Overview

Objectives of the Australian Sports Anti-Doping Authority

The Australian Sports Anti-Doping Authority (ASADA) was an Australian Government controlled entity and was a not-for-profit entity. ASADA's role and functions were set out in the Australian Sports Anti-Doping Authority Act 2006, the Australian Sports Anti-Doping Authority Regulations 2006 and the National Anti-Doping (NAD) scheme.

ASADA was structured to meet the following outcomes:

Outcome 1: Protection of the health of athletes and the integrity of Australian sport including through engagement, deterrence, detection and enforcement to minimise the risk of doping.

Entity activities contributing toward these outcomes are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the entity in its own right. Administered activities involve the management or oversight by the entity, on behalf of the Government, of items controlled or incurred by the Government. ASADA activities contributing towards this outcome were classified as departmental. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by ASADA in its own right.

In Budget 2019–20, the Government announced the establishment of a new, single national sport integrity agency, Sport Integrity Australia. The new agency brings together all functions of ASADA, the National Integrity of Sport Unit from the Department of Health, and the national sport integrity functions of Sport Australia. With the passing of the Australian Sports Anti-Doping Authority Amendment (Sport Integrity Australia) Act 2020, the new entity commenced operation on 1 July 2020.

The continued existence of Sport Integrity Australia is dependent on Government policy and on continuing funding by Parliament for the entity’s administration and programs.

Basis of preparation

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 have been prepared in accordance with:

1. Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR)
2. Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) 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 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.

New accounting standards

Adoption of new Australian accounting standard requirements
No accounting standard has been adopted earlier than the application date as stated in the standard.

The following new standards were issued prior to the signing of the statement by the Chief Executive Officer (CEO) and Chief Financial Officer, were applicable to the current reporting period and had the following effect on the ASADA's financial statements:

All other new standards that were issued prior to the sign-off date and applicable to the current reporting period did not have a material effect on ASADA’s financial statements.

Application of AASB 15 Revenue

The nature of ASADA’s operations focused on recording non-appropriation revenue upon provision of services, which aligns to the intent of the revised standards. Given that the nature of arrangements whereby ASADA received revenue were performance based in relation to provision or performance of services with sufficiently specific performance obligations, the recognition of revenue under the revised standard continued to be deferred until the performance obligation was met. There was no impact to the financial statements on implementation of the standard.

Application of AASB 16 Leases

ASADA adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2018 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.

ASADA elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under AASB 117 were not reassessed. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019.

AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard.

ASADA applied the following practical expedients when applying AASB 16 to leases previously classified as operating leases under AASB 117:

• Apply a single discount rate to a portfolio of leases with reasonably similar characteristics
• Exclude initial direct costs from the measurement of right-of-use assets at the date of initial application for leases where the right-of-use asset was determined as if AASB 16 had been applied since the commencement date
• Rely on previous assessments on whether leases are onerous as opposed to preparing an impairment review under AASB 136 Impairment of assets as at the date of initial application
• Apply the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application.

As a lessee, ASADA previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. On adoption of AASB 16, ASADA recognised right-of-use assets and lease liabilities in relation to leases of office space, which had previously been classified as operating leases.

The lease liabilities were measured at the present value of the remaining lease payments, discounted using ASADA's incremental borrowing rate as at 1 July 2019. ASADA's incremental borrowing rate was the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 0.10%.

The right-of-use assets were measured as follows:

• Office space: measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

On transition to AASB 16, ASADA recognised additional right-of-use assets and additional lease liabilities, recognising the difference in retained earnings. The impact on transition is summarised below:

The following table reconciles the minimum lease commitments disclosed in ASADA’s 30 June 2020 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:

Taxation

ASADA was exempt from all forms of taxation except Fringe Benefits Tax and the Goods and Services Tax (GST).

Significant Events

The COVID-19 pandemic had a significant impact on ASADA’s anti-doping activities, most notably from March to June 2020, with sample collection processes reducing during this time. Additionally, the agency was unable to travel domestically or internationally which was a significant part of its engagement strategy. However, during the pandemic, impacted staff were engaged in areas of the business that were experiencing high workload as a result of the pandemic, or redeployed to other Government agencies to assist with payment and claims processing. The impact on the financial statements is a clear decline in revenue from user pays clients, and lower than expected spend on activities associated with testing and engagement. Management has assessed there was no significant impact on the financial statements, including the potential for movements in the fair value of non-financial assets and recoverability of receivables.

Managing Uncertainties

There is uncertainty around the ongoing impact that the pandemic will have, however it is expected that activity across a number of sectors of the economy will not return to normal levels for some months into the 2020–21 financial year, which will directly impact the activities of Sport Integrity Australia.

Events after the reporting period

On 1 July 2020, the assets and liabilities of ASADA were transferred to Sport Integrity Australia.

Breach of Section 83 of the Constitution

After conducting an appropriate risk assessment, ASADA determined that there was low risk of breach of Section 83 of the Constitution, and there were no actual breaches during 2019–20 (2018–19: Nil).

Budget variances commentary

The primary statements include a comparison of the original budget as presented in the 2019–20 Portfolio Budget Statements to ASADA’s 2019–20 financial outcome in accordance with Australian Accounting Standards. The budget has not been subject to audit.

The notes to each of the primary statements provide a high level commentary of the major variances. Major variances are those deemed relevant to an analysis of ASADA's performance by management and are not focused merely on numerical differences between the budget and the actual amounts.

Quantifiable and unquantifiable Contingent Assets and Liabilities

At 30 June 2020, ASADA had one quantifiable contingent asset and no quantifiable liabilities (2018–19 Nil). The asset was a recovery of legal fees of up to AUD $6,884 which at 30 June 2020 was contingent on ASADA receiving a termination order from the Court of Arbitration for Sport.

At 30 June 2020 ASADA had one ongoing legal matter that may eventuate in ASADA either having to pay or being awarded associated costs. The amount is unable to be quantified, or estimated as either an asset or liability (2018–19:1).

Financial performance

This section analyses the financial performance of ASADA for the year ended 30 June 2020.

1.1A: Employee benefits

Total average staffing levels in 2020 were 75.9 (2018–19: 68).

Accounting policy

Accounting policies for employee related expenses are contained in the people and relationships section.

1.1B: Suppliers

Accounting policy

ASADA applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

ASADA had no short-term lease commitments as at 30 June 2020.

All borrowing costs were expensed as incurred.

1.1C: Impairment loss on financial instruments

1.1D: Write down of impairment and other assets

1.2 Own-source revenue and gains

Own-source revenue

1.2A: Revenue from contracts with customers

Accounting policy

Revenue from the sale of goods is recognised when control has been transferred to the buyer.

ASADA recognised revenue at an amount that reflects the consideration entitled in exchange for transferring goods or services to a customer under AASB 15. In relation to AASB 1058, transactions where consideration to acquire the asset, good or services was less than its fair value, ASADA recognised revenue as the difference between the consideration for the asset and the asset's fair value, after recognising any other related amounts.

The following is a description of principal activities from which ASADA generated revenue:

ASADA had contracts in place with Professional Sporting Bodies to undertake an agreed level of collections and type of analysis. The contracts for testing were for varying periods. Some contracts covered specific events and may have only be in place for several months as opposed to a full calendar or financial year. Similarly, other contracts covered a 12-month period but did not align to either a calendar or financial year depending on the ‘season’ that the Body adheres to.

Each contract contained essentially the same elements which determine the application of AASB 15 for the recognition of the associated revenue. The essential elements determining this are an enforceable contract being in place; distinct undertakings or performance obligations; a defined transaction price i.e. cost per test and an ability to allocate that transaction price to a performance obligation. The treatment of revenue is either, when services are provided (monthly invoice) or at agreed dates within the contract period again post services being provided. The treatment of the revenue associated with these contracts remains compliant with the requirements of AASB 15.

Receivables for goods and services, which have 30-day terms, were recognised at the nominal amounts due less any impairment allowance account. Collectability of debts was reviewed at the end of the reporting period. Allowances were made when collectability of the debt was no longer probable.

1.2B: Other revenue

1.2C: Other gains

1.2D: Revenue from government

Accounting policy

Revenue from government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) were recognised as revenue from government when ASADA gained control of the appropriation, except for certain amounts that related to activities that were reciprocal in nature, in which case revenue was recognised only when it had been earned.

Appropriations receivable were recognised at their nominal amounts.

Financial position

This section analyses ASADA’s assets used to conduct its operations and the operating liabilities incurred as a result.

Employee related information is disclosed in the People and Relationships section

2.1A: Cash and cash equivalents

Accounting policy

Cash is recognised at its nominal amount. Cash and cash equivalents includes cash on hand.

2.1B: Trade and other receivables

Credit terms for goods and services were within 30 days (2018–19: 30 days).

Accounting policy

Financial assets

Trade receivables, loans and other receivables that were held for the purpose of collecting the contractual cash flows where the cash flows are solely payments of principal and interest, that are not provided at below-market interest rates, were subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

2.2A: Reconciliation of the opening and closing balances of property, plant and equipment and intangibles

During the assessment of property, plant and equipment, 2 assets were identified as obsolete and were written off. The value of impaired assets at 30 June 2020 was $2,343 (2018–19: $8,462). During the assessment of intangible assets, there were no indicators of impairment found.

It is not expected that any property, plant and equipment and intangibles are expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assets

All revaluations were conducted in accordance with the revaluation policy. On 30 June 2020, Jones Lange LaSalle, an independent valuer conducted the revaluations.

Contractual commitments for the acquisition of property, plant, equipment and intangible assets

There are no significant contractual commitments required to be disclosed for the acquisition of property, plant, equipment and intangible assets.

Accounting policy

Acquisition of assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor accounts immediately prior to the restructuring.

Following initial recognition at cost, property, plant and equipment are carried at fair value. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the asset's fair value as at the reporting date.

Fair values for each class of asset are determined as shown below:

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000 for plant and equipment and $5,000 for leasehold improvements, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

Lease Right-of-Use (ROU) assets

Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. These assets are accounted for as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned.

On initial adoption of AASB 16 ASADA adjusted the ROU assets at the date of initial application by the amount of any provision for onerous leases recognised immediately before the date of initial application. Following initial application, an impairment review is undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised against any right of use lease asset that is impaired. Lease ROU assets continue to be measured at cost after initial recognition.

Revaluations

Following initial recognition at cost, property, plant and equipment (excluding ROU assets) are carried at fair value (or an amount not materially different from fair value) less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in 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 was 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 reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the entity using, in all cases, the straight-line method of depreciation.

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 useful lives:

The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.

Impairment

All assets were assessed for impairment at 30 June 2020. 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.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

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

Intangibles

ASADA's intangibles comprised off-the-shelf and internally developed software and associated enhancement costs. These assets were carried at cost less accumulated amortisation and accumulated impairment losses.

Software was amortised on a straight-line basis over its anticipated useful life. The useful life of ASADA’s software was 3 to 5 years (2018–19: 3 to 5 years).

2.2B: Inventories

During 2020, $27,000 worth of education inventories were recognised as an expense.

During 2020, $157,000 worth of sample collection inventories were recognised as an expense.

All inventories are expected to be used or distributed in the next 12 months.

Accounting policy

Inventories held for sale are valued at the lower of cost and net realisable value.

Inventories held for distribution are valued at cost, adjusted for any loss of service potential.

Costs incurred in bringing each item of inventory to its present location and condition are assigned as follows:

1. raw materials and stores – purchase cost on a first-in-first-out basis
2. finished goods and work-in-progress – cost of direct materials and labour plus attributable costs that can be allocated on a reasonable basis.

Inventories acquired at no cost or nominal consideration are initially measured at current replacement cost at the date of acquisition.

2.2C: Other non-financial assets

No indicators of impairment were found for other non-financial assets.

2.3A: Suppliers

2.3B: Other Payables

Funding

This section identifies ASADA's funding structure.

3.1A: Annual appropriations ('recoverable GST exclusive')

3.1B: Unspent annual appropriations ('recoverable GST exclusive')

People and relationships

This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

4.1A: Employee provisions

Accounting policy

Liabilities for short-term employee benefits and termination benefits expected within 12 months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including ASADA’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to the Financial Reporting Rule using the shorthand method. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and redundancy

Provision is made for separation and redundancy benefit payments. The entity recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

ASADA’s staff 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 CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian government and is settled by the Australian government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

ASADA made employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The entity accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June 2020 represented outstanding contributions.

4.2 Key management personnel remuneration

Key management personnel were those persons having authority and responsibility for planning, directing and controlling the activities of ASADA, directly or indirectly. ASADA determined the key management personnel to be the CEO, and officers that directly report to the CEO with substantial decision making responsibilities. Key management personnel remuneration is reported in the table below:

The total number of key management personnel that are included in the above table are 4 (2018–19: 3), and includes acting arrangements where it is determined the individual meets the key management personnel definition.

4.3 Related party disclosures

Related party partnerships:

ASADA was an Australian government controlled entity. ASADA’s related parties were its Key Management Personnel (KMP) including the Portfolio Minister, close family members of KMP, other entities controlled by KMP and/or close family members, and other Australian government entities.

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, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

ASADA transacted with other Australian government-controlled entities consistent with normal day-to-day business operations provided under normal terms and conditions, including the payment of workers compensation, insurance premiums, purchase of corporate, analytical and legal services. These are not considered individually significant to warrant separate disclosure as related party transactions.

Refer to Note 4.1 Employee provisions for details on superannuation arrangements with the CSS, the PSS, and the PSSap.

4.4 Aggregate assets and liabilities

5.1 Fair value measurement

Following initial recognition at cost, property, plant and equipment (excluding ROU assets) are carried at fair value (or an amount not materially different from fair value) less subsequent accumulated depreciation and accumulated impairment losses.

The following table provides an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

5.1A Fair value measurement

Accounting policy

Valuation of buildings – Leasehold improvements, plant and equipment

Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets, however these classes of assets are valued on average every 3 years.

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 was 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 reversed a previous revaluation increment for that class.

All assets are assessed for impairment on an annual basis. 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.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

5.2A Categories of financial instruments

Accounting policy

Financial assets

Financial assets at amortised cost

Financial assets included in this category need to meet 2 criteria:

• the financial asset is held in order to collect the contractual cash flows
• the cash flows are solely payments of principal and interest on the principal outstanding amount.

Amortised cost is determined using the effective interest method.

Impairment of financial assets

Financial assets are assessed for impairment at the end of each reporting period based on expected credit losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12-month expected credit losses if risk has not increased.

The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses.

A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial liabilities at amortised cost

Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.

Supplier and other payables 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).