department of territory and municipal services annual
TRANSCRIPT
bushfire prevention | roads and road safety | ACTION | Canberra Stadium | parks and reserves | trees | Namadgi National Park | Tidbinbilla | Stromlo Forest Park | sportsgrounds | rubbish and recycling | libraries | pools | sport and recreation | playgrounds | sustainable transport planning | Yarralumla Nursery |
domestic animal services | feral pest and weed management | street and traffic lights | Capital Linen Service | land management | conservation research and planning | Manuka Oval | heritage | Canberra Connect | cemeteries | Exhibition Park in Canberra | road user services | territory records | ACT Academy of
Sport |
ANNUAL REPORT2009–2010Department of Territory and Municipal Services
Volume 2
Enquiries about this publication should be directed to:
Director, Governance and Communications Corporate Support Division Department of Territory and Municipal Services
Phone: (02) 6207 5040
General Contact DetailsProduced by Publishing Services for:
Department of Territory and Municipal Services GPO Box 158 Canberra City ACT 2601
Website: www.tams.act.gov.au
Phone: Canberra Connect 13 22 81
Accessibility StatementThe ACT Government is committed to making its information, services, events and venues accessible to as many people as possible. If you have difficulty reading a standard printed document and would like to receive this publication in an alternative format, such as large print, braille and audio/CD, please phone the Canberra Blind Society on (02) 6247 4580.
If English is not your first language and you require the Translating and Interpreting Service, please phone 13 14 50.
If you are deaf or hearing impaired and require the National Relay Service, please phone 13 36 77.
© Australian Capital Territory, Canberra 2010
ISBN: 10: 0-642-60542-4 13: 978-0-642-60542-9
Publication No 10/0609
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without written permission from the Territory Records Office, Territory and Municipal Services, ACT Government.
Printed on recycled paper.
Front and back cover photograph: Andrew Tatnell
Department of Territory and Municipal Services
2009–2010 ANNUAL REPORT
Department of Territory and Municipal Services
2009-2010 ANNUAL REPORT
CONTENTS
VOLUME TWOTransmittal certificate iii
Statement of reference to subsumed and annexed reports iv
TERRITORY AND MUNICIPAL SERVICES
Management discussion and analysis 1
Audit report 16
Independent audit report 17
Statement of responsibility 19
Statement by the Chief Financial Officer 20
Departmental financial report 21
Territorial financial report 89
Report of factual findings 109
Strategic indicators 113
Outputs 116
Output 1.1 117
Output 1.2 119
Output 1.3 121
Output 1.4 122
Output 1.5 123
Output 1.6 125
Output 2.1 126
Output 2.2 128
ACTION
Management discussion and analysis 130
Audit report 138
Independent audit report 139
Statement of responsibility 141
Statement by the Chief Financial Officer 142
ACTION financial report 143
Report of factual findings 189
Outputs 193
Output 1.1 194
2009–2010 ANNUAL REPORT
SHARED SERVICES CENTRE
Management discussion and analysis 195
Audit report 213
Independent audit report 214
Statement of responsibility 216
Statement by the Chief Financial Officer 217
Shared Services Centre financial report 218
Report of factual findings 278
Outputs 282
Output 1.1 283
Output 2.1 285
Output 3.1 287
Output 4.1 289
List of abbreviations and acronyms 291
Other sources of information about TAMS 294
Department of Territory and Municipal Services
Department of Territory and Municipal Services
MANAGEMENT DISCUSSION AND ANALYSIS
2009–2010 ANNUAL REPORT 1
Department of Territory and Municipal Services Management discussion and analysis
for the financial year ended 30 June 2010
General overview
Objectives
The Department of Territory and Municipal Services plans, develops, manages and maintains major infrastructure such as bridges, streetlight and stormwater systems, community paths, parks, nature reserves and sportsgrounds through sustainable asset management practices.
It also provides waste and recycling services, libraries, Canberra Connect, asset acceptance, linen services, the Yarralumla Plant Nursery, and ranger and animal welfare services.
Its responsibility is to ensure compliance with Territory and national standards in areas such as heritage, transport regulation and road user safety. It also helps to ensure that the ACT’s natural and cultural environments are protected, preserved and enhanced.
It is also responsible for providing public transport services through ACTION, as well as access to a broad range of sporting programs, venues and community events.
The department provides information and communication technology (ICT), procurement, publishing and records services, as well as selected human resource and finance services, to other government departments and agencies through Shared Services.
Separate financial statements, including Management discussion and analysis, will be in the department’s 2009–10 Annual Report for Shared Services and ACTION.
Changes in administrative structure
The department was formed on 1 July 2006 following Administrative Arrangement 2006 (No 2) dated 19 June 2006.
There were several responsibility changes during 2009–10 including:
Tourism was transferred to the Chief Minister’s Department as a result of Notifiable Instrument NI2009–561 Administrative Arrangements 2009 (No 2), of 9 November 2009
Property Services was transferred to the new Department of Land and Property Services as a result of Notifiable Instrument NI2009–593 Administrative Arrangements 2009 (No 3), of 1 December 2009
2 Department of Territory and Municipal Services
the Government and Assembly Library was transferred to the Legislative Assembly secretariat on 1 July 2009 as a result of the Parliamentary Agreement between the Australian Labor Party and the ACT Greens dated 31 October 2008.
Changes in output structure
Output 1.1: Information services, Output 2.1: Government services and output 2.2: Events, have been amended to reflect the revised Administrative Arrangements.
Risk management
Risk Management Steering and Reference Groups (RMSG and RMRG respectively) continued to monitor the department’s risk environment. Regular risk presentations by business units to the RMSG ensured risks were identified and assessed.
Risks are reported at Internal Audit Committee meetings to maintain continual oversight and monitoring of risk identification, assessment and mitigation strategies.
During 2009–10 the RMSG was represented at major infrastructure oversighting committee meetings. This meant that emerging risks in these areas could be communicated directly to the RMSG for further assessment as necessary.
Major risks that have been identified are as follows:
Meeting government priorities
This includes the inability to deliver the government’s priorities and capital works program. Sources of risk can include extended capital works processes through poorly executed contract and project management, overly bureaucratic processes, inadequate resourcing or funding, and an inadequate workforce. The impact would include not being able to deliver the appropriate service level to the community, and lowered community confidence in the government.
Mitigation strategies include more focus on developing project management capability and a comprehensive reporting framework incorporating milestone performance. It also includes enhanced systems and processes for project management, such as the delivery of government priorities being monitored by senior executive.
Rising costs of meeting the demands of a growing city and aging infrastructure
The continuing growth of the city and its surrounds, coupled with aging infrastructure and increases in input prices, continues to pose significant challenges for the department in meeting its service delivery obligations.
This risk is being addressed in consultation with ACT Treasury. Asset management strategies are being enhanced, and funding growth that is consistent with
2009–2010 ANNUAL REPORT 3
community need is being identified. In addition, a heightened focus on whole‐of‐life costs for gifted assets is enabling the department to better assess future funding needs.
Loss or unacceptable deterioration of physical infrastructure within the portfolio
This refers to the loss of integrity or amenity of the ACT’s assets managed by TAMS. Sources of risk can include deterioration due to accelerated climate variations, infrastructure maintenance programs not being adequately funded, infrastructure not being adequately monitored or secured, and inadequate strategic asset management planning and frameworks.
The department continues to identify ongoing asset management requirements and whole‐of‐life costs for physical infrastructure within its portfolio, and advises the responsible infrastructure owners as appropriate to allow for efficient asset management processes.
Departmental financial performance
The following financial information is based on audited financial reports for the 2008–09 and 2009–10 financial years and the forward estimates contained in the 2010–11 Budget Papers.
Where appropriate the 2008–09 audited results have been amended to reflect comparative disclosure requirements. The analysis provided below outlines the main trends and factors affecting the department’s financial performance and position for the year ended 30 June 2010.
The department’s original 2009–10 budget has been adjusted to incorporate the impacts from changes to the Government’s Administrative Arrangements during 2009–10. The major variations relate to the transfer of ACT Property and Tourism as already noted. The adjustments to the original budget can be found at Attachment B.
4 Department of Territory and Municipal Services
Table 1 Net cost of services
Actual 2008–09
Actual 2009–10
Amended budget 2009–101
Forward estimate 2010–11
Forward estimate 2011–12
$m $m $m $m $m
Total expenditure 561.8 518.7 459.41 476.1 487.4
Total own‐source revenue 210.8 148.0 107.92 111.9 99.3
Net cost of services 351.0 370.7 351.52 364.2 388.1
2009–10 Actual net cost of services comparison to the amended budget
The department’s net cost of services2 for 2009–10 of $370.7 million was $19.2 million or 5 per cent higher than the amended 2009–10 budget of $351.5 million, reflecting a combination of factors including:
increased depreciation expense due to the impact of the 2008–09 infrastructure asset revaluation, and a change in the revaluation methodology in 2008–09 ($35 million)
expensing completed capital works relating to Bushfire Recovery Projects ($6.5 million)
the transfer of assets to other ACT Government agencies ($7.5 million).
These were offset by:
an increase in revenue from the acceptance of contaminated remediation material ($8.1 million)
an increase in other gains attributable to a combination of assets received from other ACT Government agencies, and the value of land under roads being recognised for the first time ($20 million).
Comparison to 2008–09 actual expenditure
Total net cost of services was $19.7 million higher than the 2008–09 actual result due to the reasons outlined above.
1 Refer to Attachment A. 2 Refer to Attachment B
2009–2010 ANNUAL REPORT 5
Future trend
Figure 1 Net cost of service
-
100.0
200.0
300.0
400.0
500.0
600.0
Actual 2008-09
Actual2009-2010
Amended Budget2009-10
Forw ard Estimate2010-11
Forw ard Estimate2011-12
Forw ard Estimate2012-13
$m
Total Expenditure Total Own Source Revenue Net Cost of Services
Figure 1 provides net cost of services information ranging from 2008–09 to the projected forward years. In 2010–11 the department will focus on maintaining budgeted expenditure levels in an environment where pressure on the net cost of service delivery continues to be a major challenge.
Total expenditure
Components of expenditure
Figure 2 shows a breakdown of the expenditure components in the 2009–10 financial year. Of the total departmental expenditure, supplies and services account for 36 per cent, compared to employee costs of 16 per cent, while grants and purchased services contribute a further 15 per cent. Depreciation expense accounts for 26 per cent.
Supplies and services payments include payments for professional services of $36 million, building and facilities operating costs of $27 million, repairs and maintenance expenditure of $66 million and IT & communication costs of $13.5 million.
6 Department of Territory and Municipal Services
Figure 2 Components of expenditure for 2009–10
Borrow ing Costs1%
Other4%
Depreciation and Amortisation
26%
Supplies and Services
36%
Superannuation2%
Grants and Purchased Services
15%
Employee Costs16%
Total 2009–10 expenditure compared to the amended budget
Expenditure of $518.7 million was $59.3 million, or 13 per cent higher than the 2009–10 amended budget. This increase reflects:
the expensing of completed capital works of $9.7 million, including works relating to Bushfire Recovery Projects ($6.5 million)
additional funding for municipal service delivery of $3.7 million to maintain service levels in the areas of parks, land and conservation, sport and recreational facilities and the ACT Library and Information Service
the transfer of assets to other ACT Government agencies ($7.5 million)
increased depreciation expense due to the impact of the 2008–09 infrastructure asset revaluation ($35 million).
Comparison to 2008–09 actual expenditure
Total expenditure was $43.1 million or 8 per cent lower than the 2008–09 actual result. This decrease is due to changes to the Government’s Administrative Arrangement Orders including the transfer of ACT Property to the new Department of Land and Property Services effective 1 December 2009, and the transfer of Tourism to the Chief Minister’s Department effective 9 November 2009.
Future trends
Expenditure is budgeted to increase generally in line with indexation for 2010–11 and the forward years. An additional efficiency dividend will be applied at a rate of 1 per cent in 2011–12, 1.5 per cent in 2012–13 and 2 per cent in 2013–14. The
2009–2010 ANNUAL REPORT 7
department will continue to pursue cost containment strategies and improved efficiencies to ensure core service delivery and community needs are maintained to a high standard.
Total own‐source revenue
Components of own‐source revenue
Figure 3 indicates that for the financial year ended 30 June 2010 the department recorded own‐source revenue (non‐appropriated revenue) of $148 million, of which $67 million (45 per cent) represents gains including infrastructure assets transferred from the Department of Land and Property Services ($52 million), and the value of assets recognised for the first time relating to land under roads ($13.2 million).
Figure 3 Components of own‐source revenue for 2009–10
Assets from Other Gov't Agencies
45%
User Charges42.9%
Other Revenue11%
Resources Free of Charge
1%
Interest0.1%
2009–10 own‐source revenue comparison to amended budget
Own‐source revenue for the year ended 30 June 2010 was $40.1 million higher than the 2009–10 amended budget. This increase is predominantly the result of:
gains attributable to assets received from other ACT Government agencies, and the value of land under roads being transferred to the department at zero value ($20 million)
revenue received by ACT NOWaste for the acceptance of Contaminated Remediation Material ($8.1 million)
revenue received from the Commonwealth Government for the Regional and Local Community Infrastructure Program (RLCIP) of $2 million and receipts associated with the Capital Improvement Fund ($0.8 million)
8 Department of Territory and Municipal Services
an increase in user charges due to greater than budgeted utilisation of sportsgrounds, an increase in the volume of waste to landfill, and better than expected ticket and ground hire sales from Territory Venues and Events facilities.
Comparison to 2008–09 actual income
Own‐sourced revenue was $62.8 million or 30 per cent lower than the 2008–09 actual result of $210.8 million primarily due to:
changes to the Government’s Administrative Arrangement Orders including the transfer of ACT Property to the new Department of Land and Property Services, and the transfer of Tourism to the Chief Minister’s Department
the realisation of gains to investment properties in 2008–09.
Future trends
Total own‐source revenue for 2010–11 is budgeted to reduce to $111.9 million compared to the 2009–10 outcome of $148 million. This decrease is mainly due to changes to the Government’s Administrative Arrangement Orders which included the transfer of ACT Property. Future increases in own‐sourced revenue are to be driven mainly by Wage Price Index increments.
Departmental financial position
Total assets
Components of total assets
Figure 4 indicates that for the financial year ended 30 June 2010 the department held 97 per cent of its assets in property, plant and equipment ($8 billion).
Figure 4 Total assets as at 30 June 2010
Intangible Assets0.01%
Cash0.32%Receivables
0.30%
Inventories0.05%
Other0.34%
Capital Works in Progress2.19%
Property, Plant and Equipment
96.8%
2009–2010 ANNUAL REPORT 9
The major component of property, plant and equipment is infrastructure assets ($6.1 billion). Figure 5 indicates the components within the infrastructure asset class.
Figure 5 Infrastructure assets as at 30 June 2010
Cyclepaths & Footpaths
1%
Other8%
Roads 32%
Bridges17%
Stormwater42%
Comparison to budget
The total asset position as at 30 June 2010 is $8.36 billion, which is $2.27 billion higher than the 2009–10 budget of $6.1 billion. The increase reflects:
a revaluation adjustment to property, plant and equipment ($1.2 billion) in 2008‐09
an increase in the value of land under roads of $1.1 billion as a result of a change in accounting policy in 2008–09
a revaluation increment to property, plant and equipment of $590 million in 2009–10.
These are offset by:
the transfer of ACT Property which resulted in a transfer of assets, primarily property, plant and equipment, and investment properties ($459 million)
2009–10 annual depreciation expense ($132 million).
Comparison to 2008–09 actuals
The department’s total asset position is $245 million higher than the 2008–09 actual result of $8.1 billion due to a combination of:
10 Department of Territory and Municipal Services
the above‐mentioned revaluation increment to infrastructure assets of $590 million in 2009–10
asset additions and acquisitions from other ACT Government agencies of $190 million.
These are offset by:
the transfer of ACT Property of $459 million
2009–10 annual depreciation expense $132 million.
Total liabilities
Components of total liabilities
Figure 6 indicates that the major categories of the department’s liabilities are payables (32 per cent), employee benefits (25 per cent) and other provisions for the restoration of Waste Landfill Sites at Mugga Lane and Belconnen (29 per cent).
Figure 6 Total liabilities as at 30 June 2010
Employee Benefits25%
Finance Leases5%
Other Liabilities7%
Interest-Bearing Liabilities
2%
Payables32%
Other Provisions29%
Comparison to budget
The department’s liabilities for the year ended 30 June 2010 of $115.3 million is $7.8 million lower than the 2009–10 budget due mainly to the transfer of interest bearing liabilities associated with the transfer of ACT Property ($15.6 million). This has been offset by payables being higher than anticipated by $6.3 million impacted by the end‐of‐year financial close‐off.
2009–2010 ANNUAL REPORT 11
Comparison to 2008–09 actuals
Total liabilities are $19 million lower than the 2008–09 actual result of $134.3 million primarily due to the transfer of ACT Property.
Territorial Statement of revenues and expenses
Total income
Figure 7 indicates that 59 per cent of territorial income is generated from taxes, fees and fines, particularly motor vehicle registrations. Land sale revenue accounts for a further 40 per cent of territorial revenue. A detailed breakdown of taxes, fees and fines is provided at figure 8.
Figure 7 Sources of territorial revenue for 2009–10
Land Sale Revenue40%
Payment for Expenses on Behalf of the
Territory0.6%
Commonw ealth Grants0.07%
Taxes, Fees and Fines59%
User Charges0.03%
Other revenue0.3%
Total income
Total territorial income for the year ended 30 June 2010 was $214.6 million, a decrease of $79.8 million from the 2009–10 budget. The decrease mainly relates to lower than anticipated land sale revenue from the Land Development Agency associated with the land release program ($85 million).
12 Department of Territory and Municipal Services
Figure 8 Breakdown of taxes, fees and fines for 2009–10
Motor Vehicle Registrations
68.71%
Domestic Tip Fees10.36%
Traffic Fines3.16%
Fixed Speed and Red Light Camera Fines
8.90%
Reg Fees-Domestic Animals0.12%
Reg Fees-Road Transport
0.81%
Mobile Speed Camera Fines
1.17%
Motor Vehicle Licences6.76%
Comparison to 2008–09 actuals
Total income was $19.3 million lower than the previous year due to a decrease in land sale revenue ($12 million); and lower taxes, fees and fines ($6.7 million) due to the transfer of water abstraction fees to the Department of the Environment, Climate Change, Energy and Water following the Administrative Arrangement Orders effective 11 November 2008.
Future trend
Taxes, fees and fines are anticipated to increase in line with normal indexation increments, with land sales revenue expected to increase to higher levels in the forward estimates in line with the Territory’s Land Release Program.
Total expenditure
Transfers of revenues to the ACT Government accounts for 98 per cent of expenses incurred on behalf of the Territory. Total territorial expenditure was $214.6 million, a decrease of $79.8 million on the 2009–10 budget, reflecting the decrease in payments to the ACT Government due to a corresponding reduction in territorial revenue outlined previously.
2009–2010 ANNUAL REPORT 13
Reconciliation of departmental original budget to amended budget
Original budget
Less impact of Administrative
Arrangement Orders Amended budget
$m $m $m
Total income 464.7 (63.2) 408.8
Total expenditure 514.2 (62.1) 459.4
Total assets 6,094.9 – 6,094.9
T otal liabilities 123.1 – 123.1
Reconciliation of territorial original budget to amended budget
Original budget Supplementary appropriation Amended budget
$m $m $m
Total income 294.4 – 294.4
Total expenditure 294.4 – 294.4
Total assets 29.2 – 29.2
T otal liabilities 29.5 – 29.5
14 Department of Territory and Municipal Services
Comparison of net cost of services to budget 2009–10
Original Plus: Amended Less: Variance
budget AAO budget actual explained
Transfers
Description $'000 $'000 $'000 $'000 $'000 %
Expenditure
Employee and superannuation 101 305 (8 372) 92 933 95 251 2 318 2.5%
Supplies and services 224 252 (37 739) 186 513 187 241 728 0.4%
Depreciation and amortisation 104 339 (7 093) 97 246 132 106 34 860 35.8%
Grants and purchased services 79 422 (1 058) 78 364 78 571 207 0.3%
Borrowing costs 1 426 (567) 859 2 639 1 780 207.2%
Other expenses 3 478 ‐ 3 478 22 913 19 435 558.8%
Total expenditure 514 222 (54 829) 459 393 518 721 59 328 12.9%
Own‐source revenue
User charges 100 130 (44 134) 55 996 63 150 7 154 12.8%
Interest 126 (76) 50 191 141 282.0%
Resources free of charge 1 566 ‐ 1 566 1 408 (158) ‐10.1%
Other revenue 3 459 ‐ 3 459 16 263 12 804 370.2%
Total revenue 105 281 (44 210) 61 071 81 012 19 941 32.7%
Add: gains 46 832 ‐ 46 832 66 994 20 162 43.1%
Total own‐source revenue 152 113 (44 210) 107 903 148 006 40 103 37.2%
Total net cost of services 362 109 ‐ 351 490 370 715 19 225 5.5%
2009–2010 ANNUAL REPORT 15
18 Department of Territory and Municipal Services
2009–2010 ANNUAL REPORT 19
20 Department of Territory and Municipal Services
Department of Territory and Municipal Services
DEPARTMENTAL FINANCIAL REPORT FOR YEAR ENDED 30 JUNE 2010
2009–2010 ANNUAL REPORT 21
Department of Territory and Municipal Services Operating Statement
For the Year Ended 30 June 2010
Original
Actual Budget Actual
Note 2010 2010 2009
No. $’000 $’000 $’000
Income
Revenue
Government Payment for Outputs 4 303,278 312,574 301,100
User Charges - ACT Government 5 36,374 71,120 72,220
User Charges - Non-ACT Government 5 26,776 29,010 30,667
Interest 6 191 126 369
Resources Received Free of Charge 7 1,408 1,566 1,556
Other Revenue 8 16,263 3,459 10,164 Total Revenue 384,290 417,855 416,076
Gains
Other Gains 9 66,994 46,832 95,904
Total Gains 66,994 46,832 95,904
Total Income 451,284 464,687 511,980
Expenses
Employee Expenses 10 83,194 88,541 88,415
Superannuation Expenses 11 12,057 12,764 11,874
Supplies and Services 12 187,241 224,252 223,831
Depreciation and Amortisation 13 132,106 104,339 133,092
Grants and Purchased Services 14 78,571 79,422 78,264
Borrowing Costs 15 2,639 1,426 4,100
Other Expenses 16 22,913 3,478 22,279 Total Expenses 518,721 514,222 561,855
Operating (Deficit) (67,437) (49,535) (49,875)
Other Comprehensive Income
Increase/(Decrease) in the Asset Revaluation Surplus 587,603 8,521 (65,578)
Total Other Comprehensive Income/(Deficit) 587,603 8,521 (65,578)
Total Comprehensive Income/(Deficit) 520,166 (41,014) (115,453)
The above Operating Statement should be read in conjunction with the accompanying notes.
22 Department of Territory and Municipal Services
Department of Territory and Municipal Services Balance Sheet
As at 30 June 2010
OriginalActual Budget Actual
Note 2010 2010 2009No. $’000 $’000 $’000
Current AssetsCash and Cash Equivalents 20 26,535 27,649 29,090 Receivables 21 19,153 24,730 26,152 Inventories 22 4,415 3,972 4,010 Assets Held for Sale 23 336 - - Other Assets 24 557 2,349 3,190 Total Current Assets 50,996 58,700 62,442
Non-Current AssetsReceivables 21 5,980 9,041 9,115 Investment Properties 25 - 70,761 125,000 Property, Plant and Equipment 26 8,096,353 5,683,522 7,756,501 Intangible Assets 27 528 2,474 951 Biological Assets 28 27,704 30,414 28,952 Capital Works in Progress 29 182,676 239,986 136,826 Total Non-Current Assets 8,313,241 6,036,198 8,057,345
Total Assets 8,364,237 6,094,898 8,119,787
Current LiabilitiesPayables 30 36,613 30,388 36,729 Interest-Bearing Liabilities 31 648 7,055 6,563 Finance Leases 31 1,867 1,711 3,030 Employee Benefits 32 27,502 24,159 27,643 Other Provisions 33 - 208 - Other Liabilities 34 7,566 14,237 12,409
Total Current Liabilities 74,196 77,758 86,374
Non-Current LiabilitiesPayables 30 142 - 191 Interest-Bearing Liabilities 31 1,928 5,317 12,368 Finance Leases 31 3,367 3,536 2,705 Employee Benefits 32 1,456 2,002 1,712 Other Provisions 33 33,551 33,469 30,289 Other Liabilities 34 639 1,037 638 Total Non-Current Liabilities 41,083 45,361 47,903
Total Liabilities 115,279 123,119 134,277
Net Assets 8,248,958 5,971,779 7,985,510
EquityAccumulated Funds 35 5,195,572 4,418,660 5,397,270 Asset Revaluation Surplus 35 3,053,386 1,553,119 2,588,240
Total Equity 8,248,958 5,971,779 7,985,510
The above Balance Sheet should be read in conjunction with the accompanying notes.
2009–2010 ANNUAL REPORT 23
AssetAccumulated Revaluation Total
Funds Surplus Equity OriginalActual Actual Actual Budget
Note 2010 2010 2010 2010No. $’000 $’000 $’000 $’000
Balance at the Beginning of the 2009-10 Reporting Period 5,397,270 2,588,240 7,985,510 5,746,607
Comprehensive Income
Operating (Deficit) (67,437) - (67,437) (49,535)Increase in the Asset Revaluation Surplus 35 - 587,603 587,603 8,521
(67,437) 587,603 520,166 (41,014)
Transactions Involving Owners Affecting Accumulated Funds and Asset Revaluation
SurplusTransfer of Asset Revaluation Surplus due to administrative restructure 122,457 (122,457) - Capital Injections 206,968 - 206,968 273,752 Capital Distributions (ACTION) (32,071) - (32,071) (25,863)Net Assets Transferred Out as part of an Administrative Restructure 38 (429,782) - (429,782) 21,962 Dividend Approved and Paid (1,833) - (1,833) (3,665)
Total Transactions Involving Owners Affecting Accumulated Funds (134,261) (122,457) (256,718) 266,186
Balance at the End of the Reporting Period 5,195,572 3,053,386 8,248,958 5,971,779
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Department of Territory and Municipal Services Statement of Changes in Equity
For the Year Ended 30 June 2010
Total Comprehensive Income
24 Department of Territory and Municipal Services
AssetAccumulated Revaluation Total
Funds Surplus EquityActual Actual Actual
Note 2009 2009 2009No. $’000 $’000 $’000
Balance at the Beginning of the 2008-09 Reporting Period 4,224,915 2,653,818 6,878,733
Comprehensive Income
Operating (Deficit) (49,875) - (49,875)(Decrease) in the Asset Revaluation Surplus - (65,578) (65,578)
(49,875) (65,578) (115,453)
Transactions Involving Owners Affecting Accumulated FundsNet Effect of Change in Accounting Policy 1,109,262 - 1,109,262 Capital Injections 127,202 - 127,202 Capital Distributions (ACTION) (7,885) - (7,885)Net Assets Transferred Out as part of an Administrative Restructure 38 (2,684) - (2,684)Dividend Approved (3,665) - (3,665)
Total Transactions Involving Owners Affecting Accumulated Funds 1,222,230 - 1,222,230
Balance at the End of the Reporting Period 5,397,270 2,588,240 7,985,510
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Total Comprehensive (Deficit)
Department of Territory and Municipal Services Statement of Changes in Equity
For the Year Ended 30 June 2010
2009–2010 ANNUAL REPORT 25
OriginalActual Budget Actual
Note 2010 2010 2009No. $’000 $’000 $’000
Cash Flows from Operating Activities
ReceiptsGovernment Payment for Outputs 230,626 241,322 232,482 Government Payment for Community Service Obligations 72,652 71,252 68,618 User Charges 57,872 104,925 101,821 Interest Received 190 305 369 Goods and Services Tax Input Tax Credits from the Australian Taxation Office 32,108 13,199 24,528 Goods and Services Tax Collected from Customers 6,502 18,091 10,956 Other 20,274 11,177 18,915 Total Receipts from Operating Activities 420,224 460,271 457,689
PaymentsEmployee 80,297 83,216 81,716 Superannuation 12,057 12,777 11,875 Supplies and Services 184,068 229,156 218,205 Borrowing Costs 1,055 1,346 2,268 Grants and Purchased Services 78,571 76,904 78,264 Goods and Services Tax Paid to Suppliers 37,149 29,995 31,837 Goods and Services Tax Paid to the Australian Taxation Office 2,843 431 4,535 Other 6,164 5,918 3,983 Total Payments from Operating Activities 402,204 439,743 432,683
41 18,020 20,528 25,006
Cash Flows from Investing Activities
ReceiptsProceeds from Sale of Property, Plant and Equipment 1,757 - 1,184 Total Receipts from Investing Activities 1,757 - 1,184
PaymentsPurchase of Property, Plant and Equipment 3,524 4,031 4,159 Purchase of Intangible Assets 78 77 - Capital Payment to ACTION 32,071 25,863 7,885 Purchase of Capital Works in Progress 182,433 247,958 123,597 Total Payments from Investing Activities 218,106 277,929 135,641
(216,349) (277,929) (134,457)Net Cash (Outflows) from Investing Activities
Net Cash Inflows from Operating Activities
Department of Territory and Municipal Services Cash Flow Statement
For the Year Ended 30 June 2010
26 Department of Territory and Municipal Services
Department of Territory and Municipal Services Cash Flow Statement - ContinuedFor the Year Ended 30 June 2010
OriginalNote Actual Budget ActualNo. 2010 2010 2009
$’000 $’000 $’000Cash Flows from Financing Activities
ReceiptsCapital Injections 206,968 273,752 127,202 Proceeds from Borrowings - 180 - Receipt of Transferred Cash Balances - 2,747 - Total Receipts from Financing Activities 206,968 276,679 127,202
PaymentsRepayment of Borrowings 785 1,017 1,165 Repayment of Advances 2,757 5,728 5,091 Payment of Transferred Cash Balances 4,479 - 5,474 Payment of Dividend 1,833 3,665 3,665 Repayment of Finance Leases 1,340 1,819 1,306 Total Payments from Financing Activities 11,194 12,229 16,701
195,774 264,450 110,501
Net (Decrease)/Increase in Cash and Cash Equivalents Held (2,555) 7,049 1,050 Cash and Cash Equivalents at the Beginning of the Reporting Period 29,090 20,600 28,040 Cash and Cash Equivalents at the End of the Reporting Period 41 26,535 27,649 29,090
The above Cash Flow Statement should be read in conjunction with the accompanying notes.
Net Cash Inflows from Financing Activities
2009–2010 ANNUAL REPORT 27
Department of Territory and Municipal Services Summary of Departmental Output Classes
For the Year Ended 30 June 2010
Output Class
Output Class
Intra- Department
1 2 Eliminations Total
Municipal Services
Enterprise Services
$’000 $’000 $’000 $’000
2010
Total Income 390,374 74,136 (13,226) 451,284
Total Expenses 446,741 85,206 (13,226) 518,721
Operating (Deficit) (56,367) (11,070) - (67,437)
2009
Total Income 346,938 187,446 (22,404) 511,980
Total Expenses 432,503 151,756 (22,404) 561,855
Operating (Deficit) / Surplus (85,565) 35,690 - (49,875)
Note: The income and expenses of each output class are reported inclusive of overhead allocations and internal transactions between output classes. This methodensures each output class is measured at the full cost of the outputs. Transactions between output classes are shown above as Intra-Department Eliminations, andare eliminated from the Departmental Operating Statement.
28 Department of Territory and Municipal Services
Department of Territory and Municipal Services Operating Statement for Output Class 1
Municipal Services For the Year Ended 30 June 2010
DescriptionOutput Class 1: 'Municipal Services' includes:
Original
Actual Budget Actual
2010 2010 2009
$’000 $’000 $’000
Income
Revenue
Government Payment for Outputs 291,597 290,094 280,406
Taxes Fees and Fines 3,993 2,367 3,260
User Charges – ACT Government 6,826 3,714 6,043
User Charges – Non-ACT Government 7,608 7,194 4,594
Grants from the Commonwealth - - 1,616
Interest 130 - 270
Resources Received Free of Charge 1,363 1,525 1,479
Other Revenue 11,864 1,424 6,131
Total Revenue 323,381 306,318 303,799
Gains
Other Gains 66,993 46,832 43,139
Total Gains 66,993 46,832 43,139
Total Income 390,374 353,150 346,938
Expenses
Employee Expenses 70,604 68,132 69,956
Superannuation Expenses 10,325 10,006 9,479
Supplies and Services 147,738 153,773 147,217
Depreciation and Amortisation 123,389 93,086 119,809
Grants and Purchased Services 77,760 77,261 77,085
Borrowing Costs 2,137 299 755
Cost of Goods Sold 111 60 135
Other Expenses 14,677 788 8,067
Total Expenses 446,741 403,405 432,503
Operating Surplus / (Deficit) (56,367) (50,255) (85,565)
Information Services – Provision of customer enquiry, information, bill payment and library services to the community through CanberraConnect’s shopfronts, call centres and internet service, and the ACT Library and Information Services’ branch and mobile libraries, home libraryservice, the ACT Virtual Library, Heritage Library, and the Government and Assembly Library. The ACT Government and Assembly Librarytransferred to the Legislative Assembly Secretariat effective 1 July 2009.The Office of Transport – Management of the ACT’s road assets and regulation of public passenger transport, heavy vehicles, driver competencyand vehicle registration. Also includes the promotion of road user safety, provision of strategic transport planning and public transport services.
Sport and Recreation Services – Development of programs, policies and legislation, grant provision, and education and training opportunities tomaintain and improve the capabilities of the sport and recreation sector. Also includes management and maintenance of sportsgrounds andfacilities, and the provision of support services to high performance athletes in the ACT.
Environmental Regulation – Planning and management of the ACT’s parks, plantations, reserves and open space system. The land manager roleincludes management of recreational land use, pest and weed control, fire management, conservation management, and maintenance of the lookand feel of the city and its environs, including the urban forest.
Waste and Recycling - Provision of domestic waste and recyclables collection service and operation of resource management and recyclingcentres, as well as implementation and evaluation of programs dealing with waste management programs, including household garbage and Land Management – Planning and management of the ACT’s parks, plantations, reserves and open space system. The land manager role includesmanagement of recreational land use, pest and weed control, fire management, conservation management, and maintenance of the look and feel ofthe city and its environs, including the urban forest.
2009–2010 ANNUAL REPORT 29
Department of Territory and Municipal Services Operating Statement for Output Class 2
Enterprise Services For the Year Ended 30 June 2010
DescriptionOutput Class 2: 'Enterprise Services' includes:
OriginalActual Budget Actual
2010 2010 2009$’000 $’000 $’000
Income
Revenue
Government Payment for Outputs 11,681 22,480 20,694
User Charges – ACT Government 42,774 67,406 90,012
User Charges – Non-ACT Government 19,168 21,816 23,693
Interest 61 126 99
Resources Received Free of Charge 45 41 77
Other Revenue 407 (332) 33,358
Total Revenue 74,136 111,537 167,933
Gains
Other Gains - - 19,513
Total Gains - - 19,513
Total Income 74,136 111,537 187,446
Expenses
Employee Expenses 12,590 20,409 18,459
Superannuation Expenses 1,732 2,758 2,396
Supplies and Services 48,709 70,479 97,100
Depreciation and Amortisation 8,717 11,253 13,283
Grants and Purchased Services 811 2,161 1,179
Borrowing Costs 503 1,127 1,513
Cost of Goods Sold 3,909 2,560 3,614
Other Expenses 8,235 70 14,212
Total Expenses 85,206 110,817 151,756
Operating (Deficit) / Surplus (11,070) 720 35,690
The comparative figures for the 2008-09 financial year include amounts related to functions that have transferred to the Department of Land andProperty Services and Chief Minister’s Department under Administrative Arrangements. The figures for the 2009-10 financial year includeamounts related to the same functions up to the transfer date of 1 December 2009 and 10 November 2009 respectively. For further information onthe Administrative Arrangements please refer to Note 38: "Restructure of Administrative Arrangements".
Tourism and Events – Creation and implementation of a range of marketing and development programs and activities to promote tourism andmajor events held in the ACT. This includes the domestic and international promotion of the ACT as a tourism destination; the management andpromotion of significant events such as Floriade, as well as major sporting and recreational venues including the Canberra Stadium, Manuka Oval,Stromlo Forest Park and Exhibition Park in Canberra. Australian Capital Tourism transferred to the Chief Minister’s Department effective 10November 2009. At the time that the 2009-10 Budget was prepared it was expected that Exhibition Park in Canberra would be incorporated intothe Department from 1 July 2009. The ACT Government subsequently retained Exhibition Park in Canberra as a stand-alone statutory authoritywith its own budget.
Government Services – Incorporating businesses that provide commercial services to ACT Government agencies and the private sector on a feefor service basis, including ACT Property Group, the Yarralumla Nursery and Capital Linen Services. The ACT Property Group transferred to theDepartment of Land and Property Services effective 1 December 2009.
30 Department of Territory and Municipal Services
Department of Territory and Municipal Services Departmental Statement of Appropriation
For the Year Ended 30 June 2010
Original Total Appropriation Appropriation
Budget Appropriated Drawn Drawn
2010 2010 2010 2009
$’000 $’000 $’000 $’000
Departmental
312,574 309,366 303,278 301,100
Capital Injections 273,752 287,000 206,968 127,202
Total Departmental Appropriation 586,326 596,366 510,246 428,302
The Departmental Statement of Appropriation above should be read in conjunction with the accompanying notes.
Column Heading Explanations
Government Payment
for OutputsCapital
Injections$’000 $’000
Original Budget 312,574 273,752
s.16 Transfersa (11,601) (15,073)
Treasurer's Advanceb 4,156 -
Treasurer's Advance - ACTIONc 3,168 -
s. 16B Rolloverd 633 27,766
s.17 Variation of Appropriatione - 555
s.19B appropriationf 436 - Total Appropriated 309,366 287,000
Undrawn Fundsg (6,088) (80,032)
Appropriation Drawn 303,278 206,968
The Total Appropriated column is inclusive of all appropriation variations occurring after the Original Budget.
The Original Budget column shows the amounts that appear in the Cash Flow Statement in the 2009-10 Budget Papers.
This amount also appears in these financial statements, in the Cash Flow Statement.
The Appropriation Drawn is the total amount of appropriation received by the Department during the year. This amount appears in these financial statements, in the Cash Flow Statement.
Reconciliation of Appropriation for 2009-10
a) Transfer of functions: The Legislative and Assembly Library to the Legislative Assembly effective 1 July 2009, Property ACT to the new Department of Land and Property Services effective 1 December 2010, and Tourism to the Chief Minister's Department effective 10 November 2009.
d) The rollover includes eight projects, including five feasibility projects rolled over from 2008-09.
e) Represents Commonwealth Government funding for the Roads Blackspot program.
f) The additional appropriation relates to funding received from the Commonwealth Government for a range of grants such as National Disaster and Bushfire mitigation.
b) Of this amount $3.5m relates to general service delivery and the balance of $0.66m are for specific government initiatives.c) Of this amount $2.07m relates to general service delivery and the balance of $1.1m relates to a pre-ACTIA insurance settlement.
Government Payment for Outputs (including Community Service Obligations)
g) The majority of the recurrent funding relates to delays in the scheduled 2009-10 sports grants program. Capital funding includes construction projects of $70.8m and Upgrade projects of $9.2m. These funds have been rolled into 2010-11.
2009–2010 ANNUAL REPORT 31
DEPARTMENTAL NOTE INDEX
Note 1 Objectives of the Department of Territory and Municipal Services
Note 2 Summary of Significant Accounting Policies
Note 3 Change in Accounting Estimates
Note 4 Government Payment for Outputs
Note 5 User Charges
Note 6 Interest
Note 7 Resources Received Free of Charge
Note 8 Other Revenue
Note 9 Other Gains
Note 10 Employee Expenses
Note 11 Superannuation Expenses
Note 12 Supplies and Services
Note 13 Depreciation and Amortisation
Note 14 Grants and Purchased Services
Note 15 Borrowing Costs
Note 16 Other Expenses
Note 17 Impairment Losses and Write-offs
Note 18 Act of Grace Payments
Note 19 Auditor’s Remuneration
Note 20 Cash and Cash Equivalents
Note 21 Receivables
Note 22 Inventories
Note 23 Assets Held for Sale
Note 24 Other Assets
Note 25 Investment Properties
Note 26 Property, Plant and Equipment
Note 27 Intangible Assets
Note 28 Biological Assets
Note 29 Capital Works in Progress
Note 30 Payables
Note 31 Interest-Bearing Liabilities and Finance Leases
Note 32 Employee Benefits
Note 33 Other Provisions
Note 34 Other Liabilities
Note 35 Equity
Note 36 Disaggregated Disclosure of Assets and Liabilities
Note 37 Financial Instruments
Note 38 Restructure of Administrative Arrangements
Note 39 Commitments
Note 40 Contingent Liabilities and Contingent Assets
Note 41 Cash Flow Reconciliation
Note 42 Events Occurring after Balance Date
Note 43 Third Party Monies
Other Notes
Asset Notes
Liabilities Notes
Equity Note
Income Notes
Expense Notes
32 Department of Territory and Municipal Services
For the Year Ended 30 June 2010 NOTE 1 OBJECTIVES OF THE DEPARTMENT OF TERRITORY AND
MUNICIPAL SERVICES Operations and Principal Activities of the Department of Territory and Municipal Services
The Department of Territory and Municipal Services (the Department) was established on 1 July 2006
following Notifiable Instrument NI 2006-206 Administrative Arrangements 2006 (No 2). The Department
plans, develops, manages and maintains major infrastructure such as bridges, streetlights and stormwater
systems, community paths, parks, nature reserves and sportsgrounds through sustainable asset management
practices. The Department is also responsible for the provision of waste and recycling services, libraries,
Canberra Connect, linen services, asset acceptance, plant nursery and ranger services, heritage and animal
welfare services.
The Department plays a role at the national level in the development of road transport reforms, regulations
and compliance monitoring of road transport regulations and road user safety. The Department is
responsible for providing public transport services through ACTION, as well as access to a broad range of
sporting programs, venues and community events.
The Department provides information and communication technology (ICT), procurement, publishing and
records services, as well as selected human resource and finance services, to other Government
Departments and agencies through Shared Services.
ACTION and Shared Services are part of the Department and report as separate entities within the
Department’s Annual Report.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Accounting
The Financial Management Act 1996 (FMA) requires the preparation of annual financial statements for
ACT Government Departments.
The FMA and the Financial Management Guidelines issued under the Act, requires a Department’s
financial statements to include:
(i) an Operating Statement for the year;
(ii) a Balance Sheet as at the end of the year;
(iii) a Statement of Changes in Equity for the year;
(iv) a Cash Flow Statement for the year;
(v) a Statement of Appropriation for the year;
(vi) an Operating Statement for each class of output for the year;
(vii) a summary of the significant accounting policies adopted for the year; and
(viii) such other statements as are necessary to be informative to the reader and fairly reflect the
financial operations of the Department during the year and its financial position at the end of
the year.
2009–2010 ANNUAL REPORT 33
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
(a) Basis of Accounting – continued
These general-purpose financial statements have been prepared to comply with ‘Generally Accepted
Accounting Principles’ (GAAP) as required by the FMA. The financial statements have been prepared in
accordance with:
(i) Australian Accounting Standards; and
(ii) ACT Accounting Policies.
The financial statements have been prepared using the accrual basis of accounting, which recognises the
effects of transactions and events when they occur. The financial statements have also been prepared
according to the historical cost convention, except for assets which were valued in accordance with the
(re)valuation policies applicable to the Department during the reporting period.
These financial statements are presented in Australian dollars, which is the Department’s functional
currency.
The Department of Territory and Municipal Services is an individual financial reporting entity. ACTION
and Shared Services are separate financial reporting entities and prepare their own financial statements
which are included in the Department’s Annual Report.
(b) Departmental and Territorial Items
The Department produces Departmental and Territorial financial statements. The Departmental financial
statements include income, expenses, assets and liabilities over which the Department has control. The
Territorial financial statements include income, expenses, assets and liabilities that the Department
administers on behalf of the ACT Government, but does not control.
The purpose of the distinction between Departmental and Territorial is to enable an assessment of the
Department’s performance against the decisions it has made in relation to the resources it controls, while
maintaining accountability for all resources under its responsibility.
The basis of accounting described in paragraph (a) applies to both Departmental and Territorial financial
statements except where specified otherwise.
(c) The Reporting Period
These financial statements include the financial performance, changes in equity and cash flows of the
Department for the year ending 30 June 2010 together with the financial position of the Department as at
30 June 2010.
34 Department of Territory and Municipal Services
For the Year Ended 30 June 2010 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
(d) Comparative Figures
Budget Figures
To facilitate a comparison with the Budget Papers, as required by the Financial Management Act 1996,
budget information for 2009-10 has been presented in the financial statements. Budget numbers in the
financial statements are the original budget numbers that appear in the Budget Papers.
Prior Year Comparatives
Comparative information has been disclosed in respect of the 2008-09 financial year for amounts reported
in the financial statements, except where an Australian Accounting Standard does not require comparative
information to be disclosed.
Where the presentation or classification of items in the financial statements is amended, the comparative
amounts have been reclassified where practical. Where a reclassification has occurred, the nature, amount
and reason for the reclassification is provided.
The comparative figures for the 2008-09 financial year include amounts related to functions that have
transferred to Chief Minister’s Department and the new Department of Land and Property Services under
the Administrative Arrangements. The figures for the 2009-10 financial year include amounts related to the
same functions up to the transfer date of 10 November 2009 and 1 December 2009 respectively. Further
details of the administrative arrangements are disclosed at Note 38 “Restructure of Administrative
Arrangements”.
(e) Rounding
All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000). Use of
“-” represents zero amounts or amounts rounded down to zero.
(f) Revenue Recognition
Revenue is recognised at the fair value of the consideration received or receivable in the Operating
Statement. All revenue is recognised to the extent that it is probable that the economic benefits will flow to
the Department and the revenue can be reliably measured. In addition, the following specific recognition
criteria must also be met before revenue is recognised.
Taxes, Fees and Fines
Taxes are recognised as revenue at the time of payment. Fees are either recognised as revenue at the time of
payment or when the fee is incurred. Fines are recognised as revenue on the issue of the relevant
infringement notice. Where the fine attracts a penalty for late payment, the penalty amount is recognised as
revenue on issue of the late payment notice.
2009–2010 ANNUAL REPORT 35
For the Year Ended 30 June 2010 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED (f) Revenue Recognition - Continued
Sale of Goods
Revenue from the sale of goods is recognised as revenue when the significant risks and rewards of
ownership of the goods have transferred to the buyer. The Department retains neither continuing
managerial involvement nor effective control over the goods sold and the costs incurred in respect of the
transaction can be measured reliably. Rendering of Services
Revenue from the rendering of services is recognised when the stage of completion of the transaction at the
reporting date can be measured reliably and the costs of rendering those services can be measured reliably.
Interest
Interest revenue is recognised using the effective interest rate method.
(g) Resources Received and Provided Free of Charge
Resources received free of charge are recorded as a revenue and expense in the Operating Statement at fair
value. The revenue is separately disclosed under Resources Received Free of Charge, with the expense
being recorded in the line item to which it relates. Goods and services received free of charge from other
ACT Government agencies are recorded as resources received free of charge, whereas goods and services
received free of charge from entities external to the ACT Government are recorded as donations. Services
that are received free of charge are only recorded in the Operating Statement if they can be reliably
measured and would have been purchased if not provided to the Department free of charge.
(h) Contributed Assets
Infrastructure assets received free of charge from the Land Development Agency and ACT Planning and
Land Authority are recorded as revenue at fair value in the Operating Statement under ‘Other Gains’. A
corresponding amount is recognised in the Balance Sheet under ‘Property, Plant and Equipment’. (i) Repairs and Maintenance
The Department undertakes major cyclical and reactive maintenance on its infrastructure assets. Where the
maintenance leads to an upgrade of the asset, and increases the service potential of the existing
infrastructure asset, the cost is capitalised. Maintenance expenses which do not increase the service
potential of the asset are expensed.
36 Department of Territory and Municipal Services
For the Year Ended 30 June 2010 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
(j) Borrowing Costs
Borrowing costs are expensed in the period in which they are incurred. Borrowing costs include an amount
required to increase the provision set aside for the future restoration costs of waste landfill sites. (k) Waivers of Debt
Debts that are waived during the year under section 131 of the Financial Management Act 1996 are
expensed during the year in which the right to payment was waived. Further details of waivers are
disclosed at Note 17 – Impairment Losses and Write-Offs.
(l) Current and Non-Current Items
Assets and liabilities are classified as current or non-current in the Balance Sheet and in the relevant notes.
Assets are classified as current where they are expected to be realised within the 12 months following the
reporting date. Liabilities are classified as current when they are due to be settled within 12 months of the
reporting date or the Department does not have an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date.
Assets or liabilities which do not fall within the current classification are classified as non-current.
(m) Impairment of Assets
The Department assesses, at each reporting date, whether there is any indication that an asset may be
impaired. Assets are also reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
Any resulting impairment losses for land, buildings, infrastructure, heritage and community assets, plant
and equipment and leasehold improvements are recognised as a decrease in the available Asset Revaluation
Surplus relating to these classes of assets. Where the impairment loss is greater than the balance in the
Asset Revaluation Surplus for the relevant class of asset, the difference is expensed in the Operating
Statement. Impairment losses for intangible assets are recognised in the Operating Statements, as
intangibles are carried at cost. The carrying amount of the impaired asset is also reduced to its recoverable
amount.
An impairment loss is the amount by which the carrying amount of an asset (or a cash-generating unit)
exceeds its recoverable amount. The recoverable amount is the higher of the asset’s ‘fair value less cost to
sell’ and its ‘value in use’. An asset’s ‘value in use’ is its depreciated replacement cost, where the asset
would be replaced if the Department were deprived of it. Non-financial assets that have previously been
impaired are reviewed for possible reversal of impairment at each reporting date.
2009–2010 ANNUAL REPORT 37
For the Year Ended 30 June 2010 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
(n) Cash and Cash Equivalents
For the purposes of the Cash Flow Statement and the Balance Sheet, cash includes cash at bank and cash on
hand. Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash. Cash equivalents include short-term investments held in the Cash Enhanced Portfolio
with the Territory Banking Account. Any bank overdrafts are included in cash and cash equivalents in the
cash flow statement but not in the cash or cash equivalents line on the Balance Sheet. (o) Receivables
Accounts receivable (including trade receivables and other receivables) are initially recognised at fair value
and are subsequently measured at amortised cost, with any adjustments to the carrying amount being
recorded in the Operating Statement.
Trade receivables arise in the normal course of selling goods and services to other agencies and to the
public. Trade receivables are payable within 30 days after the issue of an invoice or the goods/services
have been provided under a contractual arrangement. The Department does not grant a discount if payment
is received within 30 days.
Other receivables arise from outside the normal course of selling goods and services to other agencies and
to the public. Other receivables are payable within 30 days after the issue of an invoice or the
goods/services have been provided under a contractual arrangement. The Department has not entered into
any contractual arrangements with any customers allowing it to charge interest at commercial rates where
payment is not received within an agreed number of days after the amount falls due, until the whole debt is
paid.
The allowance for impairment losses for receivables represents the amount of trade and other receivables
the Department estimates will not be paid. The allowance for impairment losses is based on objective
evidence and a review of overdue balances. The Department generally considers the following is objective
evidence of impairment:
(a) becoming aware of financial difficulties of debtors;
(b) default payments; or
(c) debts more than 90 days overdue unless assessed as recoverable.
Please refer to note 2(af) “Significant Accounting Judgements and Estimates” for further information on
objective evidence of impairment for Territorial receivables. The amount of the impairment loss allowance
is the difference between the asset’s carrying amount and the estimated future cash flows. The amount of
the allowance is recognised in the Operating Statement. The allowance for impairment losses are written
back against the receivables account when the Department ceases action to collect the debt as it considers
that it will cost more to recover the debt than the debt is worth.
38 Department of Territory and Municipal Services
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(p) Biological Assets
The Department has recognised the commercial softwood plantations as a biological asset in accordance
with AASB 141: ‘Agriculture’. Management of the Forestry Estate is subject to the Environment
Protection Act 1997, under which a specific authorisation has been issued. All activities are required to
comply with the principles of the 1995 Code of Practice.
Timber is classified as being either ‘pre-commercial’ or ‘commercial’. Pre-commercial stands are less than
15 years old and are not yet suitable to be sold for commercial purpose. Commercial stands are 15 years
old or greater in age and are managed to produce commercial output. ‘Commercial-beyond normal’ are
areas within plantations that are beyond the planned rotation length in each forest.
The cost of restoring fire affected forestry land is expensed throughout the year. At the end of each
reporting period expenditure is assessed and where appropriate, the relevant expenditure is capitalised.
(q) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises the purchase price of
inventories as well as transport, handling and other costs directly attributable to the acquisition of
inventories. Trade discounts, rebates and other similar items are deducted in determining the costs of
purchase. The cost of inventories is assigned using the first-in, first-out method.
Net realisable value is determined using the estimated sales proceeds less costs incurred in marketing,
selling and distribution to customers.
2009–2010 ANNUAL REPORT 39
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(r) Acquisition and Recognition of Property, Plant and Equipment
Property, plant and equipment are initially recorded at cost. Cost includes the purchase price, directly
attributable costs and the estimated cost of dismantling and removing the item (where, upon acquisition,
there is a present obligation to remove the item).
Where property, plant and equipment are acquired at no cost, or minimal cost, cost is its fair value as at the
date of acquisition. However property, plant and equipment acquired at no cost or minimal cost as part of
Restructuring of Administrative Arrangements is measured at the transferor’s book value.
Property, plant and equipment with a value of $5,000 or greater, including groupings of like assets, are
capitalised.
(s) Measurement of Property, Plant and Equipment After Initial Recognition
Property, plant and equipment is valued using the fair value model. Fair value is the amount for which an
asset could be exchanged between knowledgeable willing parties in an arm’s length transaction. Fair value
is measured using market based evidence available for that asset (or a similar asset), as this is the best
evidence of an asset’s fair value. Where the market price of an asset cannot be obtained because the asset
is specialised and rarely sold, depreciated replacement cost is used as the fair value.
Fair value for land and buildings is measured using current prices in a market for similar properties in a
similar location and condition. Fair value for infrastructure assets, leasehold improvements and some
heritage and community assets is measured using depreciated replacement cost.
The fair value for land under roads (which is part of the Heritage and Community asset class) is measured
on an unimproved rateable land valuation basis. Under this methodology, a value per square metre of land
is estimated by dividing the total unimproved value of rateable land in the Territory by the total area of the
Territory.
For other heritage and community assets, fair value is determined using a market price where there is a
market for the same or similar item.
Land, buildings, infrastructure assets, plant and equipment, leasehold improvements and heritage and
community assets are re-valued every three years. However, if at any time, management considers that the
carrying amount of an asset materially differs from its fair value, then the asset will be re-valued regardless
of when the last valuation took place.
40 Department of Territory and Municipal Services
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(t) Investment Properties
All investment properties were transferred to the new Department of Land and Property Services following
the Administrative Arrangement effective 1 December 2009. Investment properties were measured at fair
value. Fair value is the amount the asset could be exchanged between knowledgeable, willing parties in an
arm’s length transaction. Changes in fair values were recorded in the Operating Statement. Investment
properties are not depreciated.
(u) Intangible Assets
The Department’s Intangible Assets are comprised of internally developed software for internal use.
Internally acquired software is recognised and capitalised when:
(a) it is probable that the expected future economic benefits that are attributable to the software will
flow to the Department;
(b) the cost of the software can be measured reliably; and
(c) the acquisition cost is equal to or exceeds $50,000.
Capitalised software has a finite useful life. Software is amortised on a straight-line basis over its useful
life, over a period not exceeding five years. Intangible Assets are measured at cost.
2009–2010 ANNUAL REPORT 41
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(v) Depreciation and Amortisation of Non-Current Assets
Non-current assets with a limited useful life are systematically depreciated or amortised over their useful
lives in a manner that reflects the consumption of their service potential. The useful life commences when
an asset is ready for use. When an asset is revalued it is depreciated or amortised over its newly assessed
remaining useful life. Amortisation is used in relation to intangible assets and depreciation is applied to
physical assets such as buildings, infrastructure assets, and plant and equipment.
Land, road earthworks and some heritage and community assets have an unlimited useful life and are
therefore not depreciated.
Leasehold improvements and motor vehicles under a finance lease are depreciated over the estimated
useful life of each asset, or the unexpired period of the relevant lease, whichever is shorter.
All depreciation is calculated after first deducting any residual values which remain for each asset.
Depreciation and amortisation for non-current assets is determined as follows:
Class of Asset Depreciation/
Amortisation
Method
Useful Life (Years)
Land Restoration Straight Line 30 - 50
Buildings Straight Line 30 - 40
Leasehold Improvements Straight Line 2 - 10
Plant and Equipment Straight Line 2 - 20
Infrastructure Straight Line 20 - 100
Internally Generated Intangibles Straight Line 2 - 5
Heritage and Community Assets Straight Line 3 - 100
The useful lives of all major assets held by Department are reassessed on an annual basis.
42 Department of Territory and Municipal Services
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(w) Payables
Payables are a financial liability and are measured at the fair value of the consideration received when
initially recognised and at amortised cost subsequent to initial recognition, with any adjustments to the
carrying amount being recorded in the Operating Statement. Amounts are normally settled within 30 days
of the invoice date, within 30 days of the receipt of goods and services, or within agreed payment terms.
Payables include Trade Payables, Accrued Expenses and Other Payables.
Trade Payables represent the amounts owing for goods and services received prior to the end of the
reporting period and unpaid at the end of the reporting period and relating to the normal operations of the
Department.
Accrued Expenses represent goods and services provided by other parties during the period that are unpaid
at the end of the reporting period and where an invoice has not been received by period end.
Other Payables are those unpaid invoices that do not directly relate to the normal operations of the
Department.
(x) Interest Bearing Liabilities
Interest-bearing liabilities are a financial liability measured at the fair value of the consideration received
when initially recognised and at amortised cost subsequent to initial recognition, with any adjustments to
the carrying amount being recorded in the Operating Statement. The associated interest expense is
recognised in the reporting period in which it occurs.
(y) Leases
The Department has entered into finance leases and operating leases.
Finance Leases
A finance lease effectively transfers to the Department substantially all the risks and rewards incidental to
ownership of the asset/s to which the finance lease relates. The title may or may not eventually be
transferred. Finance leases are initially recognised as an asset and a liability at the lower of the fair value of
the asset and the present value of the minimum lease payments each being determined at the inception of
the lease. The discount rate used to calculate the present value of the minimum lease payments is the
interest rate implicit in the lease. Assets under a finance lease are depreciated over the shorter of the asset’s
useful life and lease term. Assets under a finance lease are depreciated on a straight-line basis. The
depreciation is calculated after first deducting any residual values which remain for each leased asset. Each
lease payment is allocated between interest expense and a reduction of the lease liability. Lease liabilities
are classified as current and non-current.
Operating Leases
An operating lease does not effectively transfer to the Department substantially all the risks and rewards
incidental to ownership of the asset/s to which the operating lease relates. Operating lease payments are
recorded as an expense in the Operating Statement on a straight-line basis over the term of the lease.
2009–2010 ANNUAL REPORT 43
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(z) Employee Benefits
Employee benefits include wages and salaries, annual leave, long service leave and applicable on-costs.
On-costs include annual leave, long service leave, superannuation and other costs that are incurred when
employees take annual and long service leave. These benefits accrue as a result of services provided by
employees up to the reporting date that remain unpaid. They are recorded as a liability and as an expense.
Wages and Salaries
Accrued wages and salaries are measured at the amount that remains unpaid to employees at the end of the
reporting period.
Annual and Long Service Leave
Annual leave and long service leave that fall due wholly within the next 12 months is measured based on
the estimated amount of remuneration payable when the leave is taken.
Annual and long service leave including applicable on-costs that do not fall due within the next 12 months
are measured at the present value of estimated future payments to be made in respect of services provided
by employees up to the end of the reporting period. Consideration is given to the future wage and salary
levels, experience of employee departures and periods of service. At each reporting period end, the
estimated future payments are discounted using market yields on Commonwealth Government bonds with
terms to maturity that match, as closely as possible, the estimated future cash flows. In 2009-10, the
discount factor used to calculate the present value of these future payments is 92.9% (90.5% in 2008-09).
The long service leave liability is estimated with reference to the minimum period of qualifying service.
For employees with less than the required minimum period of 7 years of qualifying service, the probability
that employees will reach the required minimum period has been taken into account in estimating the
provision for long service leave and the applicable on-costs.
The provision for annual leave and long service leave includes estimated on-costs. As these on-costs only
become payable if the employee takes annual and long service leave while in-service, the probability that
employees will take annual and long service leave while in service has been taken into account in
estimating the liability for on-costs.
Annual leave and long service leave liabilities are classified as current liabilities in the Balance Sheet
where there are no unconditional rights to defer the settlement of the liability for at least 12 months.
However, where there is an unconditional right to defer settlement of the liability for at least 12 months,
annual leave and long service leave have been classified as a non-current liability in the Balance Sheet.
44 Department of Territory and Municipal Services
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(aa) Superannuation
Superannuation payments are made to the Territory Banking Account each year, to cover the Department’s
superannuation liability for the Commonwealth Superannuation Scheme (CSS) and the Public Sector
Superannuation Scheme (PSS). This payment covers the CSS/PSS employer contribution, but does not
include the productivity component. The productivity component is paid directly to ComSuper by the
Department. The CSS and PSS are defined benefit superannuation plans meaning that the defined benefits
received by employees are based on the employee’s years of service and average final salary.
Superannuation payments have also been made directly to superannuation funds for those members of the
Public Sector who are part of superannuation accumulation schemes. This includes the Public Sector
Superannuation Scheme Accumulation Plan (PSSAP) and schemes of employee choice.
Superannuation employer contribution payments, for the CSS and PSS, are calculated, by taking the salary
level at an employee’s anniversary date and multiplying it by the actuarially assessed nominal CSS or PSS
employer contribution rate for each employee. The productivity component payments are calculated by
taking the salary level, at an employee’s anniversary date, and multiplying it by the employer contribution
rate (approximately 3%) for each employee. Superannuation payments for the PSSAP are calculated by
taking the salary level, at an employee’s anniversary date, and multiplying it by the appropriate employer
contribution rate. Superannuation payments for fund of choice arrangements are calculated by taking an
employee’s salary each pay and multiplying it by the appropriate employer contribution rate.
A superannuation liability is not recognised in the Balance Sheet as the Superannuation Provision Account
recognises the total Territory superannuation liability for the CSS and PSS, and ComSuper and the external
schemes recognises the superannuation liability for the PSSAP and other schemes respectively.
The ACT Government is liable for the reimbursement of the emerging costs of benefits paid each year to
members of the CSS and PSS in respect of the ACT Government service provided after 1 July 1989. These
reimbursement payments are made from the Superannuation Provision Account.
2009–2010 ANNUAL REPORT 45
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(ab) Equity Contributed by the ACT Government
Contributions made by the ACT Government, through its role as owner of the Department are treated as
contributions of equity; this usually takes the form of capital injection for Capital Works.
Increases or decreases in net assets as a result of Administrative Restructures are also recognised in equity.
(ac) Insurance
Major risks are insured through the ACT Insurance Authority. The excess payable, under this arrangement,
varies depending on each class of insurance held.
(ad) Significant Accounting Judgements and Estimates
In the process of applying the accounting policies listed in this note, the Department has made the
following judgements and estimates that have the most significant impact on the amounts recorded in the
financial statements:
(1) Assets received from ACT Government agencies: Assets received from ACT Government agencies
totalling $52 million (2008-09 $46.4 million) are disclosed in Note 9 Other Gains of the financial
statements and predominantly relate to completed infrastructure assets transferred to the Department
for management and maintenance. However, as formal asset acceptance, which usually includes
verification of physical assets to work as executed (WAE) drawings, can take more than 12 months the
inclusion of these assets into a revaluation process can be delayed. Given this delay, the assets are
valued and recorded in the financial statements for the intervening period based on advice from the
transferring agencies.
(2) Infrastructure Assets: Infrastructure assets totalling $6,128.7 million (2008-09 $5,578.6 million) are
predominately valued based on depreciated replacement cost by writing-down gross replacement
values to take account of the age of assets. The age of the assets is predominantly based on the age of
the suburb, in which they are located.
(3) Land and Buildings: Land and buildings totalling $136.9 million (2008-09 $458.1 million) are valued
on a fair value basis by the Australian Valuation Office. This involves determining values from
market based evidence by appraisal.
46 Department of Territory and Municipal Services
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(ad) Significant Accounting Judgements and Estimates (continued)
(4) Land Under Roads: The Department has made a significant judgement in determining the fair value of
land under roads (Heritage and Community Assets). This is the second financial year that this asset
has been recognised in the financial statements and the Valuers-General have agreed on the valuation
basis. The Australasian Valuers-General have issued a guidance note on valuation methodology
applicable for land under roads. This guidance states that “Statutory Land Value” is the most feasible
and efficient base for valuing land under roads.
In applying this Statutory Land Value Methodology, the fair value for land under roads is measured on
an unimproved rateable land valuation basis. Under this methodology a value per square metre of land
is estimated by dividing the total unimproved value of rateable land in the Territory by the total area of
the Territory. Further information on this estimate is provided in Note 2 (s) and Note 3 Change in
Accounting Estimates.
(5) Estimation of Useful Lives of Property, Plant and Equipment: the Department has made a significant
estimate in determining the useful lives of Property, Plant and Equipment. The estimate has been
based on the historical experience of similar assets and in some cases has been based on valuations
provided by the Australian Valuation Office or estimates from officers of the Department. The useful
lives are reviewed on an annual basis and any adjustments are made when considered necessary.
Further disclosure concerning an asset’s useful life can be found at note 2(v) Depreciation and
Amortisation of Non-Current Assets.
(6) Employee Benefits: Significant judgements have been applied in estimating the liability for employee
benefits. The estimated liability for employee benefits requires a consideration of the future wage and
salary levels, experience of employee departures and periods of service. The estimate also includes an
assessment of the probability that employees will meet the minimum service period required to qualify
for long service leave and that on-costs will become payable. Further information on this estimate is
provided in Note 2(z) Employee Benefits and Note 3 Change in Accounting Estimates.
2009–2010 ANNUAL REPORT 47
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(ad) Significant Accounting Judgements and Estimates (continued)
(7) Biological Assets: Plantation Growing Stock values have been determined through an independent
valuation performed by an expert forestry consultant (Forsci Pty Ltd) using an estimate of the
sustainable yield of the plantations determined by the professional judgement and expertise of
Departmental officers. Pre-commercial stock is valued using the average establishment cost of each
forest plus an annual maintenance cost per hectare and a compound annual interest rate of 6%.
Commercial stock is valued at estimated value on liquidation to the Department using statistical
estimation of grade, age, class, volume, site characteristics and other key attributes based on the
following key assumptions:
Product distributions within the standing timber volumes are based on historic distributions;
and
Prices for products are based on agreed sale prices with mills, after deducting harvesting and
transport costs.
(8) Impairment of Assets: Assets are assessed to have been impaired having regard to a number of factors
including obsolescence, future continuing use and physical damage based on management assessment.
(9) Provision for Restoration of Waste Landfill Sites: The Department uses cost discounted to present
value modelling for the provisions for future restoration and remediation of the Department’s two
landfill sites. The expected restoration and remediation date for the Mugga Lane Landfill is the year
2018 and for the decommissioned Belconnen landfill is the year 2014.
(10) Allowance for Impairment Losses: The allowance for impairment losses on Territorial receivables
principally relates to red light camera, speed camera and traffic infringements. Objective analysis of
road traffic related infringements has been undertaken and as a result all debts, except Government
debtors, greater than 90 days outstanding have been included in the allowance for impaired
receivables. Amounts not collected within one year are written off unless assessed as recoverable,
although other punitive measures can be used in the eventual recovery process.
(11) Accrued Land Sales Revenue: The Department has accrued land sales revenue based on an estimate by
the Department of Land and Property Services. The Department makes Engcobo land sales to the
Department of Land and Property Services to enable the Department of Land and Property Services to
either develop and sell the land to the public itself or on-sell the land to private sector developers. The
Department recognises revenue from land sales to the Department of Land and Property Services when
significantly all the risks and rewards of ownership of the land have transferred from the Department to
the Department of Land and Property Services. The Department assesses that the significant risks and
rewards of ownership have transferred to the Department of Land and Property Services when the
majority of development work has been completed or when title over the land has been transferred to a
third party (the public or private sector developer). Revenue on land sales is measured at the fair value
of the consideration received as assessed by an independent valuation.
48 Department of Territory and Municipal Services
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(ae) Impact of Accounting Standards Issued but yet to be Applied
The following new and revised accounting standards and interpretations have been issued by the Australian
Accounting Standards Board but do not apply to the current reporting period. These standards and
interpretations are applicable to future reporting periods. Shared Services does not intend to adopt these
standards and interpretations early. It is estimated that the effect of adopting the below pronouncements,
when applicable, will have no material financial impact on Shared Services in future reporting periods:
AASB 5 Non-current Assets Held for Sale and Discontinued Operations (application date 1 Jan 2010);
AASB 5 Non-current Assets Held for Sale and Discontinued Operations (application date 1 Jan 2011
AASB 7 Financial Instruments: Disclosures (application date 1 Jul 2010);
AASB 9 Financial Instruments (application date 1 Jan 2013);
AASB 101 Presentation of Financial Statements (application date 1 Jan 2010);
AASB 107 Statement of Cash Flows (application date 1 Jan 2010);
AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors (application date 1 Jan
2011);
AASB 110 Events after the Reporting Period (application date 1 Jan 2011);
AASB 117 Leases (application date 1 Jan 2010);
AASB 118 Revenue (application date 1 Jan 2010);
AASB 119 Employee Benefits (application date 1 Jan 2011);
AASB 132 Financial Instruments: Presentation (application date 1 Feb 2010);
AASB 136 Impairment of Assets (application date 1 Jan 2010);
AASB 137 Provisions, Contingent Liabilities and Contingent Assets (application date 1 Jan 2011);
AASB 139 Financial Instruments: Recognition and Measurement (application date 1 Jan 2010);
AASB 139 Financial Instruments: Recognition and Measurement (application date 1 Jan 2011);
AASB 1031 Materiality (application date 1 Jan 2011);
AASB 1053 Application of Tiers of Australian Accounting Standards (application date 1 Jul 2013);
AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3,
4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10
& 12] (application date 1 Jan 2013);
AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure
Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124,
127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050, 1052 and Interpretations 2, 4, 5, 15, 17, 127,
129 & 1052] (application date 1 Jan 2013);
AASB 2010-3 Amendments to Australian Accounting Standards arising from Annual Improvements
Project [AASB 3, 7, 121, 128, 131, 132, and 139] (application date 1 Jul 2010);
AASB 2010-4 Further Amendments to Australian Accounting Standards arising from Annual
Improvements Project [AASB 1, 7, 101, 134, and Interpretation] (application date 1 Jan 2011); and
AASB Interpretation 4 Determining whether an Arrangement contains a lease (application date 1 Jan
2011).
2009–2010 ANNUAL REPORT 49
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 3 CHANGE IN ACCOUNTING POLICY AND ACCOUNTING ESTIMATES
Change in Accounting Estimates
Revision of the Employee Benefit Discount Rate As disclosed in Note 2 (z) Employee Benefits, the Department uses the discount rate to estimate the
present value of long service leave and annual leave liabilities classified as long-term. This method takes
into account future wage increases discounted back to present value using the government bond rate. Last
financial year, the discount rate was 90.5%, however, due to a change in the Commonwealth Government
bond rate the percentage is now 92.9%.
This change has resulted in an increase to the estimate of the long service leave liability and expense in
the current reporting period of approximately $0.366 million. This change has resulted in no change to the
estimate of annual leave liability and expense as the Department estimates all its annual leave to be taken
in the next 12 months.
Revision of the methodology used to calculate the value of Land Under Roads Additions
Land under roads received during the 2008-09 financial year was valued using an englobo methodology
which provided a value of $22 per square metre. This methodology was based on a draft guidance note
issued by the Australasian Valuers – General.
In October 2009, the Australian Valuer-General issued a final guidance note that concluded that a
“Statutory Land Value” is the most feasible and efficient base for valuing land under roads. In applying this
revised methodology the Department has calculated a value per square metre of land by dividing the total
unimproved value of rateable land in the Territory by the total land area of the Territory. Using this
methodology, a value of $17.58 per square metre has been applied to land under roads received during the
2009-10 financial year.
This change has resulted in the following movements in the current reporting period; an increase in the
value of land under roads of $123.72 million, an increase in the heritage and community asset revaluation
reserve of $127.04 million.
Revision of Provision for Restoration of Waste Landfill Sites
The Department uses cost discounted to present value modelling to calculate the value of provisions for
future restoration and remediation of landfill sites. Movements in the Consumer Price Index and the five
year Commonwealth Government Bond rates have resulted in the following changes in the current
reporting period; an increase in other provisions of $3.26 million, a decrease in the land asset revaluation
reserve of $1.67 million and an increase in borrowing costs of $1.58 million.
50 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 4 GOVERNMENT PAYMENT FOR OUTPUTS
2010 2009
$'000 $'000
Revenue from the ACT Government
Government Payment for Outputs 230,626 232,482
Government Payment for Community Service Obligationsa72,652 68,618
Total Government Payment for Outputs 303,278 301,100
NOTE 5 USER CHARGES
User Charges – ACT Government
User Charges - ACT Governmenta 36,374 72,220
Total User Charges – ACT Government 36,374 72,220
User Charges – Non-ACT Government
Sales 1,496 1,405
Service Revenue (Non-ACT Government) 22,740 22,040
Rent from Tenantsa2,540 7,222
Total User Charges - Non-ACT Government 26,776 30,667
Total User Charges for Goods and Services 63,150 102,887
Government Payment for Outputs (GPO) is revenue received from the ACT Government to fund the costs of delivering outputs. TheACT Government Payment for Outputs is drawn down on a 'just in time basis' consistent with the ACT Government's cash managementframework.
User-charge revenue is derived by providing goods and services to other ACT Government agencies and to the public. User-charge revenueis not part of ACT Government appropriation and is paid by the user of the goods or services. This revenue is driven by consumer demandand is commercial in nature.
a) The increase in the Community Service Obligation for 2009-10 includes funding provided via a Treasurer's Advance to ACTION of $2.07m for general service delivery and the balance of $1.1m relating to a pre-ACTIA insurance settlement. The CSO payments included $70.199m for ACTION to operate network services; ACT Forests $2.183m for the provision of public use areas within ACT Forests; and Yarralumla Nursery $0.27m for the free plant issue scheme.
a) The decrease is primarily as a result of the transfer of ACT Property to the Department of Land and Property Services effective 1 December 2009.
2009–2010 ANNUAL REPORT 51
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 6 INTEREST
2010 2009
$’000 $’000
Revenue from within the ACT Government
Interest Revenue from the Territory Banking Accounta133 277
Total Interest Revenue from within ACT Government 133 277
Revenue from Non-ACT Government Entities
Other Interest Revenue 57 92
Interest Received from Australian Taxation Office 1 -
Total Interest Revenue from Non-ACT Government Entities 58 92
Total Interest Revenue 191 369
NOTE 7 RESOURCES RECEIVED FREE OF CHARGE
Revenue from ACT Government Entities
Department of Justice and Community Safety - Legal Services 1,145 1,151
Emergency Services Agency - Support Charges 263 360
Legislative Assembly Secretariat - Library Accommodation Expenses - 45
Total Resources Received Free of Charge 1,408 1,556
NOTE 8 OTHER REVENUE
Revenue from ACT Government Entities
Capital Improvement Funda817 2,091
Total Revenue from ACT Government Entities 817 2,091
Revenue from Non-ACT Government Entities
Commonwealth Government Grantsb222 1,616
Taxes, Fees and Finesc3,993 3,260
Otherd11,231 3,197
Total Revenue from Non-ACT Government Entities 15,446 8,073
Total Other Revenue 16,263 10,164
a) Reflects decrease in planned works funded from Treasury Capital Improvement Fund.
c) The increase in taxes, fee and fines in 2009-10 relates to an increase in the volume of waste to landfill.
Other Revenue arises from the core activities of the Department. Other Revenue is distinct from Other Gains, as Other Gains tend to be one off unusual items that are not part of the core activities of the Department.
Resources received free of charge relate to goods and/or services being provided free of charge from other agencies within theACT Government. Goods and services received free of charge from entities external to the ACT Government are classified as donations.
a) The decrease is primarily due to the transfer of selected environmental functions and responsibilities, including the receipting of interest bearing grants, from Territory and Municipal Services to the Department of Environment, Climate Change, Energy and Water effective11 November 2008.
d) The increase in 2009-10 is due to the acceptance of Contaminated Remediation Material, with site management services provided by the generator or transporter of the material.
b) The reduction of Commonwealth Government Grants in 2009-10 is due to the transfer of environmental functions from the Department of Territory and Municipal Services effective 11 November 2008.
52 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 9 OTHER GAINS
2010 2009
$’000 $’000
Gain on Investment Propertiesa- 32,065
Value of Assets Recognised for the First Timeb13,206 16,242
Assets Received from ACT Government Agenciesc52,043 46,410
Gain on Sale of Assetsd1,745 1,187
Total Other Gains 66,994 95,904
a) The decrease is due to the transfer of ACT Property to the Department of Land and Property Services effective 1 December 2009
b) Value of assets recognised for the first time relates to land under roads that were originally transferred to the Department at zero value.
NOTE 10 EMPLOYEE EXPENSES
Wages and Salaries 76,873 78,365
Annual Leave Expense 483 2,371
Long Service Leave Expensea1,683 3,883
Comcare Costs 2,249 1,700
Termination Expense 600 1,244
Other Employee Benefits and On-Costs 1,306 852
Total Employee Expenses 83,194 88,415
NOTE 11 SUPERANNUATION EXPENSES
Superannuation Contributions to the Territory Banking Account 8,205 8,160
Productivity Benefit 91 457
Superannuation Payment to Comsuper (for the PSSAP) 518 555
Superannuation to External Providers 3,243 2,702
Total Superannuation Expenses 12,057 11,874
Superannuation payments are also made to external providers as part of the new employee fund of choice arrangements, and to employmentagencies for the superannuation contribution it is required to make for the contract staff it employs.
Superannuation payments have been made direct to ComSuper to cover its superannuation liability for employees that are in the new PublicSector Superannuation Scheme Accumulation Plan (PSSAP).
Other gains tend to be one-off, or more unusual transactions which are not part of the Department's core activities. Other gains are distinctfrom other revenue, as other revenue arises from the core activities of the Department.
c) Infrastructure transfers to the Department have been made by the Land Development Agency and the ACT Planning and Land Agency. These assets include roads, streetlights, guardrails and other infrastructure related to estate developments.
d) Gain on Sale of Assets in 2008-09 included $1.08m relating to sale of pine trees at Fairbairn (Biological asset).
The Department receives funding for superannuation payments as part of the Government Payment for Outputs. The Department thenmakes payments on a fortnightly basis to the Territory Banking Account for its portion of the Territory’s Commonwealth SuperannuationScheme (CSS) and Public Sector Superannuation Scheme (PSS) superannuation liability. The productivity benefit for these schemes is paiddirectly to ComSuper.
a) The reduction in annual leave and long service leave expenses is due to the change in methodology used to estimate employee entitlements in 2008-09.
2009–2010 ANNUAL REPORT 53
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 12 SUPPLIES AND SERVICES2010 2009
$’000 $’000
Repairs and Maintenance (e.g. parks, roads and property)a66,146 79,329
Building and Facilities Operating Costsa27,372 39,381
Professional Services (e.g. contractors and consultants) 36,320 38,367
Information Technology and Communications 13,518 14,920
Consumables 10,081 10,616
Insurance 7,110 8,493
Communication, Printing and Publicationb 4,111 8,996
Operating Lease Costs 5,394 5,513
Finance and Human Resources Charges 5,254 5,537
Cost of Goods Sold 4,020 3,748
Procurement and Other Charges 129 559
Legal Costs 2,169 1,673
Other Human Resource Costs 1,445 1,437
Staff Development and Training 505 952
Membership and Associations 526 760
Bank Fees and Charges 393 365
Travel Expenses 539 723
Other Supplies and Services 2,209 2,462
Total Supplies and Services 187,241 223,831
NOTE 13 DEPRECIATION AND AMORTISATION
Depreciation
Land Restorationa3,014 3,961
Buildingsb8,872 12,782
Infrastructure Assetsc110,192 104,471
Plant and Equipment 8,233 8,225
Heritage and Community Assetsa1,090 2,188
Leasehold Improvements 225 173
Total Depreciation 131,626 131,800
Amortisation
Intangible Assetsd 480 1,292
Total Amortisation 480 1,292
Total Depreciation and Amortisation 132,106 133,092
d) Several intangible assets were fully depreciated during 2008-09.
c) Depreciation expense related to infrastructure assets has increased due to additions and the impact of 2008-09 revaluations.
a) The decrease in expenditure reported in 2009-10 for Repairs and Maintenance and Building and Facilities Operating Costs is due to the
transfer of ACT Property to the new Department of Land and Property Services effective 1 December 2009.
b) Buildings valued at $196m were transferred out of the Department during 2009-10 as part of Administrative Arrangement Orders.
a) The land restoration provisions and library materials were revalued during 2008-09.
b) The decrease in Communication, Printing and Publication expenditure is due to the transfer of Tourism to the Chief Minister's Department effective 10 November 2009.
54 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 14 GRANTS AND PURCHASED SERVICES
2010 2009
$’000 $’000
Payments to Service Providers - ACTIONa 70,199 66,210
Grants to Community Organisationsb8,372 12,054
Total Grants and Purchased Services 78,571 78,264
NOTE 15 BORROWING COSTS
Interest on Borrowingsa713 1,742
Finance Charges on Finance Leases 342 526
Borrowing Costs for Land Restoration 1,584 1,832
Total Borrowing Costs 2,639 4,100
NOTE 16 OTHER EXPENSES
Capital Works in Progressa9,707 5,986
Transfer of Assets to ACT Government Agenciesb7,537 12,616
Impairment Losses and Write-Offs (see Note 17) 961 168
Loss on Disposal of Assets 2,814 1,786
Other Expenses 1,894 1,723
Total Other Expenses 22,913 22,279
Grants are amounts provided by the Department to ACT Government entities and non-ACT Government entities for general assistance orfor a particular purpose. Grants may be for capital, current or recurrent purposes and the name or category reflects the use of the grant. Thegrants given are usually subject to terms and conditions set out in the contract, correspondence, or by legislation.
Purchased services are amounts paid to obtain services from other ACT Government agencies and external parties.
b) Various assets were transferred to the Department of Climate Change, Energy and Water,the Department of Disability, Housing and Community Services and the Department of Land and Property Services during 2009-10.
a) The increase in 2009-10 arises primarily from increased government funding to meet ACTION's base funding cost pressures of $2.066mand in addressing a pre-ACTIA insurance claim of $1.102m.
a) The decrease is due to the transfer of ACT Property to the Department of Land and Property Services effective 1 December 2009 and thepayout of loans in 2009-10 relating to waste facilities at Mugga Lane and the Mitchell Transfer Station.
b) The decrease is due to one off payments made in 2008-09 for the World Mountain Bike Championships, and delays experienced in thescheduled 2009-10 sports grants program.
a) The 2009-10 figure includes expenses related to Bushfire Recovery Projects ($6.5m).
2009–2010 ANNUAL REPORT 55
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 17 IMPAIRMENT LOSSES AND WRITE-OFFS
2010 2009
No. $’000 No. $’000
Impairment Loss from Receivables
Trade Receivablesa361 959 64 163
Total Impairment Loss from Receivables 361 959 64 163
Total Impairment Losses 361 959 64 163
Write-offs
Losses or Deficiencies in Public Monies 14 2 10 5
Total Write-offs 14 2 10 5
Total Impairment Losses and Write-offs 375 961 74 168
NOTE 18 ACT OF GRACE PAYMENTS
There were no Act of Grace payments made during the reporting period pursuant to section 130 of the Financial Management Act 1996.
There were no Act of Grace payments made during the 2008-09 year pursuant to section 130 of the Financial Management Act 1996.
Under Section 131 of the Financial Management Act 1996 the Treasurer may, in writing, waive the right to payment of an amount payable to theTerritory. In 2009-10 the Department did not submit to the Treasurer any debt waivers for loans owing by third parties.A waiver is the relinquishment of a legal claim to a debt over which the Department has control. The write-off of a debt is the accounting actiontaken to remove a debt from the books but does not relinquish the legal right of the Department to recover the amount. The write-off of debtsmay occur for reasons other than waivers.
a) The increase has occurred following an objective assessment of debtors, arising from damage to ACT Government property, undertaken in accordance with the accounting policies outlined in note 2 (ad) (10).
The impairment losses and write-offs listed below have occurred during the reporting period for the Department.
56 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 19 AUDITOR’S REMUNERATION
2010 2009
$’000 $’000
Audit Services
Audit Fees Paid to the ACT Auditor-General's Office 237 220
Total Audit Fees 237 220
Total Auditor's Remuneration 237 220
NOTE 20 CASH AND CASH EQUIVALENTS
Cash on Hand 453 580
Cash at Bank 26,001 28,371
Investments with the Territory Banking Account - Cash Enhanced Portfolio 81 139
Total Cash and Cash Equivalents 26,535 29,090
NOTE 21 RECEIVABLES
Current ReceivablesTrade Receivables 9,002 13,948 Less: Allowance for Impairment Losses (804) (317) 8,198 13,631
Other Receivables 5,391 6,702 Less: Allowance for Impairment Losses (11) (6)
5,380 6,696
Accrued Revenue 654 2,172
Net Goods and Services Tax Receivable 4,921 3,653
5,575 5,825
Total Current Receivables 19,153 26,152
Non-Current Receivables
Other Receivables 5,980 9,115
5,980 9,115 Total Receivablesa
25,133 35,267
The Auditor’s remuneration consists of financial audit services provided to the Department by the ACT Auditor-General's Office to conduct thefinancial audit. No other services were provided by the ACT Auditor-General's Office.
The Department holds a number of bank accounts with the Commonwealth Bank as part of the whole-of-government banking arrangements. As part ofthese arrangements, the Department does not receive any interest on these accounts. Short-term investments were also held with the Territory BankingAccount in the Cash Enhanced Portfolio throughout the year. The investment earned a floating interest rate of 4.96%. These funds are able to bewithdrawn upon request.
a) The decrease is due to the transfer of ACT Property to the Department of Land and Property Services, and Forestry insurance funding payable by the ACT Insurance Authority to the Department was reduced by $3.6 million in 2009-10 following reimbursement for fire restoration works.
2009–2010 ANNUAL REPORT 57
NOTE 21 RECEIVABLES - CONTINUED
Aging of Receivables
Not Overdue Past Due TotalLess than
30 Days 30 to 60 DaysGreater than
60 Days
$’000 $’000 $’000 $’000 $’000
2010
Not Impaireda
Receivables 22,985 1,454 231 463 25,133
Impaired
Receivables (36) - - (779) (815)
2009
Not Impaireda
Receivables 30,091 1,553 960 2,664 35,267
Impaired
Receivables - - - (323) (323)
2010 2009
Reconciliation of the Allowance for Impairment Losses $’000 $’000
Allowance for Impairment Losses at the Beginning of the Reporting Period (323) (417)
Additional Allowance Recognised (745) (99)
Reduction in Allowance Resulting from a Write-back against the Receivables 253 193
Allowance for Impairment Losses at the End of the Reporting Period (815) (323)
The carrying amount of financial assets that are past due or impaired, whose terms have been renegotiated is nil.
Classification of ACT Government/Non-ACT Government Receivables
Receivables from ACT Government Entities
Net Trade Receivables 1,709 7,930
Net Other Trade Receivables 11,178 14,594
Accrued Revenue 329 1,086
Total Receivables from ACT Government Entities 13,216 23,610
Receivables from Non-ACT Government Entities
Net Trade Receivables 6,489 5,701
Net Other Trade Receivables 182 1,217
Accrued Revenue 325 1,086
Net Goods and Services Tax Receivable 4,921 3,653
Total Receivables with Non-ACT Government Entities 11,917 11,657
Total Receivables 25,133 35,267
The Department holds collateral as security for the loans receivable which are overdue or determined to be impaired. However it does not hold any collateral for all other receivables that are overdue or determined to be impaired.
a) 'Not Impaired' refers to Net Receivables (that is Gross Receivables less Impaired Receivables).
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
58 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 22 INVENTORIES2010 2009
$’000 $’000
Current Inventories
Raw Materials - at Cost 1,089 1,201
Finished Goods - at Cost 3,326 2,809
Total Current Inventoriesa4,415 4,010
Total Inventories 4,415 4,010
NOTE 23 ASSETS HELD FOR SALE
Plant and Equipment Held for Salea336 -
Total Assets Held for Sale 336 -
NOTE 24 OTHER ASSETS
Prepaid Supplies and Servicesa 548 3,139
Other Assets 9 51
Total Other Assets 557 3,190
a) Inventories are held primarily by Yarralumla Nursery in the form of raw materials and stock held for sale. Roads inventory includes raw materials for road works.
a) The decrease is due to the combined impact of the transfer of ACT Property to the Department of Land and Property Services, and Floriade as part of the Tourism transfer to the Chief Minister's Department.
a) The Department has classified motor vehicles whose leases have expired as assets held for sale. The Department has 20 motor vehicles which havebeen returned to SG Fleet and are expected to be sold in July 2010. The residual and all lease payments have been paid.
2009–2010 ANNUAL REPORT 59
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 25 INVESTMENT PROPERTIES
2010 2009
$’000 $’000
Land at Fair Value - 46,390
Total Land at Fair Value - 46,390
Buildings at Fair Value - 78,610
Total Buildings at Fair Value - 78,610
Total Investment Properties - 125,000
In accordance with AASB140: 'Investment Property', the Department has classified properties as investment properties if they would normally betenanted by commercial organisations. Investment properties were held at fair value based upon independent valuations undertaken by the AustralianValuation Office (AVO) as at 30 June 2009. The AVO holds a recognised and relevant professional qualification and has recent experience in thelocation and category of the investment properties involved.
The Department managed the Australian Capital Territory's commercial buildings, leases commercial buildings on behalf of the Territory, governmentoffice accommodation at whole-of-government level, and properties that were surplus to government agencies service delivery needs.
The investment properties were transferred to the new Department of Land and Property Services following the Administrative Arrangement Orderseffective 1 December 2009.
60 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 25 INVESTMENT PROPERTIES - CONTINUED2010 2009
$’000 $’000
Income and Expense from Investment Properties
Rental Income 715 1,530
Less: Direct Operating Expenses of Investment Properties that Generated Investment Income (423) (1,306)
(11) (17)
Total Operating Profit from Investment Properties 281 207
Leasing of Investment Properties
Within One Year - 698
Later than One Year but not Later than 5 Years - 2,366
Later than 5 Years - 635
Total - 3,699
Reconciliation of Investment Properties
Land Buildings Total
$’000 $’000 $’000
Carrying Amount at the Beginning of the Reporting Period 46,390 78,610 125,000
AAO Transfersa(46,390) (78,610) (125,000)
Carrying Amount at the End of the Reporting Period - - -
Land Buildings Total
$’000 $’000 $’000
Carrying Amount at the Beginning of the Reporting Period 31,375 35,636 67,011
Net Gain or Loss on Revaluation 15,415 16,650 32,065
Other Movements (400) 26,324 25,924
Carrying Amount at the End of the Reporting Period 46,390 78,610 125,000
The following table shows the movement of investment properties during 2008-09.
The following table shows the movement in value of investment properties during 2009-10.
a) All investment properties were transferred to the new Department of Land and Property Services following the Administrative Arrangement Order effective 1 December 2009.
Less: Direct Operating Expenses of Investment Properties that did not Generate Investment Income
Investment Properties held by the Department were leased to private sector entities under long-term operating leases with rental income being receivedquarterly. These operating leases were non-cancellable. This function has transferred to the new Department of Land and Property Services followingthe Administrative Arrangement Orders effective 1 December 2009.
2009–2010 ANNUAL REPORT 61
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 26 PROPERTY, PLANT AND EQUIPMENT
·
·
·
·
·
·
·
·
2010 2010 2009 2009
Number Actual Number Actual
of Trees Value of Trees Value
’000 $’000 ’000 $’000
Trees in Urban Open Space
Native Species 264 47,543 262 47,175
Exotic Species 372 126,590 369 125,611
636 174,133 631 172,786
Land includes leasehold land held by the Department but excludes land under infrastructure.
Buildings include office buildings and warehouses.
Trees . The Department includes the value of non-commercial trees in the financial statements. The value, which forms part of the Department’s landvalue, is determined by the Australian Valuation Office using methodologies based on the type of trees/vegetation present on the land being valued. Inaddition, the Department manages trees in urban open spaces in Canberra. The financial statements exclude recognition of any value for these trees.However, the Department has established the following estimate based upon replacement costs determined as at 30 June 2010.
Community assets are those assets that are provided essentially for community use or services. Community assets held by the Department includepublic parks and gardens, public sporting reserves, public nature reserves and land under infrastructure.
Heritage assets are defined as those non-current assets that the ACT Government intends to preserve indefinitely because of their unique historical,cultural or environmental attributes. A common feature of heritage assets is that they cannot be replaced and they are not usually available for sale orredeployment. Heritage assets held by the Department include art, museum and library collections, historical buildings and memorials.
Infrastructure assets comprise public utilities that provide essential services and enhance the productive capacity of the economy. Infrastructure assetsheld by the Department include bridges, stormwater assets, carparks, streetlights, community paths, traffic signals, driveways, signs and barriers. Landunder infrastructure is not included in infrastructure assets.
Plant and equipment includes motor vehicles under a finance lease, mobile plant, air conditioning and heating systems, office and computer equipment,furniture and fittings, and other mechanical and electronic equipment.
Property, plant and equipment includes the following classes of assets – land, buildings, leasehold improvements, plant and equipment, infrastructureassets, and heritage and community assets. Property, plant and equipment do not include assets held for sale or investment property.
Leasehold improvements represent capital expenditure incurred in relation to leased assets. The Department has fit-outs in its leased buildings.
62 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 26 PROPERTY, PLANT AND EQUIPMENT - CONTINUED2010 2009
$’000 $’000
LAND AND BUILDINGS
Land at Fair Valuea43,755 153,095
Land Restoration at Fair Value (waste landfill sites) 30,063 30,063
Less Accumulated Depreciation - Land Restoration (waste landfill sites) (13,335) (10,321)
Less Accumulated Impairment (Losses) - (900)
Total Land at Fair Value 60,483 171,937
Total Written-Down Value of Land 60,483 171,937
Buildings at Fair Valuea80,930 289,756
Less Accumulated Depreciation (4,518) (211)
Less Accumulated Impairment (Losses) (45) (3,387)
Total Buildings at Fair Value 76,367 286,158
Total Written-Down Value of Buildings 76,367 286,158
Total Written-Down Value of Land and Buildings 136,850 458,095
LEASEHOLD IMPROVEMENTS
Leasehold Improvements at Fair Value 2,009 1,344
Less Accumulated Depreciation (210) (4)
Total Written-Down Value of Leasehold Improvements 1,799 1,340
PLANT AND EQUIPMENT
Assets Under a Finance Lease
Plant and Equipment Under a Finance Lease
Plant and Equipment Under a Finance Lease at cost 6,691 7,967
Accumulated Depreciation of Plant and Equipment under a Finance Lease (1,477) (2,297)
Total Plant and Equipment Under Finance Lease 5,214 5,670
Plant and Equipment at Fair Value 61,420 55,774
Less Accumulated Depreciation (16,125) (10,106)
Less Accumulated Impairment (Losses) (86) (68)
Total Plant and Equipment at Fair Value 45,209 45,600
Total Written-Down Value of Plant and Equipment 50,423 51,270
a) Land and building assets were transferred out of the Department during 2009-10 as a result of Administrative Arrangement Orders.
2009–2010 ANNUAL REPORT 63
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 26 PROPERTY, PLANT AND EQUIPMENT - CONTINUED2010 2009
$’000 $’000
INFRASTRUCTURE ASSETS
Roads
Roads at Fair Value 2,020,235 1,911,839
Less Accumulated Depreciation (37,045) (96)
Total Roads at Fair Value 1,983,190 1,911,743
Total Written-Down Value of Roads 1,983,190 1,911,743
Bridges
Bridges at Fair Valuea1,054,729 928,759
Less Accumulated Depreciation - (25,056)
Total Bridges at Fair Value 1,054,729 903,703
Total Written-Down Value of Bridges 1,054,729 903,703
Stormwater Assets
Stormwater Assets at Fair Valuea2,536,383 2,258,090
Less Accumulated Depreciation - (67,744)
Total Stormwater Assets at Fair Value 2,536,383 2,190,346
Total Written-Down Value of Stormwater Assets 2,536,383 2,190,346
Cyclepaths and Footpaths
Cyclepaths and Footpaths at Fair Valuea50,461 68,436
Less Accumulated Depreciation - (10,417)
Total Cyclepaths and Footpaths at Fair Value 50,461 58,019
Total Written-Down Value of Cyclepaths and Footpaths 50,461 58,019
a) Bridges, stormwater, cyclepaths and footpaths were revalued by officers internal to the Department as at 30 June 2010.
64 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 26 PROPERTY, PLANT AND EQUIPMENT - CONTINUED2010 2009
$’000 $’000
Other Infrastructure
Other Infrastructure at Fair Valuea516,002 550,384
Less Accumulated Depreciation (8,662) (32,128)
Less Accumulated Impairment (Losses) (3,440) (3,477)
Total Other Infrastructure at Fair Value 503,900 514,779
Total Written-Down Value of Other Infrastructure 503,900 514,779
Total Written-Down Value of Infrastructure 6,128,663 5,578,590
HERITAGE AND COMMUNITY ASSETS
Land (Heritage and Community Assets) at Fair Value 418,185 424,771
Land Under Roads at Fair Valuea1,350,525 1,229,065
Less Accumulated Impairment (Losses) (1,114) (1,114)
Total Land (Heritage and Community Assets) at Fair Value 1,767,596 1,652,722
Library Materials
Library Materials at Fair Valuea3,105 4,304
Less Accumulated Depreciation - -
Total Library Materials at Fair Value 3,105 4,304
Other Heritage and Community Assets
8,299 10,401
Less Accumulated Depreciation (382) (221)
Total Other Heritage and Community Assets at Fair Value 7,917 10,180
Summary of Heritage and Community Assets at Fair Value
Heritage and Community Assets at Fair Value 1,780,114 1,668,541
Less Accumulated Depreciation (382) (221)
Less Accumulated Impairment (Losses) (1,114) (1,114)
Total Written-Down Value of Heritage and Community Assets at Fair Value 1,778,618 1,667,206
Total Written-Down Value of Heritage and Community Assets 1,778,618 1,667,206
TOTAL WRITTEN-DOWN VALUE OF PROPERTY, PLANT AND EQUIPMENT 8,096,353 7,756,501
b) The value of other heritage and community assets has decreased due to administrative arrangement transfers ($1.17m) and the transfer of assets to the infrastructure asset class ($1.2m).
a) Selected other infrastructure assets were revalued as at 30 June 2010. These valuations were conducted by a combination of officers internal to the Department and Mr. Geoff McInerney (Certified Practising Valuer) from the Australian Valuation Office.
a) Land under roads and library materials were revalued as at 30 June 2010. The Land under roads valuation was conducted by officers internal to the Department. The Library materials valuation was condcted by Mr. Bob Cunningham (Certified Practising Valuer) from the Australian Valuation Office.
Other Heritage and Community Assets at Fair Valueb
2009–2010 ANNUAL REPORT 65
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 26 PROPERTY, PLANT AND EQUIPMENT - CONTINUED
Reconciliation of Property, Plant and Equipment
The following table shows the movement of Property, Plant and Equipment during 2009-10.
Heritage and
Leasehold Plant and Infrastructure Community
Land Buildings Improvements Equipment Assets Assets Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Carrying Amount at the Beginning of the Reporting Period 171,937 286,158 1,340 51,270 5,578,591 1,667,204 7,756,501
Additions - 1,324 259 9,725 115,223 16,299 142,830
Assets Classified as Held for Sale - - - (336) - - (336)
Revaluation Increment/(Decrement) - - - - 490,659 98,744 589,403
Impairment Losses Recognised in Other Comprehensive Income - (45) - (19) (60) - (124)
Depreciation (3,014) (8,872) (225) (8,233) (110,192) (1,090) (131,626)
Acquisition/(Disposal) through Administrative Restructuring (106,530) (196,571) (96) (904) (513) (1,338) (305,952)
Acquisition from Transfers in/(out) (1,910) (5,517) 521 488 54,955 (1,202) 47,335
Other Movements - (110) - (1,568) - (1,678)
Carrying Amount at the End of the Reporting Period 60,483 76,367 1,799 50,423 6,128,663 1,778,617 8,096,353
66 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 26 PROPERTY, PLANT AND EQUIPMENT - CONTINUED
Reconciliation of Property, Plant and Equipment
The following table shows the movement of Property, Plant and Equipment during 2008-09.
Heritage and
Leasehold Plant and Infrastructure Community
Land Buildings Improvements Equipment Assets Assets Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Carrying Amount at the Beginning of the Reporting Period 127,738 271,250 1,148 50,094 5,724,049 553,332 6,727,611
Additions - 6,934 - 8,031 43,177 2,773 60,915
Revaluation Increment/(Decrement) 46,234 10,026 194 - (118,674) (1,967) (64,187)Impairment Losses Recognised in Other Comprehensive Income (2,500) - (68) 101 (189) (2,656)
Depreciation (3,961) (12,782) (173) (8,225) (104,471) (2,188) (131,800)
Acquisition/(Disposal) through Administrative Restructuring - - - (14) - - (14)
Acquisition from Transfers in/(out) (4,545) 4,742 171 2,906 34,409 (61) 37,622
Other Movements 6,471 8,488 - (1,454) - 1,115,504 1,129,009
Carrying Amount at the End of the Reporting Period 171,937 286,158 1,340 51,270 5,578,591 1,667,204 7,756,500
2009–2010 ANNUAL REPORT 67
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 27 INTANGIBLE ASSETS
2010 2009$’000 $’000
Computer Software
Internally Generated Software
Computer Software at Cost 10,862 10,881
Less Accumulated Amortisation (10,334) (9,930)
Total Internally Generated Software 528 951
Total Computer Software 528 951
Total Intangible Assets 528 951
Reconciliation of Intangible Assets
InternallyGenerated
Software Total Carrying Amount at the Beginning of the Reporting Period 951 951
Additions 78 78
Amortisation (480) (480)
Other Changes (21) (21)Carrying Amount at the End of the Reporting Period 528 528
InternallyGenerated
Software Total Carrying Amount at the Beginning of the Reporting Period 2,186 2,186
Additions 36 36
Amortisation (1,292) (1,292)
Other Changes 21 21 Carrying Amount at the End of the Reporting Period 951 951
The Department has internally generated software including Rego ACT, Navision, Horizon Library Management System and ACT.Gov portal.
The following table shows the movement of Intangible Assets from the beginning to the end of 2009-10.
The following table shows the movement of Intangible Assets from the beginning to the end of 2008-09
68 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 28 BIOLOGICAL ASSETS
2010 2009$’000 $’000
Non Current Plantation Growing Stock
Standing Timber - at Independent Valuationa 27,704 28,952
Total Non-Current Plantation Growing Stock 27,704 28,952
Represented by:Plantations
Plantation Value at the Beginning of the Reporting Period 28,952 30,414
Pre-commercial Value at the Beginning of the Reporting Period 17,137 14,364
New Plantings 380 351
Increase Due to Change in Interest Rate and Maintenance Costs - 2,422
(2,058) -
End Balance of Pre-commercial Plantations at the End of the Reporting Period 15,459 17,137
Commercial Plantations Start Value (1 July) 11,796 15,483
Increase (movement of 1995 age class from pre-commercial) 349 -
Loss of Plantation Areab - (850)
Decrease Due to Harvesting (77)
Increase from Plantation Growth (Increment) - 549
Increase from Change in Product Pricingc 158 (3,386)
End Balance Commercial Plantations at the End of the Reporting Period 12,226 11,796
Commercial beyond Rotation Age Value at the Beginning of the Reporting Period 19 567
Loss from Change in Product Pricingc - (548)
19 19
Plantations Value at the End of the Reporting Period 27,704 28,952
End Balance of Commercial beyond Rotation Age Plantations at the End of the Reporting Period
Loss (Movement to Commercial Plantations)
a) No commercial harvesting programs have been undertaken in the 2009-10 financial year and no harvesting plan has been developed for the 2010-11 financial year. Accordingly, plantation growing stock has been identified as non current. The valuation was conducted by Dr John Turner (Member, Institute of Foresters of Australia) from Forsci Pty. Ltd. as at 30 June 2010. Biological Assets are revalued on an annual basis.b) Loss of plantation area related to sale of pines at Fairbairn to the Department of Defence in 2008-09.c) Variation arises from an assessment of the product market price provided by Forsci Pty Ltd.
2009–2010 ANNUAL REPORT 69
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 29 CAPITAL WORKS IN PROGRESS
2010 2009$’000 $’000
Heritage and Communitya 15,745 12,431 Plant and Equipmenta 3,547 2,874
Infrastructurea154,107 108,549
Buildings Worksa5,942 11,557
Leasehold Improvement Worksb- 32
Investment Property Worksb- 201
Software Works 3,335 1,182
Total Capital Works in Progress 182,676 136,826
a) Increase in capital works expenditure reflects the increase in the planned program which includes additional funding from the Federal and Territory stimulus packages.
Capital Works in Progress are assets under construction as at 30 June 2010. These assets often require extensive installation work, or integration withother assets, and contrast with simpler assets that are ready for use when required, such as motor vehicles and equipment. Capital Works in Progress arenot depreciated as the Department is not currently deriving any economic benefit from them.Assets, which are under construction, include infrastructure assets, buildings, leasehold improvements and software.
b) Projects completed in 2009-10 or transferred to the Department of Land and Property Services following the Administrative Arrangement Orders effective 1 December 2009.
70 Department of Territory and Municipal Services
Department of Territory and Municipal Services
Notes to and Forming Part of the Financial StatementsFor the Year Ended 30 June 2010
NOTE 29 CAPITAL WORKS IN PROGRESS - CONTINUED
Reconciliation of Capital Works in ProgressThe following table shows the movement of Capital Works in Progress during 2009-10.
Heritage and Community
Plant and Equipment Infrastructure
Buildings Works
Leasehold Improvement
Works
Investment Property
WorksSoftware
Works
Works In Progress
Works in progress
Works in progress
Works in progress
Works in progress
Works in progress
Works in progress Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Carrying Amount at the Beginning of the Reporting Period 12,431 2,874 108,549 11,557 32 201 1,182 136,826Additions 12,165 5,421 157,731 7,521 - 95 2,153 185,086Capital Works in Progress Completed and Transferred to Property, Plant and Equipment (6,471) (4,469) (104,826) (9,245) (20) (296) - (125,327)Capital Works in Progress Completed and Transferred to Expenses (1,926) (279) (7,347) (282) - - - (9,834)
Administrative Arrangement Transfersa (454) - - (3,609) (12) - - (4,075)
Carrying Amount at the End of the Reporting Period 15,745 3,547 154,107 5,942 - - 3,335 182,676
The following table shows the movement of Capital Works in Progress during 2008-09.
Heritage and Community
Plant and Equipment Infrastructure
Buildings Works
Leasehold Improvement
Works
Investment Property
WorksSoftware
WorksWorks In Progress
Works in progress
Works in progress
Works in progress
Works in progress
Works in progress
Works in progress Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Carrying Amount at the Beginning of the Reporting Period 5,506 2,447 69,707 648 962 25,581 4 104,855Additions 9,308 5,176 95,636 13,742 12 337 1,178 125,389Capital Works in Progress Completed and Transferred to Property, Plant and Equipment (1,199) (4,737) (49,462) (2,521) (942) (25,717) - (84,578)Capital Works in Progress Completed and Transferred to Expenses (912) (12) (4,750) (312) - - - (5,986)Administrative Arrangement Transfers (272) - (2,582) - - - - (2,854)
Carrying Amount at the End of the Reporting Period 12,431 2,874 108,549 11,557 32 201 1,182 136,826
a) Projects completed in 2009-10 or transferred Department of Land and Property Services following the Administrative Arrangement Orders effective 1 December 2009.
2009–2010 ANNUAL REPORT 71
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 30 PAYABLES
2010 2009
$’000 $’000Current Payables
Trade Payables 24,279 17,363
Other Payables 6,113 8,684
Accrued Expenses 6,221 10,682 Total Current Payables 36,613 36,729
Non-Current Payables
Trade Payables 142 191 Total Non-Current Payables 142 191
Total Payables 36,755 36,920
Payables are aged as follows:
Not Overdue 21,917 27,629
Overdue for Less than 30 Days 14,690 8,884
Overdue for 30 to 60 Days 11 132
Overdue for More than 60 Days 137 275 Total Payables 36,755 36,920
Classification of ACT Government/Non-ACT Government Payables
Payables with ACT Government Entities
Trade Payables 17,724 6
Other Payables 36 871
Accrued Expenses 1,344 1,540 Total Payables with ACT Government Entities 19,104 2,417
Payables with Non-ACT Government Entities
Trade Payables 6,697 17,548
Other Payables 6,077 7,813
Accrued Expenses 4,877 9,142 Total Payables with Non-ACT Government Entities 17,651 34,503
Total Payables 36,755 36,920
72 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 31 INTEREST-BEARING LIABILITIES AND FINANCE LEASES
2010 2009$'000 $'000
Current Interest-Bearing Liabilities
SecuredFinance LeasesFinance Leases 1,867 3,030 Total Current Finance Leases 1,867 3,030
UnsecuredBorrowings
Debt to ACT Treasury for the Construction of ACT Government Buildingsa - 5,726
Debt to the Private Sector for Waste Management Facilitiesb 648 837 Total Current Borrowings 648 6,563
Total Current Interest-Bearing Liabilities 2,515 9,593
Non-Current Interest-Bearing Liabilities
SecuredFinance Leases
Finance Leases 3,367 2,705 Total Non-Current Finance Leases 3,367 2,705
UnsecuredBorrowings
Debt to the ACT Government for the Construction of ACT Government Buildingsa - 9,845
Debt to the Private Sector for Waste Management Facilitiesb 1,928 2,523 Total Non-Current Borrowings 1,928 12,368
Total Non-Current Interest-Bearing Liabilities 5,295 15,073
Total Interest-Bearing Liabilities 7,810 24,666
2009–2010 ANNUAL REPORT 73
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 31 INTEREST-BEARING LIABILITIES AND FINANCE LEASES - CONTINUED
2010 2009$'000 $'000
Finance lease commitments are payable as follows:
Within one year 2,182 3,312
Later than one year but not later than five years 3,629 2,855 Minimum Lease Payments 5,811 6,167
Less: Future Finance Lease Charges (577) (432)Amount Recognised as a Liability 5,234 5,735
Total Present Value of Minimum Lease Payments 5,234 5,735
The present value of the minimum lease payments are as follows:
Within one year 1,867 3,030
Later than one year but not later than five years 3,367 2,705 Total Present Value of Minimum Lease Payments 5,234 5,735
Classification on the Balance Sheet
Interest-Bearing Liabilities
Current Interest-Bearing Liabilities 648 6,563
Non-Current Interest-Bearing Liabilities 1,928 12,368 2,576 18,931
Finance Leases
Current Finance Leases 1,867 3,030
Non-Current Finance Leases 3,367 2,705 5,234 5,735
Total Interest-Bearing Liabilities 7,810 24,666
Credit Facilities
NOTE 32 EMPLOYEE BENEFITS
Current Employee Benefits
Annual Leave 10,175 11,033
Long Service Leavea 15,053 15,192
Accrued Salaries 1,381 1,238
Other Benefitsb 893 180
Total Current Employee Benefits 27,502 27,643
Non-Current Employee Benefits
Long Service Leavea 1,456 1,712
Total Non-Current Employee Benefits 1,456 1,712
Total Employee Benefits 28,958 29,355
b) Other benefits consist of a sign-on bonus resulting from a constructive obligation to pay the Department's staff.
b) The private sector borrowing is for a waste management facility and is being repaid through principal and interest payments. The interest rate for this borrowing is 7.8%, instalments are paid from 2007-08 to 2013-14.
Apart from the Department's use of credit cards there are no formal credit facilities in place for the Department with the Territory's appointedtransactional bank. If the Department's account goes into overdraft throughout the year, the Department is not charged interest, however, the overdraftposition is required to be rectified as soon as possible.
a) The increase in Long Service Leave Liability is due to an increase to the present value discount factor changing from 90.5% to 92.9%.
a) The ACT Government borrowings were transferred to the new Department of Land and Property Services following the Administrative Arrangement Order effective 1 December 2009, and were for the construction of ACT Government owned buildings.
74 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 32 EMPLOYEE BENEFITS - CONTINUED
2010 2009$'000 $'000
For Disclosure Purposes OnlyEstimation of when Leave is PayableEstimated Amount Payable within 12 months
Annual Leave 10,175 11,033
Long Service Leavea 2,348 2,101
Accrued Salaries 1,381 1,238
Other Benefits 893 180 Total Employee Benefits Payable within 12 months 14,797 14,552
Estimated Amount Payable after 12 months
Long Service Leavea 14,161 14,803 Total Employee Benefits Payable after 12 months 14,161 14,803
Total Employee Benefits 28,958 29,355
As at 30 June 2010, the Department employed 1,053 full-time equivalent staff and 1,169 full-time equivalent staff as at 30 June 2009.
NOTE 33 OTHER PROVISIONS2010 2009
$'000 $'000Non-Current Other ProvisionsProvision for Restoration of Waste Landfill Sites - Mugga Lane and Belconnen 33,551 30,289 Total Non-Current Other Provisions 33,551 30,289
Total Other Provisions 33,551 30,289
Reconciliation of the Provision for Restoration of Waste Landfill Sites - Mugga Lane and Belconnen
Provision for Restoration at the Beginning of the Reporting Period 30,289 33,469
Increment / (Decrement) in the Provision due to a Change in Accounting Estimate (see Note 3) 3,262 (3,180)
Provision for Restoration at the End of the Reporting Period 33,551 30,289
NOTE 34 OTHER LIABILITIES
Current Other Liabilities
Revenue Received in Advancea 3,091 3,882
Project Funding Received in Advance 347 799
Rent Received in Advanceb - 2,262
Cash Collected on Behalf of Other Entities 2,593 2,849
Otherc 1,535 2,617 Total Current Other Liabilities 7,566 12,409
Non-Current Other Liabilities
Revenue Received in Advance 639 638 Total Non Current Other Liabilities 639 638
Total Other Liabilities 8,205 13,047
a) The decrease in 2009-10 is due to the transfer of Tourism to the Chief Minister's Department.
b) The decrease in 2009-10 is due to the transfer of ACT Property to the Department of Land and Property Services.
c)The decrease is due to capital funding received in advance from the Commonwealth Government in 2008-09 under the Regional and Local Community Infrastructure Program.
a) The estimate of long service leave payable is based on an average of long service leave taken in the last three years. Annual leave is assumed to bepayable within 12 months, based on work practices.
2009–2010 ANNUAL REPORT 75
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 35 EQUITY2010 2009
$'000 $'000Total Equity at the End of the Reporting Period
Accumulated Funds 5,195,572 5,397,270
Asset Revaluation Surplus 3,053,386 2,588,240 Total Equity 8,248,958 7,985,510
Movements in Equity during the Reporting Period
Accumulated Funds
Balance at the Beginning of the Reporting Period 5,397,270 4,224,915
Net Effect of a Change in Accounting Policy - 1,109,262
Capital Injections 206,968 127,202
Capital Distributions (ACTION) (32,071) (7,885)
Transfer of Revaluation Surplus due to Administrative Restructure 122,457 -
(Distribution) of Net Assets due to Administrative Restructure (429,782) (2,684)
Operating (Deficit) (67,437) (49,875)
Dividends Approveda (1,833) (3,665)
Balance at the End of the Reporting Period 5,195,572 5,397,270
Asset Revaluation Surplus
Land Revaluation Surplus
Balance at the Beginning of the Reporting Period 118,750 71,252
Transfer Out due to Administrative Arrangements (51,918) -
(Decrement)/ Increment (1,677) 47,498
Balance at the End of the Reporting Period 65,155 118,750
Infrastructure Revaluation Surplus
Balance at the Beginning of the Reporting Period 1,802,767 1,921,341
Transfer Out due to Administrative Arrangements 97 -
Increment/ (Decrement) 490,600 (118,574)
Balance at the End of the Reporting Period 2,293,464 1,802,767
Building Revaluation Surplus
Balance at the Beginning of the Reporting Period 104,674 97,148
Transfer Out due to Administrative Arrangements (70,363) -
(Decrement)/ Increment (45) 7,526
Balance at the End of the Reporting Period 34,266 104,674
Heritage and Community Assets Revaluation Surplus
Balance at the Beginning of the Reporting Period 559,642 561,799
Increment- Revaluation of Land and Library Materials 98,744 (2,157)
Balance at the End of the Reporting Period 658,386 559,642
Property Plant and Equipment Revaluation Surplus
Balance at the Beginning of the Reporting Period 2,213 2,278
Transfer Out due to Administrative Arrangements (79) -
(Decrement) (19) (65)
Balance at the End of the Reporting Period 2,115 2,213
Leasehold Improvements Revaluation Surplus
Balance at the Beginning of the Reporting Period 194 -
Transfer Out due to Administrative Arrangements (194) -
Increment - 194
Balance at the End of the Reporting Period - 194
Total Asset Revaluation SurplusBalance at the Beginning of the Reporting Period 2,588,240 2,653,818
Transfer Out due to Administrative Arrangements (122,457) -
Increment / (Decrement)b 587,603 (65,578)Total Increase in the Asset Revaluation Surplus 465,146 (65,578)
Balance at the End of the Reporting Period 3,053,386 2,588,240
a)This relates to dividend payments made by Property Group to ACT Treasuryb) Movement in the revaluation reserve includes impairment losses of $0.124m recognised directly in equity.
The Asset Revaluation Surplus is used to record the increments and decrements in the value of Property, Plant and Equipment.
76 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 36 DISAGGREGATED DISCLOSURE OF ASSETS AND LIABILITIES
Year ended 30 June 2010
Output Class Output Class Total
1 2
Municipal Services Enterprise Services
$’000 $’000 $’000
Current AssetsCash and Cash Equivalents 22,415 4,120 26,535 Receivables 16,672 2,481 19,153 Inventories 309 4,106 4,415 Assets Held for Sale 336 - 336 Other Assets 432 125 557
Total Current Assets 40,164 10,832 50,996
Non-Current AssetsReceivables 5,980 - 5,980 Property, Plant and Equipment 8,053,424 42,929 8,096,353 Intangible Assets 432 96 528 Biological Assets 27,704 - 27,704 Capital Works in Progress 181,288 1,388 182,676
Total Non-Current Assets 8,268,828 44,413 8,313,241
Total Assets 8,308,992 55,245 8,364,237
Current LiabilitiesPayables 35,055 1,558 36,613 Interest-Bearing Liabilities 648 - 648 Finance Leases 1,854 13 1,867 Employee Benefits 25,079 2,423 27,502 Other Liabilities 5,793 1,773 7,566
Total Current Liabilities 68,429 5,767 74,196
Non-Current LiabilitiesPayables 102 40 142 Interest-Bearing Liabilities 1,928 - 1,928 Finance Leases 3,309 58 3,367 Employee Benefits 1,336 120 1,456 Other Provisions 33,551 - 33,551 Other Liabilities 639 - 639
Total Non-Current Liabilities 40,865 218 41,083
Total Liabilities 109,294 5,985 115,279
Net Assets 8,199,698 49,260 8,248,958
2009–2010 ANNUAL REPORT 77
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 36 DISAGGREGATED DISCLOSURE OF ASSETS AND LIABILITIES - CONTINUED
Year ended 30 June 2009
Output Class Output Class Total
1 2
Municipal Services Enterprise Services Unallocated
$’000 $’000 $'000 $’000
Current AssetsCash and Cash Equivalents - 139 28,951 29,090 Receivables 13,726 12,426 - 26,152 Inventories 321 3,689 - 4,010 Other Assets 167 3,023 - 3,190
Total Current Assets 14,214 19,277 28,951 62,442
Non-Current AssetsReceivables 9,115 - - 9,115 Investment Properties - 125,000 - 125,000 Property, Plant and Equipment 7,400,931 355,570 - 7,756,501 Intangible Assets 916 35 - 951 Biological Assets 28,952 - - 28,952 Capital Works in Progress 134,733 2,093 136,826
Total Non-Current Assets 7,574,647 482,698 - 8,057,345
Total Assets 7,588,861 501,975 28,951 8,119,787
Current LiabilitiesPayables 25,099 11,630 - 36,729 Interest-Bearing Liabilities 837 5,726 - 6,563 Finance Leases 2,606 424 - 3,030 Employee Benefits 21,415 6,228 - 27,643 Other Liabilities 5,769 6,640 - 12,409
Total Current Liabilities 55,726 30,648 - 86,374
Non-Current LiabilitiesPayables - 191 - 191 Interest-Bearing Liabilities 2,523 9,845 - 12,368 Finance Leases 2,063 642 - 2,705 Employee Benefits 1,252 460 - 1,712 Other Provisions 30,289 - - 30,289 Other Liabilities 638 - - 638
Total Non-Current Liabilities 36,765 11,138 - 47,903
Total Liabilities 92,491 41,786 - 134,277
Net Assets 7,496,370 460,189 28,951 7,985,510
78 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
"Unallocated Cash and Cash Equivalents"
For 2009-10,cash and cash equivalents have been allocated to the Departments output classes. The transfer of Tourism has allowed the
Department to reliably attribute these balances as there are separate bank accounts for the remaining entities in these outputs.
NOTE 36 DISAGGREGATED DISCLOSURE OF ASSETS AND LIABILITIES - CONTINUED
For 2008-09 cash and cash equivalents had been included in the 'Unallocated' column above, as this class could not be 'reliably attributed' to the
Department's output classes. As the amount of cash and cash equivalents held by Tourism was comprised of a number of disparate components and no
single allocation driver could be used to 'reliably attribute' this asset class. The components are as follows:-
· Working capital which was not held for any specific output class but was instead held for unforseen operational expenditures;· Cash held for unpresented cheques. There is no correlation between output class expenditure and actual cheques which are unpresented at any given point in time. Also, a single unpresented cheque could relate to multiple output classes;· Cash held for a specific purpose; and· Cash held in anticipation of an imminent payment.
2009–2010 ANNUAL REPORT 79
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 37 FINANCIAL INSTRUMENTS
Interest Rate Risk
Sensitivity Analysis
Credit Risk
2010
$’000
4,921
Australian Capital Territory Insurance Authority 11,178
Trade Debtors subject to critical review 9,034
25,133
Liquidity Risk
Liquidity risk is the risk that the Department will be unable to meet its financial obligations as they fall due that are settled by delivering cash or anotherfinancial asset. The Department’s main financial obligations relate to the payment of employee benefits, payment of grants and the purchase of suppliesand services. Salaries are paid on a fortnightly basis, grants are paid on a quarterly basis, and purchases of supplies and services are paid within 30 daysof the date of invoice, 30 days from receiving the goods or services, or within agreed payment terms.
The Department manages the credit risk of receivables by regular review and follow up of the Department's Aging Debtor Report. Specific analysis ofthe debtor balances is carried out on a monthly basis and where necessary a provision is raised in accordance with the Department's impairment policy.The results are reported to senior management on a monthly basis. There have been no changes in credit risk exposure since last reporting period.
The Department is considered to have insignificant exposure to interest rate risk. The interest rate for the borrowings from the private sector are at fixedrates for the entire period of the loans. As a result, the Department has a low level of interest rate risk. There have been no changes in risk exposure orprocesses for managing risk since last financial reporting period.
The Department holds cash and cash equivalents with the Territory Banking Account and as such, minimal credit risk would be associated with thesefinancial assets. There have been no changes in credit risk exposure since last reporting period.
Credit risk has been assessed as low as at 30 June 2010, mainly due to the majority of the Department's debtors being with Commonwealth or other ACTGovernment agencies. A breakdown of the Department's debtors is as follows:
GST Refund due from the Australian Taxation Office
Details of the significant policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which incomeand expenses are recognised, with respect to each class of financial asset and financial liability are disclosed in Note 2: 'Summary of SignificantAccounting Policies', to the financial statements.
Interest rate risk is the risk that the fair value or future value of a financial instrument will fluctuate because of changes in market interest rates.
A sensitivity analysis has not been undertaken for the interest rate risk of the Department as it has been determined that the possible impact on incomeand expenses or total equity from fluctuations in interest rates is immaterial.
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. TheDepartment’s credit risk is limited to the amount of the financial assets it holds net of any allowance for impairment. The Department expects to collectall financial assets that are not past due or impaired.
The Department’s exposure to liquidity risk is considered insignificant based on experience from prior years and the current assessment of risk.
The main source of cash to pay these obligations is appropriation from Government which is paid on a fortnightly basis during the year. The Departmentmanages its liquidity risk through forecasting appropriation drawdown requirements to enable payment of anticipated obligations.The Department has an aging workforce with significant levels of accumulated and unpaid leave. As staff resign or retire and these obligations fall due,the Department has been able to meet these obligations from current levels of appropriation. With anticipated higher levels of staff retiring in comingyears, it is possible that in future years the Department may need additional appropriation from the ACT Government to be able to meet payment ofthese obligations.
80 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 37 FINANCIAL INSTRUMENTS - CONTINUED
Price Risk
Fair Value of Financial Assets and Liabilities
Carrying Carrying
Amount Fair Value Amount Fair Value
2010 2010 2009 2009
$’000 $’000 $’000 $’000
Financial Assets
Cash and Cash Equivalents 26,454 26,454 28,951 28,951
Investments with the Territory Banking Account 81 81 139 139
Receivables 25,133 25,133 35,267 35,267 Total Financial Assets 51,668 51,668 64,357 64,357
Carrying Carrying
Amount Fair Value Amount Fair Value
2010 2010 2009 2009
$’000 $’000 $’000 $’000
Financial Liabilities
Payables 36,755 36,755 36,920 36,920
Borrowings - Government Buildings - - 15,571 16,446
Borrowings - Waste Management Facilities 2,576 2,825 3,360 3,705
Finance Leases 5,234 5,234 5,734 5,734 Total Financial Liabilities 44,565 44,814 61,585 62,805
Fair Value Hierarchy
The Department does not have any financial assets at fair value taken through the profit and loss. Therefore, fair value hierarchy disclosures are notrequired.
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, whether thesechanges are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded inthe market.
The carrying amounts and fair values of financial assets and liabilities at the end of the reporting period are:
The Department holds no financial assets or liabilities that are subject to price risk and, as a result, is not considered to have any price risk. Accordingly,a sensitivity analysis has not been undertaken. The Department's exposure to price risk and the management of this risk has not changed since lastreporting period.
2009–2010 ANNUAL REPORT 81
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 37 FINANCIAL INSTRUMENTS - CONTINUED
Floating Interest Over 1 to 5 Non-Interest
Rate 1 Year or Less Years Over 5 Years Bearing Total
Financial Instruments Note $’000 $’000 $'000 $’000 $’000 $’000
Financial AssetsCash and Cash Equivalents 20 - - - - 26,454 26,454 Investments Held with Territory Banking Account 20 81 - - - - 81 Receivables 21 - - - - 25,133 25,133 Total Financial Assets 81 - - - 51,587 51,668
Weighted Average Interest Rate 4.96%
Financial LiabilitiesPayables 30 - - - - 36,755 36,755 Borrowings - Waste Management Facilities 31 - 862 2,228 - - 3,090 Finance Leases 31 - 2,182 3,629 - - 5,811 Total Financial Liabilities - 3,044 5,857 - 36,755 45,656
Weighted Average Interest Rate 7.09% 7.19% -
Net Financial Assets/(Liabilities) 81 (3,044) (5,857) - 14,832 6,012
Fixed Interest Maturing In:
The following table sets out the Department’s maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including the weighted average interest rates by maturity period as at 30 June 2010. All financial assets and liabilities which have a floating interest rate or are non-interest bearing will mature in one year or less. All amounts appearing in the following maturity analysis are shownon an undiscounted cash flow basis.
82 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 37 FINANCIAL INSTRUMENTS - CONTINUED
Floating Interest Over 1 to 5 Non-Interest
Rate 1 Year or Less Years Over 5 Years Bearing Total
Financial Instruments Note $’000 $’000 $'000 $’000 $’000 $’000
Financial AssetsCash and Cash Equivalents 20 - - - - 28,951 28,951 Investments Held with Territory Banking Account 20 139 - - - - 139 Receivables 21 - - - - 35,267 35,267 Total Financial Assets 139 - - - 64,218 64,357
Weighted Average Interest Rate 6.50%
Financial LiabilitiesPayables 30 - - - - 36,920 36,920 Borrowings - Government Buildings 31 - 6,765 10,533 - - 17,298 Borrowings - Waste Management Facilities 31 - 1,064 2,892 - - 3,956 Finance Leases 31 - 3,311 2,855 - - 6,166 Total Financial Liabilities - 11,140 16,280 - 36,920 64,340
Weighted Average Interest Rate 7.41% 7.43% -
Net Financial Assets/(Liabilities) 139 (11,140) (16,280) - 27,298 17
The following table sets out the Department’s maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including the weighted average interest rates by maturity period as at30 June 2009. All financial assets and liabilities which have a floating interest rate or are non-interest bearing will mature in one year or less. All amounts appearing in the following maturity analysis are shownon an undiscounted cash flow basis.
Fixed Interest Maturing In:
2009–2010 ANNUAL REPORT 83
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 37 FINANCIAL INSTRUMENTS - CONTINUED
2010 2009
$’000 $’000
Carrying Amount of Each Category of Financial Asset and Financial Liability
Financial Assets
Loans and Receivables 25,133 35,267
Financial Liabilities
Financial Liabilities measured at Amortised Cost 44,565 61,585
NOTE 38 RESTRUCTURE OF ADMINISTRATIVE ARRANGEMENTS
Assets and Liabilities
Transferred Amounts
Transferred Amounts
2010 2009$’000 $’000
Assets
Cash and Cash Equivalents 4,479 5,454
Receivables 24,392 127
Inventories 226 -
Capital Works in Progress 4,474 2,854
Property, Plant and Equipment 304,607 169
Heritage and Community Assets 1,339 -
Investment Properties 125,295 -
Total Assets Transferred 464,812 8,604
Liabilities
Payables 31,607 4,483
Employee Benefits 3,423 1,437
Total Liabilities Transferred 35,030 5,920
Total Net Assets Transferred 429,782 2,684
The Department does not have any financial assets in the fair value category through the profit and loss, 'Available for Sale' or the 'Held toMaturity' category and as such these categories are not included above. Also, the Department does not have any financial liabilities in the 'FinancialLiabilities at Fair Value through Profit and Loss' category and, as such, this category is not included above.
• Commencing 1 July 2009, functions and responsibilities relating to the Assembly Library transferred from Territory and Municipal Services to theLegislative Assembly Secretariat;• Commencing 10 November 2009, a change to the administrative arrangements resulted in the transfer of functions and responsibilities relating toTourism from Territory and Municipal Services to the Chief Minister’s Department. The functions transferred included domestic and internationalpromotion of the ACT as a tourism destination, the management and promotion of significant events such as Floriade; and• Commencing 1 December 2009, a change to the administrative arrangements resulted in the transfer of functions and responsibilities relating toACT Property from Territory and Municipal Services to the new Department of Land and Property Services. The functions transferred included themanagement of office accommodation on behalf of ACT Government agencies; the provision of facilities management services for ACTGovernment agencies; and the provision of policy development for the sustainable management of government properties.
The following major administrative arrangement restructures occurred in 2009-10:
The assets and liabilities transferred as part of the restructuring of administrative arrangements at the dates of transfer were as follows:-
84 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
2010 2009
NOTE 39 COMMITMENTS $’000 $’000
Capital Commitmentsa
Capital Commitments - Property, Plant and Equipment
Payable:
Within one year 53,083 41,369
Later than one year but not later than five years 140 5,175
Later than five years 100 -
Total Capital Commitments - Property, Plant and Equipment 53,323 46,544
Total Capital Commitments 53,323 46,544
Other Commitments
Within one year 62,456 69,133
Later than one year but not later than five years 107,944 165,964
Later than five years 10,542 3,350 Total Other Commitments 180,942 238,447
a) Capital Commitments have increased significantly as a result of an expanded capital works program.
Other commitments contracted at reporting date that have not been recognised as liabilities, are payable as follows:
Capital commitments contracted at reporting date that have not been recognised as liabilities are as follows:
2009–2010 ANNUAL REPORT 85
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 39 COMMITMENTS - CONTINUED
Operating Lease Commitments
2010 2009
$’000 $’000
Non-Cancellable Operating Lease Commitments
Non-cancellable operating lease commitments are payable as follows:
Within one year 52 23,255
Later than one year but not later than five years 51 40,065
Later than five years - 52,175 Total Operating Lease Commitmentsa
103 115,495
The future minimum lease payments for non-cancellable operating sub-leases expected to be received
Within one year - 244 Later than one year but not later than five years - 530 Later than five years - 165
- 939
All amounts shown are inclusive of GST.
Finance Lease commitments are disclosed in Note 31 'Interest-Bearing Liabilities and Finance Leases'.
NOTE 40 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
Legal Claims 16,102 6,378 Total Contingent Liabilitiesa
16,102 6,378
Contingent Assets
Insurance refunds due in respect of above claims 15,706 6,044
Total Contingent Assets 15,706 6,044
The Department is subject to various claims as at the reporting date with the total contingent liability being shown below:
a) Operating Lease Commitments have decreased significantly as a result of the transfer of ACT Property to the Department of Land and Property Services effective 1 December 2009.
a) The ACT Government Solicitor is acting for the Department in relation to 89 individual unresolved matters of public liability as at 30 June 2010.
The Department has various non-cancellable operating leases for buildings and vehicles. The leases have varying terms, escalation clauses andrenewal rights. There are no conditions in the lease agreements requiring the Department to restore the sites that the leased buildings are situatedon. The operating lease agreements give the Department the right to renew the leases. Renegotiations of the lease terms occur on renewal of theleases
86 Department of Territory and Municipal Services
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 41 CASH FLOW RECONCILIATION
2010 2009
$'000 $'000
Total Cash and Cash Equivalents Disclosed in the Balance Sheet 26,535 29,090 Cash and Cash Equivalents at the End of the Reporting Period as Recorded in the Cash Flow Statement 26,535 29,090
(b) Reconciliation of Net Cash Inflows from Operating Activities to the Operating (Deficit)
Operating (Deficit) (67,437) (49,875)
Add/(Less) Non-Cash Items
Depreciation of Property, Plant and Equipment 131,626 131,800
Amortisation of Intangibles 480 1,291
Expensing of Capital Works in Progress 9,707 5,986
Assets Transferred to Other ACT Government Entities 7,537 12,616
Assets Transferred from Other ACT Government Entities (65,249) (62,652)
Other Non-Cash items
Revaluation and Assets Adjustments 1,381 (30,602)
Transfers as a Result of Administrative Arrangements (9,303) 5,638
Add/(Less) Items Classified as Investing or Financing
Net (Gain)/Loss on Disposal of Non-Current Assets (1,665) (934)
Finance Lease Repayment 1,340 -
Cash Before Changes in Operating Assets and Liabilities 8,417 13,268
Changes in Operating Assets and Liabilities
Decrease in Receivables 10,134 1,713
(Increase) in Inventories (405) (394)
Decrease in Other Assets 2,633 627
(Decrease)/Increase in Payables (165) 7,657
(Decrease)/Increase in Employee Benefits (397) 5,274
(Decrease) in Other Liabilities (2,197) (3,139)
Net Changes in Operating Assets and Liabilities 9,603 11,738
Net Cash Inflows from Operating Activities 18,020 25,006
(c) Non-Cash Financing and Investing Activities
Acquisition of Motor Vehicles by means of Finance Lease 3,444 2,678
(a) Reconciliation of Cash and Cash Equivalents at the End of the Reporting Period in the Cash Flow Statement to the Equivalent Items inthe Balance Sheet.
2009–2010 ANNUAL REPORT 87
Department of Territory and Municipal Services Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 42 EVENTS OCCURRING AFTER BALANCE DATE
NOTE 43 THIRD PARTY MONIES
2010 2009
$'000 $'000
The Department held the following monies at 30 June 2010:
Road Users Services Trust Account
Balance at the Beginning of the Reporting Period 3,011 2,709
Cash Receipts 159,032 99,468
Cash Payments (158,039) (99,166)
Balance at the End of the Reporting Period 4,004 3,011
NRMA Third Party Insurance
Balance at the Beginning of the Reporting Period - 21
Cash Payments - (21)
Balance at the End of the Reporting Period - -
Tourism Trust Account
Balance at the Beginning of the Reporting Perioda 100 203
Cash Receipts 676 1,641
Cash Payments (475) (1,744)
AAO Transfera (301) -
Balance at the End of the Reporting Period - 100
Total Third Party Monies held by the Departmentb4,004 3,111
b) The balance represents third party monies collected as part of the Road Transport Authority's responsibilities, pending disbursement.
a) The Tourism Trust account has transferred to the Chief Minister's Department following the Administrative Arrangement Order effective10 November 2009.
Effective 1 July 2010, land and facilities relating to the Birrigai Outdoor school, located at Paddy’s River Road and Dairy Road Fyshwick will transfer from the Department of Education to the Department of Territory and Municipal Services.
On 1 July 2010, the Department will acquire ownership of 163 vehicles currently under lease with Westpac through Rhodium Assets Solutions.As at 1 July 2010 these vehicles will be recorded in the Department’s books as vehicles under a finance lease with a written down value of $7.6m at that date. The financial effect on the Department is not considered to be material.A change to the ACT Government’s administrative arrangements will come into effect on 1 July 2010 and relates to the transfer of theACT Government Heritage Unit from the Department of Territory and Municipal Services to the Chief Minister’s Department. The financial effect on the Department is not considered to be material.
88 Department of Territory and Municipal Services
Department of Territory and Municipal Services
TERRITORIAL FINANCIAL REPORT FOR YEAR ENDED 30 JUNE 2010
2009–2010 ANNUAL REPORT 89
Original Note Actual Budget ActualNo. 2010 2010 2009
$’000 $’000 $’000
Income
Revenue
Payment for Expenses on Behalf of the Territory 45 1,292 385 -
Taxes, Fees and Fines 46 126,653 123,177 133,343
User Charges 47 62 201 52
Commonwealth Grants 48 177 - 2,143
Land Sale Revenue 49 85,676 170,682 97,404
Other Revenue 50 746 - 956
Total Revenue 214,606 294,445 233,898
Total Income 214,606 294,445 233,898
Expenses
Employee Expenses 51 - - 255
Superannuation Expenses 52 - - 38
Supplies and Services 53 95 100 271
Grants and Purchased Services 54 1,059 285 296
Transfer to Government 55 209,574 294,060 229,792
Other Expenses 56 3,878 - 3,246
Total Expenses 214,606 294,445 233,898
Operating Surplus/(Deficit) - - -
Other Comprehensive Income - - -
Total Comprehensive Income - - -
Department of Territory and Municipal ServicesStatement of Income and Expenses on Behalf of the Territory
For the Year Ended 30 June 2010
The above Statement of Income and Expenses on Behalf of the Territory should be read in conjunction with the accompanying notes.
90 Department of Territory and Municipal Services
Original Note Actual Budget ActualNo. 2010 2010 2009
$’000 $’000 $’000
Current Assets
Cash and Cash Equivalents 58 74 6,845 435
Receivables 59 32,557 22,318 53,042
Total Current Assets 32,631 29,163 53,477
Total Assets 32,631 29,163 53,477
Current Liabilities
Payables 60 32,631 29,477 53,457
Other Liabilities 61 - 40 20
Total Current Liabilities 32,631 29,517 53,477
Total Liabilities 32,631 29,517 53,477
Net (Liabilities) - (354) -
Equity
Accumulated (Deficit) Funds - (354) -
Total Equity - (354) -
The above Statement of Assets and Liabilities on Behalf of the Territory should be read in conjunction with the accompanying notes.
Department of Territory and Municipal ServicesStatement of Assets and Liabilities on Behalf of the Territory
As at 30 June 2010
2009–2010 ANNUAL REPORT 91
Accumulated TotalFunds Equity OriginalActual Actual Budget
Note 2010 2010 2010No. $’000 $’000 $’000
Balance at the Beginning of the Reporting Period - - (354)
Comprehensive Income
Operating Surplus/(Deficit) - - -
Total Comprehensive Income - - -
Transactions Involving Owners Affecting Accumulated Funds
Capital (Distributions) - - -
Total Transactions Involving Owners Affecting Accumulated Funds - - -
Balance at the End of the Reporting Period - - (354)
Accumulated TotalFunds EquityActual Actual
Note 2009 2009No. $’000 $’000
Balance at the Beginning of the Reporting Period - -
Comprehensive Income
Operating Surplus/(Deficit) - -
Total Comprehensive Income - -
Balance at the End of the Reporting Period - -
The above Statement of Changes in Equity on Behalf of the Territory should be read in conjunction with the accompanying notes.
Department of Territory and Municipal ServicesStatement of Changes in Equity on Behalf of the Territory
For the Year Ended 30 June 2010
92 Department of Territory and Municipal Services
Original Note Actual Budget ActualNo. 2010 2010 2009
$’000 $’000 $’000
Cash Flows from Operating Activities
Receipts
Cash from Government for Expenses on Behalf of the Territory 1,292 385 -
Taxes, Fees and Fines 126,323 123,177 130,897
User Charges - 201 53
Grants Received from the Commonwealth 177 - 2,143
Goods and Services Tax Input Tax Credits from Australian Taxation Office 1,535 - 66
Goods and Services Tax Collected from Customers 4 - 1,258
Land Salesa 103,194 204,137 65,363
Other 376 - 953
Total Receipts from Operating Activities 232,901 327,900 200,733
Payments
Employees - - 431
Supplies and Services 254 100 263
Grants and Purchased Services 1,060 285 295
Transfer of Territory Receipts to the ACT Government 230,388 326,431 205,860
Goods and Services Tax Remitted to the Australian Taxation Office 1,525 - 1,230
Goods and Services Tax Paid to Suppliers 35 - 71
Other - 1,084 -
Total Payments from Operating Activities 233,262 327,900 208,150
Net Cash (Outflows) from Operating Activities 64 (361) - (7,417)
Net (Decrease) in Cash and Cash Equivalents Held (361) - (7,417)
Cash and Cash Equivalents at the Beginning of the Reporting Period 435 6,845 7,852
Cash and Cash Equivalents at the End of the Reporting Period 64 74 6,845 435
The above Cash Flow Statement on Behalf of the Territory should be read in conjunction with the accompanying notes.
Department of Territory and Municipal ServicesCash Flow Statement on Behalf of the Territory
For the Year Ended 30 June 2010
2009–2010 ANNUAL REPORT 93
Original Total Appropriation AppropriationBudget Appropriated Drawn Drawn
2010 2010 2010 2009$’000 $’000 $’000 $’000
Expenses on Behalf of the Territory 385 4,152 1,292 -
Total Territorial Appropriation 385 4,152 1,292 -
Column Heading Explanations
Original Budget 385
s.16 Transfersa 3,338
s.16B Rolloverb 429
Total Appropriated 4,152
Undrawn Fundsc (2,860)
Appropriation Drawn 1,292
b) The rollover of funding from 2008-09 into 2009-10 was necessary to meet milestones relating to the Heritage Grant Program.
c) The rollover of funding relates to two Exhibition Park Corporation capital projects classified as works-in-progress of $2.56m, and a rollover of Heritage Grants funding of $0.3m into 2010-11.
a) At the time the 2009-10 Budget was prepared it was expected that Exhibition Park Corporation would be incorporated within the Department of Territory andMunicipal Services. The ACT Government subsequently retained Exhibition Park Corporation as a stand-alone Statutory Authority with its own budget effective 1 July 2009, and the transfer of funding was required to confirm this outcome.
Reconciliation of Appropriation for 2009-10
Department of Territory and Municipal ServicesTerritorial Statement of Appropriation
For the Year Ended 30 June 2010
The Appropriation Drawn is the total amount of appropriation received during the year. This amount also appears in this financial report in the CashFlow Statement.
The Total Appropriated column is inclusive of all appropriation variations occurring after the Original Budget.
The Original Budget column shows the amounts that appear in the Cash Flow Statement in the Budget Papers. This amount also appears in thisfinancial report, in the Cash Flow Statement.
The above Territorial Statement of Appropriation should be read in conjunction with the accompanying notes.
94 Department of Territory and Municipal Services
Note 44 Summary of Significant Accounting Policies
Revenue NotesNote 45 Payment for Expenses on Behalf of the Territory Note 46 Taxes, Fees and FinesNote 47 User ChargesNote 48 Commonwealth GrantsNote 49 Land Sale RevenueNote 50 Other Revenue
Expenses NotesNote 51 Employee ExpensesNote 52 Superannuation ExpensesNote 53 Supplies and ServicesNote 54 Grants and Purchased ServicesNote 55 Transfer to GovernmentNote 56 Other ExpensesNote 57 Impairment Losses,Write-offs And Waivers
Assets NotesNote 58 Cash and Cash EquivalentsNote 59 Receivables
Liabilities NotesNote 60 PayablesNote 61 Other Liabilities
OtherNote 62 Financial InstrumentsNote 63 Restructure of Administrative ArrangementsNote 64 Cash Flow ReconciliationNote 65 CommitmentsNote 66 Contingent Liabilities and Contingent AssetsNote 67 Events Occurring After the Balance Date
TERRITORIAL NOTE INDEXDepartment of Territory and Municipal Services
2009–2010 ANNUAL REPORT 95
NOTE 44 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 45 PAYMENT FOR EXPENSES ON BEHALF OF THE TERRITORY
2010 2009$’000 $’000
Revenue from the ACT Government
Payment for Expenses on Behalf of the Territorya 942 -
Payment for Community Service Obligationsb 350 -
Total Payment for Expenses on Behalf of the Territory 1,292 -
NOTE 46 TAXES, FEES AND FINES
Taxes
Motor Vehicle Registrationsa 87,006 81,835
Drivers' Licenses 8,566 8,055
Total Taxes 95,572 89,890
Fees
Fees for Regulatory Servicesb 14,309 22,409
Total Fees 14,309 22,409
Fines
Traffic Finesc 16,754 21,023
Other Fines 18 21
Total Fines 16,772 21,044
Total Taxes, Fees and Fines 126,653 133,343
NOTE 47 USER CHARGES
User Charges
Other 62 52
Total User Charges 62 52
Payment for Expenses on Behalf of the Territory is revenue received from the ACT Government to fund the costs of delivering administered functionson Behalf of Government. Payment for Expenses on Behalf of the Territory is provided by the ACT Government on a fortnightly basis, subject to
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
All of the Department of Territory and Municipal Services' accounting policies are contained in Note 2: ‘Summary of Significant AccountingPolicies’. The policies outlined in Note 2 apply to both the Departmental and Territorial Financial Statements.
c) Increased traffic compliance program by the Australian Federal Police has seen a reduction in traffic infringements issued by the Road Transport Authority.
a) The increase in funding reflects the change to the funding arrangements for Exhibition Park Corporation from 2009-10, and the rollover from2008-09 of the Heritage Grants Program.
b) Decrease due to the transfer of water abstraction fees to the Department of the Environment, Climate Change, Energy and Water following the Administrative Arrangement Orders, effective 11 November 2008.
) y g g p p g gMinisterial direction, or in agreement entered into by the ACT Government. Exhibition Park Corporation received a separate appropriation in 2008-09.
a) The increase is due to the extension of the Commonwealth Government's Small Business and General Business Tax Break to December 2009.
96 Department of Territory and Municipal Services
NOTE 48 COMMONWEALTH GOVERNMENT GRANTS
2010 2009$’000 $’000
Non-Capital Commonwealth Grants Programs
Australian Land Transport Development Program - 332
Interstate Road Transport Program - 206
Other Current Commonwealth Grants 121 156
Total Non-Capital Commonwealth Grants 121 694
Capital Commonwealth Grants
Black Spot Program 56 1,449
Total Capital Commonwealth Grants 56 1,449
Total Commonwealth Grants 177 2,143
NOTE 49 LAND SALES REVENUE
Land Sales Revenue
Land Salesa 85,676 97,404
Total Land Sales Revenue 85,676 97,404
The reduction reflects the transfer of Commonwealth Grants revenue to ACT Treasury as a result of a change in Grants receipting arrangements.
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Report
For the Year Ended 30 June 2010
a) The result shows a decrease in land sales revenue from the Department of Land and Property Services. Timing of the receipts is determined by theDepartment of Land and Property Services and is associated with the Government's land release program. (see Note 2ad 11).
2009–2010 ANNUAL REPORT 97
NOTE 50 OTHER REVENUE
2010 2009$’000 $’000
Other Revenue
Other Revenue 746 956
Total Other Revenue 746 956
NOTE 51 EMPLOYEE EXPENSES
Wages and Salaries - 238
Comcare Premiums - 9
Annual Leave - 8
Total Employee Expensesa- 255
NOTE 52 SUPERANNUATION EXPENSES
Superannuation Contributions - 28
Superannuation to External Providers - 5
Productivity Benefit - 5
Total Superannuation Expensesa- 38
a) The Commissioner for the Environment was transferred to the new Department of the Environment, Climate Change, Energy and Water following the Administrative Arrangement effective 11 November 2008. As a result, there are no superannuation expenses for the Department during the2009-10 financial year.
Superannuation payments are also made to external providers as part of the new employee work choice arrangements, and to employment agencies for the superannuation contribution it is required to make for the contract staff it employs.
Other Revenue arises from the core activities of the Department and is distinguished from Other Gains which are primarily one-off unusual itemsthat are not part of core activities.
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
The Department receives funding for superannuation payments. The Department of Territory and Municipal Services then makes payments on afortnightly basis to the Territory Banking Account for its portion of the Territory’s CSS and PSS superannuation liability. The productivity benefitfor the schemes are paid directly to Comsuper.
a) The Commissioner for the Environment was transferred to the new Department of the Environment, Climate Change, Energy and Water following the Administrative Arrangement effective 11 November 2008. As a result, there are no employee expenses for the Department during the 2009-10 financial year.
Superannuation payments have been made direct to Comsuper to cover its superannuation liability for employees that are in the new Public Sector Superannuation Scheme Accumulation Plan (PSSAP).
98 Department of Territory and Municipal Services
NOTE 53 SUPPLIES AND SERVICES
2010 2009$’000 $’000
Professional Services - 88
Accommodation - 12
Printing and Publishing - 13
Staff Development - 3
Other Supplies and Services 95 155
Total Supplies and Servicesa95 271
NOTE 54 GRANTS AND PURCHASED SERVICES
Recurrent Grants to Community Organisations 1,059 296
Total Grants and Purchased Servicesa1,059 296
NOTE 55 TRANSFER TO GOVERNMENT
Transfers to the Territory Banking Account 209,574 229,792
Total Transfer to Government 209,574 229,792
NOTE 56 OTHER EXPENSES
Impairment Losses and write-offs from Trade Receivables (refer to Note 57) 3,878 3,246
Total Other Expenses 3,878 3,246
‘Transfer to Government’ represents the funds collected by the Department on behalf of the Territory, usually in the form of CommonwealthGrants, Taxes, Fees and Fines, that is then transferred to the Territory Bank Account.
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
a) Decrease due to the transfer of the The Commissioner for the Environment function to the new Department of the Environment, Climate Change, Energy and Water following the Administrative Arrangement Orders effective 11 November 2008.
a) Increase due to the changed funding arrangements of Exhibition Park Corporation (refer note 45), and the partial rollover of the 2008-09 Heritage Grants Program and the 2009-10 Heritage Grants program.
2009–2010 ANNUAL REPORT 99
NOTE 57 IMPAIRMENT LOSSES, WRITE-OFFS AND WAIVERS
2010 2009
$’000 $’000
Impairment Loss from Receivables
Trade Receivables 3,878 3,227
Total Impairment Loss from Receivables 3,878 3,227
Total Impairment Losses 3,878 3,227
Write-offs
Losses or Deficiencies in Public Monies - 19
Total Write-offs - 19
Total Waivers, Impairment Losses and Write-offsa3,878 3,246
a) Relates primarily to traffic infringement fines.
NOTE 58 CASH AND CASH EQUIVALENTS
2010 2009$’000 $’000
Cash at Bank 74 435
Total Cash and Cash Equivalents 74 435
The Department holds a number of bank accounts with the Commonwealth Bank as part of the Whole-of-Government banking arrangements.Under the whole-of-Government banking arrangement, interest is not earned on cash at bank held with the Territorial Bank Account.
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
A waiver is the relinquishment of a legal claim to a debt over which the Department has control. The write-off of a debt is the accounting actiontaken to remove a debt from the books but does not relinquish the legal right of the Department to recover the amount. The write-off of debts mayoccur for reasons other than waivers.
The waivers and write-offs listed below have occurred during the reporting period for the Department.
100 Department of Territory and Municipal Services
NOTE 59 RECEIVABLES
2010 2009
$’000 $’000
Current Receivables
Trade Receivables 8,827 11,136
Other Receivables 354 -
Less: Allowance for Impairment Losses (4,006) (2,975)5,175 8,161
Accrued Revenuea 27,382 44,881
Total Current Receivables 32,557 53,042
Total Receivables 32,557 53,042
a) The balance relates to accrued land sales revenue.
Aging of Receivables
Not Overdue Past Due TotalLess than
30 Days 30 to 60 Days Greater than
60 Days$'000 $'000 $'000 $'000 $'000
2010
Not Impaireda
Receivables 31,715 521 320 1 32,557
Impaired
Receivables - - - (4,006) (4,006)
2009
Not Impaired
Receivables 49,488 1,856 621 1,077 53,042
Impaired
Receivables - - - (2,975) (2,975)
Reconciliation of the Allowance for Impairment Losses 2010 2009$’000 $’000
2,975 2,466
Additional Allowance Recognised 1,684 1,382
(653) (873)
4,006 2,975
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
Reduction in Allowance Resulting from a Write-back Against the Receivables
The Department does not hold any collateral for receivables that are overdue or determined to be impaired.
Allowance for Impairment Losses at the Beginning of the Reporting Period
a) 'Not Impaired' refers to Net Receivables (that is Gross Receivables less Impaired Receivables).
Allowance for Impairment Losses at the End of the Reporting Period
2009–2010 ANNUAL REPORT 101
NOTE 59 RECEIVABLES - CONTINUED2010 2009
$’000 $’000
Classification of ACT Government/Non-ACT Government Receivables
Receivables with ACT Government Entities
Net Receivablesa 27,736 45,411
Total Receivables with ACT Government Entities 27,736 45,411
Receivables with Non-ACT Government Entities
Net Receivables 4,821 7,631
Total Receivables with Non-ACT Government Entities 4,821 7,631
Total Receivables 32,557 53,042
a) The balance relates to accrued land sales revenue
NOTE 60 PAYABLES
Current Payables
Net GST Payables 126 147
Payables 5,123 8,415
Total GST and Payables 5,249 8,562
Accrued Expensesa 27,382 44,895
Total Current Payables 32,631 53,457
Total Payables 32,631 53,457
Payables are Aged as Follows:
Not Overdue 32,631 53,457
Total Payables 32,631 53,457
Classification of ACT Government/Non-ACT Government Payables
Payables with ACT Government Entities
Payables 4,681 7,996
Accrued Expenses 27,382 44,881
Total Payables with ACT Government Entities 32,063 52,877
Payables with Non-ACT Government Entities
GST Payable 126 147
Payables 442 419
Accrued Expenses - 14
Total Payables with Non-ACT Government Entities 568 580
Total Payables 32,631 53,457
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
a) Accrued expenses represent the anticipated payment to the Territory Banking Account on receipt of the accrued revenue from land sales and other territorial revenue collected as at June 2010.
102 Department of Territory and Municipal Services
NOTE 61 OTHER LIABILITIES
2010 2009
$’000 $’000
Current Other Liabilities
Revenue Received in Advance - 14
Third Party Funds - 6
Total Current Other Liabilities - 20
Non-Current Other Liabilities
Other Creditors - -
Total Non-Current Other Liabilities - -
Total Other Liabilities - 20
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
2009–2010 ANNUAL REPORT 103
NOTE 62 FINANCIAL INSTRUMENTS
Interest Rate Risk
Credit Risk
Liquidity Risk
Price Risk
Fair Value of Financial Assets and Liabilities
Carrying Fair Carrying FairNote Amount Value Amount Value
2010 2010 2009 2009$’000 $’000 $’000 $’000
Financial Assets Cash and Cash Equivalents 58 74 74 435 435 Receivables 59 5,175 5,175 8,161 8,161
Total Financial Assets 5,249 5,249 8,596 8,596
Financial Liabilities
Payables 60 5,249 5,249 8,562 8,562
Total Financial Liabilities 5,249 5,249 8,562 8,562
Fair Value Hierarchy
Department of Territory and Municipal Services
Details of the significant policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which incomeand expenses are recognised, with respect to each class of financial asset and financial liability are disclosed in Note 2 'Summary of SignificantAccounting Policies'.
Notes to and Forming Part of the Financial Statements
The Department currently has all of its financial assets and financial liabilities held in non-interest bearing arrangements. This means that theDepartment is not exposed to movements in interest rates, and does not have any interest rate risk.
The Department does not have any financial assets at fair value taken through the profit and loss. Therefore, fair value hierarchy disclosures are notrequired.
The carrying amounts and fair values of financial assets and liabilities at balance date are:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
For the Year Ended 30 June 2010
Liquidity risk is the risk that the Department will be unable to meet its financial obligations as they fall due that are settled by delivering cash or anotherfinancial asset. The Department's main financial obligation relates to the transfer to ACT Government of Taxes, Fees and Fines revenue where, due tothe transfer processes in place, no liquidity risk arises. The Department also makes payments for grants and the purchase of supplies and servicesdirectly funded primarily through Government appropriation. A variety of controls maintaining proper liquidity including a separate Territorial bankaccount, manual bank account sweeping, and balance sheet recognition of future obligations ensures the ability of the Department to meet its financialThe Department’s exposure to liquidity risk and the management of this risk has not changed since the previous reporting period.
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, whether thesechanges are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded inthe market. The Department of Territory and Municipal Services holds only cash and receivables which are not subject to changes in values, and as aresult, is not considered to have any price risk. Accordingly, a sensitivity analysis of price risk has not been undertaken.
A sensitivity analysis has not been undertaken for the interest rate risk of the Department as it is not exposed to any movement in interest rates.
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. TheDepartment's credit risk is limited to the amount of the financial assets held less any provision for losses. There is no collateral held as security forfinancial assets. As cash is held in a bank and receivables, with the exception of the Department of Land and Property Services are dispersed amongst alarge number of debtors, there is no significant concentration of credit risk for these debtors. For land sales revenue from the Department of Land andProperty Services, the risk is low as the Department of Land and Property Servicesis a government owned entity. The primary revenues are related toLand Sales, Commonwealth Grants, and Regulatory fees, with the primary credit risk arising from commercial use of ACT Landfills for waste disposal.This risk is actively managed through approval of credit applications, debt aging reports, facility access restrictions and formal debt recovery processes.There has been no change in the Department's credit risk exposure since the previous reporting period.
104 Department of Territory and Municipal Services
NOTE 62 FINANCIAL INSTRUMENTS - CONTINUED
2010
Note Floating 1 Year or Over 1 to More Non- TotalInterest Less 5 Years than 5 Interest
Rate Years Bearing$’000 $’000 $’000 $’000 $’000 $’000
Financial Instruments
Financial Assets
Cash and Cash Equivalents 58 - - - - 74 74 Receivables 59 - - - - 5,175 5,175
Total Financial Assets - - - - 5,249 5,249
Weighted Average Interest Rate
Financial Liabilities
Payables 60 - - - - 5,249 5,249
Total Financial Liabilities - - - - 5,249 5,249
Net Financial Assets - - - - 0 0
Fixed Interest maturing in:
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
The following table sets out the maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including the weighted averageinterest rates by maturity period as at 30 June 2010. All financial assets and liabilities which are non-interest bearing will mature in one year or less. Allamounts appearing in the following maturity analysis are shown on an undiscounted cash flow basis.
2009–2010 ANNUAL REPORT 105
NOTE 62 FINANCIAL INSTRUMENTS - CONTINUED
2009Note Floating 1 year Over 1 to More Non- Total
Interest or Less 5 Years than 5 Interest Rate Years Bearing$’000 $’000 $’000 $’000 $’000 $’000
Financial Instruments
Financial Assets
Cash and Cash Equivalents 58 - - - - 435 435 Receivables 59 - - - - 8,161 8,161
Total Financial Assets - - - - 8,596 8,596
Weighted Average Interest Rate
Financial LiabilitiesPayables 60 8,562 8,562
Total Financial Liabilities - - - - 8,562 8,562
Net Financial Assets - - - - 34 34
Fixed Interest maturing in:
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
The following table sets out the Department's maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including theweighted average interest rates by maturity period as at 30 June 2009. All financial assets and liabilities which are non-interest bearing will mature in 1 yearor less. All amounts appearing in the following maturity analysis are shown on an undiscounted cash flow basis.
106 Department of Territory and Municipal Services
NOTE 62 FINANCIAL INSTRUMENTS - CONTINUED
2010 2009
$’000 $’000
Carrying Amount of Each Class of Financial Asset and Financial Liability
Financial Assets
Loans and Receivables 5,175 8,161
Financial Liabilities
Financial Liabilities Measured at Amortised Cost 5,249 8,562
NOTE 63 RESTRUCTURE OF ADMINISTRATIVE ARRANGEMENTS
Assets and Liabilities
Transferred Amounts
Transferred Amounts
2010 2009
$’000 $’000
Assets
Cash and Cash Equivalents - 653
Total Assets Transferred - 653
Liabilities
Payables - 515
Employee Benefits - 138
Total Liabilities Transferred - 653
Total Net Assets Transferred - -
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
A change to the Administrative Arrangement Orders in 2009 resulted in the transfer of selected environmental functions and responsibilities from theDepartment of Territory and Municipal Services to the new Department of the Environment, Climate Change, Energy and Water. The transferincluded an environmental grants program and support to the Office of the Commissioner for Sustainability and the Environment.
The assets and liabilities transferred as part of the restructuring of administrative arrangements at the dates of transfer were as follows:-
There were no incidents of restructure of administrative arrangements during the 2009-10 financial
2009–2010 ANNUAL REPORT 107
NOTE 64 CASH FLOW RECONCILIATION
2010 2009$’000 $’000
Total Cash and Cash Equivalents Disclosed on the Statement of Assets and Liabilities on Behalf of the Territory 74 435 Cash and Cash Equivalents at the end of the Reporting Period as Recorded on the Cash Flow Statement 74 435
(b) Reconciliation of Net Cash (Outflows) from Operating Activities to the Operating Surplus/(Deficit)
Operating Surplus/(Deficit) - -
Cash Before Changes in Operating Assets and Liabilities - -
Changes in Operating Assets and Liabilities
Decrease/(Increase) in Receivables 20,485 (30,724)
(Decrease)/Increase in Payables (20,825) 23,980
(Decrease) in Other Liabilities (21) (535)
(Decrease) in Employee Benefits - (138)
Net Changes in Operating Assets and Liabilities (361) (7,417)
Net Cash (Outflows) from Operating Activities (361) (7,417)
NOTE 65 COMMITMENTS
NOTE 67 EVENTS OCCURRING AFTER BALANCE DATE
A recently announced change to the ACT Government’s Administrative Arrangement Orders effective 1 July 2010 relates to the transfer of theACT Government Heritage Unit from the Department of Territory and Municipal Services to the Chief Minister’s Department. The financial effect on the Department is not considered to be material.
There were no contingent liabilities or contingent assets as at 30 June 2010.
The Department had no commitments contracted as at the reporting date in relation to its Territorial activities.
NOTE 66 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(a) Reconciliation of Cash and Cash Equivalents at the End of the Reporting Period in the Cash Flow Statement to the Equivalent Items inthe Balance Sheet on Behalf of the Territory.
Department of Territory and Municipal ServicesNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
108 Department of Territory and Municipal Services
2009–2010 ANNUAL REPORT 111
112 Department of Territory and Municipal Services
Customer satisfaction with the delivery of services continues to demonstrate improvement
Overall customer satisfaction is measured through customer satisfaction survey results relatedto the Department's core service delivery responsibilities such as library services, CanberraConnect, infrastructure services (including roads, community paths, traffic lights, street signs),waste collection, ACTION, parks and reserves, sportsgrounds and ovals, and pool facilities.
Strategic Indicators
Strategic Indicator 2
The Department's strategic indicators are aimed at measuring performance against longer-termand strategic outcomes. The indicators provide a strategic context for the delivery of servicesto the community and links to the Government's strategic direction along with the Department'sStrategic Plan.
Strategic Indicator 1
Percentage of public sportsgrounds using non potable water to meet the vision of the 'Where Will We Play' strategy
Proportion of public sports grounds using non potable water to meet the vision of the "WhereWill We Play" strategy. This measure monitors progress of the Government's "Where Will WePlay" vision. A goal of this vision is to have no sports grounds totally reliant on potable waterby 2013.
85%
91% 90%
2009-10 Target 2009-10 Outcome Long Term
100%
10% 10%
0%
20%
40%
60%
80%
100%
2009-10 Target 2009-10 Outcome Long Term
2009–2010 ANNUAL REPORT 113
This indicator is calculated using weighbridge data of waste to landfill, and data provided bylocal resource recovery and recycling industries in the ACT. The waste to landfill and theresource recovery data are combined to provide a total waste generation level.Waste to landfill has increased from 213,969 tonnes in 2008-09 to 228,705 tonnes in 2009-10. This 7% increase has resulted primarily from an increase in construction and demolition(C&D) material sent to landfill due to increased activity in this sector and the closure of one ofCanberra’s three C&D material recovery facilities. However despite this increase, the totalresources recovered also increased by 2% with an additional 12,726 tonnes more than in 2008-09.
Strategic Indicator 4
Strategic Indicator 3Reduction in waste going to landfill and increase in material recovered from the waste stream
Annual number of road fatalities per 100,000 population
Regulation of driver competency, vehicle standards and public passenger services, togetherwith specific road safety initiatives, all contribute to the Territory’s road safety outcome. Anindicator of the Territory’s road safety performance is the number of road fatalities recordedeach year. The Territory aims to ensure that ACT road deaths do not exceed the target in theNational Road Safety Strategy (NRSS), and further, to maintain the trend for a reduction in theannual number of ACT road deaths.The ACT had 5.6 fatalities per 100,000 population for the 12 months to the end of June 2010,compared to the target of 3.5 fatalities.
0
4
8
12
16
20
Dec-90 Dec-95 Dec-00 Dec-05 Dec-10
Dea
ths
per 1
00,0
00 p
opul
atio
n
Australian Capital Territory
NRSS 2001-2010 (commenced 1 Jan 01)
5.6
3.5 (pro-rata)
National
ACT
Jun-10
6.4
Waste and Recycling Strategic Indicators
100,000
300,000
500,000
700,000
900,000
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Financial Year
Tonnes To Landfill Recovered Total Waste
114 Department of Territory and Municipal Services
As the land manager for unleased land in the ACT, TAMS is responsible for the managementof over 150,000 hectares of parks and reserves. This measure indicates the level of customersatisfaction with management activities including park and tree management, bushfiremanagement, pest and weed control, visitor programs and facility maintenance.
Strategic Indicator 5
Customer satisfaction with the delivery of services in the management of parks and reserves
90% 90%95%
50%
60%
70%
80%
90%
100%
2009-10 Target 2009-10Outcome
Long Term
2009–2010 ANNUAL REPORT 115
Department of Territory and Municipal Services
OUTPUTS 116 Department of Territory and Municipal Services
OUTPUT CLASS 1: MUNICIPAL SERVICESPRINCIPAL MEASURES
Accountability Measures Original Target Amended Target Actual Result
% Variance from Original/Amended
TargetExplanation of
Material Variances2009-10 2009-10 2009-10
Physical useLibrary visits per capita 5.75 Not measured (100%) 1Items borrowed per capita 8 7.10 (11%) 2
Online useNumber of users accessing databases via the Library website 190,000 182,750 (4%)
Number of pages downloaded from library databases on the website
120,000 274,846 129% 3
Library membersNumber of registered library users 180,000 193,606 8%Percentage of population who are library members 53% 54.6% 3%
Cost EffectivenessCustomer satisfaction with library services 85% 96.5% 14% 4Average cost of library services per visit per branch $5.80 Not measured (100%) 1,5Cost of library services per capita per branch $35.00 $34.03 (3%) 6
Library collectionPercentage of library collection purchased in previous five years
45% 53% 18% 7
Number of ACT publications or items added to the heritage collection
10,000 20,930 109% 8
Number of research reference enquiries undertaken at the Government and Assembly Library
40,000 Measure deleted Not applicable 9
Canberra ConnectCustomer satisfaction with Canberra Connect services 90% 90% 0%Call centre waiting times less than 20 seconds 80% 59% (26%) 10
Average queue time at the Canberra Connect shopfronts < 12 minutes < 12 minutes 0%Average cost per transaction at shopfronts $8.92 $9.05 1%Average cost per transaction for contact centres $5.37 $4.56 (15%) 11Average cost per transaction for web transactions $0.45 $0.47 4% 12
TOTAL COST ($’000) $34,118 $31,800 (7%)GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $30,962 $30,589 (1%)
Department of Territory and Municipal ServicesStatement of Performance
as at 30 June 2010
Description: Provision of customer enquiry, information, bill payment and library services to the community through Canberra Connect's shopfronts, call centre and internet services and the ACT Library and Information Services' branch and mobile libraries, home library service, the ACT Virtual Library, and Heritage Library.
OUTPUT 1.1: Information Services
2009–2010 ANNUAL REPORT 117
Explanation of Variances:
1.
2.
3. Library users are downloading significantly more items, indicating the popularity of available databases and electronic resources.4.
5.
6.
7.
8.9. The Assembly Library was transferred to the ACT Legislative Assembly Secretariat effective 1st July 2009.10.
11.
12.
Increased capital budgets for the new Kingston Library collection and general enhancement to Library collections has seen a significant increase in the number of new items added to the collections.
For information purposes - Web transactions included for the purpose of calculating this result are those deemed to be interaction between the customer and Canberra Connect similar to a counter or phone enquiry.
The result has been impacted by recruitment delays. The 2009-10 average wait time achieved was 47 seconds, with a 91% customer satisfaction rating.
The better than budget result has been impacted by higher than anticipated call volumes along with lower costs associated with recruitment delays during the 2009-10 financial year.
The 2009-10 result has not been measured. At the time of the preparation of the 2009-10 Budget, the ACT Library Service was expecting new door counter technology to be installeHowever, due to system problems arising during the testing phase, the installation of software for the door counter function was delayed until July 2010. In the interim, temporary door counters were installed but they were found to be unreliable. For indicative purposes, total 2009-10 library visits have been estimated using a combination of door counter statistics for 2009-10 where available, and the application of 2008-09 borrowing statistics. The indicative result is 4.5 visits recorded per capita which represents the extension of the borrowing period from three to four weeks in late 2009 and the emerging trend of library users using online databases and services.
d
In late 2009 the borrowing period was extended from three to four weeks which has impacted on the number of borrowings. Additionally library users are increasingly using online databases and services.
The result reflects the deployment of additional resources to incorporate the significant amount of items donated and added to the ACT Heritage Library collection.
The 2009-10 result has not been measured. Background information is provided at note 1. An indicative result for 2009-10 is $7.00 as the average cost per library visit which was impacted by the purchase of additional library materials for the new Kingston library facility. Other contributing factors include the extension of the borrowing period from three to four weeks from late 2009 and the emerging trend of library users using online databases and services. For information purposes - the measure reports average cost per visit for all library branches. The result includes cash/controllable costs only.
The result reflects the continuing high level of satisfaction with ACT Library Services.For information purposes - the survey results include public libraries only and do not include the Virtual, Mobile and Heritage Libraries
For information purposes - the measure reports cost per capita for all library branches. The result includes cash/controllable costs only.
118 Department of Territory and Municipal Services
OUTPUT CLASS 1: MUNICIPAL SERVICESPRINCIPAL MEASURES
Accountability Measures Original Target Amended Target Actual Result
% Variance from Original/Amended
TargetExplanation of
Material Variances2009-10 2009-10 2009-10
InfrastructureAnnual percentage of territorial roads resurfaced 5% 4.6% (8%) 1Annual percentage of municipal roads resurfaced 4% 2.9% (28%) 1Percentage of customers satisfied with the management of infrastructure services
70% 72% 3%
Percentage of territorial roads in good condition 88% 90% 2%Percentage of bridges that meet SM1600 standard on the B Double Network
53% 63% 19% 2
Sustainable TransportIncrease in length (km) of on-road cycle lanes 50 26.63 (47%) 3Increase in length (km) of bus priority/transit lanes 1 0 (100%) 4Increase in length (km) of community paths 20 40 100% 5
Transport Planning and RegulationTaxi cab waiting times within required standard 100% 100% 0%Taxi cab waiting times (wheelchair accessible taxis) within required standard
100% 94.4% (6%)
Number of random vehicle inspections 56,000 50,177 (10%) 6Number of audits of accredited driving instructors per annum 440 453 3%Number of audits of authorised vehicle examiners per annum 600 613 2%Percentage down time of fixed speed cameras 5% 7.4% 48% 7
TOTAL COST ($’000) $223,847 $249,915 12% 8GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $141,972 $144,714 2%
Department of Territory and Municipal ServicesStatement of Performance
as at 30 June 2010
Description: Management of the ACT's road assets and regulation of public passenger transport, heavy vehicles, driver competency and vehicle registration. Also includes promotion of road user safety and the provision of strategic transport planning and public transport services.
OUTPUT 1.2: Office of Transport
2009–2010 ANNUAL REPORT 119
Explanation of Variances:1.
2.
3. The result reflects a reduced resurfacing program for 2009-10. A further 7.5km of existing facilities were upgraded.4.
5. The result reflects that there was a greater than expected contribution from gifted assets with the opening of new subdivisions.
6.
7.8. The variation from target is due to increased depreciation expense relating to the 2008-09 infrastructure asset revaluation.
The down time of fixed speed cameras was below target due to two cameras off-line for a short period whilst adjacent road works were undertaken.
The result reflects an accelerated program of investigations, due to the continuation of a Commonwealth grant, has been undertaken to assess and strengthen bridges on the existing B-double network, including the appraisal of new routes which has led to the re-rating of 37 bridges during 2009-10.For information purposes - SM1600 standard is a theoretical loading designated by Australian Standards 5100 2004 Bridge Design which should ensure that bridges can carry future vehicle loadings.
The below target result has been impacted by unanticipated leave required by technical staff, and challenges in identifying qualified personnel for backfilling purposes.
The below target result reflects that proportionally more asphalt resurfacing was undertaken as opposed to resealing than originally planned. Asphalt resurfacing is a relatively higher cost activity resulting in smaller total areas treated.
The target represents two bus lane projects - Barry Drive and Flemington Road. Delays in works have been due to wet weather conditions towards the end of the 2009-10 financial year. BarryDrive was physically completed at the end of August 2010.
120 Department of Territory and Municipal Services
OUTPUT CLASS 1: MUNICIPAL SERVICESPRINCIPAL MEASURES
Accountability Measures Original Target Amended Target Actual Result
% Variance from Original/Amended
TargetExplanation of
Material Variances2009-10 2009-10 2009-10
Waste and RecyclingAnnual tonnes of waste to landfill per head of population 0.5 0.58 16% 1Annual total resource recovery tonnage per head of population 1.50 1.49 (1%)Percentage of material recovered from the total waste stream 75% 72% (4%)Annual cost of kerbside collection per household $66.30 $63.10 (5%) 2Cost of recyclables processing per tonne $19.70 $20.60 5% 2Percentage of customers satisfied with waste collection services 98% 94% (4%)
Operational cost of landfilling waste per tonne $17.40 $13.37 (23%) 3
TOTAL COST ($’000) $26,476 $26,384 (0%)
GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $19,966 $19,702 (1%)
Explanation of Variances:1.
2.
3.
There has been an increase in commercial waste to landfill resulting from improved economic conditions and increased construction and demolition activity, boosted by the Federal Government stimulus package. More construction and demolition materials are being directed to landfill in the ACT as there has been a reduction in acceptance of these materials by recycling facilities. This is due to a change in the environmental authorisation for Canberra's largest construction and demolition recycler site issued by the Environmental Protection Unit, and one other recycler becoming insolvent.
For information purposes - the target and result have been calculated using external contractor costs and excludes overheads. This methodology avoids material changes due to overhead allocation and enables a comparison of results to prior periods and costs of service in other jurisdictions.
The volume of waste to landfill has increased due to improved economic conditions and increased construction and demolition activity. Contract costs have decreased due to lower than expected fuel prices. The combination of these two factors have resulted in a drop in the actual operational cost per tonne.
Department of Territory and Municipal ServicesStatement of Performance
as at 30 June 2010
Description: Provision of domestic waste and recyclables collection service and operation of resource management and recycling centres, as well as implementation and evaluation of programs dealing with waste management programs, including household garbage and recycling.
OUTPUT 1.3: Waste and Recycling
2009–2010 ANNUAL REPORT 121
OUTPUT CLASS 1: MUNICIPAL SERVICESPRINCIPAL MEASURES
OUTPUT 1.4: Land Management
Accountability Measures Original Target Amended Target Actual Result
% Variance from Original/Amended
TargetExplanation of
Material Variances2009-10 2009-10 2009-10
Report on delivery of the Tree Watering Program Jan 2010 Jun 2010 Jun 2010 0%
Report on delivery of the Hazardous Tree Program Jan 2010 Jun 2010 (42%) 1
Park Management plans are less than 10 years old 100% 54% (46%) 2
Report on the delivery of the program for pest plants and feral animals Jan 2010 Jun 2010 Jun 2010 0%
Report on the delivery of prior year Bushfire Operations Plan activities Jul 2010 Jun 2010 Jun 2010 0%
Report on delivery of prior year Threatened Species Action Plans Sep 2010 Jun 2010 Jun 2010 0%TOTAL COST ($’000) $75,085 $93,601 25% 3
GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $66,873 $69,683 4%
Explanation of Variances:1.
2.
3. The variation to target is due to the provision of additional funding to address general service delivery requirements. The increase in total costs was also impacted by the expensing of completed capital works projects relating to the revegetation of bushfire effected land.
The variation to target is due to longer than expected consultation processes. Three major reviews of Park Management Plans occurred in 2009-10. Two plans were finalised and one is scheduled for completion in 2010-11. The remaining Plans (greater than 10 years old) will be progressively reviewed from 2011-12.
Department of Territory and Municipal ServicesStatement of Performance
as at 30 June 2010
Description: Planning and management of Canberra's parks, plantations, reserves and open space system. As the single land manager, this role includes management of recreational use of lands, pest and weed control, fire management, conservation management, and maintenance of the look and the feel of the city and its environs, including the urban forest.
The original January target related to the non-urban component of the project, which was completed by that target date. The balance of the project was delayed to enable the Department to respond to concerns raised by the Commissioner for Sustainability and the Environment. Despite this delay, the balance of the project was completed by the end of June 2010.
122 Department of Territory and Municipal Services
OUTPUT CLASS 1: MUNICIPAL SERVICESPRINCIPAL MEASURES
OUTPUT 1.5: Environment Regulation
Accountability Measures Original Target Amended Target Actual Result
% Variance from Original/Amended
TargetExplanation of
Material Variances2009-10 2009-10 2009-10
Deliver the annual Heritage Grants Program Jun 2010 Jun 2010 0%Assess development applications for their heritage impact and advise ACTPLA within 15 working days
100% 96% (4%)
Process applications for heritage registration within statutory timeframes
100% 100% 0%
Numbers of dogs processed by the Domestic Animal Shelter 2,050 1,785 (13%) 1
Percentage of stray and abandoned dogs re-homed 95% 96.2% 1%Decisions on Protected Trees within statutory timeframes 100% 98% (2%)
Remove abandoned vehicles on unleased land within seven working days
100% Not measured (100%) 2
Respond to complaints of public safety issues within 2 days 100% 100% 0%
Response & collection of "sharps" on unleased land within 4 hours
100% 99% (1%)
TOTAL COST ($’000) $8,922 $6,086 (32%) 3GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $4,826 $4,939 2%
Department of Territory and Municipal ServicesStatement of Performance
as at 30 June 2010
Description: Administration of regulatory activities to protect and enhance the natural and built environment. Provision of advice, education and compliance services to Government and the community in relation to municipal ranger functions, domestic animal management, plant and animal licensing, environment protection, water resource management, heritage places and objects, and significant tree preservation.
2009–2010 ANNUAL REPORT 123
Explanation of Variances:1
2
3
The process of determining suitable dogs for re-homing, coupled with education programs such as Responsible Dog Ownership education material, has reduced the number of dogs identified by Domestic Animal Services Rangers. For information purposes - the processing of dogs represents the dogs impounded at the shelter. This does not include roaming dogs which are picked up and returned home without being impounded.
The variation from the original target is due to a reallocation of corporate support costs following changes to the Department's functions in 2009-10.
The 2009-10 result has not been measured. The Department is reviewing existing recording methodology to enable independent verification of the reported date of abandoned motor vehicles. An indicative result for 2009-10, based on existing data is that 99% of reported abandoned motor vehicles were removed within 7 calendar days of the recorded notification date.
124 Department of Territory and Municipal Services
OUTPUT CLASS 1: MUNICIPAL SERVICESPRINCIPAL MEASURES
OUTPUT 1.6: Sport and Recreation
Accountability Measures Original Target Amended Target Actual Result
% Variance from Original/Amended
TargetExplanation of
Material Variances2009-10 2009-10 2009-10
Number of targeted programs delivered in accordance with the Australian Sports Commission agreement
9 8 (11%) 1
Value of funding to community sport and recreation and National Leagues organisations
$2,697,385 $2,652,386 (2%)
Value of performance agreements provided for delivery of ARU/NRL/AFL games in Canberra
$2,101,000 $1,825,000 (13%) 2
Customer satisfaction survey of ACT Academy of Sport services 90% 94% 4%Percentage of customers satisfied with the management of sportsgrounds and ovals
92% 96% 4%
Percentage of customers satisfied with the management of pool facilities
93% 86% (8%)
TOTAL COST ($’000) $34,957 $25,729 (26%) 3
GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $25,495 $21,970 (14%) 3
Explanation of Variances:1. The budget was prepared including the Australian Sports Commission Schools Network program, however this program was subsequently discontinued. 2.
3. The provision of funds to ACT sporting organisations for capital projects has been delayed pending completion of the planning and design phases by the relevant stakeholder.
At the time of the 2009-10 Budget preparation, the original target included a payment to the Australian Football League (AFL) for three games to be held in the ACT. However, the terms of this agreement were not extended into 2009-10.
Department of Territory and Municipal ServicesStatement of Performance
as at 30 June 2010
Description: Development of programs, policies and legislation, and provision of grants, education and training opportunities to maintain and improve the capabilities of the sport and recreation sector. Also includes management and maintenance of sportsgrounds and facilities and the provision of support services to high performance athletes in the ACT.
2009–2010 ANNUAL REPORT 125
OUTPUT CLASS 2: ENTERPRISE SERVICESPRINCIPAL MEASURES
OUTPUT 2.1: Government Services
Accountability Measures Original Target Amended Target Actual Result
% Variance from Original/Amended
TargetExplanation of
Material Variances2009-10 2009-10 2009-10
Capital Linen ServicesTotal tonnes of laundry delivered 5,000 5,535 11% 1
Retain certification of Quality Management System Standard AS/NZS ISO 9001:2000
100% 100% 0%
PropertyAccommodation utilisation rate (m2 per employee) 17.2m2 Measure transferred Not applicable 2
Occupancy rate of ACT Government office buildings 98% Measure transferred Not applicable 2
Use of Greenpower 30% Measure transferred Not applicable 2
Accommodation cost per employee $7,000 Measure transferred Not applicable 2
Occupancy rate for properties designated for use by non-government tenants
95% Measure transferred Not applicable2
Yarralumla NurseryPlant spoilage within industry standard <10% <10% 0%
TOTAL COST ($’000) $81,885 $63,850 (22%) 3GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $2,007 $1,125 (44%) 3
Department of Territory and Municipal ServicesStatement of Performance
as at 30 June 2010
Description: Incorporates businesses that provide commercial services to ACT Government agencies and the private sector on a fee for service basis, including the Yarralumla Nursery and Capital Linen Services.
126 Department of Territory and Municipal Services
Explanation of Variances:1. The result exceeds production targets due to higher demand in the health and hospitality sectors.2.
3.
Property Services performance measures transferred to the Department of Land and Property Services following the Administrative Arrangements of 1 December 2009.
The variation to the original target is due to the transfer of Property Services to the Department of Land and Property Services following the Administrative Arrangements of 1 December 2009.
2009–2010 ANNUAL REPORT 127
OUTPUT CLASS 2: ENTERPRISE SERVICESPRINCIPAL MEASURES
OUTPUT 2.2: Tourism & Events
Accountability Measures Original Target Amended Target Actual Result% Variance from
Original/Amended TargetExplanation of
Material Variances2009-10 2009-10 2009-10
TourismAwareness of the Capital Region as a tourist destination - Sydney >9% Measure transferred Not applicable 1 - Brisbane >5% Measure transferred Not applicable 1 - Regional NSW >12% Measure transferred Not applicable 1Preference of the Capital Region as a tourist destination - Sydney >10% Measure transferred Not applicable 1 - Brisbane >5% Measure transferred Not applicable 1 - Regional NSW >10% Measure transferred Not applicable 1Number of hits to the "visitcanberra" website 720,000 Measure transferred Not applicable 1Number of interstate & international visitors to: - Floriade 145,200 Measure transferred Not applicable 1
Territory Venues and EventsNumber of major events at:- Canberra Stadium 23 24 4%- Manuka Oval 5 5 0%- Stromlo Forest Park 7 6 (14%) 2- Exhibition Park in Canberra 63 Measure deleted n/a n/a 3Own Source revenue by venue:- Canberra Stadium $3,211,177 $3,296,303 3%- Manuka Oval $300,764 $211,970 (30%) 4- Exhibition Park in Canberra $1,729,000 Measure deleted n/a n/a 3
TOTAL COST ($’000) $28,932 $21,356 (26%) 5GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $20,473 $10,556 (48%) 5
Department of Territory and Municipal ServicesStatement of Performance
as at 30 June 2010
Description: Creation and implementation of a range of marketing and development programs to promote tourism and major events held in the ACT.
128 Department of Territory and Municipal Services
Explanation of Variances:1. Tourism transferred to the Chief Minister's Department following the Administrative Arrangements of 10 November 2009.2. Stromlo Forest Park forecast included the National Cross Country Selection Trials which were not held.3.
4.5.
At the time of the 2009-10 Budget preparation it was expected that Exhibition Park Corporation (EPC) would be incorporated within the Department of Territory and Municipal Services. The Government subsequently retained EPC as a stand-alone Statutory Authority with its own budget effective 1 July 2009. The associated performance measures have been removed from the Department's 2009-10 Statement of Performance.
The below budget result represents the Government's contribution of $0.1m for the staging of an AFL match at Manuka in the 2010 season. The variation to the original target is due to the transfer of Tourism to the Chief Minister's Department following the Administrative Arrangements of 10 November 2009.
2009–2010 ANNUAL REPORT 129
MANAGEMENT DISCUSSION AND ANALYSIS
ACTION
130 Department of Territory and Municipal Services
Management discussion and analysis for ACTION for the financial year ended 30 June 2010
General overview
Objectives
ACTION’s business activity is to provide public transport in the ACT including the following services:
scheduled route and school services to and from Canberra suburbs
special needs transport services for students with a disability
charter bus services for schools, sporting bodies and other organisations hosting territory events and festivals
six community buses in partnership between ACTION, the Department of Disability, Housing and Community Services and the regional community services
management of the rural schools services contract.
Risk management
ACTION has developed and maintained an up‐to‐date risk register in the context of the department’s risk management framework. It has subscribed to the department’s Fraud and Corruption Prevention Plan 2009–2011 and code of conduct. It has also developed and tested its business continuity plans. ACTION continues to respond to audit recommendations.
ACTION has identified the following potential risks that may influence its business outcomes and future financial position:
Budget and cash flow—ACTION continued to deliver more services in 2009–10, including the REDEX—a new service designed to encourage increased patronage in line with the proposed Public Transport Strategy. An analysis of the network requirements and available budget will continue in 2010–11 to further encourage growth in services associated with the implementation of Transport for Canberra. ACTION will continue to make representations through the department to ACT Treasury about its financial position and rising operational costs.
Revenue – ACTION’s ticketing system will be replaced in the second half of the 2010‐11 financial year which will mitigate revenue losses caused by equipment failures. Further revenue analysis is being undertaken to forecast revenue targets as the implementation occurs. An ambitious target for fares revenue has been established through the Transport for Canberra program
2009–2010 ANNUAL REPORT 131
which will not be realised until major changes to the network in 2011‐12. There is a risk that this may also affect revenue levels.
Safety and OHS—During 2009–10 ACTION undertook major initiatives to improve safety for both customer and staff at interchanges and depots. During 2010–11 safety initiatives will continue, such as infrastructure at depots, infrastructure for plant and equipment, and options for the provision of additional training.
Asset management plan—During 2010–11 ACTION will finalise its Strategic Asset Management Plan (SAMP) and use it to improve the asset management of depots, interchanges and buses (reducing the risk of liabilities from accidents, planning for capital investment and improving the efficiency of maintenance expenditure). An improved asset management plan will also ensure that quality standards are met and legislative compliance is achieved where applicable.
Driver and specialised human resources retention—ACTION is maintaining a vigorous driver recruitment and training regime to ensure a constant supply of high performing drivers to not only cater for growth, but to counter attrition in a tight labour market.
Financial performance
The following financial information is based on audited Financial Statements for 2008‐09 and 2009‐10, and the forward estimates contained in the 2009–10 Supplementary Budget Papers.
Operating result
The operating result for ACTION was a deficit of $6.481 million against a budget
deficit of $8.248 million, a favourable variance of $1.767 million.
Total revenue was $103.523 million, which was $6.22 million above budget of $97.303 million, while expenses at $110.004 million was above budget of $105.551 million by $4.453 million.
Total expenditure
Components of expenditure
Figure 1 indicates the components of ACTION’s expenditure for 2009‐10 with the largest component of expenditure being employee expenses and superannuation representing 63 per cent (or $69.7 million).
132 Department of Territory and Municipal Services
Figure 1 Components of expenditure
Employee, 56%
Depreciation, 6%
Supplies and Services, 28%
Superannuation, 7%
Borrowing Costs, 1%
Other, 2%
Comparison to budget
Total expenditure of $110.0 million was $4.5 million, or 4.4 per cent higher than the 2009–10 budget of $105.5 million. This higher‐than‐budgeted expenditure was largely the result of:
an increase in employee expenses of $4.5 million, made up of an increase in the number of full‐time equivalent staff due to network enhancements, and $0.8 million due to an increase in the Comcare premium
an increase in supplies and services expenses of $1.8 million, made up of $1.1 million in pre‐ACTIA insurance claim, $0.56 million in IT charges, increased insurances of $0.62 million, parts tyres and oil of $0.64 million and consultancies $0.39 million; these results were partly offset by a saving in fuel of $1.59 million
a decrease in depreciation expense of $2.1 million as a result of timing differences in the implementation of the purchase of 100 new buses and the new ticketing system
an increase in other expenses and borrowing expenses of $0.3 million mainly due to expenses relating to capital projects that could not be capitalised.
Comparison to previous year
Total expenditure was $2.1 million, or 2.1 per cent higher than the 2008‐09 reported result. The increase was primarily due to:
an increase in employee expenses by $1.5 million, or 2.3 per cent, as a result of increased Comcare ($0.8 million), and the number of full time equivalent staff through increased network services
an increase in the supplies and services expenditure of $0.9 million, or 2.7 per cent, due primarily to an insurance settlement of $1.1 million and increased insurance premiums of $0.7 million; these increases were offset by
2009–2010 ANNUAL REPORT 133
net gains of $0.8 million, primarily because of reduced promotion and advertising expenses incurred by the new network in 2008–09
an increase in depreciation by $0.6 million due to the capitalisation of new buses under the bus replacement program
a decrease in other expenses by $0.9 million due primarily to a loss of $1.3 million on revaluation of assets and transfer of assets in 2008–09, offset by expenditure incurred in 2009–10 of $0.5 million relating to capital assets that could not be capitalised.
Future trends
Expenditure is budgeted to increase in 2010–11 by $1.8 million, or 1.6 per cent to accommodate normal cost increases.
Total income
Components of income
Figure 2 indicates that for the financial year ended 30 June 2010, ACTION received 21.6 per cent of its total income of $103.5 million from user charges—non‐ACT Government. This income largely relates to fares, charter, and bus advertising services provided to private sector clients. The remainder of ACTION’s income is derived from ACT Government user charges for Community Service Obligations and other contracted sourced revenue including Special Needs Transport (77 per cent) and other grant revenue relating to fuel tax credits, staff training and employment grants and sundry gains (1.4 per cent).
Figure 2 Components of income
User Charge - ACT Gov, 77.0%
Other Revenue, 1.4%
User Charge - Non-ACT Gov, 21.6%
Comparison to budget
Revenue for the year ended 30 June 2010 was $103.5 million, which was $6.2 million above the 2009‐10 budget of $97.3 million. This result is largely due to increased funding provided by the ACT Government of $3.9 million primarily to cover the cost
134 Department of Territory and Municipal Services
pressures of wages, Comcare and insurance premiums, a pre‐ACTIA insurance claim and decreased fares revenue. Concessions revenue was $1.8 million above budget and fuel tax credits exceeded budget by $0.9 million. These increases were offset by decreased fares of $0.5 million and other revenue of $0.2 million.
Comparison to previous year
Revenue in 2009‐10 was $7.0 million, or 7.3 per cent, higher than the 2008‐09 reported result. The improvement was mainly due to:
an increase in ACT Government funding of $3.9 million for cost increases
an increase in concession fares return of $1.7 million
an increase in fares revenue of $1.9 million
a decrease in bus advertising revenue and charter revenue of $0.2 million
a decrease in other gains of $0.6 million gains from contributed assets in 2008–09.
Future trends
Total income for 2009–10 is budgeted to increase by $0.5 million due to a budgeted increase in patronage resulting in increased fares revenue.
Financial position
Total assets
Components of total assets
Figure 3 indicates that for the financial year ended 30 June 2010, property, plant and equipment accounts for 94.5 per cent of ACTION’s total asset base of $133.9 million.
Figure 3 Total assets as at 30 June 2010
Capital Works in Progress, 6.6%
Property, Plant & Equipment , 88.0%
Receivables, 2.5%Inventories, 2.5%
Other, 0.1% Cash & Cash Equivalents, 0.3%
2009–2010 ANNUAL REPORT 135
Comparison to budget
The total asset position as at 30 June 2010 is $133.9 million, $8.3 million more than the 2009‐10 budget of $125.6 million. The increase is largely the result of an increase in buses from the accelerated delivery of buses under the three year 100 bus acquisition program.
Comparison to previous year
ACTION’s total asset position is $26.7 million more than the 2008‐09 result of $107.2 million largely due to the delivery of 45 new buses as part of the fleet replacement program, further expenditure on the new ticketing project due for completion in 2010–11 and offset by annual depreciation charges.
Liquidity
‘Liquidity ratio’ is a measure of ACTION’s ability to satisfy short‐term debts as they fall due. A common indicator for liquidity is the current ratio, which compares the ability to fund short‐term liabilities from short‐term assets. A ratio of less than 1‐to‐1 may indicate a reliance on the next financial year’s funding to meet short‐term debts.
Table 1 indicates ACTION’s liquidity position.
Table 1 Current ratio
Previous year actual 2008–09
Current year budget 2009–10
Current year actual 2009–10
Current assets ($’000’s) 5,976 5,054 7,254
Current liabilities ($’000’s)
24,313 20,419 26,167
Current ratio 0.25:1 0.25:1 0.28:1
ACTION’s current ratio for the financial year is 0.28 to 1, which is a slight improvement on the budgeted current ratio of 0.25 to 1. Current employee liability entitlements include $16.8 million of long‐service and annual leave, which is unlikely to be paid in any one year. ACTION’s liquidity is therefore adequate to pay debts as they fall due.
Total liabilities
Components of total liabilities
Figure 4 below indicates that most of ACTION’s liabilities relate to employee benefits (58.7 per cent), interest bearing liabilities (17.8 per cent) and payables (20.1 per cent).
136 Department of Territory and Municipal Services
Figure 4 Total liabilities as at 30 June 2010
Interest-Bearing Liabilities, 17.8%
Employee Benefits, 58.7%
Other, 3.4%
Payables, 20.1%
Comparison to budget
ACTION’s liabilities for the year ended 30 June 2010 of $32.7 million, is $6.5 million greater than the 2008‐09 budget of $26.2 million largely due to:
an increase in employee benefits liabilities of $3.0 million
an increase in payables of $3.3 million, consisting of primarily of capital invoices.
Comparison to previous year
Total liabilities are $1.1 million greater than the 2008–09 actual results of $31.6 million. This is due to an increase in payables relating to capital projects of $2.3 million offset by a reduction in unearned revenue of $1.2 million.
2009–2010 ANNUAL REPORT 137
140 Department of Territory and Municipal Services
2009–2010 ANNUAL REPORT 141
142 Department of Territory and Municipal Services
FINANCIAL REPORT FOR YEAR ENDED 30 JUNE 2010
ACTION
2009–2010 ANNUAL REPORT 143
Note Actual Original ActualNo. Budget
2010 2010 2009$’000 $’000 $’000
Income
Revenue
User Charges - ACT Government 4 79,706 73,971 73,959 User Charges - Non-ACT Government 4 22,243 22,931 20,507 Other Revenue 5 1,551 401 1,460
Total Revenue 103,500 97,303 95,926
Gains
Other Gains 6 23 - 576
Total Gains 23 - 576
Total Income 103,523 97,303 96,502
Expenses
Employee Expenses 7 61,504 57,576 60,796 Superannuation Expenses 8 8,208 7,589 7,347 Supplies and Services 9 32,426 30,670 31,552 Depreciation 10 6,474 8,535 5,855 Borrowing Costs 11 684 744 749 Other Expenses 12 708 437 1,560
Total Expenses 110,004 105,551 107,859
Income Tax Equivalents Expense 30 - - -
Operating (Deficit) (6,481) (8,248) (11,357)
Other Comprehensive Income
Increase in the Asset Revaluation Surplus 26 - - 1,258
Total Comprehensive (Deficit) (6,481) (8,248) (10,099)
The above Operating Statement should be read in conjunction with the accompanying notes.
ACTIONOperating Statement
For the Year Ended 30 June 2010
144 Department of Territory and Municipal Services
Note Actual Original ActualNo. Budget
2010 2010 2009$’000 $’000 $’000
Current Assets
Cash and Cash Equivalents 16 348 966 249 Receivables 17 3,398 1,863 2,929 Inventories 18 3,379 2,123 2,679 Other Assets 19 129 102 119
Total Current Assets 7,254 5,054 5,976
Non-Current Assets
Property, Plant and Equipment 20 117,816 120,549 100,715 Capital Works in Progress 21 8,849 - 522
Total Non-Current Assets 126,665 120,549 101,237
Total Assets 133,919 125,603 107,213
Current Liabilities
Payables 22 6,588 3,278 4,067 Interest-Bearing Liabilities 23 588 586 574 Finance Leases 23 140 46 220 Employee Benefits 24 17,747 15,710 17,153 Other Liabilities 25 1,104 799 2,299
Total Current Liabilities 26,167 20,419 24,313
Non-Current Liabilities
Interest-Bearing Liabilities 23 4,916 4,930 5,504 Finance Leases 23 168 318 99 Employee Benefits 24 1,476 501 1,696
Total Non-Current Liabilities 6,560 5,749 7,299
Total Liabilities 32,727 26,168 31,612
Net Assets 101,192 99,435 75,601
Equity
Contributed Equity 26 124,146 121,325 92,074 Accumulated (Deficits) 26 (65,004) (62,682) (58,523)Asset Revaluation Surplus 26 42,050 40,792 42,050
Total Equity 101,192 99,435 75,601
The above Balance Sheet should be read in conjunction with the accompanying notes.
ACTIONBalance Sheet
As at 30 June 2010
2009–2010 ANNUAL REPORT 145
AssetContributed Accumulated Revaluation Total
Equity Funds Surplus Equity OriginalActual Actual Actual Actual Budget
2010 2010 2010 2010 2010$’000 $’000 $’000 $’000 $’000
Balance at the Beginning of the Reporting Period 92,074 (58,523) 42,050 75,601 81,820
Comprehensive Income
Operating (Deficit) - (6,481) - (6,481) (8,248)
Total Comprehensive (Deficit) - (6,481) - (6,481) (8,248)
Transactions Involving Owners Affecting Accumulated Funds
Capital Injections 32,072 - - 32,072 25,863
Total Transactions Involving Owners Affecting Accumulated Funds 32,072 - - 32,072 25,863
Balance at the End of the Reporting Period 124,146 (65,004) 42,050 101,192 99,435
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes
ACTIONStatement of Changes in Equity
For the Year Ended 30 June 2010
146 Department of Territory and Municipal Services
AssetContributed Accumulated Revaluation Total
Equity Funds Surplus Equity OriginalActual Actual Actual Actual Budget
2009 2009 2009 2009 2009$’000 $’000 $’000 $’000 $’000
Balance at the Beginning of the Reporting Period 84,189 (47,166) 40,792 77,815 44,731
Comprehensive Income
Operating (Deficit) - (11,357) - (11,357) (7,343)
Increase in the Asset Revaluation Surplus - - 1,258 1,258 -
Total Comprehensive (Deficit)/Income - (11,357) 1,258 (10,099) (7,343)
Transactions Involving Owners Affecting Accumulated Funds
Capital Injections 7,885 - 7,885 18,350
Total Transactions Involving Owners Affecting Accumulated Funds 7,885 - - 7,885 18,350
Balance at the End of the Reporting Period 92,074 (58,523) 42,050 75,601 55,738
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes
ACTIONStatement of Changes in Equity
For the Year Ended 30 June 2010
2009–2010 ANNUAL REPORT 147
Note Actual Original ActualNo. Budget
2010 2010 2009$’000 $’000 $’000
Cash Flows from Operating Activities
Receipts
User Charges - ACT Government 79,811 73,971 73,927 User Charges - Non-ACT Government 21,560 23,332 20,126 Commonwealth Government Grants 1,342 - 1,411 Goods and Services Tax Input Tax Credits from Australian Taxation Office 2,325 2,185 2,166 Goods and Services Tax Collected from Customers 6,283 1,980 4,341
Total Receipts from Operating Activities 111,321 101,468 101,971
Payments
Employee 61,386 57,147 57,044 Superannuation 8,183 7,589 7,346 Supplies and Services 33,439 31,060 32,098 Borrowing Costs 685 744 749 Goods and Services Tax Paid to Suppliers 2,427 4,263 4,319 Other 6,661 - 2,218
Total Payments from Operating Activities 112,781 100,803 103,774
Net Cash Inflows/(Outflows) from Operating Activities 31 (1,460) 665 (1,803)
Cash Flows from Investing Activities
Receipts
Proceeds from Sale of Property, Plant and Equipment 180 (1) 15
Total Receipts from Investing Activities 180 (1) 15
Payments
Purchase of Property, Plant and Equipment 29,387 25,863 7,150
Total Payments from Investing Activities 29,387 25,863 7,150
Net Cash (Outflows) from Investing Activities (29,207) (25,864) (7,135)
Cash Flows from Financing Activities
Receipts
Advances - - 510 Capital Injections 32,073 25,863 7,885
Total Receipts from Financing Activities 32,073 25,863 8,395
Payments
Repayment of Advances 510 - - Repayment of Borrowings 574 562 562 Repayment of Finance Leases 223 - 95
Total Payments from Financing Activities 1,307 562 657
Net Cash Inflows from Financing Activities 30,766 25,301 7,738
Net Increase/(Decrease) in Cash Held 99 102 (1,200)
Cash and Cash Equivalents at the Beginning of the Reporting Period 249 864 1,449
Cash and Cash Equivalents at the End of the Reporting Period 31 348 966 249
The above Cash Flow Statement should be read in conjunction with the accompanying notes.
ACTIONCash Flow Statement
For the Year Ended 30 June 2010
148 Department of Territory and Municipal Services
Original Total Appropriation AppropriationBudget Appropriated Drawn Drawn
2010 2010 2010 2009$’000 $’000 $’000 $’000
Departmental
Capital Injections 25,863 32,072 32,072 7,885
Total Departmental Appropriation 25,863 32,072 32,072 7,885
The above Departmental Statement of Appropriation should be read in conjunction with the accompanying notes.
Column Heading Explanations
The Original Budget column shows the amounts that appear in the Cash Flow Statement in the Budget Papers.This amount also appears in these financial statements in the Cash Flow Statement.
The Total Appropriated column is inclusive of all appropriation variations occurring after the Original Budget.
The Appropriation Drawn column is the total amount of appropriation received by the Department during the year.These amounts appear in the Cash Flow Statement.
Variances between 'Original Budget' and 'Total Appropriated'
ACTIONDepartmental Statement of Appropriation
For the Year Ended 30 June 2010
The capital injection in 'Original Budget' was provided for the purchase of 100 buses over a three-year period. There was adelay in the contract negotiations which resulted in bus delivery and expenditure being deferred to the first half of2009-10.
2009–2010 ANNUAL REPORT 149
ACTION NOTE INDEX
Note 1 Objectives of ACTION Note 2 Summary of Significant Accounting Policies Note 3 Change in Accounting Estimates Income Notes Note 4 User Charges Note 5 Other Revenue Note 6 Gains Expense Notes Note 7 Employee Expenses Note 8 Superannuation Expenses Note 9 Supplies and Services Note 10 Depreciation Note 11 Borrowing Costs Note 12 Other Expenses Note 13 Waivers, Impairment Losses and Write-Offs Note 14 Act of Grace Payments Note 15 Auditor’s Remuneration Asset Notes Note 16 Cash and Cash Equivalents Note 17 Receivables Note 18 Inventories Note 19 Other Assets Note 20 Property, Plant and Equipment Note 21 Capital Works in Progress Liabilities Notes Note 22 Payables Note 23 Interest-Bearing Liabilities and Finance Leases Note 24 Employee Benefits Note 25 Other Liabilities Equity Note Note 26 Equity
Other Notes
Note 27 Financial Instruments Note 28 Commitments
Note 29 Contingent Liabilities and Contingent Assets Note 30 Income Tax Equivalents Expense Note 31 Cash Flow Reconciliation Note 32 Events Occurring After Balance Date Note 33 Third Party Monies Note 34 Guarantees
150 Department of Territory and Municipal Services
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 1 OBJECTIVES OF ACTION
Legal Form and Principal Place of Business
The Australian Capital Territory Internal Omnibus Network (ACTION) is a commercial operation under the
Transport and Infrastructure Division of the Department of Territory and Municipal Services. ACTION
continues as a separate reporting entity with its own financial information and strategic and accountability
measures.
The principal place of business is located at North Building, London Circuit, in the Australian Capital
Territory (ACT).
Operations and Principal Activities
Public transport in the ACT is provided by ACTION and includes the following services:
a public bus and school services network providing a range of express and route options to and from
all suburbs;
a special needs transport service that is a door to door service for disadvantaged people in our
community;
a charter bus service provided at commercial rates; and
management of the ACT Rural Bus Contract
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Accounting
The Financial Management Act 1996 (FMA) requires the preparation of annual financial statements for ACT Government Agencies.
The FMA and the Financial Management Guidelines issued under the FMA, requires an Agency’s financial statements to include:
(i) an Operating Statement for the year;
(ii) a Balance Sheet at the end of the year;
(iii) a Statement of Changes in Equity for the year;
(iv) a Cash Flow Statement for the year;
(v) a Statement of Appropriation for the year;
(vi) a summary of the significant accounting policies adopted for the year; and
(vii) such other statements as are necessary to fairly reflect the financial operations of the Agency during the year and its financial position at the end of the year.
These general-purpose financial statements have been prepared to comply with ‘Generally Accepted Accounting Principles’ (GAAP) as required by the FMA. The financial statements have been prepared in accordance with:
(i) Australian Accounting Standards; and
(ii) ACT Accounting Policies.
2009–2010 ANNUAL REPORT 151
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Accounting - Continued
The financial statements have been prepared using the accrual basis of accounting, which recognises the
effects of transactions and events when they occur. The financial statements have been also prepared
according to the historical cost convention, except for assets that were valued in accordance with the
(re)valuation policies applicable to ACTION during the reporting period.
These financial statements are presented in Australian dollars, which is ACTION’s functional currency.
ACTION is an individual reporting entity.
(b) The Reporting Period
These financial statements state the financial performance, changes in equity and cash flows of ACTION for
the year ending 30 June 2010 together with the financial position of ACTION as at 30 June 2010.
(c) Comparative Figures
Budget Figures
To facilitate a comparison with the Budget Papers, as required by the Financial Management Act 1996,
budget information for 2009-10 has been presented in the financial statements. Budget numbers in the
financial statements are the original budget numbers that appear in the Budget Papers.
Prior Year Comparatives
Comparative information has been disclosed in respect of the previous period for amounts reported in the
financial statements, except where an Australian Accounting Standard does not require comparative
information to be disclosed.
Where the presentation or classification of items in the financial statements is amended, the comparative
amounts have been reclassified where practical. Where a reclassification has occurred, the nature, amount
and reason for reclassification is provided.
(d) Rounding
All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000). Use of “-”
represents zero amounts or amounts rounded down to zero.
(e) Revenue Recognition
Revenue is recognised at the fair value of the consideration received or receivable in the Operating Statement.
All revenue is recognised to the extent that it is probable that the economic benefits will flow to ACTION and
the revenue can be reliably measured. In addition, the following recognition criteria must also be met before
revenue is recognised.
Rendering of Services
Revenue from the rendering of services is recognised when the stage of completion of the transaction at the
reporting date can be measured reliably and the costs of rendering those services can be measured reliably.
Sale of Goods
Revenue from sale of goods is recognised as revenue when the significant risks and rewards of ownership of
the goods has transferred to the buyer, ACTION retains neither continuing managerial involvement nor
effective control over goods sold and the costs incurred in respect of the transaction can be measured reliably.
152 Department of Territory and Municipal Services
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(f) Repairs and Maintenance
ACTION undertakes cyclical maintenance on its buildings, plant and equipment. Where the maintenance
leads to an upgrade of the asset and increases the service potential of the existing buildings or plant and
equipment, the cost is capitalised. Maintenance expenses which do not increase the service potential of the
asset are expensed.
(g) Borrowing Costs
Borrowing costs are expensed in the period in which they are incurred.
(h) Waivers of Debt
Debts that are waived under section 131 of the Financial Management Act 1996 are expensed during the year
in which the right to payment was waived. Further details of waivers are disclosed at Note 13: ‘Waivers,
Impairment Losses and Write-Offs’.
(i) Current and Non-Current Items
Assets and liabilities are classified as current or non-current in the Balance Sheet and in the relevant notes.
Assets are classified as current where they are expected to be realised within 12 months after the reporting
date. Liabilities are classified as current when they are due to be settled within 12 months after the reporting
date or ACTION does not have an unconditional right to defer settlement of the liability for at least
12 months after the reporting date.
Assets or liabilities which do not fall within the current classification are classified as non-current.
(j) Impairment of Assets
ACTION assesses, at each reporting date, whether there is any indication that an asset may be impaired.
Assets are also reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
Any resulting impairment losses, for land and buildings, buses and plant and equipment, are recognised as a
decrease to the Asset Revaluation Surplus relating to these classes of assets. Where the impairment loss is
greater than the balance in the Asset Revaluation Surplus for the relevant class of asset, the difference is
expensed in the Operating Statement.
An impairment loss is the amount by which the carrying amount of an asset (or a cash-generating unit)
exceeds its recoverable amount. The recoverable amount is the higher of the asset’s ‘fair value less cost to
sell’ and its ‘value in use’. An asset’s ‘value in use’ is its depreciated replacement cost, where the asset would
be replaced if ACTION were deprived of it. Non-financial assets that have previously been impaired are
reviewed for possible reversal of impairment at each reporting date.
2009–2010 ANNUAL REPORT 153
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(k) Cash and Cash Equivalents
For the purposes of the Cash Flow Statement and the Balance Sheet, cash includes cash at bank and cash on
hand. Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash and are subject to an insignificant risk of change in value. Bank overdrafts are included in
cash and cash equivalents in the cash flow statement but not in the cash and cash equivalents line on the
Balance Sheet.
(l) Receivables
Accounts receivables (including trade receivables and other trade receivables) are initially recognised at fair
value and are subsequently measured at amortised cost, with any adjustments to the carrying amount being
recorded in the Operating Statement.
Trade receivables arise in the normal course of selling goods and services to other agencies and the public.
Trade receivables are payable within 30 days after the issue of an invoice or the goods/services have been
provided under a contractual arrangement.
Other trade receivables arise outside the normal course of selling goods and services to other agencies and to
the public. Other trade receivables are payable within 30 days after the issue of an invoice or the
goods/services have been provided under a contractual arrangement.
ACTION has the capacity to enter into contractual arrangements with some customers allowing it to charge
interest at commercial rates where payment is not received within 60 days after the amount falls due, until the
whole of the debt is paid.
The ability to collect receivables is reviewed on an on-going basis. Receivables that are unable to be collected
are written-off.
The allowance for impairment losses represents the amount of trade receivables and other trade receivables
ACTION estimates will not be repaid. The allowance for impairment losses is based on objective evidence
and a review of overdue balances. ACTION considers the following is objective evidence of impairment:
a) becoming aware of financial difficulties of debtors;
b) default payments; or
c) debts more than 90 days overdue.
The amount of the allowance is the difference between the asset’s carrying amount and the present value of
the estimated future cash flows, discounted at the effective interest rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is immaterial. The amount of the allowance is
recognised in the Operating Statement. The allowance for impairment losses are written-back against the
receivables account when ACTION ceases action to collect the debt as it considers that it will cost more to
recover the debt than the debt is worth.
Receivables that have been renegotiated because they are past due or impaired are accounted for based on the
renegotiated terms.
154 Department of Territory and Municipal Services
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(m) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises the purchase price of
inventories as well as handling and other costs directly attributable to the acquisition of inventories. Trade
discounts, rebates and other similar items are deducted in determining the costs of purchase. The inventory
cost is assigned using the weighted average method.
(n) Acquisition and Recognition of Property, Plant and Equipment
Property, plant and equipment is initially recorded at cost. Cost includes the purchase price, directly
attributable costs and the estimated cost of dismantling and removing the item (where, upon acquisition, there
is a present obligation to remove the item).
Where property, plant and equipment is acquired at no cost or minimal cost, cost is its fair value as at the date
of acquisition. However, property, plant and equipment acquired at no cost or minimal cost as part of
Restructuring of Administrative Arrangements is measured at the transferor’s book value.
Where payment for the property, plant and equipment is deferred beyond normal credit terms, the difference
between its cash price equivalent and the total payment is measured as interest over the period of credit. The
discount rate used to calculate the cash price equivalent is an asset specific rate.
Property, plant and equipment with a minimum value of $5,000 is capitalised.
2009–2010 ANNUAL REPORT 155
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(o) Measurement of Property, Plant and Equipment After Initial Recognition
Land, buildings buses and plant and equipment are measured at fair value.
Fair value is the amount for which an asset could be exchanged between knowledgeable willing parties in an
arm’s length transaction. Fair value is measured using market based evidence available for that asset (or a
similar asset), as this is the best evidence of an asset’s fair value. Where the market price for an asset cannot
be obtained because the asset is specialised and is rarely sold, depreciated replacement cost is used as fair
value.
Fair value for land and buildings is measured using current prices in a market for similar properties in a
similar location and condition.
Land, buildings and buses are revalued every three years. However, if at any time management considers that
the carrying amount of an asset materially differs from its fair value then the asset’s values are updated
regardless of when the last valuation took place. Any accumulated depreciation relating to buildings at the
date of revaluation is written back against the gross carrying amount of the asset and the net amount is
restated to the revalued amount of the asset.
The valuation approach taken to determine the fair value of buses is based on there being a market for second-
hand buses. A sales-comparison valuation approach has been adopted for all buses with the exception of
Compressed Natural Gas (CNG) buses. For CNG buses there is an absence of secondary sales and therefore
these buses have been valued using comparable evidence of diesel sales trends of similar aged units.
Plant and Equipment is revalued every three years to market value by independent valuers.
156 Department of Territory and Municipal Services
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(p) Depreciation and Amortisation of Non-Current Assets
Non-current assets with a limited useful life are systematically depreciated over their useful lives in a manner that
reflects the consumption of their service potential. The useful life commences when an asset is ready for use. When
an asset is revalued, it is depreciated over its newly assessed remaining useful life. Land assets have an unlimited
useful life and are therefore not depreciated.
Motor vehicles under a finance lease are depreciated over the estimated useful life of each asset, or the unexpired
period of the relevant lease, whichever is shorter. All depreciation is calculated after first deducting any residual
values which remain for each asset.
Depreciation for non-current assets is determined as follows:
Class of Asset Depreciation Useful Life (Years)
Buildings Straight Line 18-35
Buses
Plant and Equipment
Straight Line
Straight Line
15-20
10-20
Vehicles under a Finance Lease Straight Line 2-3
The useful lives of all major assets held by ACTION are reassessed on an annual basis.
(q) Payables
Payables are a financial liability and are measured at the fair value of the consideration received when initially
recognised and at amortised cost subsequent to initial recognition, with any adjustments to the carrying amount
being recorded in the Operating Statement. All amounts are normally settled within 30 days after the invoice date.
Payables include Trade Payables, Accrued Expenses and Other Payables.
Trade Payables represent the amounts owing for goods and services received prior to the end of the reporting period
and unpaid at the end of the reporting period and relating to the normal operations of ACTION.
Accrued Expenses represent the amounts owing for goods and services provided by other parties during the period
that are unpaid at the end of the reporting period and where an invoice has not been received by period end.
(r) Interest-Bearing Liabilities
Interest-bearing liabilities are financial liabilities. They are measured at amortised cost with any adjustments to the
carrying amount being recorded in the Operating Statement. The associated interest expense is recognised in the
reporting period in which it occurs.
2009–2010 ANNUAL REPORT 157
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(s) Leases
ACTION has entered into finance leases and operating leases.
Finance Leases
Finance leases effectively transfer to ACTION substantially all risks and rewards incidental to ownership of
the assets under a finance lease. The title may or may not eventually be transferred. Finance leases are
initially recognised as an asset and a liability at the lower of the fair value of the asset and the present value of
the minimum lease payments with each being determined at the inception of the lease. The discount rate used
to calculate the present value of the minimum lease payments is the interest rate implicit in the lease. Assets
under a finance lease are depreciated over the shorter of the asset’s useful life and lease term. Each lease
payment is allocated between interest expense and reduction of the lease liability. Leased assets are
depreciated on a straight-line basis. The depreciation is calculated after first deducting any residual values
which remain for each leased asset. Lease liabilities are classified as current and non-current.
Operating Leases
Operating leases do not effectively transfer to ACTION substantially all the risks and rewards incidental to
ownership. Operating lease payments are recorded as an expense in the Operating Statement on a straight-line
basis over the term of the lease.
158 Department of Territory and Municipal Services
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT POLICIES - CONTINUED
(t) Employee Benefits
Employee benefits include wages and salaries, annual leave, long service leave and applicable on-costs. On-
costs include annual leave, long service leave, superannuation and other costs that are incurred when
employees take annual and long service leave. These benefits accrue as a result of services provided by
employees up to the reporting date that remain unpaid. They are recorded as a liability and as an expense.
Wages and Salaries
Accrued wages and salaries are measured at the amount that remains unpaid to employees at the end of the
reporting period.
Annual and Long Service Leave
Annual leave and long service leave that falls due wholly within the next 12 months is measured based on the
estimated amount of remuneration payable when the leave is taken. Annual and long service leave including
applicable on-costs that do not fall due within the next 12 months are measured at the present value of
estimated future payments to be made in respect of services provided by employees up to the end of the
reporting period. Consideration is given to the future wage and salary levels, experience of employee
departures and periods of service. At each reporting period end, the estimated future payments are discounted
using market yields on Commonwealth Government bonds with terms to maturity that match, as closely as
possible, the estimated future cash flows. In 2009-10, the discount factor used to calculate the present value of
these future payments is 92.9% (90.5% in 2008-09).
Long service leave liability is estimated with reference to the minimum period of qualifying service. For
employees with less than the required minimum period of 7 years qualifying service, the probability that
employees will reach the required minimum period has been taken into account in estimating the provision for
long service leave and the applicable on-costs.
The provision for annual leave and long service leave includes estimated on-costs. As these on-costs only
become payable if the employee takes annual and long service leave while in-service, the probability that
employees will take annual and long service leave while in service has been taken into account in estimating
the liability for on-costs.
Annual leave and long service leave liabilities are classified as current liabilities in the Balance Sheet where
there are no unconditional rights to defer the settlement of the liability for at least 12 months. However, where
there is an unconditional right to defer settlement of the liability for at least 12 months, long service leave has
been classified as a non-current liability in the Balance Sheet.
2009–2010 ANNUAL REPORT 159
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(u) Superannuation
Superannuation payments are made to the Territory Banking Account each year, to cover ACTION’s
superannuation liability for the Commonwealth Superannuation Scheme (CSS) and the Public Sector
Superannuation Scheme (PSS). This payment covers the CSS/PSS employer contributions but does not
include the productivity component. The productivity component is paid directly to ComSuper by ACTION.
The CSS and PSS are defined benefit superannuation plans meaning that the defined benefits received by
employees are based on the employee’s years of service and average final salary.
Superannuation payments have also been made directly to superannuation funds for employees who are
members of superannuation accumulation schemes. This includes the Public Sector Superannuation Scheme
Accumulation Plan (PSSAP) and schemes of employee choice.
Superannuation employer contribution payments, for CSS and PSS, are calculated by taking the salary level at
an employee’s anniversary date and multiplying it by the actuarially assessed nominal CSS or PSS employer
contribution rate for each employee. The productivity component payments are calculated by taking the
salary level, at an employee’s anniversary and multiplying it by the employer contribution rate (approximately
3%) for each ACTION employee. Superannuation payments for PSSAP are calculated by taking the salary
level, at an employee’s anniversary date, and multiplying it by the appropriate employer contribution rate.
Superannuation payments for fund of choice arrangements are calculated by taking an employee’s salary each
pay and multiplying it by the appropriate employer contribution rate.
A superannuation liability is not recognised in the Balance Sheet of ACTION as the Superannuation Provision
Account recognises the total Territory superannuation liability for the CSS and PSS, and ComSuper, and the
external schemes recognise the superannuation liability for the PSSAP and other schemes respectively.
The ACT Government is liable for the reimbursement of the emerging costs of benefits paid each year to
members of the CSS and PSS in respect of the ACT Government service provided after 1 July 1989. These
reimbursement payments are made from the Superannuation Provision Account.
(v) Equity Contributed by the ACT Government
Contributions made by the ACT Government through its role as owner of ACTION, are treated as
contributions of equity.
(w) Insurance
Major risks are insured through the ACT Insurance Authority. The excess payable, under this arrangement,
varies depending on each class of insurance held.
160 Department of Territory and Municipal Services
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(x) Income Tax Equivalents
ACTION falls within the ‘National Tax Equivalents Regime’ and is required to calculate income tax in
accordance with the Income Tax Assessment Act 1977 and to account for the resulting amounts under the
requirements of Accounting Standard AASB 112: ‘Income Taxes’. ACTION has significant carry forward
tax losses that are unlikely to be recovered in the future.
The charge for the current income tax equivalents expense is based on the deficit for the year adjusted for any
non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are
substantially enacted by the balance date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial report. No
deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable surplus or deficit.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
the liability is settled. Deferred tax is credited in the Operating Statement except where it relates to items that
may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be
available against which deductible temporary differences can be utilised.
The amount of benefits bought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the economic entity
will derive sufficient future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by law.
2009–2010 ANNUAL REPORT 161
Impairment of Assets: ACTION has made a significant judgement regarding its impairment of assets by
undertaking a process of reviewing any likely impairment factors. ACTION has made an assessment of any
indication of impairment by completing an impairment checklist. This process has revealed that no likely
impairment factors exist in ACTION.
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(y) Significant Accounting Judgements and Estimates
In the process of applying the accounting policies listed on this note, ACTION has made the following
judgements and estimates that have the most significant impact on the amounts recorded in the financial
statements:
Fair Value of Land and Buildings: ACTION has made a significant judgement regarding the fair value of its
land and buildings. Land and buildings have been recorded at the market value of similar properties as
determined by an independent valuer. In some circumstances, buildings that are purpose built may in fact
realise more or less in the market.
Fair Value of Buses: ACTION has made a significant judgement regarding the fair value of its buses. The
valuation approach taken is based on there being a market for second-hand buses. A sales comparison
valuation approach has been adopted for all buses with the exception of some very new buses, being the
Scania CNG buses. In this situation, as there is an absence of evidence of secondary sales data, comparable
evidence of diesel sales trends of similar aged units are used to assess fair value. Buses have been recorded
at the fair value as determined by an independent valuer.
Fair Value of Plant and Equipment: ACTION has made a significant judgement regarding the fair value of its
plant and equipment. Plant and equipment has been recorded at the market value of similar items as
determined by an independent valuer.
Employee Benefits: Significant judgements have been applied in estimating the liability for employee benefits.
The estimated liability for employee benefits requires a consideration of the future wage and salary levels,
experience of employee departures and periods of service. The estimate also includes an assessment of the
probability that employees will meet the minimum service period required to qualify for long service leave
and that on-costs will become payable. Further information on this estimate is provided in Note 2(t) Employee
Benefits and Note 3 Change in Accounting Estimates.
Estimation of Useful Lives of Property, Plant and Equipment: ACTION has made a significant estimate in
determining the useful lives of its property, plant and equipment. The estimation of useful lives of property,
plant and equipment has been based on the historical experience of similar assets and in some cases has been
based on valuations provided by the valuers. The useful lives are based on an annual basis and any
adjustments are made when considered necessary.
Further disclosure concerning an asset’s useful life can be found at Note 2 (p): Depreciation and Amortisation
of Non-Current Assets.
Contingent Liabilities: ACTION has made a significant judgement in disclosing the contingent liabilities
amount based on an estimation provided by the ACT Government Solicitor. The ACT Government Solicitor's
estimation of contingent liability is an estimate of the Territory's likely liability for legal claims against
ACTION.
Allowance for Impairment of Receivables: ACTION has made a significant judgement in estimating the
allowance for impairment of receivables. The allowance is based on reviews of overdue receivable balances
and the amount of the allowance is recognised in the Operating Statement. Further details on the calculation
of this estimate are outlined in Note 2 (l): Receivables.
162 Department of Territory and Municipal Services
ACTION Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(z) Impact of Accounting Standards Issued but yet to be Applied
The following new and revised accounting standards and interpretations have been issued by the Australian
Accounting Standards Board but do not apply to the current reporting period. These standards and
interpretations are applicable to future reporting periods. ACTION does not intend to adopt these standards
and interpretations early. It is estimated that the effect of adopting the below pronouncements, when
applicable, will have no material financial impact on ACTION in future reporting periods:
AASB 5 Non-current Assets Held for Sale and Discontinued Operations (application date 1 Jan 2011);
AASB 7 Financial Instruments: Disclosures (application date 1 Jul 2010);
AASB 9 Financial Instruments (application date 1 Jan 2013);
AASB 101 Presentation of Financial Statements (application date 1 Jan 2010);
AASB 107 Statement of Cash Flows (application date 1 Jan 2010);
AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors (application date
1 Jan 2011);
AASB 110 Events after the Reporting Period (application date 1 Jan 2011);
AASB 117 Leases (application date 1 Jan 2010);
AASB 118 Revenue (application date 1 Jan 2010);
AASB 119 Employee Benefits (application date 1 Jan 2011);
AASB 132 Financial Instruments: Presentation (application date 1 Feb 2010);
AASB 136 Impairment of Assets (application date 1 Jan 2010);
AASB 137 Provisions, Contingent Liabilities and Contingent Assets (application date 1 Jan 2011);
AASB 139 Financial Instruments: Recognition and Measurement (application date 1 Jan 2010);
AASB 1031 Materiality (application date 1 Jan 2011);
AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5,
7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12]
(application date 1 Jan 2013);
AASB 2009-13 Amendments to Australian Accounting Standards arising from Interpretation 19 [AASB
1] (application date 1 Jul 2010);
AASB Interpretation 4 Determining whether an Arrangement contains a lease (application date
1 Jan 2011); and
AASB Interpretation 14 AASB 119 - The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction (application date 1 Jan 2011).
2009–2010 ANNUAL REPORT 163
ACTION
Notes to and Forming Part of the Financial Statements For the Year Ended 30 June 2010
NOTE 3 CHANGE IN ACCOUNTING ESTIMATES
Change in Accounting Estimate Revision of the Employee Benefit Short Hand Rate
ACTION uses the short-hand method to calculate the present value of long service leave liabilities classified as
long-term. The short-hand method takes into account future wage increases discounted back to present value
using the government bond rate. Last financial year the short-hand method was 90.5%, however, due to a
change in the government bond rate the percentage is now 92.9%.
As such the estimate of the long service leave liabilities has changed.
This change has resulted in an increase to the estimate of the long service leave liability and expense in the
current reporting period of $249,000.
164 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 4 USER CHARGES
2010 2009$’000 $’000
Revenue
User Charges – ACT Government
Service Payments from the General Government Sectora 70,199 66,210 Concessional Travel Payments 7,859 6,170 Special Needs Transport 1,587 1,579 Recoveries from other ACT Government Agencies 61 -
Total User Charges – ACT Government 79,706 73,959
User Charges – Non-ACT Government
Faresb 21,248 19,338 Charter 593 674 Advertising 333 471 Other*** 69 24
Total User Charges - Non-ACT Government 22,243 20,507
Total User Charges for Goods and Services 101,949 94,466
NOTE 5 OTHER REVENUE
Revenue from Other Sources
Grants Received from the Commonwealtha 1,276 1,460
Other Receiptsb 275 -
Total Other Revenue 1,551 1,460
User Charges - ACT Government revenue is derived from the provision of a bus service to the community as a whole.ACTION receives funds provided by the ACT Government through the Department of Territory and MunicipalServices, Concessional travel payments through the Department of Disability, Housing and Community Services andSpecial Needs transport funding through the Department of Education and Training.
User Charges - Non-ACT Government revenue is derived from sources including fare revenue, charter services,advertising and other commercial arrangements.
bOther Receipts comprise funds provided from the Whole of Government Capital Improvement Program (CentralFund) for the purchase of ACTION information screens.
aCommonwealth Grants comprise Fuel Tax Credits and Training and Indigenous Employment Grants.
bThe increase in fares revenue was due to the price increase introduced on July 2009, on average 11% offset by a slight decrease in recorded patronage. ACTION uses an automatic ticketing system ( Wayfarer ticketing system) to validate passenger tickets as passengers board a bus. Due to the age of the system and lack of available spare parts , there are occasions when the system fails or buses travel without a validator
aThe increase in service payments from the General Government Sector represents increased funding to meet cost pressures associated with a pre ACT Insurance Authority settlement, increased insurance and comcare premiums, andother minor cost pressures around service support functions.
ACTION is unable to accurately determine the revenue lost due to system failures but estimates for two months (August 2009 and June 2010) were loss of revenue of 3.3% and 5.6% respectively (annualised 4.3%).
2009–2010 ANNUAL REPORT 165
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 6 GAINS 2010 2009$’000 $’000
Other Gains
Gains from the Sale of Assets 23 - Gains from First Time Recognition of Assetsa - 576
Total Gains 23 576
NOTE 7 EMPLOYEE EXPENSES
Wages and Salariesa 48,036 44,700 Annual Leave Expenseb 3,612 5,045 Long Service Leave Expensec 1,281 3,331 Termination Expense - 34 Comcare Premium 4,135 3,780 Payroll Tax 4,291 3,906 Other Employee Benefitsd 149 -
Total Employee Expenses 61,504 60,796
NOTE 8 SUPERANNUATION EXPENSES
Superannuation Contributions to Territory Banking Account 5,726 5,342 Productivity Benefit 976 957 Superannuation Payment to ComSuper (for the PSSAP) 230 203 Superannuation to External Providers 1,276 845
Total Superannuation Expenses 8,208 7,347
Gains arise from transactions that are not core activities of ACTION.
a In 2008-09, ACTION performed an independent valuation of its plant and equipment. During the inspection andvaluation, previously unrecorded assets were located and valued, giving rise to a gain from first time recognition ofassets.
b The decrease in the annual leave expense is due largely to the first time recognition of on-costs in the estimate of the Annual Leave liability in 2008-09.
c The decrease in the Long Service Leave expense is due largely to the first time recognition of on costs in 2008-09and a change in the present value factor used to estimate the Long Service Leave liability. Refer to Note 3: Changein Accounting Estimates.
ACTION makes payments on a fortnightly basis to the Territory Banking Account for its portion of the Territory'sCommonwealth Superannuation Scheme (CSS) and Public Sector Superannuation Scheme (PSS) superannuationliability. The productivity benefit for these schemes is paid directly to Comsuper.
Superannuation payments have been made direct to Comsuper to cover the superannuation liability for employeesthat are in the Public Sector Superannuation Scheme Accumulation Plan (PSSAP). Superannuation payments arealso made to external providers as part of the employee fund of choice arrangements.
d Other Employee Benefits consist of a sign on bonus resulting from a constructive obligation to pay ACTIONadministrative staff. No constructive obligation has been made between ACTION and its industrial staff.
a The increase in wages and salaries is due to increased full time equivalent employees to meet network enhancements including increased frequency for Redex services.
166 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 9 SUPPLIES AND SERVICES 2010 2009$’000 $’000
(i) Administrative Expenses
Systems and Computing Costs 2,081 2,206
Insurancea 4,885 4,141 Repairs and Maintenance 824 712 Utility Charges 494 429 Communications 220 265 Staff Development 416 463 Contractors and Consultants 2,803 3,081 Support Vehicles and Fuel Charges 642 591 Security Expenses 400 400 Printing and Stationery 102 133 Other 1,040 876
Total Administrative Expenses 13,907 13,297
aInsurance increase was due to the Public Liability premium, and increases in bus and depot values.
(ii) Operating Expenses
Bus Running Expenses 10,499 10,719 Bus Maintenance Expenses 5,442 5,303
Advertising, Promotions and Agents Commissionsa 775 1,480 Accident Damage 282 149
Insurance Settementb 1,102 - Uniforms 220 287 Printing of Tickets and Timetables 199 317
Total Operating Expenses 18,519 18,255
Total Supplies and Services 32,426 31,552
aIn 2008-09 major expenditure was incurred in promoting the new network, including extensive media and signage.
bThis amount is for the payment of a claim that preceeds insurance coverage by present insurer. This payment wassubsequently reimbursed through a Treasurer's Advance of $1.102m and is included in the Service Payments from theGovernment Sector in Note 4 User Charges - ACT Government.
2009–2010 ANNUAL REPORT 167
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 10 DEPRECIATION 2010 2009$’000 $’000
Depreciation
Buildings 1,340 1,340 Buses 3,284 3,110
Plant and Equipmenta 1,850 1,405
Total Depreciation 6,474 5,855
aIncreased depreciation resulting from closed-circuit television and communication equipment purchased in 2008-09.
NOTE 11 BORROWING COSTS
Interest Expense on Borrowings 666 722 Finance Charges on Finance Leases 18 27
Total Borrowing Costs 684 749
NOTE 12 OTHER EXPENSES
Loss from the Sale of Assets - 23 Loss on Revaluation of Plant and Equipment - 764 Transfer of Assetsa - 545 Waivers, Impairment Losses and Write-offs (see Note 13) (20) 45 Other ACT Government Charges and Taxes 200 183 Other Expensesb 528 -
Total Other Expenses 708 1,560
bACTION undertook a number of capital projects in 2009-10 which involved expenditure that could not be capitalised
NOTE 13 WAIVERS, IMPAIRMENT LOSSES AND WRITE-OFFS
Impairment Losses 2010 2009No. $’000 No. $’000
Impairment Loss from Receivables
Trade Receivablesa 39 (20) 25 45
Total Impairment (Gain)/Loss from Receivables 39 (20) 25 45
Impairment Losses from Property, Plant and Equipment
Plant and Equipment - - - -
Total Impairment Losses from Property, Plant and Equipment - - - -
Total (Gains)/Impairment Losses 39 (20) 25 45
a During 2008-09, ACTION transferred bus interchange assets to the Department of Territory and MunicipalServices. These assets were transferred at no cost to the Department of Territory and Municpal Services and weretaken up in the financial statements by the transferee at the carrying amount.
a Refer to Note 17 Receivables - asssessment of debtors resulted in a reduction of the provision for doubtful debts.
Under section 131 of the Financial Management Act 1996 the Treasurer may, in writing, waive the right to paymentof an amount payable to the Territory. In 2009-10 ACTION did not submit to the Treasurer any debt waivers.A waiver is the relinquishment of a legal claim to a debt over which the ACTION has control. The write-off of a debtis the accounting action taken to remove a debt from the books but does not relinquish the legal right of ACTION torecover the amount. The write-off of debts may occur for reasons other than waivers.
168 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 14 ACT OF GRACE PAYMENTS
NOTE 15 AUDITOR'S REMUNERATION
2010 2009$’000 $’000
Audit Services
Audit Fees paid to the ACT Auditor-General's Office 82 76
Total Audit Fees 82 76
Total Auditor's Remuneration 82 76
NOTE 16 CASH AND CASH EQUIVALENTS
Cash at Bank 243 142 Cash on Hand 105 107
Total Cash and Cash Equivalents 348 249
There were no Act of Grace payments made during the reporting period pursuant to Section 130 of the Financial Management Act 1996 . (Nil in 2008-09).
ACTION holds a number of bank accounts with the Commonwealth Bank as part of the whole-of-governmentbanking arrangements. As part of this arrangement ACTION does not receive any interest.
Auditor's remuneration consists of financial audit services provided to ACTION by the ACT Auditor-General'sOffice. No other services were provided by the ACT Auditor-General's Office.
2009–2010 ANNUAL REPORT 169
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 17 RECEIVABLES2010 2009
$’000 $’000Current Receivables
Trade Receivables 2,134 2,140 Less: Allowance for Impairment Losses (91) (111)
2,043 2,029
Other Trade Receivables 173 6 Accrued Revenue 749 809 Net Goods and Services Tax Receivable 433 85
Total Current Receivables 3,398 2,929
Aging of ReceivablesNot Overdue Total
Less than Greater than30 Days 30 to 60 Days 60 Days
$'000 $'000 $'000 $'000 $'0002010Not ImpairedReceivables 3,049 233 48 68 3,398 ImpairedReceivables - - - 91 91
2009Not ImpairedReceivables 2,630 209 52 38 2,929 ImpairedReceivables - 1 1 108 111
'Not Impaired' refers to Net Receivables (that is Gross Receivables less Impaired Receivables)
Reconciliation of the Allowance for Impairment Losses
Allowance for Impairment Losses at the Beginning of the Reporting Period 111 66 Additional Allowance Recognised - 45 Reduction in Allowance Resulting from a Write-Back against the Receivables (20) - Allowance for Impairment Losses at the End of the Reporting Period 91 111
The carrying amount of financial assets that are past due or impaired, whose terms have been renegotiated is $0.
Classification of ACT Government/Non-ACT Government ReceivablesReceivables with ACT Government Entities
Net Trade Receivables 75 479 Net Other Trade Receivables 122 - Accrued Revenue 583 474 Total Receivables with ACT Government Entities 780 953
Receivables with Non-ACT Government Entities
Net Trade Receivables 1,968 1,550 Net Other Trade Receivables 51 6 Accrued Revenue 166 335 Net Goods and Services Tax Receivable 433 85
Total Receivables with Non-ACT Government Entities 2,618 1,976
Total Receivables 3,398 2,929
Past Due
170 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 18 INVENTORIES2010 2009
$’000 $’000
Current Inventories*
Spare Partsa 3,368 2,794 Fuel 260 129
3,628 2,923
Less: Provision for Obsolete Inventories (249) (244)
Total Current Inventories 3,379 2,679
NOTE 19 OTHER ASSETS
Current Other Assets
Prepayments 129 119
Total Current Other Assets 129 119
Total Other Assets 129 119
a The increase is due to spare parts required for the increasingly diverse fleet and ancillary equipment such asclosed-circuit television spares.
2009–2010 ANNUAL REPORT 171
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 20 PROPERTY, PLANT AND EQUIPMENT
2010 2009$’000 $’000
Land and Buildings
Land at Fair Value 21,585 21,585
Total Land at Fair Value 21,585 21,585
Buildings at Fair Value 28,882 28,882 Less Accumulated Depreciation (2,681) (1,341)Total Written-Down Value of Buildings 26,201 27,541
Total Written-Down Value of Land and Buildings 47,786 49,126
Buses
Buses at Fair Valuea 67,553 46,152 Less Accumulated Depreciation (6,387) (3,103)
Total Buses 61,166 43,049
Plant and Equipment
Plant and Equipment at Fair Value 11,104 9,063 Less Accumulated Depreciation (2,240) (523)
Total Written-Down Value of Plant and Equipment 8,864 8,540
Total Written-Down Value of Property, Plant and Equipment 117,816 100,715
Assets Under a Finance Lease
Carrying Amount of Assets under a Finance Lease
Plant and Equipment under a Finance Lease 398 466 Accumulated Depreciation of Plant and Equipment under a Finance Lease (114) (173)
284 293
Total Written-Down Value of Plant and Equipment under a Finance Lease 284 293
Valuation of Non-Current Assets
The Australian Valuation Office performed the latest independent valuation of land and buildings as at 30 June 2008. The Australian Valuation Office performed the latest independent valuation of plant and equipment as at 30 June 2009. The next valuation of all assets will be 30th June 2011.
Rodney Hyman Asset Services Pty Ltd (rhas ), Chartered Valuers, performed an independent valuation of buses as at 30 June 2008.
Property, plant and equipment includes the following classes of assets – land and buildings, buses and plant andequipment.
- Plant and Equipment includes motor vehicles under a finance lease, other plant including furniture and fittings,
Assets under a finance lease are included in the asset class to which they relate in the above disclosure. Assets under afinance lease are also required to be separately disclosed as outlined below.
- Buildings includes bus depots. - Land includes leasehold land.
forklifts, workshop plant and equipment, office equipment and automated ticketing equipment.
a The increase in fair value of buses was a result of the acquisition of 37 MAN diesel and 8 Scania steer tag buses during 2009-10.
172 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 20 PROPERTY, PLANT AND EQUIPMENT - CONTINUED
Reconciliation of Property, Plant and EquipmentThe following table shows the movement of Property, Plant and Equipment during 2009-10
Land Buildings Buses Plant and TotalEquipment
$’000 $’000 $’000 $’000 $’000
Carrying Amount at the Beginning of the Reporting Period 21,585 27,541 43,049 8,540 100,715
Additions - - 21,411 2,343 23,754
Assets Held for Sale - - - - -
Disposals - - (10) (169) (179)
Depreciation - (1,340) (3,284) (1,850) (6,474)
Carrying Amount at the End of the Reporting Period 21,585 26,201 61,166 8,864 117,816
2009–2010 ANNUAL REPORT 173
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 20 PROPERTY, PLANT AND EQUIPMENT - CONTINUED
Reconciliation of Property, Plant and EquipmentThe following table shows the movement of Property, Plant and Equipment during 2008-09
Land Buildings Buses Plant and TotalEquipment
$’000 $’000 $’000 $’000 $’000
Carrying Amount at the Beginning of the Reporting Period 21,585 28,691 38,688 8,851 97,815
Additions - 190 7,509 599 8,299
Disposals - - (38) (763) (801)
Revaluation Increment - - - 1,258 1,258
Depreciation - (1,340) (3,110) (1,405) (5,855)
Carrying Amount at the End of the Reporting Period 21,585 27,541 43,049 8,540 100,715
174 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 21 CAPITAL WORKS IN PROGRESS
2010 2009$'000 $'000
Busesa 4,477 - Myway Smartcard Ticketing System 4,372 204 Fleet Management System - 16 Capital Works Security - 302
Total Capital Works in Progress 8,849 522
Reconciliation of Capital Works in Progress
The following table shows the movement of Capital Works in Progress during 2009-10.
Plant and Equipment
Buses Total
$'000 $'000 $'000
Carrying Amount at the Beginning of the Reporting Period 522 - 522
Additions 5,959 25,889 31,848 Capital Works in Progress Completed and Transferred to Property, Plant and Equipment (2,109) (21,412) (23,521)
Carrying Amount at the End of the Reporting Period 4,372 4,477 8,849
The following table shows the movement of Capital Works in Progress during 2008-09.
Plant and Equipment Buses Total
$'000 $'000 $'000
Carrying Amount at the Beginning of the Reporting Period - 1,336 1,336
Additions 522 6,152 6,674 Capital Works in Progress Completed and Transferred to Property, Plant and Equipment - (7,488) (7,488)
Carrying Amount at the End of the Reporting Period 522 - 522
Capital Works in Progress are assets being constructed over periods of time in excess of the present reporting period. Capital Works inProgress are not depreciated as ACTION is not currently deriving any economic benefits from them.
a This amount relates to progress payments for the acquisition of 10 MAN and 4 Scania steer tag buses. A total of 36 MAN and 9 Scania steer tag buses are due for delivery in 2010-11
2009–2010 ANNUAL REPORT 175
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 22 PAYABLES2010 2009
$'000 $'000Current Payables
Trade Payablesa 5,525 2,707 Other Payables 13 17 Accrued Expenses 1,050 1,343
Total Current Payables 6,588 4,067
Total Payables 6,588 4,067
Trade Payables are aged as follows:
Not Overdue 3,219 1,795 Overdue for Less than 30 days 1,974 899 Overdue for 30 to 60 days 331 - Overdue for More than 60 days - 13
Total Trade Payables 5,524 2,707
Classification of ACT Government/Non-ACT Government Payables
Payables with ACT Government Entities
Trade Payables 1,278 1,414 Accrued Expenses 171 427
Total Payables with Non-ACT Government Entities 1,449 1,841
Payables with Non-ACT Government Entities
Trade Payables 4,247 1,293 Other Payables 13 17 Accrued Expenses 879 916
Total Payables with Non-ACT Government Entities 5,139 2,226
Total Payables 6,588 4,067
a The increase in trade payables is attributable to purchases relating to capital projects particularly the busacquisition and "Myway" Smartcard ticketing projects.
176 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 23 INTEREST-BEARING LIABILITIES AND FINANCE LEASES
2010 2009$'000 $'000
Current Interest-Bearing Liabilities
Secured
Finance Leases 140 220
Total Current Secured Interest-Bearing Liabilities 140 220
Unsecured
ACT Government Borrowings (Gas Facility Loan) 247 233 Commonwealth Borrowings (Land and Buildings Original Loan) 341 341
Total Current Unsecured Interest-Bearing Liabilities 588 574
Total Current Interest-Bearing Liabilities 728 794
Non-Current Finance Leases Secured
Finance Leases 168 99
Total Non-Current Secured Interest-Bearing Liabilities 168 99
Unsecured
ACT Government Borrowings (Gas Facility Loan) 826 1,073 Commonwealth Borrowings (Land and Buildings Original Loan) 4,090 4,431
Total Non-Current Unsecured Interest-Bearing Liabilities 4,916 5,504
Total Non-Current Interest-Bearing Liabilities 5,084 5,603
Total Interest-Bearing Liabilities 5,812 6,397
Secured Liability
ACTION has ACT Government and Commonwealth Government borrowings. The ACT Government borrowingsare held at a fixed rate of interest at 5.50% and repayments are made in four instalments during the year to theTerritory Banking Account. Instalments are to be paid from 2003-04 to 2013-14.
ACTION holds 14 finance leases (19 in 2009), which have been taken up as finance lease liability and an assetunder a finance lease. These are for motor vehicles. The interest rate implicit in these leases vary from 5.19% to7.54% with terms up to three years.
The Commonwealth Government borrowings were obtained at the time of self-government and are being repaidthrough principal and interest payments to the Territory Banking Account which then pays the Commonwealth. Theinterest rate for these borrowings is 12.57% and the principal will be fully repaid during 2022-23.
ACTION's finance lease liability is effectively secured because if the agency defaults, the assets under a financelease revert to the lessor.
2009–2010 ANNUAL REPORT 177
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 23 INTEREST-BEARING LIABILITIES AND FINANCE LEASES - CONTINUED
2010 2009$'000 $'000
Finance lease commitments are payable as follows:
Within one year 156 232 Later than one year but not later than five years 177 103
Minimum Lease Payments 333 335
Less: Future Finance Lease Charges 25 16
Amount Recognised as a Liability 308 319
Total Present Value of Minimum Lease Payments 308 319
The future minimum lease payments for non-cancellable financing - - sub-leases expected to be received.
Classification on the Balance Sheet
Interest-Bearing Liabilities
Current Interest-Bearing Liabilities 588 574 Non-Current Interest-Bearing Liabilities 4,916 5,504
Total Interest-Bearing Liabilities 5,504 6,078
Finance Lease
Current Finance Leases 140 220 Non-Current Finance Leases 168 99
Total Finance Leases 308 319
Total Interest-Bearing Liabilities 5,812 6,397
Credit Facilities
There are no formal credit facilities in place for ACTION with the Territory's appointed transactional bank.
If ACTION's bank account goes into overdraft throughout the year, ACTION is not charged interest. However, theoverdraft position is required to be rectified as soon as possible. ACTION went into overdraft by up to $1.334mover the period 9-24 June 2010 until both the Treasurer's Advance - Service Payments from the GeneralGovernment Sector and Capital Injections were received.
178 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 24 EMPLOYEE BENEFITS2010 2009
$'000 $'000
Current Employee Benefits
Annual Leave 6,030 6,350 Long Service Leave 10,820 10,345 Accrued Wages and Salaries 726 458
Other Employee Benefitsa 171 -
Total Current Employee Benefits 17,747 17,153
Non-Current Employee Benefits
Long Service Leave 1,476 1,696
Total Non-Current Employee Benefits 1,476 1,696
Total Employee Benefits 19,223 18,849
For Disclosure Purposes OnlyEstimate of when Leave is Payable
Estimated Amount Payable within 12 MonthsAnnual Leave 6,030 6,350 Long Service Leave 1,189 1,149 Accrued Wages and Salaries 726 458 Other Employee Benefits 171 -
Total Employee Benefits Payable within 12 Months 8,116 7,957
Estimated Amount Payable after 12 Months
Long Service Leave 11,107 10,892
Total Employee Benefits Payable after 12 Months 11,107 10,892
Total Employee Benefits 19,223 18,849
Employee Numbers
The Full-Time Equivalent staff at 30 June 2010 was 775 (30 June 2009, 753).
aOther Employee Benefits include provision for payment to employees under enterprise bargaining agreement of asign on bonus resulting from a contructive obligation to pay ACTION administrative staff. No constructiveobligation has been incurred by ACTION in relation to negotiations with industrial staff.
2009–2010 ANNUAL REPORT 179
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 25 OTHER LIABILITIES2010 2009
$’000 $’000Other Current Liabilities
Revenue Received in Advancea 1,051 1,775 Repayable Advance Received 53 524
Total Current Other Liabilities 1,104 2,299
Total Other Liabilities 1,104 2,299
NOTE 26 EQUITY
Total Equity at the End of the Reporting Period
Contributed Equity 124,146 92,074 Accumulated (Deficits) (65,004) (58,523)Asset Revaluation Surplus 42,050 42,050
Total Equity 101,192 75,601
Movements in Equity during the Reporting Period
Contributed Equity
Balance at the Beginning of the Reporting Period 92,074 84,189
Capital Injectionsa 32,072 7,885
Balance at the End of the Reporting Period 124,146 92,074
Accumulated Deficits
Balance at the Beginning of the Reporting Period (58,523) (47,166)Operating (Deficit) (6,481) (11,357)
Balance at the End of the Reporting Period (65,004) (58,523)
Asset Revaluation Surplus
Balance at the Beginning of the Reporting Period 42,050 40,792
Increment in Plant and Equipment due to Revaluation - 1,258
Total Increase in the Asset Revaluation Surplus - 1,258
Balance at the End of the Reporting Period 42,050 42,050
The Asset Revaluation Surplus is used to record the increments and decrements in the value of property, plant andequipment.
aRepresents tickets sold but yet to be used and are therefore not recognised as revenue. A high level of sales wasexperienced in June 2009 because of a price rise effective from 1 July 2009.
aThe increase in capital injections is due to additional capital funding for bus fleet replacement, the MywaySmartcard ticketing project, closed circuit television and ancilliary bus support projects.
180 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 27 FINANCIAL INSTRUMENTS
Details of the significant policies and methods adopted, including the criteria for recognition, the basis for measurementand the basis on which income and expenses are recognised, with respect to each class of financial asset and financialliability are disclosed in Note 2 Summary of Significant Accounting Policies to the financial statements.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because ofchanges in market interest rates.
ACTION is considered to have insignificant exposure to interest rate risk. ACTION's only interest rate risk is limited tointerest on liabilities in relation to finance lease commitments for motor vehicles which are immaterial. The interest ratefor the ACT Government and Commonwealth borrowings is at a fixed rate for the entire period of the loans. As aresult, ACTION has a very low level of interest rate risk. There have been no changes in risk exposure or processes formanaging risk since last financial reporting period.
Sensitivity AnalysisA sensitivity analysis has not been undertaken as it is considered that the ACTION’s exposure to this risk isinsignificant and would have an immaterial impact on its financial results.
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the otherparty to incur a financial loss. ACTION holds cash and cash equivalents with the Commonwealth Bank and as such, there would be a low level ofcredit risk associated with these financial assets. ACTION’s credit risk is limited to the amount of the receivables it holds net of any allowance for impairment.ACTION's receivables cover many entities split between other ACT Government entities and entities external to ACTGovernment, and these receivables are unsecured. ACTION manages its credit risk for receivables by performing aregular monitoring and assessment of its receivables with active follow up with customers of outstanding receivablesand by issuing monthly statements to overdue accounts where required. No significant concentration of credit risk hasbeen identified by ACTION and there have been no changes in credit risk exposure since the last reporting period.
Liquidity Risk
Liquidity risk is the risk that ACTION will encounter difficulties in meeting obligations associated with financialliabilities that are settled by delivering cash or another financial asset. ACTION’s main financial obligations relate tothe payment of employee benefits, purchases of supplies and services and borrowing costs including interest andprincipal repayments. Salaries are paid on a fortnightly basis and purchases of supplies and services are paid within 30days of receiving the goods or services. The main source of cash to pay these obligations is from service payments from the ACT Government which are paidon a fortnightly basis during the year, and cash fares. ACTION manages its liquidity risks through forecasting servicepayments requirements to enable the payment of anticipated obligations.
ACTION has an aging workforce with significant levels of accumulated and unpaid annual and long service leave. Asstaff resign or retire and these leave obligations fall due, ACTION has been able to meet these obligations from thecurrent levels of appropriation. With anticipated higher levels of staff retiring in coming years, it is possible that infuture years ACTION may need additional funding from the ACT Government to be able to meet payment of theseBased on the above, ACTION’s exposure to not meeting its obligations associated with financial liabilities is consideredinsignificant based on experience from prior years and the current assessment of risk.
Price Risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes inmarket prices, whether these changes are caused by factors specific to the individual financial instrument or its issuer, orfactors affecting all similar financial instruments traded in the market.ACTION only holds cash and cash equivalents and these assets are held in non-interest bearing accounts. As a result,ACTION is not considered to have any price risk. Accordingly, a sensitivity analysis has not been undertaken.ACTION’s exposure to price risk and the management of this risk has not changed since the last reporting period.
2009–2010 ANNUAL REPORT 181
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 27 FINANCIAL INSTRUMENTS - CONTINUED
Fair Value of Financial Assets and Liabilities
Carrying Net Fair Carrying Net FairAmount Value Amount Value
2010 2010 2009 2009$’000 $’000 $’000 $’000
Financial Assets Cash and Cash Equivalents 348 348 249 249 Receivables 3,398 3,398 2,929 2,929
Total Financial Assets 3,746 3,746 3,178 3,178
Financial LiabilitiesPayables 6,588 6,588 4,067 4,067 ACT Government Borrowings 1,073 1,080 1,306 1,320 Commonwealth Borrowings 4,431 5,682 4,772 6,144 Finance Leases 308 308 319 319
Total Financial Liabilities 12,400 13,658 10,464 11,850
The carrying amounts and fair values of financial assets and liabilities at the end of the reporting period are:
182 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 27 FINANCIAL INSTRUMENTS - CONTINUED
Financial InstrumentsNotes Floating 1 Year or Over 1 Year Over 2 Years Over 3 Years Over 4 Years More Non- Total
Interest Less to 2 Years to 3 Years to 4 Years to 5 Years than 5 InterestRate Years Bearing
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Financial Assets
Cash and Cash Equivalents 16 - - - - - - - 348 348 Receivables 17 - - - - - - - 3,398 3,398
Total Financial Assets - - - - - - - 3,746 3,746
Weighted Average Interest Rate 5.78% - - - - - -
Financial LiabilitiesPayables 22 - - - - - - - 6,588 6,588 ACT Government Borrowings (Gas Facility Loan) 23 - 300 301 300 301 - - - 1,202 Commonwealth Borrowings (Land and Buildings) 23 - 898 855 812 769 726 4,270 - 8,330 Finance Leases 23 - 156 116 61 - - - - 333
Total Financial Liabilities - 1,354 1,272 1,173 1,070 726 4,270 6,588 16,453
Weighted Average Interest Rate - 11.10% 11.41% 11.78% 12.25% 12.57% 12.57%
Net Financial (Liabilities) - (1,354) (1,272) (1,173) (1,070) (726) (4,270) (2,842) (12,707)
The following table sets out ACTION’s maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including the weighted average interestrates by maturity period as at 30 June 2010. All financial assets and liabilities which have a floating interest rate or are non-interest bearing will mature in one year or less. Allamounts appearing in the following maturity analysis are shown on an undiscounted cash flow basis.
Fixed Interest maturing in:
2009–2010 ANNUAL REPORT 183
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 27 FINANCIAL INSTRUMENTS - CONTINUED
Financial InstrumentsNotes Floating 1 Year or Over 1 Year Over 2 Years Over 3 Years Over 4 Years More Non- Total
Interest Less to 2 Years to 3 Years to 4 Years to 5 Years than 5 InterestRate Years Bearing
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Financial Assets
Cash and Cash Equivalents 16 - - - - - - - 249 249 Receivables 17 - - - - - - - 2,929 2,929
Total Financial Assets - - - - - - - 3,178 3,178
Weighted Average Interest Rate 6.00% - - - - - -
Financial LiabilitiesPayables 22 - - - - - - - 4,067 4,067 ACT Government Borrowings (Gas Facility Loan) 23 - 301 300 301 300 301 - - 1,503 Commonwealth Borrowings (Land and Buildings) 23 - 941 898 855 812 769 4,996 - 9,271 Finance Leases 23 - 232 103 - - - - - 335
Total Financial Liabilities - 1,474 1,301 1,156 1,112 1,070 4,996 4,067 15,176
Weighted Average Interest Rate - 10.90% 11.07% 11.46% 11.91% 12.28% 12.57%
Net Financial (Liabilities) - (1,474) (1,301) (1,156) (1,112) (1,070) (4,996) (889) (11,998)
Fixed Interest maturing in:
The following table sets out ACTION’s maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including the weighted average interestrates by maturity period as at 30 June 2009. All financial assets and liabilities which have a floating interest rate or are non-interest bearing will mature in one year or less. Allamounts appearing in the following maturity analysis are shown on an undiscounted cash flow basis.
184 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 27 FINANCIAL INSTRUMENTS - CONTINUED
2010 2009$’000 $’000
Carrying Amount of Each Category of Financial Asset and Financial Liability
Financial AssetsLoans and Receivables 3,398 2,929
Financial LiabilitiesFinancial Liabilities Measured at Amortised Cost 12,400 10,464
NOTE 28 COMMITMENTS
Capital Commitments*
Capital commitments contracted at reporting date that have not been recognised as liabilities are as follows:
Payable:Within one year 26,576 28,592 Later than one year but not longer than five years 3,556 19,591
Total Capital Commitments 30,132 48,183
Other Commitments
Other Commitments contracted at reporting date that have not been recognised as liabilities are as follows:
Payable:Within one year 474 30 Later than one year but not longer than five years 1,037 29
Total Other Commitments 1,511 59
All amounts shown in the commitments note are inclusive of GST.Finance lease commitments are disclosed in Note 23 - Interest Bearing Liabilities and Finance Leases
ACTION does not have any financial assets in the 'Available for Sale' category or the 'Held to Maturity'category and as such these categories are not included above. Also, ACTION does not have any financialliabilities in the 'Financial Liabilities at Fair Value through Profit and Loss' category and, as such, thiscategory is not included above.
Capital commitments relate primarily to major long term capital projects, being the 100 x bus replacementprogram over three years and the Myway Smartcard ticketing project over two years. The decrease in capitalcommitments is due to the capitalisation of 35 buses in 2009-10.
2009–2010 ANNUAL REPORT 185
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 29 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
Contingent Assets
NOTE 30 INCOME TAX EQUIVALENT EXPENSE 2010 2009$’000 $’000
(a) Components of Income Tax Equivalents Expense/(Income)
Tax Equivalents Expense/(Income) comprises:
Current Tax Equivalents Expense/(Income) (1,993) (2,121)Deferred Tax Equivalents Expense/(Income) relating to the originationand reversal of temporary differences (1,806) (1,285)
Tax Effect of Tax Losses not Recognised 1,993 2,121
Tax Effect of Temporary Differences not Recognised 1,806 1,285
- -
(b) Income Tax Equivalents Expense/(Income)The prima facie income tax expense/(income) on pre-tax accounting profit from operations reconciles to the income tax expense/(income) in the financial statements as follows:
(Profit)/loss from Operations 6,755 11,357
Income Tax Equivalents Expense/(Income) calculated at 30% (2,027) (3,407)
Non-Deductible Expenses - 1
(2,027) (3,406)
Tax Effect of Tax Losses not Recognised 1,993 2,121
Tax Effect of Temporary Differences not Recognised 34 1,285
- -
(c) Unrecognised deferred tax balances
Tax Losses - Revenue 15,212 13,047
Temporary Differences 5,730 7,536
Temporary Differences not Recognised in Equity (12,615) - 8,327 20,583
the ACT Government.
b. The net deferred tax effects relating to tax losses and temporary differences has not been recognised as it is not probable that the tax benefits from these assets will be recouped in the future
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporateentities on taxable profits under Australian tax law. There has been no change in the corporate tax rate from theprevious reporting period.
a. ACTION is exempt from federal income tax. However, ACTION is required to pay income tax equivalents to
The following deferred tax assets have not been brought to account as assets
ACTION is subject to various claims as at the reporting date with the total liability being $5.319m ($7.538m,2009). ACTION has contingent liabilities relating to third party accident claims. Due to the protracted nature oflegal proceedings and the various discoveries that can be made over the period of these claims, it is not possible forACTION to make an accurate assesssment of such liabilities.
Although ACTION is subject to various claims as at the reporting date with the total liability being $5.319m($7.358m, 2009), ACTION has insurance coverage through ACT Insurance Authority for the majority of suchlegal claims. The contingent assets relating to these claims would be $4.469m ($5.631m, 2009).
186 Department of Territory and Municipal Services
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 31 CASH FLOW RECONCILIATION
2010 2009$’000 $’000
Cash at Bank 243 142 Cash on Hand 105 107
Cash and Cash Equivalents at the End of the Financial Year as Recorded in the Balance Sheet 348 249
(b) Reconciliation of the Operating (Deficit) to the Net Cash (Outflows) from Operating Activities
Operating (Deficit) (6,481) (11,357)
Add/(Less) Non-Cash Items
(Gain)/Loss on Disposal of Assets (23) 23 Loss on Revaluation of Plant and Equipment - 764 Gains on First Time Recognition of Assets - (576)Depreciation 6,474 5,855 Impairment of Receivables (20) 45
(Less) Item Classified as Investing or Financing
Advance Payable/ (Receivable) 510 (510)Payable relating to Capital Assets (2,762) 240
Net Cash Before Changes in Operating Assets and Liabilities (2,302) (5,516)
Changes in Operating Assets and Liabilities
(Increase) in Receivables (450) (1,263)(Increase) in Inventories (699) (556)(Increase) in Other Assets (10) (17)Increase in Payables 2,823 158 Increase in Employee Benefits 373 3,890 (Decrease) in Other Liabilities (1,195) 1,501
Net Changes in Operating Assets and Liabilities 842 3,713
Net Cash (Outflows) from Operating Activities (1,460) (1,803)
(c) Non-Cash Financing and Investing Activities
Acquisition of Motor Vehicles by means of Finance Lease 234 -
(a) Reconciliation of Cash and Cash Equivalents at the End of the reporting period in the Cash FlowStatement to the equivalent items in the Balance Sheet.
2009–2010 ANNUAL REPORT 187
ACTIONNotes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 32 EVENTS OCCURRING AFTER BALANCE DATE
There were no events that occurred after the balance date to record.
NOTE 33 THIRD PARTY MONIES
NOTE 34 GUARANTEES
There were no guarantees or undertakings by ACTION that are not disclosed within the financial report or the accompanying notes.
There were no third party monies held by ACTION as at 30 June 2010. (Nil as at 30 June 2009).
188 Department of Territory and Municipal Services
2009–2010 ANNUAL REPORT 191
192 Department of Territory and Municipal Services
OUTPUTS
ACTION
2009–2010 ANNUAL REPORT 193
ACTIONPRINCIPAL MEASURES
Output Class 1 - Public Transport
Accountability Measures Original Target Amended Target YTD Target YTD Result
% Variance from Original/Amended
TargetExplanation of
Material Variances2009-10 2009-10 30-Jun-10 30-Jun-10
Timeliness of ACTION services 83% 83% 83% (1%)Customer satisfaction with ACTION services as assessed by passenger surveys
85% 85% 77% (10%) 1
Increase in modal share (adult work trips increase in accordance with the Sustainable Transport Plan)
3% 3% Not Measured n/a 2
Increase in total patronage 529,000 529,000 Not Measured n/a 2Percentage of fleet fully compliant with standards under the Disability Discrimination Act 1992
36% 36% 37% 2%
Percentage of fleet Euro 3 Emission Standard compliant 24.8% 24.8% 26.4% 6% 3Total cost per vehicle kilometre $4.06 $4.06 $4.31 6% 4Total cost per passenger boarding $5.43 $5.43 Not Measured n/a 5Farebox recovery as a percentage of total cost 21.0% 21.0% 19.3% (8%) 6
TOTAL COST ($’000) $105,551 $105,551 $110,158 4%GOVERNMENT PAYMENT FOR OUTPUTS ($’000) $66,266 $66,266 $70,199 6%
Explanation of Variance1 The survey methodology has been amended to remove the ambiguity of the neutral response option. 2
34
5
6 Farebox recovery is below budget due to below budget fares revenue as a result of reduction in patronage and increased expenses as identified in Note 4.
Patronage has not been measured due to validator failures which resulted in the loss of patronage data. However ACTION estimates that the loss in recorded patronage is around 1.53 million validations. The recording of these validations would result in a favourable variance in total patronage of around 900,000 validations or 70% above the original target. Euro 3 emission standards have been exceeded due to the earlier than planned delivery of new buses.The increase in Total Expenses and Government Payment for Outputs is due mainly to address a base funding pressure of $2.1million and third party payments for a pre-ACTIA settlement of $1.1 million.Patronage (boardings) have not been measured due to validator failures which resulted in the loss of patronage data. However ACTION estimates that the loss in recorded patronage is around 1.53 million validations. The recording of these validations would result in the total cost per passenger boarding of $5.96 or 10% above the target, due to greater than budget expenses as indicated in Note 4.
ACTIONStatement of Performance
as at 30th June 2010
Description: Provision of a public bus and school network providing a range of express and route options to an from all suburbs; a special needs transport service that is a door to door service for disadvantagepeople in our community and a charter bus service provided at commercial rates.
d
194 Department of Territory and Municipal Services
MANAGEMENT DISCUSSION AND ANALYSIS
SHARED SERVICES CENTRE
2009–2010 ANNUAL REPORT 195
Shared Services Centre Management discussion and analysis report
for the year ended 30 June 2010
General overview
Objectives
Shared Services Centre (Shared Services) provides information and communication technology (ICT), procurement, publishing and records services, as well as tactical and transactional human resources and finance services to all ACT Government departments and agencies.
These administrative functions are consolidated under Shared Services to achieve economies of scale, standardised and streamlined processes and an overall reduction in costs. This enables ACT Government departments and agencies to focus on providing services to the community.
Shared Services achieves its objectives by working closely with clients to identify appropriate services, agree on service standards and agree on mechanisms for delivery that are efficient and cost effective.
Shared Services’ output classes for 2009–10 are:
InTACT—providing a complete range of ICT services, including infrastructure, applications support and development, policy and project services as well as records and publishing services
procurement support services (Procurement Solutions)—providing policy, services, and managing capital works projects
human resources services—providing tactical and transactional human resources services
finance services—providing tactical and transactional finance services.
Risk management
The main risks that Shared Services believes may affect its future financial position include:
The risk that InTACT, Procurement Solutions, human resources and finance services will not meet service levels agreed with ACT Government departments and agencies due to a lack of resources, in particular sufficient appropriately skilled staff.
This risk is being addressed through a rigorous recruitment program and extensive training opportunities for staff.
196 Department of Territory and Municipal Services
The risk to cash flow resulting from delays in invoicing customers or delays in payment by customers.
Shared Services is managing this risk by carefully monitoring the invoicing process, rapid follow up of payment and rapid resolution of disputed invoices.
The risk that InTACT’s ICT infrastructure will become outdated through rapid changes in technology and evolving agency business requirements.
InTACT is managing this risk through a program of upgrading and consolidating significant elements of the ICT infrastructure. This will optimise the technical efficiency of the infrastructure and the business applications environment that it supports.
These risks were identified in Shared Services’ risk management plan for 2010–12.
Financial performance
The following financial information is based on Shared Services’ unaudited financial statements for the year ended 30 June 2010 and the forward estimates contained in the 2010–11 Budget Paper Number 4.
The analysis below outlines the main trends and factors affecting Shared Services’ financial performance and position for the year ended 30 June 2010.
Net cost of services
’Net cost of services’ is the impost Shared Services has on the Territory’s budget. ‘Own source revenue’ is Shared Services’ total income less appropriation received for government payment for outputs (GPO).
Table 1 Net cost of services
Previous year actual 2008–09 $’000s
Current year budget
2009–10 $’000s
Current year actual 2009–10 $’000s
Forward year budget 2010–11 $’000s
Forward year budget 2011–12 $’000s
Forward year budget 2012–13 $’000s
Total expenditure 170 345 170 441 178 941 174 497 179 810 183 713
Total own source revenue
156 910 156 211 171 575 161 898 168 030 171 837
Net cost of services –13 435 14 230 7 366 12 599 11 780 11 876
2009–2010 ANNUAL REPORT 197
Comparison to budget
Shared Services’ net cost of services of $7.366 million was $6.864 million or 48% per cent lower than the budgeted $14.230 million—refer to Attachment A for comparison. The better than budgeted result was due to:
Increased ACT Government user charges revenue of $15.183 million. This was mainly due to higher capital works and ICT project activity and associated expenditure, higher net consumption of ICT services and higher agency ICT support staff costs directly recovered due to increased service level requirements.
These increases were partially offset by lower ICT business system and billback expenditure recovered directly from departments and agencies.
Reduced employee and superannuation expenses of $2.315 million. This was mainly from:
o lower than expected permanent staff numbers—a result of recruitment timing for ICT staff and trainees
o lower long service leave and annual leave expenditure—a result of continued focus on reducing inherited excessive leave balances, which meant a greater reduction than accrued during the year.
These were offset by the sign-on bonus deriving from a constructive obligation to pay Shared Services’ employees.
Reduced depreciation and amortisation of $1.959 million. This was from the timing of asset purchases in 2009–10, particularly relating to completing a number of capital projects and the Windows 7 rollout.
These have been largely offset by:
Increased supplies and services expenses of $12.734 million. This was mainly from higher ICT project expenditure by departments and agencies, and an increase in contractor costs due to increased project activity and the timing of filling ICT positions permanently.
This was partially offset by:
o lower ICT business system and billback expenditure—recovered directly from departments and agencies
o lower computing costs—due to rationalisation of server and software license and maintenance costs
o lower communication expenses due to reduced voice services charges—a result of purchasing rather than renting the equipment
198 Department of Territory and Municipal Services
o lower operating lease costs—due to all ICT assets now being purchased rather than leased
o lower training, repairs and maintenance, travel and office expenses—a result of expenditure constraints.
Comparison to 2008–09 actuals
Total net cost of services was lower by $6.069 million, or 45 per cent, than last year’s $13.435 million, mainly as a result of:
Increased ACT Government user charges revenue of $14.647 million. This was mainly from higher ICT project activity and associated expenditure, higher net consumption of ICT services, higher ICT business system and billback expenditure directly recovered, and higher agency ICT support staff costs directly recovered due to increased service level requirements.
Reduced depreciation and amortisation of $1.055 million. This was from the completion timing of a number of capital projects and the timing of asset purchases in 2009–10.
Reduced other expenses of $3.180 million. This was mainly due to crediting reform-related disputed invoices associated with ACT Housing.
These have been partially offset by:
Increased supplies and services expenses of $11.301 million. This was mainly from higher ICT project expenditure, an increase in contractor costs due to increased project activity and the timing of filling ICT positions permanently, and higher ICT business system and billback expenditure recovered directly from departments and agencies.
These have been partially offset by:
o lower operating lease costs—due to asset lease commitments being finalised in 2008–09
o lower communication expenses due to reduced voice services charges—a result of purchasing rather than renting the equipment.
Increased employee and superannuation expenses of $1.641 million. This was from:
o the filling of vacant positions in InTACT and Human Resources Services
o higher Procurement Solutions staffing—a result of increased capital works activity
o the inclusion of sign-on bonus deriving from a constructive obligation to pay Shared Services employees.
2009–2010 ANNUAL REPORT 199
These were offset by lower annual leave and long service leave balances—mainly resulting from Shared Services continued efforts to reduce inherited excessive leave balances which meant a greater reduction than accrued during the year.
Future trends
Shared Services’ expenditure and own source revenue is predicted to remain relatively constant across the forward estimate period, with increases in accordance with wage increases and the Consumer Price Index.
Figure 1 Statement of financial performance trends
Total expenditure
Components of expenditure
Shared Services’ core business involves the supply and management of ICT infrastructure, procurement, publishing and records services, as well as tactical and transactional human resources and finance services to all ACT Government departments and agencies.
The main expenditure items during the year typically include supplies and services, employee expenses, depreciation and amortisation as illustrated in figure 2.
020406080
100120140160180200
Actual 2008-09 Original Budget 2009-10
Actual 2009-10 Forward Estimate 2010-11
Forward Estimate 2011-12
Forward Estimate 2012-13
$m
Total Own Source Revenue Total Expenditure Net Cost of Services
200 Department of Territory and Municipal Services
Figure 2 Components of expenditure 2009–10
Comparison to budget
Shared Services’ total expenditure of $178.941 million for the year ended 30 June 2010 was $8.500 million or 5 per cent higher than the budget of $170.441 million. This was due mainly to:
Increased supplies and services expenses of $12.734 million. This was mainly from higher ICT project expenditure by departments and agencies, and an increase in contractor costs due to increased project activity and the timing of filling ICT positions permanently.
This was partially offset by:
o lower ICT business system and billback expenditure—recovered directly from departments and agencies
o lower computing costs—due to rationalisation of server and software license and maintenance costs
o lower communication expenses due to reduced voice services charges—a result of purchasing rather than renting the equipment
o lower operating lease costs—due to all ICT assets now being purchased rather than leased
o lower training, repairs and maintenance, travel and office expenses—a result of expenditure constraints.
These have been partially offset by:
Reduced employee and superannuation expenses of $2.315 million. This was mainly from:
Employee Expenses38%
Superannuation6%
Supplies and Services
47%
Depreciation and Amortisation
9%
2009–2010 ANNUAL REPORT 201
o lower than expected permanent staff numbers—a result of recruitment timing for ICT staff and trainees
o lower long service leave and annual leave expenditure—a result of continued focus on reducing inherited excessive leave balances, which meant a greater reduction than accrued during the year.
These were offset by the sign-on bonus deriving from a constructive obligation to pay Shared Services’ employees.
Reduced depreciation and amortisation of $1.959 million. This was from the timing of asset purchases in 2009–10, particularly relating to completing a number of capital projects and the Windows 7 rollout.
Comparison to 2008–09 actuals
Total expenditure was higher by $8.596 million, or 5 per cent, than last year’s $170.345 million. This was due mainly to:
Increased supplies and services expenses of $11.301 million. This was from higher ICT project expenditure, an increase in contractor costs due to increased project activity and the timing of filling ICT positions permanently, and higher ICT business system and billback expenditure recovered directly from departments and agencies.
These have been partially offset by:
o lower operating lease costs—due to asset lease commitments being finalised in 2008–09
o lower communication expenses due to reduced voice services charges—a result of purchasing rather than renting the equipment.
Increased employee and superannuation expenses of $1.641 million. This was from:
o the filling of vacant positions in InTACT and Human Resources Services
o higher Procurement Solutions staffing—a result of increased capital works activity
o the inclusion of the sign-on bonus deriving from a constructive obligation to pay Shared Services’ employee.
These were offset by lower annual leave and long service leave balances—mainly resulting from Shared Services continued efforts to reduce inherited excessive leave balances which meant a greater reduction than accrued during the year.
202 Department of Territory and Municipal Services
These have been partially offset by:
Reduced depreciation and amortisation of $1.055 million. This was from the completion timing of a number of capital projects and the timing of asset purchases in 2009–10.
Reduced other expenses of $3.180 million. This was mainly due to crediting reform-related disputed invoices associated with ACT Housing.
Future trends
The major components of Shared Services’ expenditure are projected to slightly increase from 2009–10 into the forward years in accordance with wage increases and the Consumer Price Index.
Figure 3 Components of expenditure trends
Total own source revenue
Components of own source revenue
Shared Services derived 99.3 per cent of its own source revenue for the year ended 30 June 2010 from user charges.
0
20
40
60
80
100
120
140
160
180
200
Actual 2008-09 Original Budget 2009-10
Actual 2009-10 Forward Estimate 2010-11
Forward Estimate 2011-12
Forward Estimate 2012-13
$m
Employee Expenses Superannuation Supplies and Services
Depreciation and Amortisation Other Expenses
2009–2010 ANNUAL REPORT 203
Figure 4 Components of own source revenue 2009–10
Comparison to budget
Shared Services’ total own source revenue for the year ended 30 June 2010 was $171.575 million, which was $15.364 million or 10 per cent higher than the budget of $156.211 million. This was mainly due to:
Increased ACT Government user charges revenue of $15.183 million. This was mainly from higher capital works and ICT project activity and associated expenditure, higher net consumption of ICT services and higher agency ICT support staff costs directly recovered due to increased service level requirements.
These increases were partially offset by lower ICT business system and billback expenditure recovered directly from departments and agencies.
Comparison to 2008–09 actuals
Total own source revenue was higher by $14.665 million, or 9 per cent, than last year’s $156.910 million. This was due to:
Increased ACT Government user charges revenue of $14.647 million. This was mainly from higher ICT project activity and associated expenditure, higher net consumption of ICT services, higher ICT business system and billback expenditure directly recovered, and higher agency ICT support staff costs directly recovered due to increased service level requirements.
Future trends
User charges collected as part of the cost recovery process will continue to be the most significant component of own source revenue and are projected to slightly increase from 2009–10 into the forward years in accordance with wage increases and the Consumer Price Index.
User Charges - ACT Govt
99.2%
Resources Received Free of Charge
0.2%
Other 0.5%
User Charges - Non-ACT Govt
0.1%
204 Department of Territory and Municipal Services
Figure 5 Components of own source revenue trends
Financial position
Total assets
Components of assets
For the year ended 30 June 2010 Shared Services held 50 per cent of its assets in receivables. The significant balance in receivables as at 30 June 2010 was mainly due to timing associated with the billing and receipt of monies for capital work projects managed by Procurement Solutions.
Figure 6 Components of assets 2009–10
0
20
40
60
80
100
120
140
160
180
200
Actual 2008-09 Original Budget 2009-10
Actual 2009-10 Forward Estimate 2010-11
Forward Estimate 2011-12
Forward Estimate 2012-13
$m
User Charges - Non-ACT Govt Other Resources Received Free of Charge User Charges - ACT Govt
Cash and Cash Equivalents
22%Receivables
50%
Property Plant and Equipment
24%
Intangible Assets2%
Capital Works in Progress
1%
Other1%
2009–2010 ANNUAL REPORT 205
Shared Services’ property, plant and equipment mainly comprise infrastructure assets, leasehold improvements and ICT assets used in deriving rental income such as desktop computers, printers and other peripheral ICT equipment.
Assets under a finance lease comprise just 2 per cent (as shown in figure 7) of the value of Shared Services’ total non-current assets base, representing motor vehicles only. The remaining non-current assets are owned outright by Shared Services.
Figure 7 Components of property, plant and equipment 2009–10
Comparison to budget
Shared Services’ total asset position as at 30 June 2010 was $143.246 million, which was $30.454 million or 27 per cent higher than the full year budget of $112.792 million. The variance was due to:
Increased receivables of $47.279 million. This was mainly a result of the timing associated with billing and receipt of payments for capital work projects managed by Procurement Solutions.
Increased capital works in progress of $1.788 million. This was a result of the timing of asset purchases to complete a number of capital initiatives.
Increased intangible assets of $0.930 million. This was due to higher than expected costs for the new procurement solutions business system.
These were partially offset by:
Reduced cash and cash equivalents of $20.003 million. This was mainly due to the timing associated with the billing and receipt of payments for capital work projects managed by Procurement Solutions.
Leasehold Improvements
18%
Property, Plant and Equipment (Owned)
60%
Property, Plant and Equipment (Leased)
2%
IT Infrastructure Assets20%
206 Department of Territory and Municipal Services
Comparison to 2008–09 actuals
Total assets position was higher by $34.578 million, or 32 per cent, than its position as at 30 June 2009 of $108.668 million due to:
Increased receivables of $35.890 million. This was mainly a result of the timing associated with billing and receipt of payments for capital work projects managed by Procurement Solutions.
Increased property, plant and equipment of $6.139 million. This was due mainly to ICT assets now being purchased rather than leased, the purchase of IP handsets and the depreciation effects of delays in completing the Records Services Mitchell refurbishment and Network projects.
Increased capital works in progress of $1.788 million. This was due to the timing of asset purchases to complete a number of capital initiatives.
Increased other assets of $1.378 million. This was mainly a result of the Oracle license invoice being received, reconciled and paid by 30 June 2010.
These were partially offset by:
Reduced cash and cash equivalents of $10.635 million. This was mainly due to the timing associated with the billing and receipt of payments for capital work projects managed by Procurement Solutions.
Future trends
Shared Services’ property, plant and equipment value and components will reduce steadily from 2009–10, reflecting the aging of long term leasehold improvements and infrastructure assets.
Owned ICT assets will steadily increase from 2009–10, reflecting Shared Services’ decision to purchase them instead of leasing, as illustrated in figure 8.
2009–2010 ANNUAL REPORT 207
Figure 8 Components of property, plant and equipment trends
Total liabilities
Components of liabilities
For the year ended 30 June 2010 the majority of Shared Services’ liabilities related to payables (63 per cent) and employee benefits (24 per cent).
The large balance in payables as at 30 June 2010 was mainly due to the timing of paying invoices for capital works projects managed by Procurement Solutions.
The significant balance in employee benefits as at 30 June 2010 mainly represents Shared Services employees’ annual leave and long service leave liabilities.
Figure 9 Components of liabilities 2009–10
0
5
10
15
20
25
30
35
40
Actual 2008-09 Original Budget 2009-10
Actual 2009-10 Forward Estimate 2010-11
Forward Estimate 2011-12
Forward Estimate 2012-13
$m
Leasehold Improvements Property, Plant and Equipment (Owned)
Property, Plant and Equipment (Leased) IT Infrastructure Assets
Payables63%
Employee Benefits24%
Finance Leases1%
Other12%
208 Department of Territory and Municipal Services
Comparison to budget
Shared Services’ total liabilities as at 30 June 2010 was $99.084 million, which was $26.253 million or 36 per cent higher than the full year budget of $72.831 million. This was mainly as a result of:
Increased payables of $29.541 million. This was mainly due to the timing of paying invoices for capital works projects managed by Procurement Solutions.
Increased employee benefits of $3.578 million. This was mainly due to the change in methodology for calculating annual leave and long service leave liabilities, and the inclusion of the sign-on bonus deriving from a constructive obligation to pay Shared Services employees.
This has been partially offset by:
Reduced other liabilities of $7.176 million. This was mainly due to the timing associated with receiving capital works invoices, offset by higher salary packaging liabilities as a result of more ACT Government employees accessing these services.
Comparison to 2008–09 actuals
Total liabilities position was higher by $31.759 million, or 47 per cent, than its position as at 30 June 2009 of $67.325 million, mainly as a result of:
Increased payables of $40.927 million. This was mainly due to the timing of paying invoices for capital works projects managed by Procurement Solutions.
Increased employee benefits of $1.266 million. This was due to higher long service leave liabilities as a result of a higher discount factor, higher accrued salaries and the inclusion of the sign-on bonus deriving from a constructive obligation to pay Shared Services employees.
This has been partially offset by:
Reduced other liabilities of $10.699 million. This was mainly due to the timing associated with receiving capital works invoices, offset by higher salary packaging liabilities as a result of more ACT Government employees accessing these services.
Sustained asset base
Shared Services maintains a strong net asset position due to the large amount of assets compared to its liabilities, as illustrated in figure 10.
2009–2010 ANNUAL REPORT 209
Figure 10 Summary statement of financial position
Shared Services’ net asset position as at 30 June 2010 was $44.162 million, which was 11 per cent higher than its full year budgeted net asset position of $39.961 million.
The net asset position as at 30 June 2010 and into the forward years clearly indicates that Shared Services remains in a strong position to meet the requirements of ACT Government departments and agencies now and into the future.
Liquidity
Liquidity is the ability of an organisation to satisfy its short-term debts as they fall due. Table 2 illustrates that Shared Services’ liquidity position is currently sound and even into the forward years.
Table 2 Liquidity
Previous year actual
2008–09 $’000s
Current year budget
2009–10 $’000s
Current year actual
2009–10 $’000s
Forward year budget
2010–11 $’000s
Forward year budget
2011–12 $’000s
Forward year budget
2012–13 $’000s
Total current assets 77 592 77 099 104 515 76 556 76 394 76 235
Total current liabilities 65 293 71 302 96 766 67 645 69 304 70 974
Current ratio 1.2 : 1 1.1 : 1 1.1 : 1 1.1 : 1 1.1 : 1 1.1 : 1
Shared Services’ current ratio as at 30 June 2010 was 1.1:1, demonstrating a strong position for meeting short-term debts as they fall due. The higher current year actual figures were due mainly to the timing of receipts and payments (affecting cash and
0
20
40
60
80
100
120
140
160
Actual 2008-09 Original Budget 2009-10
Actual 2009-10 Forward Estimate 2010-11
Forward Estimate 2011-12
Forward Estimate 2012-13
$m
Total Assets Total Liabilities Net Assets
210 Department of Territory and Municipal Services
cash equivalents, receivables, payables and other liabilities) associated with the capital work projects managed by Procurement Solutions.
The ‘financial assets to liabilities’ measure is an indicator of financial strength and represents the ability to meet current and recognised future obligations from those assets capable of conversion to cash. Financial assets include cash and cash equivalents and receivables.
The ratio as at 30 June 2010 was 1:1 (see table 3), which indicates that Shared Services is well placed to meet its current obligations and into the forward years.
Table 3 Financial assets to total liabilities ratios
Previous year actual
2008–09 $’000s
Current year budget
2009–10 $’000s
Current year actual
2009–10 $’000s
Forward year budget
2010–11 $’000s
Forward year budget
2011–12 $’000s
Forward year budget
2012–13 $’000s
Total financial assets
76 970 74 949 102 225 75 794 75 562 75 333
Total liabilities 67 325 72 831 99 084 69 684 71 348 73 023
Financial assets to liabilities ratio
1.1 : 1 1 : 1 1 : 1 1.1 : 1 1.1 : 1 1 : 1
2009–2010 ANNUAL REPORT 211
Attachment A
Comparison of net cost of services to budget 2009–10
Original budget 2009–10
Actual 2009–10
Variance to be explained
Description $'000 $'000 $'000 %
Expenditure
Employee and superannuation 80 679 78 364 –2 315 –2.9%
Supplies and services 71 301 84 035 12 734 17.9%
Depreciation and amortisation 18 427 16 468 –1 959 –10.6%
Borrowing costs 34 41 7 20.6%
Other expenses – 33 33 100%
Total expenditure 170 441 178 941 8 500 5.0%
Own source revenue
User charges – ACT Government 154 957 170 140 15 183 9.8%
User charges – non-ACT Government 100 218 118 118%
Resources received free of charge – 339 339 100%
Interest 18 – –18 –100%
Other revenue 1 136 878 –258 –22.7%
Total own source revenue 156 211 171 575 15 364 9.8%
Total net cost of services 14 230 7 366 –6 864 –48.2%
212 Department of Territory and Municipal Services
2009–2010 ANNUAL REPORT 215
216 Department of Territory and Municipal Services
2009–2010 ANNUAL REPORT 217
FINANCIAL REPORT FOR YEAR ENDED 30 JUNE 2010
SHARED SERVICES CENTRE
218 Department of Territory and Municipal Services
Shared Services Centre Operating Statement
For the Year Ended 30 June 2010
OriginalActual Budget Actual
Note 2010 2010 2009No. $’000 $’000 $’000
Income
Revenue
Government Payment for Outputs 4 5,814 5,814 5,666
User Charges - ACT Government 5 170,140 154,957 155,493
User Charges - Non-ACT Government 5 218 100 502
Interest - 18 -
Resources Received Free of Charge 6 339 - 258
Other Revenue 7 878 1,136 563
Total Revenue 177,389 162,025 162,482
Gains
Other Gains 8 - - 94
Total Gains - - 94
Total Income 177,389 162,025 162,576
Expenses
Employee Expenses 9 67,814 69,631 67,041
Superannuation Expenses 10 10,550 11,048 9,682
Supplies and Services 11 84,035 71,301 72,734
Depreciation and Amortisation 12 16,468 18,427 17,523
Borrowing Costs 13 41 34 152
Other Expenses 14 33 - 3,213
Total Expenses 178,941 170,441 170,345
Operating (Deficit) (1,552) (8,416) (7,769)
Total Comprehensive (Deficit) (1,552) (8,416) (7,769)
The above Operating Statement should be read in conjunction with the accompanying notes.
2009–2010 ANNUAL REPORT 219
Shared Services Centre Balance Sheet
As at 30 June 2010
OriginalActual Budget Actual
Note 2010 2010 2No. $’000 $’000 $’000
Current Assets
Cash and Cash Equivalents 18 30,913 50,916 41,548
Receivables 19 71,312 24,033 35,422
Inventories 20 11 31 1
Assets Held for Sale 21 281 - -
Other Assets 25 1,998 2,119 612
Total Current Assets 104,515 77,099 77,592
Non-Current Assets
Property, Plant and Equipment 22 33,787 33,455 27,648
Intangible Assets 23 2,930 2,000 3,194
Capital Work in Progress 24 1,788 - -
Other Assets 25 226 238 234
Total Non-Current Assets 38,731 35,693 31,076
Total Assets 143,246 112,792 108,668
Current Liabilities
Payables 26 62,202 32,661 21,275
Finance Leases 27 438 119 267
Employee Benefits 28 21,861 19,081 20,787
Other Liabilities 29 12,265 19,441 22,963
Total Current Liabilities 96,766 71,302 65,292
Non-Current Liabilities
Finance Leases 27 320 329 226
Employee Benefits 28 1,998 1,200 1,806
Total Non-Current Liabilities 2,318 1,529 2,032
Total Liabilities 99,084 72,831 67,324
Net Assets 44,162 39,961 41,344
Equity
Accumulated Funds 40,380 36,179 37,562
Asset Revaluation Surplus 30 3,782 3,782 3,782
Total Equity 44,162 39,961 41,344
009
0
The above Balance Sheet should be read in conjunction with the accompanying notes.
220 Department of Territory and Municipal Services
Shared Services Centre Statement of Changes in Equity
For the Year Ended 30 June 2010
AssetAccumulated Revaluation Total
Funds Surplus Equity OriginalActual Actual Actual Budget
2010 2010 2010 2010$’000 $’000 $’000 $’000
Balance at the Beginning of the Reporting Period 37,562 3,782 41,344 43,021
Comprehensive Income
Operating (Deficit) (1,552) - (1,552) (8,416)
Total Comprehensive (Deficit) (1,552) - (1,552) (8,416)
Transactions Involving Owners Affecting Accumulated Funds
Capital Injections 4,370 - 4,370 5,742
Capital (Distributions) - - - (386)
Total Transactions Involving Owners Affecting Accumulated Funds
4,370 - 4,370 5,356
Balance at the End of the Reporting Period 40,380 3,782 44,161 39,961
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
2009–2010 ANNUAL REPORT 221
Shared Services Centre Statement of Changes in Equity
For the Year Ended 30 June 2010
AssetAccumulated Revaluation Total
Funds Surplus EquityActual Actual Actual
2009 2009 2009$’000 $’000 $’000
Balance at the Beginning of the Reporting Period 39,982 3,782 43,764
Comprehensive Income
Operating (Deficit) (7,769) - (7,769)
Total Comprehensive (Deficit) (7,769) - (7,769)
Transactions Involving Owners Affecting Accumulated Funds
Capital Injections 2,171 - 2,171
Net Assets transferred in as part of an Administrative Restructure
3,178 - 3,178
Total Transactions Involving Owners Affecting Accumulated Funds
5,349 - 5,349
Balance at the End of the Reporting Period 37,562 3,782 41,344
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
222 Department of Territory and Municipal Services
Shared Services Centre Cash Flow Statement
For the Year Ended 30 June 2010
OriginalActual Budget Actual
Note 2010 2010 2009No. $’000 $’000 $’000
Cash Flows from Operating Activities
Receipts
Government Payment for Outputs 5,814 5,814 5,666User Charges - ACT Government 169,527 155,800 145,722User Charges - Non-ACT Government 218 100 471Interest Received - 18 - Goods and Services Input Tax Credits from the AustralianTaxation Office 49,622 40,034 34,314Goods and Services Tax Collected from Customers 62,455 46,746 39,816
Reimbursement for Capital Works Managed a 442,367 310,216 265,689Other 525 936 137
Total Receipts from Operating Activities 730,528 559,664 491,815
Payments
Employee 66,572 68,216 62,139Superannuation 10,525 10,848 9,673Supplies and Services 92,138 71,786 81,818Borrowing Costs 41 34 244Goods and Services Input Tax Credits Remitted to the Australian Taxation Office 57,607 46,746 38,920Goods and Services Tax Paid to Suppliers 56,493 40,032 34,023
Payments for Capital Works Managed b 443,670 310,216 264,859
Total Payments from Operating Activities 727,046 547,878 491,676
Net Cash Inflows from Operating Activities 35 3,482 11,786 139
Cash Flows from Investing Activities
Receipts
Proceeds from Sale of Property, Plant and Equipment 406 400 15
Total Receipts from Investing Activities 406 400 15
Payments
Purchase of Property, Plant and Equipment 19,884 17,771 13,239
Total Payments from Investing Activities 19,884 17,771 13,239
Net Cash (Outflows) from Investing Activities (19,478) (17,371) (13,224)
a) Represents receipts received from ACT Government departments and agencies for capital works projects managed on their behalf.
b) Represents payments made to third parties for capital works projects managed on behalf of ACT Government departments
and agencies.
2009–2010 ANNUAL REPORT 223
Shared Services Centre Cash Flow Statement - Continued For the Year Ended 30 June 2010
OriginalNote Actual Budget ActualNo. 2010 2010 2009
$’000 $’000 $’000Cash Flows from Financing Activities
Receipts
Capital Injections 4,370 5,742 2,171Receipts of Transferred Cash Balances c - - 3,595
Net Movement in the Salary Packaging Bank Accounts d 1,359 - 743Net Movement in the Human Resource Management System
(HRMS) Bank Account e - - 198
Total Receipts from Financing Activities 5,729 5,742 6,707
Payments
Distributions to Government - 386Net Movement in the Human Resource Management System
(HRMS) Bank Account e 73 - - Repayment of Finance Leases 295 497 3,011
Total Payments from Financing Activities 368 883 3,011
Net Cash Inflows from Financing Activities 5,361 4,859 3,696
Net (Decrease) in Cash and Cash Equivalents Held (10,635) (726) (9,389)
Cash and Cash Equivalents at the Beginning of the Reporting Period 41,548 51,642 50,937
Cash and Cash Equivalents at the End of the Reporting Period 35 30,913 50,916 41,548
c) Represents the one-off transfer of Salary Packaging bank accounts to Shared Services from the Department of Education
and Training in September 2008.
d) Represents salary packaging transactions received and dispersed for ACT Government employees on their behalf
(see Note 18 'Cash and Cash Equivalents').
e) Represents payroll transactions received and dispersed for ACT Government departments and agencies on their behalf
(see Note 18 'Cash and Cash Equivalents').
-
Non-Cash Financing Activities
Non-cash financing activities are disclosed in Note 35 ‘Cash Flow Reconciliation’.
The above Cash Flow Statement should be read in conjunction with the accompanying notes.
224 Department of Territory and Municipal Services
Shared Services Centre Summary of Department Output Classes
For the Year Ended 30 June 2010
Output Class
Output Class
Output Class
Output Class
1 2 3 4 ToInTACT Procurement Human Resources Finance
Support Services Services Services$’000 $’000 $’000 $’000 $’000
2010
Total Income before Intra-Departmental Eliminations 132,085 16,356 21,595 12,991 183,027
Intra-Departmental Eliminations - Income (4,196) (220) (490) (732) (5,638)
Total Income 127,889 16,136 21,105 12,259 177,389
Total Expenses before Intra-Departmental Eliminations 132,045 16,245 23,018 13,271 184,579
Intra-Departmental Eliminations - Expenses (1,658) (1,030) (2,295) (655) (5,638)
Total Expenses 130,387 15,215 20,723 12,616 178,941
Operating (Deficit)/Surplus (2,498) 921 382 (357) (1,552)
2009
Total Income before Intra-Departmental Eliminations 118,211 16,165 20,697 12,692 167,765
Intra-Departmental Eliminations - Income (3,886) (214) (378) (711) (5,189)
Total Income 114,325 15,951 20,319 11,981 162,576
Total Expenses before Intra-Departmental Eliminations 121,010 18,510 22,442 13,572 175,534
Intra-Departmental Eliminations - Expenses (1,613) (840) (2,055) (681) (5,189)
Total Expenses 119,397 17,670 20,387 12,891 170,345
Operating (Deficit) (5,072) (1,719) (68) (910) (7,769)
tal
2009–2010 ANNUAL REPORT 225
Shared Services Centre Operating Statement for Output Class 1 – InTACT
For the Year Ended 30 June 2010
Description
Output Class 1: “InTACT” is a shared Information and Communication Technology (ICT) service organisation providing a complete range of ICT services to ACT Government departments and agencies, including infrastructure, applications support and development, ICT policy and ICT project services as well as records management and publishing services.
OriginalActual Budget Actual
2010 2010 2009
$’000 $’000 $’000
Income
Revenue
Government Payment for Outputs 4,261 4,261 4,149
User Charges – ACT Government 123,367 108,753 109,807
User Charges – Non-ACT Government 111 100 177Resources Received Free of Charge 59 - 69
Other Revenue 91 425 29
Total Revenue 127,889 113,539 114,231
Gains
Other Gains - - 94
Total Gains - - 94
Total Income 127,889 113,539 114,325
Expenses
Employee Expenses 34,379 35,581 33,124
Superannuation Expenses 5,364 5,792 4,810
Supplies and Services 77,041 63,818 65,067Depreciation and Amortisation 13,532 15,180 14,944
Borrowing Costs 38 34 146
Other Expenses 33 - 1,306
Total Expenses 130,387 120,405 119,397
Operating (Deficit) (2,498) (6,866) (5,072)
Adjustment to Prior Year Comparatives
Intra-Departmental transactions have been eliminated for consistency with changes to the 2009-10 Actuals and Budget.
226 Department of Territory and Municipal Services
Shared Services Centre Operating Statement for Output Class 2 – Procurement Support Services
For the Year Ended 30 June 2010
Description
Output Class 2: “Procurement Support Services” (Procurement Solutions) undertakes procurement activities on behalf of ACT Government departments and agencies for infrastructure, capital works and goods and services. It advises the ACT Government on procurement and related construction industry policy; is responsible for the development and implementation of the Government’s procurement policy; administers a range of pre-qualification schemes; and establishes and manages whole-of-government contracts.
OriginalActual Budget Actual
2010 2010 2009
$’000 $’000 $’000
Income
Revenue
Government Payment for Outputs 1,553 1,553 1,443
User Charges – ACT Government 14,181 13,822 13,980
User Charges – Non-ACT Government 107 - 325Interest - 18 -
Resources Received Free of Charge 273 - 174
Other Revenue 22 - 29
Total Revenue 16,136 15,393 15,951
Total Income 16,136 15,393 15,951
Expenses
Employee Expenses 10,338 10,072 10,206Superannuation Expenses 1,621 1,643 1,503
Supplies and Services 2,762 3,143 4,026
Depreciation and Amortisation 491 525 24Borrowing Costs 3 -
Other Expenses - - 1,906
Total Expenses 15,215 15,383 17,670
Operating Surplus/(Deficit) 921 10 (1,719)
5
2009–2010 ANNUAL REPORT 227
Shared Services Centre Operating Statement for Output Class 3 – Human Resources Services
For the Year Ended 30 June 2010
Description
Output Class 3: “Human Resources Services” provides tactical and transactional human resource services to ACT Government departments and agencies.
OriginalActual Budget Actual
2010 2010 2009
$’000 $’000 $’000
Income
Revenue
Government Payment for Outputs - - 39
User Charges – ACT Government 20,336 20,283 19,766
Resources Received Free of Charge 4 - 9
Other Revenue 765 711 505
Total Revenue 21,105 20,994 20,319
Total Income 21,105 20,994 20,319
Expenses
Employee Expenses 13,880 14,342 14,160
Superannuation Expenses 2,117 2,149 1,955
Supplies and Services 2,651 3,012 2,184Depreciation and Amortisation 2,075 2,236 2,088
Total Expenses 20,723 21,739 20,387
Operating Surplus/(Deficit) 382 (745) (68)
Adjustment to Prior Year Comparatives
Intra-Departmental transactions have been eliminated for consistency with changes to the 2009-10 Actuals and Budget.
228 Department of Territory and Municipal Services
Shared Services Centre Operating Statement for Output Class 4 – Finance Services
For the Year Ended 30 June 2010
Description
Output Class 4: “Finance Services” provides tactical and transactional finance services to ACT Government departments and agencies.
OriginalActual Budget Actual
2010 2010 2009
$’000 $’000 $’000
Income
Revenue
Government Payment for Outputs - - 35
User Charges – ACT Government 12,256 12,099 11,940
Resources Received Free of Charge 3 - 6
Total Revenue 12,259 12,099 11,981
Total Income 12,259 12,099 11,981
Expenses
Employee Expenses 9,217 9,636 9,551Superannuation Expenses 1,448 1,464 1,414
Supplies and Services 1,581 1,328 1,457
Depreciation 370 486 467Borrowing Costs - - 1Other Expenses - - 1
Total Expenses 12,616 12,914 12,891
Operating (Deficit) (357) (815) (910)
Adjustment to Prior Year Comparatives
Intra-Departmental transactions have been eliminated for consistency with changes to the 2009-10 Actuals and Budget.
2009–2010 ANNUAL REPORT 229
Shared Services Centre Departmental Statement of Appropriation
For the Year Ended 30 June 2010
Original Total Appropriation AppropriationBudget Appropriated Drawn Drawn
2010 2010 2010 2009$’000 $’000 $’000 $’000
Departmental
Government Payment for Outputs 5,814 5,814 5,814 5,666
2,171
37
Capital Injections 5,742 6,486 4,370
Total Departmental Appropriation 11,556 12,300 10,184 7,8
Column Heading Explanations
The Original Budget column shows the amounts that appear in the Cash Flow Statement in the Budget Papers. This amount also ppears in these financial statements, in the Cash Flow Statement.
ccurring after the Original Budget.
Drawn is the total amount of appropriation received by Shared Services Centre during the year. This
d’
apital Injections
he difference between the Original Budget for Shared Services and the Total Appropriated is mainly due to the rollover of funds r the Routine Replacement of Obsolete Critical Network Hardware and the Records Services Mitchell Accommodation furbishment as a result of timing issues.
ariances between ‘Total Appropriated’ and ‘Appropriation Drawn’
apital Injections
he difference between the Total Appropriated for Shared Services and the Appropriation Drawn is mainly due to the rollover of nds for the Data Management and Retention, Reducing the Risk of Communication Blackouts and the Records Services Mitchell ccommodation refurbishment as a result of timing issues.
The above Departmental Statement of Appropriation should be read in conjunction with the accompanying notes.
a
The Total Appropriated column is inclusive of all appropriation variations o
The Appropriation amount appears in these financial statements, in the Cash Flow Statement.
Variances between ‘Original Budget and ‘Total Appropriate
C Tfore
V
C TfuA
230 Department of Territory and Municipal Services
DEPARTMENTAL NOTE INDEX
Note 1 Objectives of the Shared Services Centre Note 2 Summary of Significant Accounting Policies Note 3 Change in Accounting Estimates and Accounting Policy, and Correction of Prior
Period Errors
Income Notes Note 4 Government Payment for Outputs Note 5 User Charges Note 6 Resources Received Free of Charge Note 7
Note 8
Other Revenue Other Gains
Expense Notes Note 9 Employee Expenses Note 10 Superannuation Expenses Note 11 Supplies and Services Note 12 Depreciation and Amortisation Note 13 Borrowing Costs Note 14
Note 15 Other Expenses
Waivers, Impairment Losses and Write-Offs Note 16 Act of Grace Payments Note 17 Auditor’s Remuneration
Asset Notes Note 18 Cash and Cash Equivalents Note 19 Receivables Note 20 Inventories Note 21 Asset Held for Sale Note 22 Property, Plant and Equipment Note 23 Intangible Assets Note 24
Note 25 Capital Works in Progress
Other Assets
Liability Notes Note 26 Payables Note 27 Finance Leases Note 28 Employee Benefits Note 29 Other Liabilities
Equity Note Note 30 Equity
Other Notes Note 31
Note 32 Disaggregated Disclosure of Assets and Liabilities
Financial Instruments Note 33 Commitments Note 34 Contingent Liabilities and Contingent Assets Note 35 Cash Flow Reconciliation Note 36 Events Occurring After Balance Date Note 37 Third Party Monies
2009–2010 ANNUAL REPORT 231
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 1. OBJECTIVES OF THE SHARED SERVICES CENTRE
Operations and Principal Activities
The Shared Services Centre (Shared Services) provides Information and Communication Technology (ICT),
Procurement, Publishing and Records Management services, as well as tactical and transactional Human Resource and
Finance Services, to ACT Government departments and agencies.
Shared Services consolidates these traditional core administrative functions to achieve economies of scale,
standardised and streamlined processes and an overall reduction in costs. This also allows agencies to focus on their
core business of providing services to the community.
Shared Services achieves its objectives by working closely with its clients to identify appropriate services, and agree
on mechanisms for delivery that are efficient and cost effective.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Accounting
The Financial Management Act 1996 requires the preparation of annual financial statements for ACT Government
Agencies. The Financial Management Act 1996 and the Financial Management Guidelines issued under the Act, require an Agency’s financial statements to include:
(i) an Operating Statement for the year; (ii) a Balance Sheet at the end of the year; (iii) a Statement of Changes in Equity for the year; (iv) a Cash Flow Statement for the year; (v) a Statement of Appropriation for the year; (vi) an Operating Statement for each class of output for the year; (vii) a summary of the significant accounting policies adopted for the year; and (viii) such other statements as necessary to fairly reflect the financial operations of Shared Services during
the year and its financial position at the end of the year. These general purpose financial statements have been prepared to comply with ‘Generally Accepted Accounting Principles’ as required by the Financial Management Act 1996. The financial statements have been prepared in accordance with:
(i) Australian Accounting Standards; and
(ii) ACT Accounting Policies. The financial statements have been prepared using the accrual basis of accounting, which recognises the effects of transactions and events when they occur. The financial statements have also been prepared according to the historical cost convention, except for assets which were valued in accordance with the (re)valuation policies applicable to Shared Services during the reporting period. These financial statements are presented in Australian dollars, which is Shared Services’ functional currency. Shared Services is an individual reporting entity.
232 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(b) The Reporting Period
These financial statements state the financial performance, changes in equity and cash flows of Shared Services for the
year ending 30 June 2010 together with the financial position of Shared Services as at 30 June 2010.
(c) Comparative Figures
Budget Figures
To facilitate a comparison with the Budget Papers, as required by the Financial Management Act 1996, budget
information for 2009-10 has been presented in the financial statements. Budget numbers in the financial statements
are the original budget numbers that appear in the Budget Papers.
Prior Year Comparatives
Comparative information has been disclosed in respect of the previous period for amounts reported in the financial
statements, except where an Australian Accounting Standard does not require comparative information to be
disclosed.
Where the presentation or classification of items in the financial statements is amended, the comparative amounts
have been reclassified where practical. Where a reclassification has occurred, the nature, amount and reason for the
reclassification is provided.
(d) Rounding
All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000). Use of “-”
represents zero amounts or amounts rounded down to zero.
(e) Revenue Recognition
Revenue is recognised at the fair value of the consideration received or receivable in the Operating Statement. All
revenue is recognised to the extent that it is probable that the economic benefits will flow to Shared Services and the
revenue can be reliably measured. Shared Services’ main sources of revenue are User Charges (see Note 5) and
Government Payment for Outputs (see Note 4). In addition, the following specific recognition criteria must be met
before revenue is recognised:
Sale or Rental of Goods
Shared Services’ user charges revenue includes the sale or rental of goods to other ACT Government departments and
agencies and Non-ACT Government customers. Such revenue is recognised upon the delivery of goods to customers.
Rendering of Services
User charge revenue is also derived from the rendering of a service, which is recognised upon delivery of that service
to customers, or by reference to the stage of completion of contracts or agreements for the services involved. The
stage of completion is determined on the basis of the ratio of costs incurred to date to the estimated total costs of the
transaction.
2009–2010 ANNUAL REPORT 233
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED (f) Resources Received and Provided Free of Charge
Resources received free of charge are recorded as a revenue and expense in the Operating Statement at fair value. The
revenue is separately disclosed under resources received free of charge, with the expense being recorded in the line
item to which it relates.
Goods and services received free of charge from ACT Government agencies are recorded as resources received free
of charge, whereas goods and services received free of charge from entities external to the ACT Government are
recorded as donations. Services that are received free of charge are only recorded in the Operating Statement if they
can be reliably measured and would have been purchased if not provided to Shared Services free of charge.
Resources provided free of charge are recorded at their fair value in the expense line items to which they relate.
(g) Repairs and Maintenance
Shared Services undertakes major cyclical maintenance on its infrastructure assets. Where the maintenance leads to an
upgrade of the asset, and increases the service potential of the existing infrastructure asset, the cost is capitalised.
Maintenance expenses which do not increase the service potential of the asset are expensed.
(h) Borrowing Costs
Borrowings costs are expensed in the period in which they are incurred.
(i) Waivers of Debt
Debts that are waived under section 131 of the Financial Management Act 1996 are expensed during the year in which
the right to payment was waived. Further details of waivers are disclosed at Note 15 ‘Waivers, Impairment Losses and
Write-Offs’.
(j) Current and Non-Current Items
Assets and Liabilities are classified as current or non-current in the Balance Sheet and in the relevant notes. Assets are
classified as current where they are expected to be realised within 12 months after the reporting date. Liabilities are
classified as current when they are due to be settled within 12 months after the reporting date or Shared Services does
not have an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date.
Assets or liabilities which do not fall within the current classification are classified as non-current.
234 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(k) Impairment of Assets
Shared Services assesses, at each reporting date, whether there is any indication that an asset may be impaired. Assets
are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. However, intangible assets that are not yet available for use are tested annually for impairment
regardless of whether there is an indication of impairment, or more frequently if events or circumstances indicate they
might be impaired.
Any resulting impairment losses, for infrastructure assets and leasehold improvements, are recognised as a decrease in
the Asset Revaluation Surplus relating to these classes of assets. Where the impairment loss is greater than the
balance in the Asset Revaluation Surplus for the relevant class of asset, the difference is expensed in the Operating
Statement. Impairment losses for plant and equipment, and intangible assets are recognised in the Operating
Statement. Also, the carrying amount of the asset is reduced to its recoverable amount.
An impairment loss is the amount by which the carrying amount of an asset (or a cash-generating unit) exceeds its
recoverable amount. The recoverable amount is the higher of the asset’s ‘fair value less cost to sell’ and its ‘value in
use’. An asset’s ‘value in use’ is its depreciated replacement cost, where the asset would be replaced if Shared
Services were deprived of it. Non-financial assets that have previously been impaired are reviewed for possible
reversal of impairment at each reporting date.
(l) Cash and Cash Equivalents
For the purposes of the Cash Flow Statement and the Balance Sheet, cash includes cash at bank and cash on hand.
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. Bank overdrafts are included in cash and cash
equivalents in the Cash Flow Statement but not in the cash and cash equivalents line on the Balance Sheet.
(m) Receivables
Accounts receivable (including trade receivables and other trade receivables) are initially recognised at fair value and
are subsequently measured at amortised cost, with any adjustments to the carrying amount being recorded in the
Operating Statement.
Trade receivables arise in the normal course of selling goods and services to other agencies and to the public. Trade
receivables are payable within 30 days after the issue of an invoice or the goods/services have been provided under a
contractual arrangement.
Other trade receivables represent the net movement on the HRMS salaries bank account. The balance arises when
there is a short fall between the HRMS Salaries bank account and the HRMS $1m float.
2009–2010 ANNUAL REPORT 235
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(m) Receivables - Continued
The allowance for impairment losses represents the amount of trade receivables and other trade receivables that
Shared Services estimates will not be paid. Shared Services determines the allowance for impairment losses based on
objective evidence and a review of balances within trade debtors that are unlikely to be collected. Shared Services
considers the following is objective evidence of impairment:
Debts more than 60 days overdue; or
Identified disputed invoices.
The allowance for impairment losses is written back against the receivables account when Shared Services ceases
action to collect the debt as it considers that it will cost more to recover the debt than the debt is worth.
(n) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises the purchase price of inventories as
well as transport, handling and other costs directly attributable to the acquisition of inventories. Trade discounts,
rebates and other similar items are deducted in determining the costs of purchase. The cost of inventories is assigned
using the first-in, first-out method.
Net realisable value is determined using the estimated sales proceeds less costs incurred in marketing, selling and
distribution to customers.
(o) Assets Held for Sale
Assets held for sale are assets that are available for immediate sale in their present condition, and their sale is highly
probable.
Assets held for sale are measured at the lower of the carrying amount and fair value less costs to sell. An impairment
loss is recognised for any initial or subsequent write down of the asset to fair value less cost to sell. Assets held for
sale are not depreciated.
(p) Acquisition and Recognition of Property, Plant and Equipment
Property, plant and equipment is initially recorded at cost. Cost includes the purchase price, directly attributable costs
and the estimated cost of dismantling and removing the item (where, upon acquisition, there is a present obligation to
remove the item).
Where property, plant and equipment is acquired at no cost, or minimal cost, cost is its fair value as at the date of
acquisition. However property, plant and equipment acquired at no cost or minimal cost as part of a restructuring of
administrative arrangements is measured at the transferor’s book value.
236 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(p) Acquisition and Recognition of Property, Plant and Equipment - Continued
Where payment of property, plant and equipment is deferred beyond normal credit terms, the difference between its
cash price equivalent and the total payment is measured as interest over the period of credit. The discount rate used to
calculate the cash price equivalent is an asset specific rate.
Shared Services capitalises all non-current physical assets with a value of $2,000 or more. If a certain category of
physical asset (i.e. desktops, printers, faxes, etc) is considered material because of the volume and nature of the assets
purchased, then even though the individual cost of these assets may be less than $2,000 they are still capitalised and
recorded as assets in the Balance Sheet.
(q) Measurement of Property, Plant and Equipment after Initial Recognition
Property, plant and equipment is measured at fair value.
Fair value is the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s
length transaction. Fair value is measured using market based evidence available for that asset (or a similar asset), as
this is the best evidence of an asset’s fair value. Where the market price for an asset cannot be obtained because the
asset is specialised and is rarely sold, depreciated replacement cost is used as fair value.
Property, plant and equipment assets are revalued every 3 years. However, if at any time management considers that
the carrying amount of an asset materially differs from its fair value, then the asset will be revalued regardless of when
the last valuation took place. Any accumulated depreciation relating to property, plant and equipment at the date of
revaluation is written-back against the gross carrying amount of the asset and the net amount is restated to the revalued
amount of the asset.
In January 2008, Shared Services had its assets revalued by an independent valuer, AON Valuation Services. This
revaluation resulted in an increase in the value of leasehold improvements of $2.869 million, an increase in the value
of infrastructure assets of $0.912 million and no change in the value of plant and equipment as the revaluation
determined fair value was equal to depreciated replacement cost.
(r) Intangible Assets
Shared Services’ Intangible Assets are comprised of externally acquired software for internal use.
Externally acquired software is recognised and capitalised when:
(a) it is probable that the expected future economic benefits that are attributable to the software will flow to Shared
Services;
(b) the cost of the software can be measured reliably; and
(c) the acquisition cost is equal to or exceeds $50,000.
Capitalised software has a finite useful life. Software is amortised on a straight-line basis over its useful life, over a
period not exceeding 5 years.
2009–2010 ANNUAL REPORT 237
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED (r) Intangible Assets - Continued
Intangible Assets are measured at cost.
(s) Depreciation and Amortisation of Non-Current Assets
Non-current assets with a limited useful life are systematically depreciated/amortised over their useful lives in a
manner that reflects the consumption of their service potential. The useful life commences when an asset is ready for
use. When an asset is revalued, it is depreciated/amortised over its newly assessed remaining useful life.
Amortisation is used in relation to intangible assets and depreciation is applied to physical assets such as leasehold
improvements, infrastructure assets, and plant and equipment.
Leasehold improvements and plant and equipment under a finance lease are depreciated over the estimated useful life
of each asset, or the unexpired period of the relevant lease, whichever is shorter.
All depreciation is calculated after first deducting any residual values which remain for each asset.
Depreciation/amortisation for non-current assets is determined as follows:
Class of Asset Depreciation /
Amortisation Method
Useful Life
(Years)
Leasehold Improvements Straight Line 3 - 10
Plant and Equipment Purchased Straight Line 3 - 5
Plant and Equipment under a Finance Lease Straight Line 2 - 4
Infrastructure Assets Straight Line 3 - 5
Intangible Assets Straight Line 5
The useful lives of all major assets are reassessed on an annual basis.
(t) Payables
Payables are a financial liability and are measured at the fair value of the consideration received when initially
recognised and at amortised cost subsequent to initial recognition, with any adjustments to the carrying amount being
recorded in the Operating Statement. All amounts are normally settled within 30 days after the invoice date.
Payables include Trade Payables and Accrued Expenses. Trade Payables represent the amounts owing for goods and
services received prior to the end of the reporting period and unpaid at the end of the reporting period and relating to
the normal operations of Shared Services.
Accrued Expenses represent goods and services provided by other parties during the period that are unpaid at the end
of the reporting period and where an invoice has not been received by period end.
238 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED (u) Leases
Shared Services has entered into finance leases and operating leases.
Finance Leases
Finance leases effectively transfer to Shared Services substantially all the risks and rewards incidental to ownership of
the assets under a finance lease. The title may or may not eventually be transferred. Finance leases are initially
recognised as an asset and a liability at the lower of the fair value of the leased asset and the present value of the
minimum lease payments each being determined at the inception of the lease. The discount rate used to calculate the
present value of the minimum lease payments is the interest rate implicit in the lease. Assets under a finance lease are
depreciated over the shorter of the asset’s useful life and lease term. Leased assets are depreciated on a straight-line
basis. The depreciation is calculated after first deducting any residual values which remain for each leased asset.
Each lease payment is allocated between interest expense and reduction of the lease liability. Lease liabilities are
classified as current and non-current.
Operating Leases
Operating leases do not effectively transfer to Shared Services substantially all the risks and rewards incidental to
ownership of the asset under an operating lease. Operating lease payments are recorded as an expense in the
Operating Statement on a straight-line basis over the term of the lease.
(v) Employee Benefits
Employee benefits include wages and salaries, annual leave, long service leave and applicable on-costs. On-costs
include annual leave, long service leave, superannuation and other costs that are incurred when employees take annual
leave and long service leave. These benefits accrue as a result of services provided by employees up to the reporting
date that remain unpaid. They are recorded as a liability and as an expense.
Wages and Salaries
Accrued wages and salaries are measured at the amount that remains unpaid to employees at the end of the reporting
period.
Annual and Long Service Leave
Annual leave and long service leave that fall due wholly within the next 12 months is measured based on the estimated
amount of remuneration payable when the leave is taken.
Annual and long service leave including applicable on-costs that do not fall due within the next 12 months are
measured at the present value of estimated future payments to be made in respect of services provided by employees
up to the end of the reporting period. Consideration is given to the future wage and salary levels, experience of
employee departures and periods of service. At each reporting period end, the estimated future payments are
discounted using market yields on Commonwealth Government bonds with terms to maturity that match, as closely as
possible, the estimated future cash flows. In 2009-10, the discount factor used to calculate the present value of these
future payments is 92.9% (90.5% in 2008-09).
2009–2010 ANNUAL REPORT 239
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED (v) Employee Benefits - Continued
The long service leave liability is estimated with reference to the minimum period of qualifying service. For
employees with less than the required minimum period of 7 years of qualifying service, the probability that employees
will reach the required minimum period has been taken into account in estimating the provision for long service leave
and the applicable on-costs.
The provision for annual leave and long service leave includes estimated on-costs. As these on-costs only become
payable if the employee takes annual and long service leave while in-service, the probability that employees will take
annual and long service leave while in service has been taken into account in estimating the liability for on-costs.
Annual leave and long service leave liabilities are classified as current liabilities in the Balance Sheet where there are
no unconditional rights to defer the settlement of the liability for at least 12 months. However, where there is an
unconditional right to defer settlement of the liability for at least 12 months, annual leave and long service leave have
been classified as a non-current liability in the Balance Sheet.
(w) Superannuation
Superannuation payments are made to the Territory Banking Account each year, to cover Shared Services’
superannuation liability for the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation
Scheme (PSS). This payment covers the CSS/PSS employer contribution but does not include the productivity
component. The productivity component is paid directly to ComSuper by Shared Services. The CSS and PSS are
defined benefit superannuation plans meaning that the defined benefits received by employees are based on the
employee’s years of service and average final salary.
Superannuation payments have also been made directly to superannuation funds for those members of the Public
Sector who are part of superannuation accumulation schemes. This includes the Public Sector Superannuation Scheme
Accumulation Plan (PSSAP) and schemes of employee choice.
Superannuation employer contribution payments, for the CSS and PSS, are calculated, by taking the salary level at an
employee’s anniversary date and multiplying it by the actuarially assessed CSS or PSS employer contribution rate for
each employee. The productivity component payments are calculated by taking the salary level, at an employee’s
anniversary date, and multiplying it by the employer contribution rate (approximately 3%) for each employee.
Superannuation payments for the PSSAP are calculated by taking the salary level, at an employee’s anniversary date,
and multiplying it by the appropriate employer contribution rate. Superannuation payments for fund of choice
arrangements are calculated by taking an employee’s salary each pay and multiplying it by the appropriate employer
contribution rate.
A superannuation liability is not recognised in the Balance Sheet as the Superannuation Provision Account recognises
the total Territory superannuation liability for the CSS and PSS, and ComSuper and the external schemes recognise
the superannuation liability for the PSSAP and other schemes respectively.
The ACT Government is liable for the reimbursement of the emerging costs of benefits paid each year to members of
the CSS and PSS in respect of the ACT Government service provided after 1 July 1989. These reimbursement
payments are made from the Superannuation Provision Account.
240 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(x) Equity Contributed by the ACT Government
Contributions made by the ACT Government, through its role as owner of Shared Services, are treated as contributions
of equity.
Increases or decreases in net assets as a result of Administrative Restructures are also recognised in equity.
(y) Insurance
Major risks are insured through the ACT Insurance Authority. The excess, payable under this arrangement, varies
depending on each class of insurance held.
(z) Significant Accounting Judgements and Estimates
In the process of applying the accounting policies listed in this note, Shared Services has made the following
judgements and estimates that have the most significant impact on the amounts recorded in the financial statements:
Note 2 (e): ‘Revenue Recognition’ discloses that revenue is generally recognised when Shared Services controls the
revenue. User charge revenue is recognised upon delivery of that service to customers, or by reference to the stage of
completion of contracts or agreements for the services involved. The stage of completion is determined on the basis of
the ratio of costs incurred to date to the estimated total costs of the transaction.
Note 2 (m): ‘Receivables’ discloses that where there is objective evidence that a receivable may not be collected, an
assessment of the likelihood of the recovery of a receivable is required to determine whether an impairment loss must
be recognised.
Note 2 (q): ‘Measurement of Property, Plant and Equipment after Initial Recognition’: Significant judgements have
been applied in measuring fair value. Shared Services had its assets revalued by an independent valuer, AON
Valuation Services in January 2008. The revaluations resulted in an increase in the value of leasehold improvements
and infrastructure assets and no change in the value of property, plant and equipment.
Shared Services has made a significant estimate in determining the useful lives of its Property, Plant and Equipment.
The estimation of useful lives of Property, Plant and Equipment has been based on the historical experience of similar
assets, and in some cases, has been based on valuations provided by AON Valuation Services in January 2008. The
useful lives are assessed on an annual basis and any adjustments are made when considered necessary. Further
disclosure concerning an asset’s useful life can be found at Note 2 (s) ‘Depreciation and Amortisation of Non-Current
Assets’.
Note 2 (u): ‘Leases’ discloses that leases are classified according to the risk and benefits under the leasing
arrangements.
Note 2 (v): ‘Employee Benefits’: Significant judgements have been applied in estimating the liability for employee
benefits. The estimated liability for employee benefits requires a consideration of the future wage and salary levels,
experience of employee departures and periods of service. The estimate also includes an assessment of the probability
that employees will meet the minimum service period required to qualify for long service leave and that on-costs will
become payable. Further information on this estimate is provided in Note 2 (v) ‘Employee Benefits’ and Note 3
‘Change in Accounting Estimates and Accounting Policy, and Correction of Prior Period Errors’.
2009–2010 ANNUAL REPORT 241
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(aa) Impact of Accounting Standards Issued but yet to be Applied
The following new and revised accounting standards and interpretations have been issued by the Australian
Accounting Standards Board but do not apply to the current reporting period. These standards and interpretations are
applicable to future reporting periods. Shared Services does not intend to adopt these standards and interpretations
early. It is estimated that the effect of adopting the below pronouncements, when applicable, will have no material
financial impact on Shared Services in future reporting periods:
AASB 5 Non-current Assets Held for Sale and Discontinued Operations (application date 1 Jan 2010);
AASB 5 Non-current Assets Held for Sale and Discontinued Operations (application date 1 Jan 2011
AASB 7 Financial Instruments: Disclosures (application date 1 Jul 2010);
AASB 9 Financial Instruments (application date 1 Jan 2013);
AASB 101 Presentation of Financial Statements (application date 1 Jan 2010);
AASB 107 Statement of Cash Flows (application date 1 Jan 2010);
AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors (application date 1 Jan 2011);
AASB 110 Events after the Reporting Period (application date 1 Jan 2011);
AASB 117 Leases (application date 1 Jan 2010);
AASB 118 Revenue (application date 1 Jan 2010);
AASB 119 Employee Benefits (application date 1 Jan 2011);
AASB 132 Financial Instruments: Presentation (application date 1 Feb 2010);
AASB 136 Impairment of Assets (application date 1 Jan 2010);
AASB 137 Provisions, Contingent Liabilities and Contingent Assets (application date 1 Jan 2011);
AASB 139 Financial Instruments: Recognition and Measurement (application date 1 Jan 2010);
AASB 139 Financial Instruments: Recognition and Measurement (application date 1 Jan 2011);
AASB 1031 Materiality (application date 1 Jan 2011);
AASB 1053 Application of Tiers of Australian Accounting Standards (application date 1 Jul 2013);
AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101,
102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12] (application
date 1 Jan 2013);
AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements
[AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134,
136, 137, 138, 140, 141, 1050, 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052] (application date 1 Jan
2013);
AASB 2010-3 Amendments to Australian Accounting Standards arising from Annual Improvements Project
[AASB 3, 7, 121, 128, 131, 132, and 139] (application date 1 Jul 2010);
AASB 2010-4 Further Amendments to Australian Accounting Standards arising from Annual Improvements
Project [AASB 1, 7, 101, 134, and Interpretation] (application date 1 Jan 2011); and
AASB Interpretation 4 Determining whether an Arrangement contains a lease (application date 1 Jan 2011).
242 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 3. CHANGE IN ACCOUNTING ESTIMATES AND ACCOUNTING POLICY,
AND CORRECTION OF PRIOR PERIOD ERRORS Change in Accounting Estimates
Revision of the Employee Benefit Discount Rate
As disclosed in Note 2 (v) ‘Employee Benefits’, annual and long service leave including applicable on-costs, that do
not fall due within the next 12 months are measured at the present value of the estimated future payments to be made
in respect of services provided by employees up to the end of the reporting period. The discount factor used to
estimate the present value of the liabilities increased from 90.5% to 92.9% in 2009-10 due to a change in the
government bond rate.
As such the estimate of the long service leave and annual leave liabilities has changed.
This change has resulted in an increase to the estimate of the long service leave liability and expense in the current
reporting period of $0.307m.
This change has resulted in no change to the estimate of annual leave liability and expense as Shared Services
estimates all its annual leave to be taken within the next 12 months.
Change in Accounting Policy
Shared Services had no changes in Accounting Policy during the reporting period.
Correction of Prior Period Errors
Shared Services had no correction of prior period errors during the reporting period.
NOTE 4. GOVERNMENT PAYMENT FOR OUTPUTS
Government Payment for Outputs is revenue Shared Services received from the ACT Government to fund the costs of
delivering selected outputs.
2010 2009
$'000 $'000
Revenue from the ACT Government
Government Payment for Outputs a 5,814 5,666
Total Government Payment for Outputs 5,814 5,666
a) Represents revenue received for selected initiatives including policy formulation and the Whole-of-Government desktop upgrade.
2009–2010 ANNUAL REPORT 243
Shared Services Centre
Notes to and Forming Part of the Financial Statements For the Year Ended 30 June 2010
NOTE 5. USER CHARGES User charge revenue is derived from the sale or rental of goods and services to other ACT Government departments
and agencies and Non-ACT Government customers. Such revenue is recognised upon the delivery of goods to
customers. User charge revenue is also derived from the rendering of a service, which is recognised upon delivery of
that service to customers or by reference to the stage of completion of contracts or agreements for the services
involved. The stage of completion is determined on the basis of the ratio of costs incurred to date to the estimated
total costs of the transaction. User charge revenue is not part of ACT Government appropriation and is paid by the
user of the goods or services. This revenue is driven by consumer demand and is commercial in nature.
2010 2009
$’000 $’000
User Charges – ACT Government
Information and Communication Technology (ICT) Services:
Voice and Data Telecommunication Equipment Charges 12,138 11,599
Service Delivery (includes Desktop Support charges) a 35,453 32,208
Whole-of-Government Systems b 4,705 4,023
Business Solutions (includes ICT Project Work charges) c 15,881 10,860
Asset Rental 11,148 10,935
Software 334 533
Business System Services d 13,010 11,642
Agency Staff e 24,200 22,801
Billbacks (directly to customers) f 2,628 1,115
Procurement Support Services 14,181 13,968
Human Resources Services 18,245 17,843
Finance Services 12,149 11,925
Records Management Services 3,147 3,019
Publishing Services 2,170 2,241
Other 751 781
Total User Charges – ACT Government 170,140 155,493
244 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 5. USER CHARGES - CONTINUED
2010 2009
$’000 $’000
User Charges – Non-ACT Government g
Information and Communication Technology (ICT) Services:
Voice and Data Telecommunication Equipment Charges 41 151
Business Solutions (includes ICT Project Work charges) - 1
Procurement Support Services 107 325
Publishing Services 42 25
Other 28 -
Total User Charges - Non-ACT Government 218 502
Total User Charges for Goods and Services 170,358 155,995
a) The increase was mainly due to higher Desktop Support charges as a result of increased desktop numbers held by various ACT Government departments and agencies and a change in the accounting treatment of revenue previously recorded as revenue received in advance.
b) These charges are mainly for the recovery of ICT support costs for Oracle Financials and the Human Resource Management System (Chris21). The increase was mainly due to billing of the Oracle Legacy system.
c) The increase was mainly due to higher ICT Project revenue as a result of increased ICT project activity and associated expenditure by ACT Government departments and agencies.
d) The increase was mainly due to higher ICT Business Systems expenditure by various ACT Government departments and agencies processed through the Service Level Agreement with InTACT.
e) The increase was mainly due to higher ICT support staff numbers and associated costs directly recovered from ACT Government departments and agencies.
f) Billbacks represents direct purchases of goods or services by Shared Services on behalf of its customers. These purchases are then directly recovered from the customer. See Note 11 'Supplies and Services' for corresponding Billbacks expenditure.
g) These charges are mainly for services provided to other government (Commonwealth) or government funded organisations.
NOTE 6. RESOURCES RECEIVED FREE OF CHARGE
Resources received free of charge relate to goods and/or services being provided free of charge from other
ACT Government departments and agencies.
2010 2009$’000 $’000
Revenue from ACT Government Entities
Legal Services - Department of Justice and Community Safety a 339 258
Total Resources Received Free of Charge 339 258
a) The increase was mainly due to higher legal services provided free of charge to Procurement Solutions for advice on various contracts.
2009–2010 ANNUAL REPORT 245
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 7. OTHER REVENUE
Other Revenue arises from the core activities of Shared Services. Other Revenue is distinct from Other Gains, as
Other Gains tend to be one off, unusual items that are not part of the core activities of Shared Services.
2010 2009
$’000 $’000
Revenue from Non-ACT Government Entities
Sale of Assets a 71 15
Subscriptions b 22 18
Administrative Fee c 20 25
Salary Packaging Fee d 765 505
Total Other Revenue from Non-ACT Government Entities 878 563
Total Other Revenue 878 563
a) The increase was mainly due to higher disposal activity as all ICT assets are now purchased and not leased.
b) Represents revenue received for publication of legislation subscriptions.
c) Represents revenue received by Procurement Solutions for the management of the Procurement Solutions Investments Trust Account.
d) Represents revenue received by Human Resources Services for the management of the Salary Packaging Trust Accounts transferred to Shared Services from the Department of Education and Training in 2008-09. The increase was due to higher employee expenditure to accommodate the increased level of persons accessing salary packaging services.
NOTE 8. OTHER GAINS
Other Gains tend to be one off, unusual transactions that are not part of Shared Services core activities. Other Gains
are distinct from Other Revenue, as Other Revenue arises from the core activities of Shared Services.
2010 2009
$’000 $’000
Restructure Fund Receipts a - 94
Total Other Gains - 94
a) Represents Restructure funds received for the original relocation of Records Management Services from Fyshwick to
Mitchell in 2008-09.
246 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 9. EMPLOYEE EXPENSES
2010 2009$’000 $’000
Wages and Salaries a 65,832 61,310
Annual Leave Expense b 366 2,518
Long Service Leave Expense c 737 2,970
Comcare Premium 152 96
Termination Expense 98 70
Other Employee Benefits and On-Costs d 629 77
Total Employee Expenses 67,814 67,041
a) The increase was mainly due to filling vacant positions in InTACT and Human Resources and higher Procurement Solutions staffing due to increased capital works activity.
b) The decrease was mainly due to the adjustment in 2008-09 for the change in methodology in calculating the Annual Leave Liability.
c) The decrease was mainly due to the adjustment in 2008-09 for the change in methodology in calculating the Long Service Leave Liability.
d) The increase represents a sign-on bonus resulting from a constructive obligation to pay Shared Services employees.
NOTE 10. SUPERANNUATION EXPENSES Shared Services makes payments on a fortnightly basis to the Territory Banking Account for its portion of the
Territory’s Commonwealth Superannuation Scheme (CSS) and Public Sector Superannuation Scheme (PSS)
superannuation liability. The productivity benefit for these schemes is paid directly to ComSuper.
Superannuation payments have been made direct to ComSuper to cover Shared Services’ superannuation liability for
employees that are in the new Public Sector Superannuation Scheme Accumulation Plan (PSSAP).
Superannuation payments are also made to external providers as part of the new employee fund of choice
arrangements, and to employment agencies for the superannuation contribution Shared Services is required to make
for the contract staff it employs. 2010 2009
$’000 $’000
Superannuation Contributions to the Territory Banking Account 6,919 6,539
Productivity Benefit 986 1,024
Superannuation Payment to ComSuper (for the PSSAP) 659 639
Superannuation to External Providers 1,986 1,480
Total Superannuation Expenses a 10,550 9,682
a) The increase was mainly due to filling vacant positions and higher fund of choice contributors following new staff recruitment.
2009–2010 ANNUAL REPORT 247
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 11. SUPPLIES AND SERVICES
2010 2009$’000 $’000
Staff Development 1,184 1,197
Travel 201 151
Office Expenses 1,044 1,152
Postage and Courier 1,501 1,505
Printing and Publishing 2,077 2,005
Insurance 418 598
Audit Expenses a 163 118
Repairs and Maintenance 99 181
Accommodation 5,720 5,484
Contractors and Consultants b 27,097 20,198
Voice and Data Line Charges 8,230 8,396
Other Communications 1,577 1,570
ICT Project Expenses c 9,639 5,680
Other Computing Costs 238 219
Software Licences and Maintenance d 6,610 5,506
IT Support Costs and Facilities Charges e 1,597 2,419
IT Hardware Purchases f 368 822
Operating Leases and Equipment Hire g 174 4,607
Business Systems Services h 13,104 9,403
Billbacks i 2,634 1,122
Other 360 401
Total Supplies and Services 84,035 72,734
a) Includes audit fees paid to the ACT Auditor-General 's Office (see Note 17 'Auditor's Remuneration') and internal audit costs.
b) The increase was due to higher ICT project activity and difficulties in filling ICT positions permanently.
c) The overall increase was due to higher ICT Project activity and associated expenditure by ACT Government departments and agencies.
d) The increase was mainly due to higher CITRIX and Microsoft licenses purchased during 2009-10 as a result of increased users and desktop numbers held by various ACT Government departments and agencies.
e) The decrease was mainly due to lower ICT hardware maintenance costs and reduced Storage Area Network (SAN) costs through implementing a tiered storage model.
f) The decrease was mainly due to lower hardware equipment repairs as a result of replacing out-of date assets.
g) The decrease was due to finalising ICT asset lease commitments in 2008-09, with all ICT assets now purchased and not leased.
h) The increase was due to higher ICT Business Systems expenditure by various ACT Government departments and agencies processed through the Service Level Agreement with InTACT.
i) Billbacks represents direct purchases of goods or services by Shared Services on behalf of its customers. These purchases are then directly recovered from the customer. See Note 5 'User Charges' for corresponding Billbacks revenue.
248 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 12. DEPRECIATION AND AMORTISATION
2010 2009$’000 $’000
Depreciation
Infrastructure Assets 4,843 5,703
Leasehold Improvements 1,882 1,966
Plant and Equipment Purchased a 7,561 6,712
Plant and Equipment under a Finance Lease a 164 1,535
Total Depreciation 14,450 15,916
Amortisation
Intangible Assets
b2,018 1,607
tal Amortisation 2,018 1,607
Depreciation and Amortisation 16,468 17,523
a) The increase in Plant and Equipment Purchased and the corresponding decrease in Plant and Equipment under a Finance Lease was mainly due to ICT assets now being purchased rather than leased.
b) The increase was mainly due to amortisation of the new Procurement Solutions Business System asset from 1 November 2009.
To
Total
NOTE 13. BORROWING COSTS
2010 2009$’000 $’000
Credit Card Charges - 1
Finance Charges on Finance Leases a 41 151
Total Borrowing Costs 41 152
a) For 2009-10 represents interest charges on leased fleet vehicles only. The decrease was due to ICT assets now being purchased rather than leased.
2009–2010 ANNUAL REPORT 249
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 14. OTHER EXPENSES
2010 2009$’000 $’000
Assets Donated to a Third Party a 6 -
Impairment Losses (see Note 15 'Waivers, Impairment Losses and Write-offs') b 27 3,212
Losses from the Sale of Assets - 1
Total Other Expenses 33 3,213
a) Represents computers donated to the Canberra Friends of Dili.
b) Represents the annual re-assessment of the Impairment Loss from Receivables. NOTE 15. WAIVERS, IMPAIRMENT LOSSES AND WRITE-OFFS Under Section 131 of the Financial Management Act 1996 the Treasurer may, in writing, waive the right to payment
of an amount payable to the Territory.
A waiver is the relinquishment of a legal claim to a debt over which Shared Services has control. The write-off of a
debt is the accounting action taken to remove a debt from the books but does not relinquish the legal right of Shared
Services to recover the amount. The write-off of debts may occur for reasons other than waivers.
There were no waivers or write-offs made during the reporting period pursuant to Section 131 of the
Financial Management Act 1996. (2008-09: Nil)
2010 2009$’000 $’000
Impairment Losses
Impairment Loss from Receivables
a) Represents the annual re-assessment of the Impairment Loss from Receivables. Refer to Note 2 (m) 'Summary of Significant Accounting Policies' - 'Receivables' for further details.
Trade Receivables a 27 3,212
Total Impairment Loss from Receivables 27 3,212
Total Impairment Losses 27 3,212
NOTE 16. ACT OF GRACE PAYMENTS
Under Section 130 of the Financial Management Act 1996 the Treasurer may, in writing, authorise Act of Grace
Payments be made by a Department. Act of Grace payments are a method of providing equitable remedies to entities
or individuals that may have been unfairly disadvantaged by the Government but have no legal claim to the payment.
There were no Act of Grace payments made during the reporting period pursuant to Section 130 of the
Financial Management Act 1996. (2008-09: Nil)
250 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 17. AUDITOR’S REMUNERATION
Auditor's remuneration consists only of financial audit services provided to Shared Services by the ACT Auditor-
General's Office. No other services were provided by the ACT Auditor-General’s Office.
2010 2009$’000 $’000
Audit Services
Audit Fees Paid to the ACT Auditor-General's Office 70 65
Total Audit Fees 70 65
NOTE 18. CASH AND CASH EQUIVALENTS Shared Services holds a number of bank accounts with the Commonwealth Bank as part of the Whole-of-Government
banking arrangements. As part of these arrangements, Shared Services does not receive any interest on these
accounts.
2010 2009$’000 $’000
Cash at Bank - Operating a 26,794 26,108
Cash at Bank - Procurement Solutions Operating b (2,394) 10,213
Cash at Bank - Salary Packaging c 5,697 4,338
Cash at Bank - Human Resource Management System (HRMS) Salaries d 813 886
Cash on Hand 3 3
Total Cash and Cash Equivalents 30,913 41,548
employees on their behalf (see Note 37 'Third Party Monies'). The net movement in these accounts is shown as Other Liabilities (see Note 29 'Other Liabilities'). The increase represents the increased level of persons accessing salary packaging services.
and agencies on their behalf (see Note 37 'Third Party Monies'). The net movement in these accounts is shown as either Other Receivables (see Note 19 'Receivables') or Other Liabilities (see Note 29 'Other Liabilities').
a) The balance is required to maintain Shared Services cashflow.
b) The balance is timing related and is committed to the payment of Capital Works project expenditure. The decrease
d) The transactions represented here form part of payroll funding received and dispersed for ACT Government departments
was due to the timing of Capital Works invoicing and related receipts and payments.
c) The transactions represented here form part of Salary Packaging funding received and dispersed for ACT Government
2009–2010 ANNUAL REPORT 251
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 19. RECEIVABLES
2010 2009$’000 $’000
Current Receivables
Trade Receivables 53,903 32,659Less: Allowance for Impairment Losses a (300) (3,726)
53,603 28,933
Other Trade Receivables b 187 114
Accrued Revenue 16,289 6,323
Net GST Receivable 1,233 52
Total Current Receivables 71,312 35,422
Total Receivables c 71,312 35,422
a) The Allowance for Impairment Losses includes mainly disputed debt. Refer to Note 32 'Financial Instruments' - 'Credit Risk' for further details.
b) Represents the net movement on the HRMS Salaries Bank Account.
c) The increase was due to the timing of Service Level Agreements and Capital Works invoicing and related receipts.
Ageing of Receivables
Not Overdue Total
Less than 30 to Greater than30 Days 60 Days 60 Days
$’000 $’000 $’000 $’000 $’000
2010
Not Impaired a
Receivables 48,045 20,560 923 1,784 71,312ImpairedReceivables 20 - - 280 300
2009
Not Impaired a
Receivables 23,415 9,036 2,922 49 35,422ImpairedReceivables 77 6 - 3,643 3,726
a) 'Not Impaired' refers to Net Receivables (that is Gross Receivables less Impaired Receivables).
Past Due
252 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 19. RECEIVABLES - CONTINUED
2010 2009
$’000 $’000Reconciliation of the Allowance for Impairment Losses
Allowance for Impairment Losses at the Beginning of the Reporting Period 3,726 580Additional Allowance Recognised 27 3,146
Reduction in Allowance Resulting from a Write-back against the Receivables a (3,453) -
Allowance for Impairment Losses at the End of the Reporting Period 300 3,726
Classification of ACT Government/Non-ACT Government Receivables
Receivables with ACT Government Entities
Net Trade Receivables 53,575 28,691Other Trade Receivables b 187 114
Accrued Revenue 15,615 5,540
Total Receivables with ACT Government Entities 69,377 34,345
Receivables with Non-ACT Government Entities
Net Trade Receivables 28 242Net Goods and Services Tax Receivable 1,233 52Accrued Revenue 674 783
Total Receivables with Non-ACT Government Entities 1,935 1,077
Total Receivables c 71,312 35,422
a) Represents crediting reform related debt associated with ACT Housing.
b) Represents the net movement on the HRMS Salaries Bank Account.
c) The increase was due to the timing of Service Level Agreements and Capital Works invoicing and related receipts.
2009–2010 ANNUAL REPORT 253
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 20. INVENTORIES
2010 2009$’000 $’000
Current Inventories
Corporate Uniforms 11 10
Total Current Inventories 11 10
Total Inventories 11 10
NOTE 21. ASSET HELD FOR SALE
Shared Services has one motor vehicle which has been returned to SG Fleet and is expected to be sold in July 2010.
The residual value and all lease payments have been paid. As such this vehicle has been classified as plant and
equipment held for sale. Shared Services is also holding ICT assets for sale, which are expected to be sold during the
next reporting period.
2010 2009
$’000 $’000
Plant and Equipme 281 -
tal Assets Held for Sale 281 -
been retired from active use and are awaiting sale until there is sufficient quantity
nt Held for Sale a
To
a) Represents mainly ICT assets that have
and mix of assets. There were no assets held for sale of material value at the end of the previous reporting period.
equipment consist of the following classes of assets – Leasehold Improvements, Plant and
ased assets. Shared Services has fit-
uts in its leased buildings.
Plant and Equipment includes motor vehicles under a finance lease, mobile plant, air conditioning and heating
systems, furniture and fittings and other mechanical and electronic equipment. It also includes ICT equipment
purchased outright.
Infrastructure Assets represents the Private Data Network asset, Data Centre Refurbishment and a range of assets
utilised for Whole-of-Government Data Storage and Applications management.
NOTE 22. PROPERTY, PLANT AND EQUIPMENT Property, plant and
Equipment, and Infrastructure assets.
Leasehold Improvements represent capital expenditure incurred in relation to le
o
254 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 22. PROPERTY, PLANT AND EQUIPMENT - CONTINUED
2010 2009$’000 $’000
Leasehold Improvements
Leasehold Improvements at Fair Value 10,746 9,026
Less: Accumulated Depreciation (4,587) (2,718)
Total Written-Down Value of Leasehold Improvements 6,159 6,308
Plant and Equipment
Plant and Equipment Purchased
Plant and Equipment at Fair Value 48,347 36,016
Less: Accumulated Depreciation (28,004) (24,712)
Total Written-Down Value of Plant and Equipment Purchased a 20,343 11,304
Plant and Equipment under a Finance Lease
Plant and Equipment at Fair Value 899 626
Less: Accumulated Depreciation (158) (137)
Total Written-Down Value of Plant and Equipment under a Finance Lease b 741 489
Total Written-Down Value of Plant and Equipment 21,084 11,793
Infrastructure Assets
Infrastructure Assets at Fair Value 18,276 19,979
Less: Accumulated Depreciation (11,732) (10,432)
Total Written-Down Value of Infrastructure Assets c 6,544 9,547
Total Written-Down Value of Property, Plant and Equipment 33,787 27,648
a) The increase in Plant and Equipment Purchased was mainly due to Shared Services ICT assets being purchased instead of leased and the reclassification of assets between categories.
b) The increase in Plant and Equipment under a Finance Lease was mainly due to a higher number of motor vehicles being leased in 2009-10.
c) The decrease was due to the reclassification of assets between categories.
2009–2010 ANNUAL REPORT 255
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 22. PROPERTY, PLANT AND EQUIPMENT – CONTINUED
Reconciliation of Property, Plant and Equipment
The following table shows the movement of Property, Plant and Equipment during 2009-10.
Leasehold Plant and Equipment Plant and Equipment InfrastructureImprovements Purchased under a Finance Lease Assets Total
$’000 $’000 $’000 $’000 $’000
Carrying Amount at the Beginning of the Reporting Period 6,308 11,304 489 9,547 27,648
Additions 2,102 15,305 600 4,604 22,611
Depreciation (1,882) (7,561) (164) (4,843) (14,450)
Other Movements a (369) 1,295 (184) (2,764) (2,022)
Carrying Amount at the End of the Reporting Period 6,159 20,343 741 6,544 33,787
a) Represents disposal of assets and reclassification of assets between categories.
256 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 22. PROPERTY, PLANT AND EQUIPMENT – CONTINUED
Reconciliation of Property, Plant and Equipment
The following table shows the movement of Property, Plant and Equipment during 2008-09.
Leasehold Plant and Equipment Plant and Equipment InfrastructureImprovements Purchased under a Finance Lease Assets Total
$’000 $’000 $’000 $’000 $’000
Carrying Amount at the Beginning of the Reporting Period 7,724 9,225 2,561 12,537 32,047
Additions 550 8,791 337 2,713 12,391
Depreciation (1,966) (6,712) (1,535) (5,703) (15,916)
Other Movements - - (874) - (874)
Carrying Amount at the End of the Reporting Period 6,308 11,304 489 9,547 27,648
2009–2010 ANNUAL REPORT 257
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 23. INTANGIBLE ASSETS
2010 2009$’000 $’000
Computer Software
Externally Purchased Software
Computer Software at Cost 11,044 9,290
Less: Accumulated Amortisation (8,114) (6,096)
Total Externally Purchased Software 2,930 3,194
Total Computer Software 2,930 3,194
Total Intangible Assets a 2,930 3,194
a) Represents mainly the Chris 21 Payroll Software asset transferred from the Chief Minister's Department to Shared Services on 1 July 2008 and the Procurement Solutions Business System.
Reconciliation of Intangible Assets
The following table shows the movement of Shared Services’ intangible assets during 2009-10 and 2008-09. 2010 2009
$’000 $’000
3,194 -
Additions 1,754 9,290
Amortisation (2,018) (6,096)
arrying Amount at the End of the Reporting Period 2,930 3,194
TERNALLY PURCHASED SOFTWARE
ing Amount at the Beginning of the Reporting Period
EX
Carry
C
258 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 24. CAPITAL WORKS IN PROGRESS Capital Works in Progress are assets being constructed over periods of time in excess of the present reporting period. These
assets often require extensive installation work or integration with other assets, and contrast with simpler assets that are
ready for use when acquired, such as motor vehicles and ICT equipment. Capital Works in Progress are not depreciated as
Shared Services is not currently deriving any economic benefits from them.
2010 2009$’000 $’000
Infrastructure Works in Progress 1,788a -
tal Capital Works in Progress 1,788 -
sset purchases in completing Shared Services 2009-10 capital works projects, namely
educing the Risk of Communication Blackouts and Enterprise Data Management and Retention. There were no capital
works in progress of material value at the end of the previous rep ting period.
To
a) Rep
R
resents mainly the timing of a
or
Reconciliation of Capital Works in Progress
The following table shows the movement of Shared Services’ tangible assets during 2009-10 and 2008-09.
in
2010 2009$’000 $’000
- -
Additions 1,788 - -
Carrying Amount at the End of the Reporting Period 1,788 -
INFRASTRUCTURE WORKS IN PROGRESS
Carrying Amount at the Beginning of the Reporting Period
2009–2010 ANNUAL REPORT 259
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
N TS
OTE 25. OTHER ASSE
2010 2009$’000 $’000
Current Other Assets
Prepayments a 1,998 612
Total Current Other Assets 1,998 612
Non-Current Other Assets
Prepayments b 226 234
Total Non-Current Other Assets 226 234
Total Other Assets 2,224 846
a) The increase mainly represents the Oracle License invoice for 2010-11 received, reconciled and paid by 30 June 2010.
b) Represents prepaid license and maintenance costs on the purchase of Content Keeper Web Security and Sophos anti-virus and encryption software.
260 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 26. PAYABLES
2010 2009$’000 $’000
Current Payables
Trade Payables 2,534 2,060Accrued Expenses 59,668 19,215
Total Current Payables 62,202 21,275
Total Payables a 62,202 21,275
Payables are aged as follows:
Not Overdue 61,950 20,787
Overdue for Less than 30 Days 159 486
Overdue for 30 to 60 Days 93 -
Overdue for More than 60 Days - 2
Total Payables 62,202 21,275
Classification of ACT Government/Non-ACT Government Payables
Payables with ACT Government Entities
Trade Payables 230 12Accrued Expenses 4,524 477
Total Payables with ACT Government Entities 4,754 489
Payables with Non-ACT Government Entities
2,304 2,048es 55,144 18,738
Total Payables 62,202 21,275
a) The increase was due to the timing associated with invoices being received from suppliers, with the net increase mainly due to the timing of invoices for Capital Works projects managed on behalf of other ACT Government departments and agencies.
Trade PayablesAccrued Expens
Total Payables with Non-ACT Government Entities 57,448 20,786
2009–2010 ANNUAL REPORT 261
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 27. FINANCE LEASES
Shared Services holds 38 finance leases, all of which have b taken up as a finance lease liability and an asset under a
finance lease. The interest rates implicit in these leases vary from 3.32% to 7.76% and the terms vary from 2 to 4 years.
hese leases have no terms of renewal, purchase options or escalation clauses.
een
T
2010 2009$’000 $’000
Current Finance Leases
Secured
Finance Leases 438 267
Total Current Secured Finance Leases 438 267
Total Current Finance Leases 438 267
Non-Current Finance Leases
Secured
Finance Leases 320 226
Total Non-Current Secured Finance Leases 320 226
Total Non-Current Finance Leases 320 226
Total Finance Leases 758 493
Secured Liability
Shared Services finance lease liability is effectively secured because if Shared Services defaults, the assets under a finance
lease revert to the lessor.
262 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 27. FINANCE LEASES – CONTINUED
2010 2009$’000 $’000
Finance Leases
Finance lease commitments are payable as follows:
Within one year 477 286
Later than one year but not later than five years 337 232
Minimum Lease Payments 814 518
Less: Future Finance Lease Charges (56) (25)
Amount Recognised as a Liability 758 493
Total Present Value of Minimum Lease Payments 758 493
The present value of the minimum lease payments are as follows:
Within one year 438 267
Later than one year but not later than five years 320 226
Total Present Value of Minimum Lease Payments 758 493
Classification on the Balance Sheet
Finance Leases
Current Finance Leases 438 267
Non-Current Finance Leases 320 226
Total Finance Leases a 758 493
a) Represents leased motor vehicles only. The increase was due to a higher number of motor vehicles leased in 2009-10.
2009–2010 ANNUAL REPORT 263
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 28. EMPLOYEE BENEFITS
2010 2009$’000 $’000
Current Employee Benefits
Annual Leave 9,233 9,220
Long Service Leave a 10,655 10,413
Accrued Salaries 1,429 1,154
Other Benefits b 544 -
Total Current Employee Benefits 21,861 20,787
Non-Current Employee Benefits
Long Service Leave a 1,998 1,806
Total Non-Current Employee Benefits 1,998 1,806
Total Employee Benefits 23,859 22,593
Estimate of when Leave is Payable
Estimated Amount Payable within 12 Months
Annual Leave 9,233 9,220
ong Service Leave 760 5921,429 1,154
544 -
yable after 12 Months
Long Service Leave 11,893 11,627
Total Non Current Employee Benefits Payable after 12 Months 11,893 11,627
Total Employee Benefits 23,859 22,593
a) The increase was mainly due to the present value percentage changing from 90.5% to 92.9%. Refer to Note 3 'Change in Accounting Estimates and Accounting Policy, and Correction of Prior Period Error' for further details. b) The increase represents a sign-on bonus resulting from a constructive obligation to pay Shared Services employees.
LAccrued SalariesOther Benefits
Total Employee Benefits Payable within 12 Months 11,966 10,966
Estimated Amount Pa
264 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 29. OTHER LIABILITIES
2010 2009$’000 $’000
Current Other Liabilities
Revenue Received in Advance (User Charges) a 1,834 2,446
Revenue Received in Advance (Capital Works) b 1,166 13,642
Revenue Received in Advance (Storage Area Network Asset Purchases) 3,568 2,537
Revenue Received in Advance (Salary Packaging) c 5,697 4,338
Total Current Other Liabilities 12,265 22,963
Total Other Liabilities 12,265 22,963
a) The decrease was due to a change in the accounting treatment of revenue previously recorded as revenue received in advance.
b) Represents payments received for Capital Works projects managed on behalf of other ACT Government departments and agencies. The decrease was mainly due to timing of receiving capital works invoices. There was a corresponding increase in Accrued Expenses (see Note 26 'Payables').
employees on their behalf (see Note 18 'Cash and Cash Equivalents' and Note 37 'Third Party Monies'). The increase represents the increased level of persons accessing salary packaging services.
c) The transactions represented here form part of Salary Packaging funding received and dispersed for ACT Government
NOTE 30. EQUITY
Asset Revaluation Surplus
The Asset Revaluation Surplus is used to record the increments and decrements in the value of Property, Plant and Equipment.
2010 2009$’000 $’000
Balance at the Beginning of the Reporting Period 3,782 3,782
Balance at the End of the Reporting Period 3,782 3,782
2009–2010 ANNUAL REPORT 265
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 31. DISAGGREGATED DISCLOSURE OF ASSETS AND LIABILITIES Year Ended 30 June 2010
OutputClass
OutputClass
OutputClass
OutputClass
Total
1 2 3 4InTACT Procurement Human Resources Finance
Support Services Services Services
$’000 $’000 $’000 $’000 $’000
Current Assets
Cash and Cash Equivalents 15,521 (918) 14,611 1,699 30,913
Receivables 19,686 50,524 942 160 71,312
Inventories 11 - - - 11
Assets Held for Sale 266 - - 15 281
Other Assets 1,878 120 - - 1,998
Total Current Assets 37,362 49,726 15,553 1,874 104,515
Non-Current Assets
Property, Plant and Equipment 29,552 30 1,962 2,243 33,787
Intangible Assets 143 2,787 - - 2,930
Capital Works in Progress 1,788 - - - 1,788
Other Assets 226 - - - 226
Total Non-Current Assets 31,709 2,817 1,962 2,243 38,731
Total Assets 69,071 52,543 17,515 4,117 143,246
Current Liabilities
Payables 16,393 45,335 326 148 62,202
Finance Leases 381 48 6 3 438
Employee Benefits 11,113 3,667 3,647 3,434 21,861
Other Liabilities 3,643 2,900 5,697 25 12,265
Total Current Liabilities 31,530 51,950 9,676 3,610 96,766
Non-Current Liabilities
Finance Leases 294 26 - - 320
Employee Benefits 1,013 222 459 304 1,998
Total Non-Current Liabilities 1,307 248 459 304 2,318
Total Liabilities 32,837 52,198 10,135 3,914 99,084
Net Assets/(Liabilities) 36,234 345 7,380 203 44,162
266 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 31. DISAGGREGATED DISCLOSURE OF ASSETS AND LIABILITIES
- CONTINUED
Year Ended 30 June 2009
Output Output Output OutputClass Class Class Class
Total
1 2 3 4InTACT Procurement Human Resources Finance
Support Services Services Services
$’000 $’000 $’000 $’000 $’000
Cash and Cash Equivalents 20,620 11,622 9,243 63 41,548
35,422
10
612
1,591 77,592
-Current Assets
nt and Equipment 22,475 76 2,473 2,624 27,6483,194
234
31,076
21,275
267
20,787
- 22,964
tal Current Liabilities 24,551 29,409 7,982 3,351 65,293
Non-Current Liabilities
Finance Leases 143 59 12 12 226
Employee Benefits 889 220 405 292 1,806
Total Non-Current Liabilities 1,032 279 417 304 2,032
Total Liabilities 25,583 29,688 8,399 3,655 67,325
Net Assets/(Liabilities) 34,362 (576) 6,997 560 41,343
Current Assets
Receivables 16,086 15,700 2,108 1,528
Inventories 10 - - -
Other Assets 520 92 - -
Total Current Assets 37,236 27,414 11,351
Non
Property, PlaIntangible Assets - 1,622 1,572 - Other Assets 234 - - -
Total Non-Current Assets 22,709 1,698 4,045 2,624
Total Assets 59,945 29,112 15,396 4,215 108,668
Current Liabilities
Payables 9,421 11,784 49 21
Finance Leases 242 17 4 4
Employee Benefits 10,363 3,507 3,591 3,326
Other Liabilities 4,525 14,101 4,338
To
2009–2010 ANNUAL REPORT 267
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 32. FINANCIAL INSTRUMENTS Details of the significant policies and methods adopted, including the criteria for recognition, the basis of
easurement, and the basis on which some income and expenses are recognised, with respect to each class of
e financial
tatements.
nterest Rate Risk
is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
f changes in market interest rates.
t have any interest rate risk.
s incurring a financial loss. Credit risk is
basis. There is no collateral held as security for financial assets.
s the majority of Shared Services receivables are spread across a large number of ACT Government departments
, no significant concentration of credit risk has been identified. Shared Services manages credit risk
r receivables by careful monitoring of the invoicing process, rapid follow up of payment and rapid resolution of
m
financial asset and liability are disclosed in Note 2 ‘Summary of Significant Accounting Policies’ to th
s
I
Interest rate risk
o
As Shared Services financial assets and financial liabilities are held in non-interest bearing or fixed interest
arrangements, it is not exposed to movements in interest rates and as such does no
There have been no changes to risk exposure or processes for managing risk since last financial reporting period.
A sensitivity analysis has not been undertaken as Shared Services is not exposed to this risk.
Credit Risk
Credit risk arises from the financial assets of Shared Services, which comprises cash and cash equivalents, trade
and other receivables. Shared Services’ exposure to credit risk arises from the risk that one party to a financial
instrument will fail to discharge an obligation resulting in Shared Service
limited to the amount of the financial assets it holds net of any provision for impairment and is monitored on a
regular
A
and agencies
fo
disputed invoices. Shared Services expects to collect all financial assets that are not past due or impaired.
There have been no changes in risk exposure or processes for managing risk since last reporting period.
268 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 32. FINANCIAL INSTRUMENTS - CONTINUED Credit Facilities
There are no formal credit facilities in place for Shared Services with the Territory Banking Account.
If Shared Services’ account goes into overdraft throughout the year, Shared Services is not charged interest.
However, the overdraft position is required to be rectified as soon as possible.
Liquidity Risk
Liquidity risk is the risk that Shared Services will encounter difficulties in meeting obligations associated with
financial liabilities that are settled by delivering cash or another financial asset.
Shared Services’ main financial obligations relate to the payment of employee benefits and purchases of supplies
and services. Salaries are paid on a fortnightly basis and purchases of supplies and services are paid within
30 days of receiving the invoice for goods or services purchased. The main source of cash to pay these obligations
is derived from charging other ACT Government entitles who pay these charges through direct appropriation.
Shared Services also invoices in advance for the majority of its services.
Shared Services is managing this risk by closely monitoring the invoice process, rapid follow-up of payment and
prompt resolution of disputed invoices. Shared Services exposure to liquidity risk is considered insignificant
ased on experience from past years and the current assessment of risk.
hared Services’ exposure to liquidity risk and the management of this risk has not changed since last financial
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices, whether these changes are caused by factors specific to the individual financial
instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
As Shared Services only holds cash and cash equivalents and receivables in non-interest bearing accounts, it is
not considered to have any price risk. Accordingly, a sensitivity analysis has not been taken.
b
S
year.
Price Risk
2009–2010 ANNUAL REPORT 269
Shared Services Centre es to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 32. FINANCIAL INSTRUMENTS - CONTINUED Fair Value of Fina ssets and Liabilities
The carrying amou fair values of financial assets and liabilities at the end of the reporting period are:
Not
ncial A
nts and
Carrying CarryingAmount Fair Value Amount Fair Value
2010 2010 2009 2009
$’000 $’000 $’000 $’000
Financial Assets
Cash
Rece
Tota
Fina
Paya
Fina
Tota
and Cash Equi 30,913 30,913 41,548 41,548
ivables 71,312 71,312 35,422 35,422
l Financial Ass 102,225 102,225 76,970 76,970
ncial Liabilitie
bles 62,202 62,202 21,275 21,275
nce Leases 758 758 493 493
l Financial Lia 62,960 62,960 21,768 21,768
valents
ets
s
bilities
Value rar
ed Ser fi ts and liabilities are measured, subsequent to initial recognition, at amortised cost
uch ir v hy is not required.
Fair
Shar
Hie
vices
a fa
chy
nancial asse
alue hierarcand as s
270 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 32. FINANCIAL INSTRUMENTS - CONTINUED The following table sets out Shared Services maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including the weighted average interest rates by
maturity period as at 30 June 2010. All financial assets and liabilities which have a floating interest rate or are non-interest bearing will mature in 1 year or less. All amounts appearing
in the following maturity analysis are shown on an undiscounted cashflow basis.
2010
Floating Over 1 Over 2 Over 3 Over 4 Non- Interest 1 Year Year to Years to Years to Years to Over 5 Interest
Rate or Less 2 Years 3 Years 4 Years 5 Years Years Bearing TotalNote $’000 $’000 $'000 $'000 $'000 $’000 $’000 $’000 $’000
Financial Assets
Cash and Cash Equivalents 18 - - - - - - - 30,913 30,913
Receivables 19 - - - - - - - 71,312 71,312
Total Financial Assets - - - - - - - 102,225 102,225
Weighted Average Interest Rate - - -
Financial Liabilities
Payables 26 - - - - - - - 62,202 62,202
Finance Leases 27 - 477 337 - - - - - 814
Total Financial Liabilities - 477 337 - - - - 62,202 63,016
Weighted Average Interest Rate 6.15% 6.15% 0.08%
Net Financial (Liabilities)/Assets - (477) (337) - - - - 40,023 39,209
Fixed Interest Maturing In:
2009–2010 ANNUAL REPORT 271
Shared Services Centre Notes to and Forming Part of the Financial Statements
NOTE 32. FINANCIAL INSTRUMENTS - CONTINUE The following table sets out Shared Services maturity analysis for financia iabilities as well as the exposure to interest rates, including the weighted a e interest rates by
maturity period as at 30 June 2009. All financial assets and liabilities whi atin erest rate or are non-interest bearing will mature in 1 year or less. mounts ap g
in the following maturity analysis are shown on an undiscounted cashflow
pearin
2009
Floating
For the Year Ended 30 June 2010
g int
D
l assets
ch have
basis.
and l
a flo
verag
All a
OveYear2 Years
r 1 Over 2 Over 3 Over 4 NonInterest Year to Years to Years to Years to Over 5 Interes
Rate Less 3 Years 4 Years 5 Years Years BearinNote $’000 ’000 $'000 $'000 $'000 $’000 $’000 $’00
Financial Assets
Cash and Cash Equivalents 18 - - - - - - - 41,5Receivables 19 - - - - - - - 35,4
Total Financial Assets - - - - - - - 76,9
Weighted Average Interest Rate -
Financial Liabilities
Payables 26 - - - - - - - 21,275 21,2Finance Leases 27 - 286 232 - - - - - 5
Total Financial Liabilities - 286 232 - - - - 21,275 21,7
Weighted Average Interest Rate 98% 5.98% - 0.14%
Net Financial (Liabilities)/Assets - 286) (232) - - - - 55,695 55,177
Fixed Interest Maturing In:
Total$’000
41,5435,42
76,97
-tg0
4822
70
-
1 or
$
5.
(
82
0
-
7518
93
272 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 32. FINANCIAL INSTRUMENTS – CONTINUED
2010 2009$’000 $’000
Carrying Amount of Each Category of Financial Assets
Loans and Receivables 71,312 35,422
Total Financial Assets 71,312 35,422
Financial Liabilities
Financial Liabilities Measured at Amortised Cost 62,960 21,768
Total Financial Liabilities 62,960 21,768
and Financial Liabilities
Financial Assets
Shared Services does not have any financial assets in the 'Available for Sale' category or the 'Held to Maturity'category and as such these categories are not included above. Also, Shared Services does not have any financialliabilities in the 'Financial Liabilities at Fair Value through Profit and Loss' category and as such this category isnot included above. NOTE 33. COMMITMENTS
Capital Commitments
Capital commitments, mainly for Reducing the Risk of Communication Blackouts, Telecommunication
hat have not been recognised as liabilities are as
llows:
Improvement project and servers, contracted at reporting date t
fo
2010 2009$’000 $’000
apital Commitments - Property, Plant and Equipment
916 3,568
apital Commitments - Property, Plant and Equipment 916 3,568
tments 916 3,568
C
Payable:
Within one year
C
Total Capital Commi
2009–2010 ANNUAL REPORT 273
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 33. COMMITMENTS - CONTINUED
Other Commitments
Other commitments, mainly for software licenses, support and maintenance, contracted at reporting date that have
not been recognised as liabilities are as follows:
2010 2009$’000 $’000
Within one year 5,783 4,242
Later than one year but not later than five years 889 6,267
Total Other Commitments 6,672 10,509
Operating Lease Commitments
Shared Services has 4 non-cancellable operating leases for buildings. Three of the leases expire in 1 year and the
other one expires in 7 years. The leases have varying terms, escalation clauses and renewal rights. There are no
conditions in the lease agreements requiring Shared Services to restore the sites that the lease buildings are situated
on. The operating lease agreements give Shared Services the right to renew the leases. Renegotiations of the lease
terms occur on renewal of the leases. 2010 2009
$’000 $’000
Non-cancellable operating lease commitments are payable as follows:
Within one year 2,318 2,141Later than one year but not later than five years 6,791 6,644
Later than five years 2,405 3,964
Total Operating Lease Commitments 11,514 12,749
All amounts shown in the commitments note are inclusive of GST. Finance Lease Commitments Finance lease commitments are disclosed in Note 27 ‘Finance Leases’. NOTE 34. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
There were no contingent liabilities at balance date. (2008-09: Nil)
Contingent Assets
There were no contingent assets at balance date. (2008-09: Nil)
274 Department of Territory and Municipal Services
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010
NOTE 35. CASH FLOW RECONCILIATION
2010 2009$’000 $’000
otal Cash and Cash Equivalents recorded in the Balance Sheet 30,913 41,548
Eq Period as Recorded in Sta 30,913 41,548
(b) Reconciliation of Net Cash Inflows from Operating Activities to the Operating (Deficit)
Operating (Deficit) (1,552) (7,769)
Add/(Less) Non-Cash Items
Depreciation of Property, Plant and Equipment 14,450 15,916Amortisation of Intangibles 2,018 1,607
Add/(Less) Items Classified as Investing or Financing
Net Gain on Disposal of Non-Current Assets (406) (15)Asset/Liability Accrual a (2,937) 1,648
Cash Before Changes in Operating Assets and Liabilities 11,573 11,387
Changes in Operating Assets and Liabilities
(Increase) in Receivables (21,244) (11,521)(Increase) in Accrued Revenue (11,355) (3,388)(Increase)/Decrease in Inventories (1) 21(Increase)/Decrease in Other Assets (1,378) 1,372Increase/(Decrease) in Payables 473 (3,207)Increase/(Decrease) in Accrued Expenses 40,661 (3,469)Increase in Employee Benefits 1,267 4,910(Decrease)/Increase in Other Liabilities (13,088) 888(Decrease)/Increase in Allowance for Impairment Losses (3,426) 3,146
Net Changes in Operating Assets and Liabilities (8,091) (11,248)
Net Cash Inflows from Operating Activities 3,482 139
a) Represents movements in accruals affecting Balance Sheet accounts which are reflected through financing and investingctivities in the Cash Flow Statement.
n-Cash Financing Activities
e to a change in the Whole-of-Government motor vehicle leasing arrangements, all new motor vehicle leases entered into byred Services from 2006-07 onwards are under a finance lease rather than under an operating lease.
2010 2009$’000 $’000
cquisition of Motor Vehicles by means of Finance Lease 758 493
T
Cash and Cash uivalents at the End of the Reportingthe Cash Flow tement
a
(c) No
DuSha
A
2009–2010 ANNUAL REPORT 275
Shared Services Centre Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2010 NOTE 36. EVENTS OCCURRING AFTER BALANCE DATE
ev the financial report as at 30 June 2010.
NOTE 37. THIRD PARTY MONIES
There were no ents occurring after the balance date, which would affect
2010 2009
$’000 $’000
Shared Services holds salary monies for Agencies that are Territory Authorities.
Salary Monies Held for Territory Authorities
Balance at the Beginning of the Reporting Period - -
Cash Receipts 87,668 79,714
Cash Payments (87,668) (79,714)
Balance at the End of the Reporting Period - -
Shared Services holds security deposits for Procurement Solutions Trust.
Security deposits held in trust for Procurement Solutions
Balance at the Beginning of the Reporting Period 543 495
Cash Receipts 773 761
Cash Payments (776) (713)
Balance at the End of the Reporting Period 540 543
The transactions represented here form part of payroll transactions which flow through the HRMS Salaries BankAccount. It was determined that salary monies held for Territory Authorities fall within the definition of 'TrustMoney' under the Financial Management Act 1996 and need to be disclosed separately as above.
The balance of the account is shown as Cash at Bank - HRMS Salaries (see Note 18 'Cash and Cash Equivalents')and the net movement is shown as either Other Receivables (see Note 19 'Receivables') or Other Liabilities (seeNote 29 'Other Liabilities').
276 Department of Territory and Municipal Services
52BShared Services Centre Notes to and Forming Part of the Financial Statements
101BFor the Year Ended 30 June 2010 NOTE 37. THIRD PARTY MONIES - CONTINUED
2010 2009$’000 $’000
Salary Packaging Monies
Balance at the Beginning of the Reporting Period 4,338 -
Cash Receipts 64,005 50,317
Cash Payments (62,646) (45,979)
Balance at the End of the Reporting Period 5,697 4,338
Total Third Party Monies 6,237 4,881
The balance in the account is shown as Cash at Bank - Salary Packaging (see Note 18 'Cash and CashEquivalents') and includes monies for Fringe Benefits Tax, fees and residual payment contributions, as well assome motor vehicle running costs.
Shared Services holds salary packaging money for ACT Government employees who have elected to salarypackage with the ACT Government's internal provider.
The Salary Packaging bank accounts were transferred from the Department of Education and Training to SharedServices following the signing of an Instrument under Section 34A of the Financial Management Act 1996 on11 September 2008.
2009–2010 ANNUAL REPORT 277
280 Department of Territory and Municipal Services
2009–2010 ANNUAL REPORT 281
OUTPUTS
SHARED SERVICES CENTRE
282 Department of Territory and Municipal Services
Shared Services Centre Statement of Performance
For the Year Ended 30 June 2010
Output Class 1 – InTACT
Output 1.1 – InTACT
Description – To provide and maintain Information and Communications Technology (ICT) infrastructure for the ACT Public Service. InTACT provides:
Services to agencies as outlined in InTACT’s catalogue of services and affirmed through various Service Level and Support Agreements; Management of the data and communications network; Assistance to agencies on ICT security; Management of the Whole of Government communications network; Business systems support; General service and help desk functions; In-house print and electronic publishing; and A full range of record management, mail room and courier activities to the majority of departments.
OriginalTarget
2009-10
ActualResult
2009-10
% Variance from Original
Target Explanation of Material Variances Total Cost1
$120,405,000
$130,387,000
8%
The variance is due to agencies’ higher consumption of ICT services and increased project activity.
Government Payment for Outputs $4,261,000 $4,261,000 0% Accountability Indicators
a. Costs compared to peer organisations’ costs, as benchmarked by an independent organisation2
Within 5% Within 5% 0%
b. E-mail availability across government during core business hours3
98%
99%
1%
c. Service requests made via the Service Desk are resolved within
Service Level Agreements’ timeframes4 85% 92% 8% The variance is due to constant improvements in systems and
support that continue to yield high performance efficiencies and has enabled the achievement of a high level of service response by InTACT.
d. Average time taken for telephone service requests to be answered by a Service Desk officer5
20 seconds
17.5 seconds
(13%)
The variance is due to constant improvements in systems and support that continue to yield high performance efficiencies and has enabled the achievement of a high level of service response by InTACT.
The above Statement of Performance should be read in conjunction with the accompanying notes. 2009–2010 ANNUAL REPORT 283
Shared Services Centre Statement of Performance
For the Year Ended 30 June 2010
Output 1.1 – InTACT - Continued Explanation of Measures 1. The total cost of InTACT services is represented by InTACT's total expenditure as per the Shared Services Centre's Financial Statements and Budget Papers. 2. The independent benchmarking of InTACT services is undertaken annually in August by ET Business Solutions. 3. Established by determining up-time of each core component of the network across core business hours (Monday to Friday 8am to 6pm). 4. Established by determining how quickly requests made to InTACT Service Desk are resolved in comparison to agreed Service Level Agreement timeframes. 5. Established by determining the average time taken for telephone service requests to be answered by a Service Desk officer.
284 Department of Territory and Municipal Services
Shared Services Centre Statement of Performance
For the Year Ended 30 June 2010
Output Class 2 – Procurement Support Services
Output 2.1 – Procurement Support Services
Description – To provide and maintain procurement support services for the ACT Public Service.
Procurement Support Services provides:
Procurement and associated risk management services to agencies, including delivering capital work projects on behalf of agencies; The buyers and sellers information service; The Government contracts register; Supplier pre-qualification arrangements; and The secretariat to Government Procurement Board.
OriginalTarget
2009-10
ActualResult
2009-10
% Variance from Original
Target Explanation of Material Variances Total Cost1
$15,383,000
$15,215,000
(1%)
Government Payment for Outputs $1,553,000 $1,553,000 0%
Accountability Indicators
a. Proportion of Government funded annual Capital Works program supported with project procurement services2
90%
90% 0%
b. Quality Management Systems compliance with ISO9001:2000 -
number of Category 1 non-conformance findings3
< 2 < 2 0%
c. Increase in the number of Whole-of-Government contracts and
related panel arrangements available for agency procurement4 5
5 0%
The above Statement of Performance should be read in conjunction with the accompanying notes.
2009–2010 ANNUAL REPORT 285
Shared Services Centre Statement of Performance
For the Year Ended 30 June 2010
Output 2.1 – Procurement Support Services - Continued Explanation of Measures 1. The total cost of Procurement Support Services (Procurement Solutions) is represented by Procurement Solutions’ total expenditure as per the Shared Services Centre's Financial Statements
and Budget Papers. 2. Established by determining the total value of client invoices (excluding GST) issued by Procurement Solutions for capital works projects for the full year compared to the total capital works
expenditure as reported by the relevant agencies to Treasury for the full year excluding those relating to land development, housing, capital upgrades, capital ICT works, capital grants and plant and equipment.
3. External Quality System audits are performed regularly throughout the year. Each audit is documented and all non-conformances are brought to the attention of the Procurement Solutions Management. During the year the Quality Standard changed to ISO9001:2008.
4. Established by comparing the number of whole-of-government contracts and related arrangements in place as at 30 June 2010 compared to 30 June 2009.
286 Department of Territory and Municipal Services
Shared Services Centre Statement of Performance
For the Year Ended 30 June 2010
Output Class 3 – Human Resources Services
Output 3.1 – Human Resources Services
Description – To provide and maintain tactical and transactional human resources services for the ACT Public Service.
Human Resources Services provides:
Payroll and personnel services, including tax payments and salary packaging; Recruitment services; Advice and technical support on health and safety management; Support in the management of employee relations processes; Injury management services for small agencies; Coordination and facilitation of ACT Public Service wide training and development; Statutory and human resources management reporting; and Organisational position and data management.
OriginalTarget
2009-10
ActualResult
2009-10
% Variance from Original
Target Explanation of Material Variances Total Cost1
$21,739,000
$20,723,000
(5%)
The variance is mainly due to lower Employee expenses as a result of lower long service leave and annual leave expenditure due to a focus on reducing inherited excessive leave balances and lower administrative expenditure due to expenditure constraints.
Government Payment for Outputs $0 $0 0%
Accountability Indicator a. Service requests made via the Integrated Customer Service (ICS)
system are resolved within 5 working days2 80% 96% 20% The variance is due to improved processing and staff training.
b. Data for Annual Reports and the Workforce Profile are supplied to
the Chief Minister’s Department in accordance with the agreed timeframe3
100% 100% 0%
c. Performance Standards in Recruitment Services for permanent and
temporary vacancies service specifications achieved4 90% 98% 9% The variance is due to improved processes and system
enhancements.
The above Statement of Performance should be read in conjunction with the accompanying notes.
2009–2010 ANNUAL REPORT 287
Shared Services Centre Statement of Performance
For the Year Ended 30 June 2010
Output 3.1 – Human Resources Services – Continued Explanation of Measure 1. The total cost of Human Resources Services is represented by Human Resources Services’ total expenditure as per the Shared Services Centre’s Financial Statements and Budget Papers. 2. Established by determining the number of Human Resources queries submitted via the Shared Services Customer Portal which are resolved within five working days. 3. Established by comparing the agreed date for the provision of Human Resources statistical data with the actual date the data is supplied. 4. Established by analysing data captured through the Recruitment Services Database and CHRIS 21 for specified performance standards.
288 Department of Territory and Municipal Services
Shared Services Centre Statement of Performance
For the Year Ended 30 June 2010
Output Class 4 – Finance Services
Output 4.1 – Finance Services
Description – To provide and maintain tactical and transactional finance services for the ACT Public Service.
Finance Services provides:
Accounts payable and some accounts receivable functions; General ledger; Fixed assets register; The on-going development and maintenance of the Oracle Government Financials system; Cash flow management and bank reconciliations; Tax payments including returns and advice; and Financial reporting services.
OriginalTarget
2009-10
ActualResult
2009-10
% Variance from Original
Target Explanation of Material Variances
Total Cost1 $12,914,000 $12,616,000 (2%)
Government Payment for Outputs $0 $0 0%
Accountability Indicator a. Business Activity Statements completed in accordance with
Australian Taxation Office deadline2 90% 100% 11% The variance is due to low staff turnover and consistently applied
standard processes.
b. Fringe Benefits Tax return submitted to the Australian Taxation
Office within 7 working days of agencies supplying all required information3
90% 100% 11% The variance is due to low staff turnover and consistently applied standard processes.
c. Monthly financial information available for use by agencies by 6th
working day of the month4 90% 100% 11% The variance is due to low staff turnover and consistently applied
standard processes. d. Annual financial statements completed and sent to agencies by
the 9th working day of July5
90% 100% 11% The variance is due to low staff turnover and consistently applied standard processes.
The above Statement of Performance should be read in conjunction with the accompanying notes. 2009–2010 ANNUAL REPORT 289
Shared Services Centre Statement of Performance
For the Year Ended 30 June 2010
Output 4.1 – Finance Services - Continued Explanation of Measure 1. The total cost of Finance Services is represented by Finance Services’ total expenditure as per the Shared Services Centre’s Financial Statements and Budget Papers. 2. This measure covers the submission of Business Activity Statements to the Australian Taxation Office and the remittance of GST where applicable. 3. This measure covers the lodgement of the annual Fringe Benefit Tax returns to the Australian Taxation Office. 4. This measure refers to the completion of processing monthly financial information using Oracle Government Financials. 5. This measure covers the submission of draft annual financial reports to the client agencies.
290 Department of Territory and Municipal Services
AAO Administrative Arrangement Orders
ABC Australian Broadcasting Corporation
ACAT ACT Civil and Administrative Tribunal
ACT Australian Capital Territory
ACTAS ACT Academy of Sport
ACTGS ACT Government Solicitor’s office
ACTIA ACT Insurance Authority
ACTION ACT Internal Omnibus Network
ACTLIS ACT Library and Information Service
ACTPLA ACT Planning and Land Authority
ACTPG ACT Property Group
AFL Australian Football League
AFP Australian Federal Police
AGIMO Australian Government Information Management Office
ANU Australian National University
ASBA Australian School-Based Apprenticeships
ATO Australian Tax Office
AWA Australian Workplace Agreement
AWAC Animal Welfare Advisory Committee
BCP Business Continuity Plan
BOP Bushfire Operational Plan
BPay® Bill Pay
CAG Community Advisory Group
CCTV Closed circuit television
CFI Customer Focussed Improvement Initiative
CIT Canberra Institute of Technology
CLS Capital Linen Service
CMD Chief Minister’s Department
LIST OF ABBREVIATIONS AND ACRONYMS
CMP Conservation Management Plan
CNG Compressed natural gas
COAG Council of Australian Governments
COTA Council on the Ageing
DAS Domestic Animal Services
DECCEW ACT Department of Environment, Climate Change, Energy and Water
DET ACT Department of Education and Training
DHCS ACT Department of Disability, Housing and Community Services
EAP Employee Assistance Program
EEO Equal Employment Opportunity
ELT Executive Leadership Team
EPA Environment Protection Authority
EPIC Exhibition Park in Canberra
ESA Emergency Services Authority
ESL English as a second language
FBT Fringe Benefits Tax
FIFA International Federation of Association Football
FIP Facilities improvement program
FOI Freedom of information
FTE Full-time equivalent
GDE Gungahlin Drive Extension
GSO General Service Officer
GST Goods and Services Tax
HCOANZ Heritage Chairs and Officials of Australia and New Zealand
HR Human Resources
HRRE Hume Resource Recovery Centre
IAMS Integrated Asset Management System
2009–2010 ANNUAL REPORT 291
ICS Integrated Customer Service
ICT Information and communications technology
IDC Inter Departmental Committee
InTACT IT for the ACT Government
IT Information technology
IWD International Women’s Day
JACS ACT Department of Justice and Community Safety
LAPS ACT Department of Land and Property Services
LDA ACT Land Development Agency
LMAs Land management agreements
LOTE Languages other than English
km kilometres
m2 metres squared
MBA Master Builders Association
MLA Member of the Legislative Assembly
MLRMC Mugga Lane Resource Management Centre
MOU Memorandum of Understanding
NAIDOC National Aboriginal Islander Day of Observance Committee
NCA National Capital Authority
NRL National Rugby League
NRMA National Roads and Motorists’ Association
NSW New South Wales
OHS Occupational Health and Safety
OCSE Office of the Commissioner for Sustainability and the Environment
OSCAR Online System for Comprehensive Activity Reporting
PAC Public Accounts Committee
PCL Parks, Conservation and Lands
PPP Productivity Placement Program
Pty Ltd Proprietary Limited
RAFT Remote Area Fire Team
RAOs Representative Aboriginal Organisations
RAPS Whole-of-government payment and receipting system
REDEX Rapid Express Direct Service
RFID Radio Frequency Identification
RMIA Risk Management Institution of Australasia
RMP Records Management Plan
RMSG Risk Management Steering Group
RMRG Risk Management Reference Group
RSPCA Royal Society for the Prevention of Cruelty to Animals
RTA Roads and Traffic Authority
RTPIS Real Time Passenger Information Service
SBMP Strategic Bushfire Management Plan
SEA Special employment arrangement
SES ACT State Emergency Service
SHR Strategic Human Resources
SAMC Strategic Asset Management Committee
SAMF Strategic Asset Management Framework
SLISS Sport Loan Industry Subsidy Scheme
SMT Strategic Management Team
SRS Sport and Recreation Services
STAP Sustainable Transport Action Plan
STP Sustainable Transport Plan
TAMS ACT Department of Territory and Municipal Services
TRG Transport Reference Group
TRO Territory Records Office
TVE Territory Venues and Events
294 Department of Territory and Municipal Services292 Department of Territory and Municipal Services
APPE
ND
ICES
TWU Transport Workers Union
UC University of Canberra
UCI International Cycling Union
WAT Wheelchair accessible taxi
WBRMC West Belconnen Resource Management Centre
WCU Worker Consultation Unit
WESP Work Experience and Support Program
WHS Workplace Health and Safety
WIP Work in progress
WISE Working in Safe Environments
WNBL Women’s National Basketball League
WSR Work Safety Representative
YPN Young Professionals’ Network
YMCA Young Men’s Christian Association
2009–2010 ANNUAL REPORT 293
OTHER SOURCES OF INFORMATION ABOUT TAMS
WEBSITESwww.tams.act.gov.auwww.canberraconnect.act.gov.auwww.territoryrecords.act.gov.auwww.archives.act.gov.auwww.library.act.gov.auwww.action.act.gov.auwww.stromloforestpark.com.auwww.manukaoval.com.auwww.canberrastadium.com.auwww.epic.act.gov.auwww.sharedservices.act.gov.auwww.intact.act.gov.auwww.procurement.act.gov.auwww.rego.act.gov.auwww.canberracemeteries.com.au
PUBLICATIONSA range of hard copy publications about TAMS’ programs, services and facilities is available from Canberra Connect Shopfronts.
Previous annual reports and other corporate documents are available online at www.tams.act.gov.au
PHONEPhone Canberra Connect on 13 22 81 to contact any area in TAMS or other ACT Government agency.
IN PERSONVisit any Canberra Connect Shopfront at Tuggeranong, Woden, Dickson or Belconnen.
294 Department of Territory and Municipal Services