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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 2018.

4.1 Expenses (excluding employee benefits expenses)1

4.1A: Suppliers

2018
$'000
2017
$'000
Goods and services supplied or rendered    
Accommodation expenses 6,963 6,075
AusCheck expenditure 4,749 7,057
Audit fees - internal 295 499
Audit fees - Australian National Audit Office 495 495
Consultants 1,947 3,614
Contractors 3,380 4,828
General office 6,283 7,194
Information technology and communications 16,206 19,495
Labour hire 5,505 1,914
Legal fees2 1,745 52
Library expenses 2,012 1,965
Payments and contributions to external bodies 6,868 8,818
Training and professional development 1,837 2,462
Travel 5,431 6,339
Total goods and services supplied or rendered 63,716 70,807
     
Goods supplied 4,062 3,736
Services rendered 56,654 67,071
Total goods and services supplied or rendered 63,716 70,807
 
Other suppliers
Operating lease rentals in connection with
Minimum lease payments 25,424 20,165
Workers compensation expenses 1,531 2,061
Payroll tax – Australian Government Solicitor 1,458 1,924
Total other suppliers 28,413 24,150
Total suppliers 92,129 94,957

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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.

Operating lease commitments    
Within 1 year 27,075 28,960
Between 1 to 5 years 97,207 108,047
More than 5 years 36,546 92,240
Total operating lease commitments 160,828 229,247

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The department currently has 19 (2017: 17) agreements for the lease of premises some of which have provisions requiring the department to restore the premises to their original condition at the conclusion of the lease. The department has made a provision to reflect the present value of this obligation.

Accounting Policy

Where an asset is acquired by means of a finance lease, the asset is capitalised at either the fair value of the lease 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.

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4.1B: Grants

State and territory governments     258
Non-profit organisations 346 824
Other private sector 300
Other grants 550
Total grants 896 1,382
 

4.1C: Write-down and impairment of assets and other expenses

Write-down of property, plant and equipment   116   377
Impairment of financial instruments (45)
Public Service Act 1999 s73 payments 55
Written-down value of fitout to other agencies3 10,822
Unwinding of makegood expense 1
Total write-down and impairment of assets and other expenses 117 11,209
     

4.1D: Resources provided free of charge4

   
    6,041   −
     

4.1E: Income tax expense

   
Competitive neutrality - Australian Government Solicitor 4,667   5,277

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Accounting Policy

All borrowing costs are expensed as incurred.

The Australian Government Solicitor section of the department provides services on a for-profit basis and is subject to the Australian Government's Competitive Neutrality Policy. The above amounts have been calculated as being payable to the Australian Government in the form of company income tax under the Income Tax Assessment Acts had they applied. These amounts have been paid or are payable by the department to the Official Public Account.

1 In accordance with the Administrative Arrangements Orders of 20 December 2017 and 10 May 2018, national security, commonwealth emergency management, natural disaster relief and Australian Government Disaster Recovery Payment programs and functions were transferred to the Department of Home Affairs.

2Legal services provided by the Australian Government Solicitor (AGS) to the department totalling $8.088m (2017: $12.034m) have been eliminated from revenue and expenditure in these financial statements.

3During 2016-17, the department vacated levels 2 and 3 of 4 National Circuit, Barton and transferred the remaining lease obligations and fitout to other Government agencies at no cost.

4Resources provided free of charge by the department includes employee payments made to policy and program staff who transferred to the Department of Home Affairs for the period 20 December 2017 to 8 February 2018 and employee payments made to corporate staff who transferred to the Department of Home Affairs from the period 31 January 2018 until 8 February 2018.

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4.2 Revenue and gains1

4.2A: Sale of goods and rendering of services

 

2018
$'000
2017
$'000
Ownsource Revenue    
Sale of goods   124   129
Rendering of services 160,199 157,444
Total sale of goods and rendering of services 160,323 157,573

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Accounting Policy

Revenue from the sale of goods is recognised when:

  1. the risks and rewards of ownership have been transferred to the buyer; and
  2. the department retains no managerial involvement or effective control over the goods.

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

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.

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4.2 B: Interest revenue - deposits

   
  65 62

 

Accounting Policy

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

 

Gains

4.2C: Other gains2

   
Resources received free of charge - Australian National Audit Office 495 495
  495 495

 

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).

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4.2D: Revenue from Government - departmental appropriations

  2018
$'000
2017
$'000
  181,822 199,889

 

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.

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1 In accordance with the Administrative Arrangements Orders of 20 December 2017 and 10 May 2018, national security, commonwealth emergency management, natural disaster relief and Australian Government Disaster Recovery Payment programs and functions were transferred to the Department of Home Affairs.

2The ANAO provides audit services that are funded from Government appropriation. This amount of $0.495m (2017: $0.495m) reflects the value of these services to the department.

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