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Australian Office of Financial Management

Agency Financial Statements
Notes of Administered Activity
Notes to the Financial Statements
Appendix 1: Receipts from independent sources
Appendix 2: Estimates of expenses from administered appropriations

Section 3: Budgeted financial statements

Budgeted agency and administered financial statements and related notes for the Australian Office of Financial Management (AOFM) are presented in this section. The financial statements are produced for 2001-02 (estimated actual results), 2002-03 (Budget estimate) and three forward years and comprise the following statements. The financial statements should be read in conjunction with the accompanying notes.

Agency Financial Statements

Budgeted agency statement of financial performance

This statement provides a picture of the expected financial results for the AOFM by identifying full accrual expenses and revenues.

Budgeted agency statement of financial position

This statement shows the financial position of the AOFM. It enables decision-makers to track the management of the agency's assets and liabilities.

Budgeted agency statement of cash flows

This statement provides information on the amount and nature of budgeted cash flows, categorised into expected cash flows from operating activities, investing activities and financing activities.

Agency capital budget statement

This statement shows all proposed capital expenditure on non-financial assets, whether funded through capital appropriations (equity or borrowings) or from internally sourced funds.

Agency non-financial assets - summary of movement

This statement shows the budgeted movement in the AOFM's non-financial assets during the Budget year 2002-03.

Notes of Administered Activity

Details of transactions administered by the AOFM on behalf of the Commonwealth are to be shown in the following notes to the financial statements.

Note of budgeted administered financial performance

This note identifies the revenues and expenses administered on behalf of the Government.

Note of budgeted administered financial position

This note shows the assets and liabilities administered on behalf of the Government.

Note of budgeted administered cash flows

This note shows cash flows administered on behalf of the Government.

Table 3.1: Budgeted Agency Statement of Financial Performance
for the period ended 30 June

<B>Table 3.1: Budgeted Agency Statement of Financial for the period ended 30 June

(1) K1 - shows the link back to Table 1.1.

Table 3.2: Budgeted Agency Statement of Financial Position
as at 30 June

Table 3.2: Budgeted Agency Statement of Financial Position as at 30 June

Table 3.3: Budgeted Agency Statement of Cash Flows
for the period ended 30 June

Table 3.3: Budgeted Agency Statement of Cash Flows for the period ended 30 June

Table 3.4: Agency Capital Budget Statement

Table 3.4: Agency Capital Budget Statement

Table 3.5: Agency Non-financial Assets - Summary of Movement (Budget year 2002-03)

Table 3.5: Agency Non-financial Assets - Summary of Movement (Budget year 2002-03)

Table 3.7: Note of Budgeted Financial Performance Administered on behalf of Government for the period ended 30 June

Table 3.7: Note of Budgeted Financial Performance Administered on behalf of Government for the period ended 30 June

Table 3.8: Note of Budgeted Financial Position Administered on behalf of Government as at 30 June

Table 3.8: Note of Budgeted Financial Position Administered on behalf of Government as at 30 June

Table 3.9: Note of Budgeted Administered Cash Flows
for the period ended 30 June

Table 3.9: Note of Budgeted Administered Cash Flows for the period ended 30 June

Notes to the Financial Statements

Basis of accounting

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention. No allowance is made for the effect of changing prices on the results or the financial position of the AOFM.

Administered internal transactions

Administered transactions between the AOFM and other agencies within the general government (administered internal transactions) are not reported in the note of budgeted administered financial performance or the note of administered financial position.

Cash flows in the note of budgeted administered cash flows are reported inclusive of administered internal transactions.

Goods and Services Tax (GST)

The AOFM is an input taxed entity under A New Tax System (Goods and Services Tax) Act 1999.

The budgeted financial statements have been prepared in accordance with the Goods and Services Tax (GST) accounting guidelines of the Urgent Issues Group (UIG) of the Australian Accounting Standards Board. The UIG consensus requires that expenses and assets be accounted for net of recoverable GST, revenues be accounted for net of GST payable and that cash flows and accounts payable and receivable be reported gross. Appropriations are thus net of recoverable GST amounts.

Agency and administered financial statements

Under the Commonwealth's accrual budgeting framework, and consistent with Australian Accounting Standards, transactions that agencies control (agency transactions) are separately budgeted for and reported from transactions agencies do not have control over (administered transactions). This ensures that agencies are only held fully accountable for the transactions over which they have control.

Agency assets, liabilities, revenues and expenses are those which are controlled by the agency. Agency expenses include employee and supplier expenses and other administrative costs, which are incurred by the agency in providing its goods and services.
Administered assets, liabilities, revenues and expenses are those which are managed on behalf of the Government according to set government directions. Administered expenses include interest incurred on Commonwealth debt and administered revenues include interest earned on housing agreement loans and interest from swaps.

Appropriations in the accrual budgeting framework

Under the Commonwealth's accrual budgeting framework, separate annual appropriations are provided to the AOFM for:

agency price of outputs appropriations: representing the Government's purchase of outputs; and
administered expense appropriations: for the estimated administered expenses relating to debt management output.

In addition, special appropriations continue under the accrual budgeting framework, and fund the majority of payments from the Official Public Account, including gross debt redemption and financial investment activity.

Agency revenues and expenses

Appropriations

Price of outputs appropriation estimates are not based on market price indicators. The agreed price of outputs appropriation estimates are based on budgeted expenses.

The AOFM has prepared its estimates for the 2002-03 budget and forward years to achieve a break-even operating result. Consequently the appropriation revenue from Government represents the funding required to meet all expenses after deduction of revenue from other sources.

Interest revenue

As part of the agency banking incentive scheme, the AOFM has estimated that it will earn $20,000 interest on credit balances in its agency account and from term deposit investments.

Employee expenses

The AOFM envisages an increase in the average staffing level during the 2002-03 Budget year.

Assets and liabilities

The estimated cash reserves will be maintained in order to ensure that the AOFM is well placed to:

settle employee liabilities as they fall due;
make asset replacements (from depreciation funding); and
repay liabilities.

Budgeted financial statements have been prepared on the assumption that unspent monies will not be withdrawn by the Department of Finance and Administration.