HEALTH, ORACLE CORPORATE SYSTEM

The Hon. J.D. HILL (Kaurna—Minister for Health and Ageing, Minister for Mental Health and Substance Abuse, Minister for the Arts) (14:27): I seek leave to make a ministerial statement.

Leave granted.

The Hon. J.D. HILL: Since the release of South Australia's Health Care Plan in 2007 the state government has been implementing major changes to professionalise our state's health system and to well and truly bring it into the 21^st century. This includes modernising Health's support systems—

Members interjecting:

The SPEAKER: Member for Norwood, you are warned for the second time. I am sorry, I withdraw that—apparently it was the member for Waite.

The Hon. J.D. HILL: Thank you, Madam Speaker. As I was saying, what we are trying to do is to bring our state's health system into the 21^st century and that includes modernising Health's support systems. As part of that we are investing more than $21 million to ensure our financial management capabilities—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: Thank you, Madam Speaker. This is a really important issue. It was raised by the opposition a number of times.

Ms Chapman: You're dead right it is. We want the accounts.

The SPEAKER: Order, you will hear the minister in silence!

The Hon. J.D. HILL: This issue was raised by the opposition a number of times. I am trying to give the house factual information and every paragraph is interrupted. As I was saying, as part of that approach we are investing more than $21 million to make sure that our financial management capabilities are of the highest order. This investment has focused on replacing 18 separate and outdated financial systems with one single enterprise-wide financial system—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: —with one single enterprise-wide financial system known as Oracle Corporate System. The implementation of this system will facilitate corporate services reforms, saving up to $8 million annually once fully implemented and requiring 130 fewer Public Service positions. While there have been lessons for Health staff—

Members interjecting:

The SPEAKER: Order, member for MacKillop! Order!

The Hon. J.D. HILL: I am trying to give the opposition and other members of this place factual information about this reform. If they want to treat it in this trivial kindergarten-style way, I guess that is their business. Members of the public online who are listening to today's proceedings will judge. While there have been lessons for Health staff—

The Hon. P.F. Conlon interjecting:

The Hon. J.D. HILL: That is probably true. While there have been lessons for Health staff in the implementation of Oracle, the system will support the improved management of our accounts. The introduction of Oracle has allowed SA Health to streamline, simplify and update its financial reporting—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: The introduction of Oracle has allowed SA Health to streamline, simplify and update its financial reporting structure, enabling the closure of around 100 legacy Health bank accounts, once fully complete, along with improved cash management practices. This is providing our state with significant investment opportunities not previously available with the operation of multiple separate accounts. Further, it positions the state to better respond to the current commonwealth health reform agenda around efficient price. Oracle Corporate System enables more timely and efficient reporting internally—

Members interjecting:

The SPEAKER: Order! Minister, sit down. Members on my left, this is the first question time for this new session and I know you want to make an impression, but when we can't hear what anyone is saying, it is ridiculous. You will behave or somebody will go out today. Minister.

The Hon. J.D. HILL: Thank you, Madam Speaker. As I was saying, the introduction of Oracle has allowed us to streamline, and we have been able to close around 100 legacy Health bank accounts. If people think that is a bad thing, then let them get up here and defend why it is a bad thing. This is providing our state with significant investment opportunities not previously available with the operation of multiple separate accounts. Further, it positions our state well, enabling us to respond better to the commonwealth health reform agenda.

Oracle enables more timely and efficient reporting internally and also to the Department of Treasury and Finance, which is consistent with other government agencies. Prior to the introduction of Oracle, SA Health reported a month in arrears due to the time it took to consolidate information from the existing 18 financial systems.

We have got an almost $5 billion business which has been spread over a whole range of cost centres with different information systems, different governance systems, different management systems in place. As a process, we are bringing all of that together to have an integrated system, so we can have more control. Of course, there are always teething problems when we introduce new systems.

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: The Liberal Party purports to be the alternative government.

Mr Hamilton-Smith interjecting:

The SPEAKER: Member for Waite, you are warned!

The Hon. J.D. HILL: They are demonstrating their incapacity to even be a civil audience. Prior to the introduction of Oracle, SA Health—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: Prior to the introduction of Oracle, SA Health reported a month in arrears due to the 18 systems, as I have said. The implementation of Oracle and the broader financial reforms occurring across SA Health will lead to greater financial transparency and control.

The first stage of implementation of Oracle has occurred, and I am advised that the current (as of 10 February this year) outstanding clearing of 2010-11 bank account reconciling items for the former Country Health SA amounts to $5 million and Adelaide Health Service amounts to $15 million. Clearing of these items is expected to be completed by March this year, and I am advised that at this stage this process has not identified any material issues or inappropriate transactions.

I would like to take this opportunity to commend the staff who have been undertaking this large and very onerous exercise. This has included clearing revenue receipts received through multiple legacy bank accounts across hospital sites. As this process is an accounting treatment-related matter, it is not expected to materially impact on the SA Health end of year financial position. It is important to reiterate that throughout this process, as at 30 June 2011 and on a monthly basis since, all SA Health entities have reconciled their bank accounts.

The second phase involves the complete rollout of the Oracle procurement system across the remaining health sites. While the completion of this phase will require an additional investment, this will largely be cost neutral given the savings opportunities to be achieved through economies of purchasing and the centralisation of operating costs.

I am advised that the upgraded systems are now available at a number of pilot sites, with about 1,300 users. Planning for the rollout of this is a complex thing. There will be 65 hospital sites, over 400,000 catalogue items across all the legacy systems and around 5,000 additional users, and implementation is expected to take two years to fully complete.

In relation to the audit process—there were some interjections in relation to this—I am advised that the Auditor-General concluded that this being the first year of transitioning to a new operating environment (Oracle), he wished to consider the sign off of Department of Health financial statements in conjunction—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: As I was saying, I am advised the AG concluded that this being the first year of transitioning to a new operating environment (Oracle), he wished to consider the sign off of Department of Health financial statements in conjunction with the health region's financial statements before providing his opinion. In the past he used to do the department first and he would do the regions later. Officers of SA Health have been actively working—

Ms Chapman: He should tell us, not you.

The SPEAKER: The member for Bragg, you are warned.

The Hon. J.D. HILL: Officers of SA Health have been actively working with their counterparts within the Auditor-General's Department around the process and we expect to receive a supplementary Auditor-General's Report shortly.