Annual Report 2013–14

Managing resources and assets

Financial performance

For 2013–14, the AEC recorded an operating surplus of $11.0 million including depreciation. This result, however, includes appropriations for the conduct of the proposed 2013 referendum on local government which did not proceed. These payments have been quarantined and must be formally returned to the Department of Finance in 2014–15. Excluding this appropriation revenue, the AEC overspent in other areas by $13.3 million. This compares with an operating deficit of $2.1 million in 2012–13. The 2013–14 overspend is higher than expected due to:

  • an increase in costs from the 2013 federal election. This increase is largely attributable to higher staff costs due to recruitment for the planned referendum, which ultimately did not proceed; an increase in venue hire costs; and legal costs related to the AEC’s petition to the Court of Disputed Returns regarding the outcome of the 2013 Western Australian Senate recount
  • an increase in depreciation and amortisation costs from investment in large-scale hardware and software projects over the last few years to modernise AEC systems.

The Statement of Financial Position at 30 June 2014 showed total assets of $87.0 million and total liabilities of $39.1 million. The total assets included cash and receivables of $49.7 million, although $30.5 million of this relates to appropriation receivable that will be formally reduced in 2014–15 and to which the AEC is not entitled.

Net assets have decreased by 26.7 per cent to $17.4 million, excluding the $30.5 million appropriation receivable that will be returned in 2014–15. This is due to:

  • an increase in supplier payables, as the 2013–14 balance includes a large accrual for legal expenses from the federal election
  • a decrease in the inventory balance following usage in a federal election year
  • a decrease in internally developed software, as new investment was exceeded by amortisation due to resources being allocated to delivery of three federal parliamentary elections
  • a decrease in appropriations receivable due to use of cash reserves to fund the larger than budgeted operating deficit.

Once election delivery was complete, the AEC undertook measures to bring down operating expenses. These measures will continue in 2014–15; they will consolidate cash reserves and ensure the AEC can continue implementing Keelty Report recommendations and other reforms. Successful delivery of future federal elections is reliant on having the appropriate funding and resources.

The Australian National Audit Office has issued an unmodified audit opinion for the AEC’s 2013–14 financial statements.