annual report 201 –1

Annual Report 2011–12



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www.dtf.vic.gov.au

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Contents

About DTF 1

Report of operations 10

Financial statements 25

Appendices 83

Appendix 1 Budget portfolio outcomes 84 Appendix 2 Workforce data 89 Appendix 3 DTF occupational health and safety report 30 June 2012 98 Appendix 4 Environmental reporting 101 Appendix 5 Community Support Fund 109 Appendix 6 Consultancies and major contracts 110 Appendix 7 Freedom of information 111 Appendix 8 Application of the Whistleblowers Protection Act 2001 112 Appendix 9 Compliance with the Building Act 1993 121 Appendix 10 National Competition Policy – Reporting against Competitive

Neutrality Principles 122 Appendix 11 Implementation of the Victorian Industry Participation Policy 123 Appendix 12 Publications 124 Appendix 13 Disclosure index 125 Appendix 14 Legislation administered by DTF portfolios 127 Appendix 15 Information available on request 131

Accountable Officer’s declaration In accordance with the Financial Management Act 1994, I am pleased to present the report of operations for the Department of Treasury and Finance for the year ended 30 June 2012.

Grant Hehir Secretary

Department of Treasury and Finance Annual Report 2011–12 1

About DTF Our vision is a prosperous future for all Victorians. To fulfil this vision, we provide economic and financial policy advice to the Government with the aim of increasing the living standards of all Victorians.

Our mission is to provide leadership in economic, financial and resource management. Our role is to ensure that the Government and the State of Victoria benefit from the highest standard of economic, financial and resource management. We advise the Government on how to achieve its policy outcomes through the distribution of resources within a framework of financial responsibility.

DTF’s role and objectives The Department of Treasury and Finance (DTF) provides economic, financial and resource management policy advice to assist the Government to deliver its policy outcomes. DTF’s innovative, expert advice balances economic, social and environmental goals within a framework of responsible financial management.

This includes:

• supporting the Government in budget and financial management;

• delivering innovative and timely policy advice;

• influencing government decisions on a range of economic, social and environmental issues;

• providing strategic leadership across the public sector on economic and financial sector reform;

• assisting the Government with the implementation of major infrastructure projects and frameworks;

• designing and delivering initiatives which enhance the efficiency and effectiveness of government operations;

• influencing decisions made by the Government on major contractual arrangements across the State;

• supporting the Government’s Better Financial Management policy to improve service delivery of government operations; and

• leading the achievement of fiscally responsible enterprise bargaining agreements for the Victorian public sector that promote workforce productivity and service delivery reform.

Five objectives guide the work of DTF:

• sound financial management of the State’s fiscal resources;

• guide Government actions to increase Victoria’s productivity and competitiveness;

• deliver efficient whole of government common services to the Victorian public sector;

• drive improvement in public sector asset management and the delivery of infrastructure; and

• ensure DTF and its people have the appropriate capabilities to serve Government.

2 Department of Treasury and Finance Annual Report 2011–12

Our Ministers Treasurer – Kim Wells MP The Honourable Kim Wells MP is Victoria’s 51st Treasurer.

The Treasurer is responsible for the financial management of Victoria’s $47 billion general government sector, which represents 14 per cent of the Victorian economy.

The Treasurer’s primary responsibilities are:

• the preparation and delivery of the annual State Budget;

• revenue collection for the State of Victoria, including stamp duty, payroll tax and land tax;

• borrowing, investment and financial arrangements to hedge, protect and manage the State’s financial interests;

• promoting economic growth across the State of Victoria; and

• providing investment and fund management services to the State and its statutory authorities.

Assistant Treasurer – Gordon Rich-Phillips MLC The Honourable Gordon Rich-Phillips MLC is the Assistant Treasurer and is responsible for:

• workplace accident compensation and rehabilitation;

• occupational health and safety;

• transport accident compensation and rehabilitation;

• implementation of the Government’s DataVic Access and intellectual property policies;

• managing the Government’s motor vehicle fleet;

• purchasing and procurement arrangements for the Victorian Government;

• facilitating acquisition, reuse or disposal of Victorian Government land and property;

• overseeing whole of Victorian Government accommodation planning and policies;

• overseeing superannuation policy for the State; and

• regulation of Victoria’s registered housing agencies.

Minister Rich-Phillips is also the Minister for Technology and the Minister for the Aviation Industry.

Minister for Finance – Robert Clark MP The Honourable Robert Clark MP is the Minister for Finance and is responsible for:

• the State’s financial reporting and accountability framework;

• public sector industrial relations policy;

• the Victorian Government Risk Management Framework;

• the Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry;

• overseeing insurance policy for the State (the Victorian Managed Insurance Authority); and

• economic regulation of the State’s essential services.

Minister Clark is also the Attorney-General.


Senior Executive Group DTF is managed by the Senior Executive Group (SEG), led by the Secretary and comprising the head of each of DTF’s five divisions. SEG has significant public and private sector management experience in the areas of economics, finance, people management and technology.

Grant Hehir Secretary, Department of Treasury and Finance.

Grant leads the Department in its role of providing economic, financial and resource management policy advice to the Government. Grant was appointed as Secretary, DTF in July 2006. Prior to this he was Secretary of the Victorian Department of Education and Training from 2003 to 2006, Deputy Secretary, Strategic Economic and Social Policy, in the Department of Premier and Cabinet and Deputy Secretary of DTF’s Budget and Financial Management Division.

Brendan Flynn Deputy Secretary, Economic and Financial Policy.

Brendan is responsible for the provision of high level policy advice and economic analysis to the Government on taxation, economic, social, environmental and regulatory issues. Brendan joined DTF in February 2011 with extensive economic experience in both the public and private sectors, most recently as the Senior Director for Corporate and Government Ratings for Standard & Poor’s.

Prior to this Brendan worked for ANZ Securities, joining them after six years with the Commonwealth Treasury where his major responsibilities included preparing and researching forecasts of various sectors of the Australian economy.

Laurinda Gardner Deputy Secretary, Corporate Strategy and Services.

Laurinda is responsible for ensuring the efficient delivery of communication, financial, information, legal, people, planning and technology services to the Department to support and contribute to the Department achieving its objectives and strategies and to ensure that the Department has the capability to serve government.

Laurinda joined DTF in 1998 after holding senior management roles in town planning, strategic planning and corporate services in local government.

David Webster Deputy Secretary, Commercial.

David commenced as Deputy Secretary in November 2011, replacing John Fitzgerald, who left the organisation in August 2011. Garry Phibbs acted in this role until David's appointment in November 2011.

David is responsible for the provision of high level and innovative commercial, financial and risk management advice to the Government including a focus on major infrastructure and the State’s balance sheet.

He has over 20 years of extensive international corporate and commercial senior management experience specialising in economic infrastructure and public private partnerships as a fund manager, equity investor, financial adviser and lender.

Prior to joining DTF, David worked for RBS Funds Management in Sydney as Executive Director and Chairman of RBS Funds Management (Australia) Limited. Previously David was Investment Director at EISER Global Infrastructure Fund in London and Head of Infrastructure Advisory at RBS London.

Adam Todhunter Deputy Secretary, Government Services.

Adam is responsible for managing a range of whole of Victorian government services provided to departments and agencies, and for developing policies and initiatives that increase the efficiency and effectiveness of these services. Adam joined DTF in October 2009.

Adam has experience in leading large technology and business reform projects at the Department of Education and Early Childhood Development and prior to that at the ANZ bank. Previously Adam held a number of senior roles in DTF including Executive Director, Corporate Services Centre. The Corporate Services Centre was a shared services entity that provided a range of shared services to DTF and the Department of Premier and Cabinet.

Dean Yates Deputy Secretary, Budget and Financial Management.

Dean was appointed as the Deputy Secretary, Budget and Financial Management Division in 2009. Prior to this, Dean was Deputy Secretary, Financial Reform. He has also worked in the areas of Commonwealth-State financial relations, superannuation policy and whole of government budgeting. Prior to joining DTF, Dean worked in the Tasmanian and Commonwealth Treasuries.

Dean Yates left the Department in August 2012. Melissa Skilbeck commenced as Deputy Secretary, Budget and Financial Management following Dean’s departure.


Melissa Skilbeck Deputy Secretary, Budget and Financial Management.

Melissa commenced as Deputy Secretary, Budget and Financial Management in August 2012. Melissa is responsible for assisting the Government to achieve its fiscal policy objectives, including delivery of the State Budget and Annual Financial Report and public sector resource management reform.

Between February and August 2012, Melissa was the Deputy Secretary, Resource Management Reform in the Victorian Department of Treasury and Finance (DTF).

Melissa re-joined the public service in February 2011 to head the Secretariat for the Independent Review of State Finances, supporting the Victorian Government-appointed Panel of Dr Michael Vertigan AC, Don Challen and Professor Ian Harper. Melissa has consulted to Australian governments, regulators and government businesses on public policy and administration as a director of the Allen Consulting Group and a partner in the economics and strategic advisory practice of Deloitte.


Organisational Chart, October 2012

Office of the SecretaryGrant Hehir

Secretary

State Revenue OfficePaul BroderickCommissioner

Financial ReportingSteve Mitsas

Director

Portfolio AnalysisTrudy Hart, Director

Jenny Atta, Acting Director

Review and SupportPenelope McKay, Director

Tim Barta, Director

Strategy and ReformSue EddyDirector

Budget and Financial ManagementMelissa Skilbeck

Deputy Secretary

Commercial Advisory ServicesGarry Phibbs

Director

Financial Risk ManagementBernard Gastin

Director

Infrastructure Policy,Advice and Review

Joe MonforteDirector

Infrastructure RiskManagement

Nick TamburroDirector

Partnerships Victoriaand Commercial Contracts

Jason LoosDirector

CommercialDavid Webster

Deputy Secretary

Finance and TechnologyServices

Joe BonniciChief Financial Officer

LegalMarian ChapmanGeneral Counsel

People, Informationand Communication

Ted LipiarskiDirector

Planning and ExecutiveServices

Karen FrostDirector

Corporate Strategy and ServicesLaurinda GardnerDeputy Secretary

Macroeconomics, Forecastingand Fiscal Strategy

David JohnsonDirector

Markets, Regulation andResources

Mark JohnstoneDirector

Social Policy, Insurance andInfrastructureJeremy Nott

Director

Tax and IntergovernmentalRelations

Mary CavarDirector

Victorian Competition and Efficiency Commission Secretariat

Jeff HoleExecutive Director

Economic and Financial PolicyBrendan Flynn

Deputy Secretary

Construction Code ComplianceNigel Hadgkiss

Director

Shared Service ProviderNorah Familton

Director

Strategic SourcingDarren Bloomfield

Director

Strategy and PolicySteve Schinck

Director

TechnologyTony Aitkenhead

Director

Government ServicesAdam Todhunter Deputy Secretary


Functions and services The Office of the Secretary and five divisions carry out the functions and services of DTF. These divisions are:

• Budget and Financial Management;

• Commercial;

• Corporate Strategy and Services;

• Economic and Financial Policy; and

• Government Services.

Office of the Secretary The Office of the Secretary provides support to the Secretary of the Department.

Budget and Financial Management The Budget and Financial Management division delivers policy and advisory services to the Government. The division’s main functions include:

• coordinating the annual State Budget and the Budget Update processes;

• coordinating the processes and production of the Annual and Mid-Year Financial Reports for the State of Victoria and the general government sector Quarterly Financial Reports;

• developing and implementing resource allocation and management reform frameworks for the Victorian budget sector;

• monitoring portfolio performance and revenue certification;

• maintaining and enhancing financial management frameworks, and monitoring compliance;

• reviewing the efficiency, effectiveness, and cost of delivering government goods and services;

• developing and monitoring whole of government policies and frameworks to manage public sector industrial relations, including managing financial and industrial risks while facilitating agreement making; and

• administering and monitoring the Community Support Fund to ensure that funding allocated to portfolio departments is consistent with the legislation and is managed effectively.

Commercial The Commercial division provides commercial, financial and risk management advice and guides the implementation of new infrastructure and commercial projects.

The division ensures the optimisation of contractual risks to government and is the custodian and promoter of commercial principles and practices throughout the public sector.

The division’s main functions include:

• advising, monitoring and reporting on the State’s balance sheet and associated financial risks. This includes management of the State’s debt, unfunded superannuation, insurance liabilities and the assets invested to fund the State’s liabilities;

• regulating the affordable housing sector in Victoria through the Housing Registrar;

• developing and maintaining the Government’s policies on public private partnerships and project alliancing for procuring complex infrastructure;

• advising ministers, government departments and agencies on future uses or disposal of surplus government land and property to ensure that these valuable assets are used efficiently;

• undertaking the shareholder monitoring and governance of the Government’s major government business enterprises;

• advising on major infrastructure projects, including developing business cases and procurement processes, to ensure the effective delivery of high value high risk projects;

• managing the Gateway review process and developing and implementing policies and practices improving asset investment decision making and project delivery across government; and

• guiding major commercial activities requiring specialised resources.

Corporate Strategy and Services The Corporate Strategy and Services division influences corporate strategies and delivers valued services to support the achievement of DTF’s vision, mission and objectives. This is accomplished through leading DTF’s organisational initiatives on:

• governance;

• planning, financial and risk management;

• people management, planning and development practices;

• organisational culture;

• communication and online strategies;

• improving quality;

• knowledge and information management; and

• stakeholder relationship management.


The division also provides professional services for DTF in:

• financial operations and management;

• law;

• corporate communication;

• technology systems and architecture;

• issues management;

• contract governance and compliance;

• contract resourcing;

• human resources strategy and organisational culture;

• business planning and reporting;

• Cabinet and Parliamentary processes;

• accommodation and facilities coordination;

• supporting the Senior Executive Group, DTF Board and sub-committees; and

• information and knowledge management support.

Economic and Financial Policy The Economic and Financial Policy division advises the Government on key economic and financial issues, including longer term economic development, financial strategy and taxation policy. The division’s main functions include:

• promoting Victoria’s economic development and competitiveness;

• delivering economic, social and environmental policy and reform objectives consistent with long-term economic growth;

• achieving the Government’s longer-term financial objectives;

• advising the Government on taxation and insurance policies and the management of Commonwealth-State financial arrangements;

• monitoring and forecasting trends in state and national economies and associated revenue flows;

• advising on competition and regulation policy and opportunities to reduce regulatory burdens on business and the community; and

• providing a secretariat reporting to the Victorian Competition and Efficiency Commission (VCEC), which provides independent advice to the Government on business regulation reform and opportunities.

Government Services The Government Services division provides whole of Victorian government services to departments and agencies. The division advises Government on ways to increase the effectiveness and efficiency of government services through policy and reform initiatives. The division’s functions include:

• developing and maintaining a framework of whole of government policies, standards and guidelines for procurement, information and communications technology, fleet and accommodation;

• implementing a program of procurement and contract management to ensure optimum benefit to Government, supporting the operations of the Victorian Government Procurement Board and developing procurement capability across government;

• effectively delivering vehicle fleet, accommodation, facilities and library services; and

• improving productivity and safety in the building and construction industry through the Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry.

Governance of DTF The overarching governance body for the Department is the Treasury and Finance Board. The Board consists of the Department’s Senior Executive Group and two external members, Jane Harvey and Gary Sturgess.

Its primary functions are to set and monitor the overall strategic direction, provide effective guidance and leadership, and to ensure the sound financial management and general compliance of the Department. The Board met ten times in 2011-12. The Senior Executive Group also meets weekly to discuss current and emerging operational issues.

The functions of the Board are supported by sub-committees. The structure and role of each sub-committee is:

• Budget and Financial Policy: provides overall direction and oversight relating to the State’s fiscal position, policy and strategy.

• Finance and Strategy: coordinates, monitors and provides oversight of the Department’s financial performance and strategic planning.

• High Value High Risk Assurance: provides assurance that the Department is effectively fulfilling its roles in monitoring and advising on asset investment and major project performance and implementing the high value high risk project assurance framework.


• Knowledge Management: advises and makes recommendations on appropriate knowledge management strategies designed to enhance access to and sharing of business critical information and knowledge.

• People and Culture: provides high level monitoring and oversight of our people management, organisational and communications strategies.

• Research Advisory: this committee met twice during the reporting period and was discontinued in September 2011 as a result of changing priorities within the department.

• Risk Governance: oversees the development, operation and effectiveness of the Department’s whole of government risk management frameworks related to the State’s financial and non-financial risks.

• Remuneration: manages executive remuneration practice and procedures.

DTF Audit Committee The Audit Committee assists the Board and the Secretary in fulfilling their responsibilities by reviewing the systems of internal controls established, the audit process, and the financial information that will be provided to Parliament and others. The Audit Committee has three external members, including the Chair.

The Audit Committee consisted of the following members for 2011-12:

• Jane Harvey – Chair

• Graeme Bowker

• Josie Rizza

• Laurinda Gardner

• Steve Schinck

• Steve Mitsas (Jul–Oct 2011)

• Jason Loos (Oct 2011–current)

The Department’s internal audit services were provided by PricewaterhouseCoopers up until October 2011, and by KPMG from October 2011.


Risk Attestation Statement I, Grant Hehir, certify that the Department of Treasury and Finance has risk management processes in place consistent with the Australian/New Zealand International Risk Management Standard, and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures.

The Department continues to enhance the effectiveness of its risk management practices.

The Audit Committee verifies this assurance and also that the risk profile of the Department of Treasury and Finance has been critically reviewed within the last 12 months.



Report of operations Secretary’s foreword The 2011-12 financial year provided many challenges for the Department of Treasury and Finance (DTF) as we began implementing the Government’s strategies and policies to put the State’s finances on a more sustainable footing.

The 2012-13 Budget was released in May and forecast an estimated operating surplus of $155 million in 2012-13. A key theme of the budget was constraining expenditure growth across government while promoting policies that will boost the State’s productivity.

International economic volatility has become the norm, making it even more important that Victoria continues to seek opportunities to increase efficiency and productivity while also creating an environment that helps businesses to grow.

Investing in infrastructure across the State that supports the business sector and the broader community is a key factor in supporting this and has been a high priority for the Department. In 2011-12, we began implementation of the high value high risk processes for major infrastructure projects and coordinated over 50 Gateway reviews to improve the likelihood of successful project outcomes. This work will continue to be a focus for DTF in 2012-13.

Another major area of work for the Department in 2011-12 was public sector reform. Two major aspects of this work have been the Sustainable Government Initiative and the Better Services Implementation Taskforce.

The Sustainable Government Initiative was rolled out across government to reduce public sector expenditure without impacting on frontline service delivery.

The Better Services Implementation Taskforce was announced in March 2012 to help government departments and agencies improve their operations and deliver better focused, value for money services for Victorians. The Taskforce is ongoing, and will progressively introduce reforms through 2012-13 and beyond.

Another significant initiative was the Independent Review of State Finances, which delivered its final report to the Government in early 2012. DTF played a significant role in providing secretariat functions to the Panel.

The reform agenda will continue to be central in our effort to make the public sector more accountable, cost effective and responsive to community needs. Implementing these reforms is vital if DTF is to fulfil its vision of a prosperous future for all Victorians.

Our achievements During the financial year, DTF worked on a myriad of projects often in close collaboration with other departments and agencies. DTF led economic, financial and resource management and also helped colleagues across government achieve positive outcomes for the State.

Among our major achievements for 2011-12 were:

• delivering the 2012-13 State Budget; • continuing implementation of the high value high

risk approval process; • launching the Implementation Guidelines to the

Victorian Code of Practice for the Building and Construction Industry. The Construction Code Compliance Unit was up and running by 1 July 2012, the commencement date of the Implementation Guidelines;

• achieving savings of $109 million by March 2012 against a financial year target of $101 million through whole of government contract arrangements;

• contract close and financial close achieved on the Victorian Comprehensive Cancer Centre public private partnership project;

• working on a horizontal fiscal equalisation project to drive a simpler, less volatile and more transparent model of horizontal fiscal equalisation through the GST Distribution Review;

• negotiating new workplace agreements and engaging in the Fair Work Australia process for the Victorian Public Service Workplace Determination;

• converting three metropolitan water retailers from Corporations Act entities to statutory corporations under the Water Act 1989;

• continuing progress on the Government’s red tape reduction initiative; and

• negotiating the City West Police complex and signing the Agreement to Lease. Construction of the 12 storey complex will begin next year and is expected to be completed in 2015.


Future challenges Economic and fiscal conditions will remain tight for the coming year. Much of our work will focus on delivering efficiencies, rolling out the public sector reform agenda and ensuring projects deliver value for money for Victorians.

Some of the significant projects for 2012-13 include:

• delivering the 2013-14 budget;

• coordinating the implementation of the whole of Victorian Government ICT Strategy;

• ensuring the Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry lead to behavioural change on Victorian building and construction sites;

• continuing to provide input into the review of the distribution of the GST and responding to final recommendations;

• implementing the fire services property levy;

• undertaking analysis of new corporate governance models for government business enterprises;

• releasing updated Investment Lifecycle guidance to help government departments apply higher quality project development and delivery process to new infrastructure projects;

• implementing of Commonwealth Stronger Super reforms to public sector schemes;

• implementing procurement reform. The Victorian Government Purchasing Board has committed to transition all departments to the new policy framework in the next 12 to 18 months;

• enhancing productivity through market engagement and regulatory reform;

• reforms to the financial management framework, including the establishment of a Parliamentary Budget Office and reform of the Audit Act;

• reviewing and re-drafting WorkCover legislation; and

• improving the transparency of government by providing public access to data sets, consistent with the recently released DataVic Access and Intellectual Property policies.

Our people DTF’s staff continue to excel in supporting the wellbeing and future prosperity of Victorians. In often demanding circumstances, they have helped implement policies that have placed the State’s finances on a more robust footing. At the same time, staff across the Department have worked diligently to find efficiencies and ways to boost the State’s productivity.

I would like to thank all staff for their ongoing effort to fulfil our mission of ensuring that the Government and the State of Victoria benefit from the highest standard of economic, financial and resource management.



2011–12 performance Contribution to government outcomes The Department’s outputs are arranged in the following six output groups:

1. Strategic Policy Advice 2. Financial Management Services 3. Risk Management Services 4. Resource Management Services 5. Regulatory Services 6. Revenue Management Services

Output performance in summary The Department delivered the majority of its outputs specified in the 2011-12 State Budget. Of the 80 quantity, quality and timeliness targets, 85 per cent were met (within 5 per cent of target) or were exceeded, while only 15 per cent were not met.

A report on the Department’s performance in delivering each of its outputs is provided in this section, including details on the delivery of key projects and initiatives for the year, and performance outcomes against the output performance measures set out in 2011-12 Budget Estimates, Budget Paper No. 3, Chapter 3 Departmental output statements.

Changes to output structure The Department did not make any changes to its output structure in 2011-12.


Output group 1: Strategic Policy Advice Outputs delivered Description Financial and Resource Management Frameworks

This output develops and maintains cohesive financial and resource management frameworks that drive sound financial and resource management practices within the Victorian Public Sector. This includes: leading, coordinating and implementing public finance reforms; ensuring compliance with legislative requirements and endorsed reforms; and advising Government and key stakeholders on compliance, accounting policy, resource management and tax issues.

Budget and Financial Policy Advice This output provides strategic, timely and comprehensive analysis and advice to Ministers, Cabinet and Cabinet Sub-Committees on resource allocation, departmental financial, output and asset delivery performance to support the Government in making decisions on the allocation of the State’s fiscal resources. The output also provides public sector industrial relations advice to Ministers with the aim of facilitating cooperative, flexible and productive public sector workplaces. This is intended to assist Government to deliver responsible budgets and operating surpluses

Economic and Financial Policy This output provides strategic policy advice to Government on a range of current economic and financial policy issues, including: • advice on medium and longer-term strategies to strengthen productivity,

participation and the State’s overall competitiveness; • research and advice on key economic, social and environmental policy and

infrastructure issues; • advice in relation to state revenue policy, insurance policy, and

intergovernmental financial relations; • production of the economic and revenue estimates that underpin the State

Budget; and • advice on best practice regulatory frameworks for the delivery of whole of

government red tape reduction objectives.


Financial and Resource Management Frameworks Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Annual review of whole of government compliance framework

number 1 1

Coordinating reporting requirements in relation to GST Determinations and Auditor-General Reports

number 5 3

The outcome is lower than the target due to changes in GST legislation that require fewer reports to be provided.

This quantity performance measure will be discontinued and replaced with a new 2012-13 quality measure ‘Timely coordinating of Victoria’s input to GST Regulations associated with Division 81 and the Government response to Auditor-General Reports’. This will measure the same activity as the previous measure however, it has been amended from a number to a report date measure to increase clarity and better capture the performance of the output.

Delivery of updates, guides and newsletters number 10 9 The outcome is lower than the target due to a delay in the publication of Financial Reporting Direction 120F from June 2012 to July 2012.

Review of major resource management policies number 2 2 Quality Material and adverse whole of government issues identified by Victorian Auditor-General’s Office and Australian Taxation Office requiring rectification are addressed

per cent 100 100

Service provision rating (Ministerial survey data) per cent 80 80 Timeliness Compliance assurance reports report dates By end

Aug 2011 By end

Feb 2012

8 Sep 2011

4 Mar 2012

Cost Total output cost $ million 5.0 4.3


Budget and Financial Policy Advice Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Budget and financial policy advice through Ministerial briefs, Budget and Expenditure Review Committee and Cabinet and sub-committee briefs

number 1 250 1 117

The outcome is lower than the target due to the high volume of flood related briefs that were administered outside the output.

Output evaluation and base reviews number 3 3 Quality Service provision rating (Ministerial survey data) per cent 80 82 Timeliness Delivery of output evaluation and base review reports within agreed timeframes

per cent 100 100

Delivery of output performance and asset investment performance reports within agreed timeframes

per cent 100 83.25

The outcome is lower than the target due to the delay of the December quarter output report that will be finalised in July 2012.


Total output cost is higher than the target due to additional employee expenses relating to Public Sector Industrial Relations and legal expenses relating to VPS EBA and arbitration process.

Economic and Financial Policy Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Briefings on Cabinet submissions number 200 283

The outcome is higher than the target due to an increase in Cabinet submissions. This increase has resulted in a decrease in the number of written Ministerial briefs.

Number of written Ministerial briefs numbers 300 286 The outcome for is lower than the target due to a change in the output’s work plan that required a greater number of briefings on Cabinet submissions.

Program of long-term research projects completed number 10 10 Quality Accuracy of estimating state taxation revenue in the state budget

per cent ≤5.0 3.1

Service provision rating (Ministerial survey data) per cent 80 82 Timeliness Briefings on key Australian Bureau of Statistics economic data on day of release

per cent 100 100

Long-term research projects managed on time per cent 100 100 Meet financial reporting deadlines per cent 100 100 Response to correspondence within agreed deadlines per cent 80 79.75 Cost Total output cost $ million 20.6 19.6


Output group 2: Financial Management Services Outputs delivered Description Financial Reporting This output maintains the integrity of systems and information for financial

planning, management, monitoring and reporting of the State of Victoria with respect to: • publication of the State Budget and budget related documents; • reporting, monitoring and publication of financial and non-financial

performance in the Victorian Public Sector; and • management of the daily cash requirements including investments and

borrowings of the Public Account. GBE Performance Monitoring and Financial Risk Management

This output monitors and provides advice on the financial and operational performance of Government Business Enterprises (GBEs) and Registered Housing Agencies. It develops and implements a prudential risk management and reporting framework in respect of public financial corporations (PFCs) and strategies to manage the State’s financial risks. It oversees policy and strategies to manage the State’s investment borrowing and unfunded superannuation obligations and the management of the associated risks. It produces budget and financial reporting data for the public non-financial corporation (PNFC) and PFC sectors.


Financial Reporting Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Acceptable (no material weaknesses in financial systems and reporting) Financial Report for the State of Victoria and Estimated Financial Statements audit opinions by the Auditor-General

number 2 2

This quantity performance measure will be amended to a quality measure in 2012-13. It will measure the same activity as the previous measure, however it will be amended from a number to a percentage measure to better capture the performance of the output.

Estimates reporting – Budget and Budget Update number 2 2 Financial Performance Reporting – Annual Financial Report, Mid-Year Financial Report and Quarterly Financial Reports

number 6 6

Quality Service provision rating (Ministerial survey data) per cent 80 85 Timeliness Annual Budget published by date agreed by Treasurer date May 2012 1 May 2012 Budget Update date 15 Dec 2011 15 Dec 2011 Daily management of the Public Account bank account and set-off pool balances

daily daily daily

The performance measure will be discontinued in 2012-13 as it is a legislative requirement to meet these targets and not an appropriate performance measure.

Financial Report for the State of Victoria date 15 Oct 2011 13 Oct 2011 Mid-Year Financial Report report date 15 Mar 2012 13 Mar 2012 Quarterly Financial Reports report date 15 Oct 2011

15 Nov 2011 15 Mar 2012 15 May 2012

13 Oct 2011 10 Nov 2011 13 Mar 2012 1 May 2012



GBE Performance Monitoring and Financial Risk Management Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Annual performance and compliance review of registered housing agencies

number 40 40

Board appointments number 123 127 Corporate plans reviewed and assessed and quarterly performance reports

number 198 190

Dividends negotiated number 37 31 The outcome is lower than the target due to a number of deferrals of 2011-12 interim dividends to October 2012.

Manage the review process for the State’s credit rating number 2 2 Review of financial position of business entities number 12 12 Provide financial policy advice on borrowings, investments and superannuation issues and prudential supervision

number 105 104

Provision of budget sector debt, public authority income and superannuation estimates and analysis and commentary on the PNFC and PFC sectors for whole of Victorian government published financial reports

number 7 7

Quality Service provision rating (Ministerial survey data) per cent 80 80 Timeliness Analysis and review of corporate plans, quarterly performance reports within three months of receipt

per cent 90 90

Board appointments approved within agreed timelines per cent 100 100 Dates met for dividend payments per cent 100 100 Cost Total output cost $ million 7.4 7.1


Output group 3: Risk Management Services Outputs delivered Description Land and Infrastructure Investment Management

This output provides advice and assistance to departments, Ministers and senior Departmental management on: • land purchases, sales, facilitation, leasing and remediation; • feasibility studies, business cases, procurement processes and contractual

management of major projects and commercial transactions; • policy to support project delivery; and • medium to long term asset investment planning and processes for

investment decision making.

Land and Infrastructure Investment Management Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Commercial and risk management advice on project milestones (including projects identified as high value high risk) which facilitate infrastructure and which minimise government’s exposure to risk

number 320 461

The outcome is higher than the target due to additional project review workload associated with the high value high risk framework.

Development and implementation of services including policy, procedures and training in practices which govern new infrastructure investment

number 41 95

The outcome is higher than the target due to additional project review workload associated with the high value high risk framework.

Gateway reviews undertaken to minimise government`s exposure to project risks

number 70 57

The outcome is lower than the target due to a smaller number of projects than anticipated reaching the Gate 2 review stage and the targeting of Gateway reviews to higher risk projects.

Revenue from sale of surplus government land including Crown land

$ million 50 30.15

The outcome is lower than the target due to the property market experiencing difficult conditions at all levels and across all sectors.

Quality Service provision rating (Ministerial survey data) per cent 80 80 Cost Total output cost $ million 23.9 22.6


Output group 4: Resource Management Services Outputs delivered Description Government Services This output delivers effective and efficient whole of government services and

reform initiatives in areas including procurement, fleet, facilities and accommodation, library services, car pool services and information and communications technology. It also provides strategic leadership in the implementation of the Better Financial Management policy.

Government Services Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Briefs provided on services to government number 70 131

The outcome is higher than the target due to a higher than anticipated number of briefings related to accommodation approval processes.

Deliver or renew whole of government service related policies

number 20 19

The outcome is lower than the target due to the total number of policies initially proposed as part of procurement reform being reduced.

Establishment or renewal of whole of government contracts

number 22 20

The outcome is lower than the target due to delays in approvals resulting in procurement activities scheduled for 2011-12 to be completed in 2012–13.

Quality Service provision rating (Ministerial survey data) per cent 80 80 Total accommodation cost $ per square

metre per year

350 347

Workspace ratio Square metre per

FTE

15 15.9(a)

Timeliness Whole of government contracts renewed within agreed timelines

per cent 95 100


Note:

(a) The survey has shown that there has been an increase in the amount of space occupied by each FTE. Although VPS staff numbers are declining at present, most leases are on a long-term basis, so space cannot be reduced straight away to reflect the less space needed to accommodate reduced staff numbers


Output group 5: Regulatory Services Outputs delivered Description Economic Regulatory Services This output provides economic regulation of utilities and other specified markets

in Victoria to protect the long-term interests of Victorian consumers with regard to price, quality and reliability of essential services.

Business Environment Policy Advice This output provides advice on ways the Government can improve the business environment. In particular this output: reviews regulatory impact statements, business impact assessments and regulatory change measurement assessments; undertakes inquiries into matters referred to it by the Government; and operates Victoria’s competitive neutrality unit.

Economic Regulatory Services Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity New or revised regulatory instruments issued number 2 6

The outcome is higher than the target due to additional reviews being conducted.

Performance reports for regulated businesses or industries

number 3 4

The outcome is higher than the target due to an additional report being produced.

Performance reviews and compliance audits of regulated businesses

number 93 98

The outcome is higher than the target due to additional reviews and audits being completed.

Price approvals of regulated businesses number 22 23 Registration and accreditation decisions/approvals in relation to the Victorian Energy Efficiency Target Scheme

number 400 839

The outcome is higher than the target due to larger than expected number of decisions and approvals undertaken.

Reviews, investigations or advisory projects number 6 5 The outcome is lower than the target due to one of the reviews scheduled to be completed being delayed to July 2012.

Quality Decisions upheld where subject to review, appeal or disallowance

per cent 100 100

Timeliness Deadlines met for major milestones per cent 100 100 Cost Total output cost $ million 15.2 14.7


Business Environment Policy Advice Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Public enquiries examined during the year number 3 4 Reviews of Regulatory Impact Statements (RIS) and Business Impact Assessments (BIA) and Regulatory Change Measurements

number 45 18

The outcome is lower than the target due to fewer than expected BIAs, RISs and Regulatory Change Measurements submitted for assessment. The number of completed assessments reflects the volume of the Government's legislative program and Ministerial judgements regarding the proportion of legislation and regulation that meets the thresholds for a RIS or BIA to be prepared.

Quality Service provision rating (Commissioner assessment of Secretariat performance)

per cent 80 85

Timeliness Completion of inquiry reports by due date per cent 100 100 Complete the initial assessment phase of BIA within 10 working days of receipt

per cent 90 100

Complete the initial assessment phase of RIS within 10 working days of receipt

per cent 90 100

Complete the initial assessment phase of Regulatory Change Measurements within 10 working days of receipt

per cent 90 100



Output group 6: Revenue Management Services Outputs delivered Description Revenue Management Services to Government

This output provides revenue management services across the various state-based taxes in a fair and efficient manner for the benefit of all Victorians.

Revenue Management Services to Government Major outputs/deliverables Performance measures

Unit of measure

2011-12 target

2011-12 outcome

Quantity Revenue banked on day of receipt per cent ≥99 99.65 Revenue collected as a percentage of budget target per cent ≥99 101 Revenue detected from compliance projects meets estimates

per cent ≥90 102

Quality Customer satisfaction level per cent ≥80 95 Maintain ISO 9001 (quality management systems) and ISO/IEC 20000-1:2005 (IT Service management) Certification

number 3 3

Ratio of outstanding debt to total revenue per cent <2 1.6 Timeliness Court timelines met per cent 100 100

The performance measure will be discontinued in 2012-13 as it is no longer a useful measure. Once a matter is referred to court it is incumbent on the State Revenue Office to be responsive to court timelines in the progression of litigation. Consequently, this target has always been met.

Meet Cabinet and Parliamentary timelines per cent 100 100 Timely handling of objections (within 90 days) per cent ≥80 86 Timely handling of private rulings (within 90 days) per cent ≥80 94 Cost Total output cost $ million 82.4 76.8


Financial performance Overview The Department recorded a surplus of $11.3 million in 2011-12 compared to $8.8 million in 2010-11.

Total assets of the Department increased from $855 million to $1 014 million during the year. The major cause of this increase was the revaluation increment of $157 million resulting from the independent valuation during the year of properties held by the Department.

The major assets of the Department at 30 June 2012 are land and buildings ($535 million), finance lease receivables associated with the State’s vehicle fleet leasing arrangement ($221 million), funds held in trust ($86 million) and the Department’s receivable from the State Administration Unit ($89 million).

Total liabilities decreased from $384 million to $375 million. The major liability is borrowings from Treasury Corporation of Victoria ($226 million) to fund the State’s vehicle fleet.

Core operations

The best indicator of the scale and efficiency of core departmental operations is the revenue paid by government for DTF outputs. This has marginally decreased this year to $238.7 million, from $240.6 million in 2010-11.

The following table details operational revenue by output group.

Core operations

Revenue from the provision of outputs (a)

Output group 2011-12

$m 2010-11

$m Change

$m Strategic Policy Advice 38 47 -9 Financial Management Services

22 23 -1

Risk Management Services

24 19 5

Resource Management Services

50 69 -19

Regulatory Services 22 19 3 Revenue Management Services

83 64 19

Total 239 241 -2

Note:

(a) Includes only Parliamentary appropriations.

Five year financial summary: Departmental (controlled) activities 2011-12

$m 2010-11 (a)

$m 2009-10 (a)

$m 2008-09 (b)

$m 2007-08

$m Government output appropriations income 239 241 281 236 227 Other income 66 67 60 55 99 Total income from transactions 305 308 341 291 326 Total expenses from transactions (294) (299) (354) (272) (320) Net result from transactions 11 9 (13) 19 6 Total other economic flows included in net result – – – (1) – Net result 11 9 (13) 18 6 Net cash flow from operations 28 46 33 36 23 Total assets 1 014 855 631 613 639 Total liabilities 375 384 349 318 322

Notes:

(a) The results for 2010-11 and 2009-10 were impacted by the transfer of various functions into the Department, effective 1 January in the respective years.

(b) The results for 2008-09 were impacted by the transfer of various functions out of the Department following machinery of government changes effective 1 July 2008.


Financial statements Contents Comprehensive operating statement 26

Balance sheet 27

Statement of changes in equity 28

Cash flow statement 29

Notes to financial statements 30

Note 1. Summary of significant accounting policies 30

Note 2. Departmental outputs 41

Note 3. Income from transactions 44

Note 4. Summary of compliance with annual Parliamentary and special appropriations 44

Note 5. Expenses from transactions 47

Note 6. Receivables 48

Note 7. Non-financial assets classified as held for sale 48

Note 8. Property, plant and equipment 49

Note 9. Intangible assets 52

Note 10. Payables 53

Note 11. Provisions 53

Note 12. Borrowings 54

Note 13. Leases 55

Note 14. Financial instruments 56

Note 15. Commitments for expenditure 62

Note 16. Contingent liabilities and contingent assets 63

Note 17. Responsible persons 65

Note 18. Remuneration of executives 66

Note 19. Remuneration of auditors 67

Note 20. Superannuation 67

Note 21. Cash flow information 68

Note 22. Administered items 69

Note 23. Trust account balances 76

Note 24. Subsequent events 77

Note 25. Glossary of terms 77

Accountable Officer’s and Chief Financial Officer’s declaration 80


Comprehensive operating statement for the year ended 30 June 2012 2012 2011 Notes $’000 $’000 Income from transactions Output appropriations 4(a) 238 687 240 579 Interest 3(a) 11 607 11 930 Other income 3(b) 54 952 55 230 Total income from transactions 305 246 307 739 Expenses from transactions Employee expenses 5 124 663 121 014 Depreciation 5 27 451 18 113 Interest expense 5 11 671 11 943 Grants expense 5 18 057 26 111 Capital asset charge 1(f) 16 453 18 206 Supplies and services 88 644 100 570 Payments to Consolidated Fund 6 757 3 220 Total expenses from transactions 293 696 299 177 Net result from transactions 11 550 8 562 Other economic flows included in net result Net gain/(loss) on financial instruments 4 (54) Net gain/(loss) on disposal of property, plant and equipment 418 207 Net gain/(loss) from revaluation of long service leave liability (666) 52 Total other economic flows included in net result (244) 205 Net result 11 306 8 767 Other economic flows – other non-owner changes in equity Changes in physical asset revaluation surplus 156 824 – Comprehensive result 168 130 8 767

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


Balance sheet as at 30 June 2012 2012 2011 Notes $’000 $’000 Assets Financial assets Cash and deposits 21(a) 85 873 91 478 Receivables 6 333 788 325 014 Total financial assets 419 661 416 492 Non-financial assets Inventories 55 56 Prepayments 8 183 2 690 Non-financial assets classified as held for sale 7 16 786 7 170 Property, plant and equipment 8 548 152 403 070 Intangible assets 9 20 765 25 962 Total non-financial assets 593 941 438 948 Total assets 1 013 602 855 440 Liabilities Payables 10 47 564 65 952 Provisions 11 35 414 34 134 Unearned income 4 451 3 210 Advances for capital works 52 079 47 488 Borrowings 12 235 140 233 104 Total liabilities 374 648 383 888 Net assets 638 954 471 552 Equity Contributed capital 248 019 248 747 Asset revaluation surplus 237 100 80 276 Accumulated surplus 153 835 142 529 Total equity 638 954 471 552

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


Statement of changes in equity for the year ended 30 June 2012

Contributed capital

Asset revaluation

surplus Accumulated

surplus Total Notes $’000 $’000 $’000 $’000 Balance at 1 July 2010 67 401 80 276 133 762 281 439 Capital appropriations 4(a) 62 534 62 534 Administrative restructure – net assets transferred in

6 6

Net asset transfers from other departments 191 093 191 093 Capital distributions to portfolio entities (72 287) (72 287) Net result for the year 8 767 8 767 Balance at 30 June 2011 248 747 80 276 142 529 471 552 Capital appropriations 4(a) 55 838 55 838 Net asset transfers to portfolio entities (36) (36) Capital distributions to portfolio entities (56 530) (56 530) Revaluation of assets 156 824 156 824 Net result for the year 11 306 11 306 Balance at 30 June 2012 248 019 237 100 153 835 638 954

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


Cash flow statement for the year ended 30 June 2012 2012 2011 Notes $’000 $’000 Cash flows from operating activities Receipts from government 303 413 344 247 Receipts from other entities 42 539 26 025 Goods and services tax recovered from the ATO 5 724 5 109 351 676 375 381 Payments to suppliers and employees (279 449) (271 011) Grants paid (16 286) (28 024) Capital asset charge paid (16 453) (18 206) Interest and other finance costs paid (11 710) (11 977) (323 898) (329 218) Net cash flows from operating activities 21(b) 27 778 46 163 Cash flows from investing activities Payments for property, plant and equipment (5 720) (11 862) Proceeds from sale of property, plant and equipment 2 340 2 025 Payments for intangible assets (10 980) (22 178) Payments for purchase of lease assets as lessor (148 547) (111 182) Proceeds from lease repayments 133 946 126 307 Net cash flows used in investing activities (28 961) (16 890) Cash flows from financing activities Owner contributions by State Government 55 838 62 534 Repayment of finance lease liabilities (4 232) (3 507) Capital distributions to departmental agencies (56 246) (49 950) Repayment of borrowings (500) – Net cash flows from/(used in) financing activities (5 140) 9 077 Net increase/(decrease) in cash and cash equivalents (6 323) 38 350 Cash and cash equivalents at the start of the year 90 458 52 108 Cash and cash equivalents at the end of the year 21(a) 84 135 90 458 Non-cash financing and investing activities 21(c)

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


Notes to financial statements Note 1. Summary of significant accounting policies (a) Statement of compliance These general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards including Interpretations (AASs), issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of AASB 1049 Whole of Government and General Government Sector Financial Reporting. Where relevant, those paragraphs of the AASs applicable to not-for-profit entities have been applied.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The financial statements also comply with relevant Financial Reporting Directions and relevant Standing Directions issued by the Minister for Finance.

(b) Basis of preparation The accrual basis of accounting has been applied in the preparation of these financial statements, whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

Judgements, estimates and assumptions are required to be made about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements and assumptions made by management in the application of AASs that have significant effects on the financial statements relate to:

• the fair value of land, buildings, plant and equipment and intangible assets (refer to note 1(i));

• actuarial assumptions for superannuation expense (refer to note 1(n)); and

• employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates (refer to note 1(j)).

The financial statements are presented in Australian dollars, and prepared in accordance with the historical cost convention. Historical cost is based on the fair values of the consideration given in exchange for assets. Exceptions to the historical cost convention include:

• non-current physical assets, which subsequent to acquisition, are measured at a revalued amount being their fair value at the date of revaluation less any subsequent depreciation and impairment losses. Revaluations are made with sufficient regularity such that the carrying amounts do not materially differ from their fair value; and

• certain liabilities that are calculated with regard to actuarial assessments.

The accounting policies set out below have been applied in preparing the financial statements.

(c) Reporting entity The financial statements cover the Department of Treasury and Finance as an individual reporting entity. The Department is a government department of the State of Victoria. Its principal address is:

1 Treasury Place Melbourne, Victoria, 3002

The Department is an administrative agency acting on behalf of the Crown.

The financial statements include all the controlled activities of the Department of Treasury and Finance. This includes the transactions and balances of the following controlled trust accounts:

• Finance Agency Trust;

• Government Accommodation Trust;

• Shared Corporate Services Trust Account;

• Treasury Trust; and

• Vehicle Lease Trust.

The Essential Services Commission and CenITex, which are part of the Department’s portfolio, prepare separate annual financial statements and accordingly are not included in the Department’s financial statements.

Administered resources

The Department administers, but does not control, certain resources on behalf of the Crown, for example taxes raised by the State Revenue Office. It is accountable for the transactions involving those administered resources, but does not have the discretion to deploy the resources for its own benefit or for the achievement of its objectives.


Accordingly, transactions and balances relating to these administered resources are not recognised as departmental income, expenses, assets or liabilities within the body of the financial statements, but are disclosed separately in note 22. Except as otherwise disclosed, administered transactions are accounted for on the same basis and use the same policies as for departmental items.

Objectives and funding

In 2011-12, the Department continued to pursue its mission of providing leadership in economic, financial and resource management reform. This leadership focus is reflected in the Department’s long-term operational objectives, which guide its policy directions:

• sound financial management of the State’s fiscal resources with an emphasis on maintenance of a substantial budget surplus;

• guide government actions to best increase living standards for all Victorians; and

• champion an integrated whole of government ‘value for money’ approach to ensure optimal service delivery and the provision of world class infrastructure to benefit all Victorians.

The Department is predominantly funded by accrual based Parliamentary appropriations for the provision of outputs.

Outputs of the Department

Information about the Department’s output activities, and the expenses, income, assets and liabilities which are reliably attributable to those activities, is set out in the departmental outputs schedules (note 2). Information about expenses, income, assets and liabilities administered by the Department are given in the schedule of administered income and expenses and the schedule of administered assets and liabilities (note 22).

(d) Scope and presentation of financial statements Comprehensive operating statement

Income and expenses in the comprehensive operating statement are classified according to whether or not they arise from ‘transactions’ or ‘other economic flows’, as defined in note 25. This classification is consistent with the whole of government reporting format and is allowed under AASB 101 Presentation of Financial Statements.

Balance sheet

Assets and liabilities are presented in liquidity order with assets aggregated into financial assets and non-financial assets. Current and non-current assets and liabilities are disclosed in the notes, where relevant.

Statement of changes in equity

The statement of changes in equity presents reconciliations of non-owner and owner changes in equity from opening balance at the beginning of the year to the closing balance at the end of the year. It also shows separately changes due to amounts recognised in the comprehensive result and amounts recognised in other economic flows – other movements in equity related to transactions with the owner in its capacity as owner.

Cash flow statement

Cash flows are classified according to whether they arise from operating, investing, or financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows. For purposes of the cash flow statement, cash and cash equivalents include bank overdrafts, which are included as borrowings on the balance sheet (see note 21).

(e) Income from transactions Income is recognised to the extent that it is probable that the economic benefits will flow to the Department and the income can be reliably measured. Amounts disclosed as income are, where applicable, net of duties and taxes. Income is recognised for each of the Department’s major activities as follows:

Appropriation income

Appropriated income becomes controlled and is recognised by the Department when it is appropriated from the Consolidated Fund by the Victorian Parliament and applied to the purposes defined under the relevant Appropriation Act. Additionally, the Department is permitted under section 29 of the Financial Management Act 1994 to have certain revenues annotated to the annual appropriation. The revenues which form part of a section 29 agreement are recognised and paid into the Consolidated Fund by the Department as administered income (note 22). When the revenue is recognised, section 29 provides for an equivalent amount to be added to the annual appropriation authority, which is then available for application by the Treasurer. Examples of revenues which can form part of a section 29 agreement are revenues from sales of products and services, Commonwealth specific purpose grants and the proceeds from the sale of assets.

Output appropriations

Revenue from the outputs the Department provides to government is recognised when those outputs have been delivered and the relevant Minister has certified delivery of those outputs in accordance with specified performance criteria.

Special appropriations

Special appropriations income is recognised when the amount appropriated for the purpose specified under the relevant legislation is due and payable by the Department.


Provision of services

Income from the provision of services by business units are controlled by the Department where they can be deployed for the achievement of departmental objectives. Income is recognised when the services are provided.

Resources received free of charge

Contributions of resources received free of charge or for nominal consideration are recognised at fair value when control is obtained over them, irrespective of whether these contributions are subject to restrictions or conditions over their use. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not received as a donation.

Rental accommodation income

Income from the provision of rental accommodation to government departments and agencies is accounted for on a straight line basis over the lease term.

Interest income

Interest income includes the unwinding over time of discounts on financial assets and interest received on bank term deposits and other investments. Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

Net realised and unrealised gains and losses on the revaluation of investments do not form part of income from transactions, but are reported as part of income from other economic flows in the net result or as unrealised gains and losses taken direct to equity, forming part of the total change in net worth in the comprehensive result.

Grants income

Income from grants (other than contributions by owners) is recognised when the Department obtains control over the contribution. Where such grants are payable into the Consolidated Fund, they are reported as administered income (see note 22). Where grants are reciprocal (i.e. equal value is given by the Department to the provider), the Department is deemed to have assumed control when it has satisfied its performance obligations under the terms of the grant. Non-reciprocal grants are recognised as income when the grant is received or receivable. Conditional grants may be reciprocal or non-reciprocal depending on the terms of the grant.

The Department’s administered grants mainly comprise funds provided by the Commonwealth to assist the State in meeting general or specific service delivery obligations, primarily for the purpose of aiding in the financing of operations, capital purposes and/or for on passing to other recipients.

Taxes, fines, regulatory fees and other state revenue

State taxation revenue is recognised by the State on receipt of a taxpayer’s self-assessment, or the time the taxpayer’s obligation to pay arises pursuant to the issue of an assessment, whichever is earlier. Fines and regulatory fees revenue is recognised at the time the fine or regulatory fee is issued.

Taxes, public authority dividends, fines and regulatory fees collected, but not controlled, by the Department, are not recognised as revenues in the comprehensive operating statement or cash flow statement, but are reported as administered revenues (see note 22).

(f) Expenses from transactions Employee benefits

Employee benefits comprise all costs related to employment including wages and salaries, superannuation, fringe benefits tax, leave entitlements, redundancy payments and WorkCover premiums.

Superannuation expenses represent the employer contributions for members of both defined benefit and defined contribution superannuation plans that are paid or payable during the reporting period.

The Department discloses, on behalf of the State as the sponsoring employer, the net defined benefit cost and the defined benefit liability or surplus related to the members of these plans as administered items (see note 22).

Depreciation

All buildings, plant and equipment and other non-current physical assets, excluding assets held for sale, that have finite useful lives are depreciated. Depreciation is generally calculated on a straight line basis at rates that allocate the asset’s value, less any estimated residual value, over its expected useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method.

Intangible produced assets with finite useful lives are depreciated as an expense from transactions on a straight line basis over the asset’s useful life. Depreciation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.


Estimated useful lives applicable for the years ended 30 June 2012 and 30 June 2011 are as follows:

Buildings – structures 45 years (a) Buildings – internal fitouts 22-50 years(a) Office equipment 4 years Computer equipment and associated peripherals

3-4 years

Leased motor vehicles 2-3 years Intangible produced assets 2-7 years

Note:

(a) Certain heritage listed buildings (including fitouts) owned by the Department have been determined to have useful lives (up to 257 years) considerably exceeding these typical periods.

Land assets which are considered to have an indefinite life, are not depreciated. Depreciation is not recognised in respect of these assets as their service potential has not, in any material sense, been consumed during the reporting period.

The estimated useful lives, residual values and depreciation method are reviewed at least annually.

Interest expense

Interest expense is recognised in the period in which it is incurred.

Grants expense

Grants to third parties (other than contributions to owners) are recognised as an expense in the reporting period in which they are paid or payable.

Capital asset charge

The capital asset charge represents the opportunity cost of capital invested in the non-current physical assets used in the provision of outputs. The charge is calculated on the budgeted carrying amount of applicable non-current physical assets (excluding leased motor vehicles).

Supplies and services

Supplies and services are recognised as an expense in the period in which they are incurred. The carrying amounts of any inventories held for distribution are expensed when distributed.

Resources provided free of charge

Resources provided free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of any restrictions or conditions imposed over their use, except that transfers to another government department or agency as a consequence of a restructuring of administrative arrangements are recognised at carrying value.

(g) Other economic flows included in net result Other economic flows measure the change in volume or value of assets or liabilities that do not result from transactions.

Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical and intangible assets.

Disposal of non-financial assets

Any gain or loss on the disposal of non-financial assets is recognised at the date of disposal and is determined after deducting from the proceeds the carrying value of the asset at that time.

Impairment of non-financial assets

All non-current physical assets and intangible assets, except non-current physical assets held for sale, are assessed annually for indications of impairment. If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written off as an other economic flow except to the extent that the write-down can be debited to an asset revaluation surplus amount applicable to that class of asset.

It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

Actuarial gains/(losses) on superannuation defined benefit plans

Actuarial gains or losses are recognised in the administered comprehensive operating statement in the period in which they occur.

Net gain/(loss) on financial instruments

Net gain/(loss) on financial instruments includes realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held for trading, impairment and reversal of impairment for financial instruments at amortised cost, and disposals of financial assets.

Revaluations of financial instruments at fair value

The revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets, which is reported as part of income from transactions.


Impairment of financial assets

The Department assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. All financial assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

Bad and doubtful debts are assessed on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. The allowance for doubtful receivables and bad debts not written off by mutual consent are adjusted as other economic flows.

Other gains/(losses) from other economic flows

Other gains/(losses) from other economic flows include the transfer of amounts from reserves and/or accumulated surplus to net result due to reclassification, and from the revaluation of the present value of the long service leave liability due to changes in bond interest rates.

(h) Financial assets The Department classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

The Department assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

Cash and deposits

Cash and deposits comprise cash on hand and cash at bank, deposits at call and short term deposits, with original maturities of three months or less, that are held for the purpose of meeting short term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Receivables

Receivables consist of:

• statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits recoverable; and

• contractual receivables, which include mainly debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease receivables.

Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments.

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less any allowance for impairment.

Debtors are due for settlement no more than 30 days from the date of recognition. Collectability of debtors is reviewed on an ongoing basis. A provision for doubtful debts is raised when there is objective evidence that the debts may not be collected. Bad debts are written off when identified.

Lease receivables

The Department is the lessor for the State’s motor vehicle fleet. Leases effected under this arrangement are recognised as finance leases by this department as the lessor (see note 6), and by other departments and public bodies as lessees.

Amounts due from lessees under finance leases are recorded as receivables. Finance lease receivables are initially recorded at amounts equal to the present value of the minimum lease payments receivable plus the present value of any unguaranteed residual value expected to accrue at the end of the lease term. Finance lease payments are allocated between interest revenue and reduction of the lease receivable over the term of the lease in order to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

Investments

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the time frame established by the market concerned, and are initially measured at fair value, net of transaction costs.

Investments are classified in the following categories:

• financial assets at fair value through profit or loss;

• loans and receivables; and

• available for sale financial assets.

The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition.

The Department assesses at the end of each reporting period whether a financial asset or group of financial assets is impaired.

Financial assets at fair value through profit or loss

Equities and managed investment schemes, and certain debt securities are designated at fair value through profit or loss on initial recognition on the basis that the financial assets form part of a group of financial assets that are managed and its performance evaluated by the Department in accordance with documented role strategies. The financial assets are subsequently stated at fair value, with any resultant gain/(loss) recognised in the net result as other economic flows. Any dividend or interest on a financial asset is recognised in the net result as a transaction.


Loans and receivables

Term deposits with maturity greater than three months, trade receivables, loans and other receivables are initially recognised at fair value and subsequently at amortised cost, using the effective interest method, less impairment. 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.

Available-for-sale financial assets

Other investments held by the Department are classified as being available-for-sale and are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in equity until the investment is disposed of or is determined to be impaired, at which time the cumulative gains or losses previously recognised in equity are reclassified to the net result as other economic flows for the period.

Interest income is recognised as it accrues. Dividend income is recognised when receivable. Investments and investment income are disclosed as administered items (note 22).

(i) Non-financial assets Prepayments

Prepayments represent payments in advance of receipt of goods or services or that part of expenditure made in one accounting period covering a term extending beyond that period.

Non-financial assets classified as held for sale

Non-financial physical assets are classified as held for sale and treated as current assets if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset is available for immediate use in the current condition and the sale is highly probable and is expected to be completed within one year from the date of classification. Non-financial assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell, and are not subject to depreciation.

Surplus land and buildings that fall within the Government’s asset sales program, and which are not controlled by the Department, are reported by the relevant agency and not by this department. Reporting responsibility for these assets remains with the relevant agency until the total sale price is fully discharged.

Property, plant and equipment

Property, plant and equipment are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. The initial cost for non-financial physical assets under a finance lease (refer note 1(k)) is measured at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease.

The fair value of plant, equipment and vehicles, is normally determined by reference to the asset’s depreciated replacement cost. For plant, equipment and vehicles, existing depreciated historical cost is generally a reasonable proxy for depreciated replacement cost because of the short lives of the assets concerned.

Assets such as Crown land and heritage assets are measured at fair value with regard to the asset’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset are not taken into account until it is virtually certain that the restrictions will no longer apply.

The fair value of heritage assets that the State intends to preserve because of their unique historical, cultural or environmental attributes, is measured at the replacement cost of the asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset and any accumulated impairment.

Restricted nature of heritage assets and Crown land

During, and at the end of, the reporting period, the Department held heritage assets and Crown land (see note 8), which are deemed worthy of preservation for the social rather than financial benefits they provide to the community. Consequently there are certain limitations and restrictions imposed on their use and/or disposal.

Leasehold improvements

The cost of leasehold improvements is capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.

Non-current physical assets constructed by the Department

The cost of non-current physical assets constructed by the Department includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion of variable and fixed overheads.


Revaluation of non-current physical assets

Non-current physical assets are measured at fair value in accordance with Financial Reporting Directions issued by the Minister for Finance. A full revaluation normally occurs every five years, based on the asset’s government purpose classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct these scheduled revaluations and any interim revaluations as determined in accordance with the requirements of the Financial Reporting Directions.

Revaluation increments are recognised in other comprehensive income as an increase in the asset revaluation surplus, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognised as an expense in the net result, the increment is recognised in determining the net result.

Revaluation decrements are recognised immediately as expenses (other economic flows) in the net result, except that, to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of assets, they are recognised in other comprehensive income as a decrease in the asset revaluation surplus.

Revaluation increases and decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes.

Intangible assets

Intangible assets represent identifiable non-monetary assets without physical substance. Intangible produced assets are initially recognised at cost. Subsequently, intangible produced assets with finite useful lives are carried at cost less accumulated depreciation and impairment. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the Department.

The Department’s intangible produced assets comprise capitalised software development and digital databases. Purchased intangible assets include costs incurred in acquiring databases, software and licences that will contribute to future economic benefits. Software development costs include only those costs directly attributable to the development phase and are only recognised following completion of technical feasibility and where the Department has an intention and ability to use the asset. Other development costs that do not meet these criteria are recognised as expenses.

(j) Liabilities Payables

Payables consist of:

• contractual payables, such as accounts payable, and unearned income. Accounts payable represent liabilities for goods and services provided to the Department prior to the end of the financial year that are unpaid, and arise when the Department becomes obliged to make future payments in respect of the purchase of those goods and services; and

• statutory payables, such as goods and services tax and fringe benefits tax payables.

Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost. The amounts are unsecured and are usually paid within 30 days of recognition.

Provisions

Provisions are recognised when the Department has a present obligation where the future sacrifice of economic benefits is probable and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using discount rates that reflect the time value of money and risks specific to the provision.

Employee benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.

Provisions made in respect of employee benefits expected to be settled within 12 months are measured at their nominal values, using the remuneration rate expected to apply at the time of settlement. Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Department in respect of services provided by employees up to reporting date. The liability is classified as a current liability where the Department does not have an unconditional right to defer settlement for at least 12 months after the reporting date. The long service leave liability is classified as non-current where the Department has an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service.


Borrowings

Borrowings are recorded initially at fair value, being the cost of the borrowings, net of transaction costs. The measurement basis subsequent to initial recognition depends on whether the Department has categorised its interest-bearing liabilities as either financial liabilities designated at fair value through profit or loss, or financial liabilities at amortised cost. Any difference between the initial recognised amount and the redemption value being recognised in net result over the period of the borrowings using the effective interest rate method.

Financial guarantees

Payments that are contingent under financial guarantee contracts are recognised as a liability at the time the guarantee is issued. The liability is initially measured at fair value, and if there is a material increase in the likelihood that the guarantee may be exercised, then it is measured at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation.

In the determination of fair value, consideration is given to factors including the overall capital management/ prudential supervision framework in operation, the protection provided by the Government by way of funding should the probability of default increase, probability of default by the guaranteed party and the likely loss to the Department in the event of default.

The Department has reviewed its financial guarantees and determined that there is no material liability to be recognised for financial guarantee contracts at 30 June 2012 and at 30 June 2011.

The value of loans and other amounts guaranteed by the Treasurer is disclosed in note 16 (contingent liabilities and contingent assets).

(k) Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Department as lessor

Amounts due from lessees under finance leases are recorded as receivables. Finance lease receivables are initially recorded at amounts equal to the present value of the minimum lease payments receivable plus the present value of any unguaranteed residual value expected to accrue at the end of the lease term. Finance lease payments are allocated between interest revenue and reduction of the lease receivable over the term of the lease in order to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments. In the event that lease incentives are given to the lessee, the aggregate cost of incentives are recognised as a reduction of rental income over the lease term, on a straight-line basis unless another systematic basis is more representative of the time pattern over which the economic benefit of the leased asset is diminished.

Department as lessee

Finance leases are recognised as assets and liabilities of the Department at amounts equal to the fair value of the lease property or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The leased asset is depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Lease assets held at the reporting date, being motor vehicles, are being depreciated over two to three years.

Minimum finance lease payments are apportioned between finance charges and reduction of the lease liability. Finance charges are calculated using the interest rate implicit in the lease and charged directly to the comprehensive operating statement.

Operating lease payments are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet.

(l) Goods and services tax Income, expenses and assets are recognised net of goods and services tax GST, unless the GST incurred is not recoverable from the Australian Taxation Office (ATO). In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables.

Cash flows are presented on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the ATO is classified as operating cash flows.

Commitments and contingent assets and liabilities are presented on a gross basis.


(m) Events after reporting date Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between the Department and other parties, the transactions are only recognised when the agreement is irrevocable at or before balance date. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting date and before the date the financial statements are authorised for issue, where those events provide information about conditions which existed at the reporting date. Note disclosure is made about events between the reporting date and the date the financial statements are authorised for issue where the events relate to conditions which arose after the reporting date and which may have a material impact on the results of subsequent years.

(n) Administered items Financial assets

Financial assets held in the Public Account (recognised as administered other financial assets in note 22) are primarily invested in short-term deposits and financial securities, consistent with the objective of ensuring that the short term funding needs of the Public Account can be met at all times and that any borrowings in the short term portfolio are managed to minimise the net interest cost.

Public Account liabilities

Within administered assets and liabilities (see note 22), the Department has recognised certain liabilities that exist in the Public Account at year end. These are the outstanding liabilities to other departments in respect of (a) amounts appropriated from the Consolidated Fund but remaining undrawn at the end of the year, net of Public Account advances to other departments, and (b) Trust Account funds held on their behalf within the Public Account.

Budget Sector Debt Portfolio

Management of the Budget Sector Debt Portfolio (BSDP) is based on the key objectives of achieving relative certainty of interest cost over the budgeting period while minimising net borrowing costs, and conservatively managing the financial and operational risks of the budget sector treasury operations.

The BSDP is primarily composed of fixed rate borrowing facilities that have an even maturity profile. This ensures that a relatively small proportion of the BSDP is subject to re-pricing in any one period, with the effect that BSDP interest costs are not subject to large fluctuations as a result of movements in market interest rates. Since borrowings in the BSDP are held to maturity, the BSDP is accounted for on an historical cost basis.

State Electricity Commission of Victoria (SECV) indemnity

Under a deed of indemnity from the Treasurer, the Department, on behalf of the State, is obliged to fund the shortfall relating to the SECV’s obligations under electricity supply agreements with the aluminium smelters at Point Henry and Portland. The liability amount shown in the statement of administered assets and liabilities (note 22) represents the present value of future payments to be made to the SECV to fund the shortfall.

The value of the indemnity is assessed at least annually and any revaluation gain/(loss) is recognised as an other economic flow in determining the administered net result. Any revaluation gain/(loss) recognises the adjustment required to the outstanding indemnity balance and represents a reduction/(increase) in losses under the indemnity resulting from favourable/unfavourable movements in factors affecting those losses, principally aluminium prices. The 2012 valuation includes an indexation for economic flows associated with the introduction of the carbon tax.

Superannuation liability

A liability or asset in respect of defined benefit superannuation plans is recognised in the statement of administered assets and liabilities, and is determined in accordance with AASB 119 Employee Benefits, with actuarial valuations being carried out at each reporting date. Accrued benefits are measured as the net present value of estimated future benefit payments to members arising from their membership of the scheme up to the end of the reporting period. Actuarial gains and losses are recognised in full in the statement of administered income and expenses in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

The superannuation liability recognised in the administered balance sheet represents the present value of the defined benefit obligation, adjusted for unrecognised past service cost, net of the fair value of the plan assets. This liability mainly represents the State’s superannuation liability with respect to superannuation funds operated principally for general government sector employees, being the State’s share of the shortfall between the total net assets of the State’s general government sector superannuation funds at 30 June 2012 and the present value of total benefits that members have accrued up to that date, as determined by an actuarial assessment. The balance of the superannuation liability with respect to these funds is to be met by Commonwealth funded agencies. In addition, the State also recognises a liability for accrued benefits arising from constitutionally protected pension entitlements principally in respect of judges and other judicial office holders. No assets are held in respect of these liabilities and pensions are paid from the Consolidated Fund.


Government policy is that the superannuation liability for the entire general government sector should be recognised and disclosed in the administered balance sheet of the Department of Treasury and Finance.

(o) Contributions by owners Additions to net assets which have been designated as contributions by owners are recognised as contributed capital. Other transfers that are in the nature of contributions or distributions have also been designated as contributions by owners.

Transfers of net assets arising from administrative restructurings are treated as distributions to or contributions by owners. Transfers of net liabilities arising from administrative restructurings are treated as distributions to owners.

(p) Commitments Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed in note 15 at their nominal value and inclusive of GST payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.

(q) Contingent assets and contingent liabilities Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer note 16) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of GST receivable or payable, respectively.

(r) Rounding of amounts Amounts in the financial statements have been rounded to the nearest thousand dollars, unless otherwise shown.

(s) New accounting standards and interpretations As at 30 June 2012, the following standards and interpretations (applicable to the Department) had been issued but were not mandatory for the 30 June 2012 reporting period. The Department has not adopted, and does not intend to adopt, these standards early.

AASB 9 Financial Instruments. This standard simplifies requirements for the classification and measurement of financial assets resulting from Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement). Applicable for annual reporting periods beginning on 1 January 2013. Detail of impact is still being assessed.

AASB 13 Fair Value Measurement. This standard outlines the requirements for measuring the fair value of assets and liabilities and replaces the existing fair value definition and guidance in other AASs. AASB 13 includes a ‘fair value hierarchy’ which ranks the valuation technique inputs into three levels using unadjusted quoted prices in active markets for identical assets or liabilities; other observable inputs; and unobservable inputs. Applicable for annual reporting periods beginning on 1 January 2013. Disclosure for fair value measurements using unobservable inputs are relatively onerous compared to disclosure for fair value measurements using observable inputs. Consequently, the Standard may increase the disclosures for public sector entities that have assets measured using depreciated replacement cost.

AASB 119 Employee Benefits. In this revised standard, for defined benefit superannuation plans, there is a change to the methodology in the calculation of superannuation expenses, in particular there is now a change in the split between superannuation interest expense (classified as transactions) and actuarial gains and losses (classified as ‘other economic flows – other movements in equity’) reported on the comprehensive operating statement. Applicable for annual reporting periods beginning on 1 January 2013. Not-for-profit entities are not permitted to apply this Standard prior to the mandatory application date. While the total superannuation expense is unchanged, the revised methodology is expected to have a negative impact on the net result from transactions of the few Victorian public sector entities that report superannuation defined benefit plans.

AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10 and 12]. This Standard gives effect to consequential changes arising from the issuance of AASB 9. Applicable for annual reporting periods beginning on 1 January 2013. No significant impact is expected from these consequential amendments.

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 and 1038 and Interpretations 2, 5, 10, 12, 19 and 127]. These consequential amendments are in relation to the introduction of AASB 9. Applicable for annual reporting periods beginning on 1 January 2013. No significant impact is expected from these consequential amendments.

AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements [AASB 124]. This standard amends AASB 124 Related Party Disclosures by removing the disclosure requirements in AASB 124 in relation to individual key management personnel. Applicable for annual reporting periods beginning on 1 July 2013. No significant impact is expected from these consequential amendments.


AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 [AASB 1, 2, 3, 4, 5, 7, 9, 2009-11, 2010-7, 101, 102, 108, 110, 116, 117, 118, 119, 120, 121, 128, 131, 132, 133, 134, 136, 138, 139, 140, 141, 1004, 1023 and 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 and 132]. This amending Standard makes consequential changes to a range of Standards and Interpretations arising from the issuance of AASB 13. In particular, this Standard replaces the existing definition and guidance of fair value measurements in other Australian Accounting Standards and Interpretations. Applicable for annual reporting periods beginning on 1 January 2013. Disclosures for fair value measurements using unobservable inputs is potentially onerous, and may increase disclosures for assets measured using depreciated replacement cost.

AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 and 1049]. The main change resulting from this Standard is a requirement for entities to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss in a subsequent period (reclassification adjustments). Applicable for annual reporting periods beginning on 1 July 2012. This amending Standard may change the current presentation of ‘Other economic flows – other movements in equity’ to groupings on the basis of whether the components are potentially reclassifiable to profit or loss in subsequent periods. No other significant impact is expected.

AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) [AASB 1, AASB 8, AASB 101, AASB 124, AASB 134, AASB 1049 and AASB 2011-8 and Interpretation 14]. This Standard makes consequential changes to a range of other Australian Accounting Standards and Interpretation arising from the issuance of AASB 119 Employee Benefits. Applicable for annual reporting periods beginning on 1 January 2013. No significant impact is expected from these consequential amendments.

AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities [AASB 7 and AASB 132]. This Standard amends the required disclosures in AASB 7 to include information that will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements on the entity’s financial position. Applicable for annual reporting periods beginning on 1 January 2013. No significant impact is expected from these amendments.

AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities [AASB 132]. This Standard adds application guidance to AASB 132 to address inconsistencies identified in applying some of the offsetting criteria of AASB 132. Applicable for annual reporting periods beginning on 1 January 2014. No significant impact is expected from these amendments.

AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle [AASB 1, AASB 101, AASB 116, AASB 132 and AASB 134 and Interpretation 2]. This Standard makes amendments to various standards as a consequence of the issuance of International Financial Reporting Standard Annual Improvements to IFRSs 2009–2011 Cycle by the International Accounting Standards Board in May 2012. Applicable to annual reporting periods beginning on 1 January 2013. No significant impact is expected from these amendments.


Note 2. Departmental outputs A description of departmental outputs during the year ended 30 June 2012, and the objectives of these outputs, are summarised below.

Strategic Policy Advice outputs These outputs provide strategic policy advice to Ministers on a wide range of Government activities. These include advice on:

• the State’s overall financial and aggregate budget strategy;

• taxation policy;

• the State’s insurance schemes;

• accounting policies and performance management;

• economic, social and environmental monitoring and analysis;

• managing various state-based taxes;

• financial accounting and reporting;

• strategic research focusing on developing greater understanding of factors affecting long-term living standards for Victorians; and

• inter-government financial analysis and advice in relation to the level of Commonwealth funding to the states and territories.

Financial Management Services outputs These outputs provide financial management services to government departments, agencies, government business enterprises and registered housing agencies. These services include:

• managing and forecasting cash balances and central government cash transactions;

• managing the liabilities of Victoria’s public sector superannuation schemes;

• monitoring the performance of government business enterprises;

• preparing the State’s consolidated financial and budget related reports;

• providing financial risk management and advice to manage the State’s financial risks;

• reviewing and analysing performance of departments with a focus on delivering value for money services to the community; and

• reviewing registered housing agencies.

Risk Management Services output This output provides risk management advice, frameworks and information to Ministers, departments and private infrastructure partners to manage the Government’s exposure to commercial and infrastructure project risks.

Resource Management Services output This output assists the Government in administering and coordinating the provision of whole of government services, by maximising value in purchasing decisions and providing professional management of substantial government assets.

Regulatory Services outputs These outputs regulate utilities and other regulated markets in Victoria and provide advice on ways the Government can improve the business environment.

Revenue Management Services output This output administers revenue collections of major taxes and duties on behalf of the Government. It also assesses and processes unclaimed moneys applications.


Departmental outputs schedule

Strategic Policy Advice

Financial Management

Services

Risk Management

Services 2012 2011 2012 2011 2012 2011 $’000 $’000 $’000 $’000 $’000 $’000 Controlled income and expenses for the year ended 30 June 2012

Income from transactions Output appropriations 38 102 46 588 21 598 22 613 24 424 19 454 Interest Other income 525 573 236 258 3 256 5 510 Total income from transactions 38 627 47 161 21 834 22 871 27 680 24 964 Expenses from transactions Employee benefits 27 680 28 725 13 384 11 856 11 152 9 731 Depreciation 383 380 288 185 163 154 Interest expense 24 43 13 32 11 19 Grants expense 2 352 9 514 123 3 689 37 34 Capital asset charge 139 398 69 173 3 224 3 122 Supplies and services 11 961 10 965 6 051 5 313 8 616 6 841 Payments to Consolidated Fund 1 903 1 498 Total expenses from transactions 42 539 50 025 19 928 21 248 25 106 21 399 Net result from transactions (3 912) (2 864) 1 906 1 623 2 574 3 565 Other economic flows included in net result Net gain/(loss) on financial instruments Net gain/(loss) on disposal of property, plant and equipment

Net gain/(loss) from revaluation of long service leave liability

(145) 13 (70) 6 (60) 4

Total other economic flows included in net result (145) 13 (70) 6 (60) 4 Net result (4 057) (2 851) 1 836 1 629 2 514 3 569 Other economic flows – other non-owner changes in equity Changes in physical asset revaluation surplus 31,186 - Comprehensive result (4 057) (2 851) 1 836 1 629 33 700 3 569 Controlled assets and liabilities as at 30 June 2012 Assets Financial assets 697 820 838 349 498 398 Non-financial assets 1 090 1 881 15 614 6 962 270 294 239 349 Total assets 1 787 2 701 16 452 7 311 270 792 239 747 Liabilities Total liabilities 13 348 12 437 10 552 23 259 5 765 4 718 Net assets/(liabilities) (11 561) (9 736) 5 900 (15 948) 265 027 235 029 Note:

(a) These amounts consist predominantly of the Department’s SAU balances with the Consolidated Fund and the Trust Fund.


Resource

Management Services

Regulatory Services

Revenue Management

Services Other – not

attributable (a) Departmental

total 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

50 245 69 019 21 751 18 694 82 567 64 211 238 687 240 579 11 607 11 930 11 607 11 930 50 229 48 191 103 112 603 586 54 952 55 230

112 081 129 140 21 854 18 806 83 170 64 797 – – 305 246 307 739

26 729 27 535 4 297 4 584 41 421 38 583 124 663 121 014 10 309 8 441 77 82 16 231 8 871 27 451 18 113 11 608 11 831 1 5 14 13 11 671 11 943

85 212 15 460 12 662 18 057 26 111 12 696 13 876 36 75 289 562 16 453 18 206 40 778 58 841 1 825 1 995 19 413 16 615 88 644 100 570

4 854 1 722 6 757 3 220 107 059 122 458 21 696 19 403 77 368 64 644 – – 293 696 299 177

5 022 6 682 158 (597) 5 802 153 – – 11 550 8 562

4 (54) 4 (54) 418

207 418 207

(155)

11 (25) 2 (211) 16 (666) 52

267 164 (25) 2 (211) 16 – – (244) 205 5 289 6 846 133 (595) 5 591 169 – – 11 306 8 767

125 638 - 156 824 - 130 927 6 846 133 (595) 5 591 169 – – 168 130 8 767

241 795 243 668 34 - 811 1 325 174 988 169 932 419 661 416 492 293 989 164 962 329 446 12 625 25 348 – – 593 941 438 948 535 784 408 630 363 446 13 436 26 673 174 988 169 932 1 013 602 855 440

316 097 317 500 10 746 9 404 18 140 16 570 – – 374 648 383 888 219 687 91 130 (10 383) (8 958) (4 704) 10 103 174 988 169 932 638 954 471 552


Note 3. Income from transactions Income from transactions includes:

2012 $’000

2011 $’000

(a) Interest Interest on finance leases 11 607 11 930 Total interest 11 607 11 930 (b) Other income Provision of services 21 188 20 322 Rental accommodation income 33 346 32 308 Resources received free of charge (note 21)

418 2 600

Total other income 54 952 55 230

Note 4. Summary of compliance with annual Parliamentary and special appropriations

(a) Summary of compliance with annual Parliamentary appropriations The following table discloses the details of the various Parliamentary appropriations received by the Department during the year. In accordance with accrual output-based management procedures, ‘provision of outputs’ and ‘additions to net asset base’ are disclosed as ‘controlled’ activities of the Department. Administered transactions are those that are undertaken on behalf of the State, and over which the Department has no control or discretion.

Appropriation Act Annual appropriations –

as published Advance from

Treasurer Administrative

restructure $’000 $’000 $’000

2012 2011 2012 2011 2012 2011 Controlled Provision of outputs 235 126 226 971 1 920 6 315 - 1 701 Additions to net asset base 30 058 21 690 Administered Payments made on behalf of the State 2 004 242 1 446 993 5 000 108 933 Total 2 269 426 1 695 654 6 920 115 248 - 1 701


Financial Management Act 1994

Section 29 Section 30 Section 32 Section 35 Total Parliamentary

authority Appropriations

applied Variance $’000 $’000 $’000 $’000 $’000 $’000 $’000

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2 931 9 529 244 717 248 961 238 687 240 579 6 030 8 382

4 740 4 445 232 12 523 33 900 33 545 63 570 67 758 55 838 62 534 7 732 5 224 (620) – 620 – 3 846 5 184 30 000 – 2 043 708 1 561 110 2 029 662 1 518 573 14 046 42 537

4 740 4 445 – – 7 009 27 236 63 900 33 545 2 351 995 1 877 829 2 324 187 1 821 686 27 808 56 143


Explanation of variances between total Parliamentary authority and appropriations applied – year ended 30 June 2012.

• Provision of outputs

− $5.9 million has been carried over to 2012-13, in respect of various projects not completed as expected in 2011-12.

• Additions to net asset base (ATNAB)


− $4.4 million in capital projects was funded by output appropriation (depreciation), rather than ATNAB, as anticipated in the original budget process.

• Payments made on behalf of the State


− the remaining $7.2 million unapplied appropriation is mainly related to whole of government financing costs and the red tape reduction initiative.

(b) Summary of compliance with special appropriations

Authority Purpose Appropriations applied 2012 2011 $’000 $’000 Administered (note 22)

Constitution Act, No. 8750 of 1975 – Governors’ Pensions

Governors’ pensions 1 020 942

County Court Act, No. 6230 of 1958 – Judges Judges’ pensions 12 600 11 883 Constitution Act, No. 8750 of 1975 – Supreme Court Judges

Judges’ pensions 9 159 8 820

State Superannuation Act, No. 50 of 1988, Section 90(2) – Contributions

Superannuation contributions 594 080 523 064

State Electricity Commission Act, No. 6377 of 1958, Section 85B(2)

Indemnity 13 225 50 378

Treasury Corporation of Victoria Act, No. 80 of 1992, Section 38 – Debt Retirement

Budget sector debt retirement 86 429 –

Taxation (Interest on Overpayments) Act, No. 35 of 1986, Section 11

Interest on overpayments of tax 1 528 553

State Owned Enterprises Act, No. 94 of 1994, Section 10

State equivalent tax refunds 179 4 317

Liquor Control Reform Act, No. 94 of 1988, Section 177(2)

Safety net payments 2 325 2 780

Gambling Regulation Act, No. 114 of 2003, Section 3.6.12

Payments to Community Support Fund 104 125 47 923

Financial Management Act, No. 18 of 1994, Section 39

Interest on advances 5 849 8 528

Financial Management Act, No. 18 of 1994, Section 10

First home owners’ grants – 75 228

Total 830 519 734 416


(c) Annotated revenue agreements Section 29 annotated revenue agreements included in the financial statements are:

2012 2011 $’000 $’000 Section 97 land tax certificates 2 416 2 587 Collaborative inter-governmental projects 114 553 Government land and property 1 167 435

Standard business reporting program – 310

Public financial corporations risk management and reporting framework

206 222

Ministerial referrals – Essential Services Commission 199 190 Government bodies gymnasium 150 148

Victorian Energy and Efficiency Target expansion 488 – 4 740 4 445

Note 5. Expenses from transactions 2012

$’000 2011

$’000 Expenses from transactions includes: Employee expenses Salaries and wages 96 494 93 207 Annual and long service leave expense 11 987 12 248 Superannuation • defined contribution plans 7 661 7 210 • defined benefits plans 2 081 2 162 Other on-costs 6 440 6 187 Total employee expenses 124 663 121 014 Depreciation Buildings, grounds development and external services 7 281 6 299 Office and computer equipment 1 863 1 565 Motor vehicles under finance lease 2 498 1 998 Capitalised software development 1 862 1 395 Municipal valuations database 13 947 6 856 Total depreciation 27 451 18 113 Interest expense Finance lease interest 312 254 Interest on borrowings from Treasury Corporation of Victoria 11 359 11 689 Total interest expense 11 671 11 943 Grants expense Victorian Government entities 17 922 24 623 Other organisations 135 1 488 Total grants expense 18 057 26 111


Note 6. Receivables 2012

$’000 2011

$’000 Current: Contractual Lease receivables (note 13) 121 886 126 734 Debtors 21 511 34 625 143 397 161 359 Statutory Amounts owing from Victorian Government (a) 85 777 81 196 GST recoverable 1 783 619 87 560 81 815 Total current receivables 230 957 243 174 Non-current: Contractual Lease receivables (note 13) 99 484 78 641 99 484 78 641 Statutory Amounts owing from Victorian Government (a) 3 347 3 199 3 347 3 199 Total non-current receivables 102 831 81 840 Total receivables 333 788 325 014

Note:

(a) Represents balance of appropriations relating to expenses incurred in the provision of outputs and for additions to the net asset base, for which payments had not been disbursed at balance date, and accordingly had not been drawn from the Consolidated Fund.

Note 13 discloses an ageing analysis of contractual receivables and the nature of and extent of credit risk arising from the receivables.

Note 7. Non-financial assets classified as held for sale

2012

$’000 2011

$’000 Property held for sale 16 786 7 170 Total non-financial assets classified as held for sale 16 786 7 170

The Department intends to dispose of certain land and buildings it no longer uses within the next 12 months. No impairment losses were recognised on reclassification of the land as held for sale or at balance date.


Note 8. Property, plant and equipment

2012

$’000 2011

$’000 Land At independent valuation 358 021 104 620 At cost – 192 640 Total land 358 021 297 260 Buildings (including heritage buildings) At independent valuation 147 323 83 803 At cost 35 054 35 054 Less: accumulated depreciation (7 918) (31 915) 174 459 86 942 Construction in progress – at cost 2 507 4 752 Total buildings 176 966 91 694 Plant and equipment Office and computer equipment – at cost 14 993 15 542 Less: accumulated depreciation (8 314) (7 141) 6 679 8 401 Construction in progress – at cost – 577 Motor vehicles under finance lease 9 905 8 052 Less: accumulated depreciation (3 419) (2 914) 6 486 5 138 Total plant and equipment 13 165 14 116 Total property, plant and equipment 548 152 403 070

Valuations

The basis of valuation of land and buildings is fair value, being the amounts for which the assets could be exchanged between willing parties in an arm’s length transaction or current replacement cost less accumulated depreciation (where applicable). Fair value is determined by direct reference to recent market transactions on arm’s length terms for land and buildings of comparable size and location. The latest revaluations were based on independent assessments as at 30 June 2012, carried out by Valuer-General Victoria, Urbis, Napier and Blakeley Pty. Ltd. and Herron Todd White Pty. Ltd. (2007 DTZ Australia and Patel Dore Valuers Pty. Ltd.).

The revaluation process normally occurs every five years, based on the asset’s government purpose classification. In the intervening period, annual assessments are made of all property, plant and equipment as to whether the fair value of a class of assets may differ materially from its carrying amount, being revalued amount, or cost for recently acquired items, less applicable accumulated depreciation.

Restricted assets

The Department holds $103.8 million worth of buildings listed as heritage assets. These heritage assets cannot be modified nor disposed of without formal Ministerial approval.


Note 8. Property, plant and equipment (continued) Reconciliations of carrying amounts Reconciliations of the carrying amounts of each class of property, plant and equipment at the start and end of the year are set out below.

Land Buildings $’000 $’000 2012 Carrying amount at the start of the year 297 260 86 942 Additions 91 380 Disposals (70) Transfers between classes 7 714 Transfers to intangible assets Transfers to property held for sale (9 380) Revaluation increments 70 120 86 704 Transfers through contributed capital Net transfers free of charge Depreciation expense (note 5) (7 281) Carrying amount at the end of the year 358 021 174 459 2011 Carrying amount at the start of the year 105 155 84 155 Additions 20 Disposals (2) Transfers between classes 9 066 Transfer to intangible assets Transfers through contributed capital 192 640 Net transfers free of charge (533) Depreciation expense (note 5) (6 299) Carrying amount at the end of the year 297 260 86 942


Building construction in

progress

Office and computer

equipment

Plant and equipment

construction in progress

Motor vehicles under finance lease Total

$’000 $’000 $’000 $’000 $’000

4 752 8 401 577 5 138 403 070 5 536 126 126 6 225 12 484

(12) (2 352) (2 434) (7 781) 67 –

(703) (703) (9 380) 156 824 (36) (36) (4) (27) (31) (1 863) (2 498) (11 642)

2 507 6 679 – 6 486 548 152

5 564 8 662 171 5 126 208 833 8 113 892 2 520 3 816 15 359

(12) (1 806) (1 818) (8 925) 1 167 (1 308) –

(2) (2) (743) (804) 191 093 (533) (1 565) (1 998) (9 862)

4 752 8 401 577 5 138 403 070


Note 9. Intangible assets 2012

$’000 2011

$’000 Municipal valuations database 21 208 18 734 Less: accumulated depreciation (21 208) (7 261) – 11 473 Capitalised software development 65 643 57 505 Less: accumulated depreciation (44 878) (43 016) 20 765 14 489 Total intangible assets 20 765 25 962 Reconciliations of carrying amounts Municipal valuations database Carrying amount at the start of the year 11 473 – Additions 2 474 18 329 Depreciation expense (note 5) (13 947) (6 856) Carrying amount at the end of the year – 11 473 Capitalised software development Carrying amount at the start of the year 14 489 12 113 Additions 7 435 3 769 Net transfers from plant and equipment 703 2 Depreciation expense (note 5) (1 862) (1 395) Carrying amount at the end of the year 20 765 14 489


Note 10. Payables 2012

$’000 2011

$’000 Current: Contractual Creditors and accruals 38 254 58 204 Statutory Amounts payable to other government agencies 9 310 7 748 Total payables 47 564 65 952

Note 14 discloses the maturity analysis of contractual payables and the nature and extent of risks arising from contractual payables.

Note 11. Provisions 2012

$’000 2011

$’000 Current: Employee benefits • Annual leave 10 383 9 850 • Long service leave – expected to be paid within 12 months 952 827 – expected to be paid after 12 months 19 217 18 785 • Performance bonus 1 090 1 048 Restoration costs 425 425 32 067 30 935 Non-current: Employee benefits • Long service leave 3 347 3 199 3 347 3 199 Total provisions 35 414 34 134 Represented by: Employee benefits 34 989 33 709 Restoration costs 425 425 35 414 34 134


Note 12. Borrowings 2012 2011 $’000 $’000 Current: Unsecured Bank overdraft (note 21) 1 738 1 020 Borrowings from Treasury Corporation of Victoria 91 292 90 500 93 030 91 520 Secured Finance lease liabilities (note 13) 3 910 3 321 96 940 94 841 Non-current Unsecured Borrowings from Treasury Corporation of Victoria 135 000 136 292 Secured Finance lease liabilities (note 13) 3 200 1 971 138 200 138 263 Aggregate carrying amount of borrowings Current 96 940 94 841 Non-current 138 200 138 263 Total borrowings 235 140 233 104 Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default.

Assets pledged as security The carrying amounts of non-current assets pledged as security are:

• Motor vehicles under finance lease 6 486 5 138

Note 14 discloses the maturity analysis of borrowings and the nature and extent of risks arising from borrowings.


Note 13. Leases 2012

$’000 2011

$’000 Finance lease receivables

Due within one year 131 603 135 354

Due later than one year but not later than five years 104 935 82 099

Due later than five years 100 61

Minimum lease payments 236 638 217 514

Less: lease finance revenue not yet recognised (15 268) (12 139)

221 370 205 375

Present value of finance lease receivables



Due later than five years 70 42

221 370 205 375

Operating lease receivables

The Department acts as a lessor for tenancies relating to its State-owned properties. The tenancy arrangements detail the lease terms, including options negotiated with the occupying departments. All tenancy arrangements contain market reviews in line with the biennial market rental valuations completed on the State-owned properties. The tenancy arrangements do not include an option to purchase the property at the expiry of the tenancy. These tenancy arrangements are not required to be recognised in the balance sheet.

Operating lease receivables



Due later than five years – 31 071

170 884 185 524

Finance lease commitments

Commitments in relation to finance leases are payable as follows:

Within one year 4 226 3 541

Later than one year but not later than five years 3 349 2 039

Minimum lease payments 7 575 5 580

Less: future finance charges (465) (288)

Total lease liabilities 7 110 5 292

Shown in the financial statements (note 12) as:

Current 3 910 3 321

Non-current 3 200 1 971

7 110 5 292

Operating lease commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases, not recognised as liabilities, are payable as follows:

Within one year 7 519 7 425

Later than one year but not later than five years 21 890 18 794

Later than five years 20 533 19 685

49 942 45 904


Note 14. Financial instruments (a) Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in note 1.

The Department’s main financial risks include credit risk, liquidity risk, interest rate risk. The Department manages these financial risks in accordance with its financial risk management policy. The Department uses different methods to measure and manage the different risks. Primary responsibility for the identification and management of financial risks rests with the finance and strategy committee of the Department.

(b) Categorisation of financial instruments Carrying amount of financial instruments by category:

Financial assets Note Category 2012

$’000 2011

$’000 Cash and deposits 21 Cash 85 873 91 478 Receivables (a) 6 Loans and receivables 242 881 240 000 328 754 331 478 Financial liabilities Payables (a) 10 Financial liabilities at amortised cost 38 254 58 204 Borrowings 12 Financial liabilities at amortised cost 235 140 233 104 273 394 291 308

Net holding gain/(loss) on financial instruments by category:

Financial assets Category 2012

$’000 2011

$’000 Cash and deposits Cash – – Receivables (a) Loans and receivables 11 607 11 930 11 607 11 930 Financial liabilities Payables (a) Financial liabilities at amortised cost – – Borrowings Financial liabilities at amortised cost (11 671) (11 943) (11 671) (11 943)

Note:

(a) Receivables and payables disclosed here exclude statutory receivables (i.e. amounts owing from Victorian Government and GST recoverable) and statutory payables (i.e. amounts payable to other government agencies).

The net holding gains or losses disclosed above are determined as follows:

• for cash and cash equivalents, loans or receivables and available for sale financial assets, the net gain or loss is calculated by taking the interest revenue minus any impairment recognised in the net result; and

• for financial liabilities measured at amortised cost, the net gain or loss is the interest expense.


(c) Credit risk Credit risk arises from the financial assets of the Department, which comprise cash and cash equivalents, and trade and other receivables. The Department’s exposure to credit risk arises from the potential default of counter parties on their contractual obligations, resulting in financial loss to the Department. Credit risk is measured at fair value and is monitored on a regular basis.

Credit risk associated with the Department’s financial assets is minimal because the main debtor is the Victorian Government. For debtors other than government, it is the Department’s policy to only deal with entities with high credit ratings and to obtain sufficient collateral or credit enhancements where appropriate. Credit risk in relation to receivables is also monitored by management by reviewing the ageing of receivables on a monthly basis. In addition, the Department does not engage in hedging for its financial assets and mainly obtains financial assets that are on fixed interest.

Provision for impairment of financial assets is calculated based on past experience and current and expected changes in client credit ratings.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Department’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

Financial assets that are past due or impaired

As at the reporting date, there is no event to indicate that any of the financial assets were impaired. There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated. There are no financial assets that are past due but not impaired.


(d) Liquidity risk Liquidity risk arises when the Department is unable to meet its financial obligations as they fall due. The Department operates under the Government’s fair payments policy of settling financial obligations within 30 days and, in the event of a dispute, make payments within 30 days from the date of resolution. It also continuously manages risk to ensure that short- term funding needs can be met at all times and that the net interest cost on any short term borrowings are minimised. These objectives are achieved by negotiating funding arrangements to ensure that the maximum expected short-term funding need can be met at all times and regular forecasting as a basis for borrowing or investing decisions.

The Department’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk.

Maximum exposure to liquidity risk is the carrying amounts of financial liabilities.

The following table discloses the contractual maturity analysis for the Department’s financial liabilities:

Maturity dates

Carrying amount

Nominal amount

Less than 1 month

1–3 months

3 months–1 year 1-5 years

Greater than 5 years

2012 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Payables 38 254 38 254 38 254

Bank overdrafts 1 738 1 738 1 738

Borrowings from Treasury Corporation of Victoria

226 292 226 292 7 500 15 000 68 792 135 000

Finance lease liabilities 7 110 7 575 971 590 2 665 3 349

273 394 273 859 48 463 15 590 71 457 138 349 –

2011

Payables 58 204 58 204 58 204

Bank overdrafts 1 020 1 020 1 020

Borrowings from Treasury Corporation of Victoria

226 792 226 792 8 000 15 000 67 500 136 292

Finance lease liabilities 5 292 5 580 786 520 2 235 2 039

291 308 291 596 68 010 15 520 69 735 138 331 –

The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities.


(e) Market risk The Department’s exposures to market risk are primarily through interest rate risk, which it manages by matching borrowing and investment decisions to projected forecasts. The Department has no exposure to foreign currency or other price risks.

Interest rate risk

Exposure to interest rate risk is insignificant and may arise primarily through the Department’s borrowings. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearing financial instruments. For financial liabilities, the Department mainly undertakes financial liabilities with relatively even maturity profiles. The Department’s borrowings are managed by Treasury Corporation of Victoria and any movements in interest rates are monitored on a daily basis.

The Department’s exposure to interest rate risk is set out below:

Interest rate exposure

Weighted average effective

interest rate Carrying amount

Fixed interest rate

Variable interest rate

Non-interest bearing

2012 % $’000 $’000 $’000 $’000

Financial assets

Cash and deposits – 85 873 85 873

Lease receivables 6.5 221 370 221 370

Other receivables – 21 511 21 511

328 754 221 370 – 107 384

Financial liabilities

Payables – 38 254 38 254

Bank overdrafts – 1 738 1 738

Borrowings from TCV 4.8 226 292 226 292

Finance lease liabilities 6.5 7 110 7 110

273 394 233 402 – 39 992

2011

Financial assets

Cash and deposits – 91 478 91 478

Lease receivables 6.6 205 375 205 375

Other receivables – 34 625 34 625

331 478 205 375 – 126 103

Financial liabilities

Payables – 58 204 58 204

Bank overdrafts – 1 020 1 020

Borrowings from TCV 5.0 226 792 226 292 500

Finance lease liabilities 6.6 5 292 5 292

291 308 231 584 500 59 224


Sensitivity disclosure analysis

The Department’s sensitivity to market risk is determined based on the observed range of actual historical data for the preceding five year period, with all variables other than the primary risk variable held constant. The Department’s fund managers cannot be expected to predict movements in market rates and prices. Sensitivity analyses shown are for illustrative purposes only. The following movements in market interest rates are ‘reasonably possible’ over the next 12 months – a movement of 100 basis points up and down (2011 – 100 basis points up and down).

The impact on net operating result and equity for each category of financial instruments held by the Department at year end, as presented to key management personnel, if the above movements were to occur, is immaterial for the 2012 and 2011 financial years.


(f) Fair value of financial assets and liabilities The Department considers that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values.

The fair values of financial assets and financial liabilities are determined as follows:

• the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and

• the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

None of the classes of financial assets and liabilities are readily traded on organised markets in standardised form.


Note 15. Commitments for expenditure

2012

$’000 2011

$’000 Capital commitments Commitments for capital expenditure on building improvements, fitouts and IT development, contracted for at the reporting date but not recognised as liabilities, payable:

• Within one year 1 116 7 277 • Later than one year but not later than five years – 4 593 1 116 11 870 Outsourcing commitments Commitments under outsourcing contracts for human resource, property management and security services, payable:

• Within one year 10 798 10 534 • Later than one year but not later than five years 3 413 2 128 14 211 12 662 In addition, the outsourcing of information technology services is subject to an open-ended memorandum of understanding with an annual cost to the Department of $5 800 000.

Operating lease and finance lease commitments are disclosed in note 13.


Note 16. Contingent liabilities and contingent assets Quantifiable contingent liabilities The following table summarises quantifiable contingent liabilities relating to the Department.

2012 $m

2011 $m

Guarantees on behalf of public financial corporations 275.0 275.0 Specific guarantees and indemnities under statute 326.0 306.5 Guarantees for loans to water industry entities 8 998.4 8 103.1 Guarantees for loans to other entities 919.7 954.7 Litigation against State Revenue Office 124.1 68.3 Other 155.7 144.4 Total 10 798.9 9 852.0

Non-quantifiable contingent liabilities

The Department has a number of non-quantifiable contingent liabilities, as follows.

Land remediation – environmental concerns

In addition to properties for which remediation costs have been provided in the State’s financial statements, certain other properties have been identified as potentially contaminated sites. The State does not admit any liability in respect of these sites. However, remedial expenditure may be incurred to restore the sites to an acceptable environmental standard in the event of future developments taking place.

Victorian Managed Insurance Authority – Insurance Cover

The Victorian Managed Insurance Authority (VMIA) was established in 1996 as an insurer for departments and participating bodies (predominantly in the general government sector). VMIA provides its client bodies with a range of insurance cover, including for property, public and products liability, professional indemnity and contract works. VMIA re-insures in the private market for losses above $50 million arising out of any one event, up to a maximum for each type of cover (e.g. $2 100 million for property and $750 million for public liability). The risk of losses above these re insured levels is borne by the State.

Gambling Licences

In 1992, a gaming operator’s licence was issued to the Trustees of the Will and Estate of the late George Adams, later succeeded by Tatts Group. In 1994, the State issued a wagering and gaming licence to Tabcorp Holdings Limited (Tabcorp). These licences expired in August 2012. The Gambling Regulation Act 2003 specified end of licence arrangements which included compensation provisions for the licensees predicated on the licensing arrangements being rolled over beyond their scheduled expiry date.

On 10 April 2008, the previous Government announced a new regulatory model for the post-2012 licences. The main changes included:

• separating the wagering and gaming licence to instead license wagering on a stand-alone basis; and

• transitioning from the current gaming operator duopoly to a system where venue operators are licensed to own and operate gaming machines in their own right.

After considering the end of licence arrangements in the Gambling Regulation Act 2003, the previous Government formed the view that neither Tatts Group nor Tabcorp will be entitled to compensation after the expiration of their current licences.

On 16 August 2012, Tatts Group commenced formal legal proceedings against the State. Tabcorp commenced proceedings on 24 August 2012. Each seeks, in essence, to hold the State to an obligation to provide compensation. The Government will defend the State against these claims.


Other contingent liabilities not quantified There are other commitments, made by government, which are not quantifiable at this time, arising from:

• indemnities provided in relation to transactions, including financial arrangements and consultancy services, as well as for directors and administrators;

• performance guarantees, warranties, letters of comfort and the like;

• deeds in respect of certain obligations; and

• unclaimed moneys, which may be subject to future claims by the general public against the State.

Contingent assets There were no contingent assets for the Department of Treasury and Finance at 30 June 2012 or 30 June 2011.


Note 17. Responsible persons The persons who held the positions of Ministers and Accountable Officer in the Department (from 1 July 2011 to 30 June 2012 unless otherwise stated) were as follows:-

• The Hon. Kim Wells MP Treasurer of Victoria

• The Hon. Robert Clark MP Minister for Finance

• The Hon. Gordon Rich-Phillips MLC Assistant Treasurer

• Mr Grant Hehir Secretary

The Hon. Gordon Rich-Phillips, The Hon. Robert Clark and The Hon. Ted Baillieu acted in the office of Treasurer during absences of The Hon. Kim Wells.

The Hon. Richard Dalla-Riva and The Hon. Robert Clark acted in the office of Assistant Treasurer during absences of The Hon. Gordon Rich-Phillips.

The Hon. Gordon Rich-Phillips acted in the office of Minister for Finance during the absence of The Hon. Robert Clark.

Brendan Flynn and Dean Yates acted in the office of Secretary during absences of Grant Hehir.

Remuneration Total remuneration received or receivable by the Accountable Officer, in connection with the management of the Department during the reporting period, was in the range:

$570 000 – $579 999 ($520 000 – $529 999 in 2011)

Amounts relating to Ministers are reported in the financial statements of the Department of Premier and Cabinet. Amounts relating to acting Accountable Officers are reported in ‘Remuneration of executives’ (note 18).

Other transactions Other related transactions and loans requiring disclosure under the Directions of the Minister for Finance have been considered and there are no matters to report.


Note 18. Remuneration of executives The numbers of executive officers, other than Ministers and the Accountable Officer, whose total remuneration exceeded $100 000 during the reporting period, are shown in their relevant income bands in the first two columns of the table below. The base remuneration of these executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.

Total remuneration Base remuneration Income band 2012

No. 2011

No. 2012

No. 2011

No. $10 000 – $19 999 1 – $20 000 – $29 999 – 1 $30 000 – $39 999 1 – $70 000 – $79 999 1 – $80 000 – $89 999 – 2 $100 000 – $109 999 3 3 4 3 $110 000 – $119 999 3 2 4 2 $120 000 – $129 999 3 2 6 2 $130 000 – $139 999 4 2 3 4 $140 000 – $149 999 7 5 9 9 $150 000 – $159 999 6 5 11 14 $160 000 – $169 999 7 13 10 6 $170 000 – $179 999 12 9 6 7 $180 000 – $189 999 8 4 6 7 $190 000 – $199 999 3 4 5 7 $200 000 – $209 999 8 11 8 6 $210 000 – $219 999 4 7 1 1 $220 000 – $229 999 7 3 1 1 $230 000 – $239 999 1 – – 2 $240 000 – $249 999 – 2 1 2 $250 000 – $259 999 – 1 – 1 $260 000 – $269 999 1 3 2 1 $270 000 – $279 999 1 – $280 000 – $289 999 1 – – 1 $290 000 – $299 999 1 3 $300 000 – $309 999 2 – 2 2 $310 000 – $319 999 2 – $330 000 – $339 999 – 1 $340 000 – $349 999 – 1 Total numbers 83 81 83 81 Total amount $’000s 15 229 15 360 13 686 13 950 Total annualised employee equivalents

76.4 75.7 76.4 75.7


Note 19. Remuneration of auditors 2012

$’000 2011

$’000 Audit fees paid or payable to the Victorian Auditor-General’s Office

Annual financial statements of the Department 406 393 Annual financial report for the State of Victoria 353 340 Annual budget for the State of Victoria 335 368 Commonwealth acquittals 63 4

1 157 1 105

No other services were provided by the Victorian Auditor-General’s Office.

Note 20. Superannuation Employees of the Department are entitled to receive superannuation benefits and the Department contributes to both defined benefit and defined contribution plans. The defined benefit plans provide benefits based on years of service and final average salary.

The Department does not recognise any defined benefit liability in respect of the plans because the Department has no legal or constructive obligation to pay future benefits relating to its employees. Its only obligation is to pay superannuation contributions as they fall due. The State’s superannuation liability with respect to defined benefits superannuation funds operated principally for general government sector employees is administered by this Department on behalf of the State and is recognised and disclosed as an administered item in these financial statements (note 22).

However, superannuation contributions for the period relating to departmental employees are included as part of employee benefit costs in the comprehensive operating statement of the Department.

The Department made contributions to the following major superannuation funds during the year:

Defined benefit funds Emergency Services and State Super • Revised scheme • New scheme • State employees retirement

benefit scheme • Transport scheme

Accumulation funds VicSuper

The Department does not have any contributions outstanding to the above funds and there have been no loans made from the funds. The bases for contributions are determined by the various schemes.


Note 21. Cash flow information 2012

$’000 2011

$’000

(a) Reconciliation of cash and deposits

Cash at bank and on hand 9 9 Funds held in trust 85 864 91 469 Total cash and deposits disclosed in the balance sheet 85 873 91 478 The above figures are reconciled to cash and cash equivalents at the end of the year as shown in the cash flow statement as follows:

Balances as above 85 873 91 478 Less: bank overdrafts (note 12) (1 738) (1 020) Cash and cash equivalents per cash flow statement 84 135 90 458

Due to the State of Victoria’s investment policy and government funding arrangements, the Department does not hold a large cash reserve in its bank accounts. Cash received by the Department from the generation of income is generally paid into the State’s bank account, known as the Public Account. Similarly, any departmental expenditure, including that in the form of cheques drawn by the Department for the payment of goods and services to its suppliers and creditors, are made via the Public Account. The process is such that the Public Account remits to the Department the cash

required for the amount drawn on the cheques. This remittance by the Public Account occurs upon the presentation of the cheques by the Department’s suppliers or creditors.

The above funding arrangements often result in the Department having a notional shortfall in the cash at bank (or a notional bank overdraft) required for payment of unpresented cheques at balance date. The Department’s bank overdraft figure at 30 June 2012 was totally represented by unpresented cheques.

2012 $’000

2011 $’000

(b) Reconciliation of net result to net cash flows from operating activities

Net result 11 306 8 767 Depreciation expense 27 451 18 113 Net gain on disposal of property, plant and equipment (418) (207) Net transfers free of charge 31 (2 050) Change in operating assets and liabilities, net of effects of restructuring

(Increase)/decrease in receivables 6 277 3 989 (Increase)/decrease in other operating assets (5 492) 93 Increase/(decrease) in payables (18 489) (14 685) Increase/(decrease) in other operating liabilities 7 112 32 143

Net cash flows from operating activities 27 778 46 163


(c) Non-cash financing and investing activities During the reporting period, motor vehicles with a fair value of $6 225 000 (2011 – $3 816 000) were acquired by means of finance leases.

During the reporting period, assets amounting to $449 000 (2011 – $550 000) were transferred from the Department to other government agencies, and assets amounting to $418 000 (2011 – $2 600 000) were transferred to the Department from other organisations.

These transfers were recognised in the comprehensive operating statement as resources transferred/received free of charge.

Note 22. Administered items In addition to the specific departmental operations which are included in the balance sheet, comprehensive operating statement and cash flow statement, the Department administers or manages activities on behalf of the State. The transactions relating to these State activities are reported as administered in this note. Administered transactions give rise to income, expenses, assets and liabilities and are determined on an accrual basis. Administered income includes taxes, fees,

Commonwealth grants, capital asset charges to other departments and the proceeds from the sale of surplus land and buildings. Administered assets include Public Account investments and government revenues earned but yet to be collected. Administered liabilities include the Government’s Budget Sector Debt Portfolio, superannuation liabilities managed on behalf of the State and amounts associated with the SECV indemnity.


Note 22. Administered items (continued) Administered income and expenses for the year ended 30 June 2012 Strategic Policy

Advice Financial Management

Services Risk Management

Services 2012 2011 2012 2011 2012 2011 $’000 $’000 $’000 $’000 $’000 $’000 Administered income from transactions Payments on behalf of the State appropriations (note 4(a))

599 992 310 381 1 001 215 817 300 3 278 2 395

Special appropriations (note 4(b)) 104 125 47 923 92 457 12 845 Commonwealth grants 10 426 400 11 286 770 25 181 9 466 Taxation 356 993 229 215 Dividends 659 288 239 422 Capital asset charge 2 799 113 2 549 857 979 549 884 934 Interest 13 387 8 956 155 – Other income 22 704 12 573 458 026 54 140 8 029 6 494 State revenues received into Consolidated Fund, net of appropriations applied within government departments

Total administered income from transactions

13 952 334 14 207 504 3 586 096 2 256 278 11 462 8 889

Administered expenses from transactions Grants expense 510 308 263 506 813 9 840 – 225 Interest expense 146 148 990 270 756 610 Superannuation – non-departmental Contribution to GST administration costs 168 382 167 334 Ex-gratia payments Other expenses 2 652 866 7 002 10 879 2 856 1 452 Payments to Consolidated Fund 13 776 988 13 253 905 5 900 127 5 494 854 8 029 6 742 Total administered expenses from transactions

14 458 476 13 685 759 6 898 212 6 272 183 10 885 8 419

Administered net result from transactions (506 142) 521 745 (3 312 116) (4 015 905) 577 470 Other economic flows included in net result

Actuarial gains/(losses) on superannuation defined benefit plans

Net gain/(loss) on non-financial assets 1 111 213 Net gain/(loss) on financial instruments 14 700 (7 800) – 193 Other gains/(losses) from other economic flows

Total other economic flows included in net result

14 700 (7 800) – 193 1 111 213

Administered net result (491 442) 513 945 (3 312 116) (4 015 712) 1 688 683 Other economic flows – other non-owner changes in equity

Administered comprehensive result (491 442) 513 945 (3 312 116) (4 015 712) 1 688 683


Resource Management

Services Regulatory

Services Revenue Management

Services Other – not attributable

Departmental total

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

501

2 612 114 595 424 562 385 290 2 029 662 1 518 573

3 853 78 561 630 084 595 087 830 519 734 416 – 310 10 554 563 9 777 037 21 006 144 21 073 583 11 052 334 11 221 685 11 409 327 11 450 900 659 288 239 422 3 778 662 3 434 791 13 542 8 956

3 454 3 174 184 64 72 075 73 891 564 472 150 336 4 086 177

3 174 729 4 086 177 3 174 729

3 955

5 786 298 659 11 552 824 11 759 737 15 270 824 13 546 853 44 377 793 41 785 706

472 619 435 430 2 174 275 2 510 329 3 158 015 3 219 330

2 2 1 527 545 19 000 21 630 1 010 945 778 935 1 120 186 1 160 046 1 120 186 1 160 046 168 382 167 334 1 436 2 934 1 436 2 934

2 575 2 431 119 117 47 413 41 750 – 805 62 617 58 300 693 3 512 11 328 702 10 846 862 8 380 287 7 266 707 39 394 826 36 872 582

3 270

5 945 119 117 11 851 697 11 327 521 11 693 748 10 959 517 44 916 407 42 259 461

685 (159) 179 542 (298 873) 432 216 3 577 076 2 587 336 (538 614) (473 755)

(9 327 044) 306 020 (9 327 044) 306 020

– 1 1 111 214 (5 498) (3 883) (251 736) 179 698 (242 534) 168 208

(9)

1 (9) 1

(9)

2 – – (5 498) (3 883) (9 578 780) 485 718 (9 568 476) 474 443

676 (157) 179 542 (304 371) 428 333 (6 001 704) 3 073 054 (10 107 090) 688

– –

676 (157) 179 542 (304 371) 428 333 (6 001 704) 3 073 054 (10 107 090) 688


Note 22. Administered items (continued) Administered assets and liabilities as at 30 June 2012

Strategic Policy

Advice Financial Management

Services Risk Management

Services 2012 2011 2012 2011 2012 2011 $’000 $’000 $’000 $’000 $’000 $’000 Administered assets Financial assets Cash and deposits 1 674 984 1 123 302 Receivables 67 562 91 193 516 567 64 898 3 005 3 116 Investments in controlled entities (a) Other financial assets 300 011 10 67 562 91 193 2 491 562 1 188 210 3 005 3 116 Non-financial assets Prepayments

Property, plant and equipment – – – – – – Total administered assets 67 562 91 193 2 491 562 1 188 210 3 005 3 116 Administered liabilities Payables 10 554 62 284 63 569 63 247 7 081 26 594 Public Account SAU liability (b) Provisions 753 15 061 277 163 4 224 4 631 Unearned income – 109 111 544 105 356 Borrowings 19 268 838 15 495 895 Superannuation liability (c) Total administered liabilities 11 307 77 454 19 332 684 15 559 305 122 849 136 581 Net administered assets 56 255 13 739 (16 841 122) (14 371 095) (119 844) (133 465)

Notes:

(a) On behalf of the State, this Department records the State’s investment in all its controlled entities, as an administered asset. This amount equates to the contributed capital balances of the underlying entities at year end.

(b) Net payable to other government departments relating to (a) Parliamentary appropriations applied, from which funds have not been issued from the Consolidated Fund, net of Public Account advances; and (b) Trust Fund amounts held on their behalf.

(c) On behalf of the State, the Department records the State’s superannuation liability with respect to superannuation funds operated principally for general government sector employees and the liability for accrued benefits arising from constitutionally protected pension entitlements principally in respect of judges and other judicial office holders.


Resource Management

Services Regulatory

Services Revenue Management

Services Other – not attributable

Departmental total

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

319 933 331 962 1 994 917 1 455 264

58 59 13 14 990 733 1 222 898 459 – 1 578 397 1 382 178 67 025 709 63 941 180 67 025 709 63 941 180 81 81 300 092 91

58 59 13 14 990 733 1 222 898 67 346 182 64 273 223 70 899 115 66 778 713

5 7 5 7 42 33 42 33 47 40 – – – – – – 47 40

105 99 13 14 990 733 1 222 898 67 346 182 64 273 223 70 899 162 66 778 753

8 37 739 5 52 3 481 2 673 478 757 226 690 563 455 419 279 5 507 693 4 904 070 5 507 693 4 904 070

808 602 89 52 87 000 – – 129 93 151 20 638 111 544 105 465

39 16 19 268 877 15 495 911 32 591 267 22 774 651 32 591 267 22 774 651

855 38 357 94 104 90 481 2 673 38 577 717 27 905 540 58 135 989 43 720 014

(750) (38 258) (81) (90) 900 252 1 220 225 28 768 465 36 367 683 12 763 175 23 058 739


Note 22. Administered items (continued)

The Department manages the State’s superannuation liability by:

• conducting regular actuarial valuations of the State’s public sector superannuation schemes;

• monitoring the performance of the associated superannuation assets, the majority of which are required to be invested with the Victorian Funds Management Corporation (VFMC);

• prudentially supervising VFMC; and

• providing advice to government on a wide range of superannuation issues.

The State’s superannuation liability with respect to superannuation funds operated principally for general government sector employees was $32 591 million as at 30 June 2012 (2011 – $22 775 million). This liability primarily represents the State’s share of the shortfall between the total net assets of the State’s general government sector superannuation funds and the present value of total benefits that members have accrued up to

that date, as determined by an actuarial assessment. The balance of the superannuation liability with respect to these funds is to be met by Commonwealth funded agencies (for example, universities). In accordance with the State Superannuation Act 1988, the Government, through the Consolidated Fund, is primarily responsible for meeting the employer’s share of the superannuation liability of the State Superannuation Fund section of the Emergency Services Superannuation Scheme. However, under the terms of that Act, the responsible Minister can effectively pass this liability to individual authorities.

The liability also includes $714 million (2011 – $518 million) for accrued benefits arising from constitutionally protected pension entitlements, principally in respect of judges and other judicial office holders. No assets are held in respect of these liabilities and the associated pensions are paid from the Consolidated Fund.

2012 $m

2011 $m

Reconciliation of the present value of the defined benefit obligation Balance at the start of the period 38 796 37 745 Current service cost 709 696 Interest cost 1 978 2 046 Contributions by plan participants 226 231 Actuarial (gains)/losses 8 480 225 Benefits paid (2 118) (2 147) Balance at the end of the period 48 071 38 796 Reconciliation of fair value of superannuation plan assets Balance at the start of the period 16 021 15 211 Expected return on plan assets 1 169 1 114 Actuarial gains/(losses) (846) 531 Employer contributions 1 028 1 081 Contributions by plan participants 226 231 Benefits paid (including tax paid) (2 118) (2 147) Balance at the end of the period 15 480 16 021 Reconciliation of assets and liabilities disclosed in the statement of administered assets and liabilities

State Superannuation Fund/Emergency Services Superannuation Scheme

31 275 21 977

Other funds 1 316 798 Total superannuation liability 32 591 22 775


2012 %

2011 %

Actuarial assumptions State Superannuation Fund/Emergency Services Superannuation Scheme

Expected return on assets 8.0 8.0 Discount rate 3.4 5.3 Wages growth 3.9 4.2 Inflation rate 2.4 2.7

Constitutionally Protected Pensions Discount rate 3.4 5.3 Wages growth 3.9 4.2 Inflation rate n/a n/a

Parliamentary Contributory Superannuation Fund Expected return on assets 8.0 8.0 Discount rate 3.4 5.3 Wages growth 3.9 4.2 Inflation rate n/a n/a

Health Superannuation Fund Expected return on assets 7.2 6.0 Discount rate 3.4 5.3 Wages growth 3.9 4.2 Inflation rate 2.4 2.7

The expected return on assets assumption is determined by weighting the expected long-term return for each asset class by the target allocation of assets to each class.

2012 %

2011 %

Categories of plan assets The major categories of plan assets are as follows:

Domestic equity 25.6 26.8 International equity 25.5 26.5 Domestic debt assets 18.9 19.7 Property 8.2 9.5 Cash 5.0 3.7 Other 16.8 13.8

100.0 100.0


Note 23. Trust account balances Net assets of trust accounts included in the financial statements are:

2012 2011 $’000 $’000 Controlled trusts Finance Agency Trust 53 53 Government Accommodation Trust 3 393 4 849 Shared Corporate Services Trust Account 2 070 1 480 Treasury Trust 4 752 4 509 Vehicle Lease Trust 5 716 5 514 Administered trusts Community Support Fund Trust 48 863 30 219 Debt Portfolio Trust 1 316 1 315 Land Acquisition and Compensation 146 146 Public Service Commuter Club 138 130 Vehicle Lease Trust 5 384 5 497 Victorian Natural Disasters Relief Account 462 558 440 692


Note 24. Subsequent events Victorian Public Service Workplace Determination 2012

The Victorian Public Service Workplace Determination 2012 was made by Fair Work Australia on 23 July 2012. It replaces the 2009 Extended and Varied Version of the Victorian Public Service Agreement 2006. The Workplace Determination took effect from 29 July 2012 and will remain in force until 31 December 2015. The Workplace Determination provides for wage increases of 3.25 per cent and 1.25 per cent on 1 July 2012 and 1 January 2013 respectively, with six monthly wage increases thereafter. In addition, a lump sum payment of $1 500 (or equivalent pro-rata amount for part time employees) was made in August 2012 to eligible Victorian Public Service employees who received a salary on 1 July 2012 and were employed on 29 July 2012.

As the Workplace Determination took effect from 29 July 2012, no adjustments have been made to these financial statements other than for the impact on the estimated accrued employee benefits as at 30 June 2012.

Voluntary departure packages

The Victorian Government has announced its intention to reduce the number of public servants in non-service delivery and back-office roles, with key frontline service delivery areas being exempted. The reductions will be achieved through a combination of natural attrition, a freeze on recruitment, the lapsing of fixed term contracts and the offering of voluntary departure packages (VDPs). The Department’s process for VDPs commenced on 6 September 2012. No adjustments have been made to the 2011-12 financial statements as the criteria for recognising an expense and a termination benefits liability relating to the VDPs had not been met based on the requirements of AASB 119 Employee Benefits. The Department is not able to reliably estimate the financial effect of the VDPs as the number and classification of staff who will take up VDPs is not known. The Department anticipates that the VDP process will be completed before 31 December 2013.

Note 25. Glossary of terms Actuarial gains or losses on superannuation defined benefit plans

Actuarial gains or losses reflect movements in the superannuation liability resulting from differences between the assumptions used to calculate the superannuation expense from transactions and actual experience.

Borrowings

Borrowings include interest-bearing liabilities mainly from public borrowings raised through the Treasury Corporation of Victoria, finance leases and other interest-bearing arrangements. Borrowings also include non-interest-bearing advances from government that are incurred for policy purposes.

Comprehensive result

Total comprehensive result is the change in equity for the period other than changes arising from transactions with owners. It is the aggregate of net result and other non-owner changes in equity.

Capital asset charge

The capital asset charge represents the opportunity cost of capital invested in the non-current physical assets used in the provision of outputs.

Commitments

Commitments include those operating, capital and other outsourcing commitments arising from non-cancellable contractual or statutory sources.

Depreciation

Depreciation is an expense that arises from the consumption through wear or time of a produced physical or intangible asset. This expense is classified as a transaction and so reduces the net result from transactions.

Employee benefits expenses

Employee benefits expenses include all costs related to employment including wages and salaries, fringe benefits tax, leave entitlements, redundancy payments and superannuation contributions.


Financial asset

A financial asset is any asset that is:

(a) cash;

(b) an equity instrument of another entity;

(c) a contractual right:

− to receive cash or another financial asset from another entity; or

− to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; or

(d) a contract that will or may be settled in the entity’s own equity instruments and is:

− a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments; or

− a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments.

Financial instrument

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets or liabilities that are not contractual (such as statutory receivables or payables that arise as a result of statutory requirements imposed by governments) are not financial instruments.

Financial liability

A financial liability is any liability that is:

(a) a contractual obligation:

− to deliver cash or another financial asset to another entity; or

− to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or

(b) a contract that will or may be settled in the entity’s own equity instruments and is:

− a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments; or

− a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose the entity’s own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the entity’s own equity instruments.

Financial statements

Depending on the context of the sentence where the term ‘financial statements’ is used, it may include only the main statements (i.e. comprehensive operating statement, balance sheet, cash flow statement, and statement of changes in equity); or it may also be used to include the main statements and the notes.

Grants expense

Transactions in which one unit provides goods, services, assets (or extinguishes a liability) or labour to another unit without receiving approximately equal value in return. Grants can either be operating or capital in nature. While grants to governments may result in the provision of some goods or services to the transferor, they do not give the transferor a claim to receive directly benefits of approximately equal value. Receipt and sacrifice of approximately equal value may occur, but only by coincidence. For example, governments are not obliged to provide commensurate benefits, in the form of goods or services, to particular taxpayers in return for their taxes. For this reason, grants are referred to by the AASB as involuntary transfers and are termed non-reciprocal transfers.

Grants can be paid as general purpose grants which refer to grants that are not subject to conditions regarding their use. Alternatively, they may be paid as specific purpose grants which are paid for a particular purpose and/or have conditions attached regarding their use.

Grants for on-passing

All grants paid to one institutional sector (e.g. a state general government) to be passed on to another institutional sector (e.g. local government or a private non-profit institution).

Intangible assets

Intangible assets represent identifiable non-monetary assets without physical substance.

Interest expense

Costs incurred in connection with the borrowing of funds. Interest expense includes interest on bank overdrafts and short-term and long-term borrowings, amortisation of discounts or premiums relating to borrowings, interest component of finance leases repayments, and the increase in financial liabilities and non-employee provisions due to the unwinding of discounts to reflect the passage of time.

Interest revenue

Interest revenue includes interest received on bank term deposits, interest from investments, and other interest received.

Investment properties

Investment properties represent properties held to earn rentals or for capital appreciation or both. Investment properties exclude properties held to meet service delivery objectives of the State of Victoria.


Net result

Net result is a measure of financial performance of the operations for the period. It is the net result of items of revenue, gains and expenses (including losses) recognised for the period, excluding those that are classified as ‘other non-owner changes in equity’.

Net result from transactions/net operating balance

Net result from transactions or net operating balance is a key fiscal aggregate and is revenue from transactions minus expenses from transactions. It is a summary measure of the ongoing sustainability of operations. It excludes gains and losses resulting from changes in price levels and other changes in the volume of assets. It is the component of the change in net worth that is due to transactions and can be attributed directly to government policies.

Non-financial assets

Non-financial assets are all assets that are not ‘financial assets’.

Other economic flows

Other economic flows are changes in the volume or value of an asset or liability that do not result from transactions. They include gains and losses from disposal, revaluation and impairment of non-current physical and intangible assets; actuarial gains and losses arising from defined benefit superannuation plans and fair value changes of financial instruments. In simple terms, they are changes arising from market re-measurements.

Payables

Includes short and long-term trade debt and accounts payable, grants and interest payable.

Receivables

Includes short and long-term trade credit and accounts receivable, grants, taxes and interest receivable.

Sales of goods and services

Refers to revenue from the direct provision of goods and services and includes fees and charges for services rendered, sales of goods, fees from regulatory services, work done as an agent for private enterprises. It also includes rental income under operating leases and on produced assets such as buildings and entertainment, but excludes rent income from the use of non-produced assets such as land.

Supplies and services

Supplies and services generally represent cost of goods sold and the day-to-day running costs, including maintenance costs, incurred in the normal operations of the Department.

Transactions

Transactions are those economic flows that are considered to arise as a result of policy decisions, usually an interaction between two entities by mutual agreement. They also include flows within an entity such as depreciation where the owner is simultaneously acting as the owner of the depreciating asset and as the consumer of the service provided by the asset. Taxation is regarded as mutually agreed interactions between the government and taxpayers. Transactions can be in kind (e.g. assets provided/given free of charge or for nominal consideration) or where the final consideration is cash. In simple terms, transactions arise from the policy decisions of the Government.


Accountable Officer’s and Chief Financial Officer’s declaration We certify that the attached financial statements for the Department of Treasury and Finance have been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards, including Interpretations, and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and notes to the financial statements, presents fairly the financial transactions during the year ended 30 June 2012 and financial position of the Department as at 30 June 2012.

We are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate.

We authorise the attached financial statements for issue on 25 September 2012.

Joe Bonnici Chief Financial Officer Department of Treasury and Finance

Melbourne 25 September 2012

Grant Hehir Secretary Department of Treasury and Finance

Melbourne 25 September 2012


Appendices

Appendix 1 Budget portfolio outcomes 84 Appendix 2 Workforce data 89 Appendix 3 DTF occupational health and safety report 30 June 2012 98 Appendix 4 Environmental reporting 101 Appendix 5 Community Support Fund 109 Appendix 6 Consultancies and major contracts 110 Appendix 7 Freedom of information 111 Appendix 8 Application of the Whistleblowers Protection Act 2001 112 Appendix 9 Compliance with the Building Act 1993 121 Appendix 10 National Competition Policy – Reporting against Competitive

Neutrality Principles 122 Appendix 11 Implementation of the Victorian Industry Participation Policy 123 Appendix 12 Publications 124 Appendix 13 Disclosure index 125 Appendix 14 Legislation administered by DTF portfolios 127 Appendix 15 Information available on request 131


Appendix 1 Budget portfolio outcomes

The budget portfolio outcomes statements provide a comparison between the actual financial information of all general government entities within the portfolio and the forecasted financial information published in the budget papers. The budget portfolio outcomes comprise the comprehensive operating statement, balance sheet and cash flow statement.

The budget portfolio outcomes have been prepared on a consolidated basis and include all general government entities within the portfolio. Financial transactions and balances are classified into either controlled or administered as agreed with the Treasurer in the context of the budget papers.

The following budget portfolio outcomes statements are not subject to audit by the Victorian Auditor-General’s Office. They are not prepared on the same basis as the Department’s financial statements as they include the consolidated financial information of the Essential Services Commission (ESC) and CenITex in addition to that of the Department. The ESC and CenITex are not consolidated in the Department’s audited financial statements enclosed within this annual report, as they prepare separate annual reports for tabling in Parliament. Further, the Department’s audited financial statements include certain whole of government transactions, as referred to in note 22. Otherwise, albeit in different format, the following statements are reflective of the audited financial statements.


Comprehensive operating statement for the year ended 30 June 2012

Controlled 2011–12

Actual 2011–12

Budget Variation

$m $m % Income from transactions Output appropriations 238.7 240.8 ( 0.9) Special appropriations (a) – 109.6 ( 100.0)

Interest 11.9 14.6 ( 18.5) Sale of goods and services (b) 176.5 135.1 30.6 Other income 27.1 28.4 ( 4.6) Total income from transactions 454.2 528.5 ( 14.1) Expenses from transactions

Employee benefits 193.2 154.6 25.0 Depreciation 48.9 51.1 ( 4.3)

Interest expense 11.7 13.7 ( 14.6) Grants expense (a) 2.6 105.8 ( 97.5)

Capital asset charge 16.5 16.5 – Other operating expenses (b) 203.1 175.9 15.5 Total expenses from transactions 476.0 517.6 ( 8.0) Net result from transactions ( 21.8) 10.9 ( 300.0) Other economic flows included in net result Net gain/(loss) on non-financial assets 0.4 – n/a Other gains/(losses) from other economic flows ( 0.7) – n/a Total other economic flows included in net result ( 0.3) – n/a Net result ( 22.1) 10.9 ( 302.8) Other economic flows – other non-owner changes in equity Changes in physical asset revaluation reserve (c) 156.8 43.3 262.1 Comprehensive result 134.7 54.2 148.5

Notes:

(a) The variations in special appropriations and grants expense are mainly due to the reclassification during the year of the operations of the Community Support Fund from a controlled activity to one administered on behalf of the State.

(b) The variations in sales of goods and services and other operating expenses reflect the transfer of further operations (of other departments) to both CenITex (for the provision of IT services) and the Shared Service Provider (SSP – for the provision of library, vehicle fleet management and accommodation facilities management services), with some uncertainties around operational scope during the budget process.

(c) The variation in changes in physical asset revaluation reserve reflects the fact that higher property values were attributed by the independent valuers than anticipated in the budget.


Balance sheet as at 30 June 2012

Controlled 2012

Actual 2012

Budget Variation $m $m % Financial assets

Cash and deposits 94.8 101.1 ( 6.2) Receivables 334.0 421.9 ( 20.8) Total financial assets 428.8 523.0 ( 18.0) Non-financial assets Inventories 16.3 7.1 129.6 Property, plant and equipment (a) 614.1 512.8 19.8 Intangible assets 37.5 21.7 72.8 Other assets 20.8 14.0 48.6 Total non-financial assets 688.7 555.6 24.0 Total assets 1 117.5 1 078.6 3.6 Liabilities Payables 123.9 164.9 ( 24.9) Borrowings 233.6 227.1 2.9 Provisions 48.4 47.2 2.5 Total liabilities 405.9 439.2 ( 7.6) Net assets 711.6 639.4 11.3

Equity Contributed capital 372.2 380.4 ( 2.2) Reserves (a) 237.1 123.6 91.8 Accumulated surplus 102.3 135.4 ( 24.4) Total equity 711.6 639.4 11.3

Note:

(a) The variations reflect the fact that higher property values were attributed by the independent valuers than anticipated in the budget.


Cash flow statement for the year ended 30 June 2012

Controlled 2011–12

Actual 2011–12

Budget Variation $m $m % Cash flows from operating activities Receipts from government (a) 238.7 350.4 ( 31.9) Interest received 11.9 14.6 ( 18.5) Other receipts (a) 249.7 165.3 51.1 500.3 530.3 ( 5.7)

Payments of grants and other transfers (a) ( 7.6) ( 107.6) 92.9 Payments to suppliers and employees (a) ( 432.1) ( 328.2) ( 31.7) Capital asset charge ( 16.5) ( 16.5) – Interest and other finance costs ( 11.7) ( 13.7) 14.6 ( 467.9) ( 466.0) ( 0.4) Net cash flows from operating activities 32.4 64.3 ( 49.6) Cash flows from investing activities Net investment ( 0.3) ( 26.7) 98.9 Net payments for non-financial assets ( 50.9) ( 41.0) ( 24.1)

Net loans to other parties ( 3.9) 1.0 ( 490.0) Net cash flows used in investing activities ( 55.1) ( 66.7) 17.4 Cash flows from financing activities Owner contributions by state government 4.3 9.6 ( 55.2) Net borrowings 17.4 ( 1.9) 1 015.8

Net cash flows from financing activities 21.7 7.7 181.8 Net increase/(decrease) in cash held ( 1.0) 5.3 ( 118.9) Cash at the beginning of the financial year 95.8 95.8 – Cash at the end of the financial year 94.8 101.1 ( 6.2)

Note:

(a) Reflective of variations in income and expenses, detailed in the comprehensive operating statement.


Administered items statement for the year ended 30 June 2012 2011–12

Actual 2011–12

Budget Variation $m $m % Administered income from transactions Appropriations – payments made on behalf of the State (a) 2 029.7 2 783.3 ( 27.1) Special appropriations (b) 830.5 3 668.5 ( 77.4) Grants 21 021.3 20 807.3 1.0 Other income 16 426.5 16 093.8 2.1 Total administered income from transactions 40 308.0 43 352.9 ( 7.0)

Administered expenses from transactions Employee benefits (a) 1 122.2 1 264.1 ( 11.2) Interest 1 009.4 970.6 4.0 Grants expense 3 166.6 3 074.9 3.0 Other expenses (a) 185.8 634.2 ( 70.7) Payments into the Consolidated Fund 39 403.3 37 778.8 4.3 Total administered expenses from transactions 44 887.3 43 722.6 2.7 Net result from transactions (4 579.3) ( 369.7) 1 138.7

Other economic flows included in net result Net gain/(loss) on non-financial assets 2.3 49.5 ( 95.4) Net actuarial gains/(losses) of superannuation defined benefit plans (c) (9 327.0) – n/a Net gain/(loss) on financial instruments and statutory receivables/payables (d)

( 281.7) ( 9.1) 2 995.6

Total other economic flows included in net result (9 606.4) 40.4 (23 878.2) Net result (14 185.7) ( 329.3) 4 207.8

Other economic flows – other non-owner changes in equity – – n/a Comprehensive result (14 185.7) ( 329.3) 4 207.8

Administered assets Cash assets (e) 2 701.2 4 590.8 ( 41.2) Receivables (e) 1 662.3 1 803.1 ( 7.8) Property, plant and equipment – 105.6 ( 100.0) Total administered assets 4 363.5 6 499.5 ( 32.9)

Administered liabilities Payables (e) 668.0 500.6 33.4 Borrowings 21 499.5 19 366.8 11.0 Provisions 93.2 21.8 327.5 Superannuation (c) 32 591.3 23 241.8 40.2 Total administered liabilities 54 852.0 43 131.0 27.2

Notes:

(a) The budget for DTF includes the estimate for Treasurer’s Advances which may be provided during the year to all departments. This includes both the appropriation revenue and the underlying expenditure.

(b) Appropriation for refinancing of borrowings were not required to the extent budgeted.

(c) Superannuation expenses and the associated superannuation liability were higher than budgeted, largely driven by the impact of the decreasing index linked bond yield that is used to measure the superannuation liability.

(d) This variation principally reflects the increase in the amount owing to SECV under the Treasurer’s deed of indemnity following the revaluation of the liability at 30 June.

(e) The variations in cash assets, receivables and payables reflect variations in operational funding requirements.


Appendix 2 Workforce data People and culture strategy With the launch of the new People and Culture Strategy in 2011-12, the Department of Treasury and Finance (DTF) has continued to build and expand on its previous accomplishments.

DTF is focusing its people and culture efforts in five areas in order to help the organisation meet business objectives and be in a position to respond to emerging challenges over the next three years:

• fostering a highly developed culture;

• developing DTF leaders;

• developing genuine capability increases;

• driving value for money; and

• developing greater workforce flexibility.

Some of our achievements for 2011-12 include:

• implementation of targeted capability development programs in the areas of market based solutions and influencing and advisory skills;

• implementation of leadership and management development programs to encourage the development of skills across the multiple dimensions of leadership required for high organisational performance;

• implementation of an adaptive resourcing model to better manage workload peaks during key projects delivered by DTF;

• implementation of strategies to increase value for money and efficiency in studies assistance and learning and development administration;

• working with employees and managers to develop rigorous progression targets to ensure they represent genuine value for money for the Victorian taxpayer;

• review and redevelopment of workforce metric reporting with a strategic focus to increase value;

• review and revision of a number of people-related toolkits, policies and guides to increase usability; and

• continuing to embed a constructive culture within DTF, leveraging from the results of the 2011 Organisational Culture Inventory.

People development The Department is committed to building genuine capability increases in areas that are critical to DTF’s success. DTF has supported capability building through on-the-job learning, peer forums and internal workshops. Development opportunities have been designed to strengthen staff capability as influential advisors, build staff capability to enhance productivity through market engagement and skill leaders in addressing capability gaps.

A refreshed leadership strategy that placed greater emphasis on executive induction and learning networks was successfully implemented. This approach will be further refined in the next financial year, with a program currently under development.

In addition, DTF approved 21 new studies assistance applications and supported two staff through the ANZSOG Executive Fellow Program during 2011-12.

Employee relations There were no industrial disputes that affected DTF.

The Department has a comprehensive grievance process to ensure employees’ concerns are dealt with fairly and promptly. One grievance was lodged by a DTF employee during the period which complied with policy requirements and went through to formal investigation, and was satisfactorily resolved.

The Department has a full suite of policies covering recruitment, issue resolution and grievance review, redeployment, unsatisfactory work, misconduct, probation and fair treatment (amongst others). All of these polices have been reviewed in 2011-12 as part of an annual policy review process.

Recruitment The Department is committed to ensuring the best available people are recruited and selected for advancement by applying merit and equity principles when appointing staff. The selection processes ensure that applicants are assessed and evaluated fairly and equitably on the basis of key selection criteria and other accountabilities without discrimination.

During 2011-12, the Department advertised externally for 191 roles. A number of additional vacancies were filled by internal appointment without advertisement. Further, during 2011-12, the Department had 229 cases of ‘specialised duties’ consisting of internal opportunities for acting roles or higher duties.


Graduate recruitment scheme The Department continued to support the recruitment and development of university graduates by participating in the VPS graduate scheme and managing the accounting and finance and the professional graduate economist programs on behalf of the whole Victorian public service. A total of 14 graduates joined DTF (three economists, three generalists and eight accounting and finance graduates). The Department also offers summer economist internships to a small number of penultimate year university students. There were three internships offered last summer.

Diversity The Department and its agencies provide a number of traineeships to young people (some from disadvantaged groups) through the Victoriaworks Youth Employment Scheme. In 2011-12, 16 traineeships commenced.

The Department has revised its Disability Action Plan (DAP), which focused on raising awareness and understanding of disability within DTF to include a focus on people from Culturally and Linguistically Diverse (CALD) background. The DAP has now evolved into DTFs Diversity Plan. This plan encompasses a wider whole of government initiative which aims to improve opportunities for people with a disability, and people from CALD backgrounds, assisting everyone to actively play a role in the Government and wider community.

On 24 March 2011, the Premier announced a requirement for each department to establish a plan to improve access to mainstream services for Indigenous people.

DTF’s Indigenous Inclusion Action Plan has been developed based on the four key areas identified in the National Partnership of Indigenous Economic Participation and the Victorian Indigenous Affairs Framework. DTF is committed to implementing the actions identified.

Forming part of the new Indigenous Inclusion Action Plan, DTF continues to work towards the targets in our Indigenous Employment Strategy with the overall aim of increasing Indigenous participation in the Victorian Public Service workforce.

Human Rights Charter During 2011-12, the Department contributed to the Victorian Equal Opportunity and Human Rights Commission 2011 Report on the Operation of the Charter of Human Rights and Responsibilities, focusing on how the Charter has influenced the approach to service delivery for DTF and its agencies.

The Department also promoted and encouraged employees to attend a Charter of Human Rights and Responsibilities workshop on understanding their rights and responsibilities.

Notes for all tables in Appendix 2 1. All figures reflect employment levels during the last pay period

of June of each year unless otherwise stated.

2. Ongoing employees means people engaged on an open ended contract of employment and executives engaged on a standard executive contract who were active in the last pay period of June.

3. FTE means full time equivalent.

4. Excluded are those on leave without pay or absent on secondment, external contractors/consultants and temporary staff employed by employment agencies.


Profile of Department of Treasury and Finance’s workforce: June 2012

Full time equivalents (FTE) staffing trends from 2008 to 2012

2012 2011 2010 2009 2008 675.91 714.13 673.27 566.15 557.37

Ongoing employees Fixed term and casual

Number (headcount)

Full time (headcount)

Part time (headcount) FTE FTE

Jun-12 712 609 103 675.91 34.79 Jun-11 747 651 96 714.13 25.77 Jun-12 Jul-11

Ongoing Fixed term and casual Ongoing Fixed term

and casual Number

(headcount) FTE FTE Number

(headcount) FTE FTE Gender Female 361 329.51 20.99 378 365.50 16.84 Male 351 346.40 13.80 369 348.63 8.93 Total 712 675.91 34.79 747 714.13 25.77 Age Under 25 17 17.00 9.86 25 25.00 1.00 25-34 197 189.80 14.83 217 213.00 10.00 35-44 213 196.71 6.40 209 193.67 7.17 45-54 162 154.93 2.70 173 166.23 5.00 55-64 104 100.87 1.00 109 103.83 2.23 Over 64 19 16.60 .. 14 12.40 0.37 Total 712 675.91 34.79 747 714.13 25.77 Classification Secretary 1 1.00 .. 1 1.00 .. Executive 75 72.80 .. 81 78.40 .. STS 12 11.80 .. 10 9.80 .. Grade 6 173 166.10 4.80 181 174.00 6.00 Grade 5 164 156.86 10.70 167 160.59 9.50 Grade 4 139 130.45 2.60 138 132.65 3.00 Grade 3 124 116.23 2.00 126 117.79 3.00 Grade 2 18 15.17 12.00 35 32.30 1.00 Grade 1 .. .. .. .. .. .. Legal officer 6 5.50 1.00 8 7.60 .. Casual .. .. 1.69 .. .. 3.27 Total 712 675.91 34.79 747 714.13 25.77


Profile of State Revenue Office’s workforce: June 2012


2012 2011 2010 2009 2008 471.14 438.49 444.52 428.52 433.71


Number (headcount)



Jun-12 492 433 59 471.14 19.40 Jun-11 458 400 58 438.49 20.13 Jun-12 Jul-11


and casual Number


(headcount) FTE FTE Gender Female 254 235.14 9.80 222 205.29 13.00 Male 238 236.00 9.60 236 233.20 7.13 Total 492 471.14 19.40 458 438.49 20.13 Age Under 25 15 15.00 5.00 10 9.80 6.53 25-34 139 131.97 9.00 129 122.19 7.00 35-44 136 127.23 2.80 123 116.79 4.00 45-54 114 111.27 2.00 117 113.47 1.60 55-64 79 76.67 0.60 73 70.24 1.00 Over 64 9 9.00 .. 6 6.00 .. Total 492 471.14 19.40 458 438.49 20.13 Classification Executive 6 6.00 .. 6 6.00 .. STS 1 1.00 .. 1 1.00 .. Grade 6 44 43.00 .. 43 42.40 .. Grade 5 96 93.20 2.40 89 86.40 1.60 Grade 4 109 104.62 2.00 94 89.96 1.00 Grade 3 154 146.77 4.00 159 150.93 2.00 Grade 2 59 54.15 11.00 51 47.39 13.53 Grade 1 3 3.00 .. 3 3.00 .. Legal officer 20 19.40 .. 12 11.40 2.00 Casual .. .. .. .. .. .. Total 492 471.14 19.40 458 438.49 20.13

Notes:

SRO’s FTE increased by 32.65 (7.45 per cent) overall in 2011-12 due to the Government funding of additional investigator positions as part of the 2010-11 Budget to expand taxpayer compliance activities in targeted audit, investigation and detection of taxpayer non-compliance.


Profile of DTF Executive Officers: June 2012

Ongoing Special projects Total Male Female Male Female Class 2011 2012 Var 2011 2012 Var 2011 2012 Var 2011 2012 Var 2011 2012 Var EO-1 3 3 0 2 1 -1 0 0 0 0 0 0 5 4 -1 EO-2 18 17 -1 8 7 -1 0 0 0 0 0 0 26 24 -2 EO-3 29 29 0 21 18 -3 0 0 0 0 0 0 50 47 -3 Total 50 49 -1 31 26 -5 0 0 0 0 0 0 81 75 -6

Notes:

Table excludes the Essential Services Commission and the State Revenue Office.

Table excludes the Secretary (Accountable Officer).

Nine vacancies existed at the time of reporting (June 2012). For the purposes of this report, one executive officer on leave without pay (LWOP) has been included in this vacancy figure.

Var column indicates the variation between the current and previous reporting periods.

Executive numbers decreased by five with the completion of the Independent Review of State Finances.

Reconciliation of DTF and SRO Executive Officer numbers: June 2010 – June 2012

DTF SRO Total 2012 2011 2012 2011 2012 2011 Executives whose total remuneration exceeded

$100 000 during the reporting period 77 75 6 6 83 81 Add Vacancies 8 7 1 1 9 8 Executives whose total remuneration was below

$100 000 during the reporting period 12 17 1 0 13 17 Accountable Officer (Secretary) 1 1 0 0 1 1 Less Separations 13 10 1 0 14 10 Total executive numbers 85 90 7 7 92 97

Notes:

This table reconciles with note 18.

Only eight vacancies are stated for DTF, as executive officers on leave without pay are not classified as vacancies in this table.

Executive numbers decreased by five with the completion of the Independent Review of State Finances.


Profile of CenITex: June 2012


2012 2011 2010 2009 2008 412.76 318.56 215.63 111.8 –


Number (headcount)



Jun-12 417 405 12 412.76 172.93 Jun-11 323 311 12 318.56 175.95 Jun-12 Jul-11


and casual Number


(headcount) FTE FTE Gender Female 96 91.76 41.63 87 82.56 49.55 Male 321 321.00 131.30 236 236.00 126.40 Total 417 412.76 172.93 323 318.56 175.95 Age Under 25 4 4.00 13.00 1 1.00 14.00 25-34 104 104.00 74.50 74 74.00 89.00 35-44 154 151.16 53.03 114 110.96 47.00 45-54 105 103.80 25.60 84 82.80 19.15 55-64 46 45.80 6.80 46 45.80 6.80 Over 64 4 4.00 .. 4 4.00 .. Total 417 412.76 172.93 323 318.56 175.95 Classification Executive 4 4.00 .. 3 3.00 1.00 STS 13 13.00 4.60 6 6.00 5.00 Grade 6 145 144.60 39.20 107 106.60 30.80 Grade 5 126 124.80 38.00 97 96.40 34.00 Grade 4 78 78.00 21.00 65 64.40 32.55 Grade 3 48 45.56 68.13 41 38.36 67.00 Grade 2 3 2.80 1.00 4 3.80 1.00 Grade 1 .. .. 1.00 .. .. .. Legal officer .. .. .. .. .. 1.60 Casual .. .. .. .. .. 3.00 Total 417 412.76 172.93 323 318.56 175.95

Notes:

Changes in VPS headcount were due to both a greater emphasis on recruiting VPS employees rather than contractors during 2011-12, and the conversion of selected Efficient Technology Services (ETS) contractors to VPS employees as a result of the wind-up of the ETS program at 30 June 2012.


Profile of Emergency Services and State Super: June 2012


2012 2011 2010 2009 2008 137.07 135.99 127.87 142.47 135.8


Number (headcount)



Jun-12 146 123 23 137.07 11.09 Jun-11 145 121 24 135.99 8.68 Jun-12 Jul-11


and casual Number


(headcount) FTE FTE Gender Female 72 63.94 3.13 70 69.13 4.16 Male 74 73.13 7.96 75 66.86 4.52 Total 146 137.07 11.09 145 135.99 8.68 Age Under 25 4 4.00 1.44 4 4.00 0.43 25-34 39 37.90 4.00 41 39.71 2.00 35-44 47 40.21 1.00 46 39.92 2.40 45-54 33 32.44 3.00 34 32.56 3.00 55-64 22 21.52 1.60 18 18.00 0.80 Over 64 1 1.00 0.05 2 1.80 0.05 Total 146 137.07 11.09 145 135.99 8.68 Classification Executive 8 7.80 .. 8 7.80 .. ESSB 1 36 32.11 6.44 43 38.82 2.43 ESSB 2 51 48.13 1.00 47 44.33 1.00 ESSB 3 35 33.89 0.80 30 29.50 4.40 ESSB 4 16 15.14 0.05 17 15.54 0.05 Other .. .. 2.80 .. .. 0.80 Total 146 137.07 11.09 145 135.99 8.68

Notes:

‘Other’ refers to employees on longer-term (non-executive) contracts.

FTE and headcount figures have increased from June 2011 to June 2012 due to backfill of a number of staff who are on paid leave.


Profile of Essential Services Commission’s workforce: June 2012


2012 2011 2010 2009 2008 66.84 64.64 68.84 53.76 58.81


Number (headcount)



Jun-12 69 61 8 66.84 2.80 Jun-11 66 61 5 64.64 6.08 Jun-12 Jul-11


and casual Number


(headcount) FTE FTE Gender Female 30 28.04 0.40 30 28.64 2.58 Male 39 38.80 2.40 36 36.00 3.50 Total 69 66.84 2.80 66 64.64 6.08 Age Under 25 2 2.00 .. 8 8.00 0.58 25-34 25 24.04 .. 19 18.84 0.60 35-44 28 26.80 1.00 25 23.80 3.00 45-54 10 10.00 1.00 9 9.00 1.00 55-64 3 3.00 0.40 3 3.00 0.40 Over 64 1 1.00 0.40 2 2.00 0.50 Total 69 66.84 2.80 66 64.64 6.08 Classification Executive 4 4.00 .. 3 3.00 .. SRM 3 3.00 1.00 3 3.00 2.00 STS 2 2.00 .. 2 2.00 .. Grade 6 13 12.60 .. 11 10.80 .. Grade 5 14 13.24 .. 14 13.24 .. Grade 4 17 16.00 .. 15 14.60 0.60 Grade 3 15 15.00 .. 13 13.00 .. Grade 2 1 1.00 .. 5 5.00 1.00 Grade 1 .. .. .. .. .. .. Legal officer .. .. .. .. .. .. Casual .. .. .. .. .. 0.58 Other .. .. 1.80 .. .. 1.90 Total 69 66.84 2.80 66 64.64 6.08

Notes:

SRM is a senior regulatory manager. ‘Other’ refers to the Essential Services Commission’s statutory appointees.

An error in the 2011 data for the gender split of fixed term and casual FTE has been amended.


DTF Portfolio Executives: June 2012

June 2012 June 2011 Change Organisation Female Male Female Male Female Male City West Water Limited 1 8 1 8 0 0 Rural Finance Corporation of Victoria 1 10 1 12 0 -2 South East Water Limited 2 10 1 5 1 5 State Electricity Commission of Victoria (Vicpower Trading) 0 2 0 4 0 -2 State Trustees Limited 2 3 2 5 0 -2 Transport Accident Commission 17 37 16 35 1 2 Treasury Corporation of Victoria 1 4 1 4 0 0 Victorian Funds Management Corporation 1 4 1 5 0 -1 Victorian Managed Insurance Authority 8 7 3 5 5 2 WorkSafe Victoria 25 37 24 32 1 5 Yarra Valley Water Limited 2 27 2 22 0 5 Total 60 149 52 137 8 12 Total (male and female) 209 189 20


Appendix 3 DTF occupational health and safety report 30 June 2012 The Department has continued its commitment to OHS during the financial year with a number of key initiatives:

• 40 ergonomic assessments were conducted;

• 196 staff received flu vaccinations;

• 63 work health checks occurred;

• Employee Assistance Program contract has been extended until 30 June 2015;

• extended offer for the subsidised vision screening program;

• a revised OHS Management System has been developed and implemented across all DTF workplaces; and

• WorkSafe Week 2012 planned and delivered in conjunction with Victorian Corporate Health Management.


DTF’s performance against OHS management measures Measure KPI 2009-10 2010-11 2011-12 Incidents Number of incidents 35 39 39

Rate per 100 FTE 5.03 5.27 5.48

Claims Number of standardised claims (a) 3 7 (b) 1

Rate per 100 FTE 0.29 0.95 0.14

Number of lost time claims (c) 1 2 (b) 0

Rate per 100 FTE 0.14 0.27 0

No of claims exceeding 13 weeks 1 1 (b) 0

Rate per 100 FTE 0.14 0.14 0

Fatalities Fatality claims 0 0 0

Claim costs Average cost per standard claim (d) $4 364 $6 194 (e) $2 461

Return to work Percentage of claims with return to work plan <30 days

100 per cent 100 per cent 100 per cent

Management commitment

Evidence of OHS policy statement, OHS objectives, regular reporting to senior management on OHS, and OHS plans (signed by CEO or equivalent)

Statement of commitment signed by Secretary. Monthly reporting to senior executives, including OHS Committee minutes. OHS plan included in human resources business plan.



Evidence of OHS criteria in purchasing guidelines (including goods, services and personnel)

Purchasing guidelines contain OHS criteria.



Consultation and participation

Evidence of agreed structure of designated workgroups (DWGs), health and safety representatives (HSRs), and issue resolution procedures (IRPs)

There are six designated work groups in total with 13 HSRs and deputy HSRs appointed and trained. Shared Service Provider to be added to the structure 2010-11.

There are six designated work groups in total with 13 HSRs and deputy HSRs appointed and trained. Shared Service Provider is included in the structure in 2010-2011. New issue resolution procedures, established with clearer guidance for worker, safety committee and management. New OHS Committee Constitution and Terms of Reference. Both OHS Committee Constitution and Terms of Reference and issue resolution procedures presented and endorsed by management and OHS Committee. 100 per cent of OHS Committee meetings conducted as a percentage of those planned.

There are six designated work groups in total with 19 HSRs and deputy HSRs appointed and trained. Revised issue resolution procedures, established with clearer guidance for worker, safety committee and management. Revised OHS Committee Constitution and Terms of Reference. Both OHS Committee Constitution and Terms of Reference and issue resolution procedures presented and endorsed by management and OHS Committee. 100 per cent of OHS Consultation Committee meetings conducted as a percentage of those planned.

Compliance with agreed structure on DWGs, HSRs, and IRPs.

All DWGs have HSR representation and an issue resolution procedure in place.




Measure KPI 2009-10 2010-11 2011-12 Risk management Percentage of internal audits/

inspections conducted as planned 75 per cent of internal inspections completed.

To formally commence routine in Q4 FY11. 100 per cent initial first aid and workplace inspections and assessment conducted in Q2 FY11.

75 per cent of inspections for first aid kits completed and 50 per cent of workplace inspections were completed.

Percentage of issues identified actioned arising from:

• internal audits • HSR provisional improvement

notices (PIN) • WorkSafe notices

• 100 per cent • Nil issued • Nil issued



Training Percentage of managers and staff that have received OHS training: • induction • management training • contractors, temps and visitors

A new online OHS learning module was introduced in 2009-10 through ComplianceNet. 697 employees and contractors have successfully completed this training.

DTF PCI team delivered OHS induction and training. 191 employees and contractors have successfully completed this training. A new training needs analysis assessment for DTF is currently underway for 2011-2013 periods. Online OHS manager, first aid officer, health and safety representatives and warden surveys were introduced to assist identify training needs for 2011-2013 periods.

91 new DTF employees and contractors have successfully completed online OHS learning modules in 2011-12 through ComplianceNet.

Percentage of HSRs trained: 100 per cent of HSRs are trained.

100 per cent of HSRs are trained.

100 per cent of HSRs are trained.

• acceptance or role • re-training (refresher) • reporting of incidents and

injuries.

• one vacancy exists. • annual refresher

training was offered to all HSRs in 2009-2010.

• three vacancies exist. • annual refresher

training offered to all HSRs in 2010-2011 and 100 per cent completed as a percentage of those due.

• Marsh online OHS manager, first aid officer, health and safety representatives and warden surveys completed in 2010-11.

• nil vacancies exist. • annual refresher

training offered to all HSRs in 2011-12 and 100 per cent completed as a percentage of those due.

• HSRs trained in reporting of incidents through OHS Committee and HSR refresher training.

Notes:

(a) VWA supplied data. Data for standardised claims, time lost claims and death claims is at 30 June 2012. Standardised claims are those that have exceeded the employer excess or are registered as a standard claim and are open with no payments at the time of extraction.

(b) An error in the 2010-11 claims data has been amended. In 2010-11, 11 claims were erroneously reported for standardised and time lost, and two claims were reported as being in excess of 13 weeks.

(c) VWA supplied data. A time lost claim is one with one or more days compensated by the VWA (after employer excess) at the time of extraction. They are a subset of standardised claims.

(d) VWA supplied data based on claims reported between 1st July 2011 and 30 June 2012. Claims include payments to date plus an estimate of outstanding claims costs (further costs as calculated by the VWA’s statistical case estimate model).

(e) An error in average claim costs has been amended for the 2010-11 data. In 2010-11, only total costs paid was used for the calculation, the figure now takes into account total costs paid and statistical case estimate of the claims.


Appendix 4 Environmental reporting Office based environmental impacts DTF monitored the environmental impacts of its operations during 2011-12. This was undertaken via DTF’s office-based environmental management system (EMS), which is based on international standard AS/NZS ISO14001, Environmental Management Systems Requirements.

The office-based EMS controls all operational activities in DTF’s offices and aims to minimise the generation of waste and the use of energy, water, paper, travel, vehicle fleet and greenhouse emissions in the course of operations.

The suite of environmental indicators presented below is based on the Financial Reporting Direction 24C.

Energy

The Department’s energy consumption comprises its CBD office facilities. Core DTF staff are located at 1 Macarthur Street, 1 Treasury Place, 120 Collins Street and 55 Collins Street.

Indicator 2011-12 2010-12 Electricity Natural

gas Green power

Total Electricity Natural gas

Green power

Total

Total energy usage segmented by primary source (MJ)

4 985 415 4 985 415 4 414 119 1 103 530 5 517 648

Greenhouse gas emissions associated with energy use, segmented by primary source and offsets (t CO2-e)

1 883 1 883 1 655 1 655

Percentage of electricity purchased as green power

20

Units of energy used per FTE (MJ/FTE)

7 015 7 717

Units of energy used per unit of office area (MJ/m2)

307 346

Actions undertaken Earth Hour DTF participated in the 2012 Earth Hour event.

Result

Energy consumption was reduced by 9.6 per cent.

Explanatory notes

• Billing data was used for 1 Treasury Place, 1 Macarthur Street , 120 Collins Street and 55 Collins Street.

• The reduction in green power was a result of the cessation of a whole of government purchasing agreement.


Paper

Paper use covers staff located in 1 Treasury Place, 1 Macarthur Street, 120 Collins Street and 55 Collins Street.

Indicator 2011-12 2010-11 Total units of copy paper used (reams) 10 747 10 234 Units of copy paper used per FTE (reams/FTE) 16 14 Percentage of 75–100 recycled content copy paper purchased

36 48

Percentage of 50–75 recycled content copy paper purchased

58 19

Percentage of 0–50 recycled content copy paper purchased

6 33

Optional indicators

Total units of A4 equivalent paper used in publications (reams)

2 883 11 160

Actions undertaken

e-Reviewing DTF utilised a system to review, comment and edit PDF versions of budget papers, annual reports and annual financial reports.

Draw down printing DTF rolled out the draw down printing service across its operation. Draw down printing is a secure printing function that requires staff to swipe security cards in order to release print jobs. One of the benefits is the reduction of unnecessary print jobs.

Targets

The following target was set for 2011-12:

• Reduce paper by one ream per FTE from 2010-11.

Result

• Paper use increased by two reams per FTE.

Explanatory notes

• Paper use is calculated using the information provided under the whole of government office stationary contract.

• Paper use covers staff located in 1 Treasury Place, 1 Macarthur Street, 120 Collins Street and 55 Collins Street.

• Greenhouse gas emissions related to paper were not reported in 2010-11.

• Paper used in publications decreased substantially from 2010-11 to 2011-12.

• The increase in paper use is a result of machinery of government changes which have brought different functions to DTF.


Water

The data in the table below is based on water meter readings and billing data at the four DTF sites.

Indicator 2011-12 2010-11 Total units of metered water consumed by usage types (kilolitres)

7 531 8 549

Units of metered water consumed in offices per FTE (litres/FTE)

10 523 11 944

Units of metered water consumed in offices per unit of office area (litres/m2)

464 527

Actions undertaken No actions undertaken

Targets


• Reduce water use per FTE by 3 per cent from 2010-11 levels.

Result

• Water consumption was reduced by 12 per cent per FTE.

Explanatory notes

• Water consumption covers staff located in 1 Treasury Place, 1 Macarthur Street, 120 Collins Street and 55 Collins Street.


Transport

The Department uses vehicles from the State Government Vehicle Pool for its operational car travel.

Operational vehicles 2011-12 2010-11 ULP LPG Total ULP LPG Total Total energy consumption by vehicles (MJ)

132 080 17 711 149 792 138 784 19 401 158 185

Total vehicle travel associated with entity operations (km)

53 268 4 688 57 956 47 497 5 329 52 826

Total greenhouse gas emissions from vehicle fleet (t CO2-e)

9.5 1.2 10.7 10.4 1.3 11.7

Greenhouse gas emissions from vehicle fleet per 1 000km travelled (t CO2-e)

0.2 0.2 0.2 0.2 0.2 0.5

2011-12 2010-11 Total distance travelled by aeroplane (km) 728 639 880 987

Percentage of employees regularly (>75 per cent of work attendance days) using public transport, cycling, walking, or car pooling to and from work or working from home, by locality type.

94 88.7

Actions undertaken No actions undertaken

Explanatory notes

• The vehicle travel data includes DTF hire car usage from the State Government Vehicle Pool and was provided by Vic Fleet.

• Air travel was provided by the State Government booking agency.

• 100 per cent of staff located at 1 Treasury Place, 1 Macarthur Street, 120 Collins Street and 55 Collins Street were included in the above indicators.

• An internal survey was conducted to ascertain the percentage of employees regularly using public transport.


Waste

Waste included in the indicators below, covers the three kitchen waste streams (landfill, recycling and compost) and paper and cardboard.

Waste generation 2011-12 2010-11

Landfill Co-mingled

recycling Compost Total Landfill Co-mingled

recycling Compost Total Total units of waste by destination (kg/year)

7 604 48 800 7 029 63 513 6 532 61 926 8 589 77 047

Units of waste per FTE by destination (kg/year)

10.7 68.8 9.9 89.4 9.1 86.6 12.0 107.7

Greenhouse gas emissions from waste to landfill (t CO2-e)

9.1 8.6

Recycling rate (per cent of total waste)

88 84

Actions undertaken

Green collect A green collect service was introduced at 1 Macarthur Street and 1 Treasury Place during 2011-12. Swap and trade meet An annual swap and trade meeting was held in DTF and DPC to utilise existing supplies of office

stationary. Unwanted supplies were provided to Rotary International.

Targets


• Proportion of waste recycled greater than 88 per cent.

Result

• Proportion of waste recycled was 88 per cent.

Explanatory notes

• Waste data was collected from quarterly waste audits conducted at 1 Treasury Place and 1 Macarthur Street, which covers 68 per cent of staff.


Greenhouse gas emissions

The emissions disclosed in the section below are taken from the previous sections and brought together here to show the Department’s greenhouse footprint.

Indicator 2011-12 2010-11 Total greenhouse gas emissions associated with energy use (t CO2-e) 1 883 1 655 Total greenhouse gas emissions associated with vehicle fleet (t CO2-e) 10.7 11.7 Total greenhouse gas emissions associated with air travel (t CO2-e) 180 530.8 Total greenhouse gas emissions associated with waste production (t CO2-e) 9.1 7.8 Total greenhouse gas emissions associated with paper use (t CO2-e) 41 Total greenhouse gas emissions (t CO2-e) 2 125 2 204

Explanatory notes

• The decrease in total greenhouse gas emissions is mainly attributable to a change in the factor used to calculate greenhouse gas emissions from air travel and the overall reduction in air travel.

• Greenhouse gas emissions related to paper use were not reported in 2010-11.


Procurement

DTF has undertaken procurement activities that are environmentally responsible and that support the objectives of DTF and the whole of government. These include:

• continued compliance with Victorian Government Purchasing Board Environmental Procurement Policy;

• inclusion of environmental requirements in tender specifications and tender evaluation criteria;

• supplier compliance to sustainability requirements monitored on an ongoing basis through the contract management process;

• continued membership of the national ECO-Buy Sustainability Program; and

• participation in the Australasian Procurement and Construction Council Sustainability Working Group, which has been established to promulgate the principles of sustainable procurement among Australian, New Zealand and Papua New Guinea government jurisdictions. The aim of this working group is to build on existing practices to develop a national framework for sustainable procurement.

Targets for 2012-13

The following targets have been set for 2012-13:

• reduce water use per FTE by 3 per cent from 2011-12 levels;

• reduce the number of reams of paper used per FTE by three from 2009-10 levels; and

• proportion of waste recycled greater than 90 per cent.

Glossary

FTE Full time equivalent employee kg Kilograms kL Kilolitres km Kilometres L Litres LPG Liquefied petroleum gas m2 Metres squared MJ Mega joules Ream 500 sheets of A4 paper t CO2-e Tonnes of CO2 equivalent ULP Unleaded petrol


Trend charts

250

275

300

325

350

375

400

2007-08 2008-09 2009-10 2010-11 2011-12

MJ/

M2

DTF annual energy use per unit of office area

MJ/FTE Trend

9 000

10 000

11 000

12 000

13 000

14 000

2007-08 2008-09 2009-10 2010-11 2011-12

Ream

s per

yea

r

DTF annual paper use

Reams per year Trend

40 000

50 000

60 000

70 000

80 000

90 000

2007-08 2008-09 2009-10 2010-11 2011-12

Km p

er y

ear

DTF annual car travel from operations

DTF km per year Trend

20 000

30 000

40 000

50 000

60 000

70 000

80 000

2007-08 2008-09 2009-10 2010-11 2011-12

kg p

er y

ear

DTF annual waste generation

DTF kg per year Trend


Appendix 5 Community Support Fund The Community Support Fund (CSF) is a trust fund which directs a portion of gaming revenue back into the community. It was established in 1991 and is governed by the Gambling Regulation Act 2003.

The CSF receives 8.33 per cent of revenue from electronic gaming machines located in Victorian hotels. Any interest earned on the balance of the trust fund is retained by the CSF. Each financial year, $45 million is provided to support Victoria’s drug strategy. In 2011-12, the CSF received $105.8 million revenue, excluding the drug strategy funding.

The Government can allocate funding from the CSF to a range of initiatives, which are administered by departments. Funded initiatives must be consistent with the purposes of the legislation.

Programs that tackle problem gambling are the first call on funds from the CSF. The Victorian Responsible Gambling Foundation Act 2011 gives effect to the Government’s problem gambling policy. This legislation provides the basis on which funds will be transferred from the CSF to the Responsible Gambling Fund to reduce the prevalence and severity of gambling related harm and foster responsible gambling behaviour.

The CSF can also fund:

• drug education, treatment and rehabilitation;

• financial counselling and support for families in crisis;

• youth programs;

• sport and recreation;

• arts and tourism;

• community support or advancement; and

• costs associated with administering the CSF.

The funds provided to departments are generally used to provide grants to a wide range of community-based organisations and councils, supporting them to build strong and sustainable communities.

The legislation also provides for the payment of one day’s revenue from the CSF to the Victorian Veterans’ Fund.

A total of $87.2 million was paid out of the CSF in 2011-12.

The administration of the CSF forms part of the audited accounts of the Department.

For more information in relation to the CSF please refer to www.dtf.vic.gov.au/communitysupportfund.

Programs approved from 1 July 2011 to 30 June 2012 Program Name Portfolio $ Benambra Hall Upgrade Project Regional and Rural Development 100 000 Community Facility Funding Program 2012-13 to 2014-15 Sport and Recreation 19 000 000 Community Facility Funding Program 2013-14 to 2015-16 Sport and Recreation 20 000 000 Extending Support for Soccer Facilities Sport and Recreation 1 450 000 Kokoda Memorial Wall Environment and Climate Change 500 000 Supporting Emerging Indigenous Leaders Program Aboriginal Affairs 768 215 PilchConnect – Supporting Community Organisations Regional and Rural Development 1 200 000 Social Traders – Supporting Development of Social Enterprises Regional and Rural Development 3 780 000 Spirit of ANZAC Prize Veterans’ Affairs 400 000 Total program approvals 47 198 215

http://www.dtf.vic.gov.au/communitysupportfund


Appendix 6 Consultancies and major contracts Consultancies over $10 000 (excluding GST)

Consultant Details Total

approved fee Expenditure

in 2011-12 Future

expenditure $ $ $ Professor Clifford Walsh Review of GST distribution 27 000 27 000 –

Consultancies under $10 000 One consultancy in respect of which the total expenditure incurred during the year was less than $10 000, was engaged at a total cost for the year of $9 000.

Disclosure of major contracts The Department has disclosed, in accordance with the requirements of Victorian Government policy and accompanying guidelines, all contracts greater than $10 million in value which it entered into during the year ended 30 June 2012. Details of contracts that have been disclosed can be viewed at www.contracts.vic.gov.au.

http://www.contracts.vic.gov.au/


Appendix 7 Freedom of information The Department of Treasury and Finance (DTF) is an ‘agency’ for the purposes of the Freedom of Information Act 1982 (the Act) and is therefore subject to the Act.

Particulars of the functions and organisation of the Department are set out elsewhere in this report. The Department’s website (www.dtf.vic.gov.au) provides additional information that might also be of assistance in this regard.

The Department’s Freedom of Information (FoI) Officers are authorised to deal with requests for access to documents in the possession of the Department. This authorisation does not extend to documents in the possession of the State Revenue Office (SRO) and any such requests should be sent directly to the SRO.

During 2011-12 DTF received 61 FoI requests. Of those, 23 were from Members of Parliament, 25 were from the media and 13 were from members of the public.

Nine requests for internal review of FoI decisions were received. No FoI matter was subject to review by the Victorian Civil and Administrative Tribunal.

There were no complaints to the Ombudsman during 2011-12 regarding DTF’s handling of FoI requests.

Further information about DTF’s FoI performance is available in the 2011-12 FoI Annual Report, prepared by the Department of Justice.

Compliance For the 12 months ended 30 June 2012, the Department processed 90 per cent of requests within statutory requirements, 10 per cent of requests within 46–90 days and no requests in over 90 days. The average time taken to finalise requests was 37 days.

Making a request Section 17 of the Act sets out the formal requirements for making a request. In summary, the requirements for making a request are that:

• it should be in writing;

• it should identify as clearly as possible what document is being requested; and

• it should normally be accompanied by an application fee.

Requests for documents in the possession of DTF should be addressed as follows:

Freedom of Information Officer Department of Treasury and Finance GPO Box 4379 Melbourne VIC 3001

Freedom of information contacts Ms Vivian Chung, Tel: (03) 9651 2115

Ms Ianina Belski, Tel: (03) 9651 0742

Access charges In addition to the application fee, certain other charges such as search fees and photocopying charges might apply in relation to the provision of documents as stipulated in the Freedom of Information (access charges) Regulations 2004.

Further information regarding the Act may be obtained from:

• the Act itself;

• various regulations made under the Act; and

• www.foi.vic.gov.au.

http://www.dtf.vic.gov.au/

http://www.foi.vic.gov.au/


Appendix 8 Application of the Whistleblowers Protection Act 2001 The following information is required in the Annual Report pursuant to section 104 of the Whistleblowers Protection Act 2001 (the Act).

Message from the Secretary The Department of Treasury and Finance is committed to the aims and objectives of the Whistleblowers Protection Act 2001. It does not tolerate improper conduct by its employees, officers or members, nor the taking of reprisals against those who come forward to disclose such conduct.

The Department of Treasury and Finance recognises the value of transparency and accountability in its administrative and management practices, and supports the making of disclosures that reveal corrupt conduct, conduct involving a substantial mismanagement of public resources, or conduct involving a substantial risk to public health and safety or the environment.

The Department of Treasury and Finance will take all reasonable steps to protect people who make such disclosures from any detrimental action in reprisal for making the disclosure. It will also afford natural justice to the person who is the subject of the disclosure.

During 2011-12, there were no disclosures made under this legislation.


Procedures

The current procedures established under Part 6 of the Act are as follows.

1. Purpose and scope of these procedures These procedures establish a system for reporting disclosures of improper conduct or detrimental action by the Department of Treasury and Finance (the Department) or its employees. Their scope is for use within the Department itself. The system enables such disclosures to be made to the protected disclosure coordinator or to one of the nominated protected disclosure officers. Disclosures may be made by employees or by members of the public.

These procedures are designed to complement normal communication channels between supervisors and employees.

Employees are encouraged to continue to raise appropriate matters at any time with their supervisors. As an alternative, employees may make a disclosure of improper conduct or detrimental action under the Act in accordance with these procedures.

2. Objects of the Act The Whistleblowers Protection Act 2001 is operational from 1 January 2002. The purpose of the Act is to encourage and facilitate the making of disclosures of improper conduct by public officers and public bodies.

The Act provides protection to whistleblowers who make disclosures in accordance with the Act, and establishes a system for the matters disclosed to be investigated and rectifying action to be taken.

3. Definitions of key terms Three key concepts in the reporting system are improper conduct, corrupt conduct and detrimental action. Definitions of these terms are set out below.

3.1 Improper conduct

A disclosure may be made about improper conduct by a public body or public official. Improper conduct means conduct that is corrupt, a substantial mismanagement of public resources, or conduct involving substantial risk to public health or safety or to the environment. The conduct must be serious enough to constitute, if proved, a criminal offence or reasonable grounds for dismissal.


Examples

• To avoid closure of a town’s only industry, an environmental health officer ignores or conceals evidence of illegal dumping of waste.

• An agricultural officer delays or declines imposing quarantine to allow a financially distressed farmer to sell diseased stock.

• A building inspector tolerates poor practices and structural defects in the work of a leading local builder.

3.2 Corrupt conduct

Corrupt conduct means:

• conduct of any person (whether or not a public official) that adversely affects the honest performance of a public officer’s or public body’s functions;

• the performance of a public officer’s functions dishonestly or with inappropriate partiality;

• conduct of a public officer, former public officer or a public body that amounts to a breach of public trust;

• conduct by a public officer, former public officer or a public body that amounts to the misuse of information or material acquired in the course of the performance of their official functions; or

• a conspiracy or attempt to engage in the above conduct.

Examples

• A public officer takes a bribe or receives a payment other than his or her wages or salary in exchange for the discharge of a public duty.

• A public officer favours unmeritorious applications for jobs or permits by friends and relatives.

• A public officer sells confidential information.

3.3 Detrimental action

The Act makes it an offence for a person to take detrimental action against a person in reprisal for a protected disclosure.

Detrimental action includes:

• action causing injury, loss or damage;

• intimidation or harassment; and

• discrimination, disadvantage or adverse treatment in relation to a person’s employment, career, profession, trade or business, including the taking of disciplinary action.

Examples

• A public body refuses a deserved promotion of a person who makes a disclosure.

• A public body demotes, transfers, isolates in the workplace or changes the duties of a whistleblower due to the making of a disclosure.

• A person threatens, abuses or carries out other forms of harassment directly or indirectly against the whistleblower, his or her family or friends.

• A public body discriminates against the whistleblower or his or her family and associates in subsequent applications for jobs, permits or tenders.

4. The reporting system 4.1 Contact persons within the Department of Treasury and Finance

Disclosures of improper conduct or detrimental action by the Department or its employees, may be made to the following officer:

• Karen Frost Director, Planning and Executive Services 5/1 Treasury Place, East Melbourne Vic 3002 Tel: (03) 9651 2932.

Initially, at least, the protected disclosure coordinator will also take on the responsibilities of the protected disclosure officer. If the occupant of either role changes in the future, these procedures will be amended to include their contact details.

All correspondence, phone calls and emails from internal or external whistleblowers will be referred to the protected disclosure coordinator.

Where a person is contemplating making a disclosure and is concerned about approaching the protected disclosure coordinator in the workplace, he or she can call the relevant officer and request a meeting in a discreet location away from the workplace.

4.2 Alternative contact persons

A disclosure about improper conduct or detrimental action by the Department or its employees may also be made directly to the Ombudsman:

• The Ombudsman Victoria Level 3, 459 Collins Street Melbourne Victoria 3000

Ombudsman: Mr. George Brouwer

Internet: www.ombudsman.vic.gov.au

Email: [email protected]

Tel: (03) 9613 6222 Toll free: 1800 806 314

Fax: (03) 9614 0246

http://www.ombudsman.vic.gov.au/

mailto:[email protected]


The following table sets out where disclosures about persons other than employees of the Department should be made.

Person who is the subject of the disclosure

Person/body to whom the disclosure must be made

Employee of a public body

That public body or the Ombudsman

Member of Parliament (Legislative Assembly)

Speaker of the Legislative Assembly

Member of Parliament (Legislative Council)

President of the Legislative Council

Councillor The Ombudsman Chief Commissioner of Police

The Ombudsman or Deputy Ombudsman

Member of the police force

The Ombudsman, Deputy Ombudsman or Chief Commissioner of Police

5. Roles and responsibilities 5.1 Employees

Employees are encouraged to report known or suspected incidences of improper conduct or detrimental action in accordance with these procedures.

All employees of the Department have an important role to play in supporting those who have made a legitimate disclosure. They must refrain from any activity that is, or could be perceived to be, victimisation or harassment of a person who makes a disclosure. Furthermore, they should protect and maintain the confidentiality of a person they know or suspect to have made a disclosure.

5.2 Protected disclosure officers

Protected disclosure officers will:

• be a contact point for general advice about the operation of the Act for any person wishing to make a disclosure about improper conduct or detrimental action;

• make arrangements for a disclosure to be made privately and discreetly and, if necessary, away from the workplace;

• receive any disclosure made orally or in writing (from internal and external whistleblowers);

• commit to writing any disclosure made orally;

• take all necessary steps to ensure the identity of the whistleblower and the identity of the person who is the subject of the disclosure are kept confidential; and

• forward all disclosures and supporting evidence to the protected disclosure coordinator.

5.3 Protected disclosure coordinator

The protected disclosure coordinator has a central ‘clearing house’ role in the internal reporting system. He or she will:

• receive all disclosures forwarded from the protected disclosure officers;

• receive all phone calls, emails and letters from members of the public or employees seeking to make a disclosure;

• impartially assess each disclosure to determine whether it is a public interest disclosure;

• refer all public interest disclosures to the Ombudsman;

• be responsible for carrying out, or appointing an investigator to carry out, an investigation referred to the public body by the Ombudsman;

• be responsible for overseeing and coordinating an investigation where an investigator has been appointed;

• appoint a welfare manager to support the whistleblower and to protect him or her from any reprisals;

• advise the whistleblower of the progress of an investigation into the disclosed matter;

• establish and manage a confidential filing system;

• collate and publish statistics on disclosures made;

• take all necessary steps to ensure the identity of the whistleblower and the identity of the person who is the subject of the disclosure are kept confidential; and

• liaise with the chief executive officer of the public body.

5.4 Investigator

The investigator will be responsible for carrying out an internal investigation into a disclosure where the Ombudsman has referred a matter to the public body. An investigator may be a person from within an organisation or a consultant engaged for that purpose.

In reaching a conclusion as to whether a protected disclosure is a ‘public interest disclosure’, a public body must consider whether the disclosure shows or tends to show that the public officer to whom the disclosure relates:

• has engaged, is engaging or proposes to engage in improper conduct in his or her capacity as a public officer; or

• has taken, is taking or proposes to take detrimental action in reprisal for the making of the protected disclosure.


5.5 Welfare manager

The welfare manager is responsible for looking after the general welfare of the whistleblower. The welfare manager will:

• examine the immediate welfare and protection needs of a whistleblower who has made a disclosure and seek to foster a supportive work environment;

• advise the whistleblower of the legislative and administrative protections available to him or her;

• listen and respond to any concerns of harassment, intimidation or victimisation in reprisal for making disclosure; and

• ensure the expectations of the whistleblower are realistic.

6. Confidentiality The Department will take all reasonable steps to protect the identity of the whistleblower. Maintaining confidentiality is crucial in ensuring reprisals are not made against a whistleblower.

The Act requires any person who receives information due to the handling or investigation of a protected disclosure, not to disclose that information except in certain limited circumstances. Disclosure of information in breach of section 22 constitutes an offence that is punishable by a maximum fine of 60 penalty units or six months imprisonment or both.

The circumstances in which a person may disclose information obtained about a protected disclosure include:

• where exercising the functions of the public body under the Act;

• when making a report or recommendation under the Act;

• when publishing statistics in the annual report of a public body; and

• in criminal proceedings for certain offences in the Act.

However, the Act prohibits the inclusion of particulars in any report or recommendation that is likely to lead to the identification of the whistleblower. The Act also prohibits the identification of the person who is the subject of the disclosure in any particulars included in an annual report.

The Department will ensure all files, whether paper or electronic, are kept in a secure room and can only be accessed by the protected disclosure coordinator, protected disclosure officer, the investigator or welfare manager (in relation to welfare matters).

All printed material will be kept in files that are clearly marked as a Whistleblower Protection Act matter, and warn of the criminal penalties that apply to any unauthorised divulging of information concerning a protected disclosure. All electronic files will be produced and stored on a standalone computer and be given password protection. Backup files will be kept on disc. All materials relevant to an investigation, such as tapes from interviews, will also be stored securely with the whistleblower files.

The Department will not email documents relevant to a whistleblower matter and will ensure all phone calls and meetings are conducted in private.

7. Collating and publishing statistics The protected disclosure coordinator will establish a secure register to record the information required to be published in the annual report, and to generally keep account of the status of whistleblower disclosures.

The register will be confidential and will not record any information that may identify the whistleblower.

The register will contain the following information:

• the number and types of disclosures made to public bodies during the year;

• the number of disclosures referred to the Ombudsman for determination as to whether they are public interest disclosures;

• the number and types of disclosed matters referred to the public body by the Ombudsman for investigation;

• the number and types of disclosures referred by the public body to the Ombudsman for investigation;

• the number and types of investigations taken over from the public body by the Ombudsman;

• the number of requests made by a whistleblower to the Ombudsman to take over an investigation by the public body;

• the number and types of disclosed matters that the public body has declined to investigate;

• the number and types of disclosed matters that were substantiated upon investigation and the action taken on completion of the investigation; and

• any recommendations made by the Ombudsman that relate to the public body.


8. Receiving and assessing disclosures 8.1 Has the disclosure been made in accordance with Part 2 of the Act?

Where a disclosure has been received by the protected disclosure officer or by the protected disclosure coordinator, he or she will assess whether the disclosure has been made in accordance with Part 2 of the Act and is, therefore, a protected disclosure.

8.2 Has the disclosure been made to the appropriate person?

For the disclosure to be responded to by the Department, it must concern an employee, member or officer of the Department. If the disclosure concerns an employee, officer or member of another public body, the person who has made the disclosure must be advised of the correct person or body to whom the disclosure should be directed (table 5.2). If the disclosure has been made anonymously, it should be referred to the Ombudsman.

8.3 Does the disclosure contain the essential elements of a protected disclosure?

To be a protected disclosure, a disclosure must satisfy the following criteria:

• Did a natural person (that is, an individual person rather than a corporation) make the disclosure?

• Does the disclosure relate to conduct of a public body or public officer acting in their official capacity?

• Is the alleged conduct either improper conduct or detrimental action taken against a person in reprisal for making a protected disclosure?

• Does the person making a disclosure have reasonable grounds for believing the alleged conduct has occurred?

Where a disclosure is assessed to be a protected disclosure, it is referred to the protected disclosure coordinator. The protected disclosure coordinator will determine whether the disclosure is a public interest disclosure.

Where a disclosure is assessed not to be a protected disclosure, the matter does not need to be dealt with under the Act.

The protected disclosure officer will decide how the matter should be responded to in consultation with the protected disclosure coordinator.

8.4 Is the disclosure a public interest disclosure?

Where the protected disclosure officer or coordinator has received a disclosure that has been assessed to be a protected disclosure, the protected disclosure coordinator will determine whether the disclosure amounts to a public interest disclosure.

This assessment will be made within 45 days of the receipt of the disclosure.

In reaching a conclusion as to whether a protected disclosure is a public interest disclosure, the protected disclosure coordinator will consider whether the disclosure shows, or tends to show, that the public officer to whom the disclosure relates:

• has engaged, is engaging or proposes to engage in improper conduct in his or her capacity as a public officer; or

• has taken, is taking or proposes to take detrimental action in reprisal for the making of the protected disclosure.

Where the protected disclosure coordinator concludes that the disclosure amounts to a public interest disclosure, he or she will:

• notify the person who made the disclosure of that conclusion; and

• refer the disclosure to the Ombudsman for formal determination as to whether it is indeed a public interest disclosure.

Where the protected disclosure coordinator concludes that the disclosure is not a public interest disclosure, he or she will:

• notify the person who made the disclosure of that conclusion; and

• advise that person that he or she may request the public body to refer the disclosure to the Ombudsman for a formal determination as to whether the disclosure is a public interest disclosure, and that this request must be made within 28 days of the notification.

In either case, the protected disclosure coordinator will make the notification and the referral within 14 days of the conclusion being reached by the public body. Notification to the whistleblower is not necessary where the disclosure has been made anonymously.

9. Investigations 9.1 introduction

Where the Ombudsman refers a protected disclosure to the Department for investigation, the protected disclosure coordinator will appoint an investigator to carry out the investigation.

The objectives of an investigation will be:

• to collate information relating to the allegation as quickly as possible. This may involve taking steps to protect or preserve documents, materials and equipment;

• to consider the information collected and to draw conclusions objectively and impartially;


• to maintain procedural fairness in the treatment of witnesses and the person who is the subject of the disclosure; and

• to make recommendations arising from the conclusions drawn concerning remedial or other appropriate action.

9.2 Terms of reference

Before commencing an investigation, the protected disclosure coordinator will draw up terms of reference and obtain authorisation for those terms by the chief executive officer. The terms of reference will set a date by which the investigation report is to be concluded, and will describe the resources available to the investigator to complete the investigation within the time set. The protected disclosure coordinator may approve, if reasonable, an extension of time requested by the investigator.

The terms of reference will require the investigator to make regular reports to the protected disclosure coordinator who, in turn, is to keep the Ombudsman informed of general progress.

9.3 Investigation plan

The investigator will prepare an investigation plan for approval by the protected disclosure coordinator.

The plan will list the issues to be substantiated and describe the avenue of inquiry. It will address the following issues:

• What is being alleged?

• What are the possible findings or offences?

• What are the facts in issue?

• How is the inquiry to be conducted?

• What resources are required?

At the commencement of the investigation, the whistleblower should be:

• notified by the investigator that he or she has been appointed to conduct the investigation;

• asked to clarify any matters; and

• provide any additional material he or she might have.

The investigator will be sensitive to the whistleblower’s possible fear of reprisals and will be aware of the statutory protections provided to the whistleblower.

9.4 Natural justice

The principles of natural justice will be followed in any investigation of a public interest disclosure. The principles of natural justice concern procedural fairness and ensure an objective decision maker reaches a fair decision. Maintaining procedural fairness protects the rights of individuals and enhances public confidence in the process. The Department will have regard to the following issues in ensuring procedural fairness:

• the person who is the subject of the disclosure is entitled to know the allegations made against him or her and must be given the right to respond. (This does not mean the person must be advised of the allegation as soon as the disclosure is received or the investigation has commenced.);

• if the investigator is contemplating making a report adverse to the interests of any person, that person should be given the opportunity to put forward further material that may influence the outcome of the report and that person’s defence should be fairly set out in the report;

• all relevant parties to a matter should be heard and all submissions should be considered;

• a decision should not be made until all reasonable inquiries have been made;

• the investigator or any decision maker should not have a personal or direct interest in the matter being investigated; and

• all proceedings must be carried out fairly and without bias.

Care should be taken to exclude perceived bias from the process:

• the investigator must be impartial in assessing the credibility of the whistleblowers and any witnesses; and

• where appropriate, conclusions as to credibility should be included in the investigation report.

9.5 Conduct of the investigation

The investigator will make contemporaneous notes of all discussions and phone calls, and all interviews with witnesses will be taped. All information gathered in an investigation will be stored securely. Interviews will be conducted in private and the investigator will take all reasonable steps to protect the identity of the whistleblower. Where disclosure of the identity of the whistleblower cannot be avoided, due to the nature of the allegations, the investigator will warn the whistleblower and his or her welfare manager of this probability.

It is at the discretion of the investigator to allow any witness to have legal or other representation or support during an interview. If a witness has a special need for legal representation or support, permission should be granted.

9.6 Referral of an investigation to the ombudsman

The protected disclosure coordinator will make a decision regarding the referral of an investigation to the Ombudsman where, on the advice of the investigator:

• the investigation is being obstructed by, for example, the non-cooperation of key witnesses; or

• the investigation has revealed conduct that may constitute a criminal offence.


9.7 Reporting requirements

The protected disclosure coordinator will ensure the whistleblower is kept regularly informed concerning the handling of a protected disclosure and an investigation.

The protected disclosure coordinator will report to the Ombudsman about the progress of an investigation.

Where the Ombudsman or the whistleblower requests information about the progress of an investigation, that information will be provided within 28 days of the date of the request.

10. Action taken after an investigation 10.1 Investigator’s final report

At the conclusion of the investigation, the investigator will submit a written report of his or her findings to the protected disclosure coordinator. The report will contain:

• the allegation/s;

• an account of all relevant information received and, if the investigator has rejected evidence as being unreliable, the reasons for this opinion being formed;

• the conclusions reached and the basis for them; and

• any recommendations arising from the conclusions.

Where the investigator has found that the conduct disclosed by the whistleblower has occurred, recommendations made by the investigator will include:

• the steps that need to be taken by the Department to prevent the conduct from continuing or occurring in the future; and

• any action that should be taken by the Department to remedy any harm or loss arising from the conduct. This action may include bringing disciplinary proceedings against the person responsible for the conduct, and referring the matter to an appropriate authority for further consideration.

The report will be accompanied by:

• the transcript or other record of any oral evidence taken, including tape; and

• all documents, statements or other exhibits received by the officer and accepted as evidence during the course of the investigation.

Where the investigator’s report is to include an adverse comment against any person, that person will be given the opportunity to respond and his or her defence will be fairly included in the report.

The report will not disclose particulars likely to lead to the identification of the whistleblower.

10.2 Action to be taken

If the protected disclosure coordinator is satisfied that the investigation has found that the disclosed conduct has occurred, he or she will recommend to the chief executive officer the action that must be taken to prevent the conduct from continuing or occurring in the future. The protected disclosure coordinator may also recommend that action be taken to remedy any harm or loss arising from the conduct.

The protected disclosure coordinator will provide a written report to the appropriate Minister, the Ombudsman and the whistleblower setting out the findings of the investigation and any remedial steps taken.

Where the investigation concludes that the disclosed conduct did not occur, the protected disclosure coordinator will report these findings to the Ombudsman and to the whistleblower.

11. Managing the welfare of the whistleblower 11.1 Commitment to protecting whistleblowers

The Department is committed to the protection of genuine whistleblowers against detrimental action taken in reprisal for the making of protected disclosures. The protected disclosure coordinator is responsible for ensuring whistleblowers are protected from direct and indirect detrimental action, and that the culture of the workplace is supportive of protected disclosures being made.

The protected disclosure coordinator will appoint a welfare manager to all whistleblowers who have made a protected disclosure.

The welfare manager will:

• examine the immediate welfare and protection needs of a whistleblower who has made a disclosure and, where the whistleblower is an employee, seek to foster a supportive work environment;

• advise the whistleblower of the legislative and administrative protections available to him or her;

• listen and respond to any concerns of harassment, intimidation or victimisation in reprisal for making disclosure;

• keep a contemporaneous record of all aspects of the case management of the whistleblower including all contact and follow-up action; and

• ensure the expectations of the whistleblower are realistic.

All employees will be advised that it is an offence for a person to take detrimental action in reprisal for a protected disclosure.


The maximum penalty is a fine of 240 penalty units or two years imprisonment or both. The taking of detrimental action in breach of this provision can also be grounds for making a disclosure under the Act and can result in an investigation.

Detrimental action includes:

• causing injury, loss or damage;

• intimidation or harassment; and

• discrimination, disadvantage or adverse treatment in relation to a person’s employment, career, profession, trade or business (including the taking of disciplinary action).

11.2 Keeping the whistleblower informed

The protected disclosure coordinator will ensure the whistleblower is kept informed of action taken in relation to his or her disclosure, and the time frames that apply.

The whistleblower will be informed of the objectives of an investigation, the findings of an investigation, and the steps taken by the Department to address any improper conduct that has been found to occur. The whistleblower will be given reasons for decisions made by the Department in relation to a protected disclosure. All communication with the whistleblower will be in plain English.

11.3 Occurrence of detrimental action

If a whistleblower reports an incident of harassment, discrimination or adverse treatment that would amount to detrimental action taken in reprisal for the making of the disclosure, the welfare manager will:

• record details of the incident;

• advise the whistleblower of his or her rights under the Act; and

• advise the protected disclosure coordinator or chief executive officer of the detrimental action.

The taking of detrimental action in reprisal for the making of a disclosure can be an offence against the Act as well as grounds for making a further disclosure. Where such detrimental action is reported, the protected disclosure coordinator will assess the report as a new disclosure under the Act. Where the protected disclosure coordinator is satisfied that the disclosure is a public interest disclosure, he or she will refer it to the Ombudsman.

If the Ombudsman subsequently determines the matter to be a public interest disclosure, the Ombudsman may investigate the matter or refer it to another body for investigation as outlined in the Act.

11.4 Whistleblowers implicated in improper conduct

Where a person who makes a disclosure is implicated in misconduct, the Department will handle the disclosure and protect the whistleblower from reprisals in accordance with the Act, the Ombudsman’s guidelines and these procedures. The Department acknowledges that the act of whistleblowing should not shield whistleblowers from the reasonable consequences flowing from any involvement in improper conduct. Section 17 of the Act specifically provides that a person’s liability for his or her own conduct is not affected by the person’s disclosure of that conduct under the Act. However, in some circumstances, an admission may be a mitigating factor when considering disciplinary or other action.

The chief executive officer will make the final decision on the advice of the protected disclosure coordinator as to whether disciplinary or other action will be taken against a whistleblower. Where disciplinary or other action relates to conduct that is the subject of the whistleblower’s disclosure, the disciplinary or other action will only be taken after the disclosed matter has been appropriately dealt with.

In all cases where disciplinary or other action is being contemplated, the chief executive officer must be satisfied that it has been clearly demonstrated that:

• the intention to proceed with disciplinary action is not causally connected to the making of the disclosure (as opposed to the content of the disclosure or other available information);

• there are good and sufficient grounds that would fully justify action against any non-whistleblower in the same circumstances; and

• there are good and sufficient grounds that justify exercising any discretion to institute disciplinary or other action.

The protected disclosure coordinator will thoroughly document the process including recording the reasons why the disciplinary or other action is being taken, and the reasons why the action is not in retribution for the making of the disclosure.

The protected disclosure coordinator will clearly advise the whistleblower of the proposed action to be taken, and of any mitigating factors that have been taken into account.

12. Management of the person against whom a disclosure has been made The Department recognises that employees against whom disclosures are made must also be supported during the handling and investigation of disclosures. The Department will take all reasonable steps to ensure the confidentiality of the person who is the subject of the disclosure during the assessment and investigation process.


Where investigations do not substantiate disclosures, the fact that the investigation has been carried out, the results of the investigation, and the identity of the person who is the subject of the disclosure will remain confidential.

The protected disclosure coordinator will ensure the person who is the subject of any disclosure investigated by or on behalf of a public body is:

• informed as to the substance of the allegations;

• given the opportunity to answer the allegations before a final decision is made;

• informed as to the substance of any adverse comment that may be included in any report arising from the investigation; and

• has his or her defence set out fairly in any report.

Where the allegations in a disclosure have been investigated, and the person who is the subject of the disclosure is aware of the allegations or the fact of the investigation, the protected disclosure coordinator will formally advise the person who is the subject of the disclosure of the outcome of the investigation.

The Department will give its full support to a person who is the subject of a disclosure where the allegations contained in a disclosure are clearly wrong or unsubstantiated. If the matter has been publicly disclosed, the chief executive officer of the Department will consider any request by that person to issue a statement of support setting out that the allegations were clearly wrong or unsubstantiated.

13. Criminal offences The Department will ensure officers appointed to handle protected disclosures and all other employees are aware of the following offences created by the Act:

1. It is an offence for a person to take detrimental action against a person in reprisal for a protected disclosure being made. The Act provides a maximum penalty of a fine of 240 penalty units or two years imprisonment or both.

2. It is an offence for a person to divulge information obtained as a result of the handling or investigation of a protected disclosure without legislative authority. The Act provides a maximum penalty of 60 penalty units or six months imprisonment or both.

3. It is an offence for a person to obstruct the Ombudsman in performing his responsibilities under the Act. The Act provides a maximum penalty of 240 penalty units or two years imprisonment or both.

4. It is an offence for a person to knowingly provide false information under the Act with the intention that it be acted on as a disclosed matter. The Act provides a maximum penalty of 240 penalty units or two years imprisonment or both.

14. Review These procedures will be reviewed periodically to ensure they meet the objectives of the Act and accord with the Ombudsman’s guidelines.


Appendix 9 Compliance with the Building Act 1993 Standards for publicly owned buildings The Department employs an external service provider, Brookfield Multiplex Services Pty Ltd, to manage the government owned office accommodation portfolio and to ensure compliance with standards for publicly owned buildings.

At 30 June 2012, DTF was responsible for 21 department owned office buildings.

During 2011-12 an independent condition audit of all the buildings was undertaken that included reporting on the levels of compliance with the building regulations.

Mechanisms to ensure that buildings conform with the building standards DTF complies with the Building Act 1993, the Building Regulations 2006 and associated statutory requirements and amendments. An occupancy permit or a certificate of final inspection endorsed by a Registered Building Surveyor is obtained for all upgrades to existing facilities requiring a building permit.

DTF ensures that design consultants and building contractors engaged for building works are registered building practitioners and that registrations are maintained during the course of the work. Design consultants and building contractors are sourced from the Government’s Construction Supply Register maintained by the Department of Transport.

Works projects (greater than $50 000) 23 St Andrews Place, Treasury Reserve

Lift upgrade

33 St Andrews Place, Treasury Reserve

Lift upgrade

436 Lonsdale Street, Melbourne

Building management system upgrade

565 Lonsdale Street, Melbourne

Building management system upgrade

1 Treasury Place, 2 Treasury Place, 41 St Andrews Place and 55 St Andrews Place

Boiler replacement program

Major works (greater than $50 000) not subject to certification of plans, mandatory inspections of the works and issue of occupancy permits or certification of final inspection

All works are undertaken by registered building practitioners with certification that the work either complies with the existing occupancy permit, a revised permit, or a certificate of final inspection.

Mechanisms for inspection, reporting, scheduling and carrying out of rectification works on existing buildings

There are four main mechanisms established for inspecting, reporting, scheduling and performing rectification and maintenance works on the existing buildings.

1. Provision of and management of maintenance service contracts for all owned buildings.

2. Building inspections, liaison with tenants and responses to issues identified.

3. Ensuring that there is an annual Essential Safety Measures report for each building.

4. Commissioning formal condition, maintenance and compliance reports on buildings.

Brookfield Multiplex Services Pty Ltd manage the service maintenance contracts for DTF owned government office buildings. They are responsible for: • undertaking breakdown, preventative and cyclical

maintenance; • identifying and prioritising works required in

consultation with DTF; • managing rectification works; • conducting regular inspections to ensure that work

is performed to standard; and • managing maintenance to support the issue of the

annual safety measures reports. Quality assurance, performance measures and governance are built into the contract with Brookfield Multiplex Services.

Number of buildings conforming with the building standards

21

Number of buildings that have been brought into conformity during the reporting period

Nil

Number of cases and circumstances where registered building practitioners became deregistered

Nil


Appendix 10 National Competition Policy – Reporting against Competitive Neutrality Principles Following a review of National Competition Policy in 2005, the Council of Australian Governments (COAG) agreed to annual reporting against enhanced competitive neutrality principles for incorporated government business entities engaged in significant business activities in competition with the private sector. Reports against these principles are made annually through the Heads of Treasuries.

Competitive neutrality requires government businesses to ensure where services compete – or potentially compete – with the private sector, any advantages arising solely from their government ownership are removed if they are not in the public interest. Government businesses are required to cost and price these services as if they were privately owned and thus be fully cost reflective. Competitive neutrality policy provides government businesses with a tool to enhance decisions on resource allocation. This policy does not override other policy objectives of government and focuses on efficiency in the provision of service.

The Competitive Neutrality Unit which investigates complaints by individuals and businesses and reports to the Government on compliance within the policy, resides in the Victorian Competition and Efficiency Commission. The Commission reports on competitive neutrality in its annual report.

Department compliance with competitive neutrality policy The majority of significant business activities within the Department’s portfolios relate to the activities of corporate entities, such as the Transport Accident Commission. These entities provide independent statements of their compliance with competitive neutrality policy under the Financial Management Act 1994.

All of these corporate entities comply with Victoria’s competitive neutrality policy or have the status of being a shell company only. Other business activities within the Department are limited to:

• motor vehicle fleet management services, which completed a compliance review and adjusted overhead allocations to ensure compliance with Victoria’s competitive neutrality policy. The State Government vehicle pool provides a hire car service to government agencies; and

• property management services, which entail sale of property (including Crown land) at market rates, lease of buildings at market rates as established by independent valuation mainly to public sector agencies and advisory services generally related to public interest rather than commercial issues for which no fees are charged.


Appendix 11 Implementation of the Victorian Industry Participation Policy In October 2003, the Victorian Parliament passed the Victorian Industry Participation Policy Act 2003. The Victorian Industry Participation Policy (VIPP) is implemented by Victorian Government agencies to provide greater opportunities for local companies to be involved in government procurement and major projects. The key objective of the VIPP is to encourage local industry participation and to drive industry development.

The VIPP is a key evaluation criterion in tender selection at the short-listed stage for all Victorian Government purchasing contracts and industry grants worth $3 million and over in metropolitan Melbourne and $1 million and over in regional Victoria.

VIPP plans must address the following:

• local content (defined in accordance with the Australia and New Zealand Government Procurement Agreement to include all products and services provided from Australian and New Zealand companies);

• the number of new jobs created and existing jobs retained;

• the introduction of new technology, opportunities for skills transfer and training for employees; and

• the number of new apprentices/trainees engaged and existing apprentices/trainees retained.

All VIPP plans are certified by the Industry Capability Network Victoria (ICN Victoria). In addition, ICN Victoria provides the agencies with an evaluation of each short-listed bidder’s VIPP plan, which is considered during the tender evaluation process.

During 2011-12, the Department and its agencies entered into 11 arrangements, including whole of government contracts, to which the VIPP applied, with a total estimated value of $393.9 million. Three of these contracts cover regional Victoria (approximately $15 million) and seven cover metropolitan Melbourne (approximately $156.9 million). The remaining providing statewide coverage (approximately $202 million).

The estimated commitments by providers under VIPP include the creation of 153 full time equivalent jobs and 32 apprenticeships.

The benefits to the Victorian economy include skills and technology transfers in the areas of communications, construction/infrastructure, finance and utilities.

Seven arrangements to which the VIPP applied were completed during 2011-12 with a total value of approximately $36.5 million. Of these, two contracts for $12.6 million covered regional Victoria. The reported outcomes of these projects saw the creation of seven more new full time equivalent jobs than were committed, and three apprenticeships.


Appendix 12 Publications Budget papers 2012-13 Victorian Budget:

• Budget Overview

• Budget Information Paper No. 1 Regional and Rural Victoria

• Budget Information Paper No. 2 Victorian Families

• Budget Information Paper No. 3 Federal Financial Relations

• Budget Paper No. 1 Treasurer’s Speech

• Budget Paper No. 2 Strategy and Outlook

• Budget Paper No. 3 Service Delivery

• Budget Paper No. 4 State Capital Program

• Budget Paper No. 5 Statement of Finances

Financial reports 2010-11 Annual Financial Report (incorporating Quarterly Financial Report No. 4) for the State of Victoria

2011-12 Quarterly Financial Report No. 1 for the Victorian Budget Sector

2011-12 Budget Update

2011-12 Mid-Year Financial Report (incorporating Quarterly Financial Report No. 2) for the State of Victoria General Government Sector

Government response to the Auditor-General’s Reports issued during 2010-11

Corporate publications 2010-11 Department of Treasury and Finance Annual Report

Other publications Guide to Evaluation – How to plan and conduct effective evaluation for policy and programs – August 2011

March 2012 GST Distribution review Victorian supplementary submission – April 2012

Model Financial Report for Victorian Government Departments: For reporting period ending 30 June 2012

October 2011 GST Distribution review Victorian submission – October 2011

Victorian Funds Management Corporation – Government’s strategic direction for VFMC – October 2011

Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report December 2011 – Victorian manufacturing: Meeting the challenges Inquiry into a more competitive Victorian manufacturing industry – December 2011

Victorian Government response to Victorian Competition and Efficiency Commission’s Final Report December 2011 – An inquiry into regulatory impediments in the financial services sector – December 2011

Victorian Guide to Regulation Edition 2.1, August 2011 – incorporating Guidelines made under the Subordinate Legislation Act 1994 which includes amendments effective from 1 January 2011 and 1 July 2011 – August 2011


Appendix 13 Disclosure index

Ministerial Directions Report of operations and appendices Direction Requirement Page reference

Charter and purpose FRD 22B Manner of establishment and the relevant

Ministers 2

FRD 22B Objectives, functions, powers and duties 1, 6–8 FRD 22B Nature and range of services provided 1, 6–8 Management and structure FRD 22B Organisational structure 5 Financial and other information FRD 8B Budget portfolio outcomes 84–88 FRD 10 Disclosure index 125—126 FRD 12A Disclosure of major contracts 110 FRD 15B Executive officer disclosures 65–66, 91–97 FRD 22B, SD 4.2(k) Operational and budgetary objectives and

performance against objectives 12–24

FRD 22B Employment and conduct principles 89–90 FRD 22B Occupational health and safety policy 98–100 FRD 22B Summary of the financial results for the year 24 FRD 22B Significant changes in financial position during

the year 24

FRD 22B Major changes or factors affecting performance

12

FRD 22B Subsequent events 77 FRD 22B Application and operation of Freedom of

Information Act 1982 111

FRD 22B Compliance with building and maintenance provisions of Building Act 1993

121

FRD 22B Statement on National Competition Policy 122 FRD 22B Application and operation of the

Whistleblowers Protection Act 2001 112–120

FRD 22B Details of consultancies over $100 000 110 FRD 22B Details of consultancies under $100 000 110 FRD 22B Statement of availability of other information 131 FRD 24C Reporting of office-based environmental

impacts 101–107

FRD 25 Victorian Industry Participation Policy disclosures

123

FRD 29 Workforce data disclosures 89–97 SD 4.5.5 Risk management compliance attestation 9 SD 4.2(g) General information requirements 1–11 SD 4.2(j) Sign-off requirements Inside front cover


Financial statements Direction Requirement Page reference

Financial statements required under Part 7 of the FMA SD4.2(a) Statement of changes in equity 28 SD4.2(b) Operating statement 26 SD4.2(b) Balance sheet 27 SD4.2(b) Cash flow statement 29 Other requirements under Standing Direction 4.2 SD4.2(c) Compliance with Australian accounting

standards and other authoritative pronouncements

30

SD4.2(c) Compliance with Ministerial Directions 30 SD4.2(d) Rounding of amounts 39 SD4.2(c) Accountable officer’s declaration 80 SD4.2(f) Compliance with Model Financial Report 80 Other disclosures as required by FRDs in notes to the financial statements FRD 9A Departmental disclosure of administered

assets and liabilities 74–75

FRD 11 Disclosure of ex-gratia payments n/a FRD 13 Disclosure of parliamentary appropriations 44–47 FRD 21A Responsible person and executive officer

disclosures 65–66

FRD 102 Inventories 27 FRD 103D Non-current physical assets 49–51 FRD 104 Foreign currency n/a FRD 106 Impairment of assets 33 FRD 109 Intangible assets 36 FRD 107 Investment properties n/a FRD 110 Cash flow statements 29, 69 FRD 112A Defined benefit superannuation obligations 33, 38, 75 FRD 113 Investments in subsidiaries, jointly controlled

entities and associates n/a

FRD 114A Financial Instruments – General government entities and public non-financial corporations

33

FRD 119 Contributions by owners 39

Legislation Page reference

Freedom of Information Act 1982 111 Building Act 1983 121 Whistleblowers Protection Act 2001 112–120 Victorian Industry Participation Policy Act 2003 123 Financial Management Act 1994 30, 80 Gambling Regulation Act 2003 109


Appendix 14 Legislation administered by DTF portfolios Treasurer

Accident Compensation Act 1985 –

• Division 7 of Part IV

(The Act is otherwise administered by the Assistant Treasurer and the Attorney-General)

Alcoa (Portland Aluminium Smelter) Act 1980

Appropriation Acts (passed annually)

Bank Integration Act 1992

Borrowing and Investment Powers Act 1987

Business Franchise (Petroleum Products) Act 1979

Commonwealth Places (Mirror Taxes Administration) Act 1999

Competition Policy Reform (Victoria) Act 1995

Congestion Levy Act 2005

Co-operative Housing Societies Act 1958

Duties Act 2000

Educational Institutions (Guarantees) Act 1976

Electricity Industry (Residual Provisions) Act 1993

Financial Agreement Act 1994

Financial Management Act 1994 – except:

• Sections 1-3 and 7 (these provisions are jointly administered with the Minister for Finance)

• Sections 5, 6, 8, 13-16, 18-23(1), 27A-27C, 42-54, 55-59 and 62-63

(these provisions are administered by the Minister for Finance)

• Sections 54A-54P

(these provisions are administered by the Assistant Treasurer)

Financial Sector Reform (Victoria) Act 1999

First Home Owner Grant Act 2000

Gambling Regulation Act 2003 –

• Section 3.4.33

• Section 4.3.12

• Division 1 of Part 3 of Chapter 10

(The Act is otherwise administered by the Minister for Gaming and the Minister for Racing)

Gas and Fuel Corporation (Heatane Gas) Act 1993

Gas Industry (Residual Provisions) Act 1994

Grain Handling and Storage Act 1995 – except:

• Part 3 (this Part is administered by the Minister for Agriculture and Food Security)

Land Tax Act 2005

Loy Yang B Act 1992

Melbourne Cricket Club Act 1974

Monetary Units Act 2004

Mutual Recognition (Victoria) Act 1998

National Taxation Reform (Consequential Provisions) Act 2000

New Tax System Price Exploitation Code (Victoria) Act 1999

Occupational Licensing National Law Act 2010

Payroll Tax Act 2007

Planning and Environment Act 1987 –

• Part 9B, except in so far as it relates to the land along the Ninety Mile Beach that is shown either as ‘Areas within the Settlement Boundaries’ or ‘Areas outside the Settlement Boundaries’ on the plans forming part of the document entitled ‘Ninety Mile Beach Development and Subdivision Controls: The Honeysuckles to Paradise Beach’ and dated August 2007 (revised June 2009) that was incorporated into the Wellington Planning Scheme by Amendment C48 to the Wellington Planning Scheme, and revised by Amendment C61 to the Wellington Planning Scheme, whether or not that document remains incorporated into the Wellington Planning Scheme (except in so far as it relates to that land, this Part is jointly and severally administered with the Minister for Planning)

• Part 9B in so far as it relates to the land along the Ninety Mile Beach that is shown either as ‘Areas within the Settlement Boundaries’ or ‘Areas outside the Settlement Boundaries’ on the plans forming part of the document entitled ‘Ninety Mile Beach Development and Subdivision Controls: The Honeysuckles to Paradise Beach’ and dated August 2007 (revised June 2009) that was incorporated into the Wellington Planning Scheme by Amendment C48 to the Wellington Planning Scheme, and revised by Amendment C61 to the Wellington Planning Scheme, whether or not that document remains incorporated into the Wellington Planning Scheme (in so far as it relates that land, this Part is jointly and severally administered with the Attorney-General)

(The Act is otherwise administered by the Attorney-General, the Minister responsible for the Aviation Industry and the Minister for Planning)

Port Management Act 1995 –

• Sections 160, 171 and 173

(The Act is otherwise administered by the Minister for Finance and the Minister for Ports)


Public Authorities (Dividends) Act 1983

Rural Finance Act 1988

Snowy Hydro Corporatisation Act 1997

State Bank (Succession of Commonwealth Bank) Act 1990

State Electricity Commission Act 1958 – except:

• Section 107 (this provision is administered by the Minister for Energy and Resources)

State Owned Enterprises Act 1992 – except:

• Division 2 of Part 2 in so far as it relates to the Victorian Plantations Corporation (these provisions are administered by the Minister for Agriculture and Food Security)

• Division 2 of Part 2 in so far as it relates to the Water Training Centre

(These provisions are administered by the Minister for Water)

• Part 3 and Division 2 of Part 2 in so far as they relate to the Victorian Interpreting and Translating Service

(These provisions are administered by the Minister for Multicultural Affairs and Citizenship)

State Trustees (State Owned Company) Act 1994 – except:

• Part 4 (this Part is administered by the Minister for Community Services)

Supply Acts (passed annually)

Taxation Administration Act 1997

Taxation (Interest on Overpayments) Act 1986

Trans-Tasman Mutual Recognition (Victoria) Act 1998

Treasury Corporation of Victoria Act 1992

Trustee Companies Act 1984 –

• The Act is jointly administered with the Attorney-General

Victorian Funds Management Corporation Act 1994

Workers Compensation Act 1958 –

• Division 8 of Part 1

(The Act is otherwise administered by the Assistant Treasurer)

Young Farmers’ Finance Council Act 1979

Assistant Treasurer

Accident Compensation Act 1985 – except:

• Division 1 of Part III (this Division is administered by the Attorney-General)

• Division 7 of Part IV (this Division is administered by the Treasurer)

Accident Compensation (Occupational Health and Safety) Act 1996

Accident Compensation (WorkCover Insurance) Act 1993

Asbestos Diseases Compensation Act 2008

Casino Control Act 1991 –

• Section 128K(2)

(The Act is otherwise administered by the Minister for Gaming and the Minister for Planning)

Coal Mines (Pensions) Act 1958

Crown Land (Reserves) Act 1978 –

• In so far as it relates to the land shown as:

− Crown Allotments 2A, 3 and 4 of Section 5, City of Melbourne, Parish of Melbourne North (Parish Plan No. 5514C) and known as the Treasury Reserve

− Crown Allotments 4A and 4B on Certified Plan 111284 lodged with the Central Plan Office and to be known as the Old Treasury Building Reserve

(The Act is otherwise administered by the Minister for Corrections, the Minister for Environment and Climate Change, the Minister for Health, the Minister for Major Projects, the Minister for Ports and the Minister for Sport and Recreation)

Dangerous Goods Act 1985

Equipment (Public Safety) Act 1994

Emergency Services Superannuation Act 1986

Financial Management Act 1994 –

• Sections 54A-54P

(The Act is otherwise administered by the Minister for Finance and the Treasurer)

Government Superannuation Act 1999

Housing Act 1983 –

• Part 8

• Schedules 7 and 8

• Sections 143(1), 143(2)(d), 143(2)(e), 143(2)(f), 143(2)(i) and 143(3) (these provisions are jointly and severally administered with the Minister for Housing)

(The Act is otherwise administered by the Minister for Housing)


Land Act 1958 –

• In so far as it relates to the exercise of powers relating to leases and licences under Subdivisions 1 and 2 of Division 9 of Part I in respect of:

− land in the Melbourne Casino area within the meaning of Part 9A of the Casino Control Act 1991

− Crown land coloured brown on Plans numbered LEGL./93-211, LEGL./93-212, LEGL./93-213, LEGL./93-214 and LEGL./93-215 lodged in the Central Plan Office

− land shown as Crown Allotment 32E, section 7 on Certified Plan No. 108871 lodged in the Central Plan Office

− land shown as Crown Allotment 4A, section 1A on Certified Plan No. 75050 lodged in the Central Plan Office

− land shown as Crown Allotment 4D, section 1A on Certified Plan No. 112128 lodged in the Central Plan Office

− The area of 3643 square metres of land in the city of Port Melbourne shown on Plan LEGL./96-216 lodged in the Central Plan Office

− land shown as Crown Allotment 4, section 1A on Certified Plan No. 109991 lodged in the Central Plan Office

• Division 6 of Part I, Subdivision 3 of Division 9 of Part I, section 209, and the remainder of the Act where it relates to the sale and alienation of Crown Lands as set out in Administrative Arrangements Order No. 58

• Sections 201, 201A and 399 (these provisions are jointly administered with the Minister for Environment and Climate Change)

(The Act is otherwise administered by the Attorney-General, the Minister for Corrections, the Minister for Environment and Climate Change, the Minister for Health, the Minister for Ports and the Minister for Roads)

Occupational Health and Safety Act 2004

Parliamentary Contributory Superannuation Act 1962

Parliamentary Salaries and Superannuation Act 1968 – Part 3

(The Act is otherwise administered by the Premier)

Police Regulation Act 1958 –

• Part III

(The Act is otherwise administered by the Minister for Police and Emergency Services)

State Employees Retirement Benefits Act 1979

State Superannuation Act 1988

Superannuation (Portability) Act 1989

The Constitution Act Amendment Act 1958

Transport Accident Act 1986

Transport Superannuation Act 1988

Workers Compensation Act 1958 – except:

• Division 8 of Part 1 (this Division is administered by the Treasurer)


Minister for Finance

Audit Act 1994 –

• Parts 3, 4 and 5

(The Act is otherwise administered by the Premier)

Essential Services Commission Act 2001

Financial Management Act 1994 –

• Sections 5, 6, 8, 13-16, 18-23(1), 27A-27C, 42-54, 55-59 and 62-63

• Sections 1-3 and 7 (these provisions are jointly administered with the Treasurer)

(The Act is otherwise administered by the Assistant Treasurer and the Treasurer)

House Contracts Guarantee Act 1987

Petroleum Products Subsidy Act 1965

Port Management Act 1995 –

• Sections 63AA-63J

(The Act is otherwise administered by the Minister for Ports and the Treasurer)

Public Sector Employment (Award Entitlements) Act 2006

Unclaimed Money Act 2008

Victorian Managed Insurance Authority Act 1996


Appendix 15 Information available on request Financial Reporting Direction 22C provides for the information listed below to be retained by the Accountable Officer and to be made available on request subject to the provisions of the Freedom of Information Act 1982.

However it is not necessary for an applicant to lodge a Freedom of Information request to obtain the information.

Information available on request:

• a statement that declarations of pecuniary interests have been duly completed by all relevant officers;

• details of shares held by a senior officer as nominee or held beneficially in a statutory authority or subsidiary;

• details of publications produced by the entity about the entity and the places where they can be obtained;

• details of changes in prices, fees, charges, rates and levies charged by the entity;

• details of any major external reviews carried out on the entity;

• details of any major research and development activities undertaken by the entity;

• details of overseas visits undertaken including a summary of the objectives and outcomes of each visit;

• details of major promotional, public relations and marketing activities undertaken by the entity to develop community awareness of the entity and the services it provides;

• details of assessments and measures undertaken to improve the OHS of employees;

• a general statement on industrial relations within the entity and details of any time lost through industrial accidents and disputes;

• a list of major committees sponsored by the entity, the purpose of each committee and the extent to which the purposes have been achieved; and

• details of all consultancies and contractors including consultants/contractors engaged, services provided and expenditure committed for each engagement.

To ensure the Department is meeting its accountability and compliance requirements, some of the additional information has been included in this annual report where relevant.

This additional information is available on the Department’s website www.dtf.vic.gov.au under Publications, Annual Reports.

Alternatively, you may request the information in hardcopy by telephoning 03 9651 5513 or by writing to:

Director Planning and Executive Services Corporate Strategy and Services Department of Treasury and Finance GPO Box 4379 Melbourne, Victoria, 3001

Or by email to:

[email protected] for the attention of the Director, Planning and Executive Services, Corporate Strategy and Services.



The Secretary Department of Treasury and Finance 1 Treasury Place Melbourne Victoria 3002 Australia

Telephone: +61 3 9651 5111 Facsimile: +61 3 9651 5298 Website: www.dtf.vic.gov.au

Authorised by the Victorian Government 1 Treasury Place, Melbourne, 3002.

Print managed by Finsbury Green.

© Copyright State of Victoria 2012

This book is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968.

ISSN 1325-1775

Published October 2012. Printed on recycled paper.

If you would like to receive this publication in an accessible format, such as large print or audio, please telephone (03) 9651 0909 or email [email protected].

A full listing of contact details for senior executives can be found on the DTF website (www.dtf.vic.gov.au)







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Documents