for the period ended 30 June 2014

Note 1: Summary of Significant Accounting Policies

1.1 Objectives of the Office of the Fair Work Building Industry Inspectorate

The Office of the Fair Work Building Industry Inspectorate (FWBII) is an independent Australian Government controlled entity established by the Fair Work (Building Industry) Act 2012 and is a not-for-profit entity.

FWBII is structured to meet a single outcome:

Outcome 1: Enforce workplace relations laws in the building and construction industry and ensure compliance with those laws by all participants in the building and construction industry through the provision of education, assistance and advice.

FWBII activities contributing toward the outcome are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the FWBII in its own right. Administered activities involve the management or oversight by the FWBII, on behalf of the Government, of items controlled or incurred by the Government.

The continued existence of the FWBII in its present form is dependent on Government policy and on continuing funding by Parliament for the FWBII’s administration.

1.2 Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 49 of the Financial Management and Accountability Act 1997.

The financial statements have been prepared in accordance with:

  1. Finance Minister’s Orders (FMOs) for reporting periods ending on or after 1 July 2011; and
  2. Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accruals basis and in accordance with the historical cost convention, except for certain assets that are stated 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.

Unless an alternative treatment is specifically required by an Australian Accounting Standard or Interpretation, or by the FMOs, assets and liabilities are recognised in the Statement of Financial Position when, and only when, it is probable that future economic benefits will flow to the FWBII or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the Schedule of Commitments or the Schedule of Contingencies.

Unless an alternative treatment is specifically required by an Australian Accounting Standard or Interpretation, incomes and expenses are recognised in the Statement of Comprehensive Income when, and only when, the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

1.3 Signifcant Accounting Judgements and Estimates

No accounting judgements or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next financial period.

1.4 New Australian Accounting Standards

Adoption of New Australian Accounting Standard Requirements

AASB 13 - Fair Value Measurement

This standard introduces a consistent approach to fair value measurement and additional disclosure requirements for entities on the valuation of their assets and liabilities. It is applicable to accounting periods beginning on or after 1 January 2013 and has resulted in an additional note to the financial statements (see Note 5).

All other new standards, amendments to standards and interpretations issued by the AASB that are applicable to the current reporting period did not have a material effect, and are not expected to have a future material effect, on the entity’s financial statements.

No accounting standard has been adopted earlier than the application date as stated in the standard in the current reporting period.

Future Australian Accounting Standard Requirements

Of the new standards, amendments to standards and interpretations issued by the AASB prior to the sign off date and which are applicable to future periods, none are expected to have a material financial impact on the FWBII.

1.5 Revenue

Revenue from the sale of goods is recognised when:

  1. the risks and rewards of ownership have been transferred to the buyer,
  2. the FWBII retains no managerial involvement or effective control over the goods,
  3. the revenue and transaction costs incurred can be reliably measured, and
  4. it is probable that the economic benefits associated with the transaction will flow to the FWBII.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

  1. the amount of revenue, stage of completion and transaction costs incurred can be reliably measured, and
  2. the probable economic benefits associated with the transaction will flow to the FWBII.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance. Collectability of debts is reviewed at the reporting date. Allowances are made when collectability of the debt is no longer probable.

Revenue From Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when FWBII 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.

Parental Leave Payments Scheme

The FWBII offsets amounts received under the Parental Leave Payments Scheme (for payments to employees) by amounts paid to employees under that scheme, as these transactions are only incidental to the main revenue generating activities of the FWBII.

1.6 Gains

Resources Received Free of Charge

Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. The use of these resources is recognised as an expense.

Resources received free of charge are recorded as either revenue or gains depending on their nature. Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government agency or authority as a consequence of a restructuring of administrative arrangements (refer to Note 1.7).

Sale of Assets

Gains from the disposal of assets are recognised when control of the asset has passed to the buyer.

1.7 Transactions With the Government As Owner

Equity Injections

Amounts appropriated which are designated as 'equity injections' for a year (less any formal reductions) and Departmental Capital Budgets 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 FMOs require that distributions to owners be debited to Contributed Equity unless they are in the nature of a dividend.

1.8 Employee Benefits

Liabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled.

Liabilities for short-term employee benefits (as defned in AASB 119 – Employee benefits) and termination benefits due within 12 months of the reporting date are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

All other employee benefit liabilities are measured at the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. 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 FWBII is estimated to be less than the annual entitlement for sick 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 FWBII’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 estimate of the present value of the long service leave liability takes into account attrition rates and pay increases through promotion and inflation using the shorthand method prescribed in the FMOs.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The FWBII recognises a provision for termination benefits when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

Staff of the FWBII are members of either the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS Accumulation Plan (PSSap) or other schemes.

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 in due course. This liability is reported by the Department of Finance as an administered item.

The FWBII makes employer contributions to the defined benefit schemes at rates determined by an actuary to be sufficient to meet the cost to the Australian Government of the superannuation entitlements of the FWBII’s employees. The FWBII accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June 2014 represents outstanding contributions for the final fortnight of the year.

1.9 Leases

A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.

Where an asset is acquired by means of a finance lease, the asset is capitalised at either the fair value of the leased property or, if lower, the present value of minimum lease payments at the inception of the contract and a liability is recognised at the same time and for the same amount.

The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.

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

1.10 Borrowing Costs

All borrowing costs are expensed as incurred.

1.11 Fair Value Measurement

FWBII deems transfers between levels of the fair value hierarchy to have occurred at the end of the reporting period.

1.12 Cash

Cash is recognised at its nominal amount. Cash and cash equivalents includes:

  1. cash on hand,
  2. demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of change in value,
  3. cash held by outsiders, and
  4. cash in special accounts.

1.13 Financial Assets

The FWBII classifies its financial assets in the following categories:

  1. financial assets at fair value through profit or loss,
  2. held-to-maturity investments,
  3. available-for-sale financial assets, and
  4. loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The FWBII only holds loans and receivables.

Loans and Receivables

Trade receivables, loans and other receivables that have fixed or determinable payments 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. Interest is recognised by applying the effective interest rate.

Effective Interest Method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset or, where appropriate, a shorter period.

Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss.

Impairment of Financial Assets

Financial assets are assessed for impairment at each reporting date.

Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for financial assets held at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an impairment allowance account. The loss is recognised in the Statement of Comprehensive Income.

1.14 Liabilities – Suppliers and Other Payables

Suppliers 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).

1.15 Financial Liabilities

Financial liabilities are classifed as either financial liabilities at fair value through profit or loss or other financial liabilities.

Financial Liabilities At Fair Value Through Profit Or Loss

Financial liabilities at Fair Value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Other Financial Liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with the interest expense recognised on an effective yield basis.

Effective Interest Method

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments over the expected life of the financial liability or, where appropriate, a shorter period.

1.16 Contingent Assets and Contingent Liabilities

Contingent assets and contingent liabilities 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 the likelihood of settlement is greater than remote.

1.17 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost or for nominal consideration are initially recognised as assets and revenues at their fair value at the date of acquisition, unless acquired as a consequence of the restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor agency’s accounts immediately prior to the restructuring.

1.18 Leasehold Improvements, Plant and Equipment

Asset Recognition Threshold

Purchases of leasehold improvements, plant and equipment are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than:

> $20,000 for leasehold improvements, and

> $2,000 for all other classes.

which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

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 FWBII, where there exists an obligation to restore the property to its original condition at the end of the lease term. These costs are included in the value of the FWBII’s leasehold improvements with a corresponding provision for the makegood recognised.

Revaluations

Following initial recognition at cost, leasehold improvements, 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 do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets. The FWBII revalued its leasehold improvement assets at 30 June 2013.

Revaluation adjustments are made on an asset class basis. Any revaluation increment is credited to equity under the heading of Asset Revaluation Reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised through surplus or deficit. Revaluation decrements for a class of asset are recognised directly through the surplus / deficit except to the extent that they reverse a previous revaluation increment for that class of asset.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset is restated to the revalued amount.

Depreciation

Depreciable leasehold improvements, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the FWBII 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 assets are based on the following forecast useful lives:

Forecast Deprecation Rates (Useful Lives) of Depreciable Asset Classes
Asset Class 2014 2013
Leasehold improvements Lease term Lease term
Plant and equipment 1 to 10 years 1 to 10 years

Impairment

All assets were assessed for impairment at 30 June 2014. 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.

The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash fows, and the asset would be replaced if the FWBII was deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of leasehold improvements, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

1.19 Intangibles

The FWBII’s intangible assets comprise internally developed software and purchased 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 its forecast useful life. The forecast useful life of the FWBII’s software is 3 to 6 years (2013: 3 to 6 years).

All software assets were assessed for indications of impairment as at 30 June 2014.

1.20 Taxation

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

Revenues, expenses and assets are recognised net of GST except:

  1. where the amount of GST incurred is not recoverable from the Australian Taxation Office, and
  2. for receivables and payables.

1.21 Williams Case

The Australian Government continues to have regard to developments in case law, including the High Court’s most recent decision on Commonwealth expenditure in Williams v Commonwealth [2014] HCA 23, as they contribute to the larger body of law relevant to the development of Commonwealth programs. In accordance with its general practice, the Government will continue to monitor and assess risk and decide on any appropriate actions to respond to risks of expenditure not being consistent with constitutional or other legal requirements.

1.22 Reporting of Administered Activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Except where otherwise stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Administered Cash Transfers To and From the Official Public Account

Revenue collected by the FWBII for use by the Australian Government, rather than the FWBII, is administered revenue. Collections are transferred to the Official Public Account (OPA), which is maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of the Australian Government. These transfers to and from the OPA are adjustments to the administered cash held by the FWBII on behalf of the Australian Government and are reported as such in the Administered Cash Flow Statement and in the Administered Reconciliation Schedule.

Revenue

All administered revenues are revenues relating to the course of ordinary activities performed by the FWBII on behalf of the Australian Government. As such, administered appropriations are not revenues of the individual entity that oversees distribution or expenditure of the funds as directed.

The FWBII can receive monies for court-awarded penalties under the Building and Construction Industry Improvement Act 2005, the Independent Contractors Act 2006 and the Fair Work Act 2009. Collectability of debts is reviewed at the reporting date. Impairment allowances are made when the collectability of the debt is judged to be less, rather than more, likely.

Loans and Receivables

Where receivables are not subject to concessional treatment, they are carried at amortised cost using the effective interest method. Gains and losses due to impairment, derecognition and amortisation are recognised through the operating result.

1.23 Change in Accounting Policy

Court-awarded Penalties – Administered Revenue

Within the prior year Administered Schedule of Comprehensive Income, an adjustment to revenue has been made as a result of a change in accounting policy to account for court-awarded penalties on an accrual basis.

Court-awarded penalties are recognised when the court rules in favour of any claims initiated by the FWBII. The impact of this change in accounting policy in prior year resulted in an increase in court- awarded penalties of $30,000 in the Administered Schedule of Comprehensive Income and a corresponding increase in Transfers to Official Public Account by other agencies in the Administered Reconciliation Schedule.

Note 2: Events After the Reporting Date

Departmental

Following the commencement of the Public Governance, Performance and Accountability Act on 1 July 2014, appropriation under Appropriation Acts prior to 1 July 2012 are no longer available to agencies. As at 30 June 2014, FWBII had $2.295 million in funds appropriated under Appropriation Act (No.1) 2011-12 (refer to Note 23C).

Administered

No subsequent events have occurred after the reporting date that have the potential to significantly affect the ongoing structure and financial activities of the FWBII.

Note 3: Expenses

Note 3A: Employee Benefits

Expenses: Employee Benefits
  2014
$’000
2013
$’000
Wages and salaries 10,050 11,375
Superannuation:
Defined contribution plans 1,049 1,261
Defined benefit plans 1,068 932
Leave and other entitlements 2,106 1,571
Separation and redundancies 5 399
Total Employee Benefits 14,278 15,538

Note 3B: Suppliers

Expenses: Suppliers
  2014
$’000
2013
$’000
Goods and services
Information and communications technology 900 1,336
Legal 3,375 3,427
Travel 810 880
Other 2,199 3,384
Total goods and services 7,284 9,027
Goods and services are made up of:
Provision of goods – external entities 199 303
Rendering of services – related entities 2,543 2,575
Rendering of services – external entities 4,542 6,149
Total goods and services 7,284 9,027
Other supplier expenses
Operating lease rentals – external entities:
Minimum lease payments 3,405 3,656
Workers compensation premiums 407 375
Total other supplier expenses 3,812 4,031
Total Suppliers 11,096 13,058

Note 3C: Depreciation and Amortisation

Expenses: Depreciation and Amortisation
  2014
$’000
2013
$’000
Depreciation:
Leasehold improvements 677 1,012
Plant and equipment 106 109
Total depreciation 783 1,121
Amortisation:
Intangibles – computer software 11 135
Total amortisation 11 135
Total Depreciation and Amortisation 794 1,256

Note 3D: Loss on Disposal of Assets

Expenses: Loss on Disposal of Assets
  2014
$’000
2013
$’000
Leasehold improvements    
Proceeds from sale (378)
Carrying value of assets disposed 396
Total leasehold improvements 18
Plant and equipment
Carrying value of assets disposed 6
Total plant and equipment 6
Total Loss on Disposal of Assets 24

Note 3E: Write-Down and Impairment of Assets

Expenses: Write-Down and Impairment of Assets
  2014
$’000
2013
$’000
Asset impairments from:
Impairment of leasehold improvements 328
Total Write-Down and Impairment of Assets 328

Note 4: Income

Note 4A: Other Revenue

Income: Other Revenue
  2014
$’000
2013
$’000
Court-awarded costs 280 174
Operating lease rentals 483
Other 78 144
Total Other Revenue 841 318

Note 4B: Other Gains

Income: Other Gains
  2014
$’000
2013
$’000
Resources received free of charge 25 56
Total Other Gains 25 56

Note 4C: Revenue from Government

Income: Revenue from Government
  2014
$’000
2013
$’000
Appropriations:    
Departmental appropriations 28,914 29,877
Total Revenue from Government 28,914 29,877

Note 5: Fair Value Measurement

The following tables provide an analysis of assets and liabilities that are measured at fair value.

The different levels of the fair value hierarchy are:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities that the FWBII can access at measurement date.

Level 2: Inputs other than quoted prices that are included within Level 1 and which are observable for the assets or liabilities, either directly or indirectly.

Level 3: Unobservable inputs for the assets or liabilities.

Note 5A: Fair Value Measurements

Fair value measurement at the end of the reporting period by hierarchy for assets and liabilities in 2014
Fair value measurement at the end of the reporting period by hierarchy for assets and liabilities in 2014
    Fair Value Measurements At the End of the Reporting Period Using
  Fair Value $’000 Level 1 Inputs $’000 Level 2 Inputs $’000 Level 3 Inputs $’000
Leasehold improvements 889 889
Plant and equipment 95 95
Total 984 984
Total fair value measurements of assets in the Statement of Financial Position 984 984

The highest and best use of all non-financial assets are the same as their current use.

Note 5B: Valuation Technique and Inputs for Level 2 and Level 3 Fair Value Measurements

Level 2 and 3 fair value measurements – valuation technique and the inputs used for assets and liabilities in 2014
  Category (Level 2 Or Level 3) Fair Value $’ 000 Valuation Techniques Inputs Used Range (Weighted Average)
Leasehold improvements Level 3 889 Depreciated replacement cost Replacement cost, total useful life and remaining useful life 1.5yrs – 1.7yrs (1.6yrs)
Plant and equipment Level 3 95 Depreciated replacement cost Replacement cost, total useful life and remaining useful life 1.2yrs – 9.9yrs (1.5yrs)

Recurring and non-recurring Level 3 fair value measurements – valuation process

The FWBII procured valuation services from Australian Valuation Office (AVO) at 30 June 2013 and relied on valuation models provided by AVO.

AVO determined that depreciated replacement cost (DRC) would provide the lower fair value of DRC and reproduction cost. DRC was calculated by referencing the cost of a substitution of equivalent modern assets, with due allowance for depreciation and obsolescence.

Note 5C: Reconciliation for Recurring Level 3 Fair Value Measurements

Recurring Level 3 fair value measurements – reconciliation for assets
  Leasehold Improvements
2014
$’000
Plant and Equipment
2014
$’000
Total
2014
$’000
Opening balance 1,566 201 1,767
Total losses recognised in net cost of services(1) (677) (106) (783)
Closing balance 889 95 984

The FWBII’s policy for determining when transfers between levels are deemed to have occurred can be found in Note 1.11.

(1) These losses are represented in the Statement of Comprehensive Income as depreciation expenses.

Note 6: Financial Assets

Note 6A: Cash and Cash Equivalents

Financial Assets: Cash and Cash Equivalents
  2014
$’000
2013
$’000
Cash on hand or on deposit 257 265
Total Cash and Cash Equivalents 257 265

Note 6B: Trade and Other Receivables

Financial Assets: Trade and Other Receivables
  2014
$’000
2013
$’000
Appropriations receivable:
For existing programs 48,419 43,787
Total appropriations receivable 48,419 43,787
Other receivables:
GST receivable from the Australian Taxation Office 126 170
Other receivables 256 413
Total other receivables 382 583
Total Trade and Other Receivables 48,801 44,370
Receivables are expected to be recovered in:
No more than 12 months 48,801 44,370
Total Trade and Other Receivables 48,801 44,370
Trade and other receivables are aged as follows:
Not overdue 48,743 44,370
Overdue by:
More than 90 days 58
Total trade and other receivables 48,801 44,370

No indication of impairment was found for receivables

Note 7: Non-financial Assets

Note 7A: Leasehold Improvements

Leasehold Improvements
  2014
$’000
2013
$’000
Fair value 2,795 2,795
Accumulated depreciation (1,578) (901)
Accumulated impairment losses (328) (328)
Total Leasehold Improvements 889 1,566

A revaluation of leasehold improvements at 30 June 2013 resulted in the creation of an Impairment Allowance of $328,000. A review at 30 June 2014 indicated there was no need to account for any additional impairment of these assets.

No leasehold improvement is expected to be sold or disposed of within the next 12 months.

Note 7B: Plant and Equipment

Plant and Equipment
  2014
$’000
2013
$’000
Fair value 311 311
Accumulated depreciation (216) (110)
Total Plant and Equipment 95 201

No indicators of impairment were found for plant and equipment.

No plant or equipment is expected to be sold or disposed of within the next 12 months.

Note 7C: Reconciliation of Opening and Closing Balances of Leasehold Improvements and Plant and Equipment

Reconciliation of Opening and Closing Balances of Intangibles for 2013 to 2014
  Leashold Improvements
$’000
Plant and Equipment
$’000
Total
$’000
As at 1 July 2013
Gross book value 2,795 311 3,106
Accumulated depreciation (901) (110) (1,011)
Accumulated impairment (328) (328)
Net book value – 1 July 2013 1,566 201 1,767
Additions:      
By purchase
Impairments recognised in the operating result
Depreciation (677) (106) (783)
Disposal of assets
Net book value – 30 June 2014 889 95 984
Net Book Value as at 30 June 2014 Represented by:
Gross book value 2,795 311 3,106
Accumulated depreciation (1,578) (216) (1,794)
Accumulated impairment (328) (328)
  889 95 984
Reconciliation of Opening and Closing Balances of Intangibles for 2012 to 2013
  Leashold Improvements
$’000
Plant and Equipment
$’000
Total
$’000
As at 1 July 2012
Gross book value 3,451 254 3,705
Accumulated depreciation (154) (9) (163)
Net book value – 1 July 2012 3,297 245 3,542
Additions:
By purchase 4 71 75
Impairments recognised in the operating result (328) (328)
Depreciation (1,012) (109) (1,121)
Disposal of assets (395) (6) (401)
Net book value – 30 June 2013 1,566 201 1,767
Net Book Value as at 30 June 2013 Represented by:
Gross book value 2,795 311 3,106
Accumulated depreciation (901) (110) (1,011)
Accumulated impairment (328) (328)
  1,566 201 1,767

Note 7D: Intangibles

Intangibles Assets for 2013 and 2014
  2014
$’000
2013
$’000
Computer software:
Internally developed – in use 157 157
Accumulated amortisation (157) (146)
Total Intangibles 11

No indicators of impairment were found for intangible assets.

No intangibles are expected to be sold or disposed of within the next 12 months.

Note 7E: Reconciliation of Opening and Closing Balances of Intangibles

Reconciliation of Opening and Closing Balances of Intangibles for 2013 to 2014
  Computer Software
– internally developed
$’000
Total

$’000

As at 1 July 2013    
Gross book value 157 157
Accumulated amortisation (146) (146)
Net book value – 1 July 2013 11 11
Additions:    
By purchase or internally developed  
Amortisation (11) (11)
Net book value – 30 June 2014
Net Book Value as at 30 June 2014 Represented by:    
Gross book value 157 157
Accumulated amortisation (157) (157)
 
Reconciliation of Opening and Closing Balances of Intangibles for 2012 to 2013
  Computer Software
– internally developed
$’000
Total

$’000

As at 1 July 2012
Gross book value 157 157
Accumulated amortisation (11) (11)
Net book value – 1 July 2012 146 146
Additions:
By purchase or internally developed    
Amortisation (135)
  (135)
Net book value – 30 June 2013 11 11
Net Book Value as at 30 June 2013 Represented by:
Gross book value 157 157
Accumulated amortisation (146) (146)
  11 11

Note 7F: Other Non-Financial Assets

Other Non-Financial Assets for 2013 and 2014
  2014
$’000
2013
$’000
Prepayments 614 620
Total Other Non-Financial Assets 614 620

No indicators of impairment were found for other non-financial assets.

Other non-financial assets are expected to be recovered in no more than 12 months.

Note 8: Payables

Note 8A: Suppliers

Suppliers
  2014
$’000
2013
$’000
Trade creditors and accruals 1,563 1,803
Total Suppliers 1,563 1,803
Suppliers expected to be settled within 12 months:
Related entities 1,046 918
External parties 517 885
Total Suppliers 1,563 1,803

Settlement is usually made net 30 days.

Note 8B: Other Payables

Other Payables
  2014
$’000
2013
$’000
Salaries and wages 359 304
Superannuation 64 51
Lease incentives 623 1,091
Operating lease rentals 295 370
Other 178 61
Total Other Payables 1,519 1,877
Other payables are expected to be settled in:
No more than 12 months 1,251 1,010
More than 12 months 268 867
Total Other Payables 1,519 1,877

Note 9: Employee Provisions

Employee Provisions for 2013 and 2014
  2014
$’000
2013
$’000
Annual leave 1,317 1,127
Long service leave 2,165 1,877
Other 13
Total Employee Provisions 3,495 3,004
Employee provisions are expected to be settled in:
No more than 12 months 2,667 2,330
More than 12 months 828 674
Total Employee Provisions 3,495 3,004

Note 10: Cash Flow Reconciliation

Cash Flow Reconciliation for 2013 and 2014
  2014
$’000
2013
$’000
Reconciliation of Cash and Cash Equivalents
as per Statement of Financial Position to Cash Flow Statement

Reported Cash and Cash Equivalents as per:

Cash Flow Statement 257 265
Statement of Financial Position 257 265
Difference
Reconciliation of Net Cost of Services to Net Cash Used By Operating Activities:
Net cost of services (25,302) (29,830)
Revenue from Government 28,914 29,877
Adjustments for non-cash items
Depreciation and amortisation 794 1,256
Loss on disposal of assets 24
Write-down and impairment of assets 328
Changes in assets / liabilities
Increase in trade and other receivables (4,313) (1,227)
Decrease (increase) in other non-financial assets 6 (120)
Increase (decrease) in payables (598) 332
Increase (decrease) in employee provisions 491 (1,005)
Net Cash Used By Operating Activities (8) (365)

Note 11: Contingent Assets and Liabilities

Contingent Assets and Liabilities for 2013 and 2014
  Claims for Costs Total
  2014
$’000
2013
$’000
2014
$’000
2013
$’000
Contingent Assets        
Balance from previous period 675 15 675 15
New contingent assets recognised 660 660
Contingent assets realised (675) (675)
Total Contingent Assets 675 675

Quantifiable Contingencies

The Schedule of Contingencies reports no quantifiable contingent assets in respect to court matters settled at 30 June 2014 that include an amount for costs in favour of the FWBII but for which the court has yet to issue a decision (2013: $675,343).

At 30 June 2014, the FWBII had no quantifiable contingent liabilities (2013: Nil).

Unquantifiable Contingencies

At 30 June 2014, the FWBII had 5 unquantifiable contingent assets relating to matters before the court that are considered more likely than not to lead to costs in favour of the FWBII (2013: 1). These are not included in the Schedule of Contingencies.

At 30 June 2014, the FWBII had 2 unquantifiable contingent liabilities relating to matters before the court that are considered more likely than not to lead to costs against the FWBII (2013: 3). These are not included in the Schedule of Contingencies.

Signifcant Remote Contingencies

At 30 June 2014, the FWBII had 2 significant remote contingent assets relating to matters before the courts where it is considered a remote possibility that they may lead to costs in favour of the FWBII (2013: 4). These are not included in the Schedule of Contingencies.

At 30 June 2014, the FWBII had no signifcant remote contingent liabilities relating to matters before the courts where it is considered a remote possibility that they may lead to costs against the FWBII (2013: 4). These are not included in the Schedule of Contingencies.

Note 12: Senior Executive Remuneration

Note 12A: Senior Executive Remuneration Expense for the Reporting Period

Senior Executive Remuneration Expense for the Reporting Period in 2013 and 2014
  2014
$
2013
$
Short-term employee benefits:
Salary 1,433,297 1,417,773
Non-monetary benefits 252,104 200,164
Total short-term employee benefits 1,685,401 1,617,937

Post-employment benefits:

Superannuation 282,308 258,539
Total post-employment benefits 282,308 258,539
Other long-term employee benefits:
Annual leave accrued 140,478 139,843
Long-service leave 63,218 62,932
Total other long-term employee benefits 203,696 202,775
Termination benefits
Total 2,171,405 2,079,251

Notes:

  • Note 12A is prepared on an accrual basis.
  • Excludes acting arrangements and part-year service where remuneration was less than $195,000.

Note 12B: Average Annual Reportable Remuneration Paid To Substantive Senior Executives During the Reporting Period

Average Annual Reporting Remuneration Paid to Substantive Senior Executives During the Reporting Period in 2013 to 2014
Total reportable remuneration (including part-time arrangements): Senior Executives(1) Number Reportable Salary(2) $ Contributed Superannuation(3) $ Reportable Allowances(4) $ Bonus Paid(5) $ Total
$
$0 to $195,000 1 66,178 10,192 76,370
$225,000 to $254,999 5 206,093 35,063 241,156
$255,000 to $284,999 1 238,072 25,169 2,420 265,661
$285,000 to $314,999 2 256,488 39,741 296,229
Total 9          
Average Annual Reporting Remuneration Paid to Substantive Senior Executives During the Reporting Period in 2012 to 2013
Total reportable remuneration (including part-time arrangements): Senior Executives(1) Number Reportable Salary(2) $ Contributed Superannuation(3) $ Reportable Allowances(4) $ Bonus Paid(5) $ Total
$
$0 to $195,000 2 65,740 8,568 74,308
$195,000 to $224,999 1 188,428 28,038 216,466
$225,000 to $254,999 4 207,936 29,088 106 237,130
$285,000 to $314,999 2 260,390 40,192 300,582
$315,000 to $344,999 1 293,633 34,346 327,979
$345,000 to $374,999 1 325,426 26,580 352,006
Total 11          

Notes:

  1. This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for individuals in the reportable remuneration band.
  2. Reportable Salary includes the following:
    1. gross payments (less any bonuses paid, which are separated out and disclosed in the Bonus Paid column);
    2. reportable fringe benefits (at the net amount prior to grossing up to account for tax purposes);
    3. reportable employer superannuation contributions; and
    4. exempt foreign employment income.
  3. The Contributed Superannuation amount is the average actual superannuation contributions paid to senior executives in that reportable remuneration band during the reporting period.
  4. Reportable Allowances are the average actual allowances paid as per the total allowances line on individuals’ payment summaries.
  5. Bonus Paid represents average actual bonuses paid during the reporting period in that reportable remuneration band. The Bonus Paid within a particular reportable remuneration band may vary between financial years due to various factors such as individuals commencing with or leaving the FWBII during the financial year.

Note 12C: Other Highly Paid Staff

During the current reporting period, there were no employees (2013: Nil) whose total reportable remuneration totalled $195,000 or more.

Note 13: Remuneration of Auditors

Financial statement audit services were provided free of charge by the Australian National Audit Office.

Remuneration of Auditors in 2013 and 2014
  2014
$’000
2013
$’000
The fair value of the services provided was:
Financial statement audit services 25 23
Total 25 23

No other services were provided by the auditors of the financial statements.

Note 14: Financial Instruments

Note 14A: Categories of Financial Instruments

Categories of Financial Instruments in 2013 and 2014
  2014
$’000
2013
$’000
Financial Assets
Loans and receivables:
Cash and cash equivalents 257 265
Other receivables 256 413
Total loans and receivables 513 678
Total Financial Assets 513 678
Financial Liabilities
Financial liabilities measured at amortised cost:
Suppliers 1,563 1,803
Total financial liabilities measured at amortised cost 1,563 1,803
Total Financial Liabilities 1,563 1,803

The FWBII has no net income or expenses from financial instruments.

Note 14B: Fair Value of Financial Instruments

The carrying amount of all financial assets and liabilities as at 30 June 2014 approximates their fair value.
  Carrying Amount
2014 $’000
Fair Value
2014 $’000
Carrying Amount
2013 $’000
Fair Value
2013 $’000
Financial Assets
Cash and cash equivalents 257 257 265 265
Other receivables 256 256 413 413
Total 513 513 678 678
  1,563 1,563 1,803 1,803
Financial Liabilities        
Suppliers        
Total 1,563 1,563 1,803 1,803

The carrying value represents the fair value of the above categories of financial instruments. There was no net income / expense from financial instruments.

Note 14C: Credit Risk

The FWBII is exposed to minimal credit risk through trade and other receivables. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. The FWBII’s debtors are generally limited to other Australian Government agencies and FWBII employees. The FWBII has policies and procedures that guide the recovery of employee debts.

The FWBII holds no collateral to mitigate against credit risk.

Credit quality of financial instruments for 2014
  Not Past Due Nor Impaired
2014
$’000
Past Due But Not Impaired
2014
$’000
Past Due and Impaired
2014
$’000
Total
Financial Assets        
Cash and cash equivalents 257 257
Other receivables 198 58 256
Total 455 58 513
Credit quality of financial instruments for 2013
  Not Past Due Nor Impaired
2013
$’000
Past Due But Not Impaired
2013
$’000
Past Due and Impaired
2013
$’000
Total
Financial Assets        
Cash and cash equivalents 265 265
Other receivables 413 413
Total 678 678
Ageing of financial assets that are past due but not impaired for 2014: for the period ended 30 June 2014
  0 To 30 Days
$’000
31 To 60 Days
$’000
61 To 90 Days
$’000
90+ Days
$’000
Total
$’000
Financial Assets          
Other receivables 58 58
Total 58 58
Ageing of financial assets that are past due but not impaired for 2013
  0 To 30 Days
$’000
31 To 60 Days
$’000
61 To 90 Days
$’000
90+ Days
$’000
Total
$’000
Financial Assets          
Other receivables
Total

Note 14D: Liquidity Risk

The FWBII’s financial liabilities are payables. The exposure to liquidity risk is based on the notion that the FWBII will encounter difficulties in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and internal policies and procedures in place to ensure the FWBII has access to appropriate resources to meet its financial obligations as and when they fall due.

Maturities for non-derivative financial liabilities - 2014
  On Demand
2014
$’000
Within 1 Year
2014
$’000
1 To 2 Years
2014
$’000
2 To 5 Years
2014
$’000
>5 Years
2014
$’000
Total
2014
$’000
Financial Liabilities          
Suppliers 1,438 72 44 9 1,563
Total 1,438 72 44 9 1,563
Maturities for non-derivative financial liabilities - 2013
  On Demand
2013
$’000
Within 1 Year
2013
$’000
1 To 2 Years
2013
$’000
2 To 5 Years
2013
$’000
>5 Years
2013
$’000
Total
2013
$’000
Financial Liabilities          
Suppliers 1,544 194 62 3 1,803
Total 1,544 194 62 3 1,803

Note 14E: Market Risk

The FWBII holds basic financial instruments that do not expose it to currency, interest rate or other price risks.

Note 15: Financial Assets Reconciliation

Financial Assets Reconciliation for 2013 and 2014
  2014
$’000
2013
$’000
Total Financial Assets as per Statement of Financial Position 49,058 44,635
Less non-financial instrument components:
Appropriations receivable for existing programs 48,419 43,787
GST receivable from the Australian Taxation Office 126 170
Total non-financial instrument components 48,545 43,957
Total Financial Assets as per Financial Instruments Note (Note 14A) 513 678

Note 16: Administered – Expenses

Administered – Expenses for 2013 and 2014
  2014
$(*)
2013
$(*)
Write-Down and Impairment of Assets    
Impairment of financial instruments 28,760 41,250
Total Write-Down and Impairment of Assets 28,760 41,250

(*) These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

Note 17: Administered – Income

Administered – Income for 2013 and 2014
  2014
$(*)
2013
$(*)
Own-Source Revenue
Non-taxation Revenue
Court-awarded penalties 1,890,100 291,660
Interest 4,518
Total Non-taxation Revenue 1,894,618 291,660

(*) These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

Note 18: Administered — Financial Assets

Administered — Financial Assets for 2013 and 2014
  2014
$(*)
2013
$(*)
Financial Assets
Receivables
Court-awarded penalties 497,113 1,800
Gross receivables 497,113 1,800
Less: Impairment allowance account – Court-awarded penalties
Net Receivables 497,113 1,800
Gross receivables are aged as follows:
Not overdue 308,500 1,800
Overdue by:    
0 to 30 days 21,420
31 to 60 days
61 to 90 days
More than 90 days 167,193
Gross receivables 497,113 1,800
The impairment allowance account is aged as follows:
Not overdue
Overdue by:    
0 to 30 days
31 to 60 days
61 to 90 days
More than 90 days
Total impairment allowance account
Receivables are with entities external to the Government.
Reconciliation of the impairment allowance account    
Opening balance (16,000)
Amounts written off 28,760 57,250
Increase recognised in net surplus (28,760) (41,250)
Closing balance
Other Financial Assets
Accrued revenue 10,000
Total Other Financial Assets 10,000

(*) These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

Note 19: Administered – Cash Flow Reconciliation

Administered – Cash Flow Reconciliation for 2013 and 2014
  2014
$(*)
2013
$(*)
Reconciliation of Cash and Cash Equivalents as per Administered Schedule of Assets and Liabilities to Administered Cash Flow Statement
Reported Cash and Cash Equivalents as per:
Administered Cash Flow Statement
Administered Schedule of Assets and Liabilities
Difference
Reconciliation of Net Contribution by Services to Net Cash from Operating Activities:
Net contribution by services 1,865,858 250,410
Adjustments for non-cash items    
Transfers to Offcial Public Account by other agencies (265,000) (30,000)
Changes in assets / liabilities    
Decrease (increase) in net receivables (495,313) 76,200
Increase in other financial assets (10,000)
Net Cash From Operating Activities 1,095,545 296,610

(*) These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

Note 20: Administered – Contingent Assets and Liabilities

The following information relates to potential court-awarded penalties in respect to matters to which the FWBII is/will be a party.

Quantifiable Administered Contingencies

At 30 June 2014, the FWBII has 4 quantifiable administered contingent assets with a total value of $464,363 (2013: 5, $569,000).

At 30 June 2014, the FWBII has no quantifable administered contingent liabilities (2013: Nil).

Unquantifiable Administered Contingencies

At 30 June 2014, the FWBII has 3 unquantifiable administered contingent assets relating to matters before the courts that are considered more likely than not to lead to a penalty order (2013: 4).

At 30 June 2014, the FWBII has no unquantifiable administered contingent liabilities (2013: Nil).

Significant Remote Administered Contingencies

At 30 June 2014, the FWBII has 19 significant remote administered contingent assets (2013: 11). At 30 June 2014, the FWBII has no significant remote administered contingent liabilities (2013: 11).

Note 21: Administered – Financial Instruments

Administered – Financial Instruments for 2013 and 2014
  2014
$(*)
2013
$(*)
Categories of Financial Instruments    
Receivables – court-awarded penalties 497,113 1,800
Other financial assets 10,000
Carrying Amount of Financial Assets 507,113 1,800

The administered activities of the FWBII were not exposed to a high level of credit, liquidity or market risk as the majority of financial assets were penalties imposed by courts.

There are no administered financial instrument risks from FWBII activities.

(*) These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

Note 22: Administered – Financial Assets Reconciliation

Administered - Financial Assets Reconciliation for 2013 and 2014
  2014
$(*)
2013
$(*)
Total financial assets as per Administered Schedule of Assets and Liabilities 507,113 1,800
Total Financial Assets as per Financial Instruments Note (Note 21) 507,113 1,800

(*)These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

Note 23: Appropriations

Table A: Annual Appropriations

2014 Appropriations
  2014 Appropriations Appropriation Applied in 2014 (Current and Prior Years) $’000 Variance(2) $’000
Appropriation Act FMA Act Total appropriation $’000
Annual Appropriation $’000 Appropriations reduced(1)
$’000
Section 30 $’000 Section 31 $’000 Section 32 $’000
Departmental Ordinary annual services 29,061 (103) 1,355 30,313 25,755 4,558
Total departmental 29,061 (103) 1,355 30,313 25,755 4,558
2013 Appropriations
  2013 Appropriations Appropriation Applied in 2013 (Current and Prior Years) $’000 Variance(2) $’000
Appropriation Act FMA Act Total appropriation $’000
Annual Appropriation $’000 Appropriations reduced(1)
$’000
Section 30 $’000 Section 31 $’000 Section 32 $’000
Departmental Ordinary annual services 30,656 535 31,191 29,628 1,563
Total departmental 30,656 535 31,191 29,628 1,563

Notes:

  1. Appropriations reduced under Appropriation Acts (No. 1,3,5) 2013-14: sections 10, 11 and 12 and under Appropriation Acts (No. 2,4,6) 2013-14: sections 13 and 14. Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request the Finance Minister to reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament. In the 2012-13 financial year, the Government imposed both a targeted savings measure and a fire services levy onto the FWBII totalling $103,000. The determination was issued on 5 August 2013 by the Finance Minister to reduce Appropriation Act No. 1 2013-14 by $103,000.
  2. The variance between total appropriation and appropriation applied relates to net cost of services being lower than the appropriation.

Table B: Departmental and Administered Capital Appropriations

2014 Appropriations
  2014 Appropriations Appropriation Applied in 2014 (Current and Prior Years) Variance $’000
Appropriation Act Total Appropriations $’000 Payments for non-financial assets
$’000
Payments for other purposes
$’000
Total payments $’000
Annual Appropriation $’000 Appropriations reduced
$’000
Departmental Ordinary annual services
Departmental Capital Budget(1)
118 118 118
2013 Appropriations
  2013 Appropriations Appropriation Applied in 2013 (Current and Prior Years)(2) Variance $’000
Appropriation Act Total Appropriations $’000 Payments for non-financial assets
$’000
Payments for other purposes
$’000
Total payments $’000
Annual Appropriation $’000 Appropriations reduced
$’000
Departmental Ordinary annual services
Departmental Capital Budget(1)
676 676 676

Notes:

  1. 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. For more information on ordinary annual services appropriations, see Table A: Annual Appropriations.
  2. Payments for non-financial assets include purchases of assets and expenditure on assets which have been capitalised.

Table C: Unspent Departmental Annual Appropriations

Unspent Departmental Annual Appropriations for 2013 and 2014
  2014
$’000
2013
$’000
Authority
Appropriation Act (No. 1) 2011-12(1) 2,295 14,055
Appropriation Act (No. 1) 2012-13 17,948 29,997
Appropriation Act (No. 1) 2013-14 23,454
Appropriation Act (No. 3) 2013-14 4,979
Total 48,676 44,052

Notes:

  1. Under the Public Governance, Performance and Accountability Act, appropriations receivable for financial years prior to 1 July 2012 will be no longer available to the FWBII. Further information is listed in Note 2: Events After the Reporting Date.

Note 24: Compensation and Debt Relief

Compensation and Debt Relief for 2013 and 2014
  2014
$
2013
$
Departmental    
No Act of Grace expenses were incurred during the reporting period (2013: Nil).
No waivers of amounts owing to the Australian Government were made pursuant to subsection 34(1) of the Financial Management and Accountability Act 1997 (2013: Nil).
No payments were provided under the Compensation for Detriment caused by Defective Administration Scheme during the reporting period (2013: Nil).
No ex-gratia payments were provided for during the reporting period (2013: Nil).
No payments were provided in special circumstances relating to Australian Public Service employment pursuant to section 73 of the Public Service Act 1999 during the reporting period (2013: Nil).
Administered    
No Act of Grace expenses were incurred during the reporting period (2013: Nil).
No waivers of amounts owing to the Australian Government were made pursuant to subsection 34(1) of the Financial Management and Accountability Act 1997 (2013: 2). 57,250
No payments were provided under the Compensation for Detriment caused by Defective Administration Scheme during the reporting period (2013: Nil).
No ex-gratia payments were provided for during the reporting period (2013: Nil).
No payments were provided in special circumstances relating to Australian Public Service employment pursuant to section 73 of the Public Service Act 1999 during the reporting period (2013: Nil).

 

Note 25: Reporting of Outcomes

The FWBII has a single outcome and single program. The outcome is: Enforce workplace relations laws in the building and construction industry and ensure compliance with these laws by all participants in the building and construction industry through the provision of education, assistance and advice.

Note 25A: Net Cost of Outcome Delivery

Net Cost of Outcome Delivery for 2013 and 2014
  Outcome 1 & Total
2014
$’000
Outcome 1 & Total
2013
$’000
Departmental
Expenses 26,168 30,204
Own-source income 866 374
Administered    
Expenses 29 41
Income 1,895 292
Net Cost of Outcome Delivery 23,436 29,579

Note 25B: Major Classes of Departmental Expenses and Income by Outcome

The major classes of departmental expenses and income that contribute to the FWBII’s outcome are as shown in the Statement of Comprehensive Income.

Note 25C: Major Classes of Departmental Assets and Liabilities by Outcome

The major classes of departmental assets and liabilities that contribute to the FWBII’s outcome are as shown in the Statement of Financial Position.

Note 26: Net Cash Appropriation Arrangements

Net Cash Appropriation Arrangements for 2013 and 2014
  2014
$’000
2013
$’000
Total comprehensive income less depreciation / amortisation expense previously funded through revenue appropriations 4,406 1,303
Depreciation / amortisation expenses previously funded through revenue (794) (1,256)
Total Comprehensive Income – as per the Statement of Comprehensive Income 3,612 47

From 2010-11, the Australian Government introduced net cash appropriation arrangements, where revenue appropriations for depreciation / amortisation expenses ceased. Agencies now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.

Note 27: Compliance With Statutory Conditions For Payments From the Consolidated Revenue Fund

Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. In 2013, the Department of Finance provided legal advice that indicated there could be breaches of Section 83 under certain circumstances with payments for long service leave, goods and services tax and payments under determinations of the Remuneration Tribunal. FWBII has reviewed its processes and controls over payments for these items to minimise the possibility for future breaches as a result of these payments. FWBII has determined that there is a low risk of the certain circumstances mentioned in the legal advice applying to FWBII. FWBII is not aware of any specific breaches of Section 83 in respect of these items.