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Financial performance summary
The AEC’s 2018–19 financial results highlight the ongoing challenge of the AEC’s funding model as an operating loss has been incurred at year end. The AEC’s operating loss was $19.5 million ($7.1 million net of depreciation) compared to an operating surplus of $6.5 million in 2017–18. The 2018–19 result was influenced by expenditure on six by-elections and the delivery of the 2019 federal election. Importantly, funding for the six by-elections of $11.7 million has been appropriated in the 2019–20 financial year.
The statement of financial position at 30 June 2019 shows total assets of $211.0 million and total liabilities of $101.6 million for a net asset position of $109.4 million. Total assets have increased from the previous year mainly as a result of an increase in appropriation receivables and GST receivable. This is a result of the timing of the 2019 federal election and the payment of associated invoices. Total liabilities have also increased from the previous year mainly due to an increase in suppliers payable. This again, is the result of the timing of the 2019 federal election and the receipt/payment of associated invoices. Appropriations will be drawn-down in early 2019–20 to pay these suppliers reducing both appropriations receivable and suppliers payable.
The Australian National Audit Office has issued an unqualified audit opinion for the AEC’s 2018–19 financial statements. No significant issues of non-compliance in relation to finance law were reported to the Minister for Finance in 2018–19. This included any failure to comply with the duties of accountable authorities (section 15–19 of the PGPA Act), significant fraudulent activity and other serious breaches (section 25–29 of the PGPA Act).
The AEC’s current funding model presents an ongoing challenge and poses significant risk in managing the increasing complexity of federal elections/by-elections and the ongoing growth in the size of the electoral roll. During 2018–19 the AEC successfully secured additional funding to conduct the six by-elections, however, supplementation will not be received until 2019–20, resulting in an operating loss. Funding received between elections for ongoing operations is also insufficient and restricts the AEC’s ability to provide long-term election system sustainability or ongoing innovation. The AEC has commenced work with the Department of Finance on an overarching funding review. This review is expected to be completed in 2019–20.