Financial Performance 2010-11
‘Departmental activities’ involve the use of assets, liabilities, revenue and expenses controlled or incurred by the Department in its own right. ‘Administered activities’ involve the management or oversight by the Department, on behalf of the Australian Government, of items controlled or incurred by the Australian Government.
This section should be read in conjunction with the Department's audited financial statements for 2010–11 which appear in the section of this report titled ‘Financial Statements’.
The Department of Infrastructure, Transport, Regional Development and Local Government became the Department of Infrastructure and Transport, following the Administrative Arrangements Order (AAO) issued on 14 September 2010.
The regional development and local government functions were transferred from the former department to the new DRARDLG with effect from 1 October 2010. Functions related to the Jobs Fund—Infrastructure Employment Projects were subsequently transferred back to the Department with effect from 9 December 2010.
From 1 July 2010, the Department no longer receives appropriation for depreciation and amortisation expenses. As a result, in 2010–11 the Department reported a deficit attributable to the Australian Government of $10.1 million. Had the Department received funding for depreciation and amortisation expenses, a small surplus of $2.4 million would have been reported.
Revenue from the Australian Government in 2010–11 reduced by $19.9 million, due mainly to the transfer of appropriation following the establishment of the DRARDLG as a separate agency, and appropriation no longer being provided for depreciation and amortisation expenses. This was partially offset by changes in the funding profile of several measures.
The Department's commitment to financial management continues to be reflected in its financial performance and unqualified financial statements. The Department also continued its strong focus on compliance with the Financial Management and Accountability Act 1997 (FMA Act), and implemented system improvements to enhance its FMA Act compliance regime.
Table 1.1 Summary of departmental financial performance and position ($m)
|2006–07||2007–08||2008–09||2009–10||2010–11||Change last year|
|Revenue from government||213.3||239.8||242.5||208.8||188.9||(19.9)|
|Employee and supplier expenses||208.2||220.5||234.8||201.3||200.1||(1.2)|
|Surplus (Deficit) attributable to the Australian Government||(4.7)||5.8||(3.0)||(0.2)||(10.1)||(9.9)|
|Plus non-appropriated depreciation and amortisation expenses||0.0||0.0||0.0||0.0||12.4||12.4|
|Operating result (Loss) attributable to the agency||(4.7)||5.8||(3.0)||(0.2)||2.4||2.6|
|Financial assets A||92.2||98.6||100.9||67.4||85.6||18.2|
|Non-financial assets B||57.7||64.9||71.8||58.7||53.3||(5.4)|
|Net assets = A + B - C||94.8||108.8||103.9||67.5||69.0||1.5|
The Department manages $53.3 million of non-financial assets comprising several asset classes: land and buildings; property, plant and equipment; intangibles (software); inventories; and other non-financial assets. Of these, the major investments are in land and buildings ($29.3 million) and intangibles ($10.5 million).
The Department's capital program is underpinned by centralised approval processes. Business divisions submit proposals for consideration by the Department's Strategic Information Technology and Security Committee (for IT-related projects) and the Executive (for all other proposals above $50,000).
The fair value of leasehold improvements and the related make-good by the Department was determined using depreciated replacement cost as determined by an independent valuer in 2010–11.
The Secretary has issued a Chief Executive's Instruction on asset management and the Department has documented asset policies and procedures on the management and safeguarding of assets. Asset registers are maintained and annual stocktakes are undertaken to verify their accuracy.
Total administered expenditure in 2010–11 was $4.1 billion; of this $2.0 billion was appropriated directly to the Department for grants, subsidies and other administered expenses.
Major expense items in 2010–11 were:
- Nation Building Program ($2,575.2 million)
- Nation Building Plan for the Future ($856.3 million)
- Payments to CAC Act bodies ($294.6 million)
- Tasmanian Freight Equalisation Scheme ($98.5 million), and
- Interstate Road Transport Fees ($76.4 million).
In aggregate, the administered programs managed by the Department were under-expensed by $52.0 million or 2.6 per cent, against the latest budget published in the 2011–12 PBS. Expenses incurred in 2010–11 decreased by $1.9 billion due mainly to the transfer of regional development and local government programs to DRARDLG ($2.4 billion), partially offset by an increase in expenses due to changes in the profile of funds from the Building Australia Fund ($415.1 million).
In 2010–11, taxation revenue collected on behalf of the Australian Government decreased by $0.2 million. Non-taxation revenue increased by $376.8 million overall, due mainly to changes in the profile of funds received from the Building Australia Fund ($415.1 million), an increase in the dividend from Airservices Australia ($15.0 million) and increases in Interstate Road Transport Registrations ($13.9 million) and the Australian Maritime Safety Authority levies ($9.1 million). These increases were partially offset by a reduction in other non-taxation revenue ($71.7 million) and decreased interest revenue ($3.0 million).
Administered net assets increased by $871.1 million in 2010–11, due mainly to increases in the net asset value of administered investments in government authorities and companies ($873.8 million) and a decrease in the payables balances ($39.8 million). This was partially offset by a decrease in the receivables balance associated with the transfer of the sewerage loans to DRARDLG ($32.6m) and decreases in prepayments balances due to the expensing of some prepayments made in 2005–06 and 2006–07 ($8.9 million).
The Department of the Treasury (the Treasury) is appropriated directly for payments to and through states and territories for National Partnership Agreements.
Table 1.2 is based on information reported in the Department's financial statements and excludes items for which the Treasury is appropriated directly.
Table 1.2 Summary of administered financial performance and position ($m)
|2006–07||2007–08||2008–09||2009–10||2010–11||Change last year|
|Financial assets A||1,937.3||1,974.1||2,468.9||3,461.7||4,302.7||841.0|
|Non-financial assets B||2,459.4||1,459.5||461.0||98.7||89.0||(9.7)|
|Net assets = A + B - C||4,365.1||3,403.3||2,912.7||3,495.1||4,366.1||871.1|
Note: A review was performed by the Department in 2010–11 for income administered on behalf of the Australian Government. As a result, historical data for taxation and non-taxation revenue has been amended to reflect the 2010–11 classifications of revenue items for comparative purposes.