The PBO’s operations are funded through annual departmental appropriations with supplementation from a special appropriation made under section 64D of the Parliamentary Service Act 1999.

Overview of financial performance

The PBO recorded an operating deficit of $0.044 million for the year ended 30 June 2019. Excluding depreciation and amortisation, the operating result attributable to the PBO was a surplus of $0.034 million.

We managed our financial performance and position appropriately throughout the year. Variances to budget are outlined in Note 3 in the financial statements.

In addition to ongoing departmental appropriation, the PBO has a special appropriation that can be used at the discretion of the Parliamentary Budget Officer to respond flexibly to changes in demand for our services. As at 30 June 2019, the balance of the special appropriation was $1.851 million.

In the 2019–20 Budget the PBO received departmental supplementation of $5.303 million over four years. This provides an increase to the PBO’s ongoing base funding of around $2 million per year.

We continue to consult with the Joint Committee of Public Accounts and Audit on PBO resourcing.

Expense impacts

Overall, total expenses increased to $8.601 million (2017–18: $8.395 million). This increase was largely a result of the PBO’s workforce increasing to manage the work associated with the 2019 general election. Funding augmentation of $0.500 million is provided for this surge activity. An increase in the employee leave provision, primarily due to a decrease in the 10-year government bond rate, also contributed to this increase in expenses.

Revenue and gains impacts

In 2018–19 the PBO’s revenue from its annual departmental appropriation increased to $7.238 million (2017–18: $6.753 million). This directly related to the $0.500 million funding the PBO receives every third year to support the increased work associated with a general election. The annual departmental appropriation was supplemented by $0.932 million special appropriation funding to meet operational expenses. Other revenue, relating to resources received free of charge, remained constant. A gain of $0.034 million was reported as a result of an adjustment in relation to prior year accruals.

Financial position

As at 30 June 2019, the PBO was in a sound net worth position, reporting net assets of
$1.647 million (2017–18: $1.691 million). This was represented by assets of $4.721 million (2017–18: $4.039 million) and liabilities of $3.074 million (2017–18: $2.347 million).

The increase in assets and liabilities is primarily due to an increase in the measurement of employee leave provisions reflecting a change in calculation factors.

Entity resource and outcome expense statements

Table 4 summarises the total resources available to the PBO by funding type and the total payments made by the PBO in cash terms. The balance remaining for ordinary annual services is held for the PBO’s liabilities, largely employee leave entitlements. The special appropriation balance remaining can be used to support the PBO’s operational expenses.

Table 4: Entity resource statement

1. Appropriation (Parliamentary Departments) Act (No.1) 2018–19. This includes prior year departmental appropriation and section 74 retained revenue receipts.
2. Special appropriation limited by amount [Parliamentary Service Act 1999 section 64D].

Table 5 shows the total budgeted and actual expenses for the PBO’s outcome. The Budget amounts correspond to the information contained in the ‘Budgeted expenses for Outcome’ table in the PBO’s Portfolio Budget Statements 2018–19, page 10. The actual expenses reconcile to the Statement of comprehensive income in the financial statements.

Table 5: Outcome expense statement

* Full year budget including any subsequent adjustments made to the 2018–19 Budget.

1. Departmental appropriation combines ordinary annual services (Appropriation (Parliamentary Departments) Act (No.1) 2018–19) and retained revenue receipts under section 74 of the PGPA Act 2013.
2. Expenses not requiring appropriation in the budget year are made up of depreciation expense and resources received free of charge.

Compliance with finance law

The PBO had no significant issues relating to non-compliance with the finance law.

Asset management

The PBO’s asset management framework includes an asset register that records all assets held by the PBO. An annual stocktake keeps records up to date and the assets are assessed each year for impairment and change in value. The PBO’s assets are comprised of office fitout and equipment.

Purchasing

Purchasing was managed in accordance with the PBO’s Accountable Authority Instructions and financial procedures, which are consistent with the Commonwealth Procurement Rules. The PBO’s purchasing processes focus on the core principle of value for money.

Consultants

The PBO engages consultants where specialist skills are required that are not available in-house or when independent research, review or assessment is required.

During 2018–19, four new consultancy contracts were entered into, involving a total expenditure of $66,105 (inclusive of GST). In addition, one ongoing consultancy contract was active during this period, involving total actual expenditure of $275 (inclusive of GST).

Decisions to engage consultants during 2018–19 were made in accordance with the PGPA Act, Commonwealth Procurement Rules and internal policies.

The majority of consultancy expenditure was for internal audit, business continuity and document design services.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website, www.tenders.gov.au.

Procurement initiatives to support small business

The PBO supports small business participation in the Commonwealth Government procurement market. Small and medium enterprises (SME) and small enterprise participation statistics are available on the Department of Finance’s website:
www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts/.

Procurement practices support SMEs by the use of the Commonwealth Contracting Suite for low-risk procurements valued under $200,000 and electronic systems to facilitate on-time payment.

Advertising and market research

The PBO did not undertake any advertising campaigns during 2018–19.