CHAPTER 4Management and accountability

Financial Management

Financial performance

Revenue received from ordinary activities was $18.923 million in 2006–07. The office received $17.579 million in appropriation revenue, amounting to $0.544 million more than received in 2005–06. Additional resources of $5.250 million over four years, including $0.059 million in capital funding, were received during the Additional Estimates process for an increase in workload. The increase in activity results from the introduction of the Welfare to Work Programme, implementation of the Law Enforcement (AFP Professional Standards and Related Measures) Act 2006 and amendments to the Telecommunications (Interception and Access) Act 1979.

Total expenses for the office were $18.720 million resulting in a surplus in 2006–07 of $0.204 million, primarily due to delay in implementing new initiatives.

The office requested and received approval to budget for an operating loss in 2006–07 of $0.900 million. The underlying reason for the budgeted loss was due to a timing difference. During the 2005–06 Additional Estimates, the office received funding for the Palmer Implementation Plan and migration legislation amendments. We did not increase staffing sufficiently quickly to complete all of the work as originally estimated in the 2005–06 year.Work related to the referred immigration cases was completed by the end of June 2007. There was also delay in recruiting suitably qualified staff for the new measures introduced in the 2006–07 Additional Estimates.

Financial position

The office’s total equity—that is, sum of the office’s assets less its liabilities—has increased by $0.263 million due mainly to a surplus in the 2006–07 year and an equity injection.

The office’s total assets increased to $7.611 million in 2006–07 from $6.920 million in 2005–06. The increases arose primarily out of an increase in undrawn appropriations, due to the delays in implementing the initiatives noted above. The office assets by category at 30 June 2007 are:

• receivables (amounts due to be paid to the office—66.9% of total assets).
• infrastructure, plant and equipment (24.2%)
• intangibles (non-physical assets such as software—5.3%)
• other non-financial assets (relating to prepayments—2.8%)
• cash (0.8%).

The balance sheet shows cash holdings of $0.059 million ($0.333 million in 2005–06). The office’s appropriation receivable also increased by $0.602 million, from $4.089 million in 2005–06 to $4.691 million in 2006–07.

The office’s non-financial assets increased to $2.460 million in 2006–07 ($2.274 million in 2005–06), primarily due to office fit-out and purchases of information technology assets.

Total liabilities increased by $0.427 million to $4.539 million in 2006–07 ($4.112 million in 2005–06). The change in liabilities was primarily due to an increase in employee provisions.

Purchasing

The Ombudsman’s office is committed to achieving the best value for money in its procurement practices. Purchasing practices and procedures are consistent with the Commonwealth Procurement Guidelines and are set out in the Ombudsman’s Chief Executive Instructions.

The office published its Annual Procurement Plan on the AusTender website (as required under the Commonwealth Procurement Guidelines) to facilitate early procurement planning and draw businesses’ attention to our planned procurement for 2007–08.

Consulting services

The office engages consultants when the expertise required is not available within the organisation, or when the specialised skills required are not available without diverting resources from other higher priority tasks. In accordance with procurement guidelines, consultants are selected by advertisement, panel arrangements or selective tendering. The main categories of contracts relate to information technology, financial services, human resources services, governance and legal advice.

During 2006–07 the office entered into five new consultancy contracts involving total actual expenditure of $75,045. In addition, two ongoing consultancy contracts were active, involving total actual expenditure of $29,350. See Appendix 5 for details of new consultancy contracts. (Details are also available at www.ombudsman.gov.au.)

Table 4.3 shows expenditure on consultancy contracts over the three most recent financial years.

Contractual provisions allowing access by the Auditor-General

The office’s standard contract templates include an ANAO audit clause. The office did not sign any contracts of $100,000 or more (including GST) in the reporting period.

Contracts exempt from publication in AusTender

No office contracts or standing offers that cost more than $10,000 (including GST) were exempted by the Ombudsman from being published in AusTender.