Appendix 9 Financial statements

 

Independent auditor's report

Page 1 of the Independent Auditor's Report.

Page 2 of the Independent Auditor's Report.

Statement by Accountable Authority, Chief Executive and Chief Financial Officer

Statement by Accountable Authority, Chief Executive and Chief Financial Officer.

Australian Institute of Health and Welfare
Statement of Comprehensive Income
for the period ended 30 June 2016

Net cost of services

Expenses Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Employee benefits 2A 33,817 35,054 33,535
Supplier 2B 12,844 12,565 12,242
Depreciation and amortisation 6C 1,015 1,052 1,000
Write-down and impairment of assets 2C 459
Total expenses 48,135 48,671 46,777

 

Own-source income

Own-source revenue Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Sale of goods and rendering of services 3A 31,334 32,365 30,000
Interest 3B 759 682 600
Other revenues 3C 683 2 30
Total own-source revenue 32,776 33,049 30,630
Gains
Gain from write off of provision for make good 3D 391
Total gains 391
Total own-source income 32,776 33,440 30,630
Net cost of services 15,359 15,231 16,147
Revenue from government 3E 15,625 15,800 15,625
Surplus / Deficit 266 569 (522)
 
Other Comprehensive Income Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Change in asset revaluation reserve 122
Total other comprehensive income 122
Total comprehensive income attributable to the Australian Government 388 569 (522)

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

Australian Institute of Health and Welfare
Statement of Financial Position
as at 30 June 2016

Assets

Financial assets Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Cash and cash equivalents 5A 27,220 25,562 22,540
Trade and other receivables 5B 6,435 6,858 4,837
Total financial assets 33,655 32,420 27,377

 

Assets

Non-financial assets Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Buildings 6A, 6C 4,800 5,037 4,826
Property, plant and equipment 6B, 6C 3,081 3,845 4,373
Intangibles 5
Other non-financial assets 6D 1,076 817 619
Total non-financial assets 8,957 9,699 9,823
Total assets 42,612 42,119 37,200

 

Liabilities

Payables Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Suppliers 7A (1,372) (1,248) (2,532)
Other payables 7B (4,767) (5,164) (4,838)
Contract income in advance 7C (18,970) (19,327) (14,586)
Total payables (25,109) (25,739) (21,956)

 

Liabilities

Provisions Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Employee provisions 8A (11,678) (11,082) (11,633)
Other provisions 8B (139)
Total provisions (11,817) (11,082) (11,633)
Total liabilities (36,926) (36,821) (33,589)
Net assets 5,686 5,298 3,611
 
Equity Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Contributed equity 2,756 2,756 2,756
Reserves 2,410 2,288 2,288
Retained surplus (accumulated deficit) 520 254 (1,433)
Total equity 5,686 5,298 3,611

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

Australian Institute of Health and Welfare
Statement of Changes in Equity
for the period ended 30 June 2016

 
Statement of Changes in Equity Retained Earnings
2016
$'000
Retained Earnings
2015
$'000
Retained Earnings
Original
Budget
$'000
Asset Revaluation Surplus
2016
$'000
Asset Revaluation Surplus
2015
$'000
Asset Revaluation Surplus
Original
Budget
$'000
Contributed Equity/
Capital
2016
$'000
Contributed Equity/
Capital
2015
$'000
Contributed Equity/
Capital
Original
Budget
$'000
Total Equity
2016
$'000
Total Equity
2015
$'000
Total Equity
Original
Budget
$'000
Opening balance
Balance carried forward from previous period
254 (315) (911) 2,288 2,288 2,288 2,756 2,756 2,756 5,298 4,729 4,133
Adjusted opening balance 254 (315) (911) 2,288 2,288 2,288 2,756 2,756 2,756 5,298 4,729 4,133
Other Comprehensive Income 122 122
Surplus (Deficit) for the period 266 569 (522) 266 569 (522)
Total comprehensive income attributable to the Australian Government 266 569 (522) 122 388 569 (522)
Closing balance at 30 June 520 254 (1,433) 2,410 2,288 2,288 2,756 2,756 2,756 5,686 5,298 3,611

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

Australian Institute of Health and Welfare
Cash Flow Statement
for the period ended 30 June 2016

Operating Activities

Cash received Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Receipts from government 15,625 15,800 15,625
Goods and services 32,087 35,856 30,000
Interest 727 696 700
Net GST received 452 440
Other 687 2 30
Total cash received 49,578 52,794 46,255

 

Operating Activities

Cash used Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Employees (34,154) (34,534) (33,535)
Suppliers (13,821) (14,509) (11,720)
Total cash used (47,975) (49,043) (45,255)
Net cash from (used by) operating activities 9 1,603 3,751 1,000

 

Investing Activities

Cash received Notes 2016
$'000
2015
$'000
Original
Budget
$'000
NHPA—lease incentives and make good on transition 406
Total cash received 406

 

Investing Activities

Cash used Notes 2016
$'000
2015
$'000
Original
Budget
$'000
Purchase of property, plant and equipment (351) (173) 5 2
Total cash used (351) (173) (572)
Net cash from (used by) investing activities 55 (173) (572)
Net increase (decrease) in cash held 1,658 3,578 428
Cash and cash equivalents at the beginning of the reporting period 25,562 21,984 22,112
Cash and cash equivalents at the end of the reporting period 5A 27,220 25,562 22,540

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


Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements

Note 1: Summary of Significant Accounting Policies

1.1 Objectives of the Australian Institute of Health and Welfare

The Australian Institute of Health and Welfare (AIHW) is structured to meet a single outcome:

  • A robust evidence-base for the health, housing and community sectors, including through developing and disseminating comparable health and welfare information and statistics. This outcome is included in the Department of Health (Health) Portfolio Budget Statements.

1.2 Basis of preparation of the financial statements

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:

  1. Financial Reporting Rule (FRR) for reporting periods ending on or after 1 July 2014; and
  2. Australian Accounting Standards and Interpretations 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 and values are rounded to the nearest thousand dollars unless otherwise specified.

Unless an alternative treatment is specifically required by an accounting standard or the FRR, assets and liabilities are recognised in the statement of financial position when and only when it is probable that future economic benefits will flow to the entity or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the commitments note or the contingencies note.

Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured. Financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

1.3 Significant accounting judgements and estimates

In the process of applying the accounting policies listed in this note, the AIHW has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

  • the fair value of leasehold improvements and property, plant and equipment has been taken to be the depreciated replacement cost as determined by an independent valuer.

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

1.4 New Australian Accounting Standards

Adoption of new Australian Accounting Standard requirements

No Australian Accounting Standard has been adopted earlier than the application date as stated in the standard.

New standards, revised standards, interpretations or amending standards that were issued prior to the signing off date and are applicable to the current reporting period did not have financial impact and are not expected to have a future financial impact on the AIHW.

Future Australian Accounting Standard requirements

New standards, revised standards and interpretations that were issued by the Australian Accounting Standards Board prior to the signing off date and are applicable to the future reporting period are not expected to have a future financial impact on the AIHW.

1.5 Revenue

Revenue from the sale of goods is recognised when:

  • the risks and rewards of ownership have been transferred to the buyer;
  • the entity retains no managerial involvement nor effective control over the goods;
  • the revenue and transaction costs incurred can be reliably measured; and
  • it is probable that the economic benefits associated with the transaction will flow to the entity.

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:

  • the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
  • the probable economic benefits with the transaction will flow to the AIHW.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear 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 allowance for impairment. Collectability of debts is reviewed at balance date. Allowances are made when collectability of the debt is no longer probable.

Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.

Revenues from government

Funding received or receivable from Health is recognised as Revenue from government unless they are in the nature of an equity injection or a loan.

1.6 Gains

Resources received free of charge

Resources received free of charge are recognised as gains 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.

Resources received free of charge are recorded as either revenue or gains depending on their nature.

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

Sale of assets

Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

1.7 Transactions with the government as owner

Equity injections

Amounts that are designated as equity injections for a year are recognised directly in contributed equity in that year.

1.8 Employee benefits

Liabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled.

Liabilities for 'short-term employee benefits' (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of balance date are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

Other long-term employee benefits are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date.

Leave

The liability for employee benefits 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 AIHW is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees' remuneration, including the AIHW'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 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 2016. 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. AIHW 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

AIHW staff are members of the Commonwealth Superannuation Scheme, the Public Sector Superannuation Scheme or the Public Sector Superannuation Scheme accumulation plan.

The first two are defined benefit schemes for the Australian Government. The third 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 by the Department of Finance as an administered item.

The AIHW makes employer contributions to the employee superannuation scheme at rates determined by an actuary to be sufficient to meet the cost to the government of the superannuation entitlements of the AIHW's employees. The AIHW accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year.

1.9 Leases

A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.

The AIHW has no finance leases.

Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets.

1.10 Borrowing costs

All borrowing costs are expensed as incurred.

1.11 Cash

Cash and cash equivalents includes notes and coins held and any deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Cash is recognised at its nominal amount.

1.12 Financial assets

The AIHW classifies its financial assets as loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets are recognised and derecognised upon 'trade date'.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Receivables

Trade receivables and other receivables that have fixed or determinable payments 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. Interest is recognised by applying the effective interest rate.

Impairment of financial assets

Financial assets are assessed for impairment at each balance date.

For financial assets held at amortised cost, if there is objective evidence that an impairment loss has been incurred for loans and receivables held at amortised cost, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the statement of comprehensive income.

1.13 Financial liabilities

Financial liabilities are classified as other financial liabilities.

Financial liabilities are recognised and derecognised upon 'trade date'.

Other financial liabilities

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

1.14 Contingent liabilities and contingent assets

Contingent liabilities and contingent assets are not recognised in the balance sheet but are reported in the relevant notes. They may arise from uncertainty as to the existence of a liability or asset, or represent a liability or asset 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.

1.15 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. 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 revenues 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 authority's accounts immediately prior to the restructuring.

1.16 Property, plant and equipment

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the balance sheet, except for purchases costing less than $3,000, 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).

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. This is particularly relevant to 'make good' provisions in property leases taken up by the AIHW where there exists an obligation to restore the property to its original condition. These costs are included in the value of the AIHW's leasehold improvements with a corresponding provision for the make good recognised.

Revaluations

Fair values for each class of asset are determined as shown below.

 
Asset class Fair value measured at:
Buildings — leasehold improvements Depreciated replacement cost
Property, plant and equipment Market selling price

 

Following initial recognition at cost, property, plant and equipment are carried at fair value less accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not materially differ from the assets' fair values as at the reporting date. The regularity of independent valuations depends 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 reverses a previous revaluation decrement of the same asset class that was previously recognised through surplus and deficit. Revaluation decrements for a class of assets are recognised directly through surplus and deficit except to the extent that they reverse a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

A formal revaluation of assets was completed by Allbids.com.au Pty Ltd (All Bids) as at 30 June 2016.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the AIHW 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.

 
Asset class 2016 2015
Leasehold improvements Lease term Lease term
Property, plant and equipment 3 to 10 years 3 to 10 years

 

Impairment

All assets were assessed for impairment at 30 June 2016. 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 to sell 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 AIHW were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

1.17 Intangibles

The AIHW's intangibles comprise internally developed and purchased software for internal use. These assets are carried at cost less accumulated amortisation.

Intangibles are recognised initially at cost in the balance sheet, except for purchases costing less than $50,000, which are expensed in the year of acquisition.

Software is amortised on a straight-line basis over its anticipated useful life. The useful life of the AIHW's software is 3 to 5 years (2014-15: 3 to 5 years).

All software assets were assessed for indications of impairment as at 30 June 2016.

As at 30 June 2016 all of AIHW's intangibles have been fully amortised.

1.18 Taxation

The AIHW is exempt from all forms of taxation except Goods and Services Tax (GST) and Fringe Benefits Tax.

Revenues, expenses, assets and liabilities are recognised net of GST except:

  • where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
  • for receivables and payables.

1.19 Events after the reporting period

From 1 July 2016 selected performance functions were transferred from the National Health Performance Authority (NHPA) to the AIHW including funding, and some assets and contracts. In September 2016 legislation to abolish NHPA was passed by Parliament. Any remaining assets and liabilities of NHPA will be transferred to the AIHW by March 2017.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 2: Expenses

Note 2A: Employees benefits

 
Employees benefits 2016
$'000
2015
$'000
Wages and salaries (25,702) (26,287)
Superannuation: Defined contribution plans (1,867) (1,927)
Superannuation: Defined benefit plans (3,008) (3,226)
Leave and other entitlements (3,240) (3,614)
Total employee benefits (33,817) (35,054)

Note 2B: Suppliers

 
Goods and services supplied or rendered 2016
$'000
2015
$'000
Consultants and contractors (3,745) (2,799)
Collaborating centres (1,078) (1,850)
Information technology (1,368) (1,174)
Printing and stationery (170) (194)
Training (227) (332)
Travel (579) (453)
Telecommunications (194) (144)
Other (2,277) (2,465)
Total goods and services supplied or rendered (9,638) (9,411)
 
Other supplier 2016
$'000
2015
$'000
Operating lease rentals — lease payments (2,810) (2,928)
Workers compensation premiums (396) (226)
Total other supplier expenses (3,206) (3,154)
Total supplier expenses (12,844) (12,565)

The office lease has a fixed annual 3% rent increase. This increase has been averaged over the 15-year term of the lease.

Note 2C: Write-down and impairment of assets

 
Write-down and impairment 2016
$'000
2015
$'000
Write off on disposal of property, plant and equipment (459)
Total write down and impairment of assets (459)

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 3: Revenues

Note 3A: Sale of goods and rendering of services

 
Sale of goods and rendering of services 2016
$'000
2015
$'000
Sale of goods 4 11
Rendering of services 31,330 32,354
Total sale of goods and rendering services 31,334 32,365

Note 3B: Interest

 
Interest 2016
$'000
2015
$'000
Deposits 759 682
Total interest 759 682

Note 3C: Other revenues

 
Other revenues 2016
$'000
2015
$'000
NHPA — transition costs 680
Other 3 2
Total other revenues 683 2

Note 3D: Write off of provision of make good

 
Write off of provision 2016
$'000
2015
$'000
Write off of provision of make good 391

Note 3E: Revenue from government

 
Revenue from government 2016
$'000
2015
$'000
Corporate Commonwealth entity payment item 15,625 15,800
Total revenue from government 15,625 15,800

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 4: Fair value measurements

The following tables provide an analysis of assets and liabilities that are measured at fair value. The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Note 4A: Fair value measurements, valuation techniques and inputs used

Fair value measurements at the end of the reporting period by hierarchy for assets in 2016

Fair value measurements at the end of the reporting period using: Fair value
2016
$'000
Fair value
2015
$'000
Level 1
inputs
2016
$'000
Level 1
inputs
2015
$'000
Level 2
inputs
2016
$'000
Level 2
inputs
2015
$'000
Level 3
inputs
2016
$'000
Level 3
inputs
2015
$'000
Non-financial assets: Leasehold improvements 4,800 5,037 4,800 5,037
Non-financial assets: Other property, plant and equipment 3,081 3,845 3,081 3,635 210
Total non-financial assets 7,881 8,882 7,881 3,635 5,247
Total fair value measurements of assets in the statement of financial position 7,881 8,882 7,881 3,635 5,247

Fair value measurements —highest and best use differs from current use for non-financial assets (NFAs).

The highest and best use of all non-financial assets are the same as their current use.

There are no liabilities measured at fair value.

No assets were transferred between level 1 and level 2.

Note 4B: Valuation technique and inputs for Level 2 and Level 3 fair value measurements

Level 2 and Level 3 fair value measurements—valuation technique and the inputs used for assets in 2016

Non-financial assets Category (Level 2 or Level 3) Fair value
$'000
Valuation technique(s) Inputs used Range (weighted average)
Leasehold improvements Level 2 4,800 Fair market value Revaluation by All Bids n.a.
Other property, plant and equipment Level 2 3,081 Fair market value Revaluation by All Bids n.a.

In 2016 the AIHW procured valuation services from All Bids and relied on valuation models provided by All Bids. All Bids provided written assurance to the entity that the model developed is in compliance with AASB 13. All assets were valued using the Fair Market Value Technique.

Note 4C: Reconciliation for recurring Level 3 fair value measurements

Recurring Level 3 fair value measurements—reconciliation for non-financial assets

Level 3 fair value measurements Other property,
plant and equipment
2016
$'000
Other property,
plant and equipment
2015
$'000
Leasehold
improvements
2016
$'000
Leasehold
improvements
2015
$'000
Total
2016
$'000
Total
2015
$'000
Opening balance as at 1 July 210 366 5,037 5,236 5,247 5,602
Purchases 161 161
Depreciation (156) (360) (516)
Revaluations (210) (5,037) (5,247)
Closing balance as at 30 June 210 5,037 5,247

The entity's policy for determining when transfers between levels are deemed to have occurred can be found in Note 1.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 5: Financial assets

Note 5A: Cash and cash equivalents

 
Cash and cash equivalents 2016
$'000
2015
$'000
Cash on hand or on deposit 27,220 25,562
Total cash and cash equivalents 27,220 25,562

Note 5B: Receivables

 
Receivables are aged as follows: 2016
$'000
2015
$'000
Not overdue 6,429 6,853
Overdue by: 0 to 30 days 5
Overdue by: 31-60 days 6
Overdue by: 61-90 days
Overdue by: More than 90 days
Total receivables (gross) 6,435 6,858
 
Receivables is expected to be recovered in: 2016
$'000
2015
$'000
No more than 12 months 6,435 6,858
Total receivables (gross) 6,435 6,858

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 6: Non-financial assets

Note 6A: Buildings

 
Leasehold improvements 2016
$'000
2015
$'000
Fair value 4,800 5,397
Accumulated depreciation (360)
Total 4,800 5,037
Restoration obligations
Accumulated depreciation
Total
Total buildings 4,800 5,037

No indicators of impairment were found for leasehold improvements.

Note 6B: Property, plant and equipment

 
Property, plant and equipment 2016
$'000
2015
$'000
Fair value 3,082 3,939
Accumulated depreciation (1) (1,094)
Total property, plant and equipment 3,081 3,845

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

Revaluations of non-financial assets

A revaluation increment of $122,397 (2015: nil) for leasehold improvements, nil (2015: nil) for restoration obligations assets and nil (2015: nil) for changes in provision for restoration obligations. Revaluation decrement for property, plant and equipment was $458,913 (2015: nil).

Note 6C: Analysis of property, plant and equipment

TABLE A: Reconciliation of the opening and closing balances of property, plant and equipment (2015-16)

Reconciliation of the opening and closing balances Buildings-
leasehold
improvements
$'000
Property,
plant and
equipment
$'000
Library
collection
$'000
Total
$'000
As at 1 July 2015: Gross book value 6,009 4,938 350 11,297
As at 1 July 2015: Accumulated depreciation (972) (1,093) (350) (2,415)
Net book value 1 July 2015 5,037 3,845 8,882
Additions by purchase 351 351
Disposals (1) (1)
Revaluations recognised in operating results (2,207) (2,207)
Revaluations recognised in Asset Revaluation Reserve (596) (596)
Depreciation expense (360) (655) (1,015)
Write back of depreciation on write-off
Write back of depreciation on revaluation 719 1,748 2,467
Write-offs
Net book value 30 June 2016 4,800 3,081 7,881
Net book value as at 30 June 2016 represented by: Gross book value 4,800 3,082 350 8,232
Net book value as at 30 June 2016 represented by: Accumulated depreciation (1) (350) (351)
Net book value 30 June 2016 4,800 3,081 7,881

 

TABLE B: Reconciliation of the opening and closing balances of property, plant and equipment (2014-15)

Reconciliation of the opening and closing balances Buildings-
leasehold
improvements
$'000
Property,
plant and
equipment
$'000
Library
collection
$'000
Total
$'000
As at 1 July 2014: Gross book value 5,848 4,926 350 11,124
As at 1 July 2014: Accumulated depreciation (612) (406) (350) (1,369)
Net book value 1 July 2014 5,236 4,520 9,756
Additions by purchase 161 12 173
Revaluations recognised in operating results
Depreciation expense (360) (687) (1,047)
Write back of depreciation on write-off
Write back of depreciation on revaluation  
Write-offs
Net book value 30 June 2015 5,037 3,845 8,882
Net book value as at 30 June 2015 represented by: Gross book value 6,009 4,938 350 11,297
Net book value as at 30 June 2015 represented by: Accumulated depreciation (972) (1,093) (350) (2,415)
Net book value 30 June 2015 5,037 3,845 8,882

Note 6D: Other non-financial assets

 
Other non-financial assets 2016
$'000
2015
$'000
Prepayments 1,076 817
Total other non-financial assets 1,076 817

All other non-financial assets are expected to be recovered in no more than 12 months.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 7: Payables

Note 7A: Suppliers

 
Suppliers 2016
$'000
2015
$'000
Trade creditors (1,372) (1,248)
Total supplier payables (1,372) (1,248)

Note 7B: Other payables

 
Other payables 2016
$'000
2015
$'000
Wages and salaries (112) (899)
Superannuation (27) (173)
Lease incentive — Canberra (3,250) (3,500)
Lease incentive — Sydney (267)
Operating lease (1,111) (592)
Total other payables (4,767) (5,164)
 
Other payables expected to be settled in: 2016
$'000
2015
$'000
No more than 12 months (523) (1,322)
More than 12 months (4,244) (3,842)
Total employee provisions (4,767) (5,164)

Note 7C: Contract income in advance

 
Contract income in advance 2016
$'000
2015
$'000
Contract income (18,970) (19,327)
Total contract income in advance (18,970) (19,327)

All income in advance payables is expected to be settled in 12 months.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 8: Provisions

Note 8A: Employee provisions

 
Employee provisions 2016
$'000
2015
$'000
Leave (11,678) (11,082)
Total employee provisions (11,678) (11,082)
 
Employee provisions expected to be settled in: 2016
$'000
2015
$'000
No more than 12 months (1,770) (1,173)
More than 12 months (9,908) (9,909)
Total employee provisions (11,678) (11,082)

Note 8B: Other provisions

 
Other provisions 2016
$'000
2015
$'000
Provision for make good—Sydney (139)
Total other provisions (139)
 
Other provisions expected to be settled: 2016
$'000
2015
$'000
No more than 12 months
More than 12 months (139)
Total other provisions (139)

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 9: Cash flow reconciliation

Reconciliation of cash and cash equivalents per balance sheet to cash flow statement
Cash and cash equivalents as per: 2016
$'000
2015
$'000
Cash flow statement 27,220 25,562
Statement of financial position 27,220 25,562
Discrepancy
 
Reconciliation of net cost of services to net cash from/(used by) operating activities: 2016
$'000
2015
$'000
Net cost of services (15,359) (15,231)
Add revenue from government 15,625 15,800
 
Adjustment for non-cash items 2016
$'000
2015
$'000
Depreciation/amortisation 1,015 1,052
Net write down and impairment of assets (excluding write down of inventories) 459

 

Movements in assets / liabilities
Assets 2016
$'000
2015
$'000
(Increase) / decrease in receivables 423 (2,021)
(Increase) / decrease in prepayments (259) (199)
 
Liabilities 2016
$'000
2015
$'000
Increase / (decrease) in supplier payables 124 (192)
Increase / (decrease) in lease incentive liability (267) (250)
Increase / (decrease) in other payables (397) (64)
Increase / (decrease) in employee provisions 596 585
Increase / (decrease) in other income in advance (357) 4,741
Increase / (decrease) in other provisions (470)
Net cash from operating activities 1,603 3,751

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 10: Contingent assets and liabilities

As at 30 June 2016, the AIHW has no contingent assets, remote contingencies or unquantifiable contingencies (2015: nil).

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 11: Senior management personnel remuneration

Note 11A: Senior executive remuneration expense for the reporting period

 
Short-term employee benefits: 2016 2015
Salary 1,225,956 1,618,017
Performance bonuses 18,378 35,012
Motor vehicle allowance 157,005 193,909
Total short-term employee benefits 1,401,339 1,846,938
 
Post-employment benefits 2016 2015
Superannuation 200,357 320,628
Total post-employment benefits 200,357 320,628
 
Other long term benefits 2016 2015
Annual leave* (1,963) (16,031)
Long-service leave 4,209 34,860
Total other long term employee benefits 2,246 18,829
Total senior executive remuneration expenses 1,603,942 2,186,395

*This is annual leave taken in excess of annual leave accrued.

The total number of senior management personnel that are included in the above table are 10 (2015: 10).

There was a number of vacancies of senior management personnel during the 2015-16 year. Note 11 is prepared on an accrual basis.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 12: Remuneration of auditors

 
Remuneration of Auditors 2016 2015
Remuneration for auditing the financial statements for the reporting period $35,000 $31,000

No other services were provided by the Australian National Audit Office.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 13: Financial instruments

Note 13A: Categories of financial instruments

 
Financial assets 2016
$'000
2015
$'000
Loans and receivables: Cash at bank 27,220 25,562
Loans and receivables: Receivables for goods and services 6,040 6,569
Total loans and receivables 33,260 32,131
Total financial assets 33,260 32,131
 
Financial liabilities 2016
$'000
2015
$'000
Financial liabilities measured at amortised cost: Trade creditors 1,372 1,248
Financial liabilities measured at amortised cost 1,372 1,248
Total financial liabilities 1,372 1,248

The AIHW holds basic financial instruments in the form of cash and cash equivalents, receivables for goods and services and trade creditors. The carrying value of financial instruments reported in the balance sheet is a reasonable approximation of fair value.

Note 13B: Net gains and losses from financial assets

 
Loans and receivables 2016
$'000
2015
$'000
Interest revenue 759 682
Net gain loans and receivables 759 682
Net gain from financial assets 759 682

The AIHW is exposed to minimal credit risk as the majority of loans and receivables are receivables from other government organisations. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. This amount is equal to the total amount of trade receivables (2016: $6,040,000 and 2015: $6,569,000). The AIHW has assessed the risk of the default on payment and has allocated $0 in 2016(2015: $0) to an allowance for impairment account.

The AIHW has no significant exposure to any concentrations of credit risk.

Note 13C: Credit risk

Credit quality of financial instruments not past due or individually determined as impaired:
Financial Instruments Not past due nor impaired 2016
$'000
Not past due nor impaired 2015
$'000
Past due or impaired 2016
$'000
Past due or impaired 2015
$'000
Cash at bank 27,220 25,562
Receivables for goods and services 6,034 6,564 6 5
Total 33,254 32,126 6 5
Ageing of financial assets that are past due but not impaired for 2016:
Financial Assets 0-30 days
$'000
31-60 days
$'000
61-90 days
$'000
90+ days
$'000
Total
$'000
Receivables for goods and services 6 6
Total 6 6
Ageing of financial assets that are past due but not impaired for 2015:
Financial Assets 0-30 days
$'000
31-60 days
$'000
61-90 days
$'000
90+ days
$'000
Total
$'000
Receivables for goods and services 5 5
Total 5 5

Note 13D: Liquidity risk

The AIHW is funded by appropriation and the sale of goods and services. It uses these funds to meet its financial obligations.

Note 13E: Market risk

The AIHW holds basic financial instruments that do not expose the AIHW to certain market risks. The AIHW is not exposed to 'currency risk' or 'other price risk'.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 14: Reporting of outcomes

Net cost of outcome delivery
Outcome Outcome 1 2016
$'000
Outcome 1 2015
$'000
Total 2016
$'000
Total 2015
$'000
Departmental: Expenses 48,135 48,671 48,135 48,671
Departmental: Own-source income 32,776 33,440 32,776 33,440
Net cost / (contribution) of outcome 15,359 15,231 15,359 15,231

Outcome 1 is described in Note 1.1.

The primary statements of these financial statements represent Tables B and C: Major classes of departmental expense, income, assets and liabilities by outcome.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 15: Commitments

By type
Commitments receivable 2016
$'000
2015
$'000
Project1 17,503 17,730
Net GST recoverable on commitments 2,866 2,930
Total commitments receivable 20,369 20,660
By type
Commitments payable 2016
$'000
2015
$'000
Other commitments: Operating leases2 (44,998) (47,795)
Other commitments: Other1 (4,030) (2,174)
Total other commitments (49,028) (49,969)
Total commitments payable (49,028) (49,969)
Net commitments by type (28,659) (29,309)
By maturity
Commitments receivable 2016
$'000
2015
$'000
Within 1 year 13,901 11,233
Between 1 to 5 years 4,071 6,727
More than 5 years 2,397 2,700
Total commitments receivable 20,369 20,660
By maturity
Commitments payable 2016
$'000
2015
$'000
Operating lease commitments: Within 1 year (2,881) (2,797)
Operating lease commitments: Between 1 to 5 years (15,756) (15,297)
Operating lease commitments: More than 5 years (26,361) (29,701)
Total operating lease commitments (44,998) (47,795)
By maturity
Other commitments 2016
$'000
2015
$'000
Within 1 year (3,863) (1,269)
Between 1 to 5 years (167) (905)
Total other commitments (4,030) (2,174)
Total commitments payable (49,028) (49,969)
Net commitments by maturity (28,659) (29,309)

Commitments are GST inclusive where relevant.

  1. Project and other commitments are primarily amounts relating to AIHW contract work.

  2. The AIHW's lease of an office building at 1 Thynne St, Bruce, ACT expires on 29 June 2029.

Australian Institute of Health and Welfare
Notes to and Forming Part of the Financial Statements
Note 16: Major budget variances

Revenues
Explanations of major variances Affected line items (and statement)
The NHPA reimbursed the AIHW for costs incurred by the AIHW relating to the transfer of certain functions from the NHPA to the AIHW prior to the closure of the NHPA. These costs included the salary costs of several NHPA staff who transferred to the AIHW on 21 April 2016. Other revenues (See 'Statement of comprehensive income')
Financial assets and payables
Explanations of major variances Affected line items (and statement)
Cash and cash equivalents and other payables have increased as the income received in advance was higher than budgeted.

Cash and cash equivalents (see 'Statement of financial position')

Contract income in advance (see 'Statement of financial position')

Cash received (see 'Cash flow statement')

Investing activities
Explanations of major variances Affected line items (and statement)
The AIHW received cash from the NHPA to fund the remaining lease incentive and make good liability on 1 Oxford St, Sydney, which transferred to the AIHW on 1 July 2016. Investing activities (see 'Cash flow statement')