Chapter 5—Financial statements

Summary of financial management and performance

How the agency is funded

Parliament, via the Appropriation Acts, provides the agency with two types of funding:

  • departmental—resources that are used to deliver the objectives of conserving Old Parliament House as a significant national heritage site and delivering the Museum of Australian Democracy at Old Parliament House
  • administered—revenues and payments that are administered on behalf of the government. The revenues collected are for museum admissions and building rental income. The payments made are used for building and heritage furniture capital works and the development of exhibitions.

How financial performance is measured

Financial forecasts are published through the year as part of the Budget papers. The key reference point is the Portfolio Budget Statements (PBS), released on Budget night.

The organisation’s overall focus is on providing accurate estimates and achieving a break-even financial position.

Key results in 2011–12

An unmodified audit report was received on the 2011–12 financial statements from the Australian National Audit Office with one Category C finding (indicating a low business or financial risk) identified during the year.

Departmental finances

Table 18 Trends in departmental finances
  2010–11
$ m
2011–12
$ m
Change
%
a Excluding depreciation and amortisation
Income and expenses
Employee expenses 7.178 8.057 12
Supplier expenses 6.670 6.020 –10
Other expenses 0.002 0.004 100
Total expenses 13.850 14.081 2
Other own–source revenue 0.218 0.428 96
Net cost of services 13.632 13.653 0
Revenue from government 13.755 13.655 –1
Operating resulta 0.123 0.002 –98
Balance Sheet
Financial assets 4.612 4.283 –7
Non–financial assets 2.074 2.486 20
Liabilities 2.538 2.452 –3
Net assets 4.148 4.317 4

Compared to Budget

The PBS forecast a net break-even position, after adjusting for depreciation/amortisation. This target was achieved with a $0.002 million attributable surplus, which is 0.01 per cent of appropriations (see Note 26 of the financial statements for details).

Total own-source revenue was slightly higher than anticipated, by $0.083 million, due to additional sponsorships and unbudgeted exhibition hire.

Total expenses were also slightly higher than anticipated, by $0.090 million, due mainly to the use of the additional sponsorship funding on the project to deliver the Marnti warajanga—a walk together travelling exhibition in the Pilbara region of Western Australia.

Compared to 2010–11

The attributable surplus of the agency was again very close to the target of a break-even position. The surplus was lower at $0.002 million this year, compared to $0.021 million last year.

Revenue increased by $0.110 million from last year. This was due to an increase in own-source revenue of $0.210 million partly offset by a reduction in revenue from government of $0.100 million.

The increase in own-source revenue of $0.210 million related to sponsorship funding, which was higher due to the receipt of Pilbara project sponsorship funding of $0.362 million and exhibition hire. Other gains are lower than last year as 2010–11 included asset donations of $0.103 million and $0.043 million in advertising in kind from The History Channel. Advertising in kind of $0.896 million was received in 2011–12 but it did not meet all the recognition criteria of the standard so the amount has been excluded from the accounts.

Expenses were higher by $0.231 million. This is due to higher employee costs arising from salary increases under the Enterprise Agreement, redundancies and additional staff for the Pilbara project, partly offset by lower supplier costs and depreciation.

Net equity increased by $0.169 million due to the recognition of library assets of $0.349 million and equity injections for capital of $0.224 million. This was partly offset by the deficit for the period of $0.404 million (due to changes in the net cash arrangements for depreciation and amortisation).

The agency’s financial assets at 30 June 2012 of $4.283 million are adequate to cover liabilities of $2.452 million.

Administered finances

Table 19 Trends in administered finances
  2010–11
$m
2011–12
$m
Change
%
Income and expenses
Revenue 1.482 1.340 –10
Other gains 0.044 0.066 50
Total income 1.526 1.406 –8
Depreciation and amortisation 3.866 4.340 12
Write-down and impairment of assets 0.054
Total expenses 3.866 4.394 14
Net cost of services 2.340 2.988 28
Balance Sheet
Financial assets 0.224 0.117 –48
Non–financial assets 93.459 91.473 –2
Liabilities 0.244 0.302 24
Net assets 93.439 91.288 –2

Compared to Budget

The PBS forecast net cost of services at $3.037 million and actual services were $2.988 million. This is a variance of $0.049 million. Revenue was forecast at $1.312 million and actual revenue was slightly higher, by $0.028 million, at $1.340 million. The forecast depreciation and amortisation equated to $4.349 million and actual depreciation and amortisation is slightly lower, by $0.009 million, at $4.340 million. Impairments of assets and donations were not forecast as they were not known at the time of the PBS; the net impact is a gain of $0.012 million.

Compared to 2010–11

The net cost of services increased by $0.648 million from $2.340 million in 2010–11 to $2.988 million in 2011–12.

Revenue was lower, by $0.120 million, as short-term building tenancies expired in 2011–12. Expenses were higher, by $0.528 million, mainly due to increases in depreciation on the building due to the impact of last year’s revaluation.

Net assets reduced during the year by $2.151 million from $93.439 million to $91.288 million. The main reason for this reduction is that the value of non-financial assets is reducing each year. Asset replacements are not occurring at the same rate as the assets are being consumed as the Administered Capital Budget is lower than the annual depreciation and amortisation expense.

Promoting the museum via a new partnership with Murrays Australia Pty Ltd.

Promoting the museum via a new partnership with Murrays Australia Pty Ltd.

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