Last updated 18 July 2005

Q1 On the financial template divisions are asked to split their OBF on to a sub-sheet. Does a Division have to split it up or can they report OBF as one lump sum?  Do Divisions split the OBF up to match the program headings in the plan or would they need to split it up according to each priority area?  Obviously this would be an arbitrary exercise. Could you please advise on the requirements here?
 
A1 Divisions must split their core funding on to a sub sheet.  Significant flexibility has been provided to allow Divisions to break up core funding into programs/strategies that are most meaningful to them. 
 
Q2 Where are Divisions to record Rural Workforce Support within the template?
 
A2 Divisions use the main sheets and sub-sheets for all programs funded by DoHA that are included in the new Multi Program Funding Agreements.  All DoHA funding not part of the Multi-Program Agreement (i.e. is a separate agreement) or non DoHA funded programs need to go in the 'other activities' section.  The Division must make sure it can completely acquit all those 'other activities' and meet all contractual obligations.

As such, while RWS is DoHA funding not part of the current Multi-Program Funding Agreement, it needs to go into the 'other activities' section of the template and the organisation still reports to the RWS program area as per that particular contract.
 
Q3   The Division is looking to break down its core budget into Administration (Program A), Corporate Governance (Program B), Clinical and Population Health (Program C), Integration (Program D) and Workforce and Business Support (Program E).  The Division is asking if the Department wants it to communicate how these Program Budgets relate to the new Priority areas listed in the Agreement Plan.  If so, how should this occur? Some activity in the priority areas will fall across several of these programs.
 
A3   The Division can certainly break down its core budget as outlined.  Significant flexibility has been provided to allow Divisions to break up core funding into whatever programs/strategies that are most meaningful to them.  This means the Division can relate it to the priority areas or whichever breakdown is the most meaningful to them. 
 
Q4   Nowhere on the template does it state whether to report GST exclusive or inclusive?
 
A4 All figures in the template should be GST exclusive.
 
Q5   What should be inserted on the 'Other Activities' sheet, which programs should be inserted on the Annual sheet and how do we treat other sources of income, non AGDHA funded eg NPS, DMMR etc?
 
A5   Divisions use the main sheets and sub-sheets for all programs funded by DoHA that are included in the new Multi Program Funding Agreements (i.e. all the schedules).  All DoHA funding not part of the main agreement (ie is a separate agreement) or non DoHA funded programs needs to go in the 'other activities' section. 

The Division must make sure it can meet all requirements and acquit all contract obligations for those 'other activities'. 
 
Q6 On the first budget sheet the first program after core funding is 'Aged Care Panels.'  The Aged Care funding contract states that we have to account for the two aged care funding streams separately i.e. Aged Care Panels and Div of GP Support.  Do we then report the Divisions of GP Support stream in a separate column or combine it under Aged Care Panels column?
 
A6  For those Divisions that have already submitted their Annual Budget with a particular approach on including funding for the Strengthening Medicare Aged Care GP Panels Initiative, there is no further action required.  For Division yet to submit the Annual Budget, the preferred approach is to use the section 'GP Payments ? non salaried' line item to record the GP remuneration stream of funding.  This information can be disclosed in the ?notes? section of the template. 

As previously indicated, the department will seek feedback on the planning and reporting templates in May and following this, the planning and reporting templates will be amended and re-released in July 2005.  These amendments will include a correction to ensure both streams of the Strengthening Medicare Aged Care GP Panels Initiative can be incorporated in the template.
 
Q7 Are Divisions required to report on funding from other sources?
 
A7  Divisions are required to report to the department (within 14 days) anything received over $10,000 that will go toward Programs (schedules on the Multi-Program Agreement).  In addition, Divisions must record all Other Contributions (of any value) in the Annual Reports.  This is supported by Clause 2.1 in the Agreement. 

As such, Divisions must report all income in the appropriate line items of the financial template that include: revenue from Commonwealth - DoHA; interest income; Commonwealth revenue - other; state government revenue; membership; sponsorship; proceeds from sales; other - all other revenue earned by the Division during the period. 

When splitting this income, DoHA funding relating to schedules of the Multi Program Funding Agreement needs to be listed as programs.  DoHA funding not part of the Multi Program Funding Agreement or non - DoHA funding is to be listed in the column for 'other activities'.  Other than providing a break up for specified line items (to enable an assessment of fair attribution) Divisions do not need to go into detail of different streams - this can be bundled for reporting.

From Frequently Asked Questions #2

Q1 Are Divisions able to retain their surpluses to operate as a company in the longer term?
 
A1 If uncommitted funds are held by the Division of General Practice, contractual arrangements between the Department and Divisions set out how a carry over of uncommitted funds may be considered.  As close as possible to the end of each financial year a request for carry over can be made by the Division and should include information supporting the request. In the funding agreement, approval of this should be considered after the end of the financial year, when the Division's financial expenditure is certain.

A letter has recently been sent to Divisions about this matter, so Divisions can make a case about how they would use a carry over in 2005-06.
 
Q2  In the Financial Planning and Reporting - user guide proforma on page 4.70, under expense items there is no separate item for GP salaries. A lot of divisions employ GPs on a salaried basis and this will not show up if they are placed in "other salaries".
 
A2  All GP's who are non Board members but are salaried employees of the Division would have their salaries fall under the "other salaries" section.
 
Q3  On page 4.72 of the Future Directions Toolkit, section 3.3 "Surplus Deficit" Current year surplus (deficit) - division.  If my Division received 80% of a program's funding from DoHA then would DoHA assume that 80% of any carryover from one financial year to the next would be DoHAs?  There are obviously times when a Division receives funding from another source and that funding is not spent by the end of the year. Surely DoHA is not going to claim a percentage of these funds. Can you please clarify?
 
A3  The Department is interested in the treatment of surpluses only where DoHA funds have been part of the income stream.  Should DoHA have contributed to the income stream, any surplus will be determined as a proportion of total DoHA revenue divided by total income excluding interest income unless the Division can justify an alternative basis.

If uncommitted funds are held by the Division of General Practice, contractual arrangements between the Department and Divisions set out how a carry over of uncommitted funds may be considered.  As close as possible to the end of each financial year a request for carry over can be made by the Division and should include information supporting the request. In the funding agreement, approval of this should be considered after the end of the financial year, when the Division's financial expenditure is certain.  A letter has recently been sent to Divisions about this matter, so Divisions can make a case about how they would use a carry over in 2005-06.
 
Q4  How do Divisions get auditors to audit a template?  Is the template to be audited as a document or is it sufficient to put in audited figures?
 
A4   When the Division is undertaking its year end process the Annual Template should be completed at the same time as the Annual Published Accounts so the Division should put in its audited figures at the same time. The Annual Template does not need to be audited as a separate exercise and it is sufficient for the Division to ensure they can reconcile between these two reports & put in the audited figures. This reconciliation can be shown to their auditor.
 
Q5  The programs listed on the 6 month variance and Annual variance sheets on the financial template differ to the programs on the statement sheets.  In other words, the order of the MAHS, WSRGP, GPII and AGED CARE columns are not consistent throughout the spreadsheet.  This will create problems in the future as the cells are linked.
 
A5   The Department acknowledges this fault in the template and it will be corrected in the re issue of the planning and reporting documents following the automation process in July 2005, prior to the variance sheets being required for reporting purposes. 
 
Q6 There is a problem with the FTE cell on the template.  The cell does not recognise decimal points therefore if there is 0.4 FTE staff it automatically rounds down to zero.
 
A6  The Department acknowledges this fault in the template and it will be corrected in the next release of the planning and reporting documents following the automation process in July 2005.  In the short term, Divisions are advised to add the correct information in the Notes section of the template where there is concern the department would otherwise have an inadequate understanding.
 
Q7   I'm after some clarification around the treatment of committed staff entitlements.  Are they are still considered committed funds or uncommitted funds for the purposes of the new template?  Further, if they are considered committed or uncommitted, will Division's need to complete the new pro forma requesting Departmental approval of the carry forward of staff entitlements?
 
A7  Both annual leave and long service leave are to be accrued in accordance with generally accepted accounting principles.  These staff entitlements are considered committed funds in the new template and as such, a Division does not need to request approval for carry forward of such committed funds.  If there is a carry forward surplus of DoHA funds at year end and there is a definite commitment relating to the surplus then the 'notes' area at the bottom of the template should be utilised to provide an explanation to DoHA.

The department will soon release advice concerning the provision for staff redundancy.

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From Frequently Asked Questions #1 

Q1 Can we receive an explanation from the Department as to where the half CPI increases are being spent within the Divisions program? Divisions were assured that the entire funding would remain within the program ? this is particularly relevant to the fact that the performance and development pool will not be accessed until 2006-07.
 
A1 The funding set aside for the performance and development pool is being used to build the overall capacity of the network in the first two years.  For example, it is currently being used to provide incentives to encourage accreditation and fund business cases to support increased structural efficiency.  The funds will be used in 2005/06 to build the capacity of Divisions, SBOs and the network generally in other ways.  For example, they may be used to assist with development of information management and financial reporting capacity relevant to the new national quality and performance system. 

Funding that is not used in 04/05 or 05/06 for general capacity building will be used to increase the size of the performance and development pool in 06/07.

To enable Divisions a full year under the new planning and reporting arrangements, access to the performance and development pool will be linked to performance assessment from November 2006.  The pool will be used to reward strong performance, build capacity of the network and may also be used to provide specific developmental support for poorer performing Divisions/SBOs.
 
Q2 If Divisions move to the 'new' contract, can they carry forward funds as they would have been able to within the existing three year contracted period to deliver for the term of the contract?
 
A2 If a Division moves to the new 2005-2008 multi-program agreement, they will be able to apply to the Department to carry over uncommitted funds as they are able to if they remain on the current Transitional Funding Agreement.

A process for this is currently being finalised and will be disseminated to the Divisions network shortly. It is likely to include a brief application to the Department that provides reasons for the underspend and rationale for the carryover of funds from one financial year to the next.
 
Q3 It is not clear in the financial reporting guide about the treatment of divisional 'surpluses' - it seems to insinuate that the Department will split any organisations surplus 50:50 with the Division, regardless of source?
 
A3 The Department is interested in the treatment of surpluses only where DoHA funds have been part of the income stream.  Should DoHA have contributed to the income stream, any surplus will be determined as a proportion of total DoHA revenue divided by total income excluding interest income.

The process and treatment of unspent or uncommitted funds for either the current Transitional Funding Agreement or the new 2005 ? 2008 multi-program agreement is outlined in those agreements.

Under the current Transitional Funding Agreement, Clause 13.3 states that, "the Participant must request, in writing from the Department, approval to carry over the unspent or uncommitted Funds into the next financial year".
As outlined in Question 2 above, a process to streamline this approval is currently being finalised and will be provided to the Divisions network shortly.
 
Q4 Has the Department considered the move to international accounting standards? This will occur within the contract period.
 
A4 The terms and conditions in the new Funding Agreement are currently under development.  The exposure draft of the new Funding Agreement for divisions and SBOs requires reporting and management of funds in accordance with Australian Accounting Standards and Auditing Standards.  The financial template has been designed to be consistent with Australian Accounting Standards.  These are maintained by the Australian Accounting Standards Board (AASB) created by section 226 of the Australian Securities and Investments Commission Act 2001 (Cwth);  The AASB is implementing a policy of adopting the International Accounting Standards Board's (IASB's) standards for application in Australia.  As a result, Australian Accounting Standards, which are legally binding under the Corporations Act 2001, will be equivalent to International Financial Reporting Standards (IFRS). 
 
Q5 Currently, Divisions' funding is based on a formula that takes into account the population within a Division and not the numbers of GPs or practices. Some Divisions will be penalised for working with large practices in this way. What is happening with funding review?
 
A5 Divisions that include a high proportion of large practices will not be penalised.  The Review Implementation Committee (RIC) will consider issues such as this, relating to the new funding model. ADGP will update Divisions with progress on this committee and its activities.

Divisions? funding for the next two financial years (2005/06 and 2006/07) will not change. Divisions will receive the same levels of funding as they currently receive for their core grants.
 
Q6 Is there going to be ongoing funding available for Divisions for accreditation?
 
A6 No, funding to assist Divisions in obtaining accreditation is time limited and is available in 2004/05 only.  The funding is aimed at encouraging early accreditation.
 
Q7 What are Divisions expected to report on with regard to additional funding? Will they be penalised for sourcing additional funds?
 
A7 The financial budget and reporting template requires Divisions to advise additional funding, but this does not need to be as detailed as DoHA funding.  Divisions will not be penalised for obtaining additional funding and are encouraged to build capacity through diversifying and increasing their sources of funding.
 
Q8 Is there scope for cross state amalgamations of Divisions (virtual or otherwise) For example within the Capricorn group (group of northern-Australian Divisions)?
 
A8 All proposals for amalgamation will be considered by DoHA using the same processes and against the criteria of whether they will improve the consistency, capacity and coverage of the Divisions' Network.
 
Q9 What does an independent Finance and Audit Committee mean?
 
A9 An independent Finance and Audit (F&A) Committee is a Committee that is able to access and present financial information independently of the Division CEO.  An independent F&A committee need not include members external to the Divisions but could comprise board members and senior management.  An independent F&A Committee increases the transparency and accountability of Divisions. 

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