DHB/MoH Common Chart of Accounts
Version 8.0
Issued December 2012
Valid for reporting from 1 July 2013
Contents
1. STATEMENT OF PURPOSE 3
2. APPLICATION 3
3. CHART MAINTENANCE AND CHANGE REQUESTS 3
4. GENERALLY ACCEPTED ACCOUNTING PRACTICE 3
5. RELATIONSHIP OF THE CCoA TO THE COMMON COSTING STANDARDS 4
6. STRUCTURE AND DEFINITIONS 4
6.1. GENERAL LEDGER STRUCTURE: 4
6.2. SCOPE OF THE DHB/MoH CCoA 5
6.3. MANDATORY LEVELS 5
6.4. STRUCTURE HIERARCHY 7
6.5. NUMBERING SCHEME 8
6.6. DEFINITIONS: MAJOR CATEGORY, SUB CATEGORY & GROUP 8
7. DHB/MoH FINANCIAL REPORTING FRAMEWORK 11
7.1. INTRODUCTION 11
7.2. DHB FRAMEWORK 11
7.3. PRINCIPLES 12
7.4. REPORTING REQUIREMENTS 12
7.5. MONTHLY FINANCIAL REPORTING TEMPLATE 13
7.6. MONTHLY FINANCIAL REPORTING TEMPLATE CODES 15
8. CONSOLIDATED CROWN FINANCIAL STATEMENTS 16
8.1. REQUIREMENT 16
8.2. ELIMINATING INTER-CROWN ENTITY TRANSACTIONS 16
APPENDICIES
APPENDIX A: DETAILED COMMON CHART OF ACCOUNTS (refer separate Excel Workbook)
APPENDIX B: SUFFIX NUMBERING FRAMEWORK
APPENDIX C: PERSONNEL / COMMON COSTING POOLS
DHB/MoH Common Chart of Accounts
1. STATEMENT OF PURPOSE
1.1 The purpose of the DHB/MoH Common Chart of Accounts (CCoA) is to provide a nationally consistent coding system for the recording of transactions by District Health Boards (DHBs) and the Ministry of Health (MoH).
1.2 The CCoA will allow common presentation, interpretation and use of financial information produced by DHBs.
1.3 The CCoA supports and provides a stable platform for the Common Costing Standards and all cost reporting, comparative analysis and benchmarking.
2. APPLICATION
2.1 The CCoA is a mandatory accountability document under the Nationwide Service Framework.
2.2 The entire CCoA applies to all District Health Boards, their subsidiaries and other 100% Crown-owned health related entities, including shared services agencies from 1 July 2002.
2.3 The Ministry of Health is required to use the CCoA for recording Provider payments categorised in the 6000 series of codes. This is the shared part of the CCoA.
3. CHART MAINTENANCE AND CHANGE REQUESTS
3.1 The CCoA is maintained under the authority of the CFO Technical Accounting Group (TAG).
3.2 The secretariat function for the chart is provided by the NHB, DHB Performance section.
3.3 TAG manages a CCoA working group that is intended to be representative of the sector with an appropriate skill mix to cover all aspects of the chart. The structure and personnel will be reviewed annually as part of the CCoA review process.
3.4 The CCoA will be dynamic so it can support the varying financial reporting needs of DHBs and MoH. Change requests and issues are to be directed to the Chair or Secretary of the working group. Requests must be submitted by 31 July of each year. The CCoA will be updated annually each October.
4. GENERALLY ACCEPTED ACCOUNTING PRACTICE
4.1. The CCoA is intended to comply (or support compliance) with Generally Accepted Accounting Practice (GAAP) as described in accounting standards promulgated by the New Zealand Institute of Chartered Accountants.
5. RELATIONSHIP OF THE CCoA TO THE COMMON COSTING STANDARDS
5.1. The conceptual framework of the DHB/MoH CCoA and their relationship to the Common Costing Standards is depicted below.
FIGURE 1 – Conceptual Framework of DHB/MoH CCoA with the Common Costing Standards
6. STRUCTURE AND DEFINITIONS
6.1 GENERAL LEDGER STRUCTURE
The Chart of Accounts: The Multi-segment General Ledger coding number, which describes some, or all of the following elements:
· Entity (Organisation)
· Service (or Division)
· Responsibility Centre
· Account Number
· Any Suffixes
Example (structure for use at Waitemata DHB):
02 – 70 – 740 – 2468 – 00000
Segment 1 Segment 2 Segment 3 Segment 4 Segment 5
Organisation Service RC Account Number Suffix
Waitemata DHB Clinical Support General Laboratory Phlebotomist Accident Leave
This example explains:
· Waitemata DHB (Organisation)
· Clinical Support (Service)
· General Laboratory (RC)
· Phlebotomist Payroll (Account)
· Accident Leave (Suffix)
6.2 SCOPE OF THE DHB/MoH CCoA
The Scope of this Standard is to define a consistent structure and methodology for the account number segment of the multi segment general ledger coding number (segment 4 as circled in the above example).
The definition and use of organisational unit segments (segments 1, 2 and 3 in the above example) is at the discretion of individual DHB. The use of the account suffix segment (segment 5 in the above example) is optional. Account suffixes may be implemented and used to breakdown costs to a more detailed level.
The account number segment consists of up to 4 mandatory levels. These are described below:
6.3 MANDATORY LEVELS
The following mandatory levels apply to DHBs.
Level 1 – Major Category:
1000’s Revenue
2000’s Expenditure
2001 Personnel
2002-2199 Medical Personnel
2200-2399 Nursing Personnel
2400-2599 Allied Health Personnel
2600-2799 Support Personnel
2800-2999 Management/Administration Personnel
3000’s Outsourced Services
4000’s Clinical Supplies
5000’s Infrastructure & Non-Clinical Supplies
6000’s Provider Payments (joint DHB/MoH use)
8000’s Internal Allocations
9000’s Balance Sheet
Level 2 – Sub Category:
A significant subdivision inside a Level 1 Major Category.
Example: Within Level 1 Major Category ‘Revenue’, Level 2 identifies the following divisions:
Government and Crown Agency Sourced Non Government & Crown Agency Revenue..
NOTE: Not all categories (Level 1) have Sub Categories (Level 2).
Level 3 – Group:
Defines significant subdivisions inside a Level 2 Sub-Category.
Example: Within Level 3 Sub Category ‘Allied Health’ Level 4 identifies the following divisions:
Therapies, Psychologists, Laboratory, , Pharmacy, Radiology & Radiotherapy, Ambulance & Paramedical, Other Allied Health & Allied Health-Other Costs.
Level 4 – Posting Level Account:
Defines the account into which transactions are posted and accumulated.
Example: Within Level 4 Group ‘Laboratory’, Level 4 identifies the following divisions:
Medical Laboratory Scientists, Laboratory Assistants and Phlebotomists.
NOTE: There are a number of level 4 accounts (particularly in the Payroll Expenditure Major Categories) which can be omitted, if a level 5 account (i.e. suffix) is used.
Level 5 – Suffix Account: Defines the sub accounts within the posting account, which in turn are used for posting transactions. This level is optional, as different DHB G/L systems may not be able to cope with Suffixes. The suffix allows individual DHBs to track specific items, as per individual organisational need.
Payroll Example: Within Level 4 Account ‘2473 - Pharmacist’, Level 5 includes the following divisions in addition to Regular time payment: Accident Leave, Annual Leave, Other Leave, Sick Leave, Statutory, Training/Study Leave, Long Service, Allowances, etc. See Appendix A: Chart of Account Detail.
Non-Payroll Example: Within the Level 4 Account ‘4625 – Central Nervous System Pharmaceuticals’, suffix accounts 01 and 02 could be used to refer to Clozapine and Olanzapine respectively (to track costs of Schizophrenia drugs ).
6.4 STRUCTURE HIERARCHY
The hierarchical framework for determining an account number is illustrated in the flow diagram below for a Registered Nurse Long Service Leave accrual.
6.5 NUMBERING SCHEME
Specific 4 digit account numbers have been prescribed in the DHB/MoH CCoA. Where it has been necessary for DHB’s to have further flexibility of data capture and reporting then 2 options exist:
1. Use of Suffix Accounts (both Statement of Comprehensive Income and Statement of Financial Position)
2. Use of Ranges. For specific account codes (i.e. bank accounts), a range of accounts has been specified for usage. This is the only situation for using accounts other than prescribed in this standard.
3. The numbering of the accounts has been done to accommodate different general ledger systems, and their technical specifications:
· Parent (or Summary) accounts at major categories, and grouping levels, are required by some G/L systems. Thus, the parent account number (i.e. 4th digit = 0, 1, or even 2) has been reserved from use by a (level 4) posting level account.
· Parent accounts may also use the account number ending in ‘99’. Hence this account number has also been reserved.
6.6 DEFINITIONS: MAJOR CATEGORY, SUB CATEGORY & GROUP
Refer to New Zealand Institute of Chartered Accountants Financial Reporting Standards for generic definitions.
Statement of Financial Performance
Revenue
External sources of revenue or cost recovery to the DHB. Excludes internal charging or billings at a consolidated level.
Government and Crown Agency Sourced Revenue
This consists of revenue sourced from central government and its agencies. It includes the following revenue streams:
· MoH – Vote Health
· MoH – Personal Health
· MoH – Mental Health
· MoH – Public Health
· MoH – Disability Support
· MoH – Maori Health
· Inter District Flows
· Other DHB’s
· Government (non DHB’s)
Patient / Consumer Sourced Revenue
Other Income
Expenditure
Personnel
Direct costs for those staff directly employed (i.e. those people with a legal employment relationship) by the DHB. This category therefore excludes contractors.
Medical Personnel
All staff employed primarily as practicing physicians and/or surgeons. This does not include medical staff employed solely in a management role.
Nursing Personnel
All qualified nursing staff, registered and enrolled, and nursing aides. This does not include nursing staff employed solely in a management role. The CCoA has categorised Nursing by professional occupation group, rather than by location/health specialty.
Allied Health Personnel
All professional health occupations (excluding medical or nursing staff) employed to provide patient care, either directly or indirectly.
Support Personnel
All staff employed to maintain the infrastructure and facilities of the DHB.
Management/Administration Personnel
All management, clerical and corporate staff. Includes any clinical staff employed solely in a management role.
Outsourced Services
Purchase of external staff through bureau or other employment organisation (i.e. contractors, where a legal employment relationship does not exist). Services provided here are input-based (i.e. inputs into the process of delivering patient care) rather than output based.
Medical Personnel
Nursing Personnel
Allied Health Personnel
Support Personnel
Management/Administration Personnel
Outsourced Clinical Services
Provision of entire diagnostic or treatments to the DHB, as an outsourced service (i.e. more than just the pure labour). Examples include laboratory tests, MRIs, CTs, etc. Services provided here are input-based (inputs into the process of delivering patient care i.e. inputs into a larger health output/purchase unit) rather than outputs based (these are coded to the Provider payments section).
Outsourced Corporate Services
Provision of entire (or mostly entire) Corporate services to the DHB, as an outsourced service (i.e. more than just the pure labour). Examples include Finance, Human Resources, Information Technology, and supply chain (including procurement). (Note that partial IT Bureau and Outsourcing Fees are coded under a/c 5305).
Outsourced Services – Funder Services
To be utilised for outsourced costs of Provider Audit & Monitoring and Service Monitoring & Assessment as well as the funding of the DHB Shared Services funding agencies.
Clinical Supplies
Materials or suppliers used or consumed either directly or indirectly, in the treatment of patients.
· Treatment Disposables
· Diagnostic Supplies & Other Clinical Supplies
· Instruments and Equipment
· Patient Appliances
· Implants and Prostheses
· Pharmaceuticals
Drug expenditures, classified into individual accounts as categorised by the British National Formulary.
· Other Clinical & Client Costs
Infrastructure & Non-Clinical Supplies
All non-payroll expenses related to the operation or maintenance of the organisational infrastructure rather than the direct treatment of patients.
· Hotel Services, Laundry & Cleaning
· Facilities
· Transport
· IT Systems & Telecommunications
· Interest & Finance Charges
· Professional Fees & Expenses
· Other Operating Expenses
· Democracy
· Subsidiaries and Joint Ventures
Provider Payments
Payments & disbursements made to providers by the Fund within the DHB. These are output-based payments (in contrast to input based payments as identified in the Outsourced Clinical Services section). Payments are made for an output-based service (e.g. IPA & GP consultations, Community pharmacy drugs dispensed).
· Personal Health
· Mental Health
· Public Health
· Disability Support
· Maori Health
Internal Allocations
Internal charges or Billings between Responsibility Centres (RC’s) within the DHB eliminate at a consolidated level.
Statement of Financial Position
Current Assets
Non-Current Assets
Current Liabilities
Non-Current Liabilities
Crown Equity
7. DHB/MoH FINANCIAL REPORTING FRAMEWORK
7.1. INTRODUCTION
All DHBs acknowledge their financial reporting obligations to the Ministry and other central Government entities. The Ministry will maintain a DHB Financial Reporting Template consistent with the DHB CCoA, in consultation with the DHBs for their completion. The Ministry will act as a single central repository for sector financial information receiving completed monthly templates from each DHB and serving the financial information needs of the Ministry, Statistics New Zealand and The Treasury (for Consolidated Crown Financial Statement information). The 6000 range of the chart is jointly shared by the DHBs/MoH in terms of its structure and use for reporting purposes.
7.2. DHB FRAMEWORK
The Cabinet Minutes of 18 May 2000 state that the DHBs shall produce financial statements detailing the performance of three dimensions (arms) of DHBs, as set out below. The rationale behind this policy is to maintain the transparency and accountability in the allocation of funds towards DHB Provider and non-hospital service providers.
DHB Funder – responsible for the funding of health and disability services. In this arm DHBs report on the receipt of funds from the Crown and the allocation of funds to providers, including to their own hospitals. This excludes governance, management and administration activities relating to allocation of funds.
DHB Provider – responsible for governance and management of crown owned hospital
and associated health services. Reports on the provision of health and disability services
and associated fringe activities such as renting surplus properties etc.
DHB Governance & Funding Administration - refers to the governance, management
and administration activities relating to the allocation of funds. This includes: