Part 1: The year in review
Financial performance overview
FaCS' financial statements, both departmental and administered, are in Volume two of this report. Each of the outcome summaries in Volume two contains a resource summary of our price for outputs and administered programs.
Changes in administrative arrangements
There were no changes in FaCS' administrative arrangements during the financial year. However, an Administrative Arrangements Order signed 24 June 2004 and effective from 1 July 2004 effectively transfers the administration of Aboriginal and Torres Strait Islander Commission (ATSIC) and Aboriginal and Torres Strait Islander Services (ATSIS) appropriations and programs to mainstream government departments, including FaCS. The financial effect of this transfer will be known following completion of a section 32 determination by the Finance Minister under the Financial Management and Accountability Act 1997.
Operating results
Departmental
FaCS generated an operating surplus of $0.065 million in 2003–04 (in 2002–03 there was an operating deficit of $21.7 million). Figure 4 gives a comparison of departmental revenue and expenses from financial years 2000–01 to 2003–04.
Operating revenue
Total operating revenue was $2483.3 million (compared with $2381.1 million in 2002–03). Operating revenue consists of:
- government appropriations of $2480.6 million
- sale of goods and services revenue of $1.5 million
- interest revenue of $0.014 million
- other revenue of $1.1 million.
In comparison with 2002–03, government appropriations increased for delivery of income support services, while other revenue (including sale of assets) remained steady. Sale of goods and services revenue increased due to funding received for the Indigenous Flexible Funding Pool, and interest decreased substantially due to changes in banking arrangements for government departments from 1 July 2003.
Operating expenses
Total operating expenses were $2482.9 million ($2402.7 million in 2002–03). Operating expenses consist of:
- employee expenses of $299.3 million
- supplier expenses of $198.6 million
- payments to other government agencies for service delivery of $1968.1 million
- other expenses (including depreciation) of $17.0 million.
Operating expenses increased by 3 per cent over last financial year's. This was attributable to pay increases within the department, an increase in payments to Centrelink for delivery of income support services, and an increase in depreciation due to revaluation of assets during the financial year. These increases were offset by a reduction in write-down of assets in 2003–04.
Administered
FaCS administered programs of $65.2 billion in 2003–04 on behalf of the Government (in 2002–03 this figure was $57.7 billion). Table 1 contains a comparison of the breakdown of actual administered expenses in 2002–03 and the preceding financial year.
Personal benefits increased in 2003–04 due to new Budget measures on family payments announced in the federal Budget in May 2004. Personal benefits also included large increases in the Age Pension, Disability Support Pension and Carer Payment categories. Write-down of assets in 2002–03 included an abnormally high personal benefit debt write-off. In 2003–04, write-down of assets returned to a typical level.
Increases in other expenses related primarily to payments to rehabilitation providers of approximately $119 million.
Figure 4 Departmental revenue and expenses, 2000–01 to 2003–04 (Text description)
Figure 5 Administered expenses, 2000–01 to 2003–04 (Text description)
Balance sheet
Departmental
Net asset position
The department's net asset position as at 30 June 2004 was $19.2 million (up from $10.7 million in 2003). This increase was due to:
- an increase in the Asset Revaluation Reserve resulting from the revaluation of FaCS' leasehold improvements
- an equity injection of $0.9 million for capital acquisitions relating to recommendations under the Budget Estimates and Framework Review.
Total assets
Total assets as at 30 June 2004 were $145.5 million (down from $161.6 million in 2003). Receivables were the primary driver for this reduction, decreasing by $15.6 million. All categories of departmental receivables decreased, with the majority of the decrease relating to receivables from Centrelink for adjustments under the Regional Funding Model and from the Official Public Account.
Cash balances remained steady at an agreed working capital level.
The value of land and buildings increased by approximately $6.8 million. This was due to a revaluation of FaCS' leasehold improvements during the financial year.
Other non-financial assets, including prepayments to Centrelink, were substantially lower at 30 June 2004 compared with the previous year. The Centrelink prepayment recognises that at financial year-end, approximately $4.7 million had been paid to Centrelink, for which the services remained undelivered. These services are expected to be delivered during 2004–05.
Total liabilities
Total liabilities as at 30 June 2004 were $126.3 million (down from $150.9 million in 2003). All liabilities remained constant during the financial year, with the exception of other payables and other provisions.
Other provisions of $3.1 million relating to 'make good' requirements under lease contracts were recognised.
Other payables reduced by $27.5 million. This was due to the recognition of appropriation payable to Finance in 2002–03 (nil in 2003–04).
Administered
Total administered assets were $2468.8 million (up from $2278.8 million in 2002–03; see Figure 7). This increase related to an increase in the receivable for personal benefits.
Total administered liabilities increased by $2402 million to $4803.7 million (up from $2401.7 million in 2002–03). This increase was due to new Budget measures on family payments announced in the federal Budget in May 2004. Loans under the Student Financial Supplement Scheme decreased by approximately $160 million due to the cessation of the scheme from 1 January 2004, with no new loans offered after that date.
Figure 6 Departmental assets and liabilities, 2000–01 to 2003–04 (Text description)
Figure 7 Administered assets and liabilities, 2000–01 to 2003–04 (Text description)
