FINANCIAL STATEMENTS

OFFICE OF THE INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY
STATEMENT OF FINANCIAL PERFORMANCE
for the period ended 30 June 2001

	Notes	2000-01 $		1999-00 $
Revenues from ordinary activities
Revenues from government	2A	692 848		689 190
Sales of goods and services	2B	18 500		114 725
Proceeds from disposal of assets	2C	-		426
Total revenues from ordinary activities		711 348		804 341
Expenses from ordinary activities
Employees	3A	455 035		513 183
Suppliers	3B	183 701		270 954
Depreciation	3C	5 893		5 961
Total expenses from ordinary activities		644 629		790 098
Net operating surplus/(deficit) from ordinary activities		66 719		14 243
Net surplus (deficit)		66 719		14 243
Equity interests
Net surplus/ (deficit) attributable to the Commonwealth		66 719		14 243

The above statement should be read in conjunction with the accompanying notes

OFFICE OF THE INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY
STATEMENT OF FINANCIAL POSITION
as at 30 June 2001

	Notes	2000-01 $		1999-00 $
ASSETS
Financial Assets
Cash		213220		62367
Receivables	4A	3035		67492
Total financial assets		216255		129859
Non-financial assets
Infrastructure, plant and equipment	5A	9851		15744
Other	5C	641		1335
Total non-financial assets		10492		17079
Total assets		226747		146938
LIABILITIES
Provisions and payables
Employees	6A	237901		219527
Suppliers	7A	4130		9 414
Total provisions and payables		242 031		228 941
Total liabilities		242 031		228 941
EQUITY
Parent entity interest
Capital	8A	66 000		66 000
Accumulated results	8A	(81 284)		(148 003)
Total parent entity interest		(15 284)		(82 003)
Total Equity
Current liabilities		65 351		64 038
Non-current liabilities		176 680		164 903
Current assets		216 896		131 194
Non-current assets		9 851		15 744

The above statement should be read in conjunction with the accompanying notes

OFFICE OF THE INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY
STATEMENT OF CASH FLOWS
for the period ended 30 June 2001

	Notes	2000-01 $		1999-00 $
OPERATING ACTIVITIES
Cash received
Appropriations		625 000		623 000
Sales of goods and services		15 868		112 028
Interest		3 379		1 314
GST refunds		3 965
Total cash received		648 212		736 342
Cash used
Employees		(432 719)		(464 825)
Suppliers		(130 639)		(202 574)
Total cash used		(563 358)		(667 399)
Net cash from operating activities	9	84 853		68 943
INVESTING ACTIVITIES
Cash received
Proceeds from sales of property, plant and equipment		-		426
Total cash received		-		426
Cash used
Purchase of property, plant and equipment		-		(8 533)
Total cash used		-		(8 533)
Net cash from investing activities		-		(8 107)
FINANCING ACTIVITIES
Cash received
Equity Injection		66 000		-
Total cash received		66 000		-
Net cash from financing activities		66 000		-
Net increase/(decrease) in cash held		150 853		60 836
Cash at beginning of reporting period		62 367		1 531
Cash at 30 June		213 220		62 367

The above statement should be read in conjunction with the accompanying notes

OFFICE OF THE INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY
SCHEDULE OF COMMITMENTS
As at 30 June 2001

The Agency in the past, has not had any commitments or intentions to create liabilities, as evidenced by agreements or undertakings, to make future payments to other entities. The Agency's position in regard to commitments is consistent with prior years.

The Schedule of Commitments prescribed in Appendix A to Schedule 1 of the Orders made by the Finance Minister has therefore been omitted from these financial statements.

SCHEDULE OF CONTINGENCIES
As at 30 June 2001

The Agency in the past, has not had any conditions that exist at the reporting date that may give rise to an asset (or revenue/gain) or a liability (or loss/expense) on the occurrence or non-occurrence of one or more uncertain future events that are outside the control of the Agency. The Agency's position in regard to contingencies is consistent with prior years.

The Schedule of Contingencies prescribed in Appendix A to Schedule 1 of the Orders made by the Finance Minister has therefore been omitted from these financial statements.

OFFICE OF THE INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the period ended 30 June 2001

Note	Description
1	Summary of Significant Accounting Policies
2	Operating Revenue
3	Operating Expenses
4	Financial Assets
5	Non-Financial Assets
6	Provisions
7	Payables
8	Equity
9	Cash flow reconciliation
10	Appropriations
11	Reporting of Outcomes
12	Executive Remuneration
13	Remuneration of Auditor
14	Waivers and Act of Grace Payments
15	Staffing Levels
16	Financial Instruments

Note 1 - Summary of Significant Accounting Policies

1.1 - Objective of the Office of the Inspector-General of Intelligence and Security

The objective of the Office is to meet the following outcome: Assist in creating an environment in which Australia's intelligence agencies act legally, ethically and with propriety.

The Agency is structured to meet two outputs:

Output 1: To monitor the activities of the intelligence agencies

Output 2: To provide a complaint service

1.2 Basis of Accounting

The financial statements are required by section 49 of the Financial Management and Accountability Act 1997 and are a general purpose financial report.

The statements have been prepared in accordance with:

Schedule 1 to Orders made by the Finance Minister for the preparation of Financial Statements in relation to financial years ending on or after 30 June 2001;

Australian Accounting Standards and Accounting Interpretations issued by Australian Accounting Standards Boards;

Other authoritative pronouncements of the Boards; and

Consensus views of the Urgent Issues Group.

The statements have been prepared having regard to;

· Statements of Accounting Concepts; and

· The Explanatory Notes to Schedule 1, and Guidance Notes issued by the Department of Finance and Administration.

The Agency Statement of Financial Performance and Financial Position have been prepared on an accrual basis in accordance with the historical cost convention, except for certain assets which as noted, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

Assets and liabilities are recognised in the Agency Statement of Financial Position when and only when it is probable that the future economic benefits will flow and the amounts of the assets or liabilities can be reliably measured. Assets and liabilities arising under agreements equally proportionately unperformed are however not recognised unless required by an Accounting Standard.

Revenues and expenses are recognised in the Agency Statement of Financial Performance when and only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured.

The continued existence of the Agency in its present form, and with its present programs, is dependent on Government policy and on continuing appropriations by Parliament for the Agency's administration and programs.

The Office of the Inspector General of Intelligence and Security is part of the legal entity that is the Commonwealth Government, which is ultimately responsible for all the agency's debts. The existence of total liabilities in excess of total assets of the agency as reported in the Statement of Financial Position has no bearing on whether the agency's debts will be met.

1.3 Changes in Accounting Policy

The accounting policies used in the preparation of these financial statements are consistent with those used in 1999-2000.

1.4 Revenue

The revenues described in this Note are revenues relating to the core operating activities of the Agency.

(a) Revenues from Government - Agency Appropriations

From 1 July 1999, the Commonwealth Budget has been prepared under an accruals framework.

Appropriations for departmental outputs are recognised as revenue to the extent that the Finance Minister is prepared to release appropriations for use (that is, the full amount of the appropriation passed by the parliament less any savings offered up at Additional Estimates and not subsequently released).

(b) Resources Received Free of Charge

Services received free of charge are recognised as revenue when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised at their fair value when the asset qualifies for recognition, unless received from another government agency as a consequence of a restructuring of administrative arrangements.

(c) Other Revenue

Revenue from the sale of goods is recognised upon the delivery of the goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Revenue from the disposal of non-current assets is recognised when control of the asset has passed to the buyer.

Agency revenue from the rendering of a service is recognised by reference to the stage of completion of contracts or other agreements to provide services to Commonwealth bodies. The stage of completion is determined according to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

1.5 Transactions by the Government as Owner

Appropriations designated as 'Capital - equity injections' are recognised directly in equity to the extent drawn down as at the reporting date.

1.6 Employee Entitlements

(a) Leave

The liability for employee entitlements includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Office is estimated to be less than the annual entitlement for sick leave.

The liability for annual leave reflects the value of the total annual leave entitlements of all employees at 30 June 2001 and is recognised at the nominal amount.

The non-current portion of the liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at 30 June 2001. In determining the present value of the liability, the Agency has taken into account attrition rates and pay increases through promotion and inflation.

(b) Superannuation

Staff of the Office of the Inspector General of Intelligence and Security contribute to the Commonwealth Superannuation Scheme and the Public Sector Superannuation Scheme. Employer contributions amounting to $69 532 ($70 003 for 1999-00) in relation to these schemes have been expended in these financial statements.

No liability for superannuation is recognised as at 30 June 2001 as the employer contributions fully extinguish the accruing liability which is assumed by the Commonwealth.

1.7 Cash

Cash means notes and coins held and any deposits at call with a bank or financial institution.

1.8 Financial instruments

Accounting policies for financial instruments are stated at note 16.

1.9 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and revenues at their fair value at the date of acquisition, unless acquired as a consequence of restructuring administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at which they were recognised in the transferor agency's accounts immediately prior to the restructuring.

1.10 Property, Plant and Equipment

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $2000, 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).

Revaluations

The Inspector General has assessed the carrying values of property, plant and equipment, and has concluded that the carrying amounts of these assets are not greater than their recoverable amounts.

Assets in each class acquired after the commencement of a progressive revaluation cycle are not captured by the progressive revaluation then in progress.

Plant and equipment are measured at their depreciated replacement cost. Where assets are held which would not be replaced or are surplus to requirements, measurement is at net realisable value. At 30 June 2001, the Office of the Inspector General of Intelligence and Security had no assets in this situation.

Recoverable amount test

Schedule 1 requires the application of the recoverable amount test to departmental non-current assets in accordance with AAS 10 Recoverable Amount of Non-Current Assets. The carrying amounts of these non-current assets have been reviewed to determine whether they are in excess of their recoverable amounts. In assessing recoverable amounts, the relevant cash flows have been discounted to their present value.

The Inspector-General has reviewed the carrying amount of the non-current assets and has determined that the written down value of the assets reflect their carrying amounts.

Depreciation and Amortisation

Depreciable plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Agency using, in all cases, the straight line method of depreciation.

Depreciation/amortisation rates (useful lives) and methods are reviewed at each balance date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated for a change in prices only when assets are revalued.

Depreciation and amortisation rates applying to each class of depreciable assets are as follows:

Plant and Equipment

2000-01
3 to 10 Years

1999-00
3 to 10 Years

The aggregate amount of depreciation allocated for each class of asset during the reporting periods is disclosed in Note 5A.

1.11 Taxation

The Agency is exempt from all forms of taxation except fringe benefits tax and the goods and services tax.

1.12 Insurance

The Office of the Inspector-General of Intelligence and Security has insured for risks through the Government's insurable risk managed fund, called 'Comcover'. Workers compensation, is insured through Comcare Australia.

1.13 Comparative Figures

Comparative figures have been adjusted to conform to changes in presentation in these financial statements where required.

1.14 Rounding

Amounts have been rounded to the nearest dollar.

1.15 Administered items

The Agency does not have any administered assets and liabilities and is not responsible for any administered financial transactions.

1.16 Capital User charge

The Office of the Inspector General of Intelligence and Security has total liabilities in excess of total assets as reported in the Statement of Financial Position. As a result of this excess the Agency does not pay to the Commonwealth a capital user charge.

	2000-01 $		1999-00 $
Note 2 - Operating Revenue
Note 2A - Revenues from Government
Appropriations for outputs	625 000		623 000
Resources received free of charge	67 848		66 190
Total	692 848		689 190
Note 2B - Sale of Goods and Services
Goods	-		160
Services	15 868		111 157
Other	2 632		3 408
Total	18 500		114 725
Note 2C - Proceeds and Expense from sales of Assets
Non-financial assets - Property, plant and equipment:
Revenue (proceeds) from sale	-		426
Total	-		426
Note 3 - Operating Expenses
Note 3A - Employee Expenses
Remuneration (for services provided)	453 924		506 928
Total remuneration	453 924		506 928
Other employee expenses	1 111		6 255
Total	455 035		513 183
Note 3B - Suppliers Expenses
Supply of goods and services	183 701		270 954
Total	183 701		270 954
Note 3C - Depreciation and Amortisation
The aggregate amount of depreciation or amortisation expensed during the reporting period for each class of depreciable asset are as follows:
Plant and equipment	5 893		5 961
Total	5 893		5 961
	2000-01 $		1999-00 $
Note 4 - Financial Assets
Note 4A - Receivables
Equity injection	-		66 000
Accrued income	637		1 384
Other - GST receivable	2 398		108
	3 035		67 492
Note 5 - Non-Financial Assets
Note 5A - Infrastructure, plant and equipment
Plant & equipment - at cost	58 247		58 247
Less: accumulated depreciation	(48 396)		(42 503)
Total Plant and Equipment	9 851		15 744

 

Note 5B - Analysis of Property, Plant Equipment

TABLE A - Movement summary 2000-01 for all assets irrespective of valuation basis

Item	Plant and Equipment		TOTAL
	$		$
Gross value as at 1 July 2000	58 247		58 247
Additions:	-		-
Disposals	-		-
Gross value asset 30 June 2001	58 247		58 247
Accumulated Depreciation as at 1 July 2000	42 503		42 503
Depreciation charge for assets held 1 July 2000	5 893		5 893
Depreciation charge for additions	-		-
Disposals	-		-
Accumulated Depreciation as at 30 June 2001	48 396		48 396
Net book value as at 30 June 2001	9 851		9 851
Net book value as at 1 July 2000	15 744		15 744

	2000-01 $		1999-00 $
Note 5C - Other
Prepayments	641		1 335
	641		1 335
Note 6 - Provisions
Note 6A - Employee Provisions
Salaries and wages	10 077		9 252
Superannuation	16 603		17 016
Annual leave	48 287		52 512
Long service leave	158 995		140 747
Aggregate employee entitlement liability	233 962		219 527
Other	3 939		-
Total	237 901		219 527
Current	61 220		54 282
Non Current	176 681		165 245
Note 7 - Payables
Note 7A - Suppliers
Trade creditors	4 130		9 414
Total	4 130		9 414

Note 8 Equity

Note 8A - Equity Table

Item	Capital		Accumulated results		TOTAL EQUITY
	2000-01 $	1999-00 $	2000-01 $	1999-00 $	2000-01 $	1999-00 $
Balance 1 July 2000	66 000	-	(148 003)	(151 903)	(82 003)	(151 903)
Operating result	-	-	66 719	14 243	66 719	14 243
Change in accounting policy	-	-		(10 343)		(10 343)
Equity Appropriation		66 000	-	-		66 000
Balance 30 June 2001	66 000	66 000	(81 284)	(148 003)	(15 284)	(82 003)

 

	2000-01 $		1999-00 $
Note 9 - Cash flow reconciliation
Reconciliation of Cash per Statement of Financial Position to Statement of Cash Flows:
Cash at year end per Statement of Cash Flows	213 220		62 367
Statement of Financial Position items comprising above cash - 'Financial Asset - Cash'	213 220		62 367
Reconciliation of operating surplus to net cash provided by operating activities:
Operating surplus before extraordinary items	66 719		14 243
Depreciation	5 893		5 961
Net gain on disposal of non-current assets	-		(426)
Increase/(Decrease) in provision for employee liabilities	18 374		48 976
Increase/(Decrease) in creditors	(5 283)		2 264
(Increase)/Decrease in other assets	694		9 760
(Increase)/Decrease in receivables	64 456		(66 108)
(Increase)/Decrease in accrued income	-		(1 384)
Eliminate effect of equity injection receivable	(66 000)		66 000
Eliminate effect of change in accounting policy	-		(10 343)
Net cash flow from operating activities	84 853		68 943

Note 10 - Appropriations

Note 10A - Agency Appropriations

Annual appropriations for Departmental items (outputs)
Appropriation Acts No 1 & 3 credits:
Section 7 - Act 1 - basic appropriations (budget)	625 000		623 000
Total Current Appropriation Acts	625 000		623 000
Add: FMA Act appropriations
S31 appropriations	19 247		113 768
S30A appropriations (GST recoverables)	3 964		-
	648 211		736 768
Appropriation Act No 2:
Section 10 - Act 2 - (budget)	66 000		-
Total appropriations in the year	714 211		736 768
Balance brought forward from previous period	62 367		1 531
Total appropriations available for payments	776 578		738 299
Payments During the Year	563 358		675 932
Balance of appropriations (unspent) at 30 June carried to next period	213 220		62 367

Note 11 Reporting of Outcomes

Note 11A - Reporting by Outcomes

	Outcome 1		Total
	Actual	Budget	Actual	Budget
Net Subsidies, benefits and grants expenses	-	-	-	-
Other administered expenses	-	-	-	-
Total net administered expenses	-	-	-	-
Add net costs of departmental outputs	626 129	713 000	626 129	713 000
Outcome before extraordinary items	626 129	713 000	626 129	713 000
Extraordinary items
Net Cost to Budget Outcome	626 129	713 000	626 129	713 000
Outcome - specific assets deployed as at 30/6/2001	58 247	58 247	58 247	58 247
Assets that are not outcome specific deployed as at 30/6/2001			-	-

Note 11B - Major Agency Revenues and Expenses by outcome

	OUTCOME 1		TOTAL
	Output Group 1	Output Group 2
	Actual	Actual	Budget	Actual
	$	$	$	$
Operating revenues
Revenues from Government	415 709	277 139	625 000	692 848
Sale of goods and services	11 100	7 400	92 000	18 500
Total operating revenues	426 809	284 539	717 000	711 348
Operating expenses
Employees	273 021	182 014	500 000	455 035
Suppliers	110 221	73 480	209 000	183 701
Other	3 536	2 357	8 000	5 893
Total operating expenses	386 778	257 851	717 000	644 629

Note 12 - Executives Remuneration

	2000-01 Number		1999-00 Number
The number of executives who received, or were due to receive fixed remuneration of $100,000 or more:
$220 001 to $230 000	1		-
$250 001 to $260 000	-		1
The aggregate amount of total remuneration of Executives shown above	240 155		258 404

Note 13 - Remuneration of Auditor

	2000-01		1999-00
	$		$
Financial statement audit services are provided free of charge to the Agency.
The fair value of audit services provided was:	12 000		12 000
	12 000		12 000
No other services were provided by the Auditor-General.
Note 14 - Waivers and Act of Grace Payments
The Office made no waivers or act of grace payments for the financial years 1999-00 (nil) and 2000-01 (nil).