Part 3: Report on financial performance
Financial performance
This section summarises the Commission’s financial performance during 2018–19. More detail is available in Part 4, which contains the independent auditor’s report, and Commission is audited financial statements for the financial year ending 30 June 2019.
Departmental activities
Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the Commission in its own right.
Total income for 2018–19 was $43.8 million. Government appropriation accounted for 49 per cent; non-appropriation income accounted for the remainder. Table 19 shows income since 2016–17, and Table 20 details income sources since 2016–17.
Appropriation funding reduced from $22.8 million in 2017–18 to $21.3 million in 2018–19. This decrease was the result of temporary budget funding for building digital capability in partnership with the Digital Transformation Agency, reducing from $2.8 million in 2017–18 to $1.4 million in 2018–19.
|
Source |
2016–17 ($ million) |
2017–18 ($ million) |
2018–19 ($ million) |
|---|---|---|---|
|
Appropriation |
20.3 |
22.8 |
21.3 |
|
Non-appropriation |
20.8 |
20.9 |
22.5 |
|
Total |
41.1 |
43.7 |
43.8 |
|
Source |
2016–17 (per cent) |
2017–18 (per cent) |
2018–19 (per cent) |
|---|---|---|---|
|
Appropriation |
49.4 |
52.2 |
48.7 |
|
Non-appropriation |
50.6 |
47.8 |
51.3 |
Table 21 shows the non-appropriation income received from sales of goods and the rendering of services in 2017–18 and 2018–19, while Table 22 shows the proportion of non-appropriation income received from sales of goods and services in 2017–18 and 2018–19.
|
Source |
2017–18 actual ($ million) |
2018–19 estimate ($ million) |
2018–19 actual ($ million) |
|---|---|---|---|
|
Learning and development |
12.4 |
12.6 |
14.8 |
|
Employment services |
1.7 |
1.9 |
1.6 |
|
International assistance |
2.3 |
2.8 |
1.8 |
|
Workplace relations |
2.0 |
1.6 |
1.8 |
|
Better practice and evaluation |
1.9 |
2.0 |
2.0 |
|
Other |
0.6 |
0.0 |
0.5 |
|
Total |
20.9 |
20.9 |
22.5 |
|
Source |
2017–18 (%) |
2018–19 (%) |
|---|---|---|
|
Learning and development |
60 |
66 |
|
Employment services |
8 |
7 |
|
International assistance |
11 |
8 |
|
Workplace relations |
9 |
8 |
|
Better practice and evaluation |
9 |
9 |
|
Other |
3 |
2 |
Income from learning and development programs amounted to $14.8 million in 2018–19 and accounted for 34 per cent of total income from all sources. This compares with $12.4 million (28 per cent) in 2017–18.
The majority of income is earned in a competitive market, in which entities can choose service providers and determine the level of service they require. Demand can fluctuate, so the Commission has management strategies to ensure that resources devoted to this area are in keeping with the revenue earned.
This year was the third year of a multi-year funding agreement to support leadership and learning services, and the annual remuneration survey. The Commission received $3.4 million from 43 government entities, accounting for 15 per cent of non-appropriation income. This compares with $3.4 million from 48 government entities in 2017–18, accounting for 16 per cent of non-appropriation income for that year.
The Commission recorded an operating deficit of $2.4 million in 2018–19, compared with a deficit of $1.2 million in 2017–18.
In 2018–19, the Commission incurred expenses of $0.9 million due to the impairment of software.
Excluding the impact of unfunded depreciation expenses and the impairment of software, the Commission’s underlying operating result in 2018–19 was a balanced budget.
The administered program
The Commission’s administered program facilitates the payment of judicial office holders’ remuneration, allowances and entitlements. The Commission receives special appropriations for the program, from which the Attorney-General’s Department makes payments.
Payments for 2018–19 amounted to $4.1 million, compared with $33.3 million in 2017–18. The decrease in payments was a result of the program no longer funding the remuneration of parliamentarians. Since 1 January 2018, parliamentarians have been funded by the Parliamentary Business Resources Act 2017, which is reported by the Department of Finance.
Payments made are reported in note 4.1c of the Commission’s financial statements.
Asset management
In 2018–19, the Commission managed non-financial assets with a gross value of
$11.9 million. The reduction in value of assets is mainly due to the impairment of software. All assets owned, including IT assets, are subject to a regular stock-take to verify the accuracy of records. Assets are depreciated at rates applicable to the asset class.
Purchasing
Purchasing is made in accordance with the Commonwealth Procurement Rules. Guidance is provided to staff through the purchasing guide, and the accountable authority instructions. The Commission has a framework for managing the risks inherent in procurement activity, as well as operational guidelines to support staff in assessing the risks associated with their projects. The Commission published its procurement plan for 2018–19 on the AusTender website, at www.tenders.gov.au.
Consultants
The Commission engaged consultants when the expertise sought was not available internally or when independent advice was required. Decisions to engage consultants are made in accordance with the Public Governance, Performance and Accountability Act 2013 and related Regulations, including the Commonwealth Procurement Rules, and other internal policies.
During 2018–19, the Commission entered into 23 new consultancy contracts involving total expenditure of $0.8 million. This compares with 31 new contracts totalling $0.3 million in 2017–18. A total of 13 ongoing consultancy contracts were active during 2018–19, involving total actual expenditure of $0.1 million, compared with 13 ongoing contracts totalling $0.5 million in 2017–18.
Information on the value of contracts and consultancies is available through the AusTender website. The Commission’s standard-form contracts for services and consultancies are accessible to the Auditor-General.
Table 23 details expenditure on consultancy contracts in 2017–18 and 2018–19.
|
Year |
Number of new contracts let |
Number of ongoing contracts that were active |
Total actual expenditure on new contracts ($’000) |
Total actual expenditure on ongoing contracts that were active ($’000) |
Total actual expenditure on contracts ($’000) |
|---|---|---|---|---|---|
|
2017–18 |
31 |
13 |
349 |
453 |
802 |
|
2018–19 |
23 |
13 |
838 |
149 |
987 |
Small business procurement
The Commission supports small businesses’ participation in the Australian Government procurement market. Participation statistics for small and medium enterprises and small enterprises for 2018–19 are available on the Department of Finance website, at www.finance.gov.au.
The Commission adopted two specific practices to support procurement from small and medium enterprises:
- use of the Commonwealth Contracting Suite for low-risk procurements valued under $200,000; and
- use of payment cards for purchases up to $10,000 to facilitate on-time payment.
Exempt contracts
The Commissioner may direct that contracts not be reported on the AusTender website if they are subject to an exemption under the Freedom of Information Act 1982 or if the Commissioner considers the information is genuinely sensitive and harm is likely to be caused by its disclosure. No exemptions were issued during 2018–19.
Outlook for 2019–20
The Commission has revised its strategic priorities for 2019–20. The priorities were developed by looking to 2023 and beyond, in the context of unprecedented change in the APS coupled with changing expectations from government and the Australian community.
The Corporate Plan 2019–20 sets out these strategic priorities and deliverables, as well as primary activities and measures, for the period 2019–20 to 2022–23. The plan states that the Commission’s purpose is ‘to position the APS workforce for the future to ensure it meets the demands and expectations of the Australian Government and people’. The Corporate Plan 2019–20 can be accessed on the Commission’s website, www.apsc.gov.au.
Budget outlook
Departmental appropriation revenue will decrease from $21.3 million in 2018–19 to $20.3 million in 2019–20. This is the result of a reduction in the temporary budget funding for building digital capability in partnership with the Digital Transformation Agency from $1.4 million in 2018–19 to $0.3 million in 2019–20.
The Commission is reviewing its funding model and allocation of resources, to ensure a balanced and financially sustainable financial position.
Administered payments for the Judicial Office Holders’ Remuneration and Entitlements Program are expected to remain stable at $4.2 million in 2019–20.