Annual Plan healthAlliance (FPSC) Limited 2018-2019 - (Incorporating the Statement of Performance for 2018-2019) - HealthSource
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Annual Plan healthAlliance (FPSC) Limited 2018-2019 (Incorporating the Statement of Performance for 2018-2019)
Contents Message from the CEO .........................................................................................................................................4 About healthAlliance FPSC ....................................................................................................................................6 Our Environment and Role ...................................................................................................................................6 Our Stakeholder Engagement .............................................................................................................................10 Our Strategic Priorities ........................................................................................................................................11 Our Organisation .................................................................................................................................................12 Our Governance and Accountability ...................................................................................................................14 Our Statement of Performance ..........................................................................................................................16 Financial Forecast ...............................................................................................................................................19 Statement of Responsibility ............................................................................................................................19 Forecast Financial Statements ........................................................................................................................19 Statement of Significant Accounting Policies .....................................................................................................23 General Accounting Policies............................................................................................................................23 Basis of Preparation ........................................................................................................................................23 Page 2 healthAlliance (FPSC) Limited Annual Plan 2018-2019
Introduction This Annual Plan (AP) has been prepared by healthAlliance (FPSC) Limited (healthAlliance FPSC). This document sets out the organisation’s strategic direction for the next year, taking into account the priorities of Central Government (including the including the Minister of Health’s expectations and the refreshed New Zealand Health Strategy) and Northern Region District Health Board (DHB) priorities. These, along with legislative compliance and public sector accountability, have all been considered and reflected in this Annual Plan. The Statement of Performance expectations has been included in this document. healthAlliance FPSC is responsible for the Prospective Financial Statements and Statement of Service Performance contained in this document, including the appropriateness of the assumptions underlying them. Signed on behalf of healthAlliance (FPSC) Limited: Paul Harper Meng Cheong Board Chair Director healthAlliance (FPSC) Limited Board healthAlliance (FPSC) Limited Board Date: 4 October 2018 Date: 4 October 2018 Page 3 healthAlliance (FPSC) Limited Annual Plan 2018-2019
Message from the Chief Executive
Clare Thompson, Chief Executive Officer
healthAlliance (FPSC) Limited
The Northern Region is New Zealand’s largest and fastest growing region with a population of 1.8 million that is
demographically and ethnically diverse. Overall, health outcomes in the Northern Region are generally better and
improving1 but vary considerably across the region by geography, ethnicity and deprivation.
healthAlliance FPSC supports the Northern Region District Health Boards (DHBs) to achieve their individual and regional
outcomes within their allocated funding by providing an end to end procurement and supply chain shared service to its
Northern Region DHB shareholders.
This annual plan has been developed in the context of the healthAlliance FPSC Statement of Intent 2017-2021, and taking
into account the Minister’s Letter of Expectations for DHBs and Subsidiary Entities for 2018/19, the New Zealand Health
Strategy and the Northern Region Health Plan. The Minister has emphasised “the need to support regional delivery of
services”.
FY2017/18 in review
In May 2017 the Northern Region stood up a regional procurement function and as of 1 July 2017 the Northern Region
supply chain function transitioned from healthAlliance NZ to healthAlliance FPSC. This provided the opportunity to
integrate the procurement and supply chain service to the Northern Region DHBs and in August 2017 the Northern
Region Regional Governance Group (RGG) endorsed healthAlliance FPSC as the Aggregator for the region. In this role
healthAlliance FPSC will ensure the regional coordination and visibility of all procurement and supply chain activity for the
Northern Region DHBs to optimise all regional opportunities. This decision underpins healthAlliance FPSC’s strategy for
the medium term.
In addition to establishing the regional procurement function and transitioning the supply chain function, in the past 12
months healthAlliance FPSC has made a number of organisational and operational changes under the Transformation
programme. These changes established the appropriate operating model and structure and have delivered benefits for
the Northern Region DHBs while delivering ‘business as usual’ activity. In particular, decision making is increasingly based
on data, analytics, expertise and future thinking, and performance measurement and reporting have improved.
healthAlliance FPSC has delivered a return on investment (ROI) of 6:1 for procurement, and oversight of inventory
management across the DHBs and the region is improving.
FY2018/19
Establishing healthAlliance FPSC as the Northern Region Aggregator is key to delivering economies of scale and value for
money to the region. This will allow the Northern Region DHBs to leverage real commercial benefits from both regional
2
and national procurement contracts and by establishing a fully integrated fourth party logistics (4PL) managed service.
The healthAlliance FPSC Transformation programme has delivered significant improvements in our business but given the
pressures in the health sector to address both cost and complexity, healthAlliance FPSC needs to continue to transform to
meet the needs of its Northern Region DHB shareholders.
healthAlliance FPSC has been working closely with its Northern Region DHB stakeholders and Board to agree its strategy
and work priorities for FY2018/19, in line with the direction set out in the Statement of Intent for 2017 - 2021. The
objective is to extend the suite of services for the Northern Region to give greater economies of scale. Delivering an
1
Page 10, Northern Region Health Plan, 2017/18.
2
National procurement contracts from PHARMAC, MBIE and New Zealand Health Partnerships.
Page 4 healthAlliance (FPSC) Limited Annual Plan 2018-2019integrated procurement and supply chain [4PL] service to our customers that delivers commercial value to health. Seven
operating cost and value drivers have been identified:
• Operating model
• Inventory and logistics
• Growth and change
• Managed spend
• Standardised buying
• Relationship management
• Data and insight
Targets have been identified for each of these drivers and a programme of work to achieve them has been proposed.
This programme will be rolled out over 3-5 years. The outcomes identified for year one are in our business plan for FY
2018/19. The key risk to achieving the Northern Region’s objectives of delivering economies of scale and value for money
is the alignment of healthAlliance FPSC’s stakeholders. healthAlliance FPSC has worked collaboratively with the Northern
Region DHBs to achieve alignment and this has been endorsed by the RGG.
Looking back over the past year healthAlliance FPSC is in a better place to deliver an integrated procurement and supply
chain service to the Northern Region DHBs that will assist them to meet their and the Minister’s objectives. There is
further work to do to optimise the regional shared service but we have much greater clarity on our role as the Northern
Region Aggregator and in how we will achieve this.
Page 5 healthAlliance (FPSC) Limited Annual Plan 2018-2019About healthAlliance FPSC
healthAlliance N.Z. Limited is a stand-alone company established in July 2000 by Counties Manukau (now Counties
Manukau Health) and Waitemata District Health Boards to provide shared services to both shareholders. In March 2011
Auckland and Northland District Health Boards became additional shareholders. As of 1 July 2017, each of the four
Northern Region DHBs have a 25% shareholding.
healthAlliance (FPSC) Limited is a wholly-owned subsidiary of healthAlliance N.Z. Limited, incorporated in September
2013. healthAlliance FPSC provides procurement and supply chain services to the Northern Region DHBs (and other
associated parties).
Our Environment and Role
DELIVERING ON GOVERNMENT AND SECTOR EXPECTATIONS:
The Minister of Health’s Letter of Expectations and the revised New Zealand Health Strategy provides the district health
boards, and their subsidiaries, with clear direction on sector priorities. healthAlliance FPSC’s role is to support the DHBs
to deliver on these expectations.
The diagram below outlines the linkage between national strategies, regional impacts and healthAlliance FPSC outputs.
All New Zealanders live well, stay well, in a system that is people-powered, provides services closer to home, is
Government & Health designed for value and high performance, and works as one team in a smart system.
Sector Outcomes
(Sector Outcomes)
Helping a “joined up” northern region population to
live well, stay well, get well
Economies of scale and value for Facilitating commercial
healthAlliance FPSC money by delivering more aggregation of procurement to Releasing clinical time to care
(Impacts on the optimise benefits for the through supply chain process
benefits and services for less
northern region across all improvements
northern region) cost for the region
national procurement agencies
Connecting and enabling the northern region DHBs
Leveraging the combined volumes of the northern
Leveraging systems and processes to provide
region DHBs for best quality, service, technology
efficiencies in the supply chain and managing
and price in consumables, capital items and
healthAlliance FPSC inventory, to provide on-time availability with
services; ensuring operational efficiencies in the
reduced held stock
(Outputs) procurement of goods and services
Our customers Deliver Passionate
healthAlliance FPSC Live within our professionals Optimise inventory
trust us to deliver commercial
(Strategic Priorities) means safe and investment
on our promises value to health
engaged at work
Our Vision: We deliver on our promises by being innovative and agile.
Our empowered employees are leading commercial excellence
Page 6 healthAlliance (FPSC) Limited Annual Plan 2018-2019OUR REGION healthAlliance FPSC contributes to supporting the Northern Region DHBs’ strategic focus on primary, secondary and community healthcare outcomes. The Northern Region is New Zealand’s largest and fastest growing region, and is expected to grow by 30% in the next 20 years. The changing demographic mix places additional demands on our health services and health outcomes vary across the region by geography, ethnicity and deprivation. Health services in the Northern Region are delivered in a range of settings from hospitals to primary and community services. Together, healthAlliance NZ and healthAlliance FPSC provide services that enable DHBs to support the following activities each day: OUR CUSTOMERS healthAlliance FPSC’s customers are the four Northern Region DHBs (organisations within the health sector). Page 7 healthAlliance (FPSC) Limited Annual Plan 2018-2019
OUR STRATEGIC IMPACTS
healthAlliance FPSC intends to deliver impacts in the following areas:
+ Economies of scale and value for money by delivering more benefits and services for less cost regionally than is
possible locally through innovative and regionally standardised frameworks and processes;
+ Facilitating Northern Region commercial aggregation of procurement to optimise benefits for the Northern Region
across all national procurement agencies, for example, the Ministry of Business, Innovation and Employment (MBIE),
PHARMAC, New Zealand Health Partnerships and healthAlliance FPSC; and
+ Releasing clinical time to care through supply chain process improvements.
For this Annual Plan healthAlliance (FPSC) Limited will be measuring impacts in the following areas:
Guidance
Health Strategy Linkage Approach Description of 18/19 activity Measures
Value and high hA FPSC to deliver Economies of scale and value for Delivery of shared procurement
performance services in line with money by delivering more benefits and supply chain services within
agreed DHB SLA and services for less cost for the agreed funding envelope
region
Value and high hA FPSC collaborates Facilitating Northern Region Optimise procurement by co-
performance with the DHBs to aggregation of ordinating planning, primary
establish the commercial opportunities to optimise and secondary procurement
benefits for the Northern Region and contract management
opportunity and to
across all external parties across regional and national
realise the benefits contracts
Value and high hA FPSC establish the Releasing clinical time to care through Maintain inventory managed on
performance opportunity, DHBs supply chain process improvements Oracle managed inventory
perform to optimise the end to end supply (OMI) at optimal level
chain
implementation
Page 8 healthAlliance (FPSC) Limited Annual Plan 2018-2019OUR OUTPUTS
healthAlliance FPSC enables the Northern Region DHBs to deliver high quality clinical services. healthAlliance FPSC has
two significant classes of outputs:
1) Procurement – leveraging the combined volumes of the Northern Region DHBs for best quality, service, technology
and price in consumables, capital items and services; ensuring operational efficiencies in the procurement of goods
and services.
2) Supply Chain – leveraging systems and processes to provide efficiencies in the supply chain and managing inventory,
to provide on-time availability with reduced held stock.
LINKING INPUTS AND ENABLERS TO CUSTOMER REQUIREMENTS
The following diagram explains the linkages between enablers/inputs, output classes and output measures.
Definitions and measures to achieve success in these output areas are defined in healthAlliance FPSC’s Statement of
Service Performance on page 15.
Enablers and Inputs Output Classes Output Measures
DHB Customer Requirements
Procurement – Deliver
Procurement annualised OPEX budgetary
savings to the Northern
Region DHBs
Ministerial and
Government
Expectations
Supply Chain – To
Supply Chain continuously strive for optimal
DIFOTIS (“Done In Full On Time
In Specification”)
Resources:
• Operational and capital
funding
• Regional assets (processes,
applications & infrastructure)
Page 9 healthAlliance (FPSC) Limited Annual Plan 2018-2019Our Stakeholder Engagement
healthAlliance FPSC operates in a large, complex and dynamic environment. There are multiple agencies operating in
public health procurement, which increases the complexity of delivering effective outcomes to our shareholders. Critical
to our success is the requirement that we build and maintain strong and effective relationships with key stakeholders,
whilst ensuring compliance with statutory obligations. healthAlliance FPSC engages at a number of levels within the
overall health and central government environment including:
+ Regional governance groups and supporting sub-governance groups
+ DHB boards, including audit and finance committees
+ DHB executive teams and DHB management
+ Ministry of Health
+ National advisory groups, including the Ministry of Health Services Commissioning Directorate
+ New Zealand Health Partnerships Limited
+ PHARMAC
+ Ministry of Business, Innovation and Employment (MBIE)
+ Treasury
+ Audit NZ
Page 10 healthAlliance (FPSC) Limited Annual Plan 2018-2019Our Strategic Priorities
healthAlliance FPSC’s Strategic Priorities have been endorsed by the healthAlliance FPSC Board. These will remain the
focus up to the year 2020. Our Strategic Priorities describe how we will transform ourselves and contribute to the success
of the Northern Region.
OUR PURPOSE
We are a specialist procurement and supply chain service adding value for our
customers to support the delivery of
Health Care
OUR VISION
We deliver on our promises by being innovative and agile. Our empowered
employees are leading commercial excellence.
KEY STRATEGIC PRIORITIES
healthAlliance FSPC has adopted five strategic goals. We are developing the work programme to achieve the goals.
Our immediate focus in FY1819 is on delivering commercial value to the health sector and optimising inventory
investment. This is captured in our Statement of Performance Expectations for FY1819.
Page 11 healthAlliance (FPSC) Limited Annual Plan 2018-2019Our Organisation
OUR PRINCIPLES
Our PRIDE principles describe the kind of organisation we aim to be and what is important to us in how we work. These
principles guide how we interact with each other, our customers, and with our stakeholders and partners.
PEOPLE & CULTURE PLANS
Our people are at the centre of everything we do. As part of our Transformation programme we are reviewing our People
and Culture plans to ensure we have a workforce capable of delivering on current and future demands.
We are creating a dedicated people plan that will support:
+ Leadership Capability – expanding the capability and capacity of leaders within healthAlliance FPSC to facilitate
execution of our Five Strategic Goals.
+ Organisational Culture – we put the customer at the centre of what we do, ensuring we have a change ready and
highly engaged workforce
+ Health, Safety and Wellbeing – our staff and customers are safe in the environments we provide.
+ Aligning people priorites to our performance KPIs. Resources and capability are assessed in the process of
developing the Annual Plan each year. Staff are regularly involved in performance development reviews to a)
ensure their KPIs are in line with those of the organisation and b) identify opportunities for augmenting their skill
base and competencies.
OUR STRUCTURE
The Board appoints the Chief Executive Officer (CEO) who is responsible for the day to day operations of FPSC. The CEO is
supported by an Executive Leadership Team that is accountable to the CEO in assisting with the overall management of
healthAlliance FPSC as a company and leading its functional responsibilities.
Page 12 healthAlliance (FPSC) Limited Annual Plan 2018-2019ORGANISATIONAL STRUCTURE AT 30 JUNE 2018
Chief Executive
GM, Strategy,
GM, GM, Organisational
Performance &
Commercial Supply Chain Change Manager
Intelligence
OUR ‘FULL TIME EQUIVALENT’ (FTE) NUMBERS
Current FTEs and future forecasted FTE below are based on information known at 30 June 2018:
For the year ended 30 June 2017 2018 2019 2020 2021 2022
Audited Unaudited Budget Forecast Forecast Forecast
healthAlliance (FPSC) Limited
Total3 39 167 209 209 209 209
3
Increase in FTE primarily relates to transition of Supply Chain to healthAlliance FPSC, decrease in 2018 relates to transition of National Procurement to
New Zealand Health Partnerships Ltd.
Page 13 healthAlliance (FPSC) Limited Annual Plan 2018-2019Our Governance and Accountability CORPORATE GOVERNANCE The Board of healthAlliance N.Z. Limited is appointed by its shareholders and has an independent chairperson. In turn, healthAlliance N.Z. Limited appoints the Board of healthAlliance FPSC. The healthAlliance FPSC Board meets six times per year, and the Audit and Risk Committee four times per year. The functions and purpose of healthAlliance (FPSC) Limited are set out in the Statement of Intent. Performance is monitored by the Board, and the Chairperson reports to the Northern Region’s Regional Governance Group (comprising Northern Region Chairs, CEOs and CMOs). Furthermore, the DHB-appointed Directors provide feedback to shareholder Boards. MINISTERIAL POWER TO DIRECT healthAlliance FPSC will ensure that decision-making processes comply with all legislative requirements to consult with, or notify, the Minister of Health. There is no intention to routinely or regularly report matters to the Minister. Any Ministerial directions will generally be dealt with through the Board Chair, on behalf of the Board and shareholding DHBs. INFORMATION REQUIRED BY MINISTERS healthAlliance FPSC commits to provide Ministers with information as required, to enable timely responses to: + Parliamentary questions + Routine Ministerial correspondence + Select Committee inquiries healthAlliance FPSC is required to comply with the provisions of the Official Information Act. TREATY OF WAITANGI healthAlliance FPSC will provide shared services to the population of the Northern Region, as served by the DHBs. For information about the populations those DHBs serve, and the DHBs health profiles, please refer to their Statements of Intent. Page 14 healthAlliance (FPSC) Limited Annual Plan 2018-2019
Our Statement of Performance Our Statement of Performance summarises the impacts healthAlliance FPSC wants to make in FY1819 and the results we expect to deliver for each of our output classes. In addition to these measures, healthAlliance FPSC as an organisation also measures itself against its Annual Plan and the achievement of its Service Level Agreements with Northern Region DHB customers, which are approved by the healthAlliance FPSC Board and shareholders. Reporting against these commitments is discussed on a regular basis by the Executive Leadership Team, Board and Shareholders. OUTPUT CLASSES healthAlliance FPSC measures its performance through two major output classes: 1) PROCUREMENT Leveraging the combined volumes of Northern Region DHBs for best quality, service, technology and price in consumables, capital items, and services; ensuring operational efficiencies in the procurement of goods and services. 2) SUPPLY CHAIN Leveraging systems and processes to provide efficiencies in the supply chain and managing inventory, to provide on- time availability with reduced held stock. Page 16 healthAlliance (FPSC) Limited Annual Plan 2018-2019
DELIVERING OUR PLAN
Our Statement of Performance summarises the key focus areas for healthAlliance FPSC and the results we intend to
deliver.
OUTPUT CLASS 1 – PROCUREMENT
Description Measure
+ Annualised OPEX savings Measure = $8 million in FY1819
Deliver annualised OPEX savings to the Northern Region DHBs
OUTPUT CLASS 2 – SUPPLY CHAIN
Description Measure
+ DIFOTIS Measure = Increase by 0.5% in
FY1819
Done In Full On Time In Specification
Page 17 healthAlliance (FPSC) Limited Annual Plan 2018-2019Financial Forecast
Statement of Responsibility
The information contained in this Annual Plan has been prepared in accordance with the Public Finance Act and the
Crown Entities Act 2004.
healthAlliance FPSC is responsible for:
+ The preparation of the financial statement and the judgements herein
+ Establishing and maintaining a system of internal control designed to provide reasonable assurance on the integrity
and reliability of the financial reporting
These financial statements are prepared in accordance with the statement of concepts and consistent use of accounting
principles from period-to-period is implicit.
These financial statements have been prepared on the basis that the organisation is a going concern and expects to
continue operations for the foreseeable future.
In the opinion of healthAlliance FPSC, the forecast financial statements fairly reflect the financial position and operations
of healthAlliance (FPSC) Limited.
Forecast Financial Statements
The forecast financial statements for the four years ending 30 June 2022 are included.
healthAlliance FPSC’s main financial objective is to provide services within the agreed funding envelope. Revenue is
planned to be equal to total expenses as healthAlliance FPSC only charges net expenses to its shareholder DHBs and is
effectively a not-for-profit organisation with the shareholding DHBs carrying the budget risk.
Financial forecasts (including FTE forecasts on page 12) are based on the continuation of existing services that
healthAlliance FPSC provides to its current customers.
The Supply Chain and Northern Region Procurement functions have been under the effective management of
healthAlliance (FPSC) Limited from 1 July 2016 but reported in the healthAlliance (NZ) Limited Parent company annual
accounts. From 1 July 2017 these functions formally transferred to healthAlliance (FPSC) Limited by resolution of the
Board.
The financial statements for 2017 include the provision of National Procurement activities. These activities were formally
transitioned to New Zealand Health Partnerships Limited (NZHP) effective 1 May 2017.
Where shareholder DHBs request us to develop new services - or expand current services through approved business
cases - budgets and FTE numbers will flex accordingly.
If new opportunities to provide additional services do arise, they will only be undertaken if the related additional revenue
is forecast to be equal to (or greater than) any additional expenditure. It is anticipated, at this stage, that any significant
changes in revenue generation and expense forecasts will be as a result of changes in healthAlliance FPSC/DHB capital
programmes.
healthAlliance FPSC earns revenue by charging DHBs and other customers for services provided. Currently all customers
of healthAlliance FPSC are district health boards or affiliated organisations. Funding sources and approvals for
healthAlliance FPSC is negotiated directly with Northern Region DHBs.
Funding is provided directly from DHB shareholders in accordance with the Shareholders Agreement. Consequently,
healthAlliance FPSC sources all funding from shareholders on an ‘as required’ basis and does not operate with a standby
banking facility.
The classes of output healthAlliance FPSC expects to supply are detailed on page 15.
The expected revenue to be earned and expenses to be incurred for each class of outputs are as follows (i.e. revenue is
equal to expenditure for all classes of outputs).
Page 19 healthAlliance (FPSC) Limited Annual Plan 2018-2019FORECAST STATEMENT OF OUTPUTS
For the year ended 30 June 2017 2018 2019 2020 2021 2022
($000's) ($000's) ($000's) ($000's) ($000's) ($000's)
Audited Unaudited Budget Forecast Forecast Forecast
healthAlliance (FPSC) Limited
Supply Chain 0 10,835 11,615 11,847 12,080 12,314
Procurement 10,159 5,377 5,343 5,450 5,557 5,665
Total Outputs 10,159 16,212 16,958 17,297 17,637 17,979
FORECAST STATEMENT OF EXPENDITURE FOR OUTPUTS
Total value
Personnel Information Telecom Depreciation Other
of services
For the year ended 30 June 2018 ($000’s) Technology ($000’s) ($000’s) Expenses ($000’s)
($000’s) ($000’s)
healthAlliance (FPSC) Limited
Supply Chain 10,172 22 54 58 1,309 11,614
Procurement 3,840 25 28 2 1,448 5,344
Total Outputs 14,012 47 82 60 2,757 16,958
Note: Total revenue is $0.6m lower than total expenditure for each output class, resulting in a $1.2m loss for the year
ended 30 June 2018.
FORECAST STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June
2017 2018 2019 2020 2021 2022
healthAlliance (FPSC) Limited
Revenue
Revenue from Shareholders 13,469 16,912 17,251 17,591 17,933
Revenue from NZ Health Partnerships 11,111
Other Revenue 1,151 1,501 46 46 46 46
Total Revenue 12,262 14,970 16,958 17,297 17,637 17,979
Expenses
Personnel 4,975 11,940 14,012 14,292 14,578 14,870
Information Technology 54 6 47 48 49 50
Telecommunication costs 27 68 82 84 85 87
Depreciation 368 51 60 60 55 45
Other Operating Expenses 4,735 4,147 2,757 2,813 2,869 2,928
Total Expenses 10,159 16,212 16,958 17,297 17,637 17,979
Total Comprehensive Income 2,103 (1,242) - - - -
Note: The 2017 profit includes the New Zealand Health Partnerships transition payments and the 2018 loss is a result of
organisational transition costs.
FORECAST STATEMENT OF MOVEMENTS IN EQUITY
For the year ended 30 June
2017 2018 2019 2020 2021 2022
healthAlliance (FPSC) Limited
Equity at Beginning of Year (183) 1,920 678 678 678 678
Net Surplus for Year 2,103 (1,242) - - - -
Paid Up Shares Issued - -
Equity at End of Year 1,920 678 678 678 678 678
Page 20 healthAlliance (FPSC) Limited Annual Plan 2018-2019REVENUE PER RELATED PARTIES
For the year ended 30 June
2017 2018 2019 2020 2021 2022
healthAlliance (FPSC) Limited
Revenue from Related Parties
NZ Health Partnerships 11,111 - - - - -
Northern Region DHBs - 13,469 16,912 17,251 17,591 17,933
Total Revenue from Related Parties 11,111 13,469 16,912 17,251 17,591 17,933
FORECAST OF FINANCIAL POSITION
For the year ended 30 June
2017 2018 2019 2020 2021 2022
healthAlliance (FPSC) Limited
Current Assets
Cash, Bank & Investments 825 1,477 2,210 2,283 2,288 2,283
Trade & Other Receivables 1,559 2,241 1,568 1,614 1,660 1,707
Total Current Assets 2,384 3,718 3,778 3,897 3,948 3,990
Long-term Assets
Property Plant & Equipment 2,395 157 97 87 82 87
Total Long-term Assets 2,395 157 97 87 82 87
Total Assets 4,779 3,875 3,875 3,984 4,030 4,077
Current Liabilities
Provision & Accruals 2,519 1,256 1,256 1,326 1,332 1,339
Employee Entitlements 220 1,182 1,182 1,206 1,230 1,254
Total Current Liabilities 2,739 2,438 2,438 2,532 2,562 2,594
Long-term Liabilities
Employee Entitlements 120 759 759 774 790 805
Total Long-term Liabilities 120 759 759 774 790 805
Total Liabilities 2,859 3,197 3,197 3,306 3,352 3,399
Net Assets (Liabilities) 1,920 678 678 678 678 678
Shareholder Capital 0
Retained Earnings 1,920 678 678 678 678 678
Total Equity 1,920 678 678 678 678 678
Page 21 healthAlliance (FPSC) Limited Annual Plan 2018-2019FORECAST STATEMENT OF CASHFLOWS
For the year ended 30 June
2017 2018 2019 2020 2021 2022
healthAlliance (FPSC) Limited
Cash Flows - Operating Activities
Receipts from Services 10,096 15,866 16,912 17,251 17,591 17,933
Other Income - - 23 23 23 23
Interest Received 2 23 23 23 23 23
Total Revenue - Operating Activities 10,098 15,889 16,958 17,297 17,637 17,979
Payments to employees and suppliers (8,283) (15,233) (16,225) (17,174) (17,582) (17,934)
Interest Paid (30) - - - -
Total Expenses (8,313) (15,233) (16,225) (17,174) (17,582) (17,934)
Net Cash Flow - Operating Activities 1,785 656 733 123 55 45
Cash Flows – Investing Activities
Purchase of Assets (4) - (50) (50) (50)
Net Cash Flow - Investing Activities - (4) - (50) (50) (50)
Cash Flows – Financing Activities
Borrowings (975) -
Net Cash Flow - Financing Activities (975) - - - - -
Movements in Cash
Net Cash flow 810 652 733 73 5 (5)
Opening Cash 15 825 1,477 2,210 2,283 2,288
Closing Cash 825 1,477 2,210 2,283 2,288 2,283
FORECAST CAPITAL SPEND
For the year ended 30 June
2017 2018 2019 2020 2021 2022
healthAlliance (FPSC) Limited
Other Equipment 4 0 50 50 50
Total Forecast Capital Spend 0 4 0 50 50 50
Page 22 healthAlliance (FPSC) Limited Annual Plan 2018-2019Statement of Significant Accounting Policies The following is a summarised description of the accounting policies used in preparation of the Annual Plan. A full description of the accounting policies used by the group can be found in the 2016/17 Annual Report. General Accounting Policies REPORTING ENTITY healthAlliance (FPSC) Limited is a company wholly-owned by healthAlliance N.Z. Limited. healthAlliance N.Z. Limited is jointly owned by Northland, Waitemata, Auckland and Counties Manukau District Health Boards. healthAlliance FPSC’s ultimate parent is the New Zealand Crown. healthAlliance FPSC is a crown entity subsidiary in terms of the Crown Entities Act 2004, owned by the Crown and domiciled in New Zealand. healthAlliance FPSC is a public benefit entity for financial reporting purposes as defined under NZ IAS 1. The group financial statements include healthAlliance (FPSC) Limited and its parent, healthAlliance N.Z. Limited. Basis of Preparation STATEMENT OF COMPLIANCE The financial statements have been prepared in accordance with the requirements of the Crown Entities Act 2004 and the Financial Reporting Act 1993 which include the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP). The financial statements have been prepared in accordance with Tier 1 Public Benefit Entity accounting standards. FUNCTIONAL AND PRESENTATION CURRENCY The financial statements are presented in New Zealand Dollars (NZD), rounded to the nearest thousand. The functional currency of healthAlliance FPSC is NZD. MEASUREMENT BASE The financial statements are prepared on the historical cost basis. FORECAST FINANCIAL INFORMATION The forecast financial statements have been prepared in accordance with Public Benefit Entity Financial Reporting Standard 42, Prospective Financial Statements. healthAlliance FPSC is required under the Crown Entities Act 2004 to present forecast financial statements for the next 4 years as part of its Statement of Intent and forecast financial statements for the 30 June 2018 financial year as part of the Statement of Performance. healthAlliance FPSC is responsible for the forecast financial statements presented, including the assumptions underlying statements and all other disclosures. The forecast statements have been prepared on the basis of best estimates as to future events which healthAlliance FPSC expects to take place. The company has considered factors that may lead to a material difference between information in the forecast financial statements and actual results. PARTICULAR ACCOUNTING POLICIES The following particular accounting policies which materially affect the measurement of results and financial position are applied: Page 23 healthAlliance (FPSC) Limited Annual Plan 2018-2019
REVENUE RECOGNITION Revenue is recognised on receipt or delivery of service, whichever is the earlier. RECEIVABLES AND PREPAYMENTS Receivables and Prepayments are stated at expected realisable value after providing for doubtful debts. STATEMENT OF CASH FLOWS Cash balances on hand, held in bank accounts, demand deposits and other highly liquid investments in which healthAlliance FPSC invests as part of its day-to-day cash management. Operating activities include cash received from all income sources of healthAlliance FPSC and records the cash payments made for the supply of goods and services. CHANGES IN ACCOUNTING POLICIES There have been no changes in accounting policy. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are included at cost less depreciation to date. DEPRECIATION Depreciation is provided on a straight-line basis on all tangible property, plant and equipment at rates calculated to allocate the cost, less estimated residual value, over their estimated useful lives. Major depreciation rates are: IT equipment: 12% to 33% Other equipment: 10% to 20% Leasehold Improvements: 11% to 33% INTANGIBLE ASSETS Software acquired by the Group is stated at cost less accumulated depreciation and impairment losses. Where software is developed or modified internally, the cost of internal staff time is added to the value of the software where future economic benefits will flow to the Group. AMORTISATION Amortisation is recognised in the surplus or deficit on a straight line basis over the estimated useful lives of intangible assets. Major amortisation rates are: Software: 12% to 33% LEASES Operating lease payments, where the lessors effectively retain substantially all the risks and benefits of ownership of the leased items, are recognised as expenses in the periods in which they are incurred. PAYABLES TO SHAREHOLDERS Payables to shareholders are advances payable on demand and are interest free. Page 24 healthAlliance (FPSC) Limited Annual Plan 2018-2019
EMPLOYEE ENTITLEMENTS Employee benefits that are due to be settled within the next 12 months are measured at nominal values based on entitlements at current rates. The value of benefits that will be settled beyond 12 months - after the end of the period in which the employee renders the related service - have been calculated on an actuarial basis. This takes into account the likelihood that staff will reach the point of entitlement, their years of service, and the present value of estimated future cash flows. Page 25 healthAlliance (FPSC) Limited Annual Plan 2018-2019
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