Overview
Objective of the Department of the Senate
The Department of the Senate is a not-for-profit entity. Its activities are classified as departmental. Departmental activities involve the use of assets, liabilities, revenues and expenses controlled or incurred by the department in its own right within its one outcome. Further details are contained in the statement of comprehensive income and the statement of financial position, and in the resource statement on page XX.
Basis of preparation of the financial statements
The financial statements are general purpose financial statements and are required by section 42 of the Public Governance Performance and Accountability Act 2013 (PGPA Act).
The financial statements and notes have been prepared in accordance with:
- the Public Governance Performance and Accountability (Financial Reporting Rule) 2015 (FRR), and
- Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.
The financial statements have been prepared on an accrual basis and are in accordance with historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.
Significant accounting judgements and estimates
In the process of applying the accounting policies listed in this note, the department has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:
- leave provisions involve assumptions based on the expected tenure of existing staff, patterns of leave claims and payouts, future salary movements and future discount rates.
No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.
New accounting standards
AASB 16 Leases
This new standard replaces AASB 117 for reporting periods commencing on or after 1 July 2019. Under the standard, the department is required to recognise the costs of use of leased assets and the associated benefits on the statement of financial position and expense an interest charge on the lease liability through the statement of comprehensive income.
The department did not have any existing leases that required recognition on initial application of AASB 16. During the reporting period, the department recognised right-of-use assets and lease liabilities in relation to leases of motor vehicles, held on behalf of Senate office-holders.
AASB 15 Revenue from Contracts with Customers / AASB 1058 Income of Not-for-Profit Entities
These new standards apply for the 2019–20 reporting period. AASB 15 replaces AASB 18 Revenue and outlines the principles that a for-profit entity must apply to recognise and measure revenue.
AASB 1058 replaces most of the not-for-provisions of AASB 1004 Contributions by outlining income recognition requirements.
As the department’s previous revenue recognition process was broadly consistent with the requirements of the new standards there was minimal impact on the current and future financial reporting periods as a result of these new standards.
Future Australian Accounting Standard requirements
No new or revised pronouncements were issued by the AASB prior to the finalisation of the financial statements which are expected to have a material impact on the department in future reporting periods.
Taxation
The department is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Events after the reporting period
No events have occurred after balance date that should be brought to account or noted in the 2019–20 financial statements.
Note 1: Financial performance
|
2020
$’000 |
2019
$’000 |
| Note 1.1: Expenses |
| Note 1.1A: Employee benefits |
| Wages and salaries |
14,961 |
14,299 |
| Superannuation |
| Defined benefit plans |
1,277 |
1,520 |
| Defined contribution plans |
1,591 |
1,379 |
| Leave and other entitlements |
3,785 |
3,986 |
| Total employee benefits |
21,614 |
21,184 |
Accounting policy
Superannuation
Employees of the department are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), Public Sector Superannuation accumulation plan (PSSap) or other elected defined contribution schemes.
The CSS and PSS are defined benefit schemes for the Commonwealth. The PSSap is a defined contribution scheme.
The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported by the Department of Finance as an administered item.
The department makes employer contributions to the relevant employees’ defined benefit schemes at rates determined by an actuary to be sufficient to meet the current cost to the government and accounts for the contributions as if they were contributions to defined contribution plans.
Leave and other entitlements
Accounting policies for leave and other entitlements are contained at note 3A – Employee Provisions.
|
2020
$’000 |
2019
$’000 |
| Note 1.1B: Suppliers |
| Goods and services |
| Professional and financial fees |
502 |
363 |
| Asset and ICT related |
301 |
603 |
| Staff development |
115 |
88 |
| Hire charges and hospitality |
124 |
176 |
| Travel |
506 |
668 |
| Public information and advertising |
166 |
134 |
| General office expenses |
451 |
386 |
| Printing |
104 |
136 |
| Resources received free of charge |
| DPS – Accommodation at Parliament House |
2,075 |
2,041 |
| ANAO – 2019–20 audit fee |
87 |
86 |
| Secondments |
55 |
- |
| Total goods and services |
4,486 |
4,681 |
| Other supplier expenses |
| Workers compensation |
66 |
79 |
| Short-term leases |
11 |
- |
| Total other supplier expenses |
77 |
79 |
| Total supplier expenses |
4,563 |
4,760 |
Accounting policy
Short-term leases and leases of low-value assets
The department has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). The department recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
|
2020
$’000 |
2019
$’000 |
| Note 1.2: Own-source income |
| Revenue from contracts with customers |
| Sale of goods |
24 |
120 |
| Provision of services |
429 |
355 |
| Total revenue from contracts with customers |
453 |
475 |
| Resources received free of charge |
| DPS – Accommodation at Parliament House |
2,075 |
2,041 |
| ANAO auditor remuneration |
87 |
86 |
| Secondments |
55 |
- |
| Total resources received free of charge |
2,217 |
2,127 |
| Total own-source income |
2,670 |
2,602 |
| Disaggregation of revenue from contracts with customers |
| Major product / service type: |
| Provision of corporate services |
107 |
105 |
| Provision of parliamentary education services |
322 |
332 |
| Sale of goods |
24 |
38 |
| Total revenue from contracts with customers |
453 |
475 |
Accounting policy
Revenue
The department receives revenue from appropriations, the rendering of services and the sale of goods.
Revenue from sale of goods is recognised when control has been transferred to the buyer. The department reviews contracts with customers to ascertain if the contact is in scope of AASB 15 and if the performance obligations are required by an enforceable contract and they are sufficiently specific to enable the department to determine when they have been satisfied.
The department had no remaining or unsatisfied performance obligations as at 30 June 2020.
The following is a description of the principal activities from which the department generates its revenue:
- provision of corporate services to other government entities via formal contract – revenue recognised over time as identified performance obligations fulfilled, i.e. as services rendered.
- provision of parliamentary education services via formal contract – revenue recognised over time as identified performance obligations fulfilled, i.e. as services rendered.
- sale of merchandise and educational materials based on customary business practices – revenue recognised at point of time when payment received and control passes to customer, i.e. upon shipment to customer.
The transaction price is the total amount of consideration to which the department expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.
Resources received free of charge
Resources received free of charge are recognised in the statement of comprehensive income as revenue where the amounts can be reliably measured and the services would have been purchased if they had not been provided free of charge. Use of those resources is recognised as an expense.
The department’s resources received free of charge relate to audit services from the Australian National Audit Office, accommodation at Parliament House from the Department of Parliamentary Services and secondments to the department.
Revenue from government
The departmental appropriation for the financial year (adjusted for any formal additions and reductions) is recognised as revenue from government when the department gains control of the appropriation. Appropriations receivable are recognised at their nominal amounts.
Note 2: Financial position
|
2020
$’000 |
2019
$’000 |
| Note 2.1: Financial assets |
| Note 2.1A: Cash and cash equivalents |
| Cash at bank |
153 |
224 |
| Total cash and cash equivalents |
153 |
224 |
| Note 2.1B: Receivables |
| Appropriation receivable |
12,354 |
12,079 |
| Trade and other receivables |
104 |
23 |
| GST receivable (from ATO) |
20 |
22 |
| Total receivables |
12,478 |
12,124 |
Accounting policy
Financial assets
Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand and deposits in bank accounts.
Receivables for goods and services are recognised at nominal amounts due less any impairment allowance account. Collectability of debts is continually reviewed. Allowances are made on an expected loss basis.
Trade receivables and other receivables are recorded at face value less any impairment.
Trade receivables are recognised when the department becomes party to a contract and has a legal right to receive cash. Loans and receivables are assessed for impairment on initial recognition. Impairment allowances are made on a lifetime expected loss basis. Trade receivables are derecognised on payment.
The fair values of the department’s financial assets and liabilities approximate their carrying amounts.
|
2020 |
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
| Note 2.2: Non-financial assets |
| Reconciliation of opening and closing balances of property, plant and equipment, right of use and intangibles |
|
PP&E |
RoU |
Intangibles |
Work in Progress-Intangibles |
Total |
| As at 1 July 2019 |
| Gross book value |
2,243 |
- |
540 |
- |
2,783 |
| Accumulated depreciation, amortisation and impairment |
(126) |
- |
(510) |
- |
(636) |
| Total as at 1 July 2019 |
2,117 |
- |
30 |
- |
2,147 |
| Additions by purchase |
135 |
- |
117 |
713 |
965 |
| Right of use additions |
- |
64 |
- |
- |
64 |
| Depreciation/amortisation expense |
(134) |
- |
(12) |
- |
(146) |
| Right of use depreciation expense |
- |
(10) |
- |
- |
(10) |
| Gross value of disposals |
(80) |
- |
(106) |
- |
(186) |
| Accumulated depreciation on disposals |
11 |
- |
106 |
- |
117 |
| Total as at 30 June 2020 |
2,049 |
54 |
135 |
713 |
2,951 |
| Total as at 30 June 2020 represented by: |
| Gross book value |
2,298 |
64 |
551 |
713 |
3,626 |
| Accumulated depreciation, amortisation and impairment |
(249) |
(10) |
(416) |
- |
(675) |
| Total as at 30 June 2020 |
2,049 |
54 |
135 |
713 |
2,951 |
Right of use and intangible assets are measured and carried at cost. Property, plant and equipment assets are carried at fair value following initial recognition at cost.
The opening balance of PPE and intangibles have been adjusted to better reflect the split between gross value and accumulated depreciation/amortisation.
Contractual commitments for the acquisition of plant, equipment and intangible asset
The department has $112,265 of contractual commitments payable within 1 year, primarily for the acquisition of intangible assets.
Amounts for capital commitments are GST inclusive.
|
2020
$’000 |
2019
$’000 |
| Note 2.3: Payables |
| Note 2.3A: Supplier and other payables |
| Trade creditors and accruals |
94 |
233 |
| Salaries and wages |
314 |
144 |
| Superannuation |
45 |
22 |
| FBT payable (to ATO) |
108 |
71 |
| Total supplier and other payables |
561 |
470 |
| The department’s only financial liabilities are supplier payables. |
| Note 2.3B: Interest bearing liabilities |
| Lease liabilities |
54 |
- |
| Total interest bearing liabilities |
54 |
- |
| Lease liabilities analysis |
|
|
| The department’s lease liability maturity profile is as follows: |
| Within 1 year |
22 |
|
| Between 1 to 2 years |
22 |
|
| Between 2 to 3 years |
10 |
|
| Total lease liabilities |
54 |
|
Accounting policy
Payables
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced). Supplier and other payables are derecognised on payment. Supplier payables are settled within 20 days.
The liabilities for salaries and superannuation recognised as at 30 June 2020 represents outstanding contributions for the final pay fortnight of the year.
Contingent liabilities and contingent assets
The department had no quantifiable or unquantifiable contingent assets or liabilities as at 30 June 2020 (2019: nil).
|
2020
$’000 |
2019
$’000 |
| Note 2.4: Aggregate assets and liabilities |
| Assets expected to be recovered in: |
| No more than 12 months |
13,022 |
12,717 |
| More than 12 months |
2,929 |
2,147 |
| Total assets |
15,951 |
14,864 |
| Liabilities expected to be settled in: |
| No more than 12 months |
1,995 |
1,672 |
| More than 12 months |
6,357 |
5,714 |
| Total liabilities |
8,352 |
7,386 |
Accounting policy
Acquisition of assets
Purchases of non-financial assets are initially recognised at cost in the statement of financial position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).
The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at fair value.
Property, plant and equipment
Revaluations
Following initial recognition at cost, plant and equipment assets (excluding ROU assets) are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Carrying amounts are reviewed every year to determine if an independent valuation is required. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.
Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised through operating result. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reverse a previous revaluation increment for that class. Upon revaluation, any accumulated depreciation is eliminated against the gross carrying amount of the asset. A revaluation of the department’s assets was last undertaken as at 30 June 2018.
Depreciation
Depreciable plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the department, using in all cases the straight-line method of depreciation.
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date.
Depreciation and amortisation rates applying to each category of depreciable asset are based on the following useful lives:
| Asset class |
2020 |
2019 |
| Plant and equipment |
5 to 15 years |
5 to 15 years |
| Furniture and fittings |
5 to 100 years |
5 to 100 years |
The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.
Impairment
All assets were assessed for indications of impairment at 30 June 2020. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment loss recognised if the asset’s recoverable amount is less than its carrying amount.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Gains or losses from disposal of plant and equipment are recognised when control of the asset has passed to the buyer.
Lease Right of Use (ROU) Assets
Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received.
Following initial application, an impairment review is undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised against any right of use lease asset that is impaired. Lease ROU assets continue to be measured at cost after initial recognition in Commonwealth agency, GGS and Whole of Government financial statements.
Fair value measurement
All property, plant and equipment is measured at fair value in the statement of financial position. When estimating fair value, market prices (with adjustments) are used where available. Where market prices are not available, depreciated replacement cost is used. A reconciliation of movements in property, plant and equipment is included at note 2.2 – Non-financial assets.
Intangibles
The department’s intangible assets comprise of internally developed software and purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Software is amortised on a straight-line basis over its anticipated useful life. The useful life of the department’s software is 3 to 7 years (2019: 3 to 7 years).
All software assets were assessed for indications of impairment as at 30 June 2020.
Inventories
Inventories held for sale are valued at the lower of cost and net realisable value.
Note 3: People and relationships
|
2020
$’000 |
2019
$’000 |
| Note 3A: Employee provisions |
| Leave |
| Annual leave |
1,974 |
1,696 |
| Long service leave |
5,763 |
5,220 |
| Total employee provisions |
7,737 |
6,916 |
Accounting policy
Employee benefits
Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of the end of the reporting period are measured at their nominal amounts.
The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for personal leave as all personal leave is non-vesting and the average personal leave taken in future years by employees of the department is estimated to be less than the annual entitlement for personal leave.
The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will apply at the time the leave is taken, plus the department’s employer superannuation contribution rates, and applicable on-costs, to the extent that the leave is likely to be taken during service rather than paid out on termination.
The liability for long service leave has been determined by reference to FRR 24.1(a) using the shorthand method. The estimate of the present value of the liability takes into account attrition rates and pay increases though promotion and inflation.
Note 3B: Key management personnel remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the department, directly or indirectly, including any director (whether executive or otherwise) of the department.
The department has determined the key management personnel to be the Clerk, Deputy Clerk, Clerk Assistants and the Usher of the Black Rod. Key management personnel remuneration is reported in the table below.
|
2020
$’000 |
2019
$’000 |
| Key management personnel remuneration |
| Short-term employee benefits |
1,575 |
1,528 |
| Post-employment benefits |
230 |
236 |
| Other long-term employee benefits |
35 |
35 |
| Total key management personnel remuneration |
1,840 |
1,799 |
The total number of key management personnel included in the above table is seven individuals (2019: seven).
Note 3C: Related party transactions
Related parties to the department are defined as key management personnel and close family members of key management personnel. A related party transaction is a transfer of resources, services or obligations between the department and a related party, regardless of whether a price is charged.
During 2019–20, there were no related party transactions.
Note 3D: Executive remuneration disclosure – Key management personnel
|
|
Short-term benefits |
Post-employment benefits |
Other long-term benefits |
Termination benefits |
Total remuneration |
| Name |
Position title |
Base salary |
Bonuses |
Other benefits and allowances |
Superannuation contributions |
Long service leave |
Other long-term benefits |
|
|
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
| R Pye |
Clerk of the Senate |
397,544 |
- |
1,529 |
58,203 |
9,933 |
- |
- |
467,209 |
| M Weeks1 |
Deputy Clerk of the Senate |
153,916 |
- |
16,052 |
24,883 |
3,594 |
- |
- |
198,445 |
| J Morris2 |
Clerk Assistant, Procedure / Deputy Clerk of the Senate |
213,426 |
- |
27,241 |
36,900 |
5,253 |
- |
- |
282,820 |
| T Bryant4 |
Clerk Assistant, Committees / Clerk Assistant, Table |
197,481 |
- |
27,241 |
37,033 |
4,915 |
- |
- |
266,670 |
| R Callinan4 |
Clerk Assistant, Table / Clerk Assistant, Procedure |
201,984 |
- |
27,241 |
30,376 |
4,915 |
- |
- |
264,516 |
| J Begley |
Usher of the Black Rod |
198,382 |
- |
27,164 |
29,816 |
4,915 |
- |
- |
260,277 |
| T Matulick3, 4 |
Clerk Assistant, Procedure / Clerk Assistant, Committees |
75,882 |
- |
10,376 |
12,640 |
1,815 |
- |
- |
100,713 |
| Total5 |
|
1,438,615 |
- |
136,844 |
229,851 |
35,340 |
- |
- |
1,840,650 |
1 Commenced long term leave 28 January 2020.
2 Promotion (from SES1 to SES2) on 7 February 2020.
3 Commenced acting as KMP on 10 February 2020 / Promotion effective 8 May 2020.
4 Rotation of Clerk Assistants effective 25 May 2020.
5 The total amounts outlined in the table above correspond with the disclosure at note 3B.
Note 3E: Executive remuneration disclosure – Senior executives and other highly paid staff
During the reporting period, all the department senior executives were included in the key management personnel disclosed above (2019: Nil).
The department did not have any other highly paid staff that meet the reporting threshold (2019: Nil).
Accounting policy
Remuneration policies, practices and governance arrangements
The Clerk of the Senate’s remuneration is determined by the President of the Senate, after consultation with the Remuneration Tribunal, under section 63 of the Parliamentary Service Act 1999. In practice, the advice of the tribunal and the determinations of the Presiding Officers fix the remuneration of the heads of the four parliamentary departments at the same level. All other Senior Executive Service (SES) staff are remunerated under determinations made by the Clerk of the Senate under subsection 24(1) of the Parliamentary Service Act 1999.
For many years the department’s policy has been that changes in SES terms and conditions reflect equivalent changes for non-SES employees in the department’s enterprise agreements.
The department’s remuneration arrangements do not provide for performance pay for any staff. Staff can also use other services offered at Parliament House, including vehicle parking.
The department did not identify any non-SES staff in the period whose remuneration exceeded the threshold amount for reporting key management personnel.
Note 4: Appropriations
|
2020
$’000 |
2019
$’000 |
| Note 4A: Annual appropriations (recoverable GST exclusive) |
| Annual appropriation |
23,452 |
23,463 |
| PGPA Act – section 74 receipts |
717 |
696 |
| Departmental capital budget (DCB)1 |
401 |
775 |
| Total appropriation |
24,570 |
24,934 |
| Appropriation applied (current and prior years) |
24,295 |
23,960 |
| Variance |
275 |
974 |
| 1The DCB is appropriated through theAppropriation (Parliamentary Departments) Act (No. 1). It is not separately identified in the Appropriation Act. |
| Note 4B: Unspent annual appropriations (recoverable GST exclusive) |
| Departmental |
|
|
| Appropriation (Parliamentary Departments) Act (No. 1) 2017–18 |
- |
150 |
| Appropriation (Parliamentary Departments) Act (No. 1) 2018–19 |
- |
12,153 |
| Appropriation (Parliamentary Departments) Act (No. 1) 2019–20 |
12,507 |
- |
| Total |
12,507 |
12,303 |
| Note 4C: Special appropriations managed through third party arrangements (recoverable GST exclusive) |
| Authority2 |
| Department of Finance –Parliamentary Superannuation Act 2004 (s. 18) |
2,769 |
2,495 |
| Department of Finance –Commonwealth of Australia Constitution (s. 66) |
1,417 |
1,516 |
| Department of Finance –Parliamentary Business Resources Act 2017 (s. 59) |
21,312 |
20,099 |
| Total |
25,498 |
24,110 |
| 2 Arrangements have been entered into with the Department of Finance to allow the department to draw upon these appropriations. |
Note 5: Explanation of major budget variances
| Explanation of major variance |
Variance to budget $’000 |
Variance to budget % |
Affected line items |
| The appropriation receivable balance was higher than originally budgeted due to lower than anticipated asset purchases and reduced supplier expenditure. |
(1,360) |
-11% |
Statement of financial position:Trade and other receivables |
| Significant delays in ICT projects resulted in the use of prior year capital to fund intangible purchases. |
(789) |
-93% |
Statement of financial position:Intangibles |
| (830) |
-100% |
Cash flow statement:Purchase of intangibles |
| (567) |
-59% |
Cash flow statement:Contributed equity |
| Movement in discount factors used to calculate employee leave balances led to higher employee leave provisions at year end compared to original budget. |
(1,412) |
-18% |
Statement of financial position:Employee provisions |