Annual Report 2001-02: Portfolio and Departmental Overview

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Financial performance

Operating result
Balance sheet

The following is a summary of the department’s financial performance in 2001–02; detailed results are shown in the audited financial statements, and the departmental appropriation is shown in more detail in table 1, Appropriation for Outcome 1.

The department received an unqualified audit report for 2001–02.

Operating result

The department reported an operating surplus for 2001–02 of $5.2 million – 43 per cent greater than the operating surplus for 2000–01. Table 2 demonstrates the differences between the department’s key results for the two financial years.

Of that operating surplus, $0.6 million was returned to the Commonwealth as a notional payment and a further $0.7 million will be returned, as payment of the capital use charge. The capital use charge is a levy that an agency is required to pay to compensate the Commonwealth for the use of the equity funds invested by the Commonwealth in the agency.

Table 2 Comparison of 2000–01 and 2001–02 overall performance
Indicator	2001–02 ($’000)	2000–01 ($’000)	Movement (per cent)
Revenue from Commonwealth Government	78,915	56,578	+39.5
Other revenue	3,989	5,352	–25.5
Total revenue	82,904	61,930	+33.9
Employee expenses	30,617	29,420	+4.1
Supplier expenses	36,540	21,359	+71.1
Other expenses	10,589	7,548	+40.3
Total expenses	77,746	58,327	+33.3
Operating result	5,158	3,603	+43.2

Revenue

Total revenue was $82.9 million.

The department received $78.9 million in direct revenue from the Government, (appropriation $78.4 million and free resources $0.5 million) amounting to $22.3 million more than in 2000–01.

Most of the additional funding was provided to ensure that adequate resources were available both to honour the commitments made in relation to the planned October 2001 Commonwealth Heads of Government Meeting (CHOGM), which did not proceed, and to fund the CHOGM meeting which did take place in March 2002. (More information about CHOGM is provided in a special article later in this report.)

Revenue from other sources decreased by $1.4 million because there were no contributions to task forces from other departments and less revenue for the campaign reserve special account.

Expenses

The department’s expenses during 2001–02 were $19.4 million more than in 2000‑01.

Most of that increase resulted from higher supplier expenses; that is, expenses incurred when purchasing goods or services from suppliers outside the department. Such purchases may range from property and equipment to fares for travel or fees for contract processing. In preparing for CHOGM, the department made an unusually large number of purchases and some purchases were also of high value.

Administered items

‘Administered items’ are those assets, liabilities, revenues and expenses that are controlled by the Commonwealth Government but managed or overseen by the department on the Commonwealth’s behalf.

Table 3 provides comparisons between the department’s 2000–01 and 2001–02 results for administered items.

Table 3 Comparison of 2000–01 and 2001–02 results for administered items
Administered expense	2001–02 ($’000)	2000–01 ($’000)	Movement (per cent)
Allowances to former Governors-General	943	424	+122.4
Support to former Governors-General	767	489	+56.9
State occasions and official visits	2,744	3,416	–19.7
Women’s programmes	10,554	5,923	+78.2
Prime Minister’s official residences	1,443	1,624	–11.1
Compensation and legal	0	38	Not applicable
National Australia Day Council	568	Not applicable	Not applicable
CHOGM security	10,000	7,424	+34.7
Total administered expenses	27,019	19,338	+39.7

Significant variations

There were six movements of more than 10 per cent in the cost of, or the return on, administered expenses in 2001–02, as explained below.

With the retirement of Hon. Sir William Deane, there was a 122 per cent increase in the cost of allowances to the former Governors-General. This is the result of an actuarial assessment of the provisions for personal benefits payable.
The cost of the ‘support to former Governors-General’ administered item increased by 57 per cent. This reflected the costs involved in Sir William Deane’s retirement. Most of these were one-off costs, such as those involved in furnishing a suitable office for Sir William.
The ‘state occasions and official visits’ administered item was 20 per cent lower than in the previous year, because the 2000–01 expenses included the unusually high levels of activity flowing from the Sydney 2000 Olympic Games.
‘Women’s programmes’ received an extra $4.3 million dollars in the 2001–02 Budget – for four measures: National Initiative to Combat Sexual Assault; National Leadership Initiative; Informed Choices for Women; and Women’s Development Programmes – which is reflected in the 78 per cent increase in outlays for that item.
There was an 11 per cent drop in the cost of ‘Prime Minister’s official residences’, because the 2000–01 total included expenditure on maintenance and rejuvenation projects undertaken in preparation for events connected with the Sydney 2000 Olympic Games.
As a result of the size and complexity of the security task for the reconvened CHOGM (post 11 September 2001), the ‘CHOGM security’ cost increased by 35 per cent.

The ‘National Australia Day Council’ is a new administered item.

Balance sheet

The department’s total equity – that is, the sum of the department’s assets less its liabilities – increased from $12 million in 2000–01 to $14.3 million in 2001–02.

The department’s operating surplus of $5.2 million is largely offset by the requirement to return $4 million to the Commonwealth as a distribution of equity.

Assets

The department’s assets may be broken into four main categories:

cash
infrastructure, plant and equipment
intangibles (non-physical assets such as software)
receivables (amounts due to be paid to the department).

Figure 6 Departmental assets shown by category

The department’s own total assets decreased, to the value of $28.6 million, during 2001–02.

The largest part of that decrease was in cash holdings. The department made two exceptional types of cash outlays during 2001–02. The first was to acquit CHOGM contract liabilities from 2000–01.

The second was to return $5 million to the Commonwealth Government. That amount consisted of two elements:

an efficiency dividend of $1 million, first identified by the Expenditure Review Committee of Cabinet in preparations for the 2000–01 Budget but not required to be paid until after CHOGM
the return of $4 million from the Campaign Reserve special account, being money declared surplus by the pricing review completed by the department in 2001–02.

The department’s non-financial assets increased by $1.4 million. This was mainly due to a revaluation of assets in June 2002.

Liabilities

The department’s liabilities also decreased markedly during 2001–02, by $5.3 million, largely due to the acquittal of obligations arising from CHOGM.

One area of liability – employee entitlements, including salaries and other entitlements such as payment for study leave – increased during the year, by $1.5 million. The increase represented a natural escalation in employee entitlements.

Administered assets

Figure 7 Administered assets shown by category

The composition of the department’s administered assets remained stable during 2001–02.

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