Part three
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Financial Management
2004–05 Budget
The Commission’s operating revenues for 2004–05 totalled $32.599 million. Revenues from government accounted for 52.7%, sales of goods and services accounted for 47.2% and disposal of assets accounted for the remaining 0.1% (see Table 32).
Table 32: Revenue sources, 2000–01 to 2004–05
| Revenue Source | 2001–02 | 2002–03 | 2003-04 | 2004-05 |
| Government | 60% | 55.6% | 57.2% | 52.7% |
| Sale of goods and services | 38.4% | 43.8% | 42.7% | 47.2% |
| Other ( e.g. disposal of assets' and interest) |
1.6% | 0.6% | 0.1% | 0.1% |
Investment in programme development
The Commission was granted approval, through the 2003–04 Additional Estimates, to access its accumulated reserves to fund developmental work on an integrated approach to leadership development in the APS and on increasing Indigenous employment in the APS (see Table 33).
Table 33: Reserve funding for programme development, 2003–04 to 2005–06
| 2003–04 | 2004–05 | 2005-06 | |
| Leadership development | $0.898m | $0.761m | $0.516m |
| Indigenous employment | $0.221m | $0.246m | $0.063m |
| Total additional funds | $1.119m | $1.007m | $0.579m |
Transfer of funds
The Commission received funding of $0.599 million from the Department of Immigration Multicultural and Indigenous Affairs for its role in supporting the whole-of-government approach to providing services for Aboriginal and Torres Strait Islander people.
Non-appropriation revenue
Revenue from the sale of goods and services in 2004–05 is largely earned from leadership, learning and development activities (67.8%), employment-related services (12.0%), Public Service Gazette subscriptions (7.0%), funding to support capability development in the Asia–Pacific region (6.5%), promoting better practice (5.8%), and other services (0.9%).
Revenue from leadership, learning and development activities and employment-related services amounted to $12.289 million in 2004–05 and made up 37.7% of the Commission’s total revenue from all sources. This revenue is earned in an open market where agencies have choice about where they source their services and the level of services they acquire. This potentially volatile context means the Commission must devote considerable effort to estimating revenue, expenditure and cash flows and to monitoring its financial performance during the year.
We have become increasingly dependent on non-appropriation revenue in recent years as can be observed in Figure 5.
Figure 5: Commission revenue
Table 34: Total planned budget for 2004–05
| Sources of revenue | Value |
| Base appropriation funding | $15.589 m |
| Investment in programme development | $1.007 m |
| Transfer from Department of Immigration and Multicultural and Indigenous Affairs | $0.599 m |
| International assistance | $1.005 m |
| Other non-appropriation funding | $14.399 m |
| Total | $32.599 m |
Operating outcome 2004-05
The Commission’s operating outcome for 2004–05 was a surplus of $0.783 million. The surplus resulted primarily from significant growth in elements of Output 2 against forecast performance, and contrasts with the operating outcome for 2003–04 which was a loss of $1.229 million.
The turnaround in performance is due to:
- revision of the design of some learning and development programmes that had been reaching the end of their lifecycle
- a more conservative approach to budgeting, including estimates of non-appropriation revenue
- tighter monitoring and management of budget performance during the year.
The modest operating surplus achieved in 2004–05 returns performance to the pattern of modest operating surpluses achieved prior to the 2003–04 operating loss.
Table 35: End of year position 2001–02 to 2004–05
| 2001–02 | 2002-03 | 2003–04 | 2004–05 | |
| Surplus | $0.989m | $0.074m | $0.783 m | |
| Deficit | $1.229m |
The 2004–05 operating surplus partly restores funds depleted through the 2003–04 operating loss which contribute to covering employee liabilities and provide for future investment in development of our work programme.
The Commission has sufficient accumulated reserve funds to meet its liabilities.
Budget outlook
In developing the 2005-06 budget we have continued to adopt a conservative approach with the aim of achieving a balanced outcome in the 2005–06 budget year and forward estimates.
We are continuing to strengthen our budget and business planning and management practices as our funding will continue to be tight and our reliance on potentially volatile revenue from the sale of goods and services accounts for nearly half our budget.
Appropriation funding will decline slightly from 2005–06 onwards as investment funding approved at the 2003–04 Additional Estimates for the Indigenous Employment Strategy and the Integrated Leadership System declines. This decrease in appropriations will be offset by increased training revenue and a continuing slight decline in staffing levels, so a balanced operating position will be achieved.
Finally, commencing in 2005–06 we have simplified our output group structure to:
- APS policy and employment services
- development programmes
- better practice and evaluation.
The new output group structure provides better delineation between outputs and adds clarity to budget planning and management.
