Public hospitals provide complex acute care, prevention, early intervention and primary care, aged care and mental health services.
While metropolitan and regional public hospitals largely provide acute health services, they also provide a mix of mental health, sub-acute, community health services and aged care programs. Rural public hospitals generally offer a higher proportion of aged care and community health services.
This report covers the results of our financial audits of 112 entities within the public hospital sector, comprising 87 public hospitals and the 25 entities they control. It informs Parliament about significant issues arising from the audits and augments the assurance provided through audit opinions included in the entities’ annual reports.
This report comments on the quality and timeliness of financial reporting, the financial sustainability of public hospitals and the effectiveness of procurement practices and information technology security.
Ordered to be printed
VICTORIAN GOVERNMENT PRINTER November 2011
PP No 84, Session 2011–12
In accordance with section 16(3) of the Audit Act 1994 a copy of this report was provided to the Department of Health, Health Purchasing Victoria, Melbourne Health, Peninsula Health, Latrobe Regional Hospital and Castlemaine Health with a request for submissions or comments.
Responses were received as follows:
Further audit comment:
Figure A1
Health Purchasing Victoria contracts at July 2011
Public hospitals bought more than $1.6 billion of goods and services during 2010–11. Such significant outlays of public funds warrant procurement activity marked by integrity, transparency and value-for-money.
Health Purchasing Victoria (HPV) was set up in 2001 as the central procurement agency for the public hospital sector to generate savings and improve procurement. Its functions are set out in the Health Services Act 1988 (the Act).
Victoria’s public hospitals spent more than $1.6 billion buying goods and services in 2010–11. After salaries and wages this is hospitals’ second largest cost.
Procurement goes further than just buying goods and services in that it covers planning, strategic sourcing, purchasing, order management, and ongoing cost and supplier performance management. Hospital procurement should also be conducted with integrity and transparency and achieve value-for-money.
Victoria’s public hospitals bought more than $1.6 billion of goods and services in 2010–11, their second largest cost after salaries and wages, accounting for almost 15 per cent of expenditure. Such a significant outlay of public funds means procurement activity should demonstrate integrity, transparency and value-for-money.
Health Purchasing Victoria (HPV) is the central procurement agency for the public hospital sector. Set up in 2001 under the Health Services Act 1988 (the Act), it was expected to improve hospital system effectiveness by: