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Departmental Budget Variance Commentary

The financial statements provide a comparison of the original budget as presented in the 2018‐19 Portfolio Budget Statements (PBS) to the 2018‐19 final outcome as presented in accordance with Australian Accounting Standards for Geoscience Australia. The Budget is not audited.

Variances are considered to be ‘major’ based on the following criteria:

  1. the variance between budget and actual is greater than +/‐10% of the budget for the line item; or
  2. 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
  3. the variance between budget and actual is below this threshold but is considered important for the reader’s understanding, or it is sensitive or relates to a large offsetting movement.

In some instances, a budget has not been provided for in the PBS, for example non‐cash items such as asset revaluations, foreign exchange and sale of asset adjustments.

Unless the variance is considered ‘major’ no explanation has been provided.

Statement of Comprehensive Income

Total expenses is lower than the budget by 10% predominantly due to lower supplier expenses (outlined below) offset by marginally higher employee expenses.

Supplier expenses is lower than the budget by 17% mainly due to delays in the Satellite‐based Augmentation System program ($12.2 million), lower than expected expenses associated with external revenue (refer to the sale of goods and rendering of services revenue below), and operating savings.

Grants expenses reflect grants to the World Meteorological Organisation for experience augmentation which were not anticipated in the budget.

Total own‐source revenue is lower than budget by 28% reflecting lower sales of good and rendering of services revenue (outlined above) offset by higher other revenue (outlined above).

Sale of goods and rendering of services revenue is lower than budget by 31%. The budget was based on revenue earned by the organisation in prior years. The reduction in revenue relative to the budget and prior years is due to lower activity in relation to Minerals Pre‐competitive Program surveys for the States and Territories of $7.6 million and delays in some Auscope, Disaster Risk Reduction and observatories projects.

Other revenue is significantly higher than budget due to employee salary sacrifice contributions, an insurance claim settlement and other miscellaneous receipts.

The operating surplus is significantly higher largely due to the delays in the Satellite‐based Augmentation System program.

Statement of Financial Position

Total Assets are higher than budget by 18% due to higher financial assets and non‐financial assets as outlined below.

Financial assets are higher than budget by 52% primarily as a result of higher trade and other receivables mainly due to delays in Satellite‐based Augmentation System 2018‐19 budget measure payments ($12.236 million for operating and $8.106 million capital) and increased unearned revenue ($4.043 million) from Commonwealth and State Government income streams which were not anticipated in the budget.

Non‐financial assets are lower than budget by 6% mainly as a result of decreases in plant and equipment due to delays in capital expenditure for the Satellite‐based Augmentation System program ($8.1 million), offset by higher computer software license purchases and increased prepayments relating to building rent and Amazon Web Services.

Total Liabilities are higher than budget by 9% due to higher payables and provisions as outlined below.

Payables are higher than budget by 14% primarily due to accrued redundancy costs, an increase in unearned revenue from Commonwealth and State Government income streams, and more supplier accrued expenses than anticipated.

Provisions are also higher than budget by 16% largely as a result of higher employee provisions of $3.6 million reflecting the lower 10 year bond rate impact on the Long Service Leave provision and a provision for restructuring, as well higher other provisions due to changes to the makegood provision not included in the budget.

Statement of Changes in Equity

Equity is higher than budget by 67%, mainly due to: Reserves being lower by $1.2 million as a result of the revaluation of the mineral collection assets not anticipated in the budget and bond rate changes impacting on the makegood provision, and the Accumulated deficit lower than budget by $14.1 million, reflecting the operating surplus of $1.6 million (as explained in Statement of Comprehensive Income section).

Cash Flow Statement

Total cash used for investing activities is lower than budget by 21% mainly due to delays in capital expenditure on a number of programs and projects total of $5.6 million, including the Satellite‐based Augmentation System program, partially offset by higher cash used for the purchase of intangibles.

Appropriations ‐ Contributed equity is lower than budget reflecting delays in the Satellite‐based Augmentation System program of $9.0 million.