Annual Report 2016–17: 4. Financials

Our financial report for 2016–17.

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Financial performance

The DTA recorded an operating surplus of $6.4 million in 2016–17, excluding the change in the asset revaluation reserve, driven by the Trusted Digital Identity second pass business case underspend. This compares with a surplus of $1.9 million in 2015–16.

Under the Administrative Arrangements Order (AAO) of 27 October 2016, responsibilities for the whole of government ICT and ICT procurement policy and services transferred from the Department of Finance to the DTA.

The DTA established an ICT Procurement Special Account in June 2017 as a result of the transfer. The final balance of the special account, relating to the ICT functions specified in the AAO, was transferred from the Department of Finance’s Coordinated Procurement Contracting Special Account during the first quarter of 2017–18.

The DTA’s 2016–17 financial statements are presented in the Financial statements section.

The Australian National Audit Office issued an unmodified audit report on 18 September 2017.

Table 1 Resource statement
 

Actual available appropriation for
2016–17
$’000
(a)

Payments
made for
2016–17
$’000
(b)

Remaining balance
2016–17
$’000
(a) - (b)

Ordinary annual services1

Prior year departmental appropriation

9,411

9,411

-

Departmental appropriation2

45,217

29,493

15,724

s. 74 retained revenue receipts

15,414

15,414

-

s. 75 transfers

3,075

3,075

-

Total

73,117

57,393

15,724

Total ordinary annual services

73,117

57,393

 

Total net resourcing for DTA

73,117

57,393

 
  1. Appropriation Act (No.1) 2016–17 and Appropriation Act (No.3) 2016–17.
Table 2 Expenses for Outcome 1

Outcome 1: To improve the user experience for all Australians accessing government information and services by leading the design, development and continual enhancement of whole-of-government service delivery policies and standards, platforms and joined-up services.

 

Budget1
2016–17
$’000
(a)

Actual expenses 2016–17
$’000
(b)

Variation
2016–17
$’000
(a) - (b)

Program 1.1: The Digital Transformation Agency

Departmental expenses

Departmental appropriation2

67,646

56,190

11,456

Expenses not requiring appropriation in the budget year

393

1,729

(1,336)

Total for program 1.1

68,039

57,919

10,120

Total expenses for Outcome 1

68,039

57,919

10,120

 

2015-16

2016–17

 

Average staffing level (number)

37

109

 
  1. Full-year budget, including any subsequent adjustment made to the 2016–17 Budget at Additional Estimates.
  2. Departmental appropriation combines ordinary annual services (Appropriation Act Nos 1 and 3) and retained revenue receipts under section 74 of the Public Governance, Performance and Accountability Act 2013.
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Purchasing and procurement

The DTA’s purchasing activities were undertaken in accordance with the Public Governance Performance and Accountability Act 2013 (PGPA Act), Commonwealth Procurement Rules and the Indigenous Procurement Policy.

The CEO’s Accountable Authority Instructions (AAIs) support these principles by providing further direction to DTA officials when conducting procurements on behalf of the Agency.

The AAIs are based on the principles of a competitive, non-discriminatory procurement processes, proper use of government resources, and making decisions in an accountable and transparent manner.

DTA also has a centralised procurement team to provide guidance and advice for DTA officials undertaking procurement activities.

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Consultancies

The DTA engages consultants where specialist or technical expertise is required. Consultants are typically engaged to:

  • investigate or diagnose a defined issue or problem
  • carry out independent reviews or evaluations
  • provide objective advice
  • provide recommendations to assist in decision making.

The engagement of consultants is assessed to ensure value for money and compliance with the PGPA Act, the Commonwealth Procurement Rules (CPRs) and AAIs.

During 2016–17, 13 new consultancy contracts were entered into involving a total actual expenditure of $1,941,298. In addition, one ongoing consultancy contract was active during the period involving a total actual expenditure of $13,200.

Annual reports contain information about actual expenditure on consultancy contracts. Information on the value of the contracts is available on the AusTender website: www.tenders.gov.au

There were no instances of contracts that precluded the Auditor-General from accessing the contractor’s premises (17AG(8)).

In 2016–17, the DTA published the following on the AusTender website:

  • details of publicly available business opportunities with a value of $80,000
    or more
  • details of all contracts awarded with a value of $10,000 or more.

By publishing on AusTender, the DTA ensures that information is available to industry, including small and medium enterprises (SMEs) while simplifying the way business interacts with government online.

There were no contracts in 2016–17 that were exempt from being reported on AusTender.

DTA supports small business participation in the Commonwealth Government Procurement market. SMEs and small enterprise participation statistics are available on the Department of Finance’s website at http://www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts/

The DTA procurement practices support SMEs by adopting whole of government solutions to simplify interactions with SMEs. This includes using the Commonwealth Contracting Suite for low-risk procurements valued under $200,000. This reduces process costs for SMEs by creating contracting consistency and simplifying liability, insurance and indemnity requirements.

DTA recognises the importance of ensuring that small businesses are paid on time. DTA applies the Government’s Supplier Pay on Time or Pay Interest Policy to pay invoices no later than 30 days following the receipt of a correctly rendered tax invoice valued at $1 million or less.

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Advertising and market research

During 2016–17, DTA did not undertake any advertising campaigns. DTA did make payments for market research services as shown below.

Firm

Service Provided

2016–17
Payments
made in $
(incl. GST)

Farron Research

User Research and testing sessions

28,824

Ogilvy

Immersion workshops, stakeholder research and communications review

50,320

Ogilvy

Retrospective Social listening analysis report

15,000

Farron Research

User Research and testing sessions

31,358

The Knowledge Warehouse (TKW Research Group)

Healthcare User Research

42,914

Red Rollers

User Research and testing sessions

41,250

Department of Human Services

User Research and testing sessions

21,660

Paper Giant

User Research and testing sessions

99,088

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Financial statements

for the period ending 30 June 2017

Read the full text version of the Independent Auditor’s report.

Page 1 of the Independent Auditor's report from the Australian National Audit Office.

Page 2 of the Independent Auditor's report from the Australian National Audit Office.

Digital Transformation Agency
Statement by the Chief Executive Officer and Acting Chief Finance Officer

In our opinion, the attached financial statements for the year ended 30 June 2017 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.

In our opinion, at the date of this statement, there are reasonable grounds to believe that the Digital Transformation Agency will be able to pay its debts as and when they fall due.

Gavin Slater Chief Excecutive Officer's signature

Gavin Slater
Chief Executive Officer
18 September 2017

Sarah Johnston Acting Chief Finance Officer's signature

Sarah Johnston
Acting Chief Finance Officer
18 September 2017

Digital Transformation Agency
Statement of Comprehensive Income

for the period ending 30 June 2017

 

Notes

2017
$’000

2016
$’000

Original
Budget
$’000

Net cost of services

Expenses

Employee benefits

1.1A

17,207

6,633

10,487

Suppliers

1.1B

39,560

20,423

24,404

Depreciation and amortisation

2.2A

1,138

848

208

Write-down and impairment of assets

2.2A

3

957

-

Finance costs

2.4A

11

-

-

Total expenses

57,919

28,861

35,099

Own-source revenue

Contributions

1.2A

10,000

-

-

Rendering of Services

 

5,431

-

-

Resources received free of charge

1.2B

577

261

185

Total own-source revenue

16,008

261

185

Net cost of service

 

41,911

28,600

34,914

Revenue from Government

 

48,292

30,525

34,706

Surplus/(Deficit) attributable to the Australian Government

 

6,381

1,925

(208)

Other comprehensive income

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation surplus

 

239

-

-

Total comprehensive income/(loss) attributable to the
Australian Government

 

6,620

1,925

(208)

The above statement should be read in conjunction with the accompanying notes.

Digital Transformation Agency
Statement of Financial Position

as at 30 June 2017

 

Notes

2017
$’000

2016
$’000

Original
Budget
$’000

Assets

Financial Assets

Cash

 

557

145

250

Trade and other receivables

2.1A

21,129

10,451

621

Total financial assets

 

21,686

10,596

871

Non-financial Assets

Leasehold improvements

2.2A

2,063

1,461

-

Plant and equipment

2.2A

647

572

1,179

Intangibles

2.2A

-

364

-

Prepayments

 

595

348

202

Total non-financial assets

 

3,305

2,745

1,381

Total assets

 

24,991

13,341

2,252

Liabilities

Payables

Suppliers

2.3A

4,896

5,926

410

Other payables

2.3B

1,196

210

-

Total payables

 

6,092

6,136

410

Provisions

Employee provisions

4.1A

6,313

1,463

1,257

Make good provisions

2.4A

549

325

-

Total provisions

 

6,862

1,788

1,257

Total liabilities

 

12,954

7,924

1,667

Net assets

 

12,037

5,417

585

Equity

Contributed equity

 

3,492

3,492

906

Asset revaluation reserve

 

239

-

-

Retained surplus (Accumulated deficit)

 

8,306

1,925

(321)

Total equity

 

12,037

5,417

585

The above statement should be read in conjunction with the accompanying notes.

Digital Transformation Agency
Statement of Changes in Equity

for the period ending 30 June 2017

 

2017
$’000

2016
$’000

Original Budget
$’000

Total equity - opening balance

Balance carried forward from previous period

Contributed equity

3,492

-

906

Asset revaluation reserve

-

-

-

Retained earnings

1,925

-

(113)

Adjusted opening balance

5,417

-

(113)

Comprehensive income

Retained earnings

Surplus/(Deficit) for the period

6,381

1,925

(208)

Asset revaluation reserve

Other comprehensive income

239

-

-

Total comprehensive income

6,620

1,925

(208)

Contributed equite

Transactions with owners - contributed equity

Distributions to owners

Returns of capital:

     

Return of Appropriation (equity injection)

-

(2,226)

-

Contributions by owners

     

Restructuring1

-

1,992

-

Appropriation (equity injection)

-

2,226

-

Departmental Capital Budget (DCB)

-

1,500

-

Total transactions with owners

-

3,492

-

Total equity

Contributed equity

3,492

3,492

906

Asset revaluation reserve

239

-

-

Retained earnings

8,306

1,925

(321)

Closing balance as at 30 June

12,037

5,417

585

  1. In 2017 a restructure with Department of Finance for the transfer to DTA of whole of government ICT and ICT procurement policy and services functions occurred with a nil impact on the DTA’s equity balance, see note 6.1.

Accounting Policy

Equity injections

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Restructuring of Administrative Arrangements

Net assets received from or relinquished to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

Other Distributions to Owners

The Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) requires that distributions to owners be debited to contributed equity unless it is in the nature of a dividend.

The above statement should be read in conjunction with the accompanying notes.

Digital Transformation Agency
Cash Flow Statement

for the period ended 30 June 2017

 

Notes

2017
$’000

2016
$’000

Original Budget

$’000

Operating activities

Cash received

Appropriations

 

42,391

21,259

34,424

Contributions

 

10,000

-

-

Net GST received

 

3,294

778

268

Sale of goods and rendering of services

 

5,414

-

-

Total cash received

 

61,099

22,037

34,692

Cash used

Employees

 

16,153

10,575

10,468

Suppliers

 

43,532

9,847

24,224

Total cash used

 

59,685

20,422

34,692

Net cash from operating activities

 

1,414

1,615

-

Investing activities

Cash used

Purchase of property, plant and equipment

2.2A

1,002

2,970

-

Total cash used

 

1,002

2,970

-

Net cash used by investing activities

 

(1,002)

(2,970)

-

Financing activities

Cash received

Contributed equity

Departmental capital budget

 

-

1,500

-

Total cash received

 

-

1,500

-

Net cash from financing activities

 

-

1,500

-

Net increase in cash held

 

412

145

-

Cash and cash equivalents at the beginning of the reporting period

 

145

-

250

Cash and cash equivalents at the end of the reporting period

 

557

145

250

The above statement should be read in conjunction with the accompanying notes.

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Digital Transformation Agency Notes to and forming part of the financial statements

for the period ended 30 June 2017

Overview

Basis of preparation of the financial statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

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

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except where certain assets and liabilities are recorded at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

New Australian accounting standards

All new, revised or amended standards and interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material financial impact on the DTA’s financial statements.

Taxation

The DTA is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and Goods and Services Tax (GST).

Events after the reporting period

There are no known events occurring after the reporting period that could impact on the financial statements.

Revenue from Government

Amounts appropriated for departmental ordinary annual services for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when DTA gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

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1. Financial Performance

This section analyses the financial performance of the Digital Transformation Agency for the year ended 30 June 2017.

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1.1 Expenses

 

2017
$’000

2016
$’000

Note 1.1A: Employee benefits

Wages and salaries

11,529

4,961

Superannuation

Defined contribution plans

1,247

620

Defined benefit plans

887

245

Leave and other entitlements

2,774

755

Separation and redundancies

564

5

Other

206

47

Total employee benefits

17,207

6,633

Accounting Policy

Accounting policies for employee related expenses is contained in the People and Relationships section.

Note 1.1B: Suppliers

Goods and services supplied or rendered

Consultants, contractors and legal

24,725

9,037

Information technology and communication

3,421

2,163

Payments to other government agencies1

3,002

60

Secondments

2,331

4,914

Training, recruitment and other staff costs

1,471

492

Travel

1,366

1,033

Other

1,526

1,395

Total goods and services supplied or rendered

37,842

19,094

Goods supplied

414

739

Services rendered

37,428

18,355

Total goods and services supplied or rendered

37,842

19,094

Other suppliers

Operating lease rentals

1,665

1,261

Workers compensation expenses

53

68

Total other supplier expenses

1,718

1,329

Total suppliers

39,560

20,423

Leasing commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within 1 year

2,134

1,242

Between 1 to 5 years

2,391

3,003

Total operating lease commitments

4,525

4,245

  1. Relates to collaboration with other government agencies on digital capability design.

Note: Commitments are GST inclusive where relevant.

Operating lease commitment - leases for office accommodation

Office accommodation lease payments are subject to periodic increases in accordance with the rent review provisions in the lease agreements. The three leases entered into by the DTA all have renewal options which vary from 1 to 5 years.

Accounting Policy

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.

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1.2 Own-Source Revenue and Gains

Own-Source Revenue

2017
$’000

2016
$’000

Note 1.2A: Contributions

Contribution from PM&C1

10,000

-

Total Contributions

10,000

-

  1. PM&C transferred $10 million to the DTA in 2016–17. PM&C was reimbursed for this transfer through the Trusted Digital Identity expense measure in the 2016–17 Mid-Year Economic and Fiscal Outlook (MYEFO).

Note 1.2B: Resources received free of charge

Audit fee

58

60

Secondments

519

-

Assets received free of charge

-

201

Total resources received free of charge

577

261

Accounting Policy

Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

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2. Financial Position

This section analyses the Digital Transformation Agency’s assets used to generate financial performance and the operating liabilities incurred as a result.

Leasehold improvements and plant and equipment are carried at fair value in accordance with AASB 13 Fair Value Measurement. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

Employee related information is disclosed in the People and Relationships section.

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2.1 Financial Assets

 

2017
$’000

2016
$’000

Note 2.1A: Trade and Other Receivables

   

Services receivables

Services rendered

3,838

623

Total goods and services receivables

3,838

623

Appropriations receivables

Existing programs

15,167

9,266

Total appropriations receivable

15,167

9,266

Other receivables

Statutory receivables

317

399

Other receivables

1,807

163

Total other receivables

2,124

562

Total trade and other receivables

21,129

10,451

Credit terms for goods and services were within 30 days (2016: 30 days).

Receivables have been assessed for impairment at the end of each reporting period. No allowance has been made
as at 30 June 2017 (2016: nil).

Accounting Policy
Loans and Receivables

Trade receivables, loans and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

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2.2 Non-Financial Assets

Note 2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Reconciliation of the opening and closing balances of property, plant and equipment and intangibles for 2017.

 

Leasehold
improvements
$’000

Plant and
equipment
$’000

Computer
software
internally
developed
$’000

Total
$’000

As at 1 July 2016

Gross book value

1,687

717

841

3,245

Accumulated depreciation/amortisation and impairment

(226)

(145)

(477)

(848)

Total as at 1 July 2016

1,461

572

364

2,397

Additions

Purchase

790

212

-

1,002

Make good

213

-

-

213

Revaluations recognised in other comprehensive income

147

92

-

239

Depreciation and amortisation

(548)

(226)

(364)

(1,138)

Write-down and impairments recognised in net cost of services

-

(3)

-

(3)

Total as at 30 June 2017

2,063

647

-

2,710

Total as at 30 June 2017 represented by

Gross book value

Fair value

2,206

647

841

3,694

Accumulated depreciation/amortisation and impairment

(143)

-

(841)

(984)

Total as at 30 June 2017

2,063

647

-

2,710

No significant items of property, plant and equipment are expected to be sold or disposed of within the next 12 months.

Accounting policy
Asset recognition threshold

Property, plant and equipment is the generic term that covers leasehold improvements and plant and equipment. Purchases of property, plant and equipment and intangibles are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $2,000, which are expensed in the year of acquisition.

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by the DTA where there exists an obligation to restore the asset to its original condition. These costs are included in the value of the DTA’s leasehold improvements with a corresponding provision for the ‘make good’ recognised.

Intangibles

The DTA’s intangibles comprise internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. Software is amortised on a straight-line basis over an anticipated useful life of 2 to 3 years.

Revaluations

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date, generally this will be on a three year cycle unless a significant event occurs that would impact the fair value of assets.

Fair values for each class of asset are determined as shown below:

Asset Class

Fair value measurement

2017
$’000

2016
$’000

Leasehold improvements

Depreciated replacement cost

2,063

1,461

Plant and equipment – Desktop hardware

Market selling price

71

-

Plant and equipment – other categories

Depreciated replacement cost

576

572

In 2017 a valuation of property, plant and equipment assets was undertaken by International Valuation & Property Services (IVPS). The fair value of these asset classes were adjusted by the values provided by IVPS resulting in a revaluation reserve of $239,000.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the DTA using, in all cases, the straight-line method of depreciation. Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

 

2017

2016

Leasehold improvements

Lease term

Lease term

Plant and equipment

3 to 10 years

2 to 10 years

Impairment

All assets were assessed for impairment during 2017. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

A write-down of $3,000 was recognised in 2017 (2016: $957,000) for the write-off of plant and equipment assets as a result of the annual asset stocktake process.

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2.3 Payables

 

2017
$’000

2016
$’000

Note 2.3A: Suppliers

Trade creditors and accruals

4,896

5,926

Total suppliers

4,896

5,926

Settlement is usually made within 30 days.

Note 2.3B: Other payables

Unearned revenue

765

-

Salaries and wages

158

46

Superannuation

27

7

Lease liability

23

19

Statutory payable

54

15

Other

169

123

Total other payables

1,196

210

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2.4 Other Provisions

 

2017
$’000

2016
$’000

Note 2.4A: Provision for Make Good Obligations

As at 1 July 2016

325

-

Additional provisions made

213

325

Unwinding of discount or change in discount rate

11

-

Total as at 30 June 2017

549

325

The DTA has entered into three lease arrangements (one under a Memorandum of Understanding agreement) for the leasing of premises. These arrangements have provisions requiring the DTA to restore the premises to the original condition at the conclusion of the lease.

Accounting Policy

Provision for the restoration of leased premises (make good) is based on future obligations relating to the underlying assets. The provision is disclosed at the present value of the obligation utilising the appropriate Government bond rate.

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3. Funding

This section identifies the DTA’s funding structure.

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3.1 Appropriations

Note 3.1A: Annual Appropriations (‘Recoverable GST exclusive’)

Annual appropriations for 2017

 

Appropriation Act

PGPA Act

Appropriation applied in 2017 (current and
prior years)1

Variance2

 

Annual Appropriation

Section 74
receipts

Section 75
Transfers

Total
appropriation

 

$’000

$’000

$’000

$’000

$’000

$’000

Departmental

Ordinary annual services

45,217

15,414

3,075

63,706

(57,393)

6,313

Total departmental

45,217

15,414

3,075

63,706

(57,393)

6,313

  1. The Department of Employment (shared services, previously the Shared Service Centre) spent money from the Consolidated Revenue Fund (CRF) on behalf of DTA.
  2. The variance in departmental ordinary annual services is mainly attributable to underspend on the Trusted Digital Identity second pass business case which was funded in MYEFO.

Annual appropriations for 2016

 

Appropriation Act

PGPA Act

Appropriation applied in 2016 (current and
prior years)1

Variance2

 

Annual Appropriation

Section 74
receipts

Section 75
Transfers

Total
appropriation

 

$’000

$’000

$’000

$’000

$’000

$’000

Departmental

Ordinary annual services

30,011

-

514

30,525

(20,715)

9,810

Capital Budget3

1,500

-

-

1,500

(1,500)

-

Other services

Equity injections4

2,226

-

-

2,226

-

2,226

Total departmental

33,737

-

514

34,251

(22,215)

12,036

  1. In 2016 the Shared Service Centre spent money from the Consolidated Revenue Fund (CRF) on behalf of DTA.
  2. The variance in departmental ordinary annual services is mainly attributable to undrawn current year appropriations due a higher than expected accrued expense balance.
  3. Departmental Capital Budgets are appropriated through Appropriation Acts (No. 1,3,5). They form part of ordinary annual services and are not separately identified in the Appropriation Acts.
  4. The comparative year Equity injection is shown exclusive of the Section 51 Permanent Quarantine, which has reduced contributed equity by $2.226 million.

Note 3.1B: Unspent Annual Appropriations (‘Recoverable GST exclusive’)

 

2017
$’000

2016
$’000

Authority

Departmental1

Appropriation Act (No. 1) 2015-16

-

7,896

Appropriation Act (No. 1) 2015-16 - cash held by the department

-

145

Appropriation Act (No. 3) 2015-16

-

1,370

Appropriation Act (No. 1) 2016–17

8,406

-

Appropriation Act (No. 1) 2016–17 - cash held by the department

557

-

Appropriation Act (No. 3) 2016–17

6,761

-

Total departmental

15,724

9,411

  1. Appropriations reduced under section 51 of the PGPA Act in 2016 included equity injection of $2.226 million. No amounts were reduced in 2017.

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4. People and Relationships

This section describes a range of employment and post-employment benefits provided to our people and our relationships with other key people.

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4.1 Employee Provisions

 

2017
$’000

2016
$’000

Note 4.1A: Employee Provisions

Leave

6,313

1,463

Total employee provisions

6,313

1,463

Accounting Policy

Liabilities for ‘short-term employee benefits’ and termination benefits due within twelve months of the end of reporting period are measured at their nominal amounts.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the DTA’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination. The provision is disclosed at the present value of the obligation using the short hand method that utilises the appropriate Government bond rate.

No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the DTA is estimated to be less than the annual entitlement for sick leave.

Superannuation

The DTA’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or another fund of their choice.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled
by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The DTA makes employer contributions to the employees’ superannuation scheme. For Commonwealth defined benefits schemes, these rates are determined by an actuary to be sufficient to meet the current cost to the Government. The DTA accounts for the contributions as if they were contributions to defined contribution plans.

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4.2 Key Management Personnel Remuneration

Note 4.2A: Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Key management personnel (KMP) remuneration is reported in the table below:

 

2017
$’000

2016
$’000

Short-term employee benefits

1,716

1,747

Post-employment benefits

245

254

Other long-term employee benefits

226

129

Termination benefits

414

-

Total key management personnel remuneration expenses1,2,3

2,601

2,130

  1. The DTA has determined the KMP to be the Chief Executive Officer (CEO) and 4 Executive Officers as at 30 June 2017. This executive team in 2015-16 included 9 officers until the DTA was restructured from October 2016 on transition from the Digital Transformation Office (DTO).
  2. The total number of KMP that are included in the above table is 12 (2016: 11) representing the people who individually occupied the KMP positions during the year.
  3. The above KMP remuneration excludes the remuneration and other benefits of the Portfolio Ministers. The Portfolio Ministers’ remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.

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Related party relationships:

The DTA is an Australian Government controlled entity. Related parties to the DTA are Key Management Personnel including the Portfolio Ministers and other Australian Government entities.

Transaction with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

  • Significant transactions with related parties can include:
  • the payments of grants or loans;
  • purchases of goods and services;
  • asset purchases, sales transfers or leases;
  • debts forgiven; and
  • guarantees.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the DTA, it has been determined that there are no related party transactions to be separately disclosed.

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5. Managing Uncertainties

This section analyses how the DTA manages financial risks within its operating environment.

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5.1 Contingent Asset and Liabilities

The DTA is not aware of any material departmental quantifiable or unquantifiable contingent assets or liabilities as at the signing date that would require disclosure in the financial statements.

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

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5.2 Financial Instruments

 

2017
$’000

2016
$’000

Note 5.2A: Categories of Financial Instruments

Financial Assets

Held-to-maturity investments

Cash and cash equivalents

557

145

Total held-to-maturity investments

557

145

Loans and receivables

Goods and services receivables

3,838

623

Total loans and receivables

3,838

623

Total financial assets

4,395

768

Financial Liabilities

Financial liabilities measured at amortised cost

Trade creditors and accruals

4,896

5,926

Total financial liabilities measured at amortised cost

4,896

5,926

Total financial liabilities

4,896

5,926

Note 5.2B: Net Gains or Losses on Financial Assets and Liabilities

The DTA has no gains or losses on financial instruments.

Accounting Policy
Financial assets

The DTA classifies its financial assets in the following categories:

  1. held-to-maturity investments; and
  2. loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.

Financial Liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’. Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

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6. Other Information

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6.1 Restructuring

Note 6.1A: Restructuring

Net assets received from or relinquished to another Australian Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

As part of the Administrative Arrangement Orders issued by the Government on 27 October 2016, responsibility for whole of government ICT and ICT procurement policy and services transferred from the Department of Finance (Finance) to the DTA. Assets and liabilities for this restructure occurred in two phases with phase one transferring on 15 December 2016 and phase two transferring on 18 May 2017.

The DTA’s ICT Procurement Special Account was established on 6 June 2017 to facilitate the final transfer of assets and liabilities from Finance’s Coordinated Procurement Contracting Special Account. The final transfer of the special account balance relating to ICT functions specified in the AAO will transfer from 1 July 2017.

 

2017

2016

 

Transfer from
Department
of Finance
$’000

Set up of
DTO from
PM&C1
$’000

GOV 2.0
from
Finance2
$’000

Functions assumed

Assets recognised

Appropriation receivable

3,088

-

431

Accounts receivable

356

-

-

Plant and equipment

-

989

-

Intangibles- internally generated

-

-

841

Other non-financial assets (prepayments)

-

-

162

Total assets recognised

3,444

989

1,434

Liabilities recognised

Employee provisions

2,637

-

431

Unearned revenue

807

-

-

Total liabilities recognised

3,444

-

431

Net assets recognised

-

989

1,003

Income Assumed

Recognised by DTA

713

-

-

Recognised by Department of Finance

972

-

-

Total income assumed

1,685

-

-

Expenses assumed

Recognised by DTA

3,528

-

1,836

Recognised by Department of Finance

3,793

-

331

Total expenses assumed

7,321

-

2,167

  1. During 2016, PM&C relinquished $0.989 million in plant and equipment to assist with the establishment of the then Digital Transformation Office (DTO) as its own Executive Agency on 1 July 2015.
  2. Also in 2016, as part of the Administrative Arrangement Orders issued by the Government on 21 September 2015,
    the Gov 2.0 function (and associated assets and liabilities) was transferred from the Department of Finance.

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6.2 Budgetary Explanation of Major Variances

Note 6.2A: Budgetary Reporting

The DTA’s financial statements report the original budget as published in the Department of Prime Minister and Cabinet 2016–17 Portfolio Budget Statements.

Where required, the original budget has been adjusted to align with the presentation and classification adopted in the final outcome.

Explanations of major variances between the actual and original budgeted amounts for 2017 (that are greater than +/- 10 per cent of the original budget for a line item and greater than +/- $1 million) are provided below.

Explanations of major variances

Affected line items

Statement of Comprehensive Income

Total expenses for 2016–17 were $57.9 million, an increase of $22.8 million compared to the original budget. This variance reflects additional expenditure for:

  • Additional measures announced in the 2016–17 Mid-Year Economic and Fiscal Outlook (MYEFO) including employee benefits ($3.9 million) and suppliers($11.5 million) of which the Trusted Digital Identity measure was the largest component; and
  • The Administrative Arrangements Order (AAO) of 27 October 2016, whereby responsibilities for whole of government ICT and ICT procurement policy and services transferred from the Department of Finance to DTA, including employee benefits expenditure of $3.3 million and suppliers of $0.8m.

Employees and Suppliers

Total own-source income for 2016–17 was $16.0 million, an increase of $15.8 million compared to the original budget. This increase in revenue is due to additional rendering of services from the AAO of 27 October 2016 and the contribution revenue from PM&C for the Trusted Digital Identity measure. Details regarding the contribution were disclosed in the measure published in the 2016–17 MYEFO.

Contributions and Rendering of Services

Revenue from Government for 2016–17 was $48.3 million, an increase of $13.6 million compared to the original budget. This increase relates to the AAO of 27 October 2016 and from measures including the Trusted Digital Identity measure.

Revenue from Government

Statement of Financial Position

The change in the actual balance sheet position as at 30 June 2017 compared to the original budget reflects the additional activities transferred to DTA from Department of Finance following the AAO of 26 October 2017.

All

Statement of Cash Flows

The $26.4 million increase in cash received compared to the original budget relates the AAO of 26 October 2016, a contribution from PM&C and new measure including the Trusted Digital Identity measure.

Appropriation, Contributions and Rendering of services

The $25.0 million increase in cash used compared to the original budget relates to additional expenditure as a consequence of the AAO of 26 October 2016, PM&C contribution and the Trusted Digital Identity measure.

Employees and Suppliers

The $1.0 million increase in property, plant and equipment expenditure compared to the original budget relates to increased investment in leasehold improvements and plant and equipment purchases to support the increasing size of the agency.

Purchase of property, plant and equipment

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Get in touch

If you have any questions you can send an email to info@dta.gov.au or call 0427 136 791