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- How we are funded
- Key results in 2006–07
- Departmental finances
- Administered finances
- Understanding our financial statements
How we are funded
Parliament provides PM&C with two types of funding: departmental and administered.
We use departmental resources to produce goods and services (outputs) at a quantity, quality and price endorsed by government.
We also administer payments, revenues and other resources on behalf of government, which controls how we use them and requires us to account for them separately.
PM&C’s outputs and administered items for 2006–07 are detailed in Figure 8.1. A shaded background indicates that information relates to an administered resource, both in the table and in the formal financial statements that follow it.
How we measure our performance
We published detailed financial forecasts throughout the year as part of the Budget Papers. Key reference points include:
- our Portfolio Budget Statements, released on Budget night
- our Portfolio Additional Estimates Statements, and
- our Portfolio Supplementary Additional Estimates Statements.
Our overall focus is on providing accurate estimates, achieving a balanced financial outcome, and maintaining a strong balance sheet.
Key results in 2006-07
Key results for our departmental resources included:
- Income & expenditure growth: these grew significantly in the context of APEC 2007, new taskforces and COAG decisions
- An operating deficit: we had an operating deficit of $7.8 million, due to difficulties in estimating the timing of costs for APEC 2007. This was less than the deficit forecast in our 2007–08 Portfolio Budget Statements, and
- An increase in net equity: net equity increased to $60.8 million, mostly due to equity injections associated with construction of our new building at One National Circuit, which was partially offset by the operating deficit.
We received an unqualified audit report on the 2006–07 financial statements from the Australian National Audit Office.
Departmental Finances
At the beginning of 2006–07, we expected to receive and spend $122.7 million, with 98 per cent of this figure being revenue from government. The department received additional revenue of $16.9 million from government through Additional Estimates and Supplementary Additional Estimates processes during the year due to government decisions, including to:
- support new initiatives arising from COAG
- establish the Office of Water Resources
- establish the Uranium Mining Processing and Nuclear Energy Review and the Task Group on Emissions Trading
- host an APEC Health Ministers’ meeting during 2007, and
- complete the fit-out of new accommodation and the relocation and establishment of the department’s operations.
We finished the year with an operating deficit of $7.8 million, which was less than the forecast deficit in our 2007–08 Portfolio Budget Statements.
The deficit is due to timing differences between income and expenses for APEC and will be funded from the APEC surplus of $19.0 million in 2005-06. It does not affect our long-term financial position, as APEC funding is provided on a no win/no loss basis.
Notes:
a The budget shown for 2006–07 is the revised budget published in our 2006–07 Portfolio Additional Estimates Statements, adjusted for variations made in the 2006–07 Supplementary Additional Estimates Statements.
b The actual expenses shown is the total expense recorded against each output or item in our financial statements.
c The variance is the difference between our 2006–07 budget and our 2006–07 actual expressed as a proportion of our 2006–07 budget.
d Resources available to be used include resources received free of charge, payments from special accounts, the sale of goods and services and the sale of assets.
Any surplus funds remaining at the end of the APEC project are to be returned to government.
Excluding the impact of APEC, the department would have incurred an operating surplus of $1.5 million in 2006–07.
Significant shifts in our income, expenses and balance sheet compared to 2005–06 were:
- income rose 48 per cent to $147.3 million, largely due to increased revenue from government
- expenses rose 92 per cent to $155.1 million. Employees remained our largest single expense but the largest growth was in supplier expenses due to APEC and government decisions
- liabilities rose 61 per cent to $33.4 million. While employee provisions remain our largest single liability, the largest growth was in payments due to suppliers as a result of APEC, and
- assets, in the form of infrastructure, plant and equipment, rose substantially due to the fit-out of our new building.
Details of trends in departmental finances are provided in Figure 8.2 below.
2005–06 $m |
2006–07 $m |
Change from last year |
||
|---|---|---|---|---|
| Revenue from government | 95.0 |
136.1 |
+43% |
|
| Other revenues | 4.6 |
11.2 |
+ >100% |
|
| TOTAL INCOME | 99.6 |
147.3 |
+48% |
|
| Employee expenses | 43.9 |
63.0 |
+44% |
|
| Supplier expenses | 30.4 |
83.4 |
+ > 100% |
|
| Other expenses | 6.7 |
8.7 |
+27% |
|
| TOTAL EXPENSES | 80.9 |
155.1 |
+91% |
|
| OPERATING RESULT | 18.7 |
(7.8) |
– > 100% |
|
| Financial assets | A | 52.5 |
59.1 |
+12% |
| Non-financial assets | B | 13.3 |
35.1 |
+ > 100% |
| Liabilities | C | 20.7 |
33.4 |
+61% |
| NET ASSETS = A + B – C | 45.1 |
60.8 |
+35% |
Administered finances
The department budgeted to spend $13.4 million on grants, suppliers and other expenses we administer on behalf of the Australian Government.
The department received additional funding from government at Additional Estimates of $0.4 million for the State Occasions and Official Visits programme for costs associated with the State Coach Britannia.
Actual expenses of $11.9 million were incurred. Details of expenses by programme are provided
in Figure 8.1.
Revenue collected on behalf of government rose to $8.8 million, due to increased revenue from commissions paid into the Media Commissions Special Account.
Net assets increased following a revaluation of non-financial assets.
Details of trends in administered finances are provided in Figure 8.3 below.
Understanding our financial statements
The content and format of our financial statements is prescribed by the Minister for Finance and Administration under the Financial Management and Accountability Act 1997. Our statements include:
- An income statement: This shows our income and expenses on an accrual basis.
- A balance sheet: This details our assets and liabilities, as well as the amount of the Australian Government’s equity at year-end.
- A statement of cash flows: This shows where the cash we used during the year came from, and how we used it.
- A statement of changes in equity: This shows how the Australian Government equity we hold has changed due to changes in asset valuations, accumulated surpluses and capital transactions.
More information is provided in the accompanying schedules and explanatory notes. Information on related topics is available elsewhere in this report, as follows:
- executive remuneration policies (chapter 7)
- procurement policies and practices (chapter 7)
- consultancies (chapter 7), and
- payments for market research and advertising (chapter 6).