AEC Annual Report 2016–17
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Statement by the Electoral Commissioner and Chief Finance Officer

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:

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

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets 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.

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