It is the responsibility of each Health Service to ensure that the annual report includes the financial statements and audit report issued by VAGO. It is recommended that the report of operations, the financial statements and explanatory notes are contained within the same bound publication, and not as separate publications. However, given the shortened timeframes for preparing the financial statements and the annual report, it may be necessary for some Health Services to finalise and print their report of operations early. When finalised, the financial statements can then be printed for insertion into the annual report. It should be bound to/attached securely (i.e. stapled) to the annual report. Health Services are therefore required to ensure that if the financial statements are provided to an external printer that they are proof read to ensure that the completed document agrees with the format, content and presentation as audited by VAGO. Failure to comply with the above will delay the tabling of the Health Service’s annual report and may necessitate an addendum, erratum or in extreme cases a reproduction and re-tabling of the Health Services annual report to Parliament. Any amended financial statements must be submitted to VAGO for audit review. Please note: (1) For ease of reading the financial statements, it is recommended that a font size of no less than 10 be used in the printing of these statements and for ease of storing it is recommended that the size of the annual report should be A4 size. (2) The financial statements should be bound to / attached securely (i.e. stapled) to the annual report. This is to minimise the possibility of the financial statements being detached from the annual report when being sent to Parliament for tabling. The financial statements must be processed in accordance with the yearly timetable to ensure compliance with the requirements under the Act. DHHS will collect each Health Service’s annual reports, including the report of operations, the financial statements and the audit report, by 17 August 2015, and this in turn will be submitted to the Minister for tabling Health Services should provide the required number of copies of the annual report as audited by VAGO to regional offices as per below: Metropolitan Health Services and Denominational Health Services: Manager Commercial Operations, 13/50 Lonsdale Street, Melbourne; Dental Health Services Victoria: Manager, Dental Health, 19/50 Lonsdale St, Melbourne Regions: Manager, Cabinet Parliament and Executive Services, 21/50 Lonsdale St, Melbourne • • •
Commentary - Controlled entities An entity is controlled when the controlling entity is exposed, or has rights to variable returns from its involvement with the entity it controls, and has the ability to affect those rturns through its power over the controlled entity. AASB 10 (which superceds AASB 127 Consolidated and Separate Financial Statements) focuses on ‘control’ in determining whether an entity needs to consolidate another entity. Under AASB 10, control is assessed on the achievement of all three criteria; i.e. power over the investee; exposure or rights to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of the investor’s return. If all three criteria are met, the ‘control’ test will be met and the entity will need to be consolidated. It is strongly encouraged to liaise with VAGO once an assessment has been made. Guidance Note: Economic dependency Where a health service forms a view based on the criteria below, and any other relevant criteria, that they require a letter of support from the State Government, this should be discussed with the health service’s audit services provider. The text below is to be used as a guide only as individual hospital circumstances may differ. The financial performance and position of <ABC Health Service> has declined since the prior year, with the health service reporting a deficit net result before capital and specific items of $X,XXX,XXX (2014: $X,XXX,XXX), a net current asset position of $X,XXX,XXX (2014: $X,XXX,XXX), resulting in a current asset ratio of 0.XX (2014: 0.XX) and a (continued) cash outflow from operations of $X,XXX,XXX (2014: $X,XXX,XXX). Commentary – Economic dependency