Notes to the Financial Statements
Overview
Objectives of the Climate Change Authority
The Climate Change Authority (the Authority) was established under the Climate Change Authority Act 2011 and commenced operation on 1 July 2012.
The Authority is an Australian Government controlled entity and a not-for-profit entity. It is a non-corporate Commonwealth entity. The Authority’s objective is to provide rigorous and independent advice to the Minister for Energy and Emissions Reduction and the Australian Parliament on climate change policy, in order to improve the quality of life for all Australians.
The Authority is structured to meet a single outcome:
Provide expert advice to the Australian Government on climate change initiatives, including through conducting regular and specifically commissioned reviews and undertaking climate change research.
Activities contributing toward this outcome are classified as departmental. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the Authority 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 (PGPA Act).
The financial statements have been prepared in accordance with:
- Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) made under the PGPA Act; and
- Australian Accounting Standards and Interpretations - Simplified Disclosure Requirements 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 and values are rounded to the nearest thousand dollars unless otherwise specified.
Significant Accounting Judgements and Estimates
No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.
New Australian Accounting Standards
New and modified Australian Accounting Standard Requirements
All new and modified standards and interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect on the Authority’s financial statements.
All new and modified standards and interpretations that were issued prior to the sign-off date and are applicable to future reporting periods are not expected to have a future material impact on the Authority’s financial statements.
Taxation
The Authority is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Events after the Reporting Period
The Australia Government has made an explicit commitment to restore the Authority as a source of independent climate change advice, as stated in its Powering Australia plan and the updated Nationally Determined Contribution (NDC) submitted under the Paris Agreement. This includes formally tasking the Authority with providing advice on Australia’s emissions reduction targets, and on progress towards targets together with other issues to be addressed by the Minister in an annual statement to Parliament on climate change.
The Authority anticipates that the question of additional resourcing to support the Authority undertake its news functions will be considered in the context of the October 2022 Budget.
Departmental Budget Variance Commentary
The financial statement provide a comparison of the original budget as presented in the 2021-22 Portfolio Budget Statements (PBS) to the 2021-22 final outcome as presented in accordance with the Australian Accounting Standards for the Climate Change Authority. 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% of the budget for the line item; or
- The variance between budget and actual is greater than +/-2% of the sub-total (i.e. total expenses, total income, total assets or total liabilities); 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 entity.
Statement of Comprehensive Income
Total expenses is higher than budget by 20% or $0.511 million due to increased supplier and non-ongoing employee benefits associated with the Review of International Offsets requested by the Minister and self-initiated research projects.
Total own source revenue is higher than budget by $0.668 million related to funding received from the Portfolio Department to undertake the Review of International Offsets and resources received free of charge under formal arrangements.
Statement of Financial Position
Financial assets is higher than budget by 49% or $0.494 million due mainly to the entity carrying a larger than budgeted appropriation receivable balance and leave receivables.
Non-financial assets is higher than budget by 71% or $0.005 million for prepayments of multi-media and subscription services to support the operations of the entity.
Total payables is higher than budget by 7% or $0.024 million due mainly to employee payables for the accrual of salary and transfer of leave liabilities at the end of the financial year.
Total provisions is higher than budget by 15% or $0.059 million due mainly to the engagement and transfer of a number of non-ongoing staff and their leave balances to assist with the review. The provisions are also reflective of the bond rate and salary growth impact on the long service leave provision.
Statement of Changes in Equity
Total equity is higher than budget mainly to retained surplus. There was also a minor opening balance adjustments for rounding.
Cash Flow Statement
Total cash used is reflective of an increase of 8% or $0.202 million and Total cash received by 7% or $0.185 million due to the additional funding received from the Portfolio Department to undertake the Review of International Offsets and final payment of invoices where funds were used from the balance in the operating account.
1. Departmental Financial Performance
Financial Performance This section analyses the financial performance of Climate Change Authority for the year ended 2022 | ||
1.1 Expenses | ||
2022 | 2021 | |
$'000 | $'000 | |
1.1A: Employee benefits | ||
Wages and salaries | 1,364 | 1,307 |
Superannuation | ||
Defined contribution plans | 188 | 138 |
Defined benefit plans | 51 | 89 |
Leave and other entitlements | 247 | 112 |
Other expenses | 14 | 18 |
Total employee benefits | 1,864 | 1,664 |
Accounting PolicyAccounting Policies for employee related expenses are contained at Note 4. | ||
1.1B: Suppliers | ||
Goods and services supplied or rendered | ||
Consultants | 433 | 254 |
Contractors | 390 | 126 |
Audit services | 62 | 62 |
Travel | 12 | 25 |
Administrative services under MoU | 116 | 116 |
Staffing & recruitment expenses | 33 | 39 |
Property and related expenses | 124 | 124 |
Subscriptions | 28 | 37 |
Other | 26 | 22 |
Total goods and services supplied or rendered | 1,224 | 805 |
Goods supplied | 30 | 44 |
Services rendered | 1,194 | 761 |
Total goods and services supplied or rendered | 1,224 | 805 |
Other suppliers | ||
Workers compensation premiums | 7 | 9 |
Total other suppliers | 7 | 9 |
Total suppliers | 1,231 | 814 |
1.2 Own-Source Revenue | ||||
2022 | 2021 | |||
$’000 | $’000 | |||
1.2A: Payments from Portfolio Department | ||||
Payments from Portfolio Department | 500 | - | ||
Total Payments from Portfolio Department | 500 | - | ||
1.2B: Other Revenue | ||||
Resources received free of charge | ||||
Remuneration of auditors | 62 | 62 | ||
Accommodation from the Department of Industry Science and Resources | 106 | 106 | ||
Total other revenue | 168 | 168 | ||
1.2C: Revenue from Government | ||||
Appropriations | ||||
Departmental appropriations | 2,584 | 2,600 | ||
Total revenue from Government | 2,584 | 2,600 | ||
Accounting PolicyThe Authority receives its revenue through direct appropriations. Funding received or receivable from non-corporate Commonwealth entities (appropriated to the Department of Industry, Science and Resources) for rendering of services is recognised as Payments from the Portfolio Department by the Authority. | ||||
2. Departmental Financial Position
Financial Position This section analyses the Climate Change Authority's assets used to conduct its operations and the operating liabilities incurred as a result. | ||
2.1 Financial Assets | ||
2022 | 2021 | |
$'000 | $'000 | |
2.1A: Cash and cash equivalents | ||
Cash on hand or on deposit | 66 | 83 |
Total cash and cash equivalents | 66 | 83 |
2.1B: Trade and other receivables | ||
Appropriation receivables | ||
Appropriation receivable | 1,329 | 1,014 |
Total appropriation receivables | 1,329 | 1,014 |
Other receivables | ||
Other receivables | 63 | 184 |
GST receivable from the Australian Taxation Office | 40 | 24 |
Total other receivables | 103 | 208 |
Total trade and other receivables (gross) | 1,432 | 1,222 |
Credit terms for goods and services were within 30 days (2021: 30 days). | ||
Accounting Policy: Financial assets rade receivables, loans and other receivables that are 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 are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance. | ||
2.2 Payables | ||
2022 | 2021 | |
$'000 | $'000 | |
2.2A: Suppliers | ||
Trade creditors and accruals | 241 | 243 |
Total suppliers | 241 | 243 |
Suppliers expected to be settled | ||
No more than 12 months | 241 | 243 |
More than 12 months | - | - |
Total suppliers | 241 | 243 |
2.2B: Other payables | ||
Salaries and wages | 50 | 33 |
Employee payables | 75 | 95 |
Total other payables | 125 | 128 |
Other payables to be settled | ||
No more than 12 months | 125 | 128 |
More than 12 months | - | - |
Total other payables | 125 | 128 |
3. Funding
Funding This section identifies the Climate Change Authority's funding structure. | |||||
3.1 Appropriations | |||||
3.1A: Annual Appropriations for 2022 | |||||
Annual Appropriations for 2022 | |||||
Annual Appropriation | Adjustments to appropriation1 | Total appropriation | Appropriation applied in 2022 (current and prior years) | Variance | |
$'000 | $'000 | $'000 | $'000 | $'000 | |
Departmental | |||||
Ordinary annual services | 2,584 | 693 | 3,277 | 2,769 | 508 |
Total departmental | 2,584 | 693 | 3,277 | 2,769 | 508 |
Adjustments to appropriations includes funding received by the Authority through payments from its Portfolio Department that has been applied under section 74 of the Public Governance, Performance and Accountability Act 2013 and employee leave transfer receipts retained under s74 of the PGPA Act. There were no amounts quarantined or Section 51 adjustments in the current financial year. There were no departmental capital budget amounts in the current financial year. | |||||
Annual Appropriations for 2021 | |||||
Annual Appropriation | Adjustments to appropriation1 | Total appropriation | Appropriation applied in 2021 | Variance2 | |
$'000 | $'000 | $'000 | $'000 | $'000 | |
Departmental | |||||
Ordinary annual services | 2,600 | 257 | 2,857 | 2,443 | 414 |
Total departmental | 2,600 | 257 | 2,857 | 2,443 | 414 |
Adjustments to appropriations includes funding received by the Authority through payments from its Portfolio Department that has been applied under section 74 of the Public Governance, Performance and Accountability Act 2013 and employee leave transfer receipts retained under s74 of the PGPA Act. There were no amounts quarantined or Section 51 adjustments in the previous financial year. There were no departmental capital budget amounts in the previous financial year. | |||||
3.1B: Unspent annual appropriations ('recoverable GST exclusive') | |||||
2022 | 2021 | ||||
$’000 | $’000 | ||||
Departmental | |||||
Appropriation Act (No. 1) 2019-20 | - | 586 | |||
Appropriation Act (No. 1) 2020-21 | - | 428 | |||
Appropriation Act (No. 1) 2021-22 | 1,329 | - | |||
Cash at bank | 66 | 83 | |||
Total departmental | 1,395 | 1,097 | |||
Unspent annual appropriations include an amount of $138,853 related to section 74 revenue from Portfolio Department The Authority receipted and retained the amount of $192,598 under section 74 revenue for employee leave transfers There were no amounts quarantined or Section 51 adjustments in the current or previous financial year. There were no departmental capital budget amounts in the current or previous financial year. | |||||
4. People and Relationships
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. | ||
4.1 Employee Provisions | ||
2022 | 2021 | |
$'000 | $'000 | |
4.1: Employee provisions | ||
Leave | 443 | 399 |
Total employee provisions | 443 | 399 |
Accounting policy: Liabilities for short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts. The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability. 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 the entity’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 use of the Australian Government Actuary’s shorthand method using the Standard Commonwealth sector probability profile. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. Separation and Redundancy The Authority 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. There were no redundancy payments in 2021-22. Superannuation The entity's staff are 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. The Authority makes 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 Authority accounts for the contributions as if they were contributions to defined contribution plans. The liability for superannuation recognised as at 30 June represents outstanding contributions. | ||
4.2 Related Party Disclosures | |
Related party relationships: | |
The Authority is an Australian Government controlled entity. Related parties to the Authority are Key Management Personnel including the Portfolio Minister and Executive. | |
Transactions with related parties: | |
Given the breadth of Government activities, related parties may transact with the Authority in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note. |
4.3 Key Management Personnel Remuneration | ||
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. The entity has determined the key management personnel to be the Chief Executive Officer | ||
2022 | 2021 | |
$’000 | $’000 | |
Short-term employee benefits | ||
Salary | 320 | 307 |
Performance bonus | - | - |
Allowances & benefits | 4 | 2 |
Total short-term employee benefits | 324 | 309 |
Post-employment benefits | ||
Superannuation | 50 | 51 |
Total post-employment benefits | 50 | 51 |
Other long-term employee benefits | ||
Long service leave accrued | (4) | 7 |
Total other long-term employee benefits | (4) | 7 |
Termination benefits | - | - |
Total key management personnel remuneration expenses1 | 370 | 367 |
The total number of key management personnel that are included in the above table are 1 (2021: 1). | ||
1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity. | ||
5. Managing Uncertainties
Managing uncertainties This section analyses how the Climate Change Authority manages financial risks within its operating environment. | |
5.1: Contingent assets and liabilities | |
Quantifiable Contingencies | |
The Authority had no quantifiable contingencies at either 30 June 2022 or 2021. | |
Unquantifiable Contingencies | |
The Authority had no unquantifiable contingencies at either 30 June 2022 or 2021. | |
Accounting PolicyContingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote. |
6. Other Information
Other | ||
6.1 Current/non-current distinction for assets and liabilities | ||
2022 | 2021 | |
$’000 | $’000 | |
Assets expected to be recovered in: | ||
No more than 12 months | ||
Cash and cash equivalents | 66 | 83 |
Trade and other receivables | 1,444 | 1,189 |
Total no more than 12 months | 1,510 | 1,272 |
More than 12 months | ||
Trade and other receivables | - | 41 |
Total more than 12 months | - | 41 |
Total assets | 1,510 | 1,313 |
Liabilities expected to be settled in: | ||
No more than 12 months | ||
Suppliers | 241 | 243 |
Other payables | 125 | 128 |
Employee provisions | 88 | 71 |
Total no more than 12 months | 454 | 442 |
More than 12 months | ||
Employee provisions | 355 | 328 |
Total more than 12 months | 355 | 328 |
Total liabilities | 809 | 770 |
Visit
https://www.transparency.gov.au/annual-reports/climate-change-authority/reporting-year/2021-22-26