Financial Statements 2016-17

Sections

Statement by the Accountable Authority, Chief Executive Officer and Chief Financial Officer

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Cash Flow Statement

Financial Statements Overview


Statement by the Accountable Authority, Chief Executive Officer and Chief Financial Officer

Statement by the Accountable Authority


Statement of Comprehensive Income

Statement of Comprehensive Income
for the period ended 30 June 2017

Notes 2017
$'000
2016
$'000
Original
Budget
$'000
NET COST OF SERVICES
Expenses
  • Employee Benefits
  • 2.1A
  • 33,958
  • 199
  • 39,082
  • Suppliers
  • 2.1B
  • 115,764
  • 22
  • 119,142
  • Depreciation and amortisation
  • 3.2A
  • 29,893
  • -
  • 10,132
  • Write-Down and Impairment of Assets
  • 2.1C
  • 1,746
  • -
  • -
Total expenses 181,361 221 168,356
   
Own-source Income  
Own-source revenue
  • Contributions from Jurisdictions
  • 2.2A
  • 32,250
  • -
  • 34,400
  • Interest

2.2B

  • 1,546
  • -
  • 1,200
Total own-source revenue 33,796 - 35,600
 
Gains
  • Other Gains
  • 2.2C
  • 56,699
  • 203
  • 41,183
Total gains 56,999 203 41,183
Total own-source income 90,495 203 76,783
Net cost of services (90,866) (18) (91,573)
Revenue from Government 2.2D 110,303 - 110,303

Surplus attributable to the Australian Government 19,437 (18) 18,730
   
OTHER COMPREHENSIVE INCOME
Items not subject to subsequent reclassification to net cost of services
  • Changes in asset revaluation surplus

  • 776
  • -
  • -
Total other comprehensive income 776 - -
Total comprehensive income attributable to the Australian Government 20,213 (18) 18,730

The above statement should be read in conjunction with the accompanying notes.

Budget Variances Commentary

Statement of Comprehensive Income

The Agency recorded a higher than budgeted surplus for 2016-17 due primarily to the following factors:

i. Higher ‘Gains’ pertaining to the transfer of net assets from the National Electronic Health Transition Authority (NEHTA) to the Agency on 1 July 2016. The budget figures (reported May 2016) preceded the final audited financial statements for NEHTA (which were not finalised until September 2016) and the estimate used significantly understated the ‘Other Gains’ in net assets transferred.

ii. Total expenses were higher than budgeted due to complex nature of the Agency’s program delivery and the impacts associated with transitioning operations to a corporate Commonwealth entity. This was further impacted by uncertainties inherent in the Agency’s level of investing expenditure, which is predominantly on intangible assets.

Back to top


Statement of Financial Position

Statement of Financial Position
for the period ended 30 June 2017

Notes 2017
$'000
2016
$'000
Original Budget
$'000
ASSETS
Financial assets
  • Cash and Cash Equivalents
  • 3.1A
  • 40,548
  • -
  • 27,531
  • Trade and Other Receivables
  • 3.1B
  • 8,825
  • -
  • 78
  • Other Investments
  • 3.1C
  • 6,001
  • -
  • -
Total financial assets

55,374

-

27,609

   
Non-financial assets
  • Leasehold Improvements
  • 3.2A
  • 521
  • -
  • -
  • Plant and equipment
  • 3.2A
  • 1192
  • -
  • 940
  • Computer software
  • 3.2A
  • 854
  • -
  • -
  • Other intangibles
  • 3.2A
  • 38,879
  • -
  • 50,361
  • Other Non-financial assets
  • 3.2B
  • 1,127
  • -
  • 379
Total non-financial assets 42,483 - 51,680
Total assets 97,857 - 79,289

 

LIABILITIES
Payables  
  • Suppliers
  • 3.3A
  • 11,521
  • 10
  • 5,874
  • Other Payables
  • 3.3B

588

  • 8
  • -
Total payables 12,109 18 5,874
 
Provisions
  • Employee Provisions
  • 4.1A
  • 5,802

  • -
  • 4,324
  • Other Provisions
  • 4.1B
  • 338
  • -
  • -
Total provisions 6,140 - 4,324

Total liabilities 18,249 18 10,198
Net assets 79,608 (18) 69,091
EQUITY
  • Contributed equity
  • 59,413
  • -
  • 50,361
  • Reserves
  • 776
  • -
  • -
  • Retained surplus
  • 19,419
  • (18)
  • 18,730

Total equity

  • 79,608
  • (18)
  • 69,091

 

The above statement should be read in conjunction with the accompanying notes.

Budget Variances Commentary

Statement of Financial Position

Assets

Total assets were higher than budgeted mainly due to:

  1. Higher than budgeted ‘Other Gains’ (refer comments Statement of Comprehensive Income) which were substantively represented by Cash or Cash equivalents and Other Investments.
  2. An increase in receivables reflecting current invoices due in respect of fourth quarter billing of states and territories for their contributions pursuant to the Intergovernmental Agreement on National Digital Health (IGA).
  3. An offset by a decrease in Other Intangibles and Computer Software capitalisation.

Liabilities

Total liabilities were higher than budgeted due to the delays encountered with certain projects and the movement in employee provisions.

Equity

The increase in Equity is attributable to:

  1. The higher than budgeted surplus for 2016-17, primarily driven by the transfer of NEHTA assets to the Agency on 1 July 2016
  2. Transfer of the My Health Record from the Department of Health accounted for as a restructuring of administrative arrangements

Back to top


Statement in Changes in Equity

Statement of Changes in Equity
for the period ended 30 June 2017

Notes 2017
$'000
2016
$'000
Original
Budget
$'000
CONTRIBUTED EQUITY
Opening balance
Balance carried forward from previous period

 

-

-

-

Adjusted opening balance   - - -
 
Comprehensive income

 

 

 

Other comprehensive income

-

-

-

Total comprehensive income - - -

Transactions with owners

Contributions by owners  
  • Equity injection - Appropriations
  • 10,589

  • -
  • 10,589
  • Restructuring
  • 6.1
  • 48,824
  • -

39,772

Total transactions with owners
    59,413 - 50,361
    Transfers between equity components - - -
    Closing balance as at 30 June 59,413 50,361
     
    RETAINED EARNINGS
    Opening balance - -
    Balance carried forward from previous period (18) - -
    Adjusted opening balance (18) - -
     
    Comprehensive income/strong
    Surplus/(Deficit) for the period 19,437 (18) 18,730
    Total comprehensive income 19,437 (18) 18,730
    Closing balance as at 30 June 19,419 (18) 18,730
     
    ASSET REVALUATION RESERVE
    Opening balance -
    Balance carried forward from previous period - - -
    Adjusted opening balance - - -
     
    Comprehensive income  
    Changes in asset revaluation surplus 776 - -
    Total comprehensive income 776 - -
    Closing balance as at 30 June 776 - -
     
    TOTAL EQUITY
    Opening balance
    Balance carried forward from previous period (18) - -
    Adjusted opening balance (18) - -
     
    Comprehensive income
    Surplus/(Deficit) for the period 19,437 (18) 18,730
    Changes in asset revaluation surplus 776 - -
    Total comprehensive income 20,213 (18) 18,730
     
    Transactions with owners
    Contributions by owners
    • Equity injection - Appropriations
    • 10,589
    • -
    • 10,589
    • Restructuring
    • 48,824
    • -
    • 39,772

    Total transactions with owners

     

    59,413

    -

    50,361

    Closing balance as at 30 June

     

    79,608

    (18)

    69,091

    The above statement should be read in conjunction with the following notes.

    Accounting Policy

    Equity Injections

    Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

    Restructuring of Administrative Arrangements

    Net assets received from, or relinquished, to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against Contributed equity.

    Prior to 1 July 2016, the Australian government’s investment in the My Health Record (MHR) was administered by the Department of Health and reported in its accounts as an administered intangible asset. A Cabinet decision (April 2015) provided the relevant authority in terms of section 26(2) of the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 to account for the subsequent transfer of the asset to the Agency as a restructure of administrative arrangement.

    On this basis, the asset was recognised by the Department of Health at its net book value immediately prior to transfer. This amount, $48.8 million was taken up by the Agency on 1 July 2016 as the opening balance of the MHR.

    Contributed gains

    In contrast to the transfer of the MHR asset, the transfer of NEHTA net assets to the Agency on 1 July 2016 are accounted for as Other gains in the Statement of Comprehensive Income consistent with the requirements of AASB 1004 Contributions. The net assets of NEHTA were previously controlled by the Commonwealth, states and territories through a separate company structure established under the Corporations Act 2001.

    Budget Variances Commentary

    Statement of Changes in Equity

    The increase in Equity is attributed to:

    1. The higher than budgeted surplus for 2016-17, primarily driven by the transfer of NEHTA assets to the Agency on 1 July 2016
    2. Transfer of the My Health Record from the Department of Health accounted for as a restructuring of administrative arrangements
    3. A capital contribution from the Australian Government but was partly offset by the higher than budgeted depreciation and amortisation expenses.

    Back to top


    Cash Flow Statement

    Cash Flow Statement
    for the period ended 30 June 2017

    Notes 2017
    $'000
    2016
    $'000
    Budget
    $'000
    OPERATING ACTIVITIES
    Cash received
    • Appropriations
    • 110,303
    • -
    • 110,303
    • Interest
    • 1,454
    • -
    • 1,285
    • Net GST received
    • 8,478
    • -
    • 11,000
    • Other
    • 78,273
    • -
    • 84,930
    Total cash received 198,508 - 206,978
         
    Cash used    
    • Employees
    • 30,331
    • -
    • 38,976 
    • Own-source Income

     

    • 114,866
    • -
    • 118,399
    • Net GST paid

     

    • -
    • -
    • 11,000
    Total cash used 145,197 - 168,375
    Net cash from/ (used by) operating activities 53,311 - 38,603
     
    INVESTING ACTIVITIES
    Cash received
    • Investments
    • -
    • -
    • -
    Total cash received - - -
         
    Cash used    
    • Purchase of property, plant and equipment
    • 17,351
    • -
    • 21,661
    • Investments
    • 6,001
    • -
    • -
    Total cash used 23,352 - 21,661
    Net cash from/(used by) investing activities (23,352) - (21,661)
         
    FINANCING ACTIVITIES    
    Cash received
    • Other (Contributed Equity)
    • 10,589
    • -
    • 10,589
    Total cash received 10,589 - 10,589
     
    Total cash used - - -
    Net cash from/(used by) financing activities 10,589 - 10,589
    Net increase/(decrease) in cash held 40,548 - 27,531
    Cash and cash equivalents at the beginning of the reporting period - - -
    Cash and cash equivalents at the end of the reporting period 3.1A 40,548 - 27,531

    The above statement should be read in conjunction with the following notes.

    Budget Variances Commentary

    Cash Flow Statement

    The main variances relate to:

    1. Net increase in cash held at 30 June 2017 due primarily to the higher Other contributions which relate to the transfer of net assets from NEHTA at 1 July 2016, constituted by cash and cash equivalents.
    2. Higher than budgeted movements in investing activities, both cash received and cash used, due to the Agency actively managing its cash funds position progressively throughout the financial year to derive higher interest revenues.
    3. Lower than budgeted expenditure on employee related expenses and suppliers, tied back to the lower than budgeted program expenditure.

    Back to top


    Notes to and forming part of the financial statements

    1. Overview

    Objective of the Agency

    The Australian Digital Health Agency (the Agency) is an Australian Government controlled corporate Commonwealth entity established by the Public Governance, Performance and Accountability (Establishing the Australian Digital Health Agency) Rule 2016 (the Rule).

    The Agency was established as a Corporate Commonwealth entity on 30 January 2016 following registration of the Public Governance, Performance and Accountability (Establishing the Australian Digital Health Agency) Rule 2016 on 29 January 2016, and commenced operations on 1 July 2016.

    All assets and liabilities of NEHTA and My Health Record system operation activities managed by the Department of Health transferred to the Agency on that date. Prior to 1 July 2016, the Department of Health was primarily responsible for the establishment of the Agency, and as a result there was no funding allocated to, or expenditure by, the Agency for 2015-16.

    The Agency had no cash flows during 2015-16 and the Agency held no assets during 2015-16.

    The Agency has responsibility for the strategic management and governance for the national digital health strategy and the design, delivery and operations of the national digital healthcare system including the My Health Record (MHR) system. It provides the leadership, coordination and delivery of a collaborative and innovative approach to utilising technology to support and enhance a clinically safe and connected national health system.

    The Agency is structured to meet the following outcome:

    Outcome 1: To deliver national digital healthcare systems to enable and support improvement in health outcomes for Australians.

    The continued existence of the Agency in its present form and with its present programs is dependent on:

    • Government policy and on continued funding by the Australian Government for the Agency’s administration and programs relating to the My Health Record functions, including delivery of ‘opt-out’.
    • Funding from the Australian Government, states and territories received pursuant to the IGA signed on 8 April 2016 and on any future such agreements.

    The Basis of Preparation

    The financial statements are general purpose financial statements and are required by Section 42 of the Public Governance, Performance and Accountability Act 2013.

    The financial statements have been prepared in accordance with:

    1. Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2015 and
    2. Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

    The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars and rounded to the nearest $'000 unless otherwise specified.

    New Accounting Standards

    All new, revised, amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect on the Agency’s financial statements.

    Taxation

    The Agency is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

    Events After the Reporting Period

    Opt-out funding

    Subsequent to 30 June 2017, the Agency received $181.6 million additional funding from the Australian Government for delivering national opt-out for My Health Record due by 31 December 2018. Following unanimous support by the Council of Australian Governments (COAG), the Australian Government agreed to invest significant additional funding over two years to ensure every Australian has a My Health Record, unless they prefer not to. The expansion of the My Health Record marked a major upscaling in the delivery of the Agency’s programs.

    New lease

    The Agency also entered into a 7 year lease for its Brisbane office.

    Other than these two events, there were no matters or circumstances which have arisen since the end of the financial year which significantly affected, or alternatively may affect the operations of the Agency, the results of these operations or state of affairs of the Agency in subsequent years.

    Back to top


    2.1 Expenses

    Expenses
    2017
    $'000
    2016
    $'000
    2.1A Employee Benefits
    Wages and salaries 25,413 179
    Superannuation
    • Defined contribution plans
    • 2,529
    • -
    • Defined benefit plans
    • 347
    • 12

    Leave and other entitlements

    • 4,922
    • 8

    Separation and redundancies

    • 747
    • -
    Total employee benefits  33,958  199
       
    Accounting Policy

    Accounting policy for employee related expenses is contained in Note 5.1

     
       
    2.1B Suppliers  
    Goods and services supplied or rendered  
    • Consultants
    • 81,378
    • -
    • Contractors
    • 9,142
    • -
    • Travel
    • 1,875
    • -
    • IT services
    • 5,078
    • -
    • Other
    15,437 22
    Total goods and services supplied or rendered 112,910 22
       
    Other suppliers
    • Minimum lease payments
    • 2,600
    • -
    • Workers compensation payments
    • 254
    • -
    Total other suppliers 2,854 -
    Total suppliers 115,764 22
     
    Leasing commitments

    The Agency in its capacity as a lessee holds non-cancellable property leases in Canberra, Sydney and Brisbane.

     
       
    Commitments for minimum lease payments in relation to non-cancellable
    operating leases are payable as follows:
     
    • Within 1 year
    • 1,312
    • 1,787
    • Between 1 to 5 years
    • 188
    • 1,330
    Total operating lease commitments 1,500 3,117
     
    2.1C Write-Down and Impairment of Assets
    Impairment of financial instruments1 1,746 -
    Impairment of property, plant and equipment - -
    Impairment of intangible assets - -
    Total write-down and impairment of assets 1,746 -

    Back to top

    2.2 Own-Source Revenue and gains

    Own-Source Revenue
    2017
    $'000
    2016
    $'000
    2.2A: Contributions from Jurisdictions
    New South Wales 10,326 -
    Victoria 7,998 -
    Queensland 6,515 -
    Western Australia 3,509 -
    South Australia 2,328 -
    Tasmania 710 -
    Australian Capital Territory 529 -
    Northern Territory 335 -
    Total contributions from Jurisdictions 32,250 -

    Accounting Policy
    The Agency receives contributions from jurisdictions based on an agreed formula as set out in Schedule A to the Intergovernmental Agreement on National Digital Health (signed April 2016). The above contributions from states and territories of $32.25 million represents half of the total contributions made under the Intergovernmental Agreement, with a further $32.25 million being contributed by the Australian Government. The latter contribution is included in Revenue from Government and is shown in Note 2.2D.

    2017
    $'000
    2016
    $'000
    2.2B Interest
    Deposits 1,546 -
    Total interest 1,546 -

    Accounting Policy
    Interest revenue is recognised using the effective interest method.

    2017
    $'000
    2016
    $'000
    2.2C Other Gains
    Resources received free of charge
    • Net transfer of NEHTA assets and liabilities as at 1 July 2016
    • 52,355
    • -

    Additional net assets transferred from NEHTA arising from a change in fair value at 30 June 20162

    • 4,298
    • -

    Other

    46

    203

    Total other gains

    56,699

    203

    Accounting Policy
    Resources Received Free of Charge
    Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements (refer to Note 6.1).

    2017
    $'000
    2016
    $'000
    2.2D Revenue from Government
    Appropriations
    • Departmental appropriations
    • 110,303
    • -

    Total revenue from Government

    110,303 -

    Accounting Policy
    Revenue from Government
    Funding received or receivable from non-corporate Commonwealth entities (appropriated to the non-corporate Commonwealth entity as a corporate Commonwealth entity payment item for payment to this entity) is recognised as Revenue from Government by the corporate Commonwealth entity unless the funding is in the nature of an equity injection or a loan. In addition to these payments made by the Department of Health, there was a further $32.25 million paid to the Agency from the Australian Government pursuant to the Intergovernmental Agreement (refer also Note 2.2A).

    Back to top


    3.1 Financial assets

    Financial Assets
    2017
    $'000
    2016
    $'000
    3.1A: Cash and Cash Equivalents
    Cash on hand or on deposit 40,548 -
    Total cash and cash equivalents 40,458 -

    Accounting Policy

    Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand and deposits in bank accounts with an original maturity of 3 months or less that are convertible to known amounts of cash and subject to insignificant risk of changes in value.

     
    2017
    $'000
    2016
    $'000
    3.1B: Trade and Other Receivables
    Goods and services receivables
    Goods and services 8,082 -
    GST receivable from the ATO 2,397 -
    Interest Receivable 92 -
    Total goods and services receivables 10,571 -
     
    Total trade and other receivables (gross) 10,571 -
     
    Less impairment allowance (receivables) (1,746) -
     
    Total trade and other receivables (net) 8,825 -
     
    Trade and other receivables (net) expected to be recovered
    • No more than 12 months
    • 8,825
    • -
    • More than 12 months
    • -
    • -
    Total trade and other receivables (net) 8,825 -
     
    Trade and other receivables (net) aged as follows -
    Not overdue 8,238
    Overdue by
    • 0 to 30 days
    • -
    • -
    • 31 to 60 days
    • 36
    • -
    • 61 to 90 days
    • -
    • -
    • More than 90 days
    • 551
    • -
    Total trade and other receivables (net) 8,825 -
     
    Impairment allowance aged as follows
    Not overdue
    Overdue by
    • 0 to 30 days
    • -
    • -
    • 31 to 60 days
    • -
    • -
    • 61 to 90 days
    • -
    • -
    • More than 90 days
    • 1,746
    • -
    Total impairment allowance 1,746 -

    Credit terms for goods and services were within 30 days.
    The Agency has not provided any loans.

    Accounting Policy

    Loans and Receivables

    Trade receivables and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as 'loans and receivables'. Receivables for goods and services, which have 30 day terms, are reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

    Reconciliation of the Impairment Allowance
    Movements in relation to 2017 Good and services 
    $'000
    Other receivables
    $'000
    Total
    $'000 
    As at July 2016 - - -
    Amounts written off - - -
    Amounts recovered and reversed - - -
    Increase/(Decrease) recognised in net cost of services 1,746 - 1,746
    Total as at 30 June 2017 1,746 - 1,746

    Accounting Policy

    Financial assets are assessed for impairment at the end of each reporting period. If there is an indication that receivables may be impaired the Agency makes an estimation of the receivables recoverable amount. When the carrying amount of the receivable exceeds the recoverable amount, it is considered impaired and a provision for impairment is made so the net value equals the recoverable amount.

     

    3.1C: Other Investments3 2017
    $'000
    2016
    $'000
    Deposits 6,001 -
    Total other investments 6,001 -

    Other investments expected to be recovered   -
    • No more than 12 months
    • 6,001
    • -
    • More than 12 months
    • -
    • -
    Total other investments 6,001 -

    Back to top


    3.2 Non Financial Assets

    3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

    Reconciliation of the opening and closing balances of property, plant and equipment, computer software and other intangibles for 2017

    Leasehold
    Improvements
    $’000

    Plant and
    equipment
    $’000

    Computer
    Software4
    $’000

    Other
    Intangibles5
    $’000

    Total
    $’000

    As at 1 July 2016 - - - - -
    Gross book value - - - - -

    Accumulated depreciation,
    amortisation

    - - - - -

    Total as at 1 July 2016

     -  -  -  -  -

    Additions

    • Purchase
    • 8
    • 424
    • 789
    • -
    • 1,221
    • Internally developed
    • -
    • -
    • -
    • 16,130
    • 16,130
    • Acquisition of entities or operations (including restructuring)6
    • 505
    • 2,079
    • 1,714
    • 48,824
    • 53,122

    Revaluations and impairments recognised in other comprehensive income

    515 261 - - 776
    • Depreciation and amortisation
    • (507)
    • (1,572)
    • (1,649)
    • (26,165)
    • (29,983)

    Total as at 30 June 2017

    521 1,192 854 38,879 41,356

    Total as at 30 June 2017 represented by

    Gross book value

    1,028 2,764/td> 2,503 64,954 71,249

    Accumulated depreciation,
    amortisation and impairment

    (507) (1,572) (1,649) (26,165) (29,893)

    Total as at 30 June 2017

    521 1,192 854 38,789 41,356
    Revaluations of non-financial assets

    All revaluations were conducted in accordance with the revaluation policy stated at Note 3.2. On 30 June 2017, an independent valuer, Jones Lang Lasalle Incorporated, conducted a revaluation on leasehold improvements and plant and equipment. The revaluation report identified a total increment of net fair value of the Agency’s assets held on the asset register of $776,000.

    Accounting Policy

    Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken.

    Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

    Asset Recognition Threshold

    Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $5,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

    The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in leases taken up by the Agency where there exists an obligation to makegood. These costs are included in the value of the Agency’s provisions.

    The asset capitalisation threshold for computer software and other intangible assets is $5,000.

    Revaluations

    Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depend upon the volatility of movements in values for the relevant assets.

    Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of Asset Revaluation Reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/ deficit except to the extent that they reversed a previous revaluation increment for that asset class.

    Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

    Depreciation

    Depreciable property, plant and equipment are written-off to their estimated residual values over their estimated useful lives, in all cases using the straight-line method of depreciation.

    Depreciation rates, residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

    Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

    Asset Class Useful life (years)

    Leasehold
    improvements

    length of lease
    Plant and equipment 3 - 10

    Computer software

    2 - 5

    Other Intangibles

    1 - 5

    Impairment

    All assets were assessed for impairment at 30 June 2017. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

    The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Agency were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

    Derecognition

    An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

    Intangibles

    The Agency’s intangibles comprises software licences, data sets, internally developed software for internal use and the MHR asset. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

    Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Agency’s software is shown in the table appearing under Depreciation.

    All software assets were assessed for indications of impairment as at 30 June 2017.

    3.2B: Other Non-Financial Assets

    2017
    $’000

    2016
    $’000

    • Prepayments
    • 1,127
    • -
    Total other non-financial assets 1,127 -
     

    Other non-financial assets expected to be recovered

    • No more than 12 months
    • 1,127
    • -
    • More than 12 months
    • -
    • -
    Total other non-financial assets

    1,127

    -

     

    No indicators of impairment were found for other non-financial assets.

    Back to top


    3.3 Payables

     

    Payables

    2017
    $’000

    2016
    $’000

    3.3A: Suppliers

     

     

    • Trade Creditors and Accruals
    • 11,521
    • 10

    Total suppliers

    11,521

    10

     

    Suppliers expected to be settled

    • No more than 12 months
    11,521 10
    • More than 12 months
    • -
    • -

    Total suppliers

    11,521 10

     


    Settlement terms are 30 days.

    2017
    $'000
    2016
    $'000

    3.3B: Other Payables

     

    Salaries and wages

    329

    8

    Superannuation

    24

    -

    Separations and redundancies

    235 -

    Total other payables

    588

    8

     

    Other payables to be settled

    • No more than 12 months
    588 8
    • More than 12 months
    • -
    • -

    Total other payables

    588 8

     

    Accounting Policy

    Trade creditors and accruals are recognised at their nominal amounts. Liabilities are recognised to the extent that goods and services have been received.

    Back to top


    4.1 Provisions

    Provisions
    2017
    $'000
    2016
    $'000
    4.1A Employee Provisions

     

    Leave 5,802 -
    Total employee provisions 5,802 -

     

    Employee provisions expected to be settled

    • No more than 12 months
    • 2,427
    • -
    • More than 12 months
    • 3,375
    • -

    Total employee provisions

    5,802

    -


    Accounting policy

    Liabilities for short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts.

    Leave

    The liability for employee benefits includes provision for annual leave and long service leave.

    No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years is estimated to be less than the annual entitlement for sick leave.

    The liability for long service leave has been determined by reference to the shorthand method prescribed by the Government Actuary as per the FRR and Commonwealth Entity Financial Statement Guide. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

    Separation and Redundancy

    Provision is made for separation and redundancy benefit payments. The Agency recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

    Superannuation

    The Agency’s staff comprise both APS employees and staff whose employment is subject to contracts under Common Law. Both groups of employees are reflected in the Agency’s Average Staffing Level (ASL) numbers.

    APS staff are either members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

    The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

    The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

    The Agency makes employer contributions to the employees’ defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Agency accounts for these contributions as if they were contributions to defined benefit plans.

    In respect of the other more prominent group of Common Law contract employees, the Agency makes employer contributions to funds held outside of the Australian Government. The liability for superannuation recognised as at 30 June represents outstanding contributions, if any.


    Other provisions
    2017
    $'000
    2016
    $'000
    4.1B Other Provisions

    Provision for
    restoration
    $'000

    Provision for
    restoration
    $'000

    As at July 2016
    • Additional provisions made
    • 338
    • -
    • Amounts used
    • -
    • -
    • Amounts reversed
    • -
    • -
    • Unwinding of discount or charge in discount rate
    • -
    • -
    Total as at 30 June 2017 338 -

    Other provisions expected to be settled
    • No more than 12 months
    • 67
    • -
    • More than 12 months
    • 271
    • -
    Total other provisions 338 -

     

    The Agency currently has 5 agreements for the leasing of premises which have provisions requiring the entity to restore the premises to their original condition at the conclusion of the lease. The Agency has made a provision to reflect the present value of this obligation.


    Accounting Policy

    Classification of Leases

    A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease.

    Finance Leases

    Where an asset is acquired by means of a finance lease, the asset is capitalised at either the fair value of the lease property or, if lower, the present value of minimum lease payments at the inception of the contract and a liability is recognised at the same time and for the same amount. The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.

    Operating leases

    Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.

    4.2 Key Management Personnel Remuneration

    4.2 Key Management Personnel Remuneration

    2017
    $'000

    Key management personnel are those persons having authority
    and responsibility for planning, directing and controlling the activities
    of the Agency, directly or indirectly, including any director (whether executive
    or otherwise) of that Agency. The Agency has determined the
    key management personnel to be Chief Executive Officer, Executive General Managers
    and board members. Key management personnel remuneration is reported below:

    Short-term employee benefits

    2,618

    Post-employment benefits

    229

    Other long-term employee benefits

    174

    Total key management personnel remuneration expenses7

    3,021

     

    The total number of key management personnel that are included in the above table is 17.

     

    4.3 Related Party Disclosures

    Related party relationships:

    The Agency is an Australian Government controlled corporate Commonwealth entity. It has a governing board of directors, a Chief Executive Officer (CEO) and Executive General Managers (EGMs) and a Portfolio Minister.

    Pursuant to AASB 124 Related Party Disclosures Agency key management personnel (KMP) are asked to provide details of where any of their close family members, or a controlled entity (entities) has (have) transacted with the Agency. Where any doubt exists, the information is to be recorded and collected in any event.

    AASB 124 requires disclosure of related party relationships that include transactions where significant influence exists between the Agency and other parties. The Standard identifies that ‘key management personnel (KMP)’ have the capacity to influence the operations of the Agency, and therefore parties related to KMP become related parties to the Agency and require disclosure in the annual financial statements.

    The Agency has determined that all board members, the CEO and EGMs constitute KMP for the purposes of AASB 124.

    Officers acting into the CEO, or an EGM role, have been assessed against the criteria of whether their acting role allowed them to plan, direct and control the activities of the Agency.

    Given the breadth of Government activities, related parties may transact with the government sector in the same capacity of ‘common citizens’. Common citizen or ‘open contest’ transactions are not requested or recorded as they reflect those transactions that may be undertaken with the Agency under the same terms and conditions as any other citizen.

    The Agency transacts with other Australian Government controlled entities consistent with normal day-today business operations provided under normal terms and conditions, including the payment of workers compensation and insurance premiums. These are not considered individually significant to warrant separate disclosure as related party transactions.

    Refer to Note 4.1 Employee Provisions for details on superannuation arrangements with the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), and the PSS accumulation plan (PSSap).

    Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions to be separately disclosed.

    4.4 Remuneration of Auditors

    Amounts paid or payable for audit of the financial statements 2016-17 is $160,000. (2016: $10,000).

    Back to top


    5.1 Contingent Assets and Liabilities

    Quantifiable Contingencies

    The Agency had no quantifiable contingencies at reporting date.

    Unquantifiable Contingencies

    The Agency had no unquantifiable contingencies at reporting date.

    5.2 Financial Instruments

    Financial Instruments
    2017
    $'000
    2016
    $'000
    5.2A Categories of Financial Instruments

     

    Financial Assets

    Held-to-maturity investments

    Other Investments

    6,001

     -

    Total held-to-maturity investments

    6,001

    -

     

     

     

    Loans and receivables

     

     

    • Cash and Cash Equivalents
    • 40,548
    • -
    • Trade and Other Receivables
    • 8,825
    • -

    Total loans and receivables

    49,373

    -

    Total financial assets

    55,374

    -

     

    Financial Liabilities

    Financial liabilities measured at amortised cost

    • Trade creditors and accruals
    • 11,521
    • 10

    Total financial liabilities measured at amortised cost

    11,521

    10

    Total financial liabilities

    11,521

    10


    Accounting Policy

    Financial assets

    The Agency classifies its financial assets in the following categories:

    1. financial assets at fair value through profit or loss;
    2. held-to-maturity investments;
    3. available-for-sale financial assets; and
    4. loans and receivables.

    The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.

    Effective Interest Method

    Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss.

    Financial Assets at Fair Value Through Profit or Loss

    Financial assets are classified as financial assets at fair value through profit or loss where the financial assets:

    1. have been acquired principally for the purpose of selling in the near future;
    2. are derivatives that are not designated and effective as a hedging instrument; or
    3. are parts of an identified portfolio of financial instruments that the entity manages together and has a recent actualpattern of short-term profit-taking.

    Assets in this category are classified as current assets.

    Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.

    Available-for-Sale Financial Assets

    Available-for-sale financial assets are nonderivatives that are either designated in this category or not classified in any of the other categories.

    Available-for-sale financial assets are recorded at fair value. Gains and losses arising from changes in fair value are recognised directly in reserves (equity) with the exception of impairment losses. Interest is calculated using the effective interest method and foreign exchange gains and losses on monetary assets are recognised directly in profit or loss. Where the asset is disposed of or is determined to be impaired, part (or all) of the cumulative gain or loss previously recognised in the reserve is included in surplus and deficit for the period.

    Impairment of Financial Assets

    Financial assets are assessed for impairment at the end of each reporting period.

    Financial assets held at amortised cost-if there is objective evidence that an impairment loss has been incurred for loans and receivables or held to maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.

    Available for sale financial assets-if there is objective evidence that an impairment loss on an available-for-sale financial asset has been incurred, the amount of the difference between its cost, less principal repayments and amortisation, and its current fair value, less any impairment loss previously recognised in expenses, is transferred from equity to the Statement of Comprehensive Income.

    Financial assets held at cost -if there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets.

    Financial liabilities

    Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

    Financial Liabilities at Fair Value Through Profit or Loss

    Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

    Other Financial Liabilities

    Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.

    Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

    Financial Instruments
    2017
    $'000
    2016
    $'000
    5.2B: Net Gains or Losses on Financial Assets

     

    Held-to-maturity investments

    • Interest revenue
    • 1,546
    • -

    Net gains/(losses) on held-to-maturity investments

    1,546

    -

    Net gains on financial assets

    1,546

    -

     

     

    5.2C: Fair Value of Financial Instruments

    Carrying
    amount
    2017
    $’000

    Fair value
    2017
    $’000

    Carrying
    amount
    2016
    $’000

    Fair value
    2016
    $’000

    Financial Assets
    • Other Investments
    • 6,001
    • 6,001
    - -
    • Cash and Cash Equivalents
    • 40,548
    • 40,548
    - -
    • Trade and Other Receivables
    • 8,825
    • 8,825
    - -

    Total financial assets 55,374 55,374 - -

    Financial Liabilities
    • Trade creditors and accruals
    • 11,521
    • 11,521
    - -
    Total financial liabilities 11,521 11,521 - -


    5.2D Credit Risk

    The Agency was exposed to minimal credit risk as loans and receivables are cash and trade receivables.
    The maximum exposure to credit risk was the risk that arises from potential default of a debtor.
    The amount was equal to the total amount of the trade receivables of $8.8 million in 2017.
    The Agency managed its credit risk by establishing policies and procedures for debt management.

    Credit quality of financial assets not past due or individually determined as impaired.

    5.2E: Net Gains or Losses on Financial Assets

    Not past due
    nor impaired
    2017
    $’000

    Past due or
    impaired

    2017
    $’000

    Past due or
    impaired
    2016
    $’000

    • Trade and other receivables

    • 8,238

    • 587

    -

    Total 8,238 587 -

    Receivables relate to State and Territory contributions invoiced at 30 June 2017 but not yet paid.

    Ageing of financial assets that were past due but not impaired in 2017

     

    0 to 30 days
    $’000

    31 to 60 days
    $’000

    61 to 90 days
    $’000

    90+ days
    $’000

    Total
    $’000

    • Trade and other receivables

    • -

    • 36

    -

    -

    • 36
    Total - 36 - - 36

    Back to top


    5.3 Fair Value Measurement

    The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

     

    Fair value measurement
    at the end of the
    reporting period

    5.3A: Fair Value Measurements

    2017
    $’000

    2016
    $’000

    Non-financial assets

     

     

    • Leasehold Improvements
    • 521
    • -
    • Plant and equipment
    • 1,192
    • -

    Total fair value measurements in the statement of financial position

    1,713

    -

    Total assets not measured at fair value in the statement of
    financial position

    40,770

    -

     

    Accounting Policy

    Non-financial assets were revalued at 30 June 2017 by an independent valuer.

    Back to top


    6.1 Restructuring

    6.1A: Restructuring

    2017
    Transfer of the My

    Health Record8
    $’000

    FUNCTIONS ASSUMED

     

    Assets recognised
    • Cash

    -

    • Trade and Other Receivables
    • -
    • Buildings
    • -
    • Plant and equipment
    • -
    • Computer software
    • -
    • Other intangibles
    • 48,824
    • Other Non-Financial Assets
    • -

    Total assets recognised

    48,824

    Liabilities recognised
    • Suppliers
    • -
    • Employee Provisions
    • -
    • Other Payables
    • -
    Total liabilities recognised -
    Net assets/(liabilities) recognised9 48,824

    Income assumed
    • Recognised by the receiving entity
    • -
    • Recognised by the losing entity
    • -
    Total income assumed -

    Expenses assumed
    • Recognised by the receiving entity
    • -
    • Recognised by the losing entity
    • -
    Total expenses assumed -

     

    The purpose of the Public Governance, Performance and Accountability (Establishing the Australian Digital Health Agency) Rule 2016 (the Rule) is to establish the Agency. The Agency will be a corporate Commonwealth entity which will be legally separate from the Commonwealth.

     



    1 The impairment relates to accounts receivable representing non-payment of contributions during 2016-17 by the state of South Australia.

    2 Relates to additional non-current assets revalued subsequent to the net transfer of NEHTA assets on 30 June 2016 following a reassessment of fair values.

    3 A term deposit with an original maturity of more than 3 months was held at 30 June 2017.

    4 The carrying amount of computer software included $1.5 million of purchased software and $0.2 million of internally generated assets..

    5 Other intangibles constitute the MHR asset transferred from the Department of Health on 1 July 2016 and further commentary on this is found within the Accounting Policy notes to the Statement of Changes in Equity in the paragraph ‘Restructuring of Administrative Arrangements’.

    6 Plant and equipment and Buildings (i.e. leasehold assets) were transferred from NEHTA at 1 July 2016.

    7 The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister’s remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the Agency.

    8 The fair value of the My Health Record intangible asset was transfered from the Department of Health to The Agency on 1 July 2016.

    9 The net assets/(liabilities) assumed from all entities were $48.8 million