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Financial statements

Statement of Comprehensive Income

For the period ended 30 June 2020

2020

2019

Original Budget

Notes

$'000

$'000

$'000

NET COST OF SERVICES

Expenses

Employee benefits

1.1A

12,649

12,917

13,041

Suppliers

1.1B

5,966

5,940

7,811

Grants

88

249

140

Finance cost

1.1C

19

-

-

Depreciation and amortisation

2.2A

1,340

549

630

Impairment loss on financial instruments

2

1

-

Write-down and impairment of other assets

4

-

-

Total expenses

20,068

19,656

21,622

Own-Source Income

Own-source revenue

Sale of goods and rendering of services

1.2A

10,520

10,269

10,520

Other revenue

59

72

50

Total own-source revenue

10,579

10,341

10,570

Total own-source income

10,579

10,341

10,570

Net cost of service

(9,489)

(9,315)

(11,052)

Revenue from Government

1.2B

10,422

10,231

10,422

Surplus/(Deficit) on continuing operations

933

916

(630)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation surplus

-

(159)

-

Total other comprehensive income

-

(159)

-

The above statement should be read in conjunction with the accompanying notes.

Budget Variances Commentary

Statement of Comprehensive Income

Supplier expenses: The variance of -$1.845m (-23.62%) is predominately due to reduced expenditure on key projects, including project delays and re-prioritisation of work in response to the COVID-19 pandemic.

Depreciation and amortisation: The variance of $0.710m (112.70%) is due to the financial reporting impact of AASB 16 Leases, which was not accounted for in the 2019– 20 Portfolio Budget Statements.

Statement of Financial Position

As at 30 June 2020

2020

2019

Original Budget

Notes

$'000

$'000

$'000

ASSETS

Financial assets

Cash and cash equivalent

2.1A

17,203

15,492

14,175

Trade and other receivables

2.1B

325

349

456

Total financial assets

17,528

15,841

14,631

Non-financial assets1

Buildings

2.2A

2,624

1,462

1,106

Plant and equipment

2.2A

296

59

345

Prepayments

153

207

157

Total non-financial assets

3,073

1,728

1,608

Total assets

20,601

17,569

16,239

LIABILITIES

Payables

Suppliers

2.3A

953

751

1,325

Other payables

2.3B

228

334

257

Total payables

1,181

1,085

1,582

Interest bearing liabilities

Leases

2.4A

1,547

-

-

Total interest bearing liabilities

1,547

-

-

Provisions

Employee provisions

4.1A

3,335

3,179

3,235

Total provisions

3,335

3,179

3,235

Total liabilities

6,063

4,264

4,817

Net assets

14,538

13,305

11,422

EQUITY

Contributed equity

5,308

5,209

5,308

Reserves

617

617

776

Retained surplus

8,613

7,479

5,338

Total equity

14,538

13,305

11,422

The above statement should be read in conjunction with the accompanying notes.

1 A right-of-use asset is included in Buildings.

Budget Variances Commentary

Statement of Financial Position

Cash and cash equivalent: The variance of $3.028m (21.36%) is primarily a result of Safe Work Australia’s surplus for 2019 ($0.916m) and 2020 ($0.933m), which was not anticipated when preparing the budget.

Non-financial assets – Buildings: The variance of -$1.518m (-137%) is due to the financial reporting impact of AASB 16 Leases and the recognition of the right-of-use asset.

Supplier payables: The variance of -$0.372m (-28.08%) is due to the timing of invoices received and payments made at year end, and the overall reduced expenditure compared to the budget.

Interest bearing liabilities – Leases: The variance is due to the financial reporting impact of AASB 16 Leases, which was not accounted for in the 2019–20 Portfolio Budget Statements.

Statement of Changes in Equity

For the period ended 30 June 2020

2020

2019

Original Budget

Notes

$'000

$'000

$'000

CONTRIBUTED EQUITY

Opening balance

Balance carried forward from previous period

5,209

5,117

5,209

Adjusted opening balance

5,209

5,117

5,209

Transactions with owners

Departmental capital budget

99

92

99

Total transactions with owners

99

92

99

Closing balance as at 30 June

5,308

5,209

5,308

RETAINED EARNINGS

Opening balance

Balance carried forward from previous period

7,479

6,563

5,968

Adjustment on initial application of AASB 16

201

-

-

Adjusted opening balance

7,680

6,563

5,968

Comprehensive income

Surplus/(Deficit) for the period

933

916

(630)

Total comprehensive income

933

916

(630)

Closing balance as at 30 June

8,613

7,479

5,338

ASSET REVALUATION RESERVE

Opening balance

Balance carried forward from previous period

617

776

776

Adjusted opening balance

617

776

776

Comprehensive income

Other comprehensive income

-

(159)

-

Total comprehensive income

-

(159)

-

Closing balance as at 30 June

617

617

776

TOTAL EQUITY

Opening balance

Balance carried forward from previous period

13,305

12,456

11,953

Adjustment on initial application of AASB 16

201

-

-

Adjusted opening balance

13,506

12,456

11,953

Comprehensive income

Surplus/(Deficit) for the period

933

916

(630)

Other comprehensive income

-

(159)

-

Total comprehensive income

933

757

(630)

Transactions with owners

Departmental capital budget

99

92

99

Total transactions with owners

99

92

99

Closing balance as at 30 June

14,538

13,305

11,422

Closing balance as at 30 June

14,538

13,305

11,422

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 are recognised directly in contributed equity in that year.

Budget Variances Commentary

Statement of changes in Equity

Total Comprehensive Income: the variance of $1.563m (248.10%) is primarily due to the agency achieving a surplus for the current financial year. See the Statement of Comprehensive Income.

Cash Flow Statement

For the period ended 30 June 2020

2020

2019

Original Budget

Notes

$'000

$'000

$'000

OPERATING ACTIVITIES

Cash received

Appropriations

10,422

10,231

10,422

Sale of goods and rendering of services

11,558

11,469

11,572

Other

-

6

-

Total cash received

21,980

21,706

21,994

Cash used

Employees

12,303

13,222

12,988

Suppliers

6,353

6,598

8,634

Grants

88

249

154

Interest payments on lease liabilities

19

-

-

Net GST paid

549

599

218

Total cash used

19,312

20,668

21,994

Net cash from operating activities

2,668

1,038

-

INVESTING ACTIVITIES

Cash used

Purchase of plant and equipment, and computer software

389

71

99

Total cash used

389

71

99

Net cash from (used by) investing activities

(389)

(71)

(99)

FINANCING ACTIVITIES

Cash received

Contributed equity

176

71

99

Total cash received

176

71

99

Cash used

Principal payments of lease liabilities

744

-

-

Total cash used

744

-

-

Net cash from (used by) financing activities

(568)

71

99

Net increase in cash held

1,711

1,038

-

Cash and cash equivalents at the beginning of the reporting period

15,492

14,454

14,175

Cash and cash equivalents at the end of the reporting period

2.1A

17,203

15,492

14,175

The above statement should be read in conjunction with the accompanying notes.

Budget Variances Commentary

Cash Flow Statement

Cash used – Suppliers: the variance of -$2.278m (-26.38%) is predominately due to reduced expenditure on key projects, including project delays and re-prioritisation of work in response to the COVID-19 pandemic.

Cash used – Principal payments of lease liabilities: The variance is due to the financial reporting impact of AASB 16 Leases, which was not accounted for in the 2019–20 Portfolio Budget Statements.

Overview

Objectives of Safe Work Australia

Safe Work Australia is a not-for-profit, Australian Government controlled entity. Safe Work Australia is responsible for delivering national work health and safety and workers’ compensation policy, evidence and communication initiatives. Safe Work Australia was established as a statutory agency by the Safe Work Australia Act 2008 (Cth).

The Basis of Preparation

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:

  1. Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
  2. 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.

Significant Accounting Judgements and Estimates

Safe Work Australia has made assumptions or estimates in the following areas that have the most significant impact of the amounts recorded in the financial statements:

  • The fair value of buildings, plant and equipment is assessed at market value or depreciated replacement cost as determined by an independent valuer and is subject to management assessment in between formal valuations
  • Leave provisions involve assumptions on the expected tenure of existing staff, patterns of leave claims and payouts, future salary movements and future discount rates, and
  • The right of use asset and lease liability recognised under AASB 16 Leases, which has been disclosed below.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.

New Accounting Standards

AASB 16 Leases became effective 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.

Application of AASB 16 Leases

Safe Work Australia adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of the initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented has not been restated, that is, it is presented as previously reported under AASB 117 and related interpretations.

As a lessee, Safe Work Australia 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 agency recognises right-of-use assets and lease liabilities for most leases.

On the adoption of AASB 16, the agency recognised a right-of-use asset and lease liabilities in relation to its leased office space, which had previously been classified as operating leases.

The lease liability was measured at the present value of the remaining lease payments, discounted using the Commonwealth incremental borrowing rate as at 1 July 2019. The incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The rate applied was 0.0817%.

The right-of-use asset was measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

1 July 2019

$'000

Impact on Transition of AASB 16

Departmental

Assets

Right-of-use assets - Building

2,354

Prepayments

(63)

Liabilities

Lease liability

2,291

Other payables

(201)

Equity

Retained earnings

201

The following table reconciles the Departmental minimum lease commitments disclosed in the entity's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:

Minimum operating lease commitment at 30 June 2019

2,628

Undiscounted lease payments

2,628

Less: goods and services tax included in minimum operating lease commitment at 30 June 2019

(239)

Less: prepayment as at 30 June 2019

(63)

Less: effect of discounting using the incremental borrowing rate as at the date of initial application

(35)

Lease liability recognised on 1 July 2019

2,291

Taxation

Safe Work Australia is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and Goods and Services Tax (GST).

Events After the Reporting Period

There were no subsequent events that had the potential to significantly affect the ongoing structure and financial activities of Safe Work Australia.

COVID-19

In preparing the financial statements, the impacts of COVID-19 have been considered in the assumptions and estimates used in impairment testing of financial and non-financial assets, fair value measurements and other areas of the financial statements. Although there have been events and conditions related to COVID-19 that have impacted Safe Work Australia, they do not culminate in material uncertainty about the agency’s ability to continue as a going concern. Safe Work Australia will continue to monitor this assessment as changes occur in its operating environment.

Financial performance

This section analyses the financial performance of Safe Work Australia for the year ended 30 June 2020.

1.1 Expenses

2020

2019

$'000

$'000

1.1A: Employee Benefits

Wages and salaries

8,966

8,564

Superannuation

Defined contribution plans

1,079

1,028

Defined benefit plans

628

1,029

Leave and other entitlements

1,951

1,913

Separation and redundancies

25

383

Total employee benefits

12,649

12,917

Accounting Policy

Accounting policies for employee related expenses are contained in the People and relationships section.

2020

2019

$'000

$'000

1.1B: Suppliers

Goods and services supplied or rendered

Consultants

3,063

2,060

Contractors

150

99

Travel

190

240

IT services

337

138

Recruitment and training

195

368

Advertising

152

183

Office supplies

64

50

Venue hire/ guest speaker

17

8

Subscriptions

289

311

Corporate costs

750

883

Property costs

240

213

Sponsorships

6

39

Other

463

560

Total goods and services supplied or rendered

5,916

5,152

Goods supplied

160

16

Services rendered

5,756

5,136

Total goods and services supplied or rendered

5,916

5,152

Other suppliers

Operating lease rentals in connection with subleases

16

745

Workers compensation expenses

34

43

Total other supplier

50

788

Total suppliers

5,966

5,940

The above lease disclosures should be read in conjunction with the accompanying notes 1.1C, 2.2A and 2.4

Accounting Policy

The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits.

2020

2019

$'000

$'000

1.1C: Finance costs - unwinding of discount

Interest on lease liabilities

19

-

Total finance costs

19

-

1.2 Own-Source Revenue and Gains

The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 2.2A and 2.4

2020

2019

$'000

$'000

Own-Source Revenue

1.2A: Sale of Goods and Rendering of Services

Rendering of services

10,520

10,269

Total sale of goods and rendering of services

10,520

10,269

Accounting policy

Revenue from rendering of services – state and territory contributions

State and territory contributions are recognised over the course of the year as work is completed. All contributions are deemed as being earned at the reporting date. Contribution amounts are received in accordance with the
Inter-Governmental Agreement for Regulation and Operational Reform in Occupational Health and Safety.

Other revenue from rendering of services

Other revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

  1. the amount of revenue, stage of completion and transaction costs incurred can be reliably measured, and
  2. the probable economic benefits associated with the transaction will flow to Safe Work Australia.

The stage of completion of contracts at the reporting date is determined by reference to the proportion of costs incurred to date compared to the estimated total costs of the transaction.

Receivables for goods and services, which have 30-day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

2020

2019

$'000

$'000

1.2B: Revenue from Government

Departmental appropriations

10,422

10,231

Total revenue from Government

10,422

10,231

Accounting policy

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when Safe Work Australia gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

Financial position

This section analyses Safe Work Australia’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.

2.1 Financial Assets

2020

2019

$'000

$'000

2.1A: Cash and Cash Equivalents

Cash at bank

372

302

Cash in the special account

16,831

15,190

Total cash and cash equivalents

17,203

15,492

Accounting policy

Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand, and cash in special accounts.

2020

2019

$'000

$'000

2.1B: Trade and Other Receivables

Goods and services receivable

Goods and services

268

210

Total goods and services receivable

268

210

Other receivable

GST receivable

59

62

Appropriation receivable

-

77

Total other receivable

59

139

Total trade and other receivables (gross)

327

349

Less impairment loss allowance

(2)

-

Total trade and other receivables (net)

325

349

Credit terms for goods and services were within 30 days (2019: 30 days).

Accounting policy

Trade and other receivables

Trade and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as receivables. Receivables are measured at amortised cost using the effective interest method less impairment.

2.2 Non-Financial Assets

2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Computer Software for 2020

Buildings

Plant and equipment

Total

$’000

$’000

$’000

As at 1 July 2019

Gross book value

1,462

141

1,603

Accumulated depreciation, amortisation and impairment

-

(82)

(82)

Total as at 1 July 2019

1,462

59

1,521

Recognition of right of use asset on initial application of AASB 16

2,354

-

2,354

Total as at 1 July 2019

3,816

59

3,875

Additions

Purchase

104

285

389

Depreciation and amortisation

(511)

(44)

(555)

Depreciation on right-of-use assets

(785)

-

(785)

Write-down and impairment of assets

-

(4)

(4)

Total as at 30 June 2020

2,624

296

2,920

Total as at 30 June 2020 represented by

Gross book value

3,920

369

4,289

Accumulated depreciation, amortisation and impairment

(1,296)

(73)

(1,369)

Total as at 30 June 2020

2,624

296

2,920

Carrying amount of right-of-use assets

1,569

-

1,569

No indicators of impairment were found for buildings, plant and equipment.

No buildings, plant and equipment are expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assets

All revaluations were conducted in accordance with the revaluation policy stated at Note 5.3. An independent valuer conducted the revaluation as at 30 June 2019. An annual assessment was undertaken by management for 2019–20, which determined that the carrying amount of the assets did not differ materially from fair value at 30 June 2020.

Contractual commitments for the acquisition of buildings, plant and equipment

Safe Work Australia has no significant contractual commitments for the acquisition of buildings, plant and equipment.

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.

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 buildings, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than the thresholds listed below for each class of assets, 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).

Leasehold Improvements: $20,000

Plant and Equipment: $2,000

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located.

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. 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 Commonwealth agency, GGS and Whole of Government financial statements.

Revaluations

Following initial recognition at cost, buildings, plant and equipment (excluding ROU assets) are carried at fair value (or an amount not materially different from fair value) less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets. 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 reversed 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 reversed a previous revaluation increment for that class. Any accumulated depreciation as at the revaluation date is offset against the gross carrying amount of the asset and the asset is restated to the revalued amount.

Depreciation

Depreciable buildings, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the entity 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:

Leasehold Improvements: Lease term (2019: Lease term)

Plant and Equipment: 3 to 20 years (2019: 3 to 20 years).

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 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 entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

De-recognition

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Accounting policy (continued)

Impairment

All assets were assessed for 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 entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

De-recognition

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

2.3 Payables

2020

2019

$'000

$'000

2.3A: Suppliers

Trade creditors and accruals

953

751

Total suppliers

953

751

2.3B: Other Payables

Salaries and wages

167

76

Superannuation

27

13

Lease

-

201

Other

34

44

Total other payables

228

334

2.4 Leases

Safe Work Australia 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.

2020

2019

$'000

$'000

2.4A: Leases

Lease liability

Buildings

1,547

-

Total leases

1,547

-

Accounting policy

Lease

Refer Overview section for accounting policy on leases.

Funding

This section identifies Safe Work Australia’s funding structure from the Australian government.

3.1 Appropriations

3.1A: Annual Appropriations ('Recoverable GST exclusive')

Annual appropriations for 2020

Appropriation applied in 2020 (current and prior years)

Annual Appropriation1

Total appropriation

Variance

$'000

$'000

$'000

$'000

Departmental

Ordinary annual services

10,422

10,422

10,422

-

Capital budget2

99

99

176

(77)

Total departmental

10,521

10,521

10,598

(77)

  1. During 2020, there were no appropriation amounts withheld under section 51 of the PGPA Act or quarantined for administrative purposes.
  2. 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.

3.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')

2020

2019

$'000

$'000

Departmental

Appropriation Act (No. 1) 2018-19 - Departmental Capital Budget

-

77

Total departmental

-

77

3.2 Special Accounts

Safe Work Australia Special Account

2020

2019

$'000

$'000

Balance brought forward from previous period

15,492

14,454

Increases

Appropriation credited to Special Account

10,422

10,231

Capital Injection - Departmental Capital Budget

176

71

Revenue from services

11,558

11,469

Other receipts

-

6

Total increases

22,156

21,777

Available for payments

37,648

36,231

Decreases

Departmental

Payment made to suppliers

8,142

7,517

Payment made to employees

12,303

13,222

Total departmental

20,445

20,739

Total decreases

20,445

20,739

Total balance carried to the next period

17,203

15,492

Balance represented by:

Cash held in entity bank accounts

372

302

Cash held in the Official Public Account

16,831

15,190

Total balance carried to the next period

17,203

15,492

Appropriation: Public Governance, Performance and Accountability Act 2013, section 80.

Establishing Instrument: The Safe Work Australia Special Account was established in accordance with section 64 of the Safe Work Australia Act 2008.

Purpose: To provide a source of finance to resource Safe Work Australia.

3.3 Net Cash Appropriation Arrangements

2020

2019

$'000

$'000

3.3A: Net Cash Appropriation Arrangements

Total comprehensive income less depreciation/amortisation expenses previously funded through revenue appropriations

1,529

1,465

Plus: depreciation/amortisation expenses previously funded through revenue appropriation

(555)

(549)

Plus: depreciation right-of-use assets

(785)

-

Less: principal repayments - leased assets

744

-

Total comprehensive income - as per the Statement of Comprehensive Income

933

916

From 2010-11, the Government introduced net cash appropriation arrangements where revenue appropriations for depreciation/amortisation expenses ceased. Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.

The inclusion of depreciation/amortisation expenses related to ROU leased assets and the lease liability principle repayment amount reflects the cash impact on implementation of AASB 16 Leases, it does not directly reflect a change in appropriation arrangements.

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.

4.1 Employee Provisions

2020

2019

$'000

$'000

4.1A: Employee Provisions

Leave

3,335

3,179

Total employee provisions

3,335

3,179

Employee provisions expected to be settled

No more than 12 months

1,290

1,197

More than 12 months

2,045

1,982

Total employee provisions

3,335

3,179

Accounting policy

Liabilities for short-term employee benefits and termination benefits expected within 12 months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as the net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service 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 entity’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 the Standard Parameters issued by the Department of Finance. 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. The entity recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

The entity's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

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.

Safe Work Australia 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. Safe Work Australia accounts for the contributions as if they were contributions to defined contribution plans.

4.2 Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of Safe Work Australia, directly or indirectly. Safe Work Australia has determined the key management personnel to be the Chief Executive Officer and Branch Managers during the 2019–20 period. Key management personnel remuneration is reported in the table below:

2020

2019

$'000

$'000

Short-term employee benefits

1,281

1,221

Post-employment benefits

204

189

Other long-term employee benefits

42

37

Total key management personnel remuneration expenses1

1,527

1,447

There are six key management personnel included in the above table (2019: six key management personnel).

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 Safe Work Australia.

4.3 Related Party Disclosures

Related party relationships:

Safe Work Australia is an Australian Government controlled entity. Related parties to Safe Work Australia are key management personnel, their close family members, and the Portfolio and Cabinet Ministers.

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. 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 Safe Work Australia, it has been determined that there are no related party transactions to be disclosed.

Managing uncertainties

This section analyses how Safe Work Australia manages financial risks within its operating environment.

5.1 Contingent Assets and Liabilities

At 30 June 2020 Safe Work Australia has no contingent assets or contingent liabilities. Safe Work Australia is unaware of any quantifiable, unquantifiable or significant remote contingencies.

Accounting policy

Contingent assets and contingent liabilities 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 an asset or liability 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.

5.2 Financial Instruments

2020

2019

$'000

$'000

5.2A: Categories of Financial Instruments

Financial assets at amortised cost

Cash and cash equivalents

17,203

15,492

Goods and other receivables

268

210

Total financial assets at amortised cost

17,471

15,702

Total financial assets

17,471

15,702

Financial Liabilities

Financial liabilities measured at amortised cost

Suppliers

953

751

Other payables

228

334

Total financial liabilities measured at amortised cost

1,181

1,085

Total financial liabilities

1,181

1,085

Accounting policy

The classification and measurement of financial assets under AASB 9 is determined by Safe Work Australia’s business model for managing its financial assets and the contractual cash flow characteristics of those assets.

Financial assets

Safe Work Australia’s financial assets are comprised of trade and other receivables that are held for the purposes of collecting the contracted cash flows.

Safe Work Australia classifies its financial assets as ‘financial assets at amortised cost’.

Safe Work Australia derived no interest income form financial assets in either the current or prior year.

Financial liabilities

Financial liabilities are also measured at amortised cost.

Impairment

Safe Work Australia has assessed the trade receivables at the reporting date to determine whether any indicators of impairment exist in accordance with the requirements of AASB Financial Instruments. Due to the nature of Safe Work Australia’s receivables, a nil loss allowance has been calculated.

5.3 Fair Value Measurement

Accounting policy

Safe Work Australia engaged the services of the Jones Lang LaSalle Advisory Services Pty Ltd (JLL) to conduct a detailed external valuation of non-financial assets as at 30 June 2019. JLL provided written assurance to Safe Work Australia that the models developed are in accordance with AASB13 Fair Value Measurement, AASB 116 Property, Plant and Equipment, and the Public Governance, Performance and Accountability (Financial Reporting) Rule.

An annual assessment was undertaken to determine whether the carrying amount of assets differed materially from the fair value

Carrying amounts are reviewed every year to determine if an independent valuation is required. The regularity of independent valuations depends on the volatility of movement in the market value for the relevant assets.

5.3A: Fair Value Measurements

Fair value measurements at the end of the reporting period

2020

2019

$'000

$'000

Financial assets

Cash and cash equivalents

17,203

15,492

Goods and other receivables

268

210

Non-financial assets

Buildings

1,055

1,462

Plant and equipment

296

59

Financial liabilities

Suppliers

953

751

Other payables

228

334

Other information

6.1 Aggregate Assets and Liabilities

2020

2019

$'000

$'000

6.1A: Aggregate Assets and Liabilities

Assets expected to be recovered in:

No more than 12 months

17,681

16,048

More than 12 months

2,920

1,521

Total assets

20,601

17,569

Liabilities expected to be settled in:

No more than 12 months

2,471

2,112

More than 12 months

3,592

2,152

Total liabilities

6,063

4,264