Section 5 : Budgeted Financial Statements
5.1 Analysis of budgeted financial statements
An analysis of CASA's budgeted financial statements, as reflected in the budgeted departmental financial statements for 2005-06, is provided below.
Budgeted Departmental Statement of Financial Performance
CASA is budgeting for an approved operating deficit of $0.5m which is consistent with its LTFS. This result is a $5.7m decrease from the 2004-05 estimated actual operating surplus of $5.3m and represents the utilisation of CASA's cash reserves to fund the LTFS.
Total revenue in 2005-06 is estimated to be $117.1m a decrease of $2.0m from the 2004-05 estimated actual. The decrease reflects a reduction in government appropriations of $7.6m offset by an increase in revenue from independent sources of $5.5m resulting from the phasing in of the cost recovery programme.
Total expenditure in 2005-06 is estimated to be $117.1m, an increase of $3.3m from the 2004-05 estimated actual. The increase is primarily due to supplier's expenses rising by $3.2m as a result of: progressing the CASA Improvement Programme; increasing compliance activities in Northern Australia; and establishing a single entry point to CASA for the aviation industry (Aviation Regulatory Services Service Centre).
Other significant expenditure variations relate to:
- an increase in depreciation and amortisation expenditure of $1.3m as a result of the CASA Improvement Programme which involves replacing outdated Information Technology systems, offset by
- a decrease in employee expenses of $1.3m.
Budgeted Departmental Statement of Financial Position
CASA's budgeted net asset position of $55.3m represents a decrease of $1.4m from the 2004-05 estimated actual. The decrease primarily reflects the reduction in cash of $6.8m to fund the LTFS, offset by an increase in intangible assets of $6.1m representing the funding of the CASA Improvement Programme, that is, replacement of Information Technology.
Other significant variances include:
- accrued revenue: the increase of $0.8m reflects the phasing in of the cost recovery programme, and
- leases: the decrease of $2.1m reflects lease commitments coming to an end.
5.2 Budgeted financial statements tables
Table 5.4: Departmental capital budget statement
5.3 Notes to the financial statements
- Accounting policy
The budgeted financial statements have been prepared on an accrual basis, having regard to Statements of Accounting Concepts, and are in accordance with:
- the Finance Minister's Orders
- Australian Accounting Standards
- other authoritative pronouncements of the Australian Accounting Standards Board, and
- the Consensus Views of the Urgent Issues Group.
- Departmental and administered items
Agency assets, liabilities, revenues and expenses are those items that are controlled and used by CASA in producing its outputs and include:
- computers, plant and equipment used in producing goods and services
- liabilities for employee entitlements
- revenue from appropriations or independent sources in payment for outputs, and
- employee, supplier and depreciation expenses incurred in providing agency outputs.
CASA has no administered items.
- Total revenues from ordinary activities
Appropriations - represents the purchase of outputs from CASA by the government and is recognised to the extent that it has been received by CASA's bank account.
Revenue from other sources - represents the sales of goods and services and is recognised at the time that it is imposed on customers.
- Total expenses from ordinary activities
Employee expenses - represents payments and net increases in entitlements to employees for services rendered in the financial year.
Supplier's expenses - represents payments made to suppliers for goods and services used in providing CASA's outputs.
Depreciation and amortisation expenses - depreciable plant and equipment, buildings and intangible assets are written-off to their estimated residual values over their estimated useful life to CASA using straight-line calculation method.
- Net surplus or deficit from ordinary activities
CASA has budgeted for a small operating deficit in 2005-06.
- Total financial assets
The primary financial asset relates to cash. Financial assets are used to fund CASA's capital replacements, employee entitlements, creditors and to provide working capital.
- Total non-financial assets
These items represent future economic benefits that CASA will consume in producing outputs. The reported value represents the purchase price paid less depreciation incurred to date in using the asset.
- Total interest bearing liabilities
CASA's desktop and mainframe IT environment is provided under lease, in accordance with the Government's IT outsourcing arrangements.
- Total provisions and payables
Provision has been made for CASA's liability for employee entitlements arising from services rendered by employees. This liability includes unpaid annual leave and long service leave. No provision has been made for sick leave because the level of sick leave taken is less than the amount which employees are entitled each year.
Provision has also been made for unpaid supplier expenses as at balance date.