Budget Variances Commentary
The explanations provide a comparison of the original budget as presented in the 2019-20 Portfolio Budget Statements (PBS) to the 2019-20 final outcome as presented in accordance with Australian Accounting Standards for the Australian Transport Safety Bureau (ATSB). The Budget is not audited. Variances are considered to be ‘major’ based on the following criteria: - the variance between budget and actual is greater than 10%: and - the variance between budget and actual is greater than 2% of total expenses or total own source revenues: or - the variance between budget and actual is below this threshold but is considered important for the reader’s understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of the agency. In some instances, a budget has not been provided for in the PBS, for example non-cash items such as asset revaluations and sale of assets adjustments. Unless the variance is considered to be ‘major’ no explanation has been provided. | |||
Explanations of major variances | Affected line items (and statement) | ||
Application of Australian Accounting Standards Board Standard 16 - Leases (AASB16) With the application of AASB16 Leases, there was a large shift from supplier expenses to depreciation and interest within the Statement of Financial Position, in relation to the ATSB's office accommodation and vehicle leases. At the time the budget was prepared, the full implications of AASB16 were not known to the ATSB and therefore not predictable. | Statement of Comprehensive Income Expenses - Suppliers Expenses - Depreciation and amortisation Expenses - Finance costs Statement of Financial Position Non-financial assets - Buildings Interest-bearing liabilities - Leases | ||
Return of Unspent Appropriation - Malaysia Airlines Flight 570 An unspent amount of $14.0m relating to missing Malaysia Airlines Flight 370 (MH370) was quarantined and returned to Government under section 51 of the Constitution of Australia during 2019-20. | Statement of Financial Position Financial assets - Trade and other receivables Statement of Contributed Equity Distribution to owners - Other | ||
Income A decrease in funding received in relation to the ATSB's international projects occurred after the original budget was set. | Statement of Comprehensive Income Own source revenue - Revenue from contracts with customers | ||
Other Revenue An increase in other revenue is as a result of higher than projected investigation services completed during the financial year. The ATSB receives the services free of charge from the Chief Investigator Transport Safety, Victoria and the NSW Office of Transport Safety Investigations. | Statement of Comprehensive Income Own source revenue - Other revenue | ||
Distribution to owners - Other | |||
Financial Assets The budgeted estimate for cash and accrued revenue is made on a rolling three-year historical trend, which has resulted in an estimate being less than the 2019-20 actual. | Statement of Financial Position Financial Assets - Cash and Cash Equivalents Financial Assets - Accrued Revenue | ||
Non-Financial Assets The ATSB were experienced delays to a whole of agency roll-out of ICT equipment during the second half of the financial year. It is expected the implementation of the new hardware will occur early in 2020-21. | Statement of Financial Position Non-financial assets - Plant and equipment | ||
Non-Financial Assets The ATSB progressed a number of smaller inter-related internally developed software projects during 2019-20, which were not included within the initial budget projections. | Statement of Financial Position Non-financial assets - Computer software | ||
Other Payables The variance between the budget within the PBS and the actual outcome for the 2019-20 financial year, is mainly attributable to the unprojected employee cessation entitlements payable. | Statement of Financial Position Payables - Other payables | ||
Provisions Employee provisions are higher than expected due to leave transferred in for new staff not budgeted for. | Statement of Financial Position Provisions - Employee Provisions | ||
Statement of Changes in Equity Total equity is greater than projected in the budget mainly due the differences between the actual and budgeted opening balances, with the larger variance identified above. | Statement of Changes in Equity | ||
Cash Flow Statement Variances in the Cash Flow Statement are broadly consistent with the variances explained above for income and expenses. | Cash Flow Statement | ||
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https://www.transparency.gov.au/annual-reports/australian-transport-safety-bureau/reporting-year/2019-20-24