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Chapter 4.4 Managing our finances

How we are funded

The Australian Parliament, via the Appropriation Acts, provides the department with two types of funding: departmental and administered.

Departmental resources are used to develop and implement policies and deliver services (programs).

We also administer payments, subsidies, revenues, and other resources on behalf of the Australian Government. A shaded background in our Financial Statements indicates information that relates to an administered resource (see Part 5).

Table 4.4.1: Trends in departmental finances

2019–20

$ million

201819

$ million

Change

$ million

Revenue from the Australian Government

411.9

420.5

(8.6)

Other revenue

54.2

77.8

(23.6)

Total income

466.1

498.3

(32.2)

Employee benefits

288.5

287.8

0.7

Suppliers

146.3

188.4

(42.1)

Other expenses

88.0

98.2

(10.2)

Total expenses

522.8

574.4

(51.6)

Deficit attributed to the Australian Government

(56.7)

(76.1)

19.4

Add back non-appropriated depreciation and amortisation expense

73.2

95.9

(22.7)

Less principal repayments – leased assets

(20.8)

-

(20.8)

Surplus attributed to the department

(4.3)

19.8

(24.1)

Financial assets A

91.0

99.5

(8.5)

Non-financial assets B

583.9

229.8

354.1

Liabilities C

668.5

166.2

502.3

Net assets (A+B-C)

6.4

163.1

(156.7)

Table 4.4.2: Trends in administered finances

2019–20
$ million

2018–19
$ million

Change
$ million

Recoveries

226.4

54.2

172.2

Interest

53.5

71.8

(18.3)

Other revenue

76.0

9.9

66.1

Total revenue

355.9

135.9

220.0

Suppliers

128.2

229.4

(101.2)

Subsidies

118.2

126.4

(8.2)

Personal benefits

129,233.0

110,804.4

18,428.6

Grants

2,723.5

2,425.8

297.7

Payments to corporate Commonwealth entities

8,302.7

5,305.0

2,997.7

Other expenses

463.9

248.2

215.7

Total expenses

140,969.5

119,139.2

21,830.3

Financial assets

6,398.4

7,495.6

(1,097.2)

Liabilities

8,866.1

6,632.6

2,233.5

Assets management

Our assets are managed under the authority of section 20A of the PGPA Act, relevant accounting standards and Department of Finance requirements.

We invest in new assets to improve our systems and processes. We manage capital investment through an annual capital plan that reflects both government priorities and ongoing business needs.

Consultants

During 2019–20, 88 new consultancy contracts were entered into involving total actual expenditure of $26.6 million. In addition, 51 ongoing consultancy contracts were active during the period, involving total actual expenditure of $9.7 million.

We contract providers for specialist expertise or when independent research, review, or assessment is required. Decisions to engage consultants were made after considering the skills and resources required for the task, internal capacity, and the cost effectiveness of contracting an external service provider. Consultants were engaged in line with the PGPA Act and related regulations.

Annual reports contain information about actual expenditure on contracts for consultancies. Further information on the value of contracts and consultancies is available on the AusTender website. To view the value of contracts and consultancies, go to tenders.gov.au

Summary information on consultancy services is set out in Tables 4.4.3 and 4.4.4.

Table 4.4.3: Consultancies in 2019–20

Number

Expenditure

($ million, GST incl.)

New consultancies let

88

26.6

Ongoing consultancies active

51

9.7

Total

139

36.3


Table 4.4.4: Total expenditure on new and ongoing consultancy contracts 2017–18 to 2019–20

Expenditure ($ million, GST incl.)

2019–20

2018–19

2017–18

36.3

24.1

21.0

Australian National Audit Office access clauses

All departmental contracts let in the past year required the Auditor-General to have access to the contractor’s premises.

Exempt contracts

In 2019–20, no contracts were exempted from reporting on tenders.gov.au

Purchasing

Our purchasing activities are consistent with the Secretary’s Instructions and internal procurement guidelines, which are in accordance with the Commonwealth Procurement Rules 2019.

Purchasing is made in an accountable and transparent manner, complying with Australian Government policies, and meeting relevant international obligations.

In 2019–20, we exceeded our targets under the Indigenous Procurement Policy by awarding more than three per cent of contracts to Indigenous businesses.

Procurement initiatives to support small business

We support small business participation in the Commonwealth Government procurement market. Further information on Small and Medium Enterprises (SMEs) and Small Enterprise participation statistics is available on the Department of Finance’s website. To view SME and Small Enterprise participation statistics, go to finance.gov.au

We support the use of SMEs through various means including:

  • using standardised contracts for low-risk procurements valued under $200,000
  • using an electronic invoice processing system
  • incorporating Australian Industry Participation Plans in procurement where applicable.

We recognise the importance of ensuring small businesses are paid on time.

The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website. To view the results, go to treasury.gov.au

Grants administration

We manage programs through effective design, implementation, ongoing monitoring, and evaluation to support achieving intended outcomes for the Australian community. This is supported by our Grants Management Office which works in partnership with policy areas to support best practice in planning, designing, and selecting grant recipients. In the 2019–20 financial year, 10,163 grants were administered specific to the department, across 136 programs to a value of $997.7 million (excluding fee for service arrangements).

The Community Grants Hub (the Hub) administers grants for the department, as well as providing shared services grants administration for nine external client agencies.

  • Department of Health
  • Department of Agriculture, Water and the Environment
  • Department of Veterans' Affairs
  • Department of the Prime Minister and Cabinet
  • National Indigenous Australians Agency
  • Attorney-General's Department
  • Department of Education, Skills and Employment
  • National Disability Insurance Agency
  • Department of Home Affairs.

In the 2019–20 financial year, the Hub administered 44,141 funding arrangements across 715 programs, totalling $10.3 billion (excluding fee for service funding arrangements) for these agencies and the department.

Information on grants awarded by the Department of Social Services during 2019–20, is available at grants.gov.au – Australia’s whole-of-government grants information system. Information on grants awarded up to 31 December 2017 is available at dss.gov.au