Financial Statements
Independent Auditor's Report
Statement by the Accountable Authority and Chief Finance Officer
In our opinion, the attached financial statements for the year ended 30 June 2020 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.
In our opinion, at the date of this statement, there are reasonable grounds to believe that the Murray-Darling Basin Authority will be able to pay its debts as and when they fall due.
Statement of Comprehensive Income
for the year ended 30 June 2020
2020 | 2019 | Original Budget | ||||
Notes | $'000 | $'000 | $'000 | |||
NET COST OF SERVICES | ||||||
Expenses | ||||||
Employee benefits | 38,420 | 39,098 | 41,355 | |||
Suppliers | 102,902 | 85,181 | 105,209 | |||
Grants | 36,536 | 51,007 | 33,135 | |||
Depreciation and amortisation | 4,117 | 1,862 | 1,656 | |||
Finance costs | 344 | 24 | 32 | |||
Total expenses | 182,319 | 177,172 | 181,387 | |||
Own-Source Income | ||||||
Own-source revenue | ||||||
Contributions from jurisdictions | 86,380 | 93,545 | 94,669 | |||
Interest | 1,502 | 2,295 | 2,161 | |||
Other revenue | 29,466 | 10,482 | 4,355 | |||
Total own-source revenue | 117,348 | 106,322 | 101,185 | |||
Gains/(Losses) | ||||||
Other Gains/(Losses) | 61 | (1) | - | |||
Total Gains/(Losses) | 61 | (1) | - | |||
Total own-source income | 117,409 | 106,321 | 101,185 | |||
Net cost of services | (64,910) | (70,851) | (80,202) | |||
Revenue from Government | 75,244 | 94,200 | 75,628 | |||
Surplus/(Deficit) attributable to the Australian Government | 10,334 | 23,349 | (4,574) | |||
OTHER COMPREHENSIVE INCOME | ||||||
Changes in asset revaluation surplus | - | - | - | |||
Total comprehensive income | 10,334 | 23,349 | (4,574) | |||
Total comprehensive income attributable to the Australian Government | 10,334 | 23,349 | (4,574) |
The original budget comprises the Departmental budget as disclosed in the Portfolio Budget Statements (PBS) 2019-20.
The above statement should be read in conjunction with the accompanying notes.
Budget Variances Commentary | ||||||
Budget variance explanations are outlined in Note 5. The original budget balances have been adjusted so as to be consistent with the financial statements classification. |
Statement of Financial Position
as at 30 June 2020
2020 | 2019 | Original Budget | ||||
Notes | $’000 | $’000 | $'000 | |||
ASSETS | ||||||
Financial assets | ||||||
Cash and cash equivalents | 147,005 | 126,241 | 81,942 | |||
Trade and other receivables | 3,637 | 5,171 | 3,423 | |||
Total financial assets | 150,642 | 131,412 | 85,365 | |||
Non-financial assets1 | ||||||
Buildings | 21,745 | 4,364 | 4,945 | |||
Property, plant and equipment | 1,727 | 1,638 | 2,561 | |||
Intangibles | 1,380 | 584 | 7,484 | |||
Prepayments | 842 | 510 | 742 | |||
Total non-financial assets | 25,694 | 7,096 | 15,732 | |||
Total assets | 176,336 | 138,508 | 101,097 | |||
LIABILITIES | ||||||
Payables | ||||||
Suppliers | 21,176 | 18,243 | 14,065 | |||
Other payables | 1,909 | 5,688 | 4,682 | |||
Total payables | 23,085 | 23,931 | 18,747 | |||
Interest bearing liabilities | ||||||
Leases liabilities | 16,693 | - | - | |||
Total interest bearing liabilities | 16,693 | - | - | |||
Provisions | ||||||
Employee provisions | 10,921 | 10,584 | 10,231 | |||
Other provisions | 1,205 | 1,256 | 1,304 | |||
Total provisions | 12,126 | 11,840 | 11,535 | |||
Total liabilities | 51,904 | 35,771 | 30,282 | |||
Net assets | 124,432 | 102,737 | 70,815 | |||
EQUITY | ||||||
Contributed equity | (3,774) | (11,199) | (3,774) | |||
Reserves | 2 | 2 | 2 | |||
Retained surplus | 128,204 | 113,934 | 74,587 | |||
Total equity | 124,432 | 102,737 | 70,815 |
The above statement should be read in conjunction with the accompanying notes.
1 Right-of-use assets are included in the following line items: Buildings and Property, Plant and Equipment.
Budget Variances Commentary | ||||||
Budget variance explanations are outlined in Note 5. The original budget balances have been adjusted so as to be consistent with the financial statements classification. |
Statement of Changes in Equity
for the year ended 30 June 2020
2020 | 2019 | Original Budget | |||
$’000 | $'000 | $'000 | |||
CONTRIBUTED EQUITY/CAPITAL | |||||
Opening balance | |||||
Balance carried forward from previous year1 | (11,199) | (11,199) | (11,199) | ||
Equity injection2 | 7,425 | - | 7,425 | ||
Closing balance | (3,774) | (11,199) | (3,774) | ||
RETAINED EARNINGS3 | |||||
Opening balance | |||||
Balance carried forward from previous year | 113,934 | 90,585 | 79,163 | ||
Adjustment for changes in accounting policies | 3,936 | - | - | ||
Adjusted opening balance | 117,870 | 90,585 | 79,163 | ||
Comprehensive income | |||||
Surplus/(Deficit) for the year | 10,334 | 23,349 | (4,574) | ||
Other comprehensive income | - | - | - | ||
Total comprehensive income | 10,334 | 23,349 | (4,574) | ||
Closing balance | 128,204 | 113,934 | 74,589 | ||
ASSET REVALUATION RESERVE | |||||
Balance carried forward from previous year | 2 | 2 | - | ||
Comprehensive income | |||||
Other comprehensive income | - | - | - | ||
Total comprehensive income | - | - | - | ||
Closing balance | 2 | 2 | - | ||
TOTAL EQUITY | |||||
Opening balance | |||||
Balance carried forward from previous year | 102,737 | 79,388 | 67,964 | ||
Adjustment for changes in accounting policies | 3,936 | - | - | ||
Adjusted opening balance | 106,673 | 79,388 | 67,964 | ||
Comprehensive income | |||||
Surplus/(Deficit) for the year | 10,334 | 23,349 | (4,574) | ||
Other comprehensive income | - | - | - | ||
Total comprehensive income | 10,334 | 23,349 | (4,574) | ||
Contributions by owners | |||||
Equity injection | 7,425 | - | 7,425 | ||
Total transactions with owners | 7,425 | - | 7,425 | ||
Closing balance | 124,432 | 102,737 | 70,815 |
The above statement should be read in conjunction with the accompanying notes.
1 The negative contributed equity is a historical legacy relating back to the transition of the Murray-Darling Basin Commission (MDBC) to the Murray-Darling Basin Authority on 15 December 2008. As part of the transition arrangement, all cash held by the MDBC totalling $441.488m was paid back to the Official Public Account (OPA) before being appropriated to the Authority. Once appropriated to the Authority these funds were recorded as revenue in the Authority’s accounts.
Liabilities of $19.180m and assets of $7.981m were transferred to the Authority during the 2008-09 financial year. The excess of liabilities over assets of $11.199m continues to be shown in the Financial Statements of the Authority as negative contributed equity.
2 Equity injection received to fund capital purchases required for the decentralisation project.
3 The retained earnings is inclusive of unspent funds that the MDBA has received in relation to the joint program. The Ministerial Council approves the use of these unspent funds as part of the joint program work plan approval process.
Accounting Policy | |||||
Equity Injections | |||||
Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year. |
Budget Variances Commentary | |||||
Budget variance explanations are outlined in Note 5. The original budget balances have been adjusted so as to be consistent with the financial statements classification. |
Cash Flow Statement
for the year ended 30 June 2020
2020 | 2019 | Original Budget | ||||
Notes | $’000 | $’000 | $'000 | |||
OPERATING ACTIVITIES | ||||||
Cash received | ||||||
Receipts from Government | 75,244 | 94,200 | 75,628 | |||
Contributions from jurisdictions | 86,412 | 93,490 | 94,669 | |||
Interest | 1,953 | 2,023 | 2,161 | |||
Net GST received | 11,415 | 8,323 | 11,262 | |||
Other | 30,235 | 9,703 | 4,277 | |||
Total cash received | 205,259 | 207,739 | 187,997 | |||
Cash used | ||||||
Employees | 37,762 | 38,273 | 41,355 | |||
Suppliers | 110,425 | 88,336 | 116,429 | |||
Grants | 37,596 | 52,108 | 33,135 | |||
Interest payments on lease liabilities | 332 | - | - | |||
Other | 150 | 8 | - | |||
Total cash used | 186,265 | 178,724 | 190,919 | |||
Net cash (used by)/from operating activities | 18,994 | 29,014 | (2,922) | |||
INVESTING ACTIVITIES | ||||||
Cash received | ||||||
Proceeds from sales | - | - | - | |||
Total cash received | - | - | - | |||
Cash used | ||||||
Purchase of property, plant and equipment | 2,519 | 436 | 1,656 | |||
Purchase of intangible assets | 1,060 | 287 | 6,560 | |||
Total cash used | 3,579 | 723 | 8,216 | |||
Net cash (used by) investing activities | (3,579) | (723) | (8,216) | |||
FINANCING ACTIVITIES | ||||||
Cash received | ||||||
Contributed equity | 7,425 | - | 7,425 | |||
Total cash received | 7,425 | - | 7,425 | |||
Cash used | ||||||
Principal payments of lease liabilities | 2,076 | - | - | |||
Total cash used | (2,076) | - | - | |||
Net cash from financing activities | 5,349 | - | 7,425 | |||
Net Increase/(decrease) in cash held | 20,764 | 28,291 | (3,713) | |||
Cash and cash equivalents at the beginning of the reporting period | 126,241 | 97,950 | 85,655 | |||
Cash and cash equivalents at the end of the reporting period | 147,005 | 126,241 | 81,942 |
The above statement should be read in conjunction with the accompanying notes.
Budget Variances Commentary | ||||||
Budget variance explanations are outlined in Note 5. The original budget balances have been adjusted so as to be consistent with the financial statements classification. | ||||||
Overview
Objectives of the Murray-Darling Basin Authority
The Murray-Darling Basin Authority (the Authority) is an Australian Government controlled corporate Commonwealth entity established by the Water Act 2007. It is a not-for-profit entity. The principal objective of the Authority is to manage the Murray-Darling Basin’s water resources in the national interest so that there may be an equitable and sustainable use of the Basin’s resources.
The continued existence of the Authority in its present form and with its present programs is dependent on:
Funding from Basin jurisdictions towards meeting the cost of Murray-Darling Basin Agreement functions; and
Government policy and on continuing funding by Federal Government for the Authority’s administration and programs relating to the Basin Plan and Murray-Darling Basin Agreement functions.
The Authority’s activities 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.
From 1 July 2013, the Authority became responsible for the South Australian Riverland Floodplains Integrated Infrastructure Program (SARFIIP). SARFIIP aims to enhance the effectiveness of improved environmental flows to South Australia in particular at the Pike and Katarapko - Eckert’s Creek (Katfish Reach) Floodplains and is expected to extend over 7 years, with an estimated cost of $155 million. While these activities are not controlled by the Authority it exercises effective project oversight and funding on behalf of the Commonwealth. SARFIIP funding is recorded as revenue from government and expenses are recorded as a grant expense in the Authority’s Statement of Comprehensive Income. Prior to 2014-15, the project was reported as an Administered item.
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:
a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
b) Australian Accounting Standards and Interpretations – Reduced 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.
Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income, when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.
Taxation
The Authority is exempt from all forms of taxation except for Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Revenues, expenses and assets are recognised net of GST except:
where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
for receivables and payables which are recognised inclusive of GST.
Comparative Figures
Comparative figures are adjusted so that they conform with changes in the presentation of the financial statements where required.
Events After the Reporting Period
On 4 September 2020 the Hon Keith Pitt MP, Minister for Resources, Water and Northern Australia announced the establishment of an Inspector-General of Water Compliance, combining the functions of the Inspector-General of Murray-Darling Basin Water Resources and the Authority’s Office of Compliance. The move of the Office of Compliance out of the Authority will require legislative change.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or may affect the operations of the Authority, the results of these operations or state of affairs of the Authority in subsequent years.
New Accounting Standards
Adoption of New Australian Accounting Standard Requirements
No accounting standard has been adopted earlier than the application date as stated in the standard.
The following new standards and were issued prior to the signing of the Statement by the Accountable Authority and Chief Finance Officer, were applicable to the current reporting period and had a material effect on the Authority’s financial statements:
Standard/ Interpretation | Nature of change in accounting policy, transitional provisions1, and adjustment to financial statements |
AASB 15 Revenue from Contracts with Customers / AASB 2016-8 Amendments to Australian Accounting | AASB 15, AASB 2016-8 and AASB 1058 became effective 1 July 2019. AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including AASB 118 Revenue, AASB 111 Construction Contracts and Interpretation 13 Customer Loyalty Programmes. The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. AASB 1058 is relevant in circumstances where AASB 15 does not apply. AASB 1058 replaces most of the not-for-profit (NFP) provisions of AASB 1004 Contribution and applies to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and where volunteer services are received. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements. |
AASB 16 Leases | AASB 16 became effective on 1 July 2019. This new standard has replaced AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation 115 Operating Leases—Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. AASB 16 substantially carries forward the lessor accounting in AASB 117, with the distinction between operating leases and finance leases being retained. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements. |
1 When transitional provisions apply, all changes in accounting policy are made in accordance with their respective transitional provisions.
All other new/revised/amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect, and are not expected to have a future material effect, on the entity’s financial statements.
Application of AASB 15 Revenue from Contracts with Customers / AASB 1058 Income of Not-For-Profit Entities
The Authority adopted AASB 15 and AASB 1058 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2020 is not restated, that is, it is presented as previously reported under the various applicable AASBs and related interpretations.
Under the new income recognition model the Authority shall first determine whether an enforceable agreement exists and whether the promises to transfer goods or services to the customer are ‘sufficiently specific’. If an enforceable agreement exists and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), the Authority applies the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria are not met, the Authority shall consider whether AASB 1058 applies.
The adoption of AASB 15 and AASB 1058 has not resulted in any changes to revenue recognition for the Authority.
Application of AASB 16 Leases
The Authority adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2020 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.
The Authority elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under AASB 117 were not reassessed. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019.
AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The Authority applied the following practical expedients when applying AASB 16 to leases previously classified as operating leases under AASB 117:
Apply a single discount rate to a portfolio of leases with reasonably similar characteristics;
Exclude initial direct costs from the measurement of right-of-use assets at the date of initial application for leases where the right-of-use asset was determined as if AASB 16 had been applied since the commencement date;
Reliance on previous assessments on whether leases are onerous as opposed to preparing an impairment review under AASB 136 Impairment of assets as at the date of initial application; and
Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application.
As a lessee, the Authority previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under AASB 16, the Authority recognises right-of-use assets and lease liabilities for most leases. However, the Authority has elected not to recognise right-of-use assets and lease liabilities for some leases of low value, based on the value of the underlying asset or for leases with a term less than 12 months.
On adoption of AASB 16, the Authority recognised right-of-use assets and lease liabilities in relation to leases of office space, IT equipment and motor vehicles, which had previously been classified as operating leases.
The lease liabilities were measured at the present value of the remaining lease payments, discounted using the Authority’s incremental borrowing rate as at 1 July 2019. The Authority’s incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 2.91%.
The right-of-use assets were measured as follows:
a) Office space: measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.
b) All other leases: the carrying value that would have resulted from AASB 16 being applied from the commencement date of the leases, subject to the practical expedients noted above.
Impact on transition
On transition to AASB 16, the Authority recognised additional right-of-use assets and additional lease liabilities. The amount recognised in retained earnings at transition represents the required adjustment to retained earnings in relation to lease incentives and lease straight-lining provision balances at 30 June 2019. The impact on transition is summarised below:
1 July 2019 | ||
$'000 | ||
Right-of-use assets - property, plant and equipment | 16,553 | |
Lease liabilities | 16,556 | |
Retained earnings | (3,936) |
The following table reconciles the minimum lease commitments disclosed in the Authority's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:
1 July 2019 | ||
$'000 | ||
Minimum operating lease commitment at 30 June 2019 | 19,704 | |
Less: short-term leases not recognised under AASB 16 | (123) | |
Less: low value leases not recognised under AASB 16 | - | |
Plus: effect of extension options reasonably certain to be exercised | 89 | |
Undiscounted lease payments | 19,670 | |
Less: effect of discounting using the incremental borrowing rate as at the date of initial application | ( 3,114) | |
Lease liabilities recognised at 1 July 2019 | 16,556 |
Financial Performance
This section analyses the financial performance of the Authority for the year ended 30 June 2020.
Note 1.1 Expenses
2020 | 2019 | ||
$’000 | $’000 | ||
Note 1.1A: Employee Benefits | |||
Wages and salaries | 27,459 | 27,576 | |
Superannuation: | |||
Defined contribution plans | 3,300 | 3,305 | |
Defined benefit plans | 1,873 | 2,285 | |
Leave and other entitlements | 5,232 | 5,481 | |
Separation and redundancies | 556 | 451 | |
Total employee benefits | 38,420 | 39,098 |
Accounting policy | |||
Accounting policies for employee related expenses are outlined in Note 3.1. |
2020 | 2019 | ||
$’000 | $’000 | ||
Note 1.1B: Suppliers | |||
Goods and services supplied or rendered | |||
Expenditure by State Constructing Authorities | 67,754 | 57,856 | |
Water licence fee | 3,562 | 3,548 | |
Consultants and contractors | 23,477 | 13,899 | |
Communication & IT services | 2,703 | 2,601 | |
Other employment expenses | 1,076 | 1,169 | |
Committee expenses | 536 | 583 | |
Travel | 1,312 | 1,426 | |
Other provision of goods & services | 1,698 | 1,528 | |
Goods and services supplied or rendered | 102,118 | 82,610 | |
Goods and services are made up of: | |||
Provision of goods | 483 | 423 | |
Rendering of services | 101,635 | 82,187 | |
Total goods and services supplied or rendered | 102,118 | 82,610 | |
Other suppliers | |||
Operating lease rentals1 | - | 2,163 | |
Short-term leases | 644 | - | |
Workers compensation expenses - government entity | 140 | 408 | |
Total other suppliers | 784 | 2,571 | |
Total suppliers | 102,902 | 85,181 | |
1 The Authority has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117. | |||
The Authority has no short-term lease commitments as at 30 June 2020. | |||
The above lease disclosures should be read in conjunction with the accompanying notes 1.1E, 2.2 and 2.4. |
Accounting policy | |||
Short-term leases and leases of low-value asset | |||
The Entity has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). The entity recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. |
Note 1.1C: Grants | 2020 | 2019 | |
Grants | $’000 | $’000 | |
Australian Government entities | |||
State and Territory Governments | 9,890 | 9,133 | |
South Australian Riverland Floodplains Integrated Infrastructure Project | 24,500 | 40,000 | |
Local Governments | - | 5 | |
Private sector: | |||
Commercial entities | 20 | 47 | |
Non-profit institutions | 1,679 | 1,741 | |
Other | 447 | 81 | |
Total grants | 36,536 | 51,007 | |
Note 1.1D: Finance Costs | |||
Unwinding of discount on make good provision | 12 | 16 | |
Interest on lease liabilities | 332 | - | |
Unwinding of interest on finance leases1 | - | 8 | |
Total finance costs | 344 | 24 | |
1 The Authority has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117. | |||
The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 2.2 and 2.4. |
Note 1.2: Own-Source income
2020 | 2019 | ||
Own-Source Revenue | $’000 | $’000 | |
Note 1.2A: Contributions from Jurisdictions | |||
Australian Government | 12,165 | 12,006 | |
New South Wales | 29,660 | 29,727 | |
Victoria | 21,800 | 28,703 | |
South Australia | 22,325 | 22,687 | |
Queensland | 108 | 106 | |
Australian Capital Territory | 322 | 316 | |
Total contributions from jurisdictions | 86,380 | 93,545 |
Accounting policy | |||
The Authority receives contributions from jurisdictions based on an agreed contributions model (the model). The model is based on a number of different requirements including specific provisions under the Murray-Darling Basin Agreement. These Contributions are recognised as revenue when received. |
2020 | 2019 | ||
$’000 | $’000 | ||
Note 1.2B: Other Revenue | |||
Hydropower generation | 3,517 | 7,364 | |
Funding from other MOUs1 | 23,425 | - | |
Contributions by States - Salinity program | 1,055 | 877 | |
Revenue from use of Land and cottage | 325 | 331 | |
Other2 | 1,144 | 1,910 | |
Total other revenue | 29,466 | 10,482 | |
1 Amounts relate to revenue received in relation to Memorandums of Understanding (MOUs) signed with the Department of Agriculture, Water and the Environment (DAWE) for the Ecosystem Functions, Independent Assessment of Social and Economic Conditions and Hydrometric Networks & Remote Sensing Projects, MDB Water and Environment Research Program, and First Pass Business Case River Modelling and ICT transformation. 2 Other revenue includes an amount of $78,000 for audit services provided free of charge by the Australian National Audit Office. |
Accounting policy | |||
Hydropower generation | |||
Hydroelectricity revenue is generated when the release of water from Hume and Dartmouth dams is routed through electricity generating plants. Revenue is recognised over time based on recovery of a set percentage of the hydroelectricity revenue earned during the period. | |||
Funding from other MOUs | |||
Revenue is recognised over time based on milestones achieved. | |||
Contributions by States - Salinity program | |||
Revenue is recognised over time on a cost recovery basis. | |||
Revenue from use of Land and cottage | |||
Revenue is recognised at a point in time as it is earned. | |||
Other revenue | |||
Other revenue comprises of miscellanous revenue that is recognised both at a point in time and over time depending on the nature of the transaction. |
2020 | 2019 | ||
$’000 | $’000 | ||
Gains/(Losses) | |||
Note 1.2C: Other Gains/(Losses) | |||
Gain/(loss) on movement in provisions | 61 | - | |
(Loss) on disposal/write-off of assets | - | (1) | |
Total other gains/(losses) | 61 | (1) | |
Revenue from Government | |||
Note 1.2D: Revenue from Government | |||
Corporate Commonwealth entity payment item: | |||
Department of Agriculture | 44,615 | 94,200 | |
Department of Agriculture, Water and Environment | 30,629 | - | |
Total revenue from Government | 75,244 | 94,200 |
Accounting Policy | |||
Funding received or receivable from non-corporate Commonwealth entities (appropriated to the Department of Agriculture, Water and Environment as a corporate Commonwealth entity payment item for payment to the Authority) is recognised as Revenue from Government by the Authority unless the funding is in the nature of an equity injection or a loan. |
Financial Position
This section analyses the Authority's assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section.
Note 2.1: Financial Assets
2020 | 2019 | |||
$’000 | $’000 | |||
Note 2.1A: Cash and Cash Equivalents | ||||
Cash on hand | 147,005 | 126,241 | ||
Total cash and cash equivalents | 147,005 | 126,241 | ||
Accounting policy | ||||
Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand and any deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. | ||||
Note 2.1B: Trade and Other Receivables | ||||
Goods and services recievable | ||||
Trade Receivables | 57 | 263 | ||
Net GST receivable from the Australian Taxation Office | 2,768 | 3,174 | ||
Other Receivables | 812 | 1,734 | ||
Total goods and services receivable (gross) | 3,637 | 5,171 | ||
Total trade and other receivables (net) | 3,637 | 5,171 | ||
Credit terms for goods and services were within 30 days (2019: 30 days). | ||||
Accounting policy | ||||
Trade receivables 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. |
Note 2.2: Non-Financial Assets
Note 2.2: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles | |||||||
Reconciliation of the opening and closing balances for 2020 | |||||||
Intangible assets | |||||||
Buildings1 | Other property, plant & equipment | Computer software2 | Data sets | Total | |||
$’000 | $’000 | $’000 | $’000 | $’000 | |||
As at 1 July 2019 | |||||||
Gross book value | 5,083 | 2,389 | 7,392 | 1,159 | 16,023 | ||
Accumulated depreciation, amortisation and impairment | (719) | (751) | (7,093) | (874) | (9,437) | ||
Total as at 1 July 2019 | 4,364 | 1,638 | 299 | 285 | 6,586 | ||
Transfer of finance lease asset to right of use assets: | |||||||
Gross book value | - | (167) | - | - | (167) | ||
Accumulated depreciation | - | 56 | - | - | 56 | ||
Recognition of right of use assets on initial application of AASB 16 | 16,341 | 212 | - | - | 16,553 | ||
Adjusted total as at 1 July 2019 | 20,705 | 1,739 | 299 | 285 | 23,028 | ||
Additions | |||||||
Purchased | 1,998 | 521 | 311 | 749 | 3,579 | ||
Internally developed | - | - | - | - | |||
Right-of-use assets | 2,202 | 160 | - | - | 2,362 | ||
Depreciation and amortisation | (701) | (569) | (229) | (35) | (1,534) | ||
Depreciation on right-of-use assets | (2,459) | (124) | - | - | (2,583) | ||
Other movements | |||||||
Disposals (Net Book Value) | - | - | - | - | - | ||
Total as at 30 June 2020 | 21,745 | 1,727 | 381 | 999 | 24,852 | ||
Total as at 30 June 2020 represented by | |||||||
Gross book value | 25,601 | 3,115 | 6,982 | 1,908 | 37,606 | ||
Accumulated depreciation, amortisation and impairment | (3,856) | (1,388) | (6,601) | (909) | (12,754) | ||
Total as at 30 June 2020 | 21,745 | 1,727 | 381 | 999 | 24,852 | ||
Total intangible assets | 1,380 | ||||||
Carrying amount of right-of-use assets included in the above total | 16,084 | 248 | - | - | 16,332 | ||
1 This asset class has been renamed from 'Leasehold improvements' to 'Buildings' in order to incorporate Lease Right of Use Buildings recognised upon initial application of AASB 16 Leases. | |||||||
2 The carrying amount of computer software in-use includes purchased and internally developed software. | |||||||
There is no commitment or expectation to dispose or sell any leasehold improvement, other property, plant & equipment or intangible assets within the next 12 months. | |||||||
There is a capital commitment value of $226,000 expected within the next 12 months (2019: $12,000). |
Accounting policy | |||
Acquisition of Assets | |||
Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate. | |||
Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring. | |||
Asset Recognition Threshold | |||
Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total). | |||
Lease Right of Use (ROU) Assets | |||
Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. These assets are accounted for by Commonwealth lessees as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned. | |||
The initial cost of an ROU asset also includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by the Authority where there exists an obligation to restore the property to its original condition. These costs are included in the value of the Authority's ROU assets and leasehold improvements (recognised prior to the adoption of AASB 16) with a corresponding provision for the ‘make good’ recognised. | |||
On initial adoption of AASB 16 the Authority has adjusted the ROU assets at the date of initial application by the amount of any provision for onerous leases recognised immediately before the date of initial application. Following initial application, an impairment review is undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised against any right of use lease asset that is impaired. Lease ROU assets continue to be measured at cost after initial recognition in the Authority's financial statements. | |||
Revaluation | |||
Following initial recognition at cost, property, plant and equipment (excluding ROU assets) is carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure the carrying amounts of assets do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets. | |||
All leasehold improvements and property, plant and equipment assets were reviewed and assessed for fair value in March 2018 by Deloitte Touche and Tohmatsu. | |||
Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. | |||
Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reverse a previous revaluation increment for that class. | |||
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount. | |||
Depreciation | |||
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives using the straight-line method of depreciation. | |||
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. | |||
Depreciation and/or amortisation rates applying to each class of asset are based on the following useful lives: | |||
Asset Class | |||
Computers and IT equipment | 3-7 years | ||
Office equipment | 6-9 years | ||
Leasehold improvements | Lease term | ||
Data sets | 3-20 years | ||
Software applications | 2-4 years | ||
Software licences | Length of licence | ||
The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term. | |||
Impairment | |||
All assets were assessed for indications of impairment at 30 June 2020. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Authority were deprived of the asset, its value in use is taken to be its depreciated replacement cost. | |||
Derecognition | |||
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. | |||
Intangibles | |||
The Authority’s intangibles comprise internally developed software; acquired data-sets for internal use and software licences. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. | |||
Software is amortised on a straight-line basis over its anticipated useful life. All software assets were assessed for indications of impairment as at 30 June 2020. |
Note 2.3: Payables
2020 | 2019 | ||
$’000 | $’000 | ||
Note 2.3A: Suppliers | |||
Trade creditors and accruals | 21,176 | 18,243 | |
Total suppliers | 21,176 | 18,243 | |
Note 2.3B: Other Payables | |||
Wages and salaries | 1,193 | 908 | |
Superannuation | 77 | 41 | |
Lease incentive 1 | - | 3,253 | |
Finance lease liability 1 | - | 114 | |
Prepayments received/unearned income | 639 | 684 | |
Other | - | 688 | |
Total other payables | 1,909 | 5,688 | |
1 The Authority has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117. | |||
Accounting policy | |||
The Authority's financial liabilities consist of trade creditors and accruals. These liabilities are recognised at their nominal amounts, being the amounts at which the Authority expects the liabilities will be settled. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced). | |||
Unearned income represents assets received from another party in advance of the Authority fulfilling its contracted obligations. The Authority releases unearned income to revenue when the services required to be performed have been performed. | |||
Policies in relation to AASB 117: | |||
Lease incentives received under operating leases are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis over the lease term. |
Note 2.4: Leases
2020 | 2019 | ||
$’000 | $’000 | ||
Lease Liabilities | 16,693 | - | |
Total leases | 16,693 | - | |
Total cash outflow for leases for the year ended 30 June 2020 was $2,407,776. | |||
Accounting Policy | |||
Refer Overview section for accounting policy on leases. | |||
Note 2.5: Other Provisions
2020 | 2019 | |||
$’000 | $’000 | |||
Note 2.5: Other Provisions | ||||
Provision for make good | 1,205 | 1,256 | ||
Total other provisions | 1,205 | 1,256 | ||
Provision for restoration | Total | |||
$’000 | $’000 | |||
Carrying amount 1 July 2019 | 1,256 | 1,256 | ||
Unwinding of discount or change in discount rate | 12 | 12 | ||
Amount used on settlement | (150) | (150) | ||
Reversal of prior year provision | (61) | (61) | ||
Additional provisions made | 148 | 148 | ||
Closing balance 30 June 2020 | 1,205 | 1,205 | ||
The Authority currently has 2 (2019: 2) agreements for the leasing of premises which have provisions requiring the Authority to restore the premises at the conclusion of the lease. The Authority has made a provision to reflect the present value of this obligation. |
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.
Note 3.1: Employee Provisions
2020 | 2019 | ||
$’000 | $’000 | ||
Note 3.1: Employee Provisions | |||
Leave | 10,921 | 10,584 | |
Total employee provisions | 10,921 | 10,584 |
Accounting policy | ||
Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits due 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. | ||
Other long-term employee benefits are measured at the present value of the defined benefit obligation at the end of the reporting period. | ||
Leave | ||
The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Authority is estimated to be less than the annual entitlement for sick 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 Authority’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 using the Shorthand method as per the Public Governance, Performance and Accountability (Financial Reporting) Rule (FRR) and Commonwealth Entity Financial Statements Guide. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. | ||
Superannuation | ||
The Authority's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or other employee nominated superannuation funds. | ||
The CSS and PSS are defined benefit schemes for the Australian Government. The remaining funds are defined contribution schemes. | ||
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' superannuation schemes 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 Authority also contributes to a number of complying funds to discharge the Authority’s liability in regard to individual employees and the Superannuation Guarantee (Administration) Act 1992 as well as to facilitate the salary sacrifice options of employees. | ||
The liability for superannuation recognised as at 30 June represents outstanding contributions of reporting period. This is disclosed in Note 2.3B. |
Note 3.2: 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 include the Minister for Agriculture, Water, and the Environment, Authority members, the Chief Executive and Divisional heads within the Authority and any staff member who has acted in one of the divisional head roles for longer than 3 months. Key management personnel remuneration is reported in the table below: | |||
2020 | 2019 | ||
$’000 | $’000 | ||
Short-term employee benefits | 2,086 | 2,090 | |
Other long-term employee benefits | 105 | 88 | |
Post-employment benefits | 302 | 329 | |
Total key management personnel remuneration expenses1 | 2,493 | 2,507 | |
The total number of key management personnel included in the above table is 11 (2019: 12). | |||
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. |
Note 3.3: Related Party Disclosures
Related party relationships: | |||
The Authority is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel (as detailed in Note 3.2), Members of the Ministerial Council, the Living Murray Initiatives & River Management Operations joint ventures and other Australian Government entities. | |||
Transactions with related parties: | |||
Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note. The Authority does not pay any member of the Ministerial Council for the services they provide to the MDBA under the Murray-Darling Basin Agreement. | |||
The following transactions with related parties occurred during the 2020 financial year: | |||
- There were no transactions with related parties in the current year. | |||
There were no transactions with related parties during the 2019 financial year. |
Managing uncertainties
This section analyses how the Authority manages financial risks within its operating environment.
Note 4.1: Contingent Assets and Liabilities
There are no contingent assets or liabilities in current year or prior year. |
Quantifiable Contingencies |
There were no estimated contingent liabilities as at 30 June 2020. |
Unquantifiable Contingencies |
There is one unquantifiable contingency that relates to a claim asserting negligence in relation to the Authority's performance of function under the Water Act 2007 (Cth) and Murray-Darling Basin Agreement. Damages are unquantifiable. The Authority's insurer Comcover has been formally notified of, and has accepted, this claim. |
Under Section 239F of the Water Act 2007, the liabilities of the Murray-Darling Basin Commission (the Commission) became liabilities of the Authority. These pertain to the former Commission. |
This includes any liability, duty or obligation, whether contingent or prospective; but does not include a liability, duty or obligation imposed by: |
an Act; or |
regulations or other subordinate legislation made under an Act; or |
the Murray-Darling Basin Act 1992 of New South Wales; or |
the Murray-Darling Basin Act 1993 of Victoria; or |
the Murray-Darling Basin Act 1996 of Queensland; or |
the Murray-Darling Basin Act 1993 of South Australia; or |
the former Murray-Darling Basin Agreement. |
There were no such contingencies during the financial year (2019: nil). |
Accounting policy |
Contingent 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. |
Note 4.2: Financial Instruments
2020 | 2019 | ||
$'000 | $'000 | ||
Note 4.2: Categories of Financial Instruments | |||
Financial assets measured at amortised cost | |||
Cash and cash equivalents | 147,005 | 126,241 | |
Trade and other receivables | 869 | 1,997 | |
Total financial assets at amortised cost | 147,874 | 128,238 | |
Total financial assets | 147,874 | 128,238 | |
Financial Liabilities | |||
Financial liabilities measured at amortised cost | |||
Trade creditors and accruals | 21,176 | 18,243 | |
Total financial liabilities measured at amortised cost | 21,176 | 18,243 | |
Total financial liabilities | 21,176 | 18,243 |
Accounting policy | ||
Financial Assets | ||
The entity classifies its financial assets in the following categories: a) financial assets at fair value through profit or loss; b) financial assets at fair value through other comprehensive income; and c) financial assets measured at amortised cost. The classification depends on both the entity's business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date. | ||
Financial liabilities | ||
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. | ||
The Authority only holds financial instruments carried at amortised cost. | ||
Financial Assets at Amortised Cost | ||
Financial assets included in this category need to meet two criteria: 1. the financial asset is held in order to collect the contractual cash flows; and 2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount. Amortised cost is determined using the effective interest method. | ||
Effective Interest Method | ||
Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost. | ||
Impairment of Financial Assets | ||
Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12‐month expected credit losses if risk has not increased. The simplified approach for trade and other receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses. A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset. | ||
Financial Liabilities at Amortised Cost | ||
Financial liabilities are recognised and derecognised upon ‘trade date’. Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis. Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced). |
Note 4.3: Fair Value Measurements
Accounting policy | ||
The Authority's assets are held for operational purposes and not held for the purposes of deriving a profit. The current use of all non-financial assets is considered their highest and best use. | ||
The Authority's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There have been no transfers between level 1 and level 2 of the hierarchy during the year. |
Note 4.3: Fair Value Measurements | |||
Fair value measurements | |||
2020 | 2019 | ||
$'000 | $'000 | ||
ASSETS | |||
Assets measured at fair value | |||
Buildings | 21,745 | 4,364 | |
Other property, plant and equipment | 1,727 | 1,638 | |
Total assets measured at fair value | 23,472 | 6,002 | |
Assets measured at other than fair value, but approximate fair value1 | |||
Cash and cash equivalents | 147,005 | 126,241 | |
Trade and other receivables | 3,637 | 5,171 | |
Total assets measured at other than fair value, but approximate fair value | 150,642 | 131,412 | |
Assets measured at cost | |||
Intangibles | 1,380 | 584 | |
Other non-financial assets | 842 | 510 | |
Total assets measured at cost | 2,222 | 1,094 | |
Total assets stated in the Statement of Financial Position | 176,336 | 138,508 | |
LIABILITIES | |||
Liabilities measured at fair value | |||
Provision for restoration | 1,205 | 1,256 | |
Total liabilities measured at fair value | 1,205 | 1,256 | |
Liabilities measured at other than fair value, but approximate fair value2 | |||
Suppliers | 21,176 | 18,243 | |
Other payables | 1,909 | 5,688 | |
Total liabilities measured at other than fair value, but approximate fair value | 23,085 | 23,931 | |
Liabilities measured at cost | |||
Leases liabilities | 16,693 | - | |
Employee provisions | 10,921 | 10,584 | |
Total liabilities measured at cost | 27,614 | 10,584 | |
Total liabilities stated in the Statement of Financial Position | 51,904 | 35,771 | |
1 The Authority did not measure any non-financial assets at fair value on a non-recurring basis as at 30 June 2020 (2019:Nil). | |||
2 These items' carrying amounts equate to their fair values. |
Note 4.4: Aggregate Assets and Liabilities
2020 | 2019 | |||
$'000 | $'000 | |||
Note 4.4: Aggregate Assets and Liabilities | ||||
Assets expected to be recovered in: | ||||
No more than 12 months | 151,440 | 131,844 | ||
More than 12 months | 24,896 | 6,664 | ||
Total Assets | 176,336 | 138,508 | ||
Liabilities expected to settled in: | ||||
No more than 12 months | 29,501 | 23,986 | ||
More than 12 months | 22,403 | 11,785 | ||
Total Liabilities | 51,904 | 35,771 |
Budget Variances
.
Note 5: Explanations of Major Budget Variances
Variances are considered to be ‘major’ if they are core to the Authority's activities and based on the following criteria: the variance between budget and actual is greater than +/- 10% of the original budget for a line item; and the variance between budget and actual is greater than $1,000,000; or an item 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 the Authority's performance. | ||||
The budget is not audited. | ||||
Budget Variance Explanation | Affected statements and line items | |||
The Authority experiences significant fluctuations in its spending against budget due to the complex nature of the joint programs. This complexity reflects a high level of inherent risk associated with capital construction and environmental projects. During 2019-20, there was a minor underspend of supplier spending against budget. This mainly resulted from: - disruption of COVID-19 to the manufacture and delivery of a crane from Germany, for the Maratala vessel, resulting in delay. This has also resulted in the delay of maintenance works on the South Australian Water infrastructure that requires the new crane to undertake the works; and - lower water allocations resulted in less usage for The Living Murray program with an associated reduction in water usage fees. The supplier underspend was partially offset by an increase in investigation and construction works including: - completion of the access staircase at Yarrawonga Weir; - construction of river bank stabilisation works along the Hume to Yarrawonga river reach; - Hume Dam geotechnical investigations to inform the embankment stability analysis and comprehensive risk assessment; and - continued investigations of the Hume Dam irrigation outlets to determine the scope of refurbishment works required. In preparation of the budget, estimates were made between the allocation of expenses between suppliers and grants. Actual expenditure between these two categories were slightly different to the budget. Revenue from contributions from jurisdictions is lower than budgeted amount due to some jurisdictions utilising prior year underspends. | Statement of Comprehensive Income: - Suppliers - Grants - Contribution from Jurisdictions Statement of Financial Position: - Cash and cash equivalents - Suppliers - Other payables Cash Flow Statements: - Net GST received - Suppliers - Grants | |||
On adoption of AASB 16, the Authority recognised right-of-use assets and lease liabilities in relation to leases of office space, IT equipment and motor vehicles, which had previously been classified as operating leases. The Authority adopted a retrospective approach, under which the cumulative effect of initial recognition is recognised in retained earnings as at 1 July 2019. Right of use assets, lease liabilities and deprecation were not included in the original budget. The effects of lease incentive and lease straightlining were recognised as an adjustment to the opening balance of retained earnings. For 2019-20 the Authority was allocated decentralisation capital funding for ICT and Data management. The primary focus initially was to develop strategic plans for the new ICT and data requirements. Following the acceptance of the ICT strategy in mid-2019 the Authority commenced a number of design and procurement projects. The Authority is still working on its data strategy which will be complete by late 2020. The commencement of some of the implementation activities were delayed due to market approaches and evaluations resulting in actual expenditure being lower than budgeted for capital spending. | Statement of Comprehensive Income: - Depreciation and amortisation Statement of Financial Position: - Cash and cash equivalents - Buildings - Intangibles - Other payables Cash Flow Statements: - Purchase of property, plant and equipment - Principal payments for lease liabilities | |||
The Authority received funding from a number of MOUs with DAWE during the year which were not in the 2019-20 budget. These include: - Hydrometric Networks and Remote sensing Funding Program - Ecosystem functions - Independent Assessment of Social and Economic Conditions The Hydrometric Networks and Remote sensing Funding Program was established to fund projects that will contribute to the better measurement of water diversions and in-streams flows. A substantial amount of funding under this program was received towards the end of the year which is not yet spent. The joint program underspend over the past few years, the lower than planned capital asset additions and the receipt of MOU funding above has led to an increase in the overall cash balance above that initially budgeted. Despite the increase in bank balances at year end, interest revenue decreased during the year as a result of lower interest rates. | Statement of Comprehensive Income: - Other revenue - Interest Statement of Financial Position: - Cash and cash equivalents Cash Flow Statements: - Other cash received |
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