Department of Infrastructure and Transport
Section 3: Explanatory tables and budgeted financial statements
3.1.1: Special Accounts
Special accounts provide a means to set aside and record amounts used for specified purposes. Table 3.1.1 shows the expected additions (receipts) and reductions (payments) for each account used by the Department of Infrastructure and Transport (the Department). The corresponding table in the 2010-11 Portfolio Budget Statements (PBS) is Table 3.1.2.
3.2.1: Analysis of budgeted financial statements
Estimates were not adjusted to reflect the impact of the Australian Government's Rebuilding after the floods measures at the time of printing. Detailed measures will be contained in the 2011-12 Portfolio Budget Statements.
An analysis of the Department's budgeted financial statements, as reflected in the budgeted departmental financial statements and administered schedules for 2010-11, is provided below.
Budgeted departmental income statement
Total expenses are estimated to be $216.5m in 2010-11, a decrease of $8.6m from Budget. The decrease is primarily due to reduced funding following the Administrative Arrangements Order (AAO) of 14 September 2010 ($21.0m), partially offset by:
- measures announced since the 2010-11 Budget ($6.0m);
- shared services arrangements with the Department of Regional Australia, Regional Development and Local Government. (DRARDLG) ($5.1m); and
- foreign aid to Papua New Guinea through AusAID ($1.5m).
Chart 3.1: Total departmental expenses
Budgeted departmental balance sheet
The Department's major assets are in buildings ($25.4m) and intangibles ($17.5m). The Department's primary liability continues to be accrued employee leave entitlements estimated to be $26.1m.
Schedule of budgeted income and expenses administered on behalf of government
The Department administers the collection of taxes, fees and fines, other non-taxation revenue and interest and dividends estimated at $1 162.4.0m, representing an increase of $137.5m from Budget. The increase is primarily due to:
- the profile of receipts from the Building Australia Fund special account for grants under the Nation Building Plan for the Future administered item ($120.0m);
- dividends received from Airservices Australia ($9.2m); and.
- fees collected under the Interstate Road Transport Act 1985 ($7.7m).
Administered expenses, such as for grants and subsidies programs, are budgeted at $2 222.5m, representing a decrease of $1 689.7m from Budget and will be incurred for administered items set out at Section 2. The decrease is due to:
- the transfer of administered items to DRARDLG ($1 816.5m); and
- changes in the funding profile of several administered expense programs ($18.2m).
This decrease has been partially offset by:
- increased expenses from changes in the funding profile of the Nation Building Plan for the Future administered item ($120.0m); and
- recognition of expenses associated with prepayments made in prior years ($25.0m).
Chart 3.2: Total administered expenses
Schedule of budgeted assets and liabilities administered on behalf of government
Total assets are expected to increase by $882.7m to $4 426.5m from the 2009-10 actual result. The increase relates mainly to an increase in administered investments ($947.2m), partially offset by the transfer of loans to DRARDLG ($36.3m), a reduction of prepayments associated with the Nation Building Program ($25.0m), a reduction in receivables due to loan repayments ($1.9m) and the depreciation of assets ($1.1m).
3.2.2: Budgeted financial statements tables
Table 3.2.1: Comprehensive income statement (showing net cost of services) (for the period ended 30 June)
Table 3.2.3: Departmental statement of changes in equity - summary of movement (Budget year 2010-11)
Table 3.2.7: Schedule of budgeted income and expenses administered on behalf of government (for the period ended 30 June)
Table 3.2.8: Schedule of budgeted assets and liabilities administered on behalf of government (as at 30 June)
Notes to the financial statements
1. Accounting policy
The budgeted financial statements have been prepared on an accrual accounting basis, having regard to Statements of Accounting Concepts, and 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.
2. Departmental and administered items
Agency assets, liabilities, revenues and expenses are those items that are controlled by the Department and are used by the Department in producing its outputs and include:
- computers, plant and equipment used in providing 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.
Administered items are those items incurred in providing programs that are controlled by government and managed, or oversighted, by the Department on behalf of government. Administered expenses included grant payments and subsidies, and administered revenues include levies, fees and fines.
3. Departmental expenses - employees
Payments and net increases in entitlements to employees for services rendered in the financial year.
4. Departmental expenses - suppliers
Payments to suppliers for goods and services used in providing agency outputs.
5. Departmental expenses - depreciation and amortisation
Depreciable infrastructure, plant and equipment, buildings and intangible assets are written-off to their estimated residual values over their estimated useful life to the Department, using the straight-line calculation method.
6. Departmental revenue
Revenue from government represents the purchase of outputs from the Department by government and is recognised to the extent that it has been received into the Department’s bank account.
Revenue from other sources, representing sales from goods and services, is recognised when:
- the risks and rewards of ownership have been transferred to the buyer;
- the seller retains no managerial involvement nor effective control over the goods;
- the revenue and transaction costs incurred can be reliably measured; and
- it is probable that the economic benefits associated with the transaction will flow to the Department.
7. Departmental assets - financial assets
The primary financial asset relates to receivables. Financial assets are used to fund the Department‘s capital program, employee entitlements, creditors and to provide working capital.
8. Departmental assets - non-financial assets
These items represent future economic benefits that the Department will consume in producing outputs. The reported value represents the purchase price paid less depreciation incurred to date in using the asset.
9. Departmental liabilities - interest bearing liabilities
The main interest bearing liabilities are information technology assets that the Department has procured under finance leases. These are written-off over the life of the lease.
10. Departmental liabilities - provisions and payables
Provision has been made for the Department’s liability for employee entitlements arising from services rendered by employees. This liability includes unpaid annual leave and long service leave.
Provision has also been made for unpaid supplier expenses as at balance date.
11. Administered revenue
Details of the range of taxation and non-taxation revenue collected by the Department are provided at Appendix 3.2.1.
12. Administered expenses
The majority of the Department’s administered programs are classified as grants, the most significant being the Nations Building Program and Nation Building Plan for the Future administered items.
13. Administered assets - financial assets
Comprise primarily the Australian Government’s investments in portfolio agencies.