Financial performance summary
The AEC’s range of electoral activities is subject to external factors which can impact the timing of our expenditure. Consequently, our operating result can fluctuate significantly from year to year. Following an operating loss over the last two years, the AEC’s 2020-21 financial results show an operating surplus of $49.7 million, compared to an operating loss of $21.3 million in 2019–20.
The 2020-21 operating surplus was primarily a result of lower than anticipated employee and supplier expenses associated with delays in recruitment, procurement and supplier activities, and an increase in revenues from government.
The increase in revenues from government was mainly due to additional appropriations received for new government measures as part of the 2020-21 Budget and Additional Estimates process. Funding was also brought forward from the forward estimates into 2020-21 to support election preparation activities.
The statement of financial position at 30 June 2021 held net assets of $143.9 million, largely comprising appropriation receivables, leasehold improvements and computer software.
Total assets increased by $47.4 million mainly due to an increase in appropriation receivables associated with additional funding for new government measures and the bringing forward of funding to support preparation for the next federal election, which was not fully spent during the financial year.
Computer software and leasehold improvements were also higher than anticipated primarily as a result of an increase in software capitalisation and fit-outs relating to new leases. Total liabilities increased by $4.8 million mainly due to the addition of new leases and the timing of payment of suppliers.
The Australian National Audit Office has issued an unmodified audit opinion for the AEC’s 2020–21 financial statements. No significant issues of non-compliance in relation to finance law were reported to the Minister for Finance in 2020–21. This included any failure to comply with the duties of accountable authorities (section 15-19 of the Public Governance, Performance and Accountability Act 2013), 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.
We continue to work with the Department of Finance on finalising the overarching funding review, expected to be completed in early 2021–22. The review addresses the AEC’s challenge in phasing of election funding, combined with the inadequate funding received between elections for ongoing operations. This restricts the AEC’s ability to provide long-term election system sustainability and ongoing innovation.