This note provides information about how the Authority’s funding is applied in delivering services and outputs, and the accounting policies that are relevant for an understanding of the items reported in the financial statements.
- 3.1 Summary of expenses incurred in the delivery of our services
- 3.2 Operating and administration expenses
- 3.3 Employee benefits
- 3.3.1 Employee benefits – comprehensive operating statement
- 3.3.2 Employee benefits – balance sheet
3.1 Summary of expenses incurred in the delivery of our services
|Operating and administration expenses||3.2||133|
Expenses are recognised net of goods and services tax (GST), except where the amount of GST is not recoverable from the ATO. In these circumstances, the GST is recognised as part of an item of expense.
3.2 Operating and administration expenses
|Other operating and administration expenses||53|
Recruitment costs includes costs incurred to recruit the Governing Board of the Authority and the Chief Executive Officer.
Other operating and administration expenses include costs relating to the occupancy agreement with the Department of Jobs, Precincts and Regions for the Authority’s office premises in Bendigo, and the external audit fee with the Victorian Auditor-General’s Office that are expensed as incurred.
3.3 Employee benefits
3.3.1 Employee benefits – comprehensive operating statement
Employee benefits in the Comprehensive Operating Statement are a major component of operational expenses and include all costs related to employment, including wages and salaries, superannuation and leave entitlements. The majority of employee expenses in the Comprehensive Operating Statement are salaries and wages.
|Salaries and wages||109|
|Long service leave||29|
The amount recognised in the Comprehensive Operating Statement in respect of superannuation represents contributions made or due by the Authority to the relevant superannuation plans in respect to the services of the Authority’s staff. Superannuation contributions are made to the plans based on the relevant rules of each plan and any relevant compulsory superannuation requirements that the Authority is required to comply with.
3.3.2 Employee benefits – balance sheet
As part of operations, the Authority provides for benefits accruing to employees but payable in future periods in respect of annual leave, long service leave and related on-costs for services rendered to the reporting date.
|Employee benefits – annual leave:|
|Unconditional and expected to be wholly settled within 12 months||17|
|Unconditional and expected to be paid after 12 months||2|
|Employee benefits – long service leave:|
|Unconditional and expected to be wholly settled after 12 months||27|
|On-costs relating to employee benefits:|
|Unconditional and expected to be wholly settled within 12 months||3|
|Unconditional and expected to be wholly settled after 12 months||3|
|Total current provisions for employee benefits||52|
|Total provision for employee benefits||52|
Employee numbers at the end of financial year
Wages and salaries, annual leave and accrued days off
Liabilities for wages, salaries, annual leave and accrued days off to be wholly settled within 12 months of the reporting date are measured at their nominal values. Employee benefits which are not expected to be wholly settled within 12 months are measured at the present value. Regardless of the expected timing of settlements, provisions made in respect of employee benefits are classified as a current liability, unless there is an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date, in which case it would be classified as a non‑current liability.
Long service leave
Current liability – unconditional Long Service Leave (LSL) (representing 7 or more years of continuous service) is disclosed as a current liability even where the Authority does not expect to wholly settle the liability within 12 months because it does not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.
The components of this current liability for LSL are measured at:
- present value – component that the Authority does not expect to wholly settle within 12 months
- nominal value – component that the Authority expects to wholly settle within 12 months
Non-current liability – conditional LSL (representing less than 7 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the required years of service. Conditional LSL is required to be measured at present value.
In calculating present value, consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date based on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Employee benefit on-costs
Employee benefit on-costs, including superannuation, payroll tax and workers compensation are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.
Reviewed 28 October 2019