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Basis of accounting
The agency budgeted statements are prepared in compliance with Australian Accounting Standards, Accounting Guidance Releases and having regard to Statements of Accounting Concepts.
Budgeted agency statement of financial performance
APRA is funded by a special appropriation for levies, late lodgment and late payment penalties collected under the Financial Institutions Supervisory Levies Collection Act 1998. The revenue reported by APRA is net of the levies retained in the Official Public Account to fund the Australian Securities and Investments Commission (ASIC) for consumer protection and market integrity functions, and to the Australian Taxation Office (ATO), for unclaimed moneys and lost member functions.
APRA is seeking to increase the level of regulatory activity of the superannuation industry. The increased activity will have an impact of $3.0 million in later years, with a forecast impact on the 2001-02 financial year of $2.1 million. The increased costs in the outer years will be met through increased levies.
Additional funding of $4.0 million is also being sought in the current year to meet the costs of preparing submissions to the Royal Commission.
The revenue from sales of goods and service includes revenue from fee-for-service and cost-recovery activities, as well as revenue from the sub-letting of surplus accommodation leased by APRA.
APRA's depreciation expense is increasing over time due to the development and implementation of infrastructure that will provide APRA staff with accurate and timely financial information about regulated entities and that will allow APRA to act as the central repository for this information. The introduction of this system has resulted in a shorter useful life and increased depreciation for some of APRA's legacy software systems.
The write-down of assets in 2000-01 relates to a change in APRA's policy for recognition of assets. All assets which no longer met the new criteria or asset threshold were written down as at 1 July 2000.
Budgeted agency statement of financial position
These include cash, levies deposited in the Consolidate Revenue Fund but not drawn down at year end, levies invoiced but still outstanding at year end, and sundry agency debtors. All accounts receivable are recorded at their estimated recoverable amount.
Non-financial assets include leasehold improvements, furniture and fittings, computer hardware and office equipment. Intangible assets comprise capitalised software, including work-in-progress. APRA does not own any land or buildings.
Other non-financial assets include prepayments.
The loan represents the balance of $16.1 million appropriated in 1998-99 and $4.0 million appropriated in 1999-00 for the establishment of APRA. The final repayment is to be made before 30 June 2002.
Other debt includes lease incentives.
Provisions and payables represent liabilities for miscellaneous accruals and employee benefits, including accrued salary and leave entitlements.
The opening balance represents the net value of assets and liabilities transferred from the Reserve Bank of Australia (RBA) and the Insurance and Superannuation Commission (ISC) on the formation of APRA on 1 July 1998.
Budgeted agency statement of cash flows
Cash received from operating activities includes the appropriation for levies collected from industry less amounts collected on behalf of ATO and ASIC, cash from fees and charges, and interest earned on cash balances and investments held as government backed securities.
Cash used in investing activities includes cash spent on property, plant and equipment.
Cash used for financing activities is the cash used to repay the establishment funds.
Administered
Budgeted administered financial performance
The taxation revenues are the levies, late lodgment and late payment penalties collected under the Financial Institutions Supervisory Levies Collection Act 1998. The revenue reported in this statement is higher than that reported by APRA in the budgeted agency statement of financial position by the amount retained in the Official Public Account to fund ASIC for consumer protection and market integrity functions, and to the ATO, for unclaimed moneys and lost member functions.
Budgeted administered financial position
The financial assets include levy debt invoiced and still outstanding at year end .
The accrued revenue is for levies on returns lodged but not invoiced at the end of the financial year.
The `Other' provisions and payables is revenue in advance for 2001-02 levies collected before the end of the 2000-01 financial year.
Budgeted administered cash flows
All cash collected by APRA for levies, late lodgment and late payment penalties under the Financial Institutions Supervisory Levies Collection Act 1998 and transferred to the Official Public Account at the close of business each day.
Appendix 1
Non-appropriation agency and administered revenue
Agency other income is derived from fees and charges and interest income. The increase in the estimated fees and charges is for the sub-lease of excess accommodation leased by APRA. In the 2001-02 Portfolio Budget Statements the estimated rental had been netted out against the cost of the accommodation.
Administered revenue is the levies collected under the Financial Institutions Supervisory Levies Collection Act 1998 from bodies regulated by APRA. Each year an amount determined by the Treasurer is retained in CRF to fund certain activities undertaken by ASIC and the ATO ($14.9 million in 2000-01 and $14.7 million in 2001-02). The balance is transferred to APRA as a special appropriation.
The increase in the reported revenue recognised in relation to the Financial Institutions Supervisory Levies Collection Act 1998 is due to a change in accounting policy since the 2001-02 Portfolio Budget Statements were prepared. After discussions with the Australian National Audit Office, the policy of recognising over- and under-collections of revenue as liabilities and assets, respectively, is no longer applied. This will result in an increase in revenue recognised for the 2001-02 financial year.
The increase in other revenue is for refunds of levies to financial institutions which have been made by APRA on behalf of the Commonwealth.
Appendix 2
Estimates of expenses from special appropriations
