Australian Transport Safety Bureau
Section 3: Explanatory tables and budgeted financial statements
Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the 2014–15 budget year. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and programme expenses, movements in administered funds, special accounts and government Indigenous expenditure.
3.1.1: Movement of administered funds between years
ATSB does not receive administered funds.
3.1.2: Special Accounts
ATSB does not maintain Special Accounts.
3.1.3: Australian Government Indigenous Expenditure
ATSB does not have any Indigenous specific expenses.
3.2.1: Differences in agency resourcing and financial statements
The ATSB does not have any significant differences between the resource information presented in the Budget Papers and Portfolio Budget Statements as a result of differences between Australian Accounting Standards (AAS) and Government Finance Statistics (GFS).
3.2.2: Analysis of budgeted financial statements
An analysis of ATSB's budgeted financial statements, as reflected in the budgeted departmental financial statements for 2014–15, is provided below.
Budgeted departmental comprehensive income statement
The ATSB has projected an operating loss for 2013-14, mainly due to a decrease in revenue in relation to the National Transport Reforms. In the forward years, a breakeven position is expected once the impact of depreciation and amortisation expenses is factored out.
Net appropriation revenue of $68.9m will be provided to the ATSB in 2014-15. The increase in this revenue is due mainly to funding provided for the search of Malaysia Airlines Flight MH370. The measure primarily relates to the intensified sub-surface search for the location of the missing aircraft, covering an area of up to 60,000 square kilometres. The net appropriation increase is also offset by a reduction in appropriation revenue due to the cessation in 2013-14 of New Policy funding approved in the 2011-12 Budget to enable the ATSB to implement the National Transport reforms, where the ATSB is now the national safety investigator across all Australian rail networks as of 20 January 2013.
The ATSB received $1.34m in budget supplementation in 2013-14 from the budget measure ‘Funding for pre-existing measures affecting the public sector’ announced as part of the 2013–14 Mid-Year Economic and Fiscal Outlook (MYEFO). This funding was to assist the ATSB in the implementation of a significant workforce downsizing programme to enable the ATSB to operate on a financial sustainable footing from 2014-15. Due to the timing of when staff will leave under the redundancy provisions of the ATSB Enterprise Agreement, it is estimated that $0.795m will be utilised in 2013-14 with the balance of $0.545m to be utilised in 2014-15 for separation and redundancy payments. The income statement also includes estimates of the ATSB's own source revenue of $3.3m which includes:
- revenue from the Department of Foreign Affairs and Trade for the ATSB's participation in the Australian Government transport safety initiatives including cooperation with Papua New Guinea, consistent with the MOU on Cooperation in the Transport Sector. This funding will continue until 2015–16;
- estimates of cost recoveries from Queensland, Western Australia, South Australia and Tasmania for safety investigations we undertake on their intrastate rail networks($0.650m);
- estimates of cost recoveries for training that the ATSB provides to industry($0.060m); and
- estimates of the value of the services the ATSB will receive free of charge from the Victorian Office of the Chief Investigator, the NSW Office of Transport Investigations and the Australian National Audit Office ($2.116m).
Budgeted operating expenditure in 2014-15 is $73.3 million. Removing the effect of the $49 million in funding provided in 2014-15 for the search for Malaysia Airlines Flight MH370, estimated operating expenditure is comprised of employee expenses (62%), supplier expenses (33%) and depreciation (5%).
Budgeted expenditure in 2014-15 is $36m higher than in 2013-14, due to increased effort relating to the search for Malaysia Airlines Flight MH370. Removing the effect of this budget measure in 2013-14 and 2014-15, budgeted expenditure would reduce in 2014-15 by $3.4 million (13 per cent) compared to 2013-14 mainly in the area of Employee Benefits. This is due to the implementation of the ATSB's significant workforce downsizing programme where the ATSB's average staffing level would have reduced to 98 in 2014-15 from 110 in 2013-14, an 11 per cent reduction.
Depreciation and amortisation expenses are expected to remain steady over the forward estimates period.
Budgeted departmental balance sheet
The ATSB's budgeted balance sheet at 30 June 2015 reflects the expected balances for its assets and liabilities as well as retained earnings and contributed equity, based on the projected operating result for 2013-14 and the Budget year.
The ATSB's largest financial asset is $6.1m in prior year appropriations, the majority of which has been quarantined for the ATSB to meet its employee provisions of $4.9m.
These comprise plant, equipment and intangible software assets utilised by the ATSB, the largest component of which is the agency's investment in its Safety Investigation Information Management System. This is shown in the line intangibles.
Provisions and Payables
The ATSB's primary liability is accrued employee leave entitlements, shown in the line Employee provisions.
3.2.3: Budgeted financial statements tables
Table 3.2.1: Comprehensive income statement (showing net cost of services) (for the period ended 30 June)
3.2.4: 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 ATSB that are used in producing its outcomes and include:
- infrastructure, plant and equipment used in providing goods and services;
- liabilities for employee entitlements;
- revenue from appropriations or independent sources in payment for outcomes; and
- employee, supplier and depreciation expenses incurred in providing agency outcomes.
ATSB has no administered items.
3. Departmental expenses—employee benefits
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 outcomes.
5. Departmental expenses—depreciation and amortisation
Depreciable property plant and equipment and intangible assets are written-off to their estimated residual values over their estimated useful life to ATSB, using the straight-line calculation method.
6. Departmental revenue
Revenue from government represents the purchase of outcomes from ATSB by the Australian Government and is recognised on the delivery of its outcome.
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 ATSB 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 entity.
7. Departmental assets—financial assets
The primary financial asset relates $6.1m in prior year appropriations.
8. Departmental assets—non-financial assets
These items represent future economic benefits that ATSB will consume in producing outcomes. The reported value represents the purchase price paid less depreciation incurred to date in using the asset.
9. Departmental liabilities—provisions and payables
Provision has been made for ATSB'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 the expected unpaid supplier expenses as at balance date.