The Inspector-General of Intelligence and Security - Annual Report 1995

IGIS Annual Report 1995-96

STATEMENT BY THE INSPECTOR-GENERAL

OF INTELLIGENCE AND SECURITY

AND THE

ASSISTANT INSPECTOR-GENERAL

CERTIFICATION

We certify that the attached financial statements for the year ended 30 June 1996 are in agreement with the accounts and records of the Office of the Inspector-General of Intelligence and Security and, in our opinion, the financial statements present fairly the information required by the Financial Statements of Departments Guidelines issued by the Minister for Finance for reporting periods ending on and after 30 June 1995.

Signed

R N McLeod
Inspector-General of
Intelligence and Security
August 1996

Signed

Philip Moss
Assistant Inspector-General

22 August 1996

OFFICE OF THE INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY OPERATING STATEMENT for the year ended 30 June 1996
1994-95			Notes	1995-96
$				$
	NET COST OF SERVICES	3

	Expenses

407,721	Employee expenses		477,545
629,439	Other administrative expenses		189,421
1,037,160	Total expenses		666,966

	Revenues from independent sources

1,258	Other revenues from independent sources		6,649

1,258	Total revenues from independent sources		6,649

1,035,902	Net cost of services		660,317


	REVENUES FROM GOVERNMENT	3

	Parliamentary appropriations used for:
779,227	Ordinary annual services		637,887
210,320	Other annual services		-
52,456	Liabilities assumed by government		-
67,595	Resources received free of charge		65,214
1,109,598	Total revenues from government		703,101

73,696	Excess revenues from government		42,784
	over net cost of services

(327,385)	Accumulated expenses less revenues at		(253,689)
	beginning of financial year

(253,689)	Accumulated expenses less revenues at end of		(210,905)
	financial year
The above Statement should be read in conjunction with the accompanying notes.

OFFICE OF THE INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY STATEMENT OF ASSETS AND LIABILITIES for the year ended 30 June 1996

1994-95		Notes	1995-96
$			$
	CURRENT ASSETS

1,003	Cash	4	389
1,400	Receivables	5	139
1,025	Other	6	37,624
3,428	Total current assets		38,152

	NON-CURRENT ASSETS

17,372	Property, plant and equipment	7	29,626
17,372	Total non-current assets		29,626

20,800	Total assets		67,778

	CURRENT LIABILITIES

12,319	Creditors	8	9,477
73,510	Provisions	9	40,046
85,829	Total current liabilities		49,523

	NON-CURRENT LIABILITIES

188,660	Provisions	10	229,160
188,660	Total non-current liabilities		229,160

274,489	Total liabilities		278,683

(253,689)	NET LIABILITIES		(210,905)

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 year ended 30 June 1996

1994-95		Notes	1995-96
$			$
	CASH FLOWS FROM OPERATING
	ACTIVITIES

	Inflows:
940,227	Parliamentary appropriations		637,887
49,320	Advance from the Minister for Finance		-
1,258	Other revenue from independent sources		1,176
990,805	Total cash inflows		639,063

	Outflows:
(345,268)	Employee expenses		(470,175)
(641,788)	Other administrative expenses		(154,723)
(987,056)	Total cash outflows		(624,898)

3,749	Net cash provided by operating activities	11	14,165

	CASH FLOWS FROM INVESTING
	ACTIVITIES

	Outflows:
(3,080)	Acquisition of non-current assets		(14,779)

(3,080)	Net cash provided by or used in investing activities		(14,779)

669	Net increase/(decrease) in cash held		(614)

334	Cash at beginning of financial year		1,003

1,003	Cash at end of financial year		389

The above Statement should be read in conjunction with the accompanying notes.

OFFICE OF THE INSPECTOR-GENERAL OF INTELLIGENCE AND SECURITY STATEMENT OF TRANSACTIONS BY FUND for the year ended 30 June 1996
CONSOLIDATED REVENUE FUND
1994-95		Notes	1995-96	1995-96
Actual			Budget	Actual
			$	$
$
RECEIPTS 12
1,258	Section 35 receipts			1,000	1,176
1,258	Total receipts			1,000	1,176


	EXPENDITURE 13
990,805	Appropriation Act (No. 1)			584,000	637,887
-	Receipts under Section 35 of the Audit Act 1901		1,000
990,805	Total expenditure			585,000	637,887
The above Statement should be read in conjunction with the accompanying notes.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the year ended 30 June 1996

Note 1:

Objectives

The objectives of the Office are to help the Ministers responsible for the Australian

Security Intelligence Organization, Australian Secret Intelligence Service, Defence Signals Directorate, Defence Intelligence Organisation and Office of National Assessments to oversee and review the activities of those agencies, and to ensure that the agencies act legally and with propriety, comply with ministerial guidelines and directives and respect human rights.

Note 2:

Summary of significant accounting policies

(a) Basis of accounting

The financial statements are required by Section 50 of the Audit Act 1901 and are a general purpose financial report. The financial statements have been prepared in accordance with the Financial Statements of Departments Guidelines issued by the Minister for Finance for reporting periods on or after 30 June 1995. The Guidelines require compliance with Statements of Accounting Concepts, Australian Accounting Standards, and related Guidance Releases. Compliance with consensus views of the Urgent Issues Group of the Australian Accounting Research Foundation is also required.

The financial statements have been prepared on an accrual basis in accordance with the historical cost convention and do not take account of changing money values, except where stated.

(b) Comparative figures

Where necessary, comparative figures have been adjusted to conform with changes in presentation in these financial statements.

All computers, plant and equipment with historical costs equal to or in excess of $2,000 are capitalised in the year of acquisition. Assets with historical costs less than $2,000 are expensed in the year of acquisition.

(d) Depreciation of non-current assets

Depreciation on property, plant and equipment is calculated on a straight line basis, so as to write off the cost of each item less its estimated residual value, progressively over its estimated useful life.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the year ended 30 June 1996

(e) Employee entitlements

The provision for employee entitlements encompasses 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 provision for annual leave reflects the value of the total annual leave entitlements of all employees at 30 June 1996 and is recognised at the nominal amount. The provision for long service leave reflects the value of the estimated future cash flows to be made in respect of all employees. In determining the present value of the liability, the Office has taken into account attrition rates and pay increases through promotion and inflation.

(f) Superannuation payments

Staff of the Office contribute to the Commonwealth Superannuation Scheme and the Public Service Superannuation Scheme. Total employer contributions to these Schemes for the year ended 30 June 1996 was $66,537, and have been expensed in these financial statements.

The costs of superannuation in the 1994-95 year (other than productivity contributions), were a liability assumed by government.

(g) Resources received free of charge

Resources received free of charge are recognised as revenue where the amounts can be reliably measured. Use of those resources is recognised as an expense (see Note 3).

(h) Program Statement

The Office of the Inspector-General of Intelligence and Security is a sub-program of the Prime Minister and Cabinet Portfolio (Program 7, sub-program 4) having no other component and is therefore not required to prepare a Program Statement.

(i) Taxation

The Office's activities are exempt from all forms of taxation except Fringe Benefits Tax.

(j) Administered items

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

(k) Cash

For the purposes of the Statement of Cash Flows, cash balances include cash on hand and at bank.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the year ended 30 June 1996

Note 3:	Items of expense and revenue
	The amounts and particulars of the following classes of expenses and revenues are included in the aggregate amounts shown in the Operating Statement:

1994-95			1995-96
$			$
		In relation to operating expenses:
43,593		Employee entitlements	40,102
12,880		Depreciation - Property, plant and equipment		6,547
3,406		Loss on disposal of property, plant and equipment		420

		In relation to revenue:

58,483		Appropriation carryover from the preceding financial year		58,000

		Resources received free of charge:

50,856		Department of the Prime Minister and Cabinet - an amount identified for office space	48,672

16,020		Australian National Audit Office - provision of auditing services for the preparation of the 1995-96 Financial Statements	16,000

719		Department of Finance - provision of accounting and budgetary services	542

	The following resources received free of charge are not recognised in the Operating Statement. Resources received free of charge from the Department of the Prime Minister and Cabinet are significant to the operation of the Office. These resources include: the administration of the Office's payroll and personnel functions, accommodation support, financial and other advice, information technology support, security advice and other assistance by the Department's Agency Security Adviser.
	The Department of Defence provided the Office with the use of a secure Local Area Network (LAN) in 1995-96. The cost of the LAN is approximately $69,000. The equipment remains the property of the Department of Defence.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the year ended 30 June 1996

1994-95

1995-96

Note 4:

Current Assets - Cash

151

Cash on hand

852

Cash at bank

321

1,003

Total

389

Note 5:

Current Assets - Receivables

Other debtors

1,400

Other Commonwealth entities

139

Receivables were less than 30 days overdue as at 30 June 1996.

Note 6:

Current Assets - Other

1,025

Prepayments

37,624

Note 7:

Non-Current Assets - Property, plant and equipment

74,109

Plant and equipment at cost

77,732

(56,737)

Less accumulated depreciation

(48,106)

17,372

Written down value

29,626

Note 8:

Current Liabilities - Creditors

8,035

4,284

Trade creditors

Other creditors

4,859

4,618

12,319

Total

9,477

Note 9:

Current Liabilities - Provisions

73,510

Employee entitlements

40,046

Note 10:

Non-Current Liabilities - Provisions

188,660

Employee entitlements

229,160

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the year ended 30 June 1996

Note 11:

Cash Flow Reconciliation

1994-95

Reconciliation of net cost of services to net cash provided

by operating activities

1995-96

(1,019,882)

Net cost of services - (loss)

(660,317)

1,093,578

Revenues from Government

703,101

12,880

Depreciation - Property, plant and equipment

6,547

7,502

Increase in provision for employee entitlements

7,036

(93,392)

Decrease in creditors

(2,842)

(343)

(Increase) in other assets

(36,599)

Decrease in receivables

1,261

3,406

Net loss on disposal of property plant and equipment

Revenue from independent sources - asset previously not recognised

420

(4,442)

3,749

Net cash flow from operating activities

14,165

Note 12:

Receipts to Consolidated Revenue Fund

1994-95

Actual

1995-96

Budget

1995-96

Actual