Financial Overview

DMO's Cash Position

The DMO receives the majority of its cash from Defence in payments for goods and services provided by the DMO. The DMO also receives cash from the appropriation for its outcome and from own-source revenue receipts and cash reserves. The allocations are subject to Government approval as part of the annual budget process. Once funds are paid by Defence, received from other sources or appropriated by the Government, they remain in the DMO's special account even if not fully used in the budget year. They are held as an appropriation receivable in the Official Public Account and are available to meet liabilities as they fall due, including employee liabilities.

Table 6.4 Use of Cash by the DMO in 2005–06

2005–06 Actual Result $'000
Sources of Cash
Section 32 (transfer of appropriation from Defence)	50,270
Direct Appropriation	44,257
Funding Provided by Defence	7,543,211
Net GST received	498,771
Other Cash Receipts	192,980
Sub Total Cash Available	8,329,489
Use of Cash
Employees	343,499
Suppliers	7,443,726
GST paid to Suppliers	506,150
Other Operating Activities	4,144
Purchase of Plant and Equipment	6,492
Purchase of Software and Intangibles	1,897
Purchase of Inventory	–
Borrowing Costs	–
Sub Total: Cash Used	8,305,908
2005–06 Closing Cash at Bank	23,581

Use of Cash in 2005–06

At 30 June 2006, the DMO had a cash at bank balance of $23.6m. During the course of the financial year, the DMO used $8,306m. Table 6.4 provides details of cash sources and cash usage and shows the actual movement of cash in 2005–06.

DMO's Special Accounts

As part of the funding model adopted for the DMO, two Special Accounts were established:

• Defence Materiel Special Account; and
• Other Trust Monies Special Account.

The Defence Materiel Special Account is the main operating account from which most business activities are conducted. The Other Trust Moneys Special Account holds any other public money on trust.

Defence Materiel Organisation Special Account

The main purposes for which the funds in the Special Account can be used are:

• supporting the ADF's capability through development, acquisition, sustainment, disposal, and provision of goods and/or services;
• developing, acquiring, sustaining and providing goods and/or services for foreign governments and other bodies;
• managing and marketing the Agency whose chief executive has been allocated responsibility for this Special Account; and
• developing and implementing policies for, and providing advice to, the Government on defence, defence industry and other matters related to the provision of goods and/or services.

Movements to flows in the DMO's special accounts are in Table 6.5.

Table 6.5 Actual Special Account Flows and Balances ⁽¹⁾

		Opening Balance 2005–06	Credits 2005–06	Debits 2005–06	Adjustments 2005–06	Closing Balance 2005–06
	Outcome
		$'000	$'000	$'000	$'000	$'000
DMO Special Account(1)	1	–	8,496,693	8,305,908	–	190,785
DMO Other Trust MoniesSpecial Account(2)	1	–	375	–	–	375
Total special accounts		–	8,497,068	8,305,908	–	191,160

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