Central Queensland Hospital and Health Service Annual ... · This annual report is licenced by Central Queensland Hospital and Health Service under a Creative Commons Attribution

Central Queensland Hospital and Health Service


www.health.qld.gov.au/cq/

Central Queensland Hospital and Health Service, 2014-2015 Annual ReportPublished by Central Queensland Hospital and Health Service, September, 2015ISSN 2202-5332 (Print)

© Central Queensland Hospital and Health Service 2015

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For more information contact: Central Queensland Hospital and Health Board, Canning Street, Rockhampton Qld 4700, email [email protected], phone (07) 4920 5759.

An electronic version of this document is available at www.health.qld.gov.au/cq/annual-report-2014-2015

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http://www.health.qld.gov.au/cq/annual

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Message from the ChairThe clinical results Central Queensland Hospital and Health Service delivered its patients and community during 2014-2015 are among the best in Queensland.

Delivering the quality of health services our community deserves and establishing systems that would ensure continuous improvements was a key strategy for the year.

Improvements in service delivery highlight the innovative focus of the workforce, skill of the executive team and strategic ability of the Board.

The Board continued to invest in quality, safety and efficiency measures through projects such as the introduction of lean methodology into our organisation, which has delivered outstanding results for those waiting for an outpatient appointment, and stabilising the medical workforce.

These initiatives are investments in the future through the development of sustainable services, strong leadership, a proud workforce and strong reputation. These investments contributed to a 2014-2015 budget deficit of $2.220 million.

The financial position highlights the need for increased focus on ensuring CQ Health has the financial ability to continuously improve the services it currently provides, but also to expand those services and deliver new health care services not previously offered to public patients in Central Queensland.

The Board will continue to identify strategic opportunities to implement efficiencies that will in turn result in better health outcomes and improved life expectancy for the community.

The Board’s predonimant focus remains on the oversight of the safety and quality of the services provided by the Hospital and Health Service. The improvements have been significant but we must continue to improve.

I acknowledge the commitment and skill of my Board colleagues and their resolve to deliver a service recognised nationally for its safety, innovation and results. I also acknowledge the commitment of Chief Executive Len Richards and his future vision.

The health service remains in a position of strength.

The improvements achieved during 2014-2015 are considerable, and our plans for 2015-2016 will continue to deliver for our community.

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Message from the Chief ExecutiveSlashed waiting lists, shorter waiting times, more health services and better health outcomes were delivered to Central Queenslanders in 2014-2015. It was a year of change, improvement and progress for Central Queensland Hospital and Health Service.

As a health service, we were among the top performers in the State regarding the time taken to treat patients in our emergency departments or deliver elective surgery. The improvement in waiting times for appointments in our outpatient departments was exceptional.

Our key commitment during 2014-2015 was to eliminate avoidable patient harm in the delivery of safer services to our patients. I will not be satisfied until we achieve this goal, and significantly improved systems and processes, combined with a continued focus on patient safety, have resulted in substantial improvements.

The CQ Health list of achievements is considerable and includes: the reintroduction of a public ophthalmology service after a seven-year absence resulting in the delivery of 653 eye surgeries; greatly improved medical imaging services; more permanent doctors; recruitment of two oncologists and a haematologist to deliver our additional cancer services; more surgeons and specialists at Gladstone; stabilising the medical workforce at Capricorn Coast; and the continued development of the Rural Generalist model at Emerald.

We delivered better care for our patients and changed many lives for the better.

Most of our construction projects have been completed, from the New Ward Block at Rockhampton Hospital to the Community Care Unit in North Rockhampton, Moura Community Hospital, new or refurbished operating theatres at Rockhampton, Gladstone and Emerald and new emergency departments at Emerald and Biloela. With these improvements we can continue to grow.

Central Queenslanders will soon have access to more services closer to home with a new regional cancer service, radiation oncology service, cardiac catheter laboratory, more surgeries in our regional facilities, improved mental health facilities and services, state-of-the-art Intensive Care Unit and a rooftop helipad.

These services will save lives, and reduce heartache and pain.

Our task is also to prevent illness through education and awareness and we will continue to work with our community to promote healthy lifestyle and health choices.

The commitment of our staff, feedback from our patients and support from our community, have been reassuring.

CQ Health will continue to identify the health needs of our community, develop innovative plans to meet those needs and implement safe and cost effective services that are sustainable into the future.

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Who we areThe Central Queensland Hospital and Health Board and Central Queensland Hospital and Health Service (CQHHS) were established on 1 July 2012.

The CQHHS Annual Report 2014-2015 reflects the CQHHS Strategic Plan 2014-2018 and its Vision, Values and Objectives.

Our VisionDelivering quality, integrated health services focussed on the patient.

Our Values• Care - We will care and provide care for our communities,

individuals, groups and all of our stakeholders.

• Collaboration -We will work with other providers, educators and researchers, our communities and stakeholders to ensure our collective services are seamlessly delivered across the patient experience.

• Commitment - We will always direct our efforts to delivering the best health care to Central Queenslanders.

• Innovation - We will utilise and contribute to the development of new and effective practices for the delivery of leading edge healthcare.

• Integrity - We will be accountable for everything we do. We will conduct ourselves and our business professionally at all times.

• Respect - We will respect everyone we deal with in all that we do.

These values support those of the Queensland Government: customer first; ideas into action; unleash potential; be courageous; and empower people.

Our Key Objectives• Safe, reliable services (Chapter 2)

• Sustainable, cost effective services (Chapter 3)

• Excellent patient experience and healthcare outcomes (Chapter 4)

• Great place to work (Chapter 5)

• Strong reputation (Chapter 6)

• Effective partner relationships (Chapter 7)

Our key objectives are guided by the Queensland Government’s commitment to: work closely with all Queenslanders to create jobs and a diverse economy; deliver quality frontline services; protect the environment; and build safe, caring and connected communities.

Integrity, accountability and consultation will underpin everything Central Queensland Hospital and Health Service does.

The CQHHS Strategic Plan 2014-2018 can be viewed at www.health.qld.gov.au/cq/cqhhs-board/documents/strategic-plan.pdf

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Organisational snapshots

Performed almost 7300 surgeries

All urgent patients seen in time in our Emergency Departments

Performed 653 Opthalmology surgeries

Treated 121,500 in our EDs

$895,000 daily wages spend

338,000 outpatient appointments

Delivered 2297 babies and provided 4772 home visits for new mums and bubs

More than 62,000 oral health appointments delivering 150,000 treatments

Delivered 11,575 breast screens

26,000 oral health appointments for children aged 15 and younger

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Treated 57,500 inpatients

Provided 3600 Telehealth sessions, up 27%– fourth highest user of Telehealth in Queensland

Emergency Department wait times among best in the state. Gladstone Hospital second best performer in Queensland.

Significant improvement in recruitment of senior doctors, including 10 additional doctors at Gladstone Hospital.

Public ophthalmology service reintroduced after seven year absence. 653 eye operations performed.

Oral Health waiting time slashed. 3569 waiting more than 2 years in February 2013. 19 waiting more than 12 months in June 2015.

No patient waiting too long for surgery at the end of 2014-2015.

Outpatient waiting times slashed. 4069 waiting too long on 1 July 2014, 667 waiting too long on 30 June 2015.

Major improvements in medical imaging facilities across CQ. Best performer in Queensland with a report on 83 per cent of images within 24 hours.

Hospital in the Home allowed more than 800 people to receive treatment in their home rather than having to stay in hospital

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Letter of compliance

The Honourable Cameron Dick MP Minister for Health andMinister for Ambulance Services GPO Box 48BRISBANE Q 4001

Dear Minister Dick,I am pleased to present the Annual Report 2015–2016 and financial statements for the Central Queensland Hospital and Health Service (CQHHS).

I certify that this Annual Report complies with:• The prescribed requirements of the Financial Accountability Act 2009 and the

Financial and Performance Management Standard 2009, and• The detailed requirements set out in the Annual report requirements for Queensland

Government agencies.

A checklist outlining the annual reporting requirements can be found at page 105 of this Annual Report or accessed at http://www.health.qld.gov.au/cq/annual-report-2014-2015/

Yours sincerely

Charles Ware Chair, Central Queensland Hospital and Health Board

4 September 2015

Central Queensland Hospital and Health Service PO Box 871Rockhampton Queensland 4700 Australia

Telephone +61 49205759Facsimile +61 49206 335Website www.cq.health.qld.gov.au

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Table of contents

Message from the Chair .............................................................................................................................iMessage from the Chief Executive .................................................................................................... iiWho we are ....................................................................................................................................................iiiOrganisational snapshots .......................................................................................................................ivLetter of compliance .................................................................................................................................viTable of contents ....................................................................................................................................... vii1. Our organisation ................................................................................................................................. 1

1.1. We Delivered ...........................................................................................................................................21.2. Our Service ..............................................................................................................................................31.3. Our Diversity ..........................................................................................................................................41.4. Our Role.....................................................................................................................................................5

2. Safe, reliable services ....................................................................................................................212.1. Safe Services ........................................................................................................................................222.2. Reliable Services................................................................................................................................232.3. Culture of continuous improvement .....................................................................................232.4. Severity Access Code One (SAC1) incidents .....................................................................242.5. Action Review Meetings ...............................................................................................................242.6. Strengthening safety and governance systems ..............................................................242.7. Accreditation .......................................................................................................................................252.8. Quality governance systems.......................................................................................................252.9. Pharmacy ...............................................................................................................................................252.10. Technology .........................................................................................................................................26

3. Sustainable, cost effective services ...................................................................................... 293.1. Lean methodology ............................................................................................................................303.2. Our performance overview ......................................................................................................... 31

4. Excellent patient experience and healthcare outcomes ........................................... 374.1. Local access to services .................................................................................................................384.2. Ophthalmology ...................................................................................................................................384.3. Cancer Centre ......................................................................................................................................394.4. Midwifery Group Practice ...........................................................................................................394.5. Oral Health ............................................................................................................................................404.6. Central Queensland Consumer and Community Advisory Council ....................404.7. Tropical Cyclone Marcia ...............................................................................................................404.8. Capital Works ...................................................................................................................................... 41

5. Great place to work ....................................................................................................................... 456. Strong reputation .............................................................................................................................517. Effective partner relationships ............................................................................................... 55

7.1. One Gladstone Health Plan .........................................................................................................567.2. Cardiac Catheter Laboratory .....................................................................................................577.3. Radiation Oncology Service .....................................................................................................577.4. Coalition for Health .........................................................................................................................587.5. Subacute Chronic Care Rehabilitation ................................................................................597.6. Human Research Ethics Committee .......................................................................................59

8. Our direction .......................................................................................................................................619. Appendices .......................................................................................................................................... 65

9.1. Financial Statements 2014-2015 .............................................................................................669.1.1. Statement of Comprehensive Income for the year ended 30 June 2015 . 67

9.1.2. Statement of Financial Position as at 30 June 2015 ......................................... 68

9.1.3. Statement of Changes in Equity for the year ended 30 June 2015............ 69

9.1.4. Statement of Cash Flows for the year ended 30 June 2015 ...........................70

9.1.5. Notes to and Forming Part of the Financial Statements 2014-15 ...............71

9.1.6. Certificate of Central Queensland Hospital and Health Service ................. 101

9.1.7. Independent Auditor’s Report ....................................................................................102

9.2. Executive Management Structure ........................................................................................ 1049.3. Compliance Checklist .................................................................................................................. 105

10. Abbreviations ................................................................................................................................10711. Glossary ............................................................................................................................................109

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Our organisation

1. Our organisation

text

Chapter 1

We improved the lives of more than 500 ophthalmology patients.

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1.1. We Delivered

Central Queensland Hospital and Health Service’s 2014-2015 results rank it among the best performing public health organisations in Queensland.

The focus of delivering the right quality care at the right time, in the right place by the right staff has produced better results for our patients.

Waiting times are shorter, waiting lists have been cut, the quality of care has improved, there are more permanent doctors, new services and improved technology.

No urgent (category 1) patient waited longer than clinically recommended in our Emergency Departments and the percentage of those discharged within national standard of four hours increased from 77.7% in 2013-2014 to 86.9% in 2014-2015. This result ranked CQ Health third in Queensland and Gladstone Hospital rated second out of all reporting hospitals in the state.

At the end of the financial year there were no elective surgery patients waiting longer than clinically recommended to receive their treatment.

In February 2013 there were 3569 oral health patients who had waited more than two years for an appointment. By February 2014 no patient had waited more than two years and in June 2015 there were only 19 patients who had waited more than a year.

Our outpatient departments delivered similar success.

In July 2014, 4069 patients or 49% of those on the waiting list to see a specialist had waited longer than clinically recommended. In June 2015 that had dropped to 667 or just over 10%.

CQ Health delivered a local public ophthalmology service to Central Queensland for the first time in seven years.

While recruitment of a permanent ophthalmologist is progressing, CQ Health still delivered 653 eye surgeries, returning dignity and lifestyle without the need for long waits and extensive travel.

A major improvement in the quality and safety of our services was achieved through improvements in medical imaging services including a state-of-the-art CT in Gladstone, a new CT in Emerald, the introduction of medical imaging at the Capricorn Coast including CT and ultrasound and expanded hours of access. For our patients, this means quicker access to improved medical imaging, delivering better diagnostic tools to our clinicians with less need for patient travel.

The development of Telehealth services, linking patients with specialists without the need to travel, continued with a 27% increase in the number of appointments provided placing CQ Health as the fourth largest utiliser of the technology in Queensland Health.

The 2014-2015 increase is on top of the 70% increase achieved in the financial year before.

The Rockhampton orthopaedic Telehealth clinic was particularly busy providing 1073 appointments, almost double the 2013-2014 achievement. There was a 56% increase in use by Mental Health Services.

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A continued focus on our Hospital in the Home service, including its introduction in Emerald and continued rollout across the Central Highlands, has delivered quality care to patients in the comfort of their own home, reducing the need for a hospital stay.

Stabilising the medical workforce at key facilities, through the successful Rural Generalist model at Emerald, the One Health partnership in Gladstone and the support of Vanguard Health on the Capricorn Coast, has allowed the development and delivery of sustainable services to the community.

Our staff, patients and community can be proud of the significant achievements in departments and facilities across the health service.

1.2. Our Service

CQ Health has 2598 full-time equivalent (FTE) staff focused on patient safety and delivering public hospital and health services from Gladstone in the south, inland to the Southern and Central Highlands and north along the Capricorn Coast, serving a population of around 228,000 people.

In 2014-2015 the organisation treated more than 500,000 patients with services including medical, surgical, emergency, obstetrics, paediatrics, specialist outpatient clinics, mental health, critical care and clinical support.

The geographic footprint of the health service is diverse, ranging from regional cities to remote townships in the west and beach side communities along the coast.

The latest details from the Queensland Government Statisticians Office as at 30 June 2013 revealed the population had grown 2.1% in the five years to 2013 compared with a State average of 2%. The fastest growing Local Government Area in Central Queensland was Gladstone at 2.9% with Banana the lowest at 0.4%.

Central Queensland has a relatively young population with 21.8% aged 0-14 years compared with 19.9% across the state, and a median age of 35.3, compared with 36.6 in Queensland, as at 30 June 2012. The Central Queensland population is predicted to grow at 2% per annum to 358,000 at 30 June 2036.

The 2011 census identified Central Queensland as having 5.5% of its population identifying as Aboriginal and Torres Strait Islander where the same figure for all of Australia is 2.5%. The census also revealed 5.1% of the Central Queensland population identify as unemployed, which is comparable to the national figure of 5.6%.

Economic development in Central Queensland continued to slow during 2014-2015 as a result of significant downturn in resource sector development in the region.

The health service is responsible for the direct management of

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facilities within its geographical boundaries including:

• Biloela Hospital

• Capricorn Coast Hospital

• Emerald Hospital

• Gladstone Hospital

• Moura Hospital

• Rockhampton Hospital.

The health service also provides services from a number of Multi-Purpose Health Services (MPHS) and outpatient clinics. MPHS are located in:

• Baralaba

• Blackwater

• Mount Morgan

• Springsure

• Theodore

• Woorabinda.

Outpatient clinics are located at:

• Boyne Valley

• Capella

• Gemfields

• Tieri.

1.3. Our Diversity

Distance is a challenge to service delivery for the health service. Our large geographic area means we often service rural or remote communities, where it is not possible to have immediate access to 24-hour clinical services.

In 2012-2013 the health service introduced and embraced Telehealth, enabling real-time interaction between specialist clinicians and remote communities, overcoming the need to travel long distances for appointments.

Telehealth is used to provide services ranging from core clinical diagnostics to mental health care and antenatal care. Telehealth enables efficiencies in the delivery of quality health care services across the health service.

CQ Health continues to utilise Telehealth at one of the highest rates in Queensland, delivering greater satisfaction for our patients.

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1.4. Our Role

1.4.1. Board of Directors

Chair: Mr Charles Ware

Person with legal expertise

Term of Appointment: 18 May 2013 to 17 May 2016

Mr Charles Ware is a lawyer with more than 20 years’ experience in legal practice and corporate governance in Central Queensland serving on the boards of industry, government and non-for-profit bodies.

His board level appointments have included, Deputy Chancellor of Central Queensland University, Deputy Chair of Gladstone Ports Corporation Limited, Chair of Capricornia Electricity, Director of Ergon Energy, Director of the Residential Tenancies Authority, Chair of the Rockhampton Art Gallery Trust, Director of Queensland Biennial Festival of Music Pty Ltd, Board Member of Rockhampton Regional Development Ltd.

Charles holds a Masters of Law and Masters of Business (Public Management) and undergraduate degrees in Arts and Law. He is a Fellow of the Australian Institute of Company Directors.

Deputy Chair: Dr David Austin

Person with clinical expertise

Term of appointment: 18 May 2013 to 16 March 2015

Dr David Austin is an Intensive Care and Anaesthetics specialist whose medical career has extended across Australia and New Zealand. David brings with him a wealth of committee experience and expertise in outdoor and sports medicine.

David is currently Director of Intensive Care at Rockhampton Hospital, Discipline Academic Coordinator (Intensive Care) - Rural Clinical School and a member of a number of medical steering groups and committees. He is also author of numerous publications, conference presenter and college examiner for the College of Intensive Care Medicine and the College of Anaesthesia.

David has worked in anaesthesia and intensive care medicine within rural and metropolitan hospitals across New Zealand and Australia. David has combined his love of sport with his medical knowledge and has been the medical director for Mount Everest treks since 1990, medical advisor and doctor for diving expeditions, ski patrols, yacht races and other mountaineering adventures.

David is currently a Manuscript Reviewer for: The Lancet (1998 - present), Anaesthesia and Intensive Care (2010 - present), Wilderness and Environmental Medicine (1998 - present) and the College of Intensive Care Medicine (2009 - present) and a member of the Primary Exam Committee - CICM (2010 - present). David is also a member of the Steering Group for the Statewide Intensive Care

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Member: Mr Frank Houlihan

Board Member, Central Queensland Hospital and Health Board

Chair, Audit and Risk Committee

Person with expertise in business management, financial management and human resource management


Mr Frank Houlihan is a Partner and Managing Director in HHH Partners a chartered accountancy firm he established in Emerald in 1986.

Graduating with a Bachelor of Commerce from James Cook University, Frank has more than 30 years’ experience working with businesses in Central Queensland. He is currently the Managing Director of a four-partner accountancy firm based in Central Queensland.

Frank is also a Director of the Central Queensland Rural Division of General Practice and a Director of Central Queensland Primary Health Care Pty Ltd. Both organisations are focused on providing health services to rural communities in Central Queensland.

His current professional affiliations are: Chartered Accountants Australia & New Zealand, CPA Australia and Institute of Arbitrators and Mediators Australia.

Member: Mr Graeme Kanofski

Deputy Chair: Appointed 26 June 2015

Chair, Finance and Resource Committee

Person with expertise in business management, financial management and human resource management


Mr Graeme Kanofski has 36 years of experience in local government in Queensland, including five years as Chief Executive Officer of the Gladstone Regional Council. He holds a Bachelor of Business degree and has served as President of Local Government Managers Australia.

Graeme is a well-respected local who has an extensive career history in local government and associated organisations in the Gladstone region. He has studied local government management in El Segundo City in the USA and in the United Kingdom and has a wealth of experience in local government organisations, including: the State Emergency Service, Council Disaster Response Management, Local Government Managers Australia, Gladstone Regional Council, Calliope Shire Council, Director – Gladstone Economic and Industry Development Board, Port Curtis Alliance of Councils and Australian Airport Owners Association.

Graeme has received a number of awards for his contributions to local government and the public service and has owned and operated small businesses in the Gladstone Region. Graeme retired in 2011 and now resides in Calliope.

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Member: Mr Kurt Heidecker


Person with other areas of expertise the Minister considers relevant to a service performing its functions

Term of Appointment: 18 May 2014 – 17 May 2017

Mr Kurt Heidecker is the inaugural Chief Executive Officer of the Gladstone Industry Leadership Group which addresses issues of regional concern for six of Australia’s largest industrial sites.

Kurt brings with him a wealth of business and industry experience. In his current role, Kurt is responsible for overseeing a team aimed at building an open and trusting relationship between industry and the community. Some of his achievements include forming strong relationships with industry, activist, government and community and the development of successful Board Advisory Committees.

From 2006 to 2008, Kurt led a team of implementation, network and support training specialists in the software company. Previous to this he held roles with the Sydney Olympic Games Organising Committee, Telstra and spent 17 years in the Australian Regular Army.

Kurt has held various board positions including:

• Director – Fitzroy Basin Association, (Deputy Chair and Treasurer)

• Director – Gladstone Area Promotion and Development Limited (former)

• Member – Regional Development Australia committee for Fitzroy and Central West Queensland (former) and

• Member – Central Queensland Institute of TAFE Advisory Council (former).

Kurt’s qualifications include:

• Bachelor of Engineering (Civil),

• Masters of Design Science (Building),

• Graduate Diploma of Management,

• Master Practitioner of Neuro-Linguistic Programming.

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Member: Ms Elizabeth Baker


Chair, Safety and Quality Committee

Person with expertise in health management, business management, financial management and human resource management


Ms Elizabeth Baker is an experienced commercial/ corporate lawyer with experience in Australian and international business conventions.

Liz has a Bachelor of Law, Masters of Law, Graduate Certificate of Employment Relations and has published numerous papers on various topics relevant to employment relations.

She has served on a number of community boards, including the Gladstone District Health Council and is currently Director of the Gladstone Airport Corporation. Liz’s professional memberships include: Queensland Law Society, Queensland Industrial Relations Society, Australian Corporate Lawyers Association and Resources and Energy Law Association.

Liz is currently employed as general counsel for Queensland Alumina Limited at Gladstone and is an active member of the Gladstone community.

Member: Ms Bronwyn Christensen

Person with knowledge of health consumer and community issues relevant to the operations of the service


Ms Bronwyn Christensen is a successful local farmer and grazier, Cotton Australia’s Dawson Valley Regional Manager, Secretary to the Board for the community owned Hotel Theodore Cooperative Association and Principal of Green Cow Communications.

Bronwyn is a well-respected local who has had significant involvement in local business and community organisations in Central Queensland over many years. She is currently the President of the Theodore Hospital Auxiliary.

Bronwyn is a previous Board member of the Hotel Theodore Cooperative Association and she has previously held executive positions on the Theodore District Health Council, Theodore Meals on Wheels, Theodore Show Society and Theodore School of Ballet. From 2001 to 2005, Bronwyn played a key role in setting up the Theodore District Health Council Inc office, Youth Centre, and in the development of the council’s primary health care project plan.

She was also instrumental in the submission for and awarding of Queensland’s Healthiest Town to Theodore in 2003. In the same year, Bronwyn was awarded the Australian Institute of Management’s Rural and Remote Manager of the Year.

Bronwyn has recently been awarded a place and is participating in the iconic Australian Rural Leadership Program.

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Member: Professor Leone Hinton

Person from universities, clinical schools or research centres with expertise relevant to the operations of the service


Professor Leone Hinton holds the position of Dean of School, Nursing and Midwifery, Central Queensland University.

Previously she was the Director, Corporate Strategy and Planning. Leone’s expertise in this area was recognised when in 2010 she was awarded the Australian Institute of Management Central Queensland Professional Manager of the Year. Her interests are in organisational culture, evaluation, strategic planning and risk management.

Leone began her career as a Registered Nurse working at the Mater Children’s and Rockhampton hospitals before changing career paths to nursing training, education and research at CQUniversity.

Leone is a Fellow of the Australian Institute of Management and Member of the Australasian Institute of Public Administrators. Leone is a Doctor of Professional Studies (Transdisciplinary) and has a Masters of Education (Education Administration).

Member: Ms Karen Smith

Person with clinical expertise term of appointment:

Term of appointment: 18 May 2014 – 17 May 2017

Ms Karen Smith is the Nurse Unit Manager for the Intensive Care Unit at Rockhampton Hospital and has held that position since 1993.

She has an extensive career in Intensive Care units across Australia and is an active member of the Rockhampton community. Karen began her nursing career as a student nurse at Rockhampton Hospital and chose to specialise in Intensive Care nursing soon thereafter.

She has worked at Royal Melbourne Hospital, various Brisbane hospitals and at Rockhampton Hospital. She is a member of a number of specialist groups, including: the Australian College of Critical Care Nurses, the Central ICU Clinical Network and the Paediatric Intensive Care Advisory Group.

Karen is a Registered Nurse and has a postgraduate Certificate in Critical Care Nursing from the Royal Melbourne Hospital. She is an active member of the local equestrian community.

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1.4.2. Committees

The CQHH Board has met 12 times since July 2014 and meets monthly. Committees have meetings scheduled on a quarterly basis but meet for extraordinary meetings as required.

The costs associated with committee members’ fees and incidental expenses totalled $375,000 for the 2014-2015 Financial Year.

The Board has four committees.

Executive CommitteeChaired by Mr Charles Ware the Executive Committee is responsible for supporting the Central Queensland Hospital and Health Board (CQHHB) in its role of overseeing the Central Queensland Hospital and Health Service (CQHHS). The Committee’s scope is to work with the Health Service Chief Executive to progress the strategic issues identified by the CQHHB. The Committee works in close cooperation with the Health Service Chief Executive to strengthen the relationship between the CQHHB and the Health Service Chief Executive and to ensure accountability in the delivery of services by the CQHHS.

Finance and Resource CommitteeChaired by Mr Graeme Kanofski, the Finance and Resource Committee is responsible for monitoring and assessing the financial management and reporting obligations of the health service. It oversees resource utilisation strategies including monitoring the service’s cash flow and its financial and operating performance. The committee is also responsible for bringing the attention of the Board to any unusual financial practices. The Finance and Resource Committee works in close cooperation with the Health Service Chief Executive, Executive Director Workforce and Chief Finance Officer.

Safety and Quality CommitteeChaired by Ms Elizabeth Baker, the Safety and Quality Committee is responsible for advising the Board on matters relating to the safety and quality of health services provided by the service, including the service’s strategies to address the maintenance of high quality, safe, contemporary health services to patients. The committee works in close cooperation with the Health Service Chief Executive, Executive Director of Quality and Safety, Executive Director Accreditation, District Director of Nursing and Midwifery Services and the Executive Director Workforce.

Audit and Risk CommitteeMembers of the Audit and Risk Committee as at 30 June 2015 comprised:

• Chair: Mr Frank Houlihan

• Mr Kurt Heidecker

• Dan Nolan (external nominee with relevant experience)

• Len Richards (standing rights of attendance and Health Service Chief Executive)

• Nik Fokas (standing rights of attendance as Chief Finance Officer)

• Gavin Woolley (standing rights of attendance as Executive Director Workforce)

• Lee Peters (standing rights of attendance as Internal Audit)

• Richard Wanstall (standing rights of attendance as External Audit)

• Josh Langdon (standing rights of attendance as External Audit)

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• Karen Forrest (invitee as contract accountant)

As members of the CQHHB Mr Houlihan and Mr Heidecker are remunerated for their services to the committee.

The Audit and Risk Committee has observed the terms of its charter and had due regard to Treasury’s Audit Committee Guidelines.

The Audit and Risk Committee met four times during the 2014-2015 period and followed an approved workplan reflecting the committee’s charter.

The role of the committee is to provide independent assurance and assistance to the Board in the areas of:

• Risk, control and compliance frameworks,

• external accountability responsibilities as prescribed in the Financial Accountability Act 2009, the Hospital and Health Boards Act 2011, the Hospital and Health Boards Regulation 2012 and the Statutory Bodies Financial Arrangements Act 1982; and

• integrity framework.

The functions and responsibilities of the Audit and Risk Committee as contained in its charter and linked to the committee’s work plan cover the areas of:

Financial Statements • Reviewing the appropriateness of the accounting policies

adopted by the health service and ensure they are relevant to the health service and its specific circumstances.

• Reviewing the appropriateness of significant assumptions and critical judgements made by management, particularly around estimations which impact on reported amounts of assets, liabilities, income and expenses in the financial statements.

• Reviewing the financial statements for compliance with prescribed accounting and other requirements.

• Reviewing, with management and the external auditors, the results of the external audit and any significant issues identified.

• Exercising scepticism by questioning and seeking full and adequate explanations for any unusual transactions and their presentation in the financial statements.

• Analysing the financial performance and financial position and seek explanation for significant trends or variations from budget or forecasts.

• Ensuring that assurance with respect to the accuracy and completeness of the financial statements is given by management.

• Integrity oversight and misconduct prevention

• Providing oversight, direction and guidance on the health service’s integrity framework to ensure it is functioning appropriately.

• Overseeing the health service’s Lobbyists Contact Register reporting and any significant integrity issues arising.

• Monitoring the effectiveness of the health service’s Public Interest Disclosure process.

• Ensuring the health service complies with relevant integrity legislation (e.g. Crime and Misconduct Act 2001, Public Sector Ethics Act 1994, Public Interest Disclosure Act 2010, Integrity Act 2009) and whole of government policies, principles and guidelines

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(including the Code of Conduct for the Queensland Public Service).

• Providing advice and recommendations on integrity issues to the Board and Executive Management, as necessary.

• Monitoring health service misconduct trends and prevention approaches and address any gaps in dealing with integrity issues in relation to misconduct (including fraud and corruption).

• Ensuring the health service complies with any Crime and Misconduct Commission requirements and recommendations to improve misconduct prevention and response.

Risk Management • Reviewing the risk management framework for identifying,

monitoring and managing significant risks, including fraud.

• Satisfying itself that insurance arrangements are appropriate for the risk management framework, where appropriate.

• Liaising with management to ensure there is a common understanding of the key risks to the health service. These risks will be clearly documented in a risk register which will be regularly Reviewed to ensure it remains up-to-date.

• Assessing and contribute to the audit planning processes relating to the risks and threats to the health service.

• Reviewing effectiveness of the health service’s processes for identifying and escalating risks, particularly strategic risks.

Internal Control • Reviewing, through the internal and external audit functions,

the adequacy of the internal control structure and systems, including information technology security and control.

• Reviewing, through the internal and external audit functions, whether relevant policies and procedures are in place and up to date, including those for the management and exercise of delegations, and whether they are complied with.

• Reviewing, through the Chief Finance Officer and the System Manager assurance certifications, whether the financial internal controls are operating efficiently, effectively and economically.

Performance Management • Reviewing the health service’s compliance with the performance

management and reporting requirements of the Financial Accountability Act 2009, the Financial and Performance Management Standard 2009 and the ‘Annual Report Requirements for Queensland Government Agencies’.

• Reviewing whether performance management systems in place reflect the health service’s role/purpose and objectives (as stated in its strategic plan).

• Identifying that the performance reporting and information uses appropriate benchmarks, targets and trend analysis.

Internal Audit • Reviewing the budget, staffing and skills of the internal audit function.

• Reviewing and approving the internal audit plan, its scope and progress, and any significant changes to it, including any difficulties or restrictions on scope of activities,

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or significant disagreements with management.

• Reviewing the proposed internal audit strategic plan and annual plan to ensure they cover key risks and that there is appropriate co-ordination with the external auditor.

• Reviewing the findings and recommendations of internal audit and the response to them by management.

• Reviewing the implementation of internal audit recommendations accepted by management.

• Ensuring there is no material overlap between the internal and external audit functions.

External Audit • Consulting with external audit on the service’s proposed

audit strategy, audit plan and audit fees for the year.

• Reviewing the findings and recommendations of external audit (including from performance audits) and the response to them by management.

• Reviewing responses provided by management to ensure they are in line with the health service’s risk management framework.

• Reviewing the implementation of external audit recommendations accepted by management and where issues remain unresolved ensure that satisfactory progression is being made to mitigate the risk associated with audit’s findings.

Compliance • Determining whether management has considered legal

and compliance risks as part of the health service’s risk assessment and management arrangements.

• Reviewing the effectiveness of the system for monitoring the health service’s compliance with relevant laws, regulations and government policies.

• Reviewing the findings of any examinations by regulatory agencies, and any auditor observations.

Reporting • Submitting quarterly reports to the Board outlining relevant

matters that have been considered by it as well as the committee’s opinions, decisions and recommendations.

• Circulating minutes of the committee meetings to the Board, committee members and standing invitees as appropriate.

• Preparing an annual report to the Board summarising the performance and achievements for the previous year.

• Submitting a summary of its activities for inclusion in the health service Annual Report.

1.4.3. Internal audit

The Central Queensland, Sunshine Coast and Wide Bay Hospital and Health Services have established an internal audit function under a hub and spoke, co-sourced model. This model was to ensure the effective, efficient and economical operation of the function.

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The role, operating environment and reporting arrangements of the function are established in the Internal Audit Charter that has due regard to the professional standards and Treasury’s Audit Committee Guidelines: Improving Accountability and Performance.

The Service’s internal audit function provides independent assurance and advice to the Board Audit and Risk Committee, the Health Service Chief Executive and senior management. It enhances the Service’s corporate governance environment through an objective, systematic approach to evaluating the effectiveness and efficiency of corporate governance processes, internal controls and risk assessment. This is in keeping with the role and responsibilities detailed in Part 2, Division 5 of the Financial and Performance Management Standard 2009.

The internal audit function is independent of management and the external auditors and has operated in accordance with a strategic and annual plan approved by the Board Audit and Risk Committee. The activities of the function and the status against the Annual Plan are reported to the Audit and Risk Committee through a Quarterly Report. The function has:

• discharged the responsibilities established in the Charter by executing the annual audit plan prepared as a result of risk assessments, materiality, contractual and statutory obligations, as well as through consultation with executive management;

• provided reports on the results of audits undertaken to the Health Service Chief Executive and the Audit and Risk Committee;

• monitored and reported on the status of the implementation of audit recommendations to the Audit and Risk Committee. Management is responsible for the implementation of audit recommendations;

• liaised with the Queensland Audit Office to ensure there was no duplication of ‘audit effort’;

• supported management by providing advice on corporate governance and related issues including fraud and corruption prevention programs and risk management;

• allocated audit resources to areas on a risk basis where the work of internal audit can be valuable in providing positive assurance or identifying opportunities for positive change; and

• provided a high-level review of the Service’s annual financial statements presented to the Audit and Risk Committee for endorsement.

• The audit team are members of professional bodies including the Institute of Internal Auditors, CPA Australia and the Information System Audit and Control Association (ISACA). The Service continues to support their ongoing professional development.

1.4.4. AICD

In July 2014 CQHHB Members and the Health Service Chief Executive and Chief Finance Officer participated in the Australian Institute of Company Directors Company Directors Course; a five day program designed to explore the role and responsibilities of a director and improve a director’s contribution to the performance of the Board and support of the organisation.

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1.4.5. Our management team

Central Queensland Hospital and Health Service Management Team comprised of 12 members on 30 June 2015.

See CQHHS Organisational Structure in chapter nine.

Consultation on a restructure of the Management Team was completed during 2014-2015 with a new 10-member structure effective from 1 July 2015. The restructure will deliver more than $1million in direct savings that can be invested into frontline service delivery.

Chief Executive Len Richards

Len moved to Australia in November 2013 and his leadership skills, developed during 26 years with the National Health Service in Great Britain, have supported staff to deliver a range of significant improvements and achievements to the Central Queensland community.

Delivering safe services that Central Queenslanders can trust has been integral in Len’s vision for CQ Health and was behind a restructure of the Quality and Safety Unit.

Since Len became Chief Executive, CQ Health has slashed waiting times in its emergency departments, surgical theatres, outpatient and oral health clinics.

Len’s focus on recruitment has delivered a stabilised senior medical workforce across Central Queensland which, in turn, supports the growth and development of medical services.

CQ Health is providing an ophthalmology service for the first time since 2007, improved medical imaging services across the region have delivered greater diagnostic ability to front-line clinicians, the new Regional Cancer Centre at Rockhampton is operational and will continue to grow with a radiation oncology unit in the planning phase, and a cardiac catheter laboratory is to be developed in 2016.

New and improved facilities across Central Queensland, including Moura, Biloela, Emerald, Gladstone and Rockhampton, will support Len’s push to improve and grow services delivered to our patients, closer to where they live.

CQ Health has increased its engagement with and visibility in the community through sponsorships, partnerships, engagement committees and social media platforms, community consultations and the introduction of its Everest Trek initiative which promotes healthy lifestyle choices.

Under Len’s guidance, CQ Health is delivering a continuous improvement approach to service delivery that will achieve best quality, lowest cost, shortest lead time, best safety and high morale.

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Executive Director Medical Services (Rockhampton and Rural) Dr David Cooper

Responsible for professional oversight of medical recruitment and scope of practice at Rockhampton Hospital and Rural Health Services.

Executive Director/ Director Medical Service Gladstone Dr Nicki Murdock

Responsible for professional oversight of medical recruitment, scope of practice and health service delivery at Gladstone Hospital.

Chief Finance Officer Nik Fokas

Responsible for the provision of strategic advice on budget allocations, auditing and performance monitoring against the Service Level Agreement.

District Director of Nursing Sandy Munro

Responsible for nursing practice, strategic nursing workforce, nursing standards of practice, workload processes and education.

Executive Director Quality and Safety Karen Wade

Responsible for the quality and safety systems and clinical governance across the health service.

Executive Director of Workforce Gavin Woolley

Responsible for human resources, organisational development and workplace health and safety.

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Executive Director Infrastructure Assets and Support Services Garth Taylor

Responsible for capital development program, asset management and maintenance programs of equipment and buildings, fleet and accommodation management.

Executive Director Rural Health Services Rod Hutcheon

Responsible for health service delivery in rural areas of Central Queensland.

Executive Director Subacute, Ambulatory and Community Services Michele Gardner

Responsible for the delivery of health services in the community, Rockhampton Correctional Centre and Residential Aged Care facilities.

Executive Director Rockhampton Hospital Dan Bergin

Responsible for health service delivery at Rockhampton Hospital.

Executive Director Mental Health Services Lindsay Farley

Responsible for the delivery of mental health services and alcohol and other drug programs across Central Queensland.

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1.4.6. External scrutiny

Central Queensland Hospital and Health Service’s operations are subject to regular scrutiny from external oversight bodies. These include Queensland Audit Office (QAO), Crime and Corruption Commission, Office of the Health Ombudsman, Australian Council on Healthcare Standards, Aged Care Standards and Accreditation Agency, National Quality Management Committee of BreastScreen Australia, Health Quality and Complaints Commission, Postgraduate Medical Education Council of Queensland, Australian College of Accreditation, National Association of Testing Authorities, Queensland Ombudsman, the Coroner and others.

During the year the Auditor-General issued two Reports to Parliament relative to CQ Health:

• Report 3: 2014-15 Emergency department performance reporting. and • Report 5: 2014-15 Results of audit: Hospital

and Health Service entities 2013-14.

Issues identified in relevant Auditor-General Reports are tracked through to completion by Internal Audit and the status reported to the Audit and Risk Committee. Report 3: 2014-15 identified predominately system and policy issues to be addressed at a state-wide level with monitoring at the local level. Report 5: 2014-15 identified minor issues previously reported through direct Interim and Final Management letters.

The Crime and Corruption Commission Queensland, under section 36(5) of the Crime and Corruption Act 2001, assessed information pertaining to the CQ Health contracting of Vanguard Health to provide medical staff to the Capricorn Coast Hospital and Health Service. The Commission determined there was insufficient information to support an allegation of corrupt conduct against any officer within the health service.

Although there was a change in Government in February 2015, CQ Health was not subject to any Machinery of Government changes.

Education and information promoting the use of Enterprise Discharge Summary and the Viewer throughout CQ Health improved awareness and started the transition away from the need to refer to paper records.

A new information system was introduced to make improvements to the outpatient department queuing processes. Queue Manager assists with the validation of patient data and visibility of patient movement and enables the patient’s arrival to be automatically processed at an outpatient department kiosk.

Enhancement to the Patient Flow Information System to a newer version enabled facilities to utilise the inter-hospital transfer function within the application, cutting down on staff requirements to re-enter data and save time while enhancing communications between facilities.

New bed management views have also been introduced, which allow visibility of current inpatients at all facilities.

Access audit activities were conducted and a cleanup of network users was undertaken. The monthly process for detecting non-active network accounts has been improved and implemented.

CQ Health is committed to upholding the Department of Health’s strong commitment to improving record keeping practices and complying with the Public Records Act 2002, Information Standard 40: Record keeping and Information Standard 31: Retention and Disposal of Public records.

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1.4.7. Medical records

All patients and clients are registered on a patient administration system, with a unique identifier and medical records are stored, managed and accessed in accordance with relevant legislation and standards. Routine quality monitoring is undertaken, via a number of mechanisms, including manual and electronic audits.

The Chief Executive is the official “records custodian” responsible for the management and safe custody of these clinical records in accordance with s.8 of the Public Records Act 2002 and Queensland Government Information Standard: 40 Record keeping and Queensland Government Information Standard: 31 Retention and Disposal of Public Records. The safety and security of these records are monitored via the Quality Management Framework and regularly reported to the Chief Executive.

Queensland legislation aimed at protecting privacy and confidentiality for personal information includes:

• Information Privacy Act 2009

• Information Privacy Regulation 2009

• Hospital and Health Boards Act 2011

• Hospital and Health Boards Regulation 2012

All staff involved in the management of health records are conversant with their obligations under the relevant acts. Records are securely stored to ensure that privacy and confidentiality requirements are met and access to facilities where records are housed is controlled by electronic proximity security systems.

1.4.8. Risk Management

CQ Health continually monitors and improves risk management practices across the region, enabling the delivery of effective, appropriate and efficient risk management across the clinical, corporate and governance environments. Within those environments, the health service undertakes to assess risk in alignment with the Risk Management - Principles and Guidelines Standard AS/NZS ISO 31000: 2009, which includes strategic risk, departmental, divisional, program and operational risk. The health service Risk Management policy was established to ensure all staff will have knowledge of their level of accountability and responsibility in risk identification, assessment, reporting, treatment / control of risks as well as participate in management of risks across the organisation. Aligning with AS/NZS ISO 31000: 2009 Australian/New Zealand Standard - Risk Management and the Queensland Health Policy on Integrated Risk Management, the procedure describes risk escalation and reporting procedures to ensure risk is appropriately managed at all health service sites. The Audit and Risk Committee is responsible for establishment and maintenance of a single Risk Register to capture all high level risk and reports and escalates risks to the health service Board. In accordance with the health service Risk Management Policy, CQ Health risks are systematically raised, concluded or escalated as required. Procedurally, all risks are reported through to the Health Service Management Board. Clinical risks are then reported through to the Board’s Safety and Quality Committee. Human Resource related risks are reported through to the Board’s Finance and Resource Committee and corporate and financial risks are reported to the Audit and Risk Committee.

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Safe, reliable services

Chapter 2

2. Safe, reliable services

Improved access to medical imaging delivers more accurate and quicker diagnosis delivering better service to our patients.

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2.1. Safe Services

Quality and safety continues to be the highest priority for the Central Queensland Hospital and Health Service.

At the start of 2014-2015, the health service was experiencing a high number of adverse clinical incidents and the poor performance that had existed in the organisation previously with a lack of implementation of recommendations arising out of Root Cause Analysis of incidents had just been exposed.

The medical spotlight was on the health service after a very high profile surgical incident and there was an uncoordinated and poorly implemented action plan for enacting recommendations from the previous Australian Council on Healthcare Standards (ACHS) Accreditation Survey.

The health service was entering an accreditation year and it was adamant that quality and safety were the priorities for the year. The Board was clear about the need to demonstrate improvements and the executive management team developed its strategy early in the financial year.

2014-2015 was a very successful year with regard to quality and safety delivering:

• the implementation of all the outstanding recommendations from previous Root Cause Analyses;

• full accreditation following the ACHS survey; and

• a system that is meeting its quality and safety indicators and has clinical engagement in the agenda.

The health service continued its Speaking up for Safety campaign, which involved large group meetings with staff to discuss safety and to identify from frontline staff what we should be doing to improve the safety of services across Central Queensland.

The monthly Clinical Governance Half Day grew in strength as a forum for clinicians from across disciplines and specialties to come together to discuss important clinical issues. These sessions deliver protected time where all non-emergency activity stops, providing the clinicians with an opportunity to take part in quality and safety sessions.

Overseeing all of these changes is the Director of Quality and Safety and the Quality and Safety Unit. This area has been restructured into a system that delivers a more contemporary approach to quality and safety. This involved a fundamental re-design of job roles, job descriptions with a focus on involving more clinical staff, and moving away from an administrative-type function.

These initiatives have combined to put quality and safety at the forefront of decision-making and the way the organisation is managed. The result is positive, but careful management and nurturing is essential to embed the improvements into the organisation’s culture.

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2.2. Reliable Services

Implementation of the initial stages of a comprehensive service improvement approach within the organisation has delivered substantial results and the health service has initiated a three-year program to instil Lean methodology into the culture of our workforce.

Those initial stages included embedding sustainable solution to address our Specialist Outpatient Department waiting list, particularly for orthopaedic and cardiology services.

Staff embraced the Lean methodology processes and displayed the creativity, innovation and commitment to successfully develop and implement systems that are effective in their personal setting and are unique to our health service.

The success can be seen in outpatient waiting times. At the beginning of the financial year only 47 per cent of patients were receiving an appointment in the clinically recommended timeframe. By the end of the financial year that had increased to 90 per cent.

The Director of Innovation and Operation will lead the organisational improvement. The initial focus will be to improve the processes and productivity in the Rockhampton Hospital operating theatres and the change will flow throughout our health service.

Importantly, the changes will be designed and implemented by our staff for our staff to ensure any new processes is appropriate for the Central Queensland Hospital and Health Service.

Read more about Lean methodology and the CQ Way in Chapter 3.

2.3. Culture of continuous improvement

Quality and safety and the elimination of avoidable patient harm will remain the top priority for everyone employed in the health service and, through careful management, it will be embedded into the culture of continuous improvement for each of our 2600-member workforce.

The Speaking up for Safety program will be incorporated into staff orientation and the expectation of participation in the National Standards is already part of the orientation program.

Key quality and safety indicators have been incorporated into position descriptions.

Speaking up for Safety initiatives will continue to identify issues not only as they happen, but before they happen.

Quality is an ongoing process with no peaks and troughs. It maintains standards across the health service on a daily basis.

The new quality governance committee structure will analyse trends across CQ Health and will use a whole-of-health-service approach to the improvement of service delivery, policy development and the management of risk will be maintained and enhanced over the coming 12-month period.

Overall the past 12 months has seen significant change in the quality and safety environment with the successful accreditation in March 2015 and preparation for the next periodic review already being implemented in each of the business units.

Our quality and safety initiatives will deliver better care for our patients and consumers across Central Queensland.

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2.4. Severity Access Code One (SAC1) incidents

The number of SAC1 incidents during the financial year decreased significantly, providing evidence the Speaking up for Safety program, and other safety initiatives, are having a positive impact in the clinical environment.

The Quality and Safety Unit is working closely with the organisation’s business units to ensure the recommendations from clinical incident reviews (RCA, SAC1 and HEAPS) are implemented in a timely manner and that the actions specific to the SAC1, 2 and 3 incidents receive top priority in the clinical setting.

The management of SAC1 incidents remains a top priority for Central Queensland Hospital and Health Service. The timeframe for management of significant incidents was reduced during the last half of the financial year. Significant improvements delivered during 2014-2015 will ensure the health service can achieve Queensland Health targets for the completion of reviews of serious clinical incidents.

2.5. Action Review Meetings

The health service established an Action Review Committee to ensure a priority meeting is held within 48 hours of any incident reported as a SAC1. These meetings identify the events leading up to the incident, analyse the report outcomes and determine any immediate actions needed to ensure a safe environment while a full review of the incident continues. The issues identified may relate to human resources, rostering or equipment.

The Action Review Meetings have been well received by clinical staff and the participation by multidisciplinary team members has been beneficial to all involved by ensuring a sharing of information.

2.6. Strengthening safety and governance systems

An external review of the Quality and Safety Unit in April 2014 identified a need for change to ensure the delivery of a contemporary service in the quality and safety setting.

The review led to the development of a proposal designed to deliver greater effectiveness and efficiency by implementing a business unit partner model with broader quality and safety responsibilities encompassing quality and risk, patient safety and patient liaison.

The new design would ensure appropriate skills were aligned with the business units’ quality and safety needs and deliver a combination of clinical and administrative skills.

Implementation of the new structure started in March 2015 and it was to be completed in July 2015.

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2.7. Accreditation

The health service made a significant resource commitment to ensure it was prepared for the November 2014 Australian Council on Healthcare Standards (ACHS) EQuIP National Accreditation.

An accreditation team worked with the Quality and Safety Unit and the organisation’s business units to establish systems that would prepare the health service for the November 2014 accreditation survey.

Most areas surveyed produced good results, but shortfalls were identified, particularly in Standard 7 (Blood and Blood Products). As a result, the health service was given 90 days to address 26 identified shortfalls and comply with standards.

The 90-day timeframe was postponed until March 2015 after Cyclone Marcia hit Central Queensland in late February 2015. CQ Health was awarded formal accreditation status with the evidence delivered for Standard 7 identified for special commendation by the surveyors

The quality and safety initiatives implemented as part of the accreditation preparations will continue to deliver safer services for our community.

2.8. Quality governance systems

The quality governance committee structure was redesigned to ensure it reflected National Standards. Key Performance Indicators relevant to each of the National Standards were developed and a reporting system built to ensure reporting for these standards against the level of compliance and opportunities for improvement occurs every month.

2.9. Pharmacy

Central Queensland Hospital and Health Service Pharmacy has implemented education, system management, monitoring and reporting to address patient safety concerns as they are identified.

Pharmacy keeps a very close eye on stock levels. It is essential the necessary stock is always available, but it is costly if excessive stock is ordered causing wastage.

A new stock management system called Imprest has been introduced and its use in some hospital wards has improved patient safety. Plans are being developed to introduce the system in Emergency Departments and on other hospital wards throughout the health service. Bar-code scanning checks of medications to improve dispensing accuracy were also implemented.

Pharmacy provides medical staff with a monthly report highlighting any identified issues to ensure prescribing practices are improved, delivering improved patient safety.

Other highlights for Pharmacy include:

• Achieving an 82% completion rate in each of the past 10 months for Medication Action Plans for patients admitted to the ward for more than 24 hours.

• Discharge medication records completed in each of the past 10 months for more than 65% of patients admitted for more than 24 hours.

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2.10. Technology

TelehealthThe development of Telehealth services, linking patients with specialists without the need to travel, continued with a 27% increase in the number of appointments provided, placing CQ Health as the fourth largest utiliser of the technology in Queensland Health.

The 2014-2015 increase is on top of the 70% increase achieved in the financial year before.

The Rockhampton orthopaedic Telehealth clinic was particularly busy providing 1073 appointments, almost double the 2013-2014 achievement. There was a 56% increase in use by Mental Health Services.

RadiologyCentral Queensland Hospital and Health Service delivered one of the most significant advancements in the delivery of public health services in Central Queensland.

The service contracted CQ Radiology to deliver all medical imaging services, an agreement that delivered much better service for the community.

Improvements included:

• CT machines at Capricorn Coast, Gladstone and Emerald hospitals

• Upgraded CT at Rockhampton Hospital

• Ultrasound on-site at Emerald Hospital

• Roving rural ultrasound and echocardiogram service to Biloela each week, and other rural sites

• Interventional radiology and nuclear medicine services at Rockhampton Hospital

• Advanced women’s imaging services including advanced breast MRI and digital mammography with stereotactic and vacuum-assisted biopsy capability

• 24-hour on-site service at Rockhampton

• Expanded hours at Gladstone Hospital

• On-site radiologist at Gladstone Hospital

• Capacity to introduce PET/CT scan at Rockhampton Hospital

• Introduction of a radiology registrar position and training positions in sonography/radiography.

The single biggest service issue that was raised by our front-line clinicians under our Speaking up for Safety initiative was the difficulty in getting access to radiology services out of hours.

These improved medical imaging services provide our doctors and nurses with the tools they need for more accurate and quicker diagnoses, which means better service for our patients.

Our medical imaging performance is the benchmark in Queensland with a report on 83 per cent of images completed within 24 hours.

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Sustainable, cost effective services3. Sustainable, cost effective services

Chapter 3

Our health care gets the thumbs up

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After delivering a substantial cash surplus in each of the past two financial years, Central Queensland Hospital and Health Service overspent its 2014-2015 budget by 0.5% or $2.220 million.

This result, and an underlying deficit of $12 million, have the potential to impact on future service delivery and highlight the need to create more financially sustainable systems and processes to ensure we can continue to grow our services within set budgetary and earning parameters.

During 2014-2015, the health service dedicated considerable investment in the development of efficiencies and the reduction of clinical risk through improved quality and safety.

Investments to address these issues, and the development of new, safer and expanded services, have had an impact on the health service bottom line. While an investment in the future, the initiatives have led to increased spending and a corresponding loss in efficient earning capacity.

The health service will closely monitor the financial spending of each business unit, but this focus must not dominate over the quality and safety priorities. There is evidence improved efficiency leads to improved safety, highlighting the need to manage these issues together.

The comprehensive service improvement approach (previous chapter) will play a vital part in the provision of sustainable, cost effective services.

Continued focus on meeting and exceeding State-wide access targets has been effective.

3.1. Lean methodology

Efficiency and the elimination of waste lead to safer and better delivery of health services. This has been demonstrated at many medical facilities across the world but is highlighted by the success at the Virginia Mason Medical Centre in Seattle, USA.

Virginia Mason Medical Centre used the principles of Lean methodology to create a world-recognised facility of patient safety and cost effectiveness.

CQ Health staff began implementing the principles of Lean methodology into the way it delivers health services. Using its First Steps Program, Rona Consulting guided staff through the process of identifying ways to improve processes to deliver safer, streamlined and sustainable services to our patients.

Staff embraced the Lean methodology concept and process and have delivered creative and innovative solutions in the areas they targeted. The Lean theories were put into practice at the Rockhampton Hospital Specialist Outpatient Department and the results speak for themselves:

Specialty Patients waiting longer than clinically recommended

1/07/2014 30/06/2015

General surgery 926 50

Orthopaedic 1147 94

Urology 342 8

General Medicine 204 16

Gynaecology 113 8

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CQ Health will continue to work with Rona Consulting over the next three years to develop and deliver the safe and efficient services and allow investment of savings into the development and delivery of more services for Central Queenslanders.

CQ Health staff will develop the CQ Way of health service delivery.

The CQ Way is a management and leadership approach that will drive continuous improvement in the services we provide to meet the needs of the patients and the communities we serve.

It has four pillars:

• Those who do the work improve the work. At its heart The CQ Way empowers front-line staff to solve problems, eliminate waste, and reduce variability so we can meet the needs of our patients consistently.

• The right process to produce the right result. The CQ Way provides a structured approach to improvement using proven methods to analyse existing process and design and implement new processes while continuously measuring the impact.

• The right quality, first time, every time. The CQ Way drives improvement through the relentless pursuit of higher quality and safety, empowering staff to stop and fix problems in a sustainable way.

• Place a premium on developing and empowering people. The CQ Way changes the role of management and leadership from command and control to support and trust, to facilitate and create the conditions for frontline staff to understand, improve and implement safer and more reliable ways of providing services.

Through The CQ Way our aim is to achieve best quality, lowest cost, shortest lead time, best safety and high morale.

3.2. Our performance overview

3.2.1. Financial highlights

Central Queensland Hospital and Health Service reported an operating deficit of $2.220 million.

Our clinical activity increased by 3.5% and there were corresponding increases in labour and consumable costs. The cost premium relating to medical locums and agency nurses has contributed to the operating deficit.

Queensland Treasury and Trade’s policy requires all land and buildings to be reported annually at fair value. During 2015, building valuations have demonstrated increases of $35 million, whereas individual properties within the class of land have again experienced declines reflecting the continuing depressed property market in the mining and infrastructure development regions. It is noted that without the impact of this non-cash loss, the operating result for CQ Health would have been a deficit of $1.136 million.

In 2015 total assets administered by CQ Health grew to $552.8 million, up from $397.2 million in 2014.

This is primarily due to an increase in property, plant and equipment ($160 million) with the development of new facilities including the

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regional cancer centre ($67.075 million), Rockhampton mental health community care unit ($6.8 million) and Moura community hospital ($5.5 million). In 2015, the Rockhampton Hospital expansion project was completed ($8 million) along with the refurbishment of Emerald, Gladstone and Biloela hospitals ($13 million). The 2015 revaluation process resulted in an increase in building replacement values ($35 million).

Partially offsetting these increases was the transfer of CQ Health offsite residential housing to the Department of Health as part of a whole-of-Government initiative to centrally manage residential housing stock ($10 million).

Cash and cash equivalents decreased by $11.5 million reflecting the operating deficit and capital projects.

Key financial highlights are outlined in Table 1, including results for previous years.

Key Financial Results 2014-15 Actuals $’000”

“2014-15 Target

$’000”

“2013-14 Actuals $’000”

“2012-13 Actuals $’000”

Income 491,754 465,973 462,045 454,283

Expenses excluding revaluations

492,890 465,973 452,860 435,548

Operating surplus/(deficit) prior land revaluations

(1,136) - 9,185 18,735

Operating surplus/(deficit) post land valuations

(2,220) - (1,991) 18,735

Net revaluation movement on land and buildings

34,380 8,579 34,617 18,021

Cash and cash equivalents 36,881 42,424 48,429 39,645

Total Assets 553,194 513,508 397,202 358,708

Total Liabilities 31,162 33,643 31,231 28,168

Total Equity 522,033 479,865 365,972 330,540

Current Ratio 1.82 >=1.5 1.96 2.10

Quick Ratio 1.72 >1.0 1.86 1.75

3.2.2. Sources of funding

In providing services to the public, CQ Health’s predominate source of funding is received in accordance with service agreements with the Department of Health. The Department purchases delivery of health services based on nationally set funding and efficient pricing models. In addition CQ Health raises own source revenues such as private patient fees.

Chart 1 indicates all sources of funding and their contribution to total income for 2015 over the current and past two years.

Chart 1: Sources of funding comparison

201320142015

Other revenuePharmaceutical benefits scheme

Sale of goods and servicesHospital feesOther grants

Commonwealth GrantFunding Public Health Services Commonwealth

Funding Public Health Services State

$50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000$-

Public health services

Aged care and disability services

Patient transport

Health administration

Mental health services

Other community health services

Acute care

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Funding for public health services from government increased 6% in 2015 compared to 2014. This additional funding provided for increased clinical activity of 3.5%, reduction of patient waiting lists, reinstatement of public opthalmology services, improved quality and safety in line with national standards, and for a range of new initiatives.

3.2.3. How the money was spent

CQ Health is responsible for the delivery of public hospital and health services in line with government priorities.

Expenditure by purpose is outlined in Chart 2 below. This chart trends expenditure over current and previous periods.

Chart 2: Expenditure Program Comparison

In 2015 expenses increased $27 million or 6% reflecting the cost of additional services provided. During 2015, CQ Health recorded improvements in patient access and reduced waiting times for patients with overall clinical activity rising 3.5% over 2014.

Variations from the previous year expenditure were a result of:

• the workforce increased by 54 full time equivalent and combined with a increase in wages for Enterprise Bargaining (EB) of 2.5%, employee expenses have increased $5.6 million;

• the first full year of the stabilisation of the Capricorn Coast Hospital workforce and reinstatement of ophathalomogy services by external medical service providers ($5 million);

• nursing agency costs ($3 million);

• increased Royal Flying Doctor Service (RFDS) visits, ambulance, pathology and other supply service costs ($7.4 million);

• enhanced medical imaging services across the region ($3 million);

• a further $2.8 million was spent on building repairs and maintenance relating to backlog maintenance and accreditation related expenses;

• the introduction of a new charging methodology by the Department of Health for communication services previously provided free of charge to CQ Health ($1.9 million); and

• patient travel costs increased $1.1 million reflecting an increase in the volume of patients applying for assistance, increased use of air services as the preferred mode of travel along with the introduction of a new booking tool (Corporate Travel Management) who charge a booking fee.

201320142015

Public health services

Aged care and disability services

Patient transport

Health administration

Mental health services

Other community health services

Acute care

$50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,00$-

$’000

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3.2.4. Future outlook

CQ Health is committed to the continued review of its financial and operational performance with a view to identifying a number of business initiatives. To supplement this process an independent review has been commissioned and will continue in 2015-16 to support validating the business initiatives to better manage the available financial resources.

(See full financial report in Appendix 1, page 66)

3.2.5. Tier 1 Key Performance Indicators

Central Queensland Hospital and Health Service 2014-15 Target/est.

2014-15 Est. actual

2015-16 Target/est.

Service Service standardsPercentage of patients attending emergency departments seen within recommended timeframes:•Category1(within2minutes) 100% 100.0% 100%•Category2(within10minutes) 80% 90% 80%•Category3(within30minutes) 75% 88% 75%•Category4(within60minutes) 70% 86% 70%•Category5(within120minutes) 70% 95% 70%•Allcategories .. 88% .. Percentage of emergency department attendances who depart within four hours of their arrival in the department

86% 83% 90%

Median wait time for treatment in emergency departments (minutes)

20 12 20

Median wait time for elective surgery (days) 25 56 25Percentage of elective surgery patients treated within clinically recommended times: •Category1(30days) 100% 98% >98%•Category2(90days) 97% 95% >95%•Category3(365days) 98% 100.0% >95%Percentage of specialist outpatients waiting within clinically recommended times:•Category1(30days) 51% 77.0% ..•Category2(90days) 31% 57.0% ..•Category3(365days) 90% 91.0% ..Total weighted activity units:•AcuteInpatient 33,447 32,441 33,032 •Outpatients 9,021 8,967 8,852 •Sub-acute 4,440 3,761 5,032 •EmergencyDepartment 14,521 14,239 14,729 •MentalHealth 2,893 2,833 3,740 •InterventionsandProcedures 3,531 3,086 4,484 Average cost per weighted activity unit for Activity Based Funding facilities

$4,660 $4,789 $4,574

Rate of healthcare associated Staphylococcus aureus (including MRSA) bloodstream (SAB) infections/10,000 acute public hospital patient days

<2.0 0.1 <2.0

Number of in-home visits, families with newborns 3,937 4,417 n/aRate of community follow-up within 1-7 days following discharge from an acute mental health inpatient unit

>60% 75.9% >65%

Proportion of readmissions to an acute mental health inpatient unit within 28 days of discharge

<12% 10.9% <12%

Ambulatory mental health service contact duration (hours)

>39,230 34,727 >35,000

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Excellent patient experience and healthcare outcomes4. Excellent patient experience and healthcare outcomes

Chapter 4

The first patient receives treatment in our new cancer centre

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Success in the delivery of safe, reliable services and sustainable cost effective services is delivering excellent patient experience and healthcare outcomes.

The significant improvements in waiting times for safer services, delivered closer to where a patient lives, not only improves the experience for the patient but will lead to improved quality of life and life expectancy.

The implementation of new health services, reintroduction of services that were previously offered and enhancement of existing services will continue to have a major impact on our patients’ timely access to the treatment they need.

While development of the Cancer Centre continues, planning for the introduction of a radiation oncology service continues with the aim of introducing the new service during the 2015-2016 financial year.

Plans for a cardiac catheter laboratory are also being finalised.

4.1. Local access to services

CQ Health continues to identify services able to be safely and effectively delivered from facilities across Central Queensland.

From the delivery of a public ophthalmology service in Central Queensland to utilising the Royal Flying Doctor Service to deliver surgical services at Emerald and Biloela, our patients are able to access a greater range of treatments closer to where they live.

Capacity and capability has been increased at Gladstone Hospital to allow a wider range of services to include orthopaedics and the recruitment of a special anaesthetist and the development of a High Dependency Unit will increase the ability for more surgical services at Gladstone.

Gladstone Hospital has also focused on delivering “scopes” to reduce the number of patients on the waiting list. A team of specialists from Brisbane was contracted to provide an expert endoscopy/colonoscopy service through regular visits while the hospital develops a local surgeon to be accredited to provide the same service.

The stable medical staff roster at Capricorn Coast Hospital, introduction of a radiology service and a new pharmacy role has reduced the number of patients who needed to travel to Rockhampton. It also allows Capricorn Coast patients to return to the coast hospital when they are well enough to be released from Rockhampton Hospital.

Success of the Rural Generalist model for medical officers at Emerald Hospital has produced a stable medical workforce and allowed continuity in service delivery on the Central Highlands.

4.2. Ophthalmology

A key achievement during the reporting period was the delivery of a public ophthalmology service in Central Queensland for the first time in seven years.

Partnering with Vanguard Health – a company that has unprecedented knowledge of the provision of ophthalmology services in Australia – a three-phase plan to reintroduce the service was put into place.

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This project delivered 653 eye operations and procedures and immediate improvements to the quality of life for those patients who no longer had to wait to receive their surgery at a public facility in the Brisbane area.

Phase 3 of the ophthalmology contract, the recruitment of a full-time ophthalmologist to deliver the service, is now under way. A candidate has passed the document stage of the Royal Australian and New Zealand College of Ophthalmologists assessment and is scheduled for an interview by the College’s Specialist International Medical Graduate Committee on 18 July 2015.

4.3. Cancer Centre

The Regional Cancer Centre treated its first patient in the New Ward Block on 24 June 2014.

CQ Health will deliver a comprehensive cancer service to Central Queenslanders from the centre, providing increased clinical service capability for medical haematology and radiation oncology and to provide dedicated inpatient oncology beds.

The Cancer Centre will improve access to cancer treatment and increase the lifespan of Central Queenslanders. Queensland data suggests 31% of people diagnosed with cancer do not access any care. The distance of travel required to receive treatment is identified as a significant contributor to people not receiving treatment.

When fully developed, many Central Queenslanders will no longer need to travel to Brisbane for treatment.

The Cancer Centre has three radiation oncology bunkers with capacity for two linear accelerators. It allowed an increase from 6 to 20 day-only treatment places for medical oncology and haematological malignancy, 20 dedicated cancer care inpatient beds, cancer consultation suites, allied health facilities and a clinical education unit.

CQ Health has developed its Cancer Services Strategy and made significant appointments of two clinical haematologists and two medical oncologists.

4.4. Midwifery Group Practice

CQ Health now offers a continuity of carer model for birthing women across four birthing sites.

Under this model a midwife provides care to a mother from her first antenatal appointment until two weeks after the mother and baby are discharged from hospital. The midwife works within a multidisciplinary team to ensure the women across CQ Health receive safe and quality care.

Rockhampton introduced the model in October 2014 while Emerald and Gladstone have offered a midwifery group practice model for several years. Gladstone recently increased the number of midwives while Biloela provides a team approach to care.

About a third of births at Rockhampton, Gladstone and Emerald and all births at Biloela are under this model.

The midwifery group practice model has been strongly supported by

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mothers and their families. Results from this model of care include:

• Greater satisfaction and patient experience and more compliments from mothers about their experience

• Shorter hospital stays

• Less medical intervention and a reduction in caesarean section rates

• Increased breastfeeding rates.

4.5. Oral Health

The reduction in oral health waiting times has been a major success for patients across Central Queensland.

In February 2013 there were 3569 patients who had waited longer than the two-year benchmark for an appointment. A targeted campaign during the next 12 months slashed the waiting times and by February 2014 no one had been waiting more than two years for an appointment.

CQ Health continued to cut the waiting times and by June 30, 2015, only 19 people had been waiting more than one year for an appointment.

4.6. Central Queensland Consumer and Community Advisory Council

The Central Queensland Consumer and Community Advisory Council (CCAC) was established late in the 2013-2014 financial year and has continued flourish throughout 2014-2015. The council was established in partnership with Central Queensland Medicare Local and is made up of consumer representatives from throughout Central Queensland.

The advisory council represents a peak body where consumers and community members can contribute to decisions relating to the planning, delivery and evaluation of local and regional health services across Central Queensland.

The group made significant progress reviewing issues across the region including transport issues and the provision of aged care services. The council played an important role in reviewing consumer publications for CQ Health, reviewing Quality and Safety Reports and providing valuable insights to projects such as the Rockhampton Hospital Car Park Consultation and the CQ Health Plan.

The CCAC works with the Consumer Advisory Networks and other groups that exist in many of Central Queensland’s rural communities, to take enquiries and address concerns raised by the groups and to filter information back through these groups to their communities.

4.7. Tropical Cyclone Marcia

The significant improvements in service delivery were achieved despite the impact of Tropical Cyclone Marcia on 20 February, 2015.

CQ Health established its Health Emergency Operation Centre the day before Marcia crossed the coast and it convened three times a day.

In the immediate aftermath of the cyclone, there was a suspension of ‘business as usual’ and CQ Health operated through operation centre to respond to the emerging issues. The results delivered through the

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operation centre highlighted the benefit of investment in Emergency Planning and Preparedness during the previous 12 months.

Widespread power loss in Rockhampton and Yeppoon was a major issue. It impacted medication and food storage and increased the community reliance on hospital supplies. Mount Morgan and the Capricorn Coast health facilities relied on emergency generators for around five days. Many General Practice surgeries were unable to open with no electricity placing further strain on hospital resources.

For Baralaba, Biloela, and Woorabinda, flooding around the towns meant they were not only without power; they were also isolated by road.

Communication disruption, injuries that resulted from the cyclone and ensuing clean-up, staff availability and many other factors led to an influx of patients to emergency departments, disrupted surgeries and made it difficult for patients and hospitals to meet appointment times.

The support from within the health service delivered an outstanding service for our patients in difficult conditions. Teams from Gladstone and Emerald were deployed across the worst affected communities and facilities of Yeppoon, Rockhampton and Biloela. Dedicated staff stayed at work for long periods, some working double shifts and covering colleagues because they knew they were needed.

The overall impact on CQ Health infrastructure was relatively low compared to the impact on staff and the community. During the recovery phase, the State Health Emergency Coordination Centre supported the short-term placement of additional doctors, nurses, and mental health specialists in the affected areas.

4.8. Capital Works

4.8.1. New Ward Block

Construction and fit-out of the $173.1 million New Ward Block at Rockhampton Hospital was completed and the first patient was treated in the new Cancer Centre on 24 June.

The New Ward Block will house the Cancer Centre on the bottom three levels, offices and medical officer facilities and the new Intensive Care Unit (ICU).

Two levels will contain 32-bed inpatient units and the top is a plant room. The building is capped with a rooftop helipad.

4.8.2. Helicopter landing site and Intensive Care Unit

The CQHH Board committed funds from the 2012-2013 surplus to infrastructure that would ensure our sickest patients received timely care in an appropriate setting.

The Board committed $5 million to the construction of a rooftop helipad and $12 million to develop a new Intensive Care Unit in the New Ward Block development.

Helipad construction was completed in June 2015. When hospital staff training and trial flights are completed the rescue helicopter will no longer need to land at Rockhampton Airport for the patient to be transported by Queensland Ambulance Service to the Rockhampton Hospital Emergency Department. This process added up to 60 minutes.

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Patients will have direct access to the Emergency Department, surgical theatres and Intensive Care Unit. They will soon have access to a new ICU with the contract for its construction awarded late in the 2014-2015 financial year and completion expected early-2016.

The catchment area for the Rockhampton Hospital aligns with the Capricorn Helicopter Rescue Service coverage, which is from St Lawrence, out to the Central Highlands, and down past Gladstone to 1770, and includes the offshore waters out from the coast line.

4.8.3. Rockhampton Hospital Central Sterilising Department

The 55-week refurbishment of the existing Rockhampton Hospital sterilising department started in June 2015. The project will lead to increased productivity and will support the recent upgrade to the hospital’s peri-operative suite. The sterilising and peri-operative upgrades provide the technology and capacity for Rockhampton Hospital to meet increasing service demand across Central Queensland.

4.8.4. Rockhampton Hospital theatres

Four new state-of-the-art operating theatres were commissioned at Rockhampton Hospital as part of an upgrade of the peri-operative area which includes pre-surgical, surgical, and post-surgery areas.

The new theatres are fully digitally integrated and including a camera in each to enable a video link with tertiary referral hospitals. This technology gives Rockhampton general surgeons access to advice from subspecialty surgeons when required, for example, in a major emergency.

This delivers better safety and quality for patients and gives support to our regional surgeons.

The theatres also feature up to three monitors hanging from the pendant lights, providing 360 degree views of endoscopic (keyhole) surgeries.

4.8.5. Moura Hospital

Staff and patients moved into the new Moura Community Hospital on 20 May 2015.

The hospital was built in Yatala using an innovative modular-design and was transported to Moura on the back of 14 trucks. It is located on the same grounds as the old hospital in Nott Street, Moura.

The new hospital has four beds, 24-hour on-site clinical care in an enhanced Emergency Department able to cope with significant trauma using the latest medical equipment. It also uses the latest Telehealth technology which links Moura doctors and nurses with specialists.

The building was designed in close consultation with members of the community, and residents were invited to see the results at an open day on 13 May, 2015.

4.8.6. Gladstone High Dependency Unit and operating theatres

A new High Dependency Unit, funded by Santos GLNG, was completed and opened at Gladstone Hospital and work on the new operating theatres, funded QGC, started on 10 April 2015 and is expected to be completed in by October 2015.

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The facilities, combined with an increase in specialist numbers at the Gladstone Hospital campus, will allow the delivery of a wider range of services to the Gladstone community.

4.8.7. Community Care Unit

Construction of the 20-place Community Care Unit in North Rockhampton was completed in May 2015. The unit is for adult mental health consumers who do not require inpatient treatment in hospital but need support to successfully maintain their recovery and become self-sufficient.

4.8.8. Emerald and Biloela hospitals

Emerald Hospital’s newly refurbished Emergency Department was officially opened on 1 August 2014 and the new Emergency Department at Biloela Hospital was opened on 19 September 2014. Both were funded under the Rural and Remote Infrastructure Rectification Works Program.

The Emerald Hospital work included upgrading of the operating rooms and birthing suites and construction of a negative-pressure room, a new emergency power generator, electrical switchboards upgrade, a new air-conditioner chiller plant, installation of a new fire hydrant main, water tanks, fire booster pumps and a fire indicator panel, as well as extensive general service upgrades.

Work at Biloela Hospital included two new, contemporary and fully equipped resuscitation bays that include Telehealth technology to link Biloela doctors and nurses with specialists in other centres. There are four new consulting rooms, the ambulance entry was improved to include all-weather access and good lighting and Community and Allied Health services moved into new offices at the hospital.

4.8.9. Older Persons Mental Health unit

An Older Persons Mental Health Inpatient Unit under construction at Rockhampton Hospital was doubled in size from four beds to eight to cater especially for our ageing population.

The project, expected to be completed in August 2015, will provide a safe and effective treatment model for older people with an acute mental health illness requiring hospital assessment and treatment.

The unit, co-located with the Rockhampton Mental Health Inpatient Unit, will cater for people predominantly older than 65 in a purpose-built age-appropriate environment.

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Great place to work

5. Great place to work

Chapter 5

Our staff celebrate moving to the new specialist palliative care unit

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Our 3200 staff across Central Queensland Hospital and Health Service delivered the results that are highlighted throughout this Annual Report.

It is the skill and knowledge of our staff that will design and deliver the health service of the future and it is critical the health service is able to effectively recruit and retain its staff.

The health service implemented techniques that have improved the ability to recruit the right person with the right skills into the right job.

To retain its valued employees, the health service and its Workforce Unit increased the focus on developing a culture of belonging, trust in colleagues and leadership, pride in the employer and satisfaction in delivery quality services to our patients.

The health service must also ensure its workforce has the appropriate systems, skills and resources, in the right location, to meet the needs of a growing and ageing population that has a higher rate of burden of disease than the Queensland average.

The CQHHS Workforce Plan 2015 will guide the development of initiatives aimed to address four major strategic directions:

• Building leadership capability and growing a knowledgeable, skilled, competent, agile and culturally capable workforce

• Building a sustainable workforce which meets service needs and financial constraints

• Delivering an engaged and participative workforce supported by our values and a healthy workplace

• Optimising the distribution of the workforce to achieve equitable access to health care, recognising the specific requirements of target and priority groups.

These initiatives are identified in the People Strategy 2014-2016 with progress against the strategy reported every six months. The key planks in the people strategy are: introduce a Zero Harm Strategy; deliver a high performance culture through strong visible leadership; and reduce reliance on temporary medical workforce.

The health service continued to build the strength and ability of its current and identified future leaders.

The organisation’s top leaders attended two leadership summits during the financial year where they looked at the future requirements of health service delivery in Central Queensland and were actively involved in identifying the key strategic objectives and identifying ways to achieve the objectives.

The introduction of Lean methodology and implementation of the CQ Way project (see chapter 3) will require and deliver a style of management that is supportive and advice driven.

CQ Health recognised the outstanding efforts of its staff at Awards for Excellence ceremonies held across Central Queensland during the second half of 2014.

Ceremonies were held in Gladstone, Biloela, Emerald and Rockhampton to recognise the great work done by dedicated health workers every day.

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In 2014-2015 there was a significant decrease in WorkCover claims received with a 9.5% decrease in statutory claims and a 42% decrease in common law claims. In 2014-2015 CQ Health had about 50 fewer statutory claims than the industry average. This result led to a reduction in WorkCover premium of more than $1 million or 30%.

The Lost Time Injury Frequency Rate improved from an average of 4% in 2013-2014 to 3.6% in 2014-2015. The number of reported incidents has also reduced by more than 16%.

The performance of all employees, including volunteers, is critical to the overall success and outcomes of the health service. The performance management framework supports all managers to provide regular and constructive feedback to their employees, and hold at least two formal conversations with their employees every year. This ensures alignment with the health service strategic plan, continually improved performance and productivity and a performance culture. New employees attend an orientation program that provides general information about the health service and mandatory non-clinical training modules.

A new Learning Management System was launched in 2014-15, which includes an online learning platform allowing employees to undertake self-paced learning. Local level inductions are also provided to new employees to orient them to their workplace and work procedures. The health service offers employees a wide range of in-service and external learning and development opportunities that enhance their capability and support career development.

The extended skill sets achieved by employees are highly valued by the health service. Supervisors and managers play key roles in reinforcing employee commitment and sense of belonging within the health service.

It is CQ Health’s intention to enable our employees to enjoy the benefits of being part of a flexible workforce.

The health service promotes flexible working arrangements and work-life balance using a range of policies including:

• HR Policy C5 – Flexible working arrangements

• Central Queensland Hospital and Health Service Procedure – Transition to Retirement Program for Nurses

• HR Policy C9 – Carers Leave

• HR Policy C21 – Purchased Leave

• HR Policy C26 – Parental Leave

• Public Service Commission Directive 26/2010 Paid Parental Leave

• HR Policy G2 – Equity and Diversity

• Public Sector Ethics Act 1994 - Code of Conduct for the Queensland Public Sector

The health service’s industrial and employee relations are conducted under the provisions of the Service Agreement with the Department of Health.

Employment terms and conditions are in accordance with the relevant industrial awards and agreements. Grievances or disputes are managed in accordance with the Award grievance resolution provisions and Queensland Health Human Resources Policies.

The health service is committed to meeting the requirements of the relevant industrial awards and is cognisant of the benefits of maintaining a robust

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relationship with relevant unions. To achieve this, regular consultative forums are held including the CQ Health Consultative Forum; Local Consultative Forums; and Nursing and Midwifery Consultative Forum.

During the financial year two (2) employees received redundancy packages at a cost of $316,311.76. Employees who did not accept an offer of a redundancy were offered case management for a set period of time, where reasonable attempts were made to find alternative employment placements. At the conclusion of this period, and where it is deemed that continued attempts of ongoing placement were no longer appropriate, employees yet to be placed were terminated and paid a retrenchment package. During the period, two (2) employees received retrenchment packages at a cost of $225,741.79.

The health service is committed to upholding the values and standards of conduct outlined in the Code of Conduct for the Queensland Public Service. The code of conduct applies to all employees of the health service and was developed under the Public Sector Ethics Act 1994, consisting of our core principles:

• Integrity and impartiality

• Promoting the public good

• Commitment to the system of government

• Accountability and transparency

All CQ Health employees are required to undertake training in the Code of Conduct for the Queensland Public Service. New employees attend the New Starter Orientation program, which contains the code of conduct training, within three months of the date of commencement. Employees are required to repeat the Code of Conduct training every two years. Code of Conduct face-to-face training sessions are also available to health service units on request.

In 2013 a revised Department of Health eLearning package, Ethics, Integrity and Accountability was sourced and is hosted on CQLearn, a web-based Learning Management System, allowing employees to access this training from any internet connected device.

In 2014-2015, 1501 staff completed Code of Conduct training including:

• Applying the code

• The code and your obligations

• Five step ethical decision making model

• Queensland Health zero tolerance to violence

• Assault in the workplace

• Workplace harassment and ethical standard of behaviour

• Equity and diversity

• Public Sector Ethics Act 1994 ethical obligations.

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Strong reputation

6. Strong reputation

Chapter 6

Delivering the message – a healthy lifestyle is your choice

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CQ Health continues to strengthen its reputation as a trusted, inclusive and identifiable supplier of safe and high quality health services.

The focus on patient safety delivered results. Our staff and systems achieved some of the best elective surgery and emergency department waiting time performances in the state. There was improved patient satisfaction as evidenced through an increasing number of compliments and decreasing number of complaints. New health services were introduced and some former services were reintroduced. The focus on effective recruitment delivered increased workforce stability. These, and a host of other achievements, contribute to the growing internal and external reputation of the health service.

During 2014-2015 the health service strengthened and implemented several key initiatives to build a strong reputation with our staff and the community.

The focus on delivering a high performing culture through strong visible leadership was an important part of building the internal reputation of the organisation. Coupled with internal communication and engagement mechanisms such as 60 communiqués from the Chief Executive produced in the financial year, a weekly staff newsletter, staff forums, informal staff barbecues and other gatherings, the reputation of our organisation was strengthened within our 3200 staff, who are also our greatest ambassadors.

Externally, building the visibility and recognition of our organisation through consultation, transparency and involvement was an essential part of delivering a strong reputation.

The catalyst was the Everest Trek initiative. In response to the Health Needs Assessment, this initiative involved sending three Central Queensland teenagers from challenged backgrounds on a trek to the Mount Everest Base Camp. The message was simple – anyone can improve their lifestyle and make healthier choices.

The public launch of the Everest Trek initiative in early December, 2014, provided the perfect opportunity for the health service to reveal a new public look and its online Community Hub.

The health service is now recognisable and its Community Hub provides an effective way to engage and consult with the community. Use of the Community Hub, CQ Health Facebook page, media articles and advertising are integrated to provide the community with the promised performance and achievement transparency.

Hundreds of our staff now proudly wear their CQ Health shirts to work every Friday.

The health service strengthened its relationship with the local Aboriginal and Torres Strait Islander community through a cultural placement ceremony at the New Ward Block at Rockhampton Hospital. A wall in the reception area of the Cancer Day Therapy Centre is lined with photographs of significant places and items of significance to all 10 Traditional Owners and Torres Strait Islander groups across Central Queensland Health. Special flag-raising ceremonies have been organised at all hospitals in the region and the Aboriginal and Torres Strait flags now fly alongside the Australian flag to show the health service’s commitment to providing culturally appropriate care.

To enhance its reputation as a trusted source of information, CQ Health has a strong team of employees who regularly work in

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the area of health awareness and promotion. The service areas that regularly participate in local shows, expos and community events, deliver talks to community groups and workplaces and liaise with key stakeholders and community groups include:

• BreastScreen

• Bowel Screen

• Donate Life

• Alcohol and Other Drugs Service

• CQ Youth Connect (Sexual Health Service)

• Women’s Health

• Prostate Cancer Nurse

• Emergency Planning

• Sub Acute Chronic Care Rehabilitation

• Public Health

Sponsorships of events such as Rockhampton Regional Council’s CQ Health 2015 Sports and Health Expo demonstrate the commitment to promoting healthy lifestyles to create a healthy community.

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Effective partner relationships7. Effective partner relationships

Chapter 7

Our partnerships deliver more for our patients

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Health services in Central Queensland and across Australia are provided by a range of businesses, government and non-government organisations, not-for-profit and community groups and volunteer organisations.

Central Queensland Hospital and Health Service is just one of the myriad organisations that aim to meet the specific needs of the individual and overall needs of the community.

To provide an effective and integrated service to the community the development of effect partner relations is essential.

The health service has a range of partnerships providing different outcomes, such as:

• Delivering the expertise to meet a health service need in the community, as with the radiation oncology and cardiac catheter laboratory proposals;

• Creating a critical mass of patients allowing the delivery of a health service that would otherwise not be sustainable, such as the strong partnership between the Gladstone Hospital and the co-located Mater Hospital;

• Providing links between key modes of service delivery, such as the partnership with Central Queensland Medicare Local (Country to Coast Primary Health Network) whose primary role was the provide and co-ordinate General Practitioner services;

• Delivering of a single message, such as the relationship with Kick Start CQ, Every Child Deserves Every Chance, Live Well CQ, Happier.Healthier and other projects that aim to promote healthy lifestyle choices;

• Deliver treatment to patients sooner while providing training opportunities to university students and growing future health employees, such as a Sub Acute Chronic Care and Rehabilitation Clinic at Central Queensland University

• Create links with groups within our community that have specific health needs, such as the relationship with culturally appropriate service providers

• Demographic groups.

7.1. One Gladstone Health Plan

As a result of the One Gladstone Health Plan, a much better relationship has been developed between CQ Health, Gladstone Hospital and the Mater Hospital in Gladstone.

Gladstone Hospital offers far more specialist services now than it has in the past, and the list of services is growing all the time. A few years ago we operated under a rural generalist model, but this has changed with the recruitment of a team of specialists.

In the financial year Gladstone Hospital recruited an emergency specialist, two senior medical officers for the Emergency Department, an obstetrician/gynaecologist, and made joint appointments with the Mater Hospital for a surgeon, a physician and a paediatrician.

Gladstone patients also now have access to improved cancer specialist treatment through weekly clinics.

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7.2. Cardiac Catheter Laboratory

During 2013-14, more than 1,000 patients were transferred to hospitals outside Central Queensland for cardiac services.

To better treat Central Queensland cardiac patients within their own region, CQ Health initiated a project to provide specialist cardiac services through an effective and reliable Cardiac Catheter Laboratory (Cath Lab) service.

An Expression of Interest for the development of cardiology services at Rockhampton Hospital was released to the market in early 2015 and the full service is expected to be completed in 2015-16.

A Cath Lab service will enhance the specialised clinical support needed to attract appropriately qualified medical officers to the region. It will also strengthen the health service’s relationship with the Mater and Hillcrest private hospitals in Rockhampton by allowing private patient access.

The Cath Lab will service both public and private patients and incorporate procedures for Angiography, Percutaneous Coronary Intervention (PCI) and Pacemakers and provide further benefits through a reduction in the need for hundreds of patients having to travel to Brisbane to receive treatment.

The projected Cath Lab activity in the first year of operation is:

• 525 Angiography

• 333 Percutaneous Coronary Intervention (PCI) (non-complex)

• 24 PCI (complex)

• 86 Pacemakers.

The Cath Lab will be supported by a 12-bed cardiology ward and an experienced cardiac multidisciplinary team for patients with acute cardiology conditions.

7.3. Radiation Oncology Service

People with cancer who live in rural areas of Australia including Central Queensland have poorer survival rates than those residing in major metropolitan centres. Factors impacting survival rates include:

• rural patients’ cancers are often diagnosed at a later stage, meaning they are more advanced and more difficult to successfully treat;

• poorer access to specialised treatment;

• relative shortage of health care providers in rural and regional areas; and

• higher proportion of disadvantaged groups such as Aboriginal and Torres Strait Islander people.

Central Queensland Hospital and Health Service will establish a radiation oncology service as part of its Integrated Cancer Centre to improve diagnosis, treatment and outcomes.

Radiotherapy is a treatment at the cutting edge of health care technology. Following extensive market sounding, CQ Health released an Invitation to Offer in May 2015 to find a partner for the development of a Radiation Oncology Service at Rockhampton Hospital.

CQ Health aims to have the service operational in 2016.

Establishment of this partnership arrangement will improve patient access to a much needed service by providing services closer to home, and is expected to increase participation rates, particularly from the rural areas of Central Queensland.

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7.4. Coalition for Health

The promotion of healthy lifestyles and lifestyle choices is vital to prevent the growing rates of lifestyle-related diseases including diabetes, heart disease and cancer.

CQ Health’s Everest Trek initiative was a key plank in the education campaign and it was our partners and sponsors who made the initiative possible.

Launched in December 2014, the Everest Trek was designed to encourage the Central Queensland community to improve their lifestyles and become more active. The Everest Trek gave four teenagers from Central Queensland the opportunity to trek to Mount Everest Base Camp becoming healthy lifestyle ambassadors for the community and taking on the challenge of a lifetime.

The teens were joined by Chief Executive Len Richards, Director of Nursing, Division of Medicine, Rockhampton Hospital, Wendy Hoey, and Intensive Care Unit Doctor Jack Dixon, who each funded their own trip.

The participants found the trip to be a very worthwhile experience, giving them a glimpse into the lives of those living in Nepal, and challenging them physically. One of the teens was unfortunately not medically cleared to attend.

The trek generated extensive media coverage ensuring delivery of the healthy lifestyle message while increasing the visibility and identity of CQ Health.

CQ Health received sponsorship from local businesses as well as individuals and other businesses partners including:

• Rona Consulting

• Plantability

• Kele Property Group

• Best Doors

• Prominence

• Vanguard Health

• Coal Train

• Dreamtime Cultural Centre

• Central Highlands Regional Council

• CQUniversity

• Mercy Health and Aged Care

• City Printing Works

• Zoe and Ian Etherington

• Gibb Group

The intent of the Coalition for Health initiative was to draw together business and industry partners, government and non-government organisations, community groups and support organisations to encourage positive lifestyle choices.

CQ Health continues to channel this work through the LiveWellCQ initiative and through the CQ senior leadership team which includes health, higher education, regional government and police.

Chief Executive Len Richards delivered the keynote address at the LiveWellCQ Every Child Deserves Every Opportunity conference as the starting point for a more concerted effort to get the coalition established.

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7.5. Subacute Chronic Care Rehabilitation

The Subacute Chronic Care Rehabilitation Student Health Clinic is located at the Central Queensland University Rockhampton North campus. The health clinic is the result of an effective partnering arrangement between CQUniversity and CQ Health.

The clinic integrates and coordinates clinical placements for undergraduate students across various disciplines. It creates a functional workforce that provides sub-acute care to clients with a range of complex chronic diseases.

It provides interdisciplinary, person-centred, time-limited intervention to clients with complex chronic conditions. After an initial intake assessment, which focuses on client needs and relevant health conditions, those who are eligible for the service are supported to attend the varied allied health and nursing professions within the clinic. Clients are encouraged to develop self-management strategies and actively participate in the health care journey.

Preliminary research data shows the clinic has achieved a significant reduction in hospitalisations and average length of stay for clients who have multi-morbidity and a significant improvement of quality of life.

The clinic also houses six oral health chairs which are run as joint clinics between the CQ Health’s Oral Health Services and CQUniversity. Cardiac rehabilitation services also provide services from this location.

While addressing gaps in service delivery, the clinic also improves health workforce recruitment and retention with many students now employed in new graduate positions with the health service.

This was one of Australia’s first interdisciplinary student-assisted clinics run in collaboration between a university and a health service and currently supports clinical placements from more than 10 universities across Australia.

During 2014-2015 more than 13,000 occasions of service were provided from the clinic and more than 200 university students attending the clinic for their clinical placement.

The students are from the disciplines of occupational therapy, podiatry, physiotherapy, speech pathology, exercise physiology, nutrition and dietetics, social work, pharmacy, nursing, medical science, and oral health.

7.6. Human Research Ethics Committee

Early 2015 saw the reinvigoration of the CQ Health’ Human Ethics Research Committee (HREC). An Expression of Interest process was undertaken in late 2014 and the newly established committee had its first meeting in February 2015. Membership of the committee meets the requirements of the National Health and Medical Research Council (NHMRC) so comprises a number of external people to the CQ Health. The committee is chaired by Associate Professor George Stuart from CQUniversity and meets monthly.

The A/Executive Director Rockhampton Hospital is the executive sponsor of the committee and also the Health Service Chief Executive’s delegate for the approval of Site Specific Applications for projects reviewed by other HRECs but which facilities within the Hospital and Health Service are participating sites.

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Our direction

8. Our direction

Chapter 8

Developing our clinical workforce to care for our community

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During 2014-2015 more than $200 million of new infrastructure work was completed or launched in the Central Queensland Hospital and Health Service footprint. These facilities will allow us to deliver the health services of the future.

The technology that will allow us to meet the challenges of delivering a contemporary health service over a large geographic area continues to be enhanced and the medical imaging upgrades delivered during 2014-2015 are a valuable diagnostic tool for our clinicians.

We have upgraded facilities at Emerald, Biloela and Gladstone and built new facilities at Rockhampton and Moura. In Rockhampton, work on a rooftop helipad is almost complete and construction of a new Intensive Care Unit is about to start.

Development of a Cardiac Catheter Laboratory is in train and a Radiation Oncology Service will be developed in the new Cancer Centre at Rockhampton Hospital. We are on the third and final phase of reintroducing a sustainable public ophthalmic service in Central Queensland.

We hope that in the near future funding will become available to address the infrastructure needs at Blackwater and car parking shortages at Rockhampton Hospital.

Across our health service the bricks and mortar are in place. We must now ensure we have the ability within our management team and workforce to deliver.

The successes of the first stages of our comprehensive service improvement, measured through the improvements in waiting times for orthopaedic and cardiology appointments through the specialist outpatient department, have been exceptional.

As a health service determined to deliver the best and safest services possible to our patients within our budget parameters, our future lies with continuing the comprehensive service improvement approach.

During the next three years we will continue to embed the principles of Lean methodology, adapted by our staff to best suit the way we do business in Central Queensland.

The restructure of the Executive Management Team will ensure the strategic direction of our health service with our stated imperatives in mind.

Developing the skills of our existing employees and using innovative and within our organisation through the appointment of permanent staff with the appropriate skills will ensure we have a capable workforce.

We will increase our visibility in the community and promote preventative health messages through participation in community events and with strong and opinionated leadership.

We will develop powerful and valuable partnerships with business, industry and the community to deliver integrated and sustainable services.

We will use consultation with our staff and their industrial representatives, our patients and their families, and our community to ensure our services are tailored to meet community expectations.

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Appendices

9.1. Financials ........................................................................................................................................................66

9.2. Executive Management Structure .................................................................................................. 102

9.3. Compliance Checklist ............................................................................................................................ 103

Chapter 9

9. Appendices

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9.1. Financial Statements 2014-2015

General InformationThese financial statements cover the Central Queensland Hospital and Health Service (CQHHS, Central Queensland HHS or Hospital and Health Service).

The Central Queensland Hospital and Health Service was established on 1st July 2012 as a statutory body under the Hospital and Health Boards Act 2011.

The Hospital and Health Service is controlled by the State of Queensland which is the ultimate parent.

The head office and principal place of business of CQHHS is:

Rockhampton Hospital Campus Canning Street Rockhampton QLD 4700

A description of the nature of the Hospital and Health Service’s operations and its principal activities is included in the notes to the financial statements.

For information in relation to the Hospital and Health Service’s Financial Statements please visit the website www.health.qld.gov.au/cq.

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9.1.1. Statement of Comprehensive Income for the year ended 30 June 2015

2015 2014

Notes $’000 $’000Income from Continuing Operations

User charges and fees 3 32,329 29,647

Funding public health services 4 435,569 409,841

Grants and other contributions 5 19,622 18,979

Other revenue 4,234 3,578

Total revenue 491,754 462,045

Total Income from Continuing Operations 491,754 462,045

Expenses from Continuing Operations

Employee expenses 6 31,554 1,947

Health service employee expenses 7 258,630 282,666

Supplies and services 8 172,354 140,819

Depreciation and amortisation 14 21,799 20,015

Revaluation decrement 9 1,084 11,176

Other expenses 10 8,553 7,413

Total Expenses from Continuing Operations 493,974 464,036

Operating Results from Continuing Operations (2,220) (1,991)

Other Comprehensive Income

Items that will not be reclassified subsequently to Operating Result

Increase/(decrease) in Asset Revaluation Surplus 16 35,464 45,793

Total items that will not be reclassified subsequently to Operating Result

35,464 45,793

Total Other Comprehensive Income 35,464 45,793

Total Comprehensive Income 33,244 43,803

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9.1.2. Statement of Financial Position as at 30 June 2015

2015 2014

Notes $’000 $’000

Current Assets

Cash and cash equivalents 11 36,881 48,429

Receivables 12 15,541 8,343

Inventories 13 3,115 3,108

Other 1,034 1,434

56,571 61,313

Total Current Assets 56,571 61,313

Non-Current Assets

Property, plant and equipment 14 496,623 335,889

Total Non-Current Assets 496,623 335,889

Total Assets 553,194 397,202

Current Liabilities

Payables 15 31,162 31,231

Total Current Liabilities 31,162 31,231

Total Liabilities 31,162 31,231

Net Assets 522,033 365,972

Equity

Contributed equity 408,230 285,412

Accumulated surplus/(deficit) 14,525 16,745

Asset revaluation surplus 16 99,278 63,814

Total Equity 522,033 365,972

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9.1.3. Statement of Changes in Equity for the year ended 30 June 2015

Accumulated Surplus

Asset Revaluation

Surplus (Note 16)

Contributed Equity TOTAL

$’000 $’000 $’000 $’000

Balance as at 1 July 2013 18,735 18,021 293,786 330,540

Operating Result from Continuing Operations (1,991) - - (1,991)


Increase in Asset Revaluation Surplus - 45,793 - 45,793

Total Comprehensive Income for the year (1,991) 45,793 - 43,803

Transactions with Owners as Owners:

Net assets received (transferred) under an Administrative Arrangement Note 2 (g) - - 6,129 6,129

Equity injections (Minor Capital works) Note 2 (e) 5,508 5,508

Equity withdrawals (Depreciation funding) Note 2 (e) - - (20,009) (20,009)

Total changes to contributed equity - - (8,372) (8,372)

Balance as at 30 June 2014 16,745 63,814 285,412 365,971

Balance as at 1 July 2014 16,745 63,814 285,412 365,972

Operating Result from Continuing Operations (2,220) - - (2,220)


Increase in Asset Revaluation Surplus - 35,464 - 35,464

Total Comprehensive Income for the Year (2,220) 35,464 - 33,244

Transactions with Owners as Owners:

Net assets received (transferred) under an Administrative Arrangement Note 2 (g) - - 139,137 139,137

Equity injections (Minor Capital works) Note 2 (e) - - 5,479 5,479

Equity withdrawals (Depreciation funding) Note 2 (e) - - (21,799) (21,799)

Net Transactions with Owners as Owners - - 122,817 122,817

Balance as at 30 June 2015 14,525 99,278 408,230 522,033

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9.1.4. Statement of Cash Flows for the year ended 30 June 2015

2015 2014Notes $’000 $’000

Cash flows from operating activities

Inflows:

User charges and fees 32,963 27,468

Funding public health services 405,874 392,718

Grants and other contributions 19,622 18,979

GST input tax credits from ATO 11,491 8,603

GST collected from customers 626 320

Other receipts 4,086 3,463

474,662 451,550

Outflows:

Employee expenses (30,750) (2,012)

Health service employee expenses (266,459) (281,143)

Supplies and services (168,255) (140,271)

GST paid to suppliers (11,637) (8,798)

GST remitted to ATO (662) (297)

Other (6,884) (6,918)

(484,647) (439,439)

Net cash provided by (used in) operating activities 17 (9,985) 12,111

Cash flows from investing activities

Inflows:

Sales of property, plant and equipment 2,390 23

Outflows:

Payments for property, plant and equipment (9,430) (8,858)

Net cash provided by (used in) investing activities (7,040) (8,835)

Cash flows from financing activities

Inflows:

Cash transferred in under administrative arrangement - -

Equity Injections 5,478 5,508

Net cash provided by (used in) financing activities 5,478 5,508

Net increase/(decrease) in cash and cash equivalents (11,547) 8,783

Cash and cash equivalents at the beginning of the financial year 48,428 39,645

Cash and cash equivalents at the end of the financial year 36,881 48,428

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9.1.5. Notes to and Forming Part of the Financial Statements 2014-151. Objectives and principal activities of Central Queensland Hospital and Health Service

Central Queensland Hospital and Health Service (CQHHS, Hospital and Health Service, Health Service, Service or HHS) was established on 1 July 2012, as a not-for-profit statutory body under the Hospital and Health Boards Act 2011. CQHHS is responsible for providing primary health, community and public health services in the area assigned under the Hospital and Health Boards Regulation 2012.

2. Summary of significant accounting policies

(a) Statement of Compliance

The Hospital and Health Service has prepared these financial statements in compliance with section 62 (1) of the Financial Accountability Act 2009 and section 43 of the Financial and Performance Management Standard 2009.

These financial statements are general purpose financial statements, and have been prepared on an accrual basis in accordance with Australian Accounting Standards and Interpretations.

In addition, the financial statements comply with Queensland Treasury’s Minimum Reporting Requirements for the year ending 30 June 2015, and other authoritative pronouncements.

With respect to compliance with Australian Accounting Standards and Interpretations, as the Hospital and Health Service is a not-for-profit statutory body it has applied those requirements applicable to not-for-profit entities.

Except where stated, the historical cost convention is used.

(b) The Reporting Entity

The financial statements include the value of all revenues, expenses, assets, liabilities and equity of Central Queensland Hospital and Health Service.

(c) Trust Transactions and Balances

The Hospital and Health Service acts in a fiduciary trust capacity in relation to patient trust accounts. Consequently, these transactions and balances are not recognised in the financial statements. Although patient funds are not controlled by CQHHS, trust activities are included in the audit performed annually by the Auditor-General of Queensland.

Note 22 provides additional information on the balances held in patient trust accounts.

(d) User Charges and Fees

User charges and fees are recognised as revenues when earned and can be measured reliably with a sufficient degree of certainty. This involves either invoicing for related goods/services and/or the recognition of accrued revenue.

Revenue in this category primarily consists of hospital fees (patients who elect to utilise their private health cover), reimbursements of pharmaceutical benefits, and sales of goods and services.

(e) Funding for Provision of Public Health Services

Funding revenue is received in accordance with Service Agreements with the Department of Health. The Department purchases delivery of health services based on nationally set funding and efficient pricing models determined by the Independent Hospital Pricing Authority (IHPA). The majority of services are funded on an activity unit basis. The service agreement is reviewed periodically and updated for changes in activities and prices of services delivered by CQHHS.Funding is received fortnightly in advance. At the end of the financial year, a financial adjustment may be required where the level of services provided is above or below the agreed level. State funding is also provided for depreciation and minor capital works.

Depreciation funding

CQHHS received $21.7 million funding in 2015 (2014: $20 million) from the Department of Health to cover depreciation costs. However as depreciation is a non-cash expenditure item, the Health Minister has approved a withdrawal of equity by the State for the same amount, resulting in a non-cash revenue and non-cash equity withdrawal.

Minor capital works

Purchases of equipment, furniture and fittings associated with capital works projects are managed by CQHHS. In 2015 CQHHS received $5.5 million (2014: $5.5 million) funding from the State as equity injections throughout the year. These funds are paid by the Department of Health on behalf of the State.

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(f) Grants and Other Contributions

Grants, contributions, donations and gifts that are non-reciprocal in nature are recognised as revenue in the year in which the Hospital and Health Service obtains control over them. Where grants are received that are reciprocal in nature, revenue is progressively recognised as it is earned, according to the terms of the funding arrangements.

Contributed assets are recognised at their fair value. Contributions of services are recognised only if the services would have been purchased if they had not been donated and their fair value can be measured reliably. Where this is the case, an equal amount is recognised as revenue and an expense.

CQHHS receives corporate services support from the Department of Health free of charge. Corporate services received include payroll services, accounts payable services, finance transactional services, and taxation services. As the fair value of these services is unable to be estimated reliably, no associated revenue and expense is recognised in the Statement of Comprehensive Income.

(g) Administrative Arrangements

CQHHS has the full right of use, managerial control of land and building assets and is responsible for maintenance. The Department generates no economic benefits from these assets. In accordance with the definition of control under Australian Accounting Standards, each Hospital and Health Service must recognise the value of these assets in their Statement of Financial Position.

Transfer of assets between Hospital and Health Services, the Department of Health, or other government departments

In 2014, the Minister for Health signed an enduring designation of transfer for property, plant and equipment between the Central Queensland Hospital and Health Services (CQHHS) and the Department of Health. This transfer is recognised through equity when the Chief Finance Officers of both entities agree in writing to the transfer. During this year a number of assets have been transferred under this arrangement.

2015 2014

$’000 $’000

Transfer in - practical completion of projects from the Department * 149,281 4,998

Net transfer of property plant and equipment to/from the Department 23 1,067

Net transfers equipment between HHSs - 64

Transfer of land and buildings to the Department of Health (10,167) -

139,137 6,129

*Construction of major health infrastructure continues to be managed and funded by the Department of Health. Upon practical completion of a project, assets are transferred from the Department to CQHHS.

(h) Special payments

Special payments include ex gratia expenditure and other expenditure that the CQHHS is not contractually or legally obligated to make to other parties. In compliance with the Financial and Performance Management Standard 2009, CQHHS maintains a register setting out details of all special payments exceeding $5,000. The total of all special payments (including those of $5,000 or less) is disclosed separately within Other expenses (Note 10). However, descriptions of the nature of special payments are only provided for special payments greater than $5,000.

(i) Cash and Cash Equivalents

For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash assets include all cash and cheques receipted but not banked at 30 June as well as deposits at call with financial institutions and cash debit facility. CQHHS bank accounts form part of the Whole-of-Government banking arrangement with the Commonwealth Bank of Australia.

(j) Receivables

Trade debtors are recognised at their carrying value less any impairment. The recoverability of trade debtors is reviewed on an ongoing basis at an operating unit level. Trade receivables are generally settled within 120 days, while other receivables may take longer than twelve months.

(k) Impairment of financial assets

Throughout the year, CQHHS assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes financial difficulties of the debtor, changes in debtor credit ratings and current outstanding accounts over 120 days. The allowance for impairment reflects CQHHS’s assessment of the credit risk associated with receivables balances and is determined based on historical rates of bad debts (by category) over the past three years and management judgement. Increases in the allowance for impairment are based on loss events as disclosed in Note 23 (c). All known bad debts are written off when identified.

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(l) Inventories

Inventories consist mainly of medical supplies held for distribution in hospitals and are provided to public patients free of charge except for pharmaceuticals which are provided at a subsidised rate to outpatients. Inventories are valued at the lower of cost and net realisable value. Cost is assigned on a weighted average cost adjusted, where applicable, for any loss of service potential.

(m) Other non-financial assets

Other non-financial assets primarily represent prepayments by CQHHS. These include payments for rental and maintenance agreements, deposits and other payments of a general nature made in advance.

(n) Property, Plant and Equipment

Acquisition of assets

Actual cost is used for the initial recording of all non-current physical and intangible asset acquisitions. Cost is determined as the value given as consideration plus costs incidental to the acquisition, including all other costs incurred in getting the assets ready for use, including architectural fees and engineering design fees. However, any training costs are expensed as incurred. Items or components that form an integral part of an asset are recognised as a single (functional) asset.

Where assets are received free of charge from another Queensland Government entity (whether as a result of a Machinery-of-Government change or other involuntary transfer), the acquisition cost is recognised as the gross carrying amount in the books of the transferor immediately prior to the transfer together with any accumulated depreciation. Assets acquired at no cost or for nominal consideration, other than from an involuntary transfer from another Queensland Government entity, are recognised at their fair value at the date of acquisition in accordance with AASB 116 Property, Plant and Equipment.

Property, Plant and Equipment

Items of property, plant and equipment with a cost or other value equal to more than the following thresholds and with a useful life of more than one year are recognised at acquisition. Items below these values are expensed on acquisition.

Class Threshold

Buildings and Land Improvements* $10,000

Land $1

Plant and Equipment $5,000

*Land improvements undertaken by CQHHS are included with buildings.

(o) Revaluations of non-current physical assets

Land and buildings are measured at fair value in accordance with AASB 116 Property, Plant and Equipment, AASB 13 Fair Value Measurement and Queensland Treasury’s Non-Current Asset Policies for the Queensland Public Sector. These assets are reported at their revalued amounts, being the fair value at the date of valuation, less any subsequent accumulated depreciation and impairment losses where applicable.

Plant and equipment, is measured at cost in accordance with the Non-Current Asset Policies for the Queensland Public Sector. The carrying amounts for plant and equipment at cost should not materially differ from their fair value.

The fair values reported by CQHHS are based on appropriate valuation techniques that maximise the use of available and relevant observable inputs and minimise the use of unobservable inputs (refer to Note 2 (p)).

Land and building classes measured at fair value are revalued on an annual basis either by comprehensive valuations or by the use of appropriate and relevant indices undertaken by independent professional valuers/quantity surveyors. Comprehensive revaluations are undertaken at least once every five years. However, if a particular asset class experiences significant and volatile changes in fair value, then that class is subject to specific appraisal in the reporting period, where practical, regardless of the timing of the last specific appraisal.

Where assets have not been specifically appraised in the reporting period, their previous valuations are materially kept up-to-date via the application of an interim index which approximates fair value at reporting date. Materiality concepts (according to the Framework for the Preparation and Presentation of Financial Statements) are considered in determining whether the difference between the carrying amount and the fair value of an asset is material, in which case revaluation is warranted.

Assets under construction are not revalued until they are ready for use.

For assets revalued using a cost valuation method (e.g. depreciated replacement cost), accumulated depreciation is adjusted to equal the difference between the gross amount and the carrying amount, after taking into account accumulated impairment losses and changes in remaining

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useful life. This is generally referred to as the ‘gross method’. For assets revalued using a market or income-based valuation approach, accumulated depreciation and accumulated impairment losses are eliminated against the gross amount of the asset prior to restating for the revaluation. This is generally referred to as the ‘net method’. At 30 June 2015, all revalued buildings are valued using the gross method, while land is not depreciated.

Any revaluation increment arising on the revaluation of an asset is credited to the asset revaluation surplus of the appropriate class, except to the extent it reverses a revaluation decrement for the class previously recognised as an expense. A decrease in the carrying amount on revaluation is charged as an expense to the extent it exceeds the balance, if any, in the revaluation surplus relating to that asset class.

On revaluation, accumulated depreciation is restated proportionately with the change in the carrying amount of the asset and any change in the estimate of remaining useful life.

Separately identified components of assets are measured on the same basis as the assets to which they relate.

Land is measured at fair value each year using either independent revaluations, desktop market revaluations or indexation by the State Valuation Service (SVS) within the Department of Natural Resources and Mines.

The fair value of land was based on publicly available data on sales of similar land in nearby localities. In determining the values, adjustments were made to the sales data to take into account the location of CQHHS’s land, its size, street/road frontage and access, and any significant restrictions.

The extent of the adjustments made varies in significance for each parcel of land. Subjective adjustments are also made to observable data for land classified as reserve (by the Minister for a community purpose). Reserve land parcels are not sold and therefore there are no directly observable inputs. This land can only be sold when un-gazetted and converted to freehold by the State.

The Queensland property market is deemed the most advantageous market. Property sales and values derived from this market assist the determination of values for reserves. To derive a value for reserved land considering current restrictions and classifications, valuations reference sales of land of a restricted nature, preferably not sales of land reflecting a highest and best use which is unrestricted. Where sales of land with a potential alternate use are used, appropriate allowance is included to reflect the nature of the restrictions on the land.

Land indices issued by the Valuer-General, and are based on actual market movements for each local government area. An individual factor change per property has been developed from review of market transactions, and has been endorsed by the Queensland Audit Office. The State Valuation Service (SVS) undertakes investigation and research into each factor provided for the interim land indexation. All local government property market movements are reviewed annually by market surveys to determine any material change in values. Ongoing market investigations undertaken by SVS assists in providing an accurate assessment of the prevailing market conditions and detail the specific market movement applicable to each property.

The independent valuers/quantity surveyors provide assurance of their robustness, validity and appropriateness for application to the relevant assets.

Indices are reviewed for reasonableness by CQHHS. Where indices were based on observable market data, review of market sales and overall regional trends for similar properties was performed. Comparison of results with similar assets valued by an independent professional valuer or quantity surveyor, as well as analysing the trend of changes in values over time was undertaken. Through this annual process, management assesses and confirms the relevance and suitability of indices provided based on CQHHS’s own particular circumstances.

Reflecting the specialised nature of health service buildings and on hospital-site residential facilities, fair value is determined using depreciated replacement cost methodology. Depreciated replacement cost is calculated by determining the cost to replicate the future service potential of the asset, adjusted for age and condition. Buildings are measured at fair value by applying either a revised estimate of individual asset’s depreciated replacement cost, or an interim index which approximates movement in market prices for labour and other key resource inputs. These estimates are developed by independent quantity surveyors.

The replacement cost of each building is based on replicating the existing facility as currently designed (assuming the service potential of the asset is fully utilised) and makes no allowance for upgrading to current standards or technology. This is achieved by measuring each asset, determining a bill of quantities and applying current market rates at reporting date.

Architectural floor drawings and physical site inspections by a senior quantity surveyor were used to determine quantities. The site inspection also identified the condition and deterioration of components comprising the asset (impacts remaining useful life assessments and written down value).

The valuation was prepared on an elemental basis with rates applied based on current market rates used on comparable building types in Queensland, taking into account the type of material, size, quality and complexity of the asset. All rates are based on Brisbane rates at 30 June 2015 and

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adjusted for regional locality based on judgement and experience. Elements such as substructure, columns, upper floor, roof, facade, internal partitions, doors, walls, floor and ceiling finishes and sanitary fixtures were based on current market rates. For elements such as joinery fittings, hydraulic reticulation, mechanical services, medical gases, electrical services, communications, fire protection and lifts pricing was based on Rider Levett Bucknall Pty Ltd’s health database and analysis of recent projects were used for pricing.

Valuations assume a nil residual value. Significant capital works, such as a refurbishment across multiple floors of a building, will result in an improved condition assessment and higher depreciated replacement values. This increase is typically less than the original capitalised cost of the refurbishment, resulting in a small write down. Presently all major refurbishments are funded by the Department of Health.

Significant judgement is used to assess the remaining service potential of the facility, given local climatic and environmental conditions and records of the current condition of the facility.

(p) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly derived from observable inputs or estimated using another valuation technique.

Fair values reported by CQHHS are based on appropriate valuation techniques that maximises the use of available and relevant observable inputs and minimise the use of unobservable inputs. Observable inputs are publicly available data that are relevant to the characteristics of the assets/liabilities being valued, and include, but are not limited to, published sales data for land and residual dwellings.

Unobservable inputs are data, assumptions and judgements that are not available publicly, but are relevant to the characteristics of the assets/liabilities being valued. Significant unobservable inputs used by CQHHS include, but are not limited to, subjective adjustments made to observable data to take account of the specialised nature of health service buildings and on hospital-site residential facilities, including historical and current construction contracts (and/or estimates of such costs), and assessments of physical condition and remaining useful life. Unobservable inputs are used to the extent that sufficient relevant and reliable observable inputs are not available for similar assets/liabilities.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefit by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

All CQHHS assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the following fair value hierarchy, based on the data and assumptions used in the most recent specific appraisals:

* level 1 - represents fair value measurements that reflect unadjusted quoted market prices in active markets for identical assets and liabilities;

* level 2 - represents fair value measurements that are substantially derived from inputs (other than quoted prices included in level 1) that are observable, either directly or indirectly; and

* level 3 - represents fair value measurements that are substantially derived from unobservable inputs.

None of CQHHS’s valuations of assets or liabilities are eligible for categorisation into level 1 of the fair value hierarchy.

Categorisation of valuations in the fair value hierarchy is as follows:

• Unrestricted land - level 2 fair value hierarchy• Reserved land - level 3 fair value hierarchy• Buildings - level 3 fair value hierarchy

Refer to Note 14 for specific disclosures relating to fair value hierarchy.

(q) Depreciation

Property, plant and equipment is depreciated on a straight-line basis. Annual depreciation is based on fair values and CQHHS’s assessments of the useful remaining life of individual assets. Land is not depreciated as it has an unlimited useful life.

Assets under construction (work-in-progress) are not depreciated until they reach service delivery capacity. Service delivery capacity relates to when construction is complete and the asset is first put to use or is installed ready for use in accordance with its intended application. These assets are then reclassified to the relevant classes within property, plant and equipment.

Where assets have separately identifiable components, subject to regular replacement, components are assigned useful lives distinct from the asset to which they relate and depreciated accordingly. In accordance with Queensland Treasury’s Non-current Asset Policy Guideline 2, CQHHS has determined all specialised health service buildings (material by value) are complex in nature and warrant componentisation (separate useful lives assigned to component parts). These building comprise three components:

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• Structural shell • Fit out• Services including plant

Useful lives are disclosed as part of depreciation table below and are amended progressively as part of the asset revaluation process or when significant elements within a component are replaced. Any material expenditure that increases the originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount is depreciated over the remaining useful life of the asset. The written down value of the replaced element/s (original value) is deducted from the asset value. Where the replacement forms part of a planned refurbishment program, accelerated depreciation is applied to approximate remaining useful life.

For each class of depreciable assets, the following range of depreciation rates were used:

Class Depreciation rates

Buildings and Improvements

- Shell 1-2%

- Fit out 1-6%

- Services 1-5%

- Land improvements 1-4%

- Other buildings including residential 1-5%

Plant and equipment 4-20%

(r) Impairment of non-current assets

All non-current and intangible assets are assessed for indicators of impairment on an annual basis in accordance with AASB 136 Impairment of Assets. If an indicator of possible impairment exists, CQHHS determines the asset’s recoverable amount (higher of value in use and fair value less costs to sell). Any amount by which the asset’s carrying amount exceeds the recoverable amount is considered an impairment loss. An impairment loss is recognised immediately in the Statement of Comprehensive Income, unless the asset is carried at a revalued amount, in which case the impairment loss is offset against the asset revaluation surplus of the relevant class to the extent available.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount. The increased carrying amount cannot exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. Refer also Note 2 (o).

(s) Payables

Payables are recognised for amounts to be paid in the future for goods and services received. Trade creditors are measured at the agreed purchase/contract price, gross of applicable trade and other discounts.

The amounts are unsecured and normally settled within 30 - 60 days.

(t) Financial instruments

Recognition

Financial assets and financial liabilities are recognised in the Statement of Financial Position when CQHHS becomes party to the contractual provisions of the financial instrument.

Classification

Financial instruments are classified and measured as follows:

• Receivables - held at amortised cost• Payables - held at amortised cost

Central Queensland Hospital and Health Service does not enter into transactions for speculative purposes, nor for hedging. CQHHS holds no financial assets classified at fair value through profit and loss. All other disclosures relating to the measurement and financial risk management of financial instruments held by CQHHS are included in Note 23.

(u) Employee benefits and Health service employee expenses

Under section 20 of the Hospital and Health Boards Act 2011 (HHB Act) - a Hospital and Health Services can employ health executives, and a person previously employed in the Department as a health service employee where regulation has been passed for the HHS to become a prescribed service. Where a HHS has not received the status of a ‘prescribed service’, non executive staff working in a HHS legally remain employees of the Department of Health.

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(i) Health service employee expenses

In 2014-15 the Central Queensland Hospital and Health Service was not a prescribed service and accordingly all non-executive staff (excluding Senior Medical Officers and Visiting Medical Officers under direct contract) were employed by the Department. Provisions in the HHB Act enable CQHHS to perform functions and exercise powers to ensure the delivery of its operational plan.

Under this arrangement:

• The Department provides employees to perform work for CQHHS, and acknowledges and accepts its obligations as the employer of these employees.

• CQHHS is responsible for the day to day management of these departmental employees.• CQHHS reimburses the Department for the salaries and on-costs of these employees.

As a result of this arrangement, CQHHS treats the reimbursements to the Department of Health for departmental employees in these financial statements as health service labour expenses as detailed in Note 7.

In addition to the employees contracted from the Department of Health, CQHHS has engaged employees directly. The information detailed below relates specifically to the directly engaged employees.

(ii) Central Queensland Hospital and Health Service’s directly engaged employees

CQHHS classifies salaries and wages, rostered days-off, sick leave, annual leave and long service leave levies and employer superannuation contributions as employee benefits in accordance with AASB 119 Employee Benefits (Note 6). Wages and salaries due but unpaid at reporting date, are recognised in the Statement of Financial Position at current salary rates. As CQHHS expects such liabilities to be wholly settled within 12 months of reporting date, the liabilities are recognised at undiscounted amounts.

Prior history indicates that on average, sick leave taken each reporting period is less than the entitlement accrued. This is expected to continue in future periods. Accordingly, it is unlikely that existing accumulated entitlements will be used by employees and no liability for unused sick leave entitlements is recognised. As sick leave is non-vesting, an expense is recognised for this leave as it is taken.

Annual leave

The Queensland Government’s Annual Leave Central Scheme (ALCS) became operational on 30 June 2008 for departments, commercial business units, shared service providers and selected not for profit statutory bodies. Under this scheme, a levy is made on CQHHS to cover the cost of employee’s annual leave (including leave loading and on-costs).

The levies are expensed in the period in which they are payable. Amounts paid to employees for annual leave are claimed from the scheme quarterly in arrears. The Department of Health centrally manages the levy and reimbursement process on behalf of CQHHS. No provision for annual leave is recognised in the CQHHS financial statements as the liability is held on a whole-of-government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and General Government Sector Financial Reporting.

Long Service Leave

Under the Queensland Government’s Long Service Leave Scheme, a levy is made on CQHHS to cover the cost of employees’ long service leave. The levies are expensed in the period in which they are payable. Amounts paid to employees for long service leave are claimed from the scheme quarterly in arrears. The Department of Health centrally manages the levy and reimbursement process on behalf of CQHHS. No provision for long service leave is recognised in the CQHHS financial statements as the liability is held on a whole-of-government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and General Government Sector Financial Reporting.

Superannuation

Employer superannuation contributions are paid to QSuper, the superannuation scheme for Queensland Government employees, at rates determined by the Treasurer on the advice of the State Actuary. Contributions are expensed in the period in which they are paid or payable, and CQHHS’s obligation is limited to its contribution to QSuper. The QSuper scheme has defined benefit and defined contribution categories. The liability for defined benefits is held on a whole-of-government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and General Government Sector Financial Reporting.

Board members and Visiting Medical Officers are offered a choice of superannuation funds and CQHHS pays superannuation contributions into a complying superannuation fund. Contributions are expensed in the period in which they are paid or payable. CQHHS’s obligation is limited to its contribution to the superannuation fund. Therefore no liability is recognised for accruing superannuation benefits in the CQHHS financial statements.

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Key management personnel and remuneration

Key management personnel and remuneration disclosures are made in accordance with section 5 of the Financial Reporting Requirements for Queensland Government Agencies issued by Queensland Treasury. Refer to Note 24 for the disclosures on key executive management personnel and remuneration.

(v) Insurance

The Department of Health insures property and general losses above a $10,000 threshold through the Queensland Government Insurance Fund (QGIF).

Health litigation payments above a $20,000 threshold and associated legal fees are also insured through QGIF. QGIF collects an annual premium from insured agencies intended to cover the cost of claims occurring in the premium year.

The Insurance Arrangements for Public Health Entities enables Hospital and Health Services to be named ‘insured parties’ under the Department’s policy. For the 2014-15 policy year, the premium was allocated to each Hospital and Health Service according to the underlying risk of an individual insured party. The Hospital and Health Service premiums cover claims from 1 July 2012, pre 1 July 2012 claims remain the responsibility of the Department, however each Hospital and Health Service must pay the $20,000 excess payment on these claims.

Central Queensland Hospital and Health Service pays premiums to WorkCover Queensland in respect of its obligations for employee compensation.

(w) Contributed equity

Non-reciprocal transfers of assets and liabilities between wholly-owned Queensland Government entities as a result of Machinery-of-Government changes are adjusted to Contributed Equity in accordance with Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities.

(x) Federal taxation charges

CQHHS is a State body as defined under the Income Tax Assessment Act 1936 and is exempt from Commonwealth taxation with the exception of Fringe Benefits Tax (FBT) and Goods and Services Tax (GST). The Australian Taxation Office has recognised the Department of Health and the sixteen Hospital and Health Services as a single taxation entity for reporting purposes.

All FBT and GST reporting to the Commonwealth is managed centrally by the Department, with payments/ receipts made on behalf of the Hospital and Health Services reimbursed to/from the Department on a monthly basis. GST credits receivable from, and GST payable to the ATO, are recognised on this basis. Refer to Note 12.

(y) Issuance of Financial Statements

The financial statements are authorised for issue by the Chairman of the Hospital and Health Board, the Health Service Chief Executive and the Chief Finance Officer at the date of signing the Management Certificate.

(z) Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements necessarily requires the determination and use of certain critical accounting estimates, assumptions and management judgements that have the potential to cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Such estimates, judgements and underlying assumptions are reviewed on an ongoing basis, historical experience and other factors that are considered to be relevant. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods as relevant.

Estimates and assumptions that have a potential significant effect are outlined in the following financial statement notes:

• Property, plant and equipment – Note 14• Contingent assets and liabilities – Note 20

(aa) Rounding and comparatives

Amounts included in the financial statements are in Australian dollars and have been rounded to the nearest $1,000 or, where that amount is $500 or less, to zero, unless disclosure of the full amount is specifically required.

Comparative information has been restated where necessary to be consistent with disclosures in the current reporting period.

(ab) New and revised accounting standards

Central Queensland Hospital and Health Service did not voluntarily change any of its accounting policies during 2014-15. The only Australian Accounting Standard applicable for the first time in 2014-15 with an impact on the CQHHS Financial Statements is AASB 1055 Budgetary Reporting.

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AASB 1055 became effective from reporting periods beginning on or after 1 July 2014. In response to this new standard, CQHHS has included in the financial statements a comprehensive new note “Budget vs Actual Comparison” (Note 25). This note discloses CQHHS’s original published budgeted figures for 2014-15 compared to actual results, with explanations of major variances, in respect of the CQHHS’s Statement of Comprehensive Income, Statement of Financial Position and Statement of Cash Flows.

Central Queensland Hospital and Health Service is not permitted to early adopt a new or amended accounting standard ahead of the specified commencement date unless approval is obtained from Queensland Treasury. Consequently, CQHHS has not applied any Australian Accounting Standards and Interpretations that have been issued but are not yet effective. CQHHS applies standards and interpretations in accordance with their respective commencement dates.

At the date of authorisation of the financial report, the following new or amended Australian Accounting Standards are expected to impact on the Central Queensland Hospital and Health Service in future periods. The potential effect of the revised Standards and Interpretations on the Hospital and Health Service’s financial statements is not expected to be significant but a full review has not yet been completed.

The following new and revised standards apply as from reporting periods beginning on or after 1 January 2015.

• AASB 15 Revenue from Contracts with Customers; • AASB 2014-1 Amendments to Australian Accounting Standards• AASB 2014-4 Amendments to Australian Accounting Standards - Clarification of Acceptable

Methods of Depreciation and Amortisation [AASB 116 & AASB 138]• AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 • AASB 2015-7 Amendments to Australian Accounting Standards - Fair Value Disclosures of

Not-for-Profit Sector Entities.

(ab) New and revised accounting standards continued

“AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities amends AASB 13 Fair Value Measurement effective from annual reporting periods beginning on or after 1 July 2016. The amendments provide relief from certain disclosures about fair values categorised as level 3 under the fair value hierarchy (refer to note 1(p)). Accordingly, the following disclosures for level 3 fair values in note 14 will no longer be required:

• the disaggregation of certain gains/losses on assets reflected in the operating result;• quantitative information about the significant unobservable inputs used in the fair value

measurement; and• a description of the sensitivity of the fair value measurement to changes in the unobservable

inputs.

As the amending standard was released in early July 2015, the Central Queensland Hospital and Health Service has not early adopted this relief in these financial statements, as per instructions from Queensland Treasury. However, CQHHS will be early adopting this disclosure relief as from the 2015-16 reporting period (also on instructions from Queensland Treasury).”

“AASB 2015-6 Amendments to Australian Accounting Standards - Extending Related Party Disclosures to Not-for-profit Public Sector entities will take effect from reporting periods beginning on, or after 1 July 2016. This amending standard removes paragraph Aus1.3 from AASB 124 Related Party Disclosures, thereby removing the exemption (that NFP public sector entities currently have) from a range of disclosures about remuneration of key management personnel, transactions with related parties / entities, and relationships with parent and controlled entities.”

All other Australian accounting standards and interpretations with new or future commencement dates are either not applicable to CQHHS’s activities, or have no material impact on CQHHS.

(ac) Other Events

Payroll system

Employees are paid under a service arrangement using the Department of Health’s payroll system, and the responsibility for the efficiency and effectiveness of this system remains with the Department.

(ad) Subsequent events

Transfer of legal ownership of health service land and buildings to CQHHS

On 1 July 2012, the Minister for Health approved the transfer of land and buildings via a three year concurrent lease (representing its right to use the assets) to CQHHS from the Department of Health. Under the terms of the lease no consideration in the form of a lease or residual payment by CQHHS is required.

From 1 July 2015 title to the land and buildings was transferred to CQHHS, replacing the concurrent leases. Under the Transfer Notice all leases entered into by the Central Queensland Health Service District (pre June 2012) become future expenditure commitments of CQHHS. At 30 June 2015 this represents approximately $3.5 million over the next six years.

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3. User charges and fees

2015 2014

$’000 $’000

Pharmaceutical Benefits Scheme 8,524 8,377

Sales of goods and services 4,127 2,157

Hospital fees 19,678 19,112

32,329 29,647

4. Funding public health services

Share of funding 2015 2014

StateAustralian Government

$’000 $’000

National Health Reform* $’000 $’000

Activity based funding 174,324 84,882 259,206 245,877

Block funding 50,843 26,770 77,613 68,292

Teacher Training funding 8,313 1,027 9,340 2,625

General purpose funding 89,410 - 89,410 93,047

Total National Health Reform funding 435,569 409,841

* Refer to Note 2 (e). The Australian Government pays its share of National Health funding directly to the Department of Health, for on forwarding to the Hospital and Health Service.

5. Grants and other contributions

2015 2014

$’000 $’000

Australian Government grants

Nursing home grants* 10,189 9,747

Home and community care grants* 462 443

Specific purpose - Multipurpose centre^ 3,778 3,535

Specific purpose payments 2,934 2,420

Total Australian Government grants 17,364 16,145

Other

Other grants 2,258 2,835

19,622 18,979

*As an approved provider of aged care services, CQHHS received funding from the Australian Government under the Aged Care Act 1997. This funding is dependent on the number of approved places and clients, with subsidies determined in accordance with Aged Care Funding Instruments (ACFI) administered by Medicare.

^CQHHS received subsidies for a number of rural community multipurpose health centres under a jointly funded program between the State and Commonwealth governments. The Australian Government’s contribution is paid in the form of a flexible care subsidy as determined under section 52-1 of the Aged Care Act 1997 and is paid in accordance with the Flexible Care Subsidy Principles 1997.

6. Employee expenses

2015 2014

$’000 $’000

Employee benefits

Wages and Salaries 27,041 1,264

Annual leave levy* 1,682 97

Employer superannuation contributions* 2,013 138

Long service leave levy* 561 21

Termination benefits 60 228

Employee related expenses

Workers compensation premium 121 36

Payroll tax 0 67

Other employee related expense 76 96

31,554 1,947

*Employee expenses represent the cost of engaging board members and the employment of Health Executives, Senior Medical and Visiting Medical Officers who are employed directly by CQHHS.

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Effective 4 August 2014, Senior Medical Officers and Visiting Medical Officers transitioned to individual employment contracts. As a direct employment relationship was established with CQHHS (not the Department), all the associated employee related costs were recognised as employee benefits from the date of the contracts. This has resulted in a significant increase in employee expenses and FTE numbers in 2015 over the previous year.

The number of employees including both full-time employees and part-time employees measured on a full-time equivalent basis (reflecting Minimum Obligatory Human Resource Information (MOHRI)) is:

2015 2014

Number of Employees* 87 4

* Refer to Note 2(u) (i) for more details on employee expenses Key executive management and personnel are reported in Note 24.

7. Health service employee expenses

2015 2014

$’000 $’000

Department of Health - health service employees* 258,630 282,666

*The Hospital and Health Service through service arrangements with the Department of Health has engaged 2,510 (2014: 2,585) full-time equivalent persons.

Refer to Note 2 (u) (ii) for further details on the contractual arrangements.

8. Supplies and services

2015 2014

$’000 $’000

Consultants and contractors 46,980 36,880

Electricity and other energy 5,770 5,570

Patient travel# 25,858 23,439

Other travel 1,300 1,106

Building services 2,747 1,905

Computer services 1,922 1,874

Motor vehicles 387 412

Communications 4,663 2,858

Repairs and maintenance 9,183 6,347

Minor works including plant and equipment 1,092 872

Operating lease rentals 4,453 3,957

Inventories held for distribution

Drugs 13,363 13,080

Clinical supplies and services 16,400 15,452

Catering and domestic supplies 5,694 5,034

Outsourced service delivery

Medical imaging 9,418 1,808

Medical 2,416 2,848

Other services 587 457

Pathology, blood and parts 11,663 10,885

Other 8,458 6,036

172,354 140,819

# Includes payments for aeromedical services provided by Royal Flying Doctors Service and ambulance fees.

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9. Revaluation decrement

2015 2014

$’000 $’000

Revaluation decrement 1,084 11,176

Under AASB 116, each reserve is limited to its respective class, i.e. only asset movements in land can be offset against the land reserve. Where the net movement exceeds the reserve for that class, a decrement is recorded in the Statement of Comprehensive Income. The decrement, not being the reversal of a previous revaluation increment in respect of the same class of assets, has been recognised as an expense in the Statement of Comprehensive Income.

10. Other expenses

2015 2014

$’000 $’000

External audit fees* 131 316

Other audit fees 69 130

Insurance** 5,320 5,206

Insurance premiums - Other# 145 38

Losses from the disposal of non-current assets 1,271 239

Special payments - ex-gratia payments

Ex-gratia payments 8 0

Out-of-court settlements*** 5 140

Other legal costs 503 485

Advertising 224 86

Grants 392 375

Interpreter fees 88 47

impairment losses on trade receivables^ 245 204

Other 152 147

8,553 7,413

*Total quoted Queensland Audit Office audit fee for the 2014-15 financial statement audit is $165,000 (2013-14: $184.000) including out of pocket expenses. There are no non-audit services included in this amount.

** Includes payments to Department of Health representing CQHHS’s share of the Department’s QGIF premium. Certain losses of public property and health litigation costs are insured with the Queensland Government Insurance Fund refer Note 2 (v). QGIF of the acceptance of claims, revenue is recognised for the agreed settlement amount and disclosed as “Other Revenues - Insurance compensation from loss of property”.

# Under-Treasurer’s approval has been obtained for entering into the insurance contracts.

*** One out-of-court settlement was paid in 2014-2015; two in 2013-2014 to private individuals involved in patient disputes.

^Refer Note 12 for Receivables

11. Cash and cash equivalents

2015 2014

$’000 $’000

Imprest accounts 7 8

Cash at bank* 34,023 44,838

QTC cash funds* 2,852 3,583

36,881 48,429

CQHHS’s operating bank accounts are grouped as part of a Whole-of-Government (WoG) banking arrangement between Queensland Treasury and the Commonwealth Bank, and does not earn interest on surplus funds nor is it charged interest or fees for accessing its approved cash debit facility. Any interest earned on the WoG fund accrues to the Consolidated Fund.

General trust bank and term deposits do not form part of the Whole-of-Government banking arrangement and as such incur fees as well as earn interest. Cash deposited with Queensland Treasury Corporation earns interest, calculated on a daily basis reflecting market movements in cash funds. Rates achieved throughout the year range between 2.80% to 3.87% (2013-14: 3.3% to 4.2%).

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*CQHHS receives cash contributions primarily from private practice clinicians and external entities to provide for education, study and research in clinical areas. At 30 June 2015, amounts of $2.65 million ($4.0 million 2013-14) in General Trust including $499 thousand ($442 thousand 2014) for earnings in excess of what is agreed under the Granted Private Practice retention arrangement. A further $6.3 thousand ($6.3 thousand 2013-14) for Clinical Drug Trials, were set aside for the specified purposes underlying the contribution. Contributions are also received from benefactors in the form of gifts, donations and bequests for stipulated purposes.

12. Receivables

2015 2014

$’000 $’000

Trade debtors 5,569 6,454

Payroll receivables 1 8

Less: Allowance for impairment (294) (305)

Sub total 5,276 6,157

GST receivable 1,132 987

GST payable (41) (78)

Sub total 1,092 909

Funding public health services receivable 9,173 1,277

Total 15,541 8,343

Movements in the allowance for impairment loss

Balance at beginning of the year 305 264

Amounts written off during the year (256) (163)

Amount recovered during the year 2 -

Increase/(decrease) in allowance recognised in operating result 242 204

Balance at the end of the year 294 305

Trade debtors includes receivables of $4.6 million (2013-14: $3.1 million) from health funds (reimbursement of patient fees), $377 thousand (2013-14: $410 thousand) residential fees for aged care, and $176 thousand (2013-14: $174 thousand) from the Australian Government for Pharmacy Pharmaceutical Benefits Scheme claims. The funding amount for public health services is adjusted at year end via window funding adjustments; $9.2M is the Window 3 adjustment for 2014-15 (2013-14: $1.3M - Window 4 technical adjustment)

13. Inventories

2015 2014

$’000 $’000

Inventories held for distribution - at cost

Medical supplies and equipment 3,036 3,080

Catering and domestic 69 10

Other 10 18

Total 3,115 3,108

14. Property, plant and equipment

2015 2014

$’000 $’000

Land*

At fair value 17,660 23,954

Buildings*

At fair value 758,631 533,503

Less: Accumulated depreciation (308,912) (251,595)

449,719 281,908

Plant and equipment

At cost 54,083 57,480

Less: Accumulated depreciation (29,825) (31,139)

24,258 26,341

Capital works in progress

At cost 4,986 3,686

Total property, plant and equipment 496,623 335,889

* Refer Note 2 (n).

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Land

CQHHS has engaged the State Valuation Service (SVS) to progressively undertake a comprehensive revaluation program over four years (with indices applied in the intervening periods) for all land (excluding properties which do not have a liquid market) and provide indices for land parcels not comprehensively revalued. To date SVS has comprehensively revalued 26 land lots (93% by value) over the last two years. Refer to the reconciliation table later in this note for information about the fair value classification of land.

The revaluation program resulted in a decrement of $1.1 million (decrement 2013-14: $12.8 million) to the carrying amount of land refer Note 9.

Buildings

Rider Levett Bucknall Qld Pty Ltd (RLB), independent quantity surveyors, have been engaged to undertake a rolling valuation program for buildings. This includes the provision of an annual index to approximate construction growth (for buildings not comprehensively revalued). To date RLB has comprehensively revalued 93% of buildings (by value) at 30 June 2015. The revaluation program resulted in an increment of $35 million (increment 2013-14: $42 million) to the carrying amount of buildings. Refer Note 2 (o) & (p) for further details on the revaluation methodology applied.

Plant and equipment

CQHHS has plant and equipment with an original cost of $5.2 million (2013-14: $1.1 million) or 16% (2013-14: 2%) of total plant and equipment gross value and a written down value of zero still being used in the provision of services. 19% (2014: 10%) of these assets with a gross cost of $1.6 million (2014: $118 thousand) are expected to be replaced in 2015.

Property, Plant and Equipment Reconciliation

Land BuildingsPlant &

equipmentWork in progress

Total

$’000 $’000 $’000 $’000 $’000

Carrying amount at 1 July 2013 34,383 239,578 23,537 2,015 299,513

Assets reclassified from Held for Sale 2,855 3,602 488 - 6,945

Acquisition major infrastructure transfers 548 4,451 - - 4,998

Transfers in from other Queensland Government entities

- - 2,030 - 2,030

Acquisitions - 1,507 4,855 2,496 8,858

Disposals - (22) (218) - (240)

Transfers out to other Queensland Government entities

(162) (618) (10) (108) (899)

Transfer between classes - (308) 1,024 (716) -

Impairment gains recognised in operating surplus/(deficit)*

- 40 41 - 81

Net revaluation increments/(decrements) (12,818) 42,096 - - 29,278

Impairment gains/(loss) recognised in equity

(852) 6,192 - - 5,340

Depreciation charge - (14,609) (5,406) - (20,015)

Carrying amount at 30 June 2014 23,953 281,908 26,341 3,686 335,889

Property, Plant and Equipment Reconciliation

Land BuildingsPlant &

equipmentWork in progress

Total

$’000 $’000 $’000 $’000 $’000

Carrying amount at 1 July 2014 23,953 281,908 26,341 3,686 335,889

Acquisition major infrastructure transfers - 149,255 26 - 149,281

Transfers in from other Queensland Government entities

- - 23 - 23

Acquisitions - 2,364 5,821 4,361 12,546

Disposals - (385) (3,145) - (3,530)

Transfers out to other Queensland Government entities

(5,209) (4,957) - - (10,167)

Transfer between classes - 2,436 626 (3,062) -

Net revaluation increments/(decrements) (1,084) 35,464 - - 34,380

Depreciation - (16,365) (5,434) - (21,799)

Carrying amount at 30 June 2015 17,660 449,719 24,258 4,985 496,623

* Impairment losses and reversals of impairment losses are shown as separate line items in the Statement of Comprehensive Income.

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Categorisation of fair values (refer to note 2 (p))

All buildings (and land improvements) have historically been valued using depreciated replacement cost methodology and accordingly are assigned a level 3 fair value hierarchy. The majority of buildings controlled by CQHHS reflect the specialised nature of health service buildings and on hospital-site residential facilities. These facilities are considered to already be used at highest and best use, taking into consideration the tests of physically possible, financially feasible and legally permissible.

CQHHS has six land lots classified as reserve in nature. Reserved land is land dedicated by the Minister for restrictions on the land. Reserved land has been classified as a level 3 hierarchy for fair value determinations, categorised within the following fair value hierarchy, based on the data and assumptions used in the most recent value assessments.

2015 2014

Level 2 Level 3 Total Level 2 Level 3 Total

$’000 $’000 $’000 $’000 $’000 $’000

Land 17,062 598 17,660 23,373 580 23,953

Buildings 449,719 449,719 281,908 281,908

Level 3 fair value reconciliation (Refer Note 2 (p))

Land Buildings Total

2014 2014 2014

$’000 $’000 $’000

Carrying amount at 1 July 2013 648 239,578 240,225

Assets reclassified from Held for Sale - 3,602 3,602

Acquisition major infrastructure transfers - 4,451 4,451

Acquisitions - 1,507 1,507

Disposals - (22) (22)

Transfers out to other Queensland Government entities - (618) (618)

Transfer between classes - (308) (308)

Net revaluation increments/(decrements) (68) 42,096 42,028

Impairment gains recognised in operating surplus/(deficit)*

- 40 40

Reversals of impairment gains/(loss) in equity - 6,192 6,192

Depreciation - (14,609) (14,609)

Carrying amount at 30 June 2014 580 281,908 282,488

Land Buildings Total

2015 2015 2015

$’000 $’000 $’000

Carrying amount at 1 July 2014 580 281,908 282,488

Acquisition major infrastructure transfers - 149,255 149,255

Acquisitions - 2,364 2,364

Disposals - (385) (385)

Transfers out to other Queensland Government entities - (4,957) (4,957)

Transfer between classes - 2,436 2,436

Net revaluation increments/(decrements) 18 35,464 35,482

Depreciation - (16,365) (16,365)

Carrying amount at 30 June 2015 598 449,719 450,318

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Level 3 significant valuation inputs and relationship to fair value

As the measurement of quantities is finite for buildings, the major variables in determining the valuation are the rates applied to each quantity, locality index and on-costs.

In regard to the sensitivity of valuations to variances in rates, locality index, pricing of preliminaries and builder’s margin. The following factors may affect the valuation:

• local industry construction volumes/market conditions;• material supply prices (steel, raw metals, etc.);• exchanges rate fluctuations; and• enterprise bargaining agreements.

Over the next twelve months RLB do not reasonably foresee any substantial movements in price, as construction volumes remain relatively low with no indication of a significantly increased pipeline of new projects. The current RLB tender level index forecasts a modest 4% increase in construction prices.

15. Payables

2015 2014

$’000 $’000

Trade creditors

Department of Health 5,885 12,575

Other trade creditors 15,839 13,137

Capital creditors 3,117 -

Accrued health service labour - Department of Health* 5,473 5,482

Accrued employee benefits* 817 16

Revenue received in advance 32 20

31,162 31,231

* Refer to Note 2 (u)

16. Asset revaluation surplus by class

2015 2014

$’000 $’000

Land

Balance at the beginning of the financial year - 2,494

Revaluation increment/(decrement) - (1,642)

Impairment gain (loss) through equity* - (852)

Balance at the end of the financial year - -

Buildings

Balance at the beginning of the financial year 63,814 15,527

Revaluation increment/(decrement) 35,464 42,095

Impairment gains (losses) through equity* - 6,192

Balance at the end of the financial year 99,278 63,814

Total 99,278 63,814

*The asset revaluation surplus represents the net effect of revaluation movements in assets.

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17. Cash flows

Reconciliation of operating result to net cash flows from operating activities

2015 2014

$’000 $’000

Operating Result (2,220) (1,991)

Non-cash movements:

Depreciation and amortisation 21,799 20,015

Depreciation grant funding (21,799) (20,009)

Net (gain)/loss on disposal of non-current assets 1,142 218

Impairment (gain)/loss on plant and equipment - (81)

Impairment on receivables (12) 41

Decrement on land 1,084 11,176

Change in assets and liabilities:

(Increase)/decrease in receivables 892 (2,016)

(Increase)/decrease in funding receivables (7,896) 2,886

(Increase)/decrease in GST receivables (146) (195)

(Increase)/decrease in inventories (7) (193)

(Increase)/decrease in prepayments 400 (824)

Increase/(decrease) in accounts payable (3,989) 12,861

Increase/(decrease) in accrued contract labour (10) (9,713)

Increase/(decrease) in unearned revenue 12 (21)

Increase/(decrease) in accrued employee benefits 802 (63)

Increase/(decrease) in GST payable (37) 22

Total non-cash movements (7,765) 14,102

Cash flows from operating activities (9,985) 12,111

18. Non-cash financing and investing activities

Assets and liabilities received or transferred by CQHHS are set out in the Statement of Changes in Equity and Note 2 (g).

19. Expenditure commitments

(a) Non-cancellable operating leases

Commitments under operating leases at reporting date are inclusive of anticipated GST and are payable as follows:

2015 2014

$’000 $’000

Not later than one year 547 45

Later than one year and not later than five years 48 92

Total 595 137

CQHHS has non-cancellable operating leases relating predominantly to office and residential accommodation. Lease payments are generally fixed, but with escalation clauses on which contingent rentals are determined. No lease arrangements contain restrictions on financing or other leasing activities.

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(b) Capital expenditure commitments

Material classes of capital expenditure commitments inclusive of anticipated GST, contracted for at reporting date but not recognised in the accounts are payable as follows:

2015 2015 2014 2014

$’000 $’000 $’000 $’000

BuildingsPlant and

EquipmentBuildings*

Plant and Equipment

Not later than 1 year 12,083 702 4,957 597

12,083 702 4,957 597

* The full amount for building commitments relates to contract commitments for the construction of the helipad and ICU beds at the Rockhampton Hospital site.

20. Contingent assets and liabilities

(a) Litigation in progress

As at 30 June 2015, the following cases were filed in the courts naming the State of Queensland acting through the Central Queensland Hospital and Health Service as defendant:

2015 2014

Number of cases

Number of cases

Supreme Court 2 0

Magistrates Court 0 1

Tribunals, commissions and boards 0 0

2 1

There are two cases currently before the Supreme Court. These are pending acceptance by the Queensland Government Insurance Fund (QGIF). CQHHS’s maximum exposure is limited to an excess per insurance event up to $20,000 - refer to Note 2(v).

b) Native Title

As at 30 June 2015, the Central Queensland Hospital and Health Service does not have legal title to properties under its control, refer Note 2 (n). The Department of Health remains the legal owner of health service properties. Currently two of these properties are subject to a Deed of Grant in Trust (land is held by traditional owners) and recorded at nominal value.

21. Granted private practice

Implemented on 4 August 2014, the Right of Private Practice system was replaced with the Granted Private Practice system and permits Senior Medical Officers (SMOs) employed in the public health system to treat individuals who elect to be treated as private patients. SMOs receive a private practice allowance subject to performance measures and assign private practice revenue generated to the Hospital (Assignment arrangement). Under the Retention arrangement SMOs pay a facility charge and administration fee to the Hospital and retain an agreed proportion of the private practice revenue with the balance of revenue deposited into a general trust bank account to fund research and education of senior medical staff.

2015 2014

$’000 $’000

Receipts

Billings - (Senior Medical Officers and Visiting Medical Officers) 4,170 4,176

Total receipts 4,170 4,176

Payments

Payments to Senior Medical Officers and Visiting Medical Officers 7,393 7,589

Hospital and Health Service recoverable administrative costs 117 129

Hospital and Health Service education/travel fund 44 68

Total payments 7,554 7,786

Closing balance of bank account, under a trust fund arrangement not yet disbursed, and not restricted cash.

31 17

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22. Fiduciary trust transactions and balances

CQHHS acts in a custodial role in respect of these transactions and balances. As such, they are not recognised in the financial statements, but are disclosed below for information purposes. The activities of trust accounts are audited by the Queensland Audit Office (QAO) on an annual basis.

2015 2014

$’000 $’000

Patient Trust receipts and payments

Receipts

Patient trust receipts 4,666 4,400

Total receipts 4,666 4,400

Payments

Patient trust related payments 4,623 4,311

Total payments 4,623 4,311

Increase / (decrease) in net patient trust assets 43 89

Patient trust assets opening balance 1 July 999 910

1,042 999

Patient trust assets

Current assets

Cash at bank and on hand

669 625

Patient trust and refundable deposits 373 374

Total current assets 1,042 999

23. Financial Instruments

(a) Categorisation of financial instruments

CQHHS has the following categories of financial assets and financial liabilities:

Category Note 2015 2014

$’000 $’000

Financial assets

Cash and cash equivalents 11. 36,881 48,429

Receivables 12. 15,541 8,343

Total 52,422 56,771

Financial liabilities

Financial liabilities measured at amortised cost:

Payables 15. 31,162 31,231

Total 31,162 31,231

Debit facility

Central Queensland Hospital and Health Service has access to the Whole-of-Government debit facility with limits approved by Queensland Treasury.

(b) Financial risk management

CQHHS’s activities expose it to a variety of financial risks - credit risk, liquidity risk and market risk. Financial risk management is implemented pursuant to Government and CQHHS’s policy. These policies focus on the unpredictability of financial markets and seek to minimise potential adverse effects on the financial performance of CQHHS.

CQHHS measures risk exposure using a variety of methods as follows:

Risk Exposure Measurement method Credit risk Ageing analysis, cash inflows at risk Liquidity risk Monitoring of cash flows by active management of accrual accounts Market risk Interest rate sensitivity analysis

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(c) Credit risk exposure

Credit risk is the potential for financial loss arising from a counterparty defaulting on its obligations. The maximum exposure to credit risk at balance date is equal to the gross carrying amount of the financial asset, inclusive of any allowance for impairment. The carrying amount of receivables represents the maximum exposure to credit risk. As such, receivables are not included in the disclosure below. Refer Note 12 for further information on receivables.

Credit risk is considered minimal given all CQHHS deposits are held by the State through Queensland Treasury Corporation.

2015 2014

Maximum exposure to credit risk Note $’000 $’000

Cash 11 36,881 48,429

No collateral is held as security and no credit enhancements relate to financial assets held by CQHHS.

No financial assets and financial liabilities have been offset and presented net in the Statement of Financial Position.

CQHHS has a debt collection process in place. Throughout the year, CQHHS assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes financial difficulties of the debtor, changes in debtor credit ratings and current outstanding accounts over 120 days. The allowance for impairment reflects CQHHS’s assessment of the credit risk associated with receivables balances and is determined based on historical rates of bad debts (by category) over the past three years and management judgement.

The allowance for impairment reflects the occurrence of loss events. If no loss events have arisen in respect of a particular debtor, or group of debtors, no allowance for impairment is made in respect of that debt/group of debtors. If CQHHS determines that an amount owing by such a debtor does become uncollectible (after appropriate range of debt recovery actions), that amount is recognised as a bad debt expense and written-off directly against receivables. In other cases where a debt becomes uncollectible but the uncollectible amounts exceeds the amount already allowed for impairment of that debt, the excess is recognised directly as a bad debt expense and written-off directly against receivables. Impairment loss expense for the current year regarding receivables is $256 thousand (2013-14: $163 thousand).

Ageing of past due but not impaired as well as impaired financial assets are disclosed in the following tables:

Financial assets past due but not impaired 2014

Overdue $’000

Not Overdue $’000

Less than 30 days

30-60 days 61-90 days More than 90 days

Total

Receivables 4,714 1,736 1,019 346 528 8,343

Total 4,714 1,736 1,019 346 528 8,343

Financial assets past due but not impaired 2015

Overdue $’000

Not overdue $’000

Less than 30 days


Total

Receivables 11,995 1,181 1,075 580 711 15,541

Total 11,995 1,181 1,075 580 711 15,541

Individually impaired financial assets 2014*

Overdue $’000

Less than 30 days

30-60 days

61-90 days More than 90 days

Total

Receivables (gross) 27 9 2 95 133

Allowance for impairment (27) (9) (2) (95) (133)

Carrying amount - - - - -

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Individually impaired financial assets 2015*

Overdue $’000

Less than 30 days


Total

Receivables (gross) 17 31 22 223 294

Allowance for impairment (17) (31) (22) (223) (294)

Carrying amount - - - - -

* This represents individual debts impaired. In addition, patient debtors are impaired on a historical percentage basis. These general impairments are not included in the figures above.

(d) Liquidity risk

Liquidity risk is the risk that CQHHS will not have the resources required at a particular time to meet its obligations to settle its financial liabilities.

CQHHS is exposed to liquidity risk through its trading in the normal course of business and aims to reduce the exposure to liquidity risk by ensuring that sufficient funds are available to meet employee and supplier obligations at all times. An approved debt facility of $4.5 million under Whole-of-Government banking arrangements to manage any short term cash shortfalls has been established. No funds had been withdrawn against this debt facility as at 30 June 2015.

All financial liabilities are current in nature and will be due and payable within twelve months. As such no discounting of cash flows has been made to these liabilities in the Statement of Financial Position.

(e) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises: foreign exchange risk, interest rate risk, and other price risk. CQHHS does not trade in foreign currency and is not materially exposed to commodity price changes. CQHHS has interest rate exposure on the 24 hour call deposits, however there is no risk on its cash deposits. The HHS does not undertake any hedging in relation to interest rate risk.

(f) Interest rate sensitivity analysis

Changes in interest rate have a minimal effect on the operating result of CQHHS. This is demonstrated in the interest rate sensitivity analysis below:

2015 Interest rate risk

-1% 1%

Financial instrument Carrying amount Profit Equity Profit Equity

$’000 $’000 $’000 $’000 $’000

Cash and cash equivalents 2,852 (29) (29) 29 29

Potential impact (29) (29) 29 29

2014 Interest rate risk

-1% 1%

Financial instrument Carrying amount Profit Equity Profit Equity

$’000 $’000 $’000 $’000 $’000

Cash and cash equivalents 3,583 (36) (36) 36 36

Potential impact (36) (36) 36 36

With all other variables held constant, CQHHS would have a surplus and equity increase/(decrease) of $29,000 (2013-14: $36,000).

(g) Fair value

CQHHS does not recognise any financial assets or liabilities at fair value. The fair value of trade receivables and payables is assumed to approximate the value of the original transaction, less any allowance for impairment.

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24. Key executive management personnel and remuneration

(a) Key executive management personnel

The following details for key executive management personnel include those positions that had authority and responsibility for planning, directing and controlling the activities of CQHHS during 2014-15. Further information on these positions can be found in the body of the Annual Report under the section relating to Executive Management.

Position Responsibilities

Current Incumbents

Contract classification and appointment authority

Date appointed to position (date resigned from position)

Health Service Chief Executive

Responsible for the overall leadership and management of the Central Queensland Hospital and Health Service to ensure that CQHHS meets its strategic and operational objectives.

s24 Appointed by Board under Hospital and Health Board Act 2011 (Section 7 (3)).

18 November 2013

Chief Finance Officer

Responsible for management and oversight of the CQHHS finance framework including financial accounting processes, budget and revenue systems, activity measurement and reporting, performance management frameworks and financial-corporate governance systems.

HES 2 Appointed by CE under HHB Act 2011

18 October 2010

Director Mental Health, Alcohol and Other Drug Services

Responsible for the leadership, management and coordination of the Mental Health Services Business Unit.

DSO2 Appointed by CE under HHB Act 2011

12 April 2010

Executive Director Rural Health Services

Responsible for the leadership, management and coordination of the Rural Health Services Business Unit.


20 September 2012

Executive Director, Director Medical Services Gladstone Hospital

Responsible for strategic and professional responsibility for CQHHS medical workforce, and clinical governance.

MMOI2 Appointed by CE under HHB Act 2011

27 May 2013

Executive Director Sub-Acute and Community

Responsible for the leadership, management and coordination of the Sub-Acute and Community Services Business Unit.


1 July 2013

District Director, Nursing and Midwifery

Responsible for strategic and professional leadership of nursing workforce .

NRG11 Appointed by CE under HHB Act 2011

21 October 2013

Acting Executive Director, Quality & Safety

Responsible for the leadership, management and coordination of the CQHHS Quality and Safety Division.


13 January 2014

Acting Executive Director, Rockhampton Hospital

Responsible for the leadership, management and coordination of the Rockhampton Hospital Business Unit.

HES 2 Appointed by CE under HHB Act 2011 - temporary agency contract

Resigned 3 May 2015

Acting Executive Director, Rockhampton Hospital

Responsible for the leadership, management and coordination of the Rockhampton Hospital Business Unit.


5 May 2015

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Position Responsibilities

Current Incumbents

Contract classification and appointment authority

Date appointed to position (date resigned from position)

Acting Executive Director, Medical Services

Responsible for strategic and professional responsibility for CQHHS medical workforce, and clinical governance.

MMOI2 Appointed by CE under HHB Act 2011

Resigned 1 August 2014

Acting Executive Director, Workforce

Responsible for provision of leadership and oversight of human resource, occupational health and safety functions, Indigenous training and development, and cultural awareness programs for the Health Service.


1 July 2014 to 17 October 2014 (Temporary Assignment)

Executive Director, Workforce

Responsible for provision of leadership and oversight of human resource, occupational health and safety functions, Indigenous training and development, and cultural awareness programs for the Health Service.


16 February 2015

Acting Director, Infrastructure & Support.

Responsible for management of corporate service functions including capital works projects, asset management, legal issues, contract management and nonfinancial-corporate governance systems.

DSO2 subsequently upgraded to HES2 - Appointed by CE under HHB Act 2011

1 July 2014 to 1 February 2015 (Temporary Assignment)

Acting Director, Infrastructure & Support.

Responsible for management of corporate service functions including capital works projects, asset management, legal issues, contract management and nonfinancial-corporate governance systems.


13 January 2015

(Temporary Assignment)

Director Operations and Innovation

Responsible for leading development and implementation of a continuous service improvement approach across CQHHS.

DSO1 Appointed by CE under HHB Act 2011

9 June 2015

Executive Director Gladstone and Banana

Responsible for the leadership, management and coordination of Gladstone and Banana.


15 June 2015 (Temporary Assignment)

(b) Remuneration

Section 74(1) of the Hospital and Health Boards Act 2011 provides that each person appointed as a health executive must enter into a contract of employment. The Health Service Chief Executive must enter into the contract of employment with the Chair of the Board for the Service and a Health Executive employed by a Service must enter into a contract of employment with the Health Service Chief Executive. The contract of employment must state the term of employment (no longer than 5 years per contract), the person’s functions and any performance criteria as well as the person’s classification level and remuneration entitlements.

Remuneration packages for key executive management personnel comprise the following components:

• Short-term employee expenses include:

• Salaries, allowances and leave entitlements earned and expenses for the entire year or for that part of the year during which the employee occupied the specified position.

• Non-monetary benefits – consisting of provision of vehicle and expense payments

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together with fringe benefits tax applicable to the benefit. Non-monetary benefits are presented using the net value in 2014-2015 whereas the grossed up value was used in 2013-2014.

• Long term employee expenses include long service leave earned.

• Post employment expenses includes expensed in respect of employer superannuation obligations.

• Termination benefits are not provided for within individual contracts of employment. Contracts of employment provide only for notice periods or payment in lieu on termination, regardless of the reason for termination.

• Performance bonuses are not paid under the contracts in place.

Total fixed remuneration is calculated on a ‘total cost’ basis and includes the base and non-monetary benefits, long term employee benefits and post employment benefits.

1 July 2014 - 30 June 2015

Position (date resigned if applicable)

Short Term Employee Expenses

Long Term Employee Expenses

Post Emp. Expenses

Termination Beneftis

Total Expenses

Monetary Expenses

Non-Monetary Benefits

$’000 $’000 $’000 $’000 $’000 $’000


354 3 7 39 - 403

Chief Finance Officer 182 12 3 17 - 214


135 - 3 15 - 153

Executive Director Rural Health Services (resigned 1 July 2015)

181 - 3 15 108 307

Executive Director/Director Medical Services Gladstone Hospital

479 24 10 31 - 544


182 6 3 18 - 209

District Director of Nursing and Midwifery

184 - 3 18 - 205

Acting Executive Director Quality and Safety

194 31 4 20 - 249

Acting Executive Director, Rockhampton Hospital (1 July to 3 May 2015)

232 29 - - - 261

Acting Executive Director, Rockhampton Hospital (5 May to 30 June 2015)

35 10 1 4 50

Acting Executive Director Medical Services (resigned 1 August 2014)

36 3 1 2 - 42

Acting Executive Director Workforce (1 July to17 Oct 2014)

88 9 - - - 97

Executive Director Workforce (16 Feb 2015 to June 2015)

65 16 1 7 - 89

Acting Director Infrastructure and Support (1 July to1 Feb 2015)

96 - 2 10 - 108

Acting Director Infrastructure and Support (13 Jan 2015 to 30 June 2015)

85 - 2 9 - 96

Director Operations and Innovation (9 June to 30 June 2015)

9 - - 1 - 10

Executive Director Gladstone and Banana (15 June to 30 June 2015)

6 1 - 1 - 8

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1 July 2013 - 30 June 2014

Position (date resigned if applicable)

Short Term Employee Expenses

Long Term Employee Expenses

Post Emp.

Expenses

Termination Benefits

Total Expenses

Monetary Expenses


$’000 $’000 $’000 $’000 $’000

Health Service Chief Executive (18 Nov to 30 June 14)

237 22 5 17 - 281

Acting Health Service Chief Executive (1 July to 24 Nov 2013)

79 7 2 9 - 97

Chief Operations Officer (25 Nov resigned 4 April 2014)

244 6 1 8 227 486

Acting Chief Operations Officer (1 July to 28 Nov 2013)

83 16 2 7 - 108

Chief Finance Officer - (26 Nov to 30 June 2014)

105 23 2 10 - 140

Acting Chief Finance Officer (1 July to 25 Nov 2013)

79 0 1 7 - 87

Acting Executive Director, Medical Services (1 July to 16 May 2014)

365 36 - - - 401

Acting Executive Director, Medical Services (5 May to 30 June 2014)

57 17 1 4 - 79

Executive Director/Director Medical Services Gladstone Hospital

462 4 5 32 - 503

Acting Executive Director Quality and Safety (13 Jan to 30 June 2014)

89 32 4 9 - 134

District Director of Nursing and Midwifery (21 Oct to 30 June 2014)

145 - 3 11 - 159

District Director of Nursing (1 July resigned 13 Oct 2013)

48 22 1 6 7 84

Executive Director People and Culture (1 July resigned 20 Jan 2014)

115 - 2 10 20 147

A/Executive Director People and Culture (1 July to 17 Nov 2013)

56 - 1 6 - 63

Acting Director Workforce (18 Nov to 30 Mar 2014)

50 - 1 5 - 56

Acting Executive Director Workforce (31 Mar to 30 June 2014)

71 18 - - - 89

Acting Director Infrastructure and Support resigned 24 Aug 2013

36 - - 3 181 220

Acting Director Infrastructure and Support (25 Aug to 17 Nov 2013)

37 22 1 3 - 63

Acting Director Infrastructure and Support (24 Nov to 30 Jun 2014)

82 - 2 9 - 93

Acting Executive Director, Rockhampton Hospital (31 Mar to 30 June 2014)

58 17 - - - 75


141 - 3 15 - 159

Executive Director Rural Health Services

189 - 4 18 - 211


168 10 4 18 - 200

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(c) Board remuneration

The Central Queensland Hospital and Health Service is independently and locally controlled by the Hospital and Health Board (Board).

The Board appoints the Health Service Chief Executive and exercises significant responsibilities at a local level, including controlling (a) the financial management of the Service and the management of the Service’s land and buildings (section 7 Hospital and Health Board Act 2011).

Board member Position Date of appointment

Roy (Charles) Ware Board member/Chairperson 29 June 2012 - 17 May 2016

Bronwyn Christensen Board member 29 June 2012 - 17 May 2017

Kurt Heidecker Board member 29 June 2012 - 17 May 2017

Leone Hinton Board member 29 June 2012 - 17 May 2016

Francis Houlihan Board member 9 November 2012 - 17 May 2016

Dr David Austin* Deputy Chair 29 June 2012 - 17 March 2015

Elizabeth Baker Board member 18 May 2013 - 17 May 2017

Karen Smith* Board member 18 May 2013 - 17 May 2017

Graeme Kanofski Board member 18 May 2013 - 17 May 2017

Remuneration paid or owing to board members during 2014-15 was as follows:

Board MemberShort Term Employee Expenses

Post Emp. Expenses

Total ExpensesMonetary Expenses


$’000 $’000 $’000 $’000

Roy (Charles) Ware 79 - 8 87

Bronwyn Christensen

45 - 4 49

Kurt Heidecker 45 - 4 49

Leone Hinton 43 - 4 47

Francis Houlihan 40 - 4 44

Elizabeth Baker 46 - 3 49

Graeme Kanofski 46 - 4 50

*Board members who are employed by either CQHHS or the Department of Health are not paid board fees.

Remuneration paid or owing to board members during 2013-14 was as follows:

Board MemberShort Term Employee Expenses

Post Emp. Expenses

Total ExpensesMonetary Expenses


$’000 $’000 $’000 $’000

Roy (Charles) Ware 72 - 6 78

Bronwyn Christensen

33 - 3 36

Kurt Heidecker 36 - 3 38

Leone Hinton 32 - 3 35

Francis Houlihan 33 - 3 36

Sandra Corfield 27 - 3 30

Elizabeth Baker 34 - 3 37

Graeme Kanofski 32 - 3 35

*Board members who are employed by either CQHHS or the Department of Health are not paid board fees.

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25. Budget vs actual comparisonNB. A budget vs actual comparison, and explanations of major variances, has not been included for the Statement of Changes in Equity, as major variances relating to that statement have been addressed in explanations of major variances for other statements.

Statement of Comprehensive Income

Variance Notes*

Original Budget 2015

Actual 2015

Variance Variance

$’000 $’000 $’000 % of Budget

Income from Continuing Operations

User charges and fees 1 29,590 32,329 2,739 9%

Funding public health services** 414,754 435,569 20,815 5%

Grants and other contributions 19,266 19,622 356 2%

Other revenue 2,363 4,234 1,871 79%

Total revenue 465,973 491,754 25,781

Total Income from Continuing Operations

465,973 491,754 25,781

Expenses from Continuing Operations

Employee expenses 2 1,652 31,554 29,902 1810%

Health service employee expenses 3 294,239 258,630 (35,609) -12%

Other supplies and services 4 145,363 172,354 26,991 19%

Depreciation and amortisation 22,569 21,799 (770) -3%

Revaluation decrement - 1,084 1,084 100%

Other expenses 2,150 8,553 6,403 298%

Total Expenses from Continuing Operations

465,973 493,974 28,001

Operating Result from Continuing Operations

- (2,220) (2,220)


Items that will not be reclassified subsequently to operating result

Increase in asset revaluation surplus 5 8,579 35,464 26,885 313%

Total Other Comprehensive Income 8,579 35,464 26,885

Total Comprehensive Income 8,579 33,244 24,665

*Major variance explanations are discussed in detail on page 5-37 and page 5-38. ** Reconciliation of original budget funding public health services to actuals - refer Note 26.

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Statement of Financial Position

Variance Notes*

Original Budget

2015

Actual 2015

Variance Variance

$’000 $’000 $’000% of

Budget

Current Assets

Cash and cash equivalents 6 42,424 36,881 (5,543) -13%

Receivables 7 5,198 15,541 10,343 199%

Inventories 2,970 3,115 145 5%

Other 527 1,034 507 96%

51,119 56,571 5,452

Total Current Assets 51,119 56,571 5,452

Non-Current Assets

Property, plant and equipment 462,389 496,623 34,234 7%

Total Non-Current Assets 462,389 496,623 34,234

Total Assets 513,508 553,194 39,686

Current Liabilities

Payables 33,643 31,162 (2,481) -7%

Total Current Liabilities 33,643 31,162 (2,481)

Total Liabilities 33,643 31,162 (2,481)

Net Assets 479,865 522,033 42,168

Equity 8 479,865 522,033 42,168 9%

*Major variance explanations are discussed in detail on page 5-37 and page 5-38.

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Statement of Cash Flows

Variance Notes*

Original Budget

2015

Actual 2015

Variance Variance

$’000 $’000 $’000 % of Budget

Cash flows from operating activities

Inflows:

User Charges 1 29,396 32,963 3,567 12%

Funding public health services 392,185 405,874 13,689 3%

Grants and other contributions 19,266 19,622 356 2%

GST input tax credits from ATO 16,955 11,491 (5,464) -32%

GST collected from customers 328 626 298 91%

Other receipts 2,363 4,086 1,723 73%

460,493 474,662 14,169

Outflows:

Employee expenses 2 (1,652) (30,750) (29,098) 1761%

Health service employee expenses 3 (294,239) (266,459) 27,780 -9%

Supplies and services 4 (142,384) (168,255) (25,871) 18%

GST paid to suppliers (16,990) (11,637) 5,353 -32%

GST remitted to ATO (305) (662) (357) 117%

Other (1,884) (6,884) (5,000) 265%

(457,454) (484,647) (27,193)

Net cash provided by (used in) operating activities 3,039 (9,985) (13,024)

Cash flows from investing activities

Inflows:

Sales of property, plant and equipment 9 - 2,390 2,390 100%

Outflows:

Payments for property, plant and equipment

10 (22,280) (9,430) 12,850 -58%

Net cash provided by (used in) investing activities

(22,280) (7,040) 15,240

Cash flows from financing activities

Inflows:

Equity Injections 11 4,064 5,478 1,414 35%

Net cash provided by (used in) financing activities 4,064 5,478 1,414

Net increase/(decreased) in cash and cash equivalents (15,177) (11,547) 3,630

Cash and cash equivalents at the beginning of the financial year 57,601 48,428 (9,173) -16%

Cash and cash equivalents at the end of the financial year 42,424 36,881 (5,543)

*Major variance explanations are discussed in detail on page 5-37 and page 5-38.

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Explanations of major variances

In analysing these financial statements it should be noted that while the Statement of Comprehensive Income and the Statement of Financial Position are prepared based on accrual concepts, the Statement of Cash Flows discloses cash inflows and outflows of CQHHS.

This will cause some differences in the amounts recorded under each line on the different statements.

1. User Charges and Fees

a) Statement of Comprehensive Income

The $2.7 million revenue increase for user charges and fees is predominately due to an increase in funding received for capital projects ($2.1 million).

b) Cash Flow Statement

The additional $3.5 million cash received is mainly due to receipting the funding for capital projects as well as higher receipts from customers throughout the year ($828 thousand).

2. Employee Expenses

Included in the additional $29.2 million expenditure is expenditure relating to the reclassification of senior medical officer expenditure from health service employee expenses to employee expenses.

3. Health service employee expenses

Included within the reduction, $27.8 million expenditure relates to a reclassification of senior medical officer expenditure from health service employee expenses to employee expenses.

4. Other supplies and services

The increased expenditure of $25.8 million relates to increased clinical activity that includes $5.6 million for patient expenditure items, $7 million dollars for contracted medical services, $7 million for imaging services; $1.9 million for communication services, and $2.8 million for repairs and maintenance of facilities.

5. Asset revaluation reserve

The $26.9 million increase relates to the growth in construction costs being 2.6% higher than that forecast. Increases in building values at the time of the budget were based on forecast growth of 2.5% (CPI) in construction costs in line with Queensland Treasury Budget guidelines. CQHHS engaged independent quantity surveyors Rider Levett and Bucknall Pty Ltd (RLB) to comprehensively revalue all buildings over the next three years. Actual growth in construction costs was 5.1% in 2014-15. The application of indexation to the buildings increased values by $12.1 million. In addition, RLB comprehensively revalued 52 buildings, adding a further $23 million to the asset reserve and asset values in 2014-15.

6. Cash and cash equivalents

Closing cash balance was $5.5 million less than planned due to the operating deficit and a delay in receipt of final end of year departmental funding offset by reduced net outflows for self-funded purchases relating to the helipad and ICU at Rockhampton Hospital.

7. Receivables

Receivables increased by $10.3 million due to improved billing processes and other Government funding for public health services ($7.9 million).

8. Equity

Equity increased by $42 million which is predominately related to the revaluation increment to property, plant and equipment.

9. Sales of property, plant and equipment

The $2.39 million sale of property, plant and equipment relates to the proceeds associated with surplus equipment disposed.

10. Payments for property, plant and equipment

Original budget included forecast construction of the helipad and intensive care unit at the Rockhampton Hospital with completion by 30 June 2015. The total capital cost of these projects was $17.6 million. At the end of 30 June 2015 the helipad is nearing practical completion and the construction phase of the intensive care unit has commenced. Total capital expenditure to date on these projects is $4.2 million with $396 thousand in costs paid in 2014-15. A further $2.9 million is owing to the Department of Health at 30 June 2015 with the balance of funds to be paid in 2015-16. Partially offsetting this decline is an increase in purchases of health technology equipment of $1.4 million.

11. Equity injections

Higher than forecast health technology equipment purchases in 2014-15 of $1.4 million has been matched by higher equity injections from the Department of Health.

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26. Reconciliation of original budget funding - public health services to funding public health services recognised in the Statement of Comprehensive Income.

2015

$’000

Budgeted Funding Public Health Services 414,754

Plus

Increased activity based funding 4,764

Funding for reducing waiting lists 6,022

Funding to meet additional charges by Department of Health for information services

1,025

Initiative funding - range 2,745

Enterprise bargaining (EB8) and VMO recruitment and retention funding 2,239

Regional development incentive scheme 346

Public ophthalmology service 1,432

Tropical Cyclone Marcia supplementation 565

Investment in quality safety and service 2,000

Other minor 550

Less

Depreciation funding adjustment (771)

Decreased Breastscreen activity target (102)

Funding Public Health Services recognised in the Statement of Comprehensive Income 435,569

9.1.6. Certificate of Central Queensland Hospital and Health ServiceThese general purpose financial statements have been prepared pursuant to section 62(1) of the Financial Accountability Act 2009 (the Act), relevant sections of the Financial and Performance Management Standard 2009 and other prescribed requirements.

In accordance with section 62(1)(b) of the Act we certify that in our opinion:

a) the prescribed requirements for establishing and keeping the accounts have been complied with in all material respects; and

b) the statements have been drawn up to present a true and fair view, in accordance with prescribed accounting standards, of the transactions of Central Queensland Hospital and Health Service for the financial year ended 30 June 2015 and of the financial position of the Hospital and Health Service at the end of that year.

c) these assertions are based on an appropriate system of internal controls and risk management processes being effective, in all material respects, with respect to financial reporting throughout the reporting period.

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9.1.7. Independent Auditor’s Report

Page 103

Page 104



9.2. Executive Management Structure


Executive Director of

Rockhampton Hospital

Executive Director / Director of

Medical Services

Gladstone Hospital

Director of Mental Health

Alcohol and Other Drugs

Service


Rural Health Services

Executive Director of Subacute,

Ambulatory and

Community Services


Quality and Safety

Executive Director of Workforce


Infrastructure and Support

Services

Executive Director of Operations

and Innovation

District Director

of Nursing and

Midwifery

Chief Finance Officer

Page 105

9.3. Compliance Checklist

Summary of Requirement Basis for Requirement Annual Report Reference

Letter of Compliance A letter of compliance from the accountable officer or statutory body to the relevant Minister/s

ARRs – section 8 page vi

Accessibility Table of Contents Glossary

ARRs – section 10.1 page vii page109

Public Availability ARRs – section 10.2 inside front cover

Interpreter Service Statement Queensland Government Language Services Policy ARRs – section 10.3

inside front cover

Copyright Notice Copyright Act 1968 ARRs – section 10.4

inside front cover

Information Licensing QGEA – Information Licensing ARRs – section 10.5

inside front cover

General Information Introductory Information ARRs – section 11.1 page iii

Agency role and main functions ARRs – section 11.2 page iii

Operating Environment ARRs – section 11.3 pages iv-v

Machinery of Government Changes ARRs – section 11.4 page 18

Non-Financial Performance Government’s objectives for the community ARRs – section 12.1 page iii

Other whole-of-government plans/specific initiatives ARRs – section 12.2 pages i, iii

Agency objectives and performance indicators ARRs – section 12.3 pages 34-35, each chapter

Agency service areas and service standards ARRs – section 12.4 pages 34-35

Financial Performance Summary of financial performance ARRs – section 13.1 pages 31-34

Governance – Management and Structure

Organisational Structure ARRs – section 14.1 page 104

Executive Management ARRs – section 14.2 pages 15-17

Government Bodies (statutory bodies and other entities) ARRs – section 14.3 Not Applicable

Public Sector Ethics Act 1994 Public Sector Ethics Act 1994 ARRs – section 14.4

pages 47-48

Governance – risk management and accountability

Risk management ARRs – section 15.1 page 19

External scrutiny ARRs – section 15.2 page 18

Audit committee ARRs – section 15.3 pages 10-13

Internal audit ARRs – section 15.4 pages 12-13

Information systems and recordkeeping ARRs – section 15.5 page 19

Governance – human resources

Workforce planning, attraction and performance ARRs – section 16.1 pages 46-48

Early retirement, redundancy and retrenchment Directive No. 11/12 Early Retirement, Redundancy and Retrenchment ARRs – section 16.2

page 48

Open Data Consultancies ARRs – section 17 ARRs - section 34.1

inside front cover

Overseas travel ARRs – section 17 ARRs - section 34.2

inside front cover

Queensland Language Services Policy ARRs – section 17 ARRs - section 34.3

inside front cover

Government bodies ARRs – section 17 ARRs - section 34.4

inside front cover

Financial Statements Certification of Financial Statements FAA – section 62 FPMS – sections 42,43 and 50 ARRs – section 18.1

page 101

Independent Auditors Report FAA – section 62 FPMS – section 50 ARRs – section 18.2

page 102-103

Remuneration disclosures Financial Reporting Requirements for Queensland Government Agencies ARRs – section 18.3

page 93-96

FAA Financial Accountability Act 2009 FPMS Financial and Performance Management Standard 2009 ARRs Annual Report Requirements for Queensland Government Agencies

Page 107

Abbreviations

10. Abbreviations

Chapter 10

Abbreviation Full Name

AASB Australian Accounting Standards BoardCE Chief ExecutiveCMC Crime and Misconduct CommissionCQHHS Central Queensland Hospital and Health ServiceCT computed tomographyDHPW Department of Housing and Public WorksEQuIP edition of the ACHS Evaluation and Quality Improvement ProgramFBT Fringe Benefit TaxFTE Full time equivalentGP General PracticeGST Goods and Services TaxHARP Hospital Avoidance Risk ProgramHES health executive serviceHHS Hospital and Health ServiceHR Human ResourcesICU Intensive Care UnitIS Information StandardsMPHS Multi-Purpose Health ServiceMRI Magnetic resonance imagingPPE Property, Plant and EquipmentQAO Queensland Audit OfficeQGIF Queensland Government Insurance FundRCA Root Cause AnalysesROPP Right of Private PracticeSAC1 Severity Assessment Code 1SVS State Valuation Service

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Glossary

11. Glossary

Word Definition

Accessible Accessible healthcare is characterised by the ability of people to obtain appropriate healthcare at the right place and right time, irrespective of income, cultural background or geography.

Activity Based Funding (ABF)

A management tool with the potential to enhance public accountability and drive technical efficiency in the delivery of health services by:• capturing consistent and detailed information on hospital sector activity and accurately measuring the costs of

delivery• creating an explicit relationship between funds allocated and services provided• strengthening management’s focus on outputs, outcomes and quality• encouraging clinicians and managers to identify variations in costs and practices so they can be managed at a

local level in the context of improving efficiency and effectiveness• providing mechanisms to reward good practice and support quality initiatives.

Acute Having a short and relatively severe course.

Acute care Care in which the clinical intent or treatment goal is to:• manage labour (obstetric)• cure illness or provide definitive treatment of injury• perform surgery• relieve symptoms of illness or injury (excluding palliative care)• reduce severity of an illness or injury• protect against exacerbation and/or complication of an illness and/or injury that could threaten life or

normal function• perform diagnostic or therapeutic procedures.

Admission The process whereby a hospital accepts responsibility for a patient’s care and/or treatment. It follows a clinical decision, based on specified criteria, that a patient requires same-day or overnight care or treatment, which can occur in hospital and/or in the patient’s home (for hospital-in-the-home patients).

Allied Health staff Professional staff who meet mandatory qualifications and regulatory requirements in the following areas: audiology; clinical measurement sciences; dietetics and nutrition; exercise physiology; leisure therapy; medical imaging; music therapy; nuclear medicine technology; occupational therapy; orthoptics; pharmacy; physiotherapy; podiatry; prosthetics and orthotics; psychology; radiation therapy; sonography; speech pathology and social work.

Benchmarking Involves collecting performance information to undertake comparisons of performance with similar organisations.

Best practice Cooperative way in which organisations and their employees undertake business activities in all key processes, and use benchmarking that can be expected to lead to sustainable world class positive outcomes.

Chapter 11

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Word Definition

Clinical governance A framework by which health organisations are accountable for continuously improving the quality of their services and safeguarding high standards of care by creating an environment in which excellence in clinical care will flourish.

Clinical practice Professional activity undertaken by health professionals to investigate patient symptoms and prevent and/or manage illness, together with associated professional activities for patient care.

Clinical workforce Staff who are or who support health professionals working in clinical practice, have healthcare specific knowledge/ experience, and provide clinical services to health consumers, either directly and/or indirectly, through services that have a direct impact on clinical outcomes.

e-Health Since 2007 Queensland Health has been working on an e-Health agenda that aims to create a single shared electronic medical record (eMR) which will be delivered through the use of information and communication technology.

The vision of the e-Health Program is to enable a patient-centric focus to healthcare delivery across a networked model of care.

e-Learning QH Online Training Environments. ELMO http://elmolearning.com.au/ and iLearn

e-plan Computerised plan storage room.

Emergency department waiting time

Time elapsed for each patient from presentation to the emergency department to start of services by the treating clinician. It is calculated by deducting the date and time the patient presents from the date and time of the service event.

Full time equivalent (FTE)

Refers to full-time equivalent staff currently working in a position.

Health outcome Change in the health of an individual, group of people or population attributable to an intervention or series of interventions.

Health reform Response to the National Health and Hospitals Reform Commission Report (2009) that outlined recommendations for transforming the Australian health system, the National Health and Hospitals Network Agreement (NHHNA) signed by the Commonwealth and states and territories, other than Western Australia, in April 2010 and the National Health Reform Heads of Agreement (HoA) signed in February 2010 by the Commonwealth and all states and territories amending the NHHNA.

Hospital Healthcare facility established under Commonwealth, state or territory legislation as a hospital or a free-standing day-procedure unit and authorised to provide treatment and/or care to patients.

Hospital and Health Board

The Hospital and Health Boards are made up of a mix of members with expert skills and knowledge relevant to managing a complex health care organisation.

Hospital and Health Service

Hospital and Health Service (HHS) is a separate legal entity established by Queensland Government to deliver public hospital services.

Hospital in the home (HITH)

Provision of care to hospital-admitted patients in their place of residence, as a substitute for hospital accommodation.

Incidence Number of new cases of a condition occurring within a given population, over a certain period of time.

Indigenous health worker

An Aboriginal and/or Torres Strait Islander person who holds the specified qualification and works within a primary healthcare framework to improve health outcomes for Indigenous Australians.

Long wait A ‘long wait’ elective surgery patient is one who has waited longer than the clinically recommended time for their surgery, according to the clinical urgency category assigned. That is, more than 30 days for a category 1 patient, more than 90 days for a category 2 patient and more than 365 days for a category 3 patient.

Medicare Local Established by the Commonwealth to coordinate primary health care services across all providers in a geographic area. Works closely with HHSs to identify and address local health needs.

Medical practitioner A person who is registered with the Medical Board of Australia to practice medicine in Australia, including general and specialist practitioners.

Nurse practitioner A registered nurse educated and authorised to function autonomously and collaboratively in an advanced and extended clinical role. The nurse practitioner role includes assessing and managing clients using nursing knowledge and skills and may include, but is not limited to, direct referral of clients to other healthcare professionals, prescribing medications, and ordering diagnostic investigations.

Outpatient Non-admitted health service provided or accessed by an individual at a hospital or health service facility.

Outpatient service Examination, consultation, treatment or other service provided to non-admitted non-emergency patients in a speciality unit or under an organisational arrangement administered by a hospital.

Overnight stay patient A patient who is admitted to, and separated from, the hospital on different dates (not same-day patients).

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Word Definition

Patient flow Optimal patient flow means the patient’s journey through the hospital system, be it planned or unplanned, happens in the safest, most streamlined and timely way to deliver good patient care.

Performance indicator A measure that provides an ‘indication’ of progress towards achieving the organisation’s objectives. Usually has targets that define the level of performance expected against the performance indicator.

Private hospital A private hospital or free-standing day hospital, and either a hospital owned by a for-profit company or a non-profit organisation and privately funded through payment for medical services by patients or insurers. Patients admitted to private hospitals are treated by a doctor of their choice.

Public patient A public patient is one who elects to be treated as a public patient, so cannot choose the doctor who treats them, or is receiving treatment in a private hospital under a contract arrangement with a public hospital or health authority.

Public hospital Public hospitals offer free diagnostic services, treatment, care and accommodation to eligible patients.

Registered nurse An individual registered under national law to practice in the nursing profession as a nurse, other than as a student.

Statutory bodies / authorities

A non-departmental government body, established under an Act of Parliament. Statutory bodies can include corporations, regulatory authorities and advisory committees/councils.

Sustainable A health system that provides infrastructure, such as workforce, facilities and equipment, and is innovative and responsive to emerging needs, for example, research and monitoring within available resources.

Telehealth Delivery of health-related services and information via telecommunication technologies, including: • live, audio and/or video inter-active links for clinical consultations and educational purposes• store-and-forward Telehealth, including digital images, video, audio and clinical (stored) on a client

computer, then transmitted securely (forwarded) to a clinic at another location where they are studied by relevant specialists

• teleradiology for remote reporting and clinical advice for diagnostic images• Telehealth services and equipment to monitor people’s health in their home.

The Viewer The Viewer is a read-only web-based application that displays consolidated clinical information sourced from a number of existing Queensland Health enterprise clinical and administrative systems.

Triage category Urgency of a patient’s need for medical and nursing care.

Wayfinding Signs, maps and other graphic or audible methods used to convey locations and directions.



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