The AEC’s 2019–20 financial results highlight the ongoing challenge of our funding model, as an operating loss has been incurred at year end. The AEC's operating loss was $21.3 million ($8.0 million net of depreciation and AASB16 adjustments) compared to an operating loss of $19.5 million ($7.1 million net of depreciation) in 2018–20. The 2019–20 result was influenced by the 2019 federal election held in May 2019, which resulted in the costs of the event occurring across two financial years (2018–19 and 2019–20) while the AEC only received funding for 2018–19.
The statement of financial position at 30 June 2020 shows total assets of $206.3 million and total liabilities of $104.9 million for a net asset position of $101.4 million. Total assets have not changed significantly overall, however there has been a significant reduction in financial assets (appropriations receivable) that was offset by a large increase in non-financial assets (leasehold improvements). Appropriations receivable have decreased as the previous year's appropriations were used to pay the large volume of election related suppliers due at 30 June 2019. Leasehold improvements increased significantly because of the impact of AASB 16 leases. Total liabilities have not changed significantly, however there was a substantial reduction in total payables as the AEC made payments to a large volume of election related suppliers relating to the previous year, offset by a significant increase in interest bearing liabilities from implementing AASB 16 leases.
The Australian National Audit Office has issued an unqualified audit opinion for the AEC’s 2019–20 financial statements. No significant issues of non-compliance in relation to finance law were reported to the Minister for Finance in 2019–20. 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. It poses significant risks in managing the increasing complexity of federal elections/by-elections and the ongoing growth in the size of the electoral roll. In 2019–20 the AEC supported federal election expenditure from its cash reserves and made substantial operational concessions within its standard operating environment to minimise its operating loss. The phasing of the AEC's election funding—combined with the inadequate funding received between elections for ongoing operations—restrict the AEC's ability to provide long-term election system sustainability or ongoing innovation.
The AEC continues to work with the Department of Finance on an overarching funding review which is expected to be completed in 2020–21.