Trial Consolidated Financial Report of the Government of Victoria
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joint Departmental Information Centre _evel 5. 1 Macarlhur St EAST MELBOURNE VIC 3002 •h 03 96515660 Fax: 03 96515659 email: [email protected] TRIAL CONSOLIDATED FINANCIAL REPORT OF THE GOVERNMENT OF VICTORIA YFAII ENDKD 30 JUNI: 1995 State of Victoria Trial CONTENTS Page Number Introduction 1-2 Summary of the State's Financial Performance 3-4 Unaudited Trial Consolidated Financial Report Operating Statement 5 Statement of Financial Position 6 Statement of Cash Flows 7-8 Notes to the Financial Statements 9-18 List of entities forming part of the Consolidated Financial Report 19-22 Glossary of terms used in this Report 23-24 Other Financial Information National Uniform Budget Presentation 27-30 Cash Based Financial Information Total Appropriations and Expenditure of Departments 31 Summary of Consolidated Fund Transactions 32 Additional Financial Information Total Recurrent Receipts 33 Detail - Taxation Receipts 33 Regulatory Fees and Fines 34 Recoveries of Debt 34 Public Authorities Receipts 35 Commonwealth Payments to Victoria 35-37 VIC. JOINT DEPT INFO. CENTRE 20 DEC 2000 LEVEL 3, 1 MACARTHUR STREET E. MELBOURNE VIC. 3002 • State of Victoria Trial INTRODUCTION Purpose The purpose of the trial Consolidated Financial Report for the year ended 30 June 1995, is to generate discussion on the issue of Consolidated Financial Reporting at all levels of Government.This Report is not fully comprehensive, as detailed on page 2 and has not been audited. The introduction of this trial Consolidated Financial Report is the first stage in a systematic program of producing regular Consolidated Financial Reports for the efficient and effective management of the State of Victoria. First trial presentation of a Consolidated Financial Report This is the first trial presentation of a Consolidated Financial Report comprising an Operating Statement, a Statement of Financial Position, a Statement of Cash Flows and Notes for the State of Victoria and is based on the year ended 30 June 1995. This Consolidated Financial Report is prepared on an accrual basis. The publication of this Consolidated Financial Report builds on the work underway to implement accrual accounting, monthly accrual management s reporting and output budgeting. The preparation of this Report emanates from the recommendations and findings of the Victorian Commission of Audit, May 1993 and the introduction of Exposure Draft 62 (ED 62) Financial Reporting by Governments which is due to be released as an accounting standard applicable to all Governments of Australia froml999. Entities Consolidated The ability to control an entity is the factor determining whether it should be consolidated within this Report. In order to ascertain whether a Government exercises control over specific entities both Australian Accounting Standard (AAS) AAS 24 Consolidated Financial Reports and ED 62 Financial Reporting by Governments provide assistance. The definition of control is dependent on particular circumstances. Where a Government has the capacity to dominate the financial and operating policies of another entity, then the Government has control over that entity. Some of the primary factors indicating control are: • the existence of a Ministerial or other government power which enables the Government to give directions to the governing body of that entity on its financial and operating policies; • the Government has broad discretion, under existing legislation, to remove a majority of members of the governing body of that entity; or • the Government has a majority of the votes that are likely to be cast at a general meeting of that entity. Given the above factors, the following groups have been consolidated: • Administrative Units/Departments • Government Business Enterprises • Financial Institutions • Water bodies • Hospitals • Controlled companies, trusts and joint ventures • Other budget sector agencies that fall under the control definition (Pages 19-22 list specific entities consolidated) Local Government and Universities have not been included in this Report. Consolidation Process The trial Consolidated Financial Report has been made possible due to: • nearly all Departments producing audited accrual financial statements for the year ended 30 June 1995; • the establishment of values for certain land and buildings by accredited valuers; • all other agencies already producing accrual financial data; and • the cooperation of Departments who acted as Portfolio coordinators. For the purposes of this trial, all.consolidated entities assisted the Department of Treasury and Finance in this process tojroduce the Consolidated Financial Report, by adopting the following consolidation process: • Departmental level - each department consolidated and eliminated transactions between entities within its portfolio (budget and non-budget sector, including statutory bodies); and • Central Agency level - the Department of Treasury and Finance consolidated and eliminated transactions between Portfolios, .producing the Consolidated Financial Report. To facilitate this, each Department separately identified total transactions (by category) with other Portfolios. For the 1996-97 Consolidated Financial Report, the consolidation process will be performed by the Department of Treasury and Finance, from information provided through the new financial managment system being implemented. Limitations The Consolidated Financial Report at this stage has not been audited. Care needs to be taken when interpreting these results. Most Departments and agencies have been audited as at the 30 June 1995 by the Victorian Auditor- General. However, the Australian Accounting Research Foundation's recently released AAS 29 Financial Reporting by Government Departments gives Departments until 31 December 1996 to fully comply with this standard. A significant limitation in this Consolidated Financial Report is that certain Departments have not completed, and therefore recorded, the valuation of all their assets. All the Non-current assets that are part of the Consolidated Statement of Financial Position as at 30 June 1995 have been valued independently by an accredited valuer or recorded at historical cost. The following assets have not been included, as reliable asset values had not been established by the Departments of Conservation and Natural Resources, Arts, Sport and Tourism and Education. They include: • Certain heritage assets; • Certain plantations controlled by the Department of Conservation and Natural Resources; • Conservation areas; • Crown land; • National parks; • Natural resources; • State parks; and • State schools. It follows that no depreciation has been taken to account in this consolidation for the asset categories listed above. These assets are in the process of being valued over the next two years and are to be included in subsequent Consolidated Financial Reports. The value of these assets together with their associated depreciation charge will be brought to account, once their value has been established. In addition, eliminations of transactions between entities within the Ministerial Portfolio level are required in order for the Consolidated Financial Report to be prepared. Given that this was the first attempt at preparing a Consolidated Financial Report, certain entities were not in a position to identify accurately all these transactions. As such, certain estimates as to the value of these transactions had to be made in order for transactions to be eliminated to fairly present a Consolidated Financial Report for Victoria as at 30 June 1995. Finally, Contingent Liability information relative to the State of Victoria should exist in clear unambiguous descriptive written form and, wherever possible, by way of financial estimates of the amounts of the individual claims made against the State. Their status as contingent liabilities implies that they are claims which the State has rejected and are in various stages of dispute resolution or are normal commercial guarantees which specific claims have either been made and not proven or not made. In those cases where the nature of the information is sufficiently vague so that financial estimates in any form cannot be made, it is appropriate that both the existence and general description of claims are acknowledged. For the purposes of this trial Consolidated Financial Report, only estimates and descriptions of those claims that were able to be estimated and described were provided. The contingent liability information provided in this financial report is therefore limited, in the first place to the adequacy of descriptions of those claims for which estimates of the values of the claims have been made, and secondly, to the extent of those claims that have been made against the State for which neither description nor financial estimate has been provided. M. J. VERTIGAN R. B. PAICE FCPA Secretary Deputy Secretary Department of Treasury and Finance Accounting and Financial Reporting Department of Treasury and Finance \ V State of Victoria Trial SUMMARY OF THE STATE'S FINANCIAL PERFORMANCE OPERATING STATEMENT 1994-95 $ million Operating Statement Total Revenue 29,489.3 Total Expenses 29,080.7 Operating Surplus 408.6 STATEMENT OF FINANCIAL POSITION 1994-95 $ million Assets Total Current Assets 15,288.4 Total Non-Current Assets \ 48,979.7 Total Assets* 64,268.1* Liabilities / Total Current Liabilities 16,214.1 Total Non-Current Liabilities 51.917.3 Total Liabilities 68.131.4 STATEMENT OF CASH FLOWS \ 1994-95 $ million Closing Cash Balance 1922.0 Increase/(decrease)