Disclosure and legal compliance

Certification of financial statements

for the year ended 30 June 2012

The accompanying financial statements of the Public Sector Commission have been prepared in compliance with the provisions of the Financial Management Act 2006 from proper accounts and records to present fairly the financial transactions for the financial year ended 30 June 2012 and the financial position as at 30 June 2012.

At the date of signing we are not aware of any circumstances which would render the particulars included in the financial statements misleading or inaccurate.

M C Wauchope
ACCOUNTABLE AUTHORITY
3 September 2012

M Davey
CHIEF FINANCE OFFICER
3 September 2012

Auditor General’s report

Note: The Auditor General's report letter can be found in the PDF version. To request this letter in an alternative format, please contact the Public Sector Commission.

Statement of comprehensive income

for the year ended 30 June 2012

 

Note

2012
$000

2011
$000

COST OF SERVICES

     

Expenses

     

Employee benefits expense

6

18 034

13 582

Supplies and services

7

5 912

4 760

Depreciation and amortisation expense

8

81

108

Accommodation expenses

9

2 224

1 964

Grants and subsidies

10

1 176

252

Loss on disposal of non-current assets

11

138

-

Other expenses

12

65

40

Total cost of services

 

27 630

20 706

Income

     

Revenue

     

User charges and fees

13

865

702

Commonwealth grants and contributions

14

12

20

Other revenue

13

254

57

Total revenue

 

1 131

779

Total income other than income from State Government

 

1 131

779

NET COST OF SERVICES

 

26 499

19 927

INCOME FROM STATE GOVERNMENT

     

Service appropriation

 

24 121

21 616

Assets assumed/(transferred)

 

-

(41)

Resources received free of charge

 

1 337

1 395

Royalties for Regions Fund

 

231

-

Total income from State Government

15

25 689

22 970

SURPLUS/(DEFICIT) FOR THE PERIOD

 

(810)

3 043

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

 

(810)

3 043

See also the ‘Schedule of income and expenses by service’. The ‘Statement of comprehensive income’ should be read in conjunction with the accompanying notes.

Statement of financial position

as at 30 June 2012

 

Note

2012 $000

2011 $000

ASSETS

     

Current assets

     

Cash and cash equivalents

26

2 288

3 325

Restricted cash and cash equivalents

16

212

-

Receivables

17

839

805

Amounts receivable for services

18

145

105

Other current assets

19

696

765

Total current assets

 

4 180

5 000

Non-current assets

     

Restricted cash and cash equivalents

16

384

312

Amounts receivable for services

18

5 432

4 993

Property, plant and equipment

20

96

253

Intangible assets

21

-

192

Total non-current assets

 

5 912

5 750

TOTAL ASSETS

 

10 092

10 750

LIABILITIES

     

Current liabilities

     

Payables

23

1 641

1 635

Provisions

24

4 527

4 343

Total current liabilities

 

6 168

5 978

Non-current liabilities

     

Provisions

24

1 049

895

Total non-current liabilities

 

1 049

895

TOTAL LIABILITIES

 

7 217

6 873

NET ASSETS

 

2 875

3 877

Equity

25

   

Contributed equity

 

-

-

Accumulated surplus/(deficiency)

 

2 875

3 877

TOTAL EQUITY

 

2 875

3 877

See also the ‘Schedule of assets and liabilities by service’. The ‘Statement of financial position’ should be read in conjunction with the accompanying notes.

Statement of changes in equity

for the year ended 30 June 2012

 

Note

Contributed equity $000

Reserves $000

Accumulated surplus/(deficit) $000

Total equity $000

Balance at 1 July 2010

25

1 422

-

7 547

8 969

Changes in accounting policy or correction of prior period errors

 

-

-

43

43

Restated balance at 1 July 2010

 

1 422

-

7 590

9 012

Total comprehensive income for the year

 

-

-

3 043

3 043

Transactions with owners in their capacity as owners:

         

Capital appropriations

 

-

-

-

-

Other contributions by owners

 

1 822

-

-

1 822

Distribution to owners

 

(10 000)

-

-

(10 000)

Transfer of contributed equity to accumulated surplus

 

6 756

-

(6 756)

-

Total

 

(1 422)

-

(3 713)

(5 135)

Balance at 30 June 2011

 

-

-

3 877

3 877

Balance at 1 July 2011

 

-

-

3 877

3 877

Changes in accounting policy or correction of prior period errors

 

-

-

(192)

(192)

Restated balance at 1 July 2011

 

-

-

3 685

3 685

Total comprehensive income for the year

 

-

-

(810)

(810)

Transactions with owners in their capacity as owners:

         

Capital appropriations

 

-

-

-

-

Other contributions by owners

 

-

-

-

-

Distribution to owners

 

-

-

-

-

Transfer of contributed equity to accumulated surplus

 

-

-

-

-

Total

 

-

-

(810)

(810)

Balance at 30 June 2012

 

-

-

2 875

2 875

The ‘Statement of changes in equity’ should be read in conjunction with the accompanying notes.

Statement of cash flows

for the year ended 30 June 2012

 

Note

2012 $000

2011 $000

CASH FLOWS FROM STATE GOVERNMENT

     

Service appropriation

 

23 642

21 172

Holding account drawdowns

 

-

105

Non-retained revenue distributed to owner

 

-

(9 104)

Royalties for Regions Fund

 

231

-

Net cash provided by State Government

 

23 873

12 173

Utilised as follows:

     

CASH FLOWS FROM OPERATING ACTIVITIES

     

Payments

     

Employee benefits

 

(18 186)

(13 544)

Supplies and services

 

(4 647)

(3 737)

Accommodation

 

(1 946)

(2 055)

Grants and subsidies

 

(962)

(281)

GST payments on purchases

 

(904)

(668)

GST payments to taxation authority

 

(165)

(215)

Receipts

     

User charges and fees

 

796

714

Commonwealth grants and contribution

 

12

20

GST receipts on sales

 

171

208

GST receipts from taxation authority

 

878

609

Other receipts

 

390

849

Net cash provided by/(used in) operating activities

26

(24 563)

(18 100)

CASH FLOWS FROM INVESTING ACTIVITIES

     

Payments

     

Purchase of non-current physical assets

 

(63)

(206)

Net cash provided by/(used in) investing activities

 

(63)

(206)

CASH FLOWS FROM FINANCING ACTIVITIES

     

Net cash provided by/(used in) financing activities

 

-

-

Net increase/(decrease) in cash and cash equivalents

 

(753)

(6 133)

Cash and cash equivalents at the beginning of period

 

3 637

9 770

CASH AND CASH EQUIVALENTS AT THE END OF PERIOD

26

2 884

3 637

The ‘Statement of cash flows’ should be read in conjunction with the accompanying notes.

Schedule of income and expenses by service

for the year ended 30 June 2012

 

Service 1

Service 2

Service 3

Service 4

Service 5

Service 6

Total

 

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011 $000

2012 $000

2011 $000

2012 $000

2011 $000

COST OF SERVICES

                           

Expenses

                           

Employee benefits expense

5 997

4 591

2 202

1 598

4 633

4 112

3 275

2 159

1 693

867

234

255

18 034

13 582

Supplies and services

1 544

1 532

490

495

2 553

1 986

764

510

514

171

47

66

5 912

4 760

Depreciation and amortisation expense

27

39

8

13

21

42

10

10

14

3

1

1

81

108

Accommodation expenses

638

632

397

368

536

553

377

299

245

86

31

26

2 224

1 964

Grants and subsidies

492

18

-

-

683

234

-

-

-

-

-

-

1 176

252

Carrying amount of non-current assets disposed

44

-

12

-

40

-

19

-

22

-

1

-

138

-

Other expenses

9

5

6

(3)

21

11

19

20

8

8

2

(1)

65

40

Total cost of services

8 751

6 817

3 115

2 471

8 487

6 938

4 465

2 998

2 496

1 135

316

347

27 630

20 706

Income

                           

User charges and fees

-

(115)

-

-

808

673

-

-

57

-

-

144

865

702

Commonwealth grants and contributions

-

-

-

-

12

20

-

-

-

-

-

-

12

20

Other revenue

168

51

9

-

53

-

13

5

10

1

1

-

254

57

Total income other than income from State Government

168

(64)

9

-

873

693

13

5

67

1

1

144

1 131

779

NET COST OF SERVICES

8 583

6 881

3 106

2 471

7 614

6 245

4 452

2 993

2 429

1 134

315

203

26 499

19 927

INCOME FROM STATE GOVERNMENT

                           

Service appropriation

6 610

5 730

3 181

3 330

7 411

7 486

4 354

3 479

2 226

1 155

339

436

24 121

21 616

Assets assumed/(transferred)

-

(10)

-

(5)

-

(13)

-

(9)

-

(3)

-

(1)

-

(41)

Resources received free of charge

356

383

179

178

395

419

242

295

146

88

19

32

1 337

1 395

Royalties for Regions Fund

-

-

-

-

231

-

-

-

-

-

-

-

231

-

Total income from State Government

6 966

6 103

3 360

3 503

8 037

7 892

4 596

3 765

2 372

1 240

358

467

25 689

22 970

Surplus/deficit for the period

(1,617)

(778)

254

1 032

423

1 647

144

772

(57)

106

43

264

(810)

3 043

Service 1 - Advice and assistance

Service 2 - Public sector reform

Service 3 - Professional development and training

Service 4 - Development and monitoring of HR standards, ethical codes and PID guidelines

Service 5 - Advice and evaluation of equity and diversity in public employment

Service 6 - Independent CEO selection and recruitment advice

The ‘Schedule of income and expenses by service’ should be read in conjunction with the accompanying notes.

Schedule of assets and liabilities by service

as at 30 June 2012

 

Service 1

Service 2

Service 3

Service 4

Service 5

Service 6

General - Not attributed

Total

 

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011
$000

2012
$000

2011
$000

ASSETS

                               

Current assets

1 045

972

254

253

918

1 013

484

427

104

127

28

47

1 347

2 161

4 180

5 000

Non-current assets

1 603

1 390

748

693

1 841

1 718

1 401

1 159

237

343

82

129

-

318

5 912

5 750

Total assets

2 648

2 362

1 002

946

2 759

2 731

1 885

1 586

341

470

110

176

1 347

2 479

10 092

10 750

LIABILITIES

                               

Current liabilities

1 952

1 380

871

620

1 416

1 692

1 271

957

191

285

73

44

394

1 000

6 168

5 978

Non-current liabilities

301

142

97

55

285

361

277

210

47

54

2

58

40

15

1 049

895

Total liabilities

2 253

1 522

968

675

1 701

2 053

1 548

1 167

238

339

75

102

434

1 015

7 217

6 873

NET ASSETS

395

840

34

271

1 058

678

337

419

103

131

35

74

913

1 464

2 875

3 877

Service 1 - Advice and assistance

Service 2 - Public sector reform

Service 3 - Professional development and training

Service 4 - Development and monitoring of HR standards, ethical codes and PID guidelines

Service 5 - Advice and evaluation of equity and diversity in public employment

Service 6 - Independent CEO selection and recruitment advice

The ‘Schedule of assets and liabilities by service’ should be read in conjunction with the accompanying notes.

Summary of consolidated account appropriations and income estimates

for the year ended 30 June 2012

 

2012
Estimate
$000

2012
Actual
$000

Variance
$000

2012
Actual $000

2011
Actual $000

Variance
$000

DELIVERY OF SERVICES

           

Item 6 - Net amount appropriated to deliver services

25 915

22 915

3 000

22 915

17 791

5 124

Section 25 Transfer of service appropriation

-

-

-

-

2 643

(2 643)

Amount authorised by other statutes

           

Salaries and Allowances Act 1975

1 206

1 206

-

1 206

1 182

24

Total appropriations provided to deliver services

27 121

24 121

3 000

24 121

21 616

2 505

GRAND TOTAL

27 121

24 121

3 000

24 121

21 616

2 505

             

Details of expenses by service

           

Advice and assistance

6 785

8 751

(1 966)

8 751

6 817

1 934

Public sector reform

3 651

3 115

536

3 115

2 471

644

Professional development and training

14 805

8 487

6 318

8 487

6 938

1 549

Development and monitoring of HR Standards, ethical codes and PID

3 990

4 465

(475)

4 465

2 998

1 467

Advice and evaluation of equity and diversity in public employment

1 130

2 496

(1 366)

2 496

1 135

1 361

Independent CEO selection and recruitment advice

622

316

306

316

347

(31)

Total cost of services

30 983

27 630

3 353

27 630

20 706

6 924

Less total income

(1 293)

(1 131)

(162)

(1 131)

(779)

(352)

Net cost of services

29 690

26 499

3 191

26 499

19 927

6 572

Adjustments

(2 569)

(2 378)

(191)

(2 378)

1 689

(4 067)

Total appropriations provided to deliver services

27 121

24 121

3 000

24 121

21 616

2 505

Capital expenditure

           

Purchase of non-current physical assets

125

63

62

63

197

(134)

Adjustment for other funding sources

-

(63)

63

(63)

(197)

134

Capital contribution (appropriation)

125

-

125

-

-

-

Adjustments comprise movements in cash balances and other accrual items such as receivables, payables and superannuation.

Note 31 ‘Explanatory statement’ provides details of any significant variations between estimates and actual results for 2012 and between the actual results for 2011 and 2012.

Notes to the financial statements

for the year ended 30 June 2012

1. Australian Accounting Standards

General

The Commission’s financial statements for the year ended 30 June 2012 have been prepared in accordance with Australian Accounting Standards. The term ‘Australian Accounting Standards’ includes Standards and Interpretations issued by the Australian Accounting Standards Board (AASB).

The Commission has adopted any applicable, new and revised Australian Accounting Standards from their operative dates.

Early adoption of standards

The Commission cannot early adopt an Australian Accounting Standard unless specifically permitted by Treasurer’s Instruction (TI) 1101 Application of Australian Accounting Standards and Other Pronouncements. No Australian Accounting Standards that have been issued or amended but not operative have been early adopted by the Commission for the annual reporting period ended 30 June 2012.

2. Summary of significant accounting policies

a) General statement

The Commission is a not-for-profit entity that prepares general purpose financial statements prepared in accordance with Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the AASB as applied by the Treasurer’s instructions. Several of these are modified by the Treasurer’s instructions to vary application, disclosure, format and wording.

The Financial Management Act 2006 and the Treasurer’s instructions impose legislative provisions that govern the preparation of financial statements and take precedence over Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the AASB.

Where modification is required and has had a material or significant financial effect upon the reported results, details of that modification and the resulting financial effect are disclosed in the notes to the financial statements.

b) Basis of preparation

The financial statements have been prepared on the accrual basis of accounting using the historical cost convention.

The accounting policies adopted in the preparation of the financial statements have been consistently applied throughout all periods presented unless otherwise stated.

The financial statements are presented in Australian dollars and all values are rounded to the nearest thousand dollars ($000).

Note 3 ‘Judgements made by management in applying accounting policies’ discloses judgements that have been made in the process of applying the Commission’s accounting policies resulting in the most significant effect on the amounts recognised in the financial statements.

Note 4 ‘Key sources of estimation uncertainty’ discloses key assumptions made concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

c) Reporting entity

The reporting entity comprises the Commission.

Mission

The Commission’s mission is to lead and promote excellence and integrity in the public sector.

The Commission is mainly funded by parliamentary appropriations. It provides training services on a fee for service basis.

Services

The Commission provides the following services:

  • Service 1: Advice and assistance Provide advice, support and assistance to ministers and public sector agencies.
  • Service 2: Public sector reform Strategic policy, planning and support is provided to agencies to position the public sector for the future.
  • Service 3: Professional development and training Provision of learning and development programs to build the capacity of the public sector and its professional skills base to assist in meeting current and future stakeholder requirements.
  • Service 4: Development and monitoring of human resource standards, ethical codes and public interest disclosure guidelines Develop standards and codes, assist public authorities to comply and provide independent oversight to monitor and report to parliament and ministers on compliance with the Public Sector Management Act 1994 and the Public Interest Disclosure Act 2003.
  • Service 5: Advice and evaluation of equity and diversity in public employment Advise and assist public authorities to achieve their equal employment opportunity and diversity objectives and evaluate and report on progress in meeting their responsibilities under Part IX of the Equal Opportunity Act 1984.
  • Service 6: Independent chief executive officer selection and recruitment advice Provide independent advice to the minister about reappointment and persons suitable for vacant CEO positions by using fair and comprehensive processes.

d) Contributed equity

AASB Interpretations 1038 - Contributions by owners made to wholly-owned public sector entities requires transfers in the nature of equity contributions, other than as a result of a restructure of administrative arrangements, to be designated by the Government (the owner) as contributions by owners (at the time of, or prior to transfer) before such transfers can be recognised as equity contributions. Capital appropriations have been designated as contributions by owners by Treasurer’s Instruction 955 - Contributions by owners made to wholly owned public sector entities and have been credited directly to contributed equity.

The transfer of net assets to/from other agencies, other than as a result of a restructure of administrative arrangements, are designated as contributions by owners where the transfers are non-discretionary and non-reciprocal.

e) Income

Revenue recognition

Revenue is recognised and measured at the fair value of consideration received or receivable. Revenue is recognised for the major business activities as follows:

Provision of services

Revenue is recognised on delivery of the service to the client or by reference to the stage of completion of the transaction.

Service appropriations

Service appropriations are recognised as revenues at fair value in the period in which the Commission gains control of the appropriated funds. The Commission gains control of appropriated funds at the time those funds are deposited into the Commission’s bank account or credited to the ‘Amounts receivable for services’ (holding account) held at Treasury.

Net appropriation determination

The Treasurer may make a determination providing for prescribed receipts to be retained for services under the control of the Commission. In accordance with the determination specified in the 2011/12 Budget Statements, the Commission retained $1 991 000 in 2012 ($2 482 000 in 2011) from:

  • proceeds from fees and charges
  • Commonwealth grants and contributions
  • other revenue
  • GST input credits
  • GST receipts on sales.

Grants, donations, gifts and other non-reciprocal contributions

Revenue is recognised at fair value when the Commission obtains control over the assets comprising the contributions which is usually when cash is received.

Other non-reciprocal contributions that are not contributions by owners are recognised at their fair value. Contributions of services are only recognised when a fair value can be reliably determined and the services would be purchased if not donated.

Royalties for Regions funds are recognised as revenue at fair value in the period in which the Commission obtains control over the funds. The Commission obtains control of the funds at the time the funds are deposited into the Commission’s bank account.

f) Property, plant and equipment

Capitalisation/expensing of assets

Items of property, plant and equipment costing $5000 or more are recognised as assets and the cost of utilising assets is expensed (depreciated) over their useful lives. Items of property, plant and equipment costing less than $5000 are immediately expensed direct to the ‘Statement of comprehensive income’ (other than where they form part of a group of similar items which are significant in total).

Initial recognition and measurement

Property, plant and equipment are initially recognised at cost.

For items of property, plant and equipment acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.

Subsequent measurement

The Commission does not hold land, buildings or infrastructure assets. All, items of property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses.

Depreciation

All non-current assets having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits.

Depreciation is calculated using the straight line method, using rates which are reviewed annually. Estimated useful lives for each class of depreciable asset are:

  • Computer hardware—three years
  • Office equipment—five years

Works of art controlled by the Commission are classified as property, plant and equipment which are anticipated to have very long and indefinite useful lives. Their service potential has not, in any material sense, been consumed during the reporting period and so no depreciation has been recognised.

g) Intangible assets

Capitalisation/expensing of assets

Acquisitions of intangible assets costing $5000 or more and internally generated intangible assets costing $50 000 or more are capitalised. The cost of utilising the assets is expensed (amortised) over their useful lives. Costs incurred below these thresholds are immediately expensed directly to the ‘Statement of comprehensive income’.

Intangible assets are initially recognised at cost. For assets acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.

The cost model is applied for subsequent measurement requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.

Amortisation for intangible assets with finite useful lives is calculated for the period of the expected benefit (estimated useful life which is reviewed annually) on the straight line basis. All intangible assets controlled by the Commission have a finite useful life and zero residual value. The expected useful lives for each class of intangible asset are:

  • Computer software—three years

Computer software

Software that is an integral part of the related hardware is treated as property, plant and equipment. Software that is not an integral part of the related hardware is treated as an intangible asset. Software costing less than $5000 is expensed in the year of acquisition.

Website costs

Website costs are charged as expenses when they are incurred unless they relate to the acquisition or development of an asset when they may be capitalised and amortised. Generally, costs in relation to feasibility studies during the planning phase of a website, and ongoing costs of maintenance during the operating phase are expensed. Costs incurred in building or enhancing a website, to the extent that they represent probable future economic benefits that can be reliably measured, are capitalised.

h) Impairment of assets

Property, plant and equipment and intangible assets are tested for any indication of impairment at the end of each reporting period. Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is less than the carrying amount, the asset is considered impaired and is written down to the recoverable amount and an impairment loss is recognised. As the Commission is a not-for-profit entity, unless an asset has been identified as a surplus asset, the recoverable amount is the higher of an asset’s fair value less costs to sell and depreciated replacement cost.

The risk of impairment is generally limited to circumstances where an asset’s depreciation is materially understated, where the replacement cost is falling or where there is a significant change in useful life. Each relevant class of assets is reviewed annually to verify that the accumulated depreciation/amortisation reflects the level of consumption or expiration of the asset’s future economic benefits and to evaluate any impairment risk from falling replacement costs.

Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment at the end of each reporting period irrespective of whether there is any indication of impairment.

The recoverable amount of assets identified as surplus assets is the higher of fair value less costs to sell and the present value of future cash flows expected to be derived from the asset. Surplus assets carried at fair value have no risk of material impairment where fair value is determined by reference to market-based evidence. Where fair value is determined by reference to depreciated replacement cost, surplus assets are at risk of impairment and the recoverable amount is measured. Surplus assets at cost are tested for indications of impairment at the end of each reporting period.

i) Leases

The Commission holds operating leases for its office accommodation and motor vehicles. Lease payments are expensed on a straight line basis over the lease term as this represents the pattern of benefits derived from the leased property and vehicles.

j) Financial instruments

In addition to cash, the Commission has two categories of financial instrument:

  • receivables
  • financial liabilities measured at amortised cost.

Financial instruments have been disaggregated into the following classes:

Financial assets

  • cash and cash equivalents
  • restricted cash and cash equivalents
  • receivables
  • amount receivable for services

Financial liabilities

  • payables

Initial recognition and measurement of financial instruments is at fair value which normally equates to the transaction cost or the face value.

The fair value of short-term receivables and payables is the transaction cost or the face value because there is no interest rate applicable and subsequent measurement is not required as the effect of discounting is not material.

k) Cash and cash equivalents

For the purpose of the ‘Statement of cash flows’, cash and cash equivalent (and restricted cash and cash equivalents) assets comprise cash on hand and short-term deposits with original maturities of three months or less that are readily convertible to a known amount of cash and which are subject to insignificant risk of changes in value.

l) Accrued salaries

Accrued salaries (refer note 23 ‘Payables’) represent the amount due to staff but unpaid at the end of the financial year. Accrued salaries are settled within a fortnight of the financial year end. The Commission considers the carrying amount of accrued salaries to be equivalent to its net fair value.

The accrued salaries suspense account (see note 16 ‘Restricted cash and cash equivalent assets’) consists of amounts paid annually into a suspense account over a period of 10 financial years to largely meet the additional cash outflow in each eleventh year when 27 pay days occur instead of the normal 26. No interest is received on this account.

m) Amounts receivable for services (holding account)

The Commission receives funding on an accrual basis. The appropriations are paid partly in cash and partly as an asset (holding account receivable). The accrued amount receivable is accessible on the emergence of the cash funding requirement to cover leave entitlements and asset replacement.

n) Receivables

Receivables are recognised at original invoice amount less an allowance for any uncollectible amounts (i.e. impairment). The collectability of receivables is reviewed on an ongoing basis and any receivables identified as uncollectible are written-off against the allowance account. The allowance for uncollectible amounts (doubtful debts) is raised when there is objective evidence that the Commission will not be able to collect the debts. The carrying amount is equivalent to fair value as it is due for settlement within 30 days.

o) Payables

Payables are recognised at the amount payable when the Commission becomes obliged to make future payments as a result of a purchase of assets or services. The carrying amount is equivalent to fair value, as settlement is generally within 30 days.

p) Provisions

Provisions are liabilities of uncertain timing and amount and are recognised where there is a present legal or constructive obligation as a result of a past event and when the outflow of resources embodying economic benefits is probable and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at the end of each reporting period.

Provisions—employee benefits

All annual leave and long service leave provisions are in respect of employees’ services up to the end of the reporting period.

Annual leave and long service leave

The liability for annual and long service leave expected to be settled within 12 months after the reporting period is recognised and measured at the undiscounted amounts expected to be paid when the liability is settled. Annual and long service leave not expected to be settled within 12 months after the reporting period is recognised and measured at the present value of amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

When assessing expected future payments consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions, as well as the experience of employee departures and periods of service. The expected future payments are discounted using the market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash flows.

The provision for annual leave is classified as a current liability as the Commission does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Unconditional long service leave provisions are classified as current liabilities as the Commission does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Conditional long service leave provisions are classified as non-current liabilities because the Commission has an unconditional right to defer the settlement of the liability until the employee has completed the requisite years of service.

Superannuation

The Government Employees Superannuation Board (GESB) and other funds administer public sector superannuation arrangements in Western Australia in accordance with legislative requirements. Eligibility criteria for membership in particular schemes for public sector employees varies according to commencement and implementation dates.

Eligible employees contribute to the ‘Pension Scheme’, a defined benefit pension scheme now closed to new members since 1987, or to the ‘Gold State Superannuation Scheme’ (GSS), a defined benefit lump sum scheme closed to new members since 1995.

The GSS is a defined benefit scheme for the purposes of employees and whole-of-government reporting. However, it is a defined contribution plan for agency purposes because the concurrent contributions (defined contributions) made by the Commission to GESB extinguishes the agency’s obligations to the related superannuation liability.

The Commission has no liabilities under the Pension or the GSS schemes. The liabilities for the unfunded Pension Scheme and the unfunded GSS transfer benefits attributable to members who transferred from the Pension Scheme, are assumed by the Treasurer. All other GSS obligations are funded by concurrent contributions made by the Commission to the GESB.

Employees commencing employment prior to 16 April 2007 who are not members of either the Pension or the GSS schemes became non-contributory members of the ‘West State Superannuation Scheme’ (WSS). Employees commencing employment on or after 16 April 2007 became members of the ‘GESB Super Scheme’ (GESBS). From 30 March 2012, existing members of the WSS or GESBS and new employees became able to choose their preferred superannuation fund. The Commission makes concurrent contributions to GESB or other funds on behalf of employees in compliance with the Commonwealth Government’s Superannuation Guarantee (Administration) Act 1992. Contributions to these accumulation schemes extinguish the Commission’s liability for superannuation charges in respect of employees who are not members of the Pension Scheme or GSS.

The GESB makes all benefit payments in respect of the Pension and GSS, and is recouped by the Treasurer for the employer’s share.

Provisions—other

Employment on-costs

Employment on-costs, including workers’ compensation insurance, are not employee benefits and are recognised separately as liabilities and expenses when the employment to which they relate has occurred. Employment on-costs are included as part of ‘Other expenses’ and are not included as part of the Commission’s ‘Employee benefits expense’. The related liability is included in ‘Employment on-costs provision’.

q) Superannuation expense

The superannuation expense in the ‘Statement of comprehensive income’ comprises employer contributions paid to the GSS (concurrent contributions), the WSS and the GESBS or other superannuation funds. The employer contribution paid to the GESB in respect of the GSS is paid back to the consolidated account by the GESB.

r) Resources received free of charge or for nominal cost

Resources received free of charge or for nominal cost that can be reliably measured are recognised as income at fair value. Where the resource received represents a service that the Commission would otherwise pay for, a corresponding expense is recognised. Receipts of assets are recognised in the ‘Statement of financial position’.

Assets or services received from other State Government agencies are separately disclosed under ‘Income from State Government’ in the ‘Statement of comprehensive income’.

s) Comparative figures

Comparative figures are, where appropriate, reclassified to be comparable with the figures presented in the current financial year. All functions of the Office of the Public Sector Standards Commissioner were transferred under a restructure of administrative arrangements to the Public Sector Commission with effect from 1 December 2010. As such, the figures for the 2010/11 financial year include seven months of combined operations.

3. Judgements made by management in applying accounting policies

The preparation of financial statements requires management to make judgements about the application of accounting policies that have a significant effect on the amounts recognised in the financial statements. The Commission evaluates these judgements regularly.

4. Key sources of estimation uncertainty

Key estimates and assumptions concerning the future are based on historical experience and various other factors that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Long service leave

Several estimations and assumptions used in calculating the Commission’s long service leave provision include expected future salary rates, discount rates, employee retention rates and expected future payments. Changes in these estimations and assumptions may impact on the carrying amount of the long service leave provision.

5. Disclosure of changes in accounting policy and estimates

Future impact of Australian Accounting Standards not yet operative

The Commission cannot early adopt an Australian Accounting Standard unless specifically permitted by Treasurer’s Instruction 1101 - Application of Australian Accounting Standards and other pronouncements. Consequently, the Commission has not applied early any of the following Australian Accounting Standards that have been issued and which may impact the Commission. Where applicable, the Commission plans to apply these Australian Accounting Standards from their application date.

AASB 9 - Financial instruments

Operative for reporting periods beginning on/after 1 January 2013

This standard supersedes AASB 139 - Financial Instruments: Recognition and measurement, introducing a number of changes to accounting treatments. The standard was reissued in December 2010. The Department of Treasury has not yet determined the application or the potential impact of the Standard for the Commission.

AASB 13 - Fair value measurement

Operative for reporting periods beginning on/after 1 January 2013

This standard defines fair value, sets out a framework for measuring fair value and requires disclosures about fair value measurements. There is no financial impact.

AASB 119 - Employee benefits

Operative for reporting periods beginning on/after 1 January 2013

This standard supersedes AASB 119 (October 2010). As the Commission does not operate a defined benefit plan, the impact of the change is limited to measuring annual leave as a long-term employee benefit. The resultant discounting of the annual leave benefit has an immaterial impact.

AASB 2009-11

Operative for reporting periods beginning on/after 1 July 2013

Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Int 10 & 12] [Modified by AASB 2010-7]

AASB 2010-2

Operative for reporting periods beginning on/after 1 July 2013

Amendments to Australian Accounting Standards arising from reduced disclosure requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Int 2, 4, 5, 15, 17, 127, 129 & 1052]

This standard makes amendments to Australian Accounting Standards and Interpretations to introduce reduced disclosure requirements for certain types of entities. There is no financial impact.

AASB 2010-7

Operative for reporting periods beginning on/after 1 January 2013

Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Int 2, 5, 10, 12, 19 & 127]

This standard makes consequential amendments to other Australian Accounting Standards and Interpretations as a result of issuing AASB 9 in December 2010. The Department of Treasury has not yet determined the application or the potential impact of the standard for agencies.

AASB 2011-2

Operative for reporting periods beginning on/after 1 July 2013

Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project - reduced disclosure requirements [AASB 101 & 1054]

This standard removes disclosure requirements from other standards and incorporates them in a single standard to achieve convergence between Australian and New Zealand Accounting Standards for reduced disclosure reporting. There is no financial impact.

AASB 2011-8

Operative for reporting periods beginning on/after 1 January 2013

Amendments to Australian Accounting Standards arising from AASB 13 [AASB 1, 2, 3, 4, 5, 7, 9, 2009-11, 2010-7, 101, 102, 108, 110, 116, 117, 118, 119, 120, 121, 128, 131, 132, 133, 134, 136, 138, 139, 140, 141, 1004, 1023 & 1038 and Int 2, 4, 12, 13, 14, 17, 19, 131 & 132]

This Standard replaces the existing definition and fair value guidance in other Australian Accounting Standards and Interpretations as the result of issuing AASB 13 in September 2011. There is no financial impact.

AASB 2011-9

Operative for reporting periods beginning on/after 1 July 2012

Amendments to Australian Accounting Standards - Presentation of items of other comprehensive income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049]

This standard requires to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The Commission has not yet determined the application or the potential impact of the standard.

AASB 2011-10

Operative for reporting periods beginning on/after 1 January 2013

Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) [AASB 1, 8, 101, 124, 134, 1049 & 2011-8 and Int 14]

This standard makes amendments to other Australian Accounting Standards and Interpretations as a result of issuing AASB 119 in September 2011. There is limited financial impact.

AASB 2011-11

Operative for reporting periods beginning on/after 1 July 2013

Amendments to AASB 119 (September 2011) arising from reduced disclosure requirements.

This standard gives effect to Australian Accounting Standards - reduced disclosure requirements for AASB 119 (September 2011). There is no financial impact.

AASB 2012-1

Operative for reporting periods beginning on/after 1 July 2013

Amendments to Australian Accounting Standards - fair value measurement - reduced disclosure requirements [AASB 3, 7, 13, 140 & 141]

This standard establishes and amends reduced disclosure requirements for additional and amended disclosures arising from AASB 13 and the consequential amendments implemented through AASB 2011-8. There is no financial impact.

6. Employee benefits expense

 

2012
$000

2011
$000

Wages and salaries (a)

16 556

12 339

Superannuation - defined contribution plans (b)

1 478

1 243

 

18 034

13 582

  1. Includes the value of the fringe benefit to the employee plus the fringe benefits tax component and leave entitlements including superannuation contribution component.
  2. Defined contribution plans include West State, Gold State and GESB Super Scheme (contributions paid).

Employment on-costs expenses such as workers’ compensation insurance are included at note 12 ‘Other expenses’. The employment on-costs liability is included at note 24 ‘Provisions’.

7. Supplies and services

 

2012
$000

2011
$000

Communications

136

159

Consultants and contractors

4 894

3 849

Consumables

658

431

Travel

93

59

Other

131

262

 

5 912

4 760

8. Depreciation and amortisation expense

 

2012
$000

2011
$000

Depreciation

   

Computer hardware

11

9

Furniture and fittings

52

76

Office equipment

18

23

 

81

108

9. Accommodation expenses

 

2012
$000

2011
$000

Lease rentals and outgoings

2 221

1 962

Repairs and maintenance

2

-

Cleaning

1

2

 

2 224

1 964

10. Grants and subsidies

 

2012
$000

2011
$000

Recurrent

   

Government agency grants

-

-

External grants

1 176

252

 

1 176

252

11. Loss on disposal of non-current assets

 

2012
$000

2011
$000

Proceeds from disposal of non-current assets

   

Computer hardware

1

-

 

1

-

Cost of disposal of non-current assets

   

Furniture and fittings

136

-

Computer hardware

3

-

 

139

-

Net loss

138

-

12. Other expenses

 

2012
$000

2011
$000

Employment on-costs

16

(22)

Impairment losses (a)

-

-

Other (b)

49

62

 

65

40

  1. Write down of furniture and fittings as a result of relocation of office accommodation.
  2. Audit fees, see also note 30 ‘Remuneration of auditor’.

13. User charges and fees

 

2012
$000

2011
$000

Fees

865

702

 

865

702

Other revenues

   

Recoups

227

38

Contributions by senior officers to the Government Vehicle Scheme

27

19

 

254

57

14. Commonwealth grants and contributions

 

2012
$000

2011
$000

Funding provided by Government Skills Australia to undertake staff training

12

20

15. Income from State Government

 

2012
$000

2011
$000

Appropriation received during the year

   

Service appropriations (a)

24 121

21 616

The following assets have been assumed from/(transferred to) other state government agencies during the financial year (b)

   

Office equipment

-

(28)

Furniture and fittings

-

(13)

Total assets assumed/(transferred)

-

(41)

Resources received free of charge (c)

   

Determined on the basis of the following estimates provided by agencies:

   

Department of the Premier and Cabinet - corporate support services

1 134

1 351

Department of Finance - accommodation lease services

154

25

Department of the Attorney General - legal services

49

19

 

1 337

1 395

Royalties for Regions Fund

   

Regional Community Services Account (d)

231

-

 

25 689

22 970

  1. Service appropriations fund the net cost of services delivered. Appropriation revenue comprises a cash component and a receivable (asset). The receivable (holding account) comprises the depreciation expense for the year and any agreed increase in leave liability during the year.
  2. Discretionary transfers of assets between State Government agencies are reported as assets assumed/(transferred) under ‘Income from State Government’. Non-discretionary non-reciprocal transfers of net assets (i.e. restructuring of administrative arrangements) designated as contributions by owners (CBOs) under TI 955 are recognised directly to equity.
  3. Where assets or services have been received free of charge or for nominal cost, the Commission recognises revenues equivalent to the fair value of the assets and/or the fair value of those services that can be reliably measured and which would have been purchased if they were not donated, and those fair values shall be recognised as assets or expenses, as applicable. Where the contribution of assets or services are in the nature of contributions by owners, the Commission makes the adjustment direct to equity.
  4. This is a sub-fund within the overarching Royalties for Regions Fund. The current funds are committed to projects and programs in regional areas.

16. Restricted cash and cash equivalent assets

 

2012
$000

2011
$000

Current

   

Royalties for Regions Fund (a)

212

-

Non-current

   

Accrued salaries suspense account (b)

384

312

  1. Unspent funds are committed to projects and programs in regional areas.
  2. Amount held in the suspense account is only to be used for the purpose of meeting the 27th pay in a financial year that occurs every 11 years.

17. Receivables

 

2012
$000

2011
$000

Current

   

Receivables

682

713

GST receivable

157

92

 

839

805

The Commission does not hold any collateral as security or other credit enhancements relating to receivables.

18. Amounts receivable for services (holding account)

 

2012
$000

2011
$000

Current

145

105

Non-current

5 432

4 993

 

5 577

5 098

Represents the non-cash component of service appropriations. It is restricted in that it can only be used for asset replacement or payment of leave liability.

19. Other assets

 

2012
$000

2011
$000

Current

   

Prepayments

696

765

20. Property, plant and equipment

 

2012
$000

2011
$000

Computer hardware

   

At cost

22

83

Accumulated depreciation

(15)

(62)

Accumulated impairment losses

-

-

 

7

21

Furniture and fittings

   

At cost

-

633

Accumulated depreciation

-

(413)

Accumulated impairment losses

-

(32)

 

-

188

Office equipment

   

At cost

136

136

Accumulated depreciation

(47)

(92)

Accumulated impairment losses

-

-

 

89

44

Total

96

253

See the next table for reconciliations.

Reconciliations

Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current and previous financial year are set out below:

2012

Computer hardware
$000

Furniture & fittings
$000

Office equipment
$000

Total
$000

Carrying amound at start of year

21

188

44

253

Additions

-

-

63

63

Transfers

-

-

-

-

Other disposals

(3)

(136)

-

(139)

Impairment losses

-

-

-

-

Depreciation

(11)

(52)

(18)

(81)

Carrying amount at end of year

7

-

89

96

2011

Computer hardware
$000

Furniture & fittings
$000

Office equipment
$000

Total
$000

Carrying amound at start of year

3

130

39

172

Additions

-

-

5

5

Transfers

27

134

23

184

Impairment losses

-

-

-

-

Depreciation

(9)

(76)

(23)

(108)

Carrying amount at end of year

21

188

44

253

21. Intangible assets

 

2012
$000

2011
$000

Computer software

   

At cost

-

192

Accumulated depreciation

-

-

Accumulated impairment losses

-

-

Total intangible assets

-

192

Reconciliation - Computer software

   

Carrying amount at start of year

192

-

Additions

-

192

Prior period adjustment

(192)

-

Carrying amount at end of year

-

192

22. Impairment of assets

There were no indications of impairment to property, plant and equipment at 30 June 2012.

The Commission held no goodwill or intangible assets with an indefinite useful life during the reporting period. At the end of the reporting period there were no intangible assets not yet available for use.

23. Payables

 

2012
$000

2011
$000

Current

   

Trade payables

327

125

Accrued salaries

347

915

Accrued expenses

967

595

 

1 641

1 635

24. Provisions

 

2012
$000

2011
$000

Current

   

Employee benefits provision

   

Annual leave (a)

1 840

1 856

Long service leave (b)

2 685

2 485

 

4 525

4 341

Other provisions

   

Employment on-costs (c)

2

2

 

4 527

4 343

Non-current

   

Long service leave (b)

1 048

894

Other provisions

   

Employment on-costs (c)

1

1

 

1 049

895

  1. Annual leave liabilities have been classified as current as there is no unconditional right to defer settlement for at least 12 months after the reporting period. Assessments indicate that actual settlement of the liabilities will occur as follows:

Within 12 months of the end of the reporting period

950

934

More than 12 months after the reporting period

891

923

 

1 841

1 857

  1. Long service leave liabilities have been classified as current where there is no unconditional right to defer settlement for at least 12 months after the reporting period. Assessments indicate that actual settlement of the liabilities will occur as follows:

Within 12 months of the end of the reporting period

1 231

1 041

More than 12 months after the reporting period

2 504

2 340

 

3 735

3 381

  1. The settlement of annual and long service leave liabilities gives rise to the payment of employment on-costs including workers’ compensation insurance. The provision is the present value of expected future payments. The associated expense, apart from the unwinding of the discount (finance cost), is disclosed in note 12 ‘Other expenses’.

Movement in other provisions

Movements in each class of provisions during the financial year, other than employee benefits, are set out below.

 

2012
$000

2011
$000

Employment on-cost provision

   

Carrying amount at start of period

3

2

Additional provisions recognised

1

2

Payments/other sacrifices of economic benefits

(1)

(1)

Carrying amount at end of period

3

3

25. Equity

Equity represents the residual interest in the net assets of the Commission. The Government holds the equity interest in the Commission on behalf of the community.

 

2012
$000

2011
$000

Contributed equity

   

Balance at start of period

-

1 422

Contributions by owners

   

Capital appropriations

-

-

Transfer of net assets from other agencies (a)

   

Net assets from the Office of the Public Sector Standards Commissioner

-

1 822

Total contributions by owners

-

3 244

Distributions to owners

   

Transfer of surplus cash to the Consolidated Account

-

(10 000)

Total distributions to owners

-

(10 000)

Transfer of debit balance to Accumulated Surplus

-

6 756

Balance at end of period

-

-

Accumulated surplus/(deficit) (retained earnings)

   

Balance at the start of the year

3 877

7 547

Result for the period

(810)

3 043

Income and expense recognised directly in equity

(192)

43

Transfer of debit balance from contributed equity

-

(6 756)

Balance at the end of the year

2 875

3 877

Total equity at the end of the period

2 875

3 877

  1. A restructure of administrative arrangement resulted in all functions of the Office of the Public Sector Standards Commissioner being transferred to the Public Sector Commission with effect from 1 December 2010. For that reporting period, the Office of the Public Sector Standards Commissioner recognised the following expenses, income, assets, and liabilities attributed to the transferred activities:
 

2012
$000

2011
$000

Expenses

   

Employee benefits expense

-

1 422

Supplies and services

-

183

Depreciation and amortisation expense

-

30

Accommodation expenses

-

164

Other expenses

-

44

 

-

1 843

Income

   

Service appropriation

-

2 132

Other revenues

-

3

Resources received free of charge

-

164

 

-

2 299

Assets

   

Current assets

   

Cash and cash equivalents

-

700

Receivables

-

363

Amounts receivable for services

-

72

 

-

1 135

Non-current assets

   

Restricted cash and cash equivalents

-

55

Amounts receivable for services

-

1 416

Plant and equipment

-

225

 

-

1 696

Liabilities

   

Current liabilities

   

Payables

-

148

Provisions

-

462

 

-

610

Non-current liabilities

   

Provisions

-

399

 

-

399

26. Notes to the ‘Statement of cash flows’

 

2012
$000

2011
$000

Reconciliation of cash

   

Cash at the end of the financial year as shown in the ‘Statement of cash flows’ is reconciled to the related items in the ‘Statement of financial position’ as follows:

   

Cash and cash equivalents

2 288

3 325

Restricted cash and cash equivalents (refer to note 16)

596

312

 

2 884

3 637

Reconciliation of net cost of services to net cash flows provided by/(used in) operating activities

   

Net cost of services

(26 499)

(19 927)

Non-cash items:

   

Depreciation and amortisation expense (note 8)

81

108

Net gain/(loss) on disposal on non-current assets

138

-

Resources received free of charge (note 15)

1 337

1 395

(Increase)/decrease in assets:

   

Current receivables (a)

31

774

Other current assets

69

(146)

Increase/(decrease) in liabilities:

   

Current payables (a)

6

(722)

Current provisions

184

673

Non-current provisions

154

(268)

Net GST receipts/(payments) (b)

18

66

Change in GST receivables/payables (c)

(82)

(53)

Net cash provided by/(used in) operating activities

(24 563)

(18 100)

  1. Note that the Australian Taxation Office (ATO) receivable/payable in respect of GST and the receivable/payable in respect of the sale/purchase of assets are not included in these items as they do not form part of the reconciling items.
  2. This is the net GST paid/received, i.e. cash transactions.
  3. This reverses out the GST in the receivables and payables.

27. Resources provided free of charge

During the year, resources were provided to other agencies free of charge for functions outside the normal operations of the Commission as follows:

 

2012
$000

2011
$000

Office of the Public Sector Standards Commissioner - Accommodation

-

129

28. Commitments

The commitments below are inclusive of GST where relevant.

Lease commitments

Commitments in relation to leases contracted for at the end of the reporting period but not recognised in the financial statements are payable as follows:

 

2012
$000

2011
$000

Non-cancellable operating lease commitments

   

Commitments for minimum lease payments are payable as follows:

   

Within one year

2 464

1 697

Later than one year and not later than five years

8 911

78

Later than five years

-

-

 

11 375

1 775

Motor vehicle leases as part of the ‘whole-of-government’ arrangement

   

Within one year

82

75

Later than one year and not later than five years

84

53

Later than five years

-

-

 

166

128

Accommodation leases occupied by the Commission

   

Within one year

2 382

1 622

Later than one year and not later than five years

8 827

25

Later than five years

-

-

 

11 209

1 647

29. Remuneration of senior officers

The number of senior officers, whose total of fees, salaries, superannuation, non-monetary benefits and other benefits for the financial year fall within the following bands are:

$

2012

2011

20 001 - 30 000

-

1

60 001 - 70 000

-

1

70 001 - 80 000

-

1

100 001 - 110 000

-

1

130 001 - 140 000

1

2

140 001 - 150 000

-

1

150 001 - 160 000

2

-

210 001 - 220 000

1

-

240 001 - 250 000

-

1

250 001 - 260 000

2

1

470 001 - 480 000

-

1

500 001 - 510 000

1

-

 

2012
$000

2011
$000

Total remuneration of senior officers

1 678

1 652

The total remuneration includes the superannuation expense incurred by the Commission in respect of senior officers.

No senior officers are members of the Pension Scheme.

30. Remuneration of auditor

Remuneration paid or payable to the Auditor General in respect of the audit for the current financial year is as follows:

 

2012
$000

2011
$000

Auditing the accounts, financial statements and performance indicators

45

43

31. Explanatory statement

Significant variations between estimates and actual results for income and expense as presented in the financial statement titled ‘Summary of consolidated account appropriations and income estimates’ are shown below. Significant variations are considered to be those greater than five per cent or $100 000.

Total appropriations provided to deliver services —significant variances between estimate and actual for 2012

 

2012
Estimate
$000

2012
Actual
$000

Variance
$000

Net amount appropriated to deliver services

25 915

22 915

3 000

The $3.0 million variance for the net amount appropriated to deliver services occurred because the Commission used surplus funds in its bank account to partly fund its 2011/12 operations rather than appropriation funds. The surplus bank balance arose due to the Commission operating below full FTE levels in previous financial years.

Service expenditure —significant variances between estimate and actual for 2012

Service

2012
Estimate
$000

2012
Actual
$000

Variance
$000

Service 1 - Advice and assistance

6 785

8 751

(1 966)

Service 2 - Public sector reform

3 651

3 115

536

Service 3 - Professional development and training

14 805

8 487

6 318

Service 4 - Development and monitoring of HR standards, ethical codes and PID guidelines

3 990

4 465

(475)

Service 5 - Advice and evaluation of equity and diversity in public employment

1 130

2 496

(1 366)

Service 6 - Independent CEO selection and recruitment advice

622

316

306

  • Service 1 - Advice and assistance
    The variance is due to higher than anticipated costs including severance payouts for SES staff coupled with the cost of the Sir Charles Court statue which has been allocated differently in the budget. In addition, the service operated with proportionately higher FTE numbers attracting a greater share of corporate and executive overheads.
  • Service 3 - Professional development and training
    The variance is partly due to the division operating below full FTE level for the year which impacted on the allocation of corporate and executive overheads. Two programs, the Aboriginal Employment Strategy and Regional Leadership Program were subject to start-up delays significantly reducing actual expenditure for the year.
  • Service 4 - Development and monitoring of human resource standards, ethical codes and public interest disclosure guidelines
    The service operated with proportionately higher FTE numbers attracting a greater share of direct costs and corporate and executive overheads.
  • Service 5 - Advice and evaluation of equity and diversity in public employment
    The service operated with proportionately higher FTE numbers attracting a larger share of direct costs and corporate and executive overheads.
  • Service 6 - Independent CEO selection and recruitment advice
    The service operated with proportionately fewer FTE numbers attracting a smaller share of direct costs and corporate and executive overheads.

All functions of the Office of the Public Sector Standards Commissioner were transferred under a restructure of administrative arrangements to the Public Sector Commission with effect from 1 December 2010. The functions transferred related to services 4, 5 and 6. As such, the figures for the 2010/11 financial year include seven months of combined operations.

Total appropriations provided to deliver services —significant variances between the actual for 2012 and for 2011

 

2012
Actual
$000

2011
Actual
$000

Variance
$000

Net amount appropriated to deliver services

22 915

17 791

5 124

Amount authorised by other statutes

1 206

1 182

24

The variance of $5.124 million for the net amount appropriated to deliver services is due to increased funding for accountability, governance and integrity programs ($1.107 million), public sector improvement initiatives ($1.183 million), leadership program ($2.198 million) and the Aboriginal employment strategy ($1.557 million).

In addition, the full year impact for the transfer of funds from OPSSC following the merger increased 2012 funding by $2.3 million. These increases were offset by the Public Sector Commission not drawing down its full funding in 2012 by $3.0 million due to operating below full FTE levels.

The increase in funding for the amount authorised by other statutes is due primarily to Salaries and Allowances Tribunal determinations.

Service expenditure —significant variances between the actual for 2012 and for 2011

Service

2012
Actual
$000

2011
Actual
$000

Variance
$000

Service 1 - Advice and assistance

8 751

6 817

1 934

Service 2 - Public sector reform

3 115

2 471

644

Service 3 - Professional development and training

8 487

6 938

1 549

Service 4 - Development and monitoring of HR standards, ethical codes and PID guidelines

4 465

2 998

1 467

Service 5 - Advice and evaluation of equity and diversity in public employment

2 496

1 135

1 361

Service 6 - Independent CEO selection and recruitment advice

316

347

(31)

  • Service 1 - Advice and assistance
    The variance is due to higher than anticipated costs including severance payouts for SES staff coupled with the cost of the Sir Charles Court statue which has been allocated differently in the budget. In addition, there was a minor shift in FTE numbers affecting corporate and executive overhead allocation.
  • Service 3 - Professional development and training
    The variance is mostly due to increased expenditure on programs for which new funding had been approved. The service operated at a slightly higher FTE levels resulting in an increased allocation of corporate and executive overheads.
  • Service 4 - Development and monitoring of human resource standards, ethical codes and public interest disclosure guidelines
    The variance represents the full year impact of operations following the merger with OPSSC in December 2010, combined with an increase in resources increasing direct costs and corporate and executive overheads.
  • Service 5 - Advice and evaluation of equity and diversity in public employment
    The service operated with proportionately more FTE numbers attracting a greater share of direct costs and corporate and executive overheads.

32. Financial instruments

a) Financial risk management objectives and policies

Financial instruments held by the Commission are cash and cash equivalents, restricted cash and cash equivalents, receivables and payables. The Commission has limited exposure to financial risks. The Commission’s overall risk management program focuses on managing the risks below.

Credit risk

Credit risk arises when there is the possibility of the Commission’s receivables defaulting on their contractual obligations resulting in financial loss to the Commission.

The maximum exposure to credit risk at the end of the reporting period in relation to each class of recognised financial assets is the gross carrying amount of those assets inclusive of any provisions for impairment, as shown in the table at note 32(c) ‘Financial instrument disclosures’ and note 17 ‘Receivables’.

Credit risk associated with the Commission’s financial assets is minimal because the main receivable is the amounts receivable for services (holding account). For receivables other than government, the Commission trades only with recognised, creditworthy third parties. The Commission has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Commission’s exposure to bad debts is minimal. At the end of the reporting period there are no significant concentrations of credit risk.

Allowance for impairment of financial assets is calculated based on objective evidence such as observable data indicating changes in client credit ratings. For financial assets that are either past due or impaired, refer to note 32(c) ‘Financial instrument disclosures’.

Liquidity risk

Liquidity risk arises when the Commission is unable to meet its financial obligations as they fall due. The Commission is exposed to liquidity risk through its trading in the normal course of business.

The Commission has appropriate procedures to manage cash flows including drawdowns of appropriations by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.

Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Commission’s income or the value of its holdings of financial instruments. The Commission does not trade in foreign currency and is not materially exposed to other price risks. The Commission is not exposed to interest rate risk because apart from minor amounts of restricted cash, all other cash and cash equivalents and restricted cash are non-interest bearing, and have no borrowings.

b) Categories of financial instruments

In addition to cash, the carrying amounts of each of the following categories of financial assets and financial liabilities at the end of the reporting period are as follows:

 

2012
$000

2011
$000

Financial assets

   

Cash and cash equivalents

2 288

3 325

Restricted cash and cash equivalents

596

312

Receivables (a)

6 259

5 811

Financial liabilities

   

Financial liabilities

1 641

1 635

  1. The amount of receivables excludes GST recoverable from the Australian Tax Office (statutory receivable).

c) Financial instrument disclosures

Credit risk and interest rate risk exposures

The ‘Interest rate exposures and ageing analysis of financial assets’ table details the Commission’s maximum exposure to credit risk, interest rate exposures and the ageing analysis of financial assets. The Commission’s maximum exposure to credit risk at the end of the reporting period is the carrying amount of the financial assets as shown below. The table discloses the ageing of financial assets that are past due but not impaired and impaired financial assets. The table is based on information provided to senior management of the Commission.

The Commission does not hold any collateral as security or other credit enhancements relating to the financial assets it holds.

The Commission does not hold any financial assets that had to have their terms renegotiated that would have otherwise resulted in them being past due or impaired.

Liquidity risk

The ‘Interest rate exposures and maturity analysis of financial liabilities’ table details the contractual maturity analysis for financial liabilities. The contractual maturity amounts are representative of the undiscounted amounts at the balance sheet date. The table includes both interest and principal cash flows. An adjustment has been made where material.

Fair values

All financial assets and liabilities recognised in the ‘Statement of financial position’, whether they are carried at cost or fair value, are recognised at amounts that represent a reasonable approximation of fair value unless otherwise stated in the applicable notes.

Interest rate exposures and ageing analysis of financial assets

Weighted average effective interest rate

Carrying amount

Interest rate exposure

Past due but not impaired

Impaired financial assets

Variable interest rate

Non-interest bearing

Up to 3 months

3-12 months

1-2 years

2-3 years

3-4 years

4-5 years

> 5 years

%

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

2012

 

Cash and cash equivalents

2 288

-

2 288

-

-

-

-

-

-

-

-

Restricted cash and cash equivalents

596

-

596

-

-

-

-

-

-

-

-

Receivables (a)

682

-

682

658

24

-

-

-

-

-

-

Amounts receivable for services

5 577

-

5 577

-

-

-

-

-

-

-

-

 

9 143

-

9 143

658

24

-

-

-

-

-

-

2011

 

Cash and cash equivalents

3 325

-

3 325

-

-

-

-

-

-

-

-

Restricted cash and cash equivalents

312

-

312

-

-

-

-

-

-

-

-

Receivables (a)

713

-

713

35

-

-

-

-

-

-

-

Amounts receivable for services

5 098

-

5 098

-

-

-

-

-

-

-

-

 

9 448

-

9 448

35

-

-

-

-

-

-

-

  1. The amount of receivables excludes GST recoverable from the Australian Tax Office (statutory receivable).

Interest rate exposures and maturity analysis of financial liabilities

Weighted average effective interest rate

Carrying amount

Interest rate exposure

Maturity dates

Variable interest rate

Non-interest bearing

Adjustment for discounting

Total nominal amount

Up to 3
months

3-12
months

1-2
years

2-3
years

3-4
years

4-5
years

> 5
years

%

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

2012

 

Payables

1 641

-

1 641

-

-

1 627

14

-

-

-

-

-

Other liabilities

-

-

-

-

-

-

-

-

-

-

-

-

 

1 641

-

1 641

-

-

1 627

14

-

-

-

-

-

2011

 

Payables

1 635

-

1 635

-

-

1 635

-

-

-

-

-

-

Other liabilities

-

-

-

-

-

-

-

-

-

-

-

-

 

1 635

-

1 635

-

-

1 635

-

-

-

-

-

-

The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities.

33. Events occuring after the end of the reporting period

There were no events occurring after the reporting date that impact on the financial statements.

34. Affiliated bodies

Salaries and Allowances Tribunal

The Tribunal, established by section 5 of the Salaries and Allowances Act 1975, is a government affiliated body that received administrative support from, but is not subject to operational control by, the Commission. It is funded by parliamentary appropriation of $647 000 for 2011/12 ($599 000 for 2010/11).

35. Contingent liabilities and contingent assets

Contingent liabilities

The Commission has no contingent liabilities.

Contaminated sites

Under the Contaminated Sites Act 2003, the Commission is required to report known and suspected contaminated sites to the Department of Environment and Conservation (DEC). In accordance with the Act, the DEC classifies these sites on the basis of the risk to human health, the environment and environmental values. Where sites are classified as ‘contaminated—remediation required’ or ‘possibly contaminated—investigation required’, the Commission may have a liability in respect of investigation or remediation expenses.

The Commission has no known or suspected contaminated sites.

Contingent assets

The Commission has no contingent assets.

 


Page last updated 11 September 2014