Annual Report 2007–2008

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Contents

• Table of contents
• How to use this report
• Letter of transmittal

• Part 1 Executive Summary
• Part 2 Performance reporting
• Part 3 Corporate governance and accountability
• Part 4 Appendices
• Part 5 Financial Management

• Abbreviations
• Glossary
• Compliance Index

Financial Statements

Department of Families, Housing, Community Services and Indigenous Affairs

Statement by the Chief Executive and Chief Finance Officer

In our opinion, the attached financial statements for the year ended 30 June 2008 have been prepared based on properly maintained financial records and give a true and fair view of the matters required by the Finance Minister's Orders made under the Financial Management and Accountability Act 1997 as amended.

Dr Jeff Harmer
Secretary
August 2008

Bruce Hunter
Chief Finance Officer
August 2008

Income Statement
for the period ended 30 June 2008

	Notes	30 June 2008 $'000	30 June 2007 $'000
Income
Revenue
Revenue from Government	3A	1,441,827	1,192,150
Sale of goods and rendering of services	3B	21,348	21,765
Other revenue	3C	1,530	764
Total revenue		1,464,705	1,214,679
Gains
Other gains	3D	10,931	2,788
Foreign exchange	3E	-	252
Sale of assets	3F	49	21
Total gains		10,980	3,061
Total Income		1,475,685	1,217,740
Expenses
Employee benefits	4A	291,822	234,002
Suppliers	4B	216,782	179,727
Depreciation and amortisation	4C	24,376	15,917
Finance costs	4D	117	821
Write‑down and impairment of assets	4E	3,846	3,580
Loss from assets sales	4F	529	-
Foreign exchange loss	4G	128	-
Payments for service delivery	4H	947,847	784,712
Other expenses	4I	1	4,402
Total Expenses		1,485,448	1,223,161
(Deficit)		(9,763)	(5,421)

The above statement should be read in conjunction with the accompanying notes.

Balance Sheet
as at 30 June 2008

	Notes	30 June 2008 $'000	30 June 2007 $'000
Assets
Financial Assets
Cash and cash equivalents	5A	5,129	5,973
Trade and other receivables	5B	101,099	115,813
Total financial assets		106,228	121,786
Non‑Financial Assets
Land and buildings	6A,C	145,149	95,703
Infrastructure, plant and equipment	6B,C	16,079	12,059
Intangibles	6D	47,820	44,933
Other non‑financial assets	6E	22,953	23,846
Total non‑financial assets		232,001	176,541
Total Assets		338,229	298,327
Liabilitites
Payables
Suppliers	7A	47,540	40,991
Other payables	7B	15,380	12,775
Total payables		62,920	53,766
Interest Bearing Liabilities
Leases	8A	174	556
Total interest bearing liabilities		174	556
Provisions
Employee provisions	9A	69,491	64,428
Other provisions	9B	9,765	8,230
Total provisions		79,256	72,658
Total Liabilities		142,350	126,980
Net Assets		195,879	171,347
Equity
Contributed equity		54,534	19,725
Reserves		36,032	36,105
Retained surplus		105,313	115,517
Total Equity		195,879	171,347
Current Assets		129,181	145,632
Non‑Current Assets		209,048	152,695
Current Liabilities		128,587	113,867
Non‑Current Liabilities		13,763	13,113

The above statement should be read in conjunction with the accompanying notes.

Statement of Changes in Equity
for the year ended 30 June 2008

Item	Retained Earnings		Asset Revaluation Reserves		Contributed Equity		Total Equity
	2008 $'000	2007 $'000	2008 $'000	2007 $'000	2008 $'000	2007 $'000	2008 $'000	2007 $'000
Opening balance
Balance carried forward from previous period	115,517	118,333	36,105	8,730	19,725	3,975	171,347	131,038
Adjusted opening balance	115,517	118,333	36,105	8,730	19,725	3,975	171,347	131,038
Income and expenses
Revaluation adjustment	-	-	1,778	31,413	n/a	n/a	1,778	31,413
Transfer of reserve to retained profits on gifting of assets	-	2,605	-	(2,605)	n/a	n/a	-	-
Adjustment to asset revaluation reserve for makegood	-	-	(1,851)	(1,433)	n/a	n/a	(1,851)	(1,433)
Revaluation	-	2,605	(73)	27,375	n/a	n/a	(73)	29,980
Deficit for the year	(9,763)	(5,421)	n/a	n/a	n/a	n/a	(9,763)	(5,421)
Sub‑total Income and Expenses	(9,763)	(2,816)	(73)	27,375	-	-	(9,836)	24,559
Transactions with owners:
Distributions to owners
Restructuring	-	-	-	-	(9,077)	-	(9,077)	-
Contributions by owners
Appropriations (equity injections)	-	-	-	-	40,936	15,750	40,936	15,750
Restructuring	-	-	-	-	2,950	-	2,950	-
Other ‑ transfers of Special Accounts	(441)	-	-	-	-	-	(441)	-
Sub‑total transactions with owners	(441)	-	-	-	34,809	15,750	34,368	15,750
Closing balance as at 30 June	105,313	115,517	36,032	36,105	54,534	19,725	195,879	171,347

The above statement should be read in conjunction with the accompanying notes.

Cash Flow Statement
for the year ended 30 June 2008

	Notes	30 June 2008 $'000	30 June 2007 $'000
Operating Activities
Cash received
Goods and services		20,454	25,789
Appropriations		1,459,097	1,193,803
Interest		112	-
Net GST received		36,002	17,600
Other cash received		144	9
Total cash received		1,515,809	1,237,201
Cash used
Employees		288,827	234,425
Suppliers		225,393	160,886
Payments for service delivery		951,173	783,364
Total cash used		1,465,393	1,178,675
Net cash flows from operating activities	11	50,416	58,526
Investing Activities
Cash received
Proceeds from sales of property, plant and equipment		-	354
Total cash received		-	354
Cash used
Purchase of property, plant and equipment		72,466	66,856
Purchase of intangibles		8,575	-
Total cash used		81,041	66,856
Net cash flows used by investing activities		(81,041)	(66,502)
Financing Activities
Cash received
Appropriations ‑ contributed equity		29,781	13,847
Total cash received		29,781	13,847
Net cash flows from financing activities		29,781	13,847
Net increase (decrease) in cash held		(844)	5,871
Cash and cash equivalents at the beginning of the reporting period		5,973	102
Cash and cash equivalents at the end of the reporting period	5A	5,129	5,973

The above statement should be read in conjunction with the accompanying notes.

Schedule of Commitments
as at 30 June 2008

	30 June 2008 $'000	30 June 2007 $'000
By Type
Commitments receivable
GST recoverable on commitments	(43,723)	(35,656)
Total commitments receivable	(43,723)	(35,656)
Capital commitments
Infrastructure, plant and equipment	497	11,680
Other capital commitments	898	-
Total capital commitments	1,395	11,680
Other commitments
Operating leases1	387,024	298,330
Project commitments	4,827	8,441
Research and development	28,154	40,116
Other commitments	48,375	34,113
Total other commitments	468,380	381,000
Net commitments by type	426,052	357,024
By Maturity
Commitments receivable
One year or less	(10,263)	(9,743)
From one to five years	(16,888)	(13,964)
Over five years	(16,572)	(11,949)
Total commitments receivable	(43,723)	(35,656)
Capital commitments
One year or less	1,344	9,037
From one to five years	51	2,643
Over five years	-	-
Total capital commitments	1,395	11,680
Operating lease commitments
One year or less	53,469	42,921
From one to five years	162,008	124,099
Over five years	171,547	131,310
Total operating lease commitments	387,024	298,330
Other commitments
One year or less	59,673	55,424
From one to five years	20,884	27,114
Over five years	799	132
Total other commitments	81,356	82,670
Net commitments by maturity	426,052	357,024

¹Operating leases included are effectively non‑cancelable and comprise:

Nature of lease	General description of leasing arrangement
Leases for office accommodation	FaHCSIA has office accommodation at 63 locations comprising 61 leases and 2 Commonwealth‑owned sites, where Tuggeranong Office Park and Centraplaza are the two significant locations. In addition FaHCSIA has 3 separate leases for offsite storage facilities in Canberra. FaHCSIA's lease payments are subject to review by a variety of mechanisms. These include predetermined fixed escalators, a link to CPI movements, or in accordance with a market review of comparable leases.
Agreements for the provision of motor vehicles to senior executive officers	No contingent rentals exist.
Leases for office equipment	There are a small number of office equipment leases (excluding IT) that range from 3 to 5 years.

The above statement should be read in conjunction with the accompanying notes.

Schedule of Contingencies
for the period ended 30 June 2008

Contingent Assets	Indemnities		Claims for damages/costs		Total
	2008 $'000	2007 $'000	2008 $'000	2007 $'000	2008 $'000	2007 $'000
Balance from previous period	-	-	84	241	84	241
New	-	-	811	-	811	-
Re‑measurement	-	-	(30)	(150)	(30)	(150)
Assets crystallised	-	-	(54)	(7)	(54)	(7)
Total Contingent Assets	-	-	811	84	811	84

Contingent Liabilities	Indemnities		Claims for damages/costs		Total
	2008 $'000	2007 $'000	2008 $'000	2007 $'000	2008 $'000	2007 $'000
Balance from previous period	500	-	652	150	1,152	150
New	-	500	195	652	195	1,152
Re‑measurement	(500)	-	(148)	(150)	(648)	(150)
Liabilities crystallised	-	-	(504)	-	(504)	-
Total Contingent Liabilities	-	500	195	652	195	1,152
Net Contingencies Assets (Liabilities)	-	(500)	616	(568)	616	(1,068)

Details of each class of contingent liabilities and assets, including those not included above because they cannot be quantified or considered remote, are disclosed in Note 12: Contingent Liabilities and Assets.

Note: $30,000 of the $84,000 contingent assets in 2007 were included in error. The contingent liability indemnity from 2007 for $500,000 has been remeasured as the probability of progression is now considered remote.

The above statement should be read in conjunction with the accompanying notes.

Schedule of Administered Items

Income administered on behalf of Government
for the year ended 30 June 2008

	Notes	30 June 2008 $'000	30 June 2007 $'000
Revenue
Non‑Taxation Revenue
Attorney‑General's Department revenue	16A	101,067	68,535
Recoveries	16B	158,448	31,427
Interest	16C	124,371	104,266
NZ Reciprocal Agreement	16D	51,969	60,726
Special Account revenue	16E	54,915	4,606
Other revenue	16F	11,863	8,672
Total revenues administered on behalf of Government		502,633	278,232
Gains
Net gain from the sale of assets	16G	-	59
Net write back of impairment allowance for personal benefit	16H	47,955	-
Total gains administered on behalf of Government		47,955	59
Total income administered on behalf of Government		550,588	278,291

Expenses administered on behalf of Government
for the year ended 30 June 2008

	Notes	30 June 2008 $'000	30 June 2007 $'000
Subsidies	17A	12,862	12,586
Personal benefits ‑ indirect	17B	15,402	36,627
Personal benefits ‑ direct	17B	51,752,452	43,241,614
Suppliers	17C	161,504	174,752
Grants	17D	3,697,005	3,043,077
Write‑down and impairment of assets	17E	329	207,167
Other expenses	17F	60,039	77,494
Northern Territory Flexible Funding Pool Special Account	17G	17,727	-
Total expenses administered on behalf of Government		55,717,320	46,793,317

This schedule should be read in conjunction with the accompanying notes.

Assets administered on behalf of Government
as at 30 June 2008

	Notes	30 June 2008 $'000	30 June 2007 $'000
Financial assets
Cash and cash equivalents	18A	11,807	11,207
Receivables	18B	988,331	829,013
Investments in Commonwealth entities	18C	1,236,737	514,791
Investments in deposits and government securities	18D	1,861,925	1,724,240
Total Financial Assets		4,098,800	3,079,251
Non‑Financial Assets
Non‑financial assets	18E	7,065	96,635
Total Non‑Financial Assets		7,065	96,635
Total assets administered on behalf of Government		4,105,865	3,175,886

Liabilities administered on behalf of Government
as at 30 June 2008

	Notes	30 June 2008 $'000	30 June 2007 $'000
Provisions
Personal benefits provision	19A	3,171,763	3,026,517
Total Provisions		3,171,763	3,026,517
Payables
Subsidies	19B	-	1,608
Personal benefits	19C	1,040,942	1,094,931
Grants	19D	5,388	47,534
Suppliers	19E	36,904	20,127
Total Payables		1,083,234	1,164,200
Total liabilities administered on behalf of Government		4,254,997	4,190,717

This schedule should be read in conjunction with the accompanying notes.

Administered Cash Flows
for the year ended 30 June 2008

	Notes	30 June 2008 $'000	30 June 2007 $'000
Operating Activities
Cash received
Interest		755	609
NZ Reciprocal Agreement		54,849	60,726
Net GST received		171,473	96,036
Sales of goods and rendering of services		101,395	72,506
Other Cash Received		221,702	47,104
Total Cash Received		550,174	276,981
Cash Used
Grants		3,926,040	3,188,494
Subsidies		12,002	12,585
Personal benefits		51,404,965	42,654,541
Suppliers		198,124	65,024
Payments from the Northern Territory Flexible Funding Pool Special Account to or on behalf of agencies		17,727	-
Payments to the Indigenous Land Corporation		-	96,420
Payments to land councils for administrative purposes		22,826	26,554
Payments to land councils for distribution		19,533	26,153
Other		-	12,983
Total Cash Used		55,601,217	46,082,754
Net cash flows from (used by) operating activities		(55,051,043)	(45,805,773)
Investing Activities
Cash Received
Proceeds from maturity and sales of investment		2,028,632	4,166,164
Interest on investments		97,346	112,154
Total Cash Received		2,125,978	4,278,318
Cash Used
Purchase of investments		2,134,804	4,209,563
Total Cash Used		2,134,804	4,209,563
Net cash flows from (used by) investing activities		(8,826)	68,755
Net (Decrease) in Cash Held		(55,059,869)	(45,737,018)
Cash and cash equivalents at the beginning of the reporting period		11,207	78,236
Cash from Official Public Account for:
‑ Appropriations		55,344,534	45,965,875
‑ Special accounts		43,258	4,938
		55,387,792	45,970,813
Cash to Official Public Account for:
‑ Appropriations		(255,245)	(297,084)
‑ Special accounts		(72,078)	(3,740)
		(327,323)	(300,824)
Cash and cash equivalents at the End of the Reporting Period	18A	11,807	11,207

This schedule should be read in conjunction with the accompanying notes.

Administered Commitments

	30 June 2008 $'000	30 June 2007 $'000
By Type
Commitments receivable
Other	(667,210)	(379,294)
GST recoverable on commitments	(294,948)	(135,132)
Total commitments receivable	(962,158)	(514,426)
Capital commitments
Land and buildings	1,117	-
Infrastructure, plant and equipment	471	-
Total capital commitments	1,588	-
Other commitments
Project commitments	1,051,269	382,601
Research and development	6,189	462
Other commitments	3,321,879	3,817,850
Total other commitments	4,379,337	4,200,913
Net commitments by type	3,418,767	3,686,487
By Maturity
Commitments receivable
Other commitments
One year or less	(353,417)	(245,660)
From one to five years	(538,148)	(180,816)
Over five years	(70,593)	(87,950)
Total other commitments receivable	(962,158)	(514,426)
Capital commitments
One year or less	1,540	-
From one to five years	48	-
Over five years	-	-
Total capital commitments	1,588	-
Other commitments
One year or less	2,686,771	3,174,937
From one to five years	1,595,938	905,526
Over five years	96,628	120,450
Total other commitments	4,379,337	4,200,913
Net administered commitments by maturity	3,418,767	3,686,487

This schedule should be read in conjunction with the accompanying notes.

Administered Contingencies
as at 30 June 2008

Administered Contingent Liabilities	Claims for damages or costs		Total
	2008 $'000	2007 $'000	2008 $'000	2007 $'000
Balance from previous period	993	-	993	-
New	352	993	352	993
Re‑measurement	-	-	-	-
Liabilities crystallised	(993)	-	(993)	-
Obligations expired	-	-	-	-
Total Administered Contingent Liabilities	352	993	352	993

Unquantifiable and remote but material contingencies are disclosed in Note 21: Administered Contingent Liabilities and Note 22: Administered Contingent Assets.

There are no contingent assets in the current or previous reporting periods.

The above statement should be read in conjunction with the accompanying notes.

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© Commonwealth of Australia, 2008
Last modified 30 October 2008