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Annual Report 2017-18—Chapter 5: Financial performance
Summary of financial performance
Tables 8–12 give an overview of APVMA financial performance for 2017–18. Full details are in the audited financial statements on the following pages.
The APVMA’s total income for 2017–18 was $39.195 million (Table 8) and incorporates white paper reform and Armidale relocation appropriation funding. This is an increase of $4.140 million (11.81 per cent) on the previous year.
Table 8: APVMA income
|Income source||Income ($’000)||%|
|Receipts from industry|
|Application fees||6 246||15.94|
|Annual fees (renewal fees)||5 604||14.30|
|Other receipts from industry||2 272||5.80|
|Parliamentary appropriation||6 056||15.45|
|Total income||39 195||100.00|
Table 9: Agency resourcing statement
|Resourcing description||Actual available appropriation for 2017–18 ($’000)||Payments made in 2017–18 ($’000)||Balance remaining in 2017–18 ($’000)|
|Ordinary annual service||–||–||–|
|Previous year departmental appropriation||9 282||9 282||–|
|Departmental appropriations||6 056||3 287||2 769|
|Revenue from independent sources||215||215||–|
|Total||15 553||12 784||2 769|
|Special appropriation||32 924||26 064||6 860|
|Total resourcing and payments||48 477||38 848||9 629|
– = nil
Total operating expenses for 2017–18 were $39.908 million (Tables 10 and 11), an increase of $3.893 million (10.81 per cent) on the previous year.
Table 10: APVMA expenditure (Including comparison with PBS)
|Individual lines of expenditure||2017–18 actual expenditure ($’000)||% of expenditure||2017–18 budget (per PBS) ($’000)|
|Employee benefits||29 200||73.17||26 000|
|Supplier expenses||8 842||22.16||11 352|
|Depreciation||1 796||4.50||1 728|
|Total expenditure||39 908||100||39 080|
– = nil; PBS = Portfolio Budget Statement
Table 11: Expenses for Outcome 1
|Outcome 1: Protection of the health and safety of people, animals, the environment, and agricultural and livestock industries through regulation of pesticides and veterinary medicines|
|?||2017–18 budget($’000)||2017–18 actual($’000)||2017–18 variance($’000)||2016–17 actual($’000)|
|Program 1.1 (APVMA) Department expenses||–||–||–||–|
|Ordinary annual service (Appropriation Bill 1)||6 056||6 056||–||4 744|
|Revenue from independent sources||215||215||–||192|
|Special appropriation||32 809||33 637||(828)||31 079|
|Total expenses for outcome 1||39 080||39 908||(828)||36 015|
– = nil
The APVMA recorded a net operating deficit of $0.880 million for 2017–18, resulting in an equity balance at 30 June 2018 of $6.418 million.
The APVMA achieved an unqualified audit result, and there were no adverse findings.
The APVMA’s revenue is primarily received as levy payments in December and June and registration payments in May and June. Thus, the APVMA receives the majority of its revenue at three times during the year. Cash holdings can exceed $7 million at various stages during the financial year.
To manage this, the APVMA monitors daily cash balances to ensure that cash is available to pay creditor expenses, particularly during times when the cash balances are falling in the months when income is not anticipated.
The APVMA operates to keep the cash level above $2 million as an operating reserve (an equity position of $7 million is equivalent to three months operating expenses).
In 2017–18, we entered into 26 new consultancy contracts involving total actual expenditure (including capitalisation) of $0.972 million. In addition, nine ongoing consultancy contracts were active this year, involving total expenditure of $1.647 million as at 30 June 2018.
Fifteen new consultancies commenced in 2017–18 due to activity associated with the white paper reform and Armidale relocation projects.
Selection processes are described in terms drawn from the Commonwealth procurement guidelines. ‘Direct sourcing’ refers to a selection process in which neither a tender nor a panel was used. In these situations, the APVMA obtained multiple quotes, the number of which was determined by the value of the procurement.
APVMA Finance Procedure 4, ‘Purchasing’, outlines the number of quotes required (Table 12).
Table 12: Purchasing number of quotes required
|Purchase limit for goods/services||Quotes required|
|to $2000||One quote|
|$2001 to $10 000||Two written quotes|
|$10 001 to $100 000||Three written quotes|
|$100 001 to $400 000||High-value procurement procedures|
|$400 000 and over||Tender|
Exemptions to these requirements may be approved in special circumstances.
APVMA annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.
INDEPENDENT AUDITOR’S REPORT
To the Minister for Agriculture and Water Resources
In my opinion, the financial statements of the Australian Pesticides and Veterinary Medicines Authority for the year ended 30 June 2018:
- comply with Australian Accounting Standards – Reduced Disclosure Requirements and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and
- present fairly the financial position of the Australian Pesticides and Veterinary Medicines Authority as at 30 June 2018 and its financial performance and cash flows for the year then ended.
The financial statements of the Australian Pesticides and Veterinary Medicines Authority, which I have audited, comprise the following statements as at 30 June 2018 and for the year then ended:
- Statement by the Accountable Authority and Chief Finance Officer;
- Statement of Comprehensive Income;
- Statement of Financial Position;
- Statement of Changes in Equity;
- Cash Flow Statement; and
- Notes to the financial statements, comprising a Summary of Significant Accounting Policies and other explanatory information.
Basis for Opinion
I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Australian Pesticides and Veterinary Medicines Authority in accordance with the relevant ethical requirements for financial statement audits conducted by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants to the extent that they are not in conflict with the Auditor-General Act 1997 (the Code). I have also fulfilled my other responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Accountable Authority’s Responsibility for the Financial Statements
As the Accountable Authority of the Australian Pesticides and Veterinary Medicines Authority the Chief Executive Officer is responsible under the Public Governance, Performance and Accountability Act 2013 for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards – Reduced Disclosure Requirements and the rules made under that Act. The Chief Executive Officer is also responsible for such internal control as the Chief Executive Officer determines is necessary to enable the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Chief Executive Officer is responsible for assessing the Australian Pesticides and Veterinary Medicines Authority’s ability to continue as a going concern, taking into account whether the entity’s operations will cease as a result of an administrative restructure or for any other reason. The Chief Executive Officer is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the assessment indicates that it is not appropriate.
GPO Box 707 CANBERRA ACT 2601
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Phone (02) 6203 7300 Fax (02) 6203 7777
Auditor’s Responsibilities for the Audit of the Financial Statements
My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:
- identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
- obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control;
- evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accountable Authority;
- conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern; and
- evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.
Australian National Audit Office
Delegate of the Auditor-General
14 September 2018
Download the?financial statements?(PDF,1Mb)?including:?
- Statement of comprehensive income
- Statement of financial position
- Statement of changes in equity
- Cashflow statement
- Financial performance
- Financial position
- People and relationships
- Managing uncertainties