ANNUAL REPORT 2014/15. healthalliance N.Z. Limited

Transcription

1 ANNUAL REPORT /15 healthalliance N.Z. Limited

2 CONTENTS

3 1 2 A word from our Interim CEO Our Board 5 About healthalliance 7 Our Purpose, Vision and Principles Our Operations and Service Model Our Services /15 Our Statement of Service Performance Financial Statements Statement of Responsibility Independent Auditor s Report Statutory Information To be the recognised experts in making the health dollar go further

4 Annual Report / Published: October

5 A WORD FROM OUR INTERIM CEO A word from our Interim CEO healthalliance has had a challenging and successful year. Our subsidiary company healthalliance (FPSC) Limited commenced providing procurement services for all DHBs in New Zealand. Consolidating procurement activities for 20 DHBs has been a huge task and I am pleased to note that the Procurement team delivered annualised budgetary benefits of $27.1M and a yield of 11.4% on the addressable spend for national contracts and a further $4.3M for Northern Region DHBs in IT and non clinical services. Each dollar that is saved for DHBs allows more funding to be provided for health initiatives for New Zealand s population and we are proud to be helping cost savings in the health sector. Delivering benefits also features in our other services to the Northern Region DHBs. Our Supply Chain team has, alongside the addition of new locations to their service matrix, also realised $1.5M in benefits through increased efficiencies in Supply Chain delivery. Our Information Technology delivery of capital projects progressed in this financial year, with our Projects team delivering $20M of IT infrastructure projects and $14M of application projects to Northern Region DHBs. Significant projects delivered in the 14/15 year include large scale programmes such as One Network, implementing a high capacity and resilient network infrastructure between data centres to improve DHB network connections to core data centres; and an system upgrade to a supported version, and migration of approximately 18,000 active mailboxes for Northern Region DHBs and healthalliance which delivers key end user benefits of improved speed, larger mailbox capacity, support for tool tips and improved support for mobile devices. Our customers continued to report satisfaction ratings of around 80% across our various services. To help us further increase our customer s satisfaction with our services, we created a new function of Clinical and Customer Services to help us further understand the complexities and challenges that our customers face - and how our services can help them achieve their primary tasks of realising health outcomes. healthalliance looks forward to another successful year and to delivering key outcomes for our DHB customers. Ross Chirnside Interim Chief Executive Officer healthalliance N.Z. Limited To be the recognised experts in making the health dollar go further 1

6 OUR BOARD Governance and Accountability CORPORATE healthalliance N.Z. Limited has a Board of Directors appointed by its shareholders. The Board is comprised of up to six directors and an independent chair, appointed by each shareholding DHB and NZ Health Partnerships (NZHP) (previously Health Benefits Limited; until 30 June ). The Board meets a minimum of six times each year and reviews performance as part of those meetings. The Company s performance is monitored by the Board and then by the Northern Region Regional Governance Group (comprising Northern Region chairs, chief executives and chief medical officers). healthalliance (FPSC) Limited also has a Board of Directors appointed by its shareholders. MINISTERIAL POWER TO DIRECT healthalliance N.Z. Limited ensures decision-making processes comply with all legislative requirements to consult with, or notify the Minister of Health. Any communications are generally dealt with through the Board Chair on behalf of the Board and shareholders and reported to the Minister of Health when required. David Clarke - Chair David Clarke joined the healthalliance N.Z. Limited Board on 6 May 2013 and healthalliance (FPSC) Limited on its inception. David is an independent director on the Board and has served as Chair since 23 October. He has significant experience at Chair, Director and CEO levels in numerous industries, and has a successful track record with companies in the areas of information technology, healthcare, energy, agriculture, biotechnology, water, food and related sectors. He is Chair and Director of several privately held companies, including Watercare, Hynds, Ngai Tahu Tourism, Farm IQ and others. David s previous roles include the inaugural Chair of Orion International, now New Zealand s largest software exporter. Prior to this, David was Chief Executive Officer of Counties Manukau Health. Anthony Norman Tony joined healthalliance N.Z. Limited on 1 March 2011 and healthalliance (FPSC) Limited on its inception, and represents Northland District Health Board. He has spent 29 years as a Chief Financial Officer for multinational corporations in the United Kingdom, South Africa, Papua New Guinea and Australia, before specialising in the development and implementation of recovery strategies for major failed corporations. Tony is a past Chair of Far North Holdings Ltd which owns and operates the maritime and aviation assets of the Far North District Council. He also chaired the Board of Trustees of Oruaiti School, and is currently Chair of Northland District Health Board and Deputy Chair of Waitemata DHB. 2 healthalliance Annual Report /15

7 Paul Harper Paul Harper became a director of healthalliance N.Z. Limited on 6 August 2011, (independent from 1 July ) and healthalliance (FPSC) Limited on its inception. Paul has significant experience in freight logistics, procurement and supply chain, and was a former General Manager of Procurement & Distribution at Carter Holt Harvey and CEO of CHH Lodestar Ltd. He is the Chair of Netlogix Ltd, an innovative supply chain solution provider; a director of Nexus Logistics; and various private enterprises. Paul is also the current Dean of the New Zealand Maritime School. Previous directorships include Health Benefits Ltd, Port of Napier Ltd and Cyberlynx Ltd. Paul has also been a trustee of North Harbour Stadium. Dr Lee Mathias Lee joined healthalliance N.Z. Limited and healthalliance (FPSC) Limited on 14 October (ceased (FPSC) on 30 June ), and represents Counties Manukau Health. Lee is a director of several organisations including Chair of Counties Manukau Health and Unitec and Deputy Chair of the Auckland District Health Board, Chair of the Health Promotion Board and Director of Pictor Limited. Past directorships include Birthcare Auckland Limited, IRIS Limited, ACC and Labtests Auckland Limited. She is an Accredited Fellow of the Institute of Directors (IOD) and is an Officer of the New Zealand Order of Merit. Rosalie Percival Rosalie joined healthalliance N.Z. Limited and healthalliance (FPSC) Limited on 14 October, and represents Auckland District Health Board. Rosalie is the Chief Financial Officer of Auckland District Health Board and has previously held the position of Chief Financial Officer, Waitemata District Health Board and was on the Board of healthalliance N.Z. Limited prior to To be the recognised experts in making the health dollar go further 3

8 OUR BOARD Dr Andrew Brant Andrew joined healthalliance N.Z. Limited and healthalliance (FPSC) Limited on 14 October, and represents Waitemata District Health Board. Andrew was appointed Chief Medical Officer for Waitemata District Health Board on 6 September 2010, after holding the role of Head of Division for Medicine and Health of Older People Services. Andrew is a Respiratory and General Physician, a Fellow of the Royal Australasian College of Physicians, and has a Masters in Business Administration (Cambridge) and PhD from the Imperial College, London, UK. Roger Jones Roger joined healthalliance N.Z. Limited on 21 September, as an independent director. Roger is the Chief Technology Officer at Auckland Transport. He is presently a director of Corporate Apartments Limited and an Advisory Board member of Hewlett Packard (HP) Asia Pacific Customer Advisory Board. Ron Pearson Ron Pearson joined the healthalliance (FPSC) Limited Board on 1 July and represents Counties Manukau Health (CM Health). He was previously on the healthalliance Board (November May 2013) representing CM Health and has served as an alternate director to Dr Lee Mathias. Ron is Deputy Chief Executive Officer and Director of Corporate & Business Services at CM Health, which includes the CFO role and has extensive health management experience with CM Health over an extended period. Prior to that, he has held numerous senior financial roles with New Zealand and Australian public listed companies and major cooperatives. He is presently and has been since its inception, a director/ trustee of the Middlemore Foundation for Health Innovation (formerly South Auckland Health Foundation), a charitable trust. 4 healthalliance Annual Report /15

9 ABOUT healthalliance healthalliance has a proud history. It is a Crown-owned subsidiary set up to provide shared services to its District Health Board (DHB) shareholders. By reducing costs and increasing savings and efficiencies, healthalliance frees up time and money for frontline patient care for our DHB partners. HOW WE GOT THERE AND WHERE WE RE GOING July 2000 healthalliance N.Z. Limited established Joint venture between Waitemata DHB and Counties Manukau Health to provide key non-clinical business services for both health boards. March 2011 Northland and Auckland DHBs come onboard Collectively form the four Northern Region DHBs. Each own 20% of healthalliance and Health Benefits Limited, a Crown-entity, also joined as a stakeholder taking the final 20% (until 30 June ). August 2013 Selected to be the Service provider for FPSC Services Based on our reputation and success in delivering savings to these DHBs, we were contracted by Health Benefits Ltd to deliver Finance, Procurement and Supply Chain (FPSC) services nationally to all 20 DHBs throughout New Zealand. September 2013 healthalliance (FPSC) Limited incorporated To reflect the changes for the national service. April Began providing financial services to Hutt Valley DHB July Began delivering National Procurement services to all 20 DHBs in NZ To be the recognised experts in making the health dollar go further 5

10 OUR PURPOSE, VISION & PRINCIPLES

11 Our Purpose To be right behind better healthcare Our role as provider of non-clinical services to the Northern Region DHBs includes Information Technology, Staff Services (Payroll and HR Administration), Internal Audit, and Finance, Procurement and Supply Chain. Our Vision To be the recognised experts in making the health dollar go further We will assist the health sector to spend wisely, enabling DHBs to direct money to frontline clinical services by providing savings, automating processes, enabling efficiencies and standardisation. Our Principles Our people work alongside each other with these guiding principles: Partnership Developing lasting partnerships through collaboration Working to a common goal Facilitating joint solutions within our means Respect for People Developing trust by being open and honest Listening to and understanding others views Integrity Leading by example Open, fair, honest and transparent in everything we do Courage to speak up and challenge when things don t seem right Delivering Results Delivering exceptional results through high performing teams Enhance the complete customer experience Continually improve and add value Energised by Innovation Encourage forward thinking ideas and challenge status quo Measure our performance and see it as an opportunity to learn and grow Recognising and celebrating success Open communication to share knowledge and information Valuing everyone s contribution Celebrating diversity Have fun and enjoy what we do as a team Act ethically and professionally at all times Can do, will deliver on our promises, obligations and commitments Being action orientated, responsible and accountable Providing consistent and reliable services Creating positive change by developing smarter ways to work Empowering people to maximise potential To be the recognised experts in making the health dollar go further 7

12 OUR PURPOSE, VISION & PRINCIPLES Our Leaders Our Board-appointed Chief Executive is responsible for the day-to-day operations of the company, supported by an executive management who manage each of our key service areas. The healthalliance Executive Team is comprised of: Ross Chirnside Interim CEO healthalliance N.Z. Ross Darrah Interim CEO healthalliance (FPSC) Ross Chirnside GM Finance & Strategy Kevin Robinson Chief Information Officer Kris Goodenough GM Supply Chain Trish Langridge GM Clinical & Customer Interim GM Staff Service Centre & HR Services Ramon Manzano Regional Manager Internal Audit Ross Darrah GM Procurement Our Organisation 8 healthalliance Annual Report /15

13 Good Employer healthalliance promotes equal employment opportunities to ensure a culture of awareness and provide fair and equitable opportunities for all existing and potential employees. We believe good employers operate within the guidance of policies accepted as appropriate for the fair and proper treatment of employees in all aspects of their employment. healthalliance supports the rights of all employees as a good employer defined in Sections 118 and 151 of the Crown Entities Act 2004, the Employment Relations Act and the Human Rights Act. We demonstrate this by celebrating key cultural events within the workplace and through our Wellbeing Programme. Staff Engagement We are committed to creating a good understanding of our strategy, clarifying what success looks like and showing our people how their achievements shape our organisation s success. We are developing our leadership to align both horizontally and vertically and we teach them how to involve our people in creating the future of healthalliance, building one team and ensuring people feel included. Delivering on results requires excellent leadership, people, culture, relationships and processes to be in place. The three things our staff say, more than anything else, that makes healthalliance a great place to work are: PEOPLE TEAM ENVIRONMENT To be the recognised experts in making the health dollar go further 9

14 OUR PURPOSE, VISION & PRINCIPLES Our Wellbeing Programme at a Glance Overall Wellbeing Score = 76%* 86% * * 70% 83% 70% Mental Wellbeing Measures stress and resilience Physical Wellbeing Assesses physical health and risk factors Social Wellbeing Relates to an individual s level of happiness and purpose Work Wellbeing Relates to the engagement and connection an individual feels at work 11% Smoker Non Smoker 89% 72% One Team Rating Overall score for how healthalliance employees rated themselves as one team. healthalliance scores are benchmarked against the Vitality Works average. The average is based on the average results of organisations across New Zealand and Australia who have previously completed the Workplace Wellbeing Survey. It gets you moving regularly, which I found refreshing both mentally and physically. The team-based nature of the programme was great motivation. Well done on another great programme! - 10,000 steps programme - * equal or better than Vitality Works average 10 healthalliance Annual Report /15

15 112 Employees Vaccinated Onsite 102 employees took part in the fit24 challenge during February Sugar free 7 hours sleep 10,000 steps 7 Employees Vaccinated Offsite 26 people got Mini Health Checks Our Employee Strategy for Health & Safety Our current employee Health, Safety and Wellbeing Strategy ensures that it clearly links improved wellbeing to increased engagement and work performance. Health & Wellbeing Calendar / Clarity on what we are trying to achieve Confidence in the strategy, implementation and measurement Motivation to support all key stakeholders to invest to make the plan successful Dry July Power of 3 Weight Loss Challenge Power of 3 Weight Loss Challenge Healthy Habits September Tailored Wellness Programme July Let s get physical October Rest & Relax August Seminar November Fit24 - Team Challenge Decoration Competition December Round the Bays Prevent injury and ill health: Flu vaccinations Assess office ergonomics January February March Activity to have people thrive: Health Check April May Comedy Month June Continue a calendar of health, safety and wellbeing events designed around key areas highlighted in the survey such as: work perks discounts on: sporting goods gym memberships massage /15 Wellbeing Calendar Events and activities for health and wellbeing. Weight loss Healthy eating Stress Exercise Sleep Work-life balance To be the recognised experts in making the health dollar go further 11

16 OUR PURPOSE, VISION & PRINCIPLES Health and Safety Our leaders demonstrate their commitment to excellence in occupational health and safety management through our PRIDE principles, the provision and maintenance of a safe working environment and active promotion of the wellbeing of our people. Our Board reviews our progress at every board meeting. We equip our leaders and employees with the tools and knowledge that enables them to responsibly demonstrate their commitment to our Health, Safety & Wellbeing system. The team are committed to continuous improvement, actively monitoring practices and providing metrics to the Executive Team. Our people understand that we all have a duty and responsibility to maintain our health, safety and wellbeing and that of our colleagues, to ensure that no action or inaction on their part causes themselves, or another person, harm. A work environment that is safe and healthy enables our people to deliver outstanding shared services that enable healthcare excellence for our customers. healthalliance ensures that all managers and employees have ongoing opportunities to participate in, and contribute to, the development, implementation and monitoring of regular health and safety activities and processes. Our policies and practices apply to everyone at any healthalliance premises, or place of service delivery, including employees, contractors, visitors or members of the public who may be affected by its activities. 18 LEADERS Health & Safety training for Managers 26 EMPLOYEES First Aid training 100 EMPLOYEES Health & Safety training to new staff 14 EMPLOYEES Hazardous Substances awareness 11 EMPLOYEES Health & Safety Representative training 9 EMPLOYEES Approved Handler training 12 healthalliance Annual Report /15

17 healthalliance, through its Safe Way of Working system, is committed to the maintenance of health, safety and wellbeing focused on: Health and Wellbeing promotion Hazard identification and management Incident reporting, recording, investigation and management Occupational Rehabilitation provision healthalliance is committed to complying with all relevant legislation, regulations, codes of practice and safe operating procedures addressing our responsibilities under the: Health and Safety in Employment Act Hazardous Substances and New Organisms Act Accident Compensation Act ACC Workplace Safety Management Practices Audit Tertiary Status achieved (the highest level) 100% compliance Significant hazard register reviews Reporting Near Misses Near miss reporting programme rolled out in Supply Chain Health & Safety Plan Supply Chain leading the way To be the recognised experts in making the health dollar go further 13

18 OUR OPERATIONS & SERVICE MODEL

19 healthalliance s ownership expanded in March 2011 when the four DHBs came together to form the new Northern Region shared service organisation, merging current operations with similar services at Northland, Waitemata, Auckland and Counties Manukau Health. healthalliance also provides services to other health related organisations including the Northern Regional Alliance (NRA), NZ Health Partnerships (NZHP), and Breast Screening Aotearoa. healthalliance N.Z. Limited and its four shareholders are in a partnership to enhance services for the people of the Northern Region. The shareholder agreement between all parties outlines how these organisations will work together. healthalliance also provides a range of service functions to other DHBs and the Ministry of Health. The partnership model is replicated in our wholly owned subsidiary healthalliance (FPSC) Limited delivering Procurement services nationally. Our combined focus is to: Deliver the benefits of shared services to DHBs and other New Zealand health organisations Implement an organisational culture defined by our core principles, creating engaged teams that demonstrate behaviours valued by our customers Embed performance management frameworks Develop and improve shared service performance for our customers Develop key relationships and regional shared service agreements with our DHB partners and NZHP Maintain business as usual services to expected service levels Nature and Scope of Operations We offer six distinct service lines to customers: Information Technology Finance Procurement Supply Chain Staff Service Centre Regional Internal Audit Tools, data and technology that work when you need them Turning transactions into meaningful information Achieving the best value for money Always having the right product, in the right place, at the right time Employees are paid the correct amount first time Situated administratively within healthalliance, primarily reporting to, and funded by, the Northern Region DHBs Risk & Audit Committees To be the recognised experts in making the health dollar go further 15

20 OUR OPERATIONS & SERVICE MODEL Engaging with our Stakeholders A key element to our success is the building of positive partnerships with DHBs and other health organisations to facilitate the delivery of benefits and savings. It is important that our customers have appropriate channels to connect with healthalliance when they have a problem. Our role is to provide ongoing sustainable benefits to our shareholders, the Northern Region DHBs and their stakeholders. Our strategic plans for healthalliance operations align with those of our shareholder DHBs. Our customers expect healthalliance to demonstrate: Regional leadership and accountability Delivery of savings and value Customer focus Leadership in innovation and agility ENGAGEMENT FRAMEWORK Key stakeholders are the business and clinical advocates for the service changes that we propose, particularly the implementation of Procurement and Information Technology initiatives. Our staff are locally based at clinical sites and in central business premises and regularly engage with our customers, including: National Advisory Groups, Regional Governance Groups: Northern Chief Information Officers, Regional Chief Financial Officers and Chief Executive Officer/Chief Medical Officer Forums DHB Boards, Executive Team members, management team members and staff We aim to build strong relationships with other key stakeholders including NZHP, Ministry of Health, Ministry of Business, Innovation and Employment, National Health Board, National Health IT Board, PHARMAC, suppliers and unions. 16 healthalliance Annual Report /15

21 Northland DHB Northland DHB is responsible for providing, or funding the provision of, health and disability services for the people of Northland, covering a large geographical area from Te Hana in the south to Cape Reinga in the north with a population of approximately 157,500. Acute services provided through the District Health Board s four hospitals are supplemented by a network of community-based outpatient and mental health services, a range of allied health services and a public health unit. Waitemata DHB Waitemata DHB serves the North Shore, Rodney and West Auckland areas and is now the largest and fastest growing DHB in New Zealand. Population growth (currently at 582,765), an aging population with 65+ population looking to increase from 13% in to 20% in 2034 and the growing prevalence of people with long term conditions will see increased demand for their services going forward. Auckland DHB Auckland DHB serves over 468,000 people with a projected growth of 19% or 86,000 more people by There are approximately one million patient contacts each year, including local hospital and outpatient services. More than half the work done within Auckland DHB hospitals is for people who live outside Auckland city with the largest elective surgery delivery system in New Zealand - approximately 52% of elective discharges are for other DHB populations. Counties Manukau Health (CM Health) Counties Manukau Health provides health and disability services to an estimated 512,000 people who reside in the local authorities of Auckland, Waikato and Hauraki District. The estimated Counties Manukau population for is 520,140 approximately 11% of the total New Zealand population. CM Health continues to be a leading DHB nationally and actively contributes towards national sector improvements together with regional DHB partners. National DHBs On 1 July, in addition to providing services to our Northern Region DHBs, we began providing Procurement services nationally for all District Health Boards. These 16 additional health boards include: Bay of Plenty, Tarawhiti, Lakes, Hawke s Bay, MidCentral, Hutt Valley, Wairarapa, Nelson Marlborough, Canterbury, South Canterbury, Southern, West Coast, Capital & Coast, Whanganui, Taranaki and Waikato. To be the recognised experts in making the health dollar go further 17

22 OUR SERVICES /15

23 Finance & Strategy Our finance professionals maintain services for our Northern customers particularly in managing the differing challenges and workloads in each of the DHBs. They deploy core Oracle ERP Finance modules to NZ Health Partnerships (NZHP), the Northern Region Alliance (NRA) and their associates. Finance works closely with other healthalliance service functions to improve efficiencies and quality in services delivered to our customers. Finance delivers increasing quality and effectiveness through the strategic use of Oracle ERP and a greater utilisation of Business Intelligence continues to grow within healthalliance and customer DHBs where quality and quantity of data has significantly increased. The Financial Service Delivery team has led the development of new regional processes for approval of new suppliers. The Eligibility team has also built stronger relationships with New Zealand Immigration leading to the opportunity to be part of a Q&A panel at a refugee and asylum seekers immigration forum. To demonstrate our performance, new automated monthly reporting, budgeting and forecasting templates have been created, providing greater value-add reporting to business managers. $485M REVENUE COLLECTED $33M ELIGIBILITY REVENUE 529K INVOICES PROCESSED To be the recognised experts in making the health dollar go further 19

24 OUR SERVICES /15 Information Technology We are proud to provide Information Technology that supports the delivery of healthcare to the Northern Region. We manage the third largest IT environment in New Zealand, including all computers, mobile phones, servers and clinical and business applications. In addition to IT project management and planning of multiple local, regional and national projects, we provide a wide range of technical support services, full telecommunications hardware/software systems support, web development, account management and database administration. Our team of specialists provide product recommendations and applications training for DHB staff, acknowledging that while not all staff have immediate access to our devices, they are all consumers of our service. It is important to ensure that the benefits from smart use of health IT solutions are available to all New Zealanders and appropriately supported by targeted national funding. 18.5K COMPUTERS 9.5K MOBILE DEVICES 99.9% APPLICATION AVAILABILITY Procurement The National Procurement Service was launched on the first day of the financial year. Our objectives significantly expanded from generating value and savings for the Northern Region DHBs to providing procurement services and benefits to all 20 New Zealand DHBs. We now have team members located in Northland, Auckland, Hamilton, Hawke s Bay, Wellington, Christchurch and Dunedin. Our approach is to work closely with key clinicians and suppliers to ensure high quality outcomes for our DHB customers. Functioning across a broad range of customer requirements, Procurement supports the sourcing of clinical and non-clinical products and many of the services required by our DHB customers and our own two companies. Our Clinical Product Co-ordination team provides specialist advice and guidance in the selection of the most cost effective and clinically suitable products to enable safe and efficient clinical service delivery in line with DHB policies and practice. Together we provide key procurement services and actively pursue value creation and transparency of results. 4.7K CONTRACTS 550 NATIONAL SUPPLIERS 421 PROJECTS COMPLETED 20 healthalliance Annual Report /15

25 Supply Chain Responsible for purchasing, receiving and delivering goods to the four Northern Region DHBs, our teams provide visibility of end to end supply chain through enhanced and streamlined business processes, implementing improvements and strategies, and releasing clinician time back to frontline care. Supply Chain manages product and service catalogues, working electronically with suppliers to enable efficient ordering, receiving and payment while achieving savings for the DHBs. Our understanding of purchasing enables the best possible prices based on volume. Supply Chain support the National Procurement programme by assisting in the development of the national Oracle solution; management of the national catalogue and datahub; and their leadership role in catalogue management. They continue to search out opportunities to optimise product flow from supplier to point of use, and consolidate warehouse and logistics functions. Stock levels are managed to reduce waste, manage clinical risk and optimise investment. Our service model substantially assists the Northern DHBs through regional alignment and enables optimum savings. 11K INVENTORY LINES 297K PURCHASE ORDERS 1,000 INVENTORY LOCATIONS Staff Service Centre The Staff Service Centre uses a combination of electronic and manual processing to pay over 16,000 staff per fortnight, covered by 23 collective agreements and a range of individual employment agreements. All of these have a diverse mix of employment arrangements and conditions. This, along with the varied hours District Health Board staff work, including 24 hour, 7 day rosters, makes managing the payroll for a range of employers one of the most complex in the country. It provides a stimulating and challenging work environment for the Staff Service Centre s 30+ staff dedicated to providing quality service to its customers. Staff Service Centre handles Payroll for Waitemata DHB, Counties Manukau Health, healthalliance, Northern Regional Alliance and NZ Health Partnerships. The Staff Service Centre is a transactional arm for Human Resources, providing HR Management System (HRMS) support. The Staff Service Centre is responsible for the storage of personnel records which are held in a secured space at our Penrose, Auckland office. 96.3% RESOLUTIONS WITHIN SLA 99.9% NO ERROR PAYSLIPS $1.1B TOTAL $ VALUE OF PAYSLIPS To be the recognised experts in making the health dollar go further 21

26 OUR SERVICES /15 Finance & Strategy A word from Ross Chirnside This financial year coincided with my fourth anniversary as a healthalliance employee. Much of our efforts go towards supporting our customers to make change whilst changing ourselves - in four years a lot has changed! Our customers have grown, our services have matured, our understanding has increased, and our culture has developed. We ve moved our staff together at Penrose to allow for closer collaboration and communication. We ve shaped our structure and examined our governance models, and we ve consulted our staff to an even greater degree on their engagement, their links to our strategy, and their role in making healthalliance an even better place to work. The health sector is fiscally constrained and putting any political preferences to one side, it is great to see the economy return to a positive financial position, with the government operating at a surplus and forecasting to continue to do so for the next few years. This in turn puts pressure on healthalliance to deliver more services and for Procurement to deliver more savings. National DHB CFOs are very positive towards the work that healthalliance is doing, and all eyes are on the service delivery and benefits to be delivered. One of the advantages of a successful shared services organisation is the ability to standardise and provide efficient service to all customers consistently. We have a collective challenge with the DHBs to work within a constrained funding environment where demands for services are growing in size and complexity. To me, this can be defined as demonstrating improved services to customers without increasing costs and monitoring customer satisfaction at an organisational level. It s about ensuring that our customers have a consistent and good experience when they deal with any of our teams, that they are treated with respect and we re able to respond within an appropriate time to issues. While we have our DHB customers, much of what our team does supports the internal customer and teams by providing strategic and corporate services, enabling the smooth running of healthalliance. As part of delivering to our key strategic objectives of design and build efficient processes and maintaining and sustaining a continuous improvement culture, our Strategy and Performance team have been working towards building and maintaining a single source of truth of all business processes across healthalliance. This is a key enabler for us to standardise and improve our processes. Finance & Strategy have a schedule of strategic and operational objectives which shape the way we work and position us clearly in scope with healthalliance s PRIDE principles. For me, PRIDE is our shared promise to each other - how we will conduct ourselves and how we will behave towards each other in the workplace. While work makes up a big portion of our lives, our personal values the things that are really important to each of us as individuals - are even more important. Our work satisfaction will be achieved where the company values and our personal values are aligned. Our objectives include being the team of choice, a focus on continuous improvement, effective controls and resultant value add. Our teams are progressively embedding this by supporting common goals with a healthy customer focus; respecting the talents and abilities of colleagues and celebrating success. The year /16 will see us build on our successes to unlock further value for our customers. Ross Chirnside Interim Chief Executive Officer healthalliance N.Z. General Manager Finance and Strategy 22 healthalliance Annual Report /15

27 Information Technology A word from Kevin Robinson /15 was a transformational year for Information Technology at healthalliance. We restructured our service in order to create better synergies between our teams and to provide clearer delineation between our operational and project services. We also undertook a major premises relocation in order to align our teams to this new structure. This included closing our Takapuna office, and increasing our presence at the Connect Business Park building in Penrose. Together, the team restructure and office relocations will provide benefits next year and in the years that follow in terms of improved operational efficiencies, and greater project delivery capability to better meet ever increasing demands. The Project Office, in conjunction with our technical and operational teams, delivered $20M of IT infrastructure projects in the period. Collectively, these projects have improved system performance and reduced business continuity risk at the DHBs, by replacing or improving existing IT and network infrastructure, as well as enhancing the functionality of key services like , messaging, internet and wireless connectivity, to name a few. The team also delivered $14M of Application projects. These projects have delivered significant benefits to clinical and business services. The Service Desk created new efficiencies and through continuous process improvement, key metrics such as user wait times and abandoned call rates have decreased as a result, while at the same time call volumes continue to increase. Operationally, Service Levels were consistently met and operational delivery metrics continue to improve. Financially, IT has worked within its envelope and has delivered on its commitments and on budget. Looking forward, our team is in good shape to deliver on the /16 business plan and to the unique needs of our customers. These include improved functionality and automation of systems and the ongoing work to enable improved mobility and secure system access across the Northern Region. This work will ensure our DHB business and clinical customers continue to have the technology and tools they need to perform their roles efficiently and effectively, when and where they need them. Kevin Robinson Chief Information Officer To be the recognised experts in making the health dollar go further 23

28 OUR SERVICES /15 Procurement A word from Ross Darrah For the first year of operation the National Procurement Service had two benefits targets: annualised budgetary and non budgetary benefits as set out in the healthalliance Statement of Intent; and sector agreed in-year budgetary benefits of $21.6M. At the end of the first year of operation, the National Procurement Service delivered annualised budgetary benefits of $27.1M and a yield of 11.4% on addressable spend, compared to the agreed value outlined in the original business case for National Procurement of 6.5%. With a presence in seven locations across New Zealand, our team of more than 60 procurement professionals are focused on delivering the best commercial outcomes for our customers and our shareholders. We launched our second year of operation with a clearer picture of the activity which is a priority for DHBs. These priorities are formalised in an agreed Procurement Plan which was completed in consultation with each DHB. Together we have created transparent deliverables that will help us to deliver to the expectations of our customers and shareholders. The National Procurement Service continues to be guided by our four service goals of delivering financial benefits, a strong stakeholder experience, managing and preventing risks and assuring quality in all outcomes. Ross Darrah Interim Chief Executive Officer healthalliance (FPSC) Limited General Manager Procurement 24 healthalliance Annual Report /15

29 Supply Chain A word from Kris Goodenough Our /15 business planning focused on the delivery of two key programmes. Operationally, our focus was to further develop our services across the Northern Region; however, our teams also prepared themselves for a national service through the NZHP Finance, Procurement Supply Chain (FPSC) Programme. Supply Chain largely delivered on the planning foundations laid over the previous two years. While decisions were made during the year to delay the supply of a national supply chain programme, the plan to recognise and deliver financial benefits to Northern Region DHBs was reached and we exceeded our annual target of $1.5M. Our talented team continue to support the FPSC programme through our relationship with NZ Health Partnerships (previously HBL) to assist in the development of a national Oracle solution. The Master Data team have developed, and manage the national catalogue and datahub; have taken a leadership role in Regional and DHB management of catalogues, and maintains a close relationship with the customers to optimise opportunities for improvement. A programme to review and regionally align our supply chain process documentation was delivered, streamlining our operational model across our customers. Our second programme increased the focus on the wellbeing of our people, particularly those working on hospital sites. The Supply Chain /16 Health & Safety Plan was developed, quarterly executive reviews are in place, and we expect an overall result of very good achievement to plan in. The Health & Safety Plan has already delivered a 70% reduction in Lost Time Injury Days from the previous year. We re training our people to be more aware of the environments in which they work, and to advise where potential for harm can be avoided. In line with our increased focus on risks to our people, the development of our business in its approach to the management of operational risk management is another highlight we targeted and achieved. An active risk management system now exists within Supply Chain Services, and Business Continuity Plans (BCP) and processes have been developed with scenario testing. Our customers are invested in the successful delivery of our objectives and seeking feedback from them on the services we offer is important to us. Voice of Customer surveys were completed for all departments across the Northern Region s DHBs. We were pleased to share with our teams the feedback we received; both positive in recognition of their efforts and constructive, which outline a number of opportunities that we plan to add to our continuous improvement schedule. In the last year, the Supply Chain team developed a robust DHB Supply Chain Improvement Plan. We have implemented this plan together with Auckland DHB, and the successes we have engineered means that progression to Northland, Waitemata and Counties Manukau Health will continue in /16. Supply Chain has developed, together with our customers, the understanding and importance of defining a) the services provided and b) measurement of key drivers to reflect the achievement of those service levels. Kris Goodenough General Manager Supply Chain To be the recognised experts in making the health dollar go further 25

30 OUR SERVICES /15 Staff Service Centre A word from Diana Tiavale The Staff Service Centre (SSC) has had a productive year with strong performance against all its key performance indicators and business objectives. Our two key functions are the provision of payroll services to Waitemata DHB, Counties Manukau Health, healthalliance, NZ Health Partnerships and associated customers, paying approximately 16,000 staff once a fortnight; and the support of HR services via the HR Management System (HRMS). Twelve Multi-Employer Collective Agreements (MECAs) were implemented this year, as were information changes required by Parliament in passing the Vulnerable Children Act. The SSC team responded and delivered on requests from our two largest customers - Counties Manukau Health and Waitemata DHB. For Counties Manukau Health - a project implementing their organisation structure into the HRMS enabled automation of items such as work related expenses. Support was also provided for the upgrade of the Counties Manukau Health workforce management tool. For Waitemata DHB, a piece of work was completed delivering comprehensive reporting on Learning & Development and mandatory training requirements. From a business management perspective, the team has completed a number of projects to both strengthen performance of the service and to assist our customers. Mindful of our responsibilities in the provision of specialist payroll services, an advanced auditing tool was implemented, enabling the early identification and analysis of errors and potential fraudulent activities. A number of issues were identified and resolved as a result of this tool. Alongside this project, we performed routine upgrades of the payroll system and successfully implemented advances in reporting. The coming year will see very similar activities, and work is currently underway to understand the next priorities of SSC customers so that challenges and improvements to their environments, and experience by employees, can best be supported. We operate in a team oriented environment. One with a keen sense of family and the majority of our team has been with us for many years. We are recognised by our customers for pulling together during times of critical work load to achieve the right, shared outcome. We celebrate success, support the achievements of the business community we serve and take PRIDE in the recognition of our team mates. Diana Tiavale Manager Staff Service Centre 26 healthalliance Annual Report /15

31 To be the recognised experts in making the health dollar go further 27

32 OUR STATEMENT OF SERVICE PERFORMANCE

33 Our overall engagement with the DHBs is to understand the challenges and issues that they are facing and to understand how healthalliance can support them. Our service performance response has been aligned to key performance areas identified by our customers: benefits and service quality. The specific objectives and responses are: Increase customer satisfaction Our Performance Measures: To achieve these healthalliance has: Voice of the Customer Survey by Service Service Desk - customer responsiveness Improve the delivery of the IT Capital Programme Focused our efforts on providing quality performance through our Business Planning and Service Level. Provided consistent service through our single customer service contact points. Improved programme and project management capabilities. Built relationships with key stakeholders by engaging with them regularly and understanding their needs. Design and build efficient and effective processes Our Performance Measures: To achieve these healthalliance has: Improve service quality through meeting our service targets for service requests and incidents Application and information availability (uptime for applications and sites) Cost of Services relative to cost to DHBs Standardised, streamlined and automated processes throughout the region to enable greater productivity, fewer errors and no duplication. Developed performance measures and targets for all services to ensure consistent quality and delivery. Developed programmes to ensure that key business processes are regularly reviewed and improved. Developed common processes and shared systems reducing the costs to support and maintain our systems. Developed a commercial operating model by establishing our pricing structures and cost to serve. Financial accountability and sound governance Our Performance Measures: To achieve these healthalliance has: Total Regional Procurement Savings Leveraged our size to generate sustainable Procurement savings throughout the region. Strengthened our Business Intelligence capabilities to provide more transparent and high quality information for decision making. Created an environment that enables our people to plan and manage their budgets; and report their financial performance. Embed sound governance (organisation and region) and risk management frameworks to identify and manage risks that matter. To be the recognised experts in making the health dollar go further 29

34 OUR STATEMENT OF SERVICE PERFORMANCE Customer Response Areas In Quarter 4, each of our services sent correspondence directly to their customers; invitations contained a link to their service websites and a link to their Voice of the Customer Survey. All results and commentary are direct survey extracts, tagged *(*Voice of the Customer Survey). How Our Performance is Measured Our Service Performance is based on agreed targets with our DHB shareholders and customers. The following outlines our forecast service performance measures, aligned to key benefits and service quality. Customer Benefits Output KPI Target Measure Definition Finance Cost of Finance Services relative to cost to DHBs. 0.34% Cost as a % of provider arm revenue providing an indicator of cost efficiency. 0.30% Information Technology Managing to agreed Budget. Northern Region DHBs agreed funding Net contribution vs Budget. $215K Information Technology is $215k unfavourable for the 14/15 Financial Year due to increased volumes of telecommunications and data charges. Procurement Total National Procurement savings. Total Regional Procurement savings. $43.3M National $3.8M Residual Northern Region Annualised purchase price savings, fully realised operating cost savings and value-adds that result in bottom-line contribution. In addition non budgetary savings (cost avoided) will also be realised primarily through the capital programme procurement. $27.1M $4.3M Cost of Procurement Services relative to cost to DHBs. 0.12% Cost as a % of provider arm revenue providing an indicator of cost efficiency. 0.05% Supply Chain Cost of Supply Chain services relative to cost to DHBs. 0.28% Cost as a % of provider arm revenue providing an indicator of cost efficiency. 0.24% Staff Service Centre Cost of SSC services relative to cost to DHBs. 0.15% Cost as a % of provider arm revenue providing an indicator of cost efficiency. 0.12% 30 healthalliance Annual Report /15

35 Service Quality Output KPI Target Measure Definition *(average) where applicable Finance Customer Satisfaction Voice of the Customer. 80% % of customers satisfied with service measured through surveys with defined customer representatives %* Customer Satisfaction Voice of the Customer. 75% % of customers satisfied with service measured through surveys with defined customer representatives % Information Technology Improve service quality through meeting our service targets for service requests and incidents. 75% Service Requests responded to through IT Service Desk. Incident requests responded to through IT Service Desk. Service 96.29%* Incident 91.11%* Application & information availability Tier % Uptime for applications and sites. Tier %* Tier 2. Tier %* IS Service Desk: Customer responsiveness. <10% Calls to the IT Service Desk are answered (% abandoned call rate) %* Procurement Customer Satisfaction Voice of the Customer. 85% Northern Region 65% National % of customers satisfied with service measured through surveys with defined customer representatives. Not completed Regional Internal Audit Customer Satisfaction and audit reccommendations 80% Delivery of internal audit services against the approved internal audit plan. % of customers satisfied with service measured through surveys with defined customer representatives 97.3% Voice of the Customer. 80% % of customers satisfied with service measured through surveys with defined customer representatives. 82% Supply Chain Inventory availability % % of inventory items available on the shelf %* Invoices on payment holds. 25% % reduction over 2013/14 baseline: invoices held requiring corrective action prior to pay %* Customer Satisfaction Voice of the Customer. 80% % of customers satisfied with service measured through surveys with defined customer representatives. 89% Staff Service Centre Improve service quality through meeting targets for staff payments. Improve service quality through meeting service targets for service requests and incidents. 99% 95% % of employees paid accurately, on time in First Pay. % of service requests and/or incidents resolved within an agreed-upon period of time %* 96.58%* Customer responsiveness. <10% % abandoned call rate %* (*average actual results FY/15) To be the recognised experts in making the health dollar go further 31

36 OUR STATEMENT OF SERVICE PERFORMANCE Variances to Target Measures PROCUREMENT SAVINGS MEASURE TARGET ACTUAL DEFINITION Total Regional / National Procurement savings $43.3M National $3.8M Residual Northern Region $27.1M $4.3M Annualised purchase price savings, fully realised operating cost savings and value-adds that result in bottom-line contribution. In addition non budgetary savings (cost avoided) will also be realised primarily through the capital programme procurement. The target of $43.3M was based on the original FPSC business case prepared by Health Benefits Limited. Over the first year of operation it was realised that (a) the baseline for the savings target was not accurate and (b) the work plan to support the target was not robust as some of the original assumptions were not correct. Despite these factors, a yield of 11.4% on the addressable spend was achieved which was significantly higher than the target of 6.5% stated in the FPSC business case. Residual Northern Region non FPSC savings i.e. savings from categories that were out of scope for National Procurement were slightly greater than the target because (a) there were established relationships in place between the National Procurement Service and the northern DHBs which meant they knew how to connect with the service and were faster to take advantage of the services available and (b) there were many projects in-flight which came to fruition early in the financial year. Demand for the procurement of capital items was higher than anticipated and, in addition to the cost reduction benefits shown above, a further $19.9M was achieved from National and Residual Northern Region non budgetary (cost avoidance) savings. INFORMATION TECHNOLOGY: SERVICE DESK/RESPONSIVENESS MEASURE TARGET ACTUAL DEFINITION Customer responsiveness <10% 12.3%* % abandoned call rate 171,897 calls were presented to the Service Desk in the / financial year, an increase of 14,652 calls from the previous year. Increased support for the Windows 7 upgrade project in July/August accounted for 70% of this call increase (10,223 calls), and the Abandonment Rate for this period was 17% which negatively affected the annual result. INFORMATION TECHNOLOGY: MANAGING TO AGREED BUDGET MEASURE TARGET ACTUAL DEFINITION Managing to Agreed Budget Northern Region DHBs agreed funding ($215k) Net contribution vs Budget Information Technology is $215k unfavourable for the 14/15 Financial Year due to high volumes of telecommunication and data charges. 32 healthalliance Annual Report /15

37 FINANCE VOICE OF THE CUSTOMER SURVEY MEASURE TARGET ACTUAL DEFINITION Customer satisfaction 80% 77.7%* % of customers satisfied with service measured through surveys with defined customer representatives. Result was positive but response numbers reflected the changes in management structure. Relationship building continues to be a key activity in. PROCUREMENT VOICE OF THE CUSTOMER SURVEY MEASURE TARGET ACTUAL DEFINITION Customer satisfaction 65% National 85% Northern Region Survey was not sent % of customers satisfied with service measured through surveys with defined customer representatives. Our first year of operation was firmly focused on establishing a foundation of good procurement practice across the country, providing support to all key areas. Coupled with a number of other changes across the sector, a decision was made for healthalliance FPSC to not undertake a Voice of the Customer survey. We intend to complete this survey over the coming financial year. SUPPLY CHAIN MEASURE TARGET ACTUAL DEFINITION Invoices on payment holds 25% 6%* % reduction over 2013/14 baseline for invoices held requiring corrective action prior to payment. Whilst the annual target was not met in the year, good progress was made in reducing the frequency of this issue and increasing the visibility of outstanding items. This will enable a further reduction in the target. A 25% reduction, in hindsight, was too ambitious a target due to the complexity of the issues experienced and the diversities of responsibility to manage each part of the process. STAFF SERVICE CENTRE: SERVICE DESK/RESPONSIVENESS MEASURE TARGET ACTUAL DEFINITION Customer responsiveness <10% 11.07%* % abandoned call rate Challenges with resourcing the Call Centre Roles caused by a mix of turnover, illness and re-recruiting resulted in less than optimal resourcing of this role. The service is now fully staffed. *Average calculation across the financial years, monthly reporting To be the recognised experts in making the health dollar go further 33

38 OUR STATEMENT OF SERVICE PERFORMANCE Cost of Service by Output (Parent) s Budget s s s s s s s Expenditure Revenue Expenditure Revenue Expenditure Revenue Regional Internal Audit 1,160 1,160 1,105 1,105 1,239 1,239 Finance and Strategy 11,750 11,750 11,436 11,436 11,747 11,747 Information Technology 80,787 80,787 82,826 82,826 73,306 73,306 Supply Chain 9,988 9,988 10,152 10,152 10,568 10,568 Procurement 2,210 2,232 1,633 1,633 7,045 7,213 Staff Service Centre 4,414 4,414 4,460 4,460 4,330 4, , , , , , ,404 Cost of Service by Output (FPSC) s Budget s s s s s s s Expenditure Revenue Expenditure Revenue Expenditure Revenue Finance and Strategy Procurement 9,804 9,782 7,021 7, Common Support Services 2,900 2,863 2,938 2,938 1,079 1,079 13,141 13,082 10,505 10,505 1,243 1,244 Cost of Service by Output (Group) s Budget s s s s s s s Expenditure Revenue Expenditure Revenue Expenditure Revenue Regional Internal Audit 1,160 1,160 1,105 1,105 1,239 1,239 Finance and Strategy 12,187 12,187 11,982 11,982 11,911 11,911 Information Technology 80,787 80,787 82,826 82,826 73,306 73,306 Supply Chain 9,988 9,988 10,152 10,152 10,568 10,568 Procurement 12,014 12,014 8,654 8,654 7,045 7,213 Staff Service Centre 4,414 4,414 4,460 4,460 4,330 4,330 Common Support Services 2,900 2,863 2,938 2,938 1,079 1, , , , , , , healthalliance Annual Report /15

39 To be the recognised experts in making the health dollar go further 35

40 FINANCIAL STATEMENTS /15

41 Statement of Comprehensive Revenue and Expenses Statement of Financial Position Statement of Changes in Equity 41 Statement of Cash Flows Statement of Accounting Policies Notes to the Financial Statements Statement of Responsibility Independent Auditor s Report Statutory Information To be the recognised experts in making the health dollar go further 37

42 FINANCIAL STATEMENTS /15 Statement of Comprehensive Revenue and Expenses For the year ended 30 June Notes Group Budget Parent Income Revenue 1 122, , , , ,094 Other income Finance income 5a Total income 123, , , , ,404 Expenditure Employee benefit costs 4 50,546 54,322 46,171 44,508 45,597 Depreciation and amortisation 6, 7 25,496 26,803 20,195 25,062 20,048 Other expenses 3 47,316 40,839 43,102 40,739 42,591 Finance costs 5b , , , , ,236 Surplus/ (Deficit) (37) Other Comprehensive Revenue & Expenses Total Comprehensive Revenue & Expenses (37) The accompanying notes form part of these financial statements. Explanations of major variances against budget are provided in Note healthalliance Annual Report /15

43 Statement of Financial Position As at 30 June Notes Group Budget Parent ASSETS Current Assets Cash and cash equivalents 9 6,478 4,199 6,723 6,538 6,554 Debtors and other receivables 10 11,611 13,480 13,633 11,170 13,574 Total Current Assets 18,089 17,679 20,356 17,708 20,128 Non-Current Assets Property, plant, and equipment 6 40, ,290 34,379 37,631 30,970 Intangible assets 7 65,451 12,818 59,713 65,451 59,713 Non-current prepayments Total Non-Current Assets 106, ,108 94, ,175 90,807 Total Assets 124, , , , ,935 LIABILITIES Current Liabilities Creditors and other payables 11 9,901 7,157 6,352 9,687 6,412 Provisions 13 1, Employee entitlements 12 6,654 4,226 5,980 5,976 5,792 Borrowings 14 1,623-2, Total Current Liabilities 19,288 11,383 15,016 16,523 12,379 Non-Current liabilities Provisions , Employee entitlements 12 2,582 2,280 2,497 2,406 2,458 Borrowings 14-3,326 - Total Non-Current Liabilities 3,291 6,378 4,142 2,406 3,143 Total Liabilities 22,579 17,761 19,158 18,929 15,522 Net Assets 101, ,026 95, ,954 95,413 EQUITY Shareholders equity , ,026 95, ,664 95,145 Retained earnings Total Equity 101, ,026 95, ,954 95,413 The accompanying notes form part of these financial statements. Explanations of major variances against budget are provided in Note 25. To be the recognised experts in making the health dollar go further 39

44 FINANCIAL STATEMENTS /15 Statement of Changes in Equity For the year ended 30 June Notes Contributed Equity Group Retained Earnings Total Equity at 1st July , ,354 Surplus/(deficit) Equity issued but not called - Class A shares, 80 at $10, Class B shares, 20 at $ Capital contributions - Class C shares 15 28,891-28,891 Equity at 30th June 15 95, ,414 Equity at 1st July 95, ,414 Surplus/(deficit) - (37) (37) Equity issued but not called - Class A shares, 80 at $10, Class B shares, 20 at $ Capital contributions - Class C shares 15 6,519-6,519 Equity at 30th June , ,896 Parent Equity at 1st July , ,354 Surplus/(deficit) Capital contributions - Class C shares 15 28,891-28,891 Equity at 30th June 15 95, ,413 Equity at 1st July 95, ,413 Surplus/(deficit) Capital contributions - Class C shares 15 6,519-6,519 Other Comprehensive Income Equity at 30th June , ,954 The accompanying notes form part of these financial statements. Explanations of major variances against budget are provided in Note healthalliance Annual Report /15

45 Statement of Cash Flows For the year ended 30 June Notes Group Budget Parent Cash flows from Operating Activities Cash receipts from services 122, , , , ,636 Other receipts 4,408 7, ,408 3,710 Proceeds from landlord incentive - - 1, Cash paid to employees (53,242) (54,322) (54,343) (46,930) (53,974) Cash paid to suppliers (43,363) (40,944) (42,729) (36,997) (45,844) Cash generated from operations 30,259 27,237 16,682 29,575 15,528 Interest received Interest paid (94) Goods and services tax (net) 1,169 - (1,697) 1,129 (1,693) Net Cash Flow from Operating Activities 8 31,506 27,237 15,190 30,872 14,037 Cash flows from Investing Activities Shareholder Capital Funding 6,519 28,963 18,190 6,519 18,190 Purchase of PP&E, Intangibles (37,643) (55,000) (41,612) (37,407) (38,378) Net Cash Flow from/(used in) Investing Activities (31,124) (26,037) (23,422) (30,888) (20,188) Cash flows from Financing Activities Proceeds from borrowings - - 2, Repayment of loans (627) (767) - - Net Cash Flow from/(used in) Financing Activities (627) (767) - - Net increase/(decrease) in cash and cash (245) 433 (8,232) (16) (6,151) equivalents Cash, cash equivalents at beginning of year 6,723 3,766 12,705 6,554 12,705 Cash, cash equivalents at end of year 9 6,478 4,199 6,723 6,538 6,554 The accompanying notes form part of these financial statements. Explanations of major variances against budget are provided in Note 25. To be the recognised experts in making the health dollar go further 41

46 FINANCIAL STATEMENTS /15 Statement of Accounting Policies REPORTING ENTITY healthalliance N.Z. Limited (healthalliance) is a company owned by the Northland, Waitemata, Auckland and Counties Manukau District Health Boards and Health Benefits Limited, themselves established by the New Zealand Public Health and Disability Act healthalliance s ultimate parent is the New Zealand Crown. healthalliance is a crown entity in terms of the Crown Entities Act 2004, domiciled in New Zealand. healthalliance is a public benefit entity, as defined under NZ IAS 1. healthalliance is incorporated under the Companies Act healthalliance s activities involve delivering support services in Information Technology, Procurement, Supply Chain and Finance to health sector customers. The group financial statements include healthalliance and its subsidiary, healthalliance (FPSC) Limited (hafpsc). hafpsc was incorporated on the 26th of September 2013 and is wholly owned by healthalliance and domiciled in New Zealand. The financial statements were authorised for issue by the Board on the date the Statement of Responsibility was signed. BASIS OF PREPARATION The financial statements have been prepared on a going concern basis, and the accounting policies have been applied consistently throughout the period. Statement of Compliance The financial statements have been prepared in accordance with the requirements of the Crown Entities Act 2004, which include the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP). They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS), and other applicable Financial Reporting Standards, as appropriate for public benefit entities. The financial statements have been prepared in accordance with Tier 1 PBE accounting standards. These financial statements comply with Public Sector PBE accounting standards. These financial statements are the first financial statements presented in accordance with the new PBE accounting standards. The material adjustments arising on transition to the new PBE accounting standards are explained in Note 26. Functional and Presentation Currency The financial statements are presented in New Zealand Dollars (NZD), rounded to the nearest thousand dollars (). The functional currency of healthalliance is NZD. 42 healthalliance Annual Report /15

47 Standards, Amendments and Interpretations NZ IFRS standards, amendments and interpretations issued but not yet effective that have not been early adopted and which are relevant to healthalliance are: In May 2013, the External Reporting Board issued a new suite of PBE accounting standards for application by public sector entities for reporting periods beginning on and after 1 July. healthalliance has applied these standards in preparing the 30 June financial statements. In October, the PBE suite of accounting statements was updated to incorporate requirements and guidance for the not-for-profit sector. These updated statements apply to PBEs with reporting periods beginning on or after 1 April. The DHB will apply these updated standards in preparing its 30 June 2016 financial statements. healthalliance expects there will be minimal or no change in applying these updated accounting standards. SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation The consolidated financial statements are prepared adding together like items of assets, liabilities, equity, income, and expenses on a line-by-line basis. All significant intragroup balances, transactions, income, and expenses are eliminated on consolidation. Subsidiary healthalliance is required under the Crown Entities Act 2004 to prepare consolidated financial statements in relation to the group for each financial year. healthalliance consolidates in the group financial statements all entities where they have the capacity to control their financing and operating policies so as to obtain benefits from the activities of the subsidiary. This power exists where healthalliance controls the majority voting power on the governing body or where such policies have been irreversibly predetermined by healthalliance or where the determination of such policies is unable to materially affect the level of potential ownership benefits that arise from the activities of the subsidiary. Consistent accounting policies have been used for both healthalliance and its subsidiary. Subsidiaries are consolidated from the date on which control is obtained by the group and cease to be consolidated from the date on which control is transferred out of the group. In preparing the consolidated financial statements, all intercompany balances and transactions, revenue and expenses and profit and losses resulting from intra - group transactions have been eliminated in full. The investment in subsidiaries is carried at cost in healthalliance s parent entity financial statements. To be the recognised experts in making the health dollar go further 43

48 FINANCIAL STATEMENTS /15 Foreign Currency Transactions Transactions in foreign currencies are translated into NZD at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at balance date are translated into NZD at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the surplus or deficit. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Budget Figures The group budget figures presented in the financial statements were approved by the Board and included in the Statement of Intent. The budget figures have been prepared on a basis consistent with the accounting policies adopted by healthalliance for the preparation of these financial statements. Financial Assets CASH AND CASH EQUIVALENTS Cash and cash equivalents includes cash on hand and call deposits with maturity of no more than three months from the date of acquisition. Bank overdrafts that are repayable on demand and form an integral part of healthalliance s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. DEBTORS AND OTHER RECEIVABLES Short term receivables are recorded at their face value, less any provision for impairment. A receivable is considered impaired when there is evidence that healthalliance will not be able to collect the amount due. The amount of the impairment is the difference between the carrying amount of the receivable and the present value of the amounts expected to be collected. The estimated recoverable amount of receivables carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at their original effective interest rate. Receivables with a short duration are not discounted. All overdue receivables are assessed for impairment on an on-going basis and appropriate provisions applied to individual invoices; taking into account age of the debt and payment histories of the debtor. Individual debts that are known to be uncollectible are written off when identified. An impairment provision equal to the receivable carrying amount is recognised when there is evidence that healthalliance has exhausted all reasonable prospects of collecting the receivable. 44 healthalliance Annual Report /15

49 Financial Liabilities BORROWINGS Borrowings are initially recognised at their fair value plus transaction costs. After initial recognition, all borrowings are measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless healthalliance or the group has an unconditional right to defer settlement of the liability for at least 12 months after balance date. CREDITORS AND OTHER PAYABLES Creditors and other payables are initially measured at fair value and subsequently stated at amortised cost using the effective interest rate. Property, Plant and Equipment CLASSES OF PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following asset classes: Leasehold Improvements Plant & Equipment Vehicles IT Equipment OWNED ASSETS Property, plant and equipment are stated at cost, less accumulated depreciation. The cost of self-constructed assets includes the cost of materials, direct labour, the initial estimate, where relevant, of the costs of dismantling and removing the items and restoring the site on which they are located, and an appropriate proportion of direct overheads. Where material parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate components of property, plant and equipment. ADDITIONS OF PROPERTY, PLANT AND EQUIPMENT The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential will flow to the group and the cost can be measured reliably. Work in progress is recognised at cost less impairment, and is not depreciated. DISPOSALS OF PROPERTY, PLANT AND EQUIPMENT Where an item of plant and equipment is disposed of, the gain or loss recognised in the surplus or deficit is calculated as the difference between the net sales price and the carrying amount of the asset. To be the recognised experts in making the health dollar go further 45

50 FINANCIAL STATEMENTS /15 DEPRECIATION Depreciation is recognised in the surplus or deficit using the straight line method. Depreciation is set at rates that will write off the cost of the assets, less their estimated residual values, over their useful lives. These rates are reviewed annually. The estimated useful lives of major classes of assets and resulting rates are as follows: CLASS OF ASSET ESTIMATED LIFE DEPRECIATION RATE Leasehold Improvements 3 to 9 years 11 to 33% Plant & Equipment 5 to 10 years 10 to 20% Vehicles 5 years 20% IT Equipment 3 to 5 years 20 to 33% The residual value and useful life of an asset are reviewed, and adjusted if applicable, at each financial year end. The total cost of a project is transferred to the appropriate class of asset on its completion and then depreciated. Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful lives of the improvements, whichever is the shorter. SUBSEQUENT COSTS Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to healthalliance and the cost of the item can be measured reliably. The costs of day-to-day servicing of property, plant, and equipment are recognised in the surplus or deficit as they are incurred. Leases FINANCE LEASES A finance lease is a lease that transfers to the lessee substantially all the risks and rewards incidental to ownership of an asset, whether or not title is eventually transferred. At the commencement of the lease term, finance leases where healthalliance is the lessee, are recognised as assets and liabilities in the statement of financial position at the lower of the fair value of the leased item or the present value of the minimum lease payments. The finance charge is charged to the surplus or deficit over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability. The amount recognised as an asset is depreciated over its useful life. If there is no reasonable certainty as to whether healthalliance will obtain ownership at the end of the lease term, the asset is fully depreciated over the shorter of the lease term and its useful life. 46 healthalliance Annual Report /15

51 OPERATING LEASES An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset to the lessee. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term. Lease incentives received are recognised in the surplus or deficit as a reduction of rental expense over the lease term. Intangible Assets SOFTWARE Software that is acquired by healthalliance is stated at cost less accumulated amortisation. healthalliance also develops and modifies software and the cost of internal staff time is added to the value of the software where future economic benefits of this will flow to healthalliance. Costs associated with the development and maintenance of healthalliance s website are recognised as an expense when incurred. Costs associated with maintaining computer software are recognised as an expense when incurred. Staff training costs are recognised as an expense when incurred. AMORTISATION Amortisation is recognised in the surplus or deficit on a straight-line basis over the estimated useful lives of intangible assets. Intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows: TYPE OF ASSET ESTIMATED LIFE AMORTISATION RATE Software 2 to 8 years 12 to 50% Work in progress is not amortised Impairment of Property, Plant and Equipment and Intangible Assets healthalliance does not hold any cash-generating assets. Assets are considered cash-generating where their primary objective is to generate a commercial return. IMPAIRMENT The carrying amounts of healthalliance s assets are reviewed at each balance date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amounts are estimated. If the estimated recoverable amount of an asset is less than its carrying amount, the asset is written down to its estimated recoverable amount and an impairment loss is recognised in the surplus or deficit. The reversal of an impairment loss is recognised in the surplus or deficit. To be the recognised experts in making the health dollar go further 47

52 FINANCIAL STATEMENTS /15 CALCULATION OF RECOVERABLE AMOUNT Estimated recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. Value in use is calculated differently depending on whether an asset generates cash or not. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cashgenerating unit to which the asset belongs. REVERSALS OF IMPAIRMENT Impairment losses are reversed when there is a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Employee Entitlements Obligations for contributions to defined contribution plans are recognised as an expense in the surplus or deficit as incurred. SHORT TERM EMPLOYEE ENTITLEMENTS Employee benefits that are due to be settled within 12 months after the end of the period in which the employee renders the related service are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned up to but not yet taken at balance date, sick leave, long service leave and retirement gratuities. A liability for sick leave is recognised to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that it will be used by staff to cover those future absences. LONG TERM EMPLOYEE ENTITLEMENTS Employee benefits that are due to be settled beyond 12 months after the end of the period in which the employee renders the related service, such as long service leave and retirement gratuities, have been calculated on an actuarial basis. The calculations are based on: likely future entitlements accruing to staff based on years of service, years to entitlement and the likelihood that staff will reach the point of entitlement and contractual entitlement information; and the present value of the estimated future cash flows. Provisions A provision is recognised for future expenditure of uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that an outflow of future economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 48 healthalliance Annual Report /15

53 RESTRUCTURING Provisions for restructuring are recognised when healthalliance has approved a detailed and formal restructuring plan and the restructure has been publicly announced or commenced. Future operating costs are not provided for. ACC Partnership Programme healthalliance belongs to the ACC Accredited Employers Programme (the Full Self Cover Plan ) whereby healthalliance accepts the management and financial responsibility for employee work-related illnesses and accidents. Under the programme, healthalliance is liable for all claim costs for a period of 2 years after the end of the cover period in which the injury occurred. At the end of the two-year period, healthalliance pays a premium to ACC for the value of residual claims, and from that point the liability for ongoing claims passes to ACC. The liability for the ACC Partnership Programme is measured using actuarial techniques at the present value of expected future payments to be made in respect of employee injuries and claims that occurred up to balance date. Consideration is given to anticipated future wage and salary levels and experience of employee claims and injuries. Expected future payments are discounted using market yields on New Zealand Government bonds at balance date with terms to maturity that match, as closely as possible, the estimated future cash outflows. Superannuation Schemes DEFINED CONTRIBUTION SCHEMES Employer contributions to KiwiSaver are accounted for as relating to defined contribution schemes and are recognised as an expense in the surplus or deficit as incurred. DEFINED BENEFIT SCHEMES Employer contributions to KiwiSaver are accounted for as defined contribution schemes and are recognised as an expense in the surplus or deficit as incurred. Income Tax healthalliance N.Z. Limited and healthalliance (FPSC) Limited are both exempt from income tax under section CW38 of the Income Tax Act Goods and Services Tax All amounts are shown exclusive of Goods and Services Tax (GST), except for receivables and payables that are stated inclusive of GST. Where GST is irrecoverable as an input tax, it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or payables in the statement of financial position. The net GST paid to, or received from the IRD, including the GST relating to investing and financing activities, is classified as a net operating cash flow in the statement of cash flows. Commitments and contingencies are disclosed exclusive of GST. To be the recognised experts in making the health dollar go further 49

54 FINANCIAL STATEMENTS /15 Revenue SERVICES RENDERED Revenue from services is recognised, to the proportion that a transaction is complete, when it is probable that the payment associated with the transaction will flow to healthalliance and that payment can be measured or estimated reliably, and to the extent that any obligations and all conditions have been satisfied by healthalliance. All services are provided on commercial terms and are considered to be exchange transactions. INTEREST Interest received and receivable on funds invested is recognised as interest accrues using the effective interest method, allocating the interest income over the relevant period. Expenses BORROWING COSTS Borrowing costs are recognised as an expense in the financial year in which they are incurred. Equity Equity is measured as the difference between total assets and total liabilities. Equity is disaggregated and classified into the following components: Accumulated Surpluses; and Shares Issued Critical Accounting Estimates and Assumptions In preparing these financial statements, healthalliance has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are mainly related to the lease make good provision where an estimate has been made of the future make good costs. (Refer to Note 13 for further information). RETIREMENT AND LONG SERVICE LEAVE Note 12 provides an analysis of the exposure in relation to estimates and uncertainties surrounding retirement and long service leave liabilities. 50 healthalliance Annual Report /15

55 Critical Judgements in Applying Accounting Policies Management discussed with the Board the development, selection and disclosure of healthalliance s critical accounting policies and estimates and the application of these policies and estimates. The following critical judgements have been exercised in applying accounting policies: CLASSIFICATION OF LEASES Determining whether a lease agreement is a finance or an operating lease requires judgement as to whether the agreement transfers substantially all the risks and rewards of ownership to healthalliance. Judgement is required on various aspects that include, but are not limited to, the fair value of the leased asset, the economic life of the leased asset, whether or not to include renewal options in the lease term, and determining an appropriate discount rate to calculate the present value of the minimum lease payments. Classification as a finance lease means the asset is recognised in the statement of financial position as property, plant, and equipment, whereas for an operating lease no such asset is recognised. healthalliance entered into several historical leases which are combined leases of land and buildings. It was not possible to obtain a reliable estimate of the split of the fair values of the lease interest between land and buildings at inception of the lease. Therefore, in determining lease classification healthalliance evaluated whether both parts are clearly operating leases or finance leases. Firstly, land title does not pass. Secondly, because the rent paid to the landlord for the building is increased to market rent at regular intervals, and healthalliance does not participate in the residual value of the building it is judged that substantially all the risks and rewards of the building are with the landlord. Based on these qualitative factors it is concluded that the leases are operating leases. COMPARATIVE FIGURES Comparative information has been reclassified as appropriate to achieve consistency in disclosure with the current year. Comparative information that has been restated as a result of the first time adoption of the PBE IPSAS standards is provided in Note 26. To be the recognised experts in making the health dollar go further 51

56 FINANCIAL STATEMENTS /15 STATEMENT OF SERVICE PERFORMANCE Cost of Service The cost of service statements, as reported in the statement of service performance, report the net cost of services for the outputs of healthalliance and are represented by the cost of providing the output less all the revenue that can be allocated to these activities. Cost Allocation healthalliance has arrived at the net cost of service for each significant activity using the cost allocation system outlined below. Cost Allocation Policy Direct costs are charged directly to output classes. Indirect costs are charged to output classes based on cost drivers and related activity and usage information. Criteria for Direct and Indirect Costs Direct costs are those costs directly attributable to an output class. Indirect costs are those costs that cannot be identified in an economically feasible manner with a specific output class. Cost Drivers for Allocation of Indirect Costs The cost of internal services not directly charged to outputs is allocated as overheads apportioned based on a proportion of total expenditure. 52 healthalliance Annual Report /15

57 Notes to the Financial Statements For the year ended 30 June 1. Revenue Group Parent Professional services to shareholders 115,500 98, ,136 98,516 Other services to shareholders 4,580 7,211 4,580 7,211 Software solutions to shareholders Professional services to other related parties 2,182 2,916 1,583 1,675 Other services to other related parties , , , ,094 Revenue from shareholders is disaggregated to differentiate between revenue for the provision of services contracted at the start of the year, as professional services, and revenue for other or additional services provided, as other services. 2. Other Income Group Parent Other To be the recognised experts in making the health dollar go further 53

58 FINANCIAL STATEMENTS /15 3. Other Expenses Group Parent Outsourced personnel 6,163 6,319 3,622 6,208 Software licences 21,256 22,586 21,033 22,494 Computer hardware maintenance 4,201 3,104 3,900 3,104 Telecommunications 4,753 3,949 4,675 3,949 Infrastructure and non-clinical expenses 6,429 3,826 4,235 3,758 Other expenses Audit fees (for the audit of the financial statements) Audit fees (other services) Property leases 3,128 2,055 2,144 1,828 Movement in building make-good provisions Board members' fees Operating lease expenses ,316 43,102 40,739 42,591 The fees paid to Audit New Zealand for other services were for a review of the Windows 7 project for $0 (: $12,150). These costs were capitalised as part of the project. 4. Employee Benefit Costs Group Parent Wages and salaries 49,374 44,343 43,510 43,808 Contributions to defined contribution plans 1, Increase/(decrease) in employee benefit provisions ,546 46,171 44,508 45, healthalliance Annual Report /15

59 5. Finance Group Parent a. Finance Income Interest received b. Finance Costs Interest expense Property, Plant and Equipment Leasehold Improvements Plant & Equipment Group Vehicles IT Equipment Work in Progress Cost Balance at 1 July ,701 1, ,186 Additions ,669 18,669 Assets Contributed by Shareholders ,638 (2,638) - Transfer to additions PP&E 2,206 1,101-10,464 (13,771) - Balance at 30 June 2,937 1, ,803 3, ,855 Balance at 1 July 2,937 1, ,803 3, ,855 Additions ,685 17,685 Assets Contributed by Shareholders Transfer to additions PP&E ,395 (9,117) - Balance at 30 June 3,139 2, ,198 12, ,540 Total Depreciation and impairment losses Balance at 1 July , ,500 Depreciation charge for the year ,566-10,975 Balance at 30 June , ,476 Depreciation and impairment losses Balance at 1 July , ,476 Depreciation charge for the year ,605-11,222 Balance at 30 June 1, , ,698 Carrying amounts - Group At 30 June 2,204 1, ,084 3,908 34,379 At 30 June 2,022 1, ,874 12,476 40,842 To be the recognised experts in making the health dollar go further 55

60 FINANCIAL STATEMENTS /15 Leasehold Improvements Plant & Equipment Parent Vehicles IT Equipment Work in Progress Cost Balance at 1 July ,701 1, ,186 Additions ,113 15,113 Assets Contributed by Shareholders ,638 (2,638) - Transfer to additions PP&E ,464 (10,538) - Balance at 30 June ,803 3, ,299 Balance at 1 July ,803 3, ,299 Additions ,449 17,449 Transfer to additions PP&E ,395 (8,558) - Balance at 30 June ,198 12, ,748 Total Depreciation and impairment losses Balance at 1 July , ,500 Depreciation charge for the year ,566-10,829 Balance at 30 June , ,329 Balance at 1 July , ,329 Depreciation charge for the year ,605-10,788 Balance at 30 June , ,117 Carrying amounts - Parent At 30 June ,084 3,585 30,970 At 30 June ,874 12,476 37, Intangible Assets Software Assets Group Work in Progress Total Software Cost Balance at 1 July ,564 11, ,691 Additions - 35,003 35,003 Assets Contributed by Shareholders 8,064 (8,064) - Transfer from work in progress 28,539 (28,539) - Balance at 30 June 195,167 9, ,694 Balance at 1 July 195,167 9, ,694 Additions - 20,012 20,012 Transfer from work in progress 16,320 (16,320) - Balance at 30 June 211,487 13, , healthalliance Annual Report /15

61 Software Assets Group Work in Progress Total Software Amortisation and impairment losses Balance at 1 July 135, ,762 Amortisation charge for the year 9,219-9,219 Balance at 30 June 144, ,981 Balance at 1 July 144, ,981 Amortisation charge for the year 14,274-14,274 Balance at 30 June 159, ,255 Carrying amounts - Parent At 30 June 50,186 9,527 59,713 At 30 June 52,232 13,219 65,451 Software Assets Parent Work in Progress Total Software Cost Balance at 1 July ,564 11, ,691 Additions - 35,003 35,003 Assets Contributed by Shareholders 8,064 (8,064) - Transfer from work in progress 28,539 (28,539) - Balance at 30 June 195,167 9, ,694 Balance at 1 July 195,167 9, ,694 Additions - 20,012 20,012 Transfer from work in progress 16,320 (16,320) - Balance at 30 June 211,487 13, ,706 Amortisation and impairment losses Balance at 1 July 135, ,762 Amortisation charge for the year 9,219-9,219 Balance at 30 June 144, ,981 Balance at 1 July 144, ,981 Amortisation charge for the year 14,274 14,274 Balance at 30 June 159, ,255 Carrying amounts - Parent At 30 June 50,186 9,527 59,713 At 30 June 52,232 13,219 65,451 To be the recognised experts in making the health dollar go further 57

62 FINANCIAL STATEMENTS /15 8. Reconciliation of Surplus for the period with Net Cash Flows from Operating Activities Group Parent Surplus for the period (37) Add back non cash items Depreciation and amortisation 25,496 20,195 25,062 20,048 Movements in working capital (Increase)/decrease in trade and other receivables 2,396 (2,005) 2,435 (1,419) Increase/(decrease) in trade and other payables 3,127 (5,558) 3,456 (5,712) Increase/(decrease) in provisions - 1, Increase/(decrease) in employee entitlements 524 1,069 (103) 842 Net movement in working capital 6,046 (5,174) 5,787 (6,179) Net cash inflow/(outflow) from operating activities 31,506 15,190 30,872 14, Cash and Cash Equivalents Group Parent Bank balances - 6,723-6,554 Health Benefits Limited 6,538-6,538 - Cash and cash equivalents 6,538 6,723 6,538 6,554 Bank overdrafts (60) Cash and cash equivalents in statement of cash flows 6,478 6,723 6,538 6,554 The carrying value of cash at bank and term deposits with maturities less than three months approximates their fair value. healthalliance is a party to the DHB Treasury Services Agreement between Health Benefits Limited (HBL) and participating health sector entities, joining on the 8th January. This agreement enables HBL to sweep bank accounts and invest surplus funds for the collective benefit. 58 healthalliance Annual Report /15

63 10. Debtors and Other Receivables Group Parent Trade receivables 2,170 2,865 1,820 2,640 Other receivables 391 1, ,304 Other receivables from related parties, non-commercial terms 6,659 6,659 6,659 6,659 Prepayments 2,391 2,996 2,316 2,971 11,611 13,633 11,170 13,574 Prepayments - Non current The carrying value of debtors and other receivables approximates their fair value. The ageing profile of receivables at year end is detailed below: Group Parent Gross Receivable Impairment Gross Receivable Impairment Gross Receivable Impairment Gross Receivable Impairment Not past due 8,272-9,660-8,068-9,626 - Past due 0-30 days Past due days Past due more than 91 days Total 9,220-10,637-8,854-10,603 - All receivables greater than 30 days in age are considered to be past due. The provision for impairment has been calculated based on a review of significant debtor balances and a collective assessment of all debtors (other than those determined to be individually impaired) for impairment. The collective impairment assessment is based on an analysis of past collection history and write-offs. None of the debtors as at 30 June are considered to be non-collectible and as a result no impairment value has been recognised (: $0) To be the recognised experts in making the health dollar go further 59

64 FINANCIAL STATEMENTS / Creditors and Other Payables Group Parent Trade payables 4,023 2,730 3,950 2,728 Other payables 3,858 1,362 3,921 1,562 ACC levy payable GST and PAYE payable 1, , Income in advance relating to contracts with specific performance obligations 424 1, ,775 Other non trade payables and accrued expenses ,901 6,352 9,687 6,412 Creditors and other payables are non-interest bearing and are normally settled on 30-day terms. Therefore, the carrying value of creditors and other payables approximates their fair value. 12. Employee Entitlements Group Parent Current Liabilities Liability for long service leave Liability for retirement gratuities Liability for annual leave 4,015 3,572 3,572 3,493 Liability for sick leave Liability for other leave Salary and wages accrual 1,843 1,378 1,685 1,269 Liability for restructuring Liability for other employee entitlements ,654 5,980 5,976 5,792 Non-current Liabilities Liability for long service leave Liability for retirement gratuities 1,565 1,542 1,469 1,520 Liability for other employee entitlements ,582 2,497 2,406 2, healthalliance Annual Report /15

65 13. Provisions Group Parent Current Liabilities Lease incentives received Lease make good provision , Non-current Liabilities Lease incentives received Lease make good provision , ,819 2, Opening balance 2, Additional Provision made (251) 1, Closing balance 1,819 2, In respect of a number of its leased premises, healthalliance is required at the expiry of the lease term to make good any damage caused to the premises and to remove any fixtures or fittings installed by healthalliance. In many cases healthalliance has the option to renew the leases, which affects the timing of the expected cash outflows to make-good the premises. The cash flows associated with the current portion of the lease make-good provisions are expected to occur in April 2016 and with the non-current portion in August Borrowings Group Parent Current Portion Term Loan 1,623 2, ,623 2, Non-current Portion Term Loan ,623 2, healthalliance (FPSC) Limited entered into a multi option credit facility with Westpac NZ up to the value of $5,000,000 for a maximum of 3 years from the commencement of the loan. Under the agreement with Westpac NZ, the facility is reduced by $250,000 per quarter, As at 30 June the facility limit was $3,750,000 (: $4,750,000) and $1,623,000 (: $2,250,000) had been drawn down. The facility expires on 30 April The fair value of Westpac loan borrowings is $1,623,000 (2013 $2,259,000). Fair value has been determined based on market borrowing rates at balance date ranging from 4.60% ( 4.49% to 4.60%) and the total cost to repay the debt as at balance date. The borrowings are on call to suit the groups cashflow profile. To be the recognised experts in making the health dollar go further 61

66 FINANCIAL STATEMENTS / Shareholders Equity The shares are held by the 5 shareholders, Northland, Waitemata, Auckland and Counties Manukau Health DHBs and Health Benefits Limited. The DHB s hold Class A shares and Health Benefits Ltd holds Class B shares. Class B shares have no rights to distributions of capital or income or dividends nor have liability for any calls but in other respects both classes of shares have equal rights and privileges. Class C shares are of $1 each and confer - no rights to appoint directors; rights as to distributions of capital or income; rights as to dividends; no voting rights, but otherwise have the same rights and privileges as other shares. Group Parent Issued but uncalled 80 Class A shares of $nil value Issued 80 Class A shares of $10,000 each uncalled Class B shares of $1 each uncalled Class C shares Waitemata DHB 25,567 23,991 25,567 23,991 Northland DHB 9,917 9,257 9,917 9,257 Auckland DHB 41,970 39,679 41,970 39,679 Counties Manukau Health 23,410 21,418 23,410 21, ,864 94, ,864 94, ,664 95, ,664 95,145 Class C shares have been issued as a result of IT assets transferred from each of the DHB shareholders and in relation to their contributions towards ongoing IT capital investment. 16. Commitments Group Parent Non-lease commitments Capital commitments 6,114 5,058 6,114 5,058 Non-cancellable - operating lease commitments Not more than one year 1,666 2,317-1,174 Later than one year and not more than five years 4,709 4, Later than five years ,375 6,709-1, healthalliance Annual Report /15

67 healthalliance leases a number of buildings, vehicles and office equipment (mainly photocopiers and computers) under operating leases. The leases typically run for a period of up to 5 years (for buildings) and 3 years (for vehicles and office equipment), with an option to renew the lease after that date. healthalliance sub-leases premises at 650 Great South Road to Northern Regional Alliance. 17. Financial Instruments Group Notes Held for Trading Designated at fair value through profit & loss Loans and Receivables Financial liabilities at amortised cost Debtor and other receivables ,220 - Cash and cash equivalents ,478 - Creditor and other payables (excl Taxes and Income in Advance) (8,106) Borrowings (1,623) ,698 (9,729) Group Notes Held for Trading Designated at fair value through profit & loss Loans and Receivables Financial liabilities at amortised cost Debtor and other receivables ,637 - Cash and cash equivalents ,723 - Creditor and other payables (excl Taxes and Income in Advance) (6,235) Borrowings (2,259) ,360 (8,494) To be the recognised experts in making the health dollar go further 63

68 FINANCIAL STATEMENTS /15 Parent Notes Held for Trading Designated at fair value through profit & loss Loans and Receivables Financial liabilities at amortised cost Debtor and other receivables ,854 - Cash and cash equivalents ,538 - Creditor and other payables (excl Taxes and Income in Advance) (8,066) Borrowings ,392 (8,066) Parent Notes Held for Trading Designated at fair value through profit & loss Loans and Receivables Financial liabilities at amortised cost Debtor and other receivables ,603 - Cash and cash equivalents ,554 - Creditor and other payables (excl Taxes and Income in Advance) (6,383) Borrowings ,157 (6,383) Estimation of Fair Values Analysis The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected in the table. Interest-bearing Loans and Borrowings Fair value is calculated based on discounted expected future principal and interest cash flows. Trade and Other Receivables/Payables For receivables / payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value. All other receivables / payables are discounted to determine the fair value. Other Receivables Other receivables include accrued revenue, recoveries for software items in development and for the value of certain employee related entitlements. These receivables are with other Crown owned entities and are assessed to be low risk and high quality due to their ownership and funding. Financial investment Risks Exposure to credit, interest rate and currency risks arise in the normal course of healthalliance s operations. 64 healthalliance Annual Report /15

69 Credit Risk Financial instruments, which potentially subject healthalliance to concentrations of risk, consist principally of cash, short term deposits and accounts receivable. healthalliance is a party to the DHB Treasury Services Agreement between Health Benefits Limited and all New Zealand District Health Boards as well as other approved Crown owned health sector entities. This agreement enables Health Benefits Limited to sweep the participating entities bank accounts overnight and invest surplus funds on their behalf with registered banks that have a Standard and Poor s credit rating of at least A+. Concentrations of credit risk from accounts receivable are limited due to the number and nature of the customers. The shareholders, Northland, Waitemata, Auckland and Counties Manukau Health DHBs are the largest debtors. They are assessed to be low risk and high quality entities due to their nature as the government s funded providers of health and disability support services. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard and Poor s credit ratings (if available) or to historical information about counterparty default rates. Group Parent Counterparties with Credit Ratings Cash and cash equivalents and investments AA- 6,478 6,723 6,538 6,554 Counterparties without Credit Ratings Debtors and other receivables Existing counterparty with no defaults in the past 11,611 13,633 11,170 13,574 To be the recognised experts in making the health dollar go further 65

70 FINANCIAL STATEMENTS /15 Liquidity Risk Liquidity Risk represents healthalliance s ability to meet its contractual obligations. healthalliance evaluates its liquidity requirements on an ongoing basis. In general, healthalliance generates sufficient cash flows from its operating activities to meet its obligations arising from its financial liabilities and has credit lines in place to cover potential shortfalls. The following table sets out the contractual cash flows for the principal portion of all financial liabilities which have a negative fair value or that are settled on a gross cash flow basis: Group Statement of Financial Position Contractual Cash Flow 6 mths or less 6-12 mths 1-2 years 2-5 years More than 5 years Trade and other payables 8,106 (8,106) (8,106) Borrowing 1,623 (1,623) (1,623) 9,729 (9,729) (9,729) Trade and other payables 6,235 (6,235) (6,235) Borrowing 2,259 (2,273) (2,273) ,494 (8,508) (8,508) Parent Statement of Financial Position Contractual Cash Flow 6 mths or less 6-12 mths 1-2 years 2-5 years More than 5 years Trade and other payables 8,066 (8,066) (8,066) 8,066 (8,066) (8,066) Trade and other payables 6,383 (6,383) (6,383) ,383 (6,383) (6,383) Effective interest Rates and Re-pricing Analysis In respect of interest-earning financial assets and interest-bearing financial liabilities, all investments and loans are on call and pricing is based on current day bank rates. Cash Flow Interest Rate Risk Cash flow interest rate risk is the risk that the cash flows from a financial instrument will fluctuate because of changes in market interest rates. healthalliance s exposure to cash flow interest rate risk is limited to on-call deposits. This exposure is not considered significant and is not actively managed. 66 healthalliance Annual Report /15

71 Sensitivity Analysis As at 30 June, if floating interest rates had been 100 basis points higher/lower, with all other variables held constant, the Group surplus for the year would have been $52,142 lower/higher ( $2,042) on the floating rate borrowings, the Parent would have been $68,234 lower/higher ( $0). 18. Key Management Personnel Key management personnel include all board members, the Chief Executive, and members of the healthalliance Executive Team. Due to the difficulty in determining the full-time equivalent for Board members, the full-time equivalent figure is taken as the count of Board members. Group Parent (a) Executive Leadership Team Total value of benefits 2,208 1,929 1,982 1,929 Full-time equivalent members (b) Board Member's Remuneration Murray Tonkin 56,053 58,000 19,333 58,000 David Clarke 91,173 33,833 48,333 33,833 Anthony Norman 59,600 29,000 29,000 29,000 Paul Harper 59,600 29,000 29,000 29,000 Lee Mathias 31,573-19,333 - Rosalie Percival Andrew Brant , , , ,833 Full-time equivalent members There have been no payments made to committee members appointed by the Board who are not Board members during the financial year. Board Members Rosalie Percival and Andrew Brant are executives of Auckland DHB and Waitemata DHB respectively. They are not paid to act as Board members nor are their employing DHB s reimbursed for their costs when acting as Board members. healthalliance has effected Directors and Officers Liability and Professional Indemnity insurance cover during the financial year in respect of the liability or costs of Board members and employees. No Board members received compensation or other benefits in relation to cessation ( $nil). To be the recognised experts in making the health dollar go further 67

72 FINANCIAL STATEMENTS / Transactions with Related Parties healthalliance is an entity wholly owned by other, wholly-owned Crown entities. These entities are the Northland, Waitemata, Auckland and Counties Manukau District Health Boards and Health Benefits Limited. Related party disclosures have not been made for transactions with related parties that are within a normal supplier or client/ recipient relationship on terms and conditions no more or less favourable than those it is reasonable to expect healthalliance to have adopted in dealing with the counter-party at arm s length in the same circumstances. Further, transactions with other government agencies (for example, other district health boards, Government departments or other Crown agencies) are not disclosed as related party transactions when they are consistent with the normal operating arrangements between government agencies and undertaken on the normal terms and conditions for such transactions. Non-Commercial Balances Owed by Related Parties Group Parent Related by shareholding Northland DHB 1,326 1,326 1,326 1,326 Waitemata DHB Auckland DHB 4,452 4,452 4,452 4,452 Counties Manukau Health Health Benefits Limited ,659 6,659 6,659 6,659 The non-commercial balances owed by the DHB shareholders to the parent company are for items related to uncalled share capital, certain staff entitlements owing when staff transferred to healthalliance and for charges relating to asset transfers. These are payable to healthalliance on call. 68 healthalliance Annual Report /15

73 20. Employee Remuneration Group Parent Remuneration Range $100,000 - $110, $110,001 - $120, $120,001 - $130, $130,001 - $140, $140,001 - $150, $150,001 - $160, $160,001 - $170, $170,001 - $180, $180,001 - $190, $190,001 - $200, $200,001 - $210, $210,001 - $220, $220,001 - $230, $230,001 - $240, $240,001 - $250, $280,001 - $290, $290,001 - $300, $350,001 - $360, $370,001 - $380, $410,001 - $420, Severance payments, other than those to which staff are contractually entitled were $542k to 8 staff (: $63k, 2 staff). The disclosure regime in the current year has changed from the prior year and all payments on cessation of employment must now be disclosed, while last year it was only payments in excess of those contractually entitled that were required. 21. Investment in Subsidiary healthalliance N.Z. Limited s ownership interest 100% 100% 22. Contingent Liabilities healthalliance Group has a contingent liability relating to a bank guarantee issued under subsidiary company healthalliance (FPSC) Limited by Westpac New Zealand Ltd in favour of Goodman Nominees for $1,197,009 for the future lease payments on its premises In Penrose, Auckland (: $986,019). To be the recognised experts in making the health dollar go further 69

74 FINANCIAL STATEMENTS / Contingent Assets healthalliance Group has no known potential contingent assets as at 30 June (: $nil) 24. Subsequent Events There have been no events subsequent to balance which require reporting. 25. Explanation of Budget Variances Revenue Group revenue approximates the budget overall for the year. Expenditure Increased use was made of consultant and contracted staff than expected to maintain healthalliance services during the transition period to the national service, to maintain operational flexibility from not appointing permanent staff. Overall expenditure approximated budget. Assets Reduced Capital Expenditure due to delayed projects lead to reduced Non-Current assets at year end. This also reduced cash expenditure and therefore the cash balance on hand has also increased. Liabilities A $4.3M increase in current liabilities. Current and term employee liabilities collectively were $2.7M above budget. The remainder was substantially in general creditors balances. 26. Adjustments Arising on Transition to New Public Benefit Entity Accounting Standards Recognition and Measurement Adjustments There were no restatements required for the financials as a result to the transition to the new PBE accounting standards. Reclassification Adjustments The new PBE accounting standards provide for less categorisation of transactions between related and unrelated parties where the underlying transaction is carried out on normal commercial terms and conditions. The Group has therefore reclassified certain disclosures in Note 10 Debtors and Other Receivables, Note 11 Creditors and Other Payables and Note 18 Related Parties. 27. Crown Entities Act 2004 The Crown Entities Act 2004 requires financial statements for the year ended 30 June and the audit thereof to be completed by 31 October. This requirement was not met for the year ended 30 June. 70 healthalliance Annual Report /15

75 Statement of Responsibility For the year ended 30 June 1 The 2 The Board accept responsibility for the preparation of the annual financial statements and Statement of Service Performance and the judgements used in them; Board accept responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting; and 3 In the opinion of the Board of healthalliance N.Z. Limited, the annual financial statements and Statement of Service Performance fairly reflect the financial position and operations of healthalliance N.Z. Limited for the year ended 30 June. For and on behalf of the healthalliance N.Z. Limited Board David Clarke Anthony Norman 12 November 12 November Date Date To be the recognised experts in making the health dollar go further 71

76 FINANCIAL STATEMENTS /15 Independent Auditor s Report To the readers of healthalliance N.Z. Limited and Group s financial statements and performance information for the year ended 30 June, The Auditor General is the auditor of healthalliance N.Z. Limited and its subsidiary. The Auditor General has appointed me, Karen MacKenzie, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements and the performance information of the group consisting of healthalliance N.Z. Limited and its subsidiary (collectively referred to as the Group ), on her behalf. Opinion on the financial statements and the performance information We have audited: the financial statements of healthalliance N.Z. Limited and the Group on pages 38 to 70, that comprise the statement of financial position as at 30 June, the statement of comprehensive revenue and expenses, statement of changes in equity and statement of cash flows for the year ended on that date and the statement of accounting policies and notes to the financial statements that include other explanatory information, and the performance information of the Group on pages In our opinion: the financial statements of healthalliance N.Z. Limited and the Group: present fairly, in all material respects: its financial position as at 30 June ; and its financial performance and cash flows for the year then ended; and comply with generally accepted accounting practice in New Zealand and have been prepared in accordance with Public Benefit Entity Reporting Standards; and the performance information: presents fairly, in all material respects, the Group s performance for the year ended 30 June, including for each class of reportable outputs: its standards of performance achieved as compared with forecasts included in the statement of intent for the financial year; and its actual revenue and output expenses as compared with the forecasts included in the statement of intent for the financial year; and complies with generally accepted accounting practice in New Zealand. Our audit was completed on 12 November. This is the date at which our opinion is expressed. The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board and our responsibilities, and explain our independence. Basis of Opinion We carried out our audit in accordance with the Auditor General s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements and the performance information are free from material misstatement. Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers overall understanding of the financial statements and the performance information. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the 72 healthalliance Annual Report /15

77 financial statements and the performance information. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements and the performance information, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation of healthalliance N.Z. Limited and the Group s financial statements and the Group s performance information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of healthalliance N.Z. Limited and the Group s internal control. An audit also involves evaluating: the appropriateness of accounting policies used and whether they have been consistently applied; the reasonableness of the significant accounting estimates and judgements made by the Board; the appropriateness of the reported performance information within the Group s framework for reporting performance; the adequacy of the disclosures in the financial statements and the performance information; and the overall presentation of the financial statements and the performance information. We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and the performance information. Also, we did not evaluate the security and controls over the electronic publication of the financial statements and the performance information. We believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Responsibilities of the Board The Board is responsible for preparing financial statements and the performance information that: comply with generally accepted accounting practice in New Zealand and Public Benefit Entity Standards; present fairly healthalliance N.Z. Limited and the Group s financial position, financial performance and cash flows; and present fairly the Group s performance. The Board s responsibilities arise from the Crown Entities Act The Board is responsible for such internal control as it determines is necessary to enable the preparation of financial statements and performance information that are free from material misstatement, whether due to fraud or error. The Board is also responsible for the publication of the financial statements and the performance information, whether in printed or electronic form. Responsibilities of the Auditor We are responsible for expressing an independent opinion on the financial statements and the performance information, and reporting that opinion to you based on our audit. Our responsibility arises from the Public Audit Act Independence When carrying out the audit, we followed the independence requirements of the Auditor General, which incorporate the independence requirements of the External Reporting Board. Other than the audit, we have no relationship with, or interests in, healthalliance N.Z. Limited or the Group. Karen MacKenzie Audit New Zealand On behalf of the Auditor General Auckland, New Zealand To be the recognised experts in making the health dollar go further 73

78 FINANCIAL STATEMENTS /15 Statutory Information The Directors of healthalliance N.Z. Limited present the Financial Statements for the year ended 30 June. Principal Activities The principal activity of the healthalliance group of companies during this year was the operation of shared services for District Health Boards and New Zealand health organisations. healthalliance s Corporate Address Connect Business Park Great South Road Penrose, Auckland healthalliance N.Z. Limited Board of Directors Register of Interests BOARD MEMBER David Clarke 6 May August Chair: 14 August - present Anthony Norman 1 March present Paul Harper 16 August present Lee Mathias 29 September - present INVOLVEMENT WITH OTHER ORGANISATIONS Director of Hawkins Watts Limited Chair of The Skin Institute Limited Director & Shareholder of Skin Institute Holding Company Limited Chair of TRGG Limited Director & Shareholder of TRG Group Limited Director, Hynds Limited Shareholder in Ormiston Hospital Chair of Watercare Chair of The Jucy Group Shareholder of Orion Health Group Limited Board Chair, Northland DHB Trustee and Treasurer Kerikeri International Piano Competition Trust Partner Mill Bay Haven, Mangonui Deputy Chair, Waitemata DHB Director, Pacific Link Ltd Director, Lodestar Enterprises Ltd Director, Northgate Logistics Ltd Shareholder, Director, Netlogix Ltd Director, Nexis Logistics (a Port of Auckland subsidiary) Chair, Counties Manukau Health Deputy Chair, Auckland District Health Board Chair, Unitec Director, Health Innovation Hub Director/Shareholder, Pictor Limited Director, Lee Mathias Limited Director, John Seabrook Holdings Limited Advisory Chair, Company of Women Limited Trustee, Lee Mathias Family Trust Trustee Awamoana Family Trust Trustee Mathias Martin Family Trust 74 healthalliance Annual Report /15

79 BOARD MEMBER Rosalie Percival 29 September - present Andrew Brant 29 September - present Roger Jones 21 September - present Murray Tonkin Chair: 16 August October BOARD MEMBER healthalliance (FPSC) Limited only Ronald Pearson 30 June - present INVOLVEMENT WITH OTHER ORGANISATIONS Trustee, A+ Trust Trustee of Rangitoto College Board Father works for healthalliance N.Z. Limited Chief Financial Officer of Auckland DHB Director, Northern Regional Alliance Limited Director - Corporate Apartments Limited Advisory Board member Hewlett Packard (HP) Asia Pacific Customer Advisory Board Chief Technology Officer Auckland Transport Deputy CEO Counties Manukau Health Deputy CEO and Director of Corporate & Business Services at CM Health Director/Trustee of The Middlemore Foundation for Health (formerly South Auckland Health Foundation) Member of the Chartered Accountants Australia & NZ (CAANZ) Public Sector Advisory Committee healthalliance Executive Team Register of Interests EXECUTIVE Ross Chirnside Interim CEO hanz GM Finance & Strategy Ross Darrah Interim CEO FPSC Kris Goodenough GM Supply Chain Adina Halpern Legal Advisor Trish Langridge GM Clinical & Customer Service Kevin Robinson CIO INVOLVEMENT WITH OTHER ORGANISATIONS Nil Nil Nil Family Trust - shares in Orion Health Limited Nil Nil Auditor The Auditor-General is appointed under section 14 of the Public Audit Act Audit New Zealand has been contracted to provide these services. To be the recognised experts in making the health dollar go further 75

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