Victorian Auditor-General's Office

Public Hospitals: Results of the 2010–11 Audits

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The report will provide the results of the audits of approximately 110 entities. It addressed the timeliness of their Financial services and insurance, their financial sustainability, and aspects of how they managed procurement and information technology security.

Appendix B. Audit Act 1994 section 16—submissions and comments

Introduction

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:

1 Background

1.1 Introduction

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.

Audit summary

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:

Procurement Practices in the Health Sector

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This audit examined whether procurement practices in the public health sector deliver best value, and are conducted with probity and transparency. It examined the Department of Health, Health Purchasing Victoria and four public hospitals. It covered clinical and non-clinical procurement and reviewed the implementation of past recommendations from this office and the Ombudsman.

Appendix A. Audit Act 1994 section 16—submissions and comments

Introduction

In accordance with section 16(3) of the Audit Act 1994 a copy of this report was provided to audited health services and the Department of Health with a request for submissions or comments.

The submissions and comments provided are not subject to audit nor the evidentiary standards required to reach an audit conclusion. Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.

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