Part C
agency additional estimates statements
Australian office of financial management
Section 3: Budgeted financial
statements
Agency 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 2002-03 (actual results), 2003-04 (revised Budget estimate) and three forward years. The financial statements should be read in conjunction with the accompanying notes.
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 2003-04.
Note of Administered Activity
Details of transactions administered by the AOFM on behalf of the Commonwealth are shown in the following notes to the financial statements.
Note of budgeted administered financial performance
This note identifies the main 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)
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 3.4: Agency Capital Budget Statement
Table 3.5: Agency Non-financial Assets — Summary of Movement (Budget year 2003-04)
Table 3.6: Note of Budgeted Financial Performance Administered on behalf of the Government (for the period ended 30 June)
Table 3.7: Note of Budgeted Financial Position Administered on behalf of the Government (as at 30 June)
Table 3.8: Note of Budgeted Administered Cash
Flows
(for the period ended 30 June)
(1) Includes investment activity.
(2) Includes forward foreign exchange contracts.
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)
All supplies provided by the AOFM are input taxed 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.
Budgeted 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 repayment of interest on lapsed coupons not supported by a Special Appropriation.
Special appropriations continue under the accrual budgeting framework and fund the majority of payments from the Official Public Account, including debt redemption, interest payments and financial investment activity.
Budgeted agency financial performance
Appropriations
Price of outputs appropriation estimates are not based on market price indicators. The agreed price of outputs appropriation is based on budgeted expenses.
The AOFM has prepared its estimates for the 2003-04 budget year and forward years to achieve a break-even operating result. Consequently appropriation revenues from Government represent the funding required to meet budgeted expenses.
Interest revenue
With the discontinuation of Agency Banking Incentive Scheme from 1 July 2003, the AOFM will not earn agency interest revenue for 2003-04 and onwards.
Budgeted agency financial position
Cash
The estimated cash reserves will be maintained 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.
Administered notes of budgeted financial statements
Revenues and expenses
Non-taxation revenue — interest
Interest from other sources includes interest from swaps and investments.
Expenses — grants
Expenses — interest and financing costs
Assets and Liabilities
Debt — Commonwealth securities
Commonwealth securities represent the book value of government securities on issue, net of investments (except for 2002-03 where they are reported on a gross basis).
Financial assets — receivables
