Note 19: Budgetary Report and Explanations of Major Variances

TORRES STRAIT REGIONAL AUTHORITY

Notes to and forming part of the financial statements for the period ended 30 June 2015

Note 19: Budgetary Report and Explanations of Major Variances

Note 19A: Departmental Budgetary Reports

Statement of Comprehensive Income

for the period ended 30 June 2015

	Actual	Budget Estimate
		Original¹	Variance²
	2015 $'000	2015 $'000	2015 $'000
NET COST OF SERVICES
Expenses
Employee benefits	16,712	15,545	1,167
Supplier	18,357	21,524	(3,167)
Grants	29,350	24,989	4,361
Depreciation	1,325	900	425
Finance costs	91	150	(59)
Losses from Asset Sales	70	-	70
Total expenses	65,905	63,108	2,797
LESS:
Own-Source Income
Own-source revenue
Sale of goods and rendering of services	460	240	220
Interest	1,742	1,462	280
Other revenue	15,774	13,247	2,527
Total own-source revenue	17,976	14,949	3,027
Gains
Reversals of previous asset write-downs and impairments	248	-	248
Total gains	248	-	248
Total own-source income	18,224	14,949	3,275
Net cost of services	47,681	48,159	(478)
Revenue from Government	48,159	48,159	-
Surplus attributable to the Australian Government	478	-	478
OTHER COMPREHENSIVE INCOME
Items not subject to subsequent reclassification to profit or loss
Changes in asset revaluation surplus	978	-	978
Total other comprehensive income	978	-	978
Total comprehensive income attributable to the Australian Government	1,456	-	1,456

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

1. The entity's original budgeted financial statement that was first presented to parliament in respest of the reporting period (i.e from the entity's 2014 - 15 Portfolio Budget Statements (PBS)).

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided futher at Note 19B.

TORRES STRAIT REGIONAL AUTHORITY

Notes to and forming part of the financial statements

STATEMENT OF FINANCIAL POSITION

as at 30 June 2015

Statement of Financial Position

as at 30 June 2015

	Actual	Budget Estimate
		Original¹	Variance²
	2015 $'000	2015 $'000	2015 $'000
ASSETS
Financial assets
Cash and cash equivalents	2,790	4,611	(1,821)
Trade and other receivables	7,641	8,055	(414)
Other investments	33,300	22,200	11,100
Total financial assets	43,731	34,866	8,865
Non-financial assets
Land and buildings	35,524	43,326	(7,802)
Plant and equipment	1,789	1,955	(166)
Total non-financial assets	37,313	45,281	(7,968)
Total assets	81,044	80,147	897
LIABILITIES
Payables
Suppliers	3,263	1,314	1,949
Grants	386	1,828	(1,442)
Other payables	436	4,177	(3,741)
Total payables	4,085	7,319	(3,234)
Provisions
Employee provisions	3,147	3,253	(106)
Total provisions	3,147	3,253	(106)
Total liabilities	7,232	10,572	(3,340)
Net assets	73,812	69,575	4,237
EQUITY
Contributed equity	32	32	-
Reserves	14,840	13,678	1,162
Retained surplus	58,940	55,865	3,075
Total equity	73,812	69,575	4,237

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

1. The entity's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e from the entity's 2014 - 15 Portfolio Budget Statements (PBS)).

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided futher at Note 19B.

TORRES STRAIT REGIONAL AUTHORITY

STATEMENT of CHANGES in EQUITY

for the period ended 30 June 2015

Statement of Changes in Equity

as at 30 June 2015

	Retained earnings			Asset revaluation surplus			Contributed equity/capital			Total equity
	Actual	Budget Estimate		Actual	Budget Estimate		Actual	Budget Estimate		Actual	Budget Estimate
		Original¹	Variance²		Original¹	Variance²		Original¹	Variance²		Original¹	Variance²
	2015 $'000	2015 $'000	2015 $'000	2015 $'000	2015 $'000	2015 $'000	2015 $'000	2015 $'000	2015 $'000	2015 $'000	2015 $'000	2015 $'000
Opening balance
Balance carried forward from previous period	58,462	55,865	2,597	13,862	13,678	184	32	32		72,356	69,575	2,781
Adjusted opening balance	58,462	55,865	2,597	13,862	13,678	184	32	32	-	72,356	69,575	2,781
Comprehensive income
Surplus for the period	478	-	478	-	-	-	-	-	-	478	-	478
Other comprehensive income	-	-	-	978	-	978	-	-	-	978	-	978
Total comprehensive income	478	-	478	978	-	978	-	-	-	1,456	-	1,456
Closing Balance attributable to the Australian Government	58,940	55,865	3,075	14,840	13,678	1,162	32	32	-	73,812	69,575	4,237

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

1. The entity's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e from the entity's 2014 - 15 Portfolio Budget Statements (PBS)).

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided futher at Note 19B.

TORRES STRAIT REGIONAL AUTHORITY

CASH FLOW STATEMENT

for the period ended 30 June 2015

Cash Flow Statement

as at 30 June 2015

	Actual	Budget Estimate
		Original¹	Variance²
	2015 $'000	2015 $'000	2015 $'000
OPERATING ACTIVITIES
Cash received
Receipts from Government	48,159	48,159	-
Sales of goods and rendering of services	15,850	13,487	2,363
Interest	1,673	1,312	361
Net GST received	2,638	-	2,638
Total cash received	68,320	62,958	5,362
Cash used
Employees	16,570	15,545	1,025
Suppliers	21,276	21,524	(248)
Loan payments	65	-	65
Grants	31,059	25,139	5,920
Total cash used	68,970	62,208	6,762
Net cash from/(used by) operating activities	(650)	750	(1,400)
INVESTING ACTIVITIES
Cash received
Loan receipts	1,270	600	670
Investments	4,094	7,600	(3,506)
Total cash received	5,364	8,200	(2,836)
Cash used
Loan payments	724	450	274
Purchase of property, plant and equipment	3,911	10,600	(6,689)
Total cash used	4,635	11,050	(6,415)
Net cash from/(used by) investing activities	729	(2,850)	3,579
Net increase/(decrease) in cash held	79	(2,100)	2,179
Cash and cash equivalents at the beginning of the reporting period	2,711	6,711	(4,000)
Cash and cash equivalents at the end of the reporting period	2,790	4,611	(1,821)

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

1. The entity's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e from the entity's 2014 - 15 Portfolio Budget Statements (PBS)).

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided futher at Note 19B.

TORRES STRAIT REGIONAL AUTHORITY

Notes to and forming part of the financial statements for the period ended 30 June 2015

Note 19B: Budgetary Reports and Explanations of Major Variances

Explanation of Major Variances	Affected line items (and Statement)
An unbudgeted shortfall in superannuation obligations was identified as part of a review of the payroll system.	Employee benefits (Statement of Comprehensive Income)
During the year, the TSRA was funded S1.3M through an Indigenous Advancement Strategy grant from the Department of Prime Minister and Cabinet in order to purchase the only non-indigenous commercial Beche-de-Mer fishing license existing in the Torres Strait region. The TSRA contributed an additional $200,000 to this initiative. Beche-de-Mer is one of many commercial fisheries in the Torres Strait region. The purchase of the Beche-de-mer license by the TSRA for the benefit of Torres Strait Islander and Aboriginal people of the Torres Strait is part of an ongoing process of securing 100% ownership of all Torres Strait commercial fisheries for the sole benefit of the Torres Strait Islander and Aboriginal people of the region. This funding was not included in the original budget position.	Suppliers and Grants (Statement of Comprehensive Income)
The remaining variance from budget of S4.6M was transferred to grants and paid to various organisations to deliver indigenous employment and training programs in the Torres Strait and Northern Peninsula communities.
The budget reflects the depreciation funding received as part of the annual budget and is substantially less than actual depreciation expense.	Depreciation (Statement of Comprehensive Income)
The budget only includes funding agreements that had been signed at the time the budget was prepared. Additional funding was raised after the budget was prepared. Because the TSRA is the leading Commonwealth representative body for Torres Strait Islander and Aboriginal people living in the Torres Strait, they are often approached by other government agencies to deliver programs in the Torres Strait on an adhoc basis throughout the year. In recent years it has become common practice for the TSRA to enter into additional funding agreements with other agencies after the date that the budget is formally finalised.	Other revenue (Statement of Comprehensive Income)
The TSRA has undertaken a major development for the provision of staff accomodation on Thursday Island. Delays in the preliminary phases of construction, specifically in obtaining various administrative approvals, has reduced the capital outlays expected for FY 2014/15. This explains a larger balance of cash comprised of Cash at bank and Other investments, corresponding to a smaller balance of land and buildings.	Cash and cash equivalents, Other investments and Land and buildings (Statement of Financial Position)
The variance in payables arises from timing differences due to normal business activities.	Payables (Statement of Financial Position)
The variance in retained surplus arises as a cumulative result of actual surpluses realised, whilst budgeting for breakeven results in prior years' budgets.	Retained Surplus (Statement of Financial Position)

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