Accounts and Finance

Finance

There are three main sections under Finance for EH PHA.

The Accounts Section

This section deals with the Budget Execution, Registration of Requisition for expenditure, Maintain process of approval, Payout cheques to service providers, Maintain records and filing for Audits.

The Budget Section

The budget section deals with the organization's annual budget setimates and submission for, Personal Emoluments, Operational Grants, and Development Grants from the National Goernment and the Provincial Government. Provides budget reviews

The Internal Revenue

The EH PHA internal revenue is mainly from the hospital subsidized user fee collection from all sections of the hospital, Rentals from the PHA institutional houses, sales od damaged and ageing equipment and machinery.

The PGAS System of Financial Management

The EH PHA uses the Government accounting system of financial management. In the PGAS SYSTEM, Cheques are printed, enter monthly warrant, do print out of expenditure reports.

The Brief

The Eastern Highlands Provincial Health Authority is financed by the Governments Public Accounts in Waigani. The level of health services funding to health EH PHA has been consistent with minimal increase annually since Eastern Highlands became the PHA on the 12th of June 2012. During this period we have relied on a one line budget for funding to come from the Waigani Public Accounts while the healthFunction Grant for Rural Health continue to come from the Eastern Highlands Provincial Government as per the Organic Law on the Provincial and Local Level Government.

In 2015 Eastern Highlands PHA was introduced to IFMS and through the Integrated Financial Management System(IFMS) Budgeting module proposed for the program budgeting in line with the PHA arrangements by directorates and this is being implemented up to now. All PHA Provinces are in these budgeting mode. To go into program budgeting Treasury Department has allocated a numbering codes to identify each program for budgeting. Refer to table.1.

Eastern Highlands Provincial Health Authority is funded through the Public Accounts Waigani, Government financing and receives its share of the funding for the following programs;

• Personal Emoluments (PE), Funding for salaries and allowances for all public servants employed under the EH Provincial Health Authority. Under the merged structure of 2012 there are 819 positions established for EH PHA. The major restructure submission in 2018 increased the manpower to 1021 and was approved by Department of Personal Management in April 2018.
• Goods and Services (GS), Are operational funding allocated for respective Directorates to meet the cost of the program its functions performs.
  • Executive Management & Board operations
  • Directorate of Curative Health Service and its operations
  • Directorate of Public Health Services and its operations
  • Directorate of Corporate Services and its operations.
• Rural Health Function Grant (HFG) / Minimum Priority Activities (MPA) for districts health services now under the Public Health Directorate. NEFC or National Economic & Fiscal Commission monitors this funding to ensure that there is minimal level of Government services delivery at the District and to keep the facility doors open for service delivery to the rural population who can have access to government services.

The above funding are specifically for two major cost centres to support for the government health care services delivery. The level of funding annually to the EH Provincial Health Authority on goods and services at 30% while personal emoluments takes the biggest share and is funded at 70% of the total budget allocation in any given year. In comparison on an annual bases there is less funding for goods and services to pay for the organizations operations. Refer to figure 3.

Eastern Highlands Provincial Health Authority Budget Submission

The Eastern Highlands PHA funding is dependent on the budget submission to the Department of Treasury and the Eastern Highlands Provincial Government. The budget submission through the Department of treasury is to secure the PHA Goods and Services, Personal Emoluments funding and the Development budget through the Department of National Planning and Monitoring and this Coordinated through the National Department of Health as a Sector Budget.

• 1. Personal Emoluments – Salaries & Allowance
• 2. Goods and Services – Funding for PHA operations
• 3. Public Investment Projects – PIP Infrastructure Development Projects

EH Health Function Grant

In the month of October and November each year our second budget is submitted to the Eastern Highlands Provincial Government [EHPG]. This is to secure the following funding from the Provincial Government budget.

• 1. The Health Function Grants for Rural Health Services that is funded through the Provincial Government (Constitutional Grant).
• 2. The Provincial Governments Internal Revenue supporting the health service delivery.
• 3. The PSIP funding for infrastructure development for health service delivery.
• 4. The DSIP funding for health infrastructure in each districts

EH Christian Health Services Funding.

The Eastern Highlands Christian Health Services is the biggest partner in the health service delivery. The different church denominations provide 40% of the health services while the Government provides 60%.

The budgets for all the denominations operating health facilities in the province for both Goods and Services and Personal Emoluments is coordinated through the National Christian Health Services through the National Department of Health for funding allocation on an annual bases.

• 1. Personal Emoluments
• 2. Goods & Services

Christian Health Services Workforce to come under the Government Payroll

The Government decision to absorb the health workers of the Christian Health services in the country to come under the Government payroll is honoured and the EH CHS has done the organizational structure with support from the EH PHA, has completed all tasks in June 2018. The submission is now with the National CHS for Government approval through Department of Personal Management & Department of Finance for implementation in 2019 for employees of the Christian health services to be paid and included under the Government payroll.

PHA Development Funding (Public Investment Project)

The Eastern Highlands Provincial Health Authority has received the annual PIP funding through the Department of National Planning and Monitoring, in 2017 the total budget of K15, 000,000 under the Goroka Provincial Hospital as hospital maintenance and improvement funding. Out of this allocation Vamed received K12, 000,000 as counterpart funding towards the construction of the new Diagnostic and Surgical Centre as its share of the 15% contribution from the organization while K3, 000,000 is allocated towards Goroka Hospital Rehabilitation. In 2018 K24, 000,000 was appropriated, K20, 000,000 for Vamed counterpart funding while K4, 000,000 for EH Goroka Provincial Hospital.

The PHA resource envelopes shows the different sources of funding that is provided through PHA for implementation to achieve the delivery of health services to its people.

In 2017 EH PHA received from, Department of Treasury funding for personal emoluments and Goods and services for recurrent expenditures. Health Function Grant funding continued to come from the EH Provincial Government Budget. Department of National Planning and monitoring for funding of the Public Investment Project (PIP). PSIP Development Project from the Provincial Government.

UNICEF continue to support with funding for activities for child health while UNFPA showed support for funding activities for maternal health.

PHA ACCOUNTS

All expenditure and accounts are maintained through the PHA accounts section where payments are made to suppliers of goods and services under the careful scrutiny from the office of the PHA Accountant who is responsible for all financial matters, reports and book keeping. Provides monthly cash flow to treasury for the release of monthly allocations, Budget expenditure review report to PHA Senor Executive Management team, PHA Board and Treasury.

PGAS & IFMS Accounting systems

Provincial Government Account System “PGAS”.

The National Government public accounting system of financial management “PGAS’ system is being used by the Eastern Highlands Provincial Health Authority. The system was installed in 2016 and came into operation in June 2016 and the first cheque was officially drawn from the PGAS machine then. EH Provincial Health Authority has now gone into Integrated Financial Management System of Budgeting in 2016. Officers have already been trained on the (IFMS). The IFMS budget submission is on line from PHA to treasury. Under this arrangement treasury has given us a ceiling to our budget on Personal emoluments and goods and services. This is no longer a request budget but a ceiling budget.

This is a one budget submission to treasury on Personal Emoluments, Goods and services and development projects. Budget input is done by data entry clerks, approval is done by Director Corporate services and the CEO. The National Health Department (NDoH) is now a sector and coordinates all health budgets and present it to treasury (PHA’S, Hospitals, Health Departments, PAC, PNGIMR, Christian health services).

Warrant of Authority

The warrant of authority is released by Department of Treasury on a monthly bases as per the cash flow from the agency to Department of Finance. The finance cash management branch Waigani remits the cash transfer to the agency bank account with the copy of the warrant to the organization informing our accounts of the funds transfer.

The authority Accounts staffs then enters the warrant into the PGAS chart of accounts and issues CFC to Directors informing us of the availability of the funds for commitment and expenditure

Public Utility Item.

In 2017 the budget on item for payment of public utilities has been retained by Finance in Waigani for payment. Agencies are asked to facilitate the invoice for payment from Waigani.

TYPES OF ACCOUNTS

There are three accounts operated by the EH PHA

• PHA OPERATING ACCOUNTS
• Executive and Board, Corporate Services, Curative Health, and Public Health.
• PHA Trust Account.
• Development project funds, internal revenue collections, donations.
• PHA Health Function Grant – Through EH Prov. Government and Provincial Treasury
• In 2018 Government decision for all Health Function Grants transferred to PHA’S.
• HSIP Trust Account – a subsidiary account for donor support funding
• Coordination of donor funding support for health services coordination from the National Department of Health to Provincial subsidiary account for implementation.

PHA FINANCIAL DELEGATIONS AND AUTHORITIES

The office of the chief Executive officer is the chief Accountable officer. The CEO is the section 32 officer while the directors are appointed by the CEO to be the Financial Delegate.

PHA FINANCIAL REPORTS

The PHA full Annual Financial Management Report (AFMR) will show the funding and its expenditure trend of the annual appropriation. (See separate report )

3.1 Our Funding Trend since 2016.

PHA AUDITS, 2011, 2012, 2013 and 2014 and 2015

The PHA accounts for 2011 has been Audited and reports been provided for action which has been done, the 2012 & 2013 Audit has been conducted by the Auditor’s office as of April 2015 and reports of these Audits has been received.

The Audit for 2014 was termed as failed Audits as the Auditors was here for the Audit when the PHA impass was going on and deferred to a later date asked if all cost can be met by PHA when invited to come for the same Audit again.

From our accounts, books for 2014 and 2015 has been Audited in 2016 by the office of the Auditor General’s office. The PHA Management is yet to receive the Audit report from the Auditor General for management’s response to the audit.

The Audit for 2016 and 2017 is yet to be conducted by the Auditor General’s office.