The Australian Health Practitioner Regulation Agency (AHPRA), working in partnership with the 14 National Boards, recorded a surplus of $1.861 million for the financial year 2014/15. The year-on-year results are shown in the table below.
The accumulated surplus since commencement is $41.009 million.
Equity held by AHPRA on behalf of the 14 National Boards as at 30 June 2015 was $84.904 million, an increase of $1.861 million from 30 June 2014 through accumulated surplus during the 2014/15 financial year. The last contribution to contributed capital was in 2012/13 and related to the 2012 addition of four professions to the National Registration and Accreditation Scheme. The contributed capital component of equity is $43.895 million, and is attributed to the National Boards.
In previous years AHPRA and the individual National Boards reviewed the appropriate equity levels required for each National Board. The equity levels have a strong relationship to the financial risk associated with the functions of each National Board and are reviewed on a regular basis.
It is expected that the National Boards will have reasonable and sufficient equity to cover their commitments. To reduce some equity levels National Boards will deliberately utilise these funds to cover operational expenditure including funding required for the replacement of core business infrastructure.
Total income from transactions was $170.463 million during the 2014/15 financial year, an increase of $2.604 million from 2013/14. The growth was due to an increase in the number of registrants throughout the year, along with some National Boards increasing their registration fees consistent with the Consumer Price Index (noting that other National Boards kept their fees at the same level as previous year while others decreased their fees).
Total expenses from transactions were $168.602 million, an increase of $16.715 million from the previous financial year 2013/14. The increase included new payments in 2014/15 for the Office of the Health Ombudsman in Queensland of $4.5 million, and for the National Health Ombudsman and Privacy Commissioner Office of $1.5 million.
Expenditure classified as accreditation increased by $4.019 million in 2014/15 representing funding paid to external accreditation entities for accreditation functions.
AHPRA’s net assets increased by $1.861 million to $84.904 million at 30 June 2015. Cash and cash equivalents combined with investments remained similar to the previous year ($167.2 million at 30 June 2015, compared with $167.3 million at 30 June 2014). The most significant change was that investments classified as non-current increased from $35 million to $71 million, reflecting the change in maturity timeframes for a number of the investments due to the cash flow requirements of the business.
AHPRA receives income in advance and this reduced slightly at 30 June 2015, reflecting the reduction in registration fees, particularly for the Nursing and Midwifery Board of Australia where the renewal period closed on 31 May 2015.
The balance sheet for the 2014/15 financial year also includes for the first time the recognition of a lease asset item under assets and also a lease liability item under liabilities. This relates to the recognition of a lease incentive relating to the office in Adelaide which was agreed to during 2014/15.
Overall the balance sheet is healthy and the largest contributor to this is both cash and cash equivalents and investments held by AHPRA.
The year ahead
There is a significant and important program of capital replacement that will be started in 2015/16 and will require the partial use of accumulated surpluses from previous years. Overall we expect equity to reduce from its current level of $84.904 million in 2015/16.
It is expected that AHPRA, in partnership with the National Boards, will continue to be solvent throughout 2015/16. We have secured appropriate funding ($260k) for the Aboriginal and Torres Strait Islander Health Practice Board of Australia for 2015/16. However, their longer term financial sustainability will be a priority for AHPRA and new plans will be developed during the coming financial year.