Library : Departments of Premier & Cabinet Treasury & Finance DEPARTMENT OF Level 5, 1 Macarthur St East Melbourne, VIC 3002 DX 210759 TREASURY AND FINANCE Ph: 03 9651 5660 Fax: 03 9651 5659 ANNUAL REPORT 2002-03 Email: [email protected] Intranet: http://library.dtf.vic.gov.au^ ^ ttt.: I-HE > Q = > -a = = 00 lo , a : |N rUI ' cu : ! Qi 9 TERNIE ISÈSS CONTENTS
THE YEAR IN REVIEW 3 THE DEPARTMENT 11 2002-03 PERFORMANCE 17 FINANCIAL STATEMENTS 45 APPENDICES 89
ABOVE LEFT TO RIGHT: SUZIE BRYANT, ED CHAN. 1
•' • • • • •••..
ROBERTiMCMIQWN IB .s, SECRETARY'S REPORT
For all of its 164-year history, the Department In response to these demands, DTF of Treasury and Finance (DTF) has had a single continues to evolve from a more conventional reason for its existence: the future prosperity of guardian of the exchequer to one of a the State of Victoria. So as Victoria's economy pathfinder to Victoria's future prosperity. evolved from nineteenth century land and gold Today, DTF's vision remains a prosperous rushes to twentieth century agriculture and future for all Victorians. The realisation of this manufacturing, DTF transformed Itself to meet vision demands innovative, expert advice to the challenges of the time. deliver economic, social and environmental The challenges facing Victoria into the future goals within a framework of responsible are no less daunting and complex than those financial management. This focus is reflected faced by our forebears more than a century in DTF's operational objectives. and a half ago. The pace of globalisation, technological development and social change demand pioneering and innovative solutions.
DTF'S OBJECTIVES
Providing sound financial management of the State's fiscal resources with an emphasis on maintenance of a substantial budget surplus.
Guiding Government actions to best increase living standards for all Victorians through the provision of innovative policy advice.
Championing an integrated whole-of-government approach to ensure optimal service delivery and provision of world class infrastructure to benefit all Victorians.
i DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 OBJECTIVE 1 : PROVIDING SOUND FINANCIAL MANAGEMENT OF THE STATE'S FISCAL RESOURCES WITH AN EMPHASIS ON MAINTENANCE OF A SUBSTANTIAL BUDGET SURPLUS
KEY ACHIEVEMENTS FOR THE YEAR INCLUDE:
Supported the Government in budget Delivered the 2003-04 State Budget, which financed the Government's election commitments and financial management and provided an operating surplus greater than the $100 million minimum targeted by Government.
Developed a new business management system (BMS) for whole-of-government budget development and management during 2002-03. The BMS was used in the preparation of the 2003-04 State Budget.
Developed the Financial Management Compliance Framework for implementation across the Victorian Public Service (VPS). This included a complete plain English rewrite of the Standing Directions of the Minister for Finance, the introduction (from 1 July 2003) of a certification process—based on Australian Quality Standards—and the provision of an information and assistance website.
Introduced legislation to amend the Audit and Financial Management Acts to strengthen the role of the Auditor-General. The amendments enhance the independence of the Auditor-General and provide greater scope in the Auditor-General's powers to promote sound financial management of the State.
Conducted 11 output evaluation and price reviews across all government departments, focussing on opportunities to improve output performance measures, resource allocation and governance.
Achieved confirmation of the State's Triple-A international credit rating.
Reviewed and assessed the corporate plans of 19 Government Business Enterprises (GBE) and negotiated 20 GBE dividend returns to the Government.
Updated the prudential framework for public sector superannuation funds.
Took a lead role in reviewing Released the final report of the Garnaut-Fitzgerald Review of Commonwealth-State Funding Commonwealth-State financial in August 2002. The Government's response to the Report was prepared and discussed at arrangements Heads of Treasuries meetings.
Produced regular financial reports Delivered the Annual Financial Report and Mid-Year Financial Report for the State of Victoria as well as four quarterly reports for the General Government Sector to Parliament and the public in accordance with legislative requirements.
Produced the Pre-election Budget Update, following the announcement of the State Election in 2002. This was in addition to the normal requirement to produce the Budget Update in January each year and was a first for Victoria.
MAINTAINING A SUBSTANTIAL BUDGET SURPLUS
• May 2003 Budget projection of future budget surpluses • $100m minimum surplus targeted by Government
DEPARTMENT OF TREASURY& FINANCE ANNUAL REPORT 2002-03 OBJECTIVE 2: GUIDING GOVERNMENT ACTIONS TO BEST INCREASE LIVING STANDARDS FOR ALL VICTORIANS THROUGH THE PROVISION OF INNOVATIVE POLICY ADVICE
KEY ACHIEVEMENTS FOR THE YEAR INCLUDE:
Delivered innovative and accurate Released the discussion paper Shaping a Prosperous Future, which provides 40-year projections advice on a range of economic, social of Victorian economic and fiscal trends and seeks to stimulate broad debate about the long-term and environmental issues policy challenges and choices facing governments and communities. Also released was the Labour Market Survey ofAnsett Workers and the Fire Services Funding Review.
Prepared over one thousand briefs for DTF Ministers, Cabinet and Cabinet Committees on budget, economic and resource management issues.
Implemented an Innovation Strategy whereby all DTF leaders undertook training in innovation and a team of employees was specially trained to be innovation facilitators to champion innovative activity.
Responded to the changing insurance Finalised the Government's response to the Ipp Report on negligence law. environment within Victoria Led the development and introduction of legislation to enhance the availability and affordability of insurance in the areas of public liability and medical indemnity. Introduced proportionate liability for economic loss affecting professional indemnity insurance.
Coordinated and chaired national meetings on insurance issues.
In conjunction with the Victorian Managed Insurance Authority (VMIA), provided tailored insurance solutions for sectors of the economy faced with particular insurance problems.
Implemented full retail contestability in Following extensive development and consultation, full retail contestability in the Victorian gas the Victorian gas market market was introduced from 1 October 2002. As a result, gas consumers have the ability to choose their gas retailer.
Implemented environmental reporting Developed an environmental reporting framework in partnership with the Department of Sustainabillty and Environment and the Environment Protection Authority. Under the framework, all government departments will be required to report annually to Parliament on the management of their office-based environmental impacts. DTF is leading the way by reporting against the framework a year ahead of its mandatory commencement.
VICTORIA: THE PLACE TO BE
D Net interstate migration (left scale) - Business investment, Australia (right scale) — Business Investment, Victoria (right scale)
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 7 OBJECTIVE 3: CHAMPIONING AN INTEGRATED WHOLE-OF-GOVERNMENT APPROACH TO ENSURE OPTIMAL SERVICE DELIVERY AND PROVISION OF WORLD CIJ\SS INFRASTRUCTURE TO BENEFIT ALL VICTORIANS
KEY ACHIEVEMENTS FOR THE YEAR INCLUDE:
Assisted major infrastructure project Progressed a number of major Partnerships Victoria infrastructure projects during the year, development across Victoria, including under including the execution of contracts for the Spencer Street Redevelopment, new Berwick the Government's public-private partnerships Community Hospital, Enviro Altona Wastewater project, Film and Television Studios, policy, Partnerships Victoria Echuca/Rochester Wastewater Treatment Plant and the Mobile Data Network project. In addition, Expression of Interest documentation was released for the Mitcham-Frankston Freeway.
Prepared and released new Partnerships Victoria guidance material: Public Sector Comparator Supplementary Technical Note, Use of Discount Pate in the Partnerships Victoria Process and Contract Management Policy and Guide.
Developed the Gateway Initiative for major infrastructure delivery, to ensure better asset investment outcomes across the Victorian budget sector, and improved 'cradle-to-grave' framework for major asset delivery.
Relocated the head office of the Rural Successfully relocated the Rural Finance Corporation head office to Bendigo, with the new Finance Corporation to Bendigo office officially opened by the Treasurer in December 2002.
Finalised arrangements to lease office As an integral element to the Government's city accommodation planning, the Department accommodation to be provided on the successfully managed one of the largest office tender programs in Australia to consolidate over former Southern Cross Hotel site 100 000 square metres of public sector office accommodation from fifteen to just two locations in Melbourne's CBD. This project included the finaiisation of arrangements pre-committing to long- term leasehold offices on the former Southern Cross Hotel site.
Achieved the first year of operation of the March 2003 marked the one-year anniversary of operations for the new State Revenue Office State Revenue Office facility in Ballarat (SRO) facility at the Ballarat Technology Park. The new facility handles approximately 40 per cent of SRO functions.
INVESTING IN VICTORIA'S FUTURE
3 2500 g II 3
2000 _
1500 H
1000—11 I
500 o J Li 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07
— May 2003 Budget projection of past and future Victorian Government infrastructure spending
8 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 IN ADDITION TO THE THREE OUTPUT-FOCUSSED OBJECTIVES, DTF SETS ITSELF A FOURTH OBJECTIVE OF ENSURING THE CAPABILITY OF DTF AND ITS PEOPLE TO SERVE GOVERNMENT. THIS INTERNAL OBJECTIVE IS BEST EXPRESSED THROUGH OUR ASPIRATION FOR THE TYPE OF ORGANISATION WE WANT DTF TO BE.
DTF'S ASPIRATION The aim of learning and development is CONTINUING TO DELIVER WITHIN We aspire to our vision, live our mission and to assist our people to develop and TIGHTER CONSTRAINTS enhance the skills and knowledge make a difference. DTF is focussed on the delivery of its four necessary to meet the demands of a objectives, and to do so in a way that Our customers achieve because we: changing environment. Our people are provides value for money. Indeed the cost to encouraged to meet the challenge to • take responsibility for outcomes Government of DTF has fallen from over grow personally and professionally in line • provide innovative and forthright analysis $300 million in 1998-99 to under $200 million with the Aspiration. in 2002-03. • are influential and committed to We also place a strong emphasis on relationship management Despite these financial pressures, the building the capability of the DTF leadership Department continued to deliver sound • deliver consistently and on time. group. The development of the HR Strategy financial management in 2002-03, including highlighted the need for a core Our people are challenged to grow the May 2003 Budget that met both the management program that addressed the personally and professionally because we: Government's election spending 'essential' elements of people management, commitments and minimum surplus targets. • expect excellence and accountability financial management and business • demand and display leadership management in DTF. This need is being Innovative policy advice was provided addressed through a mentoring program through some one thousand briefs and a • share skills and knowledge and the provision of a Management number of significant discussion papers and • offer a variety of experience. Essentials resource manual to support submissions, all contributing to debate managers with information, further around Improving the living standards for Our organisation is exciting and united all Victorians. because we: reference materials and key contacts. • welcome diversity and creativity The Behavioural Accountabilities Framework Equally, DTF championed an integrated (BAF) is a set of nine behaviours developed 'whole-of-government' approach to service • combine fun and dedication in consultation with our people and delivery through the release of guidance • are disciplined in applying policies and introduced in July 2002. The BAF reflects the material, the establishment of an systems desired behaviours we identify as important infrastructure delivery framework, and managing one of the largest office tender • celebrate success together. in the way we perform our day-to-day work. programs in the country. Our DTF - Our Say is an annual, voluntary In order to translate our Aspiration into a reality, survey open to all permanent staff of DTF. I am proud of what we have achieved. DTF has a range of programs designed to The survey is designed to identify issues that recruit, retain, develop and lead our people. In closing, I would like once again to thank contribute to employee satisfaction and my DTF colleagues for the significant Recruitment and selection are people enable the Department to benchmark contributions they made to the outcomes we management functions vital to DTF's future performance over time. The survey is also delivered to the Victorian Government during success. DTF is an equal opportunity designed to evaluate improvement strategies 2002-03, and to the Treasurer, Minister for employer and strives to be an employer implemented as part of the previous year's Finance and the Minister for WorkCover for of choice. Our selection procedures are survey and other organisational Initiatives the leadership they provided. rigorous, are based on principles of merit such as the Reaching our Potential program. and equity, and are fashioned to meet the Through these programs, DTF aims to organisation's strategic direction. achieve a workplace that matches our Learning and development is provided Aspiration—one in which our customers by DTF as part of its investment in people. achieve, our people are challenged to grow Our program is driven equally by DTF's personally and professionally, and which is Ian Little goals and the needs of our people. exciting and united. Secretary
DTF BUDGET - OUTPUT APPROPRIATIONS
'9-00 00-01 01-02 02-03 03-04
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 9 j. -.'.".¿^ A-
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Treasurer Minister for Finance Minister for WorkCover The Honourable John Brumby MP is The Honourable John Lenders MP was The Honourable Rob Hulls MP was appointed Victoria's 49th Treasurer. He is also the appointed as the Minister for Finance in the Minister for WorkCover in December 2002. Minister for State and Regional Development February 2002. He is also the Minister for He is also the Attorney-General and the and the Minister for Innovation. Consumer Affairs and Leader of the Minister for Industrial Relations. Government in the Legislative Council. The Treasurer is responsible for: The Minister for WorkCover is responsible for: • the preparation and delivery of the annual The Minister for Finance is responsible for: • managing Victoria's workplace health State Budget • managing more than $47 billion in assets and safety scheme • revenue collection for the State of Victoria, and total revenues of $26 billion (as at • coordinating Victoria's public safety scheme 30 June 2003), covering more than 550 including stamp duty, payroll tax, financial • managing Victoria's workers' financial consolidated reporting entities institutions duty, land tax and debits tax compensation scheme • the State's financial reporting and • borrowing, investment and financial • managing Victoria's transport accident accountability framework arrangements to hedge, protect or scheme. manage the State's financial interests • administering and coordinating all Victorian • promoting economic growth and stability Government lands and property in regional and rural Victoria • purchasing and procurement arrangements • providing investment and fund for the Victorian Government management services to the State and its • oversight of insurance issues and statutory authorities responsibility for the Victorian Managed • promoting value for money solutions in Insurance Authority public infrastructure financing. • managing the Victorian Government's Superannuation schemes • oversight of the State's vehicle fleet policy.
FROM LEFT TO RIGHT: JOHN BRUMBY MP, JOHN LENDERS MP, ROB HULLS MP.
12 DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 OUR PEOPLE
The Secretary delivery of the State Budget and Annual Warren Hodgson is Deputy Secretary, Financial Report, and public sector resource Commercial. Warren Is responsible for Ian Little was appointed Secretary to DTF in management reform. Prior to joining DTF, managing the provision of commercial advice 1998, having joined the Department in 1994. Stein worked extensively with the and activities on behalf of the Government. Prior to joining the VPS, Ian held senior Commonwealth Government, which The advice encompasses project and management and professional economic included a ten-year period managing areas commercial risk management Including positions at the ANZ Bank in Melbourne and responsible for budget coordination, Partnerships Victoria, the State's property the Reserve Bank of Australia in Sydney. He management of portfolio-specific budget portfolio, procurement strategy and fleet was educated at Monash University and The Issues and developing budget management. He joined DTF after holding London School of Economics. Improvement strategies. senior positions in several large private sector The Secretary reports to the Treasurer, the organisations delivering contracted services to Helen Silver is Deputy Secretary, Economic Minister for Finance, and the Minister for governments across the Asia-Pacific region, and Financial Policy. Helen is responsible for WorkCover. and has extensive experience managing a the provision of short and long-term variety of businesses and projects. Senior Executive Group economic and financial policy advice to the Government. This advice encompasses Laurinda Gardner is Deputy Secretary, DTF Is managed by the Senior Executive economic development policy, regulation Strategic Management. Laurinda joined DTF Group (SEG), which Is led by the Secretary and competition policy, taxation strategy, in 1998 after holding senior management and comprises the head of each of the and the State's transport accident and roles in town planning, strategic planning and Department's divisions. Collectively SEG has workers' compensation schemes. Helen has corporate services for local government. significant public and private sector many years experience In senior Laurinda is responsible for managing management experience in the areas of management positions in the Victorian and corporate planning, human resources economics, finance, people management Commonwealth public sectors, centred strategy and services, information and and technology. around the provision and management of technology services, ministerial and legal Stein Helgeby is Deputy Secretary, Budget high-level economic and financial policy services and communication activities. She and Financial Management. Stein is advice. Prior to her current position in DTF, also leads organisational strategies that responsible for assisting the Government to Helen was an Executive Director at the ensure the capability of DTF to serve achieve Its fiscal policy objectives, including Victorian WorkCover Authority. government and achieve DTF objectives.
DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 13 Our Team DTF places significant emphasis on performance management by ensuring all DTF has 491 employees, each of whom has employees have an agreed performance and contributed to our overall performance development plan with their manager for the throughout 2002-03. In recent years, DTF upcoming year. The online performance has placed increasing emphasis on employee management system was further enhanced recognition and training. In 2002-03 DTF during 2002-03 to increase useabillty and to began to shape its future through the formally record key behaviours to be used Implementation of the Aspiration and when undertaking agreed duties. DTF Reaching our Potential programs, including continues to provide training on the undertaking projects contained In the Human development of performance plans and Resources (HR) strategy. effective performance conversations. As an employer, DTF encourages diversity. DTF continues to promote the use of the The 2001 VPS Census reported that of all Organisational Learning and Development VPS portfolios, DTF's portfolio (including Calendar to assist employees In acquiring and State Revenue Office, Essential Services enhancing skills and knowledge necessary to Commission and Office of Gambling meet individual and departmental objectives. Regulation) had the highest percentage of Training continues to be provided to increase employees born outside of Australia (28.2 employee awareness, understanding and per cent) and the greatest number of obligations in relation to Internet, email and employees who spoke languages other than privacy policies within DTF. English at home (26.5 per cent). Six employees were granted scholarships to support them In furthering their professional DTF DIVISIONAL STRUCTURE AND RESPECTIVE development. A total of 29 employees were In MAJOR FOCUSES receipt of Scholarships or Studies Assistance to undertake relevant undergraduate and post-graduate qualifications under DTF's Learning and Development policy. Detailed information on the composition of DTF's workforce is provided in Appendix 4.
14 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 OUR FUTURE
In November 2001, DTF launched the Innovation Environmental Reporting Reaching our Potential (RoP) program, an During 2002-03 the Department developed Consistent with Its triple bottom-line internal organisational improvement initiative and commenced implementation of an responsibilities, the Victorian Government has encompassing a suite of significant projects. Innovation strategy. The strategy is designed directed departments to report annually on RoP represents one of our major strategies to create a sustainable culture that supports, the management of their office-based to assist DTF to change and adapt to future encourages and facilitates innovative thinking environmental impacts. DTF—in partnership demands. The program will transform the and practice and is responsive to the with the Department of Sustainability and way DTF does business—in line with our Department's desire to deliver Innovative Environment and the Environment Protection Aspiration, mission and vision. Building on solutions to its customers. A number of the Authority—developed a whole-of-government the planning and development activities key elements of the strategy have been environmental reporting framework to deliver undertaken during 2001 -02, a number of Implemented, Including training for the this commitment. DTF is now leading the way Initiatives were significantly progressed and organisation's leaders In innovation, by reporting its office-based environmental Implemented during 2002-03. deployment of a defined innovation process performance a year ahead of its mandatory and establishment of a group of Internal introduction. DTF Business Model Innovation facilitators. Over 40 Innovation DTF's Environment Mission Statement The implementation of a new DTF Business activities were identified or commenced enshrines our commitment to the environment Model will provide greater alignment with the during the course of the year. and will guide the behaviour of the Department. Government's output funding framework while maintaining a focus on the effective and Knowledge Management The Department of Treasury and Finance is efficient delivery of outputs to customers. It will committed to environmental management. During 2002-03 the DTF Knowledge result in Improved management decision- We follow the waste hierarchy of Avoid, Management Initiative commenced. The making through access to more accurate and Reduce, Re-use and Recycle to minimise our overriding goal is to achieve Improved services reliable performance Information. Greater office-based environmental impact in the to DTF customers through improving staff people and resource agility will also result from following areas: access to sound, relevant and useful the implementation of the Business Model Information and knowledge, Increasing • energy use through more flexible structures and better Information sharing with colleagues and • wasie production resource Information that will help realise establishing governance arrangements for the potential synergies across divisions. During • paper use management of information and knowledge. A 2002-03 a number of aspects of the Model number of projects were delivered during the • water consumption were implemented. New planning and year including the establishment of a DTF • transport use. budgeting processes were deployed, the portal, implementation of a new staff directory concept of groups and group management DTF complies with all government policy and and the launch of an electronic collaboration was Introduced, HR delegations and environmental legislation and strives for tool. Significant research was also undertaken responsibilities were updated, performance continual improvement. We evaluate, manage in relation to the development of a and development plan formats were enhanced and review our environmental performance comprehensive information management and output cost allocation guidelines were and report publicly on an annual basis. system for the Department. This project will be introduced. During 2003-04 the final significantly progressed during 2003-04. Full details of DTF's environmental management processes and software support performance is contained in Appendix 14. systems will be Introduced to make the Model fully operational.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 15 ausa? .tarir -feiïMsji inaili sum® .jmsviamsj masp- liäf
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received from the.Government or. 97j per, cent ofithe revenue, budgeted ¡for, in tne 2002*03 StatFBudgetTpapersJAn the¡foHowiñg]seven'output groups: amount of $2.-7ä«rruftion.wilhbe carried,forward gofey^v^e""' into*2003-04 to completexinfinished outputs,-" " âSteBHÈfl ManagemenfSéfvicës including $1 >2 irntllion.tolfinancejthe.delayed ManagementiServices industry, by,ttie! Essential [Services asas Commission!
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OUTPUT GROUP 1 : STRATEGIC POLICY ADVICE
OUTPUTS DELIVERED DESCRIPTION
• Financial Management Regulation Encourage, promote and enhance sound and Compliance financial management practices and compliance with legislative and authoritative requirements in the Victorian Public Sector through the maintenance of a cohesive financial management and compliance assurance framework. Provision of advice on whole-of-government financial policy and reporting and Commonwealth taxation Issues.
P Strategic Policy and Research Manage and coordinate economic, social and environmental research focussing on developing greater understanding of factors affecting future living standards for Victorians.
Financial and Risk Management Provide financial and risk management Policy Advice advice to Government to ensure responsible financial management associated with Public Sector superannuation and investments.
I Economic, Regulatory, Environmental and Provide economic, social and environmental Social Policy Advice analysis, ad-hoc policy advice and monitoring for Treasurer and Ministers.
Inter-Government Financial Provide inter-government financial analysis Relations Policy Advice and advice to Ministers in relation to sharing of Commonwealth funding with other States and Territories.
• Taxation (State Revenue) Policy Advice Provide taxation policy advice to Ministers on the composition and performance of all the State's taxes and on opportunities to Improve the State's tax mix.
• Budget Formulation Advice Advise Ministers and the Expenditure Review Committee (ERC) with respect to the allocation of resources In the annual State Budget, Including the alignment of its output purchases, investment decisions and payments on behalf of the State.
I Statutory Insurance Advice Provide strategic advice to Government on the State's insurance schemes with a particular emphasis on securing the long- term viability of the Victorian WorkCover Authority (VWA) and the Transport Accident Commission (TAC), and provide advice and management support for Government responses to current general Insurance issues impacting on the Victorian community. It also includes ensuring financial responsibility by developing and monitoring the prudential and reporting frameworks to contribute to the management of State-owned insurance and compensation Institutions as well as trustee companies and cooperative societies.
Note - The Gaming Policy Advice output was transferred to the Department of Justice in January 2003 in accordance with Machinery of Government changes.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 19 Key projects and initiatives Financial Management Compliance During 2002-03, development of the financial Insurance Reform management compliance framework was Insurance reform, and in particular, issues completed for Implementation across the relating to professional indemnity Insurance, VPS. This Initiative will provide assurance that was a prominent issue during the year. Work VPS entitles have appropriate systems In undertaken included finalisation of the place to ensure effective, efficient and Government's response to the Ipp Report on responsible financial management of public negligence law, coordination and chairing of resources. The framework comprises five key national meetings on Insurance issues and elements, Including application of Australian supporting the meeting of Commonwealth, Standard AS3806 for compliance programs, State and Territory Insurance Ministers In a review of the Standing Directions of the April 2003. The Department continued to Minister for Finance, a three-tier reporting build upon the significant reform work structure, a supporting web-based tool and undertaken in early 2002 by leading the an annual certification regime. Implementation development and introduction of several will occur during 2003-04 and will be a major pieces of legislation to place a cap on project for the Department. general damages awards, make provision for waivers for participants in inherently risky Shaping A Prosperous Future activities and introduce proportionate liability In April 2003, the Treasurer launched the for economic loss. discussion paper Shaping a Prosperous Future at the Melbourne Institute Business Review of Fire Services Funding Economics Forum. The paper projects The Department performed a review of Fire longer-term economic and fiscal trends and Services funding arrangements, Including seeks to stimulate broad debate about the analysing the current Victorian approach, long-term policy challenges and choices undertaking extensive consultation with facing governments and communities. It interested parties and researching practices in discusses some of the key levers available to other jurisdictions. The Review, which was State Governments to raise living standards released In July 2003, concluded that the most and highlights some of the issues that will appropriate funding method was through need to be addressed In future to meet continued contributions from Insurance changing community needs. companies. Options for Improving the transparency of the current system in relation to Identifying the fire services contribution component of insurance premiums and cost recovery from those paying direct debit charges were also identified.
FROM LEFT TO RIGHT: LIZ BOWTELL-LARNER, LUKE FERNANDO.
20 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 Boosting the role of the Auditor-General Output performance Financial and Risk Management Policy Advice - A greater number of revisions of Legislation was passed to amend the Audit For the majority of outputs in this output superannuation liabilities were required as a and Financial Management Acts to strengthen group there was a far greater than expected result of the volatility of the investment the role of the Auditor-General. The requirement to provide briefs to Government market. This extra workload and other amendments enhance the independence of on policy issues relevant to the respective factors delayed the Implementation of Family the Auditor-General and provide greater scope outputs. Law legislation relating to superannuation In the Auditor-General's powers to promote Output delivery performance varied from and the review of funds in accordance with sound financial management of the State. target for the following outputs: the revised prudential statement.
Environmental Reporting Financial Management Regulation and Economic, Regulatory, Environmental and Compliance - The significant increase In In partnership with the Department of Natural Social Policy Advice - There was a significant advice provided on financial policy Issues Resources and Environment (now Department increase In the number of briefs provided reflected the increased focus on financial of Sustalnability and Environment) and the during the year on economic, regulatory, management, regulation and compliance Environment Protection Authority, the social and environmental issues, as well as activities during the year. There were also a Department developed an environmental an increase in the number of Cabinet greater than expected number of awareness reporting framework for all government Submissions requiring economic policy programs and updates related to new departments. Under the framework, briefings. Three, rather than four Quarterly Directions and Bulletins. departments will be required to report in their Investment Cabinet Submissions were annual reports on the management of their Strategic Policy and Research - Components delivered during the year due to a joint report office-based environmental impacts. The of two major research projects on the for the September and December quarters Department is committed to leading the way knowledge economy and the future being submitted. Publication of the Victorian by reporting against the framework a year sustainability of health services were not Economic News for the September 2002 ahead of the mandatory commencement. This completed in 2002-03 as planned, largely Quarter was delayed by three weeks to allow Information can be found in Appendix 14. due to a greater than expected requirement incorporation of the latest drought data from to contribute to briefings to Government. The the Australian Bureau of Agricultural and outstanding components—an examination of Resource Economics (ABARE). the longer-term fiscal sustalnability of health expenditure, and consideration of future policy directions for education—will now be finalised during 2003-04.
FROM LEFT TO RIGHT: AN HUYNH, OLIVIA KINGS.
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 21 • Financial Management Regulation and Compliance
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Annual review of whole-of-government compliance framework number 1 1
Conduct compliance assurance reviews of portfolios and agencies number 30 30
Preparation of quarterly compliance assurance reports number 4 4
Conducting awareness programs (e.g. training, briefings) number 10 33
Review and update of knowledge management facility number 250 250
Delivery of updates, guides and newsletters number 13 28
Coordinating external reporting requirements number 5 8
Updates to financial management package number 8 8
Provision of advice on whole-of-government financial policy and reporting and Federal taxation issues number 180 358
Quality
Material and adverse whole-of-government issues identified by Victorian Auditor-General's Office (VAGO) and Australian Taxation Office (ATO) requiring rectification are addressed yes/no yes yes
Service Provision Rating (Ministerial survey data) per cent 80 88
Monitor and influence the timeliness of departments' statutory lodgement obligations yes/no yes yes
Timeliness
Quarterly compliance assurance report delivered dates 30/09/02 30/09/02 31/12/02 31/12/02 31/03/03 31/03/03 30/06/03 30/06/03
Total output cost $ million 3.1 2.9
• Strategic Policy and Research UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Development and implementation of a program of long-term strategic research and policy projects number 4 2
Quality
Service Provision Rating (Ministerial survey data) per cent 80 83
Timeliness
Key deliverables and projects managed on time - in line with planned and project timetables agreed by Minister per cent 100 94
Total output cost $ million 2.5 2.3
22 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 • Financial and Risk Management Policy Advice
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Letters of correspondence prepared number 40 42
For superannuation schemes impacted by family law changes: • Enact state laws to ensure consistency with Commonwealth laws • Ensure operational compliance number 4 0
Review of funds in accordance with new Prudential statement for Public Sector Investments number 8 0
Superannuation liability/expense revisions number 5 12
Quality
Service Provision Rating (Ministerial survey data) per cent 80 90
Timeliness
Delivery of: • Prudential Statement operational changes date Sept 2002 June 2003 1 • Family law operational changes date Oct 2002 nm 1 • Review of Family Law effectiveness date Mar 2003 nm
Total output cost $ million 1.6 1.4
1 Government deferred the introduction of the Superannuation Acts (Family Law) Bill until the Spring 2003 session of Parliament. The Bill has now passed through both Houses of Parliament and the Bill Is expected to receive Royal Assent on Tuesday 14 October 2003.
Given that the Act Is only due to come into operation in October 2003, the review of its effectiveness has been deferred until the latter part of 2003-04.
• Economic, Regulatory, Environmental and Social Policy Advice
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Ministerial briefs on economic, regulatory, social and environmental issues number 180 250
Victorian Economic News number 4 4
Macroeconomic forecast updates number 4 4
Economic policy briefings on Cabinet submissions number 160 225
Ministerial correspondence on economic, regulatory, environmental and social policy Issues number 60 26
Quarterly Investment Cabinet Submission number 4 3
National Competition Policy (NCP) Third Tranche Assessment number 1 1
Quality
Service Provision Rating (Ministerial survey data) per cent 80 80
Timeliness
Briefings on key Australian Bureau of Statistics (ABS) economic data on day of release per cent 98 100 within 15 Publication of Victorian Economic News number of working days not for working days of Qtr end Sept Qtr according to timetable Briefing on Cabinet submissions before meetings percent 95 100 Total output cost $ million 4.3 4.3
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 23 • Inter-Government Financial Relations Policy Advice
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Completion of Government response to three-State Horizontal Fiscal Equalisation (HFE) Review Report number 1 1
Support Ministerial Council Meetings number 1 1
Support Heads of Treasuries meetings number 3 3
Input to Commonwealth Grants Commission (CGC) 1 2004 Review (papers and CGC visit to Victoria) number 1
Specifiinter-governmentac Purpose Paymentl issues briefs (SPPs ) and other number 16 57 Quality
Service Provision Rating (Ministerial survey data) per cent 80 85
Informed dialogue with CGC - acceptance of arguments put forward by Victoria yes/no yes yes Timeliness
Briefings for interstate meetings completed in time and CGC submissions provided according to CGC schedule yes/no yes yes
Total output cost $ million 1.5 1.5
• Taxation (State Revenue) Policy Advice
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Provision of Ministerial Briefs on taxation policy number 30 32
Compilation of revenue initiatives proposal for 2003-04 Budget consideration (ERC Stage 1 and ERC Stage 2 submissions) number 2 2
Quality
Service Provision Rating (Ministerial survey data) per cent 80 85
Brief recommendations accepted by Treasurer per cent 80 80
Comment provided on SRO Ministerial briefs per cent 95 95
Timeliness
Budget submissions meet ERC deadlines yes/no yes yes
Possible Parliamentary Questions (PPQs) on
taxation issues provided according to schedule per cent 95 95
Total output cost $ million 1.0 1.0
24 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 • Budget Formulation Advice
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME Quantity
ERC briefs number 100 132 Delivery of budget formulation advice through Cabinet and Sub-Committee briefs number 600 537 Delivery of budget formulation advice through Ministerial briefs (related to Budget issues) number 200 246 Quality
Service Provision Rating (Ministerial survey data) per cent 80 88
Portfolio Ministers' satisfaction with ERC briefs per cent 80 88 Timeliness
Delivery of briefs In accordance with agreed timelines per cent 100 100
Total output cost $ million 3.3 3.3
B Statutory Insurance Advice
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME Quantity
Quarterly reviews of financial and performance reports of the VWA, TAC and VMIA (agencies) number 12 12 Annual review of returns and prudential framework for trustee companies and cooperative housing societies number 1 1 DTF participation in working groups with agencies affecting each of the statutory insurance schemes' viability and product delivery number 5 5
Briefings on insurance policy matters number 48 97 Funding agreement established for VWA's public safety inspection and prevention activities number 1 1 Quality
Service Provision Rating (Ministerial survey data) per cent 80 95 Service Provision Rating (Agency (VWA, TAC, VMIA) survey data) per cent 75 nm2 Timeliness
Delivery of quarterly reviews to Ministers within six weeks of end quarter per cent 100 92 Response to briefing requests and correspondence within ten days of request per cent 80 85
Total output cost $ million 8.2 8.2
2 The service provision rating survey for agencies was not conducted in 2002-03.
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 OUTPUT GROUP 2
OUTPUT GROUP 2: FINANCIAL MANAGEMENT SERVICES
OUTPUTS DELIVERED DESCRIPTION
• Financial Reporting and Control Report and monitor financial performance in the Victorian Public Sector, manage the daily cash requirements including investments and borrowings of Public Account and administer the Unclaimed Moneys Act 1962 including the assessment and processing of unclaimed moneys claims.
• Financial Assets and Liabilities Manage the State's financial assets and Management Services liabilities and the development of asset-liability management principles and initiatives, with the objective of maintaining the State's liabilities at prudent levels and the retention of a triple-A credit rating. In addition, the management of the whole-of-government banking contract promotes cost efficiencies in transactional banking and improves returns on financial assets.
D Taxation (State Revenue) Monitoring Monitor and forecast the various state-based and Forecasting Services taxes which provide revenue to the State.
D Budget Development and Production Advise Ministers and the ERC on the State's financial strategy, including development and coordination of the Budget decision-making framework. Production and publication of the State Budget and budget-related documents.
• Portfolio Performance Review Advise Ministers and the ERC on departmental financial, output and asset investment performance, the revenue to be paid for the provision of outputs and information and advice on budget risks, service delivery and strategic issues.
B GBE Performance Monitoring Services Provide advice and undertake monitoring and governance activities to ensure GBEs (and public financial institutions (PFIs) where appropriate) are operating at service standards sufficient to improve the satisfaction levels of all of their customers within financial risk parameters acceptable to the Government, and provide an adequate return to Government for the capital invested in them.
ABOVE: ANNE BORG.
DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 Key projects and initiatives Output performance
Pre-election Budget Update Output delivery performance varied from target for the following outputs: Following the announcement of the State Taxation (State Revenue) Monitoring and Election in 2002, DTF produced the Forecasting Services - Coordination of the Pre-election Budget Update. This was a first State Treasuries Tax Forecasting Group for Victoria and was in addition to the normal Meeting was delayed from October 2002 to requirement to produce the Budget Update March 2003 to accommodate the in January each year. preferences of other States. The accuracy of Establishment of Port of Melbourne forecasting State taxation revenue was Corporation impacted by the unexpected ongoing strength of the property market. As part of the Government's reforms of Victoria's commercial ports, a new Portfolio Performance Review - The March integrated Port of Melbourne Corporation 2003 Quarterly Report was delayed due to was established to manage the landside conflicting priorities and was delivered to the and waterside operations of the Port of Minister 30 working days rather than 20 Melbourne. DTF provided advice on the working days after the end of the quarter. establishment of the new entity and the GBE Performance Monitoring Services - subsequent appointment of new The number of Board appointments to Board members. relevant Government Business Enterprises during the year was higher than planned due Output Reviews to the unanticipated resignation and DTF conducted eleven Output Evaluation retirement of some Board members as well and Price Reviews across all government as additional appointments made to the new departments. These reviews focussed on Port of Melbourne Corporation Board. Identifying opportunities to improve output performance measures, resource allocation and governance. Advice was also provided to Government on options for further improving the use of output reviews.
Financial Reporting
DTF delivered the Annual Financial Report and Mid-Year Financial Report for the State of Victoria as well as four quarterly reports for the General Government Sector to Parliament and the public in accordance with legislative requirements.
LEFT TO RIGHT: GEORGINA GRANT, WAYNE SHARPE.
> V v
DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 • Financial Reporting and Control
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Weekly monitoring of the daily and monthly Public Account cash forecasts from departments against actual revenue and expenditure flows weeks 52 52
Annual Financial Report (AFR) number 1 1
Mid-Year Financial Report number 1 1
Quarterly Financial Reports number 4 4
Unclaimed Moneys claims: ensuring projected number of claims processed per year is met number 5800 6000
Quality
Manage the Public Account set-off pool average dally balances $ million <8 5.8
Unclaimed Moneys: customer satisfaction with services delivery per cent 95 95
Acceptable (no material weaknesses in financial systems and reporting) AFR audit opinion by the Auditor-General yes/no yes yes
Unclaimed Moneys: compliance with procedures for processing and assessing unclaimed moneys claims per cent 100 100
Timeliness
Daily management of the Public Account bank account and set-off pool balances daily daily daily
Mid-Year Financial Report date 15/03/03 17/03/03
AFR date 27/10/02 28/10/02
Unclaimed Moneys: verified claims processed within a target period working days 3-5 3-5
Quarterly Financial Reports date 27/10/02 28/10/02 15/11/02 15/11/02 15/03/03 17/03/03 15/05/03 15/05/03
Total output cost $ million 7.5 7.0
28 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 • Financial Assets and Liabilities Management Services
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Manage the review process for the State's credit rating number 2 2
Monitor and review the Budget Sector Debt Portfolio number 11 11
Monitor and review the investment performance of the Budget Sector Long Term Fund (BSLTF) number 22 22
Review investment mandate for the BSLTF number 2 2
Review of Cash and Banking contract performance number 16 16
Loan Council reporting requirements number 4 4
Quality
Stakeholder satisfaction with the whole-of -government Cash and Banking Contract per cent 70 69
Timeliness
Preparation and delivery of required Information to rating agencies to meet their timelines yes/no yes yes
Review of BSLTF investment mandate within eight weeks of release of Budget and
Budget Update yes/no yes yes
Total output cost $ million 0.9 0.9
I Taxation (State Revenue) Monitoring and Forecasting Services
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
State taxes monitored and forecast number 26 26
State Treasuries Tax Forecasting Group meeting number 1 1
Ministerial briefings number 4 5
Quality
Service Provision Rating (Ministerial survey data) per cent 80 80
Significant weaknesses in tax monitoring and forecasting reported by Auditor-General and Internal Auditors number nil nil
within Accuracy of estimating quarterly taxation revenue percent 10 per cent 2.2
Accuracy of estimating state taxation revenue within (Budget to AFR) per cent 5 per cent 6.2
Timeliness
Meet Financial Estimates System (FES) update deadlines per cent 100 100
Coordinate State Treasuries Tax Forecasting Group Meeting according to timetable date Oct 02 Mar 03
Total output cost $ million 0.6 0.6
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 29 • Budget Development and Production
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
State Budget number
State Budget update number
Quality
Service Provision Rating (Ministerial survey data) per cent 80
Positive review by Auditor-General yes yes under s16 (b) of Audit Act yes/no
Timeliness Annual Budget published by date agreed yes yes by Treasurer yes/no yes yes Budget Update published by 15 January yes/no Total output cost $ million 4.5 4.5
• Portfolio Performance Review
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Quarterly Output Performance and Certification report per portfolio number 40 40
Output Evaluation and Price Reviews number 11 11
Quality
Service Provision Rating (Ministerial survey data) per cent 80 83
Portfolio Ministers' satisfaction with ERC briefs and reports per cent 80 83
Timeliness
Quarterly certifications provided to the Minister 20 working days after the quarter per cent 100 75
Output Evaluation and Price Reviews completed by agreed dates percent 100 100
Total output cost $ million 4.0 4.0
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 I GBE Performance Monitoring Services
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
GBE corporate plans reviewed and assessed number 19 19
Analysis of GBE quarterly performance reports number 72 72
GBE Annual Reports tabled number 9 9
Board appointments to relevant GBEs number 10 25
GBE policy advice (including Cabinet Submissions) 59 provided as required number 30 26 GBE dividends negotiated number 26 10 Monitoring and Assessing Public Authority Income number 10 12 Monthly cash flow and receivables forecasting number 12 Quality
Service Provision Rating (Ministerial survey data) per cent 80 80
Timeliness
Analysis and review of corporate plans, quarterly performance reports and GBE policy advice provided to agreed schedule per cent 90 95
Target dates met for GBE dividend payments per cent 100 100
Total output cost $ million 1.3 1.3
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 31 OUTPUT GROUP 3
OUTPUT GROUP 3: RISK MANAGEMENT SERVICES
OUTPUTS DELIVERED DESCRIPTION
• Infrastructure Project Management Provide policy, risk and project management advice on public infrastructure and other partnership projects where there is private sector investment.
B Commercial Project and Risk Management Manage the State's post-reform residual entities, Its direct contractual obligations and contingent liabilities, to protect its financial and commercial advantage and to minimise its attendant risks.
• Prudential Supervision Manage the State's exposure to the financial risks arising from the activities of the State's PFIs through the implementation of a prudential supervision framework around the activities of the PFIs.
Key projects and initiatives Output performance
Output delivery performance varied from Partnerships Victoria target for the following outputs: A number of major Partnerships Victoria Infrastructure Project Management - Infrastructure projects were progressed during The review of existing public-private the year, Including the execution of contracts partnership contracts was not completed for the Spencer Street Redevelopment, new during 2002-03 as planned due to delays Berwick Community Hospital, Enviro Altona finalising the necessary Partnerships Victoria Wastewater project, Film and Television Contract Management guidance material, Studios, Echuca/Rochester Wastewater and will now be completed during 2003-04. Treatment Plant and the Mobile Data Network project. In addition, Expression of Interest Commercial Project and Risk Management - documentation was released for the Mltcham- The resolution of residual gas interests was Frankston Freeway. The Department also rescheduled for completion in 2003-04. developed and released enhanced The unwinding of South Eastern Medical Partnerships Victoria guidance material: the Complex Limited was also not completed as Public Sector Comparator Technical Note and planned, pending advice from the ATO, and Use of Discount Rates in the Partnerships will be completed during 2003-04. Victoria Process.
Gateway Initiative
During the year the Department developed a Gateway for major infrastructure delivery. The Gateway Initiative will ensure better asset Investment outcomes for Government across the Victorian budget sector and an Improved 'cradle-to-grave' framework for major Investment delivery. The Initiative comprises four elements: Multi-year Strategy, Business Case Development, Gateway Review Process and Reporting.
32 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 • Infrastructure Project Management
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Develop new and revise existing Partnerships Victoria guidelines number 6 6
Provision of commercial and risk management advice on public-private partnership (and other) projects to facilitate new infrastructure and number of minimise the Government's exposure to risk milestones 150 160
Education of officers responsible for infrastructure projects through delivery of training forums number 8 12
Review of existing public-private partnership (and other) contracts for both service performance and fiscal management number 20 V
Provision of commercial risk management advice number of on privately Initiated projects or business strategies milestones 8 9
Quality
Service Provision Rating (Ministerial survey data) per cent 80 83
Department and Agency satisfaction per cent 85 80
Timeliness
Provision of Initial advice within two working days per cent 90 90
Provision of detailed advice within ten working days per cent 90 90
Total output cost $ million 6.6 6.3
3 The review of existing public-private partnership contracts was not completed during 2002-03 as planned due to delays finalising the necessary Partnerships Victoria Contract Management Guidance material, and will now be completed during 2003-04.
LEFT TO RIGHT: PAULA MCDONALD, CORINNE DYER, STEVEN MARASCO.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 33 • Commercial Project and Risk Management
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Undertake additional unforeseen projects as requested by Ministers during the year number 2 2
Resolution of residual gas interests number 1 0
Deliver on DTF responsibilities in wind-up of Public Transport Corporation (PTC) number 1 1
Termination of Structured Finance transactions, removing or minimising contingent liabilities number of the State in a cost-effective manner completed 1 0
Processing of financial accommodation requests number 12 15
number Advice on, and promulgation of, commercial of reviews and financial principles and expertise completed 1 1
Advice to Treasurer and Department of Natural Resources and Environment (DNRE) to assist with the strategy Implementation of the Government Forest strategy completed 1 1
Quality
Sen/ice Provision Rating (Ministerial survey data) per cent 80 80
Timeliness
Delivery of projects to agreed deadlines per cent 90 92
Timely completion of financial accommodation requests per cent 75 93
Total output cost $ million 1.9 1.8
• Prudential Supervision
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Reports on the prudential compliance and performance of PFIs to the Balance Sheet Management Committee number 16 16
Key meetings held with the Prudential Auditor and Prudential Supervisor number 8 8
Review of prudential supervision frameworks number 1 1
Review of corporate plans of the PFIs number 3 3
Quality
Service Provision Rating (Ministerial survey data) per cent 80 95
Timeliness
Prepare Treasurer's response to the PFIs on their corporate plans date 31 July 31 July
Key meetings held with Prudential Auditor and Prudential Supervisor within 45 days of the end of the quarter yes/no yes yes
Total output cost $ million 1.2 1.2
34 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 OUTPUT GROUP 4
OUTPUT GROUP 4: REFORM SERVICES
OUTPUTS DELIVERED DESCRIPTION
D Resource Management Reform Advise the Minister for Finance and the Treasurer regarding ongoing improvements in the resource management of the Victorian Public Sector. Implement endorsed management reforms.
Key projects and initiatives Output performance Output delivery performance varied from Business Management System target for the following output: A new Business Management System Resource Management Reform - Due to the (BMS) for whole-of-government budget direction of resources to other priorities, a development and management was major policy review to provide options for developed during 2002-03. The BMS was online/real-time accountability was not used in the preparation of the 2003-04 State completed as planned during 2002-03. Two Budget. Implementation is expected to be case studies delayed from 2001 -02 on the completed during 2003-04. application of MRP principles were MRP Case Studies completed during the year. Six case studies illustrating best practice in the implementation of Management Reform Program (MRP) principles across the Victorian Public Sector (VPS) were launched during the year. These provided a forum for sharing information about innovative management practice and for promoting a culture of continuous Improvement in the VPS.
LEFT TO RIGHT: BARBARA SPILLER, VIVIAN CHUNG.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 • Resource Management Reform
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Major policy reviews and refinements number 2
ERC reports on progress against departmental and whole-of-government MRP improvement strategies number 4
Documented case studies on MRP principles/ practices applied number 6
Updates of Budget and Financial Management Guide number 7
Quality
Stakeholder satisfaction with guidance material (intranet site) as per evaluation rating per cent >75 78
Measurable improvements in knowledge/ understanding of the reform framework by all stakeholders (over June 2000 benchmark) per cent >55 50
Timeliness
Delivery of policy advice in accordance with agreed timelines per cent >70 75
ERC reports on progress against departmental end of month end of month and whole-of-government improvement strategies date after quarter after quarter
Documented case studies on MRP principles/ practices completed and launched date June 2003 June 2003
Total output cost $ million • 2.2 2.2
36 DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 OUTPUT GROUP 5
OUTPUT GROUP 5: RESOURCE MANAGEMENT SERVICES
OUTPUTS DELIVERED DESCRIPTION
• Procurement Services Manage, develop and coordinate Victorian procurement and contracting procedures in collaboration with the Victorian Government Purchasing Board (VGPB), departments and agencies.
• Government Accommodation Services Administer, coordinate and manage the accommodation for government departments.
• Government Land and Property Services Administer, coordinate and manage government lands and property, including disposal of surplus government land/property and acquisition of lands to be held in Crown ownership or freehold title on behalf of other agencies.
• Management of Motor Vehicle Leases Coordinate and manage leased motor vehicles for government departments.
Key projects and initiatives Output performance Output delivery performance varied from City Accommodation Plan target for the following output: The Department managed one of the largest Management of Motor Vehicle Leases - office tender programs In Australia to New arrangements for the financing and consolidate over 100,000 square metres of management of the Government motor public sector office accommodation from vehicle fleet, including establishing fifteen to just two locations In Melbourne's performance benchmarks, were not CBD. This project included pre-commlttlng to completed during 2002-03 as planned. This long-term leasehold offices at 50 Lonsdale work will now be completed during 2003-04. Street and on the former Southern Cross Some departmental clients had concerns with Hotel site. the fleet financing arrangements during the Electronic Commerce for Procurement (EC4P) year, resulting in an overall client satisfaction rating of 48 per cent compared with the target During the year the Department completed of 75 per cent. These concerns will be its role as the coordinator of the whole-of- considered during the development of the government EC4P project. The project has new financing arrangements in 2003-04. now moved to the implementation phase, with As a result of a change in accounting policy individual departments assuming responsibility. during the year, the whole-of-government motor vehicle lease facility was no longer subject to the capital assets charge. As this charge represented the bulk of the Management of Motor Vehicle Leases output cost, the output budget was reduced from $18.6 million to $2.1 million.
LEFT TO RIGHT: JAMES FLETCHER, REBECCA HUNTER, MARY CLARKE.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 • Procurement Services
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Establishment or renewal of whole-of-government contracts number 3 3
Analysis of purchasing recommendations for VGPB number 100 139
VGPB meetings supported number 11 10
Hits on procurement websites (e.g. VGPB, contracts, publishing and tenders) number 500,000 550,550
Completion of coordination of EC4P project number 1 1
Ministerial briefings on emerging issues number 5 5
Participants attending procurement and contracting training number 650 684
Quality
Service Provision Rating (Ministerial survey data) per cent 80 80
VGPB satisfaction with secretariat, process analysis and policy support services per cent 80 80
Accredited Purchasing Units (APU) satisfaction with services provided per cent 75 70
Participants' satisfaction with training programs per cent 80 85
Timeliness
VGPB papers distributed four business days prior to meeting per cent 100 100
Completion of coordination of EC4P project date Sept 02 Sept 02
Total output cost $ million 4.4 4.4
0 Government Accommodation Services
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Total office area managed square metres 449,000 455,053
square metre Workspace ratio per FTE 15 16.2
$ per square metre Total accommodation cost per annum 280 264
Quality
Client departments' satisfaction with office accommodation services per cent 80 70
Service Provision Rating (Ministerial survey data) per cent 80 85
Office accommodation occupancy per cent 95 97
Timeliness
Delivery of approved Government accommodation projects to agreed timeframes per cent 100 100
Total output cost $ million 35.2 32.7
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 • Government Land and Property Services
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Implementation of Government policy on land and property management per cent 90 100
Revenue from sale of surplus Government land including Crown land (DTF Portfolio) $ million 50 50
Properties estimated to be acquired on behalf of Government number 12 12
Quality
Service Provision Rating (Ministerial survey data) per cent 80 83
Timeliness
The delivery of property facilitation and acquisition projects on time per cent 100 100
Total output cost $ million 6.0 6.1
• Management of Motor Vehicle Leases
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Number of government motor vehicles financed under a central management number 8000 7956
Environmental Initiatives implemented In the government motor vehicle fleet number 2 2
Quality
Departmental clients satisfied with fleet financing arrangements. per cent 75 48
Service Provision Rating (Ministerial survey data) per cent 80 80
Benchmarks In fleet financing and management 4 met or exceeded per cent 70 nm
Timeliness
Fleet Invoicing completed within three days of the due date each month per cent 90 100
Total output cost $ million 18.6 2.1
4 New arrangements for the financing and management of the government motor vehicle fleet, including establishing performance benchmarks, were not completed during 2002-03 as planned. This work will now be completed during 2003-04.
DEPARTMENT OF TREASURY S. FINANCE ANNUAL REPORT 2002-03 39 OUTPUT GROUP 6
OUTPUT GROUP 6: REGULATORY SERVICES
OUTPUTS DELIVERED DESCRIPTION
D Economic Regulatory Services Regulation of utilities in Victoria.
Note - The Regulation of Gambling output was transferred to the Department of Justice In January 2003 in accordance with Machinery of Government changes.
Key projects and initiatives Output performance
The regulatory review of the Victorian water Gas Contestability industry was not undertaken during 2002-03 Following extensive development and as planned. This project will commence in consultation, full retail contestability in the January 2004 following the ESC assuming Victorian gas market was Introduced from responsibility for the regulation of Victoria's 1 October 2002. As a result, gas consumers water and sewerage services from 1 January have the ability to choose their gas retailer. 2004. Funding of $1.2 million for the review has been carried forward to 2003-04, resulting Appointment of ESC commissioners In a commensurate decrease In the output In August 2002 the Minister for Finance cost for 2002-03. announced the appointment of two additional, part-time commissioners to the Essential Services Commission (ESC) to strengthen its role in Independent utilities regulation.
• Economic Regulatory Services
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME
Quantity
Preparation for a contestable gas market number 1 1
Company performance reviews and audits number 28 28
New or revised Regulatory Guidelines number 4 4
Industry Performance Reports number 6 6
Price Approvals/Reviews number 19 18
New/Amended Licences number 5 46
Ministerial and regulatory responses number 3 8
Quality
Regulatory decisions upheld per cent 80 100
Timelines
Deadlines met for major milestones per cent 95 98
Total output cost $ million 18.4 17.0
40 DEPARTMEOT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 OUTPUT GROUP 7
OUTPUT GROUP 7: REVENUE MANAGEMENT SERVICES
OUTPUTS DELIVERED DESCRIPTION
O Revenue Management Services The provision of revenue management to Government services across the various State based taxes in a fair and efficient manner for the benefit of all Victorians.
Key projects and initiatives Output performance
Ballarat State Revenue Office Revenue collected was above the budget target by 8.7 per cent, mainly due to higher March 2003 marked the one-year anniversary than expected collections of stamp duties, of operations for the new SRO facility at the especially on land transfers, mortgages and Ballarat Technology Park. The new facility general insurance. The timely handling of handles approximately forty per cent of objections within 90 days was at 69 per cent SRO functions. for the year, below the annual target of 80 per cent. During the year a team was established to clear backlogs and Improved performance in this area is expected in 2003-04.
• Revenue Management Services to Government
UNIT OF 2002-03 2002-03 OUTPUT PERFORMANCE MEASURES MEASURE TARGET OUTCOME Quantity
Revenue collected between agreed budget target per cent +/-5 +8.7
Refunds and Rebates issued within Key Performance Indicator (KPI) per cent >95 98
Revenue banked on day of receipt per cent >99 99 Investigation completed of identified high risks according to plan per cent >90 90 Quality
Risk moderation strategy implemented against identified risk per cent >90 90
Customer satisfaction level per cent >75 83
Maintain ISO 9001 Certification yes/no yes yes
Ratio of outstanding debt to total revenue per cent <2 1.5 Timeliness
Revenue received within three business days of due date per cent >90 98
Meet Cabinet and Parliamentary timelines per cent 100 100
Timely handling of objections within 90 days per cent >80 69
Court timelines met per cent 100 100
Total output cost $ million 62.8 62.5
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 41 FINANCIAL PERFORMANCE
Financial Statements Overview Excluding the unfunded superannuation liability that the Department records on behalf The Department recorded a deficit of $95 of the entire budget sector (which was steady million in 2002-03. The loss mainly reflects at $13 billion), total liabilities decreased from write-downs of assets and liabilities held on $549 million to $345 million. This was largely behalf of the entire budget sector, including: attributable to the extraordinarily high bank • book losses associated with leased motor overdraft figure at 30 June 2002, arising from vehicles - arising from losses on disposal the $250 million superannuation payment and an adjustment to lease asset and referred to above. liability balances consequent upon a review of procedures involved in Core Operations accounting for disposals and amortisation The best Indicator of core Departmental rates ($53 million) operations is the revenue paid by Government • the negative impact of the annual actuarial for DTF outputs. This has fallen in each of the valuation of the State's unfunded last five years and stood at $181 million In superannuation liability ($10 million) 2002-03, down from $201 million In 2001-02 • the booking of an onerous contract and $334 million in 1998-99. provision with respect to currently unused The longer term decline owes to the leased office space, In accordance with harvesting by Government of productivity a new Australian Accounting Standard improvements within DTF, and also Machinery ($13 million) of Government changes which has seen • the write-off of the book value of property some activities transferred to other assets disposed (the proceeds associated departments. In 2002-03 the reduction mainly with these disposals being taken to the reflected an exemption to DTF from paying a Administered books, in accordance with the $16 million capital asset charge on its leased Financial Management Act) ($12 million). motor vehicle fleet. The following table details operational revenue by Output Group. Total assets of the Department decreased from $886 million to $590 million during the year, the prior year amount being temporarily boosted by a $250 million superannuation payment made In June 2002 which was not funded in cash until July 2002. The major assets of the Department at 30 June 2003 are land and buildings ($173 million), leased motor vehicles ($210 million) and the Department's receivable from the State Administration Unit ($114 million).
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 Revenue from the Provision of Outputs* 2002-03 2001-02 CHANGE OUTPUT GROUP $M $M $M
Strategic Policy Advice 27 25 2
Financial Management Services 19 21 (2)
Risk Management Services 9 10 (1)
Reform Services 2 2 -
Resource Management Services 47 61 (14)
Regulatory Services 13 17 (4)
Revenue Management Services 64 65 (1)
Total 181 201 (20)
* Includes only Parliamentary Appropriations.
Five Year Financial Summary: Departmental (Controlled) Activities 2002-03 2001-02 2000-01 1999-2000 1998-99 $M $M $M $M $M
Government Output Appropriations Revenue 181 201 219 258 334
Government Other Appropriations Revenue 1,612 256 1,190 648 3,963
User Charges and Other Revenue 82 67 62 47 93
Total Revenue 1,875 524 1,471 953 4,390
Superannuation Costs - Non-Departmental (1,624) (1,853) (785) (1,313) (659)
Expenses associated with Motor Vehicles* (111) (39) (92) (3) (3)
Investment Wrlte-Downs 0 0 (129) 0 (122)
Other Expenses (235) (239) (231) (333) (413)
Net Result for the Year (95) (1,607) 234 (696) 3,193
Net Cash Flow from Operations 336* (224)* 66 46 (13)
Total Assets 590 886* 550 673 778
Unfunded Superannuation Liability 12,965 12,955 11,357 11,734 11,063
Other Liabilities 345 549* 309 319 406
# includes amortisation, lease deficit provision, losses on disposal and other adjustments.
* impacted by $250 million payment made in June 2002, which was not funded In cash until July 2002.
DEPARTMENT OF TREASURY 5 FINANCE ANNUAL REPORT 2002-03
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ABOVE! LEEr.TORIGHT;[CYNTHIA"NGUYENiBERNAR aMIlÈKÊÊs. ttf^s^mmmm* MPHMBBMM STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2003
2003 2002 NOTES $'000 $'000
Revenue from Ordinary Activities Output Appropriations 3(a),4(a) 181,187 201,181 Special Appropriations 3(a),4(b) 1,612,262 255,881 User Charges 3(b) 91,565 77,110 Resources Received Free of Charge 3(a) 6 1,125 Other Revenue 3(c) 546 1,540 1,885,566 536,837 Payments to Consolidated Fund (10,993) (12,491) 1,874,573 524,346
Expenses from Ordinary Activities Employee Benefits 5 65,452 65,668 Depreciation and Amortisation 5 67,455 62,800 Resources Provided Free of Charge 62 6,216 Grants and Transfer Payments 5 17,176 21,983 Capital Asset Charge 1(r) 16,233 34,010 Supplies and Services 71,435 66,029 Borrowing Costs 5 19,303 16,624 Superannuation Costs - Non-Departmental 14 1,623,972 1,853,506 Other Expenses 5 87,999 4,707 1,969,087 2,131,543 Net Result for the Reporting Period 5,15(c) (94,514) (1,607,197)
Total Changes in Equity (other than those resulting from transactions with Victorian State Government in its capacity as owner on behalf of the Crown) (94,514) (1,607,197)
Hie above Statement of Financial Performance should be read in conjunction with the accompanying notes.
46 DEPARTMENT OF TREASURY&FINANCE ANNUAL REPORT 2002-03 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2003
2003 2002 NOTES $'000 $'000
Current Assets Cash Assets 6 19,396 18,364 Receivables 7 119,487 390,950 Inventories 8 1,726 14,079 Prepayments 679 834 Total Current Assets 141,288 424,227
Non-Current Assets Inventories 8 26,785 27,608 Property, Plant and Equipment 9 413,019 424,129
Intangible Assets 10 8,573 - Deferred Expenses 759 10,045 Total Non-Current Assets 449,136 461,782 Total Assets 590,424 886,009
Current Liabilities Payables 11 21,507 22,256 Interest Bearing Liabilities 12 58,150 303,330 Provisions 13 73,186 71,685 Unfunded Superannuation 14 498,875 878,619 Unearned Income 15,178 15,157 Total Current Liabilities 666,896 1,291,047
Non-Current Liabilities Interest Bearing Liabilities . 12 162,359 127,261 Provisions 13 14,937 9,188 Unfunded Superannuation 14 12,466,157 12,075,988 Total Non-Current Liabilities 12,643,453 12,212,437 Total Liabilities 13,310,349 13,503,484 Net Liabilities (12,719,925) (12,617,475)
Equity Contributed Capital 15(b) 97,678 105,614 Asset Revaluation Reserve 15(a) 54,078 54,078 Accumulated Deficit 15(c) (12,871,681) (12,777,167) Total Equity (12,719,925) (12,617,475)
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2003
2003 2002 NOTES $'000 $'000
Cash Flows from Operating Activities Receipts from Government 2,161,199 281,282 Receipts from Other Entities 2,508 601 Payments to Suppliers and Employees (174,408) (187,438) Grants and Transfer Payments (19,683) (19,476) Superannuation Costs - Non-Departmental (1,612,262) (255,881) 357,354 (180,912)
Goods and Services Tax recovered from the ATO 21,181 19,303 Goods and Services Tax paid to the ATO (17,340) (14,001) Interest Received 16 41 Other Revenue 265 335 Capital Asset Charge (16,234) (34,010) Borrowing Costs (21,003) (14,416) Net Cash lnflow/(Outflow) from Operating Activities 22 324,239 (223,660)
Cash Flows from Investing Activities
Payments for Property, Plant and Equipment (10,459) (23,461) Payments for Intangible Assets (13,058) (1,358)
Investment Proceeds - 145 Net Cash (Outflow) from Investing Activities (23,517) (24,674)
Cash Flows from Financing Activities
Repayment of Finance Lease Liabilities (net) (47,706) (38,782) Proceeds from Capital Contribution by State Government 3,552 37,288
Net Cash (Outflow) from Financing Activities (44,154) (1,494)
Net lncrease/(Decrease) In Cash Held 256,568 (249,828)
Cash/(Overdraft) at the Beginning of the Financial Year (246,185) 3,643 Cash/(Overdraft) at the End of the Financial Year 6 10,383 (246,185)
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
48 DEPARTMENT OF TREASURY 8. FINANCE ANNUAL REPORT 2002-03 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
CONTENTS
NOTE 1. Summary of Significant Accounting Policies 50
NOTE 2. Departmental Outputs 56
NOTE 3. Revenue 60
NOTE 4. Summary of Compliance with Annual Parliamentary Appropriations 61
NOTE 5. Net Result for the Reporting Period 63
NOTE 6. Cash Assets 64
NOTE 7. Receivables 64
NOTE 8. Inventories 64
NOTE 9. Property, Plant and Equipment 65
NOTE 10. Intangible Assets 67
NOTE 11. Payables 67
NOTE 12. Interest Bearing Liabilities 67
NOTE 13. Provisions 68
NOTE 14. Superannuation 69
NOTE 15. Equity and Movements in Equity 71
NOTE 16. Financial Instruments 71
NOTE 17. Ministers and Accountable Officers 75
NOTE 18. Remuneration of Executives 76
NOTE 19. Remuneration of Auditors 76
NOTE 20. Contingent Liabilities and Contingent Assets 77
NOTE 21. Commitments for Expenditure 80
NOTE 22. Reconciliation of Net Result for the Reporting Period to
Net Cash lnflow/(Outflow) from Operating Activities 81
NOTE 23. Administered Items 81
NOTE 24. Restructuring of Administrative Arrangements 86
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 49 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This general purpose financial report has been prepared on an accrual basis in accordance with the Financial Management Act 1994, Australian Accounting Standards, Statements of Accounting Concepts and other authoritative pronouncements of the Australian Accounting Standards Board, and Urgent Issues Group Consensus Views.
It is prepared in accordance with the historical cost convention, except with respect to certain assets and liabilities which, as noted, are at valuation. The accounting policies adopted, and the classification and presentation of items, are consistent with those of the previous year, except where a change is required to comply with an Australian Accounting Standard or Urgent Issues Group Consensus View, or an alternative accounting policy permitted by an Australian Accounting Standard is adopted to improve the relevance and reliability of the report. Where practicable, comparative amounts are presented and classified on a basis consistent with the current year.
(a) Reporting Entity The Essential Services Commission, which is part of the Department's portfolio, prepares separate Annual Financial Statements and accordingly is not included in the Department's Financial Statements. With that exception, the Financial Statements include all the controlled activities of the Department of Treasury and Finance. This includes the transactions and balances of the following controlled trust funds: Finance Agency Trust Government Owned Rental Accommodation Trust Industry Supervision Fund Treasury Trust
Administered Resources The Department administers, but does not control, certain resources on behalf of the Victorian Government, for example taxes raised by the State Revenue Office. It is accountable for the transactions involving those administered resources, but does not have the discretion to deploy the resources for achievement of the Department's objectives. For these resources, the Department acts only on behalf of the Victorian Government.
Transactions and balances relating to these administered resources are not recognised as departmental revenues, expenses, assets or liabilities within the body of the Financial Statements, but are disclosed separately (see Note 23).
(b) Objectives and Funding The Department's mission is to provide leadership in economic, financial and resource management. This leadership focus is reflected in the Department's three-to-five-year operational objectives of: • providing sound financial management of the State's fiscal resources with an emphasis on maintenance of a substantial budget surplus • guiding government actions to best increase living standards for all Victorians through the provision of innovative policy advice • championing an integrated whole-of-government approach to ensure optimal service delivery and provision of world class infrastructure to benefit all Victorians. The Department is predominantly funded by accrual-based Parliamentary appropriations for the provision of outputs.
(c) Outputs of the Department Information about the Department's output activities, and the expenses, revenues, assets and liabilities which are reliably attributable to those output activities, is set out in the Departmental Outputs Schedule (Note 2). Information about expenses, revenues, assets and liabilities administered by the Department is given in the schedule of administered expenses and revenues and the schedule of administered assets and liabilities (Note 23).
50 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 (d) Acquisitions of Assets
The cost method of accounting is used for all acquisitions of assets. Cost is measured as the fair value of the assets given up or liabilities undertaken at the date of acquisition, plus incidental costs directly attributable to the acquisition.
Assets acquired at no cost, or for nominal consideration, are initially recognised at their fair value at the date of acquisition.
(e) Revenue Recognition
All revenue received by the Department is generally required to be paid into the Consolidated Fund.
Revenue becomes controlled by the Department when it is appropriated from the Consolidated Fund by the Victorian Parliament and applied to the purposes defined under the relevant appropriations Act. Additionally, the Department is permitted under Section 29 of the Financial Management Act 1994 to have certain receipts annotated to the annual appropriation. The receipts which form part of a Section 29 agreement are received by the Department and paid into the Consolidated Fund as administered revenue (Note 23). At that point, Section 29 provides for an equivalent amount to be added to the annual appropriation authority limit, which is then available for application by the Treasurer. Examples of receipts which can form part of a Section 29 agreement are receipts from sales of products and sen/Ices, Commonwealth specific purpose grants and the proceeds from the sale of assets.
Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties and taxes. Revenue Is recognised for each of the Department's major activities as follows:
(i) Output Revenue
Revenue from the outputs the Department provides to Government is recognised when those outputs have been delivered and the relevant Minister has certified delivery of those outputs in accordance with specified performance criteria.
(ii) User Charges User charges raised by business units are controlled by the Department where they can be deployed for the achievement of departmental objectives. Revenue is recognised when the services are provided, or when the fee for providing services is received.
(iii) Commonwealth Grants Grants payable by the Commonwealth Government are recognised as revenue when the Department gains control of the underlying assets. Where such grants are payable into the Consolidated Fund, they are reported as administered revenue (see Note 23). Where grants are reciprocal, revenue is recognised as performance occurs under the grant. Non-reciprocal grants are recognised as revenue when the grant is received or receivable. Conditional grants may be reciprocal or non-reciprocal depending on the terms of the grant.
(iv) Taxes, Fines and Regulatory Fees State taxation revenue is recognised by the State on receipt of a taxpayer's self-assessment, or the time the taxpayer's obligation to pay arises pursuant to the issue of an assessment, whichever Is earlier. Fines and regulatory fees revenue is recognised at the time the fine or regulatory fee is issued. Taxes, Public Authority dividends, fines and regulatory fees collected, but not controlled, by the Department, are not recognised as revenues in the Statement of Financial Performance or Statement of Cash Flows, but are reported as administered revenues (see Note 23).
(f) Receivables All debtors are recognised at the amounts receivable as they are due for settlement at no more than 30 days from the date of recognition.
Collectability of debtors is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off. A provision for doubtful debts is raised when some doubt as to collection exists.
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 51 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
(g) Revaluation of Non-Current Assets Subsequent to the initial recognition as assets, non-current physical assets, other than plant and equipment, are measured at fair value. Plant and equipment are measured at cost. Revaluations are made with sufficient regularity to ensure that the carrying amount of each asset does not differ materially from its fair value at the reporting date. Revaluations are assessed annually and supplemented by independent assessments, at least every three years. Revaluations are conducted in accordance with Victorian Government Policy, Revaluation of Non-Current Physical Assets.
Revaluation increments are credited directly to the Asset Revaluation Reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognised as an expense, the increment Is recognised immediately as revenue. Revaluation decrements are recognised immediately as expenses, except that, to the extent that a credit balance exists in the Asset Revaluation Reserve in respect of the same class of assets, they are debited directly to the Asset Revaluation Reserve. Revaluation Increments and decrements are offset against one another within a class of non-current assets.
(h) Other Financial Assets - Investments Investments are brought to account at the lower of cost or their net realisable market value. Interest revenues are recognised as they accrue. Dividend income is recognised when receivable. Investments and investment Income are disclosed as administered items (Note 23). Investments comprising marketable securities and deposits held with the Victorian Funds Management Corporation are valued at cost as at 30 June 2003.
(i) Depreciation of Property, Plant and Equipment Depreciation is calculated on a straight line basis to write off the net cost or revalued amount of each item of property, plant and equipment (excluding land) over its expected useful life to the Department. Estimates of remaining useful lives for all such assets are reviewed at least annually. The expected useful lives applicable for the years ended 30 June 2003 and 30 June 2002 were as follows:
Buildings 23 years Office Equipment 4 years Computer Equipment and Associated Peripherals - Generic Revenue Collection System 7 years - Other 3 years Plant, Furniture and Equipment 10 years Leased Motor Vehicles 2-3 years
(j) Leasehold Improvements/Fitouts The cost of improvements to or on leasehold properties is amortised over the unexpired period of the lease or the estimated useful life of the improvement to the Department, whichever is the shorter. Leasehold improvements held at the reporting date are being amortised over ten years.
(k) Leased Non-Current Assets A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits. Finance leases are capitalised. A lease asset and liability are established at the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the interest expense.
The lease asset is amortised on a straight line basis over the term of the lease, or where it is. likely that the Department will obtain ownership of the asset, the expected useful life of the asset to the Department. On 3 July 1997 the State of Victoria sold the majority of its motor vehicle fleet and entered into a Master Lease Agreement to enable departments and public bodies to lease and replace vehicles under a short-term operating lease for each vehicle. The Master Lease Agreement is recognised as a finance lease (non-current asset and related liability) in this Department's Financial Statements (see Notes 9 and 12).
Operating lease payments are charged to the Statement of Financial Performance in the periods in which they are incurred, as this represents the pattern of benefits derived from the leased assets.
52 DEPARTMENT OFTREASURY & FINANCE ANNUAL REPORT 2002-03 (i) Trade and Other Creditors
These amounts represent liabilities for goods and services provided to the Department prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(m) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of GST, except where the amount of GST incurred Is not recoverable, In which case it Is recognised as part of the cost of acquisition of an asset or part of an Item of expense. The net amount of GST recoverable from, or payable to, the Australian Taxation Office is Included as part of receivables or payables In the Statement of Financial Position. The GST component of a receipt or payment is recognised on a gross basis in the Statement of Cash Flows, in accordance with Accounting Standard AAS28 Statement of Cash Flows.
(n) Employee Benefits
(i) Wages and Salaries and Annual Leave Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date, are recognised in respect of employees' sen/ices up to the reporting date and are measured as the amounts expected to be paid when the liabilities are settled.
(ii) Sick Leave
As it is considered that non-vesting sick leave to be taken in future reporting periods will not exceed entitlements which are expected to accrue in those periods, no provision has been made in these Financial Statements.
(iii) Long Service Leave
The liability for long service leave expected to be settled within 12 months of the reporting date is recognised as a provision and is measured in accordance with (i) above. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised as a provision and is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration Is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using Interest rates on national Government guaranteed securities with terms to maturity that match, as closely as possible, the estimated future cash outflows.
The following assumptions were adopted in measuring present value:
2003 2002 Weighted average rates of increase In annual employee entitlements to settlement of the liabilities 4.8% 6.9% Weighted average discount rates 4.7% 5.7% Weighted average terms to settlement of the liabilities 18 years 18 years
(iv) Superannuation
The amount charged to the Statement of Financial Performance in respect of superannuation (as included in Employee Benefits expense) represents the contributions made by the Department to the various superannuation funds (see Note 14).
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 53 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
(v) Termination Benefits Liabilities for termination benefits are recognised when a detailed plan for the terminations has been developed and a valid expectation has been raised in those employees affected that the terminations will be carried out. The liabilities for termination benefits are recognised in other creditors unless the amount or timing of the payments is uncertain, in which case they are recognised as a provision. Liabilities for termination benefits expected to be settled within 12 months are measured at the amounts expected to be paid when they are settled. Amounts expected to be settled more than 12 months from the reporting date are measured as the estimated cash outflows, discounted using interest rates on national Government guaranteed securities with terms to maturity that match, as closely as possible, the estimated future cash outflows. There were no liabilities for termination benefits recognised at 30 June 2003 or 30 June 2002.
(vi) Employee Benefit On-Costs Employee benefit on-costs, including payroll tax, are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.
(o) Borrowing Costs Borrowing costs are recognised as expenses in the period In which they are incurred, except where they are included in the costs of qualifying assets. Borrowing costs include: • interest on bank overdrafts and short-term and long-term borrowings • amortisation of discounts or premiums relating to borrowings • amortisation of ancillary costs incurred in connection with the arrangement of borrowings • finance lease charges.
(p) Inventories - Surplus Land and Buildings Surplus land and buildings that fall within the Government's Asset Sales Program, and which are not controlled by the Department, are reported by the relevant agency and not by this Department. Reporting responsibility for these assets remains with the relevant agency until the total sale price is fully discharged. Surplus properties which are surrendered to the Crown prior to disposal are treated as controlled assets in the Department's Statement of Financial Position and are shown as Properties Held for Resale (Note 8). They are valued at cost.
(q) Cash For purposes of the Statement of Cash Flows, cash includes short-term deposits that are readily convertible to cash and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts (see Note 6).
54 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 (r) Capital Asset Charge The capital asset charge represents the opportunity cost of capital invested in the non-current physical assets used in the provision of outputs. The charge is calculated on the carrying amount of non-current physical assets (excluding heritage assets and leased motor vehicles).
(s) Resources Provided and Received Free of Charge Contributions of resources and resources provided free of charge are recognised at their fair value. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.
(t) Unfunded Superannuation Liability An unfunded superannuation liability exists because funds' assets are not sufficient to cover members' accrued benefits as actuarially assessed at 30 June 2003. Government policy in relation to this liability is that the unfunded amount for the entire budget sector should be taken up in the Financial Statements of the Department of Treasury and Finance (see Note 14).
(u) Contributed Capital Consistent with UIG Abstract 38 Contributions by Owners Made to Wholly-Owned Public Sector Entities, appropriations for additions to net assets have been designated as contributed capital. Other transfers that are in the nature of contributions or distributions have also been designated as contributed capital.
(v) Going Concern Basis As a result of the Department taking up the unfunded superannuation liability for the entire budget sector, its recorded liabilities exceed its assets. Despite this, the going concern basis continues to be appropriate for these Financial Statements because the Department is ultimately part of the State Government of Victoria which guarantees payment of the Department's debts as and when they fall due.
(w) Public Account Liabilities Within Administered assets and liabilities (see Note 23), the Department has recognised certain liabilities that exist in the Public Account at year end. These are the outstanding liabilities to other Departments in respect of (a) amounts appropriated from the Consolidated Fund but remaining undrawn at the end of the year, net of Public Account advances to other Departments, and (b) Trust Account funds held on their behalf within the Public Account.
(x) Rounding of Amounts Amounts in the Financial Statements have been rounded to the nearest thousand dollars, unless otherwise shown.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 55 NOTE 2. DEPARTMENTAL OUTPUTS A description of Departmental outputs during the year ended 30 June 2003, and the objectives of these outputs, are summarised below. For full details of the Department's output performance, refer to the 2002-03 Performance section from page 17,
Strategic Policy Advice Outputs These outputs make significant contributions to the three Departmental objectives of the Department of Treasury and Finance: • Providing sound financial management of the State's fiscal resources, with an emphasis on maintenance of a substantial budget surplus • Guiding Government actions to best increase living standards for all Victorians through the provision of innovative policy advice • Championing an integrated whole-of-government approach to ensure optimal service delivery and provision of world-class infrastructure to benefit all Victorians. The individual outputs involve the provision of strategic policy advice to Ministers on all aspects of Government activity.
Financial Management Services Outputs These outputs make significant contributions to the following Departmental objectives: • Providing sound financial management of the State's fiscal resources, with an emphasis on maintenance of a substantial budget surplus • Championing an integrated whole-of-government approach to ensure optimal service delivery and provision of world-class infrastructure to benefit all Victorians. The individual outputs involve the provision of financial management services to government departments, agencies and Government Business Enterprises, including: financial accounting and reporting, managing and forecasting cash balances and central Government cash transactions, assessing and processing unclaimed monies claims, managing Government liabilities with the objective of reducing State debt, managing various State-based taxes, and reviewing and analysing performance of departments with a focus on delivering value-for-money services to the community.
Risk Management Services Outputs These outputs make significant contributions to the following Departmental objectives: • Providing sound financial management of the State's fiscal resources, with an emphasis on maintenance of a substantial budget surplus • Championing an integrated whole-of-government approach to ensure optimal service delivery and provision of world-class infrastructure to benefit all Victorians. The individual outputs involve the development and monitoring of prudential frameworks to contribute to the management of the State's financial institutions as well as trustee companies and cooperative societies, as well as provision of project risk advice on infrastructure and other partnership models.
56 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 Reform Services Output
This output contributes to the following Departmental objectives: • Providing sound financial management of the State's fiscal resources, with an emphasis on maintenance of a substantial budget surplus • Championing an integrated whole-of-government approach to ensure optimal service delivery and provision of world-class Infrastructure to benefit all Victorians. It involves provision of advice to the Minister for Finance and the Treasurer regarding ongoing improvements in the resource management of the Victorian Public Sector, and implementation of endorsed management reforms.
Resource Management Services Outputs These outputs contribute to the Departmental objective: • providing sound financial management of the State's fiscal resources, with an emphasis on maintenance of a substantial budget surplus. The individual outputs Involve: the administration and coordination of government lands and property, accommodation for Government departments, procurement and purchasing procedures with departments and agencies with the Victorian Government Purchasing Board, and the management of leased buildings and motor vehicles for government departments.
Regulatory Services Outputs
These outputs contribute to the following two Departmental objectives: • Guiding Government actions to best Increase living standards for all Victorians through the provision of innovative policy advice • Championing an integrated whole-of-government approach to ensure optimal service delivery and provision of world-class Infrastructure to benefit all Victorians. The individual outputs involve the regulation of gaming and utilities in Victoria. The output Involving the regulation of gaming was transferred during the reporting period to the Department of Justice.
Revenue Management Services Output This output contributes to the Departmental objective: • providing sound financial management of the State's fiscal resources, with an emphasis on maintenance of a substantial budget surplus. It involves the provision of revenue management services across the various State-based taxes in a fair and efficient manner for the benefit of all Victorians.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 57 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
Departmental Outputs Schedule - Controlled Revenue and Expenses for the Year Ended 30 June 2003
FINANCIAL RISK STRATEGIC MANAGEMENT MANAGEMENT REFORM POLICY ADVICE SERVICES SERVICES SERVICES
2003 2002 2003 2002 2003 2002 2003 2002 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Revenue Output Appropriations 26,957 25,058 18,503 20,681 9,390 10,025 1,549 1,736
Special Appropriations User Charges 884 1,090 975 1,136 478 636 113 140
Resources Received Free of Charge 1 1 1 - 1 - Other Revenue 473 650 7 89 3 25 4
Payments to Consolidated Fund (6) (16) (7) (17) (3) (9) (1) (2) Total Revenue 28,309 26,783 19,479 21,889 9,869 10,677 1,661 1,878
Expenses Employee Benefits 12,990 11,634 11,244 12,730 5,617 4,850 832 1,345 Depreciation and Amortisation 699 522 936 594 342 279 80 65
Resources Provided Free of Charge 3 - 6 - 1 -
Grants and Transfer Payments 4,907 5,232 - 67 55 305 - 8
Capital Asset Charge 130 81 284 101 51 44 12 10 Supplies and Services = 8,684 9,238 8,072 8,787 4,365 4,219 585 846
Borrowing Costs 3 8 9 20 2 5 - 1 Superannuation Costs - Non-Departmental
Other Expenses 1 - 1 - 1 -
Total Expenses 27,417 26,715 20,552 22,299 10,434 9,702 1,509 2,275 Net Result for the Reporting Period 892 68 (1,073) (410) (565) 975 152 (397)
Departmental Outputs Schedule - Controlled Assets and Liabilities as at 30 June 2003
2003 2002 2003 2002 2003 2002 2003 2002 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Assets Current Assets 745 822 567 491 277 1,262 50 62 Non-Current Assets ^ 7or) 1,409 4,077 3,198 629 795 145 179 Total Assets 2.465 2,231 4,644 3,689 906 2,057 195 241
Liabilities Current Liabilities 6,079 6,871 3,039 4,248 1,552 2,310 219 431 Non-Current Liabilities 1,753 1,649 1,670 1,825 738 697 123 233 Total Liabilities 7,832 8,520 4,709 6,073 2,290 3,007 342 664 Net Assets / (Liabilities) (5,367) (6,289) (65) (2,384) (1,384) (950) (147) (423)
58 DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 RESOURCE REVENUE MANAGEMENT REGULATORY MANAGEMENT OTHER DEPARTMENTAL SERVICES SERVICES SERVICES - NOT ATTRIBUTABLE TOTAL
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
47,399 61,341 13,126 17,324 64,263 65,016 181,187 201,181 1,612,262 255,881 1,612,262 255,881 88,876 73,828 51 108 188 172 91,565 77,110
1 1,124 2 - 6 1,125
3 20 4 1 56 751 546 1,540
(10,767) (12,447) (2) - (207) - (10,993) (12,491) 125,512 123,866 13,179 17,433 64,302 65,939 1,612,262 255,881 1,874,573 524,346
7,862 7,230 561 343 26,346 27,536 65,452 65,668 53,807 43,568 12 46 11,579 17,726 67,455 62,800
47 6,216 5 - 62 6,216
- 48 12,214 16,313 - 10 17,176 21,983 13,603 31,391 4 8 2,149 2,375 16,233 34,010 30', 329 20,198 508 380 18,892 22,361 71,435 66,029
19,003 16,279 1 - 285 311 19,303 16,624 1,623,972 1,853,506 1,623,972 1,853,506
87,992 4,707 1 - 3 - 87,999 4,707 212,643 129,637 13,301 17,090 59,259 70,319 1,623,972 1,853,506 1,969,087 2,131,543 (87,131) (5,771) (122) 343 5,043 (4,380) (11,710) (1,597,625) (94,514) (1,607,197)
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 S'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
4,827 16,666 95 62 1,084 612 133,643 404,250 141,288 424,227 409,449 425,850 82 138 33,034 30,213 449,136 461,782 414,276 442,516 177 200 34,118 30,825 133,643 404,250 590,424 886,009
133,332 121,377 376 243 8,760 7,578 513,539 1,147,989 666,896 1,291,047 169,230 128,486 53 44 3,729 3,515 12,466,157 12,075,988 12,643,453 12,212,437 302,562 249,863 429 287 12,489 11,093 12,979,696 13,223,977 13,310,349 13,503,484 111,714 192,653 (252) (87) 21,629 19,732 (12,846,053) (12,819,727) (12,719,925) (12,617,475)
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 59 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 3. REVENUE
2003 2002 $'000 $'000
(a) Revenue by Source Revenue from Government Output Appropriations 181,187 201,181 Special Appropriations 1,612,262 255,881 Resources Received Free of Charge 6 1,125 User Charges (Note 3(b)) 89,931 75,707 Other Revenue (Note 3(c)) 277 1,061 1,883,663 534,955
Revenue from Other Parties User Charges (Note 3(b)) 1,634 1,403 Other Revenue (Note 3(c)) 269 479 1,903 1,882 Total Revenue 1,885,566 536,837
(b) User Charges Rental Accommodation and Associated Recoupments 22,808 20,261 Imputed Lease Rentals 65,005 52,848 Other 3,752 4,001 91,565 77,110
(c) Other Revenue Interest Received 16 33 Other 530 1,507 546 1,540
60 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 NOTE 4. SUMMARY OF COMPLIANCE WITH ANNUAL PARLIAMENTARY APPROPRIATIONS
(a) Summary of Compliance with Annual Parliamentary Appropriations The following table discloses the details of the various Parliamentary appropriations received by the Department during the year. In accordance with accrual output-based management procedures, 'Provision of Outputs' and 'Additions to Net Asset Base' are disclosed as 'controlled' activities of the Department. Administered transactions are those that are undertaken on behalf of the State, and over which the Department has no control or discretion.
APPROPRIATION ACT FINANCIAL MANAGEMENT ACT 1994
TRANSFER TO OTHER DEPARTMENTS ANNUAL APPROPRIATIONS -ADMINISTRATIVE ADVANCE FROM TOTAL PARLIAMENTARY APPROPRIATIONS -AS PUBLISHED RESTRUCTURING TREASURER SECTION 29 SECTION 30 SECTION 32 SECTION 35 AUTHORITY APPLIED VARIANCE
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Controlled
Provision of Outputs 186,455 199,381 (490) - 7,200 701 2,318 2,687 (335) - 5,032 3,737 200,180 206,506 181,187 201,181 18,993 5,325
Additions to Net Asset Base 2,900 90,839 - 2,000 72 - 335 - - 8,459 245 - 3,552 101,298 3,552 101,286 - 12 Administered Payments Made on Behalf of the State
- Operating Expenses 888,737 940,353 (18,511) - - 25,000 1,902 3,909 872,128 969,262 855,219 967,359 16,909 1,903
- Capital Expenditure 20,600 61,600 44,200 - 64,800 61,600 64,800 61,600
Total 1,098,692 1,292,173 (19,001) - 7,200 27,701 2,390 2,687 - - 6,934 16,105 44,445 - 1,140,660 1,338,666 1,104,758 1,331,426 35,902 7,240
Explanation of Variances between Total Parliamentary Authority and Appropriations Applied - Year Ended 30 June 2003.
Provision of Outputs
- $16.3 million of the Appropriation was not required as the Department was exempted from paying the capital asset charge on its leased motor vehicle fleet. Refer also Note 1 (r). - Certain specific projects were not completed as expected. $2.7 million has been carried over to 2003-04.
Payments Made on Behalf of the State - Interest payments associated with the Budget Sector Debt Portfolio were lower than anticipated. NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
(b) Summary of Compliance with Special Appropriations
APPROPRIATIONS APPROPRIATIONS APPLIED APPLIED 2003 2002 AUTHORITY PURPOSE $'000 $'000
Constitution Act No. 8750 - Governor's Pension Governor's Pension 599 506 County Court Act No. 6230 - Judges Judges' Pensions 3,724 3,015 Constitution Act No. 8750 - Supreme Court Judges Judges' Pensions 2,825 2,303 Mint Act No. 6323, Pensions Section 3 - Former Employees 114 58 State Superannuation Act No. 50 Superannuation of 1988, Section 90(2) - Contributions Contributions 1,605,000 250,000 Treasury Corporation of Victoria Debt Charges Act No. 80 of 1992, Section 38 - Budget Sector 695 638 - Debt Retirement Debt Retirement Taxation (Interest on Overpayments) Interest on Act No. 35 of 1986, Section 11 Overpayments of Tax 417 505 Co-Operative Housing Act No. 6226, Section 77(2) - Indemnities Indemnities 7 Liquor Control Reform Act No. 94 of 1988, Section 177(2) Safety Net Payments 12,824 23,058 Business Franchise Fees (Petroleum Products) Act No. 9272, Section 17(2) Safety Net Payments 33,807 31,925 Financial Management Act No.18 of 1994, Section 39 Interest on Advances 2,134 2,952 Financial Management Act No.18 of 1994, First Home Owners' Section 10 Grants 76,100 142,935 State Owned Enterprises Act, No. 94 State Equivalent of 1994, Section 88 Tax Refunds 1,601 42,179 Financial Management Act No.18 of 1994, Section 58 Unclaimed Property 118 Total 1,739,965 500,074
Shown in these Financial Statements as: Controlled Appropriations Revenue (Note 3(a)) 1,612,262 255,881 Administered Appropriations Revenue (Note 23) 127,703 244,193 1,739,965 500,074
62 DEPARTMENTOFTREASURY & FINANCE ANNUAL REPORT 2002-03 NOTE 5. NET RESULT FOR THE REPORTING PERIOD The net result for the reporting period includes the following expenses:
2003 2002 $'000 $'000
Expenses Employee Benefits Salaries and Wages 51,873 51,815 Superannuation 4,433 4,039 Annual and Long Service Leave Expense 5,072 5,722 Other On-Costs 4,074 4,092 Total Employee Costs 65,452 65,668
Depreciation and Amortisation Buildings, Fitouts and Grounds Development 4,938 4,569 Computer Equipment 4,778 4,778 Office Equipment, Furniture and Fittings 267 229 Leased Motor Vehicles 48,538 38,711 Generic Revenue Collection Systems 3,899 2,697 Municipal Valuations Database 5,035 11,816 Total Depreciation and Amortisation 67,455 62,800
Other Charges Against Assets
Bad and Doubtful Debts (write back) - (3)
Grants and Transfer Payments Victorian Government Business Enterprises 4,720 5,013 Other Victorian Government Entities 12,258 16,543 Other Governments 198 427 Total Grants and Transfer Payments 17,176 21,983
Borrowing Costs Finance Lease Interest 18,999 16,274 Other 304 350 19,303 16,624
Rental Expense Relating to Operating Leases Minimum Lease Payments 13,144 6,914
Other Expenses Loss on Disposal of Property, Plant and Equipment (principally Leased Motor Vehicles in 2002-03—$29.4 million) 41,629 4,707 Loss Arising from Under-Recovery of Residual Values of Leased Motor Vehicles 9,600 _ Adjustment to Carrying Values of Leased Motor Vehicles and Related Lease Liabilities* 23,770
Onerous Contract Provision - Leased Office Space 13,000 - 87,999 4,707
This adjustment arose following a review of the procedures involved with the accounting for leased motor vehicles, principally the accounting for disposal and amortisation rates applied.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 63 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 6. CASH ASSETS
2003 2002 $'000 $'000
Cash at Bank and On Hand 9 9 Deposits at Call 304 230 Funds Held in Trust 19,083 18,125 19,396 18,364
The above figures are reconciled to Cash/(Overdraft) at the end of the financial year as shown in the Statement of Cash Flows as follows: Balances as Above 19,396 18,364 Less: Bank Overdrafts (Note 12) (9,013) (264,549) Cash/(Overdraft) per Statement of Cash Flows 10,383 (246,185)
NOTE 7. RECEIVABLES Current: Amounts Owing from Victorian Government * 114,120 385,886 Debtors 2,874 3,433 Other 2,493 1,631 119,487 390,950
* Represents balance of annual appropriation relating to expenses incurred in the provision of outputs and for additions to the net asset base, for which payments had not been disbursed at balance date, and accordingly funding had not been provided by the Victorian Government. Additionally, at 30 June 2002 an amount of $250 million was attributable to an unpresented cheque associated with a superannuation payment in June 2002.
NOTE 8. INVENTORIES Current: Supplies and Consumables - At Cost 119 98 Properties Held For Resale - At Cost 1,607 13,981 1,726 14,079
Non-Current: Properties Held For Resale - At Cost 26,785 27,608
Aggregate Carrying Amount of Inventories Current 1,726 14,079 Non-Current 26,785 27,608 28,511 41,687
64 DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 NOTE 9. PROPERTY, PLANT AND EQUIPMENT
2003 2002 $'000 $'000
Land and Buildings Land
At Independent Valuation 2001 65,865 71,805
At Cost 11,980 - 77,845 71,805
Buildings (Including Heritage Buildings)
At Independent Valuation 2001 90,142 96,407 Less: Accumulated Depreciation (7,496) (4,387) 82,646 92,020
Building Improvements, Fitouts and Grounds Development - at Cost 7,702 5,050 Less: Accumulated Depreciation (1,069) (418) 6,633 4,632
Construction in Progress - at Cost 5,734 2,411
Total Land and Buildings 172,858 170,868
Plant and Equipment
Office Equipment, Computer Equipment - at Cost 54,984 61,413 Less: Accumulated Depreciation (25,686) (31,484) 29,298 29,929
Construction in Progress - at Cost 820 4,757
Motor Vehicles under Finance Lease 257,386 252,419 Less: Accumulated Amortisation (47,343) (33,844) 210,043 218,575
Total Plant and Equipment 240,161 253,261
Total Property, Plant and Equipment 413,019 424,129
Valuations of Land and Buildings The basis of valuation of land and buildings adopted as at 30 June 2003 is fair value, being the depreciated current replacement cost of an asset's remaining future economic benefits. The latest revaluations were based on independent assessments, carried out by Herron Todd White.
DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 65 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 9. PROPERTY, PLANT AND EQUIPMENT (continued)
Reconciliations Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current financial year are set out below.
BUILDING MOTOR IMPROVEMENTS, OFFICE VEHICLES FITOUTS, BUILDING EQUIPMENT, UNDER GROUNDS CONSTRUCTION COMPUTER CONSTRUCTION FINANCE LAND BUILDINGS DEVELOPMENT IN PROGRESS EQUIPMENT IN PROGRESS LEASE TOTAL $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Carrying Amount at Start of Year 71,805 92,020 4,632 2,411 29,929 4,757 218,575 424,129 Additions 362 5,704 3,242 1,151 10,459 Disposals (5,880) (5,060) (75) (12) (11,027) Transfers Between Classes 2,381 (2,381) 5,088 (5,088) Transfers From Inventories 11,980 11,980 (108) Net Transfers Free of Charge (60) (43) (5) Net Increase in Vehicle Fleet 40,006 40,006 Depreciation/Amortisation (48,538) (62,420) Expense (Note 5) (4,271) (667) (8,944) Carrying Amount at End of Year 77,845 82,646 6,633 5,734 29,298 820 210,043 413,019
66 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 NOTE 10. INTANGIBLE ASSETS
2003 2002 $'000 $'000
Municipal Valuations Database - At Cost 13,949 16,897 Less: Accumulated Amortisation (5,376) (16,897) 8^573 ~
NOTE 11.PAYABLES Trade Creditors and Accruals 17,267 17,435 Amounts Payable to Other Government Agencies 4,240 4,821 21,507 22,256
NOTE 12. INTEREST BEARING LIABILITIES Current: Unsecured Bank Overdrafts 9,013 264,549 Secured Lease Liabilities 49,137 38,781 ' 58,150 303,330
Non-Current: Secured Lease Liabilities 162,359 127,261
Aggregate Carrying Amount of Interest Bearing Liabilities Current 58,150 303,330 Non-Current 162,359 127,261 ~~~~ 220,509 430,591
Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default. Assets Pledged as Security The carrying amounts of non-current assets pledged as security are: Motor Vehicles Under Finance Lease 210,043 218,575
Bank Overdraft Due to the State of Victoria's investment policy and government funding arrangements, government departments generally do not hold a large cash reserve In their bank accounts. Cash received by a department from the generation of revenue is generally paid into the State's bank account, known as the Public Account. Similarly, any departmental expenditure, including that in the form of cheques drawn by the department for the payment of goods and services to its suppliers and creditors, is made via the Public Account. The process is such that the Public Account remits to the department the cash required for the amount drawn on the cheques. This remittance by the Public Account occurs upon the presentation of the cheques by the department's suppliers or creditors. The above funding arrangements often result in departments having a notional shortfall in the cash at bank (or a notional bank overdraft) required for payment of unpresented cheques at balance date. The Department's bank overdraft figure at 30 June 2003 and 30 June 2002 is totally represented by unpresented cheques. At 30 June 2002, there was an unpresented cheque of $250 million associated with a superannuation payment in June 2002.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 67 NOTES TO THE FINANCIAL STATEMENTS ¡30 JUNE 2003
NOTE 13. PROVISIONS
2003 2002 $'000 $'000
Current: Employee Benefits - Annual Leave 4,959 4,821 - Long Service Leave 1,055 1,012 - Performance Bonus 2,283 2,209 Motor Vehicle Lease Deficit 57,489 63,643
Onerous Contract 7,400 - 73,186 71,685
Non-Current: Employee Benefits - Long Service Leave 9,337 9,188
Onerous Contract 5,600 - 14,937 9,188
Aggregate Carrying Amount of Provisions Current 73,186 71,685 Non-Current 14,937 9,188 88,123 80,873
Employee Benefits 17,634 17,230 Motor Vehicle Lease Deficit 57,489 63,643
Onerous Contract 13,000 - 88,123 80,873
Movements in Provisions Movements in each class of provision, other than employee benefits, during the financial year are set out below:
MOTOR VEHICLE ONEROUS LEASE DEFICIT CONTRACT*
Balance at Start of Year 63,643 - Additional Provisions Recognised 9,600 13,000
Payments Made (17,454) -
Interest Charge 1,700 - Balance at End of Year 57,489 13,000
* Relates to payments to be made under a building lease contract, to the extent that the building is unoccupied and thus not producing an economic benefit to the Department.
68 DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 NOTE 14. SUPERANNUATION
(a) Superannuation Costs - Departmental Superannuation contributions for the reporting period, in respect of current departmental staff, are included as part of Employee Benefits in the Statement of Financial Performance.
The name and details of the major employee superannuation funds and contributions made by the Department are as follows:
2003 2002 $'000 $'000
Defined Benefit Funds
Government Superannuation Office
- Revised Scheme 1,102 1,257
-New Scheme 862 910
- State Employees Retirement Benefit Scheme 13 10
Accumulation Funds
VlcSuper 3,005 2,520
Various Private Schemes 418 551 The Department does not have any contributions outstanding to the above Funds and there have been no loans made from the Funds. The bases for contributions are determined by the various schemes.
(b) Superannuation Costs - Non-Departmental 1,623,972 1,853,506
The Department bears the cost of superannuation for certain non-Departmental personnel, for example, pension entitlements under constitutionally protected schemes operated for judges.
The major items included in this category however, are (i) payments to the State Superannuation Fund of $1,605 million (2001 -02 $250 million) and (II) the impact of the change in the valuation of the outstanding unfunded superannuation liability - $10 million (2001-02 $1,598 million).
(c) Unfunded Superannuation Liability
The gross unfunded liability with respect to superannuation funds operated principally for budget sector employees was $14,112 million (2002 - $14,065 million), as detailed below. This liability represents the shortfall between the total net assets of the State's budget sector superannuation funds at 30 June 2003 and the total benefits that members have accrued up to that date, determined by an actuarial assessment.
Not all of the $14,112 million is to be met from superannuation outlays of the Budget. An amount of $1,346 million (2002 - $1,284 million) is to be met from the revenues of Commonwealth funded agencies (for example, universities) and self-funded entities. In accordance with the State Superannuation Act 1988, the Government, through the Consolidated Fund, is primarily responsible for meeting the employer's share of the unfunded liability of the State Superannuation Fund. However, under the terms of that Act, the Minister for Finance can effectively pass this unfunded liability to individual authorities.
In addition, the Department has recognised a liability of $199 million (2002 - $174 million) for accrued benefits arising from pension entitlements under constitutionally protected schemes operated principally for judges. As no assets are held in respect of these schemes, they are therefore unfunded and pensions become directly payable from the Consolidated Fund. The liability has been calculated by the Commercial and Financial Risk Management Group of the Department.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 69 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
At 30 June 2003, the total unfunded liability to be met from non-budget revenue was $1,346 million and to be met by the Department was $12,965 million, as shown below.
2003 2002 $ MILLION $ MILLION
Fund State Superannuation Fund 13,657 13,990 Emergency Services Superannuation Scheme 288 70 Parliamentary Contributory Superannuation Fund 15 5
Health Super Fund 146 -
Local Authorities Superannuation Fund 6 - 14,112 14,065
Constitutionally Protected Schemes 199 174 14,311 14,239
Liabilities to be met from Non-Budget Revenue (1,346) (1,284) Liabilities to be met from Budget Outlays 12,965 12,955
Shown as: Current Liabilities 499 879
Non-Current Liabilities 12,466 12,076 12,965 12,955
70 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 NOTE 15. EQUITY AND MOVEMENTS IN EQUITY
2003 2002 $'000 $'000
(a) Reserves
Asset Revaluation Reserve 54,078 54,078 54,078 54,078
TTie asset revaluation reserve is used to record increments and decrements on the revaluation of non-current assets, as described in accounting policy Note 1 (g).
(b) Contributed Capital
Balance at the Beginning of the Financial Year 105,614 - Capital Contributions During Year by Victorian State Government 3,552 101,286
Asset Transfers from Other Departments - 9,187 Asset Transfers to Other Departments (11,488) (4,859) Balance at the End of the Financial Year 97,678 105,614
(c) Accumulated Deficit Accumulated Deficit at the Beginning of the Financial Year (12,777,167) (11,169,970) Net Result for the Reporting Period (94,514) (1,607,197) Accumulated Deficit at the End of the Financial Year (12,871,681) (12,777,167)
Total Equity/(Net Deficit) at the Beginning of the Financial Year (12,617,475) (11,115,892) Total Changes in Equity Recognised in the Statement of Financial Performance (94,514) (1,607,197) Net Contributions/(Distributions) of Equity (Note 15(b)) (7,936) 105,614 Total Equity/(Net Deficit) at the End of the Financial Year (12,719,925) (12,617,475)
NOTE 16. FINANCIAL INSTRUMENTS
(a) Off Balance Sheet Risk The Department is not exposed to any off balance sheet risk.
(b) Credit Risk Exposures The credit risk on financial assets of the Department which have been recognised in the statement of financial position is generally the carrying amount, net of any provisions for doubtful debts.
(c) Interest Rate Risk Exposures
Financial Assets Long-term funds held in the Public Account (recognised as Administered Other Financial Assets in Note 23) have been invested by the Victorian Funds Management Corporation, consistent with the objective of being able to meet all medium-term Budget financing requirements, including the financing of Growing Victoria reserve infrastructure expenditure.
Financial Liabilities Management of the Budget Sector Debt Portfolio (BSDP) is based on the key objectives of achieving relative certainty of Interest costs while minimising net borrowing costs and refinancing risk, and conservatively managing the financial operational risks of the budget sector treasury operations.
The BSDP is primarily comprised of fixed rate borrowing facilities that have an even maturity profile across the yield curve. This ensures that a relatively small proportion of the BSDP is subject to repricing in any one period. Since borrowings in the BSDP will be held to maturity, the BSDP is accounted for on an historical cost basis.
DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 71 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
The interest rate risk profile of financial assets and liabilities held by the Department is set out in the following table.
2003 FIXED INTEREST MATURING IN:
WEIGHTED FLOATING NON- AVERAGE INTEREST 1 YEAR OVER 1 TO MORE THAN INTEREST INTEREST RATE RATE OR LESS 5 YEARS 5 YEARS BEARING TOTAL % NOTES $'000 $'000 $'000 $'000 $'000 $'000
Financial Assets
Administered
Overnight Investments held with Treasury Corporation of Victoria 23 4.70 18,000 - - - - 18,000
Public Account Investments held with Victorian Funds Management Corporation 23 7.18 2,370 - 2,571,955 - - 2,574,325
Investments with the Commonwealth (Debt Retirement Reserve Trust Account) 23 4.65 1,154 - - - - 1,154
Other Cash Assets 23 4.59 19,053 - - - 19,053
Receivables 23 5.06 - 1,647 3,108 1,891 620,745 627,391
Other Financial Assets 23 5.11 2,154 - - - 11,847 14,001
42,731 1,647 2,575,063 1,891 632,592 3,253,924
Departmental
Cash Assets 6 4.59 313 - - - 19,083 19,396
Receivables 7 - - - - - 119,487 119,487
313 - - - 138,570 138,883
Total Financial Assets 43,044 1,647 2,575,063 1,891 771,162 3,392,807
Financial Liabilities
Administered
Fixed Interest Borrowings 23 6.84 - - - 5,368,724 - 5,368,724
Advances from the Commonwealth 23 5.38 - 672 2,463 3,648 - 6,783
CPI Indexed Borrowings 23 5.10 457,723 - - - - 457,723
Consolidated Fund SAU Liability 23 - - - - - 982,491 982,491
Trust Fund SAU Liability 23 - - - - - 932,276 932,276
Payables 23 - - - - - 33,207 33,207
Unearned Income 23 - - - - - 289,524 289,524
457,723 672 2,463 5,372,372 2,237,498 8,070,728
Departmental
Bank Overdrafts 12 8.00 9,013 - - - - 9,013
Payables 11 - - - - - 21,507 21,507
Lease Liabilities 12 8.00 211,496 - - - - 211,496
Unearned Income - - - - - 15,178 15,178
220,509 - - - 36,685 257,194
Total Financial Liabilities 678,232 672 2,463 5,372,372 2,274,183 8,327,922
Net Financial Assets/(Liabilities) (635,188) 975 2,572,600 (5,370,481) (1,503,021) (4,935,115)
72 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 2002 FIXED INTEREST MATURING IN:
WEIGHTED FLOATING MORE NON- AVERAGE INTEREST 1 YEAR OVER 1 TO THAN INTEREST INTEREST RATE RATE OR LESS 5 YEARS 5 YEARS BEARING TOTAL NOTES % $'000 $'000 $'000 $'000 $'000 $'000
Financial Assets
Administered
Overnight Investments held with Treasury Corporation of Victoria 23 4.47 803,000 803,000 Public Account Investments held with Victorian Funds Management Corporation 23 7.27 995 2,393,556 2,394,551 Investments with the Commonwealth (Debt Retirement Reserve Trust Account) 23 4.45 623 _ 623
Other Cash Assets 23 4.33 709 - - - - 709
Receivables 23 5.75 - 1,917 4,140 2,487 581,566 590,110
Other Financial Assets 23 4.72 30,402 - - - 13,426 43,828
835,729 1,917 2,397,696 2,487 594,992 3,832,821
Departmental
Cash Assets 6 4.33 239 - - - 18,125 18,364
Receivables 7 - - - - - 390,950 390,950
239 - - - 409,075 409,314
Total Financial Assets 835,968 1,917 2,397,696 2,487 1,004,067 4,242,135
Financial Liabilities
Administered
Fixed Interest Borrowings 23 6.99 - - - 5,076,347 - 5,076,347
Advances from the Commonwealth 23 5.38 - - 308 7,265 - 7,573
CPI Indexed Borrowings 23 4.92 736,292 - - - - 736,292
Consolidated Fund SAU Liability 23 - - - - - 1,286,639 1,286,639
Trust Fund SAU Liability 23 - - - - - 562,351 562,351
Payables 23 - - ' - - - 49,227 49,227
Other 23 - - - - - 152,130 152,130
736,292 - 308 5,083,612 2,050,347 7,870,559
Departmental
Bank Overdrafts 12 7.78 264,549 - - - - 264,549
Payables 11 - - - - - 22,256 22,256
Lease Liabilities 12 8.00 166,042 - - - - 166,042
430,591 - - - 22,256 452,847
Total Financial Liabilities 1,166,883 - 308 5,083,612 2,072,603 8,323,406
Net Financial Assets/(Liabilities) (330,915) 1,917 2,397,388 (5,081,125) (1,068,536) (4,081,271)
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 16. FINANCIAL INSTRUMENTS (continued)
(d) Net Fair Value of Financial Assets and Liabilities The carrying amounts of the Department's financial assets are at cost, which approximates their net fair value. The net fair value of financial liabilities is determined by the net present value of expected future cash flows discounted at Treasury Corporation of Victoria's rate for similar securities at balance date. The net fair value of the Department's financial assets and liabilities are detailed below:
2003 2003 2002 2002 CARRYING NET FAIR CARRYING NET FAIR AMOUNT VALUE AMOUNT VALUE ON BALANCE SHEET FINANCIAL INSTRUMENTS $'000 $'000 $'000 $'000
Financial Assets Administered Overnight Investments held with Treasury Corporation of Victoria 18,000 18,000 803,000 803,000 Public Account Investments held with the Victorian Funds Management Corporation 2,574,325 2,606,807 2,394,551 2,385,582 Investments with the Commonwealth (Debt Retirement Reserve Trust Account) 1,154 1,154 623 623 Other Cash Assets 19,053 19,053 709 709 Receivables 627,391 627,391 590,110 590,110 Other Financial Assets 14,001 14,001 43,828 43,828 3,253,924 3,286,406 3,832,821 3,823,852
Departmental Cash Assets 19,396 19,396 18,364 18,364 Receivables 119,487 119,487 390,950 390,950 138,883 138,883 409,314 409,314 Total Financial Assets 3,392,807 3,425,289 4,242,135 4,233,166
Financial Liabilities Administered Fixed Interest Borrowings 5,368,724 5,794,501 5,076,347 5,343,002 Advances from the Commonwealth 6,783 5,941 7,573 6,487 CPI Indexed Borrowings 457,723 582,186 736,292 863,265 BSDP Borrowings 5,833,230 6,382,628 5,820,212 6,212,754 Payables 33,207 33,207 49,227 49,227 Consolidated Fund SAU Liability 982,491 982,491 1,286,639 1,286,639 Trust Fund SAU Liability 932,276 932,276 562,351 562,351 Unearned Income 289,524 289,524 152,130 152,130 8,070,728 8,620,126 7,870,559 8,263,101
Departmental Bank Overdrafts 9,013 9,013 264,549 264,549 Payables 21,507 21,507 22,256 22,256 Lease Liabilities 211,496 211,496 166,042 166,042
Unearned Income 15,178 15,178 - - 257,194 257,194 452,847 452,847
Total Financial Liabilities 8,327,922 8,877,320 8,323,406 8,715,948
Net fair value is exclusive of costs which would be incurred on realisation of an asset, and inclusive of costs which would be incurred on settlement of a liability.
74 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 NOTE 17. MINISTERS AND ACCOUNTABLE OFFICERS In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.
Names The persons who held the positions of Ministers and Accountable Officer in the Department (from 1 July 2002 to 30 June 2003 unless otherwise stated) were as follows: The Hon John Brumby MP Treasurer of Victoria The Hon John Lenders MP Minister for Finance The Hon John Pandazopoulos MP Minister for Gaming* The Hon Bob Cameron MP Minister for WorkCover (1 July 2002 to 4 December 2002) The Hon Rob Hulls MP Minister for WorkCover (from 5 December 2002) Mr Ian Little Secretary * This portfolio attached to the Department of Justice from December 2002. The Hon John Lenders MP and the Hon John Thwaites MP acted in the office of Treasurer during absences of the Hon John Brumby MP. The Hon John Brumby MP and the Hon John Thwaites MP acted in the office of Minister for Finance during absences of the Hon John Lenders MP. The Hon John Lenders MP acted in the office of Minister for Gaming during an absence of the Hon John Pandazopoulos MP. The Hon Peter Batchelor MP acted in the office of Minister for WorkCover during an absence of the Hon Bob Cameron MP. The Hon John Brumby MP and the Hon John Lenders MP acted in the office of Minister for WorkCover during absences of the Hon Rob Hulls MP. Grant Hehir, Alan Hawkes and Warren Hodgson acted in the position of Secretary during absences of Ian Little.
Remuneration Remuneration received or receivable by the Accountable Officer in connection with the management of the Department during the reporting period was in the range: $370,000 - $379,999 ($310,000 - $319,999 in 2002) Amounts relating to Ministers are reported in the Financial Statements of the Department of Premier and Cabinet. Amounts relating to the Acting Accountable Officers are reported in "Remuneration of Executives" (Note 18).
Other Transactions Other related transactions and loans requiring disclosure under the Directions of the Minister for Finance have been considered and there are no matters to report.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 75 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 18. REMUNERATION OF EXECUTIVES The numbers of Executive Officers, other than Ministers and the Accountable Officer, whose total remuneration exceeded $100,000 during the reporting period, are shown in their relevant income bands in the first two columns of the table below. The base remuneration of these executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.
TOTAL REMUNERATION BASE REMUNERATION
2003 2002 2003 2002 INCOME BAND No. No. No. No.
$0 - $9,999 - 1 $80,000 - $89,999 1 1 $90,000 - $99,999 4 5 $100,000-$109,999 10 12 17 13 $110,000-$119,999 16 11 16 15 $120,000-$129,999 13 15 14 14 $130,000-$139,999 11 5 5 5 $140,000-$149,999 7 9 5 3 $150,000-$159,999 2 3 4 4 $160,000-$169,999 5 3 1 4 $170,000 - $179,999 1 3 3 1
$180,000-$189,999 3 3 - 2 $190,000-$199,999 1 1 $200,000 - $209,999 1 2 $210,000-$219,999 1 1
$220,000 - $229,999 - 1 $230,000 - $239,999 1 2
$260,000 - $269,999 - 1 Total Numbers 71 70 71 70 Total Amount - $000's 9,509 9,770 8,788 8,680
Note: Appendix 4 (page 99) provides a full reconciliation of Executive Officer numbers.
NOTE 19. REMUNERATION OF AUDITORS
2003 2002 S'000 $'000
Audit Fees Paid or Payable Internal Audit 580 824 External Audit - Auditor-General's Office • Annual Financial Statements of the Department 275 283 • Annual Financial Report for the State of Victoria 178 183 1,033 1,290
76 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 NOTE 20. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Quantifiable Contingent Liabilities
The following table summarises quantifiable contingent liabilities relating to the Department.
2003 2002 $ MILLION $ MILLION
Guarantees on behalf of Public Financial Corporations 300.0: 300.0
Specific Guarantees and Indemnities under Statute 306.9 [ 288.8
Guarantees for Loans to Water Industry Entities 2,411.9 2,342.8 Guarantees for Loans to Other Entities 748.3 307.2
Litigation against State Revenue Office 25.9 18.1 Other 63.4 44.9
Total 3,856.4 3,301.8
Non-quantifiable Contingent Liabilities
The Department has a number of non-quantifiable contingent liabilities, as follows.
Public Transport Corporation Lease Arrangements Under various transport lease arrangements made by the Public Transport Corporation, the State of Victoria indemnified the lessors against adverse tax rulings and third party personal injury claims, where the third party is injured by the operation of the equipment during the period of the lease. The last of these lease arrangements was terminated by June 1999. The normal statute of limitations is five years for tax claims and six years for personal injury claims.
Gas Supply Incident
The State, and a number of its instrumentalities, have been named as parties in a class action before the Supreme Court arising from the explosion: and fire in September 1998 at Esso's gas processing plant at Longford. The State and its instrumentalities have denied liability and are vigorously defending their rights.
Transmission of Business Under Section 149 of the Workplace Relations Act 1996
Contractors now performing functions previously performed by government have sometimes engaged staff on lesser rates and conditions than those that previously applied under awards or agreements for public sector employees. One matter specifically involved hospital employees. Following an appeal by the State of Victoria and the Hospital Network to the High Court a settlement was subsequently made and the appeals withdrawn. The broader financial implications remain unclear.
Court decisions have Indicated that previous rates and conditions may apply to the contractor's employees with outsourcing. The application of this principle requires transfer of the whole or part of the business (of the Government) and a test that is generally applied is whether there is a 'substantial identity' between the activities before and after the outsourcing, if applicable, the principle would generally cause increases in employment costs for the contractor if the prior existing rates and conditions are more beneficial to the employees. The principle may also apply to circumstances where a "business" is taken back by the State from a contractor. Accordingly, in some circumstances, the State may have a liability in respect of the terms and conditions of employment applying to the staff employed by the contractor.
HIH Insurance Group
The State's quantifiable direct exposures arising from the collapse of the HIH Insurance Group (HIH) are included in the liabilities shown in the financial statements of the entities directly responsible for them. The State's obligations in respect of its builders' warranty insurance rescue package are also shown as direct liabilities of the relevant government entities.
The State also retains some unquantlfiable contingent exposures arising from the collapse. These contingent exposures arise primarily through the possibility that the State may be involved in litigation in which it would be entitled to recover damages from third parties. If these third parties were insured by HIH, recovery in full may not be possible.
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 77 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
Builders' Warranty The builders' warranty insurance market, like other insurance markets, has been affected by the 11 September 2001 terrorist attacks in the United States and adverse claims experience. In mid- April 2002, the State agreed to provide temporary (to 30 June 2002) reinsurance support to builders' warranty insurance provider Dexta Corporation following the withdrawal of some of its commercial reinsurance support. This support was subsequently extended to 30 September 2002. The Government determined that there would be no further extension. The State receives reinsurance premiums for this participation and will be required to contribute to payment of reinsured claims, as well as paying management fees. The precise timing and value of these receipts and payments is uncertain, as claims may be made by home owners for up to 6.5 years after the arrangement ceases. Receipts and payments will be contingent on the volume of insurance underwritten and reinsured by 30 June 2002. Based on Dexta's previous levels of activity, the central estimate of the State's gross exposure (i.e. before premium receipts) is not more than $6 million. While the State expects, like the commercial reinsurers who are party to the agreement, to at least break even on these arrangements, the State retains an unquantifiable contingent liability that claims may exceed the central estimate. On 13 March 2002, Victoria and NSW jointly announced a series of reforms to builders' warranty Insurance arrangements. This announcement included a commitment to provide a catastrophe fund capable of supporting claims above $10 million. Since builders' warranty insurance commenced there have been no losses by an Insurer to any one builder exceeding this amount. To meet this commitment, the two States offered reinsurance arrangements to all builders' warranty insurers covering claims in respect of any one builder exceeding $10 million, with each of the two States reinsuring claims relating to properties in that State. A reinsurance agreement giving effect to these arrangements was concluded In December 2002 (effective from 1 January 2003) with one insurer. This agreement requires the insurer to pay the two States reinsurance premiums that are estimated to be sufficient for the States to at least break even on these arrangements. However, the State retains an unquantifiable contingent liability for additional claims.
Royal & Sun Alliance Litigation The Government has an unquantifiable contingent liability for the payment of refunds of duty on general insurance pending the outcome of an appeal against the Supreme Court's decision in 2002 in the case of Royal & Sun Alliance Australia Limited v Commissioner of State Revenue.
78 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 Smelter Levy Litigation
The State Electricity Commission of Victoria (SECV) is the first defendant in a matter before the High Court of Australia, commenced by summons dated 5 June 2003, in which Australian Steel Company (Operations) Pty Ltd is the plaintiff. The plaintiff has claimed that Schedule 9A2 of the National Electricity Code, amongst other legislation imposing a charge known as the Smelter Reduction Amount, is invalid. The plaintiff seeks reimbursement of Smelter Reduction Amounts previously paid, together with interests and costs. The claim will be vigorously defended and the timing and outcome of any conclusion are uncertain. It is not practicable to quantify the liability in the event of a successful claim by the plaintiff.
Under an agreement between the SECV and the State of Victoria in relation to this matter, the interests of the SECV are being managed by the State, and the SECV has been granted a full indemnity by the State for all legal costs and any other monies payable by the SECV in the matter.
Land Remediation - Environmental Concerns In addition to properties for which remediation costs have been provided in these Financial Statements, certain other properties have been identified as potentially contaminated sites. The State does not admit any liability in respect of these sites. However, remedial expenditure may be incurred to restore the sites to an acceptable environmental standard in the event of future developments taking place.
Other Contingent Liabilities Not Quantified
There are other commitments, made by Government, which are not quantifiable at this time, arising from: • indemnities provided in relation to transactions, including financial arrangements and consultancy services, as well as for directors and administrators • performance guarantees, warranties, letters of comfort and the like • deeds in respect of certain obligations
• unclaimed monies, which may be subject to future claims by the general public against the State.
Contingent Assets There were no contingent assets for the Department of Treasury and Finance at 30 June 2003 or 30 June 2002.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 21. COMMITMENTS FOR EXPENDITURE 2003 2002 $'000 $'000
Capital Commitments Commitments for capital expenditure contracted for at the reporting date but not recognised as liabilities (all payable within the next financial year): Building improvements, fitouts, IT development 748 2,286
Operating Lease Commitments Commitments for minimum lease payments in relation to non-cancellable operating leases, not recognised as liabilities, are payable as follows: Within one year 12,704 9,707 Later than one year but not later than five years 23,240 27,376 Later than five years 53,254 24,757 89,198 61,840
Finance Lease Commitments Commitments in relation to finance leases are payable as follows: Within one year 65,005 52,848 Later than one year but not later than five years 173,801 138,327
Later than five years - - Minimum lease payments 238,806 191,175 Less: Future finance charges (27,310) (25,133) Total Lease Liabilities 211,496 166,042
Shown in the Financial Statements as: Current (Note 12) 49,137 38,781 Non-current (Note 12) 162,359 127,261 211,496 166,042
Further details with respect to leasing arrangements are set out in Note 1 (k).
Outsourcing Commitments The Department has entered into a contract with an external provider for the provision of a range of human resource services for the period 1 July 2001 to 30 June 2004 (with provision for , multiple two-year extensions). Fees under the contract are made up of fixed annual costs, transaction-based costs and optional costs for non-exclusive services. The fee for fixed annual and transaction-based costs for the remaining year of the contract is estimated at $1,300,000. Estimated optional costs for the remaining year of the contract are $160,000. The Department has entered into an outsourcing arrangement with an external provider for the provision of information technology services, involving desktop support, infrastructure support and network maintenance. Annual expenditure is dependent on a number of variables that are determined each year based on market conditions, but the expenditure for the next financial year is estimated at $4,500,000. The current contract ends on 29 February 2004, but has been extended by six months with an option to extend a further six months.
80 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 NOTE 22. RECONCILIATION OF NET RESULT FOR THE REPORTING PERIOD TO NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
2003 2002 $'000 $'000
Net Result for the Reporting Period (94,514) (1,607,197) Depreciation and Amortisation 67,455 62,800 Loss on Disposal of Non-Current Assets 41,629 4,562 Onerous Contract Provision 9,600
Net Transfers Free of Charge 56 5,091 Change in Operating Assets and Liabilities (lncrease)/Decrease in Receivables 271,761 (259,054) (lncrease)/Decrease in Other Operating Assets 11,305 (1,908) lncrease/(Decrease) in Payables (749) (3,641) lncrease/(Decrease) in Unfunded Superannuation 10,425 1,597,625 lncrease/(Decrease) In Other Operating Liabilities 7,271 (21,938)
Net Cash lnflow/(Outflow) from Operating Activities 324,239 (223,660)
NOTE 23. ADMINISTERED ITEMS
Activities Administered by the Department In addition to the specific departmental operations which are included in the Statement of Financial Position, Statement of Financial Performance and Statement of Cash Flows, the Department administers or manages activities on behalf of the State. The transactions relating to these State activities are reported as Administered in this note. Administered transactions give rise to revenues, expenses, assets and liabilities and are determined on an accrual basis. Administered revenues include taxes, fees, Commonwealth grants, capital asset charges to other departments and the proceeds from the sale of administered surplus land and buildings. Administered liabilities include the Government's Budget Sector Debt Portfolio and government expenses incurred but yet to be paid. Administered assets Include Public Account investments and government revenues earned but yet to be collected.
DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 81 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 23. ADMINISTERED ITEMS (continued)
Administered Revenue and Expenses for the year ended 30 June 2003 FINANCIAL RISK STRATEGIC MANAGEMENT MANAGEMENT REFORM POLICY ADVICE SERVICES SERVICES SERVICES 2003 2002 2003 2002 2003 2002 2003 2002 $"000 $'000 $"000 $'000 $'000 $'000 $'000 $'000
Administered Revenue Special Appropriations (Note 4(b)) 45 538 2,934 39,092 1,496 1,077 Payments on Behalf of the State Appropriations (Note 4(a)) 187,796 217,884 274,619 286,960 156,037 127,043 1,544 28,983 Commonwealth Grants 6,799,306 6,844,060 2,624 72 3,739 39
Other Grants - 23,124 - 37,561 - 3,852 - 6,362
Taxation 179,602 96,400 9,978 ' -
Dividends 520,178 440,017 28,899 - Interest 124 20,146 72,925 76,539 72,815 44,850 7 4 Capital Asset Charges 564,256 538,895 1,078,699 1,040,508 73,492 115,235 Other 12,965 36,610 58,588 61,414 41,660 11,491 231 4 Payments to Consolidated Fund (7,500,065) (7,436,145) (1,892,311) (1,746,243) (155,884) (60,017) (73,615) (121,170) Total 64,427 245,112 297,858 332,320 158,740 128,335 1,659 29,418
Administered Expenses Grants and Transfer Payments 14,953 5,672 10,233 10,640 1,185 1,808 171 26,332 Borrowing Costs 246 66,347 228,887 243,272 228,417 132,700 Contribution to GST Administrative Costs 122,646 112,365 16,867 15,453 Other 16,279 12,323 6,350 10,027 2,267 9,663 47 210 Total 154,124 196,707 262,337 279,392 231,869 144,171 218 26,542 (89,697) 48,405 35,521 52,928 (73,129) (15,836) 1,441 2,876 State Revenues Received into Consolidated Fund, net of Appropriations Applied within Government Departments Net Administered Revenue (89,697) 48,405 35,521 52,928 (73,129) (15,836) 1,441 2,876
82 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 RESOURCE REVENUE MANAGEMENT REGULATORY MANAGEMENT OTHER DEPARTMENTAL SERVICES SERVICES SERVICES - NOT ATTRIBUTABLE TOTAL
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
80 5,062 123,148 198,424 127,703 244,193
16,883 30,009 4,542 2,932 213,798 273,548 855,219 967,359 6,805,669 6,844,171
- 3,424 - 74,323 9,978 13,145 651,008 1,378,810 6,839,437 6,469,929 7,690,003 7,958,284 28,899 60,002 577,976 500,019 141 655 21 3 144 4 146,177 142,201 1,716,447 1,694,638
39,811 29,919 745 4 7,178 2,377 - 24,464 161,178 166,283 (77,744) (106,762) (650,758) (1,373,886) (6,858,626) (6,449,161) (17,209,003) (17,293,384)
18,048 35,454 5,558 7,863 325,079 495,121 - 24,464 871,369 1,298,087
1,650 305,675 466,660 332,217 512,762 22 13 418 504 457,990 442,836 139,513 127,818
558 4,329 154 163 11,203 7,664 33,787 135,804 70,645 180,183 , 580 5,992 154 163 317,296 474,828 33,787 135,804 1,000,365 1,263,599 17,468 29,462 5,404 7,700 7,783 20,293 (33,787) (111,340) (128,996) 34,488
192,045 1,506,516 192,045 1,506,516 17,468 29,462 5,404 7,700 7,783 20,293 158,258 1,395,176 63,049 1,541,004
DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 83 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 23. ADMINISTERED ITEMS (continued)
Administered Assets and Liabilities as at 30 June 2003 FINANCIAL RISK STRATEGIC MANAGEMENT MANAGEMENT REFORM POLICY ADVICE SERVICES SERVICES SERVICES
2003 2002 2003 2002 2003 2002 2003 2002 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Administered Assets Current Cash Assets 120,600 10,184 442,197 10,185 241,198
Receivables 413 21,553 117,117 123,359 29,156 16,925 27 2,755 Other Financial Assets 94 577 343 578 187 Other 413 142,247 127,878 565,899 39,919 258,310 27 2,755
Non-Current Receivables 24,769 81,731 90,820 81,732 49,537 Investments in Controlled Entitles,1> Other Financial Assets 359,033 1,285,978 1,316,456 1,297,824 731,492 Property, Plant and Equipment 2 7 383,802 1,367,709 1,407,276 1,379,558 781,036 Total 413 526,049 1,495,587 1,973,175 1,419,477 1,039,346 27 2,755
Administered Liabilities Current
Payables 1,352 7,931 10,636 13,238 10,788 9,558 316 Consolidated Fund SAU Liability 0 Trust Fund SAU Liability131
Other Interest Bearing Liabilities - 114 336 417 336 227
Provisions 1 - 2 - 4,329 4,242
Unearned Income 134,909 3,743 - 2,504 5,948 313 136,262 11,788 10,974 16,159 21,401 14,340 316
Non-Current
Interest Bearing Liabilities - 872,919 2,916,279 3,200,700 2,916,279 1,745,835
Provisions 3 - 3 - 2 -
Unearned Income - 80,063 - 58,228 139,778 7,279 3 952,982 2,916,282 3,258,928 3,056,059 1,753,114 Total 136,265 964,770 2,927,256 3,275,087 3,077,460 1,767,454 316 Net Administered Assets (135,852) (438,721) (1,431,669) (1,301,912) (1,657,983) (728,108) 27 2,439
(1) On behalf of the State, this Department records the State's investment in all its controlled entities, as an Administered asset. This amount equates to the contributed capital balances of the underlying entities at year end. (2) Parliamentary appropriations applied, from which funds have not been issued from the Consolidated Fund; net of Public Account advances to government departments. (3) The liability to other government departments for Trust Account funds held on their behalf within the Public Account.
84 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 RESOURCE REVENUE MANAGEMENT REGULATORY MANAGEMENT OTHER DEPARTMENTAL SERVICES SERVICES SERVICES - NOT ATTRIBUTABLE TOTAL
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 $'000 S'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
53 19,053 656 39,422 804,704 21,353 19,172 86 49,429 276,287 191,630 19,489 162 463,928 424,985 846 5,566 2,001 6,190 3 3 3 3 21,353 19,172 86 49,429 276,290 191,686 39,388 6,384 505,354 1,235,882
163,463 165,126 47,501,663 46,096,835 47,501,663 46,096,835 1,308 24,835 2,585,110 2,431,816
9 20 1 - - 389,943 12 389,970
9 20 1 - 47,502,971 46,511,613 50,250,248 49,083,747 21,362 19,192 86 49,429 276,291 191,686 47,542,359 46,517,997 50,755,602 50,319,629
8,352 14,886 94 2,079 3,204 33,207 49,227 982,491 1,286,639 982,491 1,286,639 932,276 562,351 932,276 562,351 672 758
19,868 28,663 4 - 24,204 32,905
8,889 - 149,746 6,560
37,109 43,549 - 94 2,083 3,204 1,914,767 1,848,990 2,122,596 1,938,440
5,832,558 5,819,454
7 21 8 - 23 21 139,778 145,570
7 21 8 - 5,972,359 5,965,045
37,116 43,570 - 94 2,091 3,204 1,914,767 1,848,990 8,094,955 7,903,485 (15,754) (24,378) 86 49,335 274,200 188,482 45,627,592 44,669,007 42,660,647 42,416,144
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 85 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2003
NOTE 24. RESTRUCTURING OF ADMINISTRATIVE ARRANGEMENTS
Following the State election in November 2002, the Government reallocated responsibility for certain administrative functions amongst departments and agencies, in line with a revised allocation of ministerial portfolios. The Machinery of Government changes that occurred included the transfer of certain activities, previously controlled by the Department of Treasury and Finance (DTF), to the Department of Justice (DOJ). The effective date of the transfers—for financial reporting purposes—was 31 December 2002.
The following responsibilities and functions were transferred from DTF to DOJ: • Gambling Research Panel • Gaming Policy Unit • National Gambling Research Trust • Office of Gambling Regulation. With respect to those functions, DTF has recorded—and included in these Financial Statements —total controlled revenues of $705,000 and total controlled expenses of $654,000, for the period 1 July 2002 to 31 December 2002. Total controlled revenues and total controlled expenses recorded by DOJ, in relation to these functions, for the period 1 January 2003 to 30 June 2003, were $106,000 and $187,000, respectively.
Net assets assumed by DOJ as a result of the assumption of these functions were recognised in the accounting records of DOJ at the carrying amount of those net assets in DTF's accounting records immediately prior to the transfer.
The net assets transfer was treated as a contribution of capital by the Crown, in compliance with the accounting requirements of Urgent Issues Group Abstract 38 Contributions by Owners Made to Wholly Owned Public Sector Entities and Accounting and Financial Reporting Bulletin No.39 Accounting for Contributed Capital (see Note 1 (u)}. No revenue has been recognised by DTF in respect of the net assets transferred.
The following assets and liabilities were transferred:
OUTPUT GROUP - REGULATORY SERVICES $'000
Assets Receivables 328 Liabilities
Payables (94) Provisions (234) Net capital contribution from the Crown
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 ACCOUNTABLE OFFICER'S AND CHIEF FINANCIAL OFFICER'S DECLARATION
We certify that the attached Financial Statements for the Department of Treasury and Finance have been prepared in accordance with Part 9 of the Directions of the Minister for Finance under the Financial Management Act 1994, applicable Australian Accounting Standards and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out In the Statement of Financial Performance, Statement of Financial Position, Statement of Cash Flows and Notes to the Financial Statements, presents fairly the financial transactions during the year ended 30 June 2003 and financial position of the Department as at 30 June 2003. We are not aware of any circumstance which would render any particulars included in the Financial Statements to be misleading or inaccurate.
Peter Goddard Ian Little Chief Financial Officer Secretary Department of Treasury and Finance Department of Treasury and Finance Melbourne Melbourne 17 October 2003 17 October 2003
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 200a-03 87 AUDITOR GENERAL'S REPORT
AUDITOR GENERAL VICTORIA
AUDITOR-GENERAL'S REPORT
To the Members of the Parliament of Victoria, the responsible Ministers and the Secretary of the Department of Treasury and Finance Audit Scope The accompanying financial report of the Department of Treasury and Finance for the financial year ended 30 June 2003, comprising statement of financial performance, statement of financial position, statement of cash flows and notes to the financial statements, has been audited. The Secretary of the Department of Treasury and Finance is responsible for the preparation and presentation of the financial report and the information it contains. An independent audit of the financial report has been carried out in order to express an opinion on it to the Members of the Parliament of Victoria, the responsible Ministers and the Secretary of the Department as required by the Audit Act 1994.
The audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance as to whether the financial report is free of material misstatement. The audit procedures included an examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory professional reporting requirements in Australia, and the financial reporting requirements of the Financial Management Act 1994, so as to present a view which is consistent with my understanding of the Department's financial position, and its financial performance and cash flows.
The audit opinion expressed in this report has been formed on the above basis.
Audit Opinion In my opinion, the financial report presents fairly in accordance with applicable Accounting Standards and other mandatory professional reporting requirements in Australia, and the financial reporting requirements of the Financial Management Act 1994, the financial position of the Department of Treasury and Finance as at 30 June 2003 and its financial performance and cash flows for the year then ended.
MELBOURNE J.W. CAMERON 21 October 2003 Auditor-General
Victorian Auditor-General's Office Level 34, 140 William Street, Melbourne Victoria 3000 Telephone (03) 8601 7000 Facsimile (03) 8601 7010 Email [email protected] Website www.audit.vic.gov.au
Auditing in the Public Interest
88 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 APPENDICES
APPENDIX 1 DIRECTORY 90 APPENDIX 2 FUNCTIONS AND SERVICES OF THE DEPARTMENT 92 APPENDIX 3 BUDGET PORTFOLIO OUTCOMES 93 APPENDIX 4 WORKFORCE DATA 97 APPENDIX 5 CONSULTANTS ENGAGED AND MAJOR CONTRACTS 101 APPENDIX 6 FREEDOM OF INFORMATION 101 APPENDIX 7 LEGISLATIVE CHANGES 2002-03 102 APPENDIX 8 COMPLIANCE WITH THE BUILDING ACT 1993 103 APPENDIX 9 NATIONAL COMPETITION POLICY 104 APPENDIX 10 PUBLICATIONS 108 APPENDIX 11 COMPLIANCE INDEX 109 APPENDIX 12 INFORMATION AVAILABLE ON REQUEST 111 APPENDIX 13 COMPLIANCE WITH THE WHISTLEBLOWERS PROTECTION ACT 2001 112 APPENDIX 14 ENVIRONMENTAL REPORTING 122
ABOVE LEFT TO RIGHT: CHRISTOPHER SMITH. APPENDIX 1
APPENDIX 1: DIRECTORY Commercial and Financial Risk Management Department of Treasury and Finance Director: Mr Alan Hawkes 1 Treasury Place Level 5, 1 Treasury Place Melbourne 3002 Melbourne 3002 Tel (03) 9651 5111 Tel (03) 9651 2691 Fax (03) 9654 7215 Fax (03) 9651 5036 Secretary to the Department Commercial and Infrastructure Projects of Treasury and Finance Director: Mr John Fitzgerald Mr Ian Little Level 5, 1 Treasury Place Level 4, 1 Treasury Place Melbourne 3002 Melbourne 3002 Tel (03) 9651 5793 Tel (03) 9651 6239 Fax (03) 9651 6425 Fax (03) 9651 5027 Property Group Corporate Financial Services Director: Mr Peter Carroll Chief Financial Officer: Mr Peter Goddard Level 5, 1 Treasury Place Level 13, 1 Macarthur Street Melbourne 3002 Melbourne 3002 Tel (03) 9651 2177 Tel (03) 9651 2663 Fax (03) 9651 2169 Fax (03) 9651 0724 Procurement Budget and Financial Management Division Director: Ms Jenny Melican Deputy Secretary: Dr Stein Helgeby Level 5, 1 Treasury Place Level 4, 1 Treasury Place Melbourne 3002 Melbourne 3002 Tel (03) 9651 5330 Tel (03) 9651 5350 Fax (03) 9651 2161 Fax (03) 9651 2195 Economic and Financial Policy Division Budget Coordination and Development Deputy Secretary: Ms Helen Silver Director: Mr Dean Yates Level 12, 1 Macarthur Street Level 4, 1 Treasury Place Melbourne 3002 Melbourne 3002 Tel (03) 9651 5113 Tel (03) 9651 5491 Fax (03) 9651 0978 Fax (03) 9651 0920 Economic, Social and Environmental Group Financial Reporting and Control Directors: Dr Michael Kirby and Mr Vin Martin Director: Mr Murray Jones Level 10, 1 Macarthur Street Level 4, 1 Macarthur Street Melbourne 3002 Melbourne 3002 Tel (03) 9651 5543 Tel (03) 9651 2645 Fax (03) 9651 5414 Fax (03) 9651 0059 Insurance Policy and Superannuation Analysis Director: Mr Adrian Nye Director: Mr Joe Monforte Level 12, 1 Macarthur Street Level 4, 1 Treasury Place Melbourne 3002 Melbourne 3002 Tel (03) 9651 5222 Tel (03) 9651 6462 Fax (03) 9651 2321 Fax (03) 9651 1030 Revenue Policy Resource Management Reform Director: Mr Jeff Byrne Director: Mr Steve Gurr Level 11,1 Macarthur Street Level 4, 1 Treasury Place Melbourne 3002 Melbourne 3002 Tel (03) 9651 5429 Tel (03) 9651 1069 Fax (03) 9651 6495 Fax (03) 9651 1231 Strategic Policy Commercial Division Director: Ms Claire Thomas Deputy Secretary: Mr Warren Hodgson Level 12, 1 Macarthur Street Level 5, 1 Treasury Place Melbourne 300,2. Melbourne 3002 Tel (03) 9651 2158 Tel (03) 9651 5369 Fax (03) 9651 Ó978 Fax (03) 9651 6487
90 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 Strategic Management Division Emergency Services Superannuation Board Transport Accident Commission (TAC) Deputy Secretary: Ms Laurinda Gardner c/- Emergency Services 222 Exhibition Street Level 3, 1 Macarthur Street Superannuation Scheme Melbourne 3000 Melbourne 3002 Member Services & Administration Tel 1300 654 329 Tel (03) 9651 5288 Level 6, 4 Riverside Quay Fax (03) 9664 6650 Fax (03) 9651 2770 Southbank 3006 Treasury Corporation Victoria (TCV) Tel (03) 1300 650 161 Communication Level 12, 1 Collins Street Fax (03) 9645 5900 Director: Ms Sue Lang Melbourne 3000 Toll Free 1800 802 994 Level 11,1 Macarthur Street Tel (03) 9651 4800 Melbourne 3002 Essential Services Commission Fax (03) 9651 4880 Tel: (03) 9651 5422 Level 2, 35 Spring Street Victorian Energy Networks Corporation Fax: (03) 9651 5810 Melbourne 3000 (VENCorp) Tel (03) 9651 0222 Information and Technology Services Yarra Tower Fax (03) 9651 3688 Director: Mr Ian Thomas World Trade Centre Level 7, 1 Macarthur Street Gascor Pty Ltd Level 2, Siddeley Street Melbourne 3002 Level 6, 45 William Street Melbourne 3000 Tel (03) 9651 6230 Melbourne 3000 Tel (03) 8664 6500 Fax (03) 9651 2373 Tel (03) 9932 7888 Fax (03) 8664 6511 Fax (03) 9629 2511 Organisational Strategy Victorian Funds Management Corporation Director: Mr Steve Schinck Government Superannuation Office Level 10, 60 Collins Street Level 3, 1 Macarthur Street Level 10, 35 Spring Street Melbourne 3000 Melbourne 3002 Melbourne 3000 Tel (03) 9207 2900 Tel (03) 9651 0723 Tel 131 872 Fax (03) 9207 2967 Fax (03) 9651 2132 Fax (03) 9654 4319 Victorian Government Purchasing Board Legal and Executive Services Land Tax Hardship Relief Board Level 5, 1 Treasury Place Director and Solicitor to 505 Little Collins Street Melbourne 3002 Treasury and Finance: Melbourne 3000 Tel (03) 9651 2268 Mr Ian Gibson Tel (03) 9628 0000 Fax (03) 9651 2161 Level 3, 1 Macarthur Street Fax (03) 9628 6222 Victorian Managed Insurance Authority Melbourne 3002 Old Treasury Building Reserve Committee 4th Floor, 446 Collins Street Tel (03) 9651 5714 Old Treasury Building Melbourne 3000 Fax (03) 9651 2132 Spring Street Tel (03) 8601 5900 Reaching our Potential Melbourne 3000 Fax (03) 8601 5949 Program Director: Mr Paul Eyres Tel (03) 9651 2233 Victorian WorkCover Authority Level 3, 1 Macarthur Street Fax (03) 9651 2288 (incorporating WorkCover Conciliation Melbourne 3002 Parliamentary Trustee Service and WorkCover Medical Panels) Tel (03) 9651 0723 Level 11, 35 Spring Street Level 24, 222 Exhibition Street Fax (03) 9651 2132 Melbourne 3000 Melbourne 3000 State Revenue Office Tel (03) 9651 3352 Tel (03) 9641 1555 Commissioner of State Revenue: Fax (03) 9651 3699 Fax (03) 9641 1222 Mr Paul Broderick Toll Free: 1800 136 089 Rural Finance Corporation 505 Little Collins Street 57 View Street Yarra Valley Water Limited Melbourne 3000 A Bendigo 3550 Lucknow Street Tel (03) 9628 0505 " Tel (03) 5448 2600 Mitcham 3132 Fax (03) 9628 0501 Fax (03) 5441 8901 Tel (03) 9874 2122 Fax (03) 9872 1635 Statutory Bodies and Business Enterprises South East Water Limited 20 Corporate Drive City West Water Limited Young Farmers' Finance Council Moorabbin 3189 57 View Street St Albans Road Tel (03) 9552 3000 Bendigo 3550 Sunshine 3020 Fax (03) 9552 3001 Tel (03) 5448 2600 Tel (03) 9313 8422 Fax (03) 5441 8901 Fax (03) 9313 8417 State Trustees Limited 168 Exhibition Street Melbourne 3000 Tel (03) 9667 6444 Fax (03) 9663 4260
A
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 91 APPENDIX 2
APPENDIX 2: FUNCTIONS AND Budget and Financial Management Economic and Financial Policy SERVICES OF THE DEPARTMENT Budget and Financial Management Division Economic and Financial Policy Division The Department of Treasury and Finance delivers policy and advisory services to the provides economic and financial advice to provides the Government with economic, Government. The Division's main functions the Government. The Division's main financial and resource management policy include: functions include: advice to support the Government in delivering • coordination of the Annual State Budget • Providing advice to Government on: its policy outcomes. The Department's and the Mid-Year Budget Review - longer-term economic development and innovative, expert advice balances economic, processes and the annual, mid-year and financial strategy social and environmental goals within a quarterly financial reports framework of responsible financial - taxation policy • management of support process for the management. This role includes: - insurance policy ERC • providing economic, financial and - superannuation policy • developing and implementing resource commercial advice and information allocation and management reform - environmental reporting • Implementing specific economic and frameworks for the Victorian budget sector - National Competition Policy financial Government policies • developing and maintaining financial - Victoria's transport accident and • contributing to public understanding of management regulation workplace compensation schemes. economic and financial matters • monitoring portfolio performance and • monitoring and forecasting revenue flows, • advising on the most appropriate quarterly revenue certification and trends in State and national economies interventions to achieve the policy • managing whole-of-government financial • managing Commonwealth-State financial objectives sought by Government management systems and taxation relations. • providing strategic leadership across the compliance. public sector in economic and financial Strategic Management reform Commercial Strategic Management Division works to • ensuring effective management of the Commercial Division provides commercial maintain and enhance the Department's State's financial position. advice, implements new commercial projects capability to serve Government and assist in During 2002-03, the Office of the Secretary and manages commercial activities on behalf living its Aspiration. The Division's main and four divisions carried out the functions of of Government. The Division ensures the functions include: minimisation of contractual risks to the Department. The four divisions of the • providing strategic communication advice Government and is the custodian of Department are: and services, both internal and external commercial principles and practices • Budget and Financial Management throughout the public sector. The Division's • managing corporate planning, reporting, • Commercial main functions include: and internal business assurance services • Economic and Financial Policy • managing the public-private partnership • managing human resource strategy and sen/ices • Strategic Management. models for public infrastructure projects • monitoring government business enterprises • driving and managing the Department's Office of the Secretary internal change program - 'Reaching our • managing the Government's motor vehicle Potential' The Office of the Secretary provides support fleet to the Secretary of the Department and • coordinating Cabinet, Parliament and • providing risk management advice and oversees the delivery of outputs against the Executive Council processes and liaising managing government liabilities Department's objectives and strategic between DTF and its Ministers' Offices • operating Victoria's Competitive Neutrality priorities. • providing and managing legal services Complaints Unit • managing Freedom óf Information services Corporate Financial Services • administering and managing government Corporate Financial Services is a shared land and property Information and Technology Services services group that provides corporate and • overseeing procurement across Provides Information and Technology services financial services to the Departments of Government, including e-commerce including document management and library Premier and Cabinet and Treasury and development services to the Departments of Treasury and Finance as follows: • providing facilities management for the Finance and Premier and Cabinet. • statutory and external reporting Departments of Treasury and Finance and • management reporting Premier and Cabinet. • budgeting - Annual Departmental Budget submissions and updates • data integrity - maintenance of General Ledger Chart of Accounts and transaction processing, including purchasing, accounts payable and receivable • asset management • contracting and other financial management advice.
92 DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 APPENDIX 3
APPENDIX 3: BUDGET PORTFOLIO OUTCOMES
The Budget Portfolio Outcomes statements provide a comparison Petween the actual financial information of all General Government entities within the portfolio and the forecasted financial Information published In Budget Estimates - Budget Paper No. 3 (BP 3). The Budget Portfolio Outcomes are comprised of the statements of financial performance, financial position and cash flows.
The Budget Portfolio Outcomes have been prepared on a consolidated basis and include all General Government entities within the portfolio. Financial transactions and balances are classified Into either Controlled or Administered, in accordance with Australian Accounting Standard AAS 29 Financial Reporting by Governments, and agreed with the Treasurer in the context of BP 3.
The following Budget Portfolio Outcomes statements are not subject to audit by the Victorian Auditor-General's Office. They include the financial information of the following entities: • Department of Treasury and Finance (Including the Essential Services Commission) • Victorian Casino and Gaming Authority (for the six months to 31 December 2002).
Statement of Financial Performance For the Year Ended 30 June 2003
2002-03 2002-03 ACTUAL BUDGET VARIATION % CONTROLLED $M $M
Revenue from Ordinary Activities
Output Appropriations |a| 181.2 194.4 (6.8) Special Appropriations 031 8.1 18.2 (55.5) Other Revenue 35.7 53.2 (32.9) 225.0 265.8 (15.3)
Expenses from Ordinary Activities
Employee Benefits 74.9 80.0 (6.4) Depreciation and Amortisation 68.3 75.1 (9.1) Grants and Transfer Payments 5.7 7.5 (24.0) Capital Asset Charge 16.5 34.1 (51.6) Supplies and ServicesIc) 123.0 72.0 70.8 Borrowing Costs 19.3 13.4 44.0 307.7 282.1 9.1
Net Result for the Reporting Period (82.7) (16.3) 407.4
(a) $16.3 million of the Appropriation was not required as the Department was exempted from paying the capital asset charge on its leased motor vehicle fleet. The capital asset charge expense was correspondingly lower.
(b) The variation in the level of Special Appropriations Revenue Is due to the transfer of the activities of the Office of Gambling Regulation (OGR) to the Department of Justice, effective 31 December 2002. The Budget assumed that the activities of the OGR would be included in the financial results of the Department of Treasury and Finance for the full financial year.
(c) Supplies and Services includes certain significant expense items which were not budgeted for, and which are reported in Note 5 to the audited Financial Statements, I.e. loss arising from under-recovery of residual value of leased motor vehicles ($9.6 million), adjustment to carrying values of leased motor vehicles and related lease liabilities ($23.8 million), onerous contract provision - leased office space ($13.0 million).
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 Statement of Financial Position As at 30 June 2003
2003 2003 ACTUAL BUDGET VARIATION % CONTROLLED $M $M
Current Assets Cash Assets (9.0) 27.7 (132.5) Other Financial Assets 0.3 0.2 50.0 Receivables 5.6 5.1 9.8 Inventories 2.5 21.9 (88.6) Prepayments 0.7 1.5 (53.3) Total Current Assets 0.1 56.4 (99.8)
Non-Current Assets Receivables (a| 132.3 58.8 125.0 Inventories 26.8 27.5 (2.5) Property, Plant and Equipment 395.9 331.8 19.3 Intangible Assets 8.6 5.0 72.0 Other 18.0 18.9 (4.8) Total Non-Current Assets 581.6 442.0 31.6 Total Assets 581.7 498.4 16.7
Current Liabilities Payables 13.8 22.1 (37.6) Interest Bearing Liabilities lb| 106.6 23.7 349.8 Provisions 9.1 5.7 59.6 Other 24.0 15.7 52.9
Total Current Liabilities 153.5 67.2 128.4
Non-Current Liabilities Interest Bearing LiabilitiesIbl 162.4 116.7 39.2 Provisions 9.9 14.2 (30.3) Other 5.6 0.0 na Total Non-Current Liabilities 177.9 130.9 35.9 Total Liabilities 331.4 198.1 67.3 Net Assets 250.3 300.3 (16.7)
(a) Non-Current Receivables represents the receivable from the State Administration Unit (SAU). The 2002-03 Budget, prepared before the finalisation of the 30 June 2002 audited Financial Statements, was prepared on the assumption that certain draw downs against this receivable would be made. These have not occurred to the extent anticipated. (b) The variation in Interest Bearing Liabilities is partly associated with the variation referred to in (a) above. There has been a revision to the time frame for payments to reduce the motor vehicle lease deficit provision. The variation is also partly brought about a significant adjustment to lease liabilities at year end, following a review of the procedures involved with the accounting for leased motor vehicles.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 Statement of Cash Flows For the Year Ended 30 June 2003
2002-03 2002-03 ACTUAL BUDGET VARIATION % CONTROLLED $M $M
Cash Flows from Operating Activities Receipts from GovernmentIal 186.9 217.9 (14.2) Payments for Supplies, Grants and Employees (174.2) (182.1) (4.3) 12.7 35.8 (64.5) Other Revenue 79.0 83.2 (5.0) Capital Asset Charge "' (16.5) (34.1) (51.6) Borrowing Costs Expense (25.4) (13.4) 89.6 Net Cash Inflow from Operating Activities 49.8 71.5 (30.3)
Cash Flows from Investing Activities Payments for Property, Plant and Equipment (69.6) (62.2) 11.9 Net Cash (Outflow) from Investing Activities (69.6) (62.2) 11.9
Cash Flows from Financing Activities Net Proceeds from Capital Contribution by State Government 3.6 3.0 20.0
lb Other > 271.6 - na Net Cash Inflow from Financing Activities 275.2 3.0 9,073.3 Net Increase in Cash Held 255.4 12.3 1,976.4
(a) Refer to footnote (a) to Statement of Financial Performance. (b) This consists of movements in the receivable from the SAU. On 30 June 2002, a superannuation payment of $250 million was made, which was not funded via the SAU until July 2003. Neither transaction was reflected in the original Budget.
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 95 Administered Items Statement For the Year Ended 30 June 2003
2002-03 2002-03 ACTUAL BUDGET VARIATION $M $M %
Administered Revenue Appropriations - Payments made on behalf of the State 855.2 919.3 (7.0) Special Appropriationslal 1,740.0 926.2 87.9 Sale of Goods and Services 5.7 5.6 1.8 Commonwealth Grants 6,805.7 6,778.1 0.4 Other Grants 0.2 14.3 (98.6) Taxes 7,534.7 7,704.1 (2.2) Regulatory Fees 13.0 15.3 (15.0) Other 2,758.2 2,650.8 3.3 Total Administered Revenue 19,712.7 19,013.7 3.7
Administered Expenses Expenses on behalf of the State 629.4 622.8 1.1 Superannuation 1,637.9 830.9 97.1 Grants and Other Payments 333.0 282.6 17.8 Payments into the Consolidated Fund 17,227.6 17,185.6 0.2 Total Administered Expenses 19,833.1 18,921.9 4.8 Revenue less Expenses (115.9) 91.8 (226.3)
Administered Assets Cash Assets 20.4 10.6 92.5 Receivables M (1,857.4) (1,570.5) 18.3 Other Financial Assetslbl 2,585.8 2,240.2 15.4 Inventories 7.4 (100.0) Property, Plant and Equipment(0) 389.2 (100.0) Total Administered Assets 748.8 1,076.9 (30.5)
Administered Liabilities Payables 34.6 35.9 (3.6) Interest Bearing Liabilities 5,833.2 5,839.7 (0.1) Superannuation 12,965.1 12,284.5 5.5 Amounts Owing to Other Departments - (2.0) (100.0) Other1« 313.8 162.9 92.6 Total Administered Liabilities 19,151.9 18,321.0 4.5
(a) The variations in Special Appropriations and Superannuation expense are predominantly brought about by a $750 million payment to the State Superannuation Fund on 30 June 2003, which was not budgeted for. (b) Timing matters with respect to Investment of available funds on behalf of the SAU. (c) Upon completion, the cost of capital works at Federation Square was transferred to Federation Square Management Pty Ltd (a State owned entity). (d) Actual Other Liabilities includes unearned income of $134 million relating to GST grants received in advance In June.
96 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 APPENDIX 4
APPENDIX 4: WORKFORCE DATA
DTF employees: 30 June 2003
TOTAL EMPLOYEES (VPS AND EXECUTIVE) BREAKDOWN BY GENDER MALE FEMALE TOTAL Full time 462 Full time 269 193 462 Part time 29 Part time 3 26 29 Full time Equivalent (FTE) 480.4 Total 272 219 491 Total 491
BREAKDOWN BY DIVISION FTE TOTAL Budget and Financial Management 128.8 130 Commercial 147.3 150 Economic and Financial Policy 74.1 78 Strategic Management1 92.3 95 Secretary's Office 2 37.9 38
Total 480.4 491
1. Includes 49 staff (46.5 FTE) in Information and Technology Services, a service shared with DPC. 2. Includes 34 staff (33.9 FTE) in Corporate Financial Services, a service shared with DPC.
Profile of DTF VPS employees: 30 June 2003
FULLTIME PART TIME TOTAL
MALE FEMALE MALE FEMALE
CLASS 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR VPS-5 67 64 -3 37 37 0 0 0 0 4 6 2 108 107 -1 VPS-4 61 74 13 41 33 -8 1 2 1 5 8 3 108 117 9 VPS-3 39 51 12 60 60 0 0 1 1 3 4 1 102 116 14 VPS-2 26 19 -7 52 43 -9 0 0 0 8 7 -1 86 69 -17 VPS-1 4 5 1 6 4 -2 0 0 0 0 1 1 10 10 0 Total 197 213 16 196 177 -19 1 3 2 20 26 6 414 419 5
Profile of DTF Executive Officers: 30 June 2003
ONGOING SPECIAL PROJECTS TOTAL
MALE FEMALE MALE FEMALE
CLASS 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR EO-1 4 3 -1 0 1 1 0 0 0 0 0 0 4 4 0 EO-2 14 11 -3 3 3 0 0 0 0 0 0 0 17 14 -3 EO-3 43 41 -2 8 12 4 0 1 1 0 0 0 51 54 3 Total 61 55 -6 11 16 5 0 1 1 0 0 0 72 72 0
Note: There were six Executive Officer vacancies as at 30 June 2003.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 97 SRO employees: 30 June 2003
TOTAL EMPLOYEES (VPS AND EXECUTIVE) BREAKDOWN BY GENDER MALE FEMALE TOTAL
Full time 411 Full time 224 187 411 Part time 26 Part time 2 24 26 Full time Equivalent (FTE) 428.27 Total 226 211 437 Total 437
BREAKDOWN BY DIVISION FTE TOTAL
Ballarat Operations 154.00 155 Commissioner and Staff 11.00 11 Compliance 87.84 90 Corporate Services 54.60 55 Legal Services 14.43 16 Organisational Development 15.60 16 Policy and Advisory 77.80 81 Redeployees 13.00 13 Total 428.27 437
Profile of SRO VPS employees: 30 June 2003
FULL TIME PART TIME TOTAL
MALE FEMALE MALE FEMALE
CLASS 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR
VPS-5 18 21 3 3 5 2 0 0 0 0 0 0 21 26 5 VPS-4 56 61 5 24 31 7 0 0 0 8 8 0 88 100 12 VPS-3 68 85 17 49 61 12 1 2 1 7 7 0 125 155 30 VPS-2 67 48 -19 94 76 -18 0 0 0 7 9 2 168 133 -35 VPS-1 12 6 -6 13 10 -3 0 0 0 0 0 0 25 16 -9 Total 221 221 0 183 183 0 1 2 1 22 24 2 427 430 3
Profile of SRO Executive Officers: 30 June 2003
ONGOING SPECIAL PROJECTS TOTAL
MALE FEMALE MALE FEMALE
CLASS 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR
EO-1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EO-2 1 1 0 0 0 0 0 0 0 0 0 0 1 1 0 EO-3 2 2 0 2 4 2 0 0 0 0 0 0 4 6 2 Total 3 3 0 2 4 2 0 0 0 0 0 0 5 7 2
Note: There were no Executive Officer vacancies as at 30 June 2003.
98 DEPARTMENT OF TREASURY 5 FINANCE ANNUAL REPORT 2002-03 Reconciliation of Executive Numbers with Remuneration of Executives at 30 June 2003 (Note 18 in the Financial Statements, page 76)
2002 2003 Total number of Executives with remuneration over $100,000 70 71 add Executives employed with remuneration below $100,000 20 23 Accountable Officer 1 1 less Separations 14 16 Total Executive Numbers at 30 June 2002 77 79
Note: Includes Department of Treasury and Finance and the State Revenue Office only.
Profile of Essential Services Commission Executive Officers: 30 June 2003
ONGOING SPECIAL PROJECTS TOTAL
MALE FEMALE MALE FEMALE
CLASS 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR 2002 2003 VAR EO-1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EO-2 1 1 0 0 0 0 0 0 0 0 0 0 1 1 0 EO-3 2 3 1 1 1 0 0 0 0 0 0 0 3 4 1 Total 3 4 1 1 1 0 0 0 0 0 0 0 4 5 1
Note: There was one Executive Officer vacancy as at 30 June 2003.
Public Sector Authority Executive numbers
ORGANISATION REPORTED DEPARTMENT 2003 2002 CHANGE
2003 2002 2003 2002 FEMALE MALE VACANT FEMALE MALE VACANT FEMALE MALE VACANT Emergency Services Superannuation Board Yes Yes DTF DTF 1 2 1 2 0 0 0
GasCor Pty Ltd Yes Yes DTF DNRE 1 3 1 4 0 -1 0 Government Superannuation Office Yes Yes DTF DTF 1 5 1 6 0 -1 Rural Finance Corporation Yes Yes DTF DTF 17 1 18 -1 -1 0 State Trustees Limited Yes Yes DTF DTF 5 13 5 7 0 6 0 Transport Accident Commission (TAC) Yes Yes DTF DTF 6 15 5 18 1 -3 0 Treasury Corporation of Victoria (TCV) Yes Yes DTF DTF 1 2 1 2 11 1 -1 -9 0 Victorian Funds Management Corporation Yes Yes DTF DTF 1 8 1 7 0 1 0 Victorian Managed Insurance Authority Yes Yes DTF DTF 2 6 1 8 1 -2 0 Victorian WorkCover Authority (VWA) Yes Yes DTF DTF 25 54 2 22 64 3 -10 2 Total 43 125 3 40 145 1 3 -20 2 Grand total 168 185 -17
Notes: These figures have been compiled by Government Sector Executive Remuneration Panel (GSERP) (Office of Public Employment, Department of Premier and Cabinet) from figures provided directly by the Authorities. To allow accurate comparisons, organisations now in DTF were also added to 2002 numbers. Overall there has been a decrease of 17 executive roles in 2002-03. 33 positions were either abolished or no longer considered to be at executive level. Seven people had Total Remuneration Package (TRP) increases of less than 6 per cent which took them above the $92,996 threshold for classification as an executive. One person had a TRP increase of greater than 6 per cent which took them above the $92,996 threshold for classification as an executive. Eight roles were created during 2002-03. The VWA identified that the GSERP definition of executive was not used correctly in the 2001 -02 report, resulting in a significant under reporting of executives. Using the correct definition, the correct number of VWA executives in 2001 -02 was 86. This has been corrected in the table above. The TCV reviewed their executive numbers against the GSERP definition, resulting in a reported decrease of ten roles from 2001 -02.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 99 Employee Relations During 2002-03, 140 staff received EO-1 25.0 per cent ergonomic assessments. In April 2003, 133 The Department experienced no lost time due EO-2 21.4 per cent staff received influenza vaccinations. to industrial disputes during the period. EO-3 22.2 per cent Sixteen injuries were reported (one more than DTF has a comprehensive grievance process VPS-5 40.2 per cent last year). Of these, five resulted in minor to ensure employees concerns are dealt with WorkCover claims (one more than the VPS-4 35.0 per cent fairly and promptly. There were two grievances previous year), and three were standard VPS-3 55.2 per cent lodged in 2000-01, which were identified in the WorkCover claims (two more than the annual report as ongoing. These were resolved VPS-2 72.5 per cent previous year). in 2001 -02. There were three grievances VPS-1 50.0 per cent lodged in 2001 -02 and identified in the annual Cultural Diversity DTF provides a study and scholarship report. These were also resolved in 2001 -02. assistance program to encourage all One grievance was lodged and resolved DTF is committed to ensuring that equity and employees to pursue relevant tertiary during 2002-03. diversity is maximised and that it continues to serve Victoria's culturally diverse community. qualifications to increase their career potential and contribution. Currently 12 of the 29 Recruitment DTF's strategies are mainly focused internally through developing and Implementing the recipients are female. DTF also has a DTF is committed to ensuring the best 2002-04 HR Strategy, and externally through comprehensive range of flexible work practices available people are recruited, selected and appropriate ethnic communication strategies. available to all employees including maternity retained for advancement. The Attraction, DTF Is committed to ensuring the best leave, carers leave, flexible working hours, Selection and Retention priority in the HR available people are recruited and selected part-time and additional leave opportunities. Strategy has commenced. This Includes the for advancement to ensure the Department Is As at 30 June 2003, there were seven DTF development of an Employment Brand, and representative of the culturally diverse employees on maternity leave. will build on the Department's capacity In this community of Victoria. area as it is rolled out next year. Young People Implementation of the 2002-04 HR Strategy During 2002-03 DTF advertised 102 roles. Our focus on youth in DTF is expressed will continue in 2003-04. This strategy includes Some vacancies were filled by internal through our employment practices. This a review of the DTF Equity and Diversity policy appointment without advertisement as involve continuing support for the Youth scheduled during 2003-04. The final stage of summarised below: Employment Scheme with five trainees, all the HR Strategy Involves measuring and under 24 years of age, gaining their first job REASON FOR NON ADVERTISEMENT NUMBER analysing the effectiveness of the strategy. As opportunity. DTF also supported the Graduate part of the review process, the effectiveness of Reclassification of role 6 Recruitment Scheme, employing 15 graduates the Equity and Diversity Policy will also be in home placements during 2002-03. Specialised duties 2 assessed. Any issues identified will continue to be addressed in order to maximise equity and Graduate recruitment 13 Indigenous People diversity within DTF. Fixed-term to ongoing 5 Our focus on indigenous people in DTF is Women expressed through our implementation of the Wur-cum barra Strategy, the Victorian DTF advertises all planned exemptions from Our focus on equity for women in DTF is Government's initiative to increase Indigenous advertising to all employees through its weekly expressed In our employment practices. DTF's employment within the VPS. As a first step, electronic newsletter, eNews. Equal Employment Opportunity (EEO) policy cultural awareness training for HR staff has DTF continues to participate in the VPS ensures that all employees—regardless of been completed while training of key HR and Graduate Recruitment Scheme. Eighteen gender—receive fair and equitable treatment in divisional staff on our Wur-cum barra graduates from the 2002 graduate intake all matters. The Policy is aligned with the obligations and understanding of barriers to returned to DTF in February 2003. The Directions of the Commissioner for Public indigenous employment is scheduled for 2003 intake of 15 graduates commenced Employment to ensure that: 2003-04. DTF is also reviewing its cultural their first placement with the Department in • employment decisions are based on merit awareness training for Inclusion in our February 2003. • employees are treated fairly and reasonably induction program. Occupational Health and Safety • equal employment opportunity is provided DTF is providing appropriate support to Indigenous employees through participation in The WorkCover improvement strategy has • employees have reasonable avenues of DTF and VPS training and development continued to set the direction for Occupational redress against unfair and unreasonable programs, including the VPS Indigenous Staff Health and Safety (OH&S) in the Department treatment. Network. DTF has set a target of four additional during the year. Achievements include the All staff and managers receive training and Indigenous employees in three years, and is implementation of policies on Electrical Safety are required to actively comply with the policy. encouraging recruitment of indigenous and Occupational Rehabilitation as well as Women currently comprise 44 per cent of the employees through existing entry level revised and updated Vision Screening and DTF workforce. The following statistics programs (Youth Employment Scheme, ContractorA/isitor policies. An OH&S represent the percentage of women Graduate Recruitment Scheme). At the same responsibility statement has been included in employed at each level In the organisation. time, culturally appropriate approaches to all management role descriptions and Two of the five members of the Senior vocational counselling have been built Into DTF continuous training provided for all staff in Executive Group and one In five DTF Career Assist Employee Assistance Program, OH&S awareness. executives are women. and we are improving data collection at DTF and whole-of-government levels.
100 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 APPENDIX 5 APPENDIX 6
APPENDIX 5: CONSULTANTS ENGAGED APPENDIX 6 - FREEDOM OF Further information regarding the Freedom of AND MAJOR CONTRACTS INFORMATION Information Act 1982 may be obtained from:
The following information is provided • the Act itself Consultancies over $100,000 pursuant to section 7(1 )(a) (il) of the Freedom • various regulations made under the Act No consultancies costing greater than of Information Act 1982 (the Act). • www.fol.vic.gov.au. $100,000 were engaged during 2002-03. The Department's Freedom of Information The Act and related Regulations listed above (FOI) Officers deal with requests for access to Consultancies under $100,000 are available for purchase from: documents in the possession of the Thirty-five consultancies costing less than Department, excluding the State Revenue Information Victoria $100,000 were engaged during 2002-03, at Office (SRO). The FOI Officers of the SRO 356 Collins Street a total cost of $825,409. In dollar terms, this, deal with requests for access to documents Melbourne Vic 3000 represents a decrease of 38 per cent from in Its possession. Tel: 1300 366 356 2001 -02, where 46 consultancies under Website: www.information.vic.gov.au $100,000 were engaged at a total cost of Making a request $1,337,618. A request generally falls into one of two Freedom of Information Contacts Disclosure of major contracts categories: Department of Treasury and Finance 1. Requests for access to documents of the Ms Vivian Chung The Department has disclosed all contracts agency which must contain sufficient Tel: (03)9651 2115 greater than $10 million in value which it Information to identify the documents entered into during 2002-03. The contracts Mr Mel Humphreys-Grey sought. can be viewed at www.contracts.vic.gov.au. Tel (03) 9651 5218 2. Requests for amendment of personal State Revenue Office records, which must identify the record Ms Diana Pereira involved sufficiently and specify the Tel: (03) 9628 0515 amendment sought.
The Department and the SRO have various Record-keeping systems record-keeping systems. The main ones are described below which may help applicants Accounting records to identify the categories of documents to The Department's computerised accounting which access is sought. It should be noted system records general ledger entries, that the Act does not entitle applicants to accounts payable and other accounting have access to documents that were created function details. Some paper-based records prior to July 1978 unless those documents are also maintained. relate to their personal affairs. Personnel records filing system Requests for documents must be made in writing to the Agency. Requests should be The filing system contains individual personal addressed as follows: files. The HR Services provider, Accenture, Freedom of Information Officer holds current and recent files. Older files are Department of Treasury and Finance stored either at 1 Macarthur Street, GPO Box 4379QQ Melbourne, or at the Public Records Office in Melbourne VIC 3001 North Melbourne.
Freedom of Information Officer Departmental records filing system State Revenue Office This filing system contains general files, GPO Box 1641N including Cabinet files and FOI files. Current Melbourne VIC 3001 and recent files are held at 1 Macarthur Fees and charges Street, Melbourne. Older files are stored either in an offsite secondary storage facility An application fee of $20.00 must or at the Public Records Office in North accompany a request. The fee may be Melbourne. waived if the payment is likely to cause hardship to the applicant. The State Revenue Office has its own accounting and filing systems. For further The Act provides for certain charges in details on the particular categories of relation to the provision of documents. A documents held by this agency, please schedule of charges is prescribed by the contact the responsible FOI Officer. Freedom of Information (Access Charges) Regulations 1993. The main charges relate to search time at $20.00 per hour and photocopying at 20 cents per page.
DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 101 APPENDIX 7
APPENDIX 7 - LEGISLATIVE CHANGES New Regulations for 2002-03 2002-03 New Regulations for the Treasurer Spring 2002 117/2002 Pay-roll Tax (Prescribed Sporting Club) New or amending acts of the Treasurer (Amendment) Regulations 2002 Gas Industry (Residual Provisions Bill) Act 2002 135/2002 Treasury Corporation of Victoria Relating to the transfer of potential liabilities (Prescribed Agencies) of Gascor Pty Ltd arising out of the Longford (Amendment) Regulations 2002 proceedings. 136/2002 Land Tax (Indexation Factors) New or amending acts of the Minister Regulations 2002 for Finance 47/2003 Treasury Corporation of Victoria Wrongs and Other Acts (Public Liability (Prescribed Agencies) Insurance Reform) Act 2002 (Amendment) Regulations 2003 To empower the ESC to require insurance 19/2003 Public Authorities (Dividends) companies to provide certain information and appoint a commission with specific Regulations 2003 responsibilities relating to Insurance 80/2003 Land Tax Amendment activities in Victoria. Regulations 2003 19/2003 Public Authorities (Dividends) New or amending acts of the Minister Regulations 2003 for WorkCover
Nil New Regulations for the Minister for Finance
New or amending acts of the Minister for Gaming New Regulations for the Minister for WorkCover 104/2002 Occupational Health and Safety Autumn 2003 (Mines) Regulations 2002 New or amending acts for the Treasurer 16/2003 Occupational Health and Safety Pay-roll Tax (Maternity and Adoption ~~ (Asbestos) Regulations 2003 Leave Exemption) Bill 2003 15/2003 Subordinate Legislation Act To introduce payroll tax and maternity (Occupational Health and Safety leave concessions. (Noise) Regulations 1992 - State Taxation Acts (Miscellaneous Extension of Operation) Amendment) Bill 2003 31/2003 Transport Accident (Amendment) Amendments to existing Payroll Tax Regulations 2003 and Duties Act taxation legislation. New Regulations for the Minister for Gaming Appropriation (2003/2004) Bill Appropriation (Parliament 2003/2004) Bill 103/2002 Casino Control Authority Appropriation authority for payments from (Prescribed Authorities the Consolidated Fund to Departments and and Persons) Regulations 2002 Parliament in respect of the 2003-04 109/2002 Gaming Machine Control financial year. (Responsible Gambling Information) New or amending acts for the Minister (Amendment) Regulations 2002 of Finance Audit Amendment Act 2003 Making amendments to the Audit Act including the Auditor-General's accountabilities, powers and scope.
102 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 APPENDIX 8
APPENDIX 8: COMPLIANCE WITH THE BUILDING ACT 1993
Standards for publicly owned buildings The Department of Treasury and Finance (DTF) employed an external service provider, Jones Lang LaSalle Pty Ltd, to manage the Government-owned office accommodation portfolio and to ensure compliance with standards for publicly owned buildings. At 30 June 2003 DTF was responsible for 25 government-owned buildings.
Mechanisms to ensure that buildings conform with Building Standards All building works undertaken on behalf of DTF that require a building permit under the Building Act 1993 are certified by a Building Surveyor as conforming with building regulations. DTF project managers are instructed accordingly. Tenants undertaking works within government-owned premises are required to provide a Building Surveyor's Certification of Conformity as part of the conditions of the owner's consent to the work.
DTF has not sought to exempt works from certification by applying the 10-year liability cap.
Major works projects (greater than $50,000) A number of major works have been completed this financial year. All of these have been Issued with an appropriate Certificate of Occupancy or certification by a Building Surveyor and a Final Certificate.
Major works include: A. Old Treasury Building, Melbourne Restoration and Roof Replacement 30-38 Lt Malop Street, Geelong Refurbishment, Level 5 21 McLachlan Street, Horsham Refurbishment and Fltout Works 565 Lonsdale Street, Melbourne Refurbishment and Fitout Works 1 Treasury Place, Melbourne Boiler Replacement 1 Macarthur Street, Melbourne Computer Room Services Upgrade
Major works (greater than $50,000) not • breakdown, preventative and cyclical subject to certification of plans, mandatory maintenance inspections of the works and issue of • identifying and prioritising works required Occupancy Permits or Final Certificate. in consultation with DTF Nil • managing rectification works
Mechanisms for inspection, reporting, • conducting regular inspections to ensure scheduling and carrying out of rectification that work is performed to the standard and maintenance works on existing required. buildings. Quality assurance measures have been built There are three main mechanisms into the contract with Jones Lang LaSalle established for the purpose of inspecting, Pty Ltd. reporting, scheduling and performing rectification and maintenance works on Number of buildings conforming with existing buildings: Building Standards. 1. Provision of and management of All 25 buildings conform. maintenance sen/Ice contracts for all Number of buildings that have been brought owned buildings. into conformity during 2002-03. 2. Building Inspections, liaison with tenants Nil and responses to issues identified.
3. Commissioning formal condition, Arrangements to ensure that only maintenance and compliance reports on registered building practitioners are buildings. engaged for public sector works. Jones Lang LaSalle Pty Ltd managed the DTF engages building practitioners listed on service maintenance contracts for 24 of the the Construction Suppliers Register, which is government-owned premises on behalf of managed by the Department of Infrastructure. DTF and Lemon Baxter Pty Ltd managed the remaining property, which is being managed Number of cases and circumstances where by DTF pending sale. These two companies registered building practitioners became are responsible for: deregistered. Nil
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 103 APPENDIX 9
APPENDIX 9: NATIONAL COMPETITION Progress in 2002-03 POLICY 2003 Assessment Report In 1995 the Commonwealth, State and Territory Governments agreed to Implement A major task for 2002-03 was the preparation NCP in order to promote greater competition of a report to the National Competition Council and encourage economic growth. Enhanced (NCC) for the 2003 assessment. The report competition can result in lower business comprehensively details Victoria's progress in costs, lower prices, an expansion of implementing its NCP commitments, and consumer choice, increased competitiveness compliance with those commitments. and increased flexibility to take advantage of new technologies and market opportunities. Legislation Review
The Policy is underpinned by three Under NCP, the Government must review intergovernmental agreements: and reform, where appropriate, all laws that restrict competition by June 2003. The • the Conduct Code Agreement guiding principle for NCP legislation review is • the Competition Principles Agreement that restrictive legislation is justified only • the Agreement to Implement National when the benefits of restrictions outweigh the Competition Policy and Related Reforms. costs of legislative changes and if the objectives of the legislation can only be In Victoria, the Treasurer is responsible for achieved by restricting competition. the overall implementation of NCP, including legislation review, competitive neutrality and All reviews of legislation follow five steps. securing competition payments from the 1. Identify the objectives of the legislation. Commonwealth. 2. Identify the nature of the restriction on The Department supports the Treasurer's role competition. by coordinating the implementation of the 3. Consider the likely effect of the restriction NCP within the Victorian Public Sector. The on competition and on the economy more Department's role in relation to NCP is generally. fulfilled by the Economic, Social and 4. Consider the costs and benefits of the Environment Group. restriction. 5. Identify alternative means to achieve the same result, including non-legislative approaches.
The table below details progress in 2002-03 in implementing the NCP principles for legislation under the Department's portfolios. In previous years the Department also reported on gambling legislation, but in December 2002, the Government moved responsibility for gambling legislation to the Department of Justice.
LEGISLATION PROGRESS ACHIEVED IN 2002-2003 Accident Compensation Act 1985 In response to a recommendation for Accident Compensation Independent reviews of WorkCover and (WorkCover Insurance) Act 1993 transport accident compensation schemes' Transport Accident Act 1986 proposed premiums, amendments to the Essential Services Commission Act 2001 were made in 2002 so that the Essential Services Commission could advise on proposed premiums.
Road Transport (Dangerous Goods) Act 1995 The measures in the current legislation and regulations reflect the National Standard for the Storage and Handling of Workplace Dangerous Goods.
104 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 Compliance with Competitive Neutrality Victoria's Competitive Neutrality Unit - a Competitive Neutrality Policy - New Policy new approach interpretation of application to Council owned leisure centres The majority of significant business activities The Competitive Neutrality Unit is an within the Department's portfolios relate to the independent unit located in the Department of The CN Policy created inherent difficulties activities of corporate entities, such as the Treasury and Finance that provides information where council owned leisure centres are TAC, which provide independent statements of to Victorian government businesses, local Invariably unable to charge full cost reflective compliance under the Financial Management governments and consultants on the pricing In relation to aquatic facilities. The Act 1994. In the context of the Third Tranche application and Implementation of the Treasurer approved a change in CN Policy report to the NCC all of these corporate Government's Competitive Neutrality Policy interpretation with regard to council owned entities complied with Victoria's competitive (CN Policy). The unit also undertakes formal leisure centres In May 2003. neutrality policy or had the status of being a investigations of complaints that allege Council owned leisure centres are shell company only. Other business activities departure from the CN Policy. multi-purpose facilities that act as community within the department are limited to: In December 2002 the Competitive Neutrality hubs designed to service the specific needs • Motor vehicle fleet management services, Unit (CNU) changed Its name from the of a broad cross-section of the community. which completed a compliance review and 'Competitive Neutrality Complaints Unit' to Most leisure centres have aquatic facilities adjusted overhead allocations to ensure reflect a change In Its approach to that offer both swim class and recreational compliance with Victoria's competitive competitive neutrality application. The CNU swimming components. The swim class neutrality policy. The State Government recognised a need to broaden its educational component is viewed as a significant Vehicle Pool provides a hire care service to focus in addition to Its Investigatory role. The business to which CN Policy cost Government agencies. CNU encourages parties who require advice adjustments must be Identified. Under the • Property management services, which regarding application of competitive neutrality new interpretation the recreational entail sale of property (Including crown to approach It where entitles are uncertain of component of the aquatic facility Is no longer land) at market rates, leasing of buildings their obligations. This approach has led to an viewed as a business activity but rather a at market rates as established by increase in enquiries regarding the public amenity or community Infrastructure to independent valuation mainly to public application of competitive neutrality by which CN Policy does not apply. government entitles, particularly by local sector agencies and advisory services The CNU has been exploring other difficulties government. The number of formal generally related to public interest rather created by the CN Policy and Guide, complaints lodged with the CNU was lower than commercial issues for which no fees particularly in relation to the provision of In 2002-03. are charged. community service obligations by In 2002-03 CNU representatives visited 15 government entities. Competitive Neutrality Policy regional and metropolitan councils to The following table provides a summary of Competitive neutrality requires government conduct workshops on specific issues complaints received or investigated in businesses to ensure where services relevant to each council and their application 2002-03. compete—or potentially compete—with the of competitive neutrality. The CNU has also private sector, advantages arising solely due held meetings with a further 11 government to their government ownership are removed agencies and consultants to discuss policy when it is the public interest to do so. application to various businesses. Government businesses are required to cost In October 2001 the CNU conducted a these services as if they were privately series of competitive neutrality workshops In owned. Competitive neutrality policy provides conjunction with the Municipal Association of government businesses with a tool to Victoria to local government. These enhance resource allocation decision workshops were well received and assisted making. This policy does not override other in de-mystifying elements of competitive policy objectives of government and focuses neutrality, however, the CNU recognised on resource allocation efficiency in the more work was required to sustain provision of service. understanding and application of CN Policy. The CNU together with the Department for Victorian Communities and Municipal Association of Victoria have scheduled a further round of workshops in October 2003.
DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 105 Complaint investigation reports completed in 2002-03
DATE OF SUBJECT OF DESCRIPTION RECEIPT COMPLAINT OF COMPLAINT FINDINGS OF INVESTIGATION
01-10-02 South Gippsland Community transport Completed 9 January 2003 Shire Council The investigation concluded that Council provision of community transport services in this instance was not a significant business and was therefore outside the scope of the CN Policy.
21-09-01 City of Casey Casey Leisure Centre Completed 25 September 2002
The investigation concluded that the Council would, in establishing commercial activities, apply CN cost adjustments and pricing to achieve CN compliance balanced against its public policy obligations to the community.
19-10-01 City of Whitehorse Child care services Completed 28 June 2002.
The conclusion of this investigation was that through the Council undertaking an extensive public interest process, it complies with the CN Policy with respect to its involvement in the delivery of centre-based childcare program.
The City of Whitehorse childcare centres are inherently ineffective due to size and staffing ratios, requiring on-going subsidies to continue operation. This makes compliance with competitive neutrality costing and pricing principles almost impossible.
06-02-02 Kingston City Leisure Centre - Completed 17 September 2002 Council Don Tatnell Leisure Centre The complaint related to the question whether the cost to users of the gym and fitness services at the refurbished Don Tatnell Leisure Centre reflected the costs of the refurbishment, and to public funding of competition to the detriment of existing private fitness providers.
The conclusion of the investigation was that the City of Kingston complies with CN Policy with respect to its provision of gym and fitness facilities at the Don Tatnell Leisure Centre.
17-05-02 Greater City Childcare services Completed 17 March 2003 of Ballarat The complaint investigation concluded that because the City of Ballarat has undertaken an open public interest test process it complies with CN Policy with respect to its involvement in the provision of centre-based childcare facilities.
The Council has made a commitment to examine alternative models of service delivery in partnership with the community. In addition Council has undertaken to improve information sharing about childcare in the municipality with private providers and residents.
22-05-02 Cemetery Trust - Memorials access Completed 15 May 2003 Altona Memorial to cemeteries The conclusion of this investigation is that Cemetery Trusts responsible for Altona Park Memorial Park, Fawkner Crematorium and Memorial Park, Bunurong Memorial Park and Necropolis Springvaie broadly comply with CN Policy with respect to their involvement in providing memorialisation goods and services.
The Department of Human Services is undertaking a financial viability review of the Cemetery Sector that will include the formulation of a fee model that will give effect to CN principles. The CNU requested that each trust review their pricing formulae for memorialisation goods and sen/ices and report to the CNU in order to better demonstrate compliance with CN Policy. The pricing formulae should be transparent and demonstrate recovery of full costs.
22-05-02 Cemetery Trust - Memorials access Completed 15 May 2003 The Necropolis to cemeteries Refer to comments above. Springvaie (Clayton)
22-05-02 Cemetery Trust - Memorials access Completed 15 May 2003 Fawkner to cemeteries Refer to comments above. Crematorium & Memorial Park
22-05-02 Cemetery Trust - Memorials access Completed 15 May 2003 Bunurong to cemeteries Refer to comments above. Memorial Park
08-10-02 City of Greater Commercial waste Completed 8 May 2003 Bendigo management services Council engaged an independent auditor to review its financial data relating to its waste Council operates a waste service and separate its CN cost adjustments thereby bringing transparency to the service collection service to fulfil cost structure. Following the review the CNU concluded that the Council's commercial its municipal responsibilities. waste management service is full cost reflective in pricing and so the City of Greater Beyond this service Council Bendigo is compliant with the CN Policy with respect to this service. offer a commercial collection service.
106 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 Complaints received - investigation reports not completed in 2002-03
DATE OF SUBJECT OF DESCRIPTION FINDINGS OF INVESTIGATION RECEIPT COMPLAINT OF COMPLAINT (OR STATUS AT 30 JUNE 2003) 29-08-02 Melbourne Waste collection and CityWide Service Solutions Pty Ltd is a subsidiary company wholly owned by the City Council disposai service City of Melbourne that is contracted by the Council to manage its Municipal waste. CityWide also offer commercial waste collection services in competition with private waste disposal operators. Being a subsidiary company and subject to tax payments and employing an income tax equivalence regime, CityWide appears compliant with CN Policy.
19-12-02 Kingston City Childcare Centre Investigation in progress. A draft report has prepared. Council
Follow-up reports - completed in 2002-03
DATE OF SUBJECT OF DESCRIPTION FINDINGS OF INVESTIGATION RECEIPT COMPLAINT OF COMPLAINT (OR STATUS AT 30 JUNE 2003) 02-02-01 East Gippsland Saleyards - Bairnsdale Initial investigation completed 31 August 2001. Shire Council Regional Livestock Follow-up investigation completed 24 July 2003. Exchange The East Gippsland Shire Council was originally found to be in breach of CN Policy most notably due to its failure to incorporate a rate of return on capital (including the capital related to the Regional Infrastructure Development Fund (RIDF) grant) in establishing a pricing structure for the facility. The grant was used in a second stage saleyard development that was due to be completed in April 2002. However, the stage two development was finalised in June 2003 and is now fully operational.
The conclusion of the follow-up investigation was that the East Gippsland Shire Council has satisfied the requirements of the CN Policy through full cost reflective pricing and is not in breach of CN Policy in relation to the facilities provided at the Bairnsdale Regional Livestock Exchange.
15-05-01 Mildura City Leisure Centre Initial investigation completed 21 February 2002. Council - Mildura Waves Leisure Follow-up investigation completed 3 September 2002. Centre The Council addressed the initial investigation report recommendations in relation to costing adjustments and a public interest test. Through its public interest test Council reconfirmed its public policy objectives and in conjunction with the Centre managers refined the cost allocation within the Centre and developed a revised price schedule. The conclusion of the follow-up investigation was that the Council satisfied the requirements of the CN Policy.
Complaint investigations withdrawn in 2002-03
DATE OF SUBJECT OF DESCRIPTION RECEIPT COMPLAINT OF COMPLAINT REASON FOR WITHDRAWAL 20-03-02 Macedon Ranges Waste collection and CNU officers attended a meeting with the two complainants and Council 30-04-02 Shire Council disposal service representatives to discuss issues of concern. Issue resolution was achieved and complainants withdrew their complaints. No outstanding CN issue was identified.
24-06-02 Latrobe City Community Transport Resolved through consultation. Issues concerning the structure of the community Council Services transport service were identified as the main cause of concern. These issues were brought to the attention of the appropriate government department to resolve. The complaint was withdrawn. No outstanding CN issue was identified.
18-09-02 City of Geelong Waste collection and CNU officers attended a meeting with the complainant and Council representatives disposal service to discuss issues of concern. Issue resolution was achieved and the complainant withdrew the complaint. No outstanding CN issue was identified.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 107 APPENDIX 10
APPENDIX 10: PUBLICATIONS The Department produced the following publications in 2002-03. Copies are available on the Department's website, www.dtf.vic.gov.au, or by telephoning (03) 9651 0909. 2001 -02 Annual Financial Report for the State of Victoria 2001 -02 Victorian Government Purchasing Board Annual Report 2001 -02 Department of Treasury and Finance Annual Report 2002-03 Budget Information Paper No. 1: Public Sector Asset Investment Program 2002-03 Budget Update 2002-03 Quarterly Financial Report No. 1 for the Victorian Budget Sector 2002-03 Mid-Year Financial Report for the State of Victoria (incorporating Quarterly Financial Report No. 2 for the Victorian Budget Sector) 2002-03 Quarterly Financial Report No. 3 for the Victorian Budget Sector 2003-04 Victorian Budget: • Budget Paper No. 1: Treasurer's Speech • Budget Paper No. 2: Budget Statement • Budget Paper No. 3: Budget Estimates • Budget Overview 2002-05 Corporate Plan: Department of Treasury and Finance Government Contracting and Purchasing: PACCER Training Calendar Integrated Management Cycle Calendar and Guide Management Reform Program case studies: • 'Predicting the future' in Victoria's Criminal Justice System: A Case Study of the Department of Justice Model Financial Report for Victorian Government Departments: For reporting period ending 30 June 2003 Response by the Minister for Finance to the Auditor-General's Reports issued during 2001 -02 Pre-Election Budget Update Shaping a Prosperous Future: Prospects, Issues and Choices Partnerships Victoria: Contract Management Guide
108 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 APPENDIX 11
APPENDIX 11: COMPLIANCE INDEX The Annual Report of the Department is prepared in accordance with the Financial Management Act 1994 and the Directions of the Minister for Finance.
The index facilitates identification of the Department's compliance with the Directions of the Minister for Finance by listing references to disclosures in this report.
CLAUSE REQUIREMENT PAGE REFERENCE
Report of Operations Charter and purpose 9.1.3(i)(a) Manner of establishment and Ministers 12 9.1.3(i)(b) Objectives, functions, powers and duties 5,9,13-15,92
9.1.3(i)(c) Nature and range of services provided 5,9,13-15,92
Management and structure
9.1.30(d)® Name of Chief Executive Officer 13 9.1.3(i)(d)(ii) Names of senior office holders and brief description of responsibility 13 9.1,3(i)(d)(ili) Organisational structure 12-14
Financial and other information 9.1.30(e) Statement of workforce data and merit and equity 97-100 9.1.3(ii)(a) Summary of the financial results for the year 42-43 9.1.3(il)(b) Significant changes in financial position during the year 42-43 9.1.3(ll)(c) Operational and budgetary objectives and performance against objectives 17-44 9.1.3(ii)(d) Major changes or factors affecting achievement 17-44 9.1.3(ii)(e) Subsequent events N/A
9.1.30(0 Application and operation of Freedom of Information Act 1982 101 9.1.3(ii)(h) Compliance with building and maintenance provisions of Building Act 1993 103 9.1.3(ii)(k) Statement on National Competition Policy 104-107
9.1.30i)(O Details of consultancies over $100 000 101 9.1.3(ii)(g) Details of consultancies under $100 000 101 9.6.2(i)(iv) Disclosure of major contracts 101
9.1.3(8)0 Statement of availability of other information 111 9.1.3(B)ffl Compliance index 109-110 9.8(l)(il) Occupational Health and Safety 100, 102,111 9.10.3(i) Budget Portfolio Outcomes 93-96
Financial Statements Basis on which financial statements have been prepared and other compliance details 9.2.2(ii)(a) Accrual basis of accounting 50 9.2.2(ii)(b) Compliance with AASs and other authoritative pronouncements 50 9.2.2(ii)(c) Compliance with Ministerial Directions and AFRBs 50
9.2.2(ii)(d) Adoption of the historical cost convention, except for specified assets 50 9.2.2(iii) Rounding of amounts 55 9.2.20(d) Notes to the financial statements (Contents page) 49 9.2.2(lv) Accountable officer's declaration 87
DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 109 CLAUSE REQUIREMENT PAGE REFERENCE
Statement of financial performance
9.2.20(a) Statement of financial performance 46 9.2.3(ii)(a) Operating revenue by class 60
9.2.3(ii)(b) Investment income by class 60 9.2.3(ii)(c) Other material revenue, including disposal of non current assets 60
9.2.3(ii)(e) Depreciation 63 9.2.3(ii)(f) Bad and doubtful debts 63
9.2.300(g) Financing costs 63 9.2.3(ii)(h) Net increment or decrement on revaluation recognised In the statement of financial performance 46 9.2.3(ii)(i) Audit expense 76
9.7.2000 Motor vehicle lease commitments 80
Statement of financial position 9.2.20(b) Statement of financial position 47
9.2.3(iii)(a)(0 Cash at bank and funds held In trust 64 9.2.3(iii)(a)00 Inventories by class 64 9.2.3(iii)(a)(iii) Receivables, including trade debtors, loans and other debtors 64 9.2.3(iii)(a)(iv) Other assets, including prepayments 47 9.2.3(iii)(a)(v) Investments N/A 9.2.3(iii)(a)(vi) Property, plant and equipment 65-66 9.2.3(iii)(a)(vii) Intangible assets 67
9.2.3(iii)(b)(i) Overdrafts 67 9.2.3(iii)(b)(ii) Other loans 67 9.2.3(iii)(b)(iii) Trade and other creditors 67 9.2.3(iii)(b)(iv) Finance lease charges 63 9.2.3(iii)(b)(v) Provisions, including employee entitlements 68 9.2.3(iii)(c)(i)(ii) Contributed capital 71
9.2.3(ii0(d)(0(iv) Reserves, and transfers to and from reserves 71
Statement of Cash Flows
9.2.20(c) Statement of cash flows during the year 48
Other disclosures in Notes to the Financial Statements
9.2.3(iv)(a) Liability secured by a charge over assets 67 9.2.3(iv)(b) Contingent liabilities 77-79 9.2.3(iv)(c) Commitments for expenditure 80 9.2.3(iv)(d) Government grants received or receivable 60 9.2.3(iv)(e) Employee superannuation funds 69-70
9.2.3(iv)(f) Assets received without adequate consideration 60 9.4 Responsible person-related disclosures 75
110 DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 APPENDIX 12
APPENDIX 12: INFORMATION To ensure the Department is meeting its AVAILABLE ON REQUEST accountability and compliance requirements, some of this additional information has been Under Ministerial Direction 9.1,3(iv) of the included in the Annual Report where relevant. Financial Management Act 1994, the Department is required to retain the following Requests for additional information may be information for the 2002-03 financial year made by telephone (03) 9651 5111, or in and make it available to Ministers, Members writing to the following address: of Parliament and the public on request: Deputy Secretary • a statement that declarations by pecuniary Strategic Management interests have been duly completed by all Department of Treasury and Finance relevant officers GPO Box 4379 QQ • details of shares held by a senior officer as Melbourne Vic 3001 nominee or held beneficially in a statutory authority or subsidiary • details of publications produced by the entity about the entity and the places where they can be obtained • details of changes in prices, fees, charges, rates and levies charged by the entity • details of any major external reviews carried out on the entity • details of any major research and development activities undertaken by the entity • details of overseas visits undertaken including a summary of objectives and outcomes of each visit • details of major promotional, public relations and marketing activities undertaken by the entity to develop community awareness of the entity and the services it provides • details of assessments and measures undertaken to Improve OH&S of employees • a general statement on industrial relations within the entity and details of any time lost through industrial accidents and disputes • a list of major committees sponsored by the entity, the purpose of each committee and the extent to which the purposes have been achieved.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 111 APPENDIX 13
APPENDIX 13: COMPLIANCE WITH Message from the Secretary THE WHISTLEBLOWERS PROTECTION The Department of Treasury and Finance Is ACT 2001 committed to the aims and objectives of the The following information is required in the Whistleblowers Protection Act 2001 (the Annual Report pursuant to section 104 of the Act). It does not tolerate Improper conduct Whistleblowers Protection Act 2001. by its employees, officers or members, nor the taking of reprisals against those who The number and types of disclosures come forward to disclose such conduct. made to public bodies during the year Nil The Department of Treasury and Finance The number of disclosures referred to recognises the value of transparency and the Ombudsman for determination as accountability in its administrative and to whether they are public interest management practices, and supports the disclosures Nil making of disclosures that reveal corrupt The number and types of disclosed conduct, conduct involving a substantial matters referred to the public body mismanagement of public resources, or by the Ombudsman for investigation Nil conduct Involving a substantial risk to public The number and types of disclosures health and safety or the environment. referred by the public body to the The Department of Treasury and Finance will Ombudsman for investigation Nil take all reasonable steps to protect people The number and types of who make such disclosures from any investigations taken over from the detrimental action in reprisal for making the public body by the Ombudsman Nil disclosure. It will also afford natural justice to the person who is the subject of the The number of requests made by disclosure. a whlstleblower to the Ombudsman to take over an investigation by the public body Nil
The number and types of disclosed matters that the public body has Ian Little declined to investigate Nil Secretary The number and types of disclosed matters that were substantiated upon investigation and the action taken on completion of the investigation Nil
Any recommendations made by the Ombudsman that relate to the public body Nil
The current procedures established under part 6 of the Act follow.
112 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 DEPARTMENTAL PROCEDURES 3.1 Improper conduct Examples
A disclosure may be made about improper 1. Purpose & Scope of these procedures A public officer takes a bribe or receives a conduct by a public body or public official. payment other than his or her wages or These procedures establish a system for Improper conduct means conduct that is salary in exchange for the discharge of a reporting disclosures of improper conduct or corrupt, a substantial mismanagement of public duty. detrimental action by Department of Treasury public resources, or conduct involving A public officer favours unmeritorious and Finance or its employees. Their scope is substantial risk to public health or safety or to applications for jobs or permits by friends for use within DTF itself. The system enables the environment. The conduct must be serious and relatives. such disclosures to be made to the protected enough to constitute, if proved, a criminal disclosure coordinator or to one of the offence or reasonable grounds for dismissal. A public officer sells confidential information. nominated Protected disclosure officers. Disclosures may be made by employees or Examples 3.3 Detrimental action by members of the public. To avoid closure of a town's only industry, an The Act makes it an offence for a person to environmental health officer ignores or These procedures are designed to take detrimental action against a person in conceals evidence of illegal dumping of waste. complement normal communication channels reprisal for a protected disclosure. between supervisors and employees. An agricultural officer delays or declines Detrimental action includes: Employees are encouraged to continue to imposing quarantine to allow a financially • action causing injury, loss or damage raise appropriate matters at any time with their distressed farmer to sell diseased stock. • Intimidation or harassment supervisors. As an alternative, employees may A building inspector tolerates poor practices make a disclosure of improper conduct or • discrimination, disadvantage or adverse and structural defects in the work of a detrimental action under the Act In treatment in relation to a person's leading local builder. accordance with these procedures. employment, career, profession, trade or business, including the taking of 3.2 Corrupt conduct 2. Objects of the Act disciplinary action. Corrupt conduct means: The Whistleblowers Protection Act 2001 is Examples operational from 1 January 2002. The • conduct of any person (whether or not a A public body refuses a deserved promotion purpose of the Act is to encourage and public official) that adversely affects the of a person who makes a disclosure. facilitate the making of disclosures of honest performance of a public officer's or improper conduct by public officers and public body's functions A public body demotes, transfers, isolates in public bodies. The Act provides protection to • the performance of a public officer's the workplace or changes the duties of a whistleblowers who make disclosures in functions dishonestly or with inappropriate whistleblower due to the making of a accordance with the Act, and establishes a partiality disclosure. system for the matters disclosed to be • conduct of a public officer, former public A person threatens, abuses or carries out investigated and rectifying action to be taken. officer or a public body that amounts to a other forms of harassment directly or breach of public trust indirectly against the whistleblower, his or her 3. Definitions of key terms family or friends. • conduct by a public officer, former public Three key concepts in the reporting system officer or a public body that amounts to A public body discriminates against the are improper conduct, corrupt conduct and the misuse of information or material whistleblower or his or her family and detrimental action. Definitions of these terms acquired in the course of the performance associates in subsequent applications for are set out below. of their official functions, or jobs, permits or tenders. • a conspiracy or attempt to engage in the above conduct.
DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 113 4. The reporting system Where a person is contemplating making a 5. Roles and responsibilities disclosure and is concerned about 4.1 Contact persons within the Department approaching the protected disclosure 5.1 Employees of Treasury and Finance coordinator in the workplace, he or she can Employees are encouraged to report known Disclosures of improper conduct or call the relevant officer and request a meeting or suspected incidences of improper conduct detrimental action by DTF or its employees, in a discreet location away from the workplace. or detrimental action in accordance with may be made to the following officers: these procedures. 4.2 Alternative contact persons • The protected disclosure coordinator is All employees of DTF have an important role to A disclosure about improper conduct or Steve Schinck play in supporting those who have made a detrimental action by DTF or its employees, legitimate disclosure. They must refrain from any Director, Organisational Strategy Group may also be made directly to the Ombudsman: Level 3,1 Macarthur Street activity that is, or could be perceived to be, East Melbourne Victoria 3002 The Ombudsman Victoria victimisation or harassment of a person who Tel: (03) 9651 6211 Level 22, 459 Collins Street makes a disclosure. Furthermore, they should Melbourne Victoria 3000 protect and maintain the confidentiality of a • Initially, at least, the protected disclosure (DX 210174) person they know or suspect to have made a coordinator will also take on the Internet: www.ombudsman.vlc.gov.au disclosure. responsibilities of the protected disclosure Email: [email protected] officer. If the occupant of either role Tel: (03) 9613 6222 5.2 Protected disclosure officers changes in the future, these procedures Toll Free: 1800 806 314 will be amended to include their contact Protected disclosure officers will: details. All correspondence, phone calls Ombudsman: Dr Barry Perry • be a contact point for general advice about and emails from internal or external Tel: (03) 9613 6202 the operation of the Act for any person whlstleblowers will be referred to the The following table sets out where wishing to make a disclosure about protected disclosure coordinator. disclosures about persons other than improper conduct or detrimental action employees of DTF should be made. • make arrangements for a disclosure to be made privately and discreetly and, if necessary, away from the workplace
PERSON WHO IS THE SUBJECT PERSON/BODY TO WHOM THE DISCLOSURE • receive any disclosure made orally or in OF THE DISCLOSURE MUST BE MADE writing (from internal and external Employee of a public body That public body or the Ombudsman whistleblowers) • commit to writing any disclosure made orally Member of Parliament (Legislative Assembly) Speaker of the Legislative Assembly • take all necessary steps to ensure the Member of Parliament (Legislative Council) President of the Legislative Council identity of the whistleblower and the identity Councillor The Ombudsman of the person who is the subject of the disclosure are kept confidential Chief Commissioner of Police The Ombudsman or Deputy Ombudsman • forward all disclosures and supporting Member of the police force The Ombudsman, Deputy Ombudsman evidence to the protected disclosure or Chief Commissioner of Police coordinator.
114 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 5.3 Protected disclosure coordinator 5.4 Investigator However, the Act prohibits the inclusion of particulars in any report or recommendation The protected disclosure coordinator has a The investigator will be responsible for that Is likely to lead to the identification of the central 'clearinghouse' role in the internal carrying out an internal Investigation into a whistleblower. The Act also prohibits the reporting system. He or she will: disclosure where the Ombudsman has identification of the person who is the subject referred a matter to the public body. An • receive all disclosures forwarded from the of the disclosure In any particulars included In investigator may be a person from within an protected disclosure officers an annual report. organisation or a consultant engaged for that • receive all phone calls, emails and letters purpose. DTF will ensure all files, whether paper or from members of the public or employees electronic, are kept in a secure room and can seeking to make a disclosure 5.5 Welfare manager only be accessed by the protected • impartially assess each disclosure to The welfare manager Is responsible for disclosure coordinator, protected disclosure determine whether it is a public interest looking after the general welfare of the officer, the Investigator or welfare manager (In disclosure 1 whlstleblower. The welfare manager will: relation to welfare matters). All printed • refer all public interest disclosures to the material will be kept in files that are clearly • examine the Immediate welfare and Ombudsman marked as a Whistleblower Protection Act protection needs of a whistleblower who matter, and warn of the criminal penalties • be responsible for carrying out, or has made a disclosure and seek to foster that apply to any unauthorised divulging appointing an investigator to carry out, an a supportive work environment information concerning a protected investigation referred to the public body by • advise the whistleblower of the legislative disclosure. All electronic files will be the Ombudsman and administrative protections available to produced and stored on a stand-alone • be responsible for overseeing and him or her computer and be given password protection. coordinating an investigation where an • listen and respond to any concerns of Backup files will be kept on floppy disc. All investigator has been appointed harassment, intimidation or victimisation in materials relevant to an investigation, such as • appoint a welfare manager to support the reprisal for making disclosure tapes from Interviews, will also be stored whlstleblower and to protect him or her securely with the whistleblower files. • ensure the expectations of the from any reprisals whistleblower are realistic. DTF will not email documents relevant to a • advise the whlstleblower of the progress of whlstleblower matter and will ensure all phone an Investigation Into the disclosed matter; 6. Confidentiality calls and meetings are conducted in private. • establish and manage a confidential filing DTF will take all reasonable steps to protect system the Identity of the whistleblower. Maintaining • collate and publish statistics on confidentiality is crucial in ensuring reprisals disclosures made are not made against a whistleblower. • take all necessary steps to ensure the The Act requires any person who receives identity of the whlstleblower and the Information due to the handling or identity of the person who is the subject of Investigation of a protected disclosure, not to the disclosure are kept confidential disclose that information except in certain • liaise with the chief executive officer of the limited circumstances. Disclosure of public body. Information in breach of section 22 constitutes an offence that Is punishable by a maximum fine of 60 penalty units ($6000) or six months imprisonment or both.
The circumstances in which a person may disclose Information obtained about a protected disclosure Include: • where exercising the functions of the public body under the Act • when making a report or recommendation under the Act • when publishing statistics in the annual report of a public body • in criminal proceedings for certain offences In the Act.
1. In reaching a conclusion as to whether a protected disclosure is a "public interest disclosure", a public body must consider whether the disclosure shows or tends to show that the public officer to whom the disclosure relates: • has engaged, is engaging or proposes to engage in improper conduct in his or her capacity as a public officer, or • has taken, is taking or proposes to take detrimental action in reprisal for the making of the protected disclosure.
DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 115 7. Collating and publishing statistics 8.2 Has the disclosure been made to the appropriate person? The protected disclosure coordinator will establish a secure register to record the For the disclosure to be responded to by information required to be published in the DTF, it must concern an employee, member annual report, and to generally keep account or officer of DTF. If the disclosure concerns of the status of whistleblower disclosures. an employee, officer or member of another The register will be confidential and will not public body, the person who has made the record any Information that may identify the disclosure must be advised of the correct whistleblower. person or body to whom the disclosure should be directed. (See the table In 4.2). If The register will contain the following the disclosure has been made anonymously, information: it should be referred to the Ombudsman. • the number and types of disclosures made to public bodies during the year 8.3 Does the disclosure contain the essential • the number of disclosures referred to the elements of a protected disclosure? Ombudsman for determination as to To be a protected disclosure, a disclosure whether they are public Interest disclosures must satisfy the following criteria: • the number and types of disclosed • Did a natural person (that is, an Individual matters referred to the public body by the person rather than a corporation) make Ombudsman for Investigation the disclosure? • the number and types of disclosures • Does the disclosure relate to conduct of a referred by the public body to the public body or public officer acting in their Ombudsman for investigation official capacity? • the number and types of investigations • Is the alleged conduct either improper taken over from the public body by the conduct or detrimental action taken Ombudsman against a person in reprisal for making a • the number of requests made by a protected disclosure? whistleblower to the Ombudsman to take • Does the person making a disclosure have over an Investigation by the public body reasonable grounds for believing the • the number and types of disclosed alleged conduct has occurred? matters that the public body has declined Where a disclosure Is assessed to be a to investigate protected disclosure, it is referred to the • the number and types of disclosed protected disclosure coordinator. The matters that were substantiated upon protected disclosure coordinator will Investigation and the action taken on determine whether the disclosure Is a public completion of the investigation Interest disclosure. • any recommendations made by the Where a disclosure is assessed not to be a Ombudsman that relate to the public body. protected disclosure, the matter does not need to be dealt with under the Act. The protected 8. Receiving and assessing disclosures disclosure officer will decide how the matter should be responded to in consultation with 8.1 Has the disclosure been made in the protected disclosure coordinator. accordance with Part 2 of the Act? Where a disclosure has been received by the protected disclosure officer or by the protected disclosure coordinator, he or she will assess whether the disclosure has been made in accordance with Part 2 of the Act and is, therefore, a protected disclosure.
116 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 8.4 Is the disclosure a public interest 9. Investigations 9.3 investigation plan disclosure? The investigator will prepare an investigation 9.1 Introduction Where the protected disclosure officer or plan for approval by the protected disclosure coordinator has received a disclosure that Where the Ombudsman refers a protected coordinator. The plan will list the Issues to be has been assessed to be a protected disclosure to DTF for Investigation, the substantiated and describe the avenue of disclosure, the protected disclosure protected disclosure coordinator will appoint inquiry. It will address the following Issues: coordinator will determine whether the an Investigator to carry out the investigation. • What Is being alleged? disclosure amounts to a public interest The objectives of an Investigation will be: disclosure. This assessment will be made • What are the possible findings or within 45 days of the receipt of the • to collate information relating to the offences? allegation as quickly as possible. This may disclosure. • What are the facts in Issue? involve taking steps to protect or preserve In reaching a conclusion as to whether a documents, materials and equipment • How Is the inquiry to be conducted? protected disclosure is a public interest • What resources are required? • to consider the information collected and disclosure, the protected disclosure to draw conclusions objectively and At the commencement of the investigation, coordinator will consider whether the Impartially the whistleblower should be: disclosure shows, or tends to show, that the public officer to whom the disclosure relates: • to maintain procedural fairness in the • notified by the investigator that he or she treatment of witnesses and the person has been appointed to conduct the • has engaged, Is engaging or proposes to who Is the subject of the disclosure investigation engage in improper conduct in his or her capacity as a public officer, or • to make recommendations arising from • asked to clarify any matters the conclusions drawn concerning • has taken, Is taking or proposes to take • provide any additional material he or she remedial or other appropriate action. detrimental action in reprisal for the might have. making of the protected disclosure. 9.2 Terms of reference The Investigator will be sensitive to the whlstleblower's possible fear of reprisals and Where the protected disclosure coordinator Before commencing an investigation, the will be aware of the statutory protections concludes that the disclosure amounts to a protected disclosure coordinator will draw up provided to the whistleblower. public interest disclosure, he or she will: terms of reference and obtain authorisation 1. notify the person who made the disclosure for those terms by the chief executive officer. 9.4 Natural justice of that conclusion The terms of reference will set a date by The principles of natural justice will be 2. refer the disclosure to the Ombudsman for which the Investigation report Is to be followed In any Investigation of a public formal determination as to whether It is concluded, and will describe the resources interest disclosure. The principles of natural indeed a public interest disclosure. available to the investigator to complete the investigation within the time set. The justice concern procedural fairness and Where the protected disclosure coordinator protected disclosure coordinator may ensure an objective decision maker reaches concludes that the disclosure Is not a public approve, if reasonable, an extension of time a fair decision. Maintaining procedural interest disclosure, he or she will: requested by the investigator. The terms of fairness protects the rights of Individuals and enhances public confidence In the process. 1. notify the person who made the disclosure reference will require the investigator to make of that conclusion regular reports to the protected disclosure coordinator who, in turn, is to keep the 2. advise that person that he or she may Ombudsman informed of general progress. request the public body to refer the disclosure to the Ombudsman for a formal determination as to whether the disclosure is a public interest disclosure, and that this request must be made within 28 days of the notification. In either case, the protected disclosure coordinator will make the notification and the referral within 14 days of the conclusion being reached by the public body. Notification to the whistleblower is not necessary where the disclosure has been made anonymously.
DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 117 DTF will have regard to the following issues in 9.5 Conduct of the investigation ensuring procedural fairness: The investigator will make contemporaneous • The person who is the subject of the notes of all discussions and phone calls, and disclosure is entitled to know the allegations all interviews with witnesses will be taped. All made against him or her and must be given information gathered in an investigation will the right to respond. This does not mean be stored securely. Interviews will be the person must be advised of the allegation conducted In private and the investigator will as soon as the disclosure is received or the take all reasonable steps to protect the investigation has commenced. identity of the whlstleblower. Where • If the investigator is contemplating making disclosure of the Identity of the whistleblower a report adverse to the interests of any cannot be avoided, due to the nature of the person, that person should be given the allegations, the investigator will warn the opportunity to put forward further material whistleblower and his or her welfare manager that may influence the outcome of the of this probability. report and that person's defence should It is in the discretion of the investigator to be fairly set out in the report. allow any witness to have legal or other • All relevant parties to a matter should be representation or support during an Interview. heard and all submissions should be If a witness has a special need for legal considered. representation or support, permission should be granted. • A decision should not be made until all reasonable inquiries have been made. 9.6 Referral of an investigation to the • The investigator or any decision maker Ombudsman should not have a personal or direct interest in the matter being investigated. The protected disclosure coordinator will make a decision regarding the referral of an • All proceedings must be carried out fairly investigation to the Ombudsman where, on and without bias. Care should be taken to the advice of the investigator: exclude perceived bias from the process. • the investigation is being obstructed by, for • The investigator must be impartial in example, the non-cooperation of key assessing the credibility of the witnesses, or whistleblowers and any witnesses. Where appropriate, conclusions as to • the investigation has revealed conduct that credibility should be included in the may constitute a criminal offence. investigation report. 9.7 Reporting requirements The protected disclosure coordinator will ensure the whistleblower is kept regularly Informed concerning the handling of a protected disclosure and an investigation.
The protected disclosure coordinator will report to the Ombudsman about the progress of an Investigation. Where the Ombudsman or the whistleblower requests information about the progress of an investigation, that information will be provided within 28 days of the date of the request.
118 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 10. Action taken after an investigation 10.2 Action to be taken • examine the immediate welfare and protection needs of a whistleblower who If the protected disclosure coordinator is 10.1 Investigator's final report has made a disclosure and, where the satisfied that the investigation has found that whistleblower Is an employee, seek to At the conclusion of the investigation, the the disclosed conduct has occurred, he or foster a supportive work environment investigator will submit a written report of his she will recommend to the chief executive or her findings to the protected disclosure officer the action that must be taken to • advise the whistleblower of the legislative coordinator. The report will contain: prevent the conduct from continuing or and administrative protections available to • the allegation/s occurring in the future. The protected him or her disclosure coordinator may also recommend • an account of all relevant information • listen and respond to any concerns of that action be taken to remedy any harm or received and, if the investigator has harassment, intimidation or victimisation in loss arising from the conduct. rejected evidence as being unreliable, the reprisal for making disclosure reasons for this opinion being formed The protected disclosure coordinator will • keep a contemporaneous record of all • the conclusions reached and the basis for provide a written report to the appropriate aspects of the case management of the them Minister, the Ombudsman and the whistleblower including ail contact and whistleblower setting out the findings of the follow-up action • any recommendations arising from the Investigation and any remedial steps taken. conclusions. • ensure the expectations of the Where the Investigation concludes that the whistleblower are realistic. Where the investigator has found that the disclosed conduct did not occur, the conduct disclosed by the whistleblower has All employees will be advised that it is an protected disclosure coordinator will report occurred, recommendations made by the offence for a person to take detrimental these findings to the Ombudsman and to the investigator will include: action in reprisal for a protected disclosure. whistleblower. The maximum penalty is a fine of 240 penalty • the steps that need to be taken by DTF to units ($24,000) or two years imprisonment or prevent the conduct from continuing or 11. Managing the welfare of the both. The taking of detrimental action in occurring in the future whistleblower breach of this provision can also be grounds • any action that should be taken by DTF to for making a disclosure under the Act and 11.1 Commitment to protecting remedy any harm or loss arising from the can result in an investigation. whistleblowers conduct. This action may include bringing disciplinary proceedings against the DTF Is committed to the protection of Detrimental action includes: person responsible for the conduct, and genuine whistleblowers against detrimental • causing injury, loss or damage referring the matter to an appropriate action taken in reprisal for the making of • intimidation or harassment authority for further consideration. protected disclosures. The protected • discrimination, disadvantage or adverse disclosure coordinator is responsible for The report will be accompanied by: treatment in relation to a person's ensuring whistleblowers are protected from employment, career, profession, trade • the transcript or other record of any oral direct and indirect detrimental action, and that or business (including the taking of evidence taken, including tape recordings the culture of the workplace is supportive of disciplinary action). • all documents, statements or other protected disclosures being made. exhibits received by the officer and The protected disclosure coordinator will 11.2 Keeping the whistleblower informed accepted as evidence during the course of appoint a welfare manager to all the Investigation. The protected disclosure coordinator will whistleblowers who have made a protected ensure the whistleblower is kept informed of Where the Investigator's report is to Include disclosure. The welfare manager will: action taken in relation to his or her an adverse comment against any person, disclosure, and the time frames that apply. that person will be given the opportunity to The whistleblower will be informed of the respond and his or her defence will be fairly objectives of an investigation, the findings of included in the report. an investigation, and the steps taken by DTF The report will not disclose particulars likely to to address any improper conduct that has lead to the identification of the whistleblower. been found to occur. The whistleblower will be given reasons for decisions made by DTF in relation to a protected disclosure. All communication with the whistleblower will be in plain English.
DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 119 11.3 Occurrence of detrimental action The chief executive officer will make the final decision on the advice of the protected If a whistleblower reports an incident of disclosure coordinator as to whether harassment, discrimination or adverse disciplinary or other action will be taken treatment that would amount to detrimental against a whistleblower. Where disciplinary or action taken in reprisal for the making of the other action relates to conduct that Is the disclosure, the welfare manager will: subject of the whistleblower's disclosure, the • record details of the incident disciplinary or other action will only be taken • advise the whistleblower of his or her after the disclosed matter has been rights under the Act appropriately dealt with. • advise the protected disclosure In all cases where disciplinary or other action coordinator or chief executive officer of the is being contemplated, the chief executive detrimental action. officer must be satisfied that it has been The taking of detrimental action in reprisal for clearly demonstrated that: the making of a disclosure can be an offence • the intention to proceed with disciplinary against the Act as well as grounds for making action is not causally connected to the a further disclosure. Where such detrimental making of the disclosure (as opposed to action Is reported, the protected disclosure the content of the disclosure or other coordinator will assess the report as a new available Information) disclosure under the Act. Where the protected • there are good and sufficient grounds that disclosure coordinator is satisfied that the would fully justify action against any non- disclosure is a public interest disclosure, he or whistleblower in the same circumstances she will refer it to the Ombudsman. If the • there are good and sufficient grounds that Ombudsman subsequently determines the justify exercising any discretion to institute matter to be a public Interest disclosure, the disciplinary or other action. Ombudsman may Investigate the matter or refer it to another body for Investigation as The protected disclosure coordinator will outlined in the Act. thoroughly document the process Including recording the reasons why the disciplinary or 11.4 Whistleblowers implicated in other action is being taken, and the reasons improper conduct why the action Is not in retribution for the Where a person who makes a disclosure Is making of the disclosure. The protected implicated in misconduct, DTF will handle the disclosure coordinator will clearly advise the disclosure and protect the whistleblower whistleblower of the proposed action to be from reprisals in accordance with the Act, taken, and of any mitigating factors that have the Ombudsman's guidelines and these been taken into account. procedures. DTF acknowledges that the act of whistleblowlng should not shield whistleblowers from the reasonable consequences flowing from any Involvement in improper conduct. Section 17 of the Act specifically provides that a person's liability for his or her own conduct Is not affected by the person's disclosure of that conduct under the Act. However, in some circumstances, an admission may be a mitigating factor when considering disciplinary or other action.
120 DEPARTMENT OF TREASURY S FINANCE ANNUAL REPORT 2002-03 12. Management of the person against 13. Criminal offences whom a disclosure has been made DTF will ensure officers appointed to handle DTF recognises that employees against protected disclosures and all other whom disclosures are made must also be employees are aware of the following supported during the handling and offences created by the Act: investigation of disclosures. DTF will take all 1. It is an offence for a person to take reasonable steps to ensure the confidentiality detrimental action against a person in of the person who is the subject of the reprisal for a protected disclosure being disclosure during the assessment and made. The Act provides a maximum penalty investigation process. Where investigations of a fine of 240 penalty units ($24,000) or do not substantiate disclosures, the fact that two years imprisonment or both. the investigation has been carried out, the results of the investigation, and the identity of 2. It is an offence for a person to divulge the person who is the subject of the information obtained as a result of the disclosure will remain confidential. handling or investigation of a protected disclosure without legislative authority. The protected disclosure coordinator will The Act provides a maximum penalty of ensure the person who is the subject of any 60 penalty units ($6,000) or six months disclosure Investigated by or on behalf of a imprisonment or both. public body is: 3. It is an offence for a person to obstruct • Informed as to the substance of the the Ombudsman in performing his allegations responsibilities under the Act. The Act • given the opportunity to answer the provides a maximum penalty of 240 allegations before a final decision is made penalty units ($24,000) or two years Imprisonment or both. • informed as to the substance of any adverse comment that may be included in 4. It Is an offence for a person to knowingly any report arising from the investigation, provide false information under the Act and has with the intention that it be acted on as a disclosed matter. The Act provides a • his or her defence set out fairly in any maximum penalty of 240 penalty units report. ($24,000) or two years imprisonment Where the allegations in a disclosure have or both. been investigated, and the person who is the subject of the disclosure is aware of the 14. Review allegations or the fact of the investigation, the These procedures will be reviewed annually to protected disclosure coordinator will formally ensure they meet the objectives of the Act and advise the person who is the subject of the accord with the Ombudsman's guidelines. disclosure of the outcome of the Investigation.
DTF will give its full support to a person who is the subject of a disclosure where the allegations contained in a disclosure are clearly wrong or unsubstantiated. If the matter has been publicly disclosed, the chief executive officer of DTF will consider any request by that person to issue a statement of support setting out that the allegations were clearly wrong or unsubstantiated.
DEPARTMENT OF TREASURY 8 FINANCE ANNUAL REPORT 2002-03 121 APPENDIX 14
APPENDIX 14: ENVIRONMENTAL REPORTING
This environment report has been prepared in accordance with Financial Reporting Directions issued by the Minister for Finance and an independent third party has verified our compliance with these Directions. DTF is reporting its office-based environmental performance a year ahead of its mandatory introduction.
ENVIRONMENTAL UNIT OF 2002-03 2003-04 ASPECT DESCRIPTION MEASURE ACTUAL TARGET Energy 1 Use per FTE2 Mega-joules 7 519 7 300 Use per square metre of office space Mega-joules 331 324 Total use Gigajoules 4 042 3 900 Total associated greenhouse Tonnes of C02 gas emissions equivalent3 1 540 1 494
Total GreenPower kWh 56 145 58 000 Total cost of GreenPower Dollars 2 520.90 2 600 Paper Use per FTE Reams4 29 28 Total use Reams 15 621 14 840 Transportation Total fuel consumption 5 Gigajoules6 619 613 Fuel consumption per FTE Gigajoules 1.15 1.14 Total associated greenhouse Tonnes of C02 gas emissions equivalent7 46 45 Associated greenhouse gas Tonnes of C02 emissions per FTE equivalent .86 .85
Total travel8 associated with departmental operations Kilometres 182 066 180 250 Travel associated with departmental operations per FTE Kilometres 339 335 Employees regularly (>75 per cent of time) using public transport, cycling and walking to and from work per cent 79 79
Waste Generated per FTE Kilograms 85 85 Total recycled Kilograms 28 521 42 800 Water9 Consumption per FTE Litres
Total consumption Litres - -
1 Tenancy Light and Power at 1 Treasury Place and 1 Macarthur Street. 2 FTE excludes: commissioners, board members, Inoperatlves, Ministers, statutory appointees, contractors, portfolio agencies, and statutory authorities. FTE Includes: full time, part time and casual VPS, executives and outsourced IT provider. For the purpose of this report FTE includes ministerial support staff and IT outsourced provider and will differ from other reported FTEs for the Department.
3 Victorian greenhouse coefficients, Energy and Greenhouse Management Toolkit, Module 3 State Government of Victoria. 4 500 sheets of A4 white and coloured office paper (1 ream A3 = 2 reams A4). 5 Inclusions: Dedicated passenger vehicles for departmental use and cars hired from the State Government Vehicle Pool; Exclusions: salary packaged vehicles. 6 Conversion factors taken from Workbook 3.1, 1998, Energy Workbook for Transport, Australian Greenhouse Office. 7 Conversion factor taken from Guidance to Financial Reporting Direction FRD24. 8 Inclusions: Dedicated passenger vehicles for departmental use and cars hired from the State Government Vehicle Pool; Exclusions: salary packaged vehicles. 9 Metering equipment being installed enabling reporting of baseline data and targets for water consumption In 2003-04.
122 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 Other information - participation In the TravelSmart10 program WASTE AUDIT - MARCH 2003 Weight by percentage 1. Actions taken during the year to reduce - installation of 'AAA' rated showerheads In energy use in buildings: all shower facilities. Each one estimated to General (rubbish) - installation of metering and monitoring reduce water consumption by 13 litres per Stream 37.23% equipment to Improve accuracy of minute measuring energy usage - conducting a waste audit with the - replacement of older In-efficient boilers involvement of environment champions. with higher efficiency boilers Including a Results demonstrated that when new control strategy and pump system benchmarked with similar organisations DTF's current waste disposal Is relatively - a staff awareness program to low. The waste audit indicated encourage staff to turn off equipment opportunities to further improve these and lights after use. results through the introduction of a 2. Actions taken during the year to reduce composting system. energy use In the Department's vehicle fleet: - signed fleet up to Greenfleet as part of The Year Ahead the whole-of-government initiative The focus for the environment program In - converted dedicated departmental 2003-04 will be to continue to reduce the vehicle from petrol to LPG environmental impact of the Department's - established a Treasury Reserve Bicycle office based activities. The Department has Users Group. approved a number of Environment Improvement Plans and some of the key 3. Delivered an employee awareness activities planned are: program promoting the purchase of recycled content office paper and energy - implementation of an organic waste efficient office equipment. recycling system - continuation of staff awareness programs to 2002-03 Key Achievements promote efficient and wise use of resources As part of DTF's environment program, DTF's such as paper, electricity and water Green Balance Sheet, there were a number - implementation and training of new of key achievements during 2002-03: operating procedures for waste segregation, printer and photocopier - accreditation with EcoRecycle as a Waste operation, lighting use and travelling to Wise Organisation in July 2002 off-site meetings and functions - establishment of an Environment Committee to manage the Implementation - development of a Departmental green of the environment program purchasing policy that complies with the Government's environmental - establishment of a team of Environment purchasing policy. Champions to assist in the implementation of a series of staff awareness campaigns consistent with the Avoid, Reduce, Reuse and Recycle message. These have focused on better use of office paper, improving recycling rates and more efficient use of power and water
10 TravelSmart is a program developed by the Department of Infrastructure, Sustainable Energy Authority and Department of Human Services aimed at encouraging people to choose sustainable travel alternatives such as cycling, walking or catching public transport and reducing dependency on the car.
DEPARTMENT OF TREASURY 8, FINANCE ANNUAL REPORT 2002-03 123 DEPARTMENT OF TREASURY & FINANCE ANNUAL REPORT 2002-03 BerniKEhelan.Bhotoqraphv. WWW.DTF.VIC.GOV.AU
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