Transcript Operation Sunlight - Enhancing Budget Transparency and

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Operation Sunlight
Enhancing Budget Transparency and
Accountability
Tim Youngberry
First Assistant Secretary
Financial Reporting and Cash Management
Overview
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• Purpose and objective of briefing
• Operation Sunlight
• Implications for Central Budget Management System
Operation Sunlight
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• The Government’s reform agenda to improve the
transparency and accountability of the Budget.
• Originally released in 2005 and confirmed as an election
commitment by the incoming Government in late 2007.
• A revised Operation Sunlight policy document was released
on 9 December 2008 taking into account progress on
reforms as well as suggestions for improvement from the
review conducted by the then Senator Andrew Murray.
• Details are available at www.finance.gov.au
Implementing
Operation
Sunlight
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Outcome
Framework
Improving
Budget Papers
Transparency
of Estimates
Outcomes Review*
Revamping the
Budget Papers
SP 2.2
SP1.2
Targets / Results*
Appropriation
Descriptions*
Resource Statement
GST
SP 2.5
Redesign the PAES / Annual Report
Redesign of the PAES / AR
Tax Expenditures
SP 4.3
Publication
Dates
Contingency
Reserve
Improving the
Financial
Framework
SP 5.1
SP 6.1
Long Term
Modelling
Implementing
non-cash
SP 6.2
SP 5.2
Net Cost
of Services
CoBHReview
SP 6.3
SP 5.3
AFM
IGR
SP 6.4
SP 2.4
SP 1.4
Quarterly
Reporting
SP 3.3
Accounting
Harmonisation
Special Accounts
SP 4.2
SP 3.2
SP 2.3
SP 1.3
SP 4.1
Compact of 1965
Program Reporting*
Long Term
and
IG Reporting
Budget
Reporting
SP 3.1
SP 2.1
SP1.1
Implement Agreed
Murray Recommendations
Key: Blue = Finance, Tan = Treasury, Yellow = Joint.
Green indicates that that Finance is responsible for overall
coordination of Operation Sunlight initiatives.
* indicates integrated implementation
Murray Review recommendations accepted by the Government
have been incorporated into Operation Sunlight, along with any
consequential changes to coordinating agency roles.
Other
Appropriation
Issues
Outcomes
framework
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Outcomes Review
• Outcome statements-specify purpose of appropriations
• Outcome statements to meet higher standards of specificity
and transparency
• Review has been completed in close consultation with
agencies
• Most work has been completed and revised Outcome
statements will be included in 2009-10 Budget
Outcomes
framework
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Targets/Results
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Increased emphasis on program performance from 2009-10 Budget
•
Where possible evaluating agency financial and non-financial
results against targets/KPIs at the program level in Portfolio Budget
Statements
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Where possible targets/KPIs will be reported over multiple years in
Portfolio Budget Statements
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Results/trends reported to Government annually in addition to
agencies annual reports (commencing from 2009-10)
Outcomes
framework
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Appropriation
Descriptions
•
More detailed and binding descriptions of the content of
appropriations in 2009-10 Portfolio Budget Statements
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Portfolio Budget Statements redesigned 2008-09 budget
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Revised Outcome Statements 2009-10 budget which flow through
to appropriation bills
•
Explanatory memorandum provided with each set of appropriation
bills (introduced with 2008-09 appropriation bills)
Outcomes
framework
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Resource
Statement
•
Allows readers to move from the agency level view of
appropriations through to the expense view in the budgeted
financial statements in Portfolio Budget Statements
•
Current format presented in 2008-09 Portfolio Budget Statements
– Showed the total resources available from all origins (appropriation
types and titles of each special appropriation) and included estimates of
prior year amounts available
•
Further changes at the outcome level will be made for the 2009-10
Budget
Outcomes
framework
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Redesign the
PAES/Annual
Report
• Portfolio Additional Estimates Statements same format as
2008-09 Portfolio Budget Statements
• 2008-09 Annual Report to match 2008-09 Portfolio Budget
Statements
• Further changes in 2008-09 Annual Report to align outcome
reporting with Budget reporting
Improving
budget
papers
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Improving
Budget Papers
• Introduced additional information in Statement 6 (expenses
and net capital investment) of 2008-09 Budget Paper No.1
– Included greater break down of trends in functions and subfunctions
• Government to consider ongoing changes in the presentation
of Budget Papers as required
Improving
budget
papers
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Program
Reporting
• 2009-10-Revised program lists in CBMS and Portfolio
Budget Statements
• Financial data for programs to cover the forward estimates
period and be published in portfolio budget statements
• Non-financial performance information to be included for
programs
Improving
budget
papers
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Program
Reporting
• Outcomes/programs structure agreed with all agencies
• Financial data to be comprehensive for each program
(including allocation of departmental expenses)
• Changes also to 2009-10 annual reporting
• Should result in better quality submissions to Government for
new policy proposals (more evidence based policy)
Program Reporting
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EXAMPLE ONLY
2008-09 Budget year
EXAMPLE ONLY
2009-10 Budget year
Outcome 1: Assisting the Government to provide, evaluate, plan
and invest in infrastructure across industry sectors.
Outcome 1: Improved infrastructure across Australia through
investment in and coordination of transport and other
infrastructure.
Output Group 1.1: Infrastructure investment
Program 1.1: Infrastructure investment
Administered Items:
AusLink
- AusLink Investment
- AusLink Black Spot Projects
- AusLink Heavy Vehicle Safety
- AusLink Roads to Recovery
- AusLink Strategic Regional
- AusLink Strategic Regional - supplementary
- AusLink improving local roads
- AusLink improving the National Network
- Funding for road projects other than under the AusLink
(National Land Transport) Act 2005
Management of residual issues of former Australian National
Railway Commission
Administered Items:
Building Australia Program
- Investment
- Black Spot Projects
- Heavy Vehicle Safety
- Roads to Recovery
- Strategic Regional
- Strategic Regional - supplementary
- improving local roads
- improving the National Network
- Funding for road projects other than under the AusLink
(National Land Transport) Act 2005
Management of residual issues of former Australian National
Railway Commission
Murray River Bridges - Federation Fund Project
Murray River Bridges - Federation Fund Project
Program support
Departmental Outputs:
Output 1.1.1: Infrastructure investment policy and programs
Output 1.1.2: Infrastructure investment coordination
Program 1.2 Infrastructure investment coordination
Program support
Improving
budget
papers
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Accounting
Harmonisation
• Implementation of AASB1049 Whole of government and
general government sector financial reporting
• Harmonised Statement in 2008-09 Budget Paper 1 reduced
three sets of financial statements published in previous
years’ budget papers to a single set of financial statements
• Harmonisation at agency level progressing. AASB to issue
draft standard in first quarter of 2010
Improving
budget
papers
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GST
• Recognised as a Commonwealth Tax in 2006-07
Consolidated Financial Statements
• All Australian Government Budget and outcome financial
reports (and associated measures) now include GST and
associated grants to the states/territories as an Australian
Government revenue and expense
Transparency
of estimates
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Compact of 1965
•
Relates to the allocation of items between appropriation bill 1 (ordinary
annual services of the Government) and appropriation bill 2 (not the
ordinary annual services of the Government) (and their equivalents)
•
Allocation of items between appropriation bills important for the purposes of
sections 53 and 54 of the Australian Constitution
–
S 53 in part, states that the Senate may not amend appropriation bills for the
ordinary annual services of Government while S 54 states that appropriations for
the ordinary annual services of Government shall deal only with such
appropriations
•
Appropriation Bill 1 may not be amended by the Senate, but can be
rejected. Appropriation Bill 2 may be amended by the Senate
•
Government to consider options later in the year
Transparency
of estimates
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Quarterly
Reporting
• Government currently publishes consolidated revenue and
expense information at Budget time, as part of the Mid Year
Economic and Fiscal Outlook, and through the (audited)
Consolidated Financial Statements
• Government considers current levels of disclosures
appropriate
Transparency
of estimates
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Publication Dates
• Consideration of reporting timeframes for monthly actuals
later this year
• Consideration of reporting monthly actuals against estimated
expense/revenue profiles
Budget
reporting
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Special Accounts
• Special accounts are a specific type of funding within the
Consolidated Revenue Fund to be used for specific
purposes
• Register of Special Accounts included in 2008-09 Budget
Paper 4
• 2009-10 Budget Paper 4 to include estimated opening
balances, receipts, payments, adjustments and closing
balances
Budget
reporting
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Tax Expenditures
• Treasury implementing agreed recommendations from the
May 2008 ANAO performance report- Preparation of the Tax
Expenditures Statement
Budget
reporting
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Contingency
Reserve
• Review technical definition of Contingency Reserve in 200910 Budget Paper 1 for readability
• No further changes
Long term
and IGR
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Long Term
Modelling
• Finance is developing enhanced capabilities in long term
modelling of expenditure estimates
• Enable long term view of program expenditure
Long term
and IGR
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CoBH Review
• Charter of Budget Honesty Act is legislation containing the
framework for the conduct of Government fiscal policy
• A review of the Charter of Budget Honesty is underway
• Government to consider options later in the year
Long term
and IGR
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Intergenerational
report
• Government has agreed to amend the Charter of Budget
Honesty Act 1998 to require publication of the IGR once
every 3 years
Improving
the financial
framework
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Net cash funding
arrangements
• Change to the calculation of base appropriations to a cash
requirements system, not based on accrual expenses
• Expected to be budget neutral
– There will be a change in the timing of when appropriations are
received, not the overall amounts
– Funding will be provided in the year in which it is required
Improving
the financial
framework
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Net cash funding
arrangements
• Mostly affects funding for depreciation expenses and other
non-cash items – to be removed from “revenue”
appropriations and to be replaced with a “capital budget”
appropriation
• Asset management and reporting (Capital Budget Statement;
Statement of Asset Movements)
Improving
the financial
framework
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Net cash funding
arrangements
• Introduction of collection development budgets for
designated collection institutions’ heritage and cultural
assets (no longer funding depreciation expense) (2009-10
Budget)
• Net cash funding for General Government Sector agencies
2010-11 Budget
Improving
the financial
framework
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Net Cost of
Services
•
Change to the presentation of the Income Statement for general
government sector non-profit entities to focus on net cost of
services rather than profit or loss
•
Recognises the nature of public sector activity
•
Revised presentation for 2009-10 Portfolio Budget Statements and
2009-10 annual financial statements
•
No change for 2008-09 annual financial statements
Net Cost of
Services
(EXISTING) INCOME STATEMENT for Not-For-Profit Reporting Entities
for the period ended 30 June 2010
(REPLACEMENT) COMPREHENSIVE INCOME STATEMENT (SHOWING NCOS)
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2009-10
$’000
INCOME
Revenue
Revenue from government
Sale of goods and rendering of services
Fees and fines
Interest
Dividends
Rental income
Royalties
Other revenue
Total revenue
151,482
188,114
339,596
2008-09
$’000
106,745
166,156
42
272,943
Gains
Sale of assets
Foreign exchange
Reversals of previous asset write-downs
Other gains
Total gains
Total Income
371
450
821
340,417
755
3,312
429
4,496
277,439
EXPENSES
Employee benefits
Suppliers
Grants
Depreciation and amortisation
Finance costs
Write-down and impairment of assets
Foreign exchange losses
Losses from asset sales
Other expenses
Total Expenses
113,343
187,041
10,245
750
1,236
312,615
84,579
152,010
13,845
239
232
71
250,976
-
-
27,802
26,463
5,684
17,410
Surplus (Deficit)
22,118
9,053
Surplus (Deficit) attributable to minority interests*
Surplus (Deficit) attributable to the Australian Government
22,118
9,053
Share of operating result of associates and joint ventures accounted
for using the equity method
Surplus (Deficit) before income tax
Income tax expense
for the period ended 30 June 2010
2009-10
$'000
2008-09
$'000
EXPENSES
Employee benefits
Supplier
Grants
Depreciation and amortisation
Write-down and impairment of assets
Foreign exchange losses
Losses from asset sales
Finance costs
Other
Total expenses
113,343
187,041
10,245
750
1,236
312,615
84,579
152,010
13,845
232
239
71
250,976
LESS:
RETAINED INCOME
Revenue
Sale of goods and rendering of services
Fees and fines
Interest
Dividends
Rental income
Royalties
Other revenue
Total retained revenue
188,114
188,114
166,156
42
166,198
Gains
Sale of assets
Foreign exchange
Reversals of previous asset write-downs and impairment
Other gains
Total gains
Total retained income
371
450
821
188,935
755
3,312
429
4,496
170,694
Net cost of (contribution by) services
123,680
80,282
Revenue from Government
151,482
106,745
Share of surplus/deficit of associates and joint ventures accounted for
using the equity method
-
-
27,802
5,684
22,118
26,463
17,410
9,053
-
-
Surplus (Deficit) after income tax
22,118
9,053
Surplus (Deficit) attributable to minority interests
Surplus (Deficit) attributable to the Australian Government
22,118
9,053
-
-
Surplus (Deficit) before income tax on continuing operations
Income tax expense
Surplus (Deficit) after income tax on continuing operations
Discontinued operations: Post-tax operating result and post tax gains
and/or losses
OTHER COMPREHENSIVE INCOME
Changes in asset revaluation reserves
Gains/losses on foreign currency translation
Actuarial gains/losses on defined benefit plans
Gains/losses on available for sale financial assets
Gains/losses on cash flow hedging instruments
Improving
the financial
framework
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AFM
• Advance to the Finance Minister- provision, authorised by
the annual Appropriation Acts and made available to the
Finance Minister as a contingency fund, for situations where
agencies urgently require funds
• Increased limits in 2008-09
• New report format to be published after end of 2008-09
financial year
Improving
the financial
framework
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Other
Appropriation
Issues
• Register of standing appropriations included in 2008-09
Budget Paper 4
• Seeking greater clarity on
– Section 32 transfers
– Section 31 (net appropriations) regulations
– Alignment of cash and appropriation treatments of GST for
departmental and administered
• Review of loan appropriations
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CBMS Redevelopment
•
Phase One: First Pass Business Case with Government approval to
develop a Second Pass Business Case. First Pass Approval for the
Project was received on 24 November 2008
•
Phase Two: Development of the Second Pass Business Case.
Finance intends to submit the second pass business case later in
calendar 2009
•
Phase Three: Project Build (if business case approved) – Delivery of
the Project as detailed in the Second Pass Business Case
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CBMS Redevelopment
• The focus of the Redevelopment Project is to deliver a
system that enables Finance to meet its core responsibilities
to Government for financial management, monitoring and
reporting
• Without compromising core requirements, the
Redevelopment Project will enhance the existing system
capability for agencies to provide and analyse information
submitted to Finance
• The mandate of the Project is to redevelop the financial
management system, not financial management policy
Australian Government Budget and Financial Management Requirements –
Functional & Non-functional
Functional Requirements
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Reporting & Analysis
- Statutory reporting
- User-defined reporting
- Scenario modelling & analysis
Budget Management
-Financial consolidation
Cash Management
Decision Making
-Estimates
Adjustment
-Baseline
Update
- Cash receipt &
drawdown
- Cash monitoring &
forecasting
- Budget priority setting
- Government budget
strategies & decisions
-Actuals
Management
Application Administration
- User access
- Reference data set & chart of accounts
- Business rules
Non-Functional requirements
User Interface
Application, Integration & Data management
Infrastructure Management
Architecture
Governance
Security Management
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Any questions?
Contact Details
• Hawari Badri, Branch Manager, Budget Framework Branch
– (02) 6215 2665; [email protected]
• John Trabinger, Branch Manager, CBMS Redevelopment
Project
– (02) 6215 2836; [email protected]