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.
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.