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Budget variance commentary
The following provides a comparison against original Budget as presented in the 2019-20 Portfolio Budget Statements to the outcome for 2019-20.
Explanations of major variances are provided below.
The original Budget estimates presented in these accounts were for NQLIRA. On 5 December 2019, the Agency was renamed the National Drought and North Queensland Flood Response and Recovery Agency, to reflect the expanded remit of the agency to include national drought. Increased funding was received to support the expansion of the Agency’s functions and responsibilities.
The operating surplus of $10.2 million for the Agency is attributed mainly to the progressive and measured establishment of the Agency, and constraints placed on the Agency due to COVID-19 in areas such as travel and on the ground community engagement; leveraging existing Australian capabilities such as Services Australia Recovery Connect and timings associated with the transition of capabilities from other agencies, such as the National Drought Map have also attributed to the Agency’s surplus.
Statement of Comprehensive Income
Revenue from Government was $10.4 million higher than original Budget as a result of additional funding for the expanded Agency remit ($9.2 million) and the transfer of $1.2 million for the National Drought Map.
Revenue from Government
Resources received free of charge (services and assets) are higher than original Budget, which assumed nil received. During 2019-20, the Agency received a number of resources received free of charge, including:
- assets from the Department of Prime Minister and Cabinet funded from residual 2018‑19 funds for the establishment of NQLIRA;
- receipt of leasehold improvements for already established office premises; and
- the provision of audit services from the Australian National Audit Office provided at no cost.
Resource received free of charge
Own source income
Employee benefits were higher than original Budget by $0.6 million as a result of additional employees engaged to meet the expanded remit.
Depreciation was more than Budgeted by $0.4 million. This was mainly due to the accounting changes for AASB 16 Leases not being included in original Budget.
Statement of Financial Position
Appropriation Receivable was $12.5 million higher than original Budget due to the additional funding provided during the year not being fully utilised, the progressive and measured establishment of the Agency, coupled with constraints placed on the Agency due to COVID-19.
Lease liabilities and leased assets (included in Property Plant and Equipment), were not included in original Budget.
Property, plant and equipment
Payables were higher than original Budget due to timing differences with unpaid items at 30 June (payments that were outstanding included secondees, shared services and leave transfers).
Salary and Superannuation Payable
Employee provisions were lower than original Budget due to the assumptions used at original Budget.
Cash Flow Statement
Purchases of assets and appropriations for financing activities were lower than original Budget as a result of contributions of assets (leasehold improvements and assets contributed by PM&C from residual 2018‑19 Agency establishment funding) to the entity negating the need to purchase assets.
Purchases of assets
Departmental capital budget