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Audited financial statements

 In our opinion, the attached financial statements for the year ended 30 June 2019 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act. In our opinion, at the date of this statement, there are reasonable grounds to believe that the Australian Institute of Criminology will be able to pay its debts as and when they fall due. Signed by Director Michael Phelan APM and Chief Financial Officer Yvette Whittaker on 1 October 2019.

Statement of comprehensive income

STATEMENT OF COMPREHENSIVE INCOME

for the period ended 30 June 2019

Notes

2019

Budget

2019

2018

$

$

$

NET COST OF SERVICE

Expenses

Employee benefits

1.1A

2,167,030

3,152,000

2,837,401

Suppliers

1.1B

4,139,791

3,383,000

3,049,514

Depreciation and amortisation

2.2A

29,403

22,000

43,241

Write-down and impairment of property, plant and equipment

2.2A

1,000

Total expenses

6,336,223

6,557,000

5,931,156

Own-Source Income

Own-Source revenue

Rendering of services

1.2A

2,133,556

1,470,000

1,262,486

Royalties

37,837

50,000

44,385

Other revenue

1.2B

41,549

40,000

40,305

Total own-source revenue

2,212,942

1,560,000

1,347,176

Net cost of services

(4,123,281)

(4,997,000)

(4,583,980)

Revenue from Government - Departmental appropriations

1.2C

4,590,000

4,975,000

5,002,000

Surplus/(Deficit) attributable to the Australian Government

466,719

(22,000)

418,020

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation surplus

716,771

Total other comprehensive income

716,771

Total comprehensive income/(loss) attributable to the Australian Government

466,719

(22,000)

1,134,791

The above statement should be read in conjunction with the accompanying notes.

Budget to actual variance commentary: see Note 7 for major variance explanations.

Statement of financial position

STATEMENT OF FINANCIAL POSITION

as at 30 June 2019

Notes

2019

Budget

2019

2018

$

$

$

ASSETS

Financial assets

Cash and cash equivalents

2.4

1,882,684

1,058,000

936,856

Trade and other receivables

2.1A

529,894

282,000

329,663

Total financial assets

2,412,578

1,340,000

1,266,519

Non-financial assets

Furniture and office equipment

2.2A

95,620

76,000

25,150

Library collection

2.2A

755,791

766,800

Intangibles

2.2A

17,000

2,104

Prepayments

78,151

132,000

69,928

Total non-financial assets

929,562

225,000

863,982

Total assets

3,342,140

1,565,000

2,130,501

LIABILITIES

Payables

Suppliers

2.3A

352,989

544,000

175,630

Other payables

2.3A

985,771

671,000

458,210

Total payables

1,338,760

1,215,000

633,840

Provisions

Other provisions

16,000

Total provisions

16,000

Total liabilities

1,338,760

1,231,000

633,840

Net assets

2,003,380

334,000

1,496,661

EQUITY

Contributed equity

1,225,294

1,225,000

1,185,294

Reserves

861,254

144,000

861,254

Accumulated Deficit

(83,168)

(1,035,000)

(549,887)

Total equity

2,003,380

334,000

1,496,661

The above statement should be read in conjunction with the accompanying notes.

Budget to actual variance commentary: see Note 7 for major variance explanations.

Statement of changes in equity

STATEMENT OF CHANGES IN EQUITY

for the period ended 30 June 2019

Retained earnings

Asset revaluation surplus

Contributed equity/capital

Total equity

Budget

Budget

Budget

Budget

2019

2019

2018

2019

2019

2018

2019

2019

2018

2019

2019

2018

$

$

$

$

$

$

$

$

$

$

$

$

Balance carried forward from previous period

(549,887)

(1,013,000)

(967,907)

861,254

144,000

144,483

1,185,294

1,203,000

1,180,294

1,496,661

334,000

356,870

Opening balance

(549,887)

(1,013,000)

(967,907)

861,254

144,000

144,483

1,185,294

1,203,000

1,180,294

1,496,661

334,000

356,870

Comprehensive income

Surplus (Deficit) for the period

466,719

(22,000)

418,020

466,719

(22,000)

418,020

Other comprehensive income

716,771

716,771

Total comprehensive income

466,719

(22,000)

418,020

716,771

466,719

(22,000)

1,134,791

Transactions with owners

Contributions by owners

Departmental capital budget1

40,000

22,000

5,000

40,000

22,000

5,000

Total transactions with owners

40,000

22,000

5,000

40,000

22,000

5,000

Closing balance as at 30 June

(83,168)

(1,035,000)

(549,887)

861,254

144,000

861,254

1,225,294

1,225,000

1,185,294

2,003,380

334,000

1,496,661

The above statement should be read in conjunction with the accompanying notes.

Budget to actual variance commentary: see Note 7 for major variance explanations.

1. Amounts appropriated which are designated as 'Departmental capital budgets' are recognised directly in transactions with owners in that year.

Cash flow statement

CASH FLOW STATEMENT

for the period ended 30 June 2019

Budget

2019

2019

2018

$

$

$

OPERATING ACTIVITIES

Cash received

Appropriations

4,590,000

4,975,000

5,002,000

Rendering of services

2,427,003

1,470,000

1,058,066

Net GST received

110,711

141,147

Other

37,837

50,000

40,819

Total cash received

7,165,551

6,495,000

6,242,032

Cash used

Employees

2,167,030

3,152,000

2,837,401

Suppliers

3,895,223

3,343,000

3,749,265

Section 74 receipts transferred to Official Public Account

110,711

Total cash used

6,172,963

6,495,000

6,586,666

Net cash from operating activities

992,588

(344,634)

INVESTING ACTIVITIES

Cash used

Purchase of property, plant and equipment and intangibles

86,760

22,000

4,927

Total cash used

86,760

22,000

4,927

Net cash used by investing activities

(86,760)

(22,000)

(4,927)

FINANCING ACTIVITIES

Cash received

Contributed equity

40,000

22,000

5,000

Total cash received

40,000

22,000

5,000

Net cash from financing activities

40,000

22,000

5,000

Net Increase (Decrease) in cash held

945,828

(344,561)

Cash and cash equivalents at the beginning of the reporting period

936,856

1,058,000

1,281,427

Cash and cash equivalents at the end of the reporting period

1,882,684

1,058,000

936,856

The above statement should be read in conjunction with the accompanying notes.

Budget to actual variance commentary: see Note 7 for major variance explanations.

Notes to and forming part of the financial statements

Overview

Objectives of the Australian Institute of Criminology
The Australian Institute of Criminology (AIC) is an Australian Government controlled entity. The objective of the AIC is to inform crime and justice policy and practice in Australia by undertaking, funding and disseminating policy relevant research of national significance; and through the generation of a crime and justice evidence base and national knowledge centre.

The continued existence of the AIC in its present form is dependent on Government policy and on continuing funding by Parliament. The AIC’s activities contributing toward this outcome are classified as departmental. Departmental activities involve the use of assets and income controlled, or liabilities and expenses incurred by the AIC in its own right.

Basis of Preparation of the Financial Statements
The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements and notes have been prepared in accordance with:
a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
b) Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities which are carried at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest dollar.

Unless an alternative treatment is specifically required by an accounting standard or the FRR, assets and liabilities are recognised in the statement of financial position when and only when it is probable that future economic benefits will flow to the entity or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard.

Unless an alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the statement of comprehensive income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

Taxation
The AIC is exempt from all forms of taxation except fringe benefits tax (FBT) and the goods and services tax (GST).

Revenues, expenses and assets are recognised net of GST except:
a) where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
b) for receivables and payables.

Comparative Figures
Comparative figures for 2017–18 reflect the figures reported in the AIC’s 2017–18 financial statements.

Comparative figures have been adjusted to conform with changes in presentation to these financial statements where required.

Contingent assets and liabilities
The AIC did not have any quantifiable contingencies to report for the financial year ended 30 June 2019 (2017–18: Nil).

Events after the reporting period
No subsequent events to report after the balance date.

Note 1.1: Expenses

Note 1.1A: Employee benefits

2019

2018

$

$

Wages and salaries

1,593,417

2,175,266

Superannuation

Defined contribution plans

176,928

226,463

Defined benefit plans

143,074

177,307

Leave and other entitlements

253,611

254,616

Separation and redundancies

3,749

Total employee benefits

2,167,030

2,837,401

AIC staff were primarily employed by ACIC for the duration of the year and seconded to the AIC to resource AIC’s ongoing operations. The ACIC initially met all the employee expenses, and claimed reimbursement from the AIC on a monthly basis. Therefore, whilst the employee benefits costs are reflected in the AIC statement of comprehensive income, the AIC does not hold any liabilities or provision in respect to employees in the statement of financial position.

Accounting Policy

Superannuation

The ACIC staff seconded to AIC were members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap) or other superannuation funds held outside the Australian Government.

The PSSap is a defined contribution scheme. The CSS and PSS are defined benefit schemes for the Australian Government. The liability for defined benefit schemes is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported by the Department of Finance as an administered item.

The ACIC makes employer contributions to the employees' defined benefit superannuation schemes in respect to the staff seconded to AIC at rates determined by an actuary to be sufficient to meet the current cost to the Government. The ACIC and AIC accounts for the contributions as if they were contributions to defined contribution plans.

Note 1.1B: Suppliers

2019

2018

$

$

Goods and services

Contractors and consultants1

1,384,047

782,737

Research services

426,775

471,903

Travel

156,493

95,504

Information technology

112,881

99,171

Property operating expenses2

274,999

Office rent2

218,748

Outsourced corporate expenses3

1,644,621

545,121

Conferences and meetings

276,412

378,663

Other

138,562

182,668

Total goods and services

4,139,791

3,049,514

1 Contractor and consultants have increased due to the increased workload resulting from Proceeds of Crime Account funding.

2 Property and Office Rent expenses relate to the AIC's lease in Griffith which terminated in December 2017.

3 Outsourced Coporate Expenses for 2018-19 includes all costs services provided by the ACIC to the AIC. The agreement is service based, not input based, as such this line item now incorporates costs that may have previously been charged under Employee Benefits.

Leasing commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

2019

2018

$

$

Within 1 year

238,779

Between 1 to 5 years

More than 5 years

Total operating lease commitments 1

238,779

1. Total operating lease commitments excludes GST.

Accounting Policy

Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased asset. The AIC leased office space in Griffith until December 2017.

Note 1.2: Own source revenue

Own-Source Revenue

Note 1.2A: Rendering of Services

2019

2018

$

$

Proceeds of crime and memoranda of understanding

1,298,702

Research contract income

326,673

435,651

Conference income

282,212

458,697

Other services income

225,969

368,138

Total rendering of services

2,133,556

1,262,486

Accounting Policy

Rendering of Services

Revenue from rendering of services is recognised by reference to the stage of completion of services at the reporting date. The revenue is recognised when:

a) the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and

b) the probable economic benefits associated with the transaction will flow to AIC.

The stage of completion of services at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

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 at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

Note 1.2B: Other Revenue

2019

2018

$

$

Resources received free of charge - audit services

39,000

39,000

Other

2,549

1,305

Total other revenue

41,549

40,305

Accounting Policy

Resources Received Free of Charge

Resources received free of charge are recognised as revenue when, and only when a fair value can be reliably measured and the services or transferred assets would have been purchased if they had not been provided free of charge. Use of those resources is recognised as appropriate as an expense.

Note 1.2C: Revenue from Government

2019

2018

$

$

Appropriations

Departmental appropriations

4,590,000

5,002,000

Total revenue from Government

4,590,000

5,002,000

Accounting Policy

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the AIC 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.

Note 2.1: Financial assets

Notes

2019

2018

$

$

Note 2.1A: Trade and other receivables

Debtors

370,382

208,808

Accrued Revenue

110,984

Appropriation Receivable

3.1B

110,711

GST receivable

48,801

Royalties receivable

9,871

Total trade and other receivables

529,894

329,663

Accounting Policy

Trade and Other Receivables

Trade receivables and other receivables are held for the purpose of collecting the contractual cash flows of principal and interest at market interest rates. They are subsequently measured at amortised cost using the effective interest method, adjusted for any loss allowance.

Note 2.2: Non-financial assets

Note 2.2A: Reconciliation of the Opening and Closing Balances of Non-Financial Assets

Furniture and office equipment

Library collection

Intangibles

Total

$

$

$

$

As at 1 July 2018

Gross book value

25,150

766,800

70,450

862,400

Accumulated depreciation, amortisation and impairment

(68,346)

(68,346)

Total as at 1 July 2018

25,150

766,800

2,104

794,054

Additions

Purchase

82,433

4,327

86,760

Depreciation/amortisation

(11,962)

(15,336)

(2,104)

(29,403)

Total as at 30 June 2019

95,620

755,791

851,411

Total as at 30 June 2019 represented by

Gross book value

107,583

771,127

70,450

949,160

Accumulated depreciation, amortisation and impairment

(11,963)

(15,336)

(70,450)

(97,749)

Total as at 30 June 2019

95,620

755,791

851,411

Revaluations of non-financial assets

All revaluations were conducted in accordance with the revaluation policy stated in note 2.2A. The last full valuation was carried out in 2017-18.

Accounting Policy

Asset Recognition

Furniture and office equipment costing greater than $5,000, leasehold improvements costing greater than $25,000, intangible assets purchased externally costing greater than $5,000 and intangible assets purchased and modified or developed internally costing greater than $20,000 are capitalised. All library items are accumulated as a single asset on a financial year basis and recognised irrespective of the value. Items costing less than these thresholds are expensed in the year of acquisition.

Revaluations

Following initial recognition at cost, furniture and office equipment are carried at fair value. Carrying values of the assets are reviewed every third year to determine if an independent valuation is required. The regularity of independent valuations depends on the volatility of movements in the market values for the relevant assets. Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that is previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reverse a previous revaluation increment for that class. Upon revaluation, any accumulated depreciation is eliminated against the gross carrying amount of the asset.

Depreciation

Depreciable furniture and office equipment assets are written-off to their estimated residual values over their estimated useful life using the straight-line method of depreciation. Leasehold improvements are depreciated over the life of the lease term. Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Depreciation rates applying to each class of depreciable asset are based on the following expected useful lives, unless an individual asset is assessed as having a different useful life.

2019

2018

Furniture and Office Equipment

3-10 years

3-10 years

Intangibles - Software purchased

3-5 years

3-5 years

Library

50 years

6 years1

1 This was 15% diminishing value with a 5% residual. The depreciation rate was changed to avoid significant valuation adjustments.

Intangibles

Intangibles assets comprise internally developed software and externally purchased software. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. Software licences with the renewable term ending beyond 30 June 2019 are treated as prepayments at the time of purchase and expensed over the term of the prepayment.

Impairment

All assets were assessed for impairment at 30 June 2019. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

Derecognition

An item of furniture and office equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Significant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in this note, the AIC has made assumptions or estimates in measuring the fair value of the assets that have the most significant impact on the amounts recorded in the financial statements. The fair value of the AIC’s furniture and office equipment has been taken to be the market value or current replacement costs as determined by an independent valuer.

Note 2.3: Payables

2019

2018

$

$

Note 2.3A: Suppliers

Trade creditors and accruals

352,989

175,630

Note 2.3B: Other payables

Unearned income

948,183

444,691

GST payable

1,156

13,519

Other

36,432

Total other payables

985,771

458,210

Accounting Policy

Financial Liabilities

Supplier and other payables are classified as ‘other financial liabilities’ and are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced). Supplier and other payables are derecognised on payment.

Note 2.4: Special accounts

Notes

2019

2018

$

$

Note 2.4: Criminology Research Special Account

Balance brought forward from previous period

936,856

1,281,417

Total increases

3,304,277

1,240,032

Available for payments

4,241,133

2,521,449

Total decreases

(2,358,449)

(1,584,593)

Total balance carried to the next period

1,882,684

936,856

Balance represented by:

Cash held in entity bank accounts

3.1B

192,020

60,291

Cash held in the Official Public Account

1,690,664

876,565

Total balance carried to the next period

1,882,684

936,856

Appropriation: Public Governance, Performance and Accountability Act 2013 section 80.

The Criminology Research Special Account is established under Section 46 of the Criminology Research Act 1971 as amended through the Financial Framework Legislative Amendment Act 2010 with effect from 1 July 2011.

Purpose: Conduct criminology research to promote justice, crime reduction and communicating results to Commonwealth, State & Territory, including administering programs to award grants, engage specialists for research and publication of that research.

Note 3.1: Appropriations

Note 3.1A: Annual Appropriation (‘Recoverable GST exclusive’)

Annual Appropriations for 2019

Annual Appropriation

Adjustments to appropriation

Total appropriation

Appropriation applied in 2019 (current and prior years)

Variance1

$

$

$

$

$

Departmental

Ordinary annual services

4,590,000

4,590,000

(4,590,000)

Capital Budgets

22,000

22,000

(40,000)

(18,000)

Total departmental

4,612,000

4,612,000

(4,630,000)

(18,000)

Annual Appropriations for 2018

Annual Appropriation

Adjustments to appropriation

Total appropriation

Appropriation applied in 2018 (current and prior years)

Variance

$

$

$

$

$

Departmental

Ordinary annual services

5,002,000

5,002,000

(5,002,000)

Capital Budget2

23,000

23,000

(5,000)

18,000

Total departmental

5,025,000

5,025,000

(5,007,000)

18,000

1. The AIC has no ordinary annual appropriations variance to report. The unspent capital appropriation from 2017-18 was carried forward and was fully spent in 2018-19.

2. Departmental Capital Budgets are appropriated through the Appropriation Act (No. 1). They form part of ordinary annual services, and are not separately identified in the Appropriation Act.

Unspent Annual Appropriations (‘Recoverable GST excusive’)

The AIC has no undrawn and unspent ordinary annual appropriation as at 30 June 2019 (2017-18: nil).

The AIC has no undrawn and unspent ordinary annual appropriation as at 30 June 2019, and has also drawn $18,000 Capital Budgets not drawn as at 30 June 2018.

Notes

2019

2018

$

$

Note 3.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')

Departmental

Appropriation Act (No.1) 2018-191

2.1A

110,711

Appropriation Act (No.1) 2018-19 - cash held at bank1

2.4

192,020

Total departmental

302,731

1. The Appropriation Act (No.1) balance for 2018-19 represents unused appropriation for the year.

Note 4.1: Key management personnel remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity. The AIC has determined the key management personnel positions to be the Director and the Deputy Director1. The key management personnel remuneration excludes the remuneration and other benefits of the Minister. The Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the AIC. Key management personnel remuneration (excluding the Director: refer note below) is reported in the table below:

2019

2018

$

$

Note 4.1: Key Management Personnel Remuneration

Short-term employee benefits

191,594

193,288

Post-employment benefits

29,406

29,133

Other long-term employee benefits

4,824

19,620

Total key management personnel remuneration expenses1

225,824

242,041

Total number of key management personnel1

1

1

1. Includes officers substantively holding or acting for a period exceeding three months in a key management personnel position, for the 2018-19 financial year the AIC had one key management personnel (2017-18: one). The ACIC CEO is also the Director of the Australian Institute of Criminology (AIC). The full cost of the CEO is included in ACIC financial statements, and therefore not disclosed here. The AIC makes a contribution towards the overheads of the ACIC, including executive oversight, which is shown in "Suppliers" (Refer Note 1.1B).

Note 4.2: Related party disclosure

Related party relationships:

The AIC is an Australian Government controlled entity. Related parties of the AIC comprise the Ministers responsible for the AIC, other Cabinet Ministers, other Australian Government entities, the key management personnel of the AIC, and parties related to the AIC’s key management personnel (including close family members and entities controlled by themselves, their close family members or jointly with close family members).

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions requiring disclosure.

Note 5.1: Financial instruments

2019

2018

Notes

$

$

Note 5.1A: Categories of Financial Instruments

Financial Assets measured at amortised cost

Loans and receivables

Cash and cash equivalents

1,882,684

936,856

Trade and other receivables

2.1A

370,382

329,663

Total financial assets

2,253,066

1,266,519

Financial Liabilities

Financial liabilities measured at amortised cost

Trade creditors and accruals

2.3A

352,989

175,630

Total financial liabilities

352,989

175,630

Changes with the implementation of AASB 9

AIC was reporting financial assets at amortised cost under the AASB 139 as loans and receivables. However, under the AASB 9 it has been reclassified as financial assets at amortised cost. AASB 9 did not have any impact on financial liability disclosure.

Based on the receivable management history and the current debt management process, the AIC assessed its risk of impairment is nil or immaterial. Hence, nil impairment is reported in the financial assets.

Note 6.1 : Aggregate assets and liabilities

2019

2018

$

$

Note 6.1: Aggregate Assets and Liabilities

Assets expected to be recovered in:

No more than 12 months

2,490,729

1,336,447

More than 12 months

851,411

794,054

Total Assets

3,342,140

2,130,501

Assets expected to be settled in:

No more than 12 months

1,338,760

633,840

More than 12 months

Total Liabilities

1,338,760

633,840

Note 7: Budgetary variance reporting

The following are explanations of events that have impacted on the AIC’s operations and activities for the year. Budget numbers are sourced from the AIC’s PBS for 2018-19 and are provided in the primary statements. Budgeted numbers are not audited.

Major variances are those deemed relevant or most significant to an analysis of the AIC’s performance by management, not focussed merely on numerical differences between the actual and budgeted amounts.

When providing explanations, the AIC has identified the financial impact in relation to those key aggregates relevant to the AIC’s performance. Users should be aware that there will be consequential impacts on related statements i.e. a variance in the Statement of Comprehensive Income is likely to have consequential impacts in the Statement of Financial Position and the Cash Flow Statement.

Explanation for major variances

Affected line items (and statement)

Proceeds of Crime Account Research

The AIC secured funding from the Proceeds of Crime Account (POCA) for research which was achieved post budget. This funding has had a significant effect on the AIC's financial statements. Providing a significant new revenue stream ($1.3m), influencing some supplier expenses, consultants and contractors in particular, and substantially increasing cash at bank, unearned revenue in other payables and creditors.

Expenses: Supplier expenses (Statement of Comprehensive Income) Own Source Revenue: Rendering of Services (Statement of Comprehensive Income) Financial Assets: Cash and Cash Equivalents (Statement of Financial Position) Financial Liabilities: Supplier Payables, Other Payables (Statement of Financial Position)

Shared Services

Subsequent to the budget the AIC implemented a new agreement for corporate services including accommodation with the ACIC. The new agreement results in corporate services being charged to the AIC on a cost recovery basis rather than the AIC paying for specific positions. This has shifted expenditure from employee benefits to outsourced corporate expenses.

Expenses: Employee Benefits, Supplier Expenses (Statement of Comprehensive Income)

Appropriation Adjustment

The AIC appropriation was reduced by $0.385m for savings achieved as part of the machinery of government changes.

Revenue from Government (Statement of Comprehensive Income)

Appropriation Receivable

The AIC recognised $0.111m appropriation receivable for unspent appropriation as a result of GST refunded on deemed appropriation revenue.

Financial Asset: Trade and Other Receivables (Statement of Financial Position)