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Certification

Auditors report

Statement by the Electoral Commissioner and Chief Finance Officer

Primary financial statements

Statement of comprehensive income for the period ended 30 June 2017
	Notes	2017 $’000	2016 $’000	Original Budget $’000
NET COST OF SERVICES
Expenses
Employee benefits	3.1	152,607	104,562	194,868
Suppliers	4.1A	135,675	159,515	114,356
Depreciation and amortisation	2.3A	9,229	9,326	8,719
Finance costs	2.4B	22	20	85
Write-down and impairment of assets	4.1B	1,502	(4)	–
Losses from asset disposals	2.3A	658	23	–
Total expenses		299,693	273,442	318,028
Own-Source Income
Own-source revenue
Sale of goods and rendering of services	1.2A	18,235	15,224	10,952
Other revenue	1.2B	219	447	85
Total own-source revenue		18,454	15,671	11,037
Total own-source income		18,454	15,671	11,037
Gains
Other gains	1.2C	48	–	–
Total gains		48	–	–
Net (cost of) services		(281,191)	(257,771)	(306,991)
Revenue from Government
Revenue from Government	1.1A	317,187	232,757	313,347
Surplus/(Deficit) on continuing operations		35,996	(25,014)	6,356
OTHER COMPREHENSIVE INCOME
Items not subject to subsequent reclassification to net cost of services
Changes in asset revaluation surplus		(311)	1,885	–
Total other comprehensive income		(311)	1,885	–
Total comprehensive income/(loss)	1.4	35,685	(23,129)	6,356

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

Budget Variances Commentary

Statement of Comprehensive Income

At the time that appropriations were agreed there was a significant amount of uncertainty around expenditure due to the level of election reform that the AEC was required to undertake in the delivery of the 2016 federal election. As a result, the AEC’s employee expenses are lower than budgeted and supplier expenses are higher than budgeted. The AEC’s revenue is higher than budgeted as additional funds were also appropriated to the AEC during the year to support a possible plebiscite. For these reasons the AEC incurred a higher than budgeted surplus.

Statement of financial position as at 30 June 2017
	Notes	2017 $’000	2016 $’000	Original Budget $’000
ASSETS
Financial assets
Cash and cash equivalents	2.1A	4,220	17,932	891
Receivables for goods and services	2.1A	1,687	2,116	2,305
Appropriations receivable	2.2A	83,179	74,030	24,596
Other receivables	2.2B	674	4,417	493
Total financial assets		89,760	98,495	28,285
Non-financial assets
Leasehold improvements	2.3A	8,424	10,359	12,104
Plant and equipment	2.3A	6,603	7,696	5,793
Computer software	2.3A	9,071	14,402	14,153
Intellectual property	2.3A	1,912	2,161	–
Inventories	2.3B	3,909	14,599	3,055
Lease incentive		–	38	–
Other non-financial assets	2.3C	3,135	7,077	2,068
Total non-financial assets		33,054	56,332	37,173
Total assets		122,814	154,827	65,458
LIABILITIES
Payables
Suppliers	2.1A	5,506	72,637	7,786
Other payables	2.4A	3,947	11,249	5,119
Total payables		9,453	83,886	12,905
Provisions
Employee provisions	3.2	25,130	24,611	24,085
Other provisions	2.4B	1,570	1,525	1,561
Total provisions		26,700	26,136	25,646
Total liabilities		36,153	110,022	38,551
Net assets		86,661	44,805	26,907
EQUITY
Contributed equity		60,373	54,202	60,373
Asset revaluation surplus		22,674	22,985	21,100
Retained earnings		3,614	(32,382)	(54,566)
Total equity		86,661	44,805	26,907

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

Budget Variances Commentary

Statement of financial position

The AEC’s total assets are higher than budgeted due to an increase in appropriation revenue receivable. The AEC’s expenditure was not as high as originally budgeted and due to a change in approach to the scrutiny of Senate ballot papers and the uncertainty around the extent of election reforms at the 2016 federal election, a higher than anticipated surplus was achieved. The AEC also received additional appropriation to support a possible plebiscite during 2016–17.

Statement of changes in equity for the period ended 30 June 2017
	2017 $’000	2016 $’000	Original Budget $’000
CONTRIBUTED EQUITY
Opening balance
Balance carried forward from previous period	54,202	43,190	54,202
Adjusted opening balance	54,202	43,190	54,202
Transactions with owners
Contributions by owners
Departmental Capital Budget	6,171	11,012	6,171
Total transactions with owners	6,171	11,012	6,171
Closing balance as at 30 June	60,373	54,202	60,373
RETAINED EARNINGS
Opening balance
Balance carried forward from previous period	(32,382)	(7,368)	(60,922)
Adjusted opening balance	(32,382)	(7,368)	(60,922)
Comprehensive income
Surplus/(deficit) for the period	35,996	(25,014)	6,356
Total comprehensive income	35,996	(25,014)	6,356
Closing balance as at 30 June	3,614	(32,382)	(54,566)
ASSET REVALUATION RESERVE
Opening balance
Balance carried forward from previous period	22,985	21,100	21,100
Adjusted opening balance	22,985	21,100	21,100
Comprehensive income
Other comprehensive income	(311)	1,885	–
Total comprehensive income	(311)	1,885	–
Closing balance as at 30 June	22,674	22,985	21,100
TOTAL EQUITY
Opening balance
Balance carried forward from previous period	44,805	56,922	14,380
Adjusted opening balance	44,805	56,922	14,380
Comprehensive income
Surplus/(deficit) for the period	35,996	(25,014)	6,356
Other comprehensive income	(311)	1,885	–
Total comprehensive income	35,685	(23,129)	6,356
Transactions with owners
Contributions by owners
Departmental Capital Budget	6,171	11,012	6,171
Total transactions with owners	6,171	11,012	6,171
Closing balance as at 30 June	86,661	44,805	26,907

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

Accounting Policy

Equity injections

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Budget Variances Commentary

Statement of changes in equity

The AEC incurred a higher than anticipated surplus in 2016–17 due to a change in approach to the scrutiny of Senate ballot papers and the uncertainty around the extent of election reforms at the 2016 federal election.

Cash flow statement for the period ended 30 June 2017
	Notes	2017 $’000	2016 $’000	Original Budget $’000
OPERATING ACTIVITIES
Cash received
Appropriations		311,069	201,225	298,272
Sales of goods and rendering of services		19,984	18,000	10,952
Net GST received		19,604	4,547	–
Total cash received		350,657	223,772	309,224
Cash used
Employees		157,530	95,600	194,868
Suppliers		206,335	125,925	114,356
Total cash used		363,865	221,525	309,224
Net cash (used by)/from operating activities		(13,208)	2,247	–
INVESTING ACTIVITIES
Cash used
Purchase of property, plant and equipment		1,800	4,227	6,171
Purchase of intangibles		1,844	5,313	–
Total cash used		3,644	9,540	6,171
Net cash (used by) investing activities		(3,644)	(9,540)	(6,171)
FINANCING ACTIVITIES
Cash received
Contributed equity		–	3,989	6,171
Departmental Capital Budget		3,140	20,345	–
Total cash received		3,140	24,334	6,171
Net cash from financing activities		3,140	24,334	6,171
Net (decrease)/increase in cash held		(13,712)	17,041	–
Cash and cash equivalents at the beginning of the reporting period		17,932	891	891
Cash and cash equivalents at the end of the reporting period	2.1A	4,220	17,932	891

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

Budget Variances Commentary

Cash flow statement

The AEC’s operating cash used was higher than budgeted due to costs incurred in 2015–16 in preparation for the 2016 federal election on 2 July 2016 not being paid until 2016–17. The financing cash received is lower than budgeted due to delays in the commencement of a number of capital projects that will be delivered during 2016–17.

Administered schedules

Administered schedule of comprehensive income for the period ended 30 June 2017
	Notes	2017 $’000	2016 $’000	Original Budget $’000
NET COST OF SERVICES
EXPENSES
Other expenses	5.1A	62,883	392	76,000
Total expenses		62,883	392	76,000
INCOME
Revenue
Non-taxation revenue
Electoral fines/penalties	5.2A	3,746	369	2,000
Candidate deposits	5.2A	–	25	–
Other	5.2A	–	10	–
Total non-taxation revenue		3,746	404	2,000
Total revenue		3,746	404	2,000
Net contribution by services		(59,137)	12	(74,000)
(Deficit)/surplus		(59,137)	12	(74,000)

This schedule should be read in conjunction with the accompanying notes.

Budget Variances Commentary

Schedule of comprehensive income

The AEC’s administered expenditure was lower than budgeted as payments to political parties from the 2016 federal election were not as high as anticipated. The AEC’s administered revenue was higher than anticipated due to electoral fines and penalties for the 2016 federal election being higher than anticipated.

Administered schedule of assets and liabilities as at 30 June 2017
	Notes	2017 $’000	2016 $’000	Original Budget $’000
ASSETS
Financial assets
Cash and cash equivalents	5.3A	3,560	2,282	–
Total financial assets		3,560	2,282	–
Total assets administered on behalf of Government		3,560	2,282	–
LIABILITIES
Payables
Suppliers	5.3B	–	14	–
Total payables		–	14	–
Total liabilities administered on behalf of Government		–	14	–
Net assets		3,560	2,268	–

This schedule should be read in conjunction with the accompanying notes.

Administered reconciliation schedule
	2017 $’000	2016 $’000
Opening assets less liabilities as at 1 July	2,268	1
Net cost of/(contribution by) services:
Income	3,748	2,699
Expenses	(63,815)	(420)
Transfers from/(to) Australian Government:
Appropriation transfers from Official Public Account (OPA)
Special appropriations (limited)
Payments to entities other than corporate Commonwealth entities	65,105	392
Appropriation transfers to OPA
Transfers to OPA	(3,746)	(404)
Closing assets less liabilities as at 30 June	3,560	2,268

This schedule should be read in conjunction with the accompanying notes.

Accounting Policy

Administered cash transfers to and from the Official Public Account

Revenue collected by the AEC for use by the Government rather than the AEC is administered revenue. Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by the entity on behalf of the Government and reported as such in the Administered cash flow statement and in the Administered reconciliation schedule.

Administered cash flow statement for the period ended 30 June 2017
	2017 $’000	2016 $’000
OPERATING ACTIVITIES
Cash received
Electoral fines/penalties	3,746	369
Candidate deposits	–	25
Other	2	2,305
Total cash received	3,748	2,699
Cash used
Political parties/candidates	63,710	372
Refund of electoral fines/penalties	105	34
Total cash used	63,815	406
Net cash flows (used by)/from operating activities	(60,067)	2,293
Cash from Official Public Account
Appropriations	65,105	392
Total cash from Official Public Account	65,105	392
Cash to Official Public Account
Appropriations	(3,746)	(404)
Total cash to Official Public Account	(3,746)	(404)
Cash and cash equivalents at the beginning of the reporting period	2,268	1
Cash and cash equivalents at the end of the reporting period	3,560	2,282

This schedule should be read in conjunction with the accompanying notes.

Overview

Basis of preparation

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2015; and
Australian accounting standards and interpretations – Reduced disclosure requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

The 2016 federal election was held on the 2nd of July 2016. Costs related to this incurred in 2016–17 are included in the Statement of financial position and Statement of comprehensive income.

New Australian accounting standards

Standard	Effective date	Summary of changes
AASB 124 Related Party Disclosures	1 July 2016	The standard applies to not-for-profit public sector entities for 2016–17. This will require the disclosure of remuneration for key management personnel and the disclosure of transactions with related parties.

All other new/revised/amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect on the AEC’s financial statements.

Accounting judgements and estimates

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

Taxation

The AEC is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Reporting of administered activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian accounting standards.

In accordance with changes to the FRR, special account cash balances held in AEC bank accounts and in the Official Public Account are included in the Administered schedule of assets and liabilities, Administered cash flow statement, and Administered reconciliation schedule for the first time this financial year. Previous year comparatives have also been amended (2017: $1.338 million; 2016: $2.268 million).

Events after the reporting period

Departmental

There are no events after the reporting date that will materially affect the financial statements.

Administered

There are no events after the reporting date that will materially affect the financial statements.