Financial Statements 2020-2021
OFFICE OF PARLIAMENTARY COUNSEL |
CONTENTS |
Primary Financial Statements |
Statement of Comprehensive Income |
Notes to and forming part of the Financial Statements Overview |
Budget Variance Explanations |
1: Financial Performance |
1.1 Expenses |
1.2 Income |
2: Financial Position |
2.1 Financial Assets |
2.2 Non-Financial Assets |
2.3 Payables |
2.4 Interest Bearing Liabilities |
3: Funding |
3.1 Appropriations |
3.2 Net Cash Appropriation Arrangements |
4: People and Relationships |
4.1 Employee Provisions |
4.2 Key Management Personnel Remuneration |
4.3 Related Party Disclosures |
5: Managing Uncertainties |
5.1 Financial Instruments |
5.2 Fair Value Measurement |
6: Other information |
6.1 Aggregate Assets and Liabilities |
Auditor-General's Report on Financial Statements
Certification of Financial Statements
Contents
Contents
Auditor-General’s Report on Financial Statements
Certification of Financial Statements
Contents
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Cash Flow Statement
Notes to and forming part of the Financial Statements
Statement of Comprehensive Income
OFFICE OF PARLIAMENTARY COUNSEL STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2021 | ||||
2021 | 2020 | Original Budget | ||
Notes | $’000 | $’000 | $’000 | |
NET COST OF SERVICES | ||||
EXPENSES | ||||
Employee benefits | 17,907 | 16,759 | 18,461 | |
Supplier expenses | 3,069 | 3,866 | 4,210 | |
Write-down and impairment of assets | 11 | - | - | |
Finance Costs | 64 | 75 | 64 | |
Depreciation and amortisation | 2,153 | 2,102 | 2,277 | |
Total expenses | 23,203 | 22,802 | 25,012 | |
LESS: | ||||
Own-source income | ||||
Own-source revenue | ||||
Revenue from contracts with customers | 6,704 | 6,593 | 6,198 | |
Other revenue | 68 | 68 | 64 | |
Other gains | 4 | - | - | |
Total own-source revenue | 6,776 | 6,661 | 6,262 | |
Total own-source income | 6,776 | 6,661 | 6,262 | |
Net cost of services | (16,427) | (16,141) | (18,750) | |
Revenue from Government | 17,788 | 17,298 | 17,788 | |
Surplus / (Deficit) | 1,361 | 1,157 | (962) | |
OTHER COMPREHENSIVE INCOME | ||||
Changes in asset revaluation surplus | (313) | - | - | |
Total comprehensive income / (loss) | 1,048 | 1,157 | (962) | |
The above statement should be read in conjunction with the accompanying notes.
Statement of Financial Position
OFFICE OF PARLIAMENTARY COUNSEL STATEMENT OF FINANCIAL POSITION as at 30 June 2021 | ||||
2021 | 2020 | Original Budget | ||
Notes | $’000 | $’000 | $’000 | |
ASSETS | ||||
Financial Assets | ||||
Cash and cash equivalents | 1,893 | 772 | (10) | |
Trade and other receivables | 20,753 | 21,284 | 21,492 | |
Total financial assets | 22,647 | 22,056 | 21,482 | |
Non-Financial Assets | ||||
Buildings | 7,688 | 9,345 | 7,740 | |
Plant and equipment | 865 | 982 | 850 | |
Computer software | 111 | 120 | 4,260 | |
Work in progress | 5,973 | 3,988 | 337 | |
Prepayments | 310 | 223 | 318 | |
Total non-financial assets | 14,947 | 14,658 | 13,505 | |
Total assets | 37,593 | 36,714 | 34,987 | |
LIABILITIES | ||||
Payables | ||||
Suppliers | 146 | 190 | 191 | |
Employee benefits | 366 | 337 | 336 | |
Unearned income | 4,238 | 3,870 | 3,870 | |
Total payables | 4,750 | 4,397 | 4,397 | |
Interest bearing liabilities | ||||
Leases | 5,631 | 6,802 | 5,637 | |
Total interest bearing liabilities | 5,631 | 6,802 | 5,637 | |
Provisions | ||||
Employee provisions | 7,391 | 7,141 | 7,141 | |
Total provisions | 7,391 | 7,141 | 7,141 | |
Total Liabilities | 17,772 | 18,340 | 17,175 | |
Net Assets | 19,821 | 18,374 | 17,812 | |
EQUITY | ||||
Parent Entity Interest | ||||
Contributed equity | 8,601 | 8,202 | 8,601 | |
Reserves | 144 | 457 | 457 | |
Retained surplus | 11,076 | 9,715 | 8,753 | |
Total Equity | 19,821 | 18,374 | 17,812 | |
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
Statement of Changes in Equity
OFFICE OF PARLIAMENTARY COUNSEL STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2021 | |||||
2021 | 2020 | Original Budget | |||
Notes | $’000 | $’000 | $’000 | ||
CONTRIBUTED EQUITY | |||||
Opening balance | |||||
Balance carried forward from previous period | 8,202 | 7,902 | 8,202 | ||
Transactions with owners | |||||
Contributions by owners | |||||
Departmental capital budget | 399 | 300 | 399 | ||
Total transactions with owners | 399 | 300 | 399 | ||
Closing balance as at 30 June | 8,601 | 8,202 | 8,601 | ||
RETAINED EARNINGS | |||||
Opening balance | |||||
Balance carried forward from previous period | 9,715 | 8,558 | 9,715 | ||
Comprehensive income | |||||
Surplus/(Deficit) for the period | 1,361 | 1,157 | (962) | ||
Closing balance as at 30 June | 11,076 | 9,715 | 8,753 | ||
ASSET REVALUATION RESERVE | |||||
Opening balance | |||||
Balance carried forward from previous period | 457 | 457 | 457 | ||
Other comprehensive income | (313) | - | - | ||
Closing balance as at 30 June | 144 | 457 | 457 | ||
TOTAL EQUITY | |||||
Opening balance | |||||
Balance carried forward from previous period | 18,374 | 16,917 | 18,374 | ||
Comprehensive income | |||||
Surplus/(Deficit) for the period | 1,361 | 1,157 | (962) | ||
Other comprehensive income | (313) | - | - | ||
Total comprehensive income | 1,048 | 1,157 | (962) | ||
Transactions with owners | |||||
Contributions by owners | |||||
Departmental capital budget | 399 | 300 | 399 | ||
Total transactions with owners | 399 | 300 | 399 | ||
Closing balance as at 30 June | 19,821 | 18,374 | 17,812 | ||
The above statement should be read in conjunction with the accompanying notes.
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. |
Cash Flow Statement
OFFICE OF PARLIAMENTARY COUNSEL CASH FLOW STATEMEN for the period ended 30 June 2021 | ||||
2021 | 2020 | Original Budget | ||
Notes | $’000 | $’000 | $’000 | |
OPERATING ACTIVITIES | ||||
Cash received | ||||
Appropriations | 26,400 | 23,850 | 24,061 | |
Sale of goods and rendering of services | 7,250 | 5,945 | 6,364 | |
GST received | 614 | 607 | 166 | |
Other | 3 | 3 | - | |
Total cash received | 34,267 | 30,405 | 30,591 | |
Cash used | ||||
Employees | 17,627 | 16,380 | 18,461 | |
Suppliers | 3,763 | 4,625 | 4,630 | |
Section 74 receipts transferred to the Official Public Account | 8,032 | 7,902 | 6,480 | |
Interest payments on lease liabilities | 64 | 75 | 64 | |
GST Paid | 214 | 151 | 389 | |
Total cash used | 29,700 | 29,133 | 30,024 | |
Net cash from operating activities | 4,568 | 1,272 | 567 | |
INVESTING ACTIVITIES | ||||
Cash received | ||||
Net proceeds from sale of assets | 4 | - | - | |
Total cash received | 4 | - | - | |
Cash used | ||||
Purchase of leasehold improvements, plant and equipment | 630 | 503 | - | |
Purchase of computer software | 2,049 | 1,538 | 1,030 | |
Total cash used | 2,679 | 2,041 | 1,030 | |
Net cash/ (used by) investing activities | (2,675) | (2,041) | (1,030) | |
FINANCING ACTIVITIES | ||||
Cash received | ||||
Contributed equity | 399 | 300 | 399 | |
Total cash received | 399 | 300 | 399 | |
Cash used | ||||
Principal payments of lease liabilities | 1,171 | 1,107 | 1,165 | |
Total cash used | 1,171 | 1,107 | 1,165 | |
Net cash/ (used by) financing activities | (772) | (807) | (766) | |
Net increase / (decrease) in cash held | 1,121 | (1,576) | - | |
Cash and cash equivalents at the beginning of the reporting period | 772 | 2,348 | 772 | |
Cash and cash equivalents at the end of the reporting period | 1,893 | 772 | (10) | |
The above statement should be read in conjunction with the accompanying notes.
Notes to and Forming Part of the Financial Statements for the year ended 30 June 2021
OVERVIEW
Background
Office of Parliamentary Counsel (OPC) delivers drafting and advisory services for Bills and subordinate legislation, prepares compilations of laws as amended, and registers laws and instruments on behalf of more than 70 Commonwealth entities.
Under the Legal Services Directions, certain drafting work is tied to OPC. Agencies must use OPC's drafting services for all Government Bills and regulations, Ordinances and regulations of external Territories and Jervis Bay Territory, and other legislative instruments made or approved by the Governor-General. OPC is budget funded for this tied work.
OPC delivers legislative publishing services to, and on behalf of, the whole of the Australian Government, through the Federal Register of Legislation (the Register).
OPC recovers the cost of core services from Government entities that publish legislation on the Register through annual fees.
OPC provides drafting services for legislative instruments that are not tied, and other publishing services, on a fee for service basis. The demand for these services is client driven and therefore difficult to budget accurately.
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.
The Financial Statements have been prepared in accordance with:
- Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and
- 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 are in accordance with the historical cost convention, except for certain assets 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 unless otherwise specified.
Leases
Lease for office accommodation and car parking
On adoption of AASB 16, OPC recognised a right-of-use asset and a lease liability in relation to the lease of office space, which had previously been classified as an operating lease.
The lease liability was measured at the present value of the remaining lease payments, discounted using OPC’s incremental borrowing rate as at 1 July 2019. OPC’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 1.02%.
The right-of-use asset for the office space was measured at an amount equal to the lease liability, adjusted by the amount of any prepaid lease payments.
Licence agreement for offsite parking
On adoption of AASB 16, this arrangement did not meet the definition of a lease under AASB 16, which had previously been classified as operating lease.
OPC has no low value assets or short-term leases with a lease term of 12 months or less.
New Australian Accounting Standards
All new standards, any amendments to standards, and interpretations that have been issued and are applicable to the current reporting period, have been reviewed and have no material effect on OPC’s Financial Statements.
Contingent Liabilities and Contingent Assets
OPC has no quantifiable or unquantifiable contingent assets or liabilities as at 30 June 2021. OPC had no quantifiable or unquantifiable contingent assets or liabilities as at 30 June 2020.
Taxation
OPC is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and Goods and Services Tax (GST).
Events after the Reporting Date
There is no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of the entity.
BUDGET VARIANCE EXPLANATIONS
The following is an explanation of the major variances between the original budget presented in the 2020-21 Portfolio Budget Statements and the 2020-21 final outcome, as presented in accordance with Australian Accounting Standards for OPC.
Variances are considered to be major if the variance is greater than 10% between budget and actual.
Statement of Comprehensive Income
Suppliers
Actual suppliers expense is lower than budget, mainly due to a decrease in consultants, training and travel. Some anticipated projects were delayed, reducing anticipated expenditure in consultants. Training and travel expense is lower than budget due to online delivery of courses as a result of COVID-19.
Statement of Financial Position
Cash and cash equivalents
Actual cash is higher than budget, due to higher than expected early receipt of 2021-22 annual fees.
Computer software
Actual computer software in use is lower than budget, due to delays in the finalisation of the redevelopment of the new Register. This is consistent with actual work in progress, which is higher than budget.
Work in progress
Actual work in progress is higher than budget, due to the redevelopment of the new Register.
Other payables- Unearned income
Actual unearned income is higher than budget. The 2021-22 annual fees, invoiced during 2020-21, are included in unearned income and were higher than expected. During 2019-20, due to COVID-19, OPC decided to absorb some of the costs of the Federal Register and did not increase fees for the 2020-21 year. A management decision was made in 2020-21 to no longer absorb costs, and to pass on the full cost of the register for 2021-22.
Cash Flow Statement
Operating Activities - Appropriations
Actual appropriation is higher than budget, due to higher than expected Section 74 cash received for early payment of the Register 2021-22 annual fees.
Operating Activities - Sale of goods and rendering of services
Actual sale of goods and rendering of services is higher than budget, mainly due to an increase in, and early receipt of payment, of 2021-22 annual fees.
Operating Activities - GST received
Actual GST received is higher than budget, due to higher than expected capitalised contractor costs in work in progress for the redevelopment of the Register.
Operating Activities - Suppliers
Actual suppliers is lower than budget, due to lower than expected contractor, travel and training costs. Some anticipated projects were delayed, reducing anticipated expenditure in consultants. Training and travel expense is lower than budget due to online delivery of courses as a result of COVID-19.
Operating Activities - Section 74 receipts transferred to the Official Public Account
Actual Section 74 receipts is higher than budget, due to higher than expected cash received for the Register 2021-22 annual fees.
Investing Activities - Purchase of leasehold improvements, and plant and equipment
Actual purchase of leasehold improvements, and plant and equipment, is higher than budget, due to minor fit-out works to OPC’s office.
Investing Activities - Computer software
Actual computer software work in progress is higher than budget, due to the development of the Register.
1. FINANCIAL PERFORMANCE
1.1: Expenses | |||
2021 | 2020 | ||
$’000 | $’000 | ||
1.1A: Employee benefits | |||
Wages and salaries | 13,038 | 12,695 | |
Superannuation: | |||
Defined contribution plans | 945 | 855 | |
Defined benefit plans | 1,584 | 1,632 | |
Leave and other entitlements | 2,229 | 1,577 | |
Separation and redundancies | 111 | - | |
Total employee benefits | 17,907 | 16,759 |
Accounting Policy Accounting policies for employee related expenses are contained in the People and Relationships section. |
2021 | 2020 | ||
$’000 | $’000 | ||
1.1B: Supplier benefits | |||
Goods and services supplied or rendered | |||
IT & telecommunications | 1,277 | 1,406 | |
Printing & digitisation | 612 | 666 | |
Consultancies / Non-consultancies | 341 | 711 | |
Human resources | 213 | 154 | |
Other | 189 | 313 | |
Property | 183 | 180 | |
Library | 116 | 123 | |
Staff training & development | 92 | 265 | |
Total goods and services supplied or rendered1 | 3,023 | 3,818 | |
Goods supplied | 74 | 87 | |
Services rendered | 2,950 | 3,731 | |
Total goods and services supplied or rendered | 3,023 | 3,818 | |
Other supplier expenses | |||
Workers compensation expenses | 46 | 48 | |
Total other supplier expenses | 46 | 48 | |
Total supplier expenses | 3,069 | 3,866 | |
1 2020 comparative figures for Total goods and services supplied or rendered has been adjusted for the following: Consultancies/ non-consultancies has increased by $711k, Human resources has reduced by $407k, and Accounting/ audit services has reduced by $304k. These figures were restated to reflect that these services were related to consultancies and/or non-consultancies.
1. FINANCIAL PERFORMANCE |
1.1 Expenses |
1.1C: Write-Down and Impairment of Assets | |||
Write-down of assets1 | 11 | - | |
Total Write-down and impairment of other assets | 11 | - |
1Write-down and impairment of PP&E assets.
1.1D: Finance costs | |||
Interest on lease liabilities | 64 | 75 | |
Total finance costs | 64 | 75 |
The above lease disclosures should be read in conjunction with Note 2.4A.
Accounting Policy All borrowing costs are expensed as incurred. |
1.2: Income | |||
2021 | 2020 | ||
Own-Source Revenue | $’000 | $’000 | |
1.2A: Revenue from Contracts with Customers | |||
Sale of goods | 1 | 31 | |
Rendering of services | 6,703 | 6,562 | |
Total sale of goods and rendering of services | 6,704 | 6,593 | |
Disaggregation of revenue from contracts with customers | |||
3,859 | 3,846 | ||
1,508 | 1,401 | ||
708 | 691 | ||
Secondment | 230 | 246 | |
Compilation preparation | 198 | 216 | |
Courses | 199 | 163 | |
Print on Demand | - | 30 | |
Other publications | 1 | - | |
6,704 | 6,593 | ||
Type of customer: | |||
Australian Government entities (related parties) | 6,704 | 6,593 | |
6,704 | 6,593 | ||
Timing of transfer of goods and services: | |||
Over time | 5,795 | 5,709 | |
Point in time | 909 | 884 | |
6,704 | 6,593 |
Accounting Policy Revenue from the sale of goods is recognised when control has been transferred to the buyer. All contracts are in scope of AASB15, and the performance obligations are sufficiently specific to enable OPC to determine when they have been satisfied. The following is a description of principal activities from which OPC generates its revenue. Registration annual fees The annual fee is for the management and registration of legislative documents on the Federal Register of Legislation. Clients are invoiced in advance. OPC recognises a liability, and allocates the revenue amount evenly over a 12 month period. Instrument drafting, editorial services and compilation preparation Revenue is recognised for the actual hours a drafter, editor, or complier has worked. Time spent is tracked on a per job basis. Revenue is recognised on a monthly basis, or when invoices are issued for work completed to date. Express and peak fees Revenue is recognised once the registration has been completed. Secondment Secondment revenue is invoiced in arrears and recognised over the period of the secondment. Drafting training courses Participants are invoiced in advance. OPC recognises revenue once the course has been delivered. The transaction price is the total amount of consideration to which OPC expects to be entitled, in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable. |
1. FINANCIAL PERFORMANCE | ||||||||
1.2: Income | ||||||||
2021 | 2020 | |||||||
1.2B: Other revenue | $’000 | $’000 | ||||||
Reimbursement of expenses | 3 | 3 | ||||||
Resources received free of charge | ||||||||
Remuneration of auditors (ANAO) | 65 | 65 | ||||||
Total other revenue | 68 | 68 | ||||||
1.2C: Other gains | ||||||||
Gain on disposal | 4 | - | ||||||
Total other gains | 4 | - | ||||||
Accounting Policy Resources received free of charge Resources received free of charge are recorded as either revenue or gains depending on their nature. Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined, and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. |
2021 | 2020 | ||
$’000 | $’000 | ||
1.2D: Revenue from Government | |||
Appropriations: | |||
Departmental appropriation | 17,788 | 17,298 | |
Total revenue from Government | 17,788 | 17,298 |
Accounting Policy Revenue from Government Amounts appropriated to departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when OPC gains control of the appropriation. |
1.2E: Unsatisfied obligations | |||
OPC expects to recognise as income any liability for unsatisfied obligations associated with revenue from contracts with customers within the following periods: 1 July 2021 to 30 June 2022. | |||
2. FINANCIAL POSITION
2.1: Financial Assets | ||||
2021 | 2020 | |||
$’000 | $’000 | |||
2.1A: Trade and other receivables | ||||
Goods and services receivable | ||||
Goods and services1 | 2,410 | 2,452 | ||
Contract assets2 | 130 | 85 | ||
GST receivable from the Australian Taxation Office | 158 | 112 | ||
Total goods and services receivable | 2,698 | 2,649 | ||
Appropriations receivable | ||||
Appropriations receivable | 18,055 | 18,635 | ||
Total appropriations receivable | 18,055 | 18,635 | ||
Total trade and other receivables | 20,753 | 21,284 |
1 Credit terms are 30 days.
2 Associated with instrument drafting and compilation preparation.
Accounting Policy Goods and services receivable Goods and services, and contract assets, are held for the purpose of collecting contractual cash flows. Receivables for goods and services are recognised at the nominal amounts due, less any impairment allowance. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable. |
2. FINANCIAL POSITION | |||||
2.2: Non-Financial Assets | |||||
2.2A: Reconciliation of opening and closing balances of property, plant and equipment, and computer software 2021 | |||||
Buildings1 | Plant & Equipment | Internally developed software | Computer software purchased | Total | |
$’000 | $’000 | $’000 | $’000 | $’000 | |
As at 1 July 2020 | |||||
Gross book value | 11,140 | 1,391 | 4,477 | 238 | 17,246 |
Accumulated depreciation and impairment | (1,795) | (409) | (4,418) | (177) | (6,799) |
Total as at 1 July 2020 | 9,345 | 982 | 59 | 61 | 10,447 |
Additions: | |||||
By purchase | 363 | 275 | - | 59 | 697 |
Revaluations and impairments recognised in other comprehensive income | (218) | (95) | - | - | (313) |
Depreciation and amortisation | (523) | (282) | (34) | (34) | (873) |
Depreciation on right-of-use assets | (1,279) | - | - | - | (1,279) |
Disposals: | - | - | - | - | - |
Other disposals | - | (15) | - | - | (15) |
Total as at 30 June 2021 | 7,688 | 865 | 25 | 86 | 8,664 |
Total as at 30 June 2021 represented by: | |||||
Gross book value | 10,247 | 866 | 4,477 | 294 | 15,884 |
Accumulated depreciation and impairment | (2,559) | (1) | (4,452) | (208) | (7,221) |
Total as at 30 June 2021 | 7,688 | 865 | 25 | 86 | 8,664 |
Carrying amount of right-of-use assets as at 30 June 2021 | 5,438 | - | - | - | 5,438 |
Work in Progress | |||||
As at 1 July 2020 | |||||
Gross book value | 5 | - | 3,983 | - | 3,988 |
Additions: | |||||
By purchase | - | - | 1,990 | - | 1,990 |
Total as at 30 June 2021 | - | - | 5,973 | - | 5,973 |
1 Includes leasehold improvements and a leased right of use asset.
2.2: Non-Financial Assets |
Accounting Policy 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. Asset Recognition Threshold Purchases of leasehold improvements, plant and equipment, and computer software, 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). Leased 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. Leased ROU assets continue to be measured at cost after initial recognition in Commonwealth agency, General Government Sector and Whole of Government financial statements. Derecognition All items of leasehold improvements, plant and equipment, and computer software, are derecognised upon disposal, or when no further future economic benefits are expected from their use. Revaluations See Accounting Policy in Note 5.2A. Impairment All leasehold improvements, plant and equipment, and computer software were assessed for impairment at 30 June 2021. 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. No indicators of impairment were identified for leasehold improvements, plant and equipment or computer software. No indicators of impairment were found for prepayments. Leasehold improvements, and plant and equipment Depreciation Depreciable leasehold improvements, and plant and equipment assets, are written-off to their estimated residual values over their estimated useful lives to OPC using, in all cases, 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 rates applying to each class of depreciable asset are based on the following useful lives: 2021 2020 Leasehold improvements Lease term Lease term Plant and equipment 3 to 25 years 3 to 25 years Leased ROU assets The depreciation rates for leased ROU assets are based on the commencement date to the end of the lease term. Computer software Computer software are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation Computer software are amortised on a straight-line basis over their anticipated useful life. The useful life of OPC’s computer software are as follows: 2021 2020 Purchased software 4 to 5 years 4 to 5 years Internally generated software 10 years 10 years |
2. FINANCIAL POSITION | |||
2.2: Non-Financial Asset | |||
2021 | 2020 | ||
$’000 | $’000 | ||
2.2B: Prepayments | |||
Prepayments | 310 | 223 | |
Total prepayments | 310 | 223 | |
2.3: Payables | |||
2021 | 2020 | ||
$’000 | $’000 | ||
2.3A: Suppliers | |||
Trade creditors and accruals1 | 146 | 190 | |
Total suppliers | 146 | 190 |
1 Settlement is usually made in 20 days.
2021 | 2020 | ||
$’000 | $’000 | ||
2.3B Employee benefits | |||
Salaries and wages | 318 | 293 | |
Salary packaging | 30 | 29 | |
FBT payable | 18 | 15 | |
Total employee benefits | 366 | 337 |
Accounting Policy Accounting policies for employee payables are contained in the People and Relationships section. |
2021 | 2020 | ||
$’000 | $’000 | ||
2.3C: Unearned Income | |||
Unearned income1 | 4,238 | 3,870 | |
Total unearned income | 4,238 | 3,870 |
1 The Parliamentary Counsel Act 1970 provides OPC with statutory authority to charge fees.
2. FINANCIAL POSITION | |||
2.4 Interest Bearing Liabilities | |||
2021 | 2020 | ||
$’000 | $’000 | ||
2.4A: Leases | |||
Lease Liabilities - Buildings | 5,631 | 6,802 | |
Total leases | 5,631 | 6,802 | |
Total cash outflow for leases for the year ended 30 June 2021 was $1.234 million. | |||
Accounting Policy Refer to Overview section for accounting policy on leases. |
3. FUNDING
3.1: Appropriations | |||
2021 | 2020 | ||
3.1A: Annual Departmental Appropriations ('Recoverable GST exclusive') | |||
Ordinary annual services | 17,788 | 17,298 | |
Receipts retained under PGPA Act - Section 741 | 8,032 | 7,902 | |
Departmental capital budget3 | 399 | 300 | |
Total appropriation | 26,219 | 25,500 | |
Appropriation applied | (25,102) | (23,845) | |
Variance 2 | 1,117 | 1,655 | |
1 PGPA Act - Section 74 receipts of amounts by non-corporate Commonwealth entities. This amount includes fees charges on a cost recovery basis for the Federal Register. | |||
2 The variance is mainly due to the surplus for the year after adding back non-cost recovered depreciation, offset by the use of prior year departmental appropriation for the Federal Register redevelopment. | |||
3 Departmental capital budgets are appropriated through Appropriation Acts (No. 1, 3). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. | |||
Amounts appropriated which are designated as 'equity injections' for a year (less any formal reductions) and Departmental Capital Budgets (DCB) are recognised directly in contributed equity in that year. | |||
2021 | 2020 | ||
3.1B: Unspent Annual Departmental Appropriations ('Recoverable GST exclusive') | |||
Appropriation Act (No. 1) 2019-20 | - | 11,303 | |
Appropriation Act (No. 3) 2019-20 | - | 300 | |
Supply Act (No. 1) 2019-20 | - | 7,032 | |
Supply Act (No. 1) 2020-21 | 6,129 | - | |
Appropriation Act (No. 1) 2020-21 | 11,926 | - | |
Cash at bank | 1,893 | 772 | |
Total | 19,948 | 19,407 | |
3. FUNDING | |||
3.2: Net Cash Appropriation Arrangements | |||
2021 | 2020 | ||
$’000 | $’000 | ||
Total comprehensive income/(loss) - as per the Statement of Comprehensive Income | 1,361 | 1,157 | |
Plus: depreciation/amortisation of assets funded through appropriations (departmental capital budget funding and/or equity injections) | 873 | 823 | |
Less: cost recovered amortisation1 | (33) | (76) | |
Plus: depreciation of right-of-use assets | 1,279 | 1,279 | |
Less: lease principal repayments | (1,171) | (1,100) | |
Net Cash Operating Surplus/ (Deficit) | 2,309 | 2,083 | |
In 2010-11, the Government introduced net cash appropriation arrangements where revenue appropriations for depreciation/amortisation expenses ceased. OPC receives a separate Departmental Capital Budget (DCB) provided through Departmental appropriation. DCBs are appropriated in the period when cash payment for capital expenditure is required.
The inclusion of amortisation expenses related to ROU leased assets, and the lease liability principal repayment amount, reflects the cash impact on implementation of AASB 16 Leases. It does not directly reflect a change in appropriation arrangements.
1Amortisation of the Federal Register is cost recovered through the Annual Fees.
4. PEOPLE AND RELATIONSHIPS
4.1: Employee Provisions | ||||
2021 | 2020 | |||
$’000 | $’000 | |||
4.1A: Employee provisions | ||||
Leave | 7,391 | 7,141 | ||
Total employee provisions | 7,391 | 7,141 |
Accounting Policy Employee provisions Liabilities for ‘short-term employee benefits’, and termination benefits expected within twelve months of the end of the 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. Long-term employee benefits are measured at total net 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 OPC 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 OPC'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 by reference to paragraph 24(a) of the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 using the shorthand method. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. Separation and Redundancy Provision is made for separation and redundancy benefit payments. OPC recognises a provision for termination when it has developed a detailed formal plan for terminations, and has informed those employees affected that it will carry out the terminations. Superannuation Staff of OPC are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap), or a complying fund chosen by the employee. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and other 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. OPC makes employer contributions to the employees’ defined benefit superannuation scheme, at rates determined by an actuary to be sufficient to meet the current cost to the Government. OPC accounts for the contributions as if they were contributions to defined contribution plans. The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year. |
4. PEOPLE AND RELATIONSHIPS | |||||
4.2: 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. OPC has determined the Key Management Personnel to be the First Parliamentary Counsel, the two Second Parliamentary Counsel, the General Manager Corporate Services and Chief Information Officer, the General Manager Publications, and three SES Band 2 Drafters. These SES drafters were part of the Key Management Personnel for a period of more than three months. Key Management Personnel remuneration is reported in the table below:
2021 | 2020 | ||
$’000 | $’000 | ||
Short-term employee benefits1 | 2,138 | 2,012 | |
Post- employment benefits2 | 291 | 336 | |
Other long-term employee benefits3 | 7 | 75 | |
Total key management personnel remuneration expenses | 2,436 | 2,423 |
The total number of Key Management Personnel that are included in the above table are 8 full-time employees (2020: 9 full time employees).
¹Includes salary, performance bonuses, motor vehicle allowances, annual leave and SES experience loading.
2Includes superannuation.
3Includes long service leave.
4. PEOPLE AND RELATIONSHIPS |
4.3 Related Party Disclosures |
Related party relationships: |
OPC is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel, including the Portfolio Minister, 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. |
Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions to be separately disclosed. |
5. MANAGING UNCERTAINTIES
5.1: Financial Instruments | ||||
Notes | 2021 | 2020 | ||
$’000 | $’000 | |||
5.1A: Categories of financial instruments | ||||
Financial Assets | ||||
Financial Assets at amortised cost | ||||
1,893 | 772 | |||
Goods and services receivables | 2,410 | 2,453 | ||
Contract assets | 130 | 85 | ||
Total financial asset at amortised cost | 4,433 | 3,310 | ||
Total financial assets | 4,433 | 3,310 | ||
Financial Liabilities | ||||
Financial Liabilities measured at amortised cost | ||||
Payables - suppliers | 2.3A | 146 | 190 | |
Total financial liabilities measured at amortised cost | 146 | 190 | ||
Total financial liabilities | 146 | 190 | ||
Accounting Policy Financial assets Goods and services receivables, and contract assets, are held in order to collect the contractual cash flows. Goods and services receivables are recorded at face value less any impairment. They are recognised when OPC becomes party to a contract, and has a legal right to receive cash, and are derecognised on payment. Financial assets at amortised cost are assessed for impairment at the end of each reporting period. Allowances are made when collectability of the debt is no longer probable. Comparatives have not been restated on initial application. Financial liabilities Suppliers are recognised at amortised cost to the extent that the goods or services have been received, irrespective of having been invoiced. Suppliers are derecognised on payment. The lease is recognised at fair value, net of transaction costs. This liability is subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on an effective interest basis. The net fair values of the financial assets and liabilities are at their carrying amounts. OPC derived no interest income from financial assets in either the current or prior year. |
5. MANAGING UNCERTAINTIES | |||
5.2: Fair Value Measurement | |||
5.2A: Fair Value Measurement | |||
2021 | 2020 | ||
Non-financial assets1 | |||
Plant and equipment | |||
Recurring | 866 | 982 | |
Leasehold improvements | |||
Recurring | 2,250 | 2,628 | |
Total fair value measurement of non-financial assets | 3,116 | 3,610 |
1OPC's assets are held for operational purposes and not held for the purposes of deriving a profit.
Accounting Policy Fair Value Measurement OPC deems transfers between levels of the fair value hierarchy to have occurred at the end of each reporting period. Revaluations All leasehold improvements, and plant and equipment, are measured at fair value in the Statement of Financial Position. Following initial recognition at cost, leasehold improvements, and plant and equipment (excluding leased ROU assets), are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that 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. Each year, a review of the carrying amounts of assets is conducted. Where it is considered that the carrying amount of an asset at the date of reporting would materially differ from the fair value, an independent valuation is recommended. All leasehold improvements, and plant and equipment, are subject to a formal valuation at least once every three years. An independent onsite valuation was undertaken in June 2021 by JLL Public Sector Valuations Pty Ltd. 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 through operating result. Revaluation decrements for a class of assets are recognised directly through operating result, 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. A reconciliation of movements and impact of the valuation on leasehold improvements, and plant and equipment, has been included in Note 2.2A. |
6. OTHER INFORMATION
6.1: Aggregate Assets and Liabilities | |||
2021 | 2020 | ||
6.1: Aggregate Assets and Liabilities | |||
Assets expected to be recovered in: | |||
No more than 12 months | |||
Cash and cash equivalents | 1,893 | 772 | |
Trade and other receivables | 20,753 | 21,285 | |
Prepayments | 261 | 223 | |
Total no more than 12 months | 22,908 | 22,280 | |
More than 12 months | |||
Land and buildings | 7,688 | 9,347 | |
Plant and equipment | 865 | 982 | |
Computer software | 111 | 61 | |
Other intangibles | 5,973 | 4,041 | |
Prepayments | 49 | - | |
Total more than 12 months | 14,686 | 14,432 | |
Total assets | 37,593 | 36,714 | |
Liabilities expected to be recovered in: | |||
No more than 12 months | |||
Suppliers | 146 | 190 | |
Other payables | 4,604 | 4,207 | |
Leases | 1,171 | 1,165 | |
Employee provisions | 841 | 961 | |
Total no more than 12 months | 6,762 | 6,524 | |
No more than 12 months | |||
Leases | 4,460 | 5,636 | |
Employee provisions | 6,550 | 6,180 | |
Total no more than 12 months | 11,010 | 11,816 | |
Total liabilities | 17,772 | 18,340 |
Visit
https://www.transparency.gov.au/annual-reports/office-parliamentary-counsel/reporting-year/2020-21-57