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Safe Work Australia is jointly funded by the Commonwealth, state and territory governments, as set out in the Intergovernmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety. In 2018–19 the agency received $20.590 million in funding.

In 2018–19, Safe Work Australia had an operating surplus of $0.916 million.

Assets management

Safe Work Australia manages assets in accordance with Australian Accounting Standards Board (AASB) standards 116 and 138. The agency maintains a detailed asset register and conducts an annual asset stocktake. Assets are regularly reviewed for any impairment or fair value adjustments.

Purchases of property, plant and equipment are initially recognised at cost in the statement of financial position, except for purchases less than $2,000, which are fully expensed in the year of purchase.

Safe Work Australia’s major asset is leasehold improvement, which is recognised at fair value based on an independent valuation.

Exempt contracts

There were no contracts in excess of $10,000 (inclusive of GST) or standing offers that were exempt from the requirement to publish on AusTender during 2018–19.

Australian National Audit Office access clause

All contracts over $100,000 entered into during the reporting period contained an ANAO ‘access to premises’ clause.

Purchasing

When undertaking procurement activities, Safe Work Australia makes reasonable enquiries to satisfy itself that the procurement:

  • achieves value for money
  • encourages competition and is non-discriminatory
  • uses public resources in an efficient, effective, economical and ethical manner that is not inconsistent with the policies of the Commonwealth
  • facilitates accountable and transparent decision making
  • encourages appropriate engagement with risk, and
  • is commensurate with the scale and scope of the business requirement.

The Finance and Procurement section in Safe Work Australia is responsible for
co-ordinating key procurements for the agency, developing and maintaining procurement policies, procedures, templates and forms, and providing advice and support for staff undertaking procurements. To promote best practice, the Finance and Procurement section has undertaken a wholesale review of the agency’s procurement practices and is currently reviewing and updating procurement procedures, templates and guidance material for staff.

Compliance reporting

Safe Work Australia monitors compliance with the Commonwealth Resource Management Framework and finance law, and reports regularly to senior management. There were no instances of significant non-compliance during 2018–19.

Safe Work Australia’s support of Indigenous businesses and small and medium enterprises

Safe Work Australia’s implementation of the Australian Government’s Indigenous Procurement Policy is designed to increase opportunities for businesses owned by Aboriginal and Torres Strait Islander peoples. The agency works in partnership with Supply Nation in applying the policies.

Safe Work Australia is committed to supporting small and medium enterprises (SMEs) by paying providers for goods and services in required timeframes, and engaging in ongoing monitoring and improvement to our procurement and contracting practices. The agency has simplified and streamlined its procurement processes by using the Department of Finance’s Commonwealth Contracting Suite Plus, as required, and for other low-risk procurements. This has significantly reduced the length and complexity of most tender processes and contracts by using a set of terms and conditions that are consistent with other agencies that SMEs would be familiar with. Small and medium-sized enterprise and small enterprise participation statistics are available on the Department of Finance’s website.

Safe Work Australia continues to monitor developments in Commonwealth procurement practices and liaises with the Department of Finance and other agencies to ensure its practices are commensurate with the risks involved and as simple as possible.

Grants

Safe Work Australia uses GrantConnect, the new whole-of-government information system for Commonwealth grants, to advertise grant opportunities and report all grants awarded.

Heading costs

Information required by the Legal Services Directions 2017 on Safe Work Australia’s legal services purchasing for 2018–19 will be made available on the  Legal services expenditure reports page by 30 October 2019.

Consultancy contracts

During 2018–19, nine new consultancy contracts were entered into involving total actual expenditure of $0.392 million (GST inclusive). In addition, six ongoing consultancy contracts were active during the period, involving total actual expenditure of $0.569 million (GST inclusive).

Safe Work Australia engages consultants when specialist expertise or independent research, review or assessment is required. Consultants are typically engaged to investigate or diagnose a defined issue or problem; carry out defined reviews, evaluations or data collection for research; or provide independent advice, information or creative solutions to assist in Safe Work Australia’s decision making. Prior to engaging consultants, Safe Work Australia takes into account the skills and resources required for the task, the skills available internally and the cost-effectiveness of engaging external expertise. The decision to engage a consultant is guided by the requirements of the finance law, the Commonwealth Procurement Rules and associated Guides.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on AusTender.

Entity resource statement and expenses by outcome

Safe Work Australia resource statement 2018–19

Section 17AF(1)(b) of the PGPA Rule requires non-corporate Commonwealth entities to summarise the total resources of the entity, and the total payments made by the entity during the reporting period.

This information is provided at Note 3.2 Special Accounts is in Funding of the financial statements.

Expenses by outcome

Safe Work Australia has one outcome and one program. These are:

  • Outcome 1: Healthier, safer and more productive workplaces through improvements to Australian work health and safety (WHS) and workers’ compensation arrangements.
  • Program 1.1: Reform of and improvements to Australian WHS and workers’ compensation arrangements.

Accountable Authority

Details of Accountable Authority during the reporting period, current report period (2018–19)

Name

Position Title/Position held

Date of Commencement

Date of cessation

Michelle Baxter

Chief Executive Officer

1 November 2015

31 October 2020

Independent Auditor's Report

Independent Auditor's Report page 1: INDEPENDENT AUDITOR’S REPORT To the Minister for Industrial Relations Opinion In my opinion, the financial statements of Safe Work Australia (‘the Entity’) for the year ended 30 June 2019: (a)comply with Australian Accounting Standards – Reduced Disclosure Requirements and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and (b)present fairly the financial position of the Entity as at 30 June 2019 and its financial performance and cash flows for the year then ended. The financial statements of the Entity, which I have audited, comprise the following statements as at 30 June 2019 and for the year then ended:   Statement by the Accountable Authority and Chief Financial 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 Entity 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 (the Code) to the extent that they are not in conflict with the Auditor‐General Act 1997. 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. Other information The Accountable Authority is responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2019 but does not include the financial statements and my auditor’s report thereon. My opinion on the financial statements does not cover the other information and accordingly I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Independent Auditor's Report page 2: Accountable Authority’s responsibility for the financial statements As the Accountable Authority of the Entity, the Chief Executive Officer is responsible under the Public Governance, Performance and Accountability Act 2013 (the Act) for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards – Reduced Disclosure Requirements and the rules made under the Act. The Chief Executive Officer is also responsible for such internal control as the Chief Executive Officer determines is necessary to enable the preparation 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 ability of the Entity 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. 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 the Accountable Authority 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 Peter Kerr Executive Director Delegate of the Auditor‐General Canberra 18 September 2019.

Statement by the Accountable Authority and Chief Financial Officer

In our opinion, the attached financial statements for the year ended 30 June 2019 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.

In our opinion, at the date of this statement, there are reasonable grounds to believe that Safe Work Australia will be able to pay its debts as and when they fall due.

Michelle Baxter, signature

Michelle Baxter
Chief Executive Officer
16 September 2019

Kris Arnold, signature

Kris Arnold
Chief Financial Officer
16 September 2019

Financial Statements

Statement of Comprehensive Income

For the period ended 30 June 2019

Notes 2019 $'000 2018
$'000
Original Budget
$'000
NET COST OF SERVICES
Expenses
Employee benefits 1.1A 12,917 12,713 12,440
Suppliers 1.1B 5,940 6,345 8,008
Grants 249 20 110
Depreciation and amortisation 2.2A 549 601 590
Impairment loss allowance on financial instruments 1 - -
Write-down and impairment of other assets - 1 -
Total expenses 19,656 19,680 21,148
Own-Source Income
Own-source revenue

Sale of goods and rendering of services

1.2A 10,269 10,315 10,267
Other revenue 72 59 60
Total own-source revenue 10,341 10,374 10,327
Total own-source income 10,341 10,374 10,327
Net cost of service (9,315) (9,306) (10,821)
Revenue from Government 1.2B 10,231 10,007 10,231
Surplus/(Deficit) on continuing operations 916 701 "> (590)
OTHER COMPREHENSIVE INCOME
Items not subject to subsequent reclassification to net cost of services
Changes in asset revaluation surplus (159) - -
Items subject to subsequent reclassification to net cost of services - - -
Total other comprehensive income (159) - -

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

Budget Variances Commentary

Statement of Comprehensive Income

Employee benefits: The variance of $0.477m (3.83%) is predominately due to Safe Work Australia having a higher number of staff at higher Australian Public Service classification levels.

Supplier expenses: The variance of -$2.068m (-25.82%) is primarily due to contractor delays with significant projects, as well as some projects being performed in-house by agency staff and not outsourced.

Statement of Financial Position

As at 30 June 2019

Notes

2019

$'000

2018

$'000

Original Budget

$'000

ASSETS

Financial assets

Cash and cash equivalent

2.1A

15,492

14,454

13,217

Trade and other receivables

2.1B

349

465

320

Accrued income

-

20

-

Total financial assets

15,841

14,939

13,537

Non-financial assets

Buildings

2.2A

1,462

2,071

1,573

Plant and equipment

2.2A

59

80

132

Computer software

2.2A

-

-

22

Prepayments

207

157

71

Total non-financial assets

1,728

2,308

1,798

Total assets

17,569

17,247

15,335

LIABILITIES

Payables

Suppliers

2.3A

751

837

769

Other payables

2.3B

334

919

203

Total payables

1,085

1,756

972

Provisions

Employee provisions

4.1A

3,179

3,035

3,691

Total provisions

3,179

3,035

3,691

Total liabilities

4,264

4,791

4,663

Net assets

13,305

12,456

10,672

EQUITY

Contributed equity

5,209

5,117

5,209

Reserves

617

776

776

Retained surplus

7,479

6,563

4,687

Total equity

13,305

12,456

10,672

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

Budget Variances Commentary

Statement of Financial Position

Cash and cash equivalent: The variance of $2.275m (17.21%) is primarily a result of Safe Work Australia’s surplus for 2018 ($0.701m) and 2019 ($0.916m).

Employee provision: The variance of -$0.512m (-13.87%) reflects the change in composition of annual leave and long service leave provisions compared with the budgeted amount. This is due to staff turn-over, including voluntary redundancies.

Statement of Changes in Equity

For the period ended 30 June 2019

Notes

2019

$'000

2018

$'000

Original Budget

$'000

CONTRIBUTED EQUITY

Opening balance

Balance carried forward from previous period

5,117

5,029

5,117

Adjusted opening balance

5,117

5,029

5,117

Transactions with owners

Departmental capital budget

92

88

92

Total transactions with owners

92

88

92

Closing balance as at 30 June

5,209

5,117

5,209

RETAINED EARNINGS

Opening balance

Balance carried forward from previous period

6,563

5,862

5,277

Adjusted opening balance

6,563

5,862

5,277

Comprehensive income

Surplus/(Deficit) for the period

916

701

(590)

Total comprehensive income

916

701

(590)

Closing balance as at 30 June

7,479

6,563

4,687

ASSET REVALUATION RESERVE

Opening balance

Balance carried forward from previous period

776

776

776

Adjusted opening balance

776

776

776

Comprehensive income

Other comprehensive income

(159)

-

-

Total comprehensive income

(159)

-

-

Closing balance as at 30 June

617

776

776

TOTAL EQUITY

Opening balance

Balance carried forward from previous period

12,456

11,667

11,170

Adjusted opening balance

12,456

11,667

11,170

Comprehensive income

Surplus/(Deficit) for the period

916

701

(590)

Other comprehensive income

(159)

-

-

Total comprehensive income

757

701

(590)

Transactions with owners

Departmental capital budget

92

88

92

Total transactions with owners

92

88

92

Closing balance as at 30 June

13,305

12,456

10,672

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

Accounting Policy

Equity Injections

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and departmental capital budgets are recognised directly in contributed equity in that year.

Budget Variances Commentary

Statement of changes in Equity

Total Comprehensive Income: the variance of $1.347m (228.31%) is primarily due to the agency achieving a surplus for the current financial year. See the Statement of Comprehensive Income.

Cash Flow Statement

For the period ended 30 June 2019

Notes

2019

$'000

2018

$'000

Original Budget

$'000

OPERATING ACTIVITIES

Cash received

Appropriations

10,231

10,007

10,231

Sale of goods and rendering of services

11,469

11,218

10,267

Net GST received

-

-

1,027

Other

6

12

-

Total cash received

21,706

21,237

21,525

Cash used

Employees

13,222

12,906

12,440

Suppliers

6,598

6,489

7,948

Grants

249

20

110

Net GST paid

599

585

1,027

Total cash used

20,668

20,000

21,525

Net cash from operating activities

1,038

1,237

-

INVESTING ACTIVITIES

Cash used

Purchase of plant and equipment, and computer software

71

32

92

Total cash used

71

32

92

Net cash used by investing activities

71

32

92

FINANCING ACTIVITIES

Cash received

Contributed equity

71

32

92

Total cash received

71

32

92

Net cash from financing activities

71

32

92

Net increase in cash held

1,038

1,237

-

Cash and cash equivalents at the beginning of the reporting period

14,454

13,217

13,217

Cash and cash equivalents at the end of the reporting period

2.1A

15,492

14,454

13,217

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

Budget Variances Commentary

Cash Flow Statement

Cash received - Sale of goods and rendering of services: the variance of $1.202m (11.71%) is predominately due to GST reporting in the Portfolio Budget Statements.

Overview

The Basis of Preparation

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

(a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and

(b) Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars.

Significant Accounting Judgements and Estimates

Safe Work Australia has made assumptions or estimates in the following areas that have the most significant impact of the amounts recorded in the financial statements:

  • The fair value of buildings, plant and equipment is assessed at market value or depreciated replacement cost as determined by an independent valuer and is subject to management assessment in between formal valuations, and
  • Leave provisions involve assumptions on the expected tenure of existing staff, patterns of leave claims and payouts, future salary movements and future discount rates.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.

New Accounting Standards

No new, revised, amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to the current reporting period have a material effect on Safe Work Australia's financial statements.

Future Australian Accounting Standard Requirements

Safe Work Australia will apply AASB 16 Leases from 2019–20. The impact on transition in 2019–20 is an increase to assets and liabilities of $2.365 million.

Taxation

Safe Work Australia is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and Goods and Services Tax (GST).

Events After the Reporting Period

There were no subsequent events that had the potential to significantly affect the ongoing structure and financial activities of Safe Work Australia.

Financial performance

This section analyses the financial performance of Safe Work Australia for the year ended 30 June 2019.

1.1 Expenses

2019

$'000

2018

$'000

1.1A: Employee Benefits

Wages and salaries

8,564

8,552

Superannuation

Defined contribution plans

1,028

947

Defined benefit plans

1,029

851

Leave and other entitlements

1,913

1,665

Separation and redundancies

383

698

Total employee benefits

12,917

12,713

Accounting Policy

Accounting policies for employee related expenses are contained in the people and relationships section.

1.1B: Suppliers

Goods and services supplied or rendered
Consultants 2,060 2,155
Contractors 99 273
Travel 240 331
IT services 138 187
Recruitment and training 368 293
Advertising 183
Office supplies 50 71
Venue hire/ guest speaker 8 49
Subscriptions 311 235
Corporate costs 883

1,068
Property costs 213 227
Sponsorships 39 50
Other 560

418
Total goods and services supplied or rendered 5,152 5,543
Goods supplied 16 57
Services rendered 5,136 5,486
Total goods and services supplied or rendered 5,152 5,543
Other suppliers
Operating lease rentals in connection with subleases 745 751
Workers compensation expenses

43

51
Total other supplier 788 802
Total suppliers 5,940 6,345

Leasing commitments

Safe Work Australia in its capacity as lessee of Level 7, Nishi Building, 2 Phillip Law Street, Acton has entered into a 7 year lease ending on 30 June 2022, with a five year, five month and 16 day option commencing on 1 July 2022 and expiring on 16 December 2027. In accordance with Resource Management Guide No. 504 Commonwealth Property Management Framework Lease Endorsement Process for Non-Corporate Commonwealth Entities, Safe Work Australia will need to obtain approval from the Department of Finance prior to exercising the option.

Accounting Policy

The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits.

2019

$'000

2018

$'000

Commitments for minimum lease payments in relation to non-cancellable
operating leases are payable as follows:

Within 1 year

837

799

Between 1 to 5 years

1,791

2,628

Total operating lease commitments

2,628

3,427

1.2 Own-Source Revenue and Gains

2019

$'000

2018

$'000

Own-Source Revenue

1.2A: Sale of Goods and Rendering of Services

Rendering of services

10,269

10,315

Total sale of goods and rendering of services

10,269

10,315

Accounting policy

Revenue from rendering of services – state and territory contributions

State and territory contributions are recognised over the course of the year as work is completed. All contributions are deemed as being earned at the reporting date. Contribution amounts are received in accordance with the

Inter-Governmental Agreement for Regulation and Operational Reform in Occupational Health and Safety.

Other revenue from rendering of services

Other revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

a. the amount of revenue, stage of completion and transaction costs incurred can be reliably measured, and

b. the probable economic benefits associated with the transaction will flow to Safe Work Australia.

The stage of completion of contracts at the reporting date is determined by reference to the proportion of costs incurred to date compared to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

1.2B: Revenue from Government

Departmental appropriations

10,231

10,007

Total revenue from Government

10,231

10,007

Accounting policy

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when Safe Work Australia gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

Financial position

This section analyses Safe Work Australia’s assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and relationships section.

2.1 Financial Assets

2019

$'000

2018

$'000

2.1A: Cash and Cash Equivalents

Cash at bank

302

358

Cash in the special account

15,190

14,096

Total cash and cash equivalents

15,492

14,454

Accounting policy

Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand, and cash in special accounts.

2.1B: Trade and Other Receivables
Goods and services receivable
Goods and services 210 328

Total goods and services receivable

210 328
Other receivable
GST receivable 62 81
Appropriation receivable 77 56
Total other receivable 139 137
Total trade and other receivables (gross) 349 465
Total trade and other receivables (net) 349 465

Credit terms for goods and services were within 30 days (2018: 30 days).

Accounting policy

Trade and other receivables

Trade and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as receivables. Receivables are measured at amortised cost using the effective interest method less impairment.

2.2 Non-Financial Assets

2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Computer Software for 2019
Buildings
$’000
Plant and equipment
$’000
Total
$’000
As at 1 July 2018
Gross book value 3,064 223 3,287
Accumulated depreciation, amortisation and impairment (993) (143) (1,136)
Total as at 1 July 2018 2,071 80 2,151
Additions
Purchase 47 24 71
Internally developed - - -
Revaluations (155) 3 (152)
Depreciation and amortisation (501) (48) (549)
Write-down and impairment of assets - - -
Total as at 30 June 2019 1,462 59 1,521
Total as at 30 June 2019 represented by
Gross book value 1,462 141 1,603
Accumulated depreciation, amortisation and impairment - (82) (82)
Total as at 30 June 2019 1,462 59 1,521

No indicators of impairment were found for buildings, plant and equipment.

No buildings, plant and equipment are expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assets

All revaluations were conducted in accordance with the revaluation policy stated at Note 5.3. An independent valuer conducted the revaluation as at 30 June 2019.

Contractual commitments for the acquisition of buildings, plant and equipment

Safe Work Australia has no significant contractual commitments for the acquisition of buildings, plant and equipment.

Accounting policy

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. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

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

Asset recognition threshold

Purchases of buildings, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than the thresholds listed below for each class of assets, 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).

Leasehold Improvements: $20,000

Plant and Equipment: $2,000

Internally Developed Software: $50,000

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located.

Revaluations

Following initial recognition at cost, buildings, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets. Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class. Any accumulated depreciation as at the revaluation date is offset against the gross carrying amount of the asset and the asset is restated to the revalued amount.

Depreciation

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

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future, reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

Leasehold Improvements: Lease term

Plant and Equipment: 3 to 20 years.

Impairment

All assets were assessed for impairment at 30 June 2019. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

All software assets were assessed for indications of impairment as at 30 June 2019.

De-recognition

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

2.3 Payables

2019
$'000
<2018
$'000
2.3A: Suppliers
Trade creditors and accruals 751 837
Total suppliers 751 837
2.3B: Other Payables
Salaries and wages 76 82
Superannuation 13 32
Separations and redundancies - 575
Lease 201 199
Other 44 31
Total other payables 334 919

Funding

This section identifies Safe Work Australia’s funding structure from the Australian government.

3.1 Appropriations

3.1A: Annual Appropriations ('Recoverable GST exclusive')
Annual appropriations for 2019
Annual Appropriation1
$'000
Total appropriation
$'000
Appropriation applied in 2019 (current and prior years) $'000 Variance $'000
Departmental
Ordinary annual services 10,231 10,231 10,231 -
Capital budget2 92 92 71 21
Total departmental 10,323 10,323 10,302 21

1. During 2019, there were no appropriation amounts withheld under section 51 of the PGPA Act or quarantined for administrative purposes.

2. Departmental Capital Budgets are appropriated through Appropriation Acts (No.1, 3). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.

3.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')
2019 $'000 2018
$'000
Departmental
Appropriation Act (No. 1) 2017–18 - Departmental Capital Budget - 56
Appropriation Act (No. 1) 2018–19 - Departmental Capital Budget 77 -
Total departmental 77 56

3.2 Special Accounts

Safe Work Australia Special Account
2019
$'000
2018
$'000
Balance brought forward from previous period 14,454 13,217
Increases

Appropriation credited to Special Account 10,231 10,007
Capital Injection - Departmental Capital Budget 71 32
Revenue from services 11,469 11,218
Other receipts 6 12
Total increases 21,777 21,269
Available for payments 36,231 34,486
Decreases
Departmental
Payment made to suppliers 7,517 7,126
Payment made to employees 13,222 12,906
Total departmental 20,739 20,032

Total decreases

20,739 20,032
Total balance carried to the next period 15,492 14,454
Balance represented by:
Cash held in entity bank accounts 302 358
Cash held in the Official Public Account 15,190 14,096
Total balance carried to the next period 15,492 14,454

Appropriation: Public Governance, Performance and Accountability Act 2013, section 80.

Establishing Instrument: The Safe Work Australia Special Account was established in accordance with section 64 of the Safe Work Australia Act 2008.

Purpose: To provide a source of finance to resource Safe Work Australia.

People and relationships

This section describes a range of employment and post-employment benefits provided to our people and our relationships with other key people.

4.1 Employee Provisions

2019
$'000
2018
$'000
4.1A: Employee Provisions
Leave strong>3,179 3,035
Total employee provisions 3,179 3,035
Employee provisions expected to be settled
No more than 12 months strong>1,197 1,176
More than 12 months 1,982 1,859
Total employee provisions 3,179 3,035

Accounting policy

Liabilities for short-term employee benefits and termination benefits expected within 12 months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as the net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the entity’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to the Standard Parameters issued by the Department of Finance. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and redundancy

Provision is made for separation and redundancy benefit payments. The entity recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

The entity's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

Safe Work Australia makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. Safe Work Australia accounts for the contributions as if they were contributions to defined contribution plans.

4.2 Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of Safe Work Australia, directly or indirectly. Safe Work Australia has determined the key management personnel to be the Chief Executive and Executive Officers who report directly to the Chief Executive during the 2018–19 period. Key management personnel remuneration is reported in the table below:

2019
$'000
2018
$'000
Short-term employee benefits

1,221 1,298
Post-employment benefits 189 218
Other long-term employee benefits 37 128
Termination benefits - -
Total key management personnel remuneration expenses1 1,447 1,644

There are six key management personnel included in the above table (2018: six key management personnel).

1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by Safe Work Australia.

Related party relationships:

Safe Work Australia is an Australian Government controlled entity. Related parties to Safe Work Australia are key management personnel, their close family members, and the Portfolio and Cabinet Ministers.

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by Safe Work Australia, it has been determined that there are no related party transactions to be disclosed.

Managing uncertainties

This section analyses how Safe Work Australia manages financial risks within its operating environment.

5.1 Contingent Assets and Liabilities

At 30 June 2019 Safe Work Australia has no contingent assets or contingent liabilities. Safe Work Australia is unaware of any quantifiable, unquantifiable or significant remote contingencies.

Accounting policy

Contingent assets and contingent liabilities are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of an asset or liability or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

5.2 Financial Instruments

2019
$'000
2018
$'000
5.2A: Categories of Financial Instruments
Financial Assets under AASB 139
Loans and receivables
Cash and cash equivalents - 14,454
Goods and other receivables - 328
Accrued revenue - 20
Total loans and receivables - 14,802
Financial Assets under AASB 9
Financial assets at amortised cost
Cash and cash equivalents 15,492 -
Goods and other receivables 210 -
Total financial assets at amortised cost 15,702 -
Total financial assets 15,702 14,802
Financial Liabilities
Financial liabilities measured at amortised cost
Suppliers 751 837
Other payables 334 919
Total financial liabilities measured at amortised cost 1,085 1,756
Total financial liabilities 1,085 1,756
Classification of financial assets on the date of initial application of AASB 9.
Financial assets class Note AASB 139 original classification AASB 9 new classification ASB 139 carrying amount at 30 June 2018 $'000 AASB 9 carrying amount at 1 July 2018 $'000
Cash and cash equivalents 2.1A Loans and receivables Amortised cost 14,454 14,454
Goods and other receivables 2.1B Loans and receivables Amortised cost 328 328
Accrued revenue Loans and receivables Amortised cost 20 20
Total financial assets 14,802 14,802

Accounting policy

AASB 9 Financial Instruments applies to Safe Work Australia from 1 July 2018. AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement.

The classification and measurement of financial assets under AASB 9 is determined by Safe Work Australia’s business model for managing its financial assets and the contractual cash flow characteristics of those assets.

Financial assets

Safe Work Australia’s financial assets are comprised of trade and other receivables that are held for the purposes of collecting the contracted cash flows.

Safe Work Australia classifies its financial assets as ‘financial assets at amortised cost’.

Safe Work Australia derived no interest income form financial assets in either the current or prior year.

Financial liabilities

Financial liabilities are also measured at amortised cost.

Impairment

Safe Work Australia has assessed the trade receivables at the reporting date to determine whether any indicators of impairment exist in accordance with the requirements of AASB Financial Instruments. Due to the nature of Safe Work Australia’s receivables, a nil loss allowance has been calculated.

5.3 Fair Value Measurement

Accounting policy

Safe Work Australia engaged the services of the Jones Lang LaSalle Advisory Services Pty Ltd (JLL) to conduct a detailed external valuation of non-financial assets as at 30 June 2019. JLL provided written assurance to Safe Work Australia that the models developed are in accordance with AASB13 Fair Value Measurement, AASB 116 Property, Plant and Equipment, and the Public Governance, Performance and Accountability (Financial Reporting) Rule.

Both the market and cost approach has been utilised to determine the fair value of Safe Work Australia’s assets.

Carrying amounts are reviewed every year to determine if an independent valuation is required. The regularity of independent valuations depends on the volatility of movement in the market value for the relevant assets.

5.3A: Fair Value Measurements
Fair value measurements at the end of the reporting period
2019
$'000
2018
$'000
Financial assets
Cash and cash equivalents 15,492 14,454
Goods and other receivables 210 328
Accrued revenue - 20
Non-financial assets
Buildings 1,462 2,071
Plant and equipment 59 80
Financial liabilities
Suppliers 751 837
Other payables 334 919

Other information

6.1 Aggregate Assets and Liabilities

2019
$'000
2018
$'000
6.1A: Aggregate Assets and Liabilities
Assets expected to be recovered in:
No more than 12 months 16,048 15,096
More than 12 months 1,521 2,151
Total assets 17,569 17,247
Liabilities expected to be settled in:
No more than 12 months 2,112 2,733
More than 12 months 2,152 2,058
Total liabilities 4,264 4,791

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Last modified on Thursday 16 January 2020 [10955|93199]