Chapter 1: Year in Review—Continued

Financial Performance 2011–12

‘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 2011–12 in this annual report.

Departmental finances

From 1 July 2010, the Department no longer receives appropriation for depreciation and amortisation expenses. As a result, in 2011–12 the Department reported a deficit attributable to the Australian Government of $12.3 million. Had the Department received funding for depreciation and amortisation expenses, a small surplus of $0.2million would have been reported.

Revenue from the Australian Government in 2011–12 increased by $3.6 million, due mainly to changes in the funding profile of several measures. This was partially offset by a transfer of appropriation to the then Department of Regional Australia, Regional Development and Local Government following its establishment as a separate agency on 14September2010.

Other revenue in 2011–12 remained consistent with the amount in 2010–11. The large increase from 2009–10 relates to cost recovery for shared services provided to the Department of Regional Australia, Local Government, Arts and Sport (DRALGAS).

The Department's commitment to financial management continued 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)

2007–08 2008–09 2009–10 2010–11 2011–12 Change last year
Revenue from government 239.8 242.5 208.8 188.9 192.5 3.6
Other revenue 4.5 4.6 7.0 15.9 16.3 0.4
Gains 0.6 0.9 1.0 1.4 0.8 (0.6)
Total income 244.9 248.0 216.8 206.2 209.7 3.4
Employee and supplier expenses 220.5 234.8 201.3 202.3 207.5 5.3
Depreciation 13.6 13.6 12.9 12.4 12.6 0.2
Other expenses 5.0 2.7 2.8 3.8 1.9 (1.9)
Total expenses 239.1 251.0 217.0 218.4 222.0 3.5
Surplus (Deficit) attributable to the Australian Government 5.8 (3.0) (0.2) (12.2) (12.3) (0.1)
Plus non-appropriated depreciation and amortisation expenses 0.0 0.0 0.0 12.4 12.6 0.2
Operating result (Loss) attributable to the agency 5.8 (3.0) (0.2) 0.2 0.2 0.0
Financial assets A 98.6 100.9 67.4 85.6 93.9 8.3
Non-financial assets B 64.9 71.8 58.7 53.3 44.7 (8.6)
Liabilities C 54.7 68.9 58.6 72.0 80.4 8.3
Net assets = A + B - C 108.8 103.9 67.5 66.9 58.2 (8.7)

Asset management

The Department manages $44.7 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 ($24.9 million) and in-house developed and purchased software ($7.9 million). The fall in non-financial assets was mainly due to the finalisation of the transfer of assets to DRALGAS following the AAO of 14September2010.

The Department's capital program is underpinned by centralised approval processes. All capital proposals are considered by the Executive. IT related projects are first submitted to the Department's Strategic Information Technology and Security Committee for consideration and recommendation to the Executive.

All assets were revalued to fair value using depreciated replacement cost as determined by an independent valuer in 2011–12.

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.

Administered finances

Total administered expenditure in 2011–12 was $8.1 billion; of this, $3.3 billion was appropriated directly to the Department for grants, subsidies and other administered expenses. The Department of the Treasury (the Treasury) is appropriated directly for payments to and through states and territories for National Partnership Agreements.

Major expense items in 2011–12 were:

  • Nation Building Program ($4.950 billion)
  • Nation Building Plan for the Future ($2.334 billion)
  • Payments to CAC Act bodies ($316.9 million)
  • Tasmanian Freight Equalisation Scheme ($93.2 million), and
  • Interstate Road Transport Fees ($83.8 million).

In aggregate, administered programs were $16.9 million or 0.2 per cent higher than the latest budgets published in the Department's and the Treasury's 2012–13 Portfolio Budget Statements. This increase was supported by approved movements of funds from the forward years. Combined expenses in 2011–12 were higher than in 2010–11 by some $4.0 billion due mainly to fluctuations in the funding profile of projects delivered under the Nation Building Program Investment ($2.3billion) and the Building Australia Fund ($1.4 billion).

In 2011–12, non-taxation revenue increased by $1.4billion overall, due mainly to changes in the profile of funds received from the Building Australia Fund ($1.410 billion) and increases in the Australian Maritime Safety Authority levies ($12.4million) and Interstate Road Transport Registrations ($7.4million). These increases were partially offset by a reduction in the dividend from Airservices Australia ($6.0million) and decreases in other non-taxation revenue ($4.5million) and interest revenue ($0.9million). Taxation revenue collected on behalf of the Australian Government increased by $1.4million.

Administered net assets increased by $18.1million in 2011–12, due mainly to increases in the net asset value of administered investments in government authorities and companies ($41.3million). This was partially offset by decreases in prepayments balances due to the expensing of some prepayments made in 2005–06 and 2006–07 ($23.3million).

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)

2007–08 2008–09 2009–10 2010–11 2011–12 Change last year
Taxation revenue 21.7 26.7 23.0 22.8 24.2 1.4
Non-taxation revenue 213.1 1,146.4 665.8 1,042.6 2,461.5 1,419.0
Gains 7.7 0.0 0.0 0.0 0.0 0.0
Total income 242.5 1,173.1 688.8 1,065.4 2,485.8 1,420.4
Grants 4,966.6 8,465.3 3,734.1 1,781.3 3,136.9 1,355.6
Subsidies 142.4 155.2 147.5 150.1 145.3 (4.8)
Other expenses 123.8 22.2 27.4 30.6 23.4 (7.3)
Total expenses 5,232.8 8,642.7 3,909.0 1,962.1 3,305.7 1,343.6
Financial assets A 1,974.1 2,468.9 3,461.7 4,302.7 4,343.4 40.7
Non-financial assets B 1,459.5 461.0 98.7 89.0 68.3 (20.7)
Liabilities C 30.3 17.2 65.4 25.6 27.4 1.9
Net assets = A + B - C 3,403.3 2,912.7 3,495.1 4,366.1 4,384.2 18.1

Note: A review was performed by the Department in 2010–11 for income administered on behalf of 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.

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Last Updated: 17 November, 2014