2011-2012

Portfolio Additional Estimates Statements - Glossary

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Glossary

Accrual accounting
Accumulated depreciation
Additional Estimates
Additional Estimates Bills or Acts
Administered items
Appropriation
Annotated appropriation
Annual appropriation
Available appropriation
Special account
Special appropriation
ASL (Average Staffing Levels)
Assets
Budget measure
CAC Act 1997
Capital expenditure
Cross-portfolio Budget measure
Capital Budget Statement
Departmental items
Departmental Capital Budget
Depreciation
Efficiency dividend
Expense
Fair Value
Forward estimates
Historical cost
Liabilities
Operating result
Outcomes
Performance indicators
Portfolio Budget Statements
Price Parameter Adjustment
Programs
Quality
Quantity
Revenue
Special appropriation
Standing appropriationTop of page

Accrual accounting

System of accounting where items are brought to account and included in the financial statements as they are earned or incurred, rather than as they are received or paid

Accumulated depreciation

The aggregate depreciation recorded for a particular depreciating asset.

Additional Estimates

The Additional Estimates process updates estimates from the previous Budget update.

Additional Estimates Bills or Acts

Where amounts appropriated in the annual appropriation acts -at Budget time are insufficient, Parliament may appropriate more funds to portfolios through the Additional Estimates Acts. These are Appropriation Bills 3 and 4, and a separate Bill for Parliamentary Departments (Appropriations (Parliamentary Departments) Bill (No.2)). These Bills are introduced into the Parliament sometime after the Budget Bills.

Administered items

Expenses, revenues, assets or liabilities managed by agencies on behalf of the Australian Government. Agencies do not control administered items. Administered items include grants, subsidies and benefits (for example, funding for the Pharmaceutical Benefits Scheme).

Appropriation

The amount of public moneys authorised by Parliament for expenditure from Consolidated Revenue Fund (CRF). Appropriations authorise expenditure by the Australian Government for the particular purpose specified by the appropriation.Top of page

Annotated appropriation

A form of appropriation which allows a department access to certain money it receives in payment of services. The nature and extent of the amount to be appropriated are specified in Regulation 15 and 16 under s.31 of the Financial Management Act (FMA) 1997.

Annual appropriation

Two appropriation Bills are introduced into Parliament in May and comprise the Budget. Further Bills are introduced later in the financial year as part of the additional estimates process. Parliamentary departments have their own appropriations.

Available appropriation

Available appropriation is used to allow a comparison of the current year’s appropriation with what was made available for use in the previous year. Available appropriation is the amount available to be drawn down, and is equal to: Budget appropriation + Additional Estimates appropriation + Advance to the Finance Minister (AFM) — Savings — Rephasings — Other Reductions +/- Section 32.

Special account

A special account is an appropriation mechanism that notionally sets aside an amount within the CRF to be expended for specific purposes. The amount of appropriation that may be drawn from the CRF by means of a special accou nt is limited to the balance of each special account. Special accounts are not bank accounts. However, amounts forming part of the balance of a special account may be held in the Official Public Account, an agency official bank account, partly in both, or by an outsider authorised in a manner consistent with section 12 of the FMA Act.

Special appropriation

Special appropriations are provisions within an act, other than the annual appropriation acts, that authorise expenditure for particular purposes. Special appropriations may state a maximum amount that is appropriated for the particular purpose or may specify the legislative criteria that will determine the amount to be paid.

ASL (Average Staffing Levels)

The average number of employees receiving salary/wages (or compensation in lieu of salary/wages) over a financial year, with adjustments for casual and part-time employees to show the full-time equivalent.Top of page

Assets

Future economic benefits controlled by an entity as a result of past transactions or past events.

Budget measure

A decision by the Cabinet or Ministers that has been finalised in the Budget and has resulted in a change in expenditure in the current year and or the forward years. See also cross-portfolio budget measure.

CAC Act 1997

Commonwealth Authorities and Companies Act 1997
This Act regulates the financial affairs of Commonwealth authorities and companies. In particular, it has detailed rules about reporting and accountability. This Act also deals with other matters relating to Commonwealth authorities and companies, such as banking and investment and the conduct of officers.

Capital expenditure

Expenditure by an agency on non financial assets, for example purchasing a building.

Cross-portfolio Budget measure

This is a Budget measure which affects outcomes administered in a number of portfolios.

Capital Budget Statement

A statement of the agencies estimated capital funding, through Appropriation Act 1 Departmental Capital Budget funding or Appropriation Act 2 equity injection funding and the agencies estimated expenditures on non financial assets.

Departmental items

Assets, liabilities, revenues and expenses which are controlled by the agency in providing its outputs. Departmental items would generally include computers, plant and equipment assets used by agencies in providing goods and services and most employee expenses, supplier costs and other administrative expenses incurred.

Departmental Capital Budget

Departmental Capital Budget funding appropriated to FMA Act entities through their Approproiation Act 1 Departmental appropriation, for the ongoing replacement of Departmental assets which cost less than $10m. Top of page

Depreciation

An expense recognised systematically for the purpose of allocating the depreciable amount of a depreciable asset over its useful life.

Efficiency dividend

An annual deduction of a percentage of running costs from an agency's budget, which acts as both an incentive to efficiency and a quantification of some of the efficiency gains made by an agency in the previous year.

Expense

Total value of all of the resources consumed in producing goods and services.

Fair Value

Fair values are prices in arm’s lengths transactions between willing buyers and sellers in an active market.

FMA Act 1997

Financial Management and Accountability Act 1997
The principal legislation governing the proper use and management of Commonwealth public money and public property. FMA Regulations and FMA Orders are made pursuant to the Act.

Fair Value

The amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

Forward estimates

A system of rolling three year financial estimates. After the Budget is passed, the first year of the forward estimates becomes the base for next year's Budget bid, and another outyear is added to the forward estimates.

Historical cost

The original cost of acquisition of an asset, including any costs associated with acquisition. Under AASB 116, Property, Plant and Equipment, assets are required to be reported initially at the cost of acquisition (historical cost). The Australian Government’s financial reporting requirements issued under the Finance Minister's Orders require the revaluation of non current assets with sufficient regularity to ensure that the carrying amount of assets with does not differ materially from fair value as at reporting date.Top of page

Liabilities

Future sacrifices of economic benefits that an entity is presently obliged to make to other entities as a result of past transactions or other past events.

Operating result

Equals income less expenses.

Outcomes

Outcomes are the results of events, actions or circumstances including in particular, the impact of the Australian Government on the Australian community. Outcomes may be linked with both the outputs of agencies using the departmental expenses under their control, and with the administered expenses which agencies manage on behalf of the Australian Government. Planned outcomes represent the changes desired by Government. The achievement of actual outcomes is assessed and reported in the Annual Report.

Performance indicators

A concise list of indicators, which are used to measure agency effectiveness in achieving the Government’s outcomes. Indicators must be measurable, but may be qualitative or quantitative. Indicators in the Portfolio Budget Statement (PBS) are reported against the Annual Report for the same year. Outcomes are generally measured by performance indicators relating to effectiveness and equity, but may include efficiency and access indicators.

Portfolio Budget Statements

Statements prepared by portfolios to explain the Budget appropriations in terms of outcomes and programs.

Price Parameter Adjustment

Expenses are indexed by a price parameter for anticipated increases in costs over the estimates period. Changes in indexation are annotated to each outcome as ‘Price parameter adjustment’ or ‘Application of indexation parameters’.

Programs

Commonwealth programs deliver benefits, services or transfer payments to individuals, industry/business or the community as a whole and are the primary vehicles for government agencies to achieve the intended results of their outcome statements. Commencing from the 2009-10 Budget agencies were required to report to Parliament by program. Top of page

Quality

Relates to the characteristics by which customers or stakeholders judge a product or service. Assessment of quality involves the use of information gathered from a range of sources including customers and stakeholders.

Quantity

A measure of how many, or how much, of a product or service is produced. Quantities specified in the Portfolio Budget Statements are usually estimates based on the best available evidence. Agencies report on actual quantities in their annual reports.

Revenue

Total value of resources earned or received to cover the production of goods and services.

Special appropriation

See under ‘Appropriation’ above.

Standing appropriation

See under ‘Appropriation’ above.

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