|
The following sections of this chapter provide a summary of
the department’s financial performance in 2002-03
; detailed results are shown in the audited Financial Statements,
and the summary should be read in conjunction with those statements.
The departmental appropriation is shown in some detail in Table 1.
The department received an unqualified audit report for 2002-03.
Operating result
The department’s Statement of Financial Performance below
reports an operating surplus for 2002-03 of $0.7 million,
compared to the $5 million operating surplus reported for 2001-02.
The result was, however, better than the operating result forecast
in the 2002-03 Portfolio Budget Statements of $0.5 million.
The decline in operating surplus was a result of the department
being required to absorb additional responsibilities relating
to national security policy advice and coordination, as well
as a corresponding decline in revenue from other sources. In
addition, part of the 2001-02 surplus related to additional
funding provided for the Commonwealth Heads of Government Meeting
(CHOGM) and a delay in the related expenses, of $0.1 million,
being received by the department. Those delayed expenses relating
to CHOGM were recognised in the 2002-03 financial year.
Table 2 demonstrates the department’s key results
for the financial years 2001-02 and 2002-03.
Table 2 Key results in financial
performance
| Indicator |
2002-03
($’000) |
2001-02
($’000) |
Movement
(per cent) |
| Revenue from Australian Government |
45,253 |
78,915 |
-43 |
| Other revenue |
2,100 |
3,991 |
-47 |
| Total revenue |
47,353 |
82,906 |
-43 |
| Employee expenses |
29,314 |
30,617 |
-4 |
| Supplier expenses |
14,623 |
36,540 |
-60 |
| Other expenses |
2,683 |
10,591 |
-75 |
| Total expenses |
46,620 |
77,748 |
-40 |
| Operating result |
733 |
5,158 |
-86 |
Statement of Financial Performance
Revenue
Total revenue received in 2002-03 was $47.4 million.
The department received $45.3 million in direct revenue from
the government (comprising the appropriation of $44.5 million
and free resources worth $0.7 million), amounting to $33.6 million
less than that received in 2001-02. As stated, the additional
revenue in 2001-02 was provided primarily for the organisation
of CHOGM, a large one-off event.
In 2002-03, revenue from other sources decreased by $1.9
million, from $4.0 million in 2001-02 to $2.1 million
in 2002-03. The reduction was due to a decrease in interest
revenue of $1.0 million resulting from changes to the Agency
Banking Incentive Scheme administered by the Department of Finance
and Administration, a reduction of $0.2 million in the sale
of goods and services due to a decreased demand for AUSPIC (the
government photographic service) products, and a reduction in
other revenue by $0.6 million due to decreased revenue for the
Campaign Reserve Special Account.
Expenses
The department’s expenses were $31.1 million less than
in 2001-02 due to the impact of CHOGM in 2001-02.
The total 2002-03 expenses, $46.6 million, were $4.4 million
higher than in 2001-02 when CHOGM is accounted for.
Statement of Financial
Position
Equity
The department’s total equity - that is, the sum
of the department’s assets less its liabilities -
decreased from $14.3 million in 2001-02 to $6.2 million
in 2002-03. The decrease in equity reflected the payment
of a dividend to the Official Public Account of $8.0 million,
taken from departmental reserves ($5.9 million), the Campaign
Reserve Special Account ($1.0 million) and the Services for
Other Government and Non-Agency Bodies Account ($1.1 million).
Other activities impacting on departmental equity were a revaluation
of the department’s assets, which resulted in a decrease
in the asset revaluation reserve of $0.61 million, and a capital
use charge of $0.7 million.
Assets
The department’s assets may be broken into four main
categories:
- cash
- infrastructure, plant and equipment
- intangibles (non-physical assets such as software)
- receivables (amounts due to be paid to the department)
‘Other departmental assets’ relates to prepayments
and ‘Other administered assets’ relates to prepayments
and inventories.
The proportions of each type of asset held during 2002-03
are illustrated in Figure 5.
Figure 5 Departmental
assets shown by category
Note: ‘Other’ refers to prepayments.
The department’s total assets decreased from $28 million
to $20 million in 2002-03. As detailed above, the decrease
in financial assets arose from the repayment of dividends totalling
$8 million to the Official Public Account and does not point
to a decline in the financial viability of the department.
Financial assets
The Statement of Financial Position shows the department having
cash holdings of $1.8 million in 2002-03, which may be
compared with the $17.3 million held in 2001-02. The actual
cash balance that the department had access to was $9.3 million,
comprising the $1.8 million cash balance and $7.5 million that
was returned to the Official Public Account on 30 June
2003 as part of the implementation of the recommendations of
the 2002 Budget Estimates and Framework Review (BEFR). BEFR
was a thorough review of the budget estimates and advice system.
The government endorsed the recommendations of the review in
October 2002. The department was able to access the $7.5 million
in funds deposited in the Official Public Account as required.
Non-financial assets
The department’s non-financial assets increased by $0.3
million from $9.0 million to $9.3 million in 2002-03.
This was mainly due to the revaluation of assets.
Liabilities
The department’s total liabilities decreased by $0.5
million to $13.8 million in 2002-03. The major decrease
related to a reduced liability for the leasing of information
technology equipment and reflected the fact that the lease period
remaining for the equipment decreased by one year.
Overall, employee entitlements remained static between 2001-02
and 2002-03.
Amounts owing to suppliers (creditors on hand at 30 June
2003) increased by $0.6 million, and unearned revenue of $0.3
million relating to the lease of CABNET terminals to other agencies
was recognised.
Administered items
‘Administered items’ are those assets, liabilities,
revenues and expenses that are controlled by the Australian
Government but managed or overseen by the department on the
government’s behalf.
Table 3 provides comparisons between the department’s
2001-02 and 2002-03 results for administered items.
Table 3 Key results
for administered expenses
|
Administered expense
|
2002-03
($’000)
|
2001-02
($’000)
|
Movement
(per cent)
|
| Allowances to former Governors-General |
3,884
|
943
|
312
|
| Support to former Governors-General |
1,062
|
767
|
38
|
| State occasions and official visits |
2,876
|
2,744
|
5
|
| Women’s programmes |
8,751
|
10,554
|
-17
|
| Prime Minister’s official residences |
1,521
|
1,443
|
5
|
| Compensation and legal |
61
|
-
|
Not applicable
|
| National Australia Day council |
1,274
|
568
|
124
|
| National Security Public Information Campaign |
18,549
|
-
|
Not applicable
|
| Total administered expenses |
37,978 |
17,019 |
123 |
Significant variations
There were four movements of more than 10 per cent in administered
expenses in 2002-03, as explained below.
With the resignation of Dr Peter Hollingworth, and an increase
in the rate of the allowances payable to all former Governors-General,
the total cost of the administered item ‘Allowances to
former Governors-General’ increased by 312 per cent .
The increase includes a one-off adjustment of $3.3 million to
the superannuation liability in respect of the former Governors-General
following an independent actuarial assessment.
The cost of the ‘support to former Governors-General’
administered item increased by 38 per cent. This reflected the
costs involved in Dr Hollingworth’s resignation. Most
of these were one-off costs, such as those involved in the provision
of suitable office accommodation for Dr Hollingworth.
Women’s programmes expended 17 per cent less than in
2001-02 due to delays in the development and implementation
of Partnerships Against Domestic Violence and the National Initiative
to Combat Sexual Assault. The unexpended funds were rephased
to ensure that the government maintained its commitment to these
important issues.
The grant paid to the National Australia Day Council (NADC)
increased by 124 per cent in 2002-03. This was largely
because the total for 2001-02 had reflected only a part-year
expense, as responsibility for the NADC transferred to the department
from the Department of Communications, Information Technology
and the Arts in November 2001. The remainder of the increase
reflected the government’s decision in the 2002-03
Budget to provide an additional $0.3 million in ongoing funds
and a $0.2 million one-off injection to the NADC.
The national security campaign was a significant responsibility
for the department in 2002-03. The additional expenditure
incurred for this activity was partly offset by the underspends
from the department’s administered items, with additional
funding of $6.9 million provided through the Advance to the
Finance Minister which is administered by the Department of
Finance and Administration.
Special account
The department also continued to manage an administered special
account, the Media Commissions Advance Account. The account
returned a dividend to the Official Public Account of $2.6 million
during the 2002-03 financial year.
Figure 6 Administered
assets shown by category
Note: ‘Other’ refers to prepayments and inventories.
The department’s administered cash and receivables varied
significantly in composition during 2002-03 in comparison
with those in 2001-02. This reflected the implementation
of ‘just in time drawdowns’ for administered special
accounts, and the associated return of $5.3 million in cash
reserves to the Official Public Account.
The composition of the remainder of the department’s
administered assets remained stable during 2002-03.
Factors affecting future performance
In the 2002-03 Budget, the department received additional
funding of $4.2 million for 2003-04 and $3.6 million per
annum over the forward estimates period. This will assist the
department in meeting the increasing policy demands associated
with the government’s strategic priority areas, in oversighting
the effective delivery of government programmes, and in taking
the lead role in the coordination of national security and counter-terrorism
policy. The department also obtained capital funding of $4.6
million to enhance information technology, communications infrastructure
and building security. Other areas of activity in which there
are significant resource pressures will also be earmarked for
additional support.
|
