Print this page- How we are funded
- Key results in 2007-08
- Departmental finances
- Administered finances
- Understanding our financial statements
How we are funded
Parliament, via the appropriation Acts, provides PM&C with two types of funding: departmental and administered.
We use departmental resources to produce 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 2007–08 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 through the year as part of the Budget Papers. Key reference points include:
- Our Portfolio Budget Statements, released on budget night,
- Our Portfolio Supplementary Estimates Statements, and
- Our Portfolio Additional Estimates Statements.
Our overall focus is on providing accurate estimates and achieving a balanced financial outcome.
Key results in 2007-08
Key results for our departmental resources included:
- An operating surplus of $10.9 million.
This included savings realised on APEC and lower than budgeted depreciation due to the opening balance of non-financial assets being lower than anticipated when the budget was prepared. - Net equity decreased by $21.6 million, to $39.2 million. The decrease is primarily a result of recognising a provision for the return of approximately $24.7 million of unused APEC funding.
We received an unqualified audit report on the 2007–08 financial statements from the Australian National Audit Office.
Departmental Finances
When the 2007–08 Budget was prepared, we expected to receive and spend $140.7 million in the year. The actual income recognised of $162.9 million is $22.2 million higher as a result of funding received through the Additional Estimates and Supplementary Estimates processes, changes arising from the Administrative Arrangement Orders (AAOs) and increased revenue from independent sources.
As a result of restructuring under the AAOs, the Department assumed responsibility for the Privacy and Freedom of Information Policy Branch from the Attorney General’s Department and the Office of Work and Family from the Department of Families, Housing, Community Services and Indigenous Affairs. The Department relinquished responsibility for the Campaign Advertising Special Account and AUSPIC to the Department of Finance and Deregulation and the Office of Climate Change to the newly formed Department of Climate Change.
The Department finished the year with a surplus of $10.9 million. Savings realised on APEC accounted for $1.9 million of the surplus, with a further $3.5 million relating to proceeds from the sale of APEC assets. The remaining underspend of $5.5 million was primarily a result of depreciation expense being less than budgeted. This occurred as the opening balance of non-financial assets was lower than anticipated at the time the budget was prepared.
Administered Finances
The department originally budgeted for expense of $14.0 million in 2007–08, including grants, suppliers and other expenses we administer on behalf of the Australian Government. A small increase in expenses was funded at Additional Estimates relating to accommodation costs for the former Governors-General.
As a result of restructuring under the AAOs, the Department relinquished responsibility for the Media Commissions Special Account to the Department of Finance and Deregulation. This was the primary reason for actual expenses and financial assets decreasing since last financial year.
Non-financial assets have remained constant across years and reflect the Lodge and Kirribilli House. The Governors-General pension scheme makes up 94 percent of the administered liability balance.
Details of trends in administered finances are provided in Figure 8.3 below.
Figure 8.1: PM&C outputs and administered programs in 2007–08
| 2007–08 Budget(a) $m | 2007–08 Actual $m | Variance | |
|---|---|---|---|
| OUTPUT GROUP 1 | |||
| 1.1 Economic and industry policy | 17.4 | 18.4 | 6% |
| OUTPUT GROUP 2 | |||
| 2.1 Social policy | 17.8 | 17.6 | 1% |
| OUTPUT GROUP 3 | |||
| 3.1 International policy | 4.4 | 4.6 | 5% |
| 3.2 National security policy | 18.7 | 18.1 | -3% |
| Administered item | |||
| National counter-terrorism committee | 0.1 | 0.1 | 0% |
| 3.3 APEC taskforce | 65.0 | 63.1 | -3% |
| OUTPUT GROUP 4 | |||
| 4.1 Cabinet support | 8.2 | 8.4 | 2% |
| 4.2 Machinery of government | 10.1 | 10.6 | 5% |
| Administered item | |||
| Compensation and legal expenses | 0.4 | - | - |
| National Australia Day Council | 2.4 | 2.4 | 0% |
| 4.3 Government communications(b) | 3.0 | 2.2 | -27% |
| 4.4 Support to official establishments | 0.8 | 0.8 | 0% |
| Administered item | |||
| Prime Minister’s official residences | 1.8 | 1.6 | -11% |
| 4.5 Support for ministerial offices | 2.2 | 2.4 | 9% |
| Administered item | |||
| Support to designated and former Governors-General(d) |
1.2 | 1.7 | 42% |
| 4.6 Ceremonial and hospitality | 3.6 | 3.6 | 0% |
| Administered item | |||
| State occasions and official visits | 3.1 | 2.1 | -32% |
| Australia 2020 Summit(c) | - | 2.2 | - |
| TOTAL DEPARTMENTAL EXPENSE | 151.2 | 152.0 | 1% |
| Less resources available to be used | 4.8 | 13.8 | 188% |
| Plus operating surplus | - | 10.9 | - |
| Net cost to government (appropriation) | 146.4 | 149.1 | 2% |
| TOTAL ANNUAL ADMINISTERED APPROPRIATION | 9.0 | 7.8 | -13% |
| Plus other expense | 2.5 | 1.4 | -44% |
| Total administered operating expense | 11.5 | 9.2 | -20% |
| AVERAGE STAFFING LEVELS | 526 | 505 | -4% |
- Full year budget, including additional estimates.
- The AAO of 3 December 2007 transferred the media buying function to the Department of Finance and Deregulation.
- Prior year funding was received in the 2008–09 Budget for the Australia 2020 Summit.
- Budget excludes non-cash items, i.e. interest on the Governors-General pension scheme.
Note: Figures in the table are rounded. Discrepancies between totals and sums of components are due to rounding.
There has been a significant change from 2006–07 in the department’s financial position with a 40 percent increase in liabilities, representing a return of equity to government, causing a 32 percent decrease in net equity.
A return to government of approximately $24.9 million will be paid in 2008–09. This represents unused operating and capital funding for APEC of $24.7 million and unused operating funding for the Australia 2020 Summit of $0.2 million.
Our departmental cash and receivables at 30 June 2008 of $52.7 million is adequate to cover liabilities of $48.4 million.
Details of trends in departmental finances are provided in Figure 8.2 below.
Figure 8.2: Trends in departmental finances
| 2007–08 $m |
2006–07 $m |
Change from last year | ||
|---|---|---|---|---|
| Revenue from government | 149.1 | 136.1 | +10% | |
| Other revenues | 13.8 | 11.2 | +23% | |
| TOTAL INCOME | 162.9 | 147.3 | +11% | |
| Employee expenses | 58.5 | 63.0 | -10% | |
| Supplier expenses | 78.6 | 83.4 | -6% | |
| Other expenses | 14.9 | 8.7 | +69% | |
| TOTAL EXPENSES | 152.0 | 155.1 | -3% | |
| OPERATING RESULT | 10.9 | (7.8) | +>100% | |
| Financial assets | A | 54.6 | 59.1 | -8% |
| Non-financial assets | B | 33.0 | 35.1 | -5% |
| Liabilities | C | 48.4 | 33.4 | +40% |
| NET ASSETS = A + B - C | 39.2 | 60.8 | -32% |
Figure 8.3: Trends in administered finances
| 2007–08 $m |
2006–07 $m |
Change from last year | |
|---|---|---|---|
| TOTAL INCOME | 8.5 | 9.0 | -6% |
| Grant expenses | 2.4 | 2.3 | +4% |
| Supplier expenses | 4.9 | 7.8 | -37% |
| Other expenses | 1.9 | 1.8 | +6% |
| TOTAL EXPENSES | 9.2 | 11.9 | -23% |
| Financial assets | 0.7 | 3.0 | -77% |
| Non-financial assets | 42.0 | 42.0 | 0% |
| Liabilities | 12.9 | 13.1 | -2% |
Understanding our Financial Statements
The content and format of our financial statements is prescribed by the Minister for Finance and Deregulation under the Financial Management and Accountability Act 1997. Our departmental 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.
Administered items are detailed in the accompanying schedules and further information is provided in the explanatory notes. Information on related topics is available elsewhere in this report as follows:
- Procurement policies and practices (chapter 7),
- Consultancies (chapter 7), and
- Payments for market research and advertising (chapter 7).
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