Annual Report 2016-17

Financial management

 

https://www.fwc.gov.au/documents/documents/annual_reports/ar2017/fwc_annual_report_1617_part_4_0.pdf

Financial performance

The Commission is a non-corporate entity under the PGPA Act. The Commission's audited financial statements for 2016–17 are at Appendix E: Financial statements.

The Commission's operating revenue from government for the 2016–17 financial year was $78.099 million. The Commission received own-source revenue of $2.901 million, primarily represented by subleasing rental income.

Operating expenses decreased in 2016–17 to $84.807 million ($88.202 million in 2015–16). The major expenses in 2016–17 were $47.749 million in respect of employee expenses, $32.095 million relating to supplier payments and $4.947 million in asset depreciation, amortisation and related expenses.

In 2016–17 the Commission ran a funded surplus excluding depreciation and amortisation of $1.140 million compared with a deficit in 2015–16 of $211,000.

Performance against budget and comparison to the 2015–16 year is presented for both departmental and administered activities in the primary financial statements included at Appendix E: Financial statements. Commentary is also provided in the financial statements explaining major variances to budget.

A summary table of expenses and resources outcome including departmental appropriations and expenses can be found in Table 58. An agency resource statement table providing information about funding sources drawn upon by the Commission can be found in Table 57.

Asset management

The Commission's main asset types are leasehold improvements and computer equipment. As asset management is not considered to be a significant aspect of the Commission's strategic business, the effectiveness of the Commission's asset management processes is not reported.

Procurement

The Commission's approach to procuring goods and services, including consultancies, is consistent with, and reflects the principles of, the Commonwealth Procurement Rules. The rules are applied to activities through the Accountable Authority Instructions, supporting operational guidelines and the Commission's procurement framework.

Consultants

The Commission engages external consultants where the necessary specialised or professional skills are unavailable within the Commission or where there is a need for independent research or assessment.

The Commission's practices on the selection and engagement of consultants are in accordance with the PGPA Act and related regulations, including the Commonwealth Procurement Rules and relevant internal policies. The methods of selection used for consultancies include open tender, select tender, direct sourcing and panel arrangements (initially selected through either an open tender or select tender process).

During 2016–17, the Commission entered into one consultancy contract, but no expenditure was incurred. In addition, one consultancy contract was active during the period, involving total actual expenditure of $92,680 (including GST).

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, www.tenders.gov.au.

Australian National Audit Office access clauses

No contracts of $100,000 or more (including GST) were let during 2016–17 that did not provide for the Auditor-General to have access to the contractor's premises.

Exempt contracts

No contracts or standing offers with a value of more than $10,000 (including GST) were exempted by the General Manager from being published on AusTender on the basis that they would disclose exempt matters under the Freedom of Information Act 1982.

Procurement initiatives to support small business

The Commission supports small business participation in the Commonwealth Government procurement market. Small and medium enterprise (SME) and small enterprise participation statistics are available on the Department of Finance's website at Statistics on Australian Government Procurement Contracts.

The Commission's procurement practices support SMEs, including by the use of the Commonwealth Contracting Suite for low-risk procurements valued under $200,000. The Commission communicates using clear, simple language that is presented in an accessible format throughout the procurement process.

The Commonwealth's Indigenous Procurement Policy, which commenced on 1 July 2015, is reflected in our procurement policy and practices.

Procurement targets were allocated to portfolios, who then assigned targets to individual portfolio agencies. During 2016–17, the Commission awarded one contract to an Indigenous supplier, with a value of $85,250.

Table 57: Fair Work Commission resource statement 2016–17
  Actual available
appropriation
for 2016–17
$'000
Payments
made
2016–17
$'000
Balance
remaining 2016–17
$'000

Ordinary annual services1

     Departmental appropriation2

(a)

118,358

(b)

87,480

(a) – (b)

30,878

Total ordinary annual services 118,358 87,480 30,878
Departmental non-operating

     Equity injections3

150 - 150
Total departmental non-operating 150 - 150
Total available annual appropriations and payments 118,508 87,480 31,028
Total net resourcing and payments for Fair Work Commission 118,508 87,480 31,028

1 Appropriation Act (No. 1) 2016–17 and Appropriation Act (No. 3) 2016–17 and Supply Act (No. 1) 2016–17. This may also include prior-year departmental appropriation and s.74 retained revenue receipts.

2 Includes an amount of $2.559 million in 2016–17 for the departmental capital budget. For accounting purposes, this amount has been designated as 'contributions by owners'.

3 Appropriation Act (No. 2) Non-operating– Equity Injection 2016–17.

Table 58: Fair Work Commission expenses by outcomes 2016–17
Expenses for outcome 1      
Outcome 1: Simple, fair and flexible workplace relations for employees and employers through the exercise of powers to set and vary minimum wages and modern awards, facilitate collective bargaining, approve agreements and deal with disputes. Budget* Actual expenses Variation
2016–17 2016–17 2016–17
$'000 $'000 $'000
(a) (b) (a) – (b)
Program 1.1: Dispute resolution, minimum wages, orders and approval of agreements
Departmental expenses      
Departmental appropriation1 78,499 79,805 (1,306)
Expenses not requiring appropriation in the budget year2 2,927 5,002 (2,075)
Total for Program 1.1 81,426 84,807 (3,381)
Outcome 1 totals by appropriation type      
Departmental expenses      
Departmental appropriation1 78,499 79,805 (1,306)
Expenses not requiring appropriation in the budget year2 2,927 5,002 (2,075)
Total expenses for Outcome 1 81,426 84,807 (3,381)
       
Average staffing level (number) 2016–17 2016–17  
326 312 14

* Full-year budget, including any subsequent adjustment made to the 2016–17 budget at Additional Estimates.

1 Departmental appropriation combines ordinary annual services (Appropriation Act Nos 1 and 3 and Supply Act No. 1) and retained revenue receipts under section 74 of the Public Governance, Performance and Accountability Act 2013.

2 'Expenses not requiring appropriation in the Budget year' are made up of Depreciation Expenses, Amortisation Expense and Audit Fees.

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