ACCC & AER annual report 2016-17

Finance and staffing snapshot

The ACCC received an unqualified audit report on the 2016–17 financial statements from the Australian National Audit Office. These statements can be found in part 5 from page 241–284.

The agency reduced its operating deficit to $1.7 million excluding depreciation and amortisation in 2016–17 compared to a $5.5 million deficit in 2015–16.

The ACCC’s net cost of services for 2016–17 was $180.6 million (2015–16: 176.4 million), with revenue from Government of $173.4 million (2015–16: 165.3 million).

Revenues from other sources were lower in 2016–17 by $1.4 million or 25 per cent. 2015–16 included one-off project funding to conduct a gas inquiry resulting in the decrease in 2016–17.

In 2016–17, expenditure on ACCC activities increased by $2.9 million. This mainly relates to an increase in legal settlements of $4.7 million and an increase in contractors and consulting of $5.2 million offset by a decrease in legal expenses of $6 million and a decrease in salaries and wages of $0.8 million. A comparison of revenue and expenditure trends over the last four years is illustrated in figure 1 below.

Figure 1.1: ACCC Revenue and Expenditure

Key financial results for ACCC for the financial years 2014–15 to 2016–17 are shown in table 1.1.

Table 1.1: ACCC comparative financial results, 2014–15, 2015–16 and 2016–17

 

2016–17

$’000

2015–16

$’000

2014–15

$’000

Expenses

     

Employee benefits

102 979

103 731

97 372

Legal fees

20 782

26 769

24 533

Other expenses

61 044

51 448

54 627

Total expenses

184 805

181 948

176 532

Own-source revenue

     

Other revenue

4 178

5 544

2 621

Gains

91

Total own-source revenue

4 178

5 544

2 712

Net cost of services

180 627

176 404

173 820

Revenue from Government

173 359

165 346

167 446

Net operating surplus/(deficit)

(7 268)

(11 058)

(6 374)

Changes in asset revaluation reserve

167

(48)

247

Total comprehensive income

(7 101)

(11 106)

(6 127)

Operating cash balance

1 616

1 289

1 083

Receivables

30 929

33 781

36 576

Total assets

50 927

54 503

60 199

Total liabilities

59 417

59 234

57 117

Total equity

(8 490)

(4 731)

3 082

Administered fees and fines revenue

46 699

83 861

34 050

Expenditure

The ACCC is a knowledge-based organisation and as such spends approximately 56 per cent of total expenditure on employee costs (2015–16: 57 per cent).

Legal expenditure is subject to volatility depending on the timing and outcome of litigation proceedings. Legal expenditure decreased by $5.9 million or 22 per cent in 2016–17, compared to 2015–16.

Other expenses (excluding depreciation and amortisation) increased by $9.8 million or 21 per cent in 2016–17. This is primarily due to an increase in legal settlements of $4.7 million and an increase in consultancy and contractor expenses of $5.2 million. Depreciation and amortisation has remained relatively consistent over the same period.

Figure 1.2: ACCC expenditure, 2016–17

Operating statement

The ACCC recorded a comprehensive operating loss for 2016–17 of $7.1 million, as compared to an operating loss of $11.1 million in 2015–16. The decrease is largely due to an increase in revenue from government. The reported operating loss was a result of $8.9 million in expenses for court costs awarded against the ACCC during 2016–17. The ACCC receives an operating budget of $1 million per annum for court cost expenses incurred.

Balance sheet

The ACCC’s net assets as at 30 June 2017 totalled ($8.5) million as compared to ($4.7) million in 2015–16.

Assets

Total assets as at 30 June 2017 were valued at $50.9 million compared to $54.5 million on 30 June 2016, representing a 6.6 per cent decrease. This decrease largely relates to a reduction in appropriation receivable consistent with the increase in legal settlements for the year.

All assets have been managed in accordance with Commonwealth policies and reported following the relevant accounting standards.

Liabilities

Total liabilities remained relatively consistent at $59.4 million compared to $59.2 million in 2015–16.

Administered revenue

In 2016–17 the ACCC received $46.7 million in administered revenue representing a decrease of $37.2 million from 2015–16. This amount includes court-imposed fines and costs.

Staffing summary

Table 1.1: Average staffing level

 

Budgeted

Actual

2012–13

745

798

2013–14

802

788

2014–15

735

715

2015–16

739

752

2016–17

739

772