Volume Ten 2013 focusing on Health

Improving the management of the NSW Health workforce

While there have been positive developments in the management of the NSW Health workforce, with total overtime decreasing, the frequency of workplace injuries falling and employee engagement improving, there are still areas needing improvement.

Some NSW Health employees continue to earn excessive overtime, excessive annual leave balances have increased over last year, many employees get paid without their supervisor approving their timesheet, salary overpayments have increased and sick leave is above target.

Overtime (including call backs)

While overtime payments (including call backs) reduced from $390 million in 2011-12 to $370 million in 2012-13, some employees continue to earn more than $150,000 in overtime and call backs a year.

The NSW Auditor-General, Grant Hehir, recommends that each year, all health entities should identify their top one per cent overtime (including call backs) earners and investigate whether excessive reliance on these employees represents value for money or compromises patient safety. This will assist health entities identify smarter and possibly cheaper rostering and other operational practices.

Excessive annual leave balances, time recording and salary overpayments

Despite instructions from the Ministry of Health and the expectations set out in the State Budget, the number of employees with excessive annual leave balances in NSW Health increased from 28,051 employees at 30 June 2012 to 28,707 employees at 30 June 2013.

The Auditor-General recommends all health entities need to make a more concerted effort to reduce excessive annual leave balances. He also recommends health entities ensure all employee timesheets are approved in a timely manner. In some cases, up to 30 per cent of employees are paid without a supervisor approving their timesheet, contributing to salary overpayments.

Sick leave higher than target

In 2012-13, employees working in the Ambulance Service, local health districts and specialty networks took an average of 59.7 hours of sick leave per full time equivalent (FTE) employee.  This was significantly higher than the Ministry of Health’s target of 50 hours per FTE.

The Ambulance Service had the highest sick leave per FTE, with its employees taking 82.1 hours of sick leave per FTE in 2012-13. Sydney Children’s Hospitals Network had the lowest sick leave, with its employees taking 54.1 hours of sick leave per FTE.

Maintaining NSW Health’s assets

In 2012-13, NSW Health spent $283 million on asset maintenance, $26 million more than the previous year. However, it is unclear what is the right spend to properly maintain NSW Health’s assets because:

• not all health entities have prepared detailed asset maintenance plans

• not all health entities have quantified their backlog maintenance

• the Ministry of Health has not established a benchmark for how much should be spent on maintenance each year.

Three health entities have identified their backlog maintenance - the Ambulance Service, Northern Sydney Local Health District and Mid North Coast Local Health District. Their combined backlog maintenance is around $76 million.

NSW Auditor-General, Grant Hehir, recommends the Ministry of Health should do more to help the health sector develop consistent, comprehensive asset maintenance plans and to identify and measure the backlog maintenance.  The Auditor-General also recommends the Ministry of Health sets a State benchmark to help it and health entities assess the adequacy of maintenance spend by health entities.

Most health entities did not meet budgets

In 2012-13, ten of the seventeen local health districts and specialty networks did not meet their net cost of services budgets. The largest overruns were recorded by Northern Sydney ($32.4 million), Western Sydney ($23.2 million), Western NSW ($18.9 million), South Eastern Sydney ($13.6 million) and Murrumbidgee ($8.0 million) local health districts.

The main reasons for the budget overruns were higher than projected in-patient activity, higher than budgeted visiting medical officer expenses and increased bad debt write offs. 

In 2012-13, eight local health districts received a total of $133 million in additional cash from the Ministry of Health, up from $73.4 million in 2011-12. The extra cash helped these local health districts manage their financial position and ensure timely supplier payments. 

Barry Underwood on 9275 7220 or 0403 073 664; email: barry.underwood@audit.nsw.gov.au