Contents
- Part 1 Executive Summary
- Part 2 Performance reporting
- Part 3 Corporate governance and accountability
- Part 4 Appendices
- Part 5 Financial Management
Annual Report 2008–2009
Skip to content | FaHCSIA Home
Annual Report 2008–2009
Annual Report 2008–2009 » Chapter 16: Financial Management
This section provides a summary of the Department’s financial performance for 2008–09. Departmental and administered results are shown in the audited financial statements on pages 385–468 of this report. The resource summary of the price of outputs and administered programs can be found under each outcome in Part 2 of this report.
Strong financial management within FaHCSIA has meant that our total income of $1,700.9 million continues to be effectively managed. This is reflected in the Department’s operating result for 2008–09 of a $4.4 million deficit. This deficit is attributable to the increase in employee provisions due to a reduction in the discount factor used to calculate employee provisions arising from the current economic conditions. Given the size of our operating budget our ability to achieve a small operating deficit reflects strong financial management within FaHCSIA.
The Department continues to address audit recommendations from the Australian National Audit Office (ANAO) in a timely manner. All ANAO findings from the previous year’s audit have been cleared by the ANAO.
FaHCSIA’s 2008–09 financial statements reflect a number of significant changes to FaHCSIA’s operations as well as a number of whole-of-government changes to financial reporting arrangements. These key changes and their impact are detailed below.
From 1 July 2009, the Family Tax Benefit (FTB) is only paid and claimed through Centrelink and Medicare and not through the tax system. Thus from 30 June 2009, FaHCSIA now reports the total provision for FTB. Previously the Australian Taxation Office reported part of this provision. These changes in arrangements account for a significant portion of the increase in the FTB provision as at 30 June 2009.
Under the new Federal Financial Framework agreed with COAG, from 1 January 2009 the Treasury is accountable for the payment of grants to states and territories under National Partnership Agreements. Thus the 2008–09 financial statements only include National Partnership Agreements payments made during the period 1 July to 31 December 2008.
[ top ]
From 1 July 2008 any payments for appropriations (for either recurrent operations or capital injections) to CAC Act bodies are now paid to their portfolio department for on-payment to the CAC Act bodies.
In 2008–09 FaHCSIA received and paid appropriations to:
From 1 July 2009 Centrelink will receive departmental appropriations directly. Thus in 2009–10 our revenue from Government and payments for service delivery will be significantly reduced. In 2008–09 $1,081m of our total departmental expenses of $1,705.3m were for payments to Centrelink for service delivery.
Total income was $1,700.9 million (2007–08: $1,475.7 million). Operating income consists of:
Government appropriations for the delivery of programs and services increased by $216 million in 2008–09. This increase primarily reflects increased appropriations received for Centrelink service delivery.
Total operating expenses were $1,705.3 million (2007–08: $1,485.4 million). Operating expenses consist of:
Overall, this increase in operating expenses reflects the increase in size and operations of FaHCSIA in 2008–09.
[ top ]
Total assets at 30 June 2009 were $428.6 million (2008: $338.2 million). The majority of the asset base is in land and buildings, infrastructure, plant and equipment and internally developed software. The increase in total assets mainly occurred in debtors and leasehold improvements. Both these increases reflect the growth in operations during the year.
Total liabilities at 30 June 2009 were $211.6 million (2008: $142.4 million). Employee provisions and other payables comprise a major portion of the liabilities. The increase in employee provisions is partly due to a reduction in the discount factor used in calculating these provisions in 2007–08. The increase in other payables reflects amounts owed to Centrelink as at 30 June 2009.
Total assets at 30 June 2009 were $4,787.5 million (2008: $4372.5 million). The increase over the financial year reflects the growth in the fair value of the investment in Commonwealth entities and the value of financial investments held by the Aboriginals Benefit Account and the Aboriginal and Torres Strait Islander Land Account.
Total liabilities at 30 June 2009 were $7,845.8 million (2008: $4,255.0 million). This increase is driven by an increase in the Family Tax Benefit (FTB) provision as a result of increased customer numbers and FaHCSIA now recognising that portion of the FTB provision previously reported by the ATO. In addition, personal benefits payable has increased, mainly due to:
FaHCSIA manages its current and non-current assets in accordance with guidelines as set out in the Chief Executive’s Instructions and relevant accounting standards.
FaHCSIA has updated its comprehensive asset accounting and management framework during 2008–09 including revision of asset accounting policies and management procedures to ensure they remain in line with accounting standards and industry best practice.
The Department’s purchasing activities are consistent with the FaHCSIA Chief Executive Instructions and internal procurement guidelines, which are in accordance with the Commonwealth Procurement Guidelines December 2008. All activities have ensured the efficient, effective and ethical use of public monies and have delivered value for money. Purchasing decisions have been made in an accountable and transparent manner, complying with Government policies and meeting relevant international obligations.
During 2008–09, 291 new consultancy contracts were agreed upon, involving total actual expenditure of $16.8 million. In addition, 52 ongoing consultancy contracts were active during the year, involving total actual expenditure of $1.6 million.
Summary information on consultancy services for FaHCSIA and the Social Security Appeals Tribunal (SSAT) is set out below in Tables 5.1–5.3.
| Number let | Expenditure in 2008–09 (GST inclusive) | |
|---|---|---|
| FaHCSIA core | 282 | $16,514,188 |
| SSAT | 9 | $282,411 |
| Total | 291 | $16,796,599 |
Please note: includes consultancies less than $10,000 in value.
| Number ongoing | Expenditure in 2008–09 (GST inclusive) | |
|---|---|---|
| FaHCSIA core | 48 | $1,508,672 |
| SSAT | 4 | $132,908 |
| Total | 52 | $1,641,580 |
Please note: includes consultancies less than $10,000 in value.
An ongoing consultancy is any consultancy let prior to 1 July 2008 that remained active in the 2008–09 financial year.
| 2006–07 | 2007–08 | 2008–09 |
|---|---|---|
| $29,603,036 | $28,894,703 | $18,438,179 |
Please note: includes expenditure on consultancy contracts let prior to 2006–07, and consultancies less than $10,000 in value. Includes FaHCSIA core and SSAT.
[ top ]
FaHCSIA is required under paragraph 11.1 (ba) of the Legal Services Directions 2005 to report on legal services expenditure each financial year.
Table 5.4 below is a statement of legal services expenditure by the FaHCSIA portfolio for 2008–09. This statement has been published in compliance with paragraph 11.1 (ba) of the Legal Services Directions 2005, incorporating additional reporting requirements where possible.
| Internal legal services expenditure | ||||||
|---|---|---|---|---|---|---|
| Aboriginal Hostels Limited $ |
Indigenous Business Australia $ |
Indigenous Land Corporation $ |
SSAT $ |
FaHCSIA $ |
Portfolio $ |
|
| Salaries | – | 128,000 | 453,335 | 125,010 | 6,533,848 | 7,240,193 |
| Overheads (includes administrative support and accommodation costs)1 | – | 14,000 | 108,893 | 26,438 | 2,757,743 | 2,907,074 |
| Total (GST inclusive) | Nil | 142,000 | 562,228 | 151,448 | 9,291,591 | 10,147,267 |
| External legal services expenditure | ||||||
| Legal fees | 115,336 | 2,042,453 | 1,553,070 | 26,364 | 3,084,338 | 6,821,561 |
| Other disbursements on external legal services | NIL | 374,131 | NIL | Nil | 58,319 | 432,450 |
| Total (GST inclusive) | 115,336 | 2,416,584 | 1,553,070 | 26,364 | 3,142,657 | 7,254,011 |
| Combined total | ||||||
| Total legal services expenditure | 115,336 | 2,558,584 | 2,115,298 | 177,812 | 12,434,248 | 17,401,278 |
| Briefs to counsel | ||||||
| Aboriginal Hostels Limited | Indigenous Business Australia | Indigenous Land Corporation | SSAT | FaHCSIA | Portfolio | |
| Number of male counsel briefed | – | 1 | 1 | – | 3 | 5 |
| Value of briefs to male counsel | – | $11,385 | $59,789 | – | $78,358 | $149,532 |
| Number of female counsel briefed | – | – | – | – | 2 | 2 |
| Value of briefs to female counsel | – | – | – | – | $22,656 | $22,656 |
Next: Financial Statements
Previous: Appendix 12