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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2011-11-23 Daily Xml
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HEALTH DEPARTMENT

Dr McFETRIDGE (Morphett) (15:02): My question is to the Minister for Health. Will the minister confirm that there were over $200 million worth of unexplained transactions in the health department as a result of new financial systems approved by the Minister for Health? Is it the case that some of the accounts giving rise to the $200 million worth of unexplained transactions relate to invoices which were paid twice?

The Hon. J.D. HILL (Kaurna—Minister for Health and Ageing, Minister for Mental Health and Substance Abuse, Minister for the Arts) (15:02): I am pleased that the member actually chose to ask a question on the day that I was in the house. Unfortunately, when he asked the question last week, I was in transit with an approved pair.

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: They knew in advance by about a week that I would be away, so they chose that day to ask a series of questions, but I leave their tactics up to them. I can give the house plenty of information in relation to this question, of course. The issues in relation to the unreconciled bank accounts are accounting and process-related, I am advised, relating to the finalisation of the previous Adelaide Health Service financial statements for the 2010-11 financial year. At the time this issue was raised in parliament on 10 November 2011, the unreconciled balance was approximately—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: I was hoping the members were listening because the member asked me whether it was $200 million. I am advised that, at the time that the question was asked of the Treasurer, I think, last week or the week before, the unreconciled balance was approximately $60 million, not the $200 million as claimed.

Members interjecting:

The Hon. J.D. HILL: What the members opposite—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: What the members fail to understand is that this is a reconciliation process; it is not looking for missing cash.

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: This is a reconciliation process.

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: The questions are coming from the other side. I am happy to answer all of them because, if I were to answer them while they were interjecting, I would be disorderly. So, I would invite them, Madam Speaker, through you, to ask questions in an orderly fashion and I will answer all of them. The question was asked of me whether there was a $200 million hole—there isn't. There is a reconciliation process going through and, on 10 November, the amount that had been unreconciled at that stage was $60 million. This will not impact on the SA Health end of year—

An honourable member interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: This is the opposition trying to make a mountain out of a molehill. This is a—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: Either they are ignorant, Madam Speaker, or they are deliberately misleading others in the accusations that they are making. This is the reconciliation process, where—

Mr WILLIAMS: Point of order: the minister, notwithstanding he said he wants to answer the question, is clearly debating.

Members interjecting:

The SPEAKER: Order! I do not think it was debate in that answer.

The Hon. J.D. HILL: Madam Speaker, if they did not interject I would get on with it without responding. I was saying that there was an unreconciled balance of $60 million on that date. This will not, I am advised, impact on the SA Health end of year financial position as reported to Treasury. This is about making sure that the expenditure is recorded as a correct account in the general ledger. The reconciling issues arose following the transition of finance functions from legacy financial systems to the new Oracle system. We are now undertaking manual reconciliation processes on a daily basis. Therefore, this is not—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: Therefore, Madam Speaker, I am advised this is not a system issue. SA Health continues to liaise with the Auditor-General in relation to the reconciliation issues, which form part of the Adelaide Health Service financial statements. Every effort will be made to resolve these issues prior to the finalisation of the audit of the AHS financial statements.

Mr Marshall interjecting:

The SPEAKER: Member for Norwood, you are warned!

The Hon. J.D. HILL: SA Health is working with all local health networks to make sure that their bank accounts are rectified for the 2011-12 financial year. As of 17 November, that is, a few days ago, the unreconciled balance for the former Central Northern Adelaide Health Service had been reduced to approximately $37 million, while the Southern Adelaide Health Service has fallen to approximately $8 million.

The overall objective is to reduce the balance to zero. That is because what they are doing is looking at one pile of accounts and reconciling them with another pile. Of course, there are some that have not been reconciled, and as they go through the process of reconciliation it comes down, and that is what reconciliation is all about, not, as has been implied, that they are somehow—

Members interjecting:

The SPEAKER: Order! You have asked the minister a question. Allow him to finish.

Mr Williams interjecting:

The SPEAKER: Order, the member for MacKillop!

The Hon. J.D. HILL: The member in his question also asked me about invoices that had been paid twice. I will not go through all of the detail of that, but the issue about reconciliation does not relate to whether or not invoices have been paid twice; but I am advised—

Mr Marshall: Of course it does! Have you ever done a reconciliation?

The SPEAKER: Order! The member for Norwood, you are on your second warning. Minister.

The Hon. J.D. HILL: The advice I have in relation to double payments is that Shared Services SA have advised that, since the introduction of new financial system, Oracle, the double payments made were either intragovernmental, that is, between government agencies, or with vendors for which there is a recurrent trading relationship, enabling a credit note to be issued against future issues.

I will give you an example of how this might happen. If Shared Services, for example, were to get an account in, it might be 'ABC Health Services Pty Ltd', and they pay that. Then they might see a statement which might say 'ABC Services' without the word 'Health', and they will see it as two separate accounts and, on occasions, there is a double payment. The advice I have is that there is about $7.1 million—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: Madam Speaker, they ask serious questions and I attempt to actually answer the questions, yet all I do is get a barrage of interjections which are pitiful in their lack of intellectual content. They just interrupt my flow of thought, so I am forced to go back to the beginning on every occasion.

The point I was about to make is that the total of the transactions that have been identified is about $7.1 million in double payments since the introduction of Oracle, and approximately $6.5 million of those are transactions which are either intragovernmental or with partners with whom we have long-term relations. In other words, there is no risk to the public purse in the vast majority of those cases. They are separate issues which are being managed. The opposition conflated those to make some sort of shock, horror kind of commentary last sitting week. They were wrong.

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