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Note 4: Financial performance

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This section analyses the financial performance of the Attorney-General's Department for the year ended 2017.

4.1 Expenses

  2017
$'000
2016
$'000

4.1A: Suppliers
 
Goods and services supplied or rendered
Accommodation expenses 6,075 6,249
Consultants 3,614 3,682
Contractors 4,828 5,283
Travel 6,339 6,137
Information technology and communications 19,495 17,366
Library expenses 1,965 1,889
Competitive neutrality - Australian Government Solicitor 5,277
Training and professional development 2,462 1,932
Labour hire 1,914 1,031
General office 7,064 7,054
Auscheck expenditure 7,057 7,430
Legal fees 1 52 479
Audit fees - internal 499 617
Audit fees - Australian National Audit Office 495 467
Defence Abuse Response Taskforce expenses 2 129 4,563
Payments and contributions to external bodies 8,818 6,480
Total goods and services supplied or rendered 76,084 70,659
 
Goods supplied 3,736 4,119
Services rendered 72,348 66,540
Total goods and services supplied or rendered 76,084 70,659
 
Other suppliers
Operating lease rentals in connection with
Minimum lease payments 20,165 29,444
Workers compensation expenses 2,061 2,215
Total other suppliers 22,226 31,659
Total suppliers 98,310 102,318

Leasing commitments

The department in its capacity as lessee has the following operating leases that are effectively non-cancellable and comprise leases for office accommodation.  Each lease is individual and may be subject to automatic percentage increases depending on the terms of the agreement.

  2017
$'000
2016
$'000
Operating lease commitments    
Within 1 year 28,960 31,655
Between 1 to 5 years 108,047 113,834
More than 5 years 92,240 129,563
Total operating lease commitments 229,247 275,052

Accounting Policy

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.

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

4.1B: Grants
State and territory governments 258 440
Non-profit organisations 824 28
Other private sector 300 7
Other grants 884
Total grants 1,382 1,359

4.1C: Write-down and impairment of assets and other expenses
Write-down of property, plant and equipment 377 197
Impairment of financial instruments (45) 168
Public Service Act 1999 s73 payments 55
Written-down value of fitout to other agencies 3 10,822
Unwinding of makegood expense 4
Total write-down and impairment of assets and other expenses 11,209 369

Accounting Policy

All borrowing costs are expensed as incurred.

1 Legal services provided by the Australian Government Solicitor (AGS) to the department totalling $12.034m (2016: $10.265m) have been eliminated from revenue and expenditure in these financial statements.
2 The decrease in expenditure for 2016-17 reflects the transfer of the Defence Abuse Response Taskforce to the Commonwealth Ombudsman on 1 September 2016.
3 During 2016-17, the department vacated levels 2 and 3 of 4 National Circuit, Barton and transferred the remaining lease straight-lining and fitout to other Government agencies at no cost.

4.2 Own-source revenue and gains

  2017
$'000
2016
$'000
OWN SOURCE REVENUE

4.2A: Sale of goods and rendering of services
Sale of goods 129 146
Rendering of services 157,444 166,145
Total sale of goods and rendering of services 157,573 166,291

Accounting Policy

Revenue from the sale of goods is recognised when:

  1. the risks and rewards of ownership have been transferred to the buyer;
  2. the department 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 department.

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 department.

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 account.  Collectability of debts is reviewed during the financial year and at end of the reporting period.  Impairment allowances are made when collectability of the debt is no longer probable.

4.2B: Interest revenue - deposits
62 189

Accounting Policy

Interest revenue is recognised using the effective interest method as set in AASB 139 Financial Instruments: Recognition and Measurement.

4.2C: Special account receipts
829

GAINS

4.2D: Other gains 1
Resources received free of charge - Australian National Audit Office 495 491
Resources received free of charge - Department of Immigration and Border Protection 148
  495 639

Accounting Policy

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. Use of those resources is recognised as an expense.

Resources received free of charge are recorded as either revenue or gain 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 9.1).

  2017
$'000
2016
$'000
4.2E: Revenue from Government - departmental appropriations    
199,889 194,013

Accounting Policy

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

1 The ANAO provides audit services that are funded from Government appropriation. This amount of $0.495m (2016: $0.491m) reflects the value of these services to the department.

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