Financial Performance

The department generated an operating surplus of $14.97 million in 2002-03 (2001-02: $4.73 million) with the Auditor-General again signing its Annual Financial Statements without qualification. The surplus included a $5.5 million underspend relating to Exceptional Circumstances Drought Relief payments and Sugar Industry Reform delivery costs (due to a lower than expected take-up rate). The 2002-03 operating result will help rebuild the department’s financial capacity by reducing previous accumulated operating losses and strengthening its solvency. Solvency, as measured by the current ratio*, improved in 2002-03 with a result of 1.4 overall (2001-02: 1.3), and 1.3 after excluding AQIS and NRS (2001-02: 0.8).

The department has invested significantly in rebuilding its financial management framework over the past two years and the benefits are being realised with more robust systems such as an upgrade of the department’s financial management information system, introduction of a new levies system, improved transparency and attribution of corporate costs to business units, and improved budgetary and performance reporting.

The department also progressively implemented recommendations stemming from the Budget Estimates and Framework Review, including reporting on a cash and accrual basis for each major program and monitoring small agency financial performance. These new arrangements require reporting to occur within a shorter timeframe which to date has been achieved