Civil Aviation Safety Authority
Section 3: Explanatory tables and budgeted financial statements
Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of entity finances for the 2015–16 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
This table is not provided as CASA does not receive administered funds.
3.1.2: Special Accounts
This table is not provided as CASA does not maintain Special Accounts.
3.1.3: Australian Government Indigenous Expenditure
This table is not provided as CASA does not have any Indigenous specific expenses.
3.2.1: Differences in entity resourcing and financial statements
CASA 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 CASA's budgeted financial statements, as reflected in the budgeted departmental financial statements for 2015–16, is provided below.
Budgeted departmental income statement
CASA is budgeting for an approved operating deficit in 2014–15 of $8.2m. This is mainly due to: a decrease in Special Appropriation from aviation fuel excise originally estimated to be $125.6m in 2014–15, but now estimated at $115.3m, a decrease of $10.3m; and a decrease in employee expenses due to a lower than forecast average staffing level.
CASA is planning an approved operating deficit in 2015–16 of $10.0m. The driver behind the operating deficit is the $13.6m downward revision from the previous forecast of Special Appropriation from aviation fuel excise revenue from $132.2m to $118.6m. The $3.6m shortfall between the reduction in aviation fuel excise revenue and the approved deficit is addressed through targeted reductions in supplier expenses.
CASA is budgeting for small operating surpluses in the forward years with the Special Appropriation for aviation fuel excise forecast to grow at around 3.4% per annum.
Depreciation expenditure will steadily increase in line with CASA's capital program and employee expenses will continue to increase as a result of anticipated pay rises under the next enterprise agreement.
CASA is now reviewing its funding model to deliver future financial stability. It is anticipated the outcome from the review will be made available for government consideration.
Chart 3.1 illustrates CASA's revenue funding. Revenue from special appropriations will increase by 2.9% in the budget year and 3.4% in the forward years.
Chart 3.1: Revenue
Total expenses in 2015–16 are estimated to be $190.7m, an increase of $7.2m when compared to 2014–15. The main movements in the major expense categories are:
- employee expenses are increasing $7.6m due to an increase in the average staffing level from an estimated 802 to 833;
- depreciation expenses increasing by $1.0m, reflecting an increase in capital expenditure;
- supplier expenses decreasing by $0.7m as a result of on-going targeted savings measures; and
- write-down and impairment of assets has decreased by $0.8m.
Budgeted departmental balance sheet
CASA's net asset (or equity) position for 2015–16 is forecast to reduce by $10.0m compared to 2014–15, consistent with the fall in aviation fuel excise and in line with the approved operation deficit.
Chart 3.2 illustrates CASA's budgeted asset profile. Total budgeted assets of $94.1m in 2015–16 represents a decrease of $13.6m from the estimated 2014–15 closing position.
Chart 3.2: Budgeted Assets for 2015–16
Chart 3.3 illustrates CASA's budgeted liabilities profile. Total budgeted liabilities of $46.7m in 2015–16 represents a decrease of $3.6m from the estimated 2014–15 closing position. CASA's primary liability continues to be accrued employee leave entitlements of $29.7m.
Chart 3.3: Budgeted Liabilities for 2015–16
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
Basis of accounting
The budgeted financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for infrastructure, plant and equipment assets and employee entitlements. Property, plant and equipment assets are revalued every year using a fair value methodology. Employee entitlements are measured at the present value of estimated future cash flows based on periodic actuarial assessment.
The budgeted financial statements contain estimates prepared in accordance with the requirements of the Australian Government's financial budgeting and reporting framework, including:
- the Public Governance and Accountability (Financial Reporting) Rule 2015;
- Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board; and
- specific guidance provided by the Department of Finance.
Departmental and administered items
Entity assets, liabilities, revenues and expenses are those items that are controlled and used by CASA in providing its goods and services 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 services; and
- employee, supplier and depreciation expenses incurred in providing entity services.
CASA has no administered items.
Budgeted departmental income statement
Revenue from Government
CASA's ‘at risk’ component of its appropriation estimates are subject to indexation and efficiency dividend adjustments as part of its agreed funding arrangements. Estimates for special appropriation funding have been made on the basis of expected aviation fuel excise collections.
The Department of Infrastructure and Regional Development draws down ordinary and special appropriations on behalf of CASA.
Goods and services revenue
Goods and services revenue primarily represents revenue from cost recovery arrangements and purchase provider arrangements. Estimates are derived from projected service level activities and agreed purchase provider arrangements.
Other revenue comprises the sale of forms and documents, advertising, administrative fines and other sundry revenue. Estimates are based on averages from prior year receipts.
Employee expenses represent payments and accruing entitlements to employees for services rendered in the financial year.
Supplier expenses represent payments made and accruing obligations to suppliers for goods and services used in providing CASA's goods and services.
Depreciation and amortisation expenses comprise of depreciable plant and equipment, buildings and intangible assets as they are written–off to their estimated residual values over their projected useful life to CASA using the straight-line calculation method.
Departmental assets—financial assets
CASA's financial assets are maintained to fund CASA's capital replacements, employee entitlements, creditors and to provide working capital. In addition, CASA's cash reserves provide a contingency to offset fluctuations in aviation fuel excise to avoid calls for additional budget supplementation.
Departmental assets—non-financial assets
These items primarily represent future economic benefits that CASA will consume in providing goods and services. Reported values represent the purchase price paid, adjusted for revaluations, less depreciation incurred to date in using the asset.
Other non-financial assets represent prepaid supplier expenses as at balance date.
Departmental liabilities—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.
Provision has also been made for unpaid supplier expenses as at balance date.