DEPARTMENT of Treasury
Objectives
The Department of Treasury provides strategic financial and economic advice to the Government with the aim of promoting the Territory’s financial position and economic management.
The Department plays a lead role in promoting accountability and transparency in the delivery of services to the community. This is achieved through sound financial policies, management practices and robust analysis.
2003-04 Highlights
Strategic and operational issues to be pursued in 200304 include:
· maintaining the Territory’s AAA credit rating through sound and sustainable economic and financial management;
· finalising ACT participation in the 2004 Review of Commonwealth Grants Commission methodology underpinning the distribution of the GST revenues and health care grants between all States and Territories for five years commencing from 2004-05;
· implementing the Government’s revenue initiatives, including a review of the ACT rating system;
· reviewing corporate governance and performance of government business enterprises;
· undertake Capacity Reviews, as part of the Expenditure Review Committee process, for the Department of Health and Community Care, and the Department of Urban Services; and
· implementing the Government's strategy to provide accessible and affordable insurance for community and sporting organisations and small business.
Budgeted Financial Results
Section 31 of the Financial Management Act 1996 (FMA) advises that Chief Executives are responsible for achievement of financial results. For the purpose of Section 31 of the FMA, key budgeted results are specified in the Budget papers to improve accountability. An outcome of the increased accountability will be the requirement for Chief Executives to explain material variances from specified budget results.
In accordance with Section 31 of the FMA, following are the key budgeted results for the Department:
Departmental
· Operating Result ($1.031m deficit) – this measure focuses on the financial performance of the Department, and will measure the Department’s success in managing expenditure levels within government funding and other revenue limitations. The deficit is due to the non-cash expense of depreciation.
· Current Ratio (1.3:1) – the current ratio is an indication of the ability to fund short term liabilities from short term assets. The Department has sufficient funds to cover its short term liabilities in the next financial year.
Territorial
· Taxes, fees and fines ($549.483m) – this measures the Department’s performance in relation to the collection of taxes, fees and fines revenue for the Territory.
· Debt collection ratio (0.1:1) – this indicates the proportion of taxes, fees and fines which were earned, but uncollected.
Department of Treasury /Statement of Financial Performance /
2002-03 / 2002-03 / 2003-04 / 2004-05 / 2005-06 / 2006-07 /
Budget / Est.Outcome / Budget / Var / Estimate / Estimate / Estimate /
$'000 / $'000 / $'000 / % / $'000 / $'000 / $'000 /
Revenue
37 980 / Government Payment for Outputs / 38 210 / 29 351 / -23 / 29 140 / 29 254 / 29 944
106 / User Charges - Non ACT Government / 56 / 56 / - / 56 / 56 / 56
4 625 / User Charges - ACT Government / 4 050 / 4 200 / 4 / 4 242 / 4 284 / 4 327
163 / Interest / 869 / 625 / -28 / 659 / 706 / 729
268 / Resources Received free of charge / 268 / 268 / - / 268 / 268 / 268
43 142 / Total Ordinary Revenue / 43 453 / 34 500 / -21 / 34 365 / 34 568 / 35 324
Expenses
23 919 / Employee Expenses / 23 676 / 15 246 / -36 / 15 698 / 15 779 / 15 970
1 926 / Superannuation Expenses / 1 991 / 2 031 / 2 / 2 054 / 2 063 / 2 088
13 085 / Supplies and Services / 13 144 / 11 695 / -11 / 11 323 / 11 268 / 11 712
614 / Depreciation and Amortisation / 146 / 2 378 / # / 2 841 / 2 800 / 558
3 793 / Grants and Purchased Services / 3 883 / 4 088 / 5 / 4 178 / 4 307 / 4 381
84 / Other Expenses / 84 / 93 / 11 / 102 / 191 / 196
43 421 / Total Ordinary Expenses / 42 924 / 35 531 / -17 / 36 196 / 36 408 / 34 905
-279 / Operating Result / 529 / -1 031 / -295 / -1 831 / -1 840 / 419
53 777 / Total Equity From Start of Period / 57 249 / 10 955 / -81 / 11 263 / 9 432 / 7 592
8 018 / Capital Injections / 5 476 / 1 514 / -72 / 0 / 0 / 0
-4 000 / Distributions to Government / -4 000 / 0 / 100 / 0 / 0 / 0
-47 532 / Inc/Dec in Net Assets from Admin Restructure / -48 299 / -175 / 100 / 0 / 0 / 0
9 984 / Total Equity At The End of Period / 10 955 / 11 263 / 3 / 9 432 / 7 592 / 8 011
Department of Treasury /
Statement of Financial Position /
Budget / Est.Outcome / Planned / Planned / Planned / Planned /
as at 30/6/03 / as at 30/6/03 / as at 30/6/04 / Var / as at 30/6/05 / as at 30/6/06 / as at 30/6/07 /
$'000 / $'000 / $'000 / % / $'000 / $'000 / $'000 /
Current Assets
3 138 / Cash / 2 001 / 2 001 / - / 2 001 / 2 001 / 2 001
13 739 / Receivables / 1 660 / 1 634 / -2 / 1 634 / 1 634 / 1 634
12 523 / Investments / 22 086 / 22 203 / 1 / 23 105 / 24 053 / 25 025
29 400 / Total Current Assets / 25 747 / 25 838 / .. / 26 740 / 27 688 / 28 660
Non Current Assets
683 / Property, Plant and Equipment / 684 / 553 / -19 / 424 / 330 / 247
8 696 / Intangibles / 21 / 5 893 / # / 3 181 / 475 / 0
0 / Capital Works in Progress / 5 855 / 0 / -100 / 0 / 0 / 0
9 379 / Total Non Current Assets / 6 560 / 6 446 / -2 / 3 605 / 805 / 247
38 779 / TOTAL ASSETS / 32 307 / 32 284 / .. / 30 345 / 28 493 / 28 907
Current Liabilities
13 435 / Payables / 3 186 / 3 093 / -3 / 3 070 / 3 099 / 3 128
2 235 / Employee Benefits / 2 305 / 2 085 / -10 / 2 058 / 2 103 / 2 130
11 173 / Other / 14 068 / 13 964 / -1 / 13 899 / 13 837 / 13 767
26 843 / Total Current Liabilities / 19 559 / 19 142 / -2 / 19 027 / 19 039 / 19 025
Non Current Liabilities
1 952 / Employee Benefits / 1 793 / 1 879 / 5 / 1 886 / 1 862 / 1 871
1 952 / Total Non Current Liabilities / 1 793 / 1 879 / 5 / 1 886 / 1 862 / 1 871
28 795 / TOTAL LIABILITIES / 21 352 / 21 021 / -2 / 20 913 / 20 901 / 20 896
9 984 / NET ASSETS / 10 955 / 11 263 / 3 / 9 432 / 7 592 / 8 011
REPRESENTED BY FUNDS EMPLOYED
9 984 / Accumulated Funds / 10 955 / 11 263 / 3 / 9 432 / 7 592 / 8 011
9 984 / TOTAL FUNDS EMPLOYED / 10 955 / 11 263 / 3 / 9 432 / 7 592 / 8 011
Department of Treasury /
Statement of Cashflows /
2002-03 / 2002-03 / 2003-04 / 2004-05 / 2005-06 / 2006-07 /
Budget / Est.Outcome / Budget / Var / Estimate / Estimate / Estimate /
$'000 / $'000 / $'000 / % / $'000 / $'000 / $'000 /
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts
37 980 / Cash from Government for Outputs / 38 210 / 29 351 / -23 / 29 140 / 29 254 / 29 944
71 734 / User Charges / 84 506 / 85 519 / 1 / 86 545 / 87 583 / 88 633
163 / Interest Received / 901 / 625 / -31 / 659 / 706 / 729
1 193 / Other Revenue / 18 196 / 17 888 / -2 / 18 089 / 18 293 / 18 498
111 070 / Operating Receipts / 141 813 / 133 383 / -6 / 134 433 / 135 836 / 137 804
Payments
25 775 / Related to Employees / 26 242 / 17 546 / -33 / 17 726 / 17 775 / 17 987
13 098 / Related to Supplies and Services / 11 227 / 11 532 / 3 / 11 084 / 10 975 / 11 420
3 793 / Grants and Purchased Services / 3 883 / 4 088 / 5 / 4 178 / 4 307 / 4 381
68 048 / Other / 103 862 / 99 350 / -4 / 100 543 / 101 831 / 103 044
110 714 / Operating Payments / 145 214 / 132 516 / -9 / 133 531 / 134 888 / 136 832
356 / NET CASH INFLOW /(OUTFLOW) FROM OPERATING ACTIVITIES / -3 401 / 867 / 125 / 902 / 948 / 972
CASH FLOWS FROM INVESTING ACTIVITIES
Payments
8 018 / Purchase of Property, Plant and Equipment / 5 476 / 2 264 / -59 / 0 / 0 / 0
6 600 / Capital Payments to Government Agencies / 6 600 / 2 978 / -55 / 0 / 0 / 0
14 618 / Investing Payments / 12 076 / 5 242 / -57 / 0 / 0 / 0
-14 618 / NET CASH INFLOW /(OUTFLOW) FROM INVESTING ACTIVITIES / -12 076 / -5 242 / 57 / 0 / 0 / 0
CASH FLOWS FROM FINANCING ACTIVITIES
Receipts
14 618 / Capital Injection from Government / 12 076 / 4 492 / -63 / 0 / 0 / 0
14 618 / Financing Receipts / 12 076 / 4 492 / -63 / 0 / 0 / 0
Payments
4 000 / Distributions to Government / 4 000 / 0 / -100 / 0 / 0 / 0
69 631 / Payments of Transferred Cash Balances / 76 222 / 0 / -100 / 0 / 0 / 0
73 631 / Financing Payments / 80 222 / 0 / -100 / 0 / 0 / 0
-59 013 / NET CASH INFLOW /(OUTFLOW) FROM FINANCING ACTIVITIES / -68 146 / 4 492 / 107 / 0 / 0 / 0
-73 275 / NET INCREASE/(DECREASE) IN CASH HELD / -83 623 / 117 / 100 / 902 / 948 / 972
88 936 / CASH AT BEGINNING OF REPORTING PERIOD / 107 710 / 24 087 / -78 / 24 204 / 25 106 / 26 054
15 661 / CASH AT END OF THE REPORTING PERIOD / 24 087 / 24 204 / .. / 25 106 / 26 054 / 27 026
Notes to the Budget Statements
Significant variations are as follows:
Statement of Financial Performance
· government payment for outputs: the increase of $0.230m in the 2002-03 estimated outcome from the original budget is partially due to wage increases of $0.582m; offset by the carry over of $0.442m to 200304 for the upgrade of the Oracle Government Financials system. The decrease of $8.859m in the 2003-04 Budget from the 2002-03 estimated outcome is mainly due to the removal of the 2002-03 one-off restructuring fund of $10m;
· user charges – ACT Government: the decrease of $0.575m in the 200203 estimated outcome from the original budget and increase of $0.150m in the 200304 Budget from the 2002-03 estimated outcome represents impacts on user charges by Procurement Solutions in regard to the capital works program;
· interest: the increase of $0.706m in the 200203 estimated outcome from the original budget and decrease of $0.244m in the 200304 Budget from the 2002-03 estimated outcome is mainly due to net movement of reduced level of cash holdings and underestimation of interest revenue in prior years’ budgets. The department returned surplus cash to Government of $4m in July 2002;
· employee expenses: the decrease of $8.430m in the 200304 Budget from the 200203 estimated outcome is mainly due to the removal of the one-off restructuring fund of $10m; partially offset by the transfer of the Central Financing Unit to the Department $0.442m and the effect of the wage increases of $0.520m;
· supplies and services expenses: the decrease of $1.449m in the 2003-04 Budget from the 200203 estimated outcome is primarily related to the upgrade of the Oracle Government Financials system for the Territory being substantially completed in 2002-03;
· depreciation: the decrease of $0.468m in the 200203 estimated outcome from the original budget represents the delay in replacement of ACTAX revenue system. The increase of $2.232m in the 2003-04 Budget from the 200203 estimated outcome is mainly due to the upgrade of the Oracle Government Financials system of $1.756m and the replacement of ACTAX Territory revenue system of $0.476m;
· capital injection: $1.514m is carried over to 2003-04 Budget for completion of the Oracle Government Financials systems upgrade of $0.164m and replacement of the ACTAX revenue system of $1.350m; and
· increase in net liabilities from administrative restructuring: the net liabilities of $0.175m represents the transfer of the Central Financing Unit to the Department.
Statement of Financial Position
· cash and current investment: the increase of $8.426m in the 2002-03 estimated outcome from the original budget is due to contract payments for capital works received by Procurement Solutions, partially offset by additional return of cash to Government $4m;
· current receivables: the decrease of $12.079m in the 2002-03 estimated outcome from the original budget is due to an adjustment to present receivables and payables relating to Procurement Solutions’ contract management on a ‘net’ rather the present ‘gross’ basis. As a result the ‘current payables’ has similarly decreased;
· property, plant and equipment: the decrease of $0.131m in the 2003-04 Budget from the 2002-03 estimated outcome represents depreciation expenses of leasehold improvement for 2003-04, with no other significant impacts;
· intangibles: the decrease of $8.675m in the 2002-03 estimated outcome from the original budget represents delays with the completion of both the Oracle Government Financials system upgrade of $5.268m and replacement of the ACTAX revenue system of $2.851m. The increase of $5.872m in the 2003-04 Budget from the 2002-03 estimated outcome represents the capitalisation of the systems expected to be completed in 2003-04;
· capital works in progress: the increase of $5.855m represents the delay in the completion of Oracle Government Financials system upgrade and the replacement of the ACTAX revenue system as outlined against ‘intangibles’;
· current payables: the decrease of $10.249m in the 2002-03 estimated outcome from the original budget is due to an adjustment to present receivables and payables relating to Procurement Solutions’ contract management on a ‘net’ rather than ‘gross’ basis;
· other current liabilities: the increase of $2.895m in the 2003-04 Budget from the 2002-03 estimated outcome is due to higher capital works in progress in Procurement Solutions as at end of June 2003; and
· non current employee entitlements: the decrease of $0.159m in the 2002-03 estimated outcome from original budget reflects reduction in Procurement Solutions’ provision for long service leave due to improved management of long service leave.