Auditor General

INDEPENDENT AUDITOR'S REPORT

To the Parliament of Western Australia

WA COUNTRY HEAL TH SERVICE

Report on the Financial Statements

Opinion
I have audited the financial statements of the WA Country Health Service which comprise the Statement of Financial Position as at 30 June 2018, the Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows for the year then ended, and Notes comprising a summary of significant accounting policies and other explanatory information.

In my opinion, the financial statements are based on proper accounts and present fairly, in all material respects, the operating results and cash flows of the WA Country Health Service for the year ended 30 June 2018 and the financial position at the end of that period. They are in accordance with Australian Accounting Standards, the Financial Management Act 2006 and the Treasurer's Instructions.

Basis for Opinion
I conducted my audit in accordance with the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Health Service in accordance with the Auditor General Act 2006 and the relevant ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial statements. I have also fulfilled my other ethical responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Responsibility of the Board for the Financial Statements
The Board is responsible for keeping proper accounts, and the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards, the Financial Management Act 2006 and the Treasurer's Instructions, and for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board is responsible for assessing the agency's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Western Australian Government has made policy or funding decisions affecting the continued existence of the Health Service.

Auditor's Responsibility for the Audit of the Financial Statements
As required by the Auditor General Act 2006, my responsibility is to express an opinion on the financial statements. The objectives of my audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit in accordance with Australian Auditing Standards, I exercise professional judgment and maintain professional scepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the agency's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board.
• Conclude on the appropriateness of the Board's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the agency's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor's report.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Board regarding, among other matters, the planned scope and tiniing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Report on Controls

Opinion
I have undertaken a reasonable assurance engagement on the design and implementation of controls exercised by the WA Country Health Service. The controls exercised by the Health Service are those policies and procedures established by the Board to ensure that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities have been in accordance with legislative provisions (the overall control objectives).

My opinion has been formed on the basis of the matters outlined in this report.

In my opinion, in all material respects, the controls exercised by the WA Country Health Service are sufficiently adequate to provide reasonable assurance that the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities have been in accordance with legislative provisions during the year ended 30 June 2018.

The Board's Responsibilities
The Board is responsible for designing, implementing and maintaining controls to ensure that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities are in accordance with the Financial Management Act 2006, the Treasurer's Instructions and other relevant written law.

Auditor General's Responsibilities
As required by the Auditor General Act 2006, my responsibility as an assurance practitioner is to express an opinion on the suitability of the design of the controls to achieve the overall control objectives and the implementation of the controls as designed. I conducted my engagement in accordance with Standard on Assurance Engagements ASAE 3150 Assurance Engagements on Controls issued by the Australian Auditing and Assurance Standards Board. That standard requires that I comply with relevant ethical requirements and plan and perform my procedures to obtain reasonable assurance about whether, in all material respects, the controls are suitably designed to achieve the overall control objectives and the controls, necessary to achieve the overall control objectives, were implemented as designed.

An assurance engagement to report on the design and implementation of controls involves performing procedures to obtain evidence about the suitability of the design of controls to achieve the overall control objectives and the implementation of those controls. The procedures selected depend on my judgement, including the assessment of the risks that controls are not suitably designed or implemented as designed. My procedures included testing the implementation of those controls that I consider necessary to achieve the overall control objectives.

I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Limitations of Controls
Because of the inherent limitations of any internal control structure it is possible that, even if the controls are suitably designed and implemented as designed, once the controls are in operation, the overall control objectives may not be achieved so that fraud, error, or noncompliance with laws and regulations may occur and not be detected. Any projection of the outcome of the evaluation of the suitability of the design of controls to future periods is subject to the risk that the controls may become unsuitable because of changes in conditions.

Report on the Key Performance Indicators

Opinion
I have undertaken a reasonable assurance engagement on the key performance indicators of the WA Country Health Service for the year ended 30 June 2018. The key performance indicators are the key effectiveness indicators and the key efficiency indicators that provide performance information about achieving outcomes and delivering services.

In my opinion, in all material respects, the key performance indicators of the WA Country Health Service are relevant and appropriate to assist users to assess the Health Service's performance and fairly represent indicated performance for the year ended 30 June 2018.

Matter of Significance
The Under Treasurer approved the removal of the following indicator as an audited key performance indicator (KPI):

• Percentage of Emergency Department patients seen within recommended times (major rural hospitals)

The approval was conditional on its inclusion as an unaudited performance indicator in the Annual Report and that it be reinstated as an audited KPI following the implementation of a. new Emergency Department data collection system. A new system had not been developed at 30 June 2018. Consequently, the KPI has not been included in the audited KP ls for the year ended 30 June 2018. My opinion is not modified in respect of this matter.

Emphasis of Matter
Attention is drawn to the effectiveness indicator "Proportion of elective wait list patients waiting over boundary for reportable procedures". The notes to this indicator explain that comparative information has not been reported because of errors in the data used to calculate this KPI in 2016-17. My opinion is not modified in respect of this matter.

The Board's Responsibility for the Key Performance Indicators
The Board is responsible for the preparation and fair presentation of the key performance indicators in accordance with the Financial Management Act 2006 and the Treasurer's Instructions and for such internal control as the Board determines necessary to enable the preparation of key performance indicators that are free from material misstatement, whether due to fraud or error.

In preparing the key performance indicators, the Board is responsible for identifying key performance indicators that are relevant and appropriate having regard to their purpose in accordance with Treasurer's Instruction 904 Key Performance Indicators.

Auditor General's Responsibility
As required by the Auditor General Act 2006, my responsibility as an assurance practitioner is to express an opinion on the key performance indicators. The objectives of my engagement are to obtain reasonable assurance about whether the key performance indicators are relevant and appropriate to assist users to assess the agency's performance and whether the key performance indicators are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. I conducted my engagement in accordance with Standard on Assurance Engagements ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information issued by the Australian Auditing and Assurance Standards Board. That standard requires that I comply with relevant ethical requirements relating to assurance engagements.

An assurance engagement involves performing procedures to obtain evidence about the amounts and disclosures in the key performance indicators. It also involves evaluating the relevance and appropriateness of the key performance indicators against the criteria and guidance in Treasurer's Instruction 904 for measuring the extent of outcome achievement and the efficiency of service delivery. The procedures selected depend on my judgement, including the assessment of the risks of material misstatement of the key performance indicators. In making these risk assessments I obtain an understanding of internal control relevant to the engagement in order to design procedures that are appropriate in the circumstances. I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

My Independence and Quality Control Relating to the Reports on Controls and Key Performance Indicators
I have complied with the independence requirements of the Auditor General Act 2006 and the relevant ethical requirements relating to assurance engagements. In accordance with ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, and Other Assurance Engagements, the Office of the Auditor General maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Matters Relating to the Electronic Publication of the Audited Financial Statements and Key Performance Indicators
This auditor's report relates to the financial statements and key performance indicators of the WA Country Health Service for the year ended 30 June 2018 included on the Health Service's website. The Health Service's management is responsible for the integrity of the Health Service's website. This audit does not provide assurance on the integrity of the Health Service's website. The auditor's report refers only to the financial statements and key performance indicators described above. It does not provide an opinion on any other information which may have been hyperlinked to/from these financial statements or key performance indicators. If users of the financial statements and key performance indicators are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial statements and key performance indicators to confirm the information contained in this website version of the financial statements and key performance indicators.

[Image: Caroline Spencer signature (PDF only)]

CAROLINE SPENCER
AUDITOR GENERAL
FOR WESTERN AUSTRALIA
Perth, Western Australia
J.O September 2018

WA COUNTRY HEALTH SERVICE CERTIFICATION OF FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018

The accompanying financial statements of the WA Country Health Service have been prepared in compliance with the provisions of the Financial Management Act 2006 from proper accounts and records to represent fairly the financial transactions for the financial year ending 30 June 2018 and financial position as at 30 June 2018.

At the date of signing we are not aware of any circumstance which would render the particulars included in the financial statements misleading or inaccurate.

[Mr John Arkell signature (PDF only)]
MR JOHN ARKELL
CHIEF FINANCE OFFICER
WA COUNTRY HEALTH SERVICE
19 September 2018

[Professor Neale Fong signature (PDF only)]
PROFESSOR NEALE FONG
CHAIR WA COUNTRY HEALTH SERVICE BOARD
19 September 2018

[Mr Alan Ferris signature (PDF only)]
MR ALAN FERRIS
BOARD MEMBER
WA COUNTRY HEALTH SERVICE BOARD
19 September 2018

Statement of Comprehensive Income

For the year ended 30 June 2018

	Note	2018 $000	2017 $000
COST OF SERVICES
Expenses Employee benefits expense	3.1	1,002,713	958,399
Fees for visiting medical practitioners	3.2	85,859	84,071
Patient support costs	3.2	381,124	398,039
Finance costs	7.2	138	199
Depreciation and amortisation expense	5.1, 5.2	74,005	77,016
Asset revaluation decrement	5.1	17,566	54,218
Loss on disposal of non-current assets	5.1	3,406	1,338
Repairs, maintenance and consumable equipment	3.3	49,200	48,147
Other expenses	3.3	165,559	161,643
Total cost of services		1,779,570	1,783,070
INCOME
Revenue
Patient charges	4.4	67,187	68,996
Commonwealth grants and contributions	4.2	484,181	467,570
Other grants and contributions	4.3	95,652	102,849
Donation revenue		551	637
Other revenue	4.5	22,589	23,738
Total revenue		670,160	663,790
Total income other than income from State Government		670,160	663,790
NET COST OF SERVICES		1,109,410	1,119,280
INCOME FROM STATE GOVERNMENT
Service appropriations	4.1	948,805	943,451
Assets assumed	4.1	(67)	43
Services received free of charge	4.1	55,373	56,107
Royalties for Regions Fund	4.1	71,723	86,489
Total income from State Government		1,075,834	1,086,090
DEFICIT FOR THE PERIOD		(33,576)	(33,190)
OTHER COMPREHENSIVE INCOME/(LOSS)
Items not reclassified subsequently to profit or loss
Changes in asset revaluation reserve		-	-
Gains/(losses) recognised directly in equity		-	-
Total other comprehensive income		-	-
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD		(33,576)	(33,190)

Refer also to note 2.2 'Schedule of Income and Expenses by Service'.
The Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

Statement of Financial Position

As at 30 June 2018

	Note	2018 $000	2017 $000
ASSETS
Current assets
Cash and cash equivalents	7.3	18,173	18,949
Restricted cash and cash equivalents	7.3	25,342	37,369
Receivables	6.1	23,647	23,752
Inventories	6.3	5,157	5,270
Prepayments	6.3	4,328	5,067
Total Current Assets		76,647	90,407
Non-Current Assets
Restricted cash and cash equivalents	7.3	7,463	3,840
Amounts receivable for services	6.2	748,497	674,420
Property, plant and equipment	5.1	1,916,214	1,777,418
Intangible assets	5.2	17,338	13,941
Total Non-Current Assets		2,689,512	2,469,619
Total Assets		2,766,159	2,560,026
LIABILITIES
Current Liabilities
Payables	6.4	116,019	119,198
Borrowings	7.1	1,779	1,701
Provisions	3.1	143,401	131,606
Other current liabilities		52	22
Total Current Liabilities		261,251	252,527
Non-Current Liabilities
Borrowings	7.1	1,865	3,644
Provisions	3.1	27,885	26,405
Total Non-Current Liabilities		29,750	30,049
Total Liabilities		291,001	282,576
NET ASSETS		2,475,158	2,277,450
EQUITY
Contributed equity	9.9	2,541,924	2,310,640
Reserves		-	-
Accumulated deficit		(66,766)	(33,190)
TOTAL EQUITY		2,475,158	2,277,450

The Statement of Financial Position should be read in conjunction with the accompanying notes.

Statement of Changes in Equity

For the year ended 30 June 2018

	Note	2018 $000	2017 $000
CONTRIBUTED EQUITY	9.9
Balance at start of period		2,310,640	-
Transfer of net asset by owners		-	2,196,393
Transactions with owners in their capacity as owners:
Capital appropriations		27,781	20,439
Royalties for Regions Fund		206,831	94,506
Other contributions by owners		695	2
Distributions to owners		(4,023)	(700)
Balance at end of period		2,541,924	2,310,640
RESERVES
Asset Revaluation Reserve
Balance at start of period		-	-
Comprehensive income/(loss) for the period		-	-
Balance at end of period			-
ACCUMULATED SURPLUS
Balance at start of period		(33,190)	-
Deficit for the period		(33,576)	(33,190)
Balance at end of period		(66,766)	(33,190)
TOTAL EQUITY
Balance at start of period		2,277,450	-
Total comprehensive income/(loss) for the period		(33,576)	(33,190)
Transactions with owners in their capacity as owners		231,284	2,310,640
Balance at end of period		2,475,158	2,277,450

The Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Statement of Cash Flows

For the year ended 30 June 2018

	Note	2018 $000 Inflows (Outflows)	2017 $000 Inflows (Outflows)
CASH FLOWS FROM STATE GOVERNMENT
Service appropriations		874,584	855,497
Capital appropriations		26,080	18,815
Royalties for Regions Fund		278,554	180,995
Net cash provided by State Government		1,179,218	1,055,307
Utilised as follows:
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Employee benefits		(997,236)	(938,947)
Supplies and services		(604,092)	(636,892)
Receipts
Receipts from customers		64,412	70,696
Commonwealth grants and contributions		484,181	467,570
Other grants and contributions		95,653	102,849
Donations received		521	622
Other receipts		26,532	21,795
Net cash used in operating activities	7.3	(930,029)	(912,307)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments
Purchase of non-current physical assets		(258,369)	(149,067)
Net cash used in investing activities		(258,369)	(149,067)
Net increase / (decrease) in cash and cash equivalents		(9,180)	(6,067)
Cash and cash equivalents at the beginning of the period		60,158	-
Cash and cash equivalents transferred in from abolished entity		-	66,225
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD	7.3	50,978	60,158

The Statement of Cash Flows should be read in conjunction with the accompanying notes.

Notes to the Financial Statements

For the year ended 30 June 2018

Note 1: Basis of preparation

WA Country Health Service is a WA Government entity and is controlled by the State of Western Australia, which is the ultimate parent. It is a not-for-profit entity (as profit is not its principal objective).

A description of the nature of its operations and its principal activities have been included in the 'Overview' which does not form part of these financial statements.

These annual financial statements were authorised for issue by the Accountable Authority of the WA Country Health Service on 19 September 2018.

Statement of compliance

These general purpose financial statements have been prepared in accordance with:

1. The Financial Management Act 2006
2. The Treasurer's Instructions
3. Australian Accounting Standards including applicable interpretations
4. Where appropriate, those AAS paragraphs applicable for not-for-profit entities have been applied.

The Financial Management Act 2006 and the Treasurerʼs Instructions take precedence over the Australian Accounting Standards. Several Australian Accounting Standards are modified by the Treasurer's Instructions to vary application, disclosure format and wording. Where modification is required and has had a material or significant financial effect upon the reported results, details of that modification and the resulting financial effect are disclosed in the notes to the financial statements.

Basis of preparation

These financial statements are presented in Australian dollars applying the accrual basis of accounting and using the historical cost convention. Certain balances will apply a different measurement basis (such as the fair value basis). Where this is the case the different measurement basis is disclosed in the associated note. All values are rounded to the nearest thousand dollars

Judgements and estimates

Judgements, estimates and assumptions are required to be made about financial information being presented. The significant judgements and estimates made in the preparation of these financial statements are disclosed in the notes where amounts affected by those judgements and/or estimates are disclosed. Estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances.

Contributed equity

AASB Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities requires transfers in the nature of equity contributions, other than as a result of a restructure of administrative arrangements, to be designated by the Government (the owner) as contributions by owners (at the time of, or prior to, transfer) before such transfers can be recognised as equity contributions. Capital appropriations have been designated as contributions by owners by TI 955 Contributions by Owners made to Wholly Owned Public Sector Entities and have been credited directly to Contributed Equity.

The transfers of net assets to/from other agencies, other than as a result of a restructure of administrative arrangements, are designated as contributions by owners where the transfers are non-discretionary and non-reciprocal.

Note 2: WA Country Health Service outputs

How WA Country Health Service operates

This section includes information regarding the nature of funding the WA Country Health Service receives and how this funding is utilised to achieve its objectives. This note also provides the distinction between controlled funding and administered funding:

• WA Country Health Service objectives - Note 2.1
• Schedule of Income and Expenses by Service - Note 2.2

2.1 WA Country Health Service objectives

Mission

WA Country Health Serviceʼs purpose is to improve country peopleʼs health and wellbeing through access to quality services and by supporting people to look after their own health.

WA Country Health Service is predominantly funded by Parliamentary appropriations.

Services

The key services of WA Country Health Service are:

1. Public Hospital Admitted Services
The provision of healthcare services to patients in major rural hospitals that meet the criteria for admission and receive treatment and/or care for a period of time, including public patients treated in private facilities under contract to WA Health. Admission to hospital and the treatment provided may include access to acute and/or subacute inpatient services, as well as hospital in the home services. Public Hospital Admitted Services includes teaching, training and research activities provided by the public health service to facilitate development of skills and acquisition or advancement of knowledge related to admitted services. This Service does not include any component of the Mental Health Services reported under Service four “Mental Health Services”.

2. Public Hospital Emergency Services
The provision of services for the treatment of patients in emergency departments of major rural hospitals, inclusive of public patients treated in private facilities under contract to WA Health. The services provided to patients are specifically designed to provide emergency care, including a range of pre-admission, post-acute and other specialist medical, allied health, nursing and ancillary services. Public Hospital Emergency Services includes teaching, training and research activities provided by the public health service to facilitate development of skills and acquisition or advancement of knowledge related to emergency services. This Service does not include any component of the Mental Health Services reported under Service four “Mental Health Services”.

3. Public Hospital Non-admitted Services
The provision of major rural hospital services to patients who do not undergo a formal admission process, inclusive of public patients treated by private facilities under contract to WA Health. This Service includes services provided to patients in outpatient clinics, community based clinics or in the home, procedures, medical consultation, allied health or treatment provided by clinical nurse specialists. Public Hospital Non-Admitted Services includes teaching, training and research activities provided by the public health service to facilitate development of skills and acquisition or advancement of knowledge related to nonadmitted services. This Service does not include any component of the Mental Health Services reported under Service four “Mental Health Services”.

4. Mental Health Services
The provision of inpatient services where an admitted patient occupies a bed in a designated mental health facility or a designated mental health unit in a hospital setting; and the provision of non-admitted services inclusive of community and ambulatory specialised mental health programs such as prevention and promotion, community support services, community treatment services, community bed based services and forensic services. This Service includes the provision of state-wide mental health services such as perinatal mental health and eating disorder outreach programs as well as the provision of assessment, treatment, management, care or rehabilitation of persons experiencing alcohol or other drug use problems or cooccurring health issues. Mental Health Services includes teaching, training and research activities provided by the public health service to facilitate development of skills and acquisition or advancement of knowledge related to mental health or alcohol and drug services. This service includes public patients treated in private facilities under contract to WA Health.

5. Aged and Continuing Care Services
The provision of aged and continuing care services and community based palliative care services. Aged and continuing care services include programs that assess the care needs of older people, provide functional interim care or support for older, frail, aged and younger people with disabilities to continue living independently in the community and maintain independence, inclusive of the services provided by the WA Quadriplegic Centre. Aged and Continuing Care Services is inclusive of community based palliative care services that are delivered by private facilities under contract to WA Health, which focus on the prevention and relief of suffering, quality of life and the choice of care close to home for patients.

6. Public and Community Health Services
The provision of healthcare services and programs delivered to increase optimal health and wellbeing, encourage healthy lifestyles, reduce the onset of disease and disability, reduce the risk of long-term illness as well as detect, protect and monitor the incidence of disease in the population. Public and Community Health Services includes public health programs, Aboriginal health programs, disaster management, environmental health, the provision of grants to non-government organisations for public and community health purposes, emergency road and air ambulance services, services to assist rural based patients travel to receive care, and statewide pathology services provided to external WA Agencies.

7. Small Rural Hospital Services
Provides emergency care & limited acute medical/minor surgical services in locations 'close to home' for country residents/visitors, by small & rural hospitals classified as block funded. Include community care services aligning to local community needs.

2.2 Schedule of income and expenses by service                                              

	Public Hospital Admitted Services 2018 $000	Public Hospital Admitted Services 2017 $000	Public Hospital Emergency Services 2018 $000	Public Hospital Emergency Services 2017 $000	Public Hospital Non-Admitted Services 2018 $000	Public Hospital Non-Admitted Services 2017 $000	Mental Health Services (a) 2018 $000	Mental Health Services (a) 2017 $000
COST OF SERVICES
Expenses
Employee benefits expense	363,315	338,701	160,562	163,968	63,147	62,841	86,005	82,686
Fees for visiting medical practitioners	43,639	43,351	20,599	18,485	9,193	8,423	378	2,104
Patient support costs	125,477	134,308	32,280	36,077	20,482	17,088	3,934	4,863
Finance costs	81	91	22	54	12	22	-	-
Depreciation and amortisation expense	30,767	27,024	9,610	13,010	4,829	5,855	207	515
Asset revaluation decrement	6,851	41,709	1,230	1,869	527	913	351	50
Loss on disposal of non-current assets	2,306	453	559	144	345	119	0	68
Repairs, maintenance and consumable equipment	18,345	16,383	5,811	6,855	3,269	3,031	2,252	2,343
Other expenses	41,201	48,698	16,912	24,203	7,136	11,108	26,090	19,854
Total cost of services	631,982	650,718	247,585	264,665	108,940	109,400	119,217	112,483
Income
Patient charges	19,381	19,214	1,618	1,674	17,335	15,818	307	455
Commonwealth grants and contributions	199,127	179,861	54,609	56,644	34,207	34,381	25,754	22,995
Other grants and contributions	2,216	1,970	2,278	2,262	1,211	940	83,677	81,031
Donation revenue	270	316	115	64	15	44	13	23
Other revenue	7,674	3,793	2,923	1,683	2,112	363	1,514	830
Total income other than income from State Government	228,668	205,154	61,543	62,327	54,880	51,546	111,265	105,334
NET COST OF SERVICES	403,314	445,564	186,042	202,338	54,060	57,854	7,952	7,149
INCOME FROM STATE GOVERNMENT
Service appropriations	370,360	378,866	157,575	185,454	47,529	53,630	-	502
Assets assumed	38	36	(26)	1	(4)	-	(12)	-
Services received free of charge	19,718	20,843	7,704	8,335	3,390	3,455	3,710	3,540
Royalties for Regions Fund	4,314	17,947	13,564	7,177	1,870	2,975	688	3,048
Total income from State Government	394,430	417,692	178,817	200,967	52,785	60,060	4,386	7,090
DEFICIT FOR THE PERIOD	(8,884)	(27,872)	(7,225)	(1,371)	(1,275)	2,206	(3,566)	(59)

(a) Includes services in addition to those provided under agreement with the Mental Health Commission for specialised admitted patients and community mental health.

The Schedule of Income and Expenses by Service should be read in conjunction with the accompanying notes.

	Aged and Continuing 2018 $000	Aged and Continuing 2017 $000	Public and Community 2018 $000	Public and Community 2017 $000	Small Rural 2018 $000	Small Rural 2017 $000	Total 2018 $000	Total 2017 $000
COST OF SERVICES
Expenses
Employee benefits expense	95,025	98,812	115,656	108,377	119,003	103,014	1,002,713	958,399
Fees for visiting medical practitioners	205	162	794	642	11,051	10,904	85,859	84,071
Patient support costs	17,174	24,793	147,083	145,155	34,694	35,755	381,124	398,039
Finance costs	-	-	1	1	22	31	138	199
Depreciation and amortisation expense	2,575	2,837	3,787	6,373	22,230	21,402	74,005	77,016
Asset revaluation decrement	878	581	3,162	(864)	4,567	9,960	17,566	54,218
Loss on disposal of non-current assets	22	218	22	99	152	237	3,406	1,338
Repairs, maintenance and consumable equipment	3,019	4,142	3,830	4,864	12,674	10,529	49,200	48,147
Other expenses	18,754	13,536	31,918	28,586	23,548	15,658	165,559	161,643
Total cost of services	137,652	145,081	306,253	293,233	227,941	207,490	1,779,570	1,783,070
Income
Patient charges	11,997	12,565	12,982	15,780	3,567	3,490	67,187	68,996
Commonwealth grants and contributions	43,994	54,128	24,989	8,686	101,501	110,875	484,181	467,570
Other grants and contributions	1,819	2,124	4,049	4,541	402	9,981	95,652	102,849
Donation revenue	18	51	39	68	81	71	551	637
Other revenue	2,667	2,598	2,770	12,458	2,929	2,013	22,589	23,738
Total income other than income from State Government	60,495	71,466	44,829	41,533	108,480	126,430	670,160	663,790
NET COST OF SERVICES	77,157	73,615	261,424	251,700	119,461	81,060	1,109,410	1,119,280
INCOME FROM STATE GOVERNMENT
Service appropriations	64,090	49,662	227,679	212,619	81,572	62,718	948,805	943,451
Assets assumed	(12)	1	(30)	2	(21)	3	(67)	43
Services received free of charge	3,700	3,786	9,529	9,227	7,622	6,921	55,373	56,107
Royalties for Regions Fund	6,440	18,656	18,308	26,586	26,539	10,100	71,723	86,489
Total income from State Government	74,218	72,105	255,486	248,434	115,712	79,742	1,075,834	1,086,090
DEFICIT FOR THE PERIOD	(2,939)	(1,510)	(5,938)	(3,266)	(3,749)	(1,318)	(33,576)	(33,190)

The Schedule of Income and Expenses by Service should be read in conjunction with the accompanying notes.

Note 3: Use of our funding

Expenses incurred in the delivery of services

This section provides additional information about how WA Country Health Service's funding is applied and the accounting policies that are relevant for an understanding of the items recognised in the financial statements. The primary expenses incurred by WA Country Health Service in achieving its objectives and the relevant notes are:

	Notes	2018 $000	2017 $000
Employee benefits expense	3.1(a)	1,002,713	958,399
Employee benefits expense	3.1(a)	1,002,713	958,399
Employee benefits provisions	3.1(b)	171,286	158,011
Patient support costs	3.2	466,983	482,110
Repairs, maintenance, consumable equipment and other expenses	3.3	214,759	209,790

3.1(a) Employee benefits expense

	2018 $000	2017 $000
Salaries and wages	927,098	885,996
Superannuation - defined contribution plans	75,615	72,403
	1,002,713	958,399

Salaries and wages

Salaries and wages comprise of all costs related to employment including the value of the fringe benefits to employees plus the fringe benefits tax component, the value of superannuation contribution component of leave entitlements and redundancy

Superannuation expenses

The Government Employees Superannuation Board (GESB) and other fund providers administer public sector superannuation arrangements in Western Australia in accordance with legislative requirements. Eligibility criteria for membership in particular schemes for public sector employees vary according to commencement and implementation dates.

The superannuation expense recognised in the Statement of Comprehensive Income comprises employer contribution to the Gold State Superannuation Scheme (GSS), the West State Superannuation Scheme (WSS), the GESB Super Scheme (GESBS), or other superannuation funds. The employer contribution paid to the GESB in respect of the GSS is paid back to the Consolidated Account by the GESB.

The GSS is a defined benefit scheme for the purposes of employees and whole-of-government reporting. However, it is a defined contribution plan for agency purposes because the concurrent contributions (defined contributions) made by WA Country Health Service to GESB extinguishes WA Country Health Service's obligations to the related superannuation liability.

The WA Country Health Service has no liabilities under the Pension Scheme or the GSS. The liabilities for the unfunded Pension Scheme and the unfunded GSS transfer benefits attributable to members who transferred from the Pension Scheme, are assumed by the Treasurer. All other GSS obligations are funded by concurrent contributions made by WA Country Health Service to the GESB.

Employment on-costs expenses (workers compensation insurance) are included at note 3.3 'Repair, maintenance, consumable equipment and other expenses'.

3.1(b) Employee benefits provisions

Provision is made for benefits accruing to employees in respect of salaries and wages, annual leave, time off in lieu leave and long service leave for services rendered up to the reporting date and recorded as an expense during the period the services are delivered.

	2018 $000	2017 $000
Current
Employee benefits provisions
Annual leave (a)	64,774	61,864
Time off in lieu leave (a)	31,189	24,860
Long service leave (b)	44,025	42,083
Gratuities	1,226	935
Deferred salary scheme (c)	2,187	1,864
	143,401	131,606
Non-current
Employee benefits provisions
Long service leave (b)	27,198	25,910
Gratuities	687	495
	27,885	26,405
	171,286	158,011

(a) Annual leave liabilities and time off in lieu leave liabilities are classified as current liabilities as WA Country Health Service does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Assessments indicate that actual settlement of the liabilities is expected to occur as follows:

	2018 $000	2017 $000
Within 12 months of the end of the reporting period	77,449	69,251
More than 12 months after the end of the reporting period	18,514	17,473
	95,963	86,724

The provision for annual leave and time off in lieu leave is calculated at the present value of expected payments to be made in relation to services provided by employees up to the reporting date.

(b) Unconditional long service leave provisions are classified as current liabilities as WA Country Health Service does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Pre-conditional and conditional long service leave provisions are classified as non-current liabilities because WA Country Health Service has an unconditional right to defer settlement of the liability until the employee has completed the requisite years of service.

Assessments indicate that actual settlement of the liabilities is expected to occur as follows:

	2018 $000	2017 $000
Within 12 months of the end of the reporting period	11,718	11,254
More than 12 months after the end of the reporting period	59,505	56,739
	71,223	67,993

The provision for long service leave is calculated at present value as WA Country Health Service does not expect to wholly settle the amounts within 12 months. The present value is measured taking into account the present value of expected future payments to be made in relation to services provided by employees up to the reporting date. These payments are estimated using the remuneration rate expected to apply at the time of settlement, and discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

(c) The provision for the deferred salary scheme relates to WA Country Health Service's employees who have entered into an agreement to self-fund an additional twelve months leave to be taken in the fifth year of the agreement. Deferred salary scheme liabilities are classified as current liabilities as WA Country Health Service does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period.

Assessments indicate that actual settlement of the liabilities is expected to occur as follows:

	2018 $000	2017 $000
Within 12 months of the end of the reporting period	538	416
More than 12 months after the end of the reporting period	1,649	1,448
	2,187	1,864

Key sources of estimation uncertainty – long service leave

Key estimates and assumptions concerning the future are based on historical experience and various other factors that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Several estimates and assumptions are used in calculating the WA Country Health Serviceʼs long service leave provision. These include:

• Expected future salaries rates
• Discount rates
• Employee retention rates; and
• Expected future payments

Changes in these estimations and assumptions may impact on the carrying amount of the long service leave provision.

Any gain or loss following revaluation of the present value of long service leave liabilities is recognised as employee benefits expense.

3.2 Patient support costs

	2018 $000	2017 $000
Fees for visiting medical practitioners	85,859	84,071
Medical supplies and services	80,038	84,287
Domestic charges	10,320	9,818
Fuel, light and power	30,690	28,788
Food supplies	10,670	10,927
Patient transport costs	93,452	94,011
Aboriginal health services	36,367	35,685
Pathology services	41,557	46,749
Purchase of health care services	13,845	12,794
Purchase of outsourced medical services	28,526	26,680
Purchase of other outsourced services	25,192	27,921
Grant payments	10,467	20,379
Total patient support costs	466,983	482,110

Patient support costs are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any materials held for distribution are expensed when the materials are distributed.

3.3 Repairs, maintenance, consumable equipment and other expenses

	2018 $000	2017 $000
Repairs, maintenance and consumable equipment
Repairs and maintenance	29,617	25,570
Consumable equipment	19,583	22,577
Total repairs, maintenance and consumable equipment expenses	49,200	48,147
Other expenses
Communications	5,107	4,614
Computer services	2,049	2,858
Workers compensation insurance	13,935	14,985
Other employee related expenses	29,190	26,162
Insurance	6,161	5,125
Legal expenses	506	294
Motor vehicle expenses	5,110	4,357
Operating lease expenses	27,298	29,441
Printing and stationery	4,067	4,163
Doubtful debts expense	1,514	4,018
Purchase of outsourced services	21,095	18,014
Shared services costs	31,799	26,536
Other	17,728	21,076
Total other expenses	165,559	161,643

Other operating expenses generally represent the day-to-day running costs incurred in normal operations.

Repairs and maintenance costs are recognised as expenses as incurred, except where they relate to the replacement of a significant component of an asset. In that case, the costs are capitalised and depreciated.

Doubtful debt expense is recognised as the movement in the provision for doubtful debt. Please refer to note 6.1.1 'Movement of the allowance for impairment of receivables'.

Shared services costs represent the value of services related to Information technology, Human resources, Supply and Finance provided by the Health Support Services; and pathology service provided by Pathwest during the financial year. These services are provided free of charge and the corresponding revenue is reflected under Services Provided Free of Charge.

Note 4: Our funding sources

How we obtain our funding

This section provides additional information about how WA Country Health Service obtains its funding and the relevant accounting policy notes that govern the recognition and measurement of this funding. The primary income received by WA Country Health Service and the relevant notes are:

	Notes	2018 $000	2017 $000
Income from State Government	4.1	1,075,834	1,086,090
Commonwealth grants and contributions	4.2	484,181	467,570
Other grants and contributions	4.3	95,652	102,849
Patient charges	4.4	67,187	68,996
Other revenue	4.5	22,589	23,738

4.1 Income from State Government

Appropriation received during the period:

	2018 $000	2017 $000
Service appropriation (a)	948,805	943,451
	948,805	943,451

Assets transferred from/(to) other State government agencies during the period: (b)

	2018 $000	2017 $000
Medical equipment from East Metropolitan Health Services	24	10
Medical equipment from Child and Adolescent Health Services	104	-
Plant and equipment from Child and Adolescent Health Services	6	-
Medical equipment to Health Support Services	(201)	33
Total assets transferred	(67)	43

Services received free of charge from other State government agencies during the period: (c)

	2018 $000	2017 $000
Department of Finance - government accommodation	92	80
North Metropolitan Health Service (PathWest)	23,482	29,491
Health Support Services	31,799	26,536
Total services received	55,373	56,107

Royalties for Regions Fund:

Regional Community Services Account: (d)

	2018 $000	2017 $000
Regional Workers Incentives Allowance Payments	7,878	7,974
Ear, Eye and Oral Health	1,872	531
Expand the ear bus program Fitzroy Kids Health	616 -	-50
Patient Assisted Travel Scheme	11,009	10,742
Regional Palliative Care	500	1,250
Meet and Greet Program	200	-
Royal Flying Doctor Service	2,792	7,899

Regional Infrastructure Headworks Account: (d)

	2018 $000	2017 $000
Pilbara Health Partnership (Asset Investment)	2,860	3,099
Renal Dialysis Service Expansion	920	511
Busselton ICT Southern Inland Health Initiative - District Medical Workforce Investment Program (Stream 1)	915 18,599	- 30,421
- District Hospital Investment Program (Stream 2)	-	5,159
- Residential Aged and Dementia Care Investment Program (Stream 6)	5,222	14,146
- Telehealth Investment Program (Stream 5)	4,750	4,707
- District Medical Workforce Investment Program (NEW)	13,590	-
Total Royalties for Regions Fund	71,723	86,489
Total income from State Government	1,075,834	1,086,090

(a) Service appropriations are recognised at fair value in the period in which WA Country Health Service gains control of the appropriated funds. WA Country Health Service gains control of appropriated funds at the time those funds are deposited in the bank account or credited to the ʻAmounts receivable for servicesʼ (holding account) held at Treasury.)

Service appropriations fund the net cost of services delivered (as set out in note 2.2). Appropriation revenue comprises the following:

• Cash component; and
• A receivable (asset).

The receivable (holding account – note 6.2) comprises the following:

• The budgeted depreciation expense for the year; and
• Any agreed increase in leave liabilities during the year.

(b) Transfer of assets: Discretionary transfers of assets (including grants) and liabilities between State government agencies are reported under Income from State Government. Transfers of assets and liabilities in relation to a restructure of administrative arrangements are recognised as distribution to owners by the transferor and contribution by owners by the transferee under AASB 1004. Other non discretionary non-reciprocal transfers of assets and liabilities designated as contributions by owners under TI 955 are also recognised directly to equity.

(c) Services received free of charge or for nominal cost, are recognised as revenues at the fair value of those services that can be reliably measured and which would have been purchased if they were not donated.

(d) The Regional Community Services Accounts and the Regional Infrastructure and Headworks Account are sub-funds within the over-arching ʻRoyalties for Regions Fundʼ. The recurrent funds are committed to projects and programs in WA regional areas and are recognised as revenue when WA Country Health Service gains control on receipt of the funds.

4.2 Commonwealth grants and contributions

	2018 $000	2017 $000
Recurrent
National Health Reform Agreement via the Department of Health (a)	376,330	369,449
National Health Reform Agreement via the Mental Health Commission (a)	24,909	21,839
Multi Purpose Service Units	29,547	28,850
Home and Community Care Program	10,560	10,361
Other	30,834	24,556
Capital
Bringing Renal Dialysis & Support Services Closer	9,000	8,000
Strengthening Regional Cancer Services	3,000	2,000
Other	1	2,515
	484,181	467,570

(a) Activity based funding and block grant funding is received from the Commonwealth Government under the National Health Reform Agreement for services, health teaching, training and research provided by local hospital networks (Health Services). The funding arrangement established under the Agreement requires the Commonwealth Government to make funding payments to the State Pool Account from which distributions to the local hospital networks (Health Services) are made by the Department of Health and Mental Health Commission.

4.3 Other grants and contributions

	2018 $000	2017 $000
Recurrent
Mental Health Commission - service delivery agreement	71,386	67,885
Mental Health Commission - SSAMHS	5,546	5,753
WA Alcohol and Drug Authority - Community Drug Service Team & other programs	-	4,875
Mental Health Commission - Community drug and alcohol service	4,821	-
Disability Services Commission - Community aids and equipment program	2,655	2,991
Other	11,244	11,893
Capital
Onslow Health Service Redevelopment	-	9,452
	95,652	102,849

Grant income arises from transactions described as:

• Non reciprocal (where WA Country Health Service does not provide approximate equal value in return to a party providing goods or assets (or extinguishes a liability); or
• Reciprocal (where WA Country Health Service provides equal value to the recipient of the grant provider).

The accounting for these are set out below.

For non-reciprocal grants, WA Country Health Service recognises revenue when the grant is receivable at its fair value as and when its fair value can be reliably measured.

Contributions of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

For reciprocal grants, WA Country Health Service recognises income when it has satisfied its performance obligations under the terms of the grant.

Grants can further be split between:

• eneral purpose grants
• Specific purpose grants

General purpose grants refers to grants which are not subject to conditions regarding their use. Specific purpose grants are received for a particular purpose and/or have conditions attached regarding their use.

4.4 Patient charges

	2018 $000	2017 $000
Inpatient bed charges	26,379	26,218
Outpatient charges	40,808	42,778
	67,187	68,996

4.5 Other revenue

	2018 $000	2017 $000
Services to external organisations	7,481	9,666
Use of hospital facilities	2,493	1,997
Rent from commercial properties	755	876
Rent from residential properties	325	203
Staff and boarders' accommodation	7,984	8,254
Home and Community Care client fees	1,680	1,713
RiskCover insurance premium rebate	666	142
Other	1,205	887
	22,589	23,738

Revenue on provision of services is recognised by reference to the stage of completion of the transaction.

Note 5: Key assets

Assets WA Country Health Service utilises for economic benefit or service potential

This section includes information regarding the key assets WA Country Health Service utilises to gain economic benefits or provide service potential. The section sets out both the key accounting policies and financial information about the performance of these assets:

	Notes	2018 $000	2017 $000
Property, plant and equipment	5.1	1,916,214	1,777,418
Intangible assets	5.2	17,338	13,941
Total key assets		1,933,552	1,791,359

5.1 Property, plant and equipment

	Land $000	Buildings $000	Buildings under const. $000	Site Infra. $000	Leasehold improv. $000	Computer equip. $000	Furniture and fittings $000	Motor vehicles $000	Medical equip. $000	Other plant and equip. $000	Other works in progress $000	Artworks $000	Total $000
Year ended 30 June 2018
1 July 2017
Gross carrying amount	100,941	1,259,933	187,814	187,938	1,175	4,539	2,084	770	39,480	6,960	5,080	70	1,796,784
Accumulated depreciation	-	-	-	(9,892)	(304)	(658)	(171)	(520)	(6,926)	(895)	-	-	(19,366)
Carrying amount at start of period	100,941	1,259,933	187,814	178,046	871	3,881	1,913	250	32,554	6,065	5,080	70	1,777,418
Additions	-	537	225,576	153	-	165	1,006	593	6,752	2,120	4,656	5	241,563
Transfers from/(to) other reporting entities	(2,256)	(1,072)	-	-	-	-	-	-	(73)	6	-	-	(3,395)
Transfers between asset classes	-	82,610	(91,282)	9,560	-	1,328	(313)	-	392	812	(3,328)	-	(221)
Other disposals	-	(2,690)	-	(597)	-	-	(15)	-	(78)	(26)	-	-	(3,406)
Revaluation increments/(decrements)	(16,398)	(1,168)	-	-	-	-	-	-	-	-	-	-	(17,566)
Impairment losses	-	-	-	-	-	-	-	-	-	-	-	-	-
Impairment losses reversed	-	-	-	-	-		-	-	-	-	-	-	-
Depreciation	-	(52,382)	-	(10,277)	(304)	(1,372)	(170)	(251)	(6,324)	(1,116)	-	-	(72,196)
Write-down of assets	(5)	-	(3,593)	-	-	(406)	(283)	-	(283)	(22)	(1,391)	-	(5,983)
Carrying amount at 30 June 2018	82,282	1,285,768	318,515	176,885	567	3,596	2,138	592	32,940	7,839	5,017	75	1,916,214
Gross carrying amount	82,282	1,285,768	318,515	196,987	1,176	5,627	2,478	1,363	46,161	9,844	5,017	75	1,955,293
Accumulated depreciation	-	-	-	(20,102)	(609)	(2,031)	(340)	(771)	(13,221)	(2,005)	-	-	(39,079)
	82,282	1,285,768	318,515	176,885	567	3,596	2,138	592	32,940	7,839	5,017	75	1,916,214
Year ended 30 June 2017
1 July 2016
Transferred from abolished entity	123,827	1,309,648	79,748	186,329	1,175	1,280	2,050	697	33,502	4,228	6,259	181	1,748,924
Carrying amount at start of period	123,827	1,309,648	79,748	186,329	1,175	1,280	2,050	697	33,502	4,228	6,259	181	1,748,924
Additions		51	148,295	-	-	2,926	396	31	5,986	1,185	1,576	-	160,446
Transfers from/(to) other reporting entities	(698)	-	-	-	-	-	-	-	-	-	-	-	(698)
Transfers between asset classes	-	39,446	(40,229)	1,612	-	327	(313)	42	388	1,575	(2,756)	(111)	(19)
Other disposals	-	(930)	-	(15)	-	-	(43)	-	(326)	(24)	-	-	(1,338)
Revaluation increments/(decrements)	(22,188)	(32,030)	-	-	-	-	-	-	-	-	-	-	(54,218)
Impairment losses	-	-	-	-	-	-	-	-	-	-	-	-	-
Impairment losses reversed	-	-	-	-	-	-	-	-	-	-	-	-	-
Depreciation	-	(56,252)	-	(9,880)	(304)	(651)	(177)	(520)	(6,996)	(899)	-	-	(75,679)
Write-down of assets	-	-	-	-	-	-	-	-	-	-	-	-	-
Carrying amount at 30 June 2017	100,941	1,259,933	187,814	178,046	871	3,882	1,913	250	32,554	6,065	5,079	70	1,777,418
Gross carrying amount	100,941	1,259,933	187,814	187,938	1,175	4,539	2,084	770	39,480	6,960	5,080	70	1,796,784
Accumulated depreciation	-	-	-	(9,892)	(304)	(658)	(171)	(520)	(6,926)	(895)	-	-	(19,366)
	100,941	1,259,933	187,814	178,046	871	3,881	1,913	250	32,554	6,065	5,080	70	1,777,418

Information on fair value measurements is provided in Note 8.3

Initial recognition

Items of property, plant and equipment and infrastructure, costing $5,000 or more are measured initially at cost. Where an asset is acquired for no or nominal cost, the cost is valued at its fair value at the date of acquisition. Items of property, plant and equipment and infrastructure costing less than $5,000 are immediately expensed direct to the Statement of Comprehensive Income (other than where they form part of a group of similar items which are significant in total).

Assets transferred as part of a machinery of government change are transferred at their fair value.

The cost of a leasehold improvement is capitalised and depreciated over the shorter of the remaining term of the lease or the estimated useful life of the leasehold improvement.

Subsequent measurement

Subsequent to initial recognition of an asset, the revaluation model is used for the measurement of land and buildings.

Land is carried at fair value and buildings are carried at fair value less accumulated depreciation and accumulated impairment losses.

All other property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses.

Land and buildings are independently valued annually by the Western Australian Land Information Authority (Valuations and Property Analytics) and recognised annually to ensure that the carrying amount does not differ materially from the assetʼs fair value at the end of the reporting period.

Land and buildings were revalued as at 1 July 2017 by the Western Australian Land Information Authority (Valuation and Property Analytics). The valuations were performed during the year ended 30 June 2018 and recognised at 30 June 2018. In undertaking the revaluation, fair value was determined by reference to the market value for land: $31.334 million (2017: $42.90 million) and buildings: $68.604 million (2017: $64.328 million). For the remaining balance, fair value of buildings was determined on the basis of current replacement cost and fair value of land was determined on the basis of comparison with market evidence for land with low level utility (high restricted use land).

Revaluation model:

1. Fair Value where market-based evidence is available:

The fair value of land and buildings is determined on the basis of current market values determined by reference to recent market transactions.

2. Fair value in the absence of market-based evidence:

Buildings are specialised or where land is restricted: Fair value of land and buildings is determined on the basis of existing use.

Existing use buildings: Fair value is determined by reference to the cost of replacing the remaining future economic benefits embodied in the asset, i.e. the current replacement cost.

Restricted use land: Fair value is determined by comparison with market evidence for land with similar approximate utility (high restricted use land) or market value of comparable unrestricted land (low restricted use land).

When buildings are revalued, the accumulated depreciation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount.

Significant assumptions and judgements: The most significant assumptions and judgements in estimating fair value are made in assessing whether to apply the existing use basis to assets and in determining estimated economic life. Professional judgement by the valuer is required where the evidence does not provide a clear distinction between market type assets and existing use assets.

5.1.1 Depreciation and impairment

Charge for the period

	2018 $000	2017 $000
Depreciation
Buildings	52,382	56,252
Site Infrastructure	10,277	9,880
Leasehold improvements	304	304
Computer equipment	1,372	651
Furniture and fittings	170	177
Motor vehicles	251	520
Medical equipment	6,324	6,996
Other plant and equipment	1,116	899
Total depreciation for the period	72,196	75,679

As at 30 June 2018 there were no indications of impairment to property, plant and equipment.

All surplus assets at 30 June 2018 have either been classified as assets held for sale or have been written-off.

Please refer to note 5.2.1 for guidance in relation to the impairment assessment that has been performed for intangible assets.

Finite useful lives

All property, plant and equipment having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits. The exceptions to this rule include assets held for sale, land and investment properties.

Depreciation is calculated on a straight line basis, at rates that allocate the assetʼs value, less any estimated residual value, over its estimated useful life. Estimated useful lives for the different asset classes for current and prior years are:

• Buildings - 50 years
• Site infrastructure - 50 years
• Leasehold improvements - Shorter of the lease term and useful life
• Computer equipment - 4 to 10 years
• Furniture and fittings - 10 to 20 years
• Motor vehicles - 2 to 10 years
• Medical equipment - 3 to 20 years
• Other plant and equipment - 4 to 30 years

The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

Land and artworks, which are considered to have an indefinite life, are not depreciated. Depreciation is not recognised in respect of these assets because their service potential has not, in any material sense, been consumed during the reporting period.

Impairment

Non-financial assets, including items of property, plant and equipment, are tested for impairment whenever there is an indication that the asset may be impaired. Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is less than the carrying amount, the asset is considered impaired and is written down to the recoverable amount and an impairment loss is recognised.

Where an asset measured at cost is written down to its recoverable amount, an impairment loss is recognised through profit or loss.

Where a previously revalued asset is written down to its recoverable amount, the loss is recognised as a revaluation decrement through other comprehensive income.

As WA Country Health Service is a not-for-profit entity, the recoverable amount of regularly revalued specialised assets is anticipated to be materially the same as fair value.

If there is an indication that there has been a reversal in impairment, the carrying amount shall be increased to its recoverable amount. However this reversal should not increase the assetʼs carrying amount above what would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

The risk of impairment is generally limited to circumstances where an assetʼs depreciation is materially understated, where the replacement cost is falling or where there is a significant change in useful life. Each relevant class of assets is reviewed annually to verify that the accumulated depreciation/amortisation reflects the level of consumption or expiration of the assetʼs future economic benefits and to evaluate any impairment risk from declining replacement costs.

5.1.2 Revaluation decrements

	2018 $000	2017 $000
Land	16,398	22,188
Buildings	1,168	32,030
	17,566	54,218

5.1.3 Loss on disposal of non-current assets

	2018 $000	2017 $000
Net proceeds from disposal of non-current assets: Property, plant and equipment	-	-
Carrying amount of non-current assets: Property, plant and equipment	3,406	1,338
Net loss	3,406	1,338

Realised and unrealised losses are usually recognised on a net basis. These include losses arising on the disposal of noncurrent assets and some revaluations of non-current assets.

Losses on the disposal of non-current assets are presented by deducting from the proceeds on disposal the carrying amount of the asset and related selling expenses. Losses are recognised in profit or loss in the statement of comprehensive income.

Selling expenses (e.g. sales commissions netted from WA Country Health Service's receipts) are ordinarily immaterial.

5.2 Intangible assets

	Computer software $000	Works in progress $000	Total $000
Year ended 30 June 2018
1 July 2017
Gross carrying amount	14,441	837	15,278
Accumulated amortisation	(1,337)	-	(1,337)
Carrying amount at start of period	13,104	837	13,941
Additions	-	5,101	5,101
Transfers between asset classes	1,771	(1,550)	221
Amortisation expense	(1,809)	-	(1,809)
Write-down of assets	-	(116)	(116)
Carrying amount at 30 June 2018	13,066	4,272	17,338
Year ended 30 June 2017
1 July 2016
Transferred from abolished entity	7,642	2,119	9,761
Carrying amount at start of period	7,642	2,119	9,761
Additions	2,582	2,916	5,498
Transfers between asset classes	4,217	(4,198)	19
Amortisation expense	(1,337)	-	(1,337)
Carrying amount at 30 June 2017	13,104	837	13,941

Initial recognition

Acquisitions of intangible assets costing $5,000 or more and internally generated intangible assets costing $5,000 or more that comply with the recognition criteria as per AASB 138.57, are capitalised.

Costs incurred below these thresholds are immediately expensed directly to the Statement of Comprehensive Income.

Intangible assets are initially recognised at cost. For assets acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.

An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated

(a) The technical feasibility of completing the intangible asset so that it will be available for use or sale;

(b) An intention to complete the intangible asset and use or sell it;

(c) The ability to use or sell the intangible asset;

(d) The intangible asset will generate probable future economic benefit;

(e) The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

(f) The ability to measure reliably the expenditure attributable to the intangible asset during its development.

Costs incurred in the research phase of a project are immediately expensed.

Subsequent measurement

The cost model is applied for subsequent measurement of intangible assets, requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.

5.2.1 Amortisation and impairment

Charge for the period

	2018 $000	2017 $000
Computer software	1,809	1,337
Total amortisation for the period	1,809	1,337

As at 30 June 2018 there were no indications of impairment to intangible assets.

WA Country Health Service held no goodwill or intangible assets with an indefinite useful life during the reporting period. At the end of the reporting period there were no intangible assets not yet available for use.

Amortisation of finite life intangible assets is calculated on a straight line basis at rates that allocate the assetʼs value over its estimated useful life. All intangible assets controlled by WA Country Health Service have a finite useful life and zero residual value. Estimated useful lives are reviewed annually.

The estimated useful lives for each class of intangible asset are:

• Computer software: 5 - 10 years

Computer software that is an integral part of the related hardware is recognised as property, plant and equipment. Software that is not an integral part of the related hardware is recognised as an intangible asset.

Impairment

Intangible assets with finite useful lives are tested for impairment annually or when an indication of impairment is identified. The policy in connection with testing for impairment is outlined in note 5.1.1.

Note 6: Other assets and liabilities

This section sets out those assets and liabilities that arose from WA Country Health Service's controlled operations and includes other assets utilised for economic benefits and liabilities incurred during normal operations:

	Notes	2018 $000	2017 $000
Receivables	6.1	23,647	23,752
Amounts receivable for services	6.2	748,497	674,420
Other assets	6.3	9,485	10,337
Payables	6.4	116,019	119,198

6.1 Receivables

	2018 $000	2017 $000
Current
Patient fee debtors	13,100	15,425
Other receivables	2,902	4,566
Allowance for impairment of receivables	(4,428)	(9,001)
Accrued revenue	6,117	7,848
GST receivable	5,956	4,914
Total receivables	23,647	23,752

WA Country Health Service does not hold any collateral or other credit enhancements as security for receivables.

Receivables are recognised at original invoice amount less any allowances for uncollectible amounts (i.e. impairment). The carrying amount of net trade receivables is equivalent to fair value as it is due for settlement within 30 days.

6.1.1. Movement of the allowance for impairment of receivables

	2018 $000	2017 $000
Reconciliation of changes in the allowance for impairment of receivables:
Balance at start of period	9,001	-
Transfer in from abolished entity	-	5,946
Doubtful debts expense	1,514	4,018
Amounts written off during the period	(6,149)	(921)
Amounts recovered during the period	62	(42)
Balance at end of period	4,428	9,001

The collectability of receivables is reviewed on an ongoing basis and any receivables identified as uncollectible are written-off against the allowance account. The allowance for uncollectible amounts (doubtful debts) is raised when there is objective evidence that WA Country Health Service will not be able to collect the debts.

6.2 Amounts receivable for services (Holding Account)

	2018 $000	2017 $000
Non-current	748,497	674,420
Balance at end of period	748,497	674,420

Amounts receivable for services represent the non-cash component of service appropriations. It is restricted in that it can only be used for asset replacement or payment of leave liability.

WA Country Health Service receives funding on an accrual basis. The appropriations are paid partly in cash and partly as an asset (holding account receivable). The accrued amount receivable is accessible on the emergence of the cash funding requirement to cover leave entitlements and asset replacement.

6.3 Other assets

	2018 $000	2017 $000
Current
Supply inventories	2,259	2,120
Pharmaceutical inventories	2,638	2,735
Other inventories	260	415
Prepayments	4,328	5,067
Balance at end of period	9,485	10,337

Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a weighted average cost basis.

Inventories not held for resale are measured at cost unless they are no longer required, in which case they are measured at net realisable value.

Prepayments are 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.

6.4 Payables

	2018 $000	2017 $000
Current
Trade payables	19,290	31,632
Accrued expenses	82,091	65,121
Accrued salaries	14,628	22,430
Accrued interest	10	15
Balance at end of period	116,019	119,198

Payables are recognised at the amounts payable when WA Country Health Service becomes obliged to make future payments as a result of a purchase of assets or services. The carrying amount is equivalent to fair value, as settlement is generally within 30 days.

Accrued salaries represent the amount due to staff but unpaid at the end of the reporting period. Accrued salaries are settled within a fortnight of the reporting period end. WA Country Health Service considers the carrying amount of accrued salaries to be equivalent to its fair value.

Note 7: Financing

This section sets out the material balances and disclosures associated with the financing and cashflows of WA Country Health Service.

	Notes
Borrowings	7.1
Finance costs	7.2
Cash and cash equivalents	7.3
Reconciliation of cash	7.3.1
Reconciliation of operating activities	7.3.2
Commitments	7.4
Non-cancellable operating lease commitments	7.4.1
Capital commitments	7.4.2
Other expenditure commitments	7.4.3

7.1 Borrowings

	2018 $000	2017 $000
Current Department of Treasury loans (a)	1,779	1,701
Non-Current Department of Treasury loans (a)	1,865	3,644
	3,644	5,345

7.2 Finance costs

	2018 $000	2017 $000
Interest expense (a)	138	199
	138	199

(a) All loans payable are initially recognised at fair value, being the net proceeds received. Subsequent measurement is at amortised cost using the effective interest rate method. Interest incurred are expensed as finance costs.

7.3 Cash and cash equivalents

7.3.1 Reconciliation of cash

	Notes	2018 $000	2017 $000
Cash and cash equivalents		18,173	18,949
Restricted cash and cash equivalents (a) Royalties for Regions Fund	8.1	1,141	1,428
Capital grant from the Commonwealth Government (b)		16,512	12,180
Patient receipts under section 19 (2) of the Health Insurance Act 1973		4,838	4,062
Bequests		763	774
Capital funding from external sources		-	17,391
Mental Health Commission Funding (note 9.7)		234	955
Other		1,854	579
Accrued salaries suspense account (c)		7,463	3,840
Balance at end of period		50,978	60,158

(a) Restricted cash and cash equivalents are assets, the uses of which are restricted, by specific legal or other externally imposed requirements.

(b) Unspent funds from the Commonwealth Government are committed to projects and programs in WA regional areas.

(c) Funds held in the suspense account for the purpose of meeting the 27th pay in a reporting period that occurs every 11th year. This account is classified as non current for 10 out of 11 years.

For the purpose of the statement of cash flows, cash and cash equivalent (and restricted cash and cash equivalent) assets comprise cash on hand and short-term deposits with original maturities of three months or less that are readily convertible to a known amount of cash and which are subject to insignificant risk of changes in value.

7.3.2 Reconciliation of net cost of services to net cash flows used in operating activities

	Notes	2018 $000	2017 $000
Non-cash items
Net cost of services		1,109,410	1,119,280
Depreciation and amortisation expense	5.1.1, 5.2.1	(74,005)	(77,016)
Asset revaluation decrement	5.1.2	(17,566)	(54,218)
Loss from disposal of non-current assets	5.1.3	(3,406)	(1,338)
Interest paid by Department of Health		(144)	(204)
Donation of non-current assets		30	14
Services received free of charge	4.1	(55,373)	(56,107)
Write down of property, plant and equipment Net assets transferred in that are expensed	5.1, 5.2	(6,099) -	(11,305)
Adjustment for other non-cash items		(2)	(2)
Increase/(decrease) in assets
Receivables		(105)	1,328
Inventories		(113)	(284)
Prepayments		(739)	1,935
(Increase)/decrease in liabilities
Payables (a)		(8,554)	(3,938)
Current provisions		(11,795)	(4,625)
Non-current provisions		(1,480)	(1,205)
Other current liabilities Other non-current liabilities		(30) -	(8) -
Net cash used in operating activities		930,029	912,307

(a) Note that the Australian Taxation Office (ATO) receivable/payable in respect of GST and the receivable/payable in respect of the sale/purchase of non-current assets are not included in these items as they do not form part of the reconciling items.

The mandatory application of AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107 imposed disclosure impacts only. WA Country Health Service is not exposed to changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.

7.4 Commitments

The commitments below are inclusive of GST where relevant.

7.4.1 Non-cancellable operating lease commitments

Commitments for minimum lease payments are payable as follows:

	2018 $000	2017 $000
Within 1 year	8,616	8,907
Later than 1 year and not later than 5 years	5,312	6,469
later than 5 years	43	33
	13,971	15,409

Operating leases are expensed on a straight line basis over the lease term as this represents the pattern of benefits derived from the leased properties.

Operating lease commitments predominantly consist of contractual agreements for office accommodation and residential accommodation. The basis of which contingent operating leases payments are determined is the value for each lease agreement under the contract terms and conditions at current values.

7.4.2 Capital commitments

Capital expenditure commitments, being contracted capital expenditure additional to the amounts reported in the financial statements, are payable as follows:

	2018 $000	2017 $000
Within 1 year	78,339	252,743
Later than 1 year and not later than 5 years	40,512	114,125
later than 5 years	-	-
	118,851	366,868

7.4.3 Other expenditure commitments

Other expenditure commitments contracted for at the end of the reporting period but not recognised as liabilities, are payable as follows:

	2018 $000	2017 $000
Within 1 year	176,993	162,608
Later than 1 year and not later than 5 years	61,096	109,390
later than 5 years	949	5,955
	239,038	277,953

Judgements made by management in applying accounting policies – operating lease commitments

WA Country Health Service has entered into a number of leases for buildings for branch office accommodation. Some of these leases relate to buildings of a temporary nature and it has been determined that the lessor retains substantially all the risks and rewards incidental to ownership. Accordingly, these leases have been classified as operating leases.

Note 8: Risks and Contingencies

This note sets out the key risk management policies and measurement techniques of WA Country Health Service.

	Notes
Financial risk management	8.1
Contingent assets	8.2.1
Contingent liabilities	8.2.2
Fair value measurements	8.3

8.1 Financial risk management

Financial instruments held by WA Country Health Service are cash and cash equivalents, restricted cash and cash equivalents, loans and receivables, payables, and borrowings. WA Country Health Service has limited exposure to financial risks. WA Country Health Service's overall risk management program focuses on managing the risks identified below.

(a) Summary of risks and risk management

Credit risk

Credit risk arises when there is the possibility of WA Country Health Service's receivables defaulting on their contractual obligations resulting in financial loss to WA Country Health Service.

The maximum exposure to credit risk at the end of the reporting period in relation to each class of recognised financial asset is the gross carrying amount of those assets inclusive of any allowance for impairment as shown in the table at Note 8.1(c) ʻFinancial instruments disclosuresʼ and Note 6.1 ʻReceivablesʼ.

Credit risk associated with WA Country Health Service's financial assets is minimal because the main receivable is the amounts receivable for services (holding account). For receivables other than Government, WA Country Health Service trades only with recognised, creditworthy third parties. WA Country Health Service has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that WA Country Health Service's exposure to bad debts is minimal. At the end of the reporting period there were no significant concentrations of credit risk.

Liquidity risk

Liquidity risk arises when the agency is unable to meet its financial obligations as they fall due.

WA Country Health Service is exposed to liquidity risk through its trading in the normal course of business.

WA Country Health Service has appropriate procedures to manage cash flows including drawdown of appropriations by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.

Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect WA Country Health Service's income or the value of its holdings of financial instruments. WA Country Health Service does not trade in foreign currency and is not materially exposed to other price risks. WA Country Health Service's exposure to market risk for changes in interest rates relate primarily to the long-term debt obligations.

WA Country Health Service's borrowings are with the Department of Treasury and are at variable interest rates with varying maturities. Other than as detailed in the interest rate sensitivity analysis table at Note 8.1(e), WA

Auditor General

INDEPENDENT AUDITOR'S REPORT

To the Parliament of Western Australia

WA COUNTRY HEAL TH SERVICE

Report on the Financial Statements

Opinion
I have audited the financial statements of the WA Country Health Service which comprise the Statement of Financial Position as at 30 June 2018, the Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows for the year then ended, and Notes comprising a summary of significant accounting policies and other explanatory information.

In my opinion, the financial statements are based on proper accounts and present fairly, in all material respects, the operating results and cash flows of the WA Country Health Service for the year ended 30 June 2018 and the financial position at the end of that period. They are in accordance with Australian Accounting Standards, the Financial Management Act 2006 and the Treasurer's Instructions.

Basis for Opinion
I conducted my audit in accordance with the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Health Service in accordance with the Auditor General Act 2006 and the relevant ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial statements. I have also fulfilled my other ethical responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Responsibility of the Board for the Financial Statements
The Board is responsible for keeping proper accounts, and the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards, the Financial Management Act 2006 and the Treasurer's Instructions, and for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board is responsible for assessing the agency's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Western Australian Government has made policy or funding decisions affecting the continued existence of the Health Service.

Auditor's Responsibility for the Audit of the Financial Statements
As required by the Auditor General Act 2006, my responsibility is to express an opinion on the financial statements. The objectives of my audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit in accordance with Australian Auditing Standards, I exercise professional judgment and maintain professional scepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the agency's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board.
• Conclude on the appropriateness of the Board's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the agency's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor's report.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Board regarding, among other matters, the planned scope and tiniing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Report on Controls

Opinion
I have undertaken a reasonable assurance engagement on the design and implementation of controls exercised by the WA Country Health Service. The controls exercised by the Health Service are those policies and procedures established by the Board to ensure that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities have been in accordance with legislative provisions (the overall control objectives).

My opinion has been formed on the basis of the matters outlined in this report.

In my opinion, in all material respects, the controls exercised by the WA Country Health Service are sufficiently adequate to provide reasonable assurance that the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities have been in accordance with legislative provisions during the year ended 30 June 2018.

The Board's Responsibilities
The Board is responsible for designing, implementing and maintaining controls to ensure that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities are in accordance with the Financial Management Act 2006, the Treasurer's Instructions and other relevant written law.

Auditor General's Responsibilities
As required by the Auditor General Act 2006, my responsibility as an assurance practitioner is to express an opinion on the suitability of the design of the controls to achieve the overall control objectives and the implementation of the controls as designed. I conducted my engagement in accordance with Standard on Assurance Engagements ASAE 3150 Assurance Engagements on Controls issued by the Australian Auditing and Assurance Standards Board. That standard requires that I comply with relevant ethical requirements and plan and perform my procedures to obtain reasonable assurance about whether, in all material respects, the controls are suitably designed to achieve the overall control objectives and the controls, necessary to achieve the overall control objectives, were implemented as designed.

An assurance engagement to report on the design and implementation of controls involves performing procedures to obtain evidence about the suitability of the design of controls to achieve the overall control objectives and the implementation of those controls. The procedures selected depend on my judgement, including the assessment of the risks that controls are not suitably designed or implemented as designed. My procedures included testing the implementation of those controls that I consider necessary to achieve the overall control objectives.

I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Limitations of Controls
Because of the inherent limitations of any internal control structure it is possible that, even if the controls are suitably designed and implemented as designed, once the controls are in operation, the overall control objectives may not be achieved so that fraud, error, or noncompliance with laws and regulations may occur and not be detected. Any projection of the outcome of the evaluation of the suitability of the design of controls to future periods is subject to the risk that the controls may become unsuitable because of changes in conditions.

Report on the Key Performance Indicators

Opinion
I have undertaken a reasonable assurance engagement on the key performance indicators of the WA Country Health Service for the year ended 30 June 2018. The key performance indicators are the key effectiveness indicators and the key efficiency indicators that provide performance information about achieving outcomes and delivering services.

In my opinion, in all material respects, the key performance indicators of the WA Country Health Service are relevant and appropriate to assist users to assess the Health Service's performance and fairly represent indicated performance for the year ended 30 June 2018.

Matter of Significance
The Under Treasurer approved the removal of the following indicator as an audited key performance indicator (KPI):

• Percentage of Emergency Department patients seen within recommended times (major rural hospitals)

The approval was conditional on its inclusion as an unaudited performance indicator in the Annual Report and that it be reinstated as an audited KPI following the implementation of a. new Emergency Department data collection system. A new system had not been developed at 30 June 2018. Consequently, the KPI has not been included in the audited KP ls for the year ended 30 June 2018. My opinion is not modified in respect of this matter.

Emphasis of Matter
Attention is drawn to the effectiveness indicator "Proportion of elective wait list patients waiting over boundary for reportable procedures". The notes to this indicator explain that comparative information has not been reported because of errors in the data used to calculate this KPI in 2016-17. My opinion is not modified in respect of this matter.

The Board's Responsibility for the Key Performance Indicators
The Board is responsible for the preparation and fair presentation of the key performance indicators in accordance with the Financial Management Act 2006 and the Treasurer's Instructions and for such internal control as the Board determines necessary to enable the preparation of key performance indicators that are free from material misstatement, whether due to fraud or error.

In preparing the key performance indicators, the Board is responsible for identifying key performance indicators that are relevant and appropriate having regard to their purpose in accordance with Treasurer's Instruction 904 Key Performance Indicators.

Auditor General's Responsibility
As required by the Auditor General Act 2006, my responsibility as an assurance practitioner is to express an opinion on the key performance indicators. The objectives of my engagement are to obtain reasonable assurance about whether the key performance indicators are relevant and appropriate to assist users to assess the agency's performance and whether the key performance indicators are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. I conducted my engagement in accordance with Standard on Assurance Engagements ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information issued by the Australian Auditing and Assurance Standards Board. That standard requires that I comply with relevant ethical requirements relating to assurance engagements.

An assurance engagement involves performing procedures to obtain evidence about the amounts and disclosures in the key performance indicators. It also involves evaluating the relevance and appropriateness of the key performance indicators against the criteria and guidance in Treasurer's Instruction 904 for measuring the extent of outcome achievement and the efficiency of service delivery. The procedures selected depend on my judgement, including the assessment of the risks of material misstatement of the key performance indicators. In making these risk assessments I obtain an understanding of internal control relevant to the engagement in order to design procedures that are appropriate in the circumstances. I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

My Independence and Quality Control Relating to the Reports on Controls and Key Performance Indicators
I have complied with the independence requirements of the Auditor General Act 2006 and the relevant ethical requirements relating to assurance engagements. In accordance with ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, and Other Assurance Engagements, the Office of the Auditor General maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Matters Relating to the Electronic Publication of the Audited Financial Statements and Key Performance Indicators
This auditor's report relates to the financial statements and key performance indicators of the WA Country Health Service for the year ended 30 June 2018 included on the Health Service's website. The Health Service's management is responsible for the integrity of the Health Service's website. This audit does not provide assurance on the integrity of the Health Service's website. The auditor's report refers only to the financial statements and key performance indicators described above. It does not provide an opinion on any other information which may have been hyperlinked to/from these financial statements or key performance indicators. If users of the financial statements and key performance indicators are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial statements and key performance indicators to confirm the information contained in this website version of the financial statements and key performance indicators.

[Image: Caroline Spencer signature (PDF only)]

CAROLINE SPENCER
AUDITOR GENERAL
FOR WESTERN AUSTRALIA
Perth, Western Australia
J.O September 2018

WA COUNTRY HEALTH SERVICE CERTIFICATION OF FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018

The accompanying financial statements of the WA Country Health Service have been prepared in compliance with the provisions of the Financial Management Act 2006 from proper accounts and records to represent fairly the financial transactions for the financial year ending 30 June 2018 and financial position as at 30 June 2018.

At the date of signing we are not aware of any circumstance which would render the particulars included in the financial statements misleading or inaccurate.

[Mr John Arkell signature (PDF only)]
MR JOHN ARKELL
CHIEF FINANCE OFFICER
WA COUNTRY HEALTH SERVICE
19 September 2018

[Professor Neale Fong signature (PDF only)]
PROFESSOR NEALE FONG
CHAIR WA COUNTRY HEALTH SERVICE BOARD
19 September 2018

[Mr Alan Ferris signature (PDF only)]
MR ALAN FERRIS
BOARD MEMBER
WA COUNTRY HEALTH SERVICE BOARD
19 September 2018

Statement of Comprehensive Income

For the year ended 30 June 2018

	Note	2018 $000	2017 $000
COST OF SERVICES
Expenses Employee benefits expense	3.1	1,002,713	958,399
Fees for visiting medical practitioners	3.2	85,859	84,071
Patient support costs	3.2	381,124	398,039
Finance costs	7.2	138	199
Depreciation and amortisation expense	5.1, 5.2	74,005	77,016
Asset revaluation decrement	5.1	17,566	54,218
Loss on disposal of non-current assets	5.1	3,406	1,338
Repairs, maintenance and consumable equipment	3.3	49,200	48,147
Other expenses	3.3	165,559	161,643
Total cost of services		1,779,570	1,783,070
INCOME
Revenue
Patient charges	4.4	67,187	68,996
Commonwealth grants and contributions	4.2	484,181	467,570
Other grants and contributions	4.3	95,652	102,849
Donation revenue		551	637
Other revenue	4.5	22,589	23,738
Total revenue		670,160	663,790
Total income other than income from State Government		670,160	663,790
NET COST OF SERVICES		1,109,410	1,119,280
INCOME FROM STATE GOVERNMENT
Service appropriations	4.1	948,805	943,451
Assets assumed	4.1	(67)	43
Services received free of charge	4.1	55,373	56,107
Royalties for Regions Fund	4.1	71,723	86,489
Total income from State Government		1,075,834	1,086,090
DEFICIT FOR THE PERIOD		(33,576)	(33,190)
OTHER COMPREHENSIVE INCOME/(LOSS)
Items not reclassified subsequently to profit or loss
Changes in asset revaluation reserve		-	-
Gains/(losses) recognised directly in equity		-	-
Total other comprehensive income		-	-
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD		(33,576)	(33,190)

Refer also to note 2.2 'Schedule of Income and Expenses by Service'.
The Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

Statement of Financial Position

As at 30 June 2018

	Note	2018 $000	2017 $000
ASSETS
Current assets
Cash and cash equivalents	7.3	18,173	18,949
Restricted cash and cash equivalents	7.3	25,342	37,369
Receivables	6.1	23,647	23,752
Inventories	6.3	5,157	5,270
Prepayments	6.3	4,328	5,067
Total Current Assets		76,647	90,407
Non-Current Assets
Restricted cash and cash equivalents	7.3	7,463	3,840
Amounts receivable for services	6.2	748,497	674,420
Property, plant and equipment	5.1	1,916,214	1,777,418
Intangible assets	5.2	17,338	13,941
Total Non-Current Assets		2,689,512	2,469,619
Total Assets		2,766,159	2,560,026
LIABILITIES
Current Liabilities
Payables	6.4	116,019	119,198
Borrowings	7.1	1,779	1,701
Provisions	3.1	143,401	131,606
Other current liabilities		52	22
Total Current Liabilities		261,251	252,527
Non-Current Liabilities
Borrowings	7.1	1,865	3,644
Provisions	3.1	27,885	26,405
Total Non-Current Liabilities		29,750	30,049
Total Liabilities		291,001	282,576
NET ASSETS		2,475,158	2,277,450
EQUITY
Contributed equity	9.9	2,541,924	2,310,640
Reserves		-	-
Accumulated deficit		(66,766)	(33,190)
TOTAL EQUITY		2,475,158	2,277,450

The Statement of Financial Position should be read in conjunction with the accompanying notes.

Statement of Changes in Equity

For the year ended 30 June 2018

	Note	2018 $000	2017 $000
CONTRIBUTED EQUITY	9.9
Balance at start of period		2,310,640	-
Transfer of net asset by owners		-	2,196,393
Transactions with owners in their capacity as owners:
Capital appropriations		27,781	20,439
Royalties for Regions Fund		206,831	94,506
Other contributions by owners		695	2
Distributions to owners		(4,023)	(700)
Balance at end of period		2,541,924	2,310,640
RESERVES
Asset Revaluation Reserve
Balance at start of period		-	-
Comprehensive income/(loss) for the period		-	-
Balance at end of period			-
ACCUMULATED SURPLUS
Balance at start of period		(33,190)	-
Deficit for the period		(33,576)	(33,190)
Balance at end of period		(66,766)	(33,190)
TOTAL EQUITY
Balance at start of period		2,277,450	-
Total comprehensive income/(loss) for the period		(33,576)	(33,190)
Transactions with owners in their capacity as owners		231,284	2,310,640
Balance at end of period		2,475,158	2,277,450

The Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Statement of Cash Flows

For the year ended 30 June 2018

	Note	2018 $000 Inflows (Outflows)	2017 $000 Inflows (Outflows)
CASH FLOWS FROM STATE GOVERNMENT
Service appropriations		874,584	855,497
Capital appropriations		26,080	18,815
Royalties for Regions Fund		278,554	180,995
Net cash provided by State Government		1,179,218	1,055,307
Utilised as follows:
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Employee benefits		(997,236)	(938,947)
Supplies and services		(604,092)	(636,892)
Receipts
Receipts from customers		64,412	70,696
Commonwealth grants and contributions		484,181	467,570
Other grants and contributions		95,653	102,849
Donations received		521	622
Other receipts		26,532	21,795
Net cash used in operating activities	7.3	(930,029)	(912,307)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments
Purchase of non-current physical assets		(258,369)	(149,067)
Net cash used in investing activities		(258,369)	(149,067)
Net increase / (decrease) in cash and cash equivalents		(9,180)	(6,067)
Cash and cash equivalents at the beginning of the period		60,158	-
Cash and cash equivalents transferred in from abolished entity		-	66,225
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD	7.3	50,978	60,158

The Statement of Cash Flows should be read in conjunction with the accompanying notes.

Notes to the Financial Statements

For the year ended 30 June 2018

Note 1: Basis of preparation

WA Country Health Service is a WA Government entity and is controlled by the State of Western Australia, which is the ultimate parent. It is a not-for-profit entity (as profit is not its principal objective).

A description of the nature of its operations and its principal activities have been included in the 'Overview' which does not form part of these financial statements.

These annual financial statements were authorised for issue by the Accountable Authority of the WA Country Health Service on 19 September 2018.

Statement of compliance

These general purpose financial statements have been prepared in accordance with:

1. The Financial Management Act 2006
2. The Treasurer's Instructions
3. Australian Accounting Standards including applicable interpretations
4. Where appropriate, those AAS paragraphs applicable for not-for-profit entities have been applied.

The Financial Management Act 2006 and the Treasurerʼs Instructions take precedence over the Australian Accounting Standards. Several Australian Accounting Standards are modified by the Treasurer's Instructions to vary application, disclosure format and wording. Where modification is required and has had a material or significant financial effect upon the reported results, details of that modification and the resulting financial effect are disclosed in the notes to the financial statements.

Basis of preparation

These financial statements are presented in Australian dollars applying the accrual basis of accounting and using the historical cost convention. Certain balances will apply a different measurement basis (such as the fair value basis). Where this is the case the different measurement basis is disclosed in the associated note. All values are rounded to the nearest thousand dollars

Judgements and estimates

Judgements, estimates and assumptions are required to be made about financial information being presented. The significant judgements and estimates made in the preparation of these financial statements are disclosed in the notes where amounts affected by those judgements and/or estimates are disclosed. Estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances.

Contributed equity

AASB Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities requires transfers in the nature of equity contributions, other than as a result of a restructure of administrative arrangements, to be designated by the Government (the owner) as contributions by owners (at the time of, or prior to, transfer) before such transfers can be recognised as equity contributions. Capital appropriations have been designated as contributions by owners by TI 955 Contributions by Owners made to Wholly Owned Public Sector Entities and have been credited directly to Contributed Equity.

The transfers of net assets to/from other agencies, other than as a result of a restructure of administrative arrangements, are designated as contributions by owners where the transfers are non-discretionary and non-reciprocal.

Note 2: WA Country Health Service outputs

How WA Country Health Service operates

This section includes information regarding the nature of funding the WA Country Health Service receives and how this funding is utilised to achieve its objectives. This note also provides the distinction between controlled funding and administered funding:

• WA Country Health Service objectives - Note 2.1
• Schedule of Income and Expenses by Service - Note 2.2

2.1 WA Country Health Service objectives

Mission

WA Country Health Serviceʼs purpose is to improve country peopleʼs health and wellbeing through access to quality services and by supporting people to look after their own health.

WA Country Health Service is predominantly funded by Parliamentary appropriations.

Services

The key services of WA Country Health Service are:

1. Public Hospital Admitted Services
The provision of healthcare services to patients in major rural hospitals that meet the criteria for admission and receive treatment and/or care for a period of time, including public patients treated in private facilities under contract to WA Health. Admission to hospital and the treatment provided may include access to acute and/or subacute inpatient services, as well as hospital in the home services. Public Hospital Admitted Services includes teaching, training and research activities provided by the public health service to facilitate development of skills and acquisition or advancement of knowledge related to admitted services. This Service does not include any component of the Mental Health Services reported under Service four “Mental Health Services”.

2. Public Hospital Emergency Services
The provision of services for the treatment of patients in emergency departments of major rural hospitals, inclusive of public patients treated in private facilities under contract to WA Health. The services provided to patients are specifically designed to provide emergency care, including a range of pre-admission, post-acute and other specialist medical, allied health, nursing and ancillary services. Public Hospital Emergency Services includes teaching, training and research activities provided by the public health service to facilitate development of skills and acquisition or advancement of knowledge related to emergency services. This Service does not include any component of the Mental Health Services reported under Service four “Mental Health Services”.

3. Public Hospital Non-admitted Services
The provision of major rural hospital services to patients who do not undergo a formal admission process, inclusive of public patients treated by private facilities under contract to WA Health. This Service includes services provided to patients in outpatient clinics, community based clinics or in the home, procedures, medical consultation, allied health or treatment provided by clinical nurse specialists. Public Hospital Non-Admitted Services includes teaching, training and research activities provided by the public health service to facilitate development of skills and acquisition or advancement of knowledge related to nonadmitted services. This Service does not include any component of the Mental Health Services reported under Service four “Mental Health Services”.

4. Mental Health Services
The provision of inpatient services where an admitted patient occupies a bed in a designated mental health facility or a designated mental health unit in a hospital setting; and the provision of non-admitted services inclusive of community and ambulatory specialised mental health programs such as prevention and promotion, community support services, community treatment services, community bed based services and forensic services. This Service includes the provision of state-wide mental health services such as perinatal mental health and eating disorder outreach programs as well as the provision of assessment, treatment, management, care or rehabilitation of persons experiencing alcohol or other drug use problems or cooccurring health issues. Mental Health Services includes teaching, training and research activities provided by the public health service to facilitate development of skills and acquisition or advancement of knowledge related to mental health or alcohol and drug services. This service includes public patients treated in private facilities under contract to WA Health.

5. Aged and Continuing Care Services
The provision of aged and continuing care services and community based palliative care services. Aged and continuing care services include programs that assess the care needs of older people, provide functional interim care or support for older, frail, aged and younger people with disabilities to continue living independently in the community and maintain independence, inclusive of the services provided by the WA Quadriplegic Centre. Aged and Continuing Care Services is inclusive of community based palliative care services that are delivered by private facilities under contract to WA Health, which focus on the prevention and relief of suffering, quality of life and the choice of care close to home for patients.

6. Public and Community Health Services
The provision of healthcare services and programs delivered to increase optimal health and wellbeing, encourage healthy lifestyles, reduce the onset of disease and disability, reduce the risk of long-term illness as well as detect, protect and monitor the incidence of disease in the population. Public and Community Health Services includes public health programs, Aboriginal health programs, disaster management, environmental health, the provision of grants to non-government organisations for public and community health purposes, emergency road and air ambulance services, services to assist rural based patients travel to receive care, and statewide pathology services provided to external WA Agencies.

7. Small Rural Hospital Services
Provides emergency care & limited acute medical/minor surgical services in locations 'close to home' for country residents/visitors, by small & rural hospitals classified as block funded. Include community care services aligning to local community needs.

2.2 Schedule of income and expenses by service                                              

	Public Hospital Admitted Services 2018 $000	Public Hospital Admitted Services 2017 $000	Public Hospital Emergency Services 2018 $000	Public Hospital Emergency Services 2017 $000	Public Hospital Non-Admitted Services 2018 $000	Public Hospital Non-Admitted Services 2017 $000	Mental Health Services (a) 2018 $000	Mental Health Services (a) 2017 $000
COST OF SERVICES
Expenses
Employee benefits expense	363,315	338,701	160,562	163,968	63,147	62,841	86,005	82,686
Fees for visiting medical practitioners	43,639	43,351	20,599	18,485	9,193	8,423	378	2,104
Patient support costs	125,477	134,308	32,280	36,077	20,482	17,088	3,934	4,863
Finance costs	81	91	22	54	12	22	-	-
Depreciation and amortisation expense	30,767	27,024	9,610	13,010	4,829	5,855	207	515
Asset revaluation decrement	6,851	41,709	1,230	1,869	527	913	351	50
Loss on disposal of non-current assets	2,306	453	559	144	345	119	0	68
Repairs, maintenance and consumable equipment	18,345	16,383	5,811	6,855	3,269	3,031	2,252	2,343
Other expenses	41,201	48,698	16,912	24,203	7,136	11,108	26,090	19,854
Total cost of services	631,982	650,718	247,585	264,665	108,940	109,400	119,217	112,483
Income
Patient charges	19,381	19,214	1,618	1,674	17,335	15,818	307	455
Commonwealth grants and contributions	199,127	179,861	54,609	56,644	34,207	34,381	25,754	22,995
Other grants and contributions	2,216	1,970	2,278	2,262	1,211	940	83,677	81,031
Donation revenue	270	316	115	64	15	44	13	23
Other revenue	7,674	3,793	2,923	1,683	2,112	363	1,514	830
Total income other than income from State Government	228,668	205,154	61,543	62,327	54,880	51,546	111,265	105,334
NET COST OF SERVICES	403,314	445,564	186,042	202,338	54,060	57,854	7,952	7,149
INCOME FROM STATE GOVERNMENT
Service appropriations	370,360	378,866	157,575	185,454	47,529	53,630	-	502
Assets assumed	38	36	(26)	1	(4)	-	(12)	-
Services received free of charge	19,718	20,843	7,704	8,335	3,390	3,455	3,710	3,540
Royalties for Regions Fund	4,314	17,947	13,564	7,177	1,870	2,975	688	3,048
Total income from State Government	394,430	417,692	178,817	200,967	52,785	60,060	4,386	7,090
DEFICIT FOR THE PERIOD	(8,884)	(27,872)	(7,225)	(1,371)	(1,275)	2,206	(3,566)	(59)

(a) Includes services in addition to those provided under agreement with the Mental Health Commission for specialised admitted patients and community mental health.

The Schedule of Income and Expenses by Service should be read in conjunction with the accompanying notes.

	Aged and Continuing 2018 $000	Aged and Continuing 2017 $000	Public and Community 2018 $000	Public and Community 2017 $000	Small Rural 2018 $000	Small Rural 2017 $000	Total 2018 $000	Total 2017 $000
COST OF SERVICES
Expenses
Employee benefits expense	95,025	98,812	115,656	108,377	119,003	103,014	1,002,713	958,399
Fees for visiting medical practitioners	205	162	794	642	11,051	10,904	85,859	84,071
Patient support costs	17,174	24,793	147,083	145,155	34,694	35,755	381,124	398,039
Finance costs	-	-	1	1	22	31	138	199
Depreciation and amortisation expense	2,575	2,837	3,787	6,373	22,230	21,402	74,005	77,016
Asset revaluation decrement	878	581	3,162	(864)	4,567	9,960	17,566	54,218
Loss on disposal of non-current assets	22	218	22	99	152	237	3,406	1,338
Repairs, maintenance and consumable equipment	3,019	4,142	3,830	4,864	12,674	10,529	49,200	48,147
Other expenses	18,754	13,536	31,918	28,586	23,548	15,658	165,559	161,643
Total cost of services	137,652	145,081	306,253	293,233	227,941	207,490	1,779,570	1,783,070
Income
Patient charges	11,997	12,565	12,982	15,780	3,567	3,490	67,187	68,996
Commonwealth grants and contributions	43,994	54,128	24,989	8,686	101,501	110,875	484,181	467,570
Other grants and contributions	1,819	2,124	4,049	4,541	402	9,981	95,652	102,849
Donation revenue	18	51	39	68	81	71	551	637
Other revenue	2,667	2,598	2,770	12,458	2,929	2,013	22,589	23,738
Total income other than income from State Government	60,495	71,466	44,829	41,533	108,480	126,430	670,160	663,790
NET COST OF SERVICES	77,157	73,615	261,424	251,700	119,461	81,060	1,109,410	1,119,280
INCOME FROM STATE GOVERNMENT
Service appropriations	64,090	49,662	227,679	212,619	81,572	62,718	948,805	943,451
Assets assumed	(12)	1	(30)	2	(21)	3	(67)	43
Services received free of charge	3,700	3,786	9,529	9,227	7,622	6,921	55,373	56,107
Royalties for Regions Fund	6,440	18,656	18,308	26,586	26,539	10,100	71,723	86,489
Total income from State Government	74,218	72,105	255,486	248,434	115,712	79,742	1,075,834	1,086,090
DEFICIT FOR THE PERIOD	(2,939)	(1,510)	(5,938)	(3,266)	(3,749)	(1,318)	(33,576)	(33,190)

The Schedule of Income and Expenses by Service should be read in conjunction with the accompanying notes.

Note 3: Use of our funding

Expenses incurred in the delivery of services

This section provides additional information about how WA Country Health Service's funding is applied and the accounting policies that are relevant for an understanding of the items recognised in the financial statements. The primary expenses incurred by WA Country Health Service in achieving its objectives and the relevant notes are:

	Notes	2018 $000	2017 $000
Employee benefits expense	3.1(a)	1,002,713	958,399
Employee benefits expense	3.1(a)	1,002,713	958,399
Employee benefits provisions	3.1(b)	171,286	158,011
Patient support costs	3.2	466,983	482,110
Repairs, maintenance, consumable equipment and other expenses	3.3	214,759	209,790

3.1(a) Employee benefits expense

	2018 $000	2017 $000
Salaries and wages	927,098	885,996
Superannuation - defined contribution plans	75,615	72,403
	1,002,713	958,399

Salaries and wages

Salaries and wages comprise of all costs related to employment including the value of the fringe benefits to employees plus the fringe benefits tax component, the value of superannuation contribution component of leave entitlements and redundancy

Superannuation expenses

The Government Employees Superannuation Board (GESB) and other fund providers administer public sector superannuation arrangements in Western Australia in accordance with legislative requirements. Eligibility criteria for membership in particular schemes for public sector employees vary according to commencement and implementation dates.

The superannuation expense recognised in the Statement of Comprehensive Income comprises employer contribution to the Gold State Superannuation Scheme (GSS), the West State Superannuation Scheme (WSS), the GESB Super Scheme (GESBS), or other superannuation funds. The employer contribution paid to the GESB in respect of the GSS is paid back to the Consolidated Account by the GESB.

The GSS is a defined benefit scheme for the purposes of employees and whole-of-government reporting. However, it is a defined contribution plan for agency purposes because the concurrent contributions (defined contributions) made by WA Country Health Service to GESB extinguishes WA Country Health Service's obligations to the related superannuation liability.

The WA Country Health Service has no liabilities under the Pension Scheme or the GSS. The liabilities for the unfunded Pension Scheme and the unfunded GSS transfer benefits attributable to members who transferred from the Pension Scheme, are assumed by the Treasurer. All other GSS obligations are funded by concurrent contributions made by WA Country Health Service to the GESB.

Employment on-costs expenses (workers compensation insurance) are included at note 3.3 'Repair, maintenance, consumable equipment and other expenses'.

3.1(b) Employee benefits provisions

Provision is made for benefits accruing to employees in respect of salaries and wages, annual leave, time off in lieu leave and long service leave for services rendered up to the reporting date and recorded as an expense during the period the services are delivered.

	2018 $000	2017 $000
Current
Employee benefits provisions
Annual leave (a)	64,774	61,864
Time off in lieu leave (a)	31,189	24,860
Long service leave (b)	44,025	42,083
Gratuities	1,226	935
Deferred salary scheme (c)	2,187	1,864
	143,401	131,606
Non-current
Employee benefits provisions
Long service leave (b)	27,198	25,910
Gratuities	687	495
	27,885	26,405
	171,286	158,011

(a) Annual leave liabilities and time off in lieu leave liabilities are classified as current liabilities as WA Country Health Service does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Assessments indicate that actual settlement of the liabilities is expected to occur as follows:

	2018 $000	2017 $000
Within 12 months of the end of the reporting period	77,449	69,251
More than 12 months after the end of the reporting period	18,514	17,473
	95,963	86,724

The provision for annual leave and time off in lieu leave is calculated at the present value of expected payments to be made in relation to services provided by employees up to the reporting date.

(b) Unconditional long service leave provisions are classified as current liabilities as WA Country Health Service does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Pre-conditional and conditional long service leave provisions are classified as non-current liabilities because WA Country Health Service has an unconditional right to defer settlement of the liability until the employee has completed the requisite years of service.

Assessments indicate that actual settlement of the liabilities is expected to occur as follows:

	2018 $000	2017 $000
Within 12 months of the end of the reporting period	11,718	11,254
More than 12 months after the end of the reporting period	59,505	56,739
	71,223	67,993

The provision for long service leave is calculated at present value as WA Country Health Service does not expect to wholly settle the amounts within 12 months. The present value is measured taking into account the present value of expected future payments to be made in relation to services provided by employees up to the reporting date. These payments are estimated using the remuneration rate expected to apply at the time of settlement, and discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

(c) The provision for the deferred salary scheme relates to WA Country Health Service's employees who have entered into an agreement to self-fund an additional twelve months leave to be taken in the fifth year of the agreement. Deferred salary scheme liabilities are classified as current liabilities as WA Country Health Service does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period.

Assessments indicate that actual settlement of the liabilities is expected to occur as follows:

	2018 $000	2017 $000
Within 12 months of the end of the reporting period	538	416
More than 12 months after the end of the reporting period	1,649	1,448
	2,187	1,864

Key sources of estimation uncertainty – long service leave

Key estimates and assumptions concerning the future are based on historical experience and various other factors that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Several estimates and assumptions are used in calculating the WA Country Health Serviceʼs long service leave provision. These include:

• Expected future salaries rates
• Discount rates
• Employee retention rates; and
• Expected future payments

Changes in these estimations and assumptions may impact on the carrying amount of the long service leave provision.

Any gain or loss following revaluation of the present value of long service leave liabilities is recognised as employee benefits expense.

3.2 Patient support costs

	2018 $000	2017 $000
Fees for visiting medical practitioners	85,859	84,071
Medical supplies and services	80,038	84,287
Domestic charges	10,320	9,818
Fuel, light and power	30,690	28,788
Food supplies	10,670	10,927
Patient transport costs	93,452	94,011
Aboriginal health services	36,367	35,685
Pathology services	41,557	46,749
Purchase of health care services	13,845	12,794
Purchase of outsourced medical services	28,526	26,680
Purchase of other outsourced services	25,192	27,921
Grant payments	10,467	20,379
Total patient support costs	466,983	482,110

Patient support costs are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any materials held for distribution are expensed when the materials are distributed.

3.3 Repairs, maintenance, consumable equipment and other expenses

	2018 $000	2017 $000
Repairs, maintenance and consumable equipment
Repairs and maintenance	29,617	25,570
Consumable equipment	19,583	22,577
Total repairs, maintenance and consumable equipment expenses	49,200	48,147
Other expenses
Communications	5,107	4,614
Computer services	2,049	2,858
Workers compensation insurance	13,935	14,985
Other employee related expenses	29,190	26,162
Insurance	6,161	5,125
Legal expenses	506	294
Motor vehicle expenses	5,110	4,357
Operating lease expenses	27,298	29,441
Printing and stationery	4,067	4,163
Doubtful debts expense	1,514	4,018
Purchase of outsourced services	21,095	18,014
Shared services costs	31,799	26,536
Other	17,728	21,076
Total other expenses	165,559	161,643

Other operating expenses generally represent the day-to-day running costs incurred in normal operations.

Repairs and maintenance costs are recognised as expenses as incurred, except where they relate to the replacement of a significant component of an asset. In that case, the costs are capitalised and depreciated.

Doubtful debt expense is recognised as the movement in the provision for doubtful debt. Please refer to note 6.1.1 'Movement of the allowance for impairment of receivables'.

Shared services costs represent the value of services related to Information technology, Human resources, Supply and Finance provided by the Health Support Services; and pathology service provided by Pathwest during the financial year. These services are provided free of charge and the corresponding revenue is reflected under Services Provided Free of Charge.

Note 4: Our funding sources

How we obtain our funding

This section provides additional information about how WA Country Health Service obtains its funding and the relevant accounting policy notes that govern the recognition and measurement of this funding. The primary income received by WA Country Health Service and the relevant notes are:

	Notes	2018 $000	2017 $000
Income from State Government	4.1	1,075,834	1,086,090
Commonwealth grants and contributions	4.2	484,181	467,570
Other grants and contributions	4.3	95,652	102,849
Patient charges	4.4	67,187	68,996
Other revenue	4.5	22,589	23,738

4.1 Income from State Government

Appropriation received during the period:

	2018 $000	2017 $000
Service appropriation (a)	948,805	943,451
	948,805	943,451

Assets transferred from/(to) other State government agencies during the period: (b)

	2018 $000	2017 $000
Medical equipment from East Metropolitan Health Services	24	10
Medical equipment from Child and Adolescent Health Services	104	-
Plant and equipment from Child and Adolescent Health Services	6	-
Medical equipment to Health Support Services	(201)	33
Total assets transferred	(67)	43

Services received free of charge from other State government agencies during the period: (c)

	2018 $000	2017 $000
Department of Finance - government accommodation	92	80
North Metropolitan Health Service (PathWest)	23,482	29,491
Health Support Services	31,799	26,536
Total services received	55,373	56,107

Royalties for Regions Fund:

Regional Community Services Account: (d)

	2018 $000	2017 $000
Regional Workers Incentives Allowance Payments	7,878	7,974
Ear, Eye and Oral Health	1,872	531
Expand the ear bus program Fitzroy Kids Health	616 -	-50
Patient Assisted Travel Scheme	11,009	10,742
Regional Palliative Care	500	1,250
Meet and Greet Program	200	-
Royal Flying Doctor Service	2,792	7,899

Regional Infrastructure Headworks Account: (d)

	2018 $000	2017 $000
Pilbara Health Partnership (Asset Investment)	2,860	3,099
Renal Dialysis Service Expansion	920	511
Busselton ICT Southern Inland Health Initiative - District Medical Workforce Investment Program (Stream 1)	915 18,599	- 30,421
- District Hospital Investment Program (Stream 2)	-	5,159
- Residential Aged and Dementia Care Investment Program (Stream 6)	5,222	14,146
- Telehealth Investment Program (Stream 5)	4,750	4,707
- District Medical Workforce Investment Program (NEW)	13,590	-
Total Royalties for Regions Fund	71,723	86,489
Total income from State Government	1,075,834	1,086,090

(a) Service appropriations are recognised at fair value in the period in which WA Country Health Service gains control of the appropriated funds. WA Country Health Service gains control of appropriated funds at the time those funds are deposited in the bank account or credited to the ʻAmounts receivable for servicesʼ (holding account) held at Treasury.)

Service appropriations fund the net cost of services delivered (as set out in note 2.2). Appropriation revenue comprises the following:

• Cash component; and
• A receivable (asset).

The receivable (holding account – note 6.2) comprises the following:

• The budgeted depreciation expense for the year; and
• Any agreed increase in leave liabilities during the year.

(b) Transfer of assets: Discretionary transfers of assets (including grants) and liabilities between State government agencies are reported under Income from State Government. Transfers of assets and liabilities in relation to a restructure of administrative arrangements are recognised as distribution to owners by the transferor and contribution by owners by the transferee under AASB 1004. Other non discretionary non-reciprocal transfers of assets and liabilities designated as contributions by owners under TI 955 are also recognised directly to equity.

(c) Services received free of charge or for nominal cost, are recognised as revenues at the fair value of those services that can be reliably measured and which would have been purchased if they were not donated.

(d) The Regional Community Services Accounts and the Regional Infrastructure and Headworks Account are sub-funds within the over-arching ʻRoyalties for Regions Fundʼ. The recurrent funds are committed to projects and programs in WA regional areas and are recognised as revenue when WA Country Health Service gains control on receipt of the funds.

4.2 Commonwealth grants and contributions

	2018 $000	2017 $000
Recurrent
National Health Reform Agreement via the Department of Health (a)	376,330	369,449
National Health Reform Agreement via the Mental Health Commission (a)	24,909	21,839
Multi Purpose Service Units	29,547	28,850
Home and Community Care Program	10,560	10,361
Other	30,834	24,556
Capital
Bringing Renal Dialysis & Support Services Closer	9,000	8,000
Strengthening Regional Cancer Services	3,000	2,000
Other	1	2,515
	484,181	467,570

(a) Activity based funding and block grant funding is received from the Commonwealth Government under the National Health Reform Agreement for services, health teaching, training and research provided by local hospital networks (Health Services). The funding arrangement established under the Agreement requires the Commonwealth Government to make funding payments to the State Pool Account from which distributions to the local hospital networks (Health Services) are made by the Department of Health and Mental Health Commission.

4.3 Other grants and contributions

	2018 $000	2017 $000
Recurrent
Mental Health Commission - service delivery agreement	71,386	67,885
Mental Health Commission - SSAMHS	5,546	5,753
WA Alcohol and Drug Authority - Community Drug Service Team & other programs	-	4,875
Mental Health Commission - Community drug and alcohol service	4,821	-
Disability Services Commission - Community aids and equipment program	2,655	2,991
Other	11,244	11,893
Capital
Onslow Health Service Redevelopment	-	9,452
	95,652	102,849

Grant income arises from transactions described as:

• Non reciprocal (where WA Country Health Service does not provide approximate equal value in return to a party providing goods or assets (or extinguishes a liability); or
• Reciprocal (where WA Country Health Service provides equal value to the recipient of the grant provider).

The accounting for these are set out below.

For non-reciprocal grants, WA Country Health Service recognises revenue when the grant is receivable at its fair value as and when its fair value can be reliably measured.

Contributions of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

For reciprocal grants, WA Country Health Service recognises income when it has satisfied its performance obligations under the terms of the grant.

Grants can further be split between:

• eneral purpose grants
• Specific purpose grants

General purpose grants refers to grants which are not subject to conditions regarding their use. Specific purpose grants are received for a particular purpose and/or have conditions attached regarding their use.

4.4 Patient charges

	2018 $000	2017 $000
Inpatient bed charges	26,379	26,218
Outpatient charges	40,808	42,778
	67,187	68,996

4.5 Other revenue

	2018 $000	2017 $000
Services to external organisations	7,481	9,666
Use of hospital facilities	2,493	1,997
Rent from commercial properties	755	876
Rent from residential properties	325	203
Staff and boarders' accommodation	7,984	8,254
Home and Community Care client fees	1,680	1,713
RiskCover insurance premium rebate	666	142
Other	1,205	887
	22,589	23,738

Revenue on provision of services is recognised by reference to the stage of completion of the transaction.

Note 5: Key assets

Assets WA Country Health Service utilises for economic benefit or service potential

This section includes information regarding the key assets WA Country Health Service utilises to gain economic benefits or provide service potential. The section sets out both the key accounting policies and financial information about the performance of these assets:

	Notes	2018 $000	2017 $000
Property, plant and equipment	5.1	1,916,214	1,777,418
Intangible assets	5.2	17,338	13,941
Total key assets		1,933,552	1,791,359

5.1 Property, plant and equipment

	Land $000	Buildings $000	Buildings under const. $000	Site Infra. $000	Leasehold improv. $000	Computer equip. $000	Furniture and fittings $000	Motor vehicles $000	Medical equip. $000	Other plant and equip. $000	Other works in progress $000	Artworks $000	Total $000
Year ended 30 June 2018
1 July 2017
Gross carrying amount	100,941	1,259,933	187,814	187,938	1,175	4,539	2,084	770	39,480	6,960	5,080	70	1,796,784
Accumulated depreciation	-	-	-	(9,892)	(304)	(658)	(171)	(520)	(6,926)	(895)	-	-	(19,366)
Carrying amount at start of period	100,941	1,259,933	187,814	178,046	871	3,881	1,913	250	32,554	6,065	5,080	70	1,777,418
Additions	-	537	225,576	153	-	165	1,006	593	6,752	2,120	4,656	5	241,563
Transfers from/(to) other reporting entities	(2,256)	(1,072)	-	-	-	-	-	-	(73)	6	-	-	(3,395)
Transfers between asset classes	-	82,610	(91,282)	9,560	-	1,328	(313)	-	392	812	(3,328)	-	(221)
Other disposals	-	(2,690)	-	(597)	-	-	(15)	-	(78)	(26)	-	-	(3,406)
Revaluation increments/(decrements)	(16,398)	(1,168)	-	-	-	-	-	-	-	-	-	-	(17,566)
Impairment losses	-	-	-	-	-	-	-	-	-	-	-	-	-
Impairment losses reversed	-	-	-	-	-		-	-	-	-	-	-	-
Depreciation	-	(52,382)	-	(10,277)	(304)	(1,372)	(170)	(251)	(6,324)	(1,116)	-	-	(72,196)
Write-down of assets	(5)	-	(3,593)	-	-	(406)	(283)	-	(283)	(22)	(1,391)	-	(5,983)
Carrying amount at 30 June 2018	82,282	1,285,768	318,515	176,885	567	3,596	2,138	592	32,940	7,839	5,017	75	1,916,214
Gross carrying amount	82,282	1,285,768	318,515	196,987	1,176	5,627	2,478	1,363	46,161	9,844	5,017	75	1,955,293
Accumulated depreciation	-	-	-	(20,102)	(609)	(2,031)	(340)	(771)	(13,221)	(2,005)	-	-	(39,079)
	82,282	1,285,768	318,515	176,885	567	3,596	2,138	592	32,940	7,839	5,017	75	1,916,214
Year ended 30 June 2017
1 July 2016
Transferred from abolished entity	123,827	1,309,648	79,748	186,329	1,175	1,280	2,050	697	33,502	4,228	6,259	181	1,748,924
Carrying amount at start of period	123,827	1,309,648	79,748	186,329	1,175	1,280	2,050	697	33,502	4,228	6,259	181	1,748,924
Additions		51	148,295	-	-	2,926	396	31	5,986	1,185	1,576	-	160,446
Transfers from/(to) other reporting entities	(698)	-	-	-	-	-	-	-	-	-	-	-	(698)
Transfers between asset classes	-	39,446	(40,229)	1,612	-	327	(313)	42	388	1,575	(2,756)	(111)	(19)
Other disposals	-	(930)	-	(15)	-	-	(43)	-	(326)	(24)	-	-	(1,338)
Revaluation increments/(decrements)	(22,188)	(32,030)	-	-	-	-	-	-	-	-	-	-	(54,218)
Impairment losses	-	-	-	-	-	-	-	-	-	-	-	-	-
Impairment losses reversed	-	-	-	-	-	-	-	-	-	-	-	-	-
Depreciation	-	(56,252)	-	(9,880)	(304)	(651)	(177)	(520)	(6,996)	(899)	-	-	(75,679)
Write-down of assets	-	-	-	-	-	-	-	-	-	-	-	-	-
Carrying amount at 30 June 2017	100,941	1,259,933	187,814	178,046	871	3,882	1,913	250	32,554	6,065	5,079	70	1,777,418
Gross carrying amount	100,941	1,259,933	187,814	187,938	1,175	4,539	2,084	770	39,480	6,960	5,080	70	1,796,784
Accumulated depreciation	-	-	-	(9,892)	(304)	(658)	(171)	(520)	(6,926)	(895)	-	-	(19,366)
	100,941	1,259,933	187,814	178,046	871	3,881	1,913	250	32,554	6,065	5,080	70	1,777,418

Information on fair value measurements is provided in Note 8.3

Initial recognition

Items of property, plant and equipment and infrastructure, costing $5,000 or more are measured initially at cost. Where an asset is acquired for no or nominal cost, the cost is valued at its fair value at the date of acquisition. Items of property, plant and equipment and infrastructure costing less than $5,000 are immediately expensed direct to the Statement of Comprehensive Income (other than where they form part of a group of similar items which are significant in total).

Assets transferred as part of a machinery of government change are transferred at their fair value.

The cost of a leasehold improvement is capitalised and depreciated over the shorter of the remaining term of the lease or the estimated useful life of the leasehold improvement.

Subsequent measurement

Subsequent to initial recognition of an asset, the revaluation model is used for the measurement of land and buildings.

Land is carried at fair value and buildings are carried at fair value less accumulated depreciation and accumulated impairment losses.

All other property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses.

Land and buildings are independently valued annually by the Western Australian Land Information Authority (Valuations and Property Analytics) and recognised annually to ensure that the carrying amount does not differ materially from the assetʼs fair value at the end of the reporting period.

Land and buildings were revalued as at 1 July 2017 by the Western Australian Land Information Authority (Valuation and Property Analytics). The valuations were performed during the year ended 30 June 2018 and recognised at 30 June 2018. In undertaking the revaluation, fair value was determined by reference to the market value for land: $31.334 million (2017: $42.90 million) and buildings: $68.604 million (2017: $64.328 million). For the remaining balance, fair value of buildings was determined on the basis of current replacement cost and fair value of land was determined on the basis of comparison with market evidence for land with low level utility (high restricted use land).

Revaluation model:

1. Fair Value where market-based evidence is available:

The fair value of land and buildings is determined on the basis of current market values determined by reference to recent market transactions.

2. Fair value in the absence of market-based evidence:

Buildings are specialised or where land is restricted: Fair value of land and buildings is determined on the basis of existing use.

Existing use buildings: Fair value is determined by reference to the cost of replacing the remaining future economic benefits embodied in the asset, i.e. the current replacement cost.

Restricted use land: Fair value is determined by comparison with market evidence for land with similar approximate utility (high restricted use land) or market value of comparable unrestricted land (low restricted use land).

When buildings are revalued, the accumulated depreciation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount.

Significant assumptions and judgements: The most significant assumptions and judgements in estimating fair value are made in assessing whether to apply the existing use basis to assets and in determining estimated economic life. Professional judgement by the valuer is required where the evidence does not provide a clear distinction between market type assets and existing use assets.

5.1.1 Depreciation and impairment

Charge for the period

	2018 $000	2017 $000
Depreciation
Buildings	52,382	56,252
Site Infrastructure	10,277	9,880
Leasehold improvements	304	304
Computer equipment	1,372	651
Furniture and fittings	170	177
Motor vehicles	251	520
Medical equipment	6,324	6,996
Other plant and equipment	1,116	899
Total depreciation for the period	72,196	75,679

As at 30 June 2018 there were no indications of impairment to property, plant and equipment.

All surplus assets at 30 June 2018 have either been classified as assets held for sale or have been written-off.

Please refer to note 5.2.1 for guidance in relation to the impairment assessment that has been performed for intangible assets.

Finite useful lives

All property, plant and equipment having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits. The exceptions to this rule include assets held for sale, land and investment properties.

Depreciation is calculated on a straight line basis, at rates that allocate the assetʼs value, less any estimated residual value, over its estimated useful life. Estimated useful lives for the different asset classes for current and prior years are:

• Buildings - 50 years
• Site infrastructure - 50 years
• Leasehold improvements - Shorter of the lease term and useful life
• Computer equipment - 4 to 10 years
• Furniture and fittings - 10 to 20 years
• Motor vehicles - 2 to 10 years
• Medical equipment - 3 to 20 years
• Other plant and equipment - 4 to 30 years

The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

Land and artworks, which are considered to have an indefinite life, are not depreciated. Depreciation is not recognised in respect of these assets because their service potential has not, in any material sense, been consumed during the reporting period.

Impairment

Non-financial assets, including items of property, plant and equipment, are tested for impairment whenever there is an indication that the asset may be impaired. Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is less than the carrying amount, the asset is considered impaired and is written down to the recoverable amount and an impairment loss is recognised.

Where an asset measured at cost is written down to its recoverable amount, an impairment loss is recognised through profit or loss.

Where a previously revalued asset is written down to its recoverable amount, the loss is recognised as a revaluation decrement through other comprehensive income.

As WA Country Health Service is a not-for-profit entity, the recoverable amount of regularly revalued specialised assets is anticipated to be materially the same as fair value.

If there is an indication that there has been a reversal in impairment, the carrying amount shall be increased to its recoverable amount. However this reversal should not increase the assetʼs carrying amount above what would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

The risk of impairment is generally limited to circumstances where an assetʼs depreciation is materially understated, where the replacement cost is falling or where there is a significant change in useful life. Each relevant class of assets is reviewed annually to verify that the accumulated depreciation/amortisation reflects the level of consumption or expiration of the assetʼs future economic benefits and to evaluate any impairment risk from declining replacement costs.

5.1.2 Revaluation decrements

	2018 $000	2017 $000
Land	16,398	22,188
Buildings	1,168	32,030
	17,566	54,218

5.1.3 Loss on disposal of non-current assets

	2018 $000	2017 $000
Net proceeds from disposal of non-current assets: Property, plant and equipment	-	-
Carrying amount of non-current assets: Property, plant and equipment	3,406	1,338
Net loss	3,406	1,338

Realised and unrealised losses are usually recognised on a net basis. These include losses arising on the disposal of noncurrent assets and some revaluations of non-current assets.

Losses on the disposal of non-current assets are presented by deducting from the proceeds on disposal the carrying amount of the asset and related selling expenses. Losses are recognised in profit or loss in the statement of comprehensive income.

Selling expenses (e.g. sales commissions netted from WA Country Health Service's receipts) are ordinarily immaterial.

5.2 Intangible assets

	Computer software $000	Works in progress $000	Total $000
Year ended 30 June 2018
1 July 2017
Gross carrying amount	14,441	837	15,278
Accumulated amortisation	(1,337)	-	(1,337)
Carrying amount at start of period	13,104	837	13,941
Additions	-	5,101	5,101
Transfers between asset classes	1,771	(1,550)	221
Amortisation expense	(1,809)	-	(1,809)
Write-down of assets	-	(116)	(116)
Carrying amount at 30 June 2018	13,066	4,272	17,338
Year ended 30 June 2017
1 July 2016
Transferred from abolished entity	7,642	2,119	9,761
Carrying amount at start of period	7,642	2,119	9,761
Additions	2,582	2,916	5,498
Transfers between asset classes	4,217	(4,198)	19
Amortisation expense	(1,337)	-	(1,337)
Carrying amount at 30 June 2017	13,104	837	13,941

Initial recognition

Acquisitions of intangible assets costing $5,000 or more and internally generated intangible assets costing $5,000 or more that comply with the recognition criteria as per AASB 138.57, are capitalised.

Costs incurred below these thresholds are immediately expensed directly to the Statement of Comprehensive Income.

Intangible assets are initially recognised at cost. For assets acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.

An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated

(a) The technical feasibility of completing the intangible asset so that it will be available for use or sale;

(b) An intention to complete the intangible asset and use or sell it;

(c) The ability to use or sell the intangible asset;

(d) The intangible asset will generate probable future economic benefit;

(e) The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

(f) The ability to measure reliably the expenditure attributable to the intangible asset during its development.

Costs incurred in the research phase of a project are immediately expensed.

Subsequent measurement

The cost model is applied for subsequent measurement of intangible assets, requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.

5.2.1 Amortisation and impairment

Charge for the period

	2018 $000	2017 $000
Computer software	1,809	1,337
Total amortisation for the period	1,809	1,337

As at 30 June 2018 there were no indications of impairment to intangible assets.

WA Country Health Service held no goodwill or intangible assets with an indefinite useful life during the reporting period. At the end of the reporting period there were no intangible assets not yet available for use.

Amortisation of finite life intangible assets is calculated on a straight line basis at rates that allocate the assetʼs value over its estimated useful life. All intangible assets controlled by WA Country Health Service have a finite useful life and zero residual value. Estimated useful lives are reviewed annually.

The estimated useful lives for each class of intangible asset are:

• Computer software: 5 - 10 years

Computer software that is an integral part of the related hardware is recognised as property, plant and equipment. Software that is not an integral part of the related hardware is recognised as an intangible asset.

Impairment

Intangible assets with finite useful lives are tested for impairment annually or when an indication of impairment is identified. The policy in connection with testing for impairment is outlined in note 5.1.1.

Note 6: Other assets and liabilities

This section sets out those assets and liabilities that arose from WA Country Health Service's controlled operations and includes other assets utilised for economic benefits and liabilities incurred during normal operations:

	Notes	2018 $000	2017 $000
Receivables	6.1	23,647	23,752
Amounts receivable for services	6.2	748,497	674,420
Other assets	6.3	9,485	10,337
Payables	6.4	116,019	119,198

6.1 Receivables

	2018 $000	2017 $000
Current
Patient fee debtors	13,100	15,425
Other receivables	2,902	4,566
Allowance for impairment of receivables	(4,428)	(9,001)
Accrued revenue	6,117	7,848
GST receivable	5,956	4,914
Total receivables	23,647	23,752

WA Country Health Service does not hold any collateral or other credit enhancements as security for receivables.

Receivables are recognised at original invoice amount less any allowances for uncollectible amounts (i.e. impairment). The carrying amount of net trade receivables is equivalent to fair value as it is due for settlement within 30 days.

6.1.1. Movement of the allowance for impairment of receivables

	2018 $000	2017 $000
Reconciliation of changes in the allowance for impairment of receivables:
Balance at start of period	9,001	-
Transfer in from abolished entity	-	5,946
Doubtful debts expense	1,514	4,018
Amounts written off during the period	(6,149)	(921)
Amounts recovered during the period	62	(42)
Balance at end of period	4,428	9,001

The collectability of receivables is reviewed on an ongoing basis and any receivables identified as uncollectible are written-off against the allowance account. The allowance for uncollectible amounts (doubtful debts) is raised when there is objective evidence that WA Country Health Service will not be able to collect the debts.

6.2 Amounts receivable for services (Holding Account)

	2018 $000	2017 $000
Non-current	748,497	674,420
Balance at end of period	748,497	674,420

Amounts receivable for services represent the non-cash component of service appropriations. It is restricted in that it can only be used for asset replacement or payment of leave liability.

WA Country Health Service receives funding on an accrual basis. The appropriations are paid partly in cash and partly as an asset (holding account receivable). The accrued amount receivable is accessible on the emergence of the cash funding requirement to cover leave entitlements and asset replacement.

6.3 Other assets

	2018 $000	2017 $000
Current
Supply inventories	2,259	2,120
Pharmaceutical inventories	2,638	2,735
Other inventories	260	415
Prepayments	4,328	5,067
Balance at end of period	9,485	10,337

Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a weighted average cost basis.

Inventories not held for resale are measured at cost unless they are no longer required, in which case they are measured at net realisable value.

Prepayments are 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.

6.4 Payables

	2018 $000	2017 $000
Current
Trade payables	19,290	31,632
Accrued expenses	82,091	65,121
Accrued salaries	14,628	22,430
Accrued interest	10	15
Balance at end of period	116,019	119,198

Payables are recognised at the amounts payable when WA Country Health Service becomes obliged to make future payments as a result of a purchase of assets or services. The carrying amount is equivalent to fair value, as settlement is generally within 30 days.

Accrued salaries represent the amount due to staff but unpaid at the end of the reporting period. Accrued salaries are settled within a fortnight of the reporting period end. WA Country Health Service considers the carrying amount of accrued salaries to be equivalent to its fair value.

Note 7: Financing

This section sets out the material balances and disclosures associated with the financing and cashflows of WA Country Health Service.

	Notes
Borrowings	7.1
Finance costs	7.2
Cash and cash equivalents	7.3
Reconciliation of cash	7.3.1
Reconciliation of operating activities	7.3.2
Commitments	7.4
Non-cancellable operating lease commitments	7.4.1
Capital commitments	7.4.2
Other expenditure commitments	7.4.3

7.1 Borrowings

	2018 $000	2017 $000
Current Department of Treasury loans (a)	1,779	1,701
Non-Current Department of Treasury loans (a)	1,865	3,644
	3,644	5,345

7.2 Finance costs

	2018 $000	2017 $000
Interest expense (a)	138	199
	138	199

(a) All loans payable are initially recognised at fair value, being the net proceeds received. Subsequent measurement is at amortised cost using the effective interest rate method. Interest incurred are expensed as finance costs.

7.3 Cash and cash equivalents

7.3.1 Reconciliation of cash

	Notes	2018 $000	2017 $000
Cash and cash equivalents		18,173	18,949
Restricted cash and cash equivalents (a) Royalties for Regions Fund	8.1	1,141	1,428
Capital grant from the Commonwealth Government (b)		16,512	12,180
Patient receipts under section 19 (2) of the Health Insurance Act 1973		4,838	4,062
Bequests		763	774
Capital funding from external sources		-	17,391
Mental Health Commission Funding (note 9.7)		234	955
Other		1,854	579
Accrued salaries suspense account (c)		7,463	3,840
Balance at end of period		50,978	60,158

(a) Restricted cash and cash equivalents are assets, the uses of which are restricted, by specific legal or other externally imposed requirements.

(b) Unspent funds from the Commonwealth Government are committed to projects and programs in WA regional areas.

(c) Funds held in the suspense account for the purpose of meeting the 27th pay in a reporting period that occurs every 11th year. This account is classified as non current for 10 out of 11 years.

For the purpose of the statement of cash flows, cash and cash equivalent (and restricted cash and cash equivalent) assets comprise cash on hand and short-term deposits with original maturities of three months or less that are readily convertible to a known amount of cash and which are subject to insignificant risk of changes in value.

7.3.2 Reconciliation of net cost of services to net cash flows used in operating activities

	Notes	2018 $000	2017 $000
Non-cash items
Net cost of services		1,109,410	1,119,280
Depreciation and amortisation expense	5.1.1, 5.2.1	(74,005)	(77,016)
Asset revaluation decrement	5.1.2	(17,566)	(54,218)
Loss from disposal of non-current assets	5.1.3	(3,406)	(1,338)
Interest paid by Department of Health		(144)	(204)
Donation of non-current assets		30	14
Services received free of charge	4.1	(55,373)	(56,107)
Write down of property, plant and equipment Net assets transferred in that are expensed	5.1, 5.2	(6,099) -	(11,305)
Adjustment for other non-cash items		(2)	(2)
Increase/(decrease) in assets
Receivables		(105)	1,328
Inventories		(113)	(284)
Prepayments		(739)	1,935
(Increase)/decrease in liabilities
Payables (a)		(8,554)	(3,938)
Current provisions		(11,795)	(4,625)
Non-current provisions		(1,480)	(1,205)
Other current liabilities Other non-current liabilities		(30) -	(8) -
Net cash used in operating activities		930,029	912,307

(a) Note that the Australian Taxation Office (ATO) receivable/payable in respect of GST and the receivable/payable in respect of the sale/purchase of non-current assets are not included in these items as they do not form part of the reconciling items.

The mandatory application of AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107 imposed disclosure impacts only. WA Country Health Service is not exposed to changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.

7.4 Commitments

The commitments below are inclusive of GST where relevant.

7.4.1 Non-cancellable operating lease commitments

Commitments for minimum lease payments are payable as follows:

	2018 $000	2017 $000
Within 1 year	8,616	8,907
Later than 1 year and not later than 5 years	5,312	6,469
later than 5 years	43	33
	13,971	15,409

Operating leases are expensed on a straight line basis over the lease term as this represents the pattern of benefits derived from the leased properties.

Operating lease commitments predominantly consist of contractual agreements for office accommodation and residential accommodation. The basis of which contingent operating leases payments are determined is the value for each lease agreement under the contract terms and conditions at current values.

7.4.2 Capital commitments

Capital expenditure commitments, being contracted capital expenditure additional to the amounts reported in the financial statements, are payable as follows:

	2018 $000	2017 $000
Within 1 year	78,339	252,743
Later than 1 year and not later than 5 years	40,512	114,125
later than 5 years	-	-
	118,851	366,868

7.4.3 Other expenditure commitments

Other expenditure commitments contracted for at the end of the reporting period but not recognised as liabilities, are payable as follows:

	2018 $000	2017 $000
Within 1 year	176,993	162,608
Later than 1 year and not later than 5 years	61,096	109,390
later than 5 years	949	5,955
	239,038	277,953

Judgements made by management in applying accounting policies – operating lease commitments

WA Country Health Service has entered into a number of leases for buildings for branch office accommodation. Some of these leases relate to buildings of a temporary nature and it has been determined that the lessor retains substantially all the risks and rewards incidental to ownership. Accordingly, these leases have been classified as operating leases.

Note 8: Risks and Contingencies

This note sets out the key risk management policies and measurement techniques of WA Country Health Service.

	Notes
Financial risk management	8.1
Contingent assets	8.2.1
Contingent liabilities	8.2.2
Fair value measurements	8.3

8.1 Financial risk management

Financial instruments held by WA Country Health Service are cash and cash equivalents, restricted cash and cash equivalents, loans and receivables, payables, and borrowings. WA Country Health Service has limited exposure to financial risks. WA Country Health Service's overall risk management program focuses on managing the risks identified below.

(a) Summary of risks and risk management

Credit risk

Credit risk arises when there is the possibility of WA Country Health Service's receivables defaulting on their contractual obligations resulting in financial loss to WA Country Health Service.

The maximum exposure to credit risk at the end of the reporting period in relation to each class of recognised financial asset is the gross carrying amount of those assets inclusive of any allowance for impairment as shown in the table at Note 8.1(c) ʻFinancial instruments disclosuresʼ and Note 6.1 ʻReceivablesʼ.

Credit risk associated with WA Country Health Service's financial assets is minimal because the main receivable is the amounts receivable for services (holding account). For receivables other than Government, WA Country Health Service trades only with recognised, creditworthy third parties. WA Country Health Service has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that WA Country Health Service's exposure to bad debts is minimal. At the end of the reporting period there were no significant concentrations of credit risk.

Liquidity risk

Liquidity risk arises when the agency is unable to meet its financial obligations as they fall due.

WA Country Health Service is exposed to liquidity risk through its trading in the normal course of business.

WA Country Health Service has appropriate procedures to manage cash flows including drawdown of appropriations by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.

Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect WA Country Health Service's income or the value of its holdings of financial instruments. WA Country Health Service does not trade in foreign currency and is not materially exposed to other price risks. WA Country Health Service's exposure to market risk for changes in interest rates relate primarily to the long-term debt obligations.

WA Country Health Service's borrowings are with the Department of Treasury and are at variable interest rates with varying maturities. Other than as detailed in the interest rate sensitivity analysis table at Note 8.1(e), WA Country Health Service is not exposed to interest rate risk because the majority of cash and cash equivalents and restricted cash are non-interest bearing and it has no borrowings other than the Treasurerʼs loans.

(b) Categories of financial instruments

The carrying amounts of each of the following categories of financial assets and financial liabilities at the end of the reporting period are:

(a) The amount of loans and receivables excludes GST recoverable from the ATO (statutory receivable).

(c) Ageing analysis of financial assets

(a) The amount of receivables excludes the GST recoverable from ATO (statutory receivable).

(d) Liquidity risk and interest rate exposure

The following table details WA Country Health Service's interest rate exposure and the contractual maturity analysis of financial assets and financial liabilities. The maturity analysis section includes interest and principal cash flows. The interest rate exposure section analyses only the carrying amounts of each item.

Interest rate exposure and maturity analysis of financial assets and financial liabilities

(a) The amount of receivables excludes the GST recoverable from ATO (statutory receivable).

(e) Interest rate sensitivity analysis

The following table represents a summary of the interest rate sensitivity of WA Country Health Serviceʼs financial assets and liabilities at the end of the reporting period on the surplus for the period and equity for a 1% change in interest rates. It is assumed that the change in interest rates is held constant throughout the reporting period.

Contingent assets and contingent liabilities are not recognised in the statement of financial position but are disclosed and, if quantifiable, are measured at nominal value.

Contingent assets and liabilities are presented inclusive of GST receivable or payable respectively.

At the reporting date, WA Country Health Service is not aware of any contingent assets.

The following contingent liabilities are excluded from the liabilities included in the financial statements:

Under the Contaminated Sites Act 2003, WA Country Health Service is required to report known and suspected contaminated sites to the Department of Water and Environmental Regulation (DWER). In accordance with the Act, DWER classifies these sites on the basis of the risk to human health, the environment and environmental values. Where sites are classified as contaminated – remediation required or possibly contaminated – investigation required, WA Country Health Service may have a liability in respect of investigation or remediation expenses.

Public holiday time off in lieu (PH TOIL)

Due to an inconsistent interpretation of the employee industrial awards and configuration of the payroll system, it has been identified by the Health Support Services (HSS) that incorrect calculations of Public Holiday Time off in Lieu (PH TOIL) have occurred at WA Country Health Service. A system resolution has been implemented for the nursing cohort and the net effect of this ($3.6m) has been adjusted for in the employee benefits provisions (Note 3.1(b)) in these financial statements. HSS has commenced work on calculating the impact of the inconsistent interpretation on other employee classes that also earn PH TOIL; however, the impact on these employee classes cannot as yet be reliably estimated.

Hospital cladding

WA Country Health Service has conducted a review of its hospitals that have aluminium composite panels (ACPs), following concerns about the potential fire risks associated with the use of some ACP cladding products. The review has identified three sites where ACPs may not meet the requirements of the building code of Australia. The cladding at these sites will undergo additional testing to determine the need for remediation work. Any costs associated with potential remediation work at these sites has not been reliably estimated.

AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

1) quoted prices (unadjusted) in active markets for identical assets (level 1).
2) input other than quoted prices included within level 1 that are observable for the asset either directly or indirectly (level 2); and
3) Inputs for the asset that are not based on observable market data (unobservable input) (level 3).

Level 2 fair values of land and buildings are derived using the market approach. Market evidence of sales prices of comparable land and buildings in close proximity is used to determine price per square metre.

(a) Represents residential accommodation buildings constructed in previous period and reflected at cost for which market values were provided in 2017/18.

Valuation processes

There were no changes in valuation techniques during the period.

Land (Level 3 fair values)

Fair value for restricted use land is based on comparison with market evidence for land with low level utility (high restricted use land). The relevant comparators of land with low level utility is selected by the Western Australian Land Information Authority (Valuations and Property Analytics) and represents the application of a significant Level 3 input in this valuation methodology. The fair value measurement is sensitive to values of comparator land, with higher values of comparator land correlating with higher estimated fair values of land.

Buildings (Level 3 fair values)

Fair value for existing use specialised buildings is determined by reference to the cost of replacing the remaining future economic benefits embodied in the asset, i.e. the current replacement cost. Current replacement cost is generally determined by reference to the market observable replacement cost of a substitute asset of comparable utility and the gross project size specifications, adjusted for obsolescence. Obsolescence encompasses physical deterioration, functional (technological) obsolescence and economic (external) obsolescence. Valuation using current replacement cost utilises the significant Level 3 input, consumed economic benefit/obsolescence of asset which is estimated by the Western Australian Land Information Authority (Valuations and Property Analytics). The fair value measurement is sensitive to the estimate of consumption/obsolescence, with higher values of the estimate correlating with lower estimated fair values of buildings.

Basis of valuation

In the absence of market-based evidence, due to the specialised nature of some non financial assets, these assets are valued at Level 3 of the fair value hierarchy on an existing use basis. The existing use basis recognises that restrictions or limitations have been placed on their use and disposal when they are not determined to be surplus to requirements. These restrictions are imposed by virtue of the assets being held to deliver a specific community service.

Mandatory application of AASB 2016-4 Amendments to Australian Accounting Standards - Recoverable Amount of Non-Cash- Generating Specialised Assets of Not-for-Profit Entities has no financial impact for the WA Country Health Service as it is classified as not-for-profit and regularly revalues its specialised property, plant and equipment assets. Therefore, fair value of the recoverable assets is expected to be materially the same as fair value.

This section includes additional material disclosures required by accounting standards or other pronouncements, for the understanding of this financial report.

There were no events occurring after the reporting period which had significant financial effects on these financial statements.

WA Country Health Service cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 Application of Australian Accounting Standards and Other Pronouncements or by an exemption from TI 1101. Where applicable, WA Country Health Service plans to apply the following Australian Accounting Standards from their application date.

WA Country Health Service has determined that key management personnel include cabinet ministers, board members and senior officers of WA Country Health Service. WA Country Health Service does not incur expenditures to compensate Ministers and those disclosures may be found in the Annual Report on State Finances.

The short-term employee benefits includes salary and travel allowances incurred by WA Country Health Service in respect of the accountable authority.

The number of senior officers other than senior officers reported as members of the Accountable Authority, whose total fees, salaries, superannuation, non-monetary benefits and other benefits for the financial year, falling within the following bands are:

The short-term employee benefits includes salary, motor vehicle benefits, district and travel allowances incurred by WA Country Health Service in respect of senior officers.

WA Country Health Service is a wholly owned public sector entity that is controlled by the State of Western Australia. Related parties of WA Country Health Service include:

In conducting its activities, WA Country Health Service is required to transact with the State and entities related to the State. These transactions are generally based on the standard terms and conditions that apply to all agencies. Significant transactions include:

Outside of normal citizen type transactions with WA Country Health Service, there was no other related party transactions that involved key management personnel and/or their close family members and/or their controlled (or jountly controlled) entities.

A related body is a body which receives more than half its funding and resources from WA Country Health Service and is subject to operational control by WA Country Health Service.

WA Country Health Service had no related bodies during the financial year.

An affiliated body is a body which receives more than half its funding and resources from WA Country Health Service but is not subject to operational control by WA Country Health Service.

WA Country Health Service had no affiliated bodies during the financial year.

The purpose of the special purpose account is to receive funds from the Mental Health Commission, to fund the provision of mental health services as jointly endorsed by the Department of Health and the Mental Health Commission, in the WA Country Health Service, in accordance with the annual Service Agreement and subsequent agreements.

The special purpose account has been established under section 16(1)(d) of the Financial Management Act.

Remuneration paid or payable to the Auditor General in respect of the audit for the current financial year is as follows:

The Western Australian Government holds the equity interest in WA Country Health Service on behalf of the community. Equity represents the residual interest in the net assets of WA Country Health Service.

Contributed equity

(a) Treasurer's Instruction (TI) 955 'Contributions by Owners Made to Wholly Owned Public Sector Entities' designates capital appropriations as contributions by owners in accordance with AASB Interpretation 1038 'Contributions by Owners Made to Wholly- Owned Public Sector Entities'.

(b) AASB 1004 'Contributions' requires transfers of net assets as a result of a restructure of administrative arrangements to be accounted for as contributions by owners and distributions to owners.

TI 955 designates non-discretionary and non-reciprocal transfers of net assets between state government agencies as contributions by owners in accordance with AASB Interpretation 1038. Where the transferee agency accounts for a non-discretionary and nonreciprocal transfer of net assets as a contribution by owners, the transferor agency accounts for the transfer as a distribution to owners.

During the financial year, $ 6.306 million (2017: $ 1.397 million) was written off WA Country Health Service's receivables under the:

All variances between estimates (original budget) and actual results for 2018, and between the actual results for 2018 and 2017 are shown below. Narratives are provided for key major variances, which are generally greater than:

(a) Employee benefits expense

The variance between current year estimate and actual is primarily attributable to various new and ongoing services for which funding
was not included in the initial estimates but were the subject of subsequent budget allocations throughout the year and at Mid-Year
Review. These included increased funding for Commonwealth funded programs ($37.6m) including multi purpose services, trachoma
services, aged, respite and home care for which funding agreements had not been finalised at the time of the initial 2017-18 budget, as
well as additional $8.6m for mental health, drug and alcohol programs.

(b) Patient support costs

The variance between current year estimate and actual is primarily due to expenditure associated with various continuing and new
services that were not included in the initial Estimates but were the subject of subsequent budget adjustments, including various
Commonwealth funded programs for which funding agreements had not been finalised at the time of the initial 2017-18 budget. In
addition, actual patient support costs include the value of services received at less than full cost from Pathwest, which had not been
included in the initial budget, but was the subject of a budget adjustment during the financial year ($23.0m).

(c) Asset revaluation decrement

The variance between current and last year actuals in asset revaluation decrement is a direct result of changes in land and building
valuation undertaken by the Western Australian Land Information Authority (Valuation and Property Analytics).

(d) Other expenses

The variance between current year estimate and actual is largely due to approved budgets in the initial estimates held pending
reallocation to other Health entities, and budget adjustments throughout the year and at Mid Year Review.

(e) Commonwealth grants and contributions

The variance between current year estimate and actual is primarily due to revenues for various continuing and new Commonwealth
funded services that were not included in the initial Estimates but were the subject of subsequent budget adjustments ($37.6m) such as
multi purpose services, trachoma services, aged, respite and home care, for which funding agreements had not been finalised at the
time of the initial 2017-18 budget. In addition, $19.0m of Commonwealth capital grants were received during the year for renal dialysis,
cancer care and Newman Health Redevelopment projects, with a corresponding budget Adjustment received at Mid Year Review.

(f) Services received free of charge

The variance between current year estimate and actual is due to revised estimates of the value of services received free of charge from
Health Support Services ($2.3m) with a corresponding budget adjustment received during the year, and the recognition of the value of
services received at less than full cost from Pathwest which had not been included in the initial budget but was the subject of a budget
adjustment during the financial year ($23.0m).

(g) Royalties for regions fund (Income)

The variance between current year estimate and actual is due to reconfiguration and recashflowing of Royalties for Regions programs
during the financial year. Variances included reprofiling and recashflowing for Southern Inland Health Initiative's medical workforce and
residential aged care programs ($14.8m), Turquoise Coast Health Initiative ($4.0m), Goldfields Emergency Telehealth ($2.7m) North
West Health Initiative ($3.3m) and various other programs ($6.2m) as detailed in the 2017-18 Mid Year Review and the 2018-19 State
budget documentation .

(h) Amounts receivable for services

Amounts receivable for services represents the non-cash component of service appropriations that support asset replacement or the
payment of leave liability. The variance between current and last year actuals is attributable to the increase in accrual appropriation for
depreciation and amortisation expenses.

(i) Property, plant and equipment

The variance between current and last year actuals is due to additions to capital projects including major infrastructure such as
Karratha Health Campus, Onslow Redevelopment and various Southern Inland Health Initiative capital projects, offset by reduction
through depreciation ($72.1m) and asset revaluation decrement ($17.6m).

(j) Capital appropriations

The variance between current year estimate and actual is due to delays in construction and achievement of project milestones for
various capital works projects which have been recashflowed during the 2017-18 Mid Year Review and the 2018-19 State Budget.

(k) Royalties for regions fund (cash flow)

The variance between current year estimate and actual is due to reconfiguration and recashflowing of the Royalties for Regions
programs during the financial year. Variances included reprofiling and recashflowing for Southern Inland Health Initiative 's medical
workforce and residential aged care programs ($14.8m), Turquoise Coast Health Initiative ($4.0m) and Goldfields Emergency
Telehealth ($2.7m), Karratha Health Campus development ($22.1m) and various other programs ($10m) as detailed in the 2017-18
Mid Year Review and the 2018-19 State budget documentation.

(l) Royalties for regions fund (cash flow)

The variance between current and last year actuals is due to higher funding received for various capital projects under the Southern
Inland Health Initiative ($79.7m) and the Karratha Health Campus development ($45m). This is offset by lower amounts received in
2017-18 for various hospital investment programs, residential aged and dementia care services, as well as a one-off payment to the
Royal Flying Doctor Services for the purchase of an aeroplane in 2016-17 ($5.1m).

(m) Employee expenses (cash flow)

The variance between current and last year actuals is due to the combined effect of increased FTE associated with new and expanded
services and changes to industrial awards for which budgets were provided in the initial 2017-18 Service Agreement or during the
financial year.

(n) Supplies and Services

The variance between current year estimate and actual is due to a combination of:
(i) the reconfiguration and recashflowing of the Royalties for Regions programs during the financial year. Variances included reprofiling
and recashflowing for Southern Inland Health Initiative 's medical workforce and residential aged care programs ($14.8m), Turquoise
Coast Health Initiative ($4.0m) and Goldfields Emergency Telehealth ($2.7m), North West Health Initiative ($3.3m) and various other
programs ($6.2m) as detailed in the 2017-18 Mid Year Review and the 2018-19 State budget documentation,
(ii) lower than budgeted expenditures on Hepatitis C antiviral drugs ($4.7m), and
(iii) the net effect of various other factors ($1.2m).

(o) Supplies and services

The variance between current and last year actuals is attributable to a combination of one off expenditures in 2016-17, including
Southern Inland Health Initiative [projects, grants to Royal Flying Doctor Service for replacement aircraft and medical equipment
replacements], together with reduced expenditures on drugs (particularly Hepatitis C antivirals).

(p) Payments for purchase of non-current physical assets

The variance between current year estimate and actual is due to the recashflow of Karratha Health Campus development ($22.1m),
and delays in construction and achievement of project milestones, adjustments to the Asset Investment Program and recashflowing of
various capital projects during the 2017-18 Mid Year Review and 2018-19 State Budget.

(q) Payment for purchase of non-current physical assets

The variance between current and last year actuals is primarily due to increased payments for various infrastructure projects including
the Karratha Health Campus development, Onslow Redevelopment and various Southern Inland Health Initiative capital projects.

Funds held in these trust accounts are not controlled by WA Country Health Service and are therefore not recognised in the financial statements.

WA Country Health Service administers trust accounts for the purpose of holding patients' private moneys.

A summary of the transactions for these trust accounts is as follows:

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WA COUNTRY HEALTH SERVICE CERTIFICATION OF THE KEY PERFORMANCE INDICATORS FOR THE YEAR ENDED 30 JUNE 2018

We hereby certify the key performance indicators are based on proper records, are relevant and appropriate for assisting users to assess the WA Country Health Service’s performance and fairly represent the performance of the Health Service for the financial year ending 30 June 2018.

[Image (PDF only]: Professor Neale Fong signature]
PROFESSOR NEALE FONG
CHAIR
WA COUNTRY HEALTH SERVICE BOARD

[Image (PDF only]: Mr Alan Ferris signature]
MR ALAN FERRIS
BOARD MEMBER
WA COUNTRY HEALTH SERVICE BOARD

19 September 2018

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Outcome 1: Public hospital based services that enable effective treatment and restorative healthcare for Western Australians

Outcome 2: Prevention, health promotion and aged and continuing care services that help Western Australians to live healthy and safe lives

After successful hospital stay, the most important task for WA public hospital patients and staff is preparing for a successful discharge home. Tracking the number of patients who experience unplanned readmissions to WA health system hospitals within 28 days for selected surgical procedures, assists in assessing the quality of hospital services provided to the community. Unplanned readmissions are those readmissions where the principle diagnosis and readmission interval indicate that the readmission may be related to the care provided by the hospital in an index surgical episode of care. This indicator measures readmissions to a public hospital (the hospital of the original admission or another public hospital) or as a public patient in Contracted Health Entities (CHEs).

Readmission rate is considered a global performance measure, as it potentially points to deficiencies in the functioning of the overall healthcare system. Good intervention and appropriate treatment, together with good discharge planning will decrease the likelihood of unplanned hospital readmissions. A low unplanned readmission rate suggests that good clinical practice is in operation within our health system, and lessons can be learnt from a higher than target unplanned readmission rate through the creation of a variety of improvement strategies.

The surgeries selected to be measured by this indicator have a risk associated with post-surgery complications. Good discharge plans can help to decrease the likelihood of unplanned hospital readmissions, by providing patients with the care instructions they need after a hospital stay and by helping patients recognise symptoms that may require immediate medical attention.

The 2017 targets can be seen in the below table:

The 2017 rate of unplanned readmissions within 28 days to a country hospital for selected surgical procedures can be seen in Table 13.

Table 13: Unplanned hospital readmissions within 28 days for selected surgical procedures, 2017

Data Source: Hospital Morbidity Data System (HMDS)

WACHS has met target for Hysterectomy and Cataract Surgery, with all other procedure readmission rates not meeting target. The low number of cases may lead to significant fluctuation in year on year results as evidenced by the raw numbers of procedures followed by readmission:

If patients experience issues or symptoms following surgery, readmission is often the safest option especially in rural or remote areas where the distance between a patient's place of residence and access to health services can be considerable. All readmission cases are individually reviewed to ensure appropriate care.

Elective surgery refers to planned surgery that can be booked in advance as a result of specialist assessment resulting in placement on the elective surgery waiting list. Waiting lists are actively managed by hospitals to ensure all patients are treated in clinically appropriate timeframes. Patients are prioritised based on their assigned clinical urgency category:

On 1 April 2016, the WA health system introduced a new state-wide performance target for the provision of elective services. The new target requires no patient (0%) on the elective waiting lists wait longer than the clinically recommended time for their procedure, according to their urgency category.

Reportable cases are defined as all waiting list cases that are not listed on the Elective Services Wait List Data Collection (ESWLDC) Commonwealth Non-Reportable Procedure List. This list is consistent with the Australian Institute of Health and Welfare (AIHW) list of Code 2 (other) procedures that do not meet the definition of elective surgery. It is also includes additional procedure codes that are intended to better reflect the procedures identified in the AIHW Code 2 list.

The 2017-18 target is 0% which is aligned to the WA state-wide performance target.

In 2017-18, the proportion of elective wait list patients waiting over boundary for reportable procedures did not meet target any category (see Table 14).

Table 14: Proportion of elective wait list patients waiting over boundary for reportable procedures, 2017-18

WA Country Health Service identified errors in the data used to calculate this KPI in 2016-17 and part of 2017-18. Due to the extent and impact of these errors, WACHS has removed the results section for this KPI from the 2016-17 Annual Report published on the WACHS website, and therefore no comparative period reporting is provided in the 2017-18 Annual Report. An erratum for the 2016-17 Annual Report has also been tabled in Parliament. The organisation is putting stringent measures in place to ensure and maintain accurate reporting of this KPI in the future.

WA Country Health Service is currently undertaking a project involving senior clinicians and health administration staff to improve the accuracy and consistency of referral documentation, and improve the use of business intelligence tools to support the monitoring and management of the elective waiting list. A program of control self-assessment on compliance is also being undertaken across the WA Country Health Service.

Staphylococcus aureus bloodstream infection (SABSI) is a serious infection that may be associated with the provision of healthcare. Staphylococcus aureus is a highly pathogenic organism and even with advanced medical care, infection caused by this organism is associated with prolonged hospital stays, increased healthcare costs and a marked increase in morbidity and mortality – mortality estimated at 20-25%.

HA-SABSI is generally considered to be preventable adverse events associated with the provision of healthcare.

This KPI has been selected for inclusion as it is a robust KPI of the safety and quality of WA public hospitals, and aligns to the principle of increased transparency and accountability of performance information provided to the public. A low or decreasing HA-SABSI rate is desirable and a target for WA based on historical data has been set.

The 2017 target is ≤ 1.0 per 10,000 bed days.

The rate of HA-SABSI Infection per 10,000 occupied bed days met target as seen in Table 15.

Table 15: Hospital infection rates (healthcare-associated Staphylococcus aureus bloodstream infections (HA-SABSI) per 10,000 occupied bed-days in public hospitals, 2017

WACHS participates in the WA Health Healthcare Associated Infection
Surveillance in Western Australia Healthcare Facilities (HISWA) program of
mandatory surveillance of a range of healthcare associated infections (HAI),
including HA-SABSI.

All instances of HA-SABSI are thoroughly investigated to determine the cause
of infection. Information on infection rates is discussed at the peak WACHS
infection prevention and control committee to help inform understanding of
WACHS HAI risks and the need to develop or revise processes to reduce
risks to patients. WACHS has standardised processes across regions for
the documentation and observation of peripheral intravenous devices often
associated with HA-SABSI.

This indicator measures a hospitals’ performance in relation to restoring the health of people who have suffered a sentinel condition-specifically a stroke, acute myocardial infarction (AMI) or fractured neck of femur (FNOF). For these conditions, a good recovery is more likely when there is early intervention and appropriate care on presentation to an emergency department and on admission to hospital.

These three conditions have been chosen as they are particularly significant for the healthcare of the community and are leading causes of death and hospitalisation in Australia. Patient survival after being admitted for one of these three sentinel conditions can be affected by many factors that include diagnosis, the treatment given or procedure performed, age, co-morbidities at the time of admission and complications which may have developed while in hospital. Hospital survival indicators, including this KPI, are considered screening tools as they are not definitively diagnostic of poor quality care and/or safety.

The 2017 targets can be seen in the below table:

During 2017, survival rates for stroke met target for all age cohorts (see Table 16). Low number of cases can lead to significant fluctuation in results. Across all age cohorts, WA Country Health Service reported 50 deaths attributed to stroke out of 635 episodes. This is an overall survival rate of 92.1%.

Table 16: Survival rates for sentinel condition: Stroke, 2017

Note: Due to low number of cases within some age categories, care should be taken when considering fluctuations in results.

Data Source: Hospital Morbidity Data System (HMDS)

WACHS has a standardised clinical care pathway for stroke, developed in line with best practice standards.

Survival rates for Acute Myocardial Infarction (AMI) for 2017 also met target performance for the 0-49 Years, 50-59 Years, 60-69 Years and 70-79 Years age cohorts. WACHS did not meet target for the 80+ years cohort (see Table 17). WA Country Health Service reported 16 deaths attributed to AMI out of 500 episodes, representing an overall survival rate of 96.8%.

Table 17: Survival rates for sentinel condition: Acute Myocardial Infarction (AMI), 2017

Note: Due to low number of cases within some age categories, care should be taken when considering fluctuations in results.

Data Source: Hospital Morbidity Data System (HMDS)

WACHS has a standardised chest pain pathway, designed in line with best practice clinical standards, which promotes sound escalation processes for patients diagnosed as having an acute myocardial infarction.

Table 18: Survival rates for sentinel condition: Fractured Neck of Femur (FNOF), 2017

Note: Due to low number of cases within some age categories, care should be taken when considering fluctuations in results.

Data Source: Hospital Morbidity Data System (HMDS)

WACHS utilises a standardised Falls Risk Assessment and Management Plan (FRAMP) in which patients are clinically reviewed and assessed for potential falling, and appropriate mitigation strategies are employed to reduce the likelihood of a fall occurring.

Patients presenting with a FNOF are at greater risk of developing delirium whilst an inpatient which adversely affects health outcomes. In 2018 WACHS is implementing a comprehensive cognitive impairment project which includes increasing the awareness of delirium and improving the recognition and response to patients with cognitive impairment.

Patients who leave hospital against medical advice (also called DAMA or discharged against medical advice) have been found to cost the health system 50% more than the cost of patients who are discharged by physicians.

WA health system public hospitals employ a range of initiatives to ensure patients receive timely, understandable information regarding their treatment options and the importance of continuing to receive care in the hospital setting, if clinically appropriate. These initiatives include supporting the delivery of culturally secure health services to Aboriginal people.

This new KPI will assist in measuring the success of these initiatives and provides a measure of the safety, quality and cultural security of the services provided.

Monitoring this indicator will enable identification of performance improvement opportunities, as well as the collaborative and effective addressing of the underlying factors in achieving an equitable treatment outcome for Aboriginal patients.

The 2017 target is ≤ 0.77%.

The 2017 Discharge Against Medical Advice (DAMA) rate did not meet target (see Table 19).

Table 19: Percentage of admitted Aboriginal and Non-Aboriginal patients who discharged against medical advice (DAMA), 2017

                                                                                                                    

Data Source: Hospital Morbidity Data System (HMDS)

WACHS revised and updated clinical guidance on DAMA in June 2018 (the Discharge Against Medical Advice Policy and associated medical record form). This has provided increased information for clinicians to support reducing the occurrence of DAMA, in particular among Aboriginal and Mental Health patients (who are statistically more likely to DAMA). The Policy includes a risk based approach to managing follow up with patients who DAMA.

This indicator provides an outcome measure of a baby’s physical health immediately after birth.

The Apgar score is an assessment of an infant’s health at birth based on breathing, heart rate, colour, muscle tone and reflex irritability. An Apgar score is applied at one, five and possibly ten minutes after delivery to determine how well the infant is adapting outside the mother’s womb. Apgar scores range from zero to two for each condition with a maximum total score of ten. The higher the Apgar score the better the health of the newborn infant.

The outcome measure can lead to the development and delivery of improved care pathways and interventions to improve the health outcomes of Western Australian infants.

The indicator also aligns to the National Core Maternity Indicators (2016) Health, Standard 02/02/2018.

The 2017 target is ≤ 1.8%.

In 2017, the percentage of live-born term infants with an Apgar score of less than seven, five minutes post-delivery met target, seen in Table 20.

Table 20: Percentage of live-born term infants with an Apgar score of less than seven at five minutes post delivery, 2017

Data Source: Midwives Notification System

The WA Country Health Service Midwifery Advisory Forum, in collaboration with the WA Country Health Service Clinical Advisory and Patient Safety Obstetrics and Gynaecology group, has updated the policy for Recognition and Response of Acute Deterioration in the Newborn at Clinical Risk. This policy now includes newly identified risk factors which contribute to newborn compromise at birth. The policy includes clear pathways for the ongoing management of newborns known to be at clinical risk at birth and at risk of clinical deterioration after birth. WACHS has also recently established a Neonatal and Paediatric Leadership group across rural and remote WA to address newborn and neonatal clinical care delivery issues. This will support staff and patients within WA to ensure the best outcomes for mothers and newborns.

A designated metal health inpatient unit or acute mental health inpatient unit may see patients readmitted after completion of a previous admission. Readmission rate is considered to be a global performance measure as it potentially points to deficiencies in the functioning of the overall mental healthcare system.

While multiple hospital admissions over a lifetime may be necessary for someone with ongoing illness, a high proportion of readmissions shortly after discharge may indicate that inpatient treatment was either incomplete or ineffective, or that follow-up care was not adequate to maintain the patient’s recovery out of hospital. These readmissions mean that patients spend additional time in hospital and utilise additional resources. A low readmission rate suggests that good clinical practice is in operation. This indicator is reported at the facility at which the initial admission occurred rather that the facility at which the patient was readmitted.

By measuring and monitoring this indicator key areas for improvements can be identified. This in turn can facilitate the development and delivery of targeted care pathways and interventions, which can aim to improve mental health and quality of life of Western Australians.

The 2017 target is ≤ 12%.

In 2017, the rate of total readmissions within 28 days to an acute designated mental health inpatient unit did not meet target (see Table 21).

Table 21: Rate of total hospital readmissions within 28 days to an acute designated mental health inpatient unit, 2017

Data Source: Hospital Morbidity Data System (HMDS)

WACHS has identified that due to limited options for supported step down or sub-acute accommodation in rural and remote WA, readmissions may be in the only option for some patients. People with an Emotionally Unstable Personality Disorder (EUPD), also known as borderline personality disorder, experience repeated crises. They are encouraged to return to Emergency Departments and receive short term re-admissions prior to the emotional crises escalating (which may otherwise result in increased self-harming behaviours).

WACHS Mental Health ensures that readmissions are monitored closely and occur where clinically appropriate and not as the first solution. Intensive post discharge follow up continues to be offered to patients however readmission will occur for highly complex patients, including those with a mood disorder.

In 2014-15 there were 4 million Australians (17.5%) who reported having a mental or behavioural condition. Therefore, it is crucial to ensure effective and appropriate care is provided not only in a hospital setting but also in the community.

Discharge from hospital is a critical transition point in the delivery of mental health care. People leaving hospital after an admission for an episode of mental health illness have heightened levels of vulnerability and, without adequate follow up, may relapse or be readmitted. This KPI measures the performance of the overall health system in providing continuity of mental health care.

A responsive community support system for persons who have experienced a psychiatric episode requiring hospitalisation is essential to maintain their clinical and functional stability and to minimise the need to hospital readmissions. Patients leaving hospital after a psychiatric admission with a formal discharge plan, involving linkages with public community based services and support, are less likely to need avoidable readmissions.

The standard underlying the measure is that continuity of care involves prompt community follow-up in the vulnerable period following discharge from hospital. Overall, the variation in post-discharge follow up rates suggest important differences between mental health systems in terms of their practices.

The 2017 target is ≥ 75%.

In 2017, contacts with community-based public mental health non-admitted services within seven days post discharge from an acute public mental health inpatient unit met target (see Table 22).

Table 22: Percentage of contacts with a community-based mental health non-admitted service within seven days post discharge, 2017

Data Sources: Mental Health Information System, Hospital Morbidity Data System (HMDS)

Throughout the last twelve months the WACHS regions have consistently met the target of 75 percent. Improved communication between the Mental Health Inpatient Units and the Community Mental Health teams has contributed to increased rates of follow up. The Mental Health services attempt to follow up all patients discharged but not all patients can be contacted within the seven day time frame. Patients may be difficult to contact for various reasons. Some patients when discharged do not want further contact and refuse to engage with the Mental Health Service. Others may decline to attend or not show up for appointments. Consumers may be lost to the service, not contactable or may have moved out of the area.

This indicator is a measure of the cost per weighted activity unit compared with the Health Service Provider’s Health Service Allocation Price (HSAP) set each year in the WA Activity Based Funding (ABF) Operating Model.

The measure ensures that a consistent methodology is applied to calculating and then measuring the performance of Health Service Providers (HSPs) against the funding they receive through the Government Budget Statement and subsequent Service Agreements and the activity delivered by each Hospital site (reported at an aggregate entity level). It is imperative that efficiency of this service delivery is accurately monitored and reported.

The target for average admitted cost per weighted activity unit is $7,285. This target differs from the state (aggregated) target of $6,868 as outlined in the 2017-18 Budget Statements Budget Paper No. 2-Volume 1. The target set in Budget Paper 2 excluded Teaching, Training and Research (TT&R) Programs and PathWest Resources received free of charge (RRFoC) (excluding direct charges to HSPs captured under the existing fee for service model). The 2017-18 WACHS Annual Report target of $7,285 reflects the target published in Budget Paper 2, adjusted for these items.

In 2017-18, the average admitted cost per weighted activity unit (WAU) met target, as can be seen in Table 23.

Table 23: Average admitted cost per weighted activity unit (WAU), 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, Hospital Morbidity Data System (HMDS)

WA Country Health Service inpatient activity is generally less acute and specialised, as more complex patients are typically referred to metropolitan health services. This results in a lower cost per nWAU result for inpatient activity.

This indicator is a measure of the cost per weighted activity unit compared with the Health Services Provider’s Health Service Allocation Price (HSAP) set each year in the WA Activity Based Funding (ABF) Operating Model.

The measure ensures that a consistent methodology is applied to calculating and then measuring the performance of Health Service Providers (HSPs) against the funding they receive through the Government Budget Statements and subsequent Service Agreements and the activity delivered by each hospital site (reported at an aggregated entity level). It is imperative that Emergency Department service provision is continually monitored to ensure the efficient delivery of safe and high quality care.

The target for average Emergency Department (ED) cost per weighted activity unit is $7,043.

This target differs from the state (aggregated) target of $6,642 as outlined in the 2017-18 Budget Statements Budget Paper No. 2-Volume 1. The target set in Budget Paper 2 excluded Teaching, Training and Research (TT&R) Programs and PathWest Resources received free of charge (RRFoC) (excluding direct charges to HSPs captured under the existing fee for service model). The 2017-18 WACHS Annual Report target of $7,043 reflects the target published in Budget Paper 2, adjusted for these items.

In 2017-18, the average emergency department cost per weighted activity unit (WAU) did not meet target, as seen in Table 24.

Table 24: Average Emergency Department (ED) cost per weighted activity unit (WAU), 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, Emergency Department Data Collection (EDDC)

The indicator is a measure of the cost per weighted activity unit compared with the Health Service Provider’s Health Service Allocation Price (HSAP) set each year in the WA Activity Based Funding (ABF) Operating Model.

The measure ensures that a consistent methodology is applied to calculating and then measuring the performance of Health Service Providers (HSPs) against the funding they received through the Government Budget Statements and subsequent Service Agreements and the activity delivered by each hospital site (reported at an aggregated entity level). It is imperative that efficiency of this Service delivery is accurately monitored and reported.

The indicator is a measure of the cost per weighted activity unit compared with the Health Service Provider’s Health Service Allocation Price (HSAP) set each year in the WA Activity Based Funding (ABF) Operating Model.

The target for average non-admitted cost per weighted activity unit is $7,160.

This target differs from the state (aggregated) target of $6,738 as outlined in the 2017-18 Budget Statements Budget Paper No. 2-Volume 1. The target set in Budget Paper 2 excluded Teaching, Training and Research (TT&R) Programs and PathWest Resources received free of charge (RRFoC) (excluding direct charges to HSPs captured under the existing fee for service model). The 2017-18 WACHS Annual Report target of $7,160 reflects the target published in Budget Paper 2, adjusted for these items.

In 2017-18, the average non-admitted cost per weighted activity unit (WAU) met target (see Table 25).

Table 25: Average Non-Admitted cost per weighted activity unit (WAU), 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, Non-Admitted Patient Activity and Wait List (NAPAAWL) Data Collection

Outpatient activity is predominately allied health and nursing services, with less specialist outpatient services, resulting in a lower cost per nWAU.

Specialised mental health inpatient units provide patient care in authorised hospitals and designated mental health units located within hospitals. In order to ensure quality care and cost effectiveness, it is important to monitor the unit cost of admitted patient care in specialised mental health inpatient units. The efficient use of hospital resources can help minimise the overall costs of providing mental healthcare and enable the reallocation of funds to appropriate alternative non admitted care.

The target for average cost per bed-day in specialised mental health inpatient units is $1,713.

This target differs from the target of $1,646 as outlined in the 2017-18 Budget Statements Budget Paper No. 2. The target set in Budget Paper 2 excluded Teaching, Training and Research (TT&R) Programs and PathWest Resources received free of charge (RRFoC) (excluding direct charges to HSPs captured under the existing fee for service model). The 2017-18 WACHS Annual Report target of $1,713 reflects the target published in Budget Paper 2, adjusted for these items.

In 2017-18, average cost per bed-day in specialised mental health inpatient units did not meet target, as seen in Table 26.

Table 26: Average cost per bed-day in specialised mental health inpatient units, 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, BedState

Changes to the Outcome Based Management (OBM) allocations for Mental Health services have resulted in refinement of overhead costs to inpatient mental health services, resulting in a decrease in average cost compared to 2016-17.

Efficient functioning of public community mental health services is critical to ensure that finite funds are used effectively to deliver maximum community benefit. Services provided by public community-based mental health services include assessment, treatment and continuing care.

Community mental health services consist of a range of community-based services such as emergency assessment and treatment, case management, day programs, rehabilitation, psychosocial, and residential services. The aim is to provide the best health outcomes for the individual through the provision of accessible and appropriate community mental health care. This indicator gives a measure of the cost effectiveness of treatment for public psychiatric patients under public community mental healthcare (non-admitted / ambulatory patients).

The 2017-18 WA Country Health Service Target is $542.

In 2017-18, WA Country Health Service average cost per treatment day of non-admitted care provided by public clinical mental health service did not meet the target as can be seen in Table 27.

Table 27: Average cost per treatment day of non-admitted care provided by public clinical mental health services, 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, Mental Health Information Data Collection

To ensure Western Australians receive the care and medical transport services they need, when they need it, WA Country Health Service has entered into a contractual relationship to deliver emergency air-based patient transport services to the WA public. This collaboration ensures that patients have access to an effective aeromedical and inter-hospital patient transfer service to ensure the best possible health outcomes for patients requiring urgent medical treatment through rapid response.

Response times for patient transport services have a direct impact on the speed with which a patient receives appropriate medical care and provide a good indication of the efficiency and effectiveness of patient transport services. Adverse effects on patients and the community are reduced if response times are reduced.

Calls are assigned a priority (1 to 3) by the service provider, to ensure that conflicting flight requests are dealt with in order of medical need and to allow operations coordinators to task aircraft and crews in the most efficient means possible to meet these needs. The priority system in place is as follows:

Through surveillance of this measure over time, the effectiveness of patient transport services can be determined. This facilitates further development of targeted strategies and improvements to operational management practices aimed at ensuring optimal restoration to health for patients in need of urgent medical care.

The 2017-18 target is ≥ 80% sourced from the WA Health System Service Agreement.

In 2017-18, WA Country Health Service did not meet the target as can be seen in Table 28.

Table 28: Response times for emergency air-based patient transport services, 2017-18

Data Source: Service Agreement Reports provided to WACHS

In 2017-18, there was an increase in the total number of patients transported state-wide, which had an impact on response times given available service resources.

WA Country Health Service continues to actively engage with the contracted provider in emergency air-based inter-hospital transfers to ensure the best care is provided to rural and remote communities.

Small country hospitals provide emergency care services, residential aged care services and limited acute medical and minor surgical services in locations ‘close to home’ for country residents and the many visitors to the regions.

The ability to access emergency services in line with the WA Health Clinical Services Framework at these facilities is a clear community expectation. Accessing services with the outcome of returning home, where clinically justified, rather than transferring to another facility, demonstrates effective service delivery closer to home.

The 2017-18 target is 92%.

In 2017-18, WA Country Health Service did not meet the target as can be seen in Table 29.

Table 29: Percentage of patients who access emergency services at a small rural or remote WA hospital and are subsequently discharged home, 2017-18

Data Source: Emergency Department Data Collection (EDDC)

Increases in admissions and transfer to other health services from small hospitals occurred in 2017-18, contributing to the lower than target result. The health needs of the patient are the top priority in any decision on treatment location.

The WA Country Health Service provides long-term care facilities for rural patients requiring 24 hour nursing care. This healthcare service is delivered to high and low dependency residents in nursing homes, hospitals, hostels and flexible care facilities, and constitutes a significant proportion of the activity within WA Country Health Service jurisdictions where access to nongovernment alternatives is limited.

2017-18 target is $321.

In 2017-18, average cost per bed-day for specialised residential care facilities, flexible care (hostels) and nursing home type residents did not meet target as seen in Table 30.

Table 30: Average cost per bed-day for specialised residential care facilities, flexible care (hostels) and nursing home type residents, 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, Occupied Bed Day (OBD) Data Warehouse

Performance in this indicator can be variable based on demand for aged care residential placements. There is a community expectation that residential aged care facilities operated by the WA Country Health Service will remain open and maintained, regardless of occupancy. In 2017-18, WA Country Health Service led residential care facilities reported over 10,000 less bed days compared to 2016-17, which impacted on the unit (bed day) cost of service delivery.

Population health units support individuals, families and communities to increase control over and improve their health. With the aim of improving health, population health works to integrate all activities of the health sector and link them with broader social and economic services and resources by utilising the WA Health Promotion Strategic Framework 2017–2021. This is based on the growing understanding of the social, cultural and economic factors that contribute to a person’s health status.

The 2017-18 WA Country Health Service target is $233.

In 2017-18, average cost per person of delivering population health programs by population health units did not meet target as per Table 31.

Table 31: Average cost per person of delivering population health programs by population health units, 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, EpiCalc

Refinement to the WA Health Outcome Based Management (OBM) structure has resulted in a change to the allocation of costs to this area, including the inclusion of nursing post costs which were previously reported under a separate Key Performance Indicator. This has resulted in an increase in population health program reported expenditure for 2017-18.

To ensure Western Australians receive the care they need, when they need it, strong partnerships have been forged within the healthcare community through a collaborative agreement between the WA Country Health Service and the contracted service provider. This collaboration ensures that patients have access to an effective emergency air-based transport service that aims to ensure the best possible health outcomes for patients requiring urgent medical treatment and transport services.

The 2017-18 target is $7,235.

In 2017-18, the cost per trip of patient emergency air-based transport based on the total accrued costs of these services per the total number of trips met the target, as seen in Table 32.

Table 32: Cost per trip of patient emergency air-based transport, 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, Service Agreement Reports provided to WACHS

The WA health system aims to provide safe, high-quality healthcare to ensure healthier, longer, and better quality lives for all Western Australians. The Patient Assisted Travel Scheme provides a subsidy towards the cost of travel and accommodation for eligible patients travelling long distances to seek certain categories of specialised medical care. The aim of the Patient Assisted Travel Scheme is to help ensure that all Western Australians can access safe, high-quality healthcare when needed.

The 2017-18 target is $377.

In 2017-18 the average cost per trip of Patient Assisted Travel Scheme (PATS) did not meet target, as per Table 33.

Table 33: Average cost per trip of Patient Assisted Travel Scheme (PATS), 2017-18

Data Sources: OBM Allocation Application, Oracle 11I Financial System, Secure Health Record Exchange (SHaRE) PATS On Line

The 2017-18 target was based on realisation of non-hospital savings, including in PATS expenditure. While maintaining costs at levels relatively consistent with prior years, WACHS was unable to achieve these savings. WACHS remains committed to supporting access to specialist care for rural and remote patients, including where patients may be required to travel long distances to receive specialist medical services.

The WA health system aims to provide safe, high-quality healthcare to ensure healthier, longer and better quality lives for all Western Australians.

Small rural hospitals provide an essential level of access to services for rural and remote communities. These hospitals have relatively low patient activity and have high fixed costs therefore it is appropriate to measure efficiency based on population numbers as opposed to unit of patient activity.

In the calculation of this indicator, ‘rural and remote’ population has been calculated using the total WA Country Health Service population.

The 2017-18 target is $390.

In 2017-18, average cost per rural and remote population (selected small rural hospitals) did not meet target (see Table 34).

Table 34: Average cost per rural and remote population (selected small rural hospitals), 2017-18

Data Sources: OBM Allocation Application, Oracle 11i Financial System, EpiCalc

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Treasurer’s Instruction 903 (12) requires disclosing information about Ministerial directives relevant to the setting of desired outcomes or operational objectives, the achievement of desired outcomes or operational objectives, investment activities and financial activities.

The WA Country Health Service did not receive any Ministerial directives related to this requirement.

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The total annual remuneration for each Board or committee is listed below in Table 35. For details of individual Board or committee members, please refer to Appendix 2.

Table 35: Summary of State Government Boards and committees within the WA County Health Service in 2017-18

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The National Health Reform Agreement sets the policy framework for the charging of public hospital fees and charges. Under the Agreement, an eligible person who receives public hospital services as a public patient in a public hospital or a publicly contracted bed in a private hospital is treated 'free of charge'. This arrangement is consistent with the Medicare principles which are embedded in the Health Services Act 2016 (WA).

The majority of hospital fees and charges for public hospitals are set under Schedule 1 of the Health Services (Fees and Charges) Order 2016 and are reviewed annually. The following informs WA public hospital patients fees and charges for:

The State charges public patients who require nursing care and/or accommodation after the 35th day of their stay in hospital, providing they no longer need acute care and they are deemed to be Nursing Home Type Patients. The total daily amount charged is no greater than 87.5 per cent of the current daily rate of the single aged pension and the maximum daily rate of rental assistance.

Patients who are either 'private' or 'compensable' and Medicare ineligible (overseas residents) may be charged an amount for public hospital services as determined by the State. The setting of compensable and ineligible hospital accommodation fees is set close to, or at, full cost recovery.

The Commonwealth Department of Health regulates the Minimum Benefit payable by health funds to privately insured patients for private shared ward and same day accommodation. The Commonwealth also regulates the Nursing Home Type Patient 'contribution' based on March and September pension increases. To achieve consistency with the Commonwealth Private Health Insurance Act 2007, the State sets these fees at a level equivalent to the Commonwealth Minimum Benefit.

Hospital charges of eligible war service veterans are determined under a separate Commonwealth-State agreement with the Department of Veterans' Affairs. Under this agreement, the Department of Health does not charge medical treatment to eligible war service veteran patients, Instead, medical charges are fully recouped from the Department of Veterans' Affairs.

The following fees and charges also apply:

There are other categories of fees specified under Health Regulations through Determinations, which include the supply of surgically implanted prostheses, Magnetic Resource Imaging services and pathology services. The pricing for these hospital services is determined according to their cost of service.

Table 36: Capital works completed in 2017-18

Table 37: Capital works in progress in 2017-18

Notes:

a) The above information is based upon the:
i 2017-18 published budget papers.
ii 2016-17 published budget papers.

b) Completion timeframes are based upon a combination of known dates at the time of reporting.

c) Projects listed above as 'completed' may still be in the defects period.

d) The footnotes that apply to individual projects are:
1. Transfer of funding between projects.
2. Royalties for Regions Funding changes.
3. Impacted as part of Whole of Government Capital Audit.
4. 2017/18 Budget excludes amounts that will not be capitalised, therefore the ETC may vary from that
reported in the 2016/17 Budget.

The WA Health Recruitment, Selection and Appointment Policy and Procedure is contained within the WA Health Employment Framework and provides the requirements and standard processes specific to recruitment, selection and appointment, secondment, transfer and temporary deployment. WA Country Health Service is committed to ensuring the timely recruitment of skilled candidates to vacancies in regional areas.

WA Country Health Service is committed to building a strong, skilled and growing Aboriginal health workforce across all levels in the organisation. A key strategy to increase the Aboriginal workforce in the WA health system is through the application of Section 51 (s.51) of the Equal Opportunity Act 1984. WA Country Health Service has applied the s.51 provision to advertising and recruitment strategies throughout the trial period from March 2017 – December 2018.

WA Country Health Service provides a learning and development framework that ensures the delivery of safe, high quality and consumer-centred care services. This is achieved by supporting and facilitating learning programs that enables the development and maintenance of professional skills. Ongoing skills development and learning assists us to attract and retain a competent workforce that is aligned with service needs. Strategies implemented during 2017-18 include a review of mandatory training requirements. Learning Frameworks are now available that provide the workforce with role specific training and skill development. The Framework areas include Nursing and Midwifery, Healthcare Support staff, Managers, Allied Health and Emergency Management roles. The use of a consistent Learning Management System enables an organisation wide governance approach to the management, publication and reporting of training and development. Enhancement to governance practices ensures cost effective delivery of training of programs.

The WA Country Health Service continues to expand its use of the innovative Statewide Telehealth Service to provide staff in regional and remote locations access to metropolitan specialists delivering training to support clinical skills development.

Responsibility for industrial relations is delineated by an Industrial Relations Policy MP 0025/16 established under the Employment Policy Framework issued by the System Manager (the Chief Executive Officer of the Department of Health) pursuant to section 26 of the Health Services Act 2016.

The Department of Health as System Manager is responsible for WA health system-wide industrial relations matters including negotiation and registration of industrial instruments. WA Country Health Service is responsible for the application of the WA Public Sector legislative and regulatory frameworks regulating employment and industrial relations, management of misconduct matters, representation and advocacy in industrial tribunals and courts, engagement with unions and other external stakeholders in industrial matters.

A new industrial agreement for hospital support workers was negotiated and in-principle agreement reached for hospital salaried officers. There was no significant industrial disputation in the year under review.

The WA Workers’ Compensation system is a scheme established by the State Government and exists under the statute of the Workers’ Compensation and Injury Management Act 1981.

The WA Country Health Service has an injury management system to assist employees who are injured in the workplace. This system has an early intervention focus within an environment where it is normal practice for employees to return to productive duties as soon as medically appropriate. In 2017-18, a total of 296 workers’ compensation claims were made (see Table 39).

WA Health Works Procurement Policy stipulates that all works over $2 million are coordinated by the Department of Finance, Building Management and Works (BMW).

In collaboration with a number of Group Training Organisations, the Apprentice management program (a business unit of BMW) manages the placement of apprentices with host employers undertaking government building and construction. BMW reports compliance with the Government building training policy in their annual report.

Table 39: Number of WA Country Health Service workers’ compensation claims in 2017-18

Note: For the purposes of the Annual Report, Employee categories are defined as:

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At the date of reporting, no senior officer or Board member, or firms of which senior officers or Board members are members, or entities in which senor officers or Board members have substantial interest, had any interests in existing or proposed contracts with the WA Country Health Service other than normal contracts of employment service.

WA Health uses Purchasing Cards for purchasing goods and services to achieve savings through improved administrative efficiency and more effective cash management. The Purchasing Card is a personalised credit card that provides a clear audit trail for management.

WA Health credit cards are provided to employees who require it as part of their role. Credit cards are not for personal use by the cardholder. Should a cardholder use a credit card for personal purposes, they are required to submit a Notice of Non-Compliance (Form 625-3) to the accountable authority within five working days of becoming aware of the transaction and refund the total amount of expenditure.

There were 30 transactions in the period where credit cards were inadvertently used for personal purposes. All transactions were refunded before the end of the reporting period.

Table 40: Credit card personal use expenditure in 2017–18

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In accordance with Section 40 of the Financial Management Act 2006, the WA Country Health Service has submitted Annual Estimates to the Minister at an appropriate time during the financial year, as determined by the Treasurer.

In accordance with section 175Z of the Electoral Act 1907, WA Country Health Service incurred a total advertising expenditure of $72,432 in 2017-18 (see Table 41). There was no expenditure in relation to advertising agencies, polling or direct mail organisations.

Table 41: Summary of WA Country Health Service advertising for 2017-18

The organisations that provided advertising services and the amount paid to each are detailed in Table 42.

Table 42: Organisations that provided advertising services

Note: Values of less than $2,500 are not listed although the amount is included in the total.

Our Disability Access and Inclusion Plan 2015-2020 was developed in consultation with our consumers, staff and key stakeholders to provide strategies for the WA Country Health Service to support increased independence, opportunities and inclusion for people with disability.

The plan outlines our priorities over a five-year period and builds upon our past achievements. WA Country Health Service continues to meet our commitment to ensuring that people with disability have the same opportunities to fully access the range of health services, facilities and information available in the public health system, and to participate in public consultation. Amongst a range of inclusion activities, we do this by:

In accordance with the Disability Services Act 1993, a progress report has been submitted to the Disability Services Commission outlining our progress against the priorities set out in the plan.

You can download a copy of our Disability Access and Inclusion Plan 2015-2020.

The WA Country Health Service values and encourages quality, integrity and justice, and we strive to ensure these values are represented in all that we do.

The WA Country Health Service is committed to complying with the Public Sector Standards in Human Resource Management (the Standards), the Western Australian Public Sector Commission’s Code of Ethics and WA Health Code of Conduct. WA Country Health Service raises awareness of these Standards and Code of Conduct and Ethics by providing information to new employees as part of induction and orientation programs; by including a compliance statement in all Job Description Forms; through mandatory training in Accountable and Ethical Decision Making, Aboriginal Cultural Awareness eLearning programs and the Management Development Program; through policies and procedures; and by publishing information in newsletters, on Notice Boards and on our intranet.

Human resource officers provide a range of consultancy and advisory services to managers and employees to ensure they are aware of and manage their responsibilities in relation to the Standards, together with processing services provided by Health Support Services (payroll and recruitment). Centralised oversight of the recruitment and selection process, including notification of the outcome of recruitment processes ensures that all applicants are provided information about their rights to claim a breach of the Standards.

Complaints alleging non-compliance with the Code of Ethics or Code of Conduct are reviewed, investigated and monitored by WA Country Health Service Industrial Relations in consultation with Human Resources.

Applications made for breach of Standards review, the outcome of claims, and number of complaints relating to non-compliance with the ethical codes is provided in Table 43 (next page).

Table 43: Summary of Breach of Standards Claims 2017-18

The Western Australian Freedom of Information Act 1992 gives all Western Australians a right of access to information held by the WA Country Health Service. The types of information held by the organisation include:

Members of the public can access some of the above information from the WA Country Health Service website. Members of the public who do not have internet access can obtain hard copy documents for free or a nominal fee outside of the Freedom of Information process.

Access to information under the Freedom of Information Act 1992 must be made in writing and can be lodged via email, sent by post or delivered in person. The written request must provide sufficient detail to enable the application to be processed, including contact details and an Australian address for correspondence.

In the case of an application for amendment or annotation of personal information it is required that the request include:

For applications seeking non-personal information there is a fee payable at the time of submission.

The WA Country Health Service has a Freedom of Information coordinator for each region. Contact details, including postal and email addresses can be sourced from the Healthy WA website.

All requests for information can be granted, partially granted or may be refused in accordance with the Western Australian Freedom of Information Act 1992. The applicant can appeal if dissatisfied with the process, the reasons provided and in the event of an adverse access decision.

For the year ended 30 June 2018, WA Country Health Service dealt with 3,207 applications for information, of which 2,887 applications were granted full or partial access and 86 were refused (Table 44).

Table 44: Applications for information under the Freedom of Information Act 1992 (WA)

WA Country Health Service has an agency-specific Recordkeeping Plan and supporting framework approved by the State Records Commission, which address the geographic challenges of country WA. This includes information on the recordkeeping system(s), record archiving and disposal arrangements, policies, practices and processes that comply with the State Records Act 2000.

Resources, advice and guidance regarding corporate recordkeeping are made available to all staff through the intranet, staff newsletters and training sessions. Strategies to ensure employees are aware and comply with the Recordkeeping Plan include online recordkeeping and awareness and systems training. In 2017-18, 3500 employees completed the mandatory online Recordkeeping Awareness training course, which is included in the WA Country Health Service induction program. The efficiency and effectiveness of the training program is reviewed on a regular basis via trainee feedback and assessments. Regular communication with end users of recordkeeping system is maintained through targeted training sessions including 'tip of the week' emails and ‘master classes’ for specific user groups. In addition, improved reporting has been implemented to ensure that managers have timely access to compliance information.

In 2017-18 a review of the WA Country Health Service Recordkeeping Plan commenced and is due for submission to the State Records Office in August 2018. The review will include findings on the programs evaluation, including organisation-wide survey, individual site assessments, adoption analysis and learning program surveys.

Across the WA Country Health Service, over 750,000 records were created in the Electronic Documents and Records Management Systems (EDRMS) during 2017-18. Over 600 users completed the EDRMS training program in 2017-18.

The WA Country Health Service is committed to substantive equality for Western Australians living in the regions through the implementation of the WA Health Policy Framework for Substantive Equality. Our commitment to recognising the diversity of our employees, consumers and other stakeholders is reflected in our organisational values, and reflected in our policies and procedures.

WA Country Health Service is committed to ensuring people with disability, their families and carers are not discriminated against. This includes providing strategies to increase independence, opportunities and inclusion for people with disability and detailed strategies are outlined in the WA Country Health Service Disability Access and Inclusion Plan 2015–2020.

A key focus for the organisation in contributing towards substantive equality is improving the health outcomes of Aboriginal people through a coordinated approach to the planning, funding and delivery of Aboriginal health programs, and the development of a workplace environment that values the employment and retention of Aboriginal employees.

An exciting achievement this year has been the State Government’s commitment to long term funding of Aboriginal health programs that are improving the health and wellbeing of Aboriginal people. The investment provides certainty of funding for programs across the state that support child and maternal health; sexual health education and support; tackling smoking; cancer screening; chronic disease prevention and treatment; improving access to mental health services; as well as promoting a healthy lifestyle and wellbeing. The commitment offers welcomed security for the Aboriginal health workforce and safeguards the long-term sustainability of Aboriginal health programs delivered in partnership with communities, non-government organisations, Aboriginal Community Controlled Health Organisations and other specialist providers.

A key focus for the organisation is to contribute towards substantive equality for Aboriginal people. In 2017-18 we have contributed to substantive equality in the following ways:

The WA Country Health Service is committed to providing a safe workplace and achieving high standards in safety and health for its employees, contractors and visitors. To achieve this the organisation has in place an integrated risk management approach to occupational safety and health that is underpinned by policies and procedures in accordance with the Occupational Safety and Health Act 1984, the Occupational Safety and Health Regulations 1996 and the Code of Practice on Occupational Safety and Health in the Western Australian Public Sector 2007. WA Country Health Service has a published Occupational Safety and Health Statement of Commitment and an Occupational Safety and Health Policy.

The WA Country Health Service takes a proactive approach to “best practice” occupational safety and health by establishing clear policies, goals and strategies and monitoring systems, developing preventative programs, and articulating employee responsibilities. Occupational safety and health objectives, policies, strategies and staff responsibilities are available to all staff through HealthPoint and occupational safety and health intranet pages.

Hazard and risk management processes include the use of Safety Risk Report forms, workplace inspections, risk assessments and job hazard analysis. Consultation on safety and health matters occurs with safety and health representatives and the formation of safety and health committees and OSH performance is improved by establishing measurable objectives and targets through OSH planning activities.

WA Country Health Service provides a comprehensive injury management service to support injured workers and facilitate the development and implementation of return to work programs. This service is guided by the requirements of both the Workers’ Compensation and Injury Management Act 1981 and the Workers’ Compensation Code of Practice (Injury Management) 2005.

Injury Management Coordinators manage the injury management systems and are accessible to staff and managers. They develop and assist in the implementation of return to work programs, and report on recovery progress. Claims management processes including claims lodgment and processing, early intervention, and ongoing claims supervision is conducted by both occupational safety and health staff and Injury Management Coordinators to ensure high levels of support are provided to injured workers and their managers.

All regions within the WA Country Health Service facilitate occupational safety and health management and consultation through:

Regional occupational safety and health committees meet regularly to discuss and resolve occupational safety and health issues. These processes facilitate communication with management on occupational safety and health issues and support hazard and incident reporting. This ensures issues are formally recognised and actions are communicated back to the employee and occupational safety and health representative.

WA Country Health Service has a dedicated injury management system which enables systematic management of workers' compensation claims and the provision of injury management services that are administered in accordance with the Workers' Compensation and Injury Management Act 1981.

Injury management services are provided to support the development of return to work programs for staff with a work-related injury or illness. The organisation adopts a case management approach involving the WA Country Health Service Injury Management Coordinator, the injured worker and their treating medical provider to facilitate the early and safe return to work of injured workers.

Return to work performance is reported to the WA Country Health Service Executive on a quarterly basis. Employee rehabilitation programs also extend to non-compensable injuries where there is a risk of exacerbating factors and/or a requirement to provide expert advice to facilitate the employee's safe return to work.

The annual performance reported for the WA Country Health Service in relation to occupational safety, health and injury for 2017-18 is summarised in Table 45.

Table 45: Occupational safety, health and injury performance 2015-16 to 2017-18

In the 2017/18 period there was a decrease in the number of Workers’ Compensation claims lodged, however of those lodged, there was an increase in severe cases compared to the prior period. WACHS will undertake proactive risk mitigation in the areas of Manual Handling and Stress incidents to achieve LTI and Severity rate improvement.

Note: Performance is based on a three-year trend and as such the comparison base year is two years prior to the current reporting year (ie. current year is 2017/18 and comparison base year is 2015/16).

Senior officers and their area of responsibility for the WA Country Health Service as at 30 June 2018 are listed in Table 46.

Table 46: WA Country Health Service senior officers

Note:

*Ms Melissa Vernon was Acting Chief Operating Officer Strategy and Reform until 31/12/2017 and is no longer filled.

**The position of Regional Director Pilbara was held by Mr Ron Wynn up until 14/07/2017. Margi Faulkner was appointed to the role on 07/08/2017.

*** The position Executive Director Workforce was filled by Mr Marshall Warner until 18/08/2017 and is no longer filled (the position has been abolished). The position of Executive Director Public Health and Ambulatory Care was temporarily held by Ms Margaret Denton until 22/07/2018 and is no longer filled