupants.

regular scheduled servicing and correct tyre pressure

RACV Staff Training Sessions.

Many of these initiatives have also helped reduce unnecessary maintenance costs.

Fleet Fuel Data Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total

2014/2015 Monthly Fuel kL

18.8 18.1 17.6 17.7 16.8 15.2 15.8 16.4 16.9 16.1 18.3 17.1 204.8

2014/2015 Fleet Emissions

42.9 41.3 40.1 40.4 38.4 34.6 36.0 37.3 38.6 36.7 41.8 38.9 467


19.1 19.6 18.6 18.9 18.6 17.8 18.2 19.8 18.3 17.0 20.5 17.8 224.2


43.6 44.7 42.5 43.1 42.3 40.6 41.6 45.1 41.7 38.8 46.8 40.6 511.4


27.4 23.3 26.1 23.3 26.1 24.4 25.7 25.8 24.4 23.0 23.5 17.3 290.3


62.5 53.2 59.6 53.2 59.5 55.6 58.5 58.9 55.7 52.5 53.5 39.4 662.1


42

Sustainable Procurement

By participating in HPV (Health Purchasing Victoria), we are able to incorporate environmental specifications in our key service contracts.

The Supply Department focuses on minimising waste, including excess packaging and packaging take-back.

Packaging waste is recycled or reused where possible.

The importance of managing and minimising inventory levels is promoted across clinical units, and they are supported with scanning technology and periodic review of inventory levels.

Information Technology Initiatives

Sustainability is a key part of evaluating the information and communication systems used across Peninsula Health. Our Information Technology Department ensures that information and communication systems are reliable and provide the functionality that a large health service requires.

Thin Client Technology was successfully trialed at the Mornington Centre Stage 2 project and has now been implemented as part of Frankston Hospital Stage 3/Emergency Department (2015) building project. A standard personal computer uses an average 100 watts of power while the new Thin Client technology uses only 7 watts.

Tap and go technology rolled out for printers as part of the Frankston Hospital Stage 3/Emergency Department (2015) building project. Printing jobs will only print once staff members tap the printer with their ID card reducing unwanted print jobs and paper consumption.

The visualization of 25 servers (to date) will help save on energy and cooling costs.

Building management, nurse call, duress and CCTV security systems are integrated, reducing costs of supporting, maintaining and upgrading multiple systems.

IP Video Conferencing is used to facilitate video conference sessions between Peninsula Health sites or external organisations, reducing travel times and costs and delivering more accessible communication via a broader range of devices.

Clover ePrescribing and Electronic Ordering (Stage 3) has replaced paper-based forms for ordering results and prescribing medications.

Medical records are scanned using an electronic document management system.

All Peninsula Health Ricoh printer copiers are set up to print double-sided as standard.

All PC monitors go into power save mode automatically after 10 minutes, and the smallest possible PCs are purchased to reduce power consumption.

Waste Management

Our waste management program includes online training for staff, a waste management information booklet, a waste segregation reference card for ID lanyards, and waste usage reports which include waste costs per site by bed day.

Peninsula Health is a member of the Victorian Green Health Round Table Group which shares environmental sustainability initiatives. Members carry out waste benchmarking each year, and this confirms that Peninsula Health consistently performs well when compared to other health services.

PVC waste is segregated in Theatre and CSSD and collected for recycling. PVC recycling includes IV fluid bags, oxygen masks and associated tubing.

We recycle polystyrene used for catering purposes and packaging purposes.

External litter and recycling waste bins have been installed as part of the new Frankston Hospital Stage 3/Emergency Department (2015) building project to minimise litter and waste going to landfill.

43

Gaia Recycling Unit Initiative

To reduce greenhouse gas emissions and waste costs, a Gaia Recycling unit was installed at Frankston Hospital as part of the Stage 3 and Emergency Department Project. Organic kitchen waste including meat, dairy and green waste is placed in a sealed unit which macerates and heats the organic waste up

to 100o Celsius over an 8 hour period. This reduces kitchen waste going to landfill by 85% by turning it

into a sterile biomass that can be used as a soil amendment.

Peninsula Health has confirmed through laboratory testing that the biomass can be utilised as an organic fertiliser such as blood and bone or dynamic lifter. This product will now be used at our sites to maintain the health of our gardens.

Equal Opportunity and Code of Conduct

Peninsula Health complies with Equal Employment Opportunity principles in relation to recruitment and employment.

The Code of Conduct forms part of the employment contract and appropriate workforce conduct is reinforced by performance management and discipline processes.

Freedom of Information Act 1982

In 2014 – 15 Peninsula Health received 676 requests for information:

413 Access granted in full

84 Access granted in part

0 Access denied in full

16 Withdrawn

14 Not proceeded with

25 No documents exist

124 Not finalised as of 30 June 2015 (decision pending)

National Competition Policy

The Government’s Competitive Neutrality Policy Victoria commits public health services to apply Model 2 Competitive Neutrality policies. Model 2 includes adoption of pricing principles to take account of and reflect full cost attribution for net competitive advantages conferred by government ownership.

The aim of the policy is to ensure that where government’s business activities involve it in competition with private sector business activities, the net competitive advantages to accrue to a government business are offset. This enables the government business and the private sector business to compete fairly on the basis of their relative skills, efficiency, and other unique characteristics that make up their business.

The application of competitive pricing principles to significant business activities also provides management with information about the relative efficiency of business activities.

44

Peninsula Health complies with the Model 2 competitively neutral pricing principles outlined in the documents Competitive Neutrality: A Statement of Victorian Government Policy and A Guide to Implementing Competitively Neutral Pricing Principles.

Protected Disclosure Act 2012

Peninsula Health has a Protected Disclosure Policy that is in force to ensure that Peninsula Health:

complies with the Protected Disclosure Act 2012 (Vic)

maintains an awareness amongst employees, officers and the general public of the Protected Disclosure Act

protects from detrimental action any person who makes a protected disclosure, and

investigates any complaint made to the organisation.

Occupational Health and Safety (OHS)

Peninsula Health has conducted a comprehensive review of its workplace health and safety programs in 2014 – 2015. Findings from this review and consultation with staff have been utilised to develop a four-year Workplace Health and Safety Strategy which incorporates a restructure of the health and safety department, development of staff health and wellbeing strategies, health and safety engagement, training and audit programs and early intervention projects to protect the health and safety of our workforce.

Manual Handling Risk Review Project

Progress continues on an Action Plan resulting from our Manual Handling Risk Review project. This project aimed to analyse incident data in order to understand the primary causes of risk of injury, illness or disease, and to identify strategies to reduce risk by implementing appropriate controls.

All scheduled actions from the Manual Handling Action Plan have been implemented with project areas focusing on patient manual handling, revised Safe Operating Procedures for general manual handling activities and improvements in caring for our bariatric patients.

Emergency Management Training Program

During the year, we carried out 65 emergency evacuation exercises, an increase of 13 on the previous year and a new record for Peninsula Health. This included fire drills for the new Emergency Department and wards in the Frankston Stage 3 development.

Additionally, 2000 staff took part in emergency control organisation training including Emergency Controller and Emergency Area Warden training and fire drill participation.

Our overall fire training compliance rate for the year was 87%, under the 95% target, but 2% more

than the previous financial year. Peninsula Health continues to have a very high level of

emergency preparedness training.

WorkCover

During 2014/15, 77 claims were submitted by staff which is an increase on the 2013/14 figures, however still results in Peninsula Health’s second best year to date in relation to claims received. Patient Handling claims have continued to reduce from 2012/13 with 16 claims received in this financial year.

45

Total time lost as at 30 June 2015 for claims received during 2014/15 has increased from 867 to 1141 shifts lost (in line with increased claims received). The ratio of total claims received to time lost claims has remained steady despite the increased number of claims received. This result demonstrates the strong organizational commitment to safe and sustainable return to work opportunities for staff injured in the workplace.

Year* Total

claims

Time lost

claims

> 10 lost

shifts*

Nature of incident (>10 shifts bracketed)

Aggression Patient

handling

Manual

handling

Other

2009–10 120 93 47 15 (7) 35 (12) 36 (13) 34 (15)

2010–11 112 77 34 7 (0) 27 (8) 36 (11) 42 (15)

2011–12 89 66 24 7 (0) 12 (4) 31 (9) 39 (11)

2012–13 112 87 26 18 (6) 25 (5) 19 (4) 50 (11)

2013–14 66 47 29 4 (1) 22 (10) 19 (8) 21 (10)

2014–15 77 56 32 9 (2) 16 (10) 24 (9) 29 (11)

* Calculation based on sum of lost shifts as at end of each month.

Additional Information Available on request

In compliance with the requirements of the FRD 22FStandard Disclosures in the Report of Operations, details in respect of the items listed below have been retained by Peninsula Health and are available to the relevant Ministers, Members of Parliament and the public on request, subject to Freedom of Information requirements, if applicable:

a statement of pecuniary interest has been completed

details of shares held by senior officers as nominee or held beneficially

details of publications produced by the Department about the activities of the Health Service, and where they can be obtained

details of changes in prices, fees, charges, rates and levies charged by Peninsula Health

details of any major external reviews carried out on Peninsula Health

details of major research and development activities undertaken by Peninsula Health 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 Peninsula Health 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

general statement on industrial relations within Peninsula Health 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 Peninsula Health, the purposes of each committee, and the extent to which the purposes have been achieved, and

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

46

Attestation on Compliance with Australian/New Zealand Risk Management Standard

I, Nancy Hogan, certify that Peninsula Health has risk management processes in place consistent with the AS/NZS ISO 31000:2009 and an internal control system is in place that enables the executives to understand, manage and satisfactorily control risk exposures.

The Audit and Risk Committee and Board verify this assurance and that the risk profile of Peninsula Health has been critically reviewed within the last 12 months.

Ms Nancy Hogan Chairperson Peninsula Health 24 August 2015

Attestation on Data Integrity

I, Sue Williams, certify that Peninsula Health has put in place appropriate internal controls and processes to ensure that reported data reasonably reflects actual performance. Peninsula Health has critically reviewed these controls and processes during the year.

Ms Sue Williams Chief Executive Peninsula Health 24 August 2015

Attestation on Compliance with SD 4.5.5. – Insurance

I, Ms Sue Williams, Chief Executive Officer, certify that Peninsula Health has complied with Ministerial Direction 4.5.5. – Insurance.

Ms Sue Williams Chief Executive Peninsula Health 24 August 2015

47

Peninsula Health Alternate Presentation of Comprehensive Operating Statement For the financial year ended 30 June 2015

2015 2014 $'000 $'000 Interest

1,134

1,098

Dividends and income tax equivalent and rate equivalent revenue

855 727

Fair Value of assets and services received free of charge or for nominal consideration

- 9,859

Sales of goods and services 32,771 28,278 Grants 429,320 413,849 Other Income 54,135 71,765 Total Revenue 518,215 525,576 Employee expenses

368,071

349,304

Depreciation 30,347 25,200 Interest expense 458 491 Client Brokerage expenses 9,344 11,690 Supplies and consumable expenses 59,761 56,824 Other operating expenses 46,970 44,882 Total Expenses

514,951

488,391

Net result from transactions - Net operating balance

3,264

37,185

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

(48)

968

- Net gain/ (loss) from discontinued operations

(681) (373)

- Net gain/(loss) on financial instruments

1,652 (504)

- Other gains / (losses) from other economic flows

- 14,080

Total other economic flows included in net result

923 14,171

Items that may be reclassified subsequently to net result

Changes to financial assets available-for-sale revaluation surplus

(182) 959

Total other economic flows included in net result

(182) 959

Net Result 4,005 52,315

Note: This Statement does not form part of the audited financial statements.

48

Disclosure Index

Peninsula Health’s Annual Report is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of compliance with statutory disclosure requirements.

Legislation Requirement Page

Ministerial Directions

Report of Operations

Charter and purpose

FRD 22F Manner of establishment and the relevant Ministers 8

FRD 22F Objectives, functions, powers and duties 8

FRD 22F Nature and range of services provided 10

Management and structure

FRD 22F Organisational structure 18

Financial and other information

FRD 10 Disclosure index 47

FRD 11A Disclosure of ex-gratia payments 30

FRD 12A Disclosure of major contracts 38

FRD 21B Responsible person and executive officer disclosures 7 & 46

FRD 22F Application and operation of Protected Disclosure Act 2012 44

FRD 22F Application and operation of Carers Recognition Act 2012 37

FRD 22F Application and operation of Freedom of Information Act 1982 43

FRD 22F Compliance with building and maintenance provisions of Building Act 1993 37

FRD 22F Details of consultancies over $10,000 38

FRD 22F Details of consultancies under $10,000 38

FRD 22F Employment and conduct principles 43

FRD 22F Major changes or factors affecting performance 30, 31

FRD 22F Occupational health and safety 44

FRD 22F Operational and budgetary objectives and performance against objectives 20-29

FRD 24C Reporting of office-based environmental impacts 38-44

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

FRD 22F Statement of availability of other information 49

FRD 22F Statement on National Competition Policy 43

FRD 22F Subsequent events 25

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

FRD 22F Workforce data disclosures including statement on the application of employment and

conduct principles 37

FRD 25B Victorian Industry Participation Policy disclosures 38

SD 4.2(g) Specific information requirements 1-49

SD 4.2(j) Sign-off requirements 7

SD 3.4.13 Attestation on data integrity 46

SD 4.5.5.1 Attestation on insurance 46

SD 4.5.5 Attestation on compliance with Australian/New Zealand Risk Management Standard 46

49

Financial statements

Financial statements required under Part 7 of the FMA

SD 4.2(a) Statement of changes in equity Financial Statements

SD 4.2(b) Comprehensive operating statement Financial Statements

SD 4.2(b) Balance sheet Financial Statements

SD 4.2(b) Cash flow statement Financial Statements

Other requirements under Standing Directions 4.2

SD 4.2(a) Compliance with Australian accounting standards and other authoritative pronouncements Financial Statements

SD 4.2(c) Accountable officer’s declaration Financial Statements

SD 4.2(c) Compliance with Ministerial Directions Financial Statements

SD 4.2(d) Rounding of amounts Financial Statements

Legislation

Freedom of Information Act 1982

Protected Disclosure Act 2001

Carers Recognition Act 2012

Victorian Industry Participation Policy Act 2003

Building Act 1993

Financial Management Act 1994

Glossary

ACHS Australian Council on Healthcare Standards – the principal independent authority that evaluates, assesses and

accredits quality improvement systems in Australian health care organisations. It is responsible for the ACHS

Evaluation and Quality Improvement Program (EQuIP) and undertakes a comprehensive EQuIP standards review

and consultation process of each health care organisation at least every four years

Acuity Intensity or urgency of a patient’s condition

AQL Agreed Quality Level

DVA Department of Veterans’ Affairs – the Commonwealth department that supports people who serve or have served in

the armed forces

FTE Full Time Equivalent (in relation to number of staff employed)

GEM Geriatric Evaluation & Management – sub-acute care of chronic or complex conditions associated with ageing,

cognitive dysfunction, chronic illness or disability. Patients are admitted for review, treatment and management by a

geriatrician and multidisciplinary team for a defined episode of care

HACC Home & Community Care Program – supports frail older people, younger people with disabilities and their carers by

providing basic support and maintenance to people living at home

HARP Hospital Admission Risk Program – provision of specialised person-centred medical care and care coordination in

community/ambulatory settings through an integrated response of hospital and community services to improve patient

outcomes, provide integrated seamless care within and across hospital/community sectors, reduce avoidable hospital

admissions and emergency department presentations, and ensure equitable access to healthcare

HITH Hospital in the Home – provision of acute care to public hospital patients in the comfort of their own home or other

suitable environment. Patients are regarded as hospital inpatients, and remain under the care of their hospital doctor

ICU Intensive Care Unit

MEPACS Mt Eliza Personal Alarm Call Service

NEAT National Emergency Access Target

50

NEST National Elective Surgery Target

OHS Occupational Health and Safety

SAB Staphylococcus aureus bacteraemia – a healthcare-associated infection

TAC Transport Accident Commission

Triage Emergency Department process that determines the order and priority of treating patients based on the severity

of their condition

VICNISS Victorian Hospital-Acquired Infection Surveillance System

WIES Weighted Inlier Equivalent Separations – a cost weight assigned to each patient that is dependent on the main

reason for admission and the time spent in hospital, and which determines the amount of funding received for

providing care

Annual Publications

Peninsula Health’s Annual Report 2015 has been produced as required under the Financial Management Act 1994, section 4.2 of the Standing Directions of the Minister for Finance under the Act, and Financial Reporting Directions.

It will be presented to the public at Peninsula Health’s Annual General Meeting on 20 November 2015.

The Annual Report 2015 comprises two sections: Report of Operations and Financial Statements.

For a broader picture of Peninsula Health’s activities over the past year, please see our other annual publications.

Quality of Care Report – highlights Peninsula Health’s progress and achievements in improving clinical care and our consumers’ experience

Research Report – focuses on the achievements and contributions of staff involved in research.

For further information about Peninsula Health or to download our annual publications, please visit our website, www.peninsulahealth.org.au.

© 2015 Peninsula Health

This work is copyright. You may use material from this publication without altering it for personal or non-commercial use only. You may not store,

amend or reproduce material for any other use or by any process without obtaining prior written permission. Requests and enquiries concerning

copyright should be addressed to: Director of Corporate and Community Relations, Peninsula Health, PO Box 192, Mt Eliza VIC 3930.

Peninsula Health

ABN 52 892 860 159

Hastings Road

(PO Box 52)

Frankston Vic 3199

Tel (03) 9784 7777

Callers outside the Melbourne

Metropolitan Area

Tel 1800 858 727

peninsulahealth.org.au

peninsulahealth.org.au

Annual Report 2015 Financial Statements

Table of Contents

PageFinancial StatementsChairperson's, Chief Executive Officer's and Chief Finance & Accounting Officer's Declaration 1Auditor-General's Report 2Comprehensive Operating Statement 4Balance Sheet 5Statement of Changes in Equity 6Cash Flow Statement 7Notes1 Summary of Significant Accounting Policies 82 Analysis of Revenue by Source 252a Net Gain/(Loss) on Disposal of Non Financial Assets 262b Assets Received Free of Charge 263 Analysis of Expenses by Source 27

3aAnalysis of Expenses by Internally managed and Restricted Specific Purpose Funds for Services Supported by Hospital & Community Initiatives 28

4 Depreciation and Amortisation 285 Cash and Cash Equivalents 286 Receivables 297 Investments and Other Financial Assets 308 Inventories 309 Other Assets 3010 Property, Plant and Equipment 3111 Intangible Assets 3512 Payables 3513 Borrowings 3514 Provisions 3615 Other Liabilities 3716 Equity 3717 Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities 3818 Financial Instruments 3919 Commitments for Expenditure and Contingencies 4420 Segment Reporting 4521 Responsible Persons Disclosures 4722 Executive Officer Disclosures 4823 Remuneration of Auditors 4824 Ex Gratia Payments 4825 Subsequent Events 4826 Discontinued Operation 49

Peninsula HealthComprehensive Operating StatementFor the financial year ended 30 June 2015

Note 2015 2014$'000 $'000

Revenue from Operating Activities 2 483,267 461,227 Revenue from Non-Operating Activities 2 2,192 2,488 Employee Expenses 3 (368,071) (349,304)Non Salary Labour Costs 3 (2,479) (3,152)Supplies & Consumables 3 (59,761) (56,824)Other Expenses 3 (53,835) (53,420)Net Result from Continuing Operations Before Capital & Spe cific Items 1,313 1,015

Capital Purpose Income 2 32,708 52,970

Available-for-Sale Revaluation Reserve Surplus Recognised 2 1,791 220

Assets Received Free of Charge 2 - 9,859

Reversal of impairment on Non Financial Assets 3 - 5,286 Impairment of Financial Assets 3 (139) (724)

Depreciation & Amortisation 4 (30,347) (25,200)Finance Costs 3 & 13 (458) (491)

Net Result from Continuing Operations 4,868 42,935

Gain/(Loss) from Discontinued Operation 26 (681) (373)

NET RESULT FOR THE YEAR 4,187 42,562

Other Comprehensive Income

Items that will not be reclassified to net result

- Net fair value revaluation on Non Financial Assets 16a - 8,794

Items that may be reclassifed subsequently to net result

- Net fair value gains/(losses) on Available-for-Sale Financial Investments 16a (182) 959

COMPREHENSIVE RESULT FOR THE YEAR 4,005 52,315

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

4

Peninsula HealthBalance SheetAs at 30 June 2015

Note 2015 2014$'000 $'000

Current AssetsCash and Cash Equivalents 5 20,800 26,881

Receivables 6 15,550 17,925

Investments and Other Financial Assets 7 14,146 16,281

Inventories 8 2,324 2,241

Other Assets 9 887 662

Total Current Assets 53,707 63,990

Non-Current AssetsReceivables 6 11,898 9,233 Property, Plant & Equipment 10 368,289 358,110 Intangible Assets 11 8,785 9,003 Total Non-Current Assets 388,972 376,346 TOTAL ASSETS 442,679 440,336

Current LiabilitiesPayables 12 15,007 23,879 Borrowings 13 948 948 Provisions 14 87,453 80,590 Other Liabilities 15 778 577 Total Current Liabilities 104,186 105,994

Non-Current LiabilitiesBorrowings 13 8,323 8,814 Provisions 14 13,529 12,518 Total Non-Current Liabilities 21,852 21,332 TOTAL LIABILITIES 126,038 127,326 NET ASSETS 316,641 313,010

EQUITYProperty, Plant & Equipment Revaluation Surplus 16a 68,067 68,067 Financial Asset Available for Sale Revaluation Surplus 16a 1,114 2,948 Contributed Capital 16b 193,201 191,923 Accumulated Surpluses/(Deficits) 16c 54,259 50,072 TOTAL EQUITY 316,641 313,010

Commitments for Expenditure 19Contingent Assets and Contingent Liabilities 19


5

Peninsula HealthStatement of Changes in EquityFor the financial year ended 30 June 2015

Property, Plant &

Equipment Revaluation

Surplus

Financial Asset

Available for Sale

Revaluation Surplus

Contributed Capital

Accumulated Surpluses/ (Deficits)

Total

Note $'000 $'000 $'000 $'000 $'000Balance at 1 July 2013 16 59,273 1,485 191,923 7,510 260,191 Net result for the year - - - 42,562 42,562 Transfer to Accumulated Surplus - impairment - 724 - - 724 Transfer to Accumulated Surplus - on disposal - (220) - - (220)Other Comprehensive Income for the year 8,794 959 - - 9,753

Balance at 30 June 2014 68,067 2,948 191,923 50,072 313,010

Net result for the year - - - 4,187 4,187 Transfer to Accumulated Surplus - impairment - 139 - - 139 Transfer to Accumulated Surplus - on disposal 16a - (1,791) - - (1,791)Other Comprehensive Income for the year 16a - (182) - - (182)Capital Contribution received from Victorian Government - - 1,278 - 1,278

Balance at 30 June 2015 68,067 1,114 193,201 54,259 316,641


6

Peninsula HealthCash Flow StatementFor the financial year ended 30 June 2015

Note 2015 2014$'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIESOperating Grants from Government 409,427 396,671 Patient and Resident Fees Received 35,717 31,252 Commonwealth Government - Residential Aged Care Subsidy 3,474 4,686 Interest Received 1,134 1,098 Dividends Received 855 728 Donations and Bequests Received 203 663 Other Receipts 35,377 29,961 Total receipts 486,187 465,059 Employee Expenses Paid (361,827) (344,116)Non Salary Labour Costs Paid (2,481) (3,172)Payments for Supplies & Consumables (118,129) (112,259)Finance Costs Paid (458) (491)Total payments (482,895) (460,038)Cash Generated from Operations 3,292 5,021

Capital Grants from Government 30,809 48,578 Capital Donations and Bequests Received 1,295 1,620 Other Capital Receipts 334 531

NET CASH FLOW FROM/(USED IN) OPERATING ACTIVITIES 17 35,730 55,750

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Investments (11,884) (5,989)Payments for Non-Financial Assets (45,562) (42,355)Proceeds from Sale of Rosebud Residential Aged Care 26 - 1,954 Proceeds from Sale of Michael Court Hostel 26 2,143 - Proceeds from Sale of Non-Financial Assets 146 2,667 Proceeds from Sale of Investments 13,837 3,593

NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES (4 1,320) (40,130)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from Borrowings - 744

Repayment of Borrowings (491) (220)

NET CASH FLOW FROM/(USED IN) FINANCING ACTIVITIES (4 91) 524

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENT S HELD (6,081) 16,144

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 26,881 10,737

CASH AND CASH EQUIVALENTS AT END OF YEAR 5 20,800 26,881

Non-Cash Financing and Investing Activities - -


7

PPeenniinnssuullaa HHeeaalltthh AAnnnnuuaall FFiinnaanncciiaall SSttaatteemmeennttss 22001155

NNootteess ttoo TThhee FFiinnaanncciiaall SSttaatteemmeennttss ffoorr tthhee yyeeaarr eennddeedd 3300 JJuunnee 22001155

8

NNoottee 11:: SSuummmmaarryy ooff SSiiggnnii ff iiccaanntt AAccccoouunntt iinngg

PPooll iicciieess

These annual financial statements represent the audited general purpose financial statements for Peninsula Health for the year ended 30 June 2015. The purpose of the report is to provide users with information about the Health Service’s stewardship of resources entrusted to it.

((aa)) SSttaatteemmeenntt ooff ccoommppll iiaannccee

These Financial Statements are general purpose

Financial Statements which have been prepared in

accordance with the Financial Management Act 1994

and applicable Australian Accounting Standards

(AASs) 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.

Peninsula Health is a not-for profit entity and therefore

applies the additional Aus paragraphs applicable to

‘not-for-profit’ Health Services under the AASs.

The annual Financial Statements were authorised for

issue by the Board of Directors of Peninsula Health on

25 August 2015.

((bb)) BBaassiiss ooff aaccccoouunntt iinngg pprreeppaarraatt iioonn aanndd

mmeeaassuurreemmeenntt

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 set out below have been

applied in preparing the Financial Statements for the

year ended 30 June 2015, and the comparative

information presented in these Financial Statements

for the year ended 30 June 2014.

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 Health Service.

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.

The Financial Statements are prepared in accordance

with the historical cost convention, except for:

• Non-current physical assets, which subsequent to

acquisition, are measured at a revalued amount

being their fair value at the date of the revaluation

less any subsequent accumulated depreciation

and subsequent impairment losses. Revaluations

are made and are re-assessed with sufficient

regularity to ensure that the carrying amounts do

not materially differ from their fair values;

• Available-for-sale investments which are measured

at fair value with movements reflected in equity

until the asset is derecognised; and

• The fair value of assets other than land is generally

based on their depreciated replacement value.

Historical cost is based on the fair values of the

consideration given in exchange for assets.

Judgements, estimates and assumptions are required

to be made about carrying values of assets and

liabilities that are not readily apparent from other

sources. The estimates and associated assumptions

are based on professional judgement derived from

historical experience and various other factors that are

believed to be reasonable under the circumstances.

Actual results may differ from these estimates.

The estimates and underlying assumptions are

reviewed on an ongoing basis. 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 AASs that have significant effects

on the Financial Statements and estimates relate to

the fair value of land, buildings, infrastructure, plant

and equipment (refer to note 1 (k).



9

Consistent with AASB 13 Fair Value Measurement,

Peninsula Health determines the policies and

procedures for both recurring fair value measurements

such as property, plant and equipment and financial

instruments, and for non-recurring fair value

measurements such as non-financial physical assets

held for sale, in accordance with the requirements of

AASB 13 and the relevant FRDs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, Peninsula Health 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, Peninsula Health 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 Peninsula Health’s independent valuation agency.

Peninsula Health, in conjunction with VGV monitors

the changes in the fair value of each asset and liability

through relevant data sources to determine whether

revaluation is required. Refer to Note 10 for a

description of the valuation processes used.

((cc)) RReeppoorrtt iinngg EEnntt ii ttyy

The Financial Statements include all the controlled

activities of Peninsula Health.

Its principal address is:

Hastings Road (PO Box 52)

Frankston Victoria 3199

Descriptions of the nature of Peninsula Health’s

operations and its principal activities are included in

the report of operations, which does not form part of

these Financial Statements.

Objectives and funding

Peninsula Health embraces an integrated and

collaborative view of health, working with community

and service partners to promote health and to plan for

the future needs of the local community of Frankston

and the Mornington Peninsula.

Peninsula Health provides acute care, sub acute care,

residential care, mental health services and community

health services, and is a major teaching centre.

Peninsula Health is predominantly funded by grants for

the provision of outputs in these areas.

((dd)) SSccooppee aanndd PPrreesseennttaatt iioonn ooff FFiinnaanncciiaall

SSttaatteemmeennttss

FFuunndd AAccccoouunntt iinngg

Peninsula Health operates on a fund accounting

basis and maintains three funds: Operating, Specific

Purpose and Capital Funds. Peninsula Health’s

Capital and Specific Purpose Funds include unspent

capital donations and receipts from fund-raising

activities conducted solely in respect of these funds.

Services Supported by Health Services

Agreement and Services Supported by Hospital

and Community Initiatives

Activities classified as Services supported by Health

Services Agreement (HSA) are substantially funded

by the Department of Health and Human Services

and include Residential Aged Care Services (RACS)

which are also funded from other sources such as

the Commonwealth, patients and residents, while

Services Supported by Hospital and Community

Initiatives (H&CI) are funded by Peninsula Health’s

own activities or local initiatives and/or the

Commonwealth.

Residential Aged Care Services

Carinya Nursing Home and Michael Court Hostel are

part of Peninsula Health’s operations and share its

resources. Where appropriate an apportionment of land

and buildings has been made based on floor space.

The results of these operations have been segregated

based on actual revenue earned and expenditure

incurred by each operation in Note 2, Note 3 and Note



10

26 to the Financial Statements. Carinya Nursing Home

and Michael Court Hostel are substantially funded from

Commonwealth bed-day subsidies. Residential Aged

Care Services at Michael Court Hostel were

discontinued on 20 October 2014. The individual

properties were sold in May 2015.

Comprehensive Operating Statement

The Comprehensive operating statement includes the

subtotal entitled ‘Net Result from continuing

operations Before Capital & Specific Items’ to

enhance the understanding of the financial

performance of Peninsula Health. This subtotal

reports the result excluding items such as capital

grants, assets received or provided free of charge,

depreciation, expenditure using capital purpose

income and items of an unusual nature and amount

such as specific income and expenses. The exclusion

of these items is made to enhance matching of

income and expenses so as to facilitate the

comparability and consistency of results between

years and Victorian Public Health Services. The ‘Net

Result from continuing operations Before Capital &

Specific Items’ is used by the management of

Peninsula Health, the Department of Health and

Human Services and the Victorian Government to

measure the ongoing operating performance of Health

Services.

Capital and specific items, which are excluded from

this sub-total, comprise:

• Capital purpose income, which comprises all tied

grants, donations and bequests received for the

purpose of acquiring non-current assets, such as

capital works, plant and equipment or intangible

assets. It also includes donations of plant and

equipment (refer Note 1 (f)). Consequently the

recognition of revenue as capital purpose income

is based on the intention of the provider of the

revenue at the time the revenue is provided;

• Specific income/expense comprises the following

items, where material:

o Write-down of inventories

o Non-current asset revaluation

o Diminution/impairment of investments;

• Impairment of financial and non-financial assets,

includes all impairment losses (and reversal of

previous impairment losses), which have been

recognised in accordance with Note 1(j) and (k);

• Depreciation and amortisation, as described in

note 1(g);

• Assets provided or received free of charge (refer to

Notes 1 (f); and

• Expenditure using capital purpose income,

comprises expenditure which either falls below the

asset capitalisation threshold or doesn’t meet

asset recognition criteria and therefore does not

result in the recognition of an asset in the balance

sheet, where funding for that expenditure is from

capital purpose income.

Balance sheet

Assets and liabilities are categorised either as current

or non-current (non-current being those assets or

liabilities expected to be recovered/settled more than

12 months after reporting period), are disclosed in the

notes where relevant.

Statement of Changes in Equity

The Statement of Changes in Equity presents

reconciliations of each non-owner and owner equity

opening balance at the beginning of the reporting

period to the closing balance at the end of the

reporting period. It also shows separately changes

due to amounts recognised in the comprehensive

result and amounts recognised in other

comprehensive income.

Cash Flow Statement

Cash flows are classified according to whether or not

they arise from operating activities, investing activities,

or financing activities. This classification is consistent

with requirements under AASB 107 Statement of

Cash Flows.

Comparative Information

Where necessary, figures for the previous year have

been reclassified to facilitate comparison where

requested by the applicable accounting standards.

RRoouunnddiinngg ooff AAmmoouunnttss

All amounts shown in the Financial Statements are

expressed to the nearest $1,000 unless otherwise

stated.



11

((ee)) CChhaannggee iinn AAccccoouunntt iinngg PPooll iicciieess

Subsequent to the 2013/14 reporting period, the

following new and revised Standards have been

adopted for the first time in the current period:

• AASB 10 Consolidated Financial Statements

• AASB 11 Joint Arrangements

• AASB 12 Disclosure of Interests in Other Entities

The new Standards have not had a material impact on

the Health Service.

((ff )) IInnccoommee ff rroomm ttrraannssaacctt iioonnss

Income is recognised in accordance with AASB 118

Revenue and is recognised to the extent that it is

probable that the economic benefits will flow to

Peninsula Health 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 are, where applicable,

net of returns, allowances and duties and taxes.

GGoovveerrnnmmeenntt GGrraannttss aanndd ootthheerr tt rraannssffeerrss ooff iinnccoommee

((ootthheerr tthhaann ccoonnttrr iibbuutt iioonnss bbyy oowwnneerrss))

In accordance with AASB 1004 Contributions,

government grants and other transfers of income

(other than contributions by owners) are recognised

as income when Peninsula Health gains control of the

underlying assets irrespective of whether conditions

are imposed on the Health Service’s use of the

contributions.

Contributions are deferred as income in advance

when the Health Service has a present obligation to

repay them and the present obligation can be reliably

measured.

IInnddiirreecctt CCoonnttrr iibbuutt iioonnss ff rroomm tthhee DDeeppaarrttmmeenntt ooff

HHeeaall tthh aanndd HHuummaann SSeerrvviicceess

• 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

Hospital Circular 05/2013.

PPaatt iieenntt aanndd RReessiiddeenntt FFeeeess

Patient fees are recognised as revenue at the time

invoices are raised.

PPrriivvaattee PPrraacctt iiccee FFeeeess

Private practice fees are recognised as revenue at the

time invoices are raised.

RReevveennuuee ff rroomm CCoommmmeerrcciiaall AAcctt iivv ii tt iieess

Revenue from commercial activities such as

commercial laboratory medicine is recognised at the

time invoices are raised or accrued when a service is

performed.

DDoonnaatt iioonnss aanndd OOtthheerr BBeeqquueessttss

Donations and bequests are recognised as revenue

when received. If donations are for a special purpose,

they may be appropriated to a reserve, such as the

Specific Restricted Purpose Surplus.

DDiivv iiddeenndd RReevveennuuee

Dividend revenue is recognised when the right to

receive payment is established.

IInntteerreesstt RReevveennuuee

Interest revenue is recognised on a time proportionate

basis; in that it takes into account the effective yield of

the financial asset, which allocates interest over the

relevant period.

SSaallee ooff IInnvveessttmmeennttss

The gain/loss on the sale of investments is recognised

when the investment is realised.

FFaaiirr vvaalluuee ooff AAsssseettss aanndd SSeerrvviicceess RReecceeiivveedd FFrreeee ooff CChhaarrggee oorr ffoorr NNoommiinnaall CCoonnssiiddeerraatt iioonn

Resources received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions, unless received from another Health Service or agency as a consequence of a restructuring of administrative arrangements. In the latter case, such transfer will be recognised at carrying value. Contributions in the form of services are only recognised when a fair value can be reliably determined and the service would have been purchased if not received as a donation.

Other income

Other income includes non-property rental, forgiveness

of liabilities, and bad debt reversals.

((gg)) EExxppeennssee RReeccooggnnii tt iioonn

Expenses are recognised as they are incurred and

reported in the financial year to which they relate.



12

Cost of goods sold

Costs of goods sold are recognised when the sale of an

item occurs by transferring the cost or value of the

item/s from inventories.

Employee expenses

Employee expenses include:

• Wages and salaries;

• Annual leave;

• Sick leave;

• Long service leave; and

• Superannuation expenses, which are reported

differently depending upon whether employees are

members of defined benefit or defined contribution

plans.

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.

Defined benefit superannuation plans

The amount charged to the comprehensive operating

statement in respect of defined benefit

superannuation plans represents the contributions

made by Peninsula Health to the superannuation

plans in respect of the services of current staff during

the reporting period. Superannuation contributions are

made to the plans based on the relevant rules of each

plan, and are based upon actuarial advice.

Employees of Peninsula Health are entitled to receive

superannuation benefits and Peninsula Health

contributes to both the defined benefit and defined

contribution plans. The defined benefit plan(s)

provide benefits based on years of service and final

average salary.

The name and details of the major employee

superannuation funds and contributions made by

Peninsula Health are as follows:

Contributions Paid or Payable for the Year

Fund 2015 2014

Defined benefit plans: $’000 $’000

Hospital Superannuation Fund 453 442

Government Superannuation

Fund 165 265

Defined contribution plans:

Hospital Superannuation Fund 18,317 17,180

Other Funds 10,013 8,070

Total 28,948 25,957

Contributions outstanding at the

end of the financial year 1,035 876

Depreciation

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.

Intangible assets with finite lives are depreciated as an

expense from transactions on a systematic basis over

the asset’s useful life. 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. Assets with a cost in

excess of $1,000 (2014: $1,000) are capitalised and

depreciation has been provided on depreciable assets

so as to allocate their cost or valuation over their

estimated useful lives.

The following table indicates the expected useful lives

(in years) of non-current assets on which the

depreciation charges are based.



13

2015 2014

Buildings

- Structure Shell Building Fabric 45 to 60 20

- Site Engineering Services

and Central Plant

20 to 30 20

Central Plant

- Fit Out 20 to 30 20

- Trunk Reticulated Building

Systems

20 to 30 20

Plant & Equipment 5 to 10 5 to 10

Medical Equipment 3 to 10 3 to 10

Computers and Communication 3 3

Furniture and Fitting 7 to 10 7 to 10

Motor Vehicles 4 4

Leasehold Improvements 8 to 10 8 to 10

Other Equipment 5 to 10 5 to 10

As part of the Buildings valuation, building values

were componentised and each component assessed

for its useful life which is represented above.

Amortisation

Amortisation is allocated to intangible assets with

finite useful lives on a systematic (typically straight-

line) basis over the asset’s useful life. Amortisation

begins when the asset is available for use, that is,

when it is in the location and condition necessary for it

to be capable of operating in the manner intended by

management. The consumption of intangible assets

with finite useful lives is classified as amortisation.

The amortisation period and the amortisation method

for an intangible asset with a finite useful life are

reviewed at least at the end of each annual reporting

period. In addition, an assessment is made at each

reporting date to determine whether there are

indicators that the intangible asset concerned is

impaired. If so, the assets concerned are tested as to

whether their carrying value exceeds their recoverable

amount. Any excess of the carrying amount over the

recoverable amount is recognised as an impairment

loss.

Intangible assets with finite useful lives are amortised

over a three to seven year period (2014: 3 - 7 years).

Finance costs

Finance costs are recognised as expenses in the period

in which they are incurred.

Finance costs include:

• interest on bank overdrafts and short-term and

long-term borrowings (Interest expense is

recognised in the period in which it is incurred);

• amortisation of discounts or premiums relating to

borrowings; and

• amortisation of ancillary costs incurred in

connection with the arrangement of borrowings.

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 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.

Bad and doubtful debts

Refer to Note 1 (j) Impairment of financial assets.

(h) Other comprehensive income

Other comprehensive income measures the change in

volume or value of assets or liabilities that do not result

from transactions.

Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets and liabilities

includes realised and unrealised gains and losses from

revaluation gains/(losses) of non-financial physical

assets (refer to Note 1(k)).

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

recognised at the date of disposal and is the difference

between the proceeds and the carrying value of the

asset at the time.

Net gain/(loss) on financial instruments includes:

• realised and unrealised gains and losses from

revaluations of financial instruments at fair value;

• impairment and reversal of impairment for

financial instruments at amortised cost (refer to

Note 1 (i); and • disposals of financial assets and derecognition of

financial liabilities

Revaluations of financial instrument at fair value

Refer to Note 1 (i) Financial instruments.



14

Other gains/ (losses) from other comprehensive

income

Other gains/ (losses) include the revaluation of the

present value of the long service leave liability due to

changes in the bond interest rates and transfer of

amounts from the reserves to accumulated surplus or

net result due to disposal or derecognition or

reclassification.

(i) Financial instruments

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 Peninsula

Health’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. For example,

statutory receivables arising from taxes, fines and

penalties do not meet the definition of financial

instruments as they do not arise under contract.

Where relevant, for note disclosure purposes, a

distinction is made between those financial assets and

financial liabilities that meet the definition of financial

instruments in accordance with AASB 132 and those

that do not.

The following refers to financial instruments unless

otherwise stated.

Categories of non-derivative financial instruments

Financial assets at fair value through profit or lo ss

Financial assets are categorised as fair value through

profit or loss at trade date if they are classified as held

for trading or designated as such upon initial

recognition. Financial instrument assets are designated

at fair value through profit or loss on the basis that the

financial assets form part of a group of financial assets

that are managed by the Health Service concerned

based on their fair values, and have their performance

evaluated in accordance with documented risk

management and investment strategies.

Financial instruments at fair value through profit or loss

are initially measured at fair value and attributable

transaction costs are expensed as incurred.

Subsequently, any changes in fair value are recognised

in the net result as other comprehensive income. Any

dividend or interest on a financial asset is recognised in

the net result for the year.

Loans and receivables

Trade receivables, loans, term deposits with maturity

greater than three months and other receivables 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 impairment. Term deposits with maturity greater

than three months are also measured at amortised

cost, using the effective interest method, less

impairment.

The effective interest method is a method of

calculating the amortised cost of a financial asset and

of allocating interest income over the relevant period.

The effective interest rate is the rate that exactly

discounts estimated future cash receipts through the

expected life of the financial asset, or, where

appropriate, a shorter period.

Held-to-maturity investments

If the Health Service has the positive intent and ability

to hold nominated investments to maturity, then such

financial assets may be classified as held-to-maturity.

Held-to-maturity financial assets are recognised initially

at fair value plus any directly attributable transaction

costs. Subsequent to initial recognition held-to-maturity

financial assets are measured at amortised cost using

the effective interest method, less any impairment

losses.

The Health Service makes limited use of this

classification because any sale or reclassification of

more than an insignificant amount of held-to-maturity

investments not close to their maturity, would result in

the whole category being reclassified as

available-for-sale. The Health Service would also be

prevented from classifying investment securities as

held-to-maturity for the current and the following two

financial years.

Available-for-sale financial assets

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, gains and losses



15

arising from changes in fair value are recognised in

‘other comprehensive income’ until the investment is

disposed of or is determined to be impaired, at which

time the cumulative gain or loss previously recognised

in equity is included in net result for the period. Fair

value is determined in the manner described in Note

18.

Financial liabilities at amortised cost

Financial instrument liabilities 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.

Financial instrument liabilities measured at amortised

cost include all of the Health Service’s contractual

payables, deposits held and advances received, and

interest-bearing arrangements.

((jj )) FFiinnaanncciiaall AAsssseettss

Cash and Cash Equivalents

Cash and cash equivalents recognised on the balance

sheet comprise cash on hand and cash at bank,

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 with an insignificant risk of changes in value. For

the cash flow statement presentation purposes, cash

and cash equivalents includes bank overdrafts, which

are included as current borrowings in the balance

sheet.

Receivables

Receivables consist of:

• Statutory receivables, which include

predominantly amounts owing from the Victorian

Government and GST input tax credits

recoverable; and

• Contractual receivables, which are comprised of

mainly debtors in relation to goods and services

and accrued investment income.

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 uncollectable 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.

Receivables that are contractual are classified as

financial instruments and categorised as loans and

receivables.

Receivables are recognised initially at fair value and

subsequently measured at amortised cost, using the

effective interest method, less any accumulated

impairment.

Investments and Other Financial Assets

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:

• Financial assets at fair value through profit or

loss;

• Held-to-maturity;

• Loans and receivables; and

• Available-for-sale financial assets.

Peninsula Health 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.

Peninsula Health assesses at each reporting date

whether a financial asset or group of financial assets

is impaired.

All financial assets, except those measured at fair

value through profit or loss are subject to annual

review for impairment.

Impairment of Financial Assets

At the end of each reporting period, Peninsula Health

assesses whether there is objective evidence that a

financial asset or group of financial asset is impaired.



16

All financial instrument assets, except those

measured at fair value through profit or loss, are

subject to annual review for impairment. Objective

evidence includes financial difficulties of the debtor,

default payments, debts which are more than 60 days

overdue, and changes in debtor credit ratings.

Receivables are assessed for bad and doubtful debts

on a regular basis. Bad debts considered as written

off and allowances for doubtful receivables are

expensed. Bad debt written off by mutual consent and

the allowance for doubtful debts are classified as

‘other comprehensive income’ in the net result.

The amount of the allowance is the difference

between the financial asset’s carrying amount and the

present value of estimated future cash flows,

discounted at the effective interest rate.

Where the fair value of an investment in an equity

instrument at reporting date has reduced by 20 per

cent or more than its cost price or where its fair value

has been less than its cost price for a period of 12 or

more months, the financial asset is treated as

impaired.

In order to determine an appropriate fair value as at

30 June 2015 for its portfolio of financial assets,

Peninsula Health used the quoted market price for

each individual holding. The quoted market price has

been advised by reputable financial institutions. The

above valuation process was used to quantify the

level of impairment on the portfolio of financial assets

at year end.

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.

Derecognition 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 Health Service 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 Health Service 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.

((kk)) NNoonn--FFiinnaanncciiaall AAsssseettss

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.

The basis 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.

Inventories acquired for no cost or nominal

considerations are measured at current replacement

cost at the date of acquisition.

Cost for all other inventory is measured on the basis

of weighted average cost.

Property, Plant and Equipment

All non-current physical assets are measured initially

at cost and subsequently revalued at fair value less

accumulated depreciation and impairment. Where an

asset is acquired for no or nominal cost, the cost is its

fair value at the date of acquisition.

More details about the valuation techniques and

inputs used in determining the fair value of non-

financial physical assets are discussed in Note 10

Property, plant and equipment.



17

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 constructive restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset(s) are not taken into account until it is virtually certain that any restrictions will no longer apply. Therefore, unless otherwise disclosed, the current use of these non-financial physical assets will be their highest and best uses.

Land and Buildings are recognised initially at cost

and subsequently measured at fair value less

accumulated depreciation and impairment.

Plant, Equipment and Vehicles are recognised

initially at cost and subsequently measured at fair

value less accumulated depreciation and impairment.

Depreciated historical cost is generally a reasonable

proxy for fair value because of the short lives of the

assets concerned.

Leasehold improvements

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.

Revaluations of Non-current Physical Assets

Non-current physical assets are measured at fair value

and are revalued 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 in

equity 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 normally transferred to

accumulated funds on derecognition of the relevant

asset.

In accordance with FRD 103F, Peninsula Health’s non-

current physical assets were assessed to determine

whether revaluation of the non-current physical assets

was required.

Intangible Assets

Intangible assets represent identifiable non-monetary

assets without physical substance such as computer

software and development costs (where applicable).

Intangible assets are initially recognised at cost.

Subsequently, intangible assets with finite useful lives

are carried at cost less accumulated amortisation and

accumulated impairment losses. Costs incurred

subsequent to initial acquisition are capitalised when it

is expected that additional future economic benefits

will flow to Peninsula Health.

Other non-financial assets

Prepayments

Other non-financial assets include prepayments which

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.

Disposal of Non-Financial Assets

Any gain or loss on the sale of non-financial assets is

recognised in the comprehensive operating statement.

Refer to note 1(h) – ‘comprehensive income’.



18

Impairment of Non-Financial Assets

All assets of Peninsula Health are assessed annually

for indications of impairment, except for;

• inventories; and

• assets arising from construction contracts.

If there is an indication of impairment, the assets

concerned are tested as to whether their carrying

value exceeds their possible recoverable amount.

Where an asset’s carrying value exceeds its

recoverable amount, the difference is written-off as an

expense except to the extent that the write-down can

be debited to an asset revaluation surplus amount

applicable to that same class of asset.

If there is an indication that there has been a change

in the estimate of an asset’s recoverable amount

since the last impairment loss was recognised, the

carrying amount shall be increased to its recoverable

amount. This reversal of the impairment loss occurs

only to the extent that the asset’s carrying amount

does not exceed the carrying amount that would have

been determined, net of depreciation or amortisation,

if no impairment loss had been recognised in prior

years.

It is deemed that, in the event of the loss or

destruction of an asset, the future economic benefits

arising from the use of the asset will be replaced

unless a specific decision to the contrary has been

made. The recoverable amount for most assets is

measured at the higher of depreciated replacement

cost and fair value less costs to sell. Recoverable

amount for assets held primarily to generate net cash

inflows is measured at the higher of the present value

of future cash flows expected to be obtained from the

asset and fair value less costs to sell.

((ll )) LLiiaabbii ll ii tt iieess

Payables

Payables consist of:

• contractual payables which consist predominantly

of accounts payable representing liabilities for

goods and services provided to the Health Service

prior to the end of the financial year that are

unpaid, and arise when the Health Service

becomes obliged to make future payments in

respect of the purchase of those goods and

services. The normal credit terms for accounts

payable are usually Net 30 days.

• statutory payables, such as goods and services tax

and fringe benefits tax payables.

Contractual payables are classified as financial

instruments and are initially recognised at fair value,

and then subsequently carried at amortised cost.

Statutory payables 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 a contract.

Borrowings

All borrowings are initially recognised at fair value of

the consideration received, less directly attributable

transaction costs. The measurement basis

subsequent to initial recognition for liabilities is

amortised cost. Any difference between the initial

recognised amount and the redemption value is

recognised in net result over the period of the

borrowings using the effective interest method.

Provisions

Provisions are recognised when Peninsula Health 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 provision 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. Where a provision is measured using the

cash flows estimated to settle the present obligation,

its carrying amount is the present value of those cash

flows, using a discount rate that reflects the time value

of money and risks specific to the provision.

When some or all of the economic benefits required to

settle a provision are expected to be received from a

third party, the receivable is recognised as an asset if

it is virtually certain that recovery will be received and

the amount of the receivable can be measured

reliably.



19

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, including non-

monetary benefits and annual leave are all recognised

in the provision for employee benefits as ‘current

liabilities’, because Peninsula Health 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 sick leave are measured at:

• Undiscounted value – if the health service expects

to wholly settle within 12 months; or

• Present value – if the health service does not

expect to wholly settle within 12 months.

Long Service Leave

The liability for long service leave (LSL) is recognised

in the provision for employee benefits.

Current Liability – unconditional LSL (representing

10 or more years of continuous service) is disclosed in

the notes to the Financial Statements as a current

liability even where Peninsula Health 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.

The components of this current LSL liability are

measured at:

• Undiscounted value – if the health service expects to

wholly settle within 12 months; and

• Present value – if the health service does not expect

to wholly settle within 12 months.

Non-Current Liability – conditional LSL

(representing less than 10 years of continuous

service) is disclosed as a non-current liability. There

is an unconditional right to defer the settlement of the

entitlement until the employee has completed the

requisite years of service. Conditional LSL is required

to be measured at present value.

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 bond interest rates for which

it is then recognised as an other economic flow.

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 termination of employment.

Peninsula Health recognises termination benefits when

it is demonstrably committed to either terminating the

employment of current employees according to a

detailed formal plan without possibility of withdrawal or

providing termination benefits as a result of an offer

made to encourage voluntary redundancy. Benefits

falling due more than 12 months after the end of the

reporting period are discounted to present value.

On-Costs

Employee benefit on-costs, such as workers

compensation and superannuation are recognised

together with provisions for employee benefits.

Superannuation liabilities

Peninsula Health does not recognise any unfunded

defined benefit liability in respect of the

superannuation plans because the Health Service has

no legal or constructive obligation to pay future

benefits relating to its employees; its only obligation is

to pay superannuation contributions as they fall due.

The Department of Treasury and Finance administers

and discloses the State’s defined benefit liabilities in

its Financial Statements.

Onerous contracts

An onerous contract is considered to exist when the

Health Service has a contract under which the

unavoidable cost of meeting the contractual obligation

exceeds the estimated economic benefits to be

received. Present obligations arising under onerous

contracts are recognised as a provision to the extent

that the present obligation exceeds the estimated

economic benefits to be received.



20

Make good provisions

Make good provisions are recognised when Peninsula

Health has contractual obligations to remove leasehold

improvements from leased properties and restore the

leased premises to their original condition at the end of

the lease term. The related expenses of making good

such properties are recognised when leasehold

improvements are made.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation

under the liability is discharged, cancelled or expires.

When an existing financial liability is replaced by

another from the same lender on substantially different

terms, or the terms of an existing liability are

substantially modified, such an exchange or

modification is treated as a derecognition of the original

liability and the recognition of a new liability. The

difference in the respective carrying amounts is

recognised as an expense in the comprehensive

operating statement.

((mm)) LLeeaasseess

A lease is a right to use an asset for an agreed period

of time in exchange for payment. Leases are classified

at their inception as either operating or finance leases

based on the economic substance of the agreement so

as to reflect the risks and rewards incidental to

ownership.

Leases of property, plant and equipment are classified

as finance leases whenever the terms of the lease

transfer substantially all the risks and rewards of

ownership to the lessee.

All other leases are classified as operating leases.

Operating Leases as a lessee

Operating lease payments, including any contingent

rentals, are recognised as an expense in the

comprehensive operating statement on a straight line

basis over the lease term, except where another

systematic basis is more representative of the time

pattern of the benefits derived from the use of the

leased asset. The leased asset is not recognised in the

balance sheet.

Lease Incentives

All incentives for the agreement of a new or renewed

operating lease are recognised as an integral part of the

net consideration agreed for the use of the leased

asset, irrespective of the incentive’s nature or form or

the timing of payments.

In the event that lease incentives are received by the

lessee to enter into operating leases, such incentives

are recognised as a liability. The aggregate benefits of

incentives are recognised as a reduction of rental

expense on a straight-line basis, except where another

systematic basis is more representative of the time

pattern in which economic benefits from the leased

asset is diminished.

Leasehold Improvements

The cost of leasehold improvements are capitalised as

an asset and depreciated over the remaining term of

the lease or the estimated useful life of the

improvements, whichever is the shorter.

((nn)) EEqquuii ttyy

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 or distributions 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.

Financial Assets Available-for-Sale Revaluation

Surplus

The available-for-sale revaluation surplus arises on

the revaluation of available-for-sale financial assets.

Where a revalued financial asset is sold, that portion

of the surplus which relates to that financial asset is

effectively realised, and is recognised in the

comprehensive operating statement. Where a

revalued financial asset is impaired, that portion of the



21

surplus which relates to that financial asset is

recognised in the comprehensive operating statement.

((oo)) CCoommmmiittmmeennttss

Commitments for future expenditure include operating

and capital commitments arising from contracts. These

commitments are disclosed by way of a note (refer to

note 19) 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.

((pp)) CCoonntt iinnggeenntt aasssseettss aanndd ccoonntt iinnggeenntt ll iiaabbii ll ii tt iieess

Contingent assets and contingent liabilities are not

recognised in the balance sheet, but are disclosed by

way of note and, if quantifiable, are measured at

nominal value. Contingent assets and contingent

liabilities are presented inclusive of GST receivable or

payable respectively.

((qq)) GGooooddss aanndd SSeerrvviicceess TTaaxx

Income, expenses and assets are recognised net of

the amount of associated GST, unless the GST

incurred is not recoverable from the taxation authority.

In this case it 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

taxation authority 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 taxation authority, are presented as an

operating cash flow.

Commitments for expenditure and contingent assets

and liabilities are presented on a gross basis.

((rr)) CCaatteeggoorryy GGrroouuppss

Peninsula Health has used the following category

groups for reporting purposes for the current and

previous financial years.

Acute Care comprises all recurrent health

revenue/expenditure on admitted patient services,

where services are delivered in public hospitals, or

free standing day hospital facilities, or palliative care

facilities, or rehabilitation facilities. It also includes

revenue/expenditure on outpatient and emergency

department services.

Mental Health comprises all recurrent health

revenue/expenditure on specialised mental health

services (child and adolescent, general adult and

community) managed or funded by the State, and

includes: admitted patient services, outpatient

services, community based services and ambulatory

services.

Residential Aged Care comprises all recurrent

revenue/expenditure on high level and low level

residential aged care facilities.

Residential Aged Care-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 Department of Health and Human

Services 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.

Aged Care comprises revenue/expenditure from

Home and Community Care (HACC) programs, Allied

Health, Aged Care Assessment and support services.

This category also includes the MEPACS personal

alarm monitoring service.

MEPACS provides personal alarm services to private

clients, government funded (PAV) clients, and some

research activities. Personal Alert Victoria (PAV) is a 24

hour personal monitoring service that responds to calls

for assistance and is funded by the Victorian

Government through the Department of Health and

Human Services.

Primary, Community and Dental Health comprises

a range of home based, community based,

community, primary health and dental services

including health promotion and counselling,

physiotherapy, speech therapy, podiatry and

occupational therapy and a range of dental health

services.



22

Other Services not reported elsewhere - (Other) comprises services not separately classified above, including Health and Community Initiatives.

((ss)) EEccoonnoommiicc ddeeppeennddeennccyy

The Health Service is reliant on the Department of

Health and Human Services for a substantial part of its

revenue.

((tt )) GGooiinngg ccoonncceerrnn

Notwithstanding the operating surplus from continuing

operations for the year of $4,868,000 (2014: surplus of

$42,935,000) and working capital deficiency of

$50,479,000 (2014: $42,004,000) the Financial

Statements have been prepared on a going concern

basis.

Peninsula Health generated cash flows from operations

in the financial year of $3,292,000 (2014: $5,021,000)

and has a reporting date net asset position of

$316,641,000 (2014: $313,010,000). A breakeven

result is budgeted in the 2015/16 financial year.

The extent to which current liabilities exceed current

assets is regularly reviewed by the Board of Directors

using an adjusted working capital ratio which reflects

the expected settlement date of employee entitlement

liabilities. This adjusted measure of liquidity further

supports the going concern basis adopted by the Board.

((uu)) DDiissccoonntt iinnuueedd ooppeerraatt iioonnss

A discontinued operation is a component of the Health

Service that has been disposed of and represents a

separate major line of business. The results of

discontinued operations are presented separately in the

comprehensive operating statement.



23

((vv)) AAAASSss iissssuueedd tthhaatt aarree nnoott yyeett eeff ffeecctt iivvee

Certain new Australian accounting standards have been published that are not mandatory for the 30 June 2015 reporting

period. DTF assesses the impact of all these new standards and advises Peninsula Health of their applicability and early

adoption where applicable.

As at 30 June 2015, 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. Peninsula Health has not and does not intend to adopt these standards early.

Standard/Interpretation Summary Applicable for

annual reporting periods beginning on

Impact on Health Services Financial Statements

AASB 9 Financial Instruments The key changes include the 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.

1 Jan 2018 The assessment has identified that the financial impact of available for sale (AFS) assets will now be reported through other comprehensive income (OCI) and no longer recycled to the profit and loss. While the preliminary assessment has not identified any material impact arising from AASB 9, it will continue to be monitored and assessed.

AASB 15 Revenue from Contracts with Customers

The 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.

1 Jan 2017 (Exposure Draft 263 – potential deferral to 1 Jan 2018)

The changes in revenue recognition requirements in AASB 15 may result in changes to the timing and amount of revenue recorded in the financial statements. The Standard will also require additional disclosures on service revenue and contract modifications. A potential impact will be the upfront recognition of revenue from licenses that cover multiple reporting periods. Revenue that was deferred and amortised over a period may now need to be recognised immediately as a transitional adjustment against the opening returned earnings if there are no former performance obligations outstanding.

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

Amends 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 as a consequence of Chapter 6 Hedge Accounting, and to amend reduced disclosure requirements.

1 Jan 2018 This amending standard will defer the application period of AASB 9 to the 2018-19 reporting period in accordance with the transition requirements.



24

Standard/Interpretation Summary Applicable for annual reporting periods beginning on

Impact on Health Services Financial Statements

AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation [AASB 116 & AASB 138]

Amends AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets to: establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset; prohibit the use of revenue-based methods to calculate the depreciation or amortisation of an asset, tangible or intangible, because revenue generally reflects the pattern of economic benefits that are generated from operating the business, rather than the consumption through the use of the asset.

1 Jan 2016 The assessment has indicated that there is no expected impact as the revenue-based method is not used for depreciation and amortisation.

AASB 2015-6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities [AASB 10, AASB 124 & AASB 1049]

The Amendments extend the scope of AASB 124 Related Party Disclosures to not-for-profit public sector entities. A guidance has been included to assist the application of the Standard by not-for-profit public sector entities.

1 Jan 2016 The amending standard will result in extended disclosures on the entity's key management personnel (KMP), and the related party transactions.

In addition to the new standards above, the AASB has issued a list of amending standards that are not effective for the 2014-15 reporting period. In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on the Health Service.

Note 2: Analysis of Revenue by SourceResidential Residential

Acute Acute Mental Mental Aged Care- Aged Care- Aged Aged Primary Primary Other Other Total Total

Care Care Health Health Mental Hth Mental Hth Care Care Health Health2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Government grants 353,634 336,601 34,468 33,812 3,016 2,909 17,471 17,098 20,731 23,429 - - 429,320 413,849 Indirect contributions by Department of Health and Human Services - - - - - - - - - - 2,962 2,096 2,962 2,096 Patient and Resident Fees 22,135 18,444 - - 517 591 422 487 - - - - 23,074 19,522 Commercial Activities - - - - - - - - - - 9,697 8,756 9,697 8,756 Other Revenue from Operating Activites 9,829 9,577 752 518 - 40 3,066 2,315 4,316 4,277 251 277 18,214 17,004 Total Revenue from Operating Activities 385,598 364,622 35,220 34,330 3,533 3,540 20,959 19,900 25,047 27,706 12,910 11,129 483,267 461,227

Interest - - - - - - - - - - 1,134 1,098 1,134 1,098 Dividends - - - - - - - - - - 855 727 855 727 Other Revenue from Non-Operating Activites - - - - - - - - - - 203 663 203 663 Total Revenue from Non- Operating Activities - - - - - - - - - - 2,192 2,488 2,192 2,488

Capital Purpose Income (excluding interest) - - - - - - - - - - 31,127 49,850 31,127 49,850 Net Gain/(Loss) from Disposal of Non Current Assets - - - - - - - - - - (48) 968 (48) 968 Capital Donations & Bequests - - - - - - - - - - 1,295 1,620 1,295 1,620 Other Capital Purpose Income - - - - - - - - - - 334 532 334 532 Total Capital Purpose Income - - - - - - - - - - 32,708 52,970 32,708 52,970

Assets Received Free of Charge (refer note 2b) - - - - - - - - - - - 9,859 - 9,859 Available-for-Sale Revaluation Reserve Surplus Recognised - - - - - - - - - - 1,791 220 1,791 220

- - - - - - - - - - 1,791 10,079 1,791 10,079

Total Revenue 385,598 364,622 35,220 34,330 3,533 3,540 20,959 19,900 25,047 27,706 49,601 76,666 519,958 526,764

Indirect contributions by the Department of Health and Human Services:

Peninsula Health Annual Financial Statements 2015Notes to The Financial Statements for the financial year ended 30 June 2015

The Department of Health and Human Services makes certain payments on behalf of Peninsula Health. These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.

25

Note 2a: Net Gain/(Loss) on Disposal of Non Financial Ass ets2015 2014$'000 $'000

Proceeds from Disposals of Non Financial AssetsLand - 2,611 Plant & Equipment 30 33 Motor Vehicles 116 23 Total Proceeds from Disposal of Non Financial Assets 146 2,667

Less: Written Down Value of Non Financial Assets SoldLand - 1,697 Plant & Equipment 193 - Motor Vehicles 1 2 Total Written Down Value of Non Financial Assets Sold 194 1,699

Net gains/(losses) on disposal of Non Financial Assets (48) 968

Refer to Note 26 for Non Financial Assets disposed of as part of the discontinued operation.

Note 2b: Assets Received Free of Charge2015 2014$'000 $'000

During the reporting period, the fair value of assets received free of charge, was as follows:

- Land - 3,662 - Buildings - 5,784 - Building Fixtures & Fittings - 413 Total - 9,859


26

Note 3: Analysis of Expenses by Source2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

Residential ResidentialAged Care Aged Care

Acute Acute Mental Mental Mental Mental Aged Aged Primary Primary Other Other TOTAL TOTALCare Care Health Health Health Health Care Care Health Health$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Employee expenses 292,408 276,828 31,705 30,521 4,537 4,555 10,888 10,346 23,802 22,371 4,731 4,683 368,071 349,304 Non Salary Labour Costs 1,027 1,580 29 32 19 21 1,288 1,379 66 88 50 52 2,479 3,152 Supplies & Consumables 57,062 54,219 843 836 238 235 31 25 449 455 1,138 1,054 59,761 56,824 Client Brokerage Costs 897 832 1,986 1,923 - - 4,764 4,502 1,697 4,433 - - 9,344 11,690 Other Expenses 36,836 35,230 2,556 2,630 140 153 2,802 1,517 1,186 1,073 971 1,127 44,491 41,730

Total Expenditure from Operating Activities 388,230 368,689 37,119 35,942 4,934 4,964 19,773 17,769 27,200 28,420 6,890 6,916 484,146 462,700

Depreciation & Amortisation (refer note 4) - - - - - - - - - - 30,347 25,200 30,347 25,200 Finance Costs (refer note 13) - - - - - - - - - - 458 491 458 491 Reversal of impairment on Non Financial Assets (refer note 10) - - - - - - - - - - - (5,286) - (5,286)Impairment of Financial Assets (refer note 16) - - - - - - - - - - 139 724 139 724

Total Other Expenses - - - - - - - - - - 30,944 21,129 30,944 21,129

388,230 368,689 37,119 35,942 4,934 4,964 19,773 17,769 27,200 28,420 37,834 28,045 515,090 483,829 Total Expenses


27

Note 3a: Analysis of Expense and Revenue by Internal managed and Restricted Specific Purpose Funds

2015 2014 2015 2014Expense Expense Revenue Revenue

$'000 $'000 $'000 $'000Commercial ActivitiesThoracic Medicine 673 599 544 416

Echo Cardiology/Angiography 1,073 984 769 646

Sleep Laboratory 951 905 359 396

Property Rental - - 200 195

Cafeteria & Catering Services 1,145 1,140 1,483 1,483

Car Park 366 382 2,586 2,132

Other Special Purpose Funds 2,547 2,906 3,756 3,488 TOTAL 6,755 6,916 9,697 8,756

Note 4: Depreciation & Amortisation2015 2014$'000 $'000

DepreciationBuildings 14,664 13,955 Plant & Equipment 6,664 6,452 Furniture & Fittings 7,134 2,773 Motor Vehicles 284 523 Total Depreciation 28,746 23,703

AmortisationSoftware 1,601 1,497 Total Amortisation 1,601 1,497

Total Depreciation and Amortisation 30,347 25,200

Note 5: Cash and Cash EquivalentsFor the purposes of the Cash Flow Statement, cash assets include cash on hand and in banks, andshort-term deposits which are readily convertible to cash on hand, and are subject to an insignificant risk of change in value, net of outstanding bank overdrafts.

2015 2014$'000 $'000

Cash on Hand 26 26 Cash at Bank 10,774 26,855 Deposits at Call 10,000 - TOTAL 20,800 26,881

Represented by:Cash for Health Service Operations 20,800 26,881 TOTAL 20,800 26,881


28

Note 6: Receivables2015 2014$'000 $'000

CURRENTContractual Inter Hospital Debtors 235 175 Trade Debtors 5,559 7,247 Patient Fees 5,244 5,586 Accrued Investment Income 57 16 Less Allowance for Doubtful Debts (74) (69)

11,021 12,955 Statutory Department of Health and Human Services – Long Service Leave 3,632 3,632 GST Receivable 897 1,338

4,529 4,970 TOTAL CURRENT RECEIVABLES 15,550 17,925

NON CURRENTContractual Trade Debtors 1,954 1,954 Statutory Department of Health and Human Services – Long Service Leave 9,944 7,279 TOTAL NON-CURRENT RECEIVABLES 11,898 9,233

TOTAL RECEIVABLES 27,448 27,158

(a) Movement in Allowance for Doubtful Debts2015 2014$'000 $'000

Balance at beginning of year 69 191 Amounts written off during the year (205) (190)Amounts recovered during the year - - Increase/(decrease) in allowance recognised in profit or loss 210 68 Balance at end of year 74 69

(b) Ageing analysis of receivablesPlease refer to note 18(d) for the ageing analysis of receivables.

(c) Nature and extent of risk arising from receivablesPlease refer to note 18(d) for the nature and extent of credit risk from receivables.


29

Note 7: Investments and Other Financial AssetsTotal Total2015 2014$'000 $'000

Equities & Managed Investment Schemes Available for Sal e at Fair Value Hybrid Securities 2,006 8,006 Direct Equity-Shares 2,140 8,275 VFMC Growth Fund 10,000 - Total Current 14,146 16,281

Represented by:Health Service Investments 13,368 15,704 Monies Held in Trust:- Patient Monies 10 4 Accommodation Bonds (Refundable Entrance Fees) 768 573 TOTAL 14,146 16,281

(a) Ageing analysis of other financial assetsPlease refer to note 18(d) for the ageing analysis of other financial assets.

(b) Nature and extent of risk arising from other financial a ssets

(c) Compliance with Standing Direction 4.5.6 Treasury Ri sk Management

Note 8: Inventories2015 2014$'000 $'000

Pharmaceuticals - at cost 729 812 Catering Supplies - at cost 62 78 Housekeeping Supplies - at cost 47 48 Medical and Surgical Lines - at cost 1,468 1,285 Administration Stores - at cost 18 18 TOTAL INVENTORIES 2,324 2,241

Note 9: Other Assets2015 2014$'000 $'000

CURRENTPrepayments 887 662 TOTAL 887 662

Please refer to note 18(d) for the nature and extent of credit risk arising from other financial assets.


To comply with the requirements of the standing direction of ensuring that the Health Service’s financial instruments are held with VFMC and TCV by 30 June 2015, management, with oversight by the Board, developed and implemented a divestment strategy during the current financial year, which saw the Health Service having divested and invested $20 million of its investments with VFMC & TCV by 30 June 2015. The divestment strategy continues post year end as the Health Service held a number of investments, with maturity date post 1 July 2015. As at the 17 August 2015, an additional $3.2m of the $4.1m non VFMC investments was realised and invested with VFMC or TCV.

30

Note 10: Property, Plant & Equipment

(a) Gross carrying amount and accumulated depreciation 2015 2014$'000 $'000

Land- Land at Fair Value 63,289 64,644 Total Land 63,289 64,644

Buildings- Buildings at Fair Value 337,696 277,043 Less Accumulated Depreciation (74,487) (59,840)Total Buildings 263,209 217,203

Plant and Equipment- Plant and Equipment at fair value 65,170 57,810 Less Accumulated Depreciation (35,456) (30,146)Total Plant and Equipment 29,714 27,664

Furniture and Fittings- Furniture and Fittings at fair value 28,107 21,117 Less Accumulated Depreciation (18,563) (11,458)Total Furniture and Fittings 9,544 9,659

Motor Vehicles- Motor Vehicles at fair value 4,610 4,600 Less Accumulated Depreciation (4,263) (4,451)Total Motor Vehicles 347 149

Assets Under Construction- Assets under construction at cost 2,186 38,791 Total Assets Under Construction 2,186 38,791

TOTAL 368,289 358,110

(b) Reconciliations of the carrying amounts of each class of asset

Land Buildings Plant & Furniture & Motor Assets Under Tot alEquipment Fittings Vehicles Construction

$'000 $'000 $'000 $'000 $'000 $'000 $'000Balance at 1 July 2013 37,017 212,099 28,993 6,330 643 35,481 320,563 Additions - 2,335 4,869 1,083 31 41,311 49,629 Disposals (1,697) - (119) - (2) - (1,818)Assets received free of charge 3,662 5,784 - 413 - - 9,859 Transfers from Assets Under Construction - 22,522 373 4,606 - (27,501) - Net Transfers to Intangible Assets (Note 11) - - - - - (10,500) (10,500)Impairment Losses (recognised)/reversed in Net Result 5,286 - - - - - 5,286 Revaluation increments/(decrements) 20,376 (11,582) - - - - 8,794 Depreciation (note 4) - (13,955) (6,452) (2,773) (523) - (23,703)Balance at 30 June 2014 64,644 217,203 27,664 9,659 149 38,791 358,110 Additions - 3,409 5,475 4,459 483 27,729 41,555 Disposals (1,355) (500) (183) (11) (1) - (2,050)Assets received free of charge - - - - - - - Transfers from Assets Under Construction - 57,761 3,422 2,571 - (63,754) - Net Transfers to Intangible Assets (Note 11) - - - - - (580) (580)Impairment Losses (recognised)/reversed in Net Result - - - - - - - Revaluation increments/(decrements) - - - - - - - Depreciation (note 4) - (14,664) (6,664) (7,134) (284) - (28,746)Balance at 30 June 2015 63,289 263,209 29,714 9,544 347 2,186 368,289

Land and buildings carried at valuationAn independent valuation of Peninsula Health's land and buildings was performed by the Valuer-General Victoria to determine the fair value of the land and buildings. 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 was 30 June 2014.


31

Note 10: Property, Plant & Equipment continued

Level 1 (i) Level 2 (i) Level 3 (i)

Land at fair value- Non-specialised land 4,900 - 4,900 -

- Specialised land 59,744 - - 59,744

Total of land at fair value 64,644 - 4,900 59,744

Buildings at fair value- Specialised buildings 217,203 - - 217,203

Plant and equipment at fair value- Plant and equipment 27,664 - - 27,664

Furniture and Fittings at fair value- Office furniture, computers and leasehold improvements 9,659 - - 9,659

Motor Vehicles at fair value- Vehicles (ii) 149 - - 149

319,319 - 4,900 314,419

Level 1 (i) Level 2 (i) Level 3 (i)

Land at fair value- Non-specialised land 3,545 - 3,545 - - Specialised land 59,744 - - 59,744 Total of land at fair value 63,289 - 3,545 59,744 Buildings at fair value- Specialised buildings 263,209 - - 263,209 Plant and equipment at fair value- Plant and equipment 29,714 - - 29,714 Furniture and Fittings at fair value

- Office furniture, computers and leasehold improvements 9,544 - - 9,544

Motor Vehicles at fair value- Vehicles (ii) 347 - - 347

366,103 - 3,545 362,558

Note(i) Classified in accordance with the fair value hierarchy, see Note 1

(ii) Vehicles are categorised to Level 3 assets because the depreciated replacement cost is used in estimating the fair value.

Non-specialised land and buildings

Specialised land and specialised buildings

Plant and equipment, Furniture & Fittings

Vehicles

Peninsula Health Annual Financial Statements 2015

An independent valuation of the Health Service’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 was 30 June 2014.

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 2015. For all assets measured at fair value, the current use is considered the highest and best use.

The Health Service 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).

Fair value measurement at end of reporting period using:

There have been no transfers between levels during the period.

For non-specialised land and non-specialised buildings, an independent valuation was performed by independent valuers, The Valuer-General Victoria (VGV), 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 was 30 June 2014.

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.

Notes to The Financial Statements for the financial year ended 30 June 2015

For Peninsula Health, 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.

Carrying amount as at 30 June 2014

Fair value measurement at end of reporting period using:(c) Fair value measurement hierarchy for assets as at 30 June 2014

(c) Fair value measurement hierarchy for assets as at 30 June 2015Carrying amount as

at 30 June 2015

To the extent that non-specialised land and non-specialised buildings do not contain significant, unobservable adjustments, these assets are classified as Level 2 under the market approach.

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.

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.

32


Opening Balance at 1 July 2013 37,017 212,099 28,993 6,330 643Purchases (sales) 1,051 30,641 5,090 6,102 8 Transfers in (out) of Level 3 (4,900) - - - -

Gains or losses recognised in net result- Depreciation - (13,955) (6,452) (2,773) (523) - Impairment loss 5,286 - - - - Subtotal 38,454 228,785 27,631 9,659 128

Items recognised in other comprehensive income- Revaluation 20,376 (11,582) - - - Subtotal 20,376 (11,582) - - -

58,830 217,203 27,631 9,659 128

Unrealised gains/(losses) on non-financial assets 914 - 33 - 21

Closing Balance at 30 June 2014 59,744 217,203 27,664 9,659 149

Opening Balance at 1 July 2014 59,744 217,203 27,664 9,659 149

Purchases (sales) - 60,670 8,714 7,019 482

Transfers in (out) of Level 3 - - - - -

Gains or losses recognised in net result

- Depreciation - (14,664) (6,664) (7,134) (284) - Impairment loss - - - - -

Subtotal 59,744 263,209 29,714 9,544 347

Items recognised in other comprehensive income

- Revaluation - - - - -

Subtotal - - - - -

59,744 263,209 29,714 9,544 347

Unrealised gains/(losses) on non-financial assets - - - - -

Closing Balance at 30 June 2015 59,744 263,209 29,714 9,544 347

Note(i) Classified in accordance with the fair value hierarchy, see Note 1


Furniture & Fittings

(d) Reconciliation of Level 3 fair value at 30 June 2015(i)

(d) Reconciliation of Level 3 fair value at 30 June 2014(i) Motor Vehicles

Motor VehiclesLand Buildings

Plant and Equipment

Furniture & Fittings

Land BuildingsPlant and

Equipment

33


e) Description of significant unobservable inputs to Level 3 valuations 30 June 2015 and 30 June 2014:

Specialised land

Specialised land Market approach

Community Service Obligation (CSO) adjustment 20% (i)

A significant increase or decrease in the CSO adjustment would result in a significantly lower (higher) fair value

Specialised buildings

Hospital care facilities $1,300 - $2,500/m2 ($1,900)

Residential building structures $2,000 - $3,500/m2 ($2,750)

Community Centre (Hastings) $6,000/m2

Other sheds and halls $1,000 - $1,200/m2 ($1,100)

All Useful life of specialised buildings

1 - 60 years (30 years)

Plant and equipment at fair value

Plant and equipment Depreciated replacement cost Cost per unit

$9,000 - $10,000 ($9,500)

Useful life of PPE 5-10 years (7 years) Vehicles

Motor vehicles Depreciated replacement cost Cost per unit

$9,000-$10,000 per unit($9500 per unit)

Useful life of Vehicles 3-5 years (4 years) Medical equipment at fair value

Medical equipment Depreciated replacement cost Cost per unit

$6,000 - $7,000 ($6,500)

Useful life of ME 3-10 years (6 years) Furniture and fittings at fair value

Furniture and fittings Depreciated replacement cost Cost per unit

$6,000 - $7,000 ($6,500)

Useful life of F&F 3-10 years (6 years)

Increase (decrease) in gross replacement cost would result in a significantly higher (lower) fair value

Direct cost per square metre

Depreciated replacement cost

(i) A CSO adjustment of 20% was applied to reduce the market approach value for the Health Service’s specialised land.

Valuation technique

Significant unobservable inputs (i)

Range (weighted average) (i)

Sensitivity of fair value measurement to changes in

significant unobservable inputs

A significant increase or decrease in direct cost per square meter adjustment would result in a significantly higher or lower fair value

A significant increase or decrease in cost per unit would result in a significantly higher or lower fair value

A significant increase or decrease in cost per unit would result in a significantly higher or lower fair value

Increase (decrease) in gross replacement cost would result in a significantly higher (lower) fair value


34

Note 11: Intangible Assets 2015 2014$'000 $'000

Software 11,883 10,500 Less Accumulated Amortisation (3,098) (1,497)Total Intangible Assets 8,785 9,003

2015 2014$'000 $'000

Balance at beginning of year 9,003 - Additions 803 - Net Transfers from Assets Under Construction (Note 10) 580 10,500 Disposals - - Amortisation expense (Note 4) (1,601) (1,497)Balance at end of year 8,785 9,003

Note 12: Payables 2015 2014$'000 $'000

CURRENTContractualTrade Creditors (i) 4,055 5,257 Salary Packaging 3,376 3,238 Accrued Expenses 7,009 13,021

14,440 21,516 StatutoryDepartment of Health and Human Services(ii) 567 2,363

TOTAL CURRENT 15,007 23,879

(a) Maturity analysis of payablesPlease refer to Note 18(e) for the ageing analysis of payables.(b) Nature and extent of risk arising from payablesPlease refer to note 18(e) for the nature and extent of risks arising from contractual payables.

Note 13: Borrowings 2015 2014$'000 $'000

CURRENTTCV borrowings 948 948

NON CURRENTTCV borrowings 8,323 8,814

TOTAL BORROWINGS 9,271 9,762

The terms and conditions of the interest bearing borrowings include a 15 year repayment periodat a fixed interest rate of 4.795%.

- Interest on long term borrowings (recognised as a finance cost) 458 491

(a) Maturity analysis of borrowingsPlease refer to note 18(e) for the ageing analysis of borrowings.(b) Nature and extent of risk arising from borrowin gsPlease refer to note 18(e) for the nature and extent of risks arising from borrowings.(c) Defaults and breaches


Finance costs of the Health Service incurred during the year are accounted for as follows:

Reconciliation of the carrying amounts of intangible assets at the beginning and end of the previous and current financial year:

During the current and prior year, there were no defaults and breaches of any of the borrowings.

(i) The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice. Thereafter, $nil interest was charged on the outstanding balance in 2014/15 (2013/14: $nil).(ii) Terms and conditions of amounts payable to the Department of Health and Human Services vary according to the particular agreement with the Department.

Software

35

Note 14: Provisions

Employee Benefits 2015 2014$'000 $'000

CURRENTEmployee Benefits (i) (Note 14(a))Annual Leave (Note 14(a))- Unconditional and expected to be settled within 12 months (ii) 24,364 21,906 - Unconditional and expected to be settled after 12 months (ii) 4,060 6,032 Long Service Leave (Note 14(a))- Unconditional and expected to be settled within 12 months (ii) 4,573 4,582 - Unconditional and expected to be settled after 12 months (ii) 34,608 30,834 Accrued Days Off (Note 14(a))- Unconditional and expected to be settled within 12 months (ii) 975 984 - Unconditional and expected to be settled after 12 months (ii) - - Accrued Wages and Salaries 11,632 9,470

80,212 73,808 Provisions related to Employee Benefit On-Costs- Unconditional and expected to be settled within 12 months (ii) 3,037 2,794 - Unconditional and expected to be settled after 12 months (ii) 4,204 3,988

7,241 6,782 Total Current Provisions 87,453 80,590

NON-CURRENTEmployee Benefits (i) (Note 14(a)) 12,295 11,347 Provisions related to Employee Benefit On-Costs (Note 14(a) and Note 14(b)) 1,234 1,171 Total Non-Current Provisions 13,529 12,518

Total Provisions 100,982 93,108

(a) Employee Benefits and Related On-Costs

Current Employee Benefits and related on-costsAnnual Leave Entitlements 31,261 30,727 Unconditional Long Service Leave Entitlement 43,482 39,305 Accrued Days Off 1,078 1,088 Accrued Wages and Salaries 11,632 9,470 Non-Current Employee Benefits and related on-costsConditional Long Service Leave Entitlements 13,529 12,518 Total Employee Benefits and Related On-Costs 100,982 93,108

Notes:

(b) Movement in Long Service Leave:

Balance at start of year 51,823 47,458 Provision made during the year:-Revaluations 293 (33)-Expense recognising employee service 9,970 9,483 Settlement made during the year (5,075) (5,085)Balance at end of year 57,011 51,823


(i) Employee benefits consist of annual leave and long service leave accrued by employees. On-costs such as superannuation and worker's compensation insurance are not employee benefits and are reflected as a separate provision.

(ii) The amounts disclosed are at present values


36

Note 15: Other Liabilities2015 2014$'000 $'000

CURRENT*Trust Funds - Patient Monies held in Trust 778 577

778 577 * Total Monies Held in TrustRepresented by the following assets:- Cash Assets Held in Trust (refer to Note 5) 10 4 - Other Financial Assets Held at Trust (refer to Note 7) 768 573 TOTAL 778 577

Note 16: Equity 2015 2014$'000 $'000

(a) SurplusesProperty, Plant & Equipment Revaluation Surplus 1

Balance at the beginning of the reporting period 68,067 59,273 Revaluation increment/(decrement) - 8,794 Impairment losses - - Balance at the end of the reporting period 68,067 68,067

* Represented by:- Buildings 47,691 47,691 - Land 20,376 20,376

68,067 68,067

Financial Asset Available-for-Sale Revaluation Surplus 2

Balance at the beginning of the reporting period 2,948 1,485 Cumulative (gain)/loss transferred to Operating Statement on sale of financial assets (1,791) (220)Cumulative (gain)/loss transferred to Operating Statement on impairment of financial assets 139 724 Valuation gain/(loss) recognised direct to equity (182) 959 Balance at the end of the reporting period 1,114 2,948

Total Surpluses 69,181 71,015

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

2. The financial assets available-for-sale revaluation surplus arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, that portion of the reserve which relates to the financial asset, and is effectively realised, is recognised in the net result. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in net result.

(b) Contributed CapitalBalance at the beginning of the reporting period 191,923 191,923 Capital Contribution received from Victorian Government 1,278 - Balance at the end of the reporting period 193,201 191,923

(c) Accumulated Surpluses/(Deficits)Balance at the beginning of the reporting period 50,072 7,510 Net Result for the Year 4,187 42,562 Balance at the end of the reporting period 54,259 50,072

Total Equity at the end of the reporting period 316,641 313,010


37

Note 17: Reconciliation of Net Result for the Year to Net Cas h Inflow/(Outflow)from Operating Activities

2015 2014$'000 $'000

Net Result for the Year 4,187 42,562

Non-cash movementsDepreciation & Amortisation 30,347 25,200 Non-Cash Department of Health Capital Grants (318) (1,272)Non-Cash Assets Available for Sale (1,791) (220)Non-Cash Impairment of Financial Assets 139 724 Non-Cash Revaluation/Impairment of Non Financial Assets - (5,286)Assets received free of charge - (9,859)Movements included in investing and financing activitiesNet (Gain)/Loss from Sale of Plant and Equipment 48 (968)(Gain)/Loss from Discontinued Operation (155) (1,954)Movements in Assets & Liabilities- Increase/(Decrease) in Payables (4,204) 1,476 - Increase/(Decrease) in Employee Benefits 7,874 6,781 - (Increase)/Decrease in Inventories (83) 81 - (Increase)/Decrease in Receivables (290) (1,891)- (Increase)/Decrease in Prepayments (225) 11 - Increase/(Decrease) in Other Liabilities 201 365

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 35,730 55,750


38


Note 18: Financial Instruments

(a) Financial Risk Management Objectives & Policies

(b) Risk management policies

(c) Categorisation of financial instrumentsCarrying Carrying

Details of each category in accordance with AASB139 Amount Amount 2015 2014

Note Category $'000 $'000Financial AssetsCash and cash equivalents 5 20,800 26,881 Receivables 6 12,975 14,909 Other Financial Assets 7 14,146 16,281 Total Financial Assets (i) 47,921 58,071 Financial LiabilitiesPayables 12 14,440 21,516 Borrowings 13 9,271 9,762 Accommodation Bonds 15 768 573 Other Liabilities 15 10 4 Total Financial Liabilities (ii) 24,489 31,855

(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)

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

gain/(loss)

Total interest income /

(expense)Fee income /

(expense)Impairment

loss Total$'000 $'000 $'000 $'000 $'000

2015Financial Assets

Cash and Cash Equivalents (i) - 1,134 - - 1,134

Loans and Receivables (i) - - - - -

Available for Sale (i) (1,973) - 855 (139) (1,257)Total Financial Assets (1,973) 1,134 855 (139) (123)Financial LiabilitiesAt Amortised Cost (ii) - (458) - - (458)Total Financial Liabilities - (458) - - (458)

2014Financial Assets

Cash and Cash Equivalents (i) - 1,098 - - 1,098

Loans and Receivables (i) - - - - - Available for Sale (i) 739 - 728 (724) 743 Total Financial Assets 739 1,098 728 (724) 1,841 Financial LiabilitiesAt Amortised Cost (ii) - (491) - - (491)Total Financial Liabilities - (491) - - (491)

Peninsula Health Annual Financial Statements

This is supported by a risk register which is regularly updated in conjunction with our internal auditors.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

The main purpose in holding financial instruments is to prudentially manage Peninsula Health's financial risks within government policy parameters.

Available for sale financial assets

Peninsula Health's risk management framework is based on the Australian Standard and has an overarching policy with 10 policies relating to specific areas such as clinical governance, financial risk, IT risk and building and infrastructure risk.

Peninsula Health's principal financial instruments comprise of cash assets, term deposits, receivables (excluding statutory receivables, investment in equities, payables (excluding statutory payables), accommodation bonds and borrowings.

Peninsula Health's main financial risks include credit risk, liquidity risk, interest rate risk and equity price risk. Peninsula Health manages these financial risks in accordance with its financial risk management policy.Peninsula Health uses different methods to measure and manage the different risks to which it is exposed. Primary responsibility for the identification and management of financial risks rests with the financial risk management committee of the Health Service.

Risk management is seen as a core component of service delivery and high or extreme risks are managed at an appropriate level of seniority. A consistent risk assessment and management tool is used across all risk areas.

Financial liabilities measured at amortised cost

Loans and ReceivablesLoans and Receivables

(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.

Financial liabilities measured at amortised cost

Financial liabilities measured at amortised costFinancial liabilities measured at amortised cost

39


Note 18: Financial Instruments Continued

(d) Credit Risk

Ageing analysis of Financial Asset as at 30 June

Less than 1 Month

1-3 Months 3 months - 1 Year

1-5 Years

2015 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 20,800 20,800 - - - - - Receivables

- Trade Debtors* 12,975 8,681 2,711 634 1,023 - (74)

- Other Receivables - - - - - - - Other Financial Assets - Managed Investments 14,146 14,146 - - - - -

Total Financial Assets (i) 47,921 43,627 2,711 634 1,023 - (74)

2014

Financial Assets

Cash and Cash Equivalents 26,881 26,881 - - - - -

Receivables

- Trade Debtors 14,909 11,708 1,609 525 1,136 - (69)

Other Financial Assets - Managed Investments 16,281 16,281 - - - - -

Total Financial Assets 58,071 54,870 1,609 525 1,136 - (69)

Credit quality of contractual financial assets that are neither past due nor impaired

2015 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 10,000 10,800 - - 20,800 Loans and Receivables - - - 12,975 12,975 Available for sale - Shares in Other Entities - - - 14,146 14,146 Total Financial Assets (i) 10,000 10,800 - 27,121 47,921

2014Financial AssetsCash and Cash Equivalents - 26,881 - - 26,881 Loans and Receivables - - 1,236 13,673 14,909 Available for sale - Shares in Other Entities - - - 16,281 16,281 Total Financial Assets (i) - 26,881 1,236 29,954 58,071


Financial institutions(AAA credit

rating)

Financial Institutions(AA- credit

rating)

Government agencies(min BBB

credit rating)

Other (min BBB

credit rating)

Total

* For some trade receivables, Peninsula Health has obtained security in the form of guarantees which can be called upon if the counterparty is in default under the agreement. There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated. The ageing analysis table above discloses the ageing only of contractual financial assets that are past due but not impaired. There are no material financial assets which are individually determined to be impaired.

Credit risk arises from the contractual financial assets of the Health Service, which comprise cash and deposits, non-statutory receivables and available for sale contractual financial assets. The Health Service’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Health Service. Credit risk is measured at fair value and is monitored on a regular basis. Credit risk associated with the Health Service’s contractual financial assets is minimal because the main debtor is the Victorian Government. For debtors other than the Government, it is the Health Service’s policy to only deal with entities with high credit ratings of a minimum Triple-B rating and to obtain sufficient collateral or credit enhancements, where appropriate.In addition, the Peninsula Health does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. As with the policy for debtors, Peninsula Health’s policy is to only deal with banks with high credit ratings.Provision of impairment for contractual financial assets is recognised when there is objective evidence that Peninsula Health will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings.Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents Peninsula Health’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

Impaired Financial Assets

(i) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and GST input tax credit recoverable).

Carrying Amount

Not Past Due and Not Impaired

Past Due But Not Impaired

40


Note 18: Financial Instruments continued(e) Liquidity Risk

Carrying Amount Nominal Amount

Less than 1 Month

1-3 Months 3 months - 1 Year

1-13 Years

2015 $'000 $'000 $'000 $'000 $'000 $'000Financial LiabilitiesAt amortised costPayables 14,440 14,440 11,064 1,688 1,688 - Borrowings 9,271 12,562 - 237 711 11,614 Other Financial Liabilities - Accommodation Bonds 768 768 768 - - - - Other 10 10 10 - - -

Total Financial Liabilities 24,489 27,780 11,842 1,925 2,399 11,614

2014Financial LiabilitiesAt amortised costPayables 21,516 21,516 18,278 1,619 1,619 - Borrowings 9,762 13,511 - 237 711 12,563 Other Financial Liabilities - Accommodation Bonds 573 573 573 - - - - Other 4 4 4 - - -

Total Financial Liabilities 31,855 35,604 18,855 1,856 2,330 12,563

(f) Market Risk

Currency Risk

Interest Rate Risk

Interest Rate Exposure of Financial Assets and Liabil ities as at 30 June

CarryingAmount Fixed Variable Non-interest

interest rate interest rate bearing2015 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 20,800 - 20,774 26 Receivables(i) - Trade Debtors 12,975 - - 12,975 Other Financial Assets - Managed Investments 14,146 2,006 - 12,140

47,921 2,006 20,774 25,141 Financial LiabilitiesAt amortised costPayables(i) 14,440 - - 14,440 Borrowings 9,271 9,271 - - Other Financial Liabilities - Accommodation Bonds 768 - - 768 - Other 10 - - 10

24,489 9,271 - 15,218 2014Financial AssetsCash and Cash Equivalents 26,881 - 26,855 26 Receivables(i) - Trade Debtors 14,909 - - 14,909 Other Financial Assets - Managed Investments 16,281 8,006 - 8,275

58,071 8,006 26,855 23,210 Financial LiabilitiesAt amortised costPayables(i) 21,516 - - 21,516 Borrowings 9,762 9,762 - - Other Financial Liabilities - Accommodation Bonds 573 - - 573 - Other 4 - - 4

31,855 9,762 - 22,093

(i) The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable).

Interest Rate Exposureeffective interest

rate (%)

2.10%

--


The following table discloses the contractual maturity analysis for Peninsula Health'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 JuneMaturity Dates

Weighted average

Ageing analysis of financial liabilities excludes statutory financial liabilities (i.e GST payable).

Liquidity risk is the risk that the Health Service would be unable to meet its financial obligations as and when they fall due. Peninsula Health operates under the Government's fair payments policy of settling financial obligations within 30 days and in the event of a dispute, making payments within 30 days from the date of resolution. The Health Service’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet. Peninsula Health manages its liquidity risk through regular cash forecasts and ensuring sufficient available cash is held to meet its obligations.

Peninsula Health's exposures to market risk are primarily through interest rate risk, and other price risks such as variability in equity markets, with only an insignificant exposure to foreign currency price risks. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraph below.

Peninsula Health is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement.

Exposure to interest rate risk might arise primarily through Peninsula Health's interest bearing financial assets. Minimisation of risk has been achieved by using fixed rate for financial liabilities.

4.79%-

-

-

2.79%

--

-

4.79%-

-

41


Note 18: Financial Instruments continued

(g) Market Risk (continued)Sensitivity Disclosure Analysis

- A shift of +1% and -1% in market interest rates (AUD) from year-end rates of 2.10% (2014: 2.79%); - A parallel shift of +5% and -5% in inflation rate from year-end rates of 4.44% (2014: 4.44%).

CarryingAmount

Profit Equity Profit Equity Profit Equity Profit Equity2015 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents(i) 20,800 (208) (208) 208 208 - - - - Receivables(ii)

- Trade Debtors 12,975 - - - - - - - - Other Financial Assets - Managed Investments 14,146 (20) (20) 20 20 (607) (607) 607 607 Financial LiabilitiesAt amortised costPayables 14,440 - - - - - - - - Borrowings (fixed rate) 9,271 - - - - - - - - Other Financial Liabilities - Accommodation Bonds 768 - - - - - - - - - Other 10 - - - - - - - -

(228) (228) 228 228 (607) (607) 607 607 2014Financial AssetsCash and Cash Equivalents(i) 26,881 (269) (269) 269 269 - - - -

Receivables(ii)

- Trade Debtors 14,909 - - - - - - - - Other Financial Assets - Managed Investments 16,281 (80) (80) 80 80 (414) (414) 414 414 Financial LiabilitiesAt amortised costPayables 21,516 - - - - - - - - Borrowings (fixed rate) 9,762 - - - - - - - - Other Financial Liabilities - Accommodation Bonds 573 - - - - - - - - - Other 4 - - - - - - - -

(349) (349) 349 349 (414) (414) 414 414

(ii) The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable).

Interest Rate Risk Other Price Risk -1% +1%

(i) eg. Sensitivity of cash and cash equivalents to a +1% movement in interest rates: [$20,800k*0.031]-[$20,800k*0.021] = $208k. Similar for a -1% movement in interest rate, impact = $(208k).

-5% +5%

Taking into account past performance, future expectations, economic forecasts, the views of external consultants, and management's knowledge and experience of the financial markets, the Health Service believes the following movements are 'reasonably possible' over the next 12 months (base rates are sourced from the Reserve Bank of Australia):

The following table discloses the impact on net operating result and equity for each category of financial instrument held by Peninsula Health at year end as presented to key management personnel, if changes in the relevant risk occur.


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Note 18: Financial Instruments continued

(h) Fair Value

Carrying Fair Value Carrying Fair Value

Amount Amount Amount Amount

2015 2015 2014 2014

$'000 $'000 $'000 $'000

Financial Assets

Cash and cash equivalents 20,800 20,800 26,881 26,881

Receivables 12,975 12,975 14,909 14,909

Other Financial Assets 14,146 14,146 16,281 16,281

Total Financial Assets 47,921 47,921 58,071 58,071

Financial Liabilities

At amortised cost

Payables 14,440 14,440 21,516 21,516

Borrowings 9,271 9,271 9,762 9,762

Accommodation Bonds 768 768 573 573 Other Liabilities 10 10 4 4

Total Financial Liabilities 24,489 24,489 31,855 31,855

Financial Assets measured at fair value

Carrying Amount as at 30 June

Level 1 Level 2 Level 3

2015 $'000 $'000 $'000 $'000

Financial assets at fair value through profit & los s


- Equities and managed funds 14,146 14,146 - -

Total Financial Assets 14,146 14,146 - -

2014

Financial assets at fair value through profit & los s


- Equities and managed funds 16,281 16,281 - -

Total Financial Assets 16,281 16,281 - -


Fair value measurement at end of year using:

The fair values and net fair values of financial instrument assets and liabilities are determined as follows: • Level 1 - the fair value of financial instrument assets and liabilities with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices; • Level 2 - the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability, either directly or indirectly; and • Level 3 - the fair value is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using unobservable market inputs.

There have been no transfers between levels during the period.

The financial assets include holdings in listed shares. The listed share assets are valued at fair value with reference to a quoted (unadjusted) market price from an active market. Peninsula Health categorises these instruments as Level 1.

Peninsula Health considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full.Accordingly, the following table presents that the fair values of most of the contractual financial assets and liabilities, are the same as the carrying amounts.

Comparison between carrying amount and fair value

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Note 19: Commitments for Expenditure & Contingencies

2015 2014$'000 $'000

Capital Expenditure CommitmentsPayable:- Land and Buildings 3,782 35,010 - Plant & Equipment 4,144 8,754 Total Capital Commitments 7,926 43,764

Not later than one year 7,926 38,764 Later than one year and not later than 5 years - 5,000 Total Capital commitments inclusive of GST 7,926 43,764

Less GST recoverable from the Australian Tax Office 721 3,979 Total Capital commitments exclusive of GST 7,205 39,785

Lease CommitmentsCommitments in relation to leases contracted for at the reporting date:- Operating leases 854 357 Total Lease Commitments 854 357

Operating LeasesNon-CancellableNot later than one year 463 216 Later than one year and not later than 5 years 391 141 Later than 5 years - - Sub-total 854 357 Total Lease commitments inclusive of GST 854 357

Less GST recoverable from the Australian Tax Office 78 32 Total Lease commitments exclusive of GST 777 325

Contingent Assets and Contingent Liabilities


As at 30 June 2015, Peninsula Health does not have any contingent assets or liabilities (2014: Nil).

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Note 20: Segment ReportingResidential Aged Residential Aged Pers. Alarm Pers. Alarm Acute Acute Mental Mental Aged Aged Primary Primary Other Other Total Total

Care Services Care Services Call systems Call systems Care Care Health Health Care Care Health Health2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

REVENUEExternal Segment Revenue 3,533 3,540 12,987 12,233 385,598 364,622 35,220 34,330 7,972 7,667 25,047 27,706 12,910 11,129 483,267 461,227 Unallocated Revenue - - - - - - - - - - - - 32,911 53,633 32,911 53,633 Total Revenue 3,533 3,540 12,987 12,233 385,598 364,622 35,220 34,330 7,972 7,667 25,047 27,706 45,821 64,762 516,178 514,860

EXPENSESExternal Segment Expenses 4,934 4,964 8,276 6,768 388,230 368,689 37,119 35,942 11,497 11,001 27,200 28,420 6,890 6,916 484,146 462,700 Unallocated Expense - - - - - - - - - - - - 30,347 25,200 30,347 25,200 Total Expenses 4,934 4,964 8,276 6,768 388,230 368,689 37,119 35,942 11,497 11,001 27,200 28,420 37,237 32,116 514,493 487,900

Net Result from ordinary activities (1,401) (1,424) 4,711 5,465 (2,632) (4,067) (1,899) (1,612) (3,525) (3,334) (2,153) (714) 8,584 32,646 1,685 26,960 Interest and dividend Income - - - - - - - - - - - - 1,989 1,825 1,989 1,825 Finance costs - - - - - - - - - - - - (458) (491) (458) (491)Assets Received Free of Charge - - - - - - - - - - - - - 9,859 - 9,859 Reversal of impairment on Non Financial Assets - - - - - - - - - - - - - 5,286 - 5,286 Gain/(Loss) from Discontinued Operation (681) (373) - - - - - - - - - - - - (681) (373)Available-for-Sale Revaluation Reserve Surplus recognised - - - - - - - - - - - - 1,791 220 1,791 220 Impairment of Financial Assets - - - - - - - - - - - - (139) (724) (139) (724)Net Result for Year (2,082) (1,797) 4,711 5,465 (2,632) (4,067) (1,899) (1,612) (3,525) (3,334) (2,153) (714) 11,767 48,621 4,187 42,562

OTHER INFORMATIONSegment Assets 1,550 1,466 4,124 5,073 391,230 382,407 15,077 16,084 1,294 1,412 17,745 23,510 11,659 10,384 442,679 440,336 Total Assets 1,550 1,466 4,124 5,073 391,230 382,407 15,077 16,084 1,294 1,412 17,745 23,510 11,659 10,384 442,679 440,336

Segment Liabilities 1,626 1,986 3,117 3,260 92,547 93,743 8,453 9,148 1,913 2,043 6,012 7,384 12,370 9,762 126,038 127,326 Total Liabilities 1,626 1,986 3,117 3,260 92,547 93,743 8,453 9,148 1,913 2,043 6,012 7,384 12,370 9,762 126,038 127,326

Acquisition of property, plant and equipment 3 50 1,305 1,442 38,953 47,474 182 471 477 2 23 190 612 - 41,555 49,629 Assets Received Free of Charge - - - - - - - - - - - - - 9,859 - 9,859 Reversal of impairment on Non Financial Assets - - - - - - - - - - - - - 5,286 - 5,286 Revaluation of Non-Financial Assets - - - - - - - - - - - - - 8,794 - 8,794 Depreciation expense 88 81 1,336 1,564 26,095 22,782 842 249 20 25 1,164 499 802 - 30,347 25,200


45


Note 20: Segment Reporting continued

Business Segments

Residential Aged Care Services (RACS)The Commonwealth Government regulates and partly funds the provision of residential care for older people who can no longer live independently in their own home. Carinya is a 30-bed purpose built Aged Persons Mental Health Residential Care Facility designed to provide high level specialist nursing care to residents with complex mental health diagnoses.

Personal Alarm Call Systems (MEPACS)MEPACS provides personal alarm services to private clients as well as government funded (PAV) clients. Personal Alert Victoria (PAV) is a 24 hour personal monitoring service that responds to calls for assistance and is funded by the Victorian Government through the Department of Health. This segment reporting note excludes some corporate costs and significant capital expenditure items.

Acute CarePeninsula Health provides inpatient and outpatient care within the areas of general and specialty medical and surgical services, maternity, paediatric and emergency services.

Mental HealthPeninsula Mental Health Service provides a range of mental health services including aged and adult acute inpatient services, community liaison early intervention acute and recovery services (CLEARS), consultation liaison inpatient psychiatric services (CLIPS) and community care units (residential care).

Aged CarePeninsula Health provides a range of inpatient, interim care and domiciliary aged care and rehabilitation services as well as palliative care and Hospital in the Home services.

Primary HealthPeninsula Health provides support for the community in the areas of audiology, counselling, nutrition, podiatry, physiotherapy, cardiac rehabilitation, diabetes education, health education and health promotion.

Geographical SegmentPeninsula Health operates predominantly in Melbourne (South Eastern Suburbs and Mornington Peninsula), Victoria. Peninsula Health's revenue, net surplus from ordinary activities and segment assets relate to operations in that area.


46


Note 21: Responsible Persons Disclosures

(a) Responsible Persons

Responsible MinisterThe Honourable David Davis MLC, Minister for Health and Minister for Ageing 1-Jul-2014 3-Dec-2014The Honourable Mary Wooldridge MP, Minister for Mental Health 1-Jul-2014 3-Dec-2014The Honourable Jill Hennessy, Minister for Health, Minister for Ambulance Services 4-Dec-2014 30-Jun-2015The Honourable Martin Foley, Minister for Housing, Disability and Ageing, Minister for Mental Health 4-Dec-2014 30-Jun-2015

Governing BoardMs Nancy Hogan 1-Jul-2014 30-Jun-2015Mr Michael Tiernan 1-Jul-2014 30-Jun-2015Mr Geoffrey Rankin 1-Jul-2014 30-Jun-2015Professor Henry Ekert AM 1-Jul-2014 30-Jun-2015Mr Jonathan Tribe 1-Jul-2014 30-Jun-2015Ms Erika Wilke 1-Jul-2014 30-Jun-2015Mr Michael Carroll 1-Jul-2014 30-Jun-2015Dr Laurie Warfe 1-Jul-2014 30-Jun-2015Ms Bronwyn Lewis 14-Oct-2014 30-Jun-2015

Accountable OfficerDavid Anderson 1-Jul-2014 3-Aug-2014Sue Williams 4-Aug-2014 30-Jun-2015

(b) Remuneration of Responsible Persons & Accountable Offi cer

2015 2014No. No.

Income Band$0 - $9,999 1 1$10,000 - $19,999 1 -$20,000 - $29,999 6 7$40,000 - $49,999 1 1$120,000 - $129,999 - 1$340,000 - $349,999 1 -$440,000 - $449,000 - 1

Total Numbers 10 11

$'000 $'000

Total remuneration for the reporting period for Responsible Persons included above amounted to: 527 768

(c) Other Transactions of Responsible Persons and their R elated Parties

Period

Amounts relating to the Responsible Ministers is reported in the financial statements of the Department of Premier and Cabinet.

There were no other transactions between the Health Service and the Responsible Persons or their Related parties.

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.

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


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Note 22: Executive Officer Disclosures

Executive Officer Remuneration

The number of executive officers, other than Ministers and Accountable Officers, and their total remunerationduring the reporting period are shown in the first and third column in the table below in their relevant income bands.The base remuneration of executive officers is shown in the second and fourth column. Base remuneration isexclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefits.The total annualised employee equivalent provides a measure of full time equivalent executive officers over the reporting period.

TOTAL BASE TOTAL BASEIncome Band No. No. No. No.

$10,000 - $19,999 - - 1 1

$50,000 - $59,999 2 3 - -

$60,000 - $69,999 1 - - -

$110,000 - $119,999 - - - 1

$120,000 - $129,999 - 1 1 -

$130,000 - $139,999 - - - 1

$140,000 - $149,999 1 - - -

$150,000 - $159,999 - - 1 -

$180,000- $189,999 - - - 1

$200,000 - $209,999 - - - 1

$210,000 - $219,999 - 1 - -

$220,000 - $229,999 - - 1 -

$230,000 - $239,999 - 1 1 2

$240,000 - $249,999 1 2 - -

$250,000 - $259,999 - - - -

$260,000 - $269,999 - - - -

$270,000 - $279,999 1 - 2 -

$280,000 - $289,999 2 - - -

Total number of executives 8 8 7 7

Total annualised employee equivalent (AEE)* 5.3 5.3 5.5 5.5

$'000 $'000 $'000 $'000

Total remuneration for the reporting period for Executive Officers included above amounted to: 1,413 1,225 1,302 1,134

* Annualised employee equivalent is based on working 40 ordinary hours per week over the reporting period.

Note 23: Remuneration of Auditors2015 2014$'000 $'000

Audit fees paid or payable to the Victorian Auditor-General'sOffice for audit of Peninsula Health's financial statements:- Paid and Payable as at 30 June 105 102 Total Paid and Payable 105 102

Note 24: Ex Gratia Payments2015 2014$'000 $'000

Peninsula Health has made the following ex gratia payments:- Ex gratia payments 25 5 Total Paid 25 5

Note 25: Subsequent Events

The term of office for three Board members expired on 30 June 2015. Replacement Board members have not yet beenappointed by the Minister for Health.

There have been no other events subsequent to reporting date that require additional disclosure.

2015 Remuneration 2014 Remuneration


48


Note 26: Discontinued Operation

Financial information relating to the discontinued operation for the period to the date of disposal is set out below.The financial performance and cashflow information presented are for the four months ended 30 October 2014and the year ended 30 June 2015.

(a) Net result from discontinued operations

2015 2014$'000 $'000

Revenue from ordinary activities 547 1,747 Expenses from ordinary activities (1,383) (2,120)Net Result (836) (373)

Gain/(Loss) on disposal of Operation 155 - Net Result from Discontinued Operation (681) (373)

Net Cash Inflow/(Outflow) from Operating Activities (836) (373)Net Cash Inflow/(Outflow) from Investing Activities (2014 includes an inflow of $1,954,000 from the sale of RRAC) 2,143 1,954 Total Cash Inflow/(Outflow) from Discontinued Operation 1,307 1,581

(b) Details of the sale of Michael Court Hostel

Consideration received or receivable:- Cash (net of direct selling costs) 2,143 - - Less direct selling costs (100) - Total disposal consideration 2,043 -

Carrying amounts of assets and liabilities as at the date of sale were:- Property, plant and equipment 1,888 - Total Assets 1,888 -

- Liabilities - - Total Liabilities - -

Net Assets 1,888 -

Gain/(Loss) on Disposal of Operation 155 -


In July 2014 the Commonwealth Government introduced the Aged Care reform which introduced significant changes to the provision of Aged Care. The Department of Health and Human Services also changed its policy seeking to transfer responsibility for Public Sector Residential Aged Care Service (PSRACS) to the private or not for profit sector.As part of Peninsula Health’s strategic planning it was not financially sustainable to continue operating residential Mental Health Aged Care facilities in the two locations. In August 2014, the process was commenced to discontinue providing low level care to residents at Michael Court Hostel and over the ensuing months, all Residents were transferred to other Residential Aged Care Facilities within the area. The facility was closed on 30 October 2014 once all residents were transferred. The land and buildings were sold in May 2015 and the effect of this disposal reported in these financial statements as a discontinued operation.

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