1999-2000
Part D - Budgeted Financial Statements
The 1999-2000 Portfolio Budget Statements, informs Senators and Members of Parliament of the proposed allocation of resources to portfolios outcomes and their objectives and targets including the agencies within the Health and Family Services portfolio.
Financial Statements
The following budgeted departmental/agency and administered financial statements for the Portfolio of Health and Aged Care are presented in this section. The budgeted financial statements will form the basis of the financial statements that will appear in the Annual Reports of the Portfolio agencies, and form the basis for the input into the Whole of Government Accounts.
Budgeted Statement of Revenues and Expenses (Budgeted Operating Statement)
This statement provides a picture of the expected financial results for the Department/Agency by identifying full accrual expenses and revenues, which highlights whether the Department/Agency is operating at a sustainable level in the short run.
Budgeted Statement of Assets and Liabilities (Budgeted Balance Sheet)
Shows the financial position of the Department/Agency. It enables decision-makers to track the management of the Department's/Agency's assets and liabilities.
Budgeted Cash Flow Statement
Budgeted cash flows, as reflected in the statement of cash flows, provides important information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities.
Capital Budget
Shows all proposed capital expenditure funded either through the Budget as appropriation by equity injections or as loans, and/or appropriations for administered capital, or as funds from internal sources or as funds from other sources.
Non-financial Assets - Summary of Movement
This statement shows only the Budget year 1999-2000.
1. Department of Health and Aged Care
Departmental Overview
The Department's role is to provide expert advice to Government, to finance health and aged care services, and to develop strategic directions in the provision of quality, cost-effective health and aged care services to all Australians.
Priority outcomes have been developed to enable all Australians access to appropriate health and aged care services. The Department is responsible for the funding of medical services, medicines and acute care services, and for providing care and/or support for the frail aged, the disabled and their carers. The Department is committed to improving the health status of Aboriginal and Torres Strait Islander peoples, to improving access to quality care for Australians living in rural and remote regions, and to considering the needs of other disadvantaged groups. Strategies are being developed in consultation with other agencies and relevant stakeholders to help minimise the incidence and severity of preventable mortality, illness, injury and disability, and to improve the quality, integration and effectiveness of care.
The Department is committed to a collaborative approach to the planning and implementation of best practice medicine and aged care facilities. Divisions work in partnership with other governments, professional bodies, other key stakeholders and the community, and demonstrate teamwork and leadership in the health and aged care sector.
During 1999-2000 the Department will be negotiating a new certified agreement with personnel, and will continue to find effective ways to manage information and communication across the portfolio. Divisions will also be administering the transition to the new outcome structure, which will have implications for financial management and performance reporting across the Department.
Further information on the role of the Department can be found under the description of each of the Portfolio Outcomes.
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Table D1.1: Budgeted Statement of Revenues and Expenses
Table D1.2: Budgeted Statement of Assets and Liabilities
Table D1.3: Budgeted Cash Flow Statement
Table D1.4: Capital Budget
Table D1.5: Non-financial Assets - Summary of Movement
2. Australia New Zealand Food Authority
Agency Overview
The Australia New Zealand Food Authority (ANZFA), in cooperation with the Australian Commonwealth, State, and Territory governments and the New Zealand Government, develops food standards and other food regulatory measures for Australia and New Zealand. Once the Australia New Zealand Food Standards Council (ANZFSC) approves a food standard they are published in the 'Food Standards Code' and are adopted by reference in State and Territory law. Food standards are gazetted in New Zealand by the New Zealand Minister of Health.
In Australia, ANZFA also:
- coordinates the surveillance of food;
- coordinates food product recalls in cooperation with the States and Territories;
- conducts research on matters that may be included in a food standard;
- undertakes food safety education initiatives in cooperation with the States and Territories;
- develops codes of practice for industry on any matter that may be included in a food standard; and
- develops risk assessment policies for foods imported into Australia.
Table D2.1: Budgeted Statement of Revenues and Expenses
Table D2.2: Budgeted Statement of Assets and Liabilities
Table D2.3: Budgeted Cash Flow Statement
Table D2.4: Capital Budget
Table D2.5: Non-financial Assets - Summary of Movement
3. Australian Radiation Protection and Nuclear Safety Agency
Agency Overview
Activities of the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) during 1999-2000 reflect the functions of the Chief Executive Officer (CEO) as expressed in the Australian Radiation Protection and Nuclear Safety Act 1998.
During 1999-2000 the Agency will continue to implement new regulatory controls in respect of all Commonwealth radiation and nuclear activities. Other priorities include: regulating the siting, construction, commissioning and operation of the proposed replacement research reactor; promotion of uniformity in radiation protection law in Australia; the clean-up of Maralinga; participation in the Comprehensive Test Ban Treaty; and informing and educating in relation to the safe use of medical radiation and UV and other non-ionising radiation.
Further information on the role of ARPANSA can be found under Outcome 1.
Table D3.1: Budgeted Statement of Revenues and Expenses
Table D3.2: Budgeted Statement of Assets and Liabilities
Table D3.3: Budgeted Cash Flow Statement
Table D3.4: Capital Budget
Table D3.5: Non-financial Assets - Summary of Movement
4. Health Insurance Commission
Agency Overview
The Health Insurance Commission (HIC) is a statutory authority created under the Health Insurance Act 1973, within the Health and Aged Care Portfolio.
The HIC administers a range of government programs on behalf of the Department of Health and Aged Care, including Medicare, Pharmaceutical Benefits Scheme (PBS), aspects of the 30% Private Health Insurance Rebate, Australian Childhood Immunisation Register (ACIR), General Practice Immunisation Incentives (GPII), Practice Incentives Program (PIP), payments to hearing services providers, and compensation recoveries for Medicare and nursing home benefits. The HIC also administers the Commonwealth Childcare Rebate and Veterans' Treatment Accounts for other Departments.
In most of these programs, the HIC processes claims and benefits and records relevant data. The HIC is also responsible for preventing and detecting the occurrence of fraud and inappropriate servicing within Medicare and the PBS.
The relationship between the HIC and the Department is underpinned by a service level agreement, known as the Strategic Partnership Agreement, and by a funding agreement, known as the Output Pricing Agreement.
Table D4.1: Budgeted Statement of Revenues and Expenses
Table D4.2: Budgeted Statement of Assets and Liabilities
Table D4.3: Budgeted Cash Flow Statement
Table D4.4: Capital Budget
Table D4.5: Non-financial Assets - Summary of Movement
5. Professional Services Review
Agency Overview
The Professional Services Review (PSR) Scheme is founded on a process of peer review which focuses on a practitioner's conduct to determine whether the practitioner has inappropriately rendered or initiated services which attract a Medicare benefit, or has inappropriately prescribed under the Pharmaceutical Benefits Scheme. Practitioners whose conduct may be examined under the Scheme are doctors, dentists, optometrists, chiropractors, physiotherapists and podiatrists. The Scheme is the Government's primary means of investigating inappropriate practice.
The review process has three distinct and independent processes: referral by the Health Insurance Commission of a practitioner to the Director of Professional Services Review (DPSR) for review where there is concern about his or her practice; the hearing of, and reporting on, the referral by a Professional Services Review Committee made up of members of the profession or specialty of which the person under review is a member; and the making of a determination on the appropriate sanction to be applied by an independent Determining Officer, currently located in the Department of Health and Aged Care.
Appeals are permitted to an independent Professional Services Review Tribunal and on points of law to the Federal Court.
A recent review of the Scheme by a committee chaired by the Australian Medical Association has recommended substantial changes to this administrative structure.
Currently the PSR is a separate agency within the Minister's portfolio and provides administrative support to the review committees. The Department provides administrative support to the Determining Officer and retains responsibility for policy aspects of the Scheme.
Table D5.1: Budgeted Statement of Revenues and Expenses
Table D5.2: Budgeted Statement of Assets and Liabilities
Table D5.3: Budgeted Cash Flow Statement
Table D5.4: Capital Budget
Table D5.5: Non-financial Assets - Summary of Movement
6. Private Health Insurance Ombudsman
Agency Overview
The Private Health Insurance Ombudsman (PHIO) contributes to the outcome of a viable private health industry by improving consumer and provider confidence in private health insurance through provision of a high quality information and dispute resolution service. PHIO is committed to ensuring that its service is accessible, effective, objective, timely and customer driven. An expansion of PHIO's existing successful information and dispute resolution service is planned for 1999-2000.
Further information on the role of PHIO can be found under Outcome 3.
Table D6.1: Budgeted Statement of Revenues and Expenses
Table D6.2: Budgeted Statement of Assets and Liabilities
Table D6.3: Budgeted Cash Flow Statement
Table D6.4: Capital Budget
Table D6.5: Non-financial Assets - Summary of Movement
7. Private Health Insurance Administration Council
Agency Overview
The Private Health Insurance Administration Council (PHIAC), a statutory body reporting to the Minister of Health and Aged Care, works in conjunction with the Department to promote a viable private health industry via their role of monitoring and regulating the private health insurance industry. During the 1999-2000 financial year, the PHIAC will:
- implement the new legislation and in particular develop new prudential standards for the industry; and,
- implement other initiatives such as reinsurance arrangements.
The Private Health Insurance Administration Council received $1.308m direct from the private health insurance industry in 1998-99. The Council will not determine its 1999-2000 budget until late May 1999. For this reason only tables 7.1 and 7.2 have been included in this document.
Table D7.1: Budgeted Statement of Revenues and Expenses
Table D7.2: Budgeted Statement of Assets and Liabilities
8. Aged Care Standards and Accreditation Agency
Agency Overview
The Aged Care Standards and Accreditation Agency has four roles. These are:
- the management of the residential aged care accreditation process;
- assisting services to improve service quality through education and training, information dissemination and identification of best practice;
- conduct assessments and strategic management of services not yet ready for accreditation, including management of facilities where complaints or regular liaison suggest there may be systematic under-performance against the Residential Care Standards; and
- liaison with the Department regarding those services identified as not meeting the Residential Care Standards.
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Table D8.1: Budgeted Statement of Revenues and Expenses
Table D8.2: Budgeted Statement of Assets and Liabilities
Table D8.3: Budgeted Cash Flow Statement
Table D8.4: Capital Budget
Table D8.5: Non-financial Assets - Summary of Movement
9. Australian Institute of Health and Welfare
Agency Overview
The Australian Institute of Health and Welfare will assist in the achievement of this outcome by informing community discussion and decision making through national leadership in the development and provision of authoritative and timely information and analysis on the health and welfare of Australians.
During 1999-2000, the Australian Institute of Health and Welfare will focus on:
- improved information on health and community services available to the community and for decision making at all levels;
- national cooperative approach to the development and production of national health and community services statistics and information;
- developing a nationally cooperative approach to the development and production of housing assistance information; and
- national statistics and information that provide a valid and reliable basis for decision making on the wellbeing of the Indigenous peoples.
Table D9.1: Budgeted Statement of Revenues and Expenses
Table D9.2: Budgeted Statement of Assets and Liabilities
Table D9.3: Budgeted Cash Flow Statement
Table D9.4: Capital Budget
Full Set of Notes to the Financial Statements
Note Description
- 1 Summary of Significant Accounting Policies
2 Segment Reporting
3 Economic Dependency
4 Goods and Services Expenses
5 Operating Revenue from Independent Sources
6 Revenues from Government
7 Provisions and Payables
8 Financial Assets
9 Non-Financial Assets
10 Financial Instruments
1 Summary of Significant Accounting Policies
1.1 Basis of accounting
As per year ended 30 June 1998, the financial statements are a general purpose financial report
They have been prepared in accordance with
- The hypothetical presentation as per Estimates Memorandum 1999/25 covering the 1999-2000 Portfolio Budget Statements (PBS) - Final Guidelines issued by the Department of Finance and Administration on 20 April 1999, and
- Guidelines titled Financial Statements of Commonwealth Authorities issued by the Minister for Finance and Administration in July 1997 (the 'Guidelines') which require that the financial statements are prepared
- in compliance with Australian Accounting Standards and Accounting Guidance Releases issued by the Australian Accounting Research Foundation, and
- having regard to Statements of Accounting Concepts, and the Consensus Views of the Urgent Issues Group.
1.2 Rounding
As per year ended 30 June 1998, amounts are rounded to the nearest $1,000.
1.3 Taxation
The Australian Institute of Health and Welfare (the Institute) is exempt from all forms of taxation except fringe benefits tax.
1.4 Inventories
Inventories held represent Institute publications for sale. Inventories are valued at cost or net realisable value, whichever is the lowest.
From 15 September 1997 all sales of the Institutes publications have been under an arrangement whereby proceeds from sales are distributed on a 50 - 50 consignment arrangement with AusInfo (formely Australian Government Publishing Service)
1.5 Infrastructure, plant and equipment
As per year ended 30 June 1998, purchases of infrastructure, plant and equipment are recognised initially at cost in the Statement of Assets and Liabilities, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total). The $2,000 threshold was selected because it facilitates efficient asset management and recording without materially affecting asset values recognised. The acquisition of infrastructure, plant and equipment free of charge or for a nominal amount is recognised initially at fair value. The Guidelines require that infrastructure, plant and equipment be progressively revalued in accordance with the 'deprival' method of valuation (as set out in the Guidelines on Accounting Policy for Valuation of assets of Government Trading Enterprises).
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The Institute is implementing its progressive revaluations as follows:
- infrastructure, plant and equipment will be initially revalued over the financial year 1998-99, and thereafter over successive three-year periods.
The financial effect of the move to progressive revaluations is that the carrying amounts of assets will reflect current values and that depreciation charges will reflect the current cost of the service potential consumed in each period.
The application of the deprival method by the Institute will result in its assets being valued at their depreciated replacement cost. Any assets which would not be replaced or are surplus to requirements are valued at net realisable value. At 30 June 1998 there were no assets in this situation.
Depreciable infrastructure, plant and equipment assets are written off to their estimated residual values over their estimated useful life to the Institute using, the straight line method of depreciation. Useful lives and residual values are reviewed at each balance date and necessary adjustments made.
Fitout is amortised on a straight line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.
As per year ended 30 June 1998, depreciation and amortisation rates applying to each class of depreciable asset are as follows:
Leasehold fit-out Lease term
Plant and equipment 5 to 10 years
The aggregate amount of depreciation allocated for each class of asset during the reporting period is disclosed in Note 4C.
1.6 Liability for employee entitlements
The liability for employee entitlements encompasses provisions for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken by employees is less than the annual entitlement for sick leave.
The provision for annual leave reflects the value of total annual leave entitlements of all employees at 30 June and is recognised at its nominal value.
The liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at 30 June. In determining the present value of the liability, attrition rates and pay increases through promotion and inflation have been taken into account.
Provision is also made for separation and redundancy payments in circumstances where the Institute has formally identified positions as excess to requirements and a reliable estimate of the amount of the payments can be determined.
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1.7 Income in advance and services provided in advance
Contract income has been recorded in the Operating Statement to the extent that an equivalent amount of output has been produced. Any surplus contract income over output produced is recorded as income in advance in the Statement of Assets and Liabilities. Conversely, any output produced in excess of contract income received is recorded as services provided in advance in the Statement of Assets and Liabilities.
1.8 Leases
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased assets and operating leases, under which the lessor effectively retains all such risks and benefits.
There are no finance leases.
Operating lease payments are charged to expense on a basis which is representative of the pattern of benefits derived from the leased assets. The net present value of future net outlays in respect of surplus space under non-cancellable lease agreements is expensed in the period in which space becomes surplus.
1.9 Bad and doubtful debts
Bad debts are written off to expense during the year in which they are identified, to the extent they have not previously been provided for. A provision is raised for doubtful debts based on a review of all outstanding receivables at year end.
1.10 Cash
For the purpose of the Statement of Cash Flows, cash includes estimated deposits held at call with a bank.
1.11 Resources received free of charge
Estimated resources received free of charge are recognised as revenues in the Operating Statement where their fair value can be reliably measured. Use of the resources is recognised as an expense, or, where there is a long term benefit, an asset is recognised.
1.12 Comparative figures
Where necessary, comparative figures have been adjusted to conform with changes in presentation in these financial statements.
1.13 Changes in accounting policies
Where applicable changes in accounting policy are identified in these notes under their appropriate headings.
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2 Segment reporting
The Institute operates in a single industry and geographic segment, being provision of government programs in Australia.
3 Economic dependency
The Institute is dependent on appropriations from Parliament to meet its current obligations and to carry out its normal activities.
4 Revenues from government
4A. Parliamentary appropriations
Appropriation Act No. 1 7,703 8,062 7,846 7,843 7,889
4B. Resources received free of charge
Provision of facilities by the Department
of Health and Family Services now
Department of Health and Aged Care 160 160 160 160 160
5 Operating revenue from independent sources
5A. Interest
Cash at bank 50 50 50 50 50
5B. Other revenues
Consultancy, Recoveries, Publications,
Conferences 186 186 186 186 186
6 Goods and services expenses
6A. Employee expenses
The separation and redundancy expense is calculated on the basis of two weeks pay for every year of service by employees made redundant. No estimate has been made for separation/redundancy expenses. The Institute contributes to the Commonwealth Superannuation (CSS) and the Public Sector (PSS) superannuation schemes which provide retirement, death and disability benefits to employees. Contributions to the schemes are at rates calculated to cover existing and emerging obligations. Current contribution rates are 19.9% of salary (CSS) and 11.4% of salary (PSS). An additional 3% is contributed for employer productivity benefits.
Estimated
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6B. Depreciation and amortisation
Actual Estimated Estimated Estimated Estimated
1998-99 1999-2000 2000-01 2001-02 2002-03
Depreciation of infrastructure,
plant and equipment $'000 $'000 $'000 $'000 $'000
450 421 193 175 195
The aggregate amounts of depreciation or amortisation allocated during the reporting period, as expense, for each class of depreciable asset are as follows:
6C. Suppliers expenses
Suppliers expenses is an estimate of:
Supply of goods and services
Operating lease rentals
Contracted services
7 Provisions and payables
7A. Liabilities to employees
Aggregate employee entitlement liability 2,232 2,299 2,336 2,373 2,411
8 Financial assets
8A. Cash
Balance of cash as at 30 June shown in
the Statement of Cash Flows 1,893 1,518 1,323 1,106 885
9 Non-financial assets
9A. Infrastructure, plant and equipment
Infrastructure, plant and equipment at cost 2,569 2,918 3,089 3,258 3,428
Accumulated depreciation 1,909 2,330 2,523 2,698 2,894
Total Infrastructure, plant and equipment 659 588 566 560 534
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9B. Analysis of infrastructure, plant and equipment
 | Fitout $'000 | Other Infrastructure, plant and equipment $'000 | Total $'000 |
| Gross value as at 1 July 1999
Additions Disposals Other movement | 893
280 0 | 1,676 70 0 | 2,569 350 0 |
| Gross value as a | 1,173 | 1,746 | 2,919 |
| Accumulated Depreciation
As at 1 July 1999 Disposals Charge for the readjustment for d Other movement As at 30 June | 647 0 272 0 0 919 | 1,262 0 149 0 0 1,411 | 1,909 0 421 0 0 2,330 |
| Net book value at | 254 | 335 | 589 |
| Net book value at | 246 | 414 | 660 |
9C. Other
Inventories held for sale (net realisable value), prepayments 166 166 166 166 166
10 Financial Instruments
10A. Foreign exchange risk
The Institute has not entered into any foreign currency transactions
10B. Credit risk exposures
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
The credit risk on financial assets of the Institute which have been recognised on the balance sheet, is the carrying amount, net of any provision for doubtful debts. Due to the nature of the majority of the Institute's clients (mainly Commonwealth Government), such risk is considered by the Directors to be very low.
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10C. Net fair values of financial assets and liabilities
The net fair value of the Institute's financial assets and financial liabilities approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the balance sheet and in the notes to and forming part of the accounts.
