2002-03 Financial Statements

Department of Defence
Notes To And Forming Part Of The Financial Statements
for the year ended 30 June 2003

Note 29:	Reporting of Outcomes
	As per Note 1, Defence had only one outcome: The defence of Australia and its national interests.
	The Department of Defence uses several different methods of attributing shared items. These methods are based upon the type of 'general business activity' undertaken by the respective Group. This distribution approach incorporates the use of staff numbers, task lists (specifically Defence Science & Technology Organisation), operational support and asset utilisation. The basis of the attribution in the following tables is consistent with the basis used for the 2002-03 Budget.

Note 29A: Net cost of outcome delivery

	Outcome 1		Total Outcomes
	2002-03 $'000	2001-02 $'000	2002-03 $'000	2001-02 $'000
Expenses
Administered expenses	2,594,657	2,289,635	2,594,657	2,289,635
Departmental expenses	16,009,781	14,580,610	16,009,781	14,580,610
Total Expenses	18,604,438	16,870,245	18,604,438	16,870,245
Costs recovered from provision of goods and services to the non-government sector
Departmental1	15,112	-	15,112	-
Total costs recovered	15,112	-	15,112	-
Other external revenues
Administered
Interest	1,114	8,604	1,114	8,604
Dividends from Defence Housing Authority	373,525	88,636	373,525	88,636
Other sources of non taxation revenues	668,052	753,009	668,052	753,009
Total Administered	1,042,691	850,249	1,042,691	850,249
Departmental
Goods and Services Revenue from Related Entities	4,198	5,177	4,198	5,177
Goods and Services Revenue from External Entities1	211,235	227,701	211,235	227,701
Interest	19,332	15,246	19,332	15,246
Revenue from sale of assets	685,537	-	685,537	-
Gain on sale of assets	-	17,930	-	17,930
Net foreign exchange gain	17,101	3,529	17,101	3,529
Assets now recognised	866,295	694,050	866,295	694,050
Other revenues	118,390	186,462	118,390	186,462
Total Departmental	1,922,088	1,145,095	1,922,088	1,145,095
Total other external revenues	2,964,779	1,995,344	2,694,779	1,995,344
Net costs (contribution) of outcomes 2	15,624,547	14,874,901	15,624,547	14,874,901

Notes

1. In accordance with the Finance Minister's Orders 2002-03 Defence has disclosed above those cost recoveries as required by Finance Circular No 2002/02 Cost Recovery by Government Agencies. The specific elements that constitute the cost recoveries disclosed are; the sale of Navy Hydrographic maps and charts, and the provision of specific training provided to foreign forces. The cost recoveries identified are in accordance with the 'Commonwealth Cost Recovery Guidelines for Information Agencies' and therefore exclude intra and inter government services. The cost recoveries shown are Departmental in nature and are included as part of the Sale of Goods and Service total in the Statement of Financial Performance.
2. The amounts shown for financial year 's 2002 are as published in that year's annual report (note 47). It is impractical to represent or reclassify comparative amounts due to a major restructure of the chart of accounts.

	2002-03	2001-02
	$'000	$'000
Intra-entity transactions with related parties:
Auditor-General	1,950	1,850
National Archives of Australia	163	207
Total related party transactions	2,113	2,057

Note 29B: Major classes of departmental revenues and expenses by Outputs

	Output 1		Output 2		Output 3		Output 4		Output 5		Output 6		Total
	2002-03	2001-02	2002-03	2001-02	2002-03	2001-02	2002-03	2001-02	2002-03	2001-02	2002-03	2001-02	2002-03	2001-02
	$'000		$'000		$'000		$'000		$'000		$'000		$'000
Departmental expenses
Employees	378,307	410,129	1,365,621	1,332,045	2,755,824	2,452,465	1,447,159	1,312,030	80,563	87,067	167,098	151,194	6,194,572	5,744,930
Suppliers	520,142	369,828	1,405,202	1,282,910	1,692,004	1,450,178	1,535,003	1,371,017	96,536	101,548	100,987	107,429	5,349,874	4,682,910
Grants	295	188	443	493	886	1,041	635	672	119	20,135	166	58	2,544	22,587
Depreciation & amortisation	66,251	23,564	888,766	914,160	533,631	571,046	1,330,872	948,584	3,719	5,167	40,177	63,676	2,863,416	2,526,197
Value of assets sold 2	18,275	-	138,335	-	273,043	-	203,024	-	2,023	-	5,849	-	640,549	-
Write down of assets	36,702	21,273	212,738	574,127	257,601	392,087	67,945	577,175	2,873	1,785	8,616	7,188	586,475	1,573,635
Other	21,118	227	75,578	261	154,698	454	80,150	238	4,645	537	9,407	53	345,596	1770
Borrowing costs expense	1,260	1,329	4,529	4,868	15,534	16,553	4,923	5,279	214	227	295	325	26,755	28,581
Total departmental expenses	1,042,350	826,538	4,091,212	4,108,864	5,683,221	4,883,824	4,669,711	4,214,995	190,692	216,465	332,595	329,923	16,009,781	14,580,610
Funded by:
Revenues from Government 1	699,969	1,150,485	5,740,792	5,678,971	5,568,606	5,068,165	5,664,544	5,358,014	212,837	192,235	345,690	397,664	18,232,438	17,845,534
Sale of goods and services	49,785	57,727	32,271	33,071	94,716	89,865	44,117	40,780	6,291	4,381	3,365	2,054	230,545	227,878
Interest	709	686	5,283	4,423	7,604	5,252	5,164	4,576	176	77	396	232	19,332	15,246
Revenue from sale of assets 2	22,096	-	165,334	-	310,775	-	179,240	-	2,267	-	5,825	-	685,537	-
Gains on sale of assets 2	-	733	-	3,878	-	8,657	-	4,371	-	97	-	194	-	17,930
Net foreign exchange gains	773	101	5,362	1,510	2,128	291	8,841	1,616	(49)	-	46	11	17,101	3,529
Assets now recognised	45,141	48,603	284,977	149,144	264,138	246,758	265,927	241,506	1,933	507	4,179	7,532	866,295	694,050
Other	54,733	28,581	29,814	32,977	22,492	68,841	8,300	46,736	1,251	3,618	1,800	5,709	118,390	186,462
Total departmental revenues	873,206	1,286,916	6,263,833	5,903,975	6,270,459	5,487,829	6,176,133	5,697,599	224,706	200,915	361,301	413,396	20,169,638	18,900,629

Note

1. Total operating revenues by output include the allocation of the Capital Use Charge. However, in accordance with the disclosure arrangements for the financial statements, the operating expenses for outputs does not include the Capital Use Charge as it is not an operating expense in the end of year financial reports. The Capital Use Charge for financial year 2001-02 is $4,633,854 and for financial year 2002-03 is $5,056,094.
2. In accordance with the Finance Minister's Orders 2002-03, Defence is required to separately disclose the 'Value of assets sold' and 'Revenue from sale of assets'. In previous years, these items were reported as a net result, either as gain/loss. The amounts shown for 2001-02 are as published in that year's Annual Report (note 47). It is impractical to represent or reclassify comparative amendments due to a major restructure of the chart of accounts.

Table D: Major Classes of Administered Revenues and Expenses by Outcome

	Outcome 1
	2002-03 $'000	2001-02 $'000
Administered Revenues
Interest	1,114	8,604
Dividends from Defence Housing Authority	373,525	88,636
Other sources of non taxation revenues	668,052	753,009
Total administered revenues	1,042,691	850,249
Administered Expenses
Employees	2,498,659	2,270,955
Subsidies	7,394	6,411
Net foreign exchange losses	2,045	12,269
Write-down of assets	84,239	-
Other	2,320	-
Total administered expenses	2,594,657	2,289,635