Results

The AIHW’s financial results from 2015–16 to 2019–20 are summarised in Table 1 .3: Financial results, 2015–16 to 2019–20 ($ million).

Income and expenditure

The AIHW has two main types of income— appropriation income from the Australian Parliament and income from externally funded projects.

Our appropriation income from the Australian Parliament was $35.0 million in 2019–20, compared with $33.3 million in 2018–19 (Table 1 .4: Income and expenditure, 2015–16 to 2019–20 ($ million) and Figure 1.7).

Income from externally funded projects increased to $50.3 million in 2019–20 from $42.7 million in 2018–19 due to more project work. Most of this income came from Australian Government departments, with the largest funder being the Department of Health.

Income from interest fell to $1.3 million in 2019–20, compared with $2.0 million in 2018–19. This decrease was due to the fall in interest rates on term deposits.

Employee-related expenditure increased to $45.1 million in 2019–20 from $42.2 million in 2018–19. This rise was because of a pay increase and additional staff numbers. There was also an increase in expenses of $0.419 million arising from a decrease in the 10-year Government bond rate which is used to calculate the present value of long-service leave.

There was an increase of $5.6 million in agency staff and contractors because of the cap on public service employees. There was also an increase of $1.0 million in consultants, mostly for the National Suicide and Self Harm Monitoring project and ICT projects.

Adoption of the new Australia Accounting Standards Board (AASB) 16 Leases resulted in an additional $0.590 million being recognised in other expenditure. From 2019–20 onwards, AASB 16 Leases requires the AIHW to recognise assets and liabilities for all property leases, and expenses are reflected as depreciation and interest. Previously operating leases were treated as off-balance sheet commitments with actual lease payments recorded as expenses.

The overall result for the year was a deficit of $946,000. Before making the above adjustments to long-service leave liabilities and lease expenses, the AIHW recorded a small surplus.

Figure 1.7: Revenue sources, 2015–16 to 2019–20

Balance sheet

Assets totalled $148.3 million in 2019–20—an increase of $42.2 million from the previous year (Table 1 .5: Balance sheet summary, 2015–16 to 2019–20 ($ million)). The cash balance component of financial assets remained high at $100.8 million, most of which is invested in term deposits in accordance with our Investment Policy.

As a result of AASB 16 Leases, building assets now include right of use assets with a net book value of $30.4 million at 30 June 2020.

Liabilities increased by $36.5 million to $111.6 million in 2019–20, from $75.1 million in 2018–19. This rise relates mostly to the lease liability now required under AASB 16 Leases, plus an increase in income received in advance and employee provisions.

Overall, total equity increased by $5.8 million to $36.8 million. Of this, $4.8 million was due to an adjustment to opening equity resulting from the adoption of AASB 16 Leases, plus a capital injection of $1.9 million offset by the deficit in 2019–20.

Cash flow

Net cash received from operating activities in 2019–20 was $23.8 million. This cash flow related mainly to income received in advance at the end of year. We spent $1.4 million on the purchase of property, plant and equipment in 2019–20, compared with $1.9 million in 2018–19.

The net cash increase over the year was $20.8 million, increasing the cash balance to $100.8 million from $80.0 million.

Financial outlook

Appropriation income from the Australian Parliament is expected to decrease by $2.8 million in 2020–21. We have budgeted for income from externally funded projects to increase to $56.0 million.

We have budgeted to break even in 2020–21, before accounting for the requirements of AASB 16 Leases. We obtained approval from the Department of Finance to budget for a loss to cover AASB 16 Leases adjustments up until the end of 2022–23. This loss will have no effect on cash balances. We do not expect significant changes in the balance sheet.

Auditor-General's report

The Australian National Audit Office conducts an annual audit of our financial statements. The auditors issued an unqualified audit opinion that the financial statements for 2019–20 comply with subsection 42(2) of PGPA Act, and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act. Our audited financial statements can be found in Financial statements.