2014 Annual report
Table of Contents
Part One: Report of Operations
Welcome ...... 7 Report from the Board Chair and Interim Chief Executive Officer ...... 7
About Federation Training ...... 7
Governance and Management ...... 8
Overview Operations...... 8 Board Membership – Federation Training ...... 8 Board Membership – GippsTAFE ...... 9 Board Membership – Advance TAFE ...... 9 Board Committees ...... 9
Organisational Structure as at 31 December 2014...... 11
Executive Team ...... 12
Highlights for 2014 ...... 13 Information Management ...... 13 Sales, Marketing & Product Innovations ...... 13 Professional Programs ...... 13
Transformation and Redesign Process ...... 13
Finance and Infrastructure ...... 13
Support Services for Students ...... 13 Access and Equity ...... 14 Counselling and Welfare Services ...... 14 Disability ...... 14 Library Services ...... 14 Bookshop ...... 14
Technical Innovations ...... 14
Major Commercial Operations ...... 14
International ...... 14 Strategic Approach ...... 14 Risk Management Strategies ...... 14 Malaysia ...... 14 Papua New Guinea (PNG) ...... 15 Other International Activity ...... 15
Our People ...... 15 People Matter Survey ...... 15
Professional Development and Study Support ...... 15
Staff Profile ...... 16 Federation Training as at 31 December 2014 ...... 16 GippsTAFE as at December 2013 (Data Source 2013 GippsTAFE Annual Report) ...... 17 Advance TAFE as at December 2013 (Data Source 2013 Advanced TAFE Annual Report) ...... 18
Major Committee Representation ...... 18
Federation Training: 2014 Annual Report Page | 2
Compliance ...... 18 Additional Information Available on Request ...... 18 Industrial Relations ...... 19 Victorian Public Sector Travel Principles ...... 19 Workplace Health and Safety...... 19 Public Sector Employment and Conduct Principles ...... 19 Freedom of Information (FOI) ...... 20 Building Act 1993...... 20 Protected Disclosure Act 2012 ...... 20 Environmental Performance...... 20 Carers Recognition Act 2012 ...... 20 Fees and Charges ...... 20 Consultants and Other Payments ...... 21 Ex Gratia ...... 21 National Competition Policy ...... 21
Attestation...... 21 Attestation for Compliance with the Australian/New Zealand Risk Management Standard ...... 21
Financial Summary ...... 24 Part Two: Financial Report Auditor General’s Report ...... 26 Declaration by Chairman and Accountable Officer – Financial Report ...... 29 Comprehensive Operating Statement for the Year Ended 31 December 2014 ...... 30 Balance Sheet as at 31 December 2014 ...... 31 Statement of Changes in Equity for the Year Ended 31 December 2014...... 31 Cash Flow Statement for the Year Ended 31 December 2014 ...... 32 Notes to the Financial Statements ...... 33 Note 1 – Summary of Significant Accounting Policies ...... 34 Note 2 – Income from Transactions ...... 43 Note 3 – Expenses from Transactions ...... 44 Note 4 – Other Economic Flows included in Net Result ...... 45 Note 5 – Business Combination ...... 45 Note 6 – Receivables ...... 46 Note 7 – Investments and Other Financial Assets...... 47 Note 8 – Inventories ...... 47 Note 9 – Property, Plant and Equipment ...... 48 Note 10 – Intangible Assets ...... 49 Note 11 – Other Non-Financial Assets ...... 50 Note 12 - Payables ...... 50 Note 13 – Provisions ...... 51 Note 14 - Borrowings ...... 52 Note 15 - Reserves ...... 52
Federation Training: 2014 Annual Report Page | 3
Note 16 – Cash Flow Information ...... 53 Note 17 – Commitments for Expenditure ...... 54 Note 18 – Contingent Assets and Contingent Liabilities ...... 54 Note 19 – Leases ...... 55 Note 20 – Superannuation ...... 55 Note 21.1 – Financial Instruments ...... 56 Note 21.2 – Financial Instruments ...... 56 Note 21.3 – Financial Instruments ...... 58 Note 21.4 – Financial Instruments ...... 59 Note 21.5 – Financial Instruments ...... 60 Note 22 – Responsible Persons and Executive Officers ...... 61 Note 23 – Remuneration of Auditors...... 63 Note 24 – Subsequent Events ...... 63 Note 25 – Economic Dependency ...... 63 Note 26 – Federation Training Details ...... 63 Note 27 – Advance TAFE ...... 64 Note 27 – Advance TAFE – Comprehensive Operating Statement ...... 64 Note 27 – Advance TAFE – Balance Sheet ...... 65 Note 27 – Advance TAFE – Cash Flow Statement...... 65 Note 28 – Advance TAFE – Statement of Changes in Equity ...... 66 Note 29 – Advance TAFE – Income from Transactions ...... 66 Note 30 – Advance TAFE – Expenses from Transactions ...... 67 Note 31 – Advance TAFE – Other Economic Flows included in Net Result ...... 68 Note 32 – Advance TAFE – Receivables ...... 69 Note 33 – Advance TAFE – Inventories ...... 69 Note 34 – Advance TAFE – Property, Plant & Equipment ...... 70 Note 35 – Advance TAFE - Intangible Assets ...... 71 Note 36 – Advance TAFE – Biological Assets ...... 72 Note 37 – Advance TAFE – Payables ...... 72 Note 38 – Advance TAFE – Provisions ...... 73 Note 39 – Advance TAFE – Cash Flow Information ...... 74 Note 40 – Advance TAFE – Responsible Persons and Executive Officers ...... 75 Disclosure Index ...... 77 Glossary of Terms ...... 80
Federation Training: 2014 Annual Report Page | 4
Part One: Report of Operations
Federation Training: 2014 Annual Report Page | 6
Welcome Gippsland is also in a period of transition as industries such as Report from the Board Chair and Interim Chief Executive Timber and traditional Manufacturing decline and both Energy Officer and Agriculture experience significant technological and Federation Training aims to create one integrated TAFE economic change. In addition, population shifts and community education model for Gippsland. This provides unprecedented demographics continue to evolve rapidly. opportunities for local students and an exciting learning environment for those seeking a regional educational Our commitment to the Community is to be an integral part of experience. that Community in order to fully understand its changing needs and seek out opportunities for the provision of education and In early 2014 Federation University Australia, Federation training that supports individuals and businesses to achieve Training and the Department of Education and Early Childhood their goals and aspirations. Development (DEECD) signed a Memorandum of Understanding committing all parties to work together through Our 2014 achievements reflect this commitment – to provide 2014 and 2015 to improve the delivery of higher and vocational more diverse, relevant, flexible and valued education and education in Gippsland. Subsequently in 2015, this MOU was training opportunities, so more students can aspire to and replaced by an Alliance Agreement. achieve better jobs, higher levels of education and personal development, all of which will deliver enhanced contribution to The new Management Team and Board of Directors of their communities and the economy. Federation Training have worked diligently to integrate and complete the merger of our two predecessor institutes and put We look forward to being an important, respected and integral in place strategies to guide the business transformation part of an exciting new future for the Gippsland region. needed to create a high performing, respected and sustainable education and training organisation. In addition, new and enhanced governance processes have been put in place, particularly in the areas of educational quality assurance and financial control and reporting.
In support of the process of organisational transformation and in dealing with the longer term changes in the market for Mike Smith Wendy Wood vocational education and training, the organisation has sought Chairman: Board Interim Chief and received additional financial support from the State. of Directors Executive Officer The Board and our Executive Team established six major strategies to guide the business transformation and make progress towards becoming a high performing education About Federation Training organisation. Building on over 85 years’ experience in training and Strategy One – PRODUCT DEVELOPMENT education Federation Training provides improved In order to better meet the needs of our customers and local opportunities and outcomes for vocational education community, we have changed and streamlined our course students across Gippsland and South Eastern Victoria. offerings and continue to improve our teaching and course delivery models. With 9 campuses from Chadstone in Melbourne’s outer East across the state to Lakes Entrance, Federation Training offers Strategy Two – WORKFORCE TRANSFORMATION a diverse range of programs and specially designed learning We have reorganised our workforce and have commenced environments, providing students with the opportunity to get developing their skills and talent to do new work in new ways. hands on experience and develop real skills in the industry of their choice. Strategy Three – MARKETING AND BRANDING We have worked hard to better understand the needs of our Federation Training has a variety of courses from Pre- customers so that we can refocus our entire organisational effort to meeting and exceeding those demands. Our focus is apprenticeships, Apprenticeships and Traineeships, to Certificates, Diplomas and Advanced Diplomas. Students can on growth and diversification in order to achieve business choose to study courses in Business, Health, General sustainability and to better meet the long term needs of our community. Education or Trades.
Strategy Four – SYSTEMS, BACK-OFFICE AND ASSET Students can also study a Federation University Australia RATIONALISATION AND TRANSFORMATION degree at Federation Training, with flexible pathway options We have significantly reduced our overhead costs and that can take the student from Diploma to Bachelor Degree in improved our business processes, governance and decision- just 2-3 years. making. This is aimed at improving our organisational efficiency and also at improving every aspect of our customers’ Flexible study options mean that students can complete their experience when dealing with us. course in a way that best suits their lifestyle. Students can study full time, part time or online with confidence that they will Strategy Five – CHANGE MANAGEMENT be equipped with the skills needed to get ahead in the We are actively managing and tracking outcomes of our workforce. transformation to ensure its success.
Federation Training has established effective and appropriate Strategy Six – PROJECT GOVERNANCE relationships with local industry, in the development of courses We are applying a robust professional approach to address to meet the requirements of the workplace. These initiatives opportunities and risks in the transformation process. ensure that students have access to significant employment
opportunities once they graduate. Gippsland is an important region in economic, community and environmental terms. It has major energy, agricultural and tourism activities, a growing community (significantly in the At Federation Training, we care about our student’s career west and south) and a diverse environment, with around 50% goals and set out to help them achieve their aspirations. of Victoria's coastline and significant national, state and marine parks.
Federation Training: 2014 Annual Report Page | 7
Federation Training is a recognised TAFE Institute operating in with Financial Management Act 1994 to assist it in carrying out accordance with the Education and Training Reform Act 2016. its governance work (and those required by Government). The Institute is a registered training organisation with the Australian Skills Quality Authority (ASQA). Board Directors contribute to the corporate governance of Federation Training. The community (and on their behalf, the Throughout 2014 our governing Ministers were: Government) looks to the Directors to establish and protect the reputation of Federation Training. Individual Directors contribute to the governance of Federation Training through The Hon. Peter Hall, MLC Minister for Higher Education participation in or chairmanship of the various committees of and Skills from 1 January to 17 March 2014 the Board and between committee meetings they may have The Hon. Nick Wakeling, MP Minister for Higher contact with management through committee or project Education and Sills from 17 March to 3 December 2014 involvement. The Chief Executive Officer has regular contact The Hon. Steve Herbert, MP Minister for Training and with the Chairman, Board of Directors, and Directors on major Skills from 3 December until 31 December 2014 following issues. There is an active program for Directors to view the the State election on 29 November 2014 separate campuses of Federation Training in order to obtain an insight into the activities and services provided.
Governance and Management Objectives, Functions, Powers and Duties of the Board In addition to the objectives set out in section 3.1.12(a) of the Responsible Bodies’ Declaration Act, the objectives of the Institute include pursuing an
integrated tertiary education model for the Gippsland region by In accordance with the Financial Management Act 1994, I am seeking merger with Federation University Australia, with a pleased to present the Report of Operations for Federation planned merger date of 1 January 2016. Training for the year ended 31 December 2014.
These objectives are in addition to, and do not take away from,
the objectives imposed on the Board by the Act, other
provisions of the Constitution, and any other objectives
imposed by any other Act or law.
Governance of the Board is in accordance with section
3.1.11(2)(a) of the Act in that there is established a Board of Mike Smith Directors to oversee and govern Federation Training. The Chairman: Board of Directors Board of Directors is responsible and accountable for:
Overview Operations Governing in a manner that ensures the Institute is efficiently and effectively managed The Board Ensuring the population of the areas is effectively The Federation Training (Institute) Board is established under serviced with technical and further education that best the Constitution of Federation Training Order 2014, which was suits their needs created by an Order in Council dated 15 April 2014 and Provide adult, community and further education serves published in the Government Gazette. which are responsible to the needs of industry and the community as well as ensuring that all of its statutory By virtue of the Constitution, the Institute is a Body Corporate obligations are met by operation of sections 3.1.12 of the Education and Training Reform Act 2006 (the Act). In accordance with section Directors are selected in part because they enjoy public 3.1.11(2) of the Act, the Board of Federation Training is confidence and respect. Their experience and reputation in established to oversee and govern the Institute. private and public life defines the stature and authority of the Board and its activities. Collectively their knowledge, networks The Minister for Education and Training (the Minister) pursuant and influence is intended to provide the pool of resources to the Act appoints Directors. The number of Directors is set which will guarantee that Federation Training can respond to at nine (9) of whom one (1) is Chairperson of the Board, four its opportunities, create its solutions and ensure its long-term (4) are Ministerial nominee Directors and four (4) are Board viability and success. The responsibility to act in ways that nominee Directors. enhance the reputation of Federation Training commences with an individual Director’s appointment. The powers and duties of the Board are detailed by common law, legislation and the Institute’s Constitution. In administering appropriate governance the Directors ensure that the Board provides a clear direction for Federation Training The Board has approved the establishment a of Finance and ensures its sustainability and viability into the future. Committee and an Audit and Risk Committee in accordance
Board Membership – Federation Training Federation Training Category of Membership Commencement Date Expiry Date Board Member Michael Smith Ministerial Nominee Director 1 May 2014 30 June 2016 Anthony Stone Ministerial Nominee Director 1 May 2014 30 June 2016 Dr Meredith Doig Ministerial Nominee Director 1 May 2014 04 May 2016 Ian Nethercote Ministerial Nominee Director 1 May 2014 30 June 2016 Catherine Greaves Ministerial Nominee Director 14 July 2014 30 June 2016 Debra Cerasa Board Nominee Director 14 July 2014 30 June 2016 Dr Jack Hamilton Board Nominee Director 14 July 2014 30 June 2016 Rob Hogarth Board Nominee Director 14 July 2014 30 June 2016 Kevin Quigley Board Nominee Director 14 July 2014 30 June 2016
Federation Training: 2014 Annual Report Page | 8
Board Membership – GippsTAFE GippsTAFE Category of Membership Commencement Date Expiry Date Board Member John Mitchell Ministerial Nominee Director 16 April 2013 30 April 2014 David Gittins Ministerial Nominee Director 1 September 2013 30 April 2014 Joanne Stringer Ministerial Nominee Director 1 September 2013 30 April 2014 Ormond Pearson Ministerial Nominee Director 1 September 2013 30 April 2014 Julie Hocking Ministerial Nominee Director 1 September 2013 30 April 2014 Mark Dunsmuir Board Nominee Director 1 September 2013 30 April 2014 Belinda Wilson Board Nominee Director 1 September 2013 30 April 2014 Peter Vines Board Nominee Director 1 September 2013 30 April 2014 Dr Cheryl Glowrey Board Nominee Director 1 September 2013 30 April 2014
Board Membership – Advance TAFE
Advance TAFE Category of Membership Commencement Date Expiry Date Board Member Scott Rossetti Ministerial Nominee Director 1 September 2013 30 April 2014 Lyndon Webb Ministerial Nominee Director 1 September 2013 30 April 2014 Angus Hume Ministerial Nominee Director 1 September 2013 30 April 2014 Catherine Greaves Ministerial Nominee Director 1 September 2013 30 April 2014 Gabrielle Belle Ministerial Nominee Director 1 September 2013 30 April 2014 Dianne Wilkinson Board Nominee Director 1 September 2013 30 April 2014 Tim Weight Board Nominee Director 1 September 2013 30 April 2014 Thelma Hutchinson Board Nominee Director 1 September 2013 30 April 2014 Andrew Reynolds Board Nominee Director 1 September 2013 30 April 2014
Board Committees The Federation Training Board is supported in its corporate The Chief Executive and Executive Director Finance and governance and management responsibilities by Committees, Infrastructure attended the Finance Committee by standing comprising Finance and Audit and Risk. invitation.
The role of each Committee is defined by Terms of Reference Serving members of the Audit and Risk Committee during 2014 which are approved by the Federation Training Board. The were: Terms of Reference establish the Committee’s responsibilities, composition, structure and membership. Rob Hogarth (Chairperson) Mike Smith Serving members of the Finance Committee during 2014 were: Kevin Quigley Dr Meredith Doig Anthony Stone (Chairperson) Mike Smith The Chief Executive and Executive Director Finance and Kevin Quigley Infrastructure attended the Finance Committee by standing Rob Hogarth invitation.
Federation Training: 2014 Annual Report Page | 9
Common Statement Regarding Our Ongoing Close Relationship with Federation University Australia Federation Training and Federation University Australia, working closely with the Victorian Government, have forged a strong alliance over the last 6 months. We are working collaboratively to achieve our common goal of maximising educational opportunities and outcomes for the people of Gippsland and beyond.
Through the alliance, Federation Training and Federation University Australia are working together on developing relevant curriculum, delivering Higher Education and Vocational programs, and creating strong educational pathways.
These are some of the achievements of the Federation Training/Federation University Australia alliance:
Delivery of a range of Federation University Australia degrees through Federation Training across Gippsland in areas such as Early Childhood, Arts, Management and Engineering Technology Joint development and delivery of a new degree in Advanced Manufacturing Engineering (Mechatronics) specifically targeted at manufacturing industry in Gippsland Joint delivery of key vocational qualifications including Automotive Re-development of the Traralgon Campus of Federation Training to deliver a wide range of degrees and vocational qualifications Joint development and delivery of a new qualification for Gippsland students – the Diploma of Community Health
In 2015 our collaboration will be expanded to include:
Joint development of health programs including a new Diploma of Nursing An expansion of degrees and other courses delivered by Federation University Australia at Federation Training campuses to improve access to higher education in the region Improved network connectivity between Federation University Australia and Federation Training sites
The Board of Federation Training and the Council of Federation University Australia are committed to the growth and development of our strong strategic alliance over coming years to provide the best possible educational opportunities for the people of Gippsland and beyond.
Federation Training: 2014 Annual Report Page | 10
Organisational Structure as at 31 December 2014
Federation Training: 2014 Annual Report Page | 11
Executive Team
Position Responsibilities
Responsible to the Board of Directors for the efficient overall management of Federation Training and the achievement of its strategic objectives, as determined by the Board of Wendy Wood Directors. Acts as principal advisor to the Board of Directors and provides leadership of Interim Chief Executive Officer and guidance to the Executive Team of Federation Training. The CEO has specific Appointed 1 June 2014 responsibility for strategic development, leadership of all TSAF and other transformation projects, the internal audit program, risk management and Executive community engagement.
Karen Bird Providing strategic advice and management of education and training, policy, innovation Executive Director and planning issues, and overseeing educational quality and compliance. Campus Professional Programs leadership responsibility for the Fulham, Sale, and Traralgon campuses. Appointed 1 May 2014 David Brooks Leads project management and strategic advice to the Chief Executive Officer, Project Manager Executive Team and Board to ensure a successful merger of the two former TAFE Business Transformation institutes and implementation of the business transformation plan. Appointed 26 August 2014 Scott Dargan Responsible for Sales, Marketing & Product Innovation with a strong focus on developing Executive Director and implementing a commercially focused business culture across the organisation. This Sales, Marketing and Product Innovation role includes campus leadership responsibility for the Yallourn campus. Appointed 27 October 2014 Nick Fordham Responsible for ICT and Student Administration functions. Responsibility for the Executive Director utilisation of technology to support business transformation. Campus leadership Information Management responsibility for the Bairnsdale and Lakes Entrance campus clusters. Appointed 1 May 2014 Jenni Hardy Responsible for the Human Resources, Employee Relations & Development, Payroll, Executive Director Internal Communications, Workplace Health & Safety, and Contractor management People and Culture functions of the organisation. Campus leadership responsibility for the Warragul and Appointed 1 May 2014 Leongatha campuses.
Responsible for Finance, Treasury, Insurance and Internal Audit and accountability for Pranay Lodhiya assets of Federation Training under the Financial Management Act. The primary role Executive Director maintains a rigorous approach to financial accountability and financial sustainability. Finance & Infrastructure Financial transformation of Federation Training and ensuring long term viability and Appointed 18 August 2014 rigorous approach to financial accountability. Also responsible for international business development. Campus leadership responsibility for the Chadstone and Morwell campuses. Les Manson Responsible to the Chief Executive Officer for oversight of Federation Training’s Executive Officer corporate governance and to provide an effective secretarial service for the Board of Board Secretary Directors and Board Committees to ensure compliance with legal, government, policy Appointed 19 August 2014 and other requirements.
Executive Team Resignations during 2014
Dr Peter Whitley Acting Joint Chief Executive Officer 1 July 2014 Shaun McDonagh Acting Joint Chief Executive Officer 2 June 2014 Brenton Barker Executive Director Audit, Risk & Compliance 17 November 2014 Ian Carroll Executive Director Infrastructure and Finance 15 August 2014 Carol Elliot Executive Director Student and Academic Progression 12 September 2014 Jim Vivian Executive Director Industry Skills Programs 19 December 2014
Federation Training: 2014 Annual Report Page | 12
students completing diplomas and certificates to obtain credits Highlights for 2014 towards degree courses. This initiative provides seamless Information Management pathways for youth and others to logically progress their 2014 saw the integration of the former Advance TAFE and educational and training attainment from certificates to GippsTAFE business entities. Singular Student Management diplomas to degrees and post-graduate study. Many of these Centre and Information Communication Technology Services opportunities allow students to undertake further study whilst groups were established and leadership positions filled. remaining a resident within Gippsland.
Several key technology platforms were integrated or created to Federation Training partnered with Federation University serve the organisational transformation, including: Australia in the Gippsland Integrated Health and Community Care Education Program. This project, funded under the Regional Partnerships Facilitation Fund (RPFF), aimed to Integration of the former Advance TAFE and GippsTAFE increase tertiary participation across the region in health and networks social services programs leading to increased career Creation of a single institute identity management system opportunities. As a result of this project, the Diploma of (Active Directory) Community Health was developed and accredited, 183 Federation Training website and Intranet sites were students enrolled over the past two years in the Diploma of established Community Health, new units have been developed and Commencement of the primary Student Management incorporated into other diplomas, pathways have been System integration developed between Vocational Education and Training (VET) courses and undergraduate courses at Federation University Australia and more than 75 students who have completed Sales, Marketing & Product Innovations diplomas are seeking to continue into undergraduate studies. Restructure of the Sales, Marketing & Product Innovation team 2015 targets and accountability/performance framework Transformation and Redesign implemented The implementation of a technology based solution for Process pipeline management that will support the Business Partnership Consultants and ensure that reporting is ‘real In 2014 a significant number of business processes were re- time’ and accurate for tracking purposes engineered to assist in the establishment of Federation Implementing regular pipeline review activity to ensure Training as a single training organisation. In addition, that opportunities are ‘real’ and being progressed through substantial planning was completed to transform business the key stages of the sales process, from prospecting to processes. Of particular note was the establishment of a closing the deal redesign team which has developed a range of improvements The development of a specific Product Innovation stream to processes which impact the customer experience. to facilitate the full process from idea generation through to development and the provision of guidance around implementation, which will include further development of Finance and Infrastructure e-learning, investigating new markets and increasing facility utilization rates Following the merging of GippsTAFE and Advance TAFE on 1 Implementation of a student recruitment capability within May 2014 key projects were identified and throughout the latter the sales environment part of 2014 the focus has been on: Identified and addressed key reputational risks with clients Development and implementation of a strategic Marketing Merging two finance systems Plan for 2015 Introducing a more robust financial management framework Professional Programs Introducing rigor around forecasting and monitoring of In 2014 Federation Training, in partnership with Yooralla financial performance Disability Day Service in Leongatha, began offering iPad Introducing a budget framework focused on achieving a classes to their clients. These classes focused on giving financial turnaround with associated agreed actions and participants an understanding of how iPads can be utilised to revenue growth assist with communication, learning, entertainment and Implementing a framework for business cases for connection. Participants also gained important life skills and decision making built self-confidence by attending these classes one or two Putting in place controls around expenditure days a week. Such was the overwhelming success of these Establishing an implementation plan for business programs, that in addition to the popular iPad classes intelligence Federation Training now offers classes to several disability day service providers in South and West Gippsland in other vocational areas such as Hair and Beauty, Coffee Making, Support Services for Students Literacy and Numeracy, Basic Car Maintenance, Yoga and Art. Student Management Centre The Student Management Centre operates the Customer Federation Training, along with the East Gippsland Food Service and Support and the Student Administration functions Cluster and Link Employment & Training were extremely proud of Federation Training. to be announced as winners of the Victorian Industry Collaboration Award at the 2014 Victorian Training Awards. Customer Service & Support/Reception staff are located at all The East Gippsland Agrifood Industry Traineeship Program campuses and their role is to inform and guide students gives young people the opportunity to take up traineeships in a through their enquiry, enrolment and payment Certificate II or III Food Processing with prospects to not only processes. Students can seek information and advice from transition into permanent employment and tertiary studies but these staff, both at the time of enquiry or enrolment and also identify a range of other career opportunities and throughout their study periods with Federation Training. They developmental pathways available in the Agrifood sector. can assist, amongst other matters, with course information and entry requirements, enrolment and identification requirements, Federation Training has worked closely with higher education concession enquiries, payments and payment plans, student providers to develop articulation pathways which enable loans, VET Fee Help enquiries, general enquiries.
Federation Training: 2014 Annual Report Page | 13
campuses. The Bookshop also operates a delivery service to Student Administration staff work behind the scenes to ensure all campuses. that the processes of student data are managed efficiently and that students can access their records and qualifications/certificates in a timely manner upon Technical Innovations completion. The Student Administration staff can also access historical records and assist with student graduation Some of the notable technical innovations that were ceremonies and awards. implemented during 2014 include:
Access and Equity Integration of the previous GippsTAFE and Advance Federation Training supports students experiencing TAFE videoconferencing systems. The integration saw disadvantage and unequal educational outcomes to improve two very technically separate and different their participation in education in a number of ways. videoconferencing solutions combined to form a very usable single solution Promotion of qualifications, and the increased likelihood of The use of O365 for student email and cloud storage employment that occurs following successful completion, is a Creation of a single desktop support management system key component of student engagement, especially of learners and staff support portal that may be difficult to engage. Support is tailored to individuals to maximise their success through building aspirations, developing self-esteem, and promoting engagement. Major Commercial Operations
Work in this important area is promoted by all staff at The major developments from a Commercial Operations Federation Training - from initial engagement through to perspective that were implemented in 2014 are: graduation. Specifically, specialist support staff include: Koori Liaison, Disability Liaison and Support Workers, Counsellors, Developing and implementing a strong performance and Specialist Case Management Officers, Study Tutors, and accountability culture that facilitated a shift from reactive Foundation-Skills Trainers. to proactive commercial revenue generation Implementing a sales pipeline management system to Counselling and Welfare Services provide a ‘real time’ view of progress for performance Federation Training counsellors provide responsive clinical monitoring purposes services and referral for students to significantly foster ongoing Developing and implementing a targeted Marketing study engagement and a greater course completion level. Strategy for different sectors of the market Implementing a proactive approach to student recruitment Welfare services and referral are also an important component to bolster course numbers across both funded and non- of student support. Welfare support assists students with the funded programs essential requirements to engage in learning - stable accommodation, transport, income, peer and external support. International In the Gippsland region, meeting these basic needs may be problematic for an individual, but linking vulnerable students to Strategic Approach these channels of external support enhances the likelihood of Our strategic focus is on developing highly flexible and successful learning outcomes. responsive programs that are suited to the international marketplace. Federation Training concentrates on Malaysia Interventions vary according to the intensity and critical need and Papua New Guinea to develop long-term, mutually experienced by the individual needing help. beneficial and respectful relationships with partners to contextualise training specific for the industry demand, while Disability ensuring our programs are offered in a culturally sensitive Federation Training supports students who identify as requiring manner. assistance at the time of enrolment, or where it is determined throughout the course of their study that additional help may Risk Management Strategies be required to achieve successful outcomes. Support for Federation Training is a member of Victorian TAFE students with disabilities is allocated in a manner to promote International (VTI) and the Department of State Development, student independence – where needed, students are assisted Business and Innovation (DSDBI) International clusters to to recognise their minimum requirements for their education at ensure up-to-date information is used to make sound business Federation Training. Support can include a Disability Support decisions in the offshore environment. Worker, an Interpreter, a Notetaker, or a Tutor, and this level of support is targeted to specific needs and is reduced as the Malaysia student builds confidence and knowledge. The Oil and Gas industry is our focus for offshore delivery in this region. Library Services The library service across Federation Training continues to Our partnership with Curtin University Sarawak provides provide a quality service to students with library staff now quality training across four programs in technical vocational accessing more contemporary resources and databases for education and training for the state of Sarawak: student information. They have also formed a number of partnerships with other library services to provide a much Diploma of Process Plant Technology broader range of resources to Federation Training students. Diploma of Instrumentation and Control Engineering Diploma of Business In addition, the library offers tutorials on research and study Diploma of Occupational Health & Safety techniques, academic writing, referencing, etc., access to private study spaces and assistance with online searching and Our new partnership with PPKS (Pusat Pembangunan basic IT support for students. Kemahiran Sarawak) has expanded our delivery across the Sarawak region. Further qualifications will be added to this Bookshop delivery model beyond 2014. An auspice agreement is in place Federation Training operates an on-site bookshop service for: where students can access all forms of stationery, text books and classroom workbooks conveniently on site at the Yallourn Diploma of Management Campus, but accessible via electronic ordering from all other
Federation Training: 2014 Annual Report Page | 14
Our partnership with Beyond Petroleum Education has In 2014, this Survey was administered separately to staff of the broadened and strengthened our Oil and Gas training across previous two legacy organisations, Advance TAFE and the Peninsula region of Malaysia with the delivery to a long- GippsTAFE. The Survey was open to staff throughout May term unemployed learner cohort of Indian-Malaysians funded 2014, the month that the two organisations merged to form through the NAAM Foundation: Federation Training.
Certificate II in Engineering During this time of uncertainty and ongoing reform within the TAFE sector, the results were marginally down on previous Papua New Guinea (PNG) years, although overall staff satisfaction ratings remained Specialised trade delivery continues to be the sought-after strong for both surveys. offshore training.
2015 will see the Survey administered to Federation Training Areas include: as a single organisation for the first time.
High Voltage Skill Sets Certificate II in Automotive Technology (Air Conditioning) Professional Development and Certificate III in Polymer Processing (via Recognition of Prior Learning) Study Support
Federation Training was successful in tendering through the Expenditure on staff training and professional development Australia Awards Fellowships – PNG for 17 mature-aged remained conservative in 2014, whilst still meeting our aims of Health students from PNG to study the Diploma of growing staff expertise in critical areas. In addition, the Human Management for four weeks in Australia plus additional Resources department was successful in securing funding workplace requirements upon return to their workplace. from the VET Development Centre, to run specialist projects and development activities. Other International Activity Federation Training provided consultancy support to the San Some of the major highlights throughout 2014 included: Luis province government, Argentina during their development and designing stages of a vocational education and training Several staff undertaking activities related to the (VET) framework, a qualifications matrix to meet the needs of Australian Skills Quality Authority (ASQA) requirements the building and construction maintenance industries (bricklaying, electrical, welding, plumbing, mechanical) and the Teaching staff undertaking the Certificate IV Training & aesthetics industries (hairdressing, beauty, massage), and the Assessment, and the Diploma of VET Practice establishment of the University of Eva Peron which will deliver A significant number of staff attending industry relevant training for the industry sectors. conferences and seminars Occupational Health and Safety and First Aid training. Online facilitation courses Our People Several staff upgrading or formalising their vocational competency through further training People Matter Survey Courses on business and commercial proposal writing. Federation Training participates in the People Matter Survey Customer Service training administered by the Victorian Public Sector Commissioners Specialised training in key IT systems (i.e. Finance Office annually. system, Human Resources/Payroll System and Student Management System) All Federation Training staff are provided with the opportunity Tutorials on videoconferencing to participate in this Survey which benchmarks comparative data related to staff satisfaction.
Federation Training: 2014 Annual Report Page | 15
Staff Profile Federation Training as at 31 December 2014
Teaching FT PT Total EFT
Non-Contract Female 19 42 61 46.00 Male 50 5 55 53.40 Contract Female 15 27 42 31.70 Male 15 12 27 23.50 Casual Female 44.37 Male 30.20 Sub Total Female 34 69 103 122.07 Male 65 17 82 107.10
Non-Teaching FT PT Total EFT
Exec Officers Female 4 0 4 4.00 Male 1 1 2 1.60 PACCT Non-Contract Female 78 26 104 94.12 Male 36 3 39 38.16 PACCT Contract Female 53 26 79 69.75 Male 24 7 31 28.33 Other Non-Contract Female 1 2 3 2.00 Male 2 0 2 2.00 Casual Female 27.72 Male 13.91 Sub Total Female 136 54 197.59 Male 63 11 84.00
Total FT PT Total EFT
Female 170 123 293 319.66 Male 128 28 156 191.10 Total 298 151 449 510.76
Federation Training: 2014 Annual Report Page | 16
GippsTAFE as at December 2013 (Data Source 2013 GippsTAFE Annual Report) December 2012 June 2013 December 2013 Head Count Head Count Head Count Full Part Full Part Full Part Total EFT Total EFT Total EFT Teaching Time Time Time Time Time Time Non-Contract Female 18 23 41 32.2 9 17 26 19.4 9 16 25 18.8 Male 49 4 53 51.36 29 3 32 31.1 25 4 29 27.5 Contract Female 9 14 23 18.8 8 6 14 12.8 6 7 13 11.18 Male 13 10 23 19.7 10 1 11 10.8 10 3 13 12.1 Casual Female 29.99 30.94 31.28 Male 18.17 27.2 34.74 Sub Total Female 27 37 64 80.99 17 23 40 63.14 15 23 38 61.26 Male 62 14 76 89.23 39 4 43 69.1 35 7 42 74.34 Full Part Full Part Full Part Non- Teaching Total EFT Total EFT Total EFT Time Time Time Time Time Time Executive Officers Female 1 0 1 1 2 0 3 1 2 0 2 2 Male 3 0 3 3 3 0 3 4 3 0 3 3 PACCT Non-Contract Full Part Full Part Full Part Total Total EFT Total EFT Total EFT Time Time Time Time Time Time Female 94 58 152 190.36 88 41 129 177.29 86 44 130 182.23 Male 105 17 122 149.02 80 5 85 122.43 76 10 86 130.16 Total 199 75 274 339.38 168 46 214 299.72 162 54 216 312.39
Federation Training: 2014 Annual Report Page | 17
Advance TAFE as at December 2013 (Data Source 2013 Advanced TAFE Annual Report)
December 2013 – Current Year December 2012 – Prior Year
Employe Fixed Term & Employe Fixed Term & Ongoing Ongoing e - All Casual e - All Casual
Head- Head- Head- Head- Head- Head- FTE FTE FTE FTE FTE FTE count count count count count count Employment Status Full time 119 119 91 91 28 28 127 127 88 88 39 39 Part time 119 65 47 29 72 36 159 87 50 34 109 53 Total 238 184 138 120 100 64 286 214 138 122 148 92 Gender Male 90 76 55 51 35 25 111 87 62 57 49 30 Female 148 108 83 69 65 39 175 127 76 65 99 62 Total 238 184 138 120 100 64 286 214 138 122 148 92 Age (Headcount Only) Under 25 3 0 3 11 1 10 25-34 24 14 10 33 13 20 35-44 59 29 30 62 29 33 45-54 77 50 27 91 47 44 55-64 69 42 27 84 46 38 Over 64 6 3 3 5 2 3 Total 238 138 100 286 138 148
December 2013 – Current Year December 2012 – Prior Year
Headcount FTE Headcount FTE
Classification Executives 4 4 4 4 Teaching - Full & Part Time 101 85 117 96 Teaching - Casual 23 8 21 8 PACCT - Full & Part Time 93 78 94 81 PACCT - Casual Admin & Student Support Staff 9 3 36 13 Other - Full Part Time 8 6 14 12
Major Committee Representation Statement regarding declarations of pecuniary interest. Federation Training continues to have strong community Shares held beneficially by senior officers as nominees of partnerships by actively supporting the following groups: a statutory authority or subsidiary Publications and where they are located Changes in prices, fees, charges, rates and levies. The Adult Community and Further Education (ACFE) Major external reviews Board Major research and development activities. Committee for Gippsland Overseas visits undertaken Gippsland Educational Precinct Major promotional, public relations and marketing Gippsland Sports Academy activities Gippsland Network Events; Latrobe Community Network Assessments and measures undertaken to improve the Events, Baw Baw Business & Community Events and workplace health and safety of employees Bass Coast Sough Gippsland Business Alliance Industrial relations issues Gippsland East Local Learning & Employment Network Major committees sponsored by Federation Training Baw Baw Local Learning & Employment Network South East Local Learning & Employment Network Baw Baw Skills Centre Enquiries regarding details of the above should be addressed South Gippsland Skills Centre to: Leongatha Education Precinct Jenni Hardy, Executive Director People and Culture Federation Training, PO Box 3279 GMC Compliance Morwell VIC 3841 Additional Information Available on Request Federation Training complies with all relevant legislation and In compliance with the requirements of FRD 22C Standing subordinate instruments, including, but not limited to, the Directions in the Report of Operations details in respect of the following: items listed below have been retained by Federation Training and are available to the relevant Ministers, Members of Education and Training Reform Act 2006 Parliament and the public on request (subject to the freedom The constitution of Federation Training Order 2014 of information requirements, is applicable): Directions of the Minister for Education and Training
Federation Training: 2014 Annual Report Page | 18
TAFE institute Commercial Guidelines Government as having a Public Sector Board. The Travel TAFE institute Strategic Planning Guidelines Principles provide a minimum standard framework and devolve Public Administration Act 2004 accountability for the authorisation and expenditure on travel to Freedom of Information Act 1982 the appropriate management level within Departments and Building Act 1983 Public Sector Boards. Compliance with the Travel Principles Protected Disclosure Act 2012 is expected within the framework of the Public Sector Values Victorian Industry Participation Policy Act 2003 and Employment Principles specified in the Public Administration Act 2004, the Victorian Public Sector Code of Fair Work Act 2009 Conduct for Victorian Public Sector Employees and Individual Departmental Values. Federation Training will ensure that all Commentary against relevant Acts is provided below, as travel is undertaken in accordance with the Premier’s Circular appropriate. No. 2006/4: Victorian Public Sector Travel Principles.
Industrial Relations All business travel (international and/or domestic) by The teaching staff of Federation Training are covered by the Federation Training employees during the year ended 31 Victorian TAFE Teaching Staff Multi-Business Agreement December 2014 was compliant with Victorian Public Sector (MBA) 2009. The terms and conditions of this Agreement will Travel Principles. continue to apply whilst negotiations are undertaken for a new Agreement to be approved by Fair Work Australia in 2015. Workplace Health and Safety Federation Training recognises its legal and moral obligations, The industrial trainers at the Chadstone Campus of Federation in particular under the Occupational Health & Safety Act 2004 Training are covered by the Chadstone Trainers’ Enterprise and associated regulations, to provide a safe and healthy work Agreement 2011. The terms and conditions of this Agreement environment for staff, students, clients, visitors and will continue to apply whilst negotiations are undertaken for a contractors. Federation Training has developed a Workplace new Agreement to be approved by Fair Work Australia in 2015. Health & Safety (WH&S) Policy and Management System to support that policy. The administrative staff of Federation Training are currently covered by two Agreements from the previous two Federation Training’s WH&S policy is reviewed annually and organisations: aims to:
Safeguard all persons from occupational injury or illness Central Gippsland Institute of TAFE Professional, Provide resources and funding sufficient to maintain an Administrative, Clerical, Computing & Technical (PACCT) effective health and safety program Staff Enterprise Agreement 2011 Comply with all relevant, statutory WH&S requirements East Gippsland Institute of TAFE (trading as Advance
TAFE) PACCT Staff Enterprise Agreement 2012 Federation Training’s commitment is outlined in the WH&S policy statement that is on display at each campus and The terms and conditions of both of these Agreements will available on the Intranet and Internet. continue to apply whilst negotiations are undertaken for one Details of management, employee and contractor Agreement to cover all administrative staff of Federation responsibilities are contained in the WH&S Management Training, to be approved by Fair Work Australia in 2015. System, with detailed requirements defined in the various WH&S procedures that deal with specific WH&S risks. Victorian Public Sector Travel Principles Federation Training has a WH&S Management System to The Victorian Public Sector Travel Principles (“Travel minimise the likelihood of an injury occurring, and a Return to Principles”) apply to the whole of the Victorian Public Sector, Work Program administered through the Workplace Health & including all Departments, Agencies, Public Entities and Safety Department to ensure an effective recovery from any Boards. Federation Training is recognised by the Victorian work related injuries that do arise.
In 2014 Federation Training recorded the following WH&S statistics:
Workers Compensation Claims
Medical Treatment Injuries 1 Lost Time Injuries 5 Total WorkCover Claims 6 Total Days Lots Through Injury 378.7
WH&S Incident Statistics
Staff Incident Reports 21 Student Incident Reports 18 Contractor & Visitor Incident Reports Nil Total Incident Reports 39
Identified injuries, incidents, and near misses are reported as Public Sector Employment and Conduct Principles required, with appropriate corrective action taken. All incidents Federation Training assists staff to identify behaviours and are investigated and solutions developed at the local level to ensures that policy and practice are underpinned by core public prevent recurrence. All serious or potentially serious injuries sector values through its Code of Conduct and Financial Code or incidents are investigated immediately by the Manager of Practice which are approved by the Board of Directors and Workplace Health & Safety and the Health and Safety are consistent with the Public Sector Code of Conduct for Representative of the area concerned. No serious incident Victorian Public Sector Employees issued by the Victorian occurred during 2014. Public Sector Commission. Principles of equal opportunity and fair and reasonable treatment of others are included in the Code of Conduct and a range of policies and guidelines, including a policy and guideline on conflicts of interest.
Federation Training: 2014 Annual Report Page | 19
Freedom of Information (FOI) Environmental Performance Federation Training is subject to the provisions of the Freedom Federation Training has undertaken a number of strategies in of Information Act 1982 – No. 9859/1982 (the FOI Act). The line with government policy to reduce our energy usage that FOI Act gives right of access to information held in include: documentary form by Federation Training. Monitoring of room timetables to ensure facilities are not It is Federation Training’s policy to facilitate all reasonable heated and air-conditioned when they are not occupied requests from students, staff and the general public, subject to Installation of smart metering of buildings to ensure closer privacy and confidentiality provisions, without recourse to the monitoring of energy consumption provisions of the FOI Act. Purchase of renewable power Specific building design of the Chadstone and Leongatha The authorised FOI Officer for Federation Training is the campuses to maximise the benefits of solar electricity for Executive Director People and Culture. Requests for access heating, cooling and power consumption, while to information in documentary form in the custody of Federation minimising costs Training should be made in writing to: Automatic controls on air-conditioning systems. Water efficiency appliances Lighting controls and energy efficient glazing and window The Chief Executive Officer shading Attention FOI Officer Water collection, storage and re-distribution systems for Federation Training, PO Box 3279 GMC landscape purposes Morwell VIC 3841 Transport considerations – utilizing of videoconferencing in lieu of driving vehicles No requests were received in 2014 for access to Federation Commissioning and maintenance regimes Training documents under the FOI Act. Design practices, construction and operation of buildings that promote green building programs and technologies Building Act 1993 as enunciated by the Green Building Council of Australia The Minister for Finance has issued instructions in accordance with the Building Act 1993 – No.126/1993, such that all public Carers Recognition Act 2012 entities are required to ensure that all buildings under their The Carers Recognition Act 2012 (the Act) came into effect on control are safe and fit for occupation, comply with statutory 1 July 2012. The Act has principles relating to carers, people requirements, buildings are maintained to a standard in which being cared for, and people in care relationships. The they remain safe and fit for occupancy and to report annually principles are primarily about respect, recognition, support, on measures taken to ensure compliance with the Building Act consultation, health and well-being and the ability of carers to 1993. It is Federation Training’s practice to ensure that all participate in education and employment. The Act is works requiring building approval have plans certified, works in accompanied by the Victorian charter supporting people in care progress inspected and occupancy permits issued by relationships. independent building surveyors engaged on a job-by-job basis. It also ensures that plans for these works are lodged with the The Act is relevant for carers of older people, people with a relevant local council. mental illness, people with a disability, and people being cared for in a foster, kinship or permanent care arrangement. There A register of building surveyors and the jobs that they certified are certain obligations in the Act for state government is maintained. Federation Training requires all building departments, local councils, and organisations funded to practitioners engaged on its works to show evidence of current provide services and support to carers. These obligations registration upon their engagement. A condition of their include: contracts with Federation Training is that they maintain their registered status for the course of their contract. Promoting the principles in the Act to organisational staff Promoting the principles in the Act to people in care All practitioners engaged by Federation Training maintained relationships their registered status throughout the year. During the year, Reflecting the principles in developing, providing or works and maintenance were undertaken to maximise evaluating support and assistance for people in care conformity to relevant standards. relationships Reporting annually on how obligations under the Act are Protected Disclosure Act 2012 being met, for example in a paragraph in an organisation's In 2014 Federation Training policy and procedures were annual report updated from the Whistleblowers Protection Act 2001 to reflect legislation contained in the Protected Disclosure Act 2012 An information kit about the Act, what it means for people in (Vic). care relationships, and how organisations can meet their obligations under the Act, is available on the web at Federation Training supports the making of disclosures that www.dhs.vic.gov.au/carersact reveal corrupt conduct, conduct involving a substantial mismanagement of public resources, or conduct involving a Find out more on the Department of Human Services website. substantial risk to public health and safety or the environment. Disclosure can be made in accordance with Federation Fees and Charges Training’s Protected Disclosure Procedure which is publicly Federation Training did not collect any compulsory non- available on the Federation Training website. academic fees, subscriptions and charges from students and prospective students during the year ended 31 December 2014.
Federation Training: 2014 Annual Report Page | 20
Consultants and Other Payments Ex Gratia Total number of consultancies individually valued in excess of Federation Training made no ex-gratia payments for the year $10,000 = 6. ended 31 December 2014.
Total number on Consultancies individually valued at less than National Competition Policy $10,000 = 13 Federation Training supports the Victorian Government’s Total Expenditure of these consultancy arrangements = Competitive Neutrality Policy as outlined in the Guide to $31,483 Implementing Competitive Neutral Pricing Principles. We see competitive neutrality as a complementary mechanism to the Schedule Listing Consultants Total Project Fees ongoing quest to increase operating efficiencies by way of Engaged Approved benchmarking and embracing better work practices. Deloitte Touche Tohmatsu $129,408 Federation Training will comply with changes implemented to PricewaterhouseCoopers $153,240 Victorian legislation and assess its compatibility with National Squiz Australia $22,000 Competition Policy Talent 2 Works $37,334 Technology One $39,413 Wyndarra Consulting $10,800 $392,195 * Details of the consultancies over $10,000 are publically available on the Federation Training website
Attestation Attestation for Compliance with the Australian/New Zealand Risk Management Standard To the best of my knowledge and belief, I, Wendy Wood, certify that Federation Training has risk management processes in place consistent with the key risk management principles outlined in the Australian/New Zealand Risk Management Standard AS/NZS ISO31000:2009 and that an appropriate internal control system is in place. This enables the executive to understand, manage and satisfactorily control risk exposures. I acknowledge that Federation Training has undertaken significant work during the year to review and further detail Federation Training’s Risk Management policy and its related attachment, the Enterprise Risk Management Framework, to increase its alignment with the Australian/New Zealand Risk Management Standard AS/NZS ISO31000:2009 provisions .
An organisation-wide risk management program, supported by a risk education program, is currently being undertaken, which will encompass key aspects of the risk management process that will enable Federation Training to:
Ensure that controls are effective and efficient in both design and operation Obtain information to improve risk assessments and identify treatment plans Analyse and learn lessons from events, changes, trends, successes and failures Detect changes in the external and internal context; changes to risk criteria and the risk itself, which can require revision of risk treatments and priorities Identify emerging risks Progress the implementation of risk treatment plans
Wendy Wood Interim Chief Executive Officer Chadstone
Federation Training: 2014 Annual Report Page | 21
Statement of Performance
Statement of Corporate Intent 2014
Priority Action and Deliverable Outcome Strategic goals Improve our market leadership in student employment Ongoing outcomes. Improve the quality of student, learner and client experience, Ongoing as measured by lifting retention rates to 88% and satisfaction rates to 80%. Establish Federation Training as a brand with high levels of Achieved market awareness. Marketing Plan developed and approved by Board. Ongoing implementation with key milestones to be met throughout 2015. Achieve a minimum net return on non-current assets of 0% Not Achieved and an operating margin of 8% or greater. Key Operational Educational Quality and Effectiveness: Priorities Strong compliance with the ASQA and VRQA regulatory Achieved framework. Implementation plan established to ensure compliance with ASQA and VRQA regulatory framework. Expand blended learning model. Ongoing Ensure all teaching staff have up to date qualifications and Ongoing tailored professional development. Ongoing development continues in line with new staff commencing and current staff upgrading as required. Business Transformation To transform our business through increasing productivity Ongoing and targeting a range of profitable growth opportunities. 2015 Budget to deliver a break-even result by Q3 2015. Implement a Strategic Asset Master Plan that optimises Not Achieved returns from our current footprint and maximises asset On hold pending direction from the Minister utilisation. for Education and Training. ICT Systems Effectiveness with IT integration of SMS, HR Not Achieved and Finance systems. System integration works to be finalised in Q1 2015 Finance to be completed in Q1 2015 SMS to be completed in Q1 2015 HR/Payroll – Complete in Q1 2015 Organisational Change and Innovation Establish a project management office to lead the change Achieved program and track outcomes. Regular reporting of the Transformation Plan provided to the Board of Directors, Executive Team and staff. Transition to a customer centric operating model which Achieved promotes innovation, productivity and continuous Customer Service Framework developed improvement. with roll out plan to occur early in 2015. Establish a culture of continuous improvement with a focus Ongoing on a quality educational offering delivered in an efficient manner utilising modern delivery modes with efficient asset utilisation. Increase pathway options available to students, learners and Ongoing clients. Increase offsite delivery options for industry Achieved Implementation of a new costing model with a focus on flexible customer solutions for non-government funded opportunities to ensure commercial sustainability. Key Performance Transformation Plan Achieved Indicators To deliver a project plan structured around the strategic Project Plan completed. themes of: Substantive work continuing in 2015. 1. Product Development and Revenue Generation 2. Workforce Transformation 3. Marketing and Branding 4. Systems, Asset and Back-office Rationalisation and Integration 5. Change Management
Federation Training: 2014 Annual Report Page | 22
6. Project Governance Specific Participation in the State Services Authority (SSA) People Achieved Expectations 2014 Matter Survey. People Matter Survey conducted in May 2014. Implementation of processes for the induction of Board Achieved Directors. Established and ongoing. Conduct a Board evaluation and development of a Achieved governance improvement plan. Board of Directors processes self-evaluation questionnaire introduced. The results of the self-evaluation will influence the development of a governance improvement plan for the Board in 2015. An internal audit of compliance against the Constitution, Not Achieved Strategic Plan and Guidelines and Commercial guidelines. Compliance with performance monitoring and reporting Achieved requirements. Performance reporting provided to the Department of Education and Training on a regular basis. Assessment of current practices in relation to the findings of Ongoing the Victoria Auditor-General’s Office – Performance Audits for the TAFE sector and any annual institute specific Financial Audit findings recommendations and making of any necessary improvements. Achievement of the agreed Return on Investment. Not Achieved Compliance with all ASQA and VRQA regulatory frameworks Achieved inclusive of a strong continuous improvement culture and An implementation plan established to sound internal audit processes. ensure compliance with ASQA and VRQA regulatory frameworks. A sound risk management framework. Achieved Established and ongoing.
Federation Training: 2014 Annual Report Page | 23
Financial Summary Financial summary result 2014 including previous 4 year comparisons * *4 year comparisons not applicable as Federation Training was established on 1 May 2014. Data amalgamation from GippsTAFE and Advance TAFE
Actual Actual Actual Actual Actual 2010 2011 2012 2013 2014 ,000 ,000 ,000 ,000 ,000 Operating Revenue Excluding FFS 24,575 30,467 27,674 21,070 39,394 Other Revenue FFS 15,247 11,192 11,256 7,758 8,026 Capital Revenue 13,641 12,007 8,002 2,703 0 Total Revenue 53,463 53,666 46,932 31,531 47,420 Salaries and On-costs 26,978 28,188 27,743 22,970 32,875 Depreciation & Amortisation 2,413 2,759 3,076 3,152 5,371 Non-salary costs 11,292 11,915 10,174 10,476 13,154 Total Costs 40,683 42,862 40,993 36,598 51,400 Result from Continuing Operations including Capital 12,780 10,804 5,939 (4,718) (12,687) Add/ Subtract Non Cash Items Less Capital Contributions 13,641 12,007 8,002 2,702 0 Add Back Depreciation & Amortisation 2,413 2,759 3,076 3,152 5,371 Add Back (Profit)/ Loss on sale of assets 0 42 (1) 0 8,707 Add Back Non Cash LSL Movements 0 669 (145) 348 0 Funded Surplus/ (Deficit) 1,552 2,267 867 (4,268) 1,391
Federation Training: 2014 Annual Report Page | 24
Part Two:
Financial Report
Auditor’s Report...... 26
Decalaration by Chairman and Accountable Officer – Finance Report ...... 29
Comprehensive Operating Statement...... 30
Balance Sheet ...... 31
Statement of Changes in Equity ...... 31
Cash Flow Statement ...... 32
Notes to the Financial Statements ...... 33
Disclosure Index ...... 77
Glossary ...... 80
The financial statements were authorised for issue by the Audit and Risk Committee on June 29, 2016
The financial statements were authorised for issue by the Board of Directors on June, 29 2016
The Board of Federation Training has the power to amend and reissue the financial statements.
Federation Training: 2014 Annual Report Page | 25
Auditor General’s Report
Federation Training: 2014 Annual Report Page | 26
Federation Training: 2014 Annual Report Page | 27
Federation Training: 2014 Annual Report Page | 28
Declaration by Chairman and Accountable Officer – Financial Report
Federation Training: 2014 Annual Report Page | 29
Comprehensive Operating Statement for the Year Ended 31 December 2014
The comprehensive operating statement should be read in conjunction with the notes to the financial statements.
Federation Training: 2014 Annual Report Page | 30
Balance Sheet as at 31 December 2014
The balance sheet should be read in conjunction with the notes to the financial statements.
Statement of Changes in Equity for the Year Ended 31 December 2014
The statement of changes in equity should be read in conjunction with the notes to the financial statements.
*In 2012 GippsTAFE received a loan of $3.2m for the redevelopment of the Chadstone campus, it was incorrectly treated as an income grant in the GippsTAFE accounts. This has subsequently been rectified in the prior year financial figures and now appropriately recognised as a borrowing.
Federation Training: 2014 Annual Report Page | 31
Cash Flow Statement for the Year Ended 31 December 2014
The above cash flow statement should be read in conjunction with the notes to the financial statements.
Federation Training: 2014 Annual Report Page | 32
Notes to the Financial Statements
Note Accompanying Note
1 Summary of Significant Accounting Policies 34 2 Income from Transactions 43 3 Expenses from Transactions 44 4 Other Economic Flows Included in Net Result 45 5 Business Combination 45 6 Receivables 46 7 Investments and Other Financial Assets 47 8 Inventories 47 9 Property, Plant and Equipment 48 10 Intangible Assets 49 11 Other Non-Financial Assets 50 12 Payables 50 13 Provisions 51 14 Borrowings 52 15 Reserves 52 16 Cash Flow Information 53 17 Commitments For Expenditure 54 18 Contingent Assets and Contingent Liabilities 54 19 Leases 55 20 Superannuation 55 21 Financial Instruments 56 22 Responsible Persons and Executive Officers 61 23 Remuneration of Auditors 63 24 Subsequent Events 63 25 Economic Dependency 63 26 Federation Training Details 63 27 Advance TAFE Financials At 30th April 2014 64 28 Statement of Changes in Equity (Advance TAFE) 66 29 Income from Transactions (Advance TAFE) 66 30 Expenses from Transactions (Advance TAFE) 67 31 Other Economic Flows Included in Net Result (Advance TAFE) 68 32 Receivables (Advance TAFE) 69 33 Inventories (Advance TAFE) 69 34 Property, Plant and Equipment (Advance TAFE) 70 35 Intangible Assets (Advance TAFE) 71 36 Biological Assets (Advance TAFE) 72 37 Payables (Advance TAFE) 72 38 Provisions (Advance TAFE) 73 39 Cash Flow Information (Advance TAFE) 74 40 Responsible Persons and Executive Officers (Advance TAFE) 75
Federation Training: 2014 Annual Report Page | 33
Note 1 – Summary of Significant Accounting Policies
The annual financial statements represent the audited general Critical accounting judgement and key sources of purpose financial statements for Federation Training. estimation uncertainty Judgements, estimates and assumptions are required to be The accounting policies set out below have been applied in made about the carrying values of assets and liabilities that are preparing the financial statements for the year ended 31 not readily apparent from other sources. The estimates and December 2014 and the comparative information presented for associated assumptions are based on professional the year ended 31 December 2013. judgements derived from historical experience and various other factors that are believed to be reasonable under the The following is a summary of the material accounting policies circumstances, within reasonable levels of materiality. Actual adopted by Federation Training in the preparation of the results may differ from these estimates. financial report. The accounting policies have been consistently applied unless otherwise stated. The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are 1.00 Basis of Figures recognised in the period in which the estimate is revised and The figures in the 2014 accounts comprise 4 months (January also in future periods that are affected by the revision. to April) of GippsTAFE and 8 months (May to December) of Judgements made by management in the application of AASs Federation Training, being the business combination of that have significant effects on the financial statements and Advance TAFE and Central Gippsland Institute of Technical estimates relate to: and Further Education (GippsTAFE). The 2013 comparative figures are 12 months (January to December) of GippsTAFE – The fair value of land, buildings, plant and equipment and refer Note 5. intangible assets The impairment of the Student Management System 1.01 Statement of Compliance (SMS) These general purpose financial statements have been Actuarial assumptions for employee benefit provisions prepared in accordance with the Financial Management Act based on likely tenure of existing staff, patterns of leave 1994 (FMA) and applicable Australian Accounting Standards claims, future salary movements and future discount (AAS) which include Interpretations, issued by the Australian rates, and Accounting Standards Board (AASB). In particular, they are Receivables note 6 presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Government Fair value measurement Sector Financial Reporting. Consistent with AASB 13 Fair Value Measurement, Federation Training determines the policies and procedures for both For the purposes of preparing financial statements, Federation recurring fair value measurements such as property, plant and Training is classed as a not-for-profit entity. Where equipment, biological assets and financial instruments and for appropriate, those AAS paragraphs applicable to not-for-profit non-recurring fair value measurements such as non-financial entities have been applied. physical assets held for sale, in accordance with the requirements of AASB 13 and the relevant Financial Reporting Accounting policies are selected and applied in a manner Directions. which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that All assets and liabilities for which fair value is measured or the substance of the underlying transactions or other events is disclosed in the financial statements are categorised within the reported. fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as 1.02 Basis of accounting preparation and a whole: measurement The accrual basis of accounting has been applied in the Level 1 — Quoted (unadjusted) market prices in active preparation of these financial statements whereby assets, markets for identical assets or liabilities liabilities, equity, income and expenses are recognised in the Level 2 — Valuation techniques for which the lowest level reporting period to which they relate, regardless of when cash input that is significant to the fair value measurement is is received or paid. directly or indirectly observable; and Level 3 — Valuation techniques for which the lowest level These financial statements are presented in Australian dollars, input that is significant to the fair value measurement is the functional and presentation currency of Federation unobservable. Training, and have been prepared in accordance with the historical cost convention. Historical cost is based on the fair For the purpose of fair value disclosures, Federation Training values of the consideration given in exchange for assets. has determined classes of assets and liabilities on the basis of Exceptions to the historical cost convention include: the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. Non-financial physical assets which, subsequent to acquisition, are measured at a revalued amount being In addition, Federation Training determines whether transfers their fair value at the date of the revaluation less any have occurred between levels in the hierarchy by re assessing subsequent accumulated depreciation and subsequent categorisation (based on the lowest level input that is impairment losses. Revaluations are made with sufficient significant to the fair value measurement as a whole) at the end regularity to ensure that the carrying amounts do not of each reporting period. materially differ from their fair value; The fair value of an asset other than land is generally The Valuer General Victoria (VGV) is Federation Training’s based on its depreciated replacement value; and independent valuation agency. Available-for-sale investments which are measured at fair Federation Training, in conjunction with VGV, monitors value with movements reflected in 'other economic flows changes in the fair value of each asset and liability through - other comprehensive income. relevant data sources to determine whether revaluation is required.
Federation Training: 2014 Annual Report Page | 34
1.03 Reporting entity The financial statements cover Federation Training as an individual reporting entity. Federation Training is a statutory body corporate, established pursuant to an act made by the Victorian Government under the Education and Training Reform Act 2006.
Its principal address is:
Federation Training Corner of Princes Drive and Monash Way, Morwell Victoria, 3840.
1.04 Business Combination At 15 April 2014 an Order in Council under the Education and Training Reform Act 2006, was made constituting Federation Train ing. The Order came into effect on 1 May 2014. Among other matters the Order provided for the change of name of Central Gippsland Institute of Technical and Further Education to Federation Training and to amalgamate Advance TAFE with Federation Training.
With effect from 1 May 2014 the assets and liabilities of Advance TAFE were assigned to Federation Training. Advance TAFE ceased to exist.
No formal balance date closure of the Advance TAFE ledgers occurred and no audit was carried out. All assets and liabilities assumed by Federation Training as a result of the business combination were recognised in the accounts of Federation Training at the carrying amount of those assets and liabilities in the accounts of Advance TAFE. Subsequently, the carrying amounts were assessed by Federation Training and a number of adjustments made. The effects of these adjustments are shown in the operating results.
The net assets transfer was treated as a contribution of capital to Federation Training by the State Government. No income has been recognised by Federation Training with respect to the net assets transferred from Advance TAFE. The balance of the net assets has been recognised as contributed capital in equity.
Because the assets and liabilities of Advance TAFE were taken on to the books of Federation Training at 1 May 2014, comparative values for the year ended 31 December 2013 were not brought forward into the Federation Training accounts at 31 December 2014. As a result, care should be taken in making comparisons between years for some line items in the accounts of Federation Training.
The unaudited Statement of Financial Position for Advance TAFE immediately before the net assets transfer is shown below.
2014 2013 $'000 $'000 Assets Financial assets Cash and deposits 456 1,963 Receivables 3,155 896 Total financial assets 3,611 2,859 Non-financial assets Inventories 134 148 Property, plant and equipment 46,455 47,107 Biological assets - 13 Intangible assets 4,203 4,214 Other non-financial assets 69 143 Total non-financial assets 50,861 51,625 Total assets 54,472 54,484 Liabilities Payables 1,960 1,197 Provisions 2,096 2,097 Total liabilities 4,056 3,294 Net assets 50,416 51,190 Equity Accumulated surplus/(deficit) 22,042 22,816 Physical asset revaluation surplus 9,082 9,082 Contributed capital 19,292 19,292 Net worth 50,416 51,190 Commitments for expenditure - 1,518 Contingent assets and contingent liabilities -
1.05 Events after reporting date Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between Federation Training and other parties, the transactions are only recognised when the agreement is irrevocable at or before balance date. Adjustments are made to amounts recognised in the financial statements for events which occur after t he reporting date and before the date the statements are authorised for issue, where those events provide information about conditions which existed at the reporting date. Note disclosure is made about events between the reporting date and the date the statements are authorised for issue where the events relate to conditions which arose after the reporting date and are considered to be of material interest.
Federation Training: 2014 Annual Report Page | 35
1.06 Goods and Services Tax (GST) other economic flows in the net result or as unrealised gains or Income, expenses and assets are recognised net of the losses taken directly to equity, forming part of the total change amount of associated GST, unless the GST incurred is not in net worth in the comprehensive result. recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as Other income part of the expense. Rental income Rental income is recognised on a time proportional basis and Receivables and payables are stated inclusive of the amount is brought to account when Federation Training's right to of GST receivable or payable. The net amount of GST receive the rental is established. recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance 1.08 Expenses from transactions sheet. Expenses from transactions are recognised as they are incurred. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing Employee benefits and financing activities which is recoverable from, or payable Expenses for employee benefits are recognised when to, the taxation authority are presented as operating cash flow. incurred.
Commitments and contingent assets or liabilities are presented Retirement benefit obligations on a gross basis. (i) Defined contribution plan Contributions to defined contribution plans are expensed when 1.07 Income from transactions they become payable Income is recognised to the extent that it is probable that the economic benefits will flow to the entity and the income can be (ii) Defined benefit plans reliably measured at fair value. Amounts disclosed as income The amount charged to the statement of comprehensive are, where applicable, net of returns, allowances and duties income in respect of superannuation represents the and taxes. Revenue is recognised for each of Federation contributions made by Federation Training to the Training’s major activities as follows: superannuation plan in respect of current services of current Institute staff. Superannuation contributions are made to the Government contributions plans based on the relevant rules of each plan. Government contributions are recognised as revenue in the period when Federation Training gains control of the Federation Training does not recognise any deferred liability in contributions. Control is recognised upon receipt or notification respect of the plan(s) because Federation Training has no legal by relevant authorities of the right to receive a contribution for or constructive obligation to pay future benefits relating to its the current period. employees; its only obligation is to pay superannuation contributions as and when they fall due. The Department of Sale of goods and services Treasury and Finance recognises and discloses the State's (i) Student fees and charges defined benefit liabilities in its finance report. Student fees and charges revenue is recognised by reference to the percentage of services provided. Where student fees Depreciation and amortisation and charges revenue has been clearly received in respect of Depreciation courses or programs to be delivered in the following year, any Depreciation is provided on property, plant and equipment, non-refundable portion of the fees is treated as revenue in the including freehold buildings but excluding land. Depreciation is year of receipt and the balance as Revenue in Advance. calculated on a straight-line basis, at rates that allocate the asset's value, less any estimated residual value, over its (ii) Fee for Service estimated useful life. Leasehold improvements are depreciated Fee for service revenue is recognised by reference to the over the period of the lease or estimated useful life, whichever percentage completion of each contract, i.e. in the reporting is the shorter, using the straight-line method. The estimated period in which the services are rendered. Where fee for useful lives, residual values and depreciation method are service revenue of a reciprocal nature has been clearly reviewed at the end of each annual reporting period, and received in respect of programs or services to be delivered in adjustments made where appropriate. the following year, such amounts are disclosed as Revenue in Advance. Depreciation methods and rates used for each class of depreciable assets are: (iii) Revenue from sale of goods Revenue from sale of goods is recognised by Federation 2014 2013 Training when: Class of asset Method Rate(s) Rate(s) the significant risks and rewards of ownership of the Buildings Straight Line 2.5% 1% -5%
goods have transferred to the buyer; Plant & equipment Straight Line 10-33.3% 4% - 40%
Federation Training retains neither continuing managerial Motor vehicles Straight Line 15.0% 15% - 33% involvement to the degree usually associated with Library collections Straight Line 15-25% 25.0% ownership nor effective control over the goods sold; Internal use software Straight Line 20.0% 5% - 10% the amount of revenue can be reliably measured; Other Straight Line 10.0% 5% - 10% it is probable that the economic benefits associated with the transaction will flow to Federation Training; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. The assets' residual values and useful lives are reviewed and adjusted if appropriate on an annual basis. Interest Interest income includes interest received on bank term Amortisation deposits and other investments and the unwinding over time of Intangible assets with finite lives are amortised on a straight the discount on financial assets. Interest income is recognised line basis over the assets useful lives. Amortisation begins using the effective interest method which allocates the interest when the asset is available for use, that is, when it is in the over the relevant period. location and condition necessary for it to be capable of Net realised and unrealised gains and losses on the operating in the manner intended by management. The revaluation of investments do not form part of income from amortisation period and the amortisation method for an transactions, but are reported either as part of income from intangible asset with a finite useful life are reviewed at least at
Federation Training: 2014 Annual Report Page | 36
the end of each annual reporting period. In addition, an the extent that the write down can be debited to an asset assessment is made at each reporting date to determine revaluation reserve amount applicable to that class of asset. whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested If there is an indication that there has been a change in the as to whether their carrying value exceeds their recoverable estimate of an asset’s recoverable amount since the last amount. impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the Intangible assets with indefinite lives are not amortised. The impairment loss occurs only to the extent that the asset’s useful life of intangible assets that are not being amortised are carrying amount does not exceed the carrying amount that reviewed each period to determine whether events and would have been determined, net of depreciation or circumstances continue to support an indefinite useful life amortisation, if no impairment loss had been recognised in assessment for that asset. In addition, Federation Training prior years. tests all intangible assets with indefinite lives for impairment by comparing its recoverable amount with its carrying amount: It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the annually; asset will be replaced unless a specific decision to the contrary whenever there is an indication that the intangible asset has been made. may be impaired. The recoverable amount for most assets is measured at the Any excess of the carrying amount over the recoverable higher of depreciated replacement cost and fair value less amount is recognised as an impairment loss. costs to sell. Recoverable amount for assets held primarily to generate net cash flows is measured at the higher of the Interest Expense present value of future cash flows expected to be obtained from Interest expense is recognised in the period in which it is the asset and fair value less costs to sell. It is deemed that, in incurred. the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a Interest expense includes interest on bank overdrafts and short specific decision to the contrary has been made. term and long term borrowings, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs Other gains/(losses) from other economic flows incurred in connection with the arrangement of borrowings and Other gains/(losses) from other economic flows include the finance lease charges. gains or losses from reclassifications of amounts from reserves and/or accumulated surplus to net result, and from the Grants and other transfers revaluation of the present value of the long service leave Grants and other transfers to third parties are recognised as an liability due to changes in the bond interest rates. expense in the reporting period in which they are paid or payable. 1.10 Financial instruments Financial instruments arise out of contractual agreements that 1.09 Other economic flows included in net result give rise to a financial asset of one entity and a financial liability Other economic flows measure the change in volume or value or equity instrument of another entity. of assets or liabilities that do not result from transactions. Categories of non‑derivative financial instruments Net gain/(loss) on non-financial assets Loans and receivables Net gain/(loss) on non-financial assets and liabilities includes Loans and receivables are financial instrument assets with realised and unrealised gains and losses from revaluations, fixed and determinable payments that are not quoted on an impairments, and disposals of all physical assets and active market. These assets are initially recognised at fair value intangible assets. plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at Disposal of non-financial assets amortised cost using the effective interest method, less any Any gain or loss on disposal of non-financial assets is impairment. recognised at the date control of the asset is passed to the buyer and is determined after deducting from the proceeds the Loans and receivables category includes cash and deposits carrying value of the asset at the time. (refer to Note 1.11), term deposits with maturity greater than three months, trade receivables, loans and other receivables, Gain/(loss) arising from fair value changes of biological but not statutory receivables. assets Biological assets are measured at fair value, and the resultant Financial liabilities at amortised cost gain/(loss) is reported as another economic flow. There was a Financial instrument liabilities are initially recognised on the disposal of biological assets in Advance TAFE's accounts date they are originated. They are initially measured at fair before the merger. value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments Impairment of non-financial assets are measured at amortised cost with any difference between Goodwill and intangible assets with indefinite useful lives (and the initial recognised amount and the redemption value being intangible assets not yet available for use) are tested annually recognised in profit and loss over the period of the interest- for impairment (i.e. as to whether their carrying value exceeds bearing liability, using the effective interest rate method. their recoverable amount and so require write downs). Financial instrument liabilities measured at amortised cost All other assets are assessed annually for indications of include all of Federation Training's contractual payables, impairment, except for: advances received and interest-bearing arrangements other than those designated at fair value through profit or loss. Inventories; Financial assets; 1.11 Financial assets Cash and deposits If there is an indication of impairment, the assets concerned Cash and deposits, including cash equivalents, comprise cash are tested as to whether their carrying value exceeds their on hand and cash at bank, deposits at call and those highly possible recoverable amount. Where an asset's carrying value liquid investments with an original maturity of three months or exceeds its recoverable amount, the difference is written off by less, which are held for the purpose of meeting short term cash a charge to the statement of comprehensive income, except to commitments rather than for investment purposes, and which
Federation Training: 2014 Annual Report Page | 37
are readily convertible to known amounts of cash and are 1.12 Leases subject to an insignificant risk of changes in value. A lease is a right to use an asset for an agreed period of time in exchange for payment. For cash flow statement presentation purposes, cash and cash Leases are classified at their inception as either operating or equivalents includes bank overdrafts, which are included as finance leases based on the economic substance of the borrowings on the balance sheet. agreement so as to reflect the risks and rewards incidental to ownership. Leases of property, plant and equipment are Receivables classified as finance infrastructure leases whenever the terms Receivables consist of: of the lease transfer substantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are statutory receivables, which include predominantly classified as operating leases amounts owing from the Victorian Government and GST input tax credits recoverable; and contractual receivables, which include debtors in relation Operating leases to goods and services, loans to third parties, accrued Institute as lessor investment income, student debt and finance lease Rental income from operating leases is recognised on a receivables straight-line basis over the term of the relevant lease.
Receivables that are contractual are classified as financial All incentives for the agreement of a new or renewed operating instruments. Statutory receivables are not classified as lease are recognised as an integral part of the net financial instruments. consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of Receivables are recognised initially at fair value and payments. subsequently measured at amortised cost, using the effective interest method, less an allowance for impairment. In the event that lease incentives are given to the lessee, the aggregate cost of incentives are recognised as a reduction of A provision for doubtful receivables is made when there is rental income over the lease term, on a straight-line basis objective evidence that the debts may not be collected and bad unless another systematic basis is more representative of the debts are written off when identified. time pattern over which the economic benefit of the leased asset is diminished. Investments and other financial assets Investments are classified in the following categories: Institute as lessee Operating lease payments, including any contingent rentals, financial assets at fair value through profit or loss; are recognised as an expense in the comprehensive operating loans and receivables; statement on a straight-line basis over the lease term, except held to maturity investments; and where another systematic basis is more representative of the available-for-sale financial assets. time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet. The classification depends on the purpose for which the investments were acquired. Management determines the All incentives for the agreement of a new or renewed operating classification of its investments at initial recognition. lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, Any dividend or interest earned on the financial asset is irrespective of the incentive’s nature or form or the timing of recognised in the comprehensive operating statement as a payments. transaction. In the event that lease incentives are received to enter into Impairment of financial assets operating leases, the aggregate cost of incentives are At the end of each reporting period, Federation Training recognised as a reduction of rental expense over the lease assesses whether there is objective evidence that a financial term on a straight-line basis, unless another systematic basis asset or group of financial assets is impaired. Objective is more representative of the time pattern in which economic evidence includes financial difficulties of the debtor, default benefits from the leased asset are consumed. payments, debts which are more than 60 days overdue, and changes in debtor credit ratings. All financial instrument assets, 1.13 Non-Financial Assets except those measured at fair value through profit or loss, are Inventories subject to annual review for impairment. Inventories include goods and other property held either for sale or for distribution at a zero or nominal cost, or for Bad and doubtful debts for financial assets are assessed on a consumption in the ordinary course of business operations. It regular basis. Those bad debts considered as written off by includes land held-for-sale and excludes depreciable assets. mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for Inventories held-for-distribution are measured at cost, adjusted doubtful receivables are classified as ‘other economic flows’ in for any loss of service potential. All other inventories, including the net result. land held for sale, are measured at the lower of cost and net realisable value. Where Inventories are acquired for no cost or The amount of the allowance is the difference between the nominal consideration, they are measured at current financial asset’s carrying amount and the present value of replacement cost at the date of acquisition. estimated future cash flows, discounted at the effective interest rate. Cost, includes an appropriate portion of fixed and variable overhead expenses. Cost is assigned to a land held for sale In assessing impairment of statutory (non-contractual) financial (undeveloped, under development, developed) and to other assets, which are not financial instruments, professional high value, low volume inventory items on a specific judgement is applied in assessing materiality using estimates, identification of cost basis. Cost for all other inventory is averages and other computational methods in accordance with measured on the basis of weighted average cost. AASB 136 Impairment of Assets. The basis used in assessing loss of service potential for inventories held-for-distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or
Federation Training: 2014 Annual Report Page | 38
all of the tasks it was originally acquired to do, but no longer An increase or decrease in the fair value of these biological matches existing technologies. Functional obsolescence assets is recognised in the comprehensive operating occurs when an item no longer functions the way it did when it statement as other economic flow. was first acquired. Intangible assets Property, plant and equipment / Furniture & Fittings Intangible assets are initially recognised at cost. Subsequently, All non-financial physical assets, are measured initially at cost intangible assets with finite useful lives are carried at cost less and subsequently revalued at fair value less accumulated accumulated depreciation/amortisation and accumulated depreciation and impairment. Where an asset is received for impairment losses. Costs incurred subsequent to initial no or nominal consideration, the cost is the asset’s fair value at acquisition are capitalised when it is expected that additional the date of acquisition. future economic benefits will flow to Federation Training.
The initial cost for non-financial physical assets under a finance When recognition criteria of AASB 138 Intangible Assets are lease is measured at amounts equal to the fair value of the met, internally generated intangible assets are recognised and leased asset or, if lower, the present value of the minimum measured at cost less accumulated depreciation/amortisation lease payments, each determined at the inception of the lease. and impairment.
The cost of constructed non-financial physical assets includes Expenditure on research activities is recognised as an expense the cost of all materials used in construction, direct labour on in the period in which it is incurred. the project, and an appropriate proportion of variable and fixed overheads. An internally-generated intangible asset arising from development (or from the development phase of an internal For the accounting policy on impairment of non-financial project) is recognised if, and only if, all of the following are physical assets, refer to Note 1.09 on Impairment of non- demonstrated: financial assets. the technical feasibility of completing the intangible asset Library collections so that it will be available for use or sale; Library collections are measured at fair value. the intention to complete the intangible asset and use or sell it; Leasehold improvements the ability to use or sell the asset; The cost of a leasehold improvements is capitalised as an the intangible asset will generate probable future asset and depreciated over the remaining term of the lease or economic benefits; the estimated useful life of the improvements, whichever is the the availability of adequate technical, financial and other shorter. resources to complete the development and to use or sell the intangible asset; and Revaluations of non-financial physical assets the ability to measure reliably the expenditure attributable Non-current physical assets measured at fair value are to the intangible asset during its development. revalued in accordance with Financial Reporting Directions (FRDs) issued by the Minister for Finance. A full revaluation Where no internally-generated intangible asset can be normally occurs every five years, based upon the asset’s recognised, development expenditure is recognised as an government purpose classification, but may occur more expense in the period as incurred. frequently if fair value assessments indicate material changes in values. Independent valuers are generally used to conduct Intangible assets are measured at cost less accumulated these scheduled revaluations. Revaluation increases or amortisation and impairment, and are amortised on a straight- decreases arise from differences between an asset’s carrying line basis over their useful lives as follows: value and fair value. 2014 2013
Revaluation increases are credited directly to equity in the Capitalised software development cost (years) 5 5 revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of that class of Prepayments property, plant and equipment, previously recognised as an Prepayments represent payments in advance of receipt of expense (other economic flows) in the net result, the increase goods and services or that part of expenditure made in one is recognised as income (other economic flows) in determining accounting period covering a term extending beyond that the net result. period
Revaluation decreases are recognised immediately as 1.14 Liabilities expenses (other economic flows) in the net result, except to the Payables extent that a credit balance exists in the revaluation reserve in Payables consist of: respect of the same class of property, plant and equipment, they are debited to the revaluation reserve. contractual payables, such as accounts payable, and unearned income including deferred income from Revaluation increases and revaluation decreases relating to concession arrangements. Accounts payable represent individual assets within a class of property, plant and liabilities for goods and services provided to Federation equipment are offset against one another within that class but Training prior to the end of the financial year that are are not offset in respect of assets in different classes. unpaid, and arise when Federation Training becomes obliged to make future payments in respect of the Biological Assets purchase of those goods and services; and Productive trees in commercial native forest and breeding statutory payables, such as goods and services tax and livestock are recognised as biological assets. These biological fringe benefits tax payables. assets are measured at fair value less costs to sell and are revalued at 31st December each year. Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. For breeding livestock, fair value is based on the amount that Statutory payables are recognised and measured similarly to could be expected to be received from the disposal of livestock contractual payables, but are not classified as financial with similar attributes. There was a disposal of biological assets instruments and not included in the category of financial in Advance TAFE's accounts before the merger. liabilities at amortised cost, because they do not arise from a contract.
Federation Training: 2014 Annual Report Page | 39
Provisions Employee benefits on-costs Provisions are recognised when Federation Training has a Provision for on-costs such as payroll tax, workers present obligation, the future sacrifice of economic benefits is compensation and superannuation are recognised separately probable, and the amount of the provision can be measured from the provision of employee benefits. reliably. Performance Payments The amount recognised as a provision is the best estimate of Performance payments for Federation Training's Executive the consideration required to settle the present obligation at Officers are based on a percentage of the annual salary reporting date, taking into account the risks and uncertainties package provided under the contract of employment. A liability surrounding the obligation. Where a provision is measured is provided for under the term of the contracts at reporting date using the cashflows estimated to settle the present obligation, and paid out in the next financial year. There were no its carrying amount is the present value of those cashflows. performance payments paid to any Executive Officers during 2014. Employee benefits Provision is made for benefits accruing to employees in respect Borrowings of wages and salaries, annual leave and long service leave for Borrowings are initially measured at fair value, being the cost services rendered to the reporting date. of the interest bearing liabilities, net of transaction costs. The measurement basis subsequent to initial recognition depends Wages and salaries, and annual leave on whether Federation Training has categorised its interest- Liabilities for wages and salaries, including non-monetary bearing liabilities as either financial liabilities designated at fair benefits annual leave and accumulating sick leave, are all value through the profit and loss, or financial liabilities at recognised in the provision for employee benefits as 'current amortised cost. Any difference between the initial recognised liabilities', because Federation Training does not have an amount and the redemption value is recognised in net result unconditional right to defer settlements of these liabilities. over the period of the borrowing using the effective interest method. Depending on the expectation of the timing of settlement, liabilities for wages and salaries, annual leave and sick leave The classification depends on the nature and purpose of the are measured at: interest bearing liabilities. Federation Training determines the classification of its interest bearing liabilities at initial undiscounted value - if Federation Training expects to recognition. wholly settle within 12 months; or present value - if Federation Training does not expect to Financial liabilities wholly settle within 12 months. Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost Long service leave using the effective interest rate method. Liability for long service leave (LSL) is recognised in the provision for employee benefits. 1.15 Commitments Commitments for future expenditure include operating and Unconditional LSL is disclosed in the notes to the financial capital commitments arising from contracts. These statements as a current liability, even where Federation commitments are disclosed by way of note at their nominal Training does not expect to settle the liability within 12 months value and inclusive of the GST payable. In addition, where it is because it will not have the unconditional right to defer the considered appropriate and provides additional relevant settlement of the entitlement should an employee take leave information to users, the net present values of significant within 12 months. individual projects are stated. These future expenditures cease to be disclose as commitments once the related liabilities are The components of the current LSL liability are measured at: recognised on the balance sheet.
nominal value (undiscounted value) - component that is 1.16 Contingent assets and contingent liabilities expected to be wholly settled within 12 months; and Contingent assets and contingent liabilities are not recognised present value (discounted value) - component that is not in the balance sheet, but are disclosed by way of a note (refer expected to be wholly settled within 12 months. to Note 18) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of the Conditional LSL is disclosed a non-current liability. There is an GST receivable or payable respectively unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of 1.17 Equity service. This non-current LSL liability is measured at present Contributed capital value. Funding that is in the nature of contributions by the Victorian State government is treated as contributed capital when Any gain or loss following revaluation of the present value of designated in accordance with UIG Interpretation 1038 non-current LSL liability is recognised as a transaction, except Contribution by Owners Made to Wholly-Owned Public Sector to the extent that a gain or loss arises due to changes in bond Entities. Commonwealth capital funds are not affected and are interest for which it is then recognised as another economic treated as income. flow. Transfers of net assets arising from the business combination Termination benefits treated as contributed capital. Termination benefits are payable when employment is terminated before the normal retirement date, or when an 1.18 Going Concern employee decides to accept an offer of benefits in exchange Due to cash flows decreasing significantly lower than budget, for termination of employment. Federation Training recognises there is material uncertainty as to the going concern termination benefits when it is demonstrably committed to assumption. The decrease in cash flows in predominately due either terminating the employment of current employees to the decline in student numbers and demand for courses. according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an Federation Training was established as an amalgamation of offer made to encourage voluntary redundancy. Benefits falling two TAFEs operating in the Gippsland region – Advance TAFE due more than 12 months after balance sheet date are and GippsTafe. The State government appointed a new board discounted to present value.
Federation Training: 2014 Annual Report Page | 40
and a new interim CEO with the mandate of transforming the organisation into a viable and sustainable entity. 1.19 Materiality The transformation exercise commenced in July 2014. The In accordance with Accounting Standard AASB 108 State government has provided funding to Federation Training Accounting Policies, Changes in Accounting Estimates and to: Error, when an Australian Accounting Standard specifically applies to a transaction, other event or condition, the Support the entity’s operating and cash deficit accounting policies applied to that item shall be determined by Fund the transformation exercise applying the Standard, unless the effect of applying them is immaterial. A total of $25.4 million has been committed to Federation Training to support various projects including the reduction of Accounting policies will be considered material if their omission costs, funding to improve its revenue generating ability and or misstatement could, either individually or collectively, support for its underlying cash position. In 2015 $10.4 million influence the economic decisions that user’s make on the basis of this is due to be received. of the financial statements. Materiality depends on the size and nature of the omission or misstatement judged in the A further $5.1million in additional funding has been granted surrounding circumstances. from the State government for additional specific projects. 1.20 Rounding of amounts The Department of Education and Training has also deferred Amounts in the financial report have been rounded to the $10.5 million of loan repayment to 2018 nearest thousand dollars, unless otherwise stated.
Federation Training has submitted a Strategic plan that 1.21 Comparative information outlines how the organisation will utilise the relevant funding to When required by Accounting Standards, comparative figures deliver its required activities. The Plan also outlines that the have been adjusted to conform to changes in presentation for organisation will return to an underlying breakeven position by the current financial year. 1 January2016. The State government has committed to provide Federation Training with funding to support achieving 1.22 Change in accounting policy this break even position. Subsequent to the 2013 reporting period, the following new and revised accounting standards have been adopted in the current The cost reductions and revenue generation projects period these have no financial impact on the accounts. underway also provide management with the confidence that it will be able to achieve its budgetary goals. AASB 10 Consolidated Financial Statements; AASB 1031 Materiality The State government has provided a letter of support to Federation for ensuring going concern.
On the basis of the above, the Board of Federation Training is of the view that Federation Training will continue on a going concern basis.
Federation Training: 2014 Annual Report Page | 41
1.23 New and revised AASBs in issue but not yet effective Certain new accounting standards and interpretations have been published that are not mandatory for the 31 December 2014 reporting period.
As at 31 December 2014 the following standards and interpretations (applicable to Federation Training) had been issued but were not mandatory for financial year ending 31 December 2014. Federation Training has not, and does not intend to, adopt these standards early.
Application Standard/Interpretation Summary date of Impact on entity financial statements standard AASB 9 Financial This standard simplifies requirements 1 Jan 2017 The preliminary assessment has identified Instruments for the classification and measurement that the financial impact of available-for- of financial assets resulting from Phase sale assets will now be reported through 1 of the IASB’s project to replace IAS other comprehensive income and no longer 39 Financial Instruments: Recognition recycled to the profit and loss. and Measurement (AASB 139 Financial Instruments: Recognition and While the preliminary assessment has not Measurement). identified any material impact arising from AASB 9, it will continue to be monitored and assessed.
1.24 Prior Year Adjustment In 2012 GippsTAFE received a loan of $3.2 million for the redevelopment of the Chadstone campus, it was incorrectly treated as an income grant in the GippsTAFE accounts. This has subsequently been rectified in the prior year financial figures and now appropriately recognised as a borrowing. This affected the opening balance as at 1st of January 2013 and the reclassification resulted in a reduction of accumulated surplus of $3.2 million and an increase in non-current liabilities of $3.2 million
1.25 Restatement of prior year comparatives Prior year comparatives have been amended as follows:
Note 2 Original Restatement Explanation Government contributions 18,329 18,351 The movement of revenue between categories reflects Sale of goods and services 12,819 12,351 recategorisation, arising from a post-combination review for Other income 115 561 improved disclosure.
Note 3 Original Restatement Explanation Employee Expenses 23,620 22,970 The movement of expenses between categories reflects Supplies and Services 6,518 5,478 recategorisation, arising from a post-combination review for Other operating expenses 3,308 4,998 improved disclosure.
Federation Training: 2014 Annual Report Page | 42
Note 2 – Income from Transactions
Refer Note 1.00
2014 2013 Income from transactions $'000 $'000's (a) Grants and other transfers (other than contributions by owners) (i) Government contributions - operating State government - contestable 15,378 12,493 Other contributions by Commonwealth Government 572 933 Other contributions by State Government 14,627 2,222 Total government contributions - operating 30,577 15,648 (ii) Government contributions - capital State capital - 2,703 Total government contributions - capital - 2,703 Total government contributions 30,577 18,351 AASB 118.35(b)(i) (b) Sales of goods and services Student fees and charges 7,077 2,793 AASB 118.35(b)(ii) Rendering of services Fee for service - Government 1,287 1,915 Fee for service - International operations - offshore 635 746 Fee for service - other 6,412 6,361 Total rendering of services 8,334 11,815 Other non-course fees and charges Sale of goods 802 536 Total other fees and charges 802 536 Total revenue from sale of goods and services 16,213 12,351 AASB 118.35(b)(iii) (c) Interest Interest from financial assets not at fair value: Interest on bank deposits 138 268 Total interest from financial assets not at fair value 138 268 Net interest income 138 268 (d) Other income AASB 140.75(f)(i) Rental income Hire of Facilities 177 115 AASB 118.35(b)(v) Total rental income 177 115 Other revenue 315 446 Total other income 492 561
31,531
Federation Training: 2014 Annual Report Page | 43
Note 3 – Expenses from Transactions Refer Note 1.00
2014 2013 Expenses from transactions $'000 $'000 (a) Employee expenses Salaries, wages, overtime and allowances 22,444 16,310 Superannuation 2,104 1,536 Payroll tax 1,432 1,010 Worker's compensation 495 254 Long service leave 1,050 378 Annual leave 1,002 1,004 Termination benefits 2,257 726 Other 2,091 1,752 Total employee expenses 32,875 22,970 (b) Depreciation and amortisation Depreciation of non-current assets Buildings 1,931 1,452 Leasehold improvements 128 146 Plant and equipment 2,594 1,397 Motor vehicles 108 62 Library collections 119 18 Land improvements 75 2 Furniture & Fittings 2 - Total depreciation 4,957 3,077 Amortisation of non-current physical and intangible assets Software 414 - WAN Optiv Fibre Licence - 75 Total amortisation 414 75 Total depreciation and amortisation 5,371 3,152
(c) Interest expense Interest on government loans 280 - Total interest expense 280 -
(d) Supplies and services Purchase of supplies and consumables 2,357 2,313 Communication expenses 459 388 Contract and other services 2,255 1,175 Cost of goods sold/distributed (ancillary trading) 81 - Building repairs and maintenance 486 711 Minor equipment 176 91 Fees and charges 980 800 Total supplies and services 6,794 5,478 (e) Other operating expenses General expenses Marketing and promotional expenses 796 1,066 Occupancy expenses 1,460 1,026 Audit fees and services - note 23 144 102 Staff development 100 65 Travel and motor vehicle expenses 1,206 1,004 Motor vehicle taxes 123 70 Other expenses 834 222 Operating lease rental expenses: Lease payments 1,417 1,443 Total operating lease rental expenses 1,417 1,443 Subtotal 6,080 4,998 Total other operating expenses 6,080 4,998
Federation Training: 2014 Annual Report Page | 44
Note 4 – Other Economic Flows included in Net Result
Refer Note 1.00
2014 2013 Other economic flows included in net result $'000 $'000 (a) Net gain/(loss) on non-financial assets (including PPE and intangible assets) Impairment - Student Management System (Advance TAFE)1 (1,339) - Derecognition - Student Management System (GippsTAFE) (6,209) - Net gain/ (loss) on disposal of property plant and equipment (1,159) - Total net gain/(loss) on non-financial assets (8,707) -
(b) Other gains/(losses) from other economic flows
Net gain/(loss) arising from revaluation of long service leave liability - 348 Total other gains from other economic flows - 348
1 AfterAfter review review the the Student Student Management Management Systems Systems ofof GippsGipps TAFE was deemeddeemed to to no no longer longer be be required required and and has has been been fully fully 1 derecognised. The Advance TAFE Student management System was revalued and was impaired. derecognised. The Advance TAFE Student management System was revaulued and was impaired.
Note 5 – Business Combination Pursuant to an Order in Council effective from 1st May 2014, the name of Central Gippsland Institute of TAFE was changed to Federation Training. On the same day, the Order amalgamated Advance TAFE with Federation Training.
The Order directed that Advance TAFE assign all assets, liabilities to Federation Training.
The net assets assumed by Federation Training as a result of the business combination is recognised in the balance sheet at the carrying amount of those assets in the transferor's balance sheet immediately before the transfer.
The net assets transfer was treated as a contribution of capital by the State Government. No income has been recognised by Federation Training in respect of the net assets transferred by Advance TAFE. The balance of net assets above has been recognised as a capital contribution in equity.
Statement of Financial Position 30 April 2014 - Central Gippsland Institute of TAFE (continuing entity)
Current Assets $'000 Cash and cash equivalents 2,723 Receivables 5,521 Prepayments 724 Inventories 287 Total Current Assets 9,255
Non-Current Assets Property, plant and equipment 88,042 Intangibles 6,670 Total Non-Current Assets 94,712 TOTAL ASSETS 103,967
Liabilities Payables 10,777 Provisions 3,222 Revenue in Advance 4,895 Total Liabilities 18,894 TOTAL LIABILITIES 18,894
NET ASSETS 85,073
The financial statements of Advance TAFE are provided in Note 27.
Federation Training: 2014 Annual Report Page | 45
Note 6 – Receivables
Refer Note 1.00
2014 2013 Receivables $'000 $'000 Current receivables Contractual Sale of goods and services 1 2,663 649 Provision for doubtful contractual receivables (See also Note 6(a) & (d) below) (507) (1) Revenue receivable - 46 Total contractual 2,156 694
Statutory Amounts owing from Victorian Government 1,033 74 GST receivable from ATO 16 148 Total statutory 1,049 222 Total current receivables 3,205 916 Total receivables 3,205 916
1 The average credit period for sales of goods and services and for other receivables is 30 days. No interest is charged for the first 30 days from the date of the invoice. Thereafter, credit collection charges are levied as incurred on the outstanding balance. A provision has been made for estimated irrecoverable amounts from the sale of goods determined by a detailed review of debtors on 90 days plus.
Refer Note 1.00 2014 2013 (a) Movement in the provision for doubtful contractual receivables $'000 $'000 Balance at beginning of the year 1 1 Increase in provision recognised due to business combination 700 - Write off of bad debts (194) - Balance at end of the year 507 1
(b) Ageing analysis of contractual receivables Please refer to Note 21(ii) for the ageing analysis of contractual receivables.
(c) Nature and extent of risk arising from contractual receivables Please refer to Note 21(ii) for the nature and extent of credit risk arising from contractual receivables.
(d) Central Gippsland Institute of TAFE (GippsTAFE) doubtful debts Following the merger of two TAFE institutes (Advance Training and GippsTAFE) on 1 May 2014, major reconciliation and validation issues were identified with the existing debtors balances, and issues were identified with the recording of debtors in the Finance system (general ledger and debtors ledger) and the Student Management System (SMS) of GippsTAFE.
Remedial Work The following substantial remedial work has been undertaken to remediate these identified issues with debtors: 1. Special project teams working over a 6 month period to: - validate individual debtors against the underlying records - reconcile the general ledger and debtors ledger to the SMS 2. An internal audit review of step 1. 3. Engagement of Technology One (T1) SMS specialists to review methodology used by GippsTAFE to record student and sponsor debtors in the SMS and confirm the validity of the debt. 4. Subsequent acceptance of T1 recommendation of debtor write off within SMS of student and sponsor debtors as deemed invalid. 5. A complete revamp in the business rules surrounding the processing of invoices and the matching of cash receipts to invoices. 6. Substantial upgrades to both the Finance system and SMS. 7. Continued debtors collection follow-up.
Federation Training: 2014 Annual Report Page | 46
Note 7 – Investments and Other Financial Assets
Refer Note 1.00
2014 2013 Investments and other financial assets $'000 $'000 Current investments and other financial assets Term deposits Australian dollar term deposits > three months - 7,000 Total current investments and other financial assets - 7,000 Total investments and other financial assets - 7,000
(a) Ageing analysis of investments and other financial assets Refer to Note 21(ii) for the ageing analysis of investments and other financial assets.
(b) Nature and extent of risk arising from investments and other financial assets Refer to Note 21(ii) for the nature and extent of risks arising from investments and other financial assets.
Note 8 – Inventories Refer Note 1.00 2014 2013 Inventories $'000 $'000 Current Supplies and consumables - at cost 17 117 Raw materials - at cost 34 - Finished goods - at cost 12 - Inventories held-for-sale: at cost 335 148 Total current inventories 398 265
Federation Training: 2014 Annual Report Page | 47
Note 9 – Property, Plant and Equipment
Land at fair Buildings Assets Plant and Motor Leasehold Library Land Furniture & Lease Infrastruct Computer Total value under equipment Vehicles Improveme Improveme Fittings Rights ure Assets constructio nts nts n
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 At 1 January 2013 Cost - - 1,332 3,843 48 - 12 - . - - - 5,235 Valuation 15,446 54,511 - 12,776 773 5,102 792 - - 888 718 3,752 94,758 Accumulated depreciation - (172) - (5,929) (639) (129) (759) - - (130) (258) (3,729) (11,745) Net book amount 15,446 54,339 1,332 10,690 182 4,973 45 - - 758 460 23 88,248
Year ended 31 December 2013 Opening net book amount 15,446 54,339 1,332 10,690 182 4,973 45 - - 758 460 23 88,248 Additions - 140 2,020 965 186 ------3,311 Disposals - - - (19) (103) ------(122) Transfer into/(out of) assets under construction - - (2,850) 2,850 ------Depreciation - (1,451) - (1,434) (62) (146) (18) - - (28) (36) (23) (3,198) Closing net book amount 15,446 53,028 502 13,052 203 4,827 27 - - 730 424 - 88,239
At 31 December 2013 Cost - - 502 - - - 12 - - 888 718 - 2,120 Valuation 15,445 54,651 - 20,371 823 5,101 792 - - (158) (294) - 97,183 Accumulated depreciation - (1,622) - (7,260) (620) (246) (777) - - - - - (10,525) Net book amount 15,445 53,029 502 13,111 203 4,855 27 - - 730 424 - 88,778
Year ended 31 December 2014 Opening net book amount 15,445 53,029 502 13,111 203 4,855 27 - - 730 424 - 88,326 Additions - - - 2,562 26 29 ------2,617 Disposals - - - (3,108) (112) (29) ------(3,249) Asset register adjustments - - - 424 - 730 - - - (730) (424) - - Transfer into/(out of) assets under construction - - (1,068) 1,068 ------Business combination 8,104 32,061 965 2,378 556 262 198 1,921 11 - - - 46,456 Depreciation - (1,931) - (2,594) (108) (128) (119) (75) (2) - - - (4,957) Closing net book amount 23,549 83,159 399 13,841 565 5,719 106 1,846 9 - - - 129,193
At 31 December 2014 Cost - 110 399 ------509 Valuation 23,549 99,876 - 35,287 2,243 6,555 1,538 2,438 168 - - - 171,654 Accumulated depreciation - (16,827) - (21,446) (1,678) (836) (1,432) (592) (159) - - - (42,970) Net book value at the end of the financial year 23,549 83,159 399 13,841 565 5,719 106 1,846 9 - - - 129,193
Federation Training: 2014 Annual Report Page | 48
Note 10 – Intangible Assets
Software Total $’000 $’000 Year ended 31 December 2013 Gross carrying amount AASB 138.118 ( c) Opening balance 6,872 6,872 Closing balance 6,872 6,872 AASB 138.118 ( c) Accumulated depreciation, amortisation and impairment AASB 138.118(e)(vi) Opening balance (434) (434) AASB 138.118(e)(i) Amortisation of intangible non produced assets (41) (41) Closing balance (475) (475) Net book value at end of financial year 6,397 6,397
Software Total $’000 $’000 Year ended 31 December 2014 Gross carrying amount AASB 138.118 ( c) Opening balance 6,872 6,872 AASB 138.118(e)(i) Acquisitions through business combinations 4,203 4,203 AASB 138.118(e)(i) Additions from internal developments 1,364 1,364 Impairment - Student Management System (Advance TAFE)1 (1,339) (1,339) AASB 138.118(e)(ii) Derecognition - Student Management System (GippsTAFE) (6,209) (6,209) Closing balance 4,891 4,891 AASB 138.118 ( c) Accumulated depreciation, amortisation and impairment AASB 138.118(e)(vi) Opening balance (475) (475) AASB 138.118(e)(i) Amortisation of intangible non produced assets (870) (870) AASB 138.118(e)(iv), 136.130(b) Impairment -Student Management System 456 456 Closing balance (889) (889) Net book value at end of financial year 4,002 4,002
Significant intangible assets The Student Management Systems of Gipps TAFE was deemed to no longer be required and has been fully derecognised. The Advance TAFE Student management System was revalued; a professional valuation was sought for replacement cost of a like system and based on this valuation it was impaired. The carrying amount of the capitalised software development expenditure of $3.736 million. Its useful life is five years.
Federation Training: 2014 Annual Report Page | 49
Note 11 – Other Non-Financial Assets
Refer Note 1.00
2014 2013 Other non-financial assets $'000 $'000 Current other non-financial assets Prepayments 429 340 Total current other non-financial assets 429 340 Total non-current other financial assets - - Total other non-financial assets 429 340
Note 12 - Payables
Refer Note 1.00
2014 2013 Payables $'000 $'000 Current Contractual Supplies and services 1 1,974 2,967 Revenue in Advance 1,422 3,105 Other payables 1 370 415 3,766 6,487 Statutory Taxes payable 57 141 Total current payables 3,823 6,628 Non-current Contractual Other payables 1 - 300 Total non-current payables - 300 Total payables 3,823 6,928
Notes 1 The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice.
(a) Maturity analysis of contractual payables Please refer to Note 21(iii) for the maturity analysis of contractual payables.
(b) Nature and extent of risk arising from contractual payables Please refer to Note 21(iii) for the nature and extent of risks arising from contractual payables.
Federation Training: 2014 Annual Report Page | 50
Note 13 – Provisions
Refer Note 1.00 2014 2013 13 Provisions $'000 $'000 Current provisions Employee benefits (Note 13(a)) Annual leave (Note 13(a)): Unconditional and expected to wholly settle within 12 months 941 911 Unconditional and expected to wholly settle after 12 months 86 102 Performance payments - 58 Long service leave(Note 13(a)): Unconditional and expected to wholly settle within 12 months 120 139 Unconditional and expected to wholly settle after 12 months 2,091 1,084 3,238 2,294 Provisions for on costs (Note 13(a) and Note 13(b)): Unconditional and expected to wholly settle within 12 months 201 218 Unconditional and expected to wholly settle after 12 months 414 197 615 415 Total current provisions 3,853 2,709 Non-current Employee benefits (Note 13(a)) 393 242 On costs (Note 13(a) and Note 13(b)) 73 44 Total non-current provisions 466 286 Total provisions 4,319 2,996
2014 2013 (a) Employee benefits and on costs $'000 $'000 Current employee benefits Annual leave 1,027 1,071 Long service leave 2,211 1,223 3,238 2,294 Non current employee benefits Long service leave 393 242 Total employee benefits 3,631 2,536 Current on costs 615 415 Non current on costs 73 44 Total on costs 688 459 Total employee benefits and on costs 4,319 2,996
Federation Training: 2014 Annual Report Page | 51
2014 2013 (b) Movement in provisions - Federation Training $'000 $'000
Opening balance 2,996 3,509 Additional provisions recognised 3,375 1,031 Net gain(loss) from revaluation of long service liability - 348 Reductions arising from payments/other sacrifices of future economic benefits (2,052) (1,892) Closing balance 4,319 2,996
Current 3,853 2,709
Non-current 466 286 4,319 2,996
Note 14 - Borrowings Refer Note 1.00 2014 2013 Borrowings $'000 $'000 Current Other loans 6,700 3,200 Total current borrowings 6,700 3,200
Non-current Other loans 7,000 7,000 Total non-current borrowings 7,000 7,000 Total borrowings 13,700 10,200
Note 15 - Reserves
Refer Note 1.00
2014 2013 Reserves $'000 $'000 (a) Physical asset revaluation surplus1: Balance at 1 January 38,171 38,171 Balance at 31 December 38,171 38,171 Net changes in reserves 38,171 38,171
Notes 1 The physical assets revaluation surplus arises on the revaluation of infrastructure, land and buildings.
Federation Training: 2014 Annual Report Page | 52
Note 16 – Cash Flow Information Refer Note 1.00 2014 2013 Cash flow information $'000 $'000 (a) Reconciliation of cash and cash equivalents Total cash and deposits disclosed in the balance sheet1 8,945 3,484 Balance as per cash flow statement 8,945 3,484
Notes: 1 Federation Training does not hold a large cash reserve in its bank accounts. Cash received by the Federation Training from the generation of income is generally paid into the Federation Training's bank accounts. Similarly, any Federation Training expenditure, including those in the form of cheques drawn by Federation Training for the payment of goods and services to its suppliers and creditors are made via the Federation Training bank accounts.
2014 2013 (b) Reconciliation of net result for the period $'000 $'000 Net result for the year (12,687) (4,718) Non cash movements: (Gain)/loss on sale or disposal of non current assets 8,565 33 Depreciation and amortisation of non current assets 6,116 3,152 Business combination (698) - Movement in allowance for doubtful debts - 1 Movements in assets and liabilities Decrease / (increase) in trade receivables (2,289) 6 Decrease / (increase) in inventories (133) (6) Decrease / (increase) in other assets (89) 3 Decrease / (increase) in other debtors - 388 Increase / (decrease) in payables (3,107) 1,708 Increase / (decrease) in employee benefits 1,322 (515) Net cash flows from/(used in) operating activities (3,000) 52
Federation Training: 2014 Annual Report Page | 53
Note 17 – Commitments for Expenditure
Refer Note 1.00 2014 2013 Commitments for expenditure $'000 $'000 (a) Capital expenditure commitments payable Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows Property, Plant and Equipment Payable: Within one year - 1,238 Total Property, Plant and Equipment - 1,238 GST reclaimable on the above - 124 Net Commitments Property, Plant and Equipment - 1,114 Total capital expenditure commitments - 1,114 (b) Other expenditure commitments Commitments for leases in existence at the reporting date but not recognised as liabilities, payable Within one year 805 1,458 Later than one year but not later than five years 1,231 2,913 Later than five years 9,757 10,325 Total other expenditure commitments 11,793 14,696 GST reclaimable on the above 1,179 1,470 Net commitments other expenditure commitments 10,613 13,226
Note 18 – Contingent Assets and Contingent Liabilities
2014 2013 Contingent Assets and Contingent Liabilities $'000 $'000 Contingent Assets Legal proceedings and disputes 646 - Federation Training has claims against the liquidator of Lehman Brothers Australia Limited relating to failed investments in collateralised debt obligations purchased in 2006 and 2007. The liquidator advised in October 2014 that they expected to pay a dividend to client creditors however no amount was specified. Subsequent to year end the liquidator has settled legal disputes with the parent and related entities of Lehman Brothers Australia. The liquidator has since advised that client creditors are expected to receive in excess of 80 cents in the dollar, being approximately $646k for Federation Training. Total Estimated Contingent Assets 646 -
Contingent Liabilities Legal proceedings and disputes Advance TAFE was audited by HESG in early 2014, prior to the merger that created Federation Training. As a result of the audit, overpaid contestable funds revenue, (300) - estimated at $300k may be re-claimed by Government Total Estimated Contingent Liabilities (300) - Total Estimated Contingent Assets and (Liabilities) 346 -
Federation Training: 2014 Annual Report Page | 54
Note 19 – Leases (i) Operating leases - Federation Training as lessee Refer to Note 17 (Commitments for expenditure).
(ii) Operating leases - Federation Training as lessor Federation Training leases out certain land, buildings and equipment, which are excess to current requirements, at current market rates.
Leasing Arrangements Federation Training leased out a building at the Yallourn Campus which was excess to current requirements in 2013 at current market rates.
Refer Note 1.00 2014 2013 $'000 $'000 Non-cancellable operating lease receivables Payments due Within one year 41 13 Total non-cancellable operating lease receivables 41 13 GST payable on the above 4 1 Net operating leases receivables 45 14
Note 20 – Superannuation Employees of Federation Training are entitled to receive superannuation benefits and Federation Training contributes to both defined benefit and defined contribution plans. The defined benefit plan(s) provides benefits based on years of service and final average salary.
Federation Training does not recognise any defined benefit liability in respect of the plan(s) because the entity has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance recognises and discloses the State’s defined benefit liabilities in its financial statements.
However, superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the Statement of Comprehensive Income of Federation Training.
The name and details of the major employee superannuation funds and contributions made by Federation Training are as follows:
Refer Note 1.00 2014 2013 Superannuation $'000 $'000 Paid Contribution for the Year Defined benefit plans State Superannuation Fund 48 100 Total defined benefit plans 48 100 Defined contribution plans VicSuper 1,459 1,200 Other 597 676 Total defined contribution plans 2,056 1,876 Total paid contribution for the year 2,104 1,976
Federation Training: 2014 Annual Report Page | 55
Note 21.1 – Financial Instruments (i) Financial risk management objectives and policies Federation Training’s principal financial instruments comprise cash assets, term deposits, receivables (excluding statutory receivables), payables (excluding statutory payables) and borrowings.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument is disclosed in Note 1 of the financial statements.
Management provides principles for overall risk management, as well as policies covering specific areas.
The carrying amounts of the Federation Trainings contractual financial assets and financial liabilities by category are disclosed below:
Refer Note 1.00 2014 2013 Carrying amount of financial instruments by category Note $'000 $'000
(a) Loans and receivables Cash and deposits 16 8,945 3,484 Receivables Trade receivables 6 2,156 694 Total loans and receivables 11,101 4,178 Total financial assets 11,101 4,178
(b) Financial liabilities at amortised cost: Payables Supplies and services 12 2,344 3,070 Borrowings: Other loans 14 13,700 10,200 Total financial liabilities at amortised cost 16,044 13,270 Total financial liabilities 16,044 13,270
Note 21.2 – Financial Instruments (ii) Credit risk Credit risk arises from the contractual financial assets of Federation Training, which comprise cash and deposits, non-statutory receivables and available-for-sale contractual financial assets. Federation Training’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to Federation Training.
Credit risk is measured at fair value and is monitored on a regular basis.
All potential non student customers are rated for credit worthiness taking into account their size, market position and financial standing; an All potential student customers are not rated for credit worthiness but must pay in full on enrolment or enter a payment plan and Customers that do not meet Federation Training’s strict credit policies may only purchase in cash or using recognised credit cards.
Federation Training does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by Federation Training.
The trade receivables balance at 31 December 2014 and 31 December 2013 do not include any counterparties with external credit ratings. Customers are assessed for credit worthiness using the criteria detailed above.
Provision of impairment for contractual financial assets is recognised when there is objective evidence that Federation Training will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings.
The carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents Federation Training’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
Federation Training: 2014 Annual Report Page | 56
Credit quality of contractual financial assets that are neither past due nor impaired
Financial Government Other
institutions agencies counter- Total (AAA rating) (AAA rating) party 2014 $'000 $'000 $'000 $'000 Cash and deposits 8,945 - - 8,945 Receivables - - 2,156 2,156 Total contractual financial assets 2014 8,945 - 2,156 11,101 2013 Cash and deposits 3,484 - - 3,484 Receivables - 74 694 768 Investments and other financial assets 7,000 - - 7,000 Total contractual financial assets 2013 10,484 74 694 11,252
Ageing analysis of financial assets
There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.
The following table discloses the ageing analysis for Federation Training's financial assets.
Not past Past due but not impaired Impaired Carrying due and not financial amount Less than 1‑3 3 months 1‑5 impaired 1 month months – 1 year years assets $'000 $'000 $'000 $'000 $'000 $'000 $'000 2014 Financial assets Receivables1 Trade receivables 3,170 - 353 176 1,689 445 507 Total 2014 financial assets 3,170 - 353 176 1,689 445 507 2013 Financial assets Receivables1 Trade receivables 694 - 192 383 29 90 - Investment and other financial assets - Term Deposits 7,000 7,000 - - - - -
Total 2013 financial assets 7,694 7,000 192 383 29 90 -
Note 1 Receivables and payables disclosed here exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).
Federation Training: 2014 Annual Report Page | 57
Note 21.3 – Financial Instruments (iii) Liquidity risk All of Federations Training's investments are held with one of the top tier banks or with Treasury Corporation of Victoria (TCV).
Maturity analysis of financial liabilities The carrying amount detailed in the following table of contractual financial liabilities recorded in the financial statements, and $13.7m(2013: $10.2m) in relation to financial guarantees granted for loans to other entities (refer to Note 22), represents Federation Training's maximum exposure to liquidity risk.
The following table discloses the contractual maturity analysis for Federation Training's financial liabilities.
Maturity dates Carrying Nominal amount amount Less than 1‑3 3 months 1‑5 5+ 1 month months – 1 year years years $'000 $'000 $'000 $'000 $'000 $'000 $'000 2014 Financial liabilities Payables Supplies and services 1,974 859 386 729 - - - Other payables 1,792 1,808 - - - - - Borrowings Other loans 13,700 - - - 6,700 7,000 - Total 2014 financial liabilities 17,466 2,667 386 729 6,700 7,000 - 2013 Financial liabilities Payables Supplies and services 2,967 - 2,599 368 - - - Other payables 3,208 3,208 - - - - - Borrowings Other loans 10,200 - - - 3,200 7,000 - Total 2013 financial liabilities 16,375 3,208 2,599 368 3,200 7,000 -
Federation Training: 2014 Annual Report Page | 58
Note 21.4 – Financial Instruments
(iv) Market risk Federation Training does not have a significant exposure to market risk that could have an adverse effect on its operating result.
(v) Interest rate risk Federation Training does not have a significant exposure to interest rate risk, all investments are placed with a top tier bank or Treasury Corporation of Victoria. (TCV)
There has been no significant change in Federation Training's exposure, or its objectives, policies and processes for managing interest rate risk or the methods used to measure this risk from the previous reporting period.
Interest rate movements have not been sufficiently significant during the year to have an impact on Federation Training's year end result.
Federation Training's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities are set out in the financial instrument composition and maturity analysis table below.
Financial instrument composition and interest rate exposure Interest rate exposure Weighted Total Carrying average Amount per Floating Fixed Non- effective rate Balance Sheet interest interest Interest Consolidated rate rate Bearing 2014 % $'000 $'000 $'000 $'000 Financial assets Cash and deposits 2 8,945 8,945 - - Receivables Trade receivables - 2,156 - - 2,156 Revenue receivables - - - - 1,136 Total financial assets 11,101 8,945 - 3,292 Financial liabilities Payables Supplies and services - 1,974 - - 1,974 Other payables - 1,792 - - 1,792 Borrowings Other loans 4 13,700 - 7,000 6,700 Total financial liabilities 17,466 - 7,000 10,466
Interest rate exposure Weighted Total Carrying Floating Fixed Non- average Amount per interest interest Interest effective rate Balance Sheet Consolidated rate rate Bearing 2013 % $'000 $'000 $'000 $'000 Financial assets Cash and deposits 2 3,475 3,475 - - Receivables Trade receivables - 694 - - 694 Revenue receivables - 222 - - 222 Total financial assets 4,391 3,475 - 916 Financial liabilities Payables Supplies and services - 3,070 - - 3,070 Borrowings Lease liabilities - - - - - Other loans 4 10,200 - 7,000 3,200 Total financial liabilities 13,270 - 7,000 6,270
Federation Training: 2014 Annual Report Page | 59
Note 21.5 – Financial Instruments
(vi) Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
Fair values of financial instrument asset and liabilities are determined using the fair value hierarchy that categorises the inputs to valuation techniques used to measure fair value into three levels based on the degree to which the fair value is observable.
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities that the Institute can access at the measurement date. Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Federation Training considers that the carrying amount of trade receivables and payables is a reasonable approximation of their fair values due to the short-term nature of trade receivables and payables.
Due to the short-term nature of the current receivables, their carrying value is assumed to approximate their fair value, and based on credit history it is expected that the receivables that are neither past due nor impaired will be received when due.
For other assets and other liabilities the fair value approximates their carrying value. Financial assets where the carrying amount exceeds fair values have not been written down as the Institute intends to hold these assets to maturity.
The carrying amounts and aggregate net fair values of financial assets and liabilities at balance date are:
2014 2013 Carrying Net Fair Carrying Net Fair Amount Value Amount Value $’000 $’000 $’000 $’000 Financial assets Cash and deposits 8,945 8,945 3,475 3,475 Receivables Trade receivables 2,156 2,156 694 694 Revenue receivables - - 222 222 Other receivables - - - - Investment and other financial assets: Term Deposits - - 7,000 7,000 Total financial assets 11,101 11,101 11,391 11,391 Financial liabilities Payables Supplies and services 1,974 1,974 2,967 2,967 Other payables 1,792 1,792 3,208 3,208 Borrowings Lease liabilities - - - - Advances from government 13,700 13,700 10,200 10,200 Other loans - - - - Total financial liabilities 17,466 17,466 16,375 16,375
Note 1 Receivables and payables disclosed here exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).
The Institute did not have any financial instruments that are measured subsequent to initial recognition at fair value as at 31 December 2014.
Federation Training: 2014 Annual Report Page | 60
Note 22 – Responsible Persons and Executive 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 and executive officers for the reporting period.
(i) Minister The relevant Minister was The Hon Peter Hall, MLC until his retirement from parliament on 17 March 2014.
The Hon Nick Wakeling, MP, was the Minister for Higher Education and Skills from March 2014 until the change of government in December 2014.
The Hon Steve Herbert MP is the current Minister for Training and Skills.
Remuneration of the Minister for Higher Education and Skills is disclosed in the financial report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members interests which is completed by each member of the Parliament.
(ii) Chief executive officer (accountable officer) Dr Peter Whitley (resigned 1/7/2014) Wendy Wood (appointed 1/6/2014)
Remuneration received or receivable by the chief executive officers in connection with the management of Federation Training during the reporting period was in the range:
Income band $300,000 - $309,999 (2013 $220,000 - $229,999)
(iii) Members of the board Board Director / Chair - Michael Smith (appointed 1/5/2014- 30/4/2016, term extended 1/5/2016) Board Director - Anthony Stone (appointed 1/5/2014 - 30/4/2016, term extended 1/5/2016) Board Director - Ian Nethercote (appointed 1/5/2014) Board Director - Catherine Greaves (appointed 14/07/2014 -31/3/2015, reappointed 2/12/2015) Board Nominee Director - Robert Hogarth (appointed 14/7/2014) Board Nominee Director - Debra Cerasa (appointed 14/7/2014) Board Nominee Director - Dr Jack Hamilton (appointed 14/7/2014 - 30/4/2016, term extended 1/5/2016) Board Nominee Director - Kevin Quigley (appointed 14/7/2014 - 30/4/2016, term extended 1/5/2016) Board Director - Dr Meredith Doig (appointed 1/5/2014, resigned 4/5/2016) Board Director - David Gittins (resigned 30/4/2014) Board Director - Joanne Stringer (resigned 10/3/2014) Board Director - Julie Hocking (resigned 30/4/2014) Board Director - Ormond Pearson (resigned 30/4/2014) Board Director - John Mitchell (resigned 30/4/2014) Board Nominee Director - Mark Dunsmuir (resigned 30/4/2014) Board Nominee Director - Belinda Wilson (resigned 30/4/2014) Board Nominee Director - Peter Vines (resigned 30/4/2014) Board Nominee Director - Dr. Cheryl Glowrey (resigned 30/4/2014)
Remuneration of the board members in connection with the management of Federation Training are disclosed below.
2014 2013 No. No. Income range The number of board members whose total remuneration from Federation Training was within the specified income bands are as follows:
Nil 1
Less than $10,000 13 8 $10,000 - $19,999 4 4 $20,000 - $29,999 1 1 $80,000 -$99,999 - 1 Total number of board members 18 15 Total remuneration of board members ($'000) 195 143
Other transactions Other related transactions and loan requiring disclosure under the Directions of the Minister for Finance have been considered and there are no matters to report.
Federation Training: 2014 Annual Report Page | 61
(iv) Executive officers The following persons also had authority and responsibility for planning, directing and controlling the activities of Federation Training during the financial year:
Executive Director Information Management - Nicholas Fordham (appointed 1/5/2014 Executive Director Professional Programs - Karen Bird (appointed 1/5/2014) Executive Director Audit, Risk & Compliance - Brenton Barker (appointed 1/5/2014, resigned 17/11/2014) Executive Director Finance & Infrastructure - Ian Carrol (resigned 15/8/2014) Executive Director Student & Academic Progression - Carol Elliot (resigned 12/9/2014) Executive Director People & Culture - Jenni Hardy Executive Director Industry Skills Program - Jim Vivian (resigned 19/12/2014) Executive Director - Shaun McDonagh (appointed 1/5/2014, resigned 2/6/2014)
Remuneration of executive officers The number of executive officers, including the chief executive officer, and their total remuneration during the reporting period are shown in the table below in their relevant income bands.
The base remuneration of executive officers is shown in the table below. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.
The total annualised employee equivalent provides a measure of full time equivalent executive offices over the reporting period.
Several factors affected total remuneration payable to executives over the year.
Total Remuneration Base Remuneration 2014 2013 2014 2013 No. No. No. No. Income range The number of executive officers whose total remuneration from Federation Training exceeded $100,000, separately identifying base remuneration and total remuneration, disclosed within the income band of $10,000 in a table format: $70,000 - $79,999 - - 1 - $100,000 - $109,999 - - 1 - $120,000 - $129,999 1 1 1 1 $140,000 - $149,999 - 1 1 1 $150,000 - $159,999 - 1 - 1 $160,000 - $169,999 1 1 1 1 $180,000 - $189,999 - - 1 - $190,000 - $199,999 - 1 - 1 $200,000 - $209,999 1 - - - $230,000 - $239,999 1 - - - $320,000 - $329,999 1 - - - $350,000 - $359,999 1 - - - Total number of executive officers 6 5 6 5 Total amount of remuneration ($'000) 1,407 791 798 791
Other transactions Other related transactions and loans requiring disclosure under the Directions of the Minister for Finance have been consider ed and there are no matters to report.
(v) Payments to other personnel The number of contractors charged with significant management responsibilities, to whom the total expenses paid by Federation Training exceeded $100,000 per person is disclosed. These contractors are responsible for planning, directing or controlling, directly or indirectly, Federation Training's activities.
The change in total expenses from 2013 to 2014 reporting period was mainly driven by the appointment of contracted chief executive officer, chief financial officer and executive directors.
Total expenses (exclusive of GST) 2014 2013 No. of contractors No. of contractors Expense band $100,000 - $109,999 1 - - - $130,000 - $139,999 1 - - - $230,000 - $239,999 1 - - - Total expenses paid to other personnel ($'000) 464 -
Federation Training: 2014 Annual Report Page | 62
Note 23 – Remuneration of Auditors
Refer Note 1.00
2014 2013 Remuneration of auditors $'000 $'000 Remuneration of Victorian Auditor General's Office for Audit of the financial statements 72 28 Total remuneration of Victoria Auditor General's Office 72 28 Remuneration of other auditors Internal Auditors 72 75 Total remuneration of other auditors 72 75 Total Remuneration of auditors 144 103
Note 24 – Subsequent Events The State Government announced in February a $20 million TAFE rescue funding package of which Federation Training received an additional $2.5 million of funding.
A further $5.1m in additional funding has been granted from the State government for additional specific projects.
The Department of Education and Training has also deferred $10.5 million of loan repayment to 2018.
Note 25 – Economic Dependency
Refer Note 1.00 2014 2013 Economic dependency $'000 $'000 Department of Education and Early Childhood Development 28,078 18,463 28,078 18,463
Higher Education & Skills Group Federation Training is dependent on a significant volume of revenue derived from the Higher Education & Skills Group (formerl y the Victorian Skills Commission). The revenues predominantly fund the delivery of general and specific training courses.
Note 26 – Federation Training Details
The registered office of Federation Training is:
Federation Training Corner of Princes Drive and Monash Way, Morwell Victoria, 3840.
The principal place of business is:
Federation Training Corner of Princes Drive and Monash Way, Morwell Victoria, 3840.
Federation Training: 2014 Annual Report Page | 63
Note 27 – Advance TAFE
The following unaudited material financial information of Advance TAFE is for the period ending 30th April 2014, before the business combination with Federation Training, refer Note 5. 27 Annual Financial Report 27 Comprehensive operating statement 27 Balance sheet 27 Cash flow statement 28 Statement of changes in equity
Note 27 – Advance TAFE – Comprehensive Operating Statement 30-Apr 31-Dec 2014 2013 $'000 $'000 Continuing operations Income from transactions Government contributions - operating 3,186 9,118 Government contributions - capital - 600 Sale of goods and services 2,666 7,741 Interest 11 133 Other income 121 191 Total income from transactions 5,984 17,783 Expenses from transactions Employee expenses 4,591 16,654 Depreciation and amortisation 680 2,217 Grants and other transfers 4 18 Supplies and services 1,014 3,727 Other operating expenses 440 2,173 Goodwill and capitalised costs written off 2,114 Total expenses from transactions 6,729 26,903 Net result from transactions (net operating balance) (745) (9,120) Other economic flows included in net result Net gain/(loss) on non-financial assets (29) 78 Other gains/(losses) from other economic flows - (17) Total other economic flows included in net result (29) 61 Net result from continuing operations (774) (9,058) Net result (774) (9,058) Comprehensive result (774) (9,058)
The comprehensive operating statement should be read in conjunction with the accompanying notes 28 -40
Federation Training: 2014 Annual Report Page | 64
Note 27 – Advance TAFE – Balance Sheet as at 30 Apr as at 31st Dec 2014 2013 2014 2013 $'000 $'000 Assets Financial assets Cash and deposits 456 1,963 Receivables 3,155 896 Total financial assets 3,611 2,859 Non-financial assets Inventories 134 148 Property, plant and equipment 46,455 47,107 Biological assets - 13 Intangible assets 4,203 4,214 Other non-financial assets 69 143 Total non-financial assets 50,861 51,625 Total assets 54,472 54,484 Liabilities Payables 1,960 1,197 Provisions 2,096 2,097 Total liabilities 4,056 3,294 Net assets 50,416 51,190 Equity Accumulated surplus/(deficit) 22,042 22,816 Physical asset revaluation surplus 9,082 9,082 Contributed capital 19,292 19,292 Net worth 50,416 51,190 Commitments for expenditure - 1,518 Contingent assets and contingent liabilities -
The balance sheet should be read in conjunction with the accompanying notes 28 -40
Note 27 – Advance TAFE – Cash Flow Statement 4 months 12 months 2014 2013 $'000 $'000 Cash flows from operating activities Receipts Government contributions - operating 3,186 9,118 Government contributions - capital - 600 User fees and charges received 1,205 7,741 Goods and services tax recovered from the ATO 134 792 Interest received 11 133 Other receipts 121 187 Total receipts 4,657 18,571 Payments Payments to suppliers and employees (5,605) (23,162) Payments of grants and other transfers (4) Interpretation 1031.11 Goods and services tax paid to the ATO (186) (1,043) Other payments (440) (488) Total payments (6,235) (24,693) Net cash flows from/(used in) operating activities (1,578) (6,122) Cash flows from investing activities Payments for investments 6,438 Proceeds from sales of non-financial assets 71 (494) Payments for biological assets - 6 Loans granted to other parties - 137 Net cash provided by/(used in) investing activities 71 6,087 Net increase/(decrease) in cash and cash equivalents (1,507) (35) Cash and cash equivalents at the beginning of the financial period 1,963 1,998 Cash and cash equivalents at the end of the financial year 456 1,963
The cash flow statement should be read in conjunction with the accompanying notes 28 -40
Federation Training: 2014 Annual Report Page | 65
Note 28 – Advance TAFE – Statement of Changes in Equity
Physical asset Available for sale Accumulated Contributions Total revaluation financial asset surplus by owner surplus revaluation surplus Note $'000 $'000 $'000 $'000 $'000 At 1 January 2013 8,694 388 31,874 15,556 56,512 Net result for the year - - (9,058) - (9,058) Capital appropriations - - - 3,736 3,736 Year ended 31 December 2013 8,694 388 22,816 19,292 51,190 Net result for the period (774) (774) Period ended 30 April 2014 8,694 388 22,042 19,292 50,416
The statement of changes in equity should be read in conjunction with the notes to the financial statements.
Note 29 – Advance TAFE – Income from Transactions
4 months 12 months
2014 2013 Income from transactions $'000 $'000 (a) Grants and other transfers (other than contributions by owners) (i) Government contributions - operating State government - contestable 1,598 7,634 Other contributions by Commonwealth Government 39 - Other contributions by State Government 1,549 1,484 Total government contributions - operating 3,186 9,118 (ii) Government contributions - capital State capital - 600 Total government contributions - capital - 600 Total government contributions 3,186 9,718 (b) Sales of goods and services Student fees and charges 885 2,933 Rendering of services Fee for service - Government 1,148 2,946 Fee for service - other 379 1,037 Total rendering of services 1,527 3,983 Other non-course fees and charges Sale of goods 254 825 Total other fees and charges 254 825 Total revenue from sale of goods and services 2,666 7,741 (c) Interest Interest from financial assets not at fair value Interest on bank deposits 8 30 Total interest from financial assets not at fair value 8 30 Interest from financial assets at fair value Interest from debt securities 3 103 Total interest from financial assets at fair value 3 103 Net interest income 11 133 (d) Other income Other revenue 121 191 Total other income 121 191
Federation Training: 2014 Annual Report Page | 66
Note 30 – Advance TAFE – Expenses from Transactions
4 months 12 months
2014 2013 Expenses from transactions $'000 $'000 (a) Employee expenses Salaries, wages, overtime and allowances 3,659 12,127 Superannuation 344 1,243 Payroll tax 192 740 Workers compensation 18 138 Long service leave 37 218 Annual leave 2 127 Termination benefits 39 145 Other 300 1,916 Total employee expenses 4,591 16,654 (b) Depreciation and amortisation Depreciation of non-current assets Buildings 279 942 Plant and equipment 261 849 Motor vehicles 56 165 Library collections 55 160 Land improvements 12 50 Furniture & Fittings 2 6 Total depreciation 665 2,172 Amortisation of non-current physical and intangible assets Leasehold improvements 4 13 WAN Optiv Fibre Licence 11 32 Total amortisation 15 45 Total depreciation and amortisation 680 2,217 (c) Grants and other transfers (other than contributions by owners) Grants and subsidies apprentices and trainees 4 18 Total grants and other transfers 4 18 (d) Supplies and services Purchase of supplies and consumables 193 985 Communication expenses 63 221 Contract and other services 374 719 Cost of goods sold/distributed (ancillary trading) 33 167 Building repairs and maintenance 120 477
Fees and charges 231 491
Federation Training: 2014 Annual Report Page | 67
4 months 12 months Total supplies and services 1,014 3,060 (e) Other operating expenses General expenses Marketing and promotional expenses 53 187 Occupancy expenses 141 555 Audit fees and services 45 47 Staff development 16 138 Travel and motor vehicle expenses 86 364 Motor vehicle taxes 8 62 Other expenses 36 420 Total other expenses 385 1,773 Operating lease rental expenses: Lease payments 1 14 Total operating lease rental expenses 1 14 Subtotal 386 1,787 Bad debts from transactions - 667 Equipment below capitalisation threshold 54 386 Total other operating expenses 440 2,840
Note 31 – Advance TAFE – Other Economic Flows included in Net Result
4 months 12 months
2014 2013 Other economic flows included in net result $'000 $'000 (a) Net gain/(loss) on non-financial assets (including PPE and intangible assets) Net gain/(loss) on disposal of property plant and equipment (29) 78 Total net gain/(loss) on non-financial assets (29) 78 (b) Other gains/(losses) from other economic flows Net gain/(loss) arising from revaluation of long service leave liability - (17) Total other gains/(losses) from other economic flows - (17)
Federation Training: 2014 Annual Report Page | 68
Note 32 – Advance TAFE – Receivables
30-Apr 31-Dec
2014 2013 Receivables $'000 $'000 Current receivables Contractual Sale of goods and services 1 2,972 1,307 Provision for doubtful contractual receivables (See also Note 5(a) below) (700) (700) Total contractual 2,272 607 Statutory Amounts owing from Victorian Government 803 248 GST receivable from ATO 79 41 Total statutory 882 289 Total current receivables 3,154 896
Total receivables 3,154 896
1 The average credit period for sales of goods and services and for other receivables is 30 days. No interest is charged for the first 30 days from the date of the invoice. Thereafter, credit collection charges are levied as incurred on the outstanding balance. A provision has been made for estimated irrecoverable amounts from the sale of goods determined by a detailed review of debtors on 90 days plus.
4 months 12 months 2014 2013 (a) Movement in the provision for doubtful contractual receivables $'000 $'000 Balance at beginning of the year 700 49 Increase in provision recognised in the net result - 651 Balance at end of period 700 700
Note 33 – Advance TAFE – Inventories 30-Apr 31-Dec 2014 2013 Inventories $'000 $'000 Current List type of inventories held Supplies and consumables - at cost 18 21 Raw materials - at cost 53 56 Finished goods - at cost 12 12 Inventories held-for-sale at cost 51 59 Total current inventories 134 148
Federation Training: 2014 Annual Report Page | 69
Note 34 – Advance TAFE – Property, Plant & Equipment
In accordance with government purpose classifications, the Institute's property, plant and equipment are assets used for the purpose of education. Property, plant & equipment includes all operational assets.
Land at fair Buildings Assets under Plant and Motor Leasehold Library Land Furnitue & Total value1 construction equipment Vehicles Improvements Improvements Fittings
(a) Institute $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 At 1 January 2013 Cost ------734 - - 734 Valuation 8,104 44,735 3,024 10,769 1,568 509 - 2,438 168 71,315 Accumulated depreciation - (11,610) - (7,413) (954) (230) (321) (455) (150) (21,133) Net book amount 8,104 33,125 3,024 3,356 614 279 413 1,983 18 50,916 Year ended 31 December 2013 Opening net book amount 8,104 33,125 3,024 3,356 614 279 413 1,983 18 50,916 Additions - 110 - 161 223 - - - - 494 Disposals - - - - (59) - - - - (59) Impairment of assets - - (2,059) ------(2,059) Depreciation2 - (942) - (849) (165) (13) (160) (50) (6) (2,185) Closing net book amount 8,104 32,293 965 2,668 613 266 253 1,933 12 47,107 At 31 December 2013 Cost ------Valuation 8,104 44,845 965 10,930 1,732 509 734 2,438 168 70,425 Accumulated depreciation - (12,552) - (8,262) (1,119) (243) (481) (505) (156) (23,318) Net book amount 8,104 32,293 965 2,668 613 266 253 1,933 12 47,107 Period Ended 30 April 2014 Opening net book amount 8,104 32,293 965 2,668 613 266 253 1,933 12 47,107 Disposals - - - (71) - - - - - (71) Depreciation - (232) - (220) (57) (4) (55) (12) (2) (582) Closing net book amount 8,104 32,061 965 2,377 556 262 198 1,921 10 46,454 At 30 April 2014 Cost - - 965 10,758 1,460 509 734 2,438 168 17,032 Valuation 8,104 44,845 ------52,949 Accumulated depreciation - (12,784) - (8,380) (904) (247) (536) (517) (158) (23,526) Net book value at the end of the financial period 8,104 32,061 965 2,378 556 262 198 1,921 10 46,455
Federation Training: 2014 Annual Report Page | 70
Note 35 – Advance TAFE - Intangible Assets
Trademarks Goodwill Software Total & Licences
$’000 $’000 $’000 $’000 Year ended 31 December 2013 Gross carrying amount Opening balance 55 - 510 565 Additions - 3,736 - 3,736 Closing balance 55 3,736 510 4,301 Accumulated depreciation, amortisation and impairment Opening balance - - - - Amortisation of intangible non produced assets 1 - - (32) (32) Impairment losses charged to net result2 (55) - - (55) Closing balance (55) - (32) (87) Net book value at end of financial year - 3,736 478 4,214
Trademarks Goodwill Software Total & Licences $’000 $’000 $’000 $’000 Period ended 30 April 2014 Gross carrying amount Opening balance - 3,736 478 4,214 Closing balance - 3,736 478 4,214 Accumulated depreciation, amortisation and impairment Opening balance - - - - Impairment losses charged to net result2 - - (11) (11) Closing balance - - (11) (11) Net book value at end of financial period - 3,736 467 4,203
Notes 1 The consumption of intangible produced assets is included in ‘depreciation’ line item, where the consumption of the intangible non produced assets is included in ‘net gain/(loss) on non-financial assets’ line item on the comprehensive operating statement.
2 Impairment losses are included in the line item ‘net gain/(loss) on non-financial assets’ in the comprehensive operating statement.
Significant intangible assets Advance TAFE has capitalised software development expenditure for the development of its SMS software. The carrying amount of the capitalised software development expenditure of $3.736 million (2013: $3.736 million). Its useful life is five years and will be fully amortised in 2018.
Federation Training: 2014 Annual Report Page | 71
Note 36 – Advance TAFE – Biological Assets 12 Biological assets (a) Groups of biological assets 30-Apr 31-Dec 2014 2013 Qty Qty Breeding livestock (by headcount) 24 24
30-Apr 31-Dec 2014 2013 (b) Reconciliation of carrying amount $'000 $'000 Movement in carrying amounts of livestock Carrying amount at beginning of period 13 19 Increases due to acquisition/transfers in - 6 Decreases attributable to disposal/transfers out (13) (6) Other - (6) Carrying amount at end of period - 13 Total biological assets - 13
Note 37 – Advance TAFE – Payables 30-Apr 31-Dec 2014 2013 9 Payables $'000 $'000 Current Contractual Supplies and services 1 533 413 Revenue in Advance 1,502 593 Other payables 1 (287) 117 1,748 1,123 Statutory GST payable 206 69 FBT payable 6 5 Total current payables 1,960 1,197 Total payables 1,960 1,197
Notes 1 The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice.
Federation Training: 2014 Annual Report Page | 72
Note 38 – Advance TAFE – Provisions 30-Apr 31-Dec 2014 2013 38 Provisions $'000 $'000 Current provisions Employee benefits Annual leave Unconditional and expected to wholly settle within 12 months 338 338 Long service leave Unconditional and expected to wholly settle within 12 months 153 181 Unconditional and expected to wholly settle after 12 months 1,281 1,256 Total current provisions 1,772 1,775 Non-current Employee benefits 324 322 Total non-current provisions 324 322 Total provisions 2,096 2,097
Notes: 1 Employee benefits consist of annual leave and long service leave accrued by employees. On costs such as payroll tax and workers’ compensation insurance are not employee benefits and are reflected as a separate provision.
2 Amounts are measured at present values.
Federation Training: 2014 Annual Report Page | 73
Note 39 – Advance TAFE – Cash Flow Information
4 months 12 months 2014 2013 Cash flow information $'000 $'000 (a) Reconciliation of cash and cash equivalents Total cash and deposits disclosed in the balance sheet 456 1,963 Balance as per cash flow statement 456 1,963
4 months 12 months 2014 2013 (e) Reconciliation of net result for the period $'000 $'000 Net result for the year (774) (9,058) Non cash movements (Gain)/loss on sale or disposal of non current assets (71) (79) Depreciation and amortisation of non current assets 680 2,217 Impairment of non current assets (11) - Goodwill Write Off - 55 Capitalised costs write off - 2,059 Movement in allowance for doubtful debts - 651 Net gain/(loss) on employee benefits provision (1) 17 Movements in assets and liabilities Decrease / (increase) in trade receivables (1,665) (455) Decrease / (increase) in inventories 14 17 Decrease / (increase) in other debtors (42) 872 Increase / (decrease) in payables 625 (2,111) Increase / (decrease) in employee benefits (1) (164) Decrease / (increase) in other financial assets (332) (143) Net cash flows from/(used in) operating activities (1,578) (6,123)
Federation Training: 2014 Annual Report Page | 74
Note 40 – Advance TAFE – Responsible Persons and Executive 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 and executive officers for the reporting period. (i) Minister The relevant Minister was The Hon Peter Hall, MLC until his retirement from parliament on 17 March 2014.
The Hon Nick Wakeling, MP, was the Minister for Higher Education and Skills from March 2014 until the change of government in December 2014.
The Hon Steve Herbert MP is the current Minister for Training and Skills.
Remuneration of the Minister for Higher Education and Skills is disclosed in the financial report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members interests which is completed by each member of the Parliament.
(ii) Chief executive officer (accountable officer) Shaun McDonagh - (appointed 31/07/2013 - ended 31/4/2014)
Remuneration received or receivable by the chief executive officer in connection with the management of Advance TAFE during the reporting period was in the range:
$50 000 - $ 59 999 (2013: $80 000 - $89 999)
(iii) Members of the board Board Director / Chair - Scott Rossetti (resigned 30/4/2014) Board Director - Lyndon Webb (resigned 30/4/2014) Board Director - Gabrielle Bell (resigned 30/4/2014) Board Director - Angus Hume (resigned 30/4/2014) Board Director - Catherine Greaves (resigned 30/4/2014) Board Nominee Director - Dianne Wilkinson (resigned 30/4/2014) Board Nominee Director - Tim Weight (resigned 30/4/2014) Board Nominee Director - Andrew Reynolds (resigned 30/4/2014)
Remuneration of the board members in connection with the management of the Advance TAFE are disclosed below.
2014 2013 No. No. Income range The number of board members whose total remuneration from the Advance TAFE was within the specified income bands are as follows: Less than $10,000 8 5 $10,000 - $19,999 - 4 Total number of board members 8 9 Total remuneration of board members ($'000) 27 88
Other transactions Other related transactions and loan requiring disclosure under the Directions of the Minister for Finance have been considered and there are no matters to report.
Federation Training: 2014 Annual Report Page | 75
(iv) Executive officers The following persons also had authority and responsibility for planning, directing and controlling the activities of Advance TAFE during the financial year:
Executive Manager Corporate Services - Nicholas Fordham Executive Manager Learning and Innovation - Karen Bird Chief Finance Officer - Brenton Barker
Remuneration of executive officers The number of executive officers, including the chief executive officer, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands.
The base remuneration of 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.
The total annualised employee equivalent provides a measure of full time equivalent executive offices over the reporting period.
Total Remuneration 2014 2013 No. No. Income range The number of executive officers whose total remuneration from the Advance TAFE exceeded $100,000, separately identifying base remuneration and total remuneration, disclosed within the income band of $10,000 in a table format: $20,000 - $29,999 - 1 $30,000 - $39,999 2 1 $40,000 - $49,999 1 - $130,000 - $139,999 - 1 $140,000 - $149,999 - 1 Total number of executive officers 3 4 Total annualised employee equivalent (AEE) 3 Total amount of remuneration ($'000) 104 329
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.
Federation Training: 2014 Annual Report Page | 76
Disclosure Index
REPORT OF OPERATIONS
CHARTER AND PURPOSE FRD 22E Manner of establishment and the relevant Minister 7-8 FRD 22E Objectives, functions, powers and duties 8 FRD 22E Nature and range of services provided including communities served 6 - 24 MANAGEMENT AND STRUCTURE FRD 22E Organisational structure and chart, including accountabilities 11 FRD 22E Names of Board members 8-9 FINANCIAL AND OTHER INFORMATION FRD 03A Accounting for Dividends NA FRD 07A Early adoption of authoritative accounting pronouncements 34 – 41 FRD 10 Disclosure Index 77 – 79 FRD 17B Long Service leave wage inflation and discount rates NA FRD 19 Private provision of public infrastructure NA FRD 20A Accounting for State motor vehicle lease arrangements prior to 1 Feb 2004 NA FRD 22E Operational and budgetary objectives, performance against objectives and achievements 22
Occupational health and safety statement including performance indicators, performance against FRD 22E 19 those indicators and how they affected outputs Workforce data for current and previous reporting period including a statement on employment and FRD 22E 17-19 conduct principles FRD 22E Summary of the financial results for the year including previous 4 year comparisons 24 FRD 22E Significant changes in financial position during the year 31 FRD 22E Major changes or factors affecting performance 22 FRD 22E Post-balance sheet date events likely to significantly affect subsequent reporting periods NA FRD 22E Summary of application and operation of the Freedom of Information Act 1982 20 FRD 22E Statement of compliance with building and maintenance provisions of the Building Act 1993 20 FRD 22E Statement on National Competition Policy 21 FRD 22E Summary of application and operation of the Protected Disclosure Act 2012 20 FRD 22E Summary of Environmental Performance 20 Consultants: Report of Operations must include a statement disclosing each of the following 1. Total number of consultancies over $10,000 2. Location (eg website) of where details of these consultancies over $10,000 have been made publicly available 3. Total number of consultancies individually valued at less than $10,000 and the total expenditure for the reporting period FRD 22E 21 – 22 AND publication on TAFE institute website required, for each consultancy more than $10,000, of a schedule listing: Consultant engaged Brief summary of project Total project fees approved Expenditure for reporting period Any future expenditure committed to the consultant for the project Statement, to the extent applicable, on the application and operation of the Carers Recognition Act FRD 22E 20 2012 (Carers Act), and the actions that were taken during the year to comply with the Carers Act List of other information available on request from the Accountable Officer, and which must be FRD 22E 18 retained by the Accountable Officer (refer to list at (a) – (l) in the FRD) FRD 24C Reporting of office based environmental impacts 20 FRD 25B Victorian Industry Participation Policy Disclosures 19 FRD 26A Accounting for VicFleet motor vehicle lease arrangements on or after 1 February 2004 N/A FRD 29 Workforce Data Disclosures on the public service employee workforce 16-18
Federation Training: 2014 Annual Report Page | 77
Provide an attestation that risk identification and management is consistent with AS/NZS SD 4.5.5 21 ISO31000:2009 or equivalent Qualitative and Quantitative information to be included in Report of Operations, and provide SD 4.2 (g) 7 - 15 general information about the entity and its activities, together with highlights and future initiatives The Report must be prepared in accordance with requirements of the relevant Financial Reporting SD 4.2 (h) 29 Directions SD 4.2 (j) The Report of Operations must be signed and dated by a member of the Responsible Body 8, 29 CG 10 (clause 27) Major Commercial Activities 14 CG 12 (clause 33) Controlled Entities NA
FINANCIAL REPORT
FINANCIAL STATEMENTS REQUIRED UNDER PART 7 OF THE FINANCIAL MANAGEMENT
ACT 1984 The financial statements must be prepared in accordance with: Australian accounting standards (AAS and AASB standards) and other mandatory professional SD 4.2(a) reporting requirements (including urgent issues group consensus views); 34 Financial Reporting Directions; and Business rules. The financial statements are to comprise the following: Income statement; Balance sheet; SD 4.2(b) 30 – 76 Statement of recognised income and expense; Cash flows statement; and Notes to the financial statements. OTHER REQUIREMENTS UNDER STANDING DIRECTION 4.2 The financial statements must where applicable be signed and dated by the Accountable Officer, CFAO and a member of the Responsible Body, stating whether, in their opinion: The financial statements present fairly the financial transactions during the reporting period and the financial position at the end of the period; SD 4.2(c) The financial statements are prepared in accordance with this direction and applicable Financial 29 Reporting Directions; and The financial statements comply with applicable Australian accounting standards (AAS and AASB standards) and other mandatory professional reporting requirements (including urgent issues group consensus views). SD 4.2(d) Rounding of amounts 41 SD 4.2(e) Review and recommendation by Audit Committee or responsible body 26 – 28 OTHER REQUIREMENTS AS PER FINANCIAL REPORTING DIRECTIONS IN NOTES TO THE
FINANCIAL STATEMENTS FRD 11A Disclosure of ex-gratia payments 21 Disclosures of Responsible Persons, Executive Officer and Other Personnel (Contractors with FRD 21B 61 significant management responsibilities) in the Financial Report FRD 101 First time adoption 42 FRD 102 Inventories 38 FRD 103E Non-current physical assets 48 – 50 FRD 104 Foreign currency 34 FRD 105A Borrowing costs 44 34, 37, FRD 106 Impairment of assets 38, 49 FRD 109 Intangible assets 39, 49, 71 FRD 107A Investment properties NA FRD 110 Cash flow statements 32 FRD 112D Defined benefit superannuation obligations NA FRD 113 Investment in subsidiaries, jointly controlled entities and associates NA FRD 114A Financial instruments – general government entities and public non-financial corporations 56 FRD 119A Transfers through contributed capital 31 FRD 120H Accounting and reporting pronouncements applicable to the reporting period 41 PART 7 OF THE FINANCIAL MANAGEMENT ACT 1994 (FMA) FMA s49(a) Must contain such information as required by the Minister 25 – 79
Federation Training: 2014 Annual Report Page | 78
FMA s49(b) Must be prepared in a manner and form approved by the Minister 25 – 79 Must present fairly the financial transactions of an institute during the financial year to which they FMA s49(c) 25 – 79 relate FMAs 49 (d) Must present fairly the financial position of an institute as at the end of the year 25 – 79 FMAs 49 (e) Must be certified by the Accountable Officer for an institute in the manner approved by the Minister 25 – 79 COMPLIANCE WITH OTHER LEGISLATION, SUBORDINATE INSTRUMENTS AND POLICIES The TAFE institute Annual Report must contain a statement that it complies with all relevant legislation and subordinate instruments, including, but not limited to, the following: Education and Training Reform Act 2006 (ETRA) TAFE institute constitution Directions of the Minister for Higher Education and Skills (or predecessors) TAFE institute Commercial Guidelines Legislation TAFE institute Strategic Planning Guidelines 18 – 19 Public Administration Act 2004 Financial Management Act 1994 Freedom of Information Act 1982 Building Act 1983 Protected Disclosure Act 2012 Victorian Industry Participation Policy Act 2003 ETRA s3.2.8 Statement about compulsory non-academic fees, subscriptions and charges payable in 2014. 20 Policy Statement that the TAFE institute complies with the Victorian Public Sector Travel Principles 19 PRESENTATION OF REPORTING AND PERFORMANCE INFORMATION
Audited Statements of Key Performance Measures (KPIs) must include an audited statement of
performance for certain KPIs. Reporting and performance should be presented using KPIs as set out in the Statement of Corporate Intent agreed with the Minister, comparing 2014 actual performance against the 2014 FRD 27B target and 2013 actual performance, and providing an explanation of any variance between the 22 – 23 2014 actual performance and 2014 target for each KPI. The KPIs must also include the Return on Investment. OVERSEAS OPERATIONS OF VICTORIAN TAFE INSTITUTES Financial and other information on initiatives taken or strategies relating to the institute’s PAEC and overseas operations VAGO Nature of strategic and operational risks for overseas operations (June 2003 15 Strategies established to manage such risks of overseas operations Special Review item 3.110) Performance measures and targets formulated for overseas operations The extent to which expected outcomes for overseas operations have been achieved.
Federation Training: 2014 Annual Report Page | 79
Glossary of Terms
Actuarial gains or losses on superannuation defined Financial statements benefit plans Depending on the context of the sentence where the term Actuarial gains or losses reflect movements in the ‘financial statements’ is used, it may include only the main superannuation liability resulting from differences between the financial statements (i.e. comprehensive operating statement, assumptions used to calculate the superannuation expense balance sheet, cash flow statements, and statement of from transactions and actual experience. changes in equity); or it may also be used to replace the old Associates term ‘financial report’ under the revised AASB 101 (Sept 2007), Associates are all entities over which an entity has significant which means it may include the main financial statements and influence but not control, generally accompanying a the notes. shareholding and voting rights of between 20 per cent and 50 Intangible assets per cent. Intangible assets represent identifiable non-monetary assets Comprehensive result without physical substance. Total comprehensive result is the change in equity for the Interest expense period other than changes arising from transactions with Costs incurred in connection with the borrowing of funds. owners. It is the aggregate of net result and other non-owner Interest expenses include interest on bank overdrafts and short changes in equity. term and long-term borrowings, amortisation of discounts or Capital asset charge premiums relating to borrowings, interest component of finance The capital asset charge represents the opportunity cost of leases repayments, and the increase in financial liabilities and capital invested in the non-current physical assets used in the non-employee provisions due to the unwinding of discounts to provision of outputs. reflect the passage of time. Commitments Interest revenue Commitments include those operating, capital and other Interest revenue includes interest received on bank term outsourcing commitments arising from non-cancellable deposits, interest from investments, and other interest contractual or statutory sources. received. Employee benefits expenses Joint ventures Employee benefits expenses include all costs related to Joint ventures are contractual arrangements between employment including wages and salaries, leave entitlements, Federation Training and one or more other parties to undertake redundancy payments and superannuation contributions. an economic activity that is subject to joint control. Joint control Financial asset only exists when the strategic financial and operating decisions A financial asset is any asset that is: relating to the activity require the unanimous consent of the (a) Cash; parties sharing control (the venturers). (b) An equity instrument of another entity; Net acquisition of non‑financial assets (from transactions) (c) A contractual right: Purchases (and other acquisitions) of non‑financial assets less To receive cash or another financial asset from another sales (or disposals) of non-financial assets less depreciation entity; plus changes in inventories and other movements in Or nonfinancial assets. Includes only those increases or To exchange financial assets or financial liabilities with decreases in non-financial assets resulting from transactions another entity under conditions that are potentially and therefore excludes write-offs, impairment write-downs and Favourable to the entity; or revaluations. (d) A contract that will or may be settled in the entity’s Net result own equity instruments and is: Net result is a measure of financial performance of the A non-derivative for which the entity is or may be obliged operations for the period. It is the net result of items of revenue, to receive a variable number of the entity’s own equity gains and expenses (including losses) recognised for the instruments; or period, excluding those that are classified as ‘other non-owner A derivative that will or may be settled other than by the changes in equity’. exchange of a fixed amount of cash or another financial Net result from transactions/net operating balance asset for a fixed number of the entity’s own equity Net result from transactions or net operating balance is a key instruments fiscal aggregate and is revenue from transactions minus Grants and other transfers expenses from transactions. It is a summary measure of the Transactions in which one unit provides goods, services, ongoing sustainability of operations. It excludes gains and assets (or extinguishes a liability) or labour to another unit losses resulting from changes in price levels and other without receiving approximately equal value in return. Grants changes in the volume of assets. It is the component of the can either be operating or capital in nature. While grants to change in net worth that is due to transactions and can be governments may result in the provision of some goods or attributed directly to government policies. services to the transferor, they do not give the transferor a Non-financial assets claim to receive directly benefits of approximately equal value. Non-financial assets are all assets that are not ‘financial Receipt and sacrifice of approximately equal value may occur, assets’. but only by coincidence. For example, governments are not Other economic flows obliged to provide commensurate benefits, in the form of goods Other economic flows are changes in the volume or value of or services, to particular taxpayers in return for their taxes. For an asset or liability that do not result from transactions. They this reason, grants are referred to by the AASB as involuntary includes gains and losses from disposals, revaluations and transfers and are termed non-reciprocal transfers. impairments of non-current physical and intangible assets; Grants can be paid as general purpose grants which refer to actuarial gains and losses arising from defined benefit grants that are not subject to conditions regarding their use. superannuation plans; fair value changes of financial Alternatively, they may be paid as specific purpose grants instruments and agricultural assets; and depletion of natural which are paid for a particular purpose and/or have conditions assets (non‑produced) from their use or removal. In simple attached regarding their use. terms, other economic flows are changes arising from market Grants for on-passing re-measurements. All grants paid to one institutional sector (e.g. a State general government) to be passed on to another institutional sector (e.g. local government or a private non-profit institution).
Federation Training: 2014 Annual Report Page | 80
CONTACT US 1300 133 717 [email protected] federationtraining.edu.au PO Box 3279 GMC Morwell, 3841
TRAINING LOCATIONS Bairnsdale Campus 48 Main St, Bairnsdale, 3875
Chadstone Campus 41 Drummond Street, Chadstone 3148
Forestec Campus 27 Scriveners Rd, Kalimna West VIC 3909
Lakes Entrance (Seamec) Campus Bullock Island Rd, Bullock Island, Lakes Entrance, 3909
Leongatha Campus Nerrena Rd, Leongatha, 3953
Morwell Campus Corner Princes Dr and Monash Way, Morwell, 3841
Sale Campus Williams Dr, Fulham, 3850
Traralgon Campus 49-63 Princes St, Traralgon, 3844
Warragul Campus 116 - 118 Queen St, Warragul, 3820
Yallourn Campus Monash Rd, Newborough, 3825
CONNECT WITH US ON SOCIAL MEDIA
1300 133 717 federationtraining.edu.au National Provider Number: 0417