Note 45. Budgetary Reporting – Explanations of Major Variances Between Actual Amounts and Original Budget Amounts

The following are brief explanations of major line item variances between budget estimates and actual outcomes.  Variances are considered to be major variances if both of the following criteria are met:

  1. The line item is a significant line item:  the line item actual amount accounts for more than 10% of the relevant associated category (Income, Expenses and Equity totals) or sub-element (e.g. Current Liabilities and Receipts from Operating Activities totals) of the financial statements; and
  2. The variances (original budget to actual) are greater than plus (+) or minus (-) 10% of the budget for the financial statement line item.

Operating Statement Line Items

Actual
2014-15
$’000

Original
Budget1
2014-15
$’000

Variance
$’000

Variance
%

Variance Explanation

Grants and Purchased Services

78,343

92,810

(14,467)

(15.59)

Lower than budgeted Grants and Purchased Services  is mainly due to work being performed within the Directorate instead of being paid to external organisations.

1 Original Budget refers to the amounts presented to the Legislative Assembly in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Statements).  These amounts have not been adjusted to reflect supplementary appropriation or appropriation instruments.

Balance Sheet Line Items

Actual
2014-15
$’000

Original
Budget1
2014-15
$’000

Variance
$’000

Variance
%

Variance Explanation

Cash and Cash Equivalents

105,069

42,075

62,994

149.7

Higher than anticipated cash and cash equivalent is largely the result of:

- higher opening balance of $42 million due to early settlement of cross border

  receivables in 2013-14;

- higher net cash flow from operating activities of $40 million;

- higher capital injection than capital works expenses due to timing delay $7m;

  partially offset by the return of surplus cash of $27 million to the ACT Government.

Receivables - Current

27,232

73,236

(46,004)

(62.8)

Lower receivable balance is mainly due to early settlement of cross border receivables.

Property, Plant and Equipment

886,129

1,015,328

(129,199)

(12.7)

This is due to the deferral of capital works projects from 2014-15 to 2015-16 and

2016-17. The major deferrals from 2014-15 into future years are:

- $10.2 million moved out of this financial year for the Calvary Car Park due to delays in

  excavation works;

- $9.6 million moved out of this financial year from postponement of Hospital Road

  works due to road closures associated with Building 15 demountable installation;

- $8.0 million moved out of this financial year for the E-Health ICT project due to

  lengthy delays in contract negotiations which delayed Electronic Medication

  Management & Clinical Records Information System Replacement Projects; and

- $7.4 million moved out of this financial year from the clinical services

  redevelopment – phase 3 project due to delays with procurement of generators.

1 Original Budget refers to the amounts presented to the Legislative Assembly in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Statements).  These amounts have not been adjusted to reflect supplementary appropriation or appropriation instruments.

Balance Sheet Line Items

Actual
2014-15
$’000

Original
Budget1
2014-15
$’000

Variance
$’000

Variance
%

Variance Explanation

Payables - Current

54,269

88,172

(33,903)

(38.5)

Current payables were lower largely due to early settlement of cross border health costs and capital works invoices.

Finance Leases - Current

-

2,515

(2,515)

(100.0)

Finance leases are nil due to a change in leasing arrangements at a whole-of-government level. Motor vehicles are now classified as operating leases.

Employee Benefits - Current

229,506

187,149

42,357

22.6

Employee benefits are higher mainly due to accrued pay rises for Medical Officers, impacts of change in present value, discounting factors , impact of higher than budgeted pay rise rates

Finance Leases - Non Current

-

4,362

(4,362)

(100.0)

Finance leases are nil due to a change in leasing arrangements at a whole-of-government level. Motor vehicles are now classified as operating leases.

Accumulated Funds

758,870

861,215

(102,345)

(11.9)

Accumulated funds are lower mainly due to lower than budgeted capital injection of $58 million and $27 million of surplus cash returned to ACT Government.

Asset Revaluation Surplus

129,428

144,007

(14,579)

(10.1)

The accumulated revaluation surplus is lower mainly due to lower than anticipated asset values when the buildings were revalued in 2013-14.

Statement of Changes in Equity

 

 

 

 

These line items are covered in other financial statements

1 Original Budget refers to the amounts presented to the Legislative Assembly in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Statements).  These amounts have not been adjusted to reflect supplementary appropriation or appropriation instruments.

Cash Flow Statement Line Items

Actual
2014-15
$'000

Original
Budget1
2014-15
$’000

Variance
$’000

Variance
%

Variance Explanation

Goods and Services Tax Input Tax Credits from the Australian Taxation Office

39,346

49,100

(9,754)

(19.9)

This is mainly due to timing of the GST refund from the Australian Tax Office

Goods and Services Tax Paid to Suppliers

43,826

54,400

(10,574)

(19.4)

The reduction is mainly due to lower capital works invoices paid.

Payments for Capital Works

66,894

132,251

(65,357)

(49.4)

This is due to delays in some capital projects and timing of payment of capital works invoices.

Capital Injections

74,041

132,251

(58,210)

(44.0)

This is due to the deferral of capital works projects from 2014-15 to 2015-16 and

2016-17. The major deferrals from 2014-15 into future years are:

- $10.2 million moved out of this financial year for the Calvary Car Park due to delays in

  excavation works;

- $9.6 million moved out of this financial year from postponement of Hospital Road

  works due to road closures associated with Building 15 demountable installation;

- $8.0 million moved out of this financial year for the E-Health ICT project due to

  lengthy delays in contract negotiations which Electronic Medication Management &

  Clinical Record Information System Replacement Projects; and

- $7.4 million moved out of this financial year from the clinical services

  redevelopment – phase 3 project due to delays with procurement of generators.

Cash Flow Statement Line Items

Actual
2014-15
$’000

Original
Budget1
2014-15
$’000

Variance
$’000

Variance
%

Variance Explanation

Cash and Cash Equivalents at the Beginning of the Reporting Period

107,256

64,816

42,440

65.5

Higher than anticipated cash and cash equivalent is largely the result of:

- higher opening balance of $42million due to early settlement of cross border

   receivables in 2013-14;

- higher than budgeted net cashflow from operating activities of $40million; and

- timing of capital expenses $10m; partially offset by the return of surplus cash of

  $27million to the ACT Government.

1 Original Budget refers to the amounts presented to the Legislative Assembly in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Statements).  These amounts have not been adjusted to reflect supplementary appropriation or appropriation instruments.