Financial Performance

AFTRS generated a deficit of $305,000 for the 2019–20 financial year. The deficit is primarily due to the implementation of AASB 16 Leases which replaces rent expense and the reduction of the lease incentive liability with depreciation and finance costs, resulting in a higher total expense of $255,000.

The remainder of the deficit ($50,000) was due to COVID-19, which had a significant impact on the financial results. Revenue was affected by higher levels of student withdrawals and leave of absences and the cancellation of various face-to-face short courses. However, AFTRS also experienced reduced expenditure from the cancellation and postponement of travel, lower utility costs due to reduced traffic in the building and a deferral of production and teaching
costs into the next semester.

The total revenue received was $30,666,000 with appropriations from government accounting for $22,605,000 of this amount. The balance of $8,061,000 was generated through AFTRS’ activities and mainly comprised student fees. Award Courses produced $5,724,000 with $1,984,000 generated by the Engagement Division, which provides short courses to industry, corporate groups, and schools. Other revenue sources such as interest, donations and royalties produced the remaining $353,000.

AFTRS’ operating expenditure totalled $30,971,000. This included $17,233,000 for employee benefits, $6,474,000 for suppliers, $6,370,000 for depreciation and amortisation, $742,000 for finance costs relating to the building lease and $152,000 for write down and impairment of other assets.

AFTRS reviewed its asset fair values as at 30 June 2020. The leasehold improvements asset class was revalued upwards by $756,000, and the plant and equipment asset class were revalued upwards by $214,000.

External Audit

The Australian National Audit Office performs the external audit of AFTRS.

Internal Audit

AFTRS has engaged KPMG to provide an independent internal audit service. The contract for audit services with KPMG is for a period of three years, with a Contract end date of 31 July 2021.

Internal Audit is administratively responsible to the Director of Finance and Technology and is accountable to the Finance, Audit and Risk Management (FARM) Committee. Representatives from the internal auditors attend FARM Committee meetings, together with a representative of the Australian National Audit Office.

Internal Auditors provide the FARM Committee with a three-year audit plan annually. While the plan is reviewed annually, the FARM Committee re-evaluates the plan at each FARM Committee meeting with consideration to conditions within the School.

During the 2019–20 period, the audits conducted were:

• August 2019 – Social Media
• November 2019 – Procurement and Asset Management
• February 2020 – Marketing and CRM
• May 2020 – School Performance Reporting.

Risk Management

AFTRS’ Risk Management Framework is overseen by the Finance, Audit and Risk Management Committee. It demonstrates how governance, policies, processes, review, and consultation work together to meet the requirements of the PGPA Act 2013 and promote a well-informed decision making framework.

AFTRS’ risk tolerance, as set out in the Business Risk Register, is informed by AFTRS’ Administrative Orders, and the Financial and Human Resource Delegations. Any risk at a high or significant level is escalated to the CEO and reported to the Finance, Audit and Risk Management Committee. The Business Risk Register is reviewed monthly by the AFTRS Executive team and takes into account changes to the School’s risk environment and relevant strategies, goals, and endeavours.

Claims and Losses

There were no major losses during the year ending 30 June 2020.

Purchasing

AFTRS’ purchasing procedures are consistent with the Commonwealth Procurement Rules. Through the Administrative Orders, AFTRS’ Council delegates certain powers and functions, including purchasing levels, to occupants of specific AFTRS management positions. This is subject to the limits prescribed under the Australian Film, Television and Radio School Act 1973 and the
Council-approved policies, programs, and procedures of AFTRS.

To the best of the School’s knowledge, all properly rendered invoices were paid within the agreed trading terms. AFTRS participates in some whole-of-government contracts where appropriate, including the Travel Services contract, and contracts for the provision of stationery and office supplies. Information technology equipment and general goods purchases used both state and federal contracts where appropriate. The School buys capital items in accordance with the annual capital plan.

Competitive Tendering and Expressions of Interest

The AFTRS’ Administrative Orders require purchases of more than $100,000 be obtained through formal processes that may involve either public or selected tender (RFQ/RFP/RFT) and could include an expression of interest phase. Purchases greater than $350,000 require public tender, which may also include an expression of interest process.

In general, consideration is given to the following factors to determine the method of approach to the market:

• Urgency of the requirement
• Limited number of known potential suppliers
• Competitiveness of the marketplace
• A supplier’s prior knowledge or experience with a particular activity that other suppliers could not build up unless extensive additional costs and time delays were incurred
• Compatibility with existing equipment.

In 2019–20, AFTRS sought written quotes and/or tenders for the following services (over $100,000):

• Electricity
• Mix Theatre upgrade
• Audio Console upgrade.

Consultancy Services

AFTRS engages consultants with specialist skills to help with defined projects. During the reporting period, the School entered into 16 specialist consultancies, involving an expenditure of $319,000. Two consultancies had a value exceeding $20,000.

Also, the School engaged other consultants to provide regular, ongoing services.

Contractors

Each year AFTRS engages a range of independent contractors. Most are industry practitioners that support the School’s core activities of teaching and learning. (See note 1B in Financial Statements.)

Property Use

AFTRS’ headquarters are located at the Entertainment Quarter, Moore Park, NSW.

The building (12,964m2) features a specialist screen and radio teaching and production facilities. The cost of leasing, outgoings, and other property costs for 2019–20 totalled $5,222,000.