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Annual Report 06–07
Overview: The Portfolio Department of Human Services
The Portfolio Department of Human Services (DHS) comprises the Core Department, the Child Support Agency (CSA) and CRS Australia. Unless otherwise indicated, references in this document to the Department refer to these three groups.
Outcome and output structure
The planned outcome of DHS is:
Effective and efficient delivery of social and health-related services, including financial assistance, to the Australian community.
Each of the three parts that constitute DHS produces one output, as defined in the Portfolio Budget Statements and Portfolio Additional Estimates Statements, to deliver this outcome. These are set out in Figure 2 below.
Figure 2 summarises the structure and purpose of DHS at 30 June 2007.
Corporate governance
This section describes corporate governance matters that are common to the Core Department, CSA and CRS Australia. Owing to the particular structure of DHS, the separate corporate governance arrangements of each group making up DHS are detailed in the output sections of this report.
The executive
Executive responsibilities
The Secretary is directly responsible to the Minister for Human Services for the leadership, sound management and performance of DHS. She is responsible for delivering strong organisational performance by determining priorities and resource allocations across DHS, and for shaping the Portfolio Department’s future.
The General Manager of CSA is responsible for the leadership, sound management and performance of CSA within the delegations established by the Secretary. This position also holds the statutory office of the Child Support Registrar, which has legal responsibility for the administration of child support legislation.
The General Manager of CRS Australia is responsible for the leadership, sound management and performance of CRS Australia within the delegations established by the Secretary.
Executive remuneration
Salary ranges for executive employees are provided in Appendix 1.
Information on executive staff members who received, or were due to receive, total remuneration of $130,000 or more is set out in Note 13 to the financial statements in this report.
Portfolio Department governance framework
Agency Heads Meeting
A regular meeting is held bi-monthly or more frequently to discuss and resolve matters relating to all agencies in the Human Services Portfolio. The Agency Heads Meeting is attended by:
- Secretary Portfolio Department (as Chair);
- Deputy Secretaries Core Department;
- General Manager CSA;
- General Manager CRS Australia;
- Chief Executive Officer Medicare Australia;
- Chief Executive Officer Centrelink
- Managing Director HSA Group; and
- Managing Director Australian Hearing.
The Executive Officer to the Secretary provides secretariat services to the meeting.
Audit arrangements
Medicare Australia, Centrelink, HSA Group and Australian Hearing have separate audit arrangements.
DHS’s Audit Committee is responsible for:
- reviewing, monitoring and recommending improvements in the corporate governance framework of DHS, including internal controls, risk management, compliance and financial reporting; and
- overseeing internal and external audit processes within DHS.
An external provider delivers internal audit services to DHS.
In 2006–07, the Audit Committee oversaw the integration of the corporate governance frameworks of DHS into a wider departmental governance framework consistent with the Australian National Audit Office better practice guide Public Sector Audit Committees.
The membership structure of the Audit Committee in 2006–07 is shown in Table 4 in Output 1 Core Department. Membership of the committee is determined by the Secretary in consultation with the Executive Management Committee and is for a fixed term, as determined by the Secretary.
Jeff Popple, Acting Deputy Secretary of the Core Department, chaired the committee (following the departure of Geoff Leeper in January 2007) in 2006–07. The two independent members, Jenny Morison and Len Early, have specialist skills in financial reporting, risk management and corporate governance.
As a result of changes to committee membership agreed to in May 2007, the Audit Committee for 2007–08 will be made up of the Chair and two independent members only.
Financial overview
This section provides a summary of financial performance for 2006–07 of the full Portfolio Department, including the Core Department, CSA and CRS Australia. Results are shown in the audited financial statements and this summary should be read in conjunction with those statements.
DHS’s total resources are shown in some detail in Table 1. The administered and departmental expenses incurred in delivering the department’s outputs are also detailed in Table 1, as is the budget allocation for 2007–08.
| (1) Budget 2006–07a |
(2) Actual expenses 2006–07 |
Variation (2) – (1) |
Budget 2007–08b |
|
|---|---|---|---|---|
| Administered expenses | ||||
| Child Support | 997,257 | 1,110,030 | 112,773 | 1,040,446 |
| Welfare to Work | 119,716 | 103,539 | –16,177 | 141,130 |
| Total administered expenses | 1,116,973 | 1,213,569 | 96,596 | 1,181,576 |
| Price of departmental outputs | ||||
| Output 1: Core Department | 79,157 | 73,847 | –5,310 | 142,083 |
| Output 2: Child Support Agency | 369,729 | 370,141 | 412 | 466,971 |
| Output 3: CRS Australiac | – | – | – | – |
| Subtotal departmental outputs | 448,886 | 443,988 | –4,898 | 609,054 |
| Revenue from government (appropriation) for departmental outputs | 448,886 | 448,886 | – | 609,054 |
| Revenue from other sources | 233,717 | 199,419 | –34,298 | 220,178 |
| Total price of outputs | 682,603 | 648,305 | –34,298 | 829,232 |
| Total for Outcome 1 (price of outputs and administered expenses) | 1,799,576 | 1,861,874 | 62,298 | 2,010,808 |
| 2006–07 | 2007–08 | |||
| Average staffing level | 5,126 | 6,509 | ||
a Full-year budget, including additional estimates.
b Budget prior to additional estimates.
c CRS Australia is a business operation and as such did not receive direct appropriations in the 2006–07 Budget.
Departmental financial performance
DHS’s statement of financial performance reports an operating surplus of $18.6 million, which is 2.9 per cent of the revenue available to the Department. The result was less than the operating result of $28.1 million forecast for the 2006–07 year in the Portfolio Budget Statements 2007–08.
Statement of financial performance
Revenue
DHS was appropriated $404.7 million in the 2006–07 Budget. In February 2007, under the 2006–07 Portfolio Additional Estimates Statements, DHS was provided additional funding of $44.2 million, bringing the total appropriation for 2006–07 to $448.9 million. Of this, $79.2 million was for the Core Department and $369.7 million was for CSA.
In addition, DHS recognised further revenue of $199.4 million, primarily from the provision of vocational rehabilitation services by CRS Australia (see Figure 3). Total revenue received by DHS in 2006–07 was, therefore, $648.3 million.
Expenses
DHS’s expenses totalled $630.2 million: $73.8 million for the Core Department, $370.1 million for CSA and $186.3 million for CRS Australia (see Figure 4).
DHS incurred employee expenses of $363.9 million, supplier expenses of $245.6 million, depreciation and other expenses of $18.9 million, and income tax equivalent expenses for CRS Australia of $1.8 million (see Figure 5).
Statement of financial position
Equity
DHS’s total equity is $141.4 million, representing an increase of $79.0 million during 2006–07. This reflects the retention of the 2006–07 surplus of $18.6 million as well as the impact of injections of equity into CSA and the Core Department during the year.
Assets
DHS’s assets total $294.7 million and can be categorised as:
- cash;
- fixed assets (infrastructure, plant and equipment, land and buildings);
- intangibles (non-physical assets such as software);
- receivables; and
- other non-financial assets (prepayments).
DHS has $189.3 million recorded as a receivable in the Official Public Account. Of this amount, $55.1 million is held for the Core Department, $69.3 million for CSA and $64.9 million for CRS Australia.
Liabilities
DHS has total liabilities of $153.3 million. This consists of employee provisions of $86.7 million, building-related provisions of $17.9 million, trade creditor provisions of $40.8 million and other payables of $7.8 million.
Administered items
CSA’s administered activities include the provision of assessment, registration, collection and disbursement services that facilitate the transfer of child support payments between separated parents for the support of their children.
The Core Department receives administered appropriations to fund expenses in respect of Job Capacity Assessments, administered dividend revenue from Australian Hearing and the HSA Group, and competitive neutrality revenue from Australian Hearing.
All administered receipts are transferred directly to the Official Public Account.