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Note 4: Financial Performance

This section analyses the financial performance of the Attorney-General's Department for the year ended 2020.

4.1 Expenses (excluding employee benefits expenses) 1

4.1A: Suppliers

2020

2019

$'000

$'000

Goods and services supplied or rendered

Accommodation expenses

7,314

6,452

Audit fees - internal

228

279

Audit fees - Australian National Audit Office

495

495

Consultants

4,318

1,401

Contractors

4,920

2,136

General office

5,938

6,711

Information technology and communications

11,713

10,276

Labour hire

4,139

3,578

Legal fees 1

12,383

8,077

Library expenses

2,129

1,546

Payments and contributions to external bodies

7,818

1,819

Recruitment expenses

1,504

1,391

Training and professional development

1,834

1,589

Travel

3,158

4,379

Total goods and services supplied or rendered

67,891

50,129

Goods supplied

3,778

2,446

Services rendered

64,113

47,683

Total goods and services supplied or rendered

67,891

50,129

Other suppliers

Operating lease rentals 2

2,870

23,807

Workers compensation expenses

597

1,152

Payroll tax - Australian Government Solicitor

3,472

Total other suppliers

3,467

28,431

Total suppliers

71,358

78,560

1 Legal services provided by the Australian Government Solicitor to the department totalling $9.287m (2019: $8.924m) have been eliminated from revenue and expenditure in these financial statements.

2 The department has applied AASB 16 for the first time using the modified retrospective approach. The comparative information has not been restated and continues to be reported under AASB 117. The current year total represents low-value leases of $0.025m. There were no short-term leases in the current year total. The department has short-term lease commitments of $26.002m at 30 June 2020.

The department has short-term lease commitments of $26.002m at 30 June 2020.

The above lease disclosures should be read in conjunction with the accompanying notes 4.1C, 6.2A and 6.4A.

Accounting Policy

Short-term leases and leases of low-value assets

The department has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). The department recognises the lease payments associated with these leases as an expense on a straight-line basis over the life of lease.

4.1B: Grants

2020

2019

$'000

$'000

Non-profit organisations

414

278

Other grants

55

Total grants

414

333

4.1C: Finance costs

2020

2019

$'000

$'000

Interest on lease liabilities

5,437

Unwinding of discount

2

2

Total finance costs

5,439

2

Accounting Policy

All borrowing costs are expensed as incurred.

4.1D: Write-down and impairment of assets and other expenses

2020

2019

$'000

$'000

Write-down of property, plant and equipment

6

40

Act of grace payments

10,259

Resources provided free of charge 1

1,137

Total write-down and impairment of assets and other expenses

11,402

40

1 To support the government’s whole-of-government approach in responding to the COVID-19 pandemic, the department redeployed staff to Services Australia and other departments and agencies. The amount shown as resources provided free of charge represents the total remuneration of those staff transferred.

4.1E: Income tax expense/(benefit)

2020

2019

$'000

$'000

Competitive neutrality - Australian Government Solicitor

(230)

934

Accounting Policy

The Australian Government Solicitor section of the department provided services on a for-profit basis up to 30 June 2019 and was subject to the Australian Government’s Competitive Neutrality Policy. The above amounts have been calculated as being payable to the Australian Government in the form of company income tax under the Income Tax Assessment Acts had they applied. These amounts have been paid or are payable by the department to the Official Public Account.

4.2 Revenue and gains 2

4.2A: Revenue from contracts with customers

OWN SOURCE REVENUE

2020

2019

$'000

$'000

Revenue from contracts with customers

Sale of goods

85

124

Rendering of services

147,559

145,153

Total revenue from contracts with customers

147,644

145,277

Major product/service line:

Service delivery

147,644

147,644

Type of customer:

Australian Government entities (related parties)

143,541

State and Territory Governments

1,485

Non-government entities

2,618

147,644

Timing of transfer of goods and services:

Over time

145,951

Point in time

1,693

147,644

Accounting Policy

Revenue from the sale of goods is recognised when control has been transferred to the buyer.

The following is a description of principal activities from which the department generates its revenue:

  • The majority of AGS revenue consists of fees for the provision of legal services. AGS also has a number of small additional streams including revenue from training programs. The bulk of AGS services are provided to Commonwealth entities. AGS also provides legal services to a number of other clients including universities and state and local governments. As the majority of AGS customers are within the Commonwealth, collection risks are minimal
  • The department also receives revenue in the form of annual subscriptions from Commonwealth entities to access the Whole of Government Legal Services Panel.

The transaction price is the total amount of consideration to which the department expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

Receivables for goods and services, which have 30-day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed during the financial year and at end of the reporting period. Impairment allowances are made when collectability of the debt is no longer probable.

4.2B: Other revenue

2020

2019

$'000

$'000

Resources received free of charge - Australian National Audit Office 1

495

495

1 The ANAO provides audit services that are funded from Government appropriation. This amount of $0.495m (2019: $0.495m) reflects the value of these services to the department.

GAINS

4.2C: Other gains

2020

2019

$'000

$'000

Assets first recognised

101

AGS impairment of financial instruments

1,134

381

1,134

482

Accounting Policy

Resources received free of charge

Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Resources received free of charge are recorded as either revenue or gain depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government agency or authority as a consequence of a restructuring of administrative arrangements (Refer Note 9.2).

4.2D: Revenue from Government - departmental appropriations

2020

2019

$'000

$'000

Revenue from Government - departmental appropriations

213,111

131,064

Accounting Policy

Revenue from Government

Amounts appropriated for departmental outputs for the year (adjusted for any formal additions and reductions) are recognised as revenue from Government when the department gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned.

Appropriations receivable are recognised at their nominal amounts.

Footnotes

  1. In accordance with the Administrative Arrangements Order of 29 May 2019, industrial relations functions were transferred to the department from the Department of Employment, Skills, Small and Family Business.
  2. In accordance with the Administrative Arrangements Order of 29 May 2019, industrial relations functions were transferred to the department from the Department of Employment, Skills, Small and Family Business.