Year in Review—Continued
Financial Performance 2013–14
‘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 2013–14 which appear in the section of this report titled ‘Financial Statements’.
The Department's Financial Statements for 2013–14 includes statements for the Department of Regional Australia, Local Government, Arts and Sport to 18 September 2013 as well as for Infrastructure and Regional Development for the period ended 30 June 2014.
From 1 July 2010, the Department no longer receives appropriation for depreciation and amortisation expenses. As a result, in 2013–14 the Department reported a surplus attributable to the Australian Government of $2.1 million. Had the Department received funding for depreciation and amortisation expenses, a surplus of $13.7 million would have been reported.
Revenue from the Australian Government in 2013–14 increased by $50.4 million. This was due mainly to increased funding following the Administrative Arrangements Order of 18 September 2013 ($45.4 million) and changes in the funding profile of several measures.
Other revenue in 2013–14 decreased by $1.7 million, which was largely a result of the abolition of the former Department of Regional Australia, Local Government, Arts and Sport to which the Department provided shared services to 18 September 2013.
Other gains in 2013–14 increased by $1.9 million, due mainly to the reversal of various provisions.
The Department's commitment to financial management continues to be reflected in its financial performance and unqualified financial statements. The Department also continued its strong focus on compliance with the Financial Management and Accountability Act 1997 (FMA Act), and implemented system improvements to enhance its FMA Act compliance regime.
Table 1.1 Summary of departmental financial performance and position ($m)
|2009–10||2010–11||2011–12||2012–13||2013–14||Change last year|
|Revenue from government||208.8||188.9||192.5||180.7||231.1||50.4|
|Employee and supplier expenses||201.3||202.3||202.9||189.5||230.4||40.9|
|Depreciation and amortisation||12.9||12.4||12.6||10.2||11.6||1.4|
|Surplus (Deficit) attributable to the Australian Government||(0.2)||(12.2)||(12.3)||(6.1)||2.1||8.3|
|Plus non-appropriated depreciation and amortisation expenses||-||12.4||12.6||10.2||11.6||1.4|
|Operating result (Loss) attributable to the agency||(0.2)||0.2||0.2||4.0||13.7||9.6|
|Net assets = A + B - C||67.5||66.9||58.2||59.1||79.6||20.5|
The Department manages $50.4 million of non-financial assets comprising several asset classes: land and buildings; property, plant and equipment, intangibles (software) and other non-financial assets. Of these the major investments are in land and buildings ($22.4 million) and in-house developed and purchased software ($13.5 million). The increase in non-financial assets was mainly due to the recognition of assets transferred as part of the Administrative Arrangements Order of 18 September 2013 and asset acquisitions, partially offset by depreciation.
The Department's capital programme 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.
The Secretary issued a Chief Executive's Instruction on asset management, and the Department 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 2013–14 was $8.7 billion; of this $3.7 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 2013–14 were:
- Infrastructure Investment Programme ($4,653.8 million)
- Plan for the Future ($1,199.0 million)
- Infrastructure Growth Package ($1,000.0 million)
- Local Government Financial Assistance Grants ($867.3 million)
- Payments to CAC Act bodies ($348.8 million)
- Regional Development Australia Fund ($109.6 million)
- Tasmanian Freight Equalisation Scheme ($101.7 million)
- Services to Indian Ocean Territories ($88.1 million), and
- Interstate Road Transport Fees ($75.1 million).
In aggregate, administered programmes were $46.1 million or 0.5 per cent lower than the latest budgets published in the Department's and the Treasury's 2014–15 Portfolio Budget Statements. Combined expenses in 2013–14 were higher than the prior year by some $4.5 billion due mainly to fluctuations in the funding profile of projects delivered under the Infrastructure Investment Programme ($2.3 billion), funding provided for the Infrastructure Growth Package ($1.0 billion) and the transfer of the Local Government Financial Assistance Grants Programme ($0.9 billion) to the Department as part of the Administrative Arrangements Order of 18 September 2013.
In 2013–14, non-taxation revenue increased by $278.6 million overall. This was due mainly to changes in the profile of funds received from the Building Australia Fund ($1,255.1 million), partially offset by an increase in refunds of prior year payments ($32.0 million). Taxation revenue collected on behalf of the Australian Government increased by $9.7 million.
Administered net assets increased by $825.0 million in 2013–14. This was due mainly to the recognition of assets transferred as part of the Administrative Arrangements Order of 18 September 2013 ($698.8 million) and increases in the net asset value of administered investments in government authorities and companies ($149.9 million), partially offset by increased liabilities ($41.3 million).
Table 1.2 is based on information reported in the Department's financial statements and excludes items for which the Treasury is appropriated directly.
Table 1.2 Summary of administered financial performance and position ($m)
|2009–10||2010–11||2011–12||2012–13||2013–14||Change last year|
|Non-taxation revenue||665.8||1 042.6||2 461.5||1 241.4||1 520.0||278.6|
|Total income||688.8||1 065.4||2 485.8||1 266.2||1 554.5||288.3|
|Employee and supplier expenses||26.2||26.2||21.9||18.1||100.4||82.3|
|Depreciation and amortisation||1.1||1.1||1.1||1.2||29.1||37.9|
|Grants||3 734.1||1 781.3||3 136.9||1 816.7||3 431.6||1 614.9|
|Total expenses||3 909.0||1 962.1||3 305.7||1 997.8||3 726.9||1 729.1|
|Financial assets||A||3 461.7||4 302.7||4 343.4||4 496.7||4 727.8||231.1|
|Net assets = A + B - C||3 495.1||4 366.1||4 384.2||4 536.6||5 361.6||825.0|