St. Joseph’s tradition of fiscal accountability and stewardship of funds continued again in fiscal 2012/13. We remain committed to ethical and effective business practice and improved openness and transparency. The hospital’s year-end financial statements reflect a number of changes to accounting standards and disclosures that impacted all government not for profit entities, beginning April 1, 2012. Our overall results were also made possible through the implementation of approximately $8 million in budget efficiency savings, required to achieve a balanced budget plan for the year, given continued inflation and decreasing funding.
St. Joseph’s ended the fiscal year with a GAAP surplus of $3.6 million which is less than 1% of operations, primarily due to investment income for the year, which totaled $3.9 million. The remaining $0.3 million deficit is the net result of both restructuring and operating costs, against a total budget of $418 million.
This balanced position was achieved during a year of major hospital funding reform, which included the introduction of Quality Based Procedures, and a movement towards a more ‘activity based’ funding allocation methodology for hospitals.
Working Capital Results
St. Joseph’s working capital remains strong at a ratio of 1.6:1, well within the guidelines established through our Hospital Services Accountability Agreement with the South West Local Health Integration Network. For hospitals, a healthy working capital position allows for the restriction of funds in support of reinvestment and renewal of facilities and equipment, both in the short and long term.
St. Joseph’s restricted investments for current and future commitments remain secure and total $177.1 million at March 31, 2013. These investments are externally managed by professional firms under the stewardship of the Investment Subcommittee of our Board.
Supporting St. Joseph’s care, teaching and research mission, capital investments during the year totaled $54.7 million. Of this total, $39 million was spent on building projects and $15.7 million on capital equipment. These expenditures were supported by $22.2 million of internal funds and $32.5 million in external funds, primarily through contributions from the provincial government and the St. Joseph’s Heath Care Foundation. The generous support of donors through the St. Joseph’s Health Care Foundation is vital to our ability to invest in the future while responding to today’s care, comfort and research needs.
The total estimated hospital or ‘local share’ contribution for our three current major redevelopment initiatives – St. Joseph’s Hospital, the new Southwest Centre for Forensic Mental Health Care and the future new specialized mental health facility beside Parkwood Hospital - is $43.3 million. The hospital also funded the $5 million demolition and site completion of the old St. Mary’s Annex at the corner of Richmond and Grosvenor Streets.
All patient volume accountabilities as established in the Hospital Services Accountability Agreement between St. Joseph’s and the South West Local Health Integration Network were met.
We continue to learn more about the future impacts of provincial Health System Funding Reform and remain diligent to our budget planning processes to ensure we continue preparing for future years with the best information available. We understand that funding reform of this magnitude will hold challenges for all hospitals, including St. Joseph’s. It must be noted that the timeliness of Ministry funding confirmations, including volume expectations, must be improved to support the ability of all hospitals to respond while sustaining the delivery of quality, safe patient care and balanced operations.
Change, economic uncertainty and growing need continue to be the backdrop for health care and indeed, all sectors of our society. St. Joseph’s continues to rise to the challenges through our mission and ministry of service, rooted in strong values, a clear strategic plan, and durable fiduciary and leadership principles.
St. Joseph’s is blessed with the support of dedicated, skilled staff and physicians, compassionate volunteers, responsive partners, and a supportive community. It is with appreciation to all that we present these financial results.
Treasurer, Board of Directors
Vice President Corporate Services and Chief Financial Officer