financial statements - dpac.tas.gov.au

Department of Premier and Cabinet - Annual Report 2010-11 174

Financial statements

The Department of Premier and Cabinet’s financial statements for 2010-11 including:

Income statement

Balance sheet

Cash flow statement

Statement of recognised income and expense

Notes to and forming part of the financial statements

Certification of financial statements

Independent audit report.


DEPARTMENT OF PREMIER AND CABINET

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011


Table of contents

Statement of Comprehensive Income 177

Statement of Financial Position 178

Statement of Cash Flows 179

Statement of Changes in Equity 180

Notes to and forming part of the Financial Statements 181


Department of Premier and Cabinet

Statement of Comprehensive Income

for the year ended 30 June 2011

2011 2011 2010 Budget Actual Actual

Notes $’000 $’000 $’000

Continuing Operations

Revenue and other income from transactions

Revenue from Government

Appropriation revenue - recurrent 2.8(a), 7.1 70,600 77,157 68,178

Appropriation revenue – works and services 2.8(a), 7.1 250 250 583

Appropriation Carried Forward under section 8A(2)

of the Public Account Act 1986

2.8(a), 7.1

- 561 -

Revenue from Special Capital Investment Funds 7.2,14.3 - 724 1,107

Grants 2.8(b), 7.3 12 176 284

Sale of goods and services 2.8(c), 7.4 33,531 30,333 30,520

Other revenue 2.8(d), 7.5 - 996 716

Total revenue and other income from transactions 104,393 110,197 100,388

Expenses from transactions

Employee benefits 2.9(a), 8.1 35,040 40,542 38,031

Superannuation 8.1 4,000 4,345 3,609

Depreciation and amortisation 2.9(b), 8.2 1,190 956 958

Supplies and consumables 8.3 44,716 36,173 35,269

Grants and subsidies 2.9(c), 8.4 5,036 8,896 6,509

Borrowing costs 2.9(d), 8.5 - 31 23

Transfers to Service Tasmania lead agencies 2.9(f) 9,080 11,202 11,008

Other transfer payments 2.9(f), 8.6 950 1,254 3,652

Transfers to the Consolidated Fund 12 26 13

Contributions provided 2.9(e), 8.7 - 215 -

Other expenses 2.9(f), 8.8 4,311 2,820 3,212

Total expenses from transactions 104,335 106,460 102,284

Net result from transactions (net operating balance) 58 3,737 (896)

Other economic flows included in net result

Net gain/(loss) on non-financial assets 2.10(a)(c), 9.1 - - (113)

Total other economic flows included in net result - - (113)

Net result 58 3,737 (1,009)

This Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

Budget information refers to original estimates and has not been subject to audit.

Explanations of material variances between budget and actual outcomes are provided in Note 5.1 of the

accompanying notes.



Statement of Financial Position

as at 30 June 2011

2011 2011 2010

Budget Actual Actual

Notes $’000 $’000 $’000

Assets Financial assets

Cash and deposits 2.11(a), 14.1 2,483 10,278 5,902

Receivables 2.11(b), 10.1 6,831 4,770 4,909 Non-financial assets

Inventories 2.11(c), 10.2 137 3 7

Plant, equipment and leasehold improvements 2.11(d), 10.3 2,263 2,435 2,082

Infrastructure 2.11(d), 10.4 825 822 1,012

Intangibles 2.11(e), 10.5 124 571 318

Other non-financial assets 2.11(f), 10.6 3,067 2,813 2,653

Total assets 15,730 21,692 16,883

Liabilities

Financial liabilities

Payables 2.12(a), 11.1 2,880 2,522 2,488

Interest bearing liabilities 2.12(b), 11.2 - 227 915 Non-financial liabilities

Employee benefits 2.12(d), 11.3 9,786 10,416 9,007

Other non-financial liabilities 2.12(f), 11.4 1,016 2,492 2,175

Total liabilities 13,682 15,657 14,585

Net assets 2,048 6,035 2,298

Equity

Reserves 13.1 180 10 180

Accumulated funds 1,868 6,025 2,118

Total Equity 2,048 6,035 2,298

This Statement of Financial Position should be read in conjunction with the accompanying notes.


Explanations of material variances between budget and actual outcomes are provided in Note 5.2 of the accompanying

notes.



Statement of Cash Flows


2011 2011 2010 Budget Actual Actual

Notes $’000 $’000 $’000

Inflows Inflows Inflows

Cash flows from operating activities (Outflows) (Outflows) (Outflows) Cash inflows Appropriation receipts – recurrent 70,600 77,958 68,739

Appropriation receipts – capital 250 250 583 Receipts from non-operational capital funding - SCIF - 724 1,099

Grants - 176 284 Sale of goods and services 33,599 30,506 30,966 GST receipts 3,892 6,668 6,461

Other cash receipts - 1,016 620

Total cash inflows 108,341 117,298 108,752 Cash outflows

Employee benefits (39,211) (43,440) (41,847) GST payments (4,861) (6,727) (6,452)

Borrowing costs - (55) - Supplies and consumables (43,552) (36,628) (35,363) Grants and subsidies (4,486) (8,897) (6,509)

Transfers to Service Tasmania lead agencies (9,080) (11,202) (11,008) Other transfer payments (950) (1,332) (3,652) Transfers to the Consolidated Fund - (26) (13)

Other cash payments (6,044) (2,341) (3,245)

Total cash outflows (108,184) (110,648) (108,089)

Net cash from operating activities 14.2 157 6,650 663

Cash outflows Payments for acquisition of non-financial assets (617) (1,586) (371)

Total cash outflows (617) (1,586) (371)

Net cash used by investing activities (617) (1,586) (371)

Cash flows from financing activities

Cash inflows Proceeds from borrowings - - 915

Total cash inflows - - 915

Cash outflows

Repayment of borrowings - (688) -

Total cash outflows - (688) -

Net cash from (used by) financing activities - (688) 915

Net increase (decrease) in cash held and cash equivalents (460) 4,376 1,207

Cash and cash deposits at the beginning of the reporting period

2,943 5,902 4,695

Cash and cash deposits at the end of the reporting period

14.1 2,483 10,278 5,902

This Statement of Cash Flows should be read in conjunction with the accompanying notes.


Explanations of material variances between budget and actual outcomes are provided in Note 5.3 of the accompanying

notes.



Statement of Changes in Equity


2011

Reserves Accumulated surplus /

(deficit)

Total equity

$’000 $’000 $’000

Balance as at 1 July 2010 180 2,118 2,298

Total comprehensive result - 3,737 3,737

180 5,855 6,035

Transfer of Heritage assets (170) 170 -

Balance as at 30 June 2011 10 6,025 6,035

2010

Reserves Accumulated surplus /

(deficit)

Total equity

$’000 $’000 $’000

Balance as at 1 July 2009 180 3,127 3,307

Total comprehensive result - (1,009) (1,009)

Balance as at 30 June 2010 180 2,118 2,298

This Statement of Changes in Equity should be read in conjunction with the accompanying notes.


Notes to and forming part of the Financial Statements for the year ended

30 June 2011

Contents

NOTE 1 ... Administered Financial Statements ................................................................................................................................... 183

1.1 ... Schedule of Administered Income and Expenses ................................................................................................... 183

1.2 ... Schedule of Administered Assets and Liabilities ...................................................................................................... 183

1.3 ... Schedule of Administered Cash Flows ........................................................................................................................... 184

1.4 ... Schedule of Administered Changes in Equity ............................................................................................................ 184

NOTE 2 ... Significant Accounting Policies ............................................................................................................................................. 185

2.1 ... Objectives and Funding ........................................................................................................................................................... 185

2.2 ... Basis of Accounting .................................................................................................................................................................... 185

2.3 ... Reporting Entity............................................................................................................................................................................ 186

2.4 ... Functional and Presentation Currency ........................................................................................................................... 186

2.5 ... Changes in Accounting Policies .......................................................................................................................................... 186

2.6 ... Administered Transactions and Balances...................................................................................................................... 187

2.7 ... Activities Undertaken Under a Trustee or Agency Relationship ................................................................... 187

2.8 ... Income from transactions ....................................................................................................................................................... 187

2.9 ... Expenses from transactions .................................................................................................................................................. 188

2.10 . Other economic flows included in net result ............................................................................................................ 189

2.11 . Assets ................................................................................................................................................................................................. 190

2.12 . Liabilities ............................................................................................................................................................................................ 191

2.13 . Leases ................................................................................................................................................................................................. 192

2.15 . Judgements and Assumptions .............................................................................................................................................. 193

2.16 . Foreign Currency ......................................................................................................................................................................... 193

2.17 . Budget Information .................................................................................................................................................................... 193

2.18 . Rounding .......................................................................................................................................................................................... 193

2.19 . Departmental Taxation ........................................................................................................................................................... 193

2.20 . Goods and Services Tax ......................................................................................................................................................... 193

NOTE 3 ... Departmental Output Schedules ...................................................................................................................................... 194

3.1 ... Output Group Information ................................................................................................................................................... 194

3.2 ... Reconciliation of Total Output Groups Net Result to Statement of Comprehensive Income .. 203

3.3 ... Reconciliation of Total Output Groups Net Assets to Statement of Financial Position ................. 203

3.4 ... Administered Output Schedule ......................................................................................................................................... 204

3.5 ... Reconciliation of Total Administered Output Groups Comprehensive Result to Administered

Changes in Equity ..................................................................................................................................................................................... 204

NOTE 4 ... Expenditure under Australian Government Funding Arrangements ........................................................... 205

NOTE 5 ... Explanations of Material Variances between Budget and Actual Outcomes ......................................... 205

5.1 ... Statement of Comprehensive Income ........................................................................................................................... 205

5.2 ... Statement of Financial Position ........................................................................................................................................... 206

5.3 ... Statement of Cash Flows ....................................................................................................................................................... 207

NOTE 6 ... Events Occurring After Balance Date ............................................................................................................................. 208

NOTE 7 ... Income from transactions ....................................................................................................................................................... 208

7.1 ... Revenue from Government ................................................................................................................................................. 208

7.2 ... Revenue from Special Capital Investment Funds ..................................................................................................... 208

7.3 ... Grants ................................................................................................................................................................................................. 209

7.4 ... Sale of goods and services ..................................................................................................................................................... 209


7.5 ... Other revenue .............................................................................................................................................................................. 209

NOTE 8 ... Expenses from transactions .................................................................................................................................................. 210

8.1 ... Employee benefits ...................................................................................................................................................................... 210

8.2 ... Depreciation and amortisation ........................................................................................................................................... 210

8.3 ... Supplies and consumables ..................................................................................................................................................... 211

8.4 ... Grants and subsidies .................................................................................................................................................................. 211

8.5 ... Borrowing Costs .......................................................................................................................................................................... 213

8.6 ... Other transfer payments ........................................................................................................................................................ 213

8.7 ... Contributions provided ........................................................................................................................................................... 214

8.8 ... Other expenses ........................................................................................................................................................................... 214

NOTE 9 ... Other economic flows included in net result ............................................................................................................ 214

9.1 ... Net gain/(loss) on non-financial assets ........................................................................................................................... 214

NOTE 10 . Assets ................................................................................................................................................................................................. 214

10.1 . Receivables ...................................................................................................................................................................................... 214

10.2 . Inventories ....................................................................................................................................................................................... 215

10.3 . Plant, equipment and leasehold improvements ........................................................................................................ 215

10.4 . Infrastructure .................................................................................................................................................................................. 216

10.5 . Intangibles ........................................................................................................................................................................................ 217

10.6 . Other non-financial assets ...................................................................................................................................................... 217

NOTE 11 . Liabilities ............................................................................................................................................................................................ 218

11.1 . Payables ............................................................................................................................................................................................. 218

11.2 . Interest bearing liabilities ......................................................................................................................................................... 218

11.3 . Employee benefits ...................................................................................................................................................................... 218

11.4 . Other liabilities .............................................................................................................................................................................. 219

NOTE 12 . Commitments and Contingencies .................................................................................................................................... 219

12.1 . Schedule of Commitments.................................................................................................................................................... 219

12.2 . Contingent Assets and Liabilities ....................................................................................................................................... 221

NOTE 13 . Reserves ............................................................................................................................................................................................ 221

13.1 . Reserves ............................................................................................................................................................................................ 221

NOTE 14 . Cash Flow Reconciliation........................................................................................................................................................ 222

14.1 . Cash and deposits ....................................................................................................................................................................... 222

14.2 . Reconciliation of Net Result to Net Cash from Operating Activities ......................................................... 222

14.3 . Acquittal of Capital Investment and Special Capital Investment Funds ..................................................... 223

14.4 . Financing Facilities ........................................................................................................................................................................ 223

NOTE 15 . Financial Instruments ................................................................................................................................................................. 224

15.1 . Risk Exposures .............................................................................................................................................................................. 224

15.2 . Categories of Financial Assets and Liabilities .............................................................................................................. 226

15.3 . Comparison between Carrying Amount and Net Fair Value of Financial Assets and Liabilities . 226

NOTE 16 . Notes to Administered Statements ................................................................................................................................. 227

16.1 . Explanations of Material Variances between Budget and Actual Outcomes ......................................... 227

16.2 . Administered Revenue from Government.................................................................................................................. 227

16.3 . Tasmanian Community Forest Agreement ................................................................................................................. 228

16.4 . Tasmanian Community Fund ............................................................................................................................................... 228

16.5 . Reconciliation of Administered Net Result to Net Cash from Administered Operating Activities228

16.6 . Financial Instruments (Administered) .............................................................................................................................. 228

NOTE 17 . Transactions and Balances Relating to a Trustee or Agency Arrangement ............................................. 229


NOTE 1 Administered Financial Statements

1.1 Schedule of Administered Income and Expenses

2011 2011 2010 Budget Actual Actual Notes $’000 $’000 $’000

Administered revenue and other income from transactions

Revenue from Government

Appropriation revenue – recurrent 2.8(a), 16.2 - 5,617 18,000

Total administered revenue and other income from

transactions

- 5,617 18,000

Administered expenses from transactions

Tasmanian Community Forest Agreement 2.9(c)(f), 16.3 - - 19,911

Tasmanian Community Fund 2.9 (f), 16.4 - 5,617 -

Total administered expenses from transactions - 5,617 19,911

Administered net result from transactions attributable to the

State

16.5 - - (1,911)

Administered Comprehensive Result - - (1,911)

This Schedule of Administered Income and Expenses should be read in conjunction with the accompanying notes.



accompanying notes.

1.2 Schedule of Administered Assets and Liabilities

2011 2011 2010 Budget Actual Actual Notes $’000 $’000 $’000

Administered Assets

Administered financial assets

Cash and deposits 2.11(a) - - -

Total administered assets - - -

Administered net assets - - -

Administered equity

Accumulated funds - - -

Total administered equity - - -

This Schedule of Administered Assets and Liabilities should be read in conjunction with the accompanying notes.



accompanying notes.


1.3 Schedule of Administered Cash Flows

2011 2011 2010


Notes $’000 $’000 $’000

Inflows Inflows Inflows

Administered cash flows from operating activities (Outflows) (Outflows) (Outflows)

Administered cash inflows

Appropriation receipts - recurrent 16.2 - 5,617 18,000

Total administered cash inflows - 5,617 18,000

Administered cash outflows

Tasmanian Community Forest Agreement 16.3 - - (19,911)

Tasmanian Community Fund 16.4 - (5,617) -

Total administered cash outflows - (5,617) (19,911)

Administered net cash from (used by) operating activities 16.5 - - (1,911)

Net increase (decrease) in administered cash held - - (1,911)

Administered cash and deposits at the beginning of the reporting

period - - 1,911

Administered cash and deposits at the end of the reporting

period

- - -

This Schedule of Administered Cash Flows should be read in conjunction with the accompanying notes.



accompanying notes.

1.4 Schedule of Administered Changes in Equity

2011 Accumulated surplus / (deficit)

Total equity

$’000 $’000

Balance as at 1 July 2010 - - Total comprehensive result - -

Total - -

Balance as at 30 June 2011 - -

2010 Accumulated surplus / (deficit)

Total equity

$’000 $’000

Balance as at 1 July 2009 1,911 1,911 Total comprehensive result (1,911) (1,911)

Total - -

Balance as at 30 June 2010 - -

This Schedule of Administered Changes in Equity should be read in conjunction with the accompanying notes.


NOTE 2 Significant Accounting Policies

2.1 Objectives and Funding

The Department of Premier and Cabinet provides a broad range of services to Cabinet, other

members of Parliament, Government agencies and the community. The Department works closely

with the public sector, the community, local government, the Australian Government and other state

and territory governments.

The Department of Premier and Cabinet is a central agency of the Tasmanian Government. The

Ministers whom the Department supports as of 30 June 2011 are the Premier, the Minister for Local

Government, the Minister for Veterans’ Affairs, the Minister for Children, the Minister for Aboriginal

Affairs, the Minister for Community Development and the Minister for Climate Change.

The Department also provides administrative support to the State Service Commissioner, the

Electricity Supply Industry Expert Panel, Tasmania Together Progress Board and the Local Government

Board each reporting directly to Parliament.

The Department has an important role in whole-of-government policy co-ordination, issues

management, inter-governmental relations, information technology and telecommunications, public

sector management, and coordination of government services through Service Tasmania.

The Department delivers a range of outputs to support the activities of other public sector

organisations. These services encompass project management, information resource management,

inter-agency human resource management issues and across government telecommunication and

computing services.

Department activities contributing toward these outcomes are classified as either controlled or

administered. Controlled activities involve the use of assets, liabilities, revenues and expenses controlled

or incurred by the Department in its own right. Administered activities involve the management or

oversight by the Department on behalf of the Government of items controlled or incurred by the

Government.

The Department is funded by a mixture of Parliamentary appropriations and retained revenues. It

provides the following services on a fee-for-service basis:

training services;

legislation drafting;

project management services; and

telecommunications and computing services.

The financial report encompasses all funds through which the Department controls resources to carry

out its functions.

In the process of preparing accrual based reports for the Department as a single entity, all material

intra-entity transactions and balances have been eliminated.

2.2 Basis of Accounting

The Financial Statements are a general purpose financial report and have been prepared in accordance

with:

Australian Accounting Standards and interpretations issued by the Australian Accounting Standards

Board; and

The Treasurer’s Instructions issued under the provisions of the Financial Management and Audit Act

1990.

The Financial Statements were signed by the Secretary on 15 August 2011.


Compliance with the Australian Accounting Standards (AAS) may not result in compliance with

International Financial Reporting Standards (IFRS), as the AAS include requirements and options

available to not-for-profit organisations that are inconsistent with IFRS. The Department is considered

to be not-for-profit and has adopted some accounting policies under AAS that do not comply with

IFRS.

The Financial Statements have been prepared on an accrual basis and, except where stated, are in

accordance with the historical cost convention. The accounting policies are generally consistent with

the previous year except for those changes outlined in Note 2.5.

The Financial Statements have been prepared as a going concern. The continued existence of the

Department in its present form, undertaking its current activities, is dependent on Government policy

and on continuing appropriations by Parliament for the Department’s administration and activities.

2.3 Reporting Entity

The Financial Statements include all the controlled activities of the Department. The Financial

Statements consolidate material transactions and balances of the Department and entities included in

its output groups. Material transactions and balances between the Department and such entities have

been eliminated.

2.4 Functional and Presentation Currency

These Financial Statements are presented in Australian dollars, which is the Department’s functional

currency.

2.5 Changes in Accounting Policies

a) Impact of new and revised Accounting Standards

In the current year, the Department has adopted all of the new and revised AAS and interpretations

issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and

effective for the current annual reporting period. These include:

AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127 –

This Standard introduces some minor terminology changes. There is no expected financial impact

of applying these changes.

AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual

Improvements Project – This Standard introduces small disclosure and classification changes. There is

no expected financial impact of applying these changes.

b) Impact of new and revised Accounting Standards yet to be applied

The following new standards have been issued by the AASB and are yet to be applied:

AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 – The

amendments require modification to the disclosure of categories of financial assets. It is not

anticipated that there will be any financial impact.

AASB 1053 Application of Tiers of Australian Accounting Standards – This Standard establishes a

differential financial reporting framework consisting of two tiers of reporting requirements for

preparing general purpose financial statements. The Standard does not have any financial impact on

the Department. However, it may affect disclosures if reduced disclosure requirements apply.

AASB 1054 Australian Additional Disclosures - This standards sets out the Australian-specific

disclosures for entities that have adopted Australian Accounting Standards that are additional to the

requirements under International Financial Reporting Standards in areas such as the nature of

financial statements (general purpose or special purpose), audit fees and the reconciliation of net

operating cash flow to profit (loss). It is not anticipated that there will be any financial impact.


AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure

Requirements – This Standard makes amendments to introduce reduced disclosure requirements for

certain types of entities. There is no expected financial impact of applying these changes, as the

Department is likely to be considered a Tier 1 entity.

AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial

Assets – This Standard includes additional presentation and disclosure requirements for financial

assets. It is not expected to have a financial impact.

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 – This Standard

makes minor revisions, however it is not expected to have a financial impact.

AASB 2009-12 Amendments to Australian Accounting Standards – This Standard introduces a number

of terminology changes. There is no expected financial impact.

AASB 2010-5 Amendments to Australian Accounting Standards – This Standard introduces

terminology changes as well as presentation changes, however, there is no financial impact from

these revisions.

2.6 Administered Transactions and Balances

The Department administers, but does not control, certain resources on behalf of the Government as

a whole. It is accountable for the transactions involving such administered resources, but does not have

the discretion to deploy resources for the achievement of the Department’s objectives.

Administered assets, liabilities, expenses and revenues are disclosed in Note 1 to the Financial

Statements.

2.7 Activities Undertaken Under a Trustee or Agency Relationship

Transactions relating to activities undertaken by the Department in a trust or fiduciary (agency) capacity

do not form part of the Department’s activities. Trustee and agency arrangements, and

transactions/balances relating to those activities, are neither controlled nor administered.

Fees, commissions earned and expenses incurred in the course of rendering services as a trustee or

through an agency arrangement are recognised as controlled transactions.

The financial administration of the Tasmanian Community Fund was with the Department of Treasury

and Finance from 1 July 2010 until 30 September 2010. The Department of Premier and Cabinet

assumed financial administration from 1 October 2010.

The Department holds monies in a trustee capacity on behalf of the Jim Bacon Foundation, the

Tasmanian Early Years Foundation and the Tasmanian Community Fund.

As the Department performs only a custodial role in respect of these monies, and because the monies

cannot be used for achievement of the Department’s objectives, transactions and balances relating to a

trustee arrangement are not recognised as departmental revenues, expenses, assets or liabilities in

these Financial Statements. A summary of transactions is provided in Note 17.

2.8 Income from transactions

Income is recognised in the Statement of Comprehensive Income when an increase in future economic

benefits related to an increase in an asset or a decrease of a liability has arisen that can be measured

reliably.

a) Revenue from Government

Appropriations, whether recurrent or capital, are recognised as revenues in the period in which the

Department gains control of the appropriated funds. Except for any amounts identified as carried

forward in Note 7.1 and 16.2, control arises in the period of appropriation.


b) Grants

Grants payable by the Australian Government are recognised as revenue when the Department gains

control of the underlying assets. Where grants are reciprocal, revenue is recognised as performance

occurs under the grant.

Non-reciprocal grants are recognised as revenue when the grant is received or receivable. Conditional

grants may be reciprocal or non-reciprocal depending on the terms of the grant.

c) Sales of goods and services

Amounts earned in exchange for the provision of goods are recognised when the significant risks and

rewards of ownership have been transferred to the buyer. Revenue from the provision of services is

recognised in proportion to the stage of completion of the transaction at the reporting date. The stage

of completion is assessed by reference to surveys of work performed.

d) Other revenue

Revenue from charges for services provided and other recoveries and transfers is recognised when an

increase in future economic benefit relating to an increase in an asset or a decrease in a liability has

arisen and can be reliably measured.

2.9 Expenses from transactions

Expenses are recognised in the Statement of Comprehensive Income when a decrease in future

economic benefits related to a decrease in an asset or an increase of a liability has arisen that can be

measured reliably.

a) Employee benefits

Employee benefits include, where applicable, entitlements to wages and salaries, recreation leave,

personal leave, long service leave, superannuation and other post-employment benefits.

b) Depreciation and amortisation

All applicable non-financial assets having a limited useful life are systematically depreciated over their

useful lives in a manner that reflects the consumption of their service potential.

Depreciation is provided for on a straight line basis, using rates which are reviewed annually. Major

depreciation periods are:

Minor computing equipment 3 years

Major computing equipment 5 years

Office plant and equipment 5 years

Leasehold improvements 10 years

Infrastructure 10 years

Heritage assets are not depreciated.

All intangible assets having a limited useful life are systematically amortised over their useful lives

reflecting the pattern in which the asset’s future economic benefits are expected to be consumed by

the Department.

Intangibles (software) are amortised over 3 years.


c) Grants and subsidies

Grants and subsidies expenditure is recognised to the extent that:

the services required to be performed by the grantee have been performed; or

the grant eligibility criteria have been satisfied.

A liability is recorded when the Department has a binding agreement to make the grant but services

have not been performed or criteria satisfied. Where grant monies are paid in advance of performance

or eligibility, a prepayment is recognised.

d) Borrowing costs

All borrowing costs are expensed as incurred using the effective interest method.

Borrowing costs include:

interest on bank overdrafts and short term and long term borrowings;

unwinding of discounting of provisions;

amortisation of discounts or premiums related to borrowings;

amortisation of ancillary costs incurred in connection with the arrangement of borrowings; and

finance lease charges.

e) Contributions provided

Contributions provided free of charge by the Department to another entity are recognised as an

expense when fair value can be reliably determined.

f) Other expenses

Expenses from acquisition of supplies and services are recognised when the obligation to pay can be

reliably measured, usually at the time of supply of such supplies and services. Transfers to Service

Tasmania lead agencies relate to recoveries by lead agencies (Department of Education, TMD and

Department of Primary Industries, Parks, Water and Environment) for delivery of services to Service

Tasmania. Other transfer payments relate to transfers of funding to other agencies, foundations and

other Government entities.

2.10 Other economic flows included in net result

a) Gain (Loss) from the Sale of Non-financial Assets

Gains or losses from the sale of non-financial assets are recognised when control of the asset has

passed to the buyer.

b) Impairment – Financial Assets

Financial assets are assessed at each reporting date to determine whether there is any objective

evidence that there are any financial assets that are impaired. A financial asset is considered to be

impaired if objective evidence indicates that one or more events have had a negative effect on the

estimated future cash flows of that asset.

An impairment loss, in respect of a financial asset measured at amortised cost, is calculated as the

difference between its carrying amount, and the present value of the estimated future cash flows

discounted at the original effective interest rate.

All impairment losses are recognised in the Statement of Comprehensive Income.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the

impairment loss was recognised. For financial assets measured at amortised cost, the reversal is

recognised in profit or loss.


c) Impairment – Non Financial Assets

All non-financial assets are assessed to determine whether any impairment exists. Impairment exists

when the recoverable amount of an asset is less than its carrying amount. Recoverable amount is the

higher of fair value less costs to sell and value in use. The Department’s assets are not used for the

purpose of generating cash flows; therefore value in use is based on depreciated replacement cost

where the asset would be replaced if deprived of it.

All impairment losses are recognised in the Statement of Comprehensive Income.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications

that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a

change in the estimates used to determine the recoverable amount. An impairment loss is reversed

only to the extent that the asset’s carrying amount does not exceed the carrying amount that would

have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

d) Other gains/(losses) from other economic flows

Other gains/(losses) from other economic flows include gains or losses from reclassifications of

amounts from reserves and/or accumulated surplus to net result, and from the revaluation of the

present values of the long service leave liability due to changes in the bond interest rate.

2.11 Assets

Assets are recognised in the Statement of Financial Position when it is probable that the future

economic benefits will flow to the Department and the asset has a cost or value that can be measured

reliably.

a) Cash and deposits

Cash means notes, coins, any deposits held at call with a bank or financial institution, as well as funds

held in the Special Deposits and Trust Fund. Deposits are recognised at amortised cost, being their

face value.

b) Receivables

Receivables are recognised at amortised cost, less any impairment losses. However, due to the short

settlement period, receivables are not discounted back to their present value.

c) Inventories

Inventories held for distribution are valued at cost adjusted, when applicable, for any loss of service

potential. Inventories acquired for no cost or nominal consideration are valued at current replacement

cost.

Inventories are measured at the lower of cost and current replacement cost.

d) Plant, equipment, leasehold improvements and infrastructure

(i) Valuation basis

Heritage assets are recorded at fair value. All other non-current physical assets, including work in

progress, are recorded at historical cost less accumulated depreciation and accumulated impairment

losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The costs of

self-constructed assets includes the cost of materials and direct labour, any other costs directly

attributable to bringing the asset to a working condition for its intended use, and the costs of

dismantling and removing the items and restoring the site on which they are located. Purchased

software that is integral to the functionality of the related equipment is capitalised as part of that

equipment.

When parts of an item of plant, equipment and leasehold improvements have different useful lives,

they are accounted for as separate items (major components) of plant and equipment.


(ii) Subsequent costs

The cost of replacing part of an item of plant, equipment and any leasehold improvement is recognised

in the carrying amount of the item if it is probable that the future economic benefits embodied within

the part will flow to the Department and its costs can be measured reliably. The carrying amount of

the replaced part is derecognised. The costs of day-to-day servicing of plant, equipment and leasehold

improvements are recognised in profit or loss as incurred.

(iii) Asset recognition threshold

The asset capitalisation threshold adopted by the Department for all classes of assets is $10,000, with

the exception of assets held by TMD. For business purposes TMD has adopted a recognition

threshold of $1,000. Items purchased that are valued at less than the asset capitalisation threshold of

their class of asset are charged to the Statement of Comprehensive Income in the year of purchase

(other than where they form part of a group of similar items which are material in total).

(iv) Revaluations

The Department’s heritage assets (furniture) are revalued on a 3 yearly basis. They were revalued by

Gowans Auctions (Auctioneers and Valuers) in June 2009. Heritage assets are reported at fair value.

Details of the revaluation are in Note 10.3.

e) Intangibles

An intangible asset is recognised where:

it is probable that an expected future benefit attributable to the asset will flow to the Department;

and

the cost of the asset can be reliably measured.

Intangible assets held by the Department are valued at fair value less any subsequent accumulated

amortisation and any subsequent accumulated impairment losses where an active market exists.

Where no active market exists, intangibles are valued at cost less any accumulated amortisation and

any accumulated impairment losses. Intangible assets for the Department are not revalued due to

software having a limited useful life.

f) Other non financial assets

Prepayments are recognised when they occur and are measured at the nominal amount.

2.12 Liabilities

Liabilities are recognised in the Statement of Financial Position when it is probable that an outflow of

resources embodying economic benefits will result from the settlement of a present obligation and the

amount at which the settlement will take place can be measured reliably.

a) Payables

Payables, including goods received and services incurred but not yet invoiced, are recognised at

amortised cost, which due to the short settlement period, equates to face value, when the Department

becomes obliged to make future payments as a result of a purchase of assets or services.


b) Interest bearing liabilities

Bank loans and other loans are initially measured at fair value, net of transaction costs. Bank loans and

other loans are subsequently measured at amortised cost using the effective interest rate method, with

interest expense recognised on an effective yield basis.

The effective interest rate method is a method of calculating the amortised cost of a financial liability

and allocating interest expense over the relevant period. The effective interest rate is the rate that

exactly discounts estimated future cash payments through the expected life of the financial liability, or

where appropriate, a shorter period.

c) Provisions

A provision arises if, as a result of a past event, the Department has a present legal or constructive

obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be

required to settle the obligation. Provisions are determined by discounting the expected future cash

flows at a rate that reflects current market assessments of the time value of money and the risks

specific to the liability. Any right to reimbursement relating to some or all of the provision is

recognised as an asset when it is virtually certain that the reimbursement will be received.

d) Employee benefits

Liabilities for wages and salaries and recreation leave are recognised when the employee becomes

entitled to receive a benefit. Those liabilities expected to be realised within 12 months are measured as

the amount expected to be paid. Other employee entitlements are measured as the present value of

the benefit at 30 June 2011, where the impact of discounting is material, and at the amount expected

to be paid if discounting is not material.

A liability for long service leave is recognised, and is measured as the present value of expected future

payments to be made in respect of services provided by employees up to the reporting date.

e) Superannuation

The Department does not recognise a superannuation liability for the accruing superannuation benefits

of employees. This liability is held centrally and is recognised within the Finance-General Division of the

Department of Treasury and Finance.

f) Other financial liabilities

Revenue in advance held is recognised at the time of receipt and treated as revenue in the period to

which it relates.

Payroll tax liability is a liability for payroll on-costs calculated on employee benefits liabilities for wages

and salaries recreation leave and long service leave and is recognised when the employee becomes

entitled to receive these benefits. The liability expected to be realised within 12 months is measured as

the amount expected to be paid. The liability due in more than 12 months is measured as the present

value of expected future payments to be made in respect of services provided by employees up to the

reporting date.

2.13 Leases

The Department has entered into a number of operating lease agreements for buildings and office

equipment, where the lessors effectively retain all the risks and benefits incidental to ownership of the

items leased. Equal instalments of lease payments are charged to the Statement of Comprehensive

Income over the lease term, as this is representative of the pattern of benefits to be derived from the

leased property.

The Department is prohibited by Treasurer’s Instruction 502 Leases from holding finance leases.


2.15 Judgements and Assumptions

In the application of Australian Accounting Standards, the Department is required to make judgements,

estimates and assumptions about carrying values of assets and liabilities that are not readily apparent

from other sources. The estimates and associated assumptions are based on historical experience and

various other factors that are believed to be reasonable under the circumstances, the results of which

form the basis of making the judgements. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimates are revised if the revisions affect only that

period, or in the period of the revisions and future periods if the revisions affect both current and

future periods.

Judgements made by the Department that have significant effects on the Financial Statements are

disclosed in the relevant notes to the Financial Statements, such as Note 2.11(d) and 2.12 (d).

The Department has made no assumptions concerning the future that may cause a material adjustment

to the carrying amounts of assets and liabilities within the next reporting period.

2.16 Foreign Currency

Transactions denominated in a foreign currency are converted at the exchange rate at the date of the

transaction. Foreign currency receivables and payables are translated at the exchange rates current as

at balance date.

2.17 Budget Information

Budget information refers to original estimates as disclosed in the 2010-11 Budget Papers and is not

subject to audit.

2.18 Rounding

All amounts in the Financial Statements have been rounded to the nearest thousand dollars unless

otherwise stated. Where the result of expressing amounts to the nearest thousand dollars would result

in an amount of zero, the financial statement will contain a note expressing the amount to the nearest

whole dollar.

2.19 Departmental Taxation

The Department is exempt from all forms of taxation except Fringe Benefits Tax, Payroll Tax and the

Goods and Services Tax (GST).

2.20 Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of Goods and Services Tax, except

where the GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables

and payables are stated inclusive of GST. The net amount recoverable or payable to the ATO is

recognised as an asset or liability within the Statement of Financial Position.

In the Statement of Cash Flows, the GST component of cash flows arising from operating, investing or

financing activities which is recoverable from, or payable to, the ATO is, in accordance with the AAS,

classified as operating cash flows.


NOTE 3 Departmental Output Schedules

3.1 Output Group Information

Comparative information has not been restated for external administrative restructures. Budget information

refers to original estimates and has not been subject to audit.

(I) Ministerial and Parliamentary Support Output Group

Output Group 1 – Support For Members of Parliament 2011 2011 2010


$'000 $'000 $'000



Revenue from appropriation 19,960 21,459 20,006

Sale of goods and services - 3 1

Other revenue - 160 218


Expenses from transactions

Employee benefits

Salaries and wages 11,299 13,762 12,259

Other employee related expenses 344 90 70

Reserved by Law – Ministerial Salaries and Allowances 744 762 728

Superannuation 1,352 1,348 1,106

Depreciation and amortisation 17 - 9

Grants and transfer payments - 1 -

Supplies and consumables

Advertising and promotion - 43 35

Communications 417 432 425

Consultants 21 71 41

Information technology 281 182 150

Maintenance 294 66 31

Operating lease costs 150 552 566

Property services 2,262 2,668 2,475

Travel and transport 1,484 1,015 813

Other supplies and consumables 313 501 379

Other transfer payments - 4 -

Contributions provided - 215 -

Other expenses 911 973 877


Net result from transactions (net operating balance) 71 (1,063) 261

Net Result 71 (1,063) 261

Comprehensive result 71 (1,063) 261

Expense by output

1.1 Support for Ministers 15,946 17,900 15,944

1.2 Support for other Members of Parliament 3,943 4,785 4,020

Total 19,889 22,685 19,964

Net assets

Total assets deployed for Output Group 1 254 615

Total liabilities incurred for Output Group 1 (3,562) (2,808)

Net assets deployed for Output Group 1 (3,308) (2,193)


(II) DEPARTMENTAL OUTPUT GROUPS

Output Group 1 – Support for Executive Decision Making

2011 2011 2010


$'000 $'000 $'000




Section 8A(2) carry forward revenue - 471 -

Sale of goods and services 95 184 141


Expense from transactions

Employee benefits



Superannuation 494 511 459

Depreciation and amortisation 193 10 10

Grants and transfer payments 1,365 2,403 2,648


Advertising and promotion 828 128 124

Board members’ fees 110 114 123






Property services 532 628 596

Travel and transport 214 165 158

Other supplies and consumables 2,128 1,157 391

Other transfer payments 50 217 3,079

Transfers to the Consolidated Fund - 18 -

Other expenses 1,516 320 318


Net result from transactions (net operating balance) (126) (220) (209)

Net Result (126) (220) (209)

Comprehensive result (126) (220) (209)

Expense by output

1.1 Strategic Policy and Advice 5,753 4,697 6,342

1.2 Climate Change 1,896 1,771 2,010

1.3 Social Inclusion 4,812 4,180 4,962

Total 12,461 10,648 13,314

Net assets





Output Group 2 – Government Processes and Services

2011 2011 2010


$'000 $'000 $'000




Appropriation – works and services 368 - -

Grants - 121 215

Sale of goods and services - 362 411

Other revenue - 120 -



Employee benefits





Grants and transfer payments 2,372 2,768 1,415

Borrowing costs - 31 23



Board members fees 200 237 -








Other supplies and consumables 1,630 2,127 1,973

Other transfer payments - 96 50

Transfers to the Consolidated Fund - 1 13

Other expenses 353 475 1,033


Net result from transactions (net operating balance) 130 446 (971)

Net Result 130 446 (971)

Comprehensive result 130 446 (971)

Expense by output

2.1 Management of Executive Government Processes 7,062 8,972 8,485

2.2 Principal and Subordinate Legislation 3,262 3,003 3,228

2.3 Tasmanian Government Courier 613 608 609

2.4 Corporate Support to Ministerial and Parliamentary

Offices and the Office of the Governor 1,563 1,709 1,352

2.5 Electricity Industry Supply Review - 1,234 -

Total 12,500 15,526 13,674

Net assets

Total assets deployed for Output Group 2 1,057 471




Output Group 3 – Electronic Services for Government Agencies and the Community

2011 2011 2010


$'000 $'000 $'000




Sale of goods and services 31,590 28,835 29,001




Employee benefits





Grants and transfer payments 155 350 350



Board members fees - 7 -

Communications 16,552 15,418 15,528


Information technology 2,131 1,455 1,502



Property services 1,669 1,259 1,467


Other supplies and consumables 5,242 603 539

Transfers to Service Tasmania lead agencies 8,830 10,952 10,759

Other transfer payments - - 18



Net result from transactions (net operating balance) 51 5,281 227

Other economic flows included in net result

Write-down of inventory to net realisable value - - (113)

Total other economic flows included in net result - - (113)

Net Result 51 5,281 114

Comprehensive result 51 5,281 114

Expense by output

3.1 ICT Policy Development and Implementation 2,591 2,244 2,732

3.2 Management and Ongoing Development of Service

Tasmania 12,070 12,076 11,910

3.3 Management of TASINET and Networking Tasmania 21,833 21,565 20,819

3.4 Information Systems Management 9,065 4,833 5,304

Total 45,559 40,718 40,765

Net assets

Total assets deployed for Output Group 3 9,124 9,198


Net assets deployed for Output Group 3 4,049 4,270


Output Group 4 – State Service Management

2011 2011 2010


$'000 $'000 $'000




Sale of goods and services 1,432 1,122 1,016




Employee benefits








Consultants 3 - 49


Maintenance 16 6 3




Other supplies and consumables 1,121 1,084 930

Other transfer payments 400 415 -




Net Result (6) (16) (60)


Expense by output

4.1 State Service Employment and Management 3,016 3,850 2,871

4.2 Support for the State Service Commissioner 1,187 1,128 964

Total 4,203 4,978 3,835

Net assets


Total liabilities incurred for Output Group 4 (909) (870)

Net assets deployed for Output Group 4 (540) (607)


Output Group 5 – Tasmania Together Progress Board

2011 2011 2010


$'000 $'000 $'000



Revenue from appropriation 1,113 1,151 948

Other revenue - 48 -

Total revenue and other income from transactions 1,113 1,199 948


Employee benefits

Salaries and wages 414 561 473







Consultants 4 22 20


Maintenance 4 1 -







Total expenses from transactions 1,110 1,230 976

Net result from transactions (net operating balance) 3 (31) (28)

Net Result 3 (31) (28)

Comprehensive result 3 (31) (28)

Expense by output

5.1 Support for Tasmania Together Progress Board 1,110 1,230 976

Total 1,110 1,230 976

Net assets





Output Group 6 – Community Development

2011 2011 2010


$'000 $'000 $'000




Grants 12 55 68

Sales of goods and services 46 11 6




Employee benefits





Grants and transfer payments 1,144 2,054 989







Maintenance 23 9 29





Other transfer payments 500 484 554





Net Result (78) (704) (60)


Expense by output

6.1 Community Development – policy advice and ongoing

community development 6,316 7,351 6,387

Total 6,316 7,351 6,387

Net Assets


Total liabilities incurred for Output Group 6 (1,276) (645)



Output Group 7 – Development of Local Government

2011 2011 2010


$'000 $'000 $'000




Section 8A(2) carry forward revenue - 90 -



Employee benefits

Salaries and wages 944 1,027 1,129



Depreciation and amortisation - 2 2

Grants and transfer payments - 596 -


Advertising and Promotion 16 6 7

Board members’ fees - 2 50




Maintenance 13 2 2





Other transfer payments - 38 -



Net result from transactions (net operating balance) 13 46 (56)

Net Result 13 46 (56)

Comprehensive result 13 46 (56)

Expense by output

7.1 Development of Local Government 2,047 2,348 1,792

Total 2,047 2,348 1,792

Net assets





Capital Investment Program

2011 2011 2010


$'000 $'000 $'000



Appropriation revenue – works and services 250 250 583

Total revenue and other income from transactions 250 250 583



Communications 209

Maintenance 122

Other supplies and consumables 2

Transfers to Service Tasmania lead agencies 250 250 250

Total expenses from transactions 250 250 583

Net result from transactions (net operating balance) - - -

Net Result - - -

Comprehensive result - - -

Expense by project -

Telepresence for COAG - - 333

Service Tasmania Shops Capital Investment 250 250 250

Total 250 250 583

Infrastructure Fund

2011 2011 2010


$'000 $'000 $'000



Revenue from Special Capital Investment Funds - 724 1,107

Total expenses from transactions - 724 1,107


Grants and transfer payments - 724 1,107

Total expenses from transactions - 724 1,107

Net result from transactions (net operating balance) - - -

Net Result - - -

Comprehensive result - - -

Expense by project

Main Street Makeover Program - 724 917

Veteran’s Memorial Centre Bridgewater - - 190

Total - 724 1,107

Net assets

Total assets deployed for Infrastructure Fund - -

Total liabilities incurred for Infrastructure Fund - -

Net assets deployed for Infrastructure Fund - -


3.2 Reconciliation of Total Output Groups Net Result to Statement of Comprehensive

Income

2011 2011 2010


$'000 $'000 $'000

Total comprehensive result of Output Groups 58 3,737 (1,009)

Reconciliation to comprehensive result - - -

Comprehensive result 58 3,737 (1,009)

3.3 Reconciliation of Total Output Groups Net Assets to Statement of Financial Position

2011 2010

Actual Actual

$'000 $'000

Total net assets deployed for Output Groups (4,240) (3,600)

Reconciliation to net assets

Assets unallocated to Output Groups 10,275 5,898

Liabilities unallocated to Output Groups - -

Net assets 6,035 2,298


3.4 Administered Output Schedule


Output Group – Administered Items

2011 2011 2010


$'000 $'000 $'000

Administered revenue and other income from transactions

Revenue from appropriation - 5,617 18,000

Total administered revenue and other income from

transactions - 5,617 18,000

Administered expense from transactions

Tasmanian Community Forest Agreement - - 19,911

Tasmanian Community Fund - 5,617 -

Total administered expenses from transactions - 5,617 19,911

Administered net result from transactions (net operating

balance) - - (1,911)

Total administered comprehensive result - - (1,911)

Administered expense by project

Tasmanian Community Forest Agreement - - 19,911

Tasmanian Community Fund - 5,617 -

Total - 5,617 19,911

Administered net assets

Total assets deployed for Administered items - -

Total liabilities incurred for Administered items - -

Administered net assets deployed for Administered items - -

3.5 Reconciliation of Total Administered Output Groups Comprehensive Result to

Administered Changes in Equity

2011 2011 2010


$'000 $'000 $'000

Total administered net result of Administered Items - - (1,911)

Reconciliation to administered net surplus/(deficit) - - -

Net surplus (deficit) - - (1,911)


NOTE 4 Expenditure under Australian Government Funding

Arrangements

The Department of Premier and Cabinet did not have any expenditure under the Australian Government Funding

Arrangements in 2009-10.

State Funds

Australian

Govt Funds State Funds

Australian

Govt Funds

2011 2011 2010 2010

Actual Actual Actual Actual

$’000 $’000 $’000 $’000

National Partnership Payments

Local Government Reform - 356 - -

Total - 356 - -

NOTE 5 Explanations of Material Variances between Budget and

Actual Outcomes

The following are brief explanations of material variances between Budget estimates and actual outcomes. Variances

are considered material where the variance exceeds the greater of 10 per cent of Budget estimate and $500,000.

5.1 Statement of Comprehensive Income

Note Budget Actual Variance Variance

$’000 $’000 $’000 %

Appropriation revenue - recurrent (a) 70,600 77,157 6,557 9

Appropriation Carried Forward under section 8A(2)

of the Public Account Act 1986 (b) - 561 561 100

Sales of goods and services (c) 33,531 30,333 (3,198) (10)

Other revenue (d) - 996 996 100

Employee benefits (e) 35,040 40,542 5,502 16

Supplies and consumables (f) 44,716 36,173 (8,543) (19)

Grants and subsides (g) 5,036 8,896 3,860 77

Transfers to Service Tasmanian lead agencies (h) 9,080 11,202 2,122 23

Other expenses (i) 4,311 2,820 (1,491) (35)

Notes to Statement of Comprehensive Income variances

(a) Variations are primarily due to:

Funding provided by the Commonwealth for Local Government reform – Future proofing councils and

Development of Local Government

A donation to the Queensland Flood Appeal based on the Government's commitment to match fundraising efforts

through service clubs including Apex, Lions, Soroptimist and Rotary

The cost of State Funerals for the late Sue Napier and the late Darrel Baldock

The Government’s contribution to the Unicef Pakistan Flood Appeal

Funding was required for the establishment of an expert panel to undertake a review of the Tasmanian electricity

supply industry, which is to be administered by the Department.

Funding required to meet the Government's commitment to provide financial assistance to the Six Rivers

Aboriginal Corporation (SRAC) for the purpose of supporting the relocation of the SRAC Community Centre

including the purchase and refurbishment of premises; and for the redevelopment of the Tiagarra Museum

Expenditure brought forward on the Government's IT Transformation Project. The funding brought forward

related to the consolidation of email services across Government component of the project.


Increased accommodation expenses, primarily arising from cost revisions within the leasing agreements for

Ministerial Offices and other Members’ offices.

Increased non-salary office expenses for an additional four Ministerial offices.

Unbudgeted staff related, property and other non-salary expenses within Ministerial and Parliamentary Support to

meet the cost of the approved staffing structure within Ministerial Offices, other Government members offices,

Office of the Liberal Opposition and Office of the Tasmanian Greens.

(b) Reflects funding carried forward into 2010-11 for the Local Government Valuation and Rating Review, the Cars for

Communities program, and the ClimateConnect grants program.

(c) Reflects lower than estimated revenue from telecommunications charges due to government wide

telecommunications budget management strategies.

(d) Reflects funding received from Treasury for Stage 1 of the Structured Infrastructure Investment Review Program,

the transfer of Tasmania Day funding from the Department of Economic Development, Tourism and the Arts, the

contribution from several agencies for the People Pulse Survey, salary reimbursements received for staff on

secondment to other agencies, carbon emission offsets received, and transfer of funds from Workplace Standards

for Unions Tasmania funding.

(e) Reflects the impact of State Service Wage increases during 2010-11, additional staff costs for new programs

including the IT Transformation program and the Electricity Supply Industry Review Panel, and the recasting of

expenses against budget against Supplies and Consumables.

(f) Reflects a reduction in telecommunications costs due to government wide telecommunications budget

management strategies, and a recasting of expenses against budget between Supplies and Consumables, Employee

Benefits, Grants and Subsidies, and Other Expenses in the Financial Statements.

(g) Reflects recasting of expenses against budget between Grants and Subsidies, Supplies and Consumables, and Other

Expenses in the Financial Statements.

(h) Reflects payments made to meet the cost of Service Tasmania delivery channels.

(i) Reflects recasting of expenses against budget between Other Expenses, Supplies and Consumables, Employee

Benefits, and Grants and Subsidies in the Financial Statements.

5.2 Statement of Financial Position


$’000 $’000 $’000 %

Receivables (a) 6,831 4,770 (2,061) (30)

Employee benefits (b) 9,786 10,416 630 6

Other non financial liabilities (c) 1,016 2,492 1,476 145

Notes to Statement of Financial Position variances

(a) Reflects the reduction in Sales of Goods and Services, and improved debt collection processes.

(b) Reflects the impact of State Service Wage increases during 2010-11, additional staff costs for new programs

including the IT Transformation program and the Electricity Supply Industry Review Panel, and additional staff

expenses to meet the cost of the approved staffing structure within Ministerial Offices, other Government

members offices, Office of the Liberal Opposition and Office of the Tasmanian Greens.

(c) Reflects funding carry forwards for the Six Rivers Aboriginal Corporation and Climate Connect grants, increased

payroll tax liability, and an increase in revenue received in advance.


5.3 Statement of Cash Flows


$’000 $’000 $’000 %

Appropriation revenue - recurrent (a) 70,600 77,958 7,358 10

Sale of goods and services (b) 33,599 30,506 (3,093) (9)

GST receipts (c) 3,892 6,668 2,776 71

Other cash receipts (d) - 1,016 1,016 100

Employee benefits (e) (39,211) (43,440) (4,229) 11

GST payments (f) (4,861) (6,727) (1,866) 38

Supplies and consumables (g) (43,552) (36,628) 6,924 (16)

Grants and subsidies (h) (4,486) (8,173) (3,687) 82

Transfers to Service Tasmania lead agencies (i) (9,080) (11,202) (2,122) 23

Other cash payments (j) (6,044) (2,341) 3,703 (61)

Notes to Statement of Cash Flows variances

(a) Variations are primarily due to:

Funding provided by the Commonwealth for Local Government reform – Future proofing councils and

Development of Local Government

A donation to the Queensland Flood Appeal based on the Government's commitment to match fundraising efforts

through service clubs including Apex, Lions, Soroptimist and Rotary

The cost of State Funerals for the late Sue Napier and the late Darrel Baldock

The Government’s contribution to the Unicef Pakistan Flood Appeal

Funding was required for the establishment of an expert panel to undertake a review of the Tasmanian electricity

supply industry, which is to be administered by the Department of Premier & Cabinet.

Funding required to meet the Government's commitment to provide financial assistance to the Six Rivers

Aboriginal Corporation for the purpose of supporting the relocation of the SRAC Community Centre including the

purchase and refurbishment of premises; and for the redevelopment of the Tiagarra Museum

Expenditure brought forward on the Government's IT Transformation Project. The funding brought forward

related to the consolidation of email services across Government component of the project.

Increased accommodation expenses, primarily arising from cost revisions within the leasing agreements for

Ministerial Offices and other Members’ offices.

Increased non-salary office expenses for an additional four Ministerial offices.

Unbudgeted staff related, property and other non-salary expenses within Ministerial and Parliamentary Support to

meet the cost of the approved staffing structure within Ministerial Offices, other Government members offices,

Office of the Liberal Opposition and Office of the Tasmanian Greens.

(b) Reflects lower than estimated revenue from telecommunications charges due to government wide

telecommunications budget management strategies.

(c) Reflects the actual level of input tax credits received and GST received on services provided.

(d) Reflects funding received from Treasury for Stage 1 of the Structured Infrastructure Investment Review Program,

the transfer of Tasmania Day funding from the Department of Economic Development, Tourism and the Arts, the

contribution from several agencies for the People Pulse Survey, salary reimbursements received for staff on

secondment to other agencies, carbon emission offsets received, and transfer of funds from Workplace Standards

for Unions Tasmania funding.

(e) Reflects the impact of State Service Wage increases during 2010-11, additional staff costs for new programs

including the IT Transformation program and the Electricity Supply Industry Review Panel, and the recasting of

expenses against budget against Supplies and Consumables and Other Expenses.

(f) Reflects actual level of GST paid on purchases of goods and services and payment of GST to the ATO.

(g) Reflects a reduction in telecommunications costs due to government wide telecommunications budget

management strategies, and a recasting of expenses against budget between Supplies and Consumables, Employee

Benefits, Grants and Subsidies, and Other Cash Payments in the Financial Statements.

(h) Reflects recasting of expenses against budget between Grants and Subsidies, Supplies and Consumables, and Other

Expenses in the Financial Statements.

(i) Reflects payments made to meet the cost of Service Tasmania delivery channels.


(j) Reflects recasting of expenses against budget between Other Cash Payments, Supplies and Consumables,

Employee Benefits, and Grants and Subsidies in the Financial Statements.

NOTE 6 Events Occurring After Balance Date

No events have occurred after the reporting date for which a financial effect has not been recognised.

NOTE 7 Income from transactions

7.1 Revenue from Government

Revenue from Appropriation includes revenue from appropriations, including appropriations carried forward under

section 8A(2) of the Public Account Act 1986, and Items Reserved by Law.

The Budget information is based on original estimates and has not been subject to audit.

2011 2011 2010


$’000 $’000 $’000

Appropriation revenue - recurrent

Current year 69,856 76,395 67,450

Item Reserved by Law: Parliamentary Salaries, Superannuation and

Allowances Act 1973 744 762 728

Total 70,600 77,157 68,178

Appropriation revenue – works and services 250 250 583

Revenue from Government - other

Appropriation carried forward under section 8A(2) of the Public

Account Act 1986 taken up as revenue in the current year - 561 -

Total 250 811 583

Total Revenue from Government 70,850 77,968 68,761

Section 8A(2) of the Public Account Act 1986 allows for an unexpended balance of an appropriation to be transferred

to an account in the Special Deposits and Trust Fund for such purposes and conditions as approved by the Treasurer.

In the initial year, the carry forward is recognised as a liability, Revenue Received in Advance. The carry forward from

the initial year is recognised as revenue in the reporting year, assuming the conditions of the carry forward are met and

the funds are expended.

7.2 Revenue from Special Capital Investment Funds

Funding for major infrastructure projects is provided through Special Capital Investment Funds. The Department is

allocated funding for specific projects from the Special Capital Investment Funds as part of the Budget process.

2011 2010

Actual Actual

$’000 $’000

Economic and Social Infrastructure Fund 724 1,107

Total Revenue from Special Capital Investment Funds 724 1,107

Details of total Special Capital Investment Funds revenues and expenses are provided as part of Note 3 Departmental

Output Schedules. Details for each project are at Note 14.3.


7.3 Grants

2011 2010

$’000 $’000

Grants from Australian Government

Specific grants 140 185

Total 140 185

Other Grants

Grant for National Youth Week activities 36 -

Contribution to the treatment of natural hazard risk project - 90

Training incentives - 9

Total 36 99

Total 176 284

Grants received from the National Australia Day Council of $120,671 are provided on the condition that they are

used for Australia Day celebrations. An amount of $4,795 will be expended in the 2011-12 financial year.

Grant received from the Commonwealth Department of Education, Employment and Workplace Relations of

$19,547 was provided on the condition that the funds were used for National Youth Week activities. The funding

was fully expended.

Grant received from Beyond Blue of $36,000 was provided on the condition that the funds were used for National

Youth Week activities. The funding was fully expended.

7.4 Sale of goods and services

2011 2010

$’000 $’000

TASINET charges 18,851 18,999

Network Tasmania (NT) contract management 2,012 2,105

Computing services 2,634 2,619

Human resource systems 1,632 1,456

Oracle licensing 629 606

Information technology policy 64 198

Legislation drafting 317 473

Training services 1,107 1,016

Service Tasmania transaction fees and contributions 2,746 2,864

Other 341 184

Total 30,333 30,520

7.5 Other revenue

2011 2010

$’000 $’000

Carbon emissions offsets revenue 95 85

Transfers from other agencies 426 291

Other 475 340

Total 996 716


NOTE 8 Expenses from transactions

8.1 Employee benefits

2011 2010

$’000 $’000

Wages and salaries (including fringe benefits and non-monetary components) 34,477 30,812

Recreation leave 2,998 2,908

Long service leave 1,468 836

Personal leave 937 947

Other post-employment benefits 158 1,867

Recruitment 133 51

Training and conferences 293 388

Other employee expenses 78 222

Sub Total 40,542 38,031

Superannuation 4,345 3,609

Total 44,887 41,640

Superannuation expenses relating to the defined benefits scheme relate to payments into the Superannuation

Provision Account (SPA) held centrally and recognised within the Finance General Division of the Department of

Treasury and Finance. The amount of the payment is based on an employer contribution rate determined by the

Treasurer, on the advice of the State Actuary. The current employer contribution is 12.3 per cent of salary.

Superannuation expenses relating to contribution schemes are paid directly to superannuation funds at a rate of

nine per cent of salary. In addition, departments are also required to pay into the SPA a “gap” payment equivalent to

3.3 per cent of salary in respect of employees who are members of contribution schemes.

8.2 Depreciation and amortisation

a) Depreciation 2011 2010

$’000 $’000

Plant, equipment and leasehold improvements 523 594

Infrastructure assets 190 190

Total 713 784

b) Amortisation 2011 2010

$’000 $’000

Intangibles - software 243 174

Total 243 174

Total depreciation and amortisation 956 958


8.3 Supplies and consumables

2011 2010

$’000 $’000

Advertising and promotion 883 921

Audit fees – financial audit 78 50

Audit fees – internal audit 44 40

Building and infrastructure maintenance 172 292

Communications 16,327 16,523

Consultants 890 934

Contractors, training fees, and expenses 2,190 919

Entertainment 97 92

Information technology 2,293 2,749

Materials and supplies 203 199

Meetings/committee expenses 331 228

Minor equipment purchases and maintenance 933 228

Operating lease costs 1,001 1,100

Other property services 817 804

Printing and information 1,360 1,457

Rent 5,589 5,701

Sitting fees 566 344

Travel and transport 1,635 1,441

Other supplies and consumables 764 1,247

Total 36,173 35,269

8.4 Grants and subsidies

2011 2010

$’000 $’000

Community Capacity Building 700 971

Community Development Grants 1,183 657

Family Assistance Program 350 350

Main Street Makeover Program 724 917

Six Rivers Aboriginal Corporation Grant 524 -

Social Inclusion Grant Programs 1,055 1,146

Sundry Grants – Premier 2,315 841

Tasmanian Climate Change Office Grants 528 424

University Scholarships 130 125

Urban Renewal and Heritage Fund 78 -

Other Grants and Contributions 1,309 1,078

Total 8,896 6,509

Community Capacity Building Grants

The Community Capacity Building Grants Program aims to improve Tasmanian’s participation in the social, economic,

political and cultural life of their community by building individual and community capacity. This grants program is

funded jointly under Output 1.3 – Social Inclusion and Output 6.1 – Community Development - Policy advice and

ongoing community development.

Community Development Grants

The Aboriginal Affairs Program provides grants to:

the Tasmanian Aboriginal Centre Inc, to assist Aboriginal first home buyers and Aboriginal charitable institutions

with the payment of stamp duty costs; and

the Aboriginal Land Council of Tasmania, to assist with the management of land returned to the Aboriginal

community.

The Office of Children and Youth Affairs provides funding for the Youth Network of Tasmania (YNOT) including the

Tasmanian Youth Forum.


Multicultural Tasmania allocated $90 000 funding for the Multicultural Council of Tasmania, the peak body for the

culturally and linguistically diverse community in the State. The Migrant Resource Centre (South) was allocated funding

of $57 000 and the Migrant Resource Centre (North) was allocated $43 000.

The Seniors Bureau’s grant program provides grant assistance to the Council of the Ageing (Tasmania) to perform the

functions of a peak body representing and advocating the interests of older Tasmanians and the Tasmanian non-

government aged sector.

During 2010, the Tasmanian Government facilitated a statewide tour of Deadly Dollars, a New South Wales

performance based consumer rights and financial literacy program for Aboriginal and Torres Strait Islander people, with

financial assistance from the Australian Government of $29,000.

The Lesbian, Gay, Bisexual, Transgender and Intersex (LGBTI) Community grants program allocated $50,000 to

community organisations to progress achievement against Tasmania Together benchmarks that relate to the LGBTI

community.

These grants are all funded under Output 6.1 Community Development – Policy advice and ongoing community

development.

Family Assistance Program

This item provides special funding for five welfare organisations undertaking programs to support Tasmanian families.

The funding is available for emergency relief, as well as preventative support programs designed to reduce the need for

emergency relief and social policy research associated with emergency relief. Grants under this program are not

available to meet administrative overheads. Funding under this program is designed to supplement other available

funding sources. Recipient organisations are expected to maintain their efforts to secure funding from other sources.

This program was funded under Output 1.3 – Social Inclusion.

Main Street Makeover Program

Funding is provided from the Special Capital Investment Fund, through the Economic and Social Infrastructure Fund, for

the Main Street Makeover program which enables councils to increase the number of towns in Tasmania with

improved streetscapes that will encourage visitors to spend more time in the vicinity and to enhance local

communities.

Six Rivers Aboriginal Corporation Grant

Six Rivers Aboriginal Corporation (SRAC) (formerly known as the Mersey Leven Aboriginal Corporation) endeavours

to provide a range of services to Aboriginal and Torres Strait Islander people in the Mersey Leven area. In 2010,

Government committed to assisting the SRAC to relocate its premises and to re-develop the Tiagarra Museum

located on Mersey Bluff. A total of $524,000 was provided to SRAC in 2010-11.

Social Inclusion Grant Programs

Funding is provided to support the Returned and Services League of Australia (RSLA) (Tasmanian Branch) to deliver

services to its members and reconnect isolated and socially excluded veterans, war widows and dependants to their

community.

The Tasmanian Government has invested $260,000 in funding per year for four years for the Supporting Tasmanian

Volunteers Program to reinvigorate and coordinate volunteering in Tasmania.

The War Memorial grants program was allocated $50,000 to provide funding as a contribution to the cost of repairing

and maintaining memorials in Tasmania.

The Cars for Communities Program was introduced to help community organisations design local transport services

that help isolated Tasmanians become more involved in their communities.

Three food vans across the State received grants funded through Output 1.3 – Social Inclusion. The objective of the

grants is to assist the provision of food and beverage services and outreach to other services, information and social

contact to disadvantaged Tasmanians

These grants were funded under Output 1.3 – Social Inclusion.

Sundry Grants – Premier

A discretionary grants program is maintained to allow the Premier to meet requests received to provide limited

financial assistance to groups or individuals. These grants are designed to support valued community and cultural

activities with national, statewide or local significance. Election commitment grants were included in the sundry grants

program. This grants program is funded under Output 2.1 - Management of Executive Government Processes.


Tasmanian Climate Change Office Grants Programs

The Climate Change Office funds two programs to help local communities, households and individuals to reduce their

carbon footprint. Both programs are funded under Output 1.2 – Climate Change.

The Climate Connect community grants program was developed to assist not-for-profit community groups and local

government entities to undertake innovative and targeted projects that help communities reduce their carbon

emissions, conserve energy, and / or respond to the impacts of climate change.

The Earn Your Stars Micro-grants program is designed to give communities the resources, skills and knowledge to

respond to climate change issues.

University Scholarships

The Tasmania Scholarships Program offers financial assistance on the basis of merit to qualified people wishing to study

at the University of Tasmania. The Program is a key element in activities by the University to capitalise on the potential

of Tasmania to become a national and international higher education destination. The Tasmania Scholarships Program

is designed to encourage local students to stay in the State and to attract top national and international students to the

University of Tasmania. This item provides for a contribution by the State Government to the Tasmania Scholarships

Program. The Program is funded under Output 2.1 – Management of Executive Government Processes.

Urban Renewal and Heritage Fund Grants

The Urban Renewal and Heritage Fund supports conservation and restoration of heritage assets as well as urban

renewal projects. The Dorset Council received a grant for the Bridport Cultural and Recreation Revitalisation Project.

Other grants and contributions

Australia Day Grants: ($9,896)

Celebrate Tasmania Day Grants: ($62,000)

Tasmanian Electronic Commerce Centre: ($350,000)

Kentish Council Railton Streetscape: ($300,000)

National partnership Agreement to Support Local Government Projects: ($218,000)

UNICEF donation to the Pakistan Flood appeal: ($100,000)

Queensland Flood Relief Appeal: ($248,000)

Relationships Australia Research Program: ($10,000)

Tasmanian Centre for Global Learning: ($2,000)

Tasmanian Regional Arts Inc: ($4,000)

Volunteering Tasmania Inc: ($5,000).

8.5 Borrowing Costs

2011 2010

$’000 $’000

Interest expense

Interest on advance from the State Government 31 23

Total 31 23

8.6 Other transfer payments

2011 2010

$’000 $’000

Transfers to Tasmanian state government agencies 360 1,003

Transfers to Australian government agencies 90 1,075

Transfers to interstate government agencies 22 219

Transfers to Government Business Enterprises and State Owned Companies 23 696

Transfer to Jim Bacon Foundation 50 50

Transfer to Tasmanian Early Years Foundation 500 500

Other transfers 209 109

Total 1,254 3,652


8.7 Contributions provided

2011 2010

$’000 $’000

Voluntary transfer of activities between departments

Assets transferred at no cost – Department of Treasury and Finance 15 -

Assets transferred at no cost - Office of the Governor 200 -

Total 215 -

A Heritage furniture asset transferred to the Department of Treasury and Finance is shown above as a Contribution

provided $15,000. Six other Heritage furniture items that were below the asset capitalisation threshold of $10,000

were also transferred. The total value of these six items of Heritage furniture was $22,200.

A Heritage furniture asset transferred to Office of the Governor is shown above as a Contribution provided $200,000.

8.8 Other expenses

2011 2010

$’000 $’000

Ex gratia payment - 629

Payroll Tax 2,687 2,451

Workers’ compensation premiums 133 132

Total 2,820 3,212

NOTE 9 Other economic flows included in net result

9.1 Net gain/(loss) on non-financial assets

2011 2010

$’000 $’000

Write-down of inventory to net realisable value - (113)

Net gain/(loss) on disposal of physical assets - -

Total net gain/(loss) on non-financial assets - (113)

NOTE 10 Assets

10.1 Receivables

2011 2010

$’000 $’000

Receivables 4,770 4,909

Total 4,770 4,909

Sales of goods and services receivables (inclusive of GST) 1,763 3,495

Accrued revenue 2,440 897

Tax assets 443 355

Other receivables 124 162

Total 4,770 4,909

Settled within 12 months 4,770 4,909

Settled in more than 12 months -

Total 4,770 4,909


10.2 Inventories

2011 2010

$’000 $’000

Communications equipment 3 7

Total 3 7

Settled within 12 months 3 7

Settled in more than 12 months - -

Total 3 7

10.3 Plant, equipment and leasehold improvements

a) Carrying amount 2011 2010

$’000 $’000

Heritage furniture assets

At fair value 30 245

Total 30 245

Plant and equipment

At cost 83 111

Less: accumulated depreciation (79) (102)

Total 4 9

Computer hardware

At cost 2,579 2,392

Less: accumulated depreciation (1,979) (1,959)

Total 600 433

Leasehold improvements

At cost 1,986 1,963


1,221 1,395

Work in progress (at cost) 580 -

Total 1,801 1,395

Total plant, equipment and leasehold improvements 2,435 2,082

The latest revaluations of the Heritage furniture assets as at 10 June 2009 were performed independently. The valuer

was Gowans Auctions (Auctioneers and Valuers with 30 years experience). The valuations were based on fair market

value.


b) Reconciliation of movements

Reconciliations of the carrying amounts of each class of plant, equipment and leasehold improvements at the beginning

and end of the current and previous financial year are set out below. Carrying value means the net amount after

deducting accumulated depreciation and accumulated impairment losses.

Heritage

furniture

Plant and

equipment

Computer

hardware

Leasehold

improvements Total

2011 $’000 $’000 $’000 $’000 $’000

Carrying value at 1 July 245 9 433 1,395 2,082

Additions - - 488 23 511

Disposals (215) - - - (215)

Work in progress at cost - - - 580 580

Revaluation - - - - -

Depreciation - (5) (321) (197) (523)

Carrying value at 30 June 30 4 600 1,801 2,435

Heritage

furniture

Plant and

equipment

Computer

hardware

Leasehold

improvements Total

2010 $’000 $’000 $’000 $’000 $’000

Carrying value at 1 July 245 22 634 1,581 2,483

Additions - 6 176 11 193

Disposals - - - - -

Work in progress at cost - - - - -

Revaluation - - - - -

Depreciation - (19) (378) (197) (594)

Carrying value at 30 June 245 9 433 1,395 2,082

10.4 Infrastructure


$’000 $’000

Infrastructure

TMD Data Centre at cost 1,790 1,790


Total 822 1,012

Infrastructure assets were reviewed in accordance with departmental policy for revaluation – see Note 2.11(d)(iv). No

infrastructure assets were revalued in 2010-11.


b) Reconciliation of movements

2011 2010

$’000 $’000

Carrying amount at start of year 1,012 1,188

Additions - 14

Disposals/transfers - -

Depreciation expense (190) (190)

Carrying amount at end of year 822 1,012

10.5 Intangibles


$’000 $’000

Software at cost 2,570 2,171

less accumulated amortisation (1,999) (1,853)

Total 571 318

Intangible assets for the Department are not revalued due to software having a limited useful life. Note 2.11(e).

b) Reconciliation of movements 2011 2010

$’000 $’000

Carrying amount at start of year 318 327

Additions 496 165

Amortisation expense (243) (174)

Carrying amount at end of year 571 318

10.6 Other non-financial assets

2011 2010

$’000 $’000

Prepayments 2,813 2,653

Total 2,813 2,653


Settled in more than 12 months - -

Total 2,813 2,653


NOTE 11 Liabilities

11.1 Payables

2011 2010

$’000 $’000

Creditors 1,990 1,851

Accrued expenses 532 637

Total 2,522 2,488


Settled in more than 12 months -

Total 2,522 2,488

Settlement is usually made within 28 days.

11.2 Interest bearing liabilities

2011 2010

$’000 $’000

Loans from the State Government1 227 915

Total 227 915

Settled within 12 months 227 508

Settled in more than 12 months - 407

Total 227 915

Note:

1. Interest bearing liability reflects a State Government advance for Voluntary Targeted Employment Separation

Arrangements (VTESA) payments.

11.3 Employee benefits

2011 2010

$’000 $’000

Accrued salaries 970 773

Recreational leave 3,228 2,830

Long service leave 6,153 5,383

Provision for SSALS2 65 21

Total 10,416 9,007


Settled in more than 12 months 5,236 4,639

Total 10,416 9,007

Note:

2. State Service Accumulated Leave Scheme (SSALS)


11.4 Other liabilities

2011 2010

$’000 $’000

Revenue received in advance:

Other revenue received in advance 1,085 1,089

Revenue in advance – Section 8(A)2 carry forward 801 561

1,886 1,650

Other liabilities

Payroll tax liability 606 525

606 525

Total 2,492 2,175


Settled in more than 12 months 291 257

Total 2,492 2,175

NOTE 12 Commitments and Contingencies

12.1 Schedule of Commitments

2011 2010

$’000 $’000

By Type

Operating lease commitments

Operating leases 18,613 22,888

Total operating lease commitments 18,613 22,888

Rental commitments

Rent for Crown owned properties 3,310 3,222

Rent for Crown leased properties 8,540 12,660

Total other commitments 11,850 15,882

By maturity

Operating lease commitments

One year or less 3,595 3,151

From one to five years 9,971 12,251

More than five years 5,047 7,486

Total operating lease commitments 18,613 22,888

Rental commitments

One year or less 2,687 2,647

From one to five years 8,611 10,588

More than five years 552 2,647

Total other commitments 11,850 15,882

Rental Commitments

Property lease payments are determined during the lease negotiation process and are outlined in the lease

documents.

Crown owned or leased property rental payments are determined by the Valuer-General on a market rental basis

and CPI applied.

All lease terms vary and in most instances will contain a provision for an extension of lease for a further term/s.


Leases contain provision for rent reviews and the rate is adjusted in accordance with the terms and conditions

outlined in the lease document. Generally, rent is reviewed to market, CPI or fixed increase.

Lease agreements do not contain provision for purchase on cessation.

Lease agreements have been reviewed for make good provisions. (Note 12.2)

Operating Lease Commitments

Motor Vehicles

The Government Motor Vehicle fleet is managed by Lease Plan.

Lease payments vary according to the type of vehicle.

Generally, all lease terms are for a maximum of two to three years, irrespective of kilometres travelled.

No restrictions or purchase options are contained in the lease agreements.

Photocopiers

Lease payments are determined at time of lease agreement and are paid quarterly.

Lease terms are for four or five years with no change to the lease rate.


Water Coolers

Lease payments are determined at time of lease agreement and are paid yearly.

Lease terms are for one year with no change to the lease rate.


Other Rental Commitments

Other rental commitments are on properties either Crown owned or Crown leased and the rent is paid to the

Department of Treasury and Finance.

Crown owned or Crown leased property rental payments are determined by the Valuer-General on a price per

square metre basis.

Terms of the agreement are not fixed.

Adjustment payments are normally made after a three-year period.


12.2 Contingent Assets and Liabilities

Contingent assets and liabilities are not recognised in the Statement of Financial Position due to uncertainty regarding

the amount or timing of the underlying claim or obligation.

a) Quantifiable contingencies

A quantifiable contingent asset is a possible asset that arises from past events and whose existence will be confirmed

only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the

entity.

A quantifiable contingent liability is a possible obligation that arises from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the

control of the entity; or a present obligation that arises from past events but is not recognised because it is not

probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

2011 2010

$’000 $’000

Quantifiable contingent liabilities

Potential make good on lease 810 813

Litigation claim 410 210

Total quantifiable contingent liabilities 1,220 1,023

Quantifiable contingent assets

Lease hold improvement – make good 318 306

Total quantifiable contingent assets 318 306

NOTE 13 Reserves

13.1 Reserves

2011 2010

$’000 $’000

Physical asset revaluation reserve

Balance at the beginning of financial year 180 180

Transfer of Heritage assets (170) -

Balance at end of financial year 10 180

a) Nature and purpose of reserves

Asset Revaluation Reserve

The Asset Revaluation Reserve is used to record increments and decrements on the revaluation of the Heritage assets

(furniture), as described in Note 2.11(d).


NOTE 14 Cash Flow Reconciliation

14.1 Cash and deposits

Cash and deposits includes the balance of the Special Deposits and Trust Fund Accounts held by the Department, and

other cash held, excluding those accounts which are administered or held in a trustee capacity or agency arrangement.

2011 2010

$’000 $’000

Special Deposits and Trust Fund balance

T520 Department of Premier and Cabinet Operating Account 4,981 4,828

T631 TMD Operating Account 4,513 459

T816 Department of Premier and Cabinet Service Tasmania Account 781 611

Total 10,275 5,898

Other cash held

Petty cash 3 4

Total 3 4

Total cash and deposits 10,278 5,902

14.2 Reconciliation of Net Result to Net Cash from Operating Activities

2011 2010

$’000 $’000

Net result 3,737 (1,009)

Depreciation and amortisation 956 958

Contributions provided 215 -

Decrease (increase) in Receivables 1,770 405

Decrease (Increase) in Tax assets (88) 21

Decrease (Increase) in Accrued revenue (1,544) (183)

Decrease (Increase) in Prepayments (160) 314

Decrease (Increase) in Inventories 4 130

Increase (decrease) in Employee Benefits 1,409 (339)

Increase (decrease) in Creditors 415 (289)

Increase (decrease) in Accrued Expenses (381) (18)

Increase (decrease) in Other Liabilities 317 673

Net cash provided (used) by operating activities 6,650 663


14.3 Acquittal of Capital Investment and Special Capital Investment Funds

The Department received Works and Services Appropriation funding and revenues from the Economic and Social

Infrastructure Fund to fund specific projects.

Cash outflows relating to these projects are listed below by category.


a) Project expenditure

2011 2011 2010


$’000 $’000 $’000

Capital Investment Program

Service Tasmania Shop funding 250 250 250

Telepresence project - - 333

Total 250 250 583

Special Capital Investment Funds

Economic and Social Infrastructure Fund

Main Street Makeover Program - 724 917

Veterans’ Memorial Bridgewater - - 190

- 724 1,107

Total Project Expenditure 250 974 1,690

b) Classification of cash flows

The project expenditure above is reflected in the Statement of Cash Flows as follows.

2011 2010

Actual Actual

$’000 $’000

Cash Outflows

Communications - 209

Grants 724 1,107

Maintenance - 122

Other supplies and consumables - 2

Transfers to Service Tasmania lead agencies 250 250

Total Cash Outflows 974 1,690

14.4 Financing Facilities

TMD has a Westpac operating bank account with an overdraft facility limit of ($500,000).

2011 2010

Actual Actual

$’000 $’000

Westpac TMD Operating account

Amount unused 500 500

Amount used - -

Total 500 500

Total Financing Facilities 500 500


NOTE 15 Financial Instruments

15.1 Risk Exposures

a) Risk management policies

The Department has exposure to the following risks from its use of financial instruments:

1) credit risk;

2) liquidity risk; and

3) market risk.

The Head of Agency has overall responsibility for the establishment and oversight of the Department’s risk

management framework. Risk management policies are established to identify and analyse risks faced by the

Department, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

b) Credit risk exposures

Credit risk is the risk of financial loss to the Department if a customer or counterparty to a financial instrument fails

to meet their contractual obligations.

The credit risk on financial assets of the Department, which have been recognised in the Statement of Financial

Position, is generally the carrying amount net of any provision for impairment.

The Department has a debt management policy with processes surrounding the raising of debts payable to the

Department and the management of outstanding debts. The Department does not have a significant exposure to

credit risk as departmental receivables are mainly from other government entities. The Department does not

consider a need to have a provision for impairment.

The Department’s maximum exposures to credit risk at reporting date in relation to each class of recognised

financial assets is the carrying amount of those assets as indicated in the Statement of Financial Position.

The Department does not have any significant exposure to credit risk.

The following tables analyse financial assets that are past due but not impaired.

Analysis of financial assets that are past due at 30 June 2011 but not impaired Past due 30

days

$’000

Past due 60

days

$’000

Past due 90

days

$’000

Total

Receivables 215 65 19 299

Analysis of financial assets that are past due at 30 June 2010 but not impaired Past due 30

days

$’000

Past due 60

days

$’000

Past due 90

days

$’000

Total

Receivables 272 3 11 286


c) Liquidity risk

Liquidity risk is the risk that the Department will not be able to meet its financial obligations as they fall due. The

Department’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its

liabilities when they fall due. The Department does not have any significant exposure to liquidity risk.

The Department has policies in place to manage liabilities as they fall due. The Department’s budget policy

enables the identification of issues and initiatives that have a budgetary impact and where appropriate to seek

adequate funding to meet commitments as they arise.

The following tables detail the undiscounted cash flows payable by the Department by remaining contractual

maturity for its financial liabilities. It should be noted that as these are undiscounted, totals may not reconcile to the

carrying amounts presented in the Statement of Financial Position:

2011

Maturity analysis for financial liabilities

1 Year 2 Years 3 Years 4 Years 5 Years > 5 Years

Undiscounted

Total

Carrying

Amount

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000


Payables 2,522 - - - - - 2,522 2,522

Interest bearing liabilities 227 - - - - - 227 227

Total 2,749 - - - - - 2,749 2,749

2010

Maturity analysis for financial liabilities

1 Year 2 Years 3 Years 4 Years 5 Years > 5 Years

Undiscounted

Total

Carrying

Amount

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000


Payables 2,488 - - - - - 2,488 2,488

Interest bearing liabilities 508 305 102 - - - 915 915

Total 2,996 305 102 - - - 3,403 3,403

d) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of

changes in market prices. The primary market risk that the Department is exposed to is interest rate risk.

The Department manages a number of accounts under the Public Account Act 1986 and in accordance with the

Financial Management and Audit Act 1990, including the Treasurer’s Instructions.

The Department does not have any significant exposure to interest rate risk.


Sensitivity Analysis of Department’s Exposure to possible Changes in Interest Rates.

The Department has performed a sensitivity analysis relating to its exposure to interest rate risk as at balance date.

The Department operates a collection account and an expenditure account. No interest is applied to these

accounts.

Receivables are mainly from other government entities with credit terms of 30 days. Interest is not applied

to other agencies on overdue amounts.

The Department’s accounts payable policy and procedures is to pay accounts within 30 days unless other

trading terms have been agreed. This is deemed to provide no interest rate risk to the Department.

The Department does not have financial leases or financial guarantees.

As at 30 June 2011 the Department did not have interest bearing financial instruments and no significant exposure

to changes in interest rates.

A change in the variable rate of 100 basis points would not have an effect on the Department’s profit and loss or

equity.

15.2 Categories of Financial Assets and Liabilities

2011 2010

$'000 $'000

Financial assets

Financial assets measured at amortised cost

Cash at bank 3 4

Cash in Special Deposits and Trust Fund 10,275 5,898

Loans and receivables 4,770 4,909

Total 15,048 10,811


Financial liabilities measured at amortised cost

Payables 2,522 2,488

Interest bearing liabilities 227 915

Total 2,749 3,403

15.3 Comparison between Carrying Amount and Net Fair Value of Financial Assets and

Liabilities

Carrying

Amount

2011

Net Fair

Value

2011

Carrying

Amount

2010

Net fair

Value

2010

$’000 $’000 $’000 $’000

Financial assets

Cash at bank 3 3 4 4

Cash in Special Deposits and Trust Fund 10,275 10,275 5,898 5,898

Loans and receivables 4,770 4,770 4,909 4,909

Total financial assets 15,048 15,048 10,811 10,811


Payables 2,522 2,522 2,488 2,488

Interest bearing liabilities 227 227 915 915

Total financial liabilities 2,749 2,749 3,403 3,403


NOTE 16 Notes to Administered Statements

The Department assumed administrative responsibility for the Tasmanian Community Forest Agreement on

1 July 2006. This ceased in May 2010.

The Department assumed administrative responsibility for the Tasmanian Community Fund on 1 October 2010.

16.1 Explanations of Material Variances between Budget and Actual Outcomes

The following are brief explanations of material variances between Budget estimates and actual outcomes.

Variances are considered material where the variance exceeds the greater of 10 per cent of Budget estimate and

$500,000

a) Schedule of Administered Income and Expenses Budget Actual Variance Variance

$’000 $’000 $’000 %

Appropriation revenue - Reserved by law – Tasmanian

Community Fund - 5,617 5,617 100

Transfer to Tasmanian Community Fund - 5,617 5,617 100

Notes to Schedule of Administered Income and Expenses variances

Variations are due to:

The Reserved by Law appropriation budget for the transfer of funding to the Tasmanian Community Fund was included in

the Department of Treasury and Finance original budget figures. From 1 October 2010 the financial responsibility was

transferred to the Department of Premier and Cabinet.

b) Schedule of Administered Cash Flows Budget Actual Variance Variance

$’000 $’000 $’000 %

Appropriation revenue - Reserved by law – Tasmanian

Community Fund - 5,617 5,617 100

Transfer to Tasmanian Community Fund - 5,617 5,617 100

Notes to Schedule of Administered Income and Expenses variances

Variations are due to:

The Reserved by Law appropriation budget for the transfer of funding to the Tasmanian Community Fund was included in

the Department of Treasury and Finance original budget figures. From 1 October 2010 the financial responsibility was

transferred to the Department of Premier and Cabinet.

16.2 Administered Revenue from Government

Administered revenue from Government includes revenue from appropriations, including appropriations carried

forward under section 8A of the Public Account Act 1986, and from Items Reserved by Law.

The Budget information is based on original estimates and has not been subject to audit.

2011 2011 2010


$’000 $’000 $’000

Appropriation revenue - recurrent

Current year - - 18,000

Reserved by law – Tasmanian Community Fund - 5,617 -

Total revenue from Government - 5,617 18,000


16.3 Tasmanian Community Forest Agreement

2011 2010

Actual Actual

$’000 $’000

Transfers to other agencies - 19,851

Other grants and transfers - 60

Total - 19,911

16.4 Tasmanian Community Fund

2011 2010

Actual Actual

$’000 $’000

Transfer to Tasmanian Community Fund 5,617 -

Total 5,617 -

16.5 Reconciliation of Administered Net Result to Net Cash from Administered

Operating Activities

2011 2010

$’000 $’000

Net result - (1,911)

Net cash used by operating activities - (1,911)

16.6 Financial Instruments (Administered)

a) Risk management policies

The Department has exposure to the following risks from its use of financial instruments:

credit risk;

liquidity risk; and

market risk.

The Head of Agency has overall responsibility for the establishment and oversight of the Department’s risk

management framework. Risk management policies are established to identify and analyse risks faced by the

Department, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

b) Credit risk exposures

Credit risk is the risk of financial loss to the Department if a customer or counterparty to a financial instrument fails

to meet its contractual obligations.

The credit risk on financial assets of the Department, which have been recognised in the Schedule of Administered

Assets and Liabilities, is generally the carrying amount net of any provision for impairment.

The Department has a debt management policy with processes surrounding the raising of debts payable to the

Department and the management of outstanding debts.

The Department’s maximum exposures to credit risk at the reporting date in relation to each class of recognised

financial assets is the carrying amount of those assets as indicated in the Schedule of Administered Assets and

Liabilities. The Department did not have Administered Receivables as at 30 June 2010 or 30 June 2011.

The Department does not have any significant exposure to credit risk.


c) Liquidity risk

Liquidity risk is the risk that the Department will not be able to meet its financial obligations as they fall due. The

Department’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when they fall due. The Department does not have any significant exposure to liquidity risk.

The Department has policies in place to manage liabilities as they fall due. The Department’s budget policy

enables the identification of issues and initiatives that have a budgetary impact and where appropriate to seek

adequate funding to meet commitments as they arise.

The Department did not have any administered financial liabilities as at 30 June 2010 or 30 June 2011.

d) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of

changes in market prices. The primary market risk that the Department is exposed to is interest rate risk.

The Department manages a number of accounts under the Public Account Act 1986 and in accordance with the

Financial Management and Audit Act 1990, including the Treasurer’s Instruction.

The Department does not have any significant exposure to interest rate risk.

Sensitivity Analysis of Department’s Exposure to possible Changes in Interest Rates.

The Department has performed a sensitivity analysis relating to its exposure to interest rate risk as at balance date.

The Department operates a collection account and an expenditure account. No interest is applied to these

accounts,

The Department did not have any administered financial liabilities as at 30 June 2010 or 30 June 2011.

The Department’s accounts payable policy and procedures is to pay accounts within 30 days unless other

trading terms have been agreed. As the Department did not have any accounts payable as at 30 June 2010

or 30 June 2011, there is no interest rate risk to the Department.

The Department does not have financial leases or financial guarantees.

As at 30 June 2010 and 30 June 2011 the Department did not have interest bearing financial instruments and no

significant exposure to changes in interest rates.

A change in the variable rate of 100 basis points would not have an effect on the Department’s profit and loss or

equity.

NOTE 17 Transactions and Balances Relating to a Trustee or

Agency Arrangement

Account/Activity Opening

balance

Net transactions

during 2010-11

Closing balance

$’000 $’000 $’000

T471 Jim Bacon Foundation Account 460 5 465

T472 Tasmanian Early Years Foundation Account 1,872 (534) 1,338

T423 Tasmanian Community Fund Board - 7,307 7,307

This represents the balance of accounts held in the Special Deposit and Trust Fund in a Trustee Capacity or under

an agency arrangement. These funds do not form part of the Department’s assets. See Note 2.7.


CERTIFICATION OF FINANCIAL STATEMENTS:

The accompanying Financial Statements of the Department of Premier and Cabinet are in agreement

with the relevant accounts and records and have been prepared in compliance with Treasurer’s

Instructions issued under the provisions of the Financial Management and Audit Act 1990 to present fairly

the transactions for the year ending 30 June 2011 and the financial position as at end of the year.

At the date of signing, I am not aware of any circumstances which would render the particulars included

in the Financial Statements misleading or inaccurate.

Rhys Edwards

Secretary

15 August 2011


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financial statements - dpac.tas.gov.au

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