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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-03-28 Daily Xml
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Ministerial Statement

HEALTH DEPARTMENT ANNUAL REPORT

The Hon. J.D. HILL (Kaurna—Minister for Health and Ageing, Minister for Mental Health and Substance Abuse, Minister for the Arts) (14:12): I seek leave to make a ministerial statement.

Ms CHAPMAN: Point of order: I could not hear that. I could not hear whether the minister announced the South Australian Film Corporation annual report. Was that in that list?

The SPEAKER: I do not think there was any point of order in that. Minister, you are seeking leave to make a ministerial statement?

The Hon. J.D. HILL: I am, Madam Speaker; indeed, I am.

Leave granted.

The Hon. J.D. HILL: Thank you, Madam Speaker. Today, as you note, I tabled five annual reports, including the Department of Health's annual report for 2010-11. The department has been awaiting the Auditor-General to complete his audit of the department's accounts. This has now occurred and the Auditor-General will hand down his report shortly, obviously at a time of his choosing. The Public Finance and Audit Act 1986 requires that the financial statements are lodged with the Auditor-General within 42 days of the end of the financial year.

Whilst the Department of Health met this 42-day statutory reporting obligation, other entities lodged their financial statements at various points in time between 11 August 2011 and 28 October 2011. Subsection 12(2) of the Public Sector Act 2009 requires a public sector agency to present its annual report within three months of the end of the financial year. Under subsection 12(9) a written statement must be provided with, and at the same time as, the completed annual report if there is a delay in provision of an annual report, and this ministerial statement does that.

In light of the implementation of the new statewide financial Oracle accounting system and its use in the preparation of all SA Health entity financial statements, the Auditor-General did not finalise the audit of the department's financial statements before receiving and completing the audits of regional financial statements. This change in audit methodology has delayed the Department of Health from lodging its annual report until the Auditor-General completed his audit of all SA Health entities, as I have informed the house before.

With respect to the Department of Health, SA Ambulance Service and the Women's and Children's Health Service, the Auditor-General found that the financial reports were materially correct and provided an unqualified audit opinion. The Auditor-General did however make reference to control deficiencies and inadequate management attention given to the effective and timely reconciliation of various account balances.

In relation to Country Health SA and the then Adelaide health service, the Auditor-General found there were limitations in the ability to trace transactional data to Oracle from the old Legacy financial systems that are being phased out. As a result, the Auditor-General was unable to obtain sufficient audit evidence in relation to revenue raised from fees and charges, receivables and cash, and cash equivalents, in order to provide an unqualified audit opinion. He has also made comment in relation to the inability to obtain transactional data for staff benefit expenses, supplies and services, and payables in order to provide an unqualified audit opinion.

The department of health has signed off on the financial statements and has acknowledged the Auditor-General's findings in relation to deficiencies in financial reconciliations performed during 2010-11. The department, however, considers that these lapses and controls have not materially impacted—

Ms Chapman interjecting:

The SPEAKER: Member for Bragg, order!

The Hon. J.D. HILL: The department, however, considers that these lapses and controls have not materially impacted the department's financial result or the financial information contained in the financial statements.

The issues raised by the Auditor-General are the result of difficulties associated with phasing out the old Legacy financial systems and implementing the new statewide financial Oracle system. Concurrent with the change to Oracle, the department is moving towards a single integrated financial model.

The Auditor-General has not identified any issues with the Oracle system per se. The need for this system was essential, given the existing disparate outdated Legacy systems that in some instances were experiencing operational issues. These Legacy systems are reaching their technological obsolescence and becoming more costly to maintain. In time, the Oracle system and the integration of financial management functions centrally within SA Health will achieve greater efficiencies through economies of scale in support personnel, infrastructure and licensing costs. The new statewide system will also provide more rigorous financial controls and the consolidation of banking across the portfolio.

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