Budget 2010-11

Aboriginal Hostels Limited

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 2010-11 budget year. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and program expenses, movements in administered funds, special accounts and government Indigenous expenditure.

3.1 Explanatory tables

3.1.1 Movement of administered funds between years

AHL has no administered funds for 2010-11.

3.1.2 Special accounts

AHL has no special accounts for 2010-11.

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3.1.3 Australian Government Indigenous expenditure

Table 3.1.3: Australian Government Indigenous expenditure
Outcome	Appropriations			Other	Total	Program
Outcome	Bill No. 1 $'000	Bill No. 2 $'000	Total Approp $'000	$'000	$'000	Program
Aboriginal Hostels Ltd
Outcome 1
Departmental 2010-11	36,255	6,920	43,175	11,482	54,657	1.1
	6,400	-	6,400		6,400	1.2
Departmental 2009-10	30,440	3,790	34,230	12,440	46,670	1.1
	6,400	-	6,400		6,400	1.2
Total Outcome 2010-11	42,655	6,920	49,575	11,482	61,057
Total Outcome 2009-10	36,840	3,790	40,630	12,440	53,070
Total AGIE 2010-11	42,655	6,920	49,575	11,482	61,057
Total AGIE 2009-10	36,840	3,790	40,630	12,440	53,070

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3.2 Budgeted financial statements

3.2.1 Differences in agency resourcing and financial statements

There are no significant differences between the resource information presented in the Budget papers and Portfolio Budget Statements (PB Statements) as a result of differences between Australian Accounting Standards and Government Finance Statistics. Furthermore, there are no differences that arise because of related entity transactions.

3.2.2 Analysis of budgeted financial statements

An analysis of the primary causes of movements from the financial statements published in the 2010-11 PB Statements is provided below.

Budgeted departmental income statement

This statement provides a picture of the expected financial results for AHL by identifying full accrual expense and revenues, which highlights whether AHL is operating at a sustainable level.

Total revenue

Operating income from Government has increased by $5.8 million in 2010-11 as a result of additional operating funds for Kununurra Secondary Education Hostel ($0.6 million), Townsville Renal Dialysis Hostel ($0.8 million), Port Hedland Renal Dialysis Hostel ($0.8 million), Nhulunbuy/Borroloola Secondary Education Hostels (now reallocated to Noongar Elders Home in Perth) ($1.2 million); Fire Safety and OH&S major maintenance depreciation ($1.6 million); and a net increase in ongoing operational costs of $0.8 million.

Accommodation charges have increased due to revisions of tariff rates in line with the increase in Centrelink benefits.

Other grants reflects the funding expected to be received from DEEWR through the Indigenous Youth Mobility Program (IYMP) until 30 June 2012. The contract with DEEWR for the delivery of the IYMP in seven locations (Darwin, Alice Springs, Port Augusta, Adelaide, Dubbo, Coffs Harbour and Hobart) is due to end in June 2012. As a result, there is a marked reduction in total income from 2012-13.

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Total expenses

Salaries and employee benefits-these have been increased by $1.4 million as a result of new AHL hostels in Mt Isa redevelopment, Kununurra and Townsville.

Suppliers-this includes food, materials, services and sundry expenses and the increase is reflective of new hostels and the IYMP program through DEEWR.

Depreciation and amortisation-the higher level of depreciation expenditure flows from the acquisition costs for fire safety works across all AHL sites ($5.0 million from 2007-08 to 2009-10) and the expected additional OH&S-type major repairs totalling $6.92 million during the 2010-11 financial year.

Grants-this item represents the community hostels grants of a capital and operating nature to approved organisations to operate hostels.

The contract with DEEWR for the delivery of the IYMP in seven locations (Darwin, Alice Springs, Port Augusta, Adelaide, Dubbo, Coffs Harbour and Hobart) is due to end in June 2012. As a result, there is a marked reduction in both total income and expenditure from 2012-13.

Budgeted departmental balance sheet

This statement shows the financial position of AHL. It helps AHL to track the management of assets and liabilities.

The major variations between estimated actuals for 2009-10 and the budget for 2010-11 in the balance sheet are as follows:

Investment activity in non-current assets continues to increase in 2010-11 due to the capital equity injections for OH&S major maintenance at AHL hostels ($6.92 million) and Noongar Elders Home in Perth ($1.2 million).
The cash balance reflects the nature of hostel major maintenance and construction works, as they normally take two to three years to complete. Consequently, actual payments are spread over two financial years, resulting in an increase in the cash balance in 2010-11.
The receivables are fairly stable and include items such as GST refunds due from the Australian Taxation Office and trade debtors.
Liabilities are expected to remain at similar level for the next three financial years.

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Budgeted departmental statement of cash flows

Budgeted cash flows, as reflected in the statement of cash flows, provide important information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities.

The major variations between estimated actuals for 2009-10 and the budget for 2010-11 in the statement of cash flows are as follows:

The increase in total cash to be received in 2010-11 is linked to the increase in appropriation and the higher level of accommodation charges collected ($3.2 million cash impact).
The trend in payments to suppliers and employees is in line with the comments provided under the expenses category in the income statement.
The purchase of property, plant and equipment in 2010-11 is due to capital equity injections of $6.92 million for OH&S-type major repairs at AHL-owned hostels and the finalisation of the Kununurra Secondary Education Hostel during 2010-11.

Departmental statement of changes in equity-summary of movement

The changes in the statement of equity are a $0.001 million surplus for the 2010-11 financial year and $6.92 million in capital equity injections for the OH&S-type major repairs at AHL-owned hostels.

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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)
	Estimated actual 2009-10 $'000	Budget estimate 2010-11 $'000	Forward estimate 2011-12 $'000	Forward estimate 2012-13 $'000	Forward estimate 2013-14 $'000
EXPENSES
Employee benefits	25,869	27,312	27,262	26,823	26,589
Supplier	14,060	16,103	16,095	15,866	15,687
Grants	6,400	6,400	6,400	6,400	6,400
Depreciation and amortisation	2,840	4,211	4,597	4,597	4,597
Write-down and impairment of assets	110	110	110	110	110
Finance costs
Other	-	-	-	-	-
Total expenses	49,279	54,136	54,464	53,796	53,383
LESS:
OWN-SOURCE INCOME
Revenue
Accommodation Charges	8,869	9,000	9,427	9,427	9,427
Appropriations	36,840	42,655	42,556	41,888	41,475
Grants and Subsidies
Department of Health and Ageing	2,413	1,800	1,800	1,800	1,800
Indigenous Youth Mobility Program	476	-	-	-	-
Interest	500	500	500	500	500
Other revenue	182	182	182	182	182
Total revenue	49,280	54,137	54,465	53,797	53,384
Surplus (Deficit)	1	1	1	1	1
Surplus (Deficit) attributable to the Australian Government	1	1	1	1	1

Prepared on Australian Accounting Standards basis.

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Table 3.2.2: Budgeted departmental balance sheet (as at 30 June)
	Estimated actual 2009-10 $'000	Budget estimate 2010-11 $'000	Forward estimate 2011-12 $'000	Forward estimate 2012-13 $'000	Forward estimate 2013-14 $'000
ASSETS
Financial assets
Cash and equivalents	26,467	24,833	23,585	22,338	21,090
Trade and other Receivables	1,368	2,060	2,752	3,444	4,136
Total financial assets	27,835	26,893	26,337	25,782	25,226
Non-financial assets
Land and buildings	65,364	72,864	73,058	73,252	73,446
Infrastructure, plant and equipment	2,657	3,017	3,377	3,737	4,097
Heritage and cultural assets	110	113	116	119	122
Total non-financial assets	68,131	75,994	76,551	77,108	77,665
Total assets	95,966	102,887	102,888	102,890	102,891
LIABILITIES
Provisions
Employees	3,248	3,248	3,248	3,248	3,248
Total provisions	3,248	3,248	3,248	3,248	3,248
Payables
Suppliers	240	240	240	240	240
Total payables	240	240	240	240	240
Total liabilities	3,488	3,488	3,488	3,488	3,488
Net assets	92,478	99,399	99,400	99,402	99,403
EQUITY*
Parent entity interest
Contributed equity	81,161	88,081	88,081	88,081	88,081
Retained surpluses or accumulated deficits	11,317	11,318	11,319	11,321	11,322
Total equity	92,478	99,399	99,400	99,402	99,403
Current assets	27,835	26,893	26,337	25,782	25,226
Non-current assets	68,131	75,994	76,551	77,108	77,665
Current liabilities	3,248	3,248	3,248	3,248	3,248
Non-current liabilities	240	240	240	240	240

Prepared on Australian Accounting standards basis

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Table 3.2.3: Departmental statement of changes in equity-summary of movement (Budget year 2010-11)
	Retained earnings $'000	Contributed equity/capital $'000	Total equity $'000
Opening balance as at 1 July 2010
Balance carried forward from previous period	11,317	81,161	92,478
Surplus (deficit) for the period	1	-	1
Transactions with owners
Contribution by owners Appropriation (equity injection)	-	6,920	6,920
Estimated closing balance as at 30 June 2011	11,318	88,081	99,399

Prepared on Australian Accounting Standards basis.

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Table 3.2.4: Budgeted departmental statement of cash flows (for the period ended 30 June)
	Estimated actual 2009-10 $'000	Budget estimate 2010-11 $'000	Forward estimate 2011-12 $'000	Forward estimate 2012-13 $'000	Forward estimate 2013-14 $'000
OPERATING ACTIVITIES
Cash received
Accomodation Charges	8,759	8,890	9,317	9,317	9,317
Appropriations	36,640	41,963	41,864	42,196	41,783
Grants and Subsidies	2,889	1,800	1,800	1,800	1,800
Interest	500	500	500	500	500
Other	2,597	2,597	2,597	2,597	2,597
Total cash received	51,385	55,750	56,078	56,410	55,997
Cash used
Employees	24,841	26,252	26,202	26,144	25,910
Suppliers	17,303	19,578	19,570	19,960	19,781
Grants	6,400	6,400	6,400	6,400	6,400
Total cash used	48,544	52,230	52,172	52,504	52,091

Net cash from or (used by) operating activities	2,841	3,520	3,906	3,906	3,906
INVESTING ACTIVITIES
Cash used
Purchase of property, plant and equipment	7,934	12,074	5,154	5,154	5,154
Net cash from or (used by) investing activities	(7,934)	(12,074)	(5,154)	(5,154)	(5,154)
FINANCING ACTIVITIES
Cash received
Appropriations - contributed equity	3,790	6,920	-	-	-
Net cash from or (used by) financing activities	3,790	6,920	-	-	-
Net increase or (decrease) in cash held	(1,303)	(1,634)	(1,248)	(1,247)	(1,248)
Cash at the beginning of the reporting period	27,770	26,467	24,833	23,585	22,338
Cash at the end of the reporting period	26,467	24,833	23,585	22,338	21,090

Prepared on Australian Accounting Standards basis.

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Table 3.2.5: Departmental capital budget statement
	Estimated actual 2009-10 $'000	Budget estimate 2010-11 $'000
CAPITAL APPROPRIATIONS
Total equity injections	3,790	6,920
Total loans	-	-
Special appropriations	-	-
Total capital appropriations	3,790	6,920
Represented by:
Purchase of non-financial assets	3,790	6,920
Other
Total represented by	3,790	6,920
ACQUISITION OF NON-FINANCIAL ASSETS
Funded by capital appropriations	3,790	6,920
Funded internally from Departmental resources¹	4,600	-
TOTAL	8,390	6,920

Prepared on Australian Accounting Standards basis.

1. Includes the following sources of funding: annual and prior year appropriations; donations and contributions; gifts; finance leases; internally developed assets; s. 31 relevant agency receipts; proceeds from the sale of assets.

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Table 3.2.6: Statement of asset movements (2010-11)
	Land $'000	Buildings $'000	Other Infrastructure, Plant & Equipment $'000	Heritage & Cultural Assets $'000	Total $'000
as at 1 July 2010
Gross book value	5,740	85,185	4,355	128	95,408
Accumulated depreciation/amortisation	-	25,561	1,698	18	27,277
Opening net book balance	5,740	59,624	2,657	110	68,131
CAPITAL ASSET ADDITIONS
Estimated expenditure on new or replacement assets
by purchase or internally developed	-	11,420	650	4	12,074
Sub-total	-	11,420	650	4	12,074
as at 30 June 2011
Gross book value	5,740	96,605	5,005	132	107,482
Accumulated depreciation/amortisation	-	29,481	1,988	19	31,488
Closing net book balance	5,740	67,124	3,017	113	75,994

Prepared on Australian Accounting Standards basis.

3.2.4 Notes to the financial statements

The financial statements have been prepared in accordance with Australian Equivalent of International Financial Reporting Standards (AEIFRS) and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial statements are prepared on an accrual basis and in accordance with historical cost convention.

The accounting policies adopted that underpin these statements are consistent with those applied in 2009-10.

Reference should be made to AHL's Annual Report 2009-10 for detailed disclosure of AHL's accounting policies.

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