DISTRICT AND NETWORK RETURN AUDIT PROGRAM 1 Presentation Title
BACKGROUND The DNR is used for.. Uploading to the ABM Portal and related applications NSW State Price development Service Group Statement Reporting in the Audited Financial Statements National Hospital Cost Data Collection (NHCDC) submission to IHPA Public Hospitals Establishment Collection (PHE) submission to AIHW Health Expenditure Australia Report (HEX) submission to AIHW Reconciling expense, revenue & FTE for Mental Health Establishment National Minimum Data Set (MHE NMDS) submission to AIHW Report on Government Spending (ROGS) to Productivity Commission 2
BACKGROUND In the NSW Auditor General s Report to Parliament in 2013, the Auditor General made a number of recommendations: The Ministry should develop a formal data quality assurance framework to improve the accuracy and reliability of data used to make activity based funding decisions. As a minimum the framework should include: A mandatory internal audit of the costing and patient data included in the annual District and Network Return. The Ministry should consider including the minimum audit requirements in its service agreements with the local health districts and specialty networks 3
DNR AUDIT PROGRAM Developed in 2015 for the 2014/15 DNR Mandatory annual audit o Condition of Subsidy Performed by LHD/SHN o Internal Audit Team o Contracted Third Party Submit to Secretary: o Attestation o Key findings and recommendations Three lines of inquiry: Is the financial and patient data reliable and accurate? Are costing methodologies used appropriate and robust? Does the preparation of the DNR comply with NSW cost accounting guidelines? 4
AUDIT PROGRAM PRINCIPLES Risk based and Governance process focused Adequacy and effectiveness of controls Concept of materiality Elements of subjectivity Continuous improvement foundation Not punitive 5
CONTROL OBJECTIVE 1 The DNR Submission provides consistent and accurate patient cost data Main focus: Overall governance and Compliance with the CAG Number of Tests: 5 Test 1.1.1 Determine the process that enabled the Chief Executive to approve the DNR for submission, including reconciliation, documentation and stakeholder engagement 6
CONTROL OBJECTIVE 2 All General Ledger expenses have been fully and accurately absorbed Main focus: Transformation of the GL for costing, overhead cost allocation, product fractions Number of Tests: 23 Test 4.1.2 Evaluate Finance Department review of processes to ensure that the transactions processed to it, reflect the intent of the account code used. Test key controls as deemed appropriated (Refer to Standard 3.1) 7
CONTROL OBJECTIVE 3 Data within PPM is a reliable and accurate representation of patient activity Main focus: Collection, extraction, formatting, loading and processing of the patient data Number of Tests: 30 Test 22.1.1 Evaluate processes and controls implemented by Data Managers to ensure that information entered into Feeder systems is complete and accurate. Test appropriate key controls. (Example of control may include investigation of unusual items: anaesthetic time < operating time) 8
CONTROL OBJECTIVE 4 Data quality checks are in place to ensure the reliability of the DNR Main focus: Quality of the DNR output Number of Tests: 1 Test 26.1.1 Review the results of the Quality Assurance page within the RQ App. Determine if case numbers with a score less than 1 were investigated, and assess the reasonableness of explanations provided. 9
AUDIT PROGRAM IMPLEMENTATION A number of strategies Combined Internal Audit and Costing Officer Workshop Govdex Collaborative Space Implementation Aids Audit Support 10
DNR AUDIT PROGRAM CHALLENGES Costing Officers are the SMEs Enormous learning curve for IA Not a traditional audit It is a big audit program Timing and Third Parties 11
DNR AUDIT PROGRAM FINDINGS All DNRs were found to be fit for purpose Opportunities for improvement 12
KEY RECOMMENDATIONS Formal governance procedures Cost centre classification Product fraction reviews Patient and feeder data quality 13
PEER REVIEW 6 LHD site visits by 5 LHD IA peers Very positive experience Robust working papers supporting findings, conclusions, recommendations Rationale and risk rating required for tests Timing of DNR Audit 14
DNR AUDIT PROGRAM BENEFITS The DNR Audit Program has: Audit has status Engaged LHD/SHNs Started conversations and shares responsibility for DNR Provided strategic direction Identified opportunities for links with other audits It will enable costing officers to cost! 15