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Risk and Compliance

Financial Analysis Information Sheet

PDF Printable version: Financial Analysis Information Sheet (PDF 22 KB)

The Department of Health and Ageing (the Department) is also now including additional financial analysis at a small number of organisations each year as part of their risk assessment. Organisations will be randomly selected using stratified sampling, for an additional financial analysis to occur in conjunction with the scheduled risk assessment.

It is important to note these will not be a formal audit but rather an examination of records relating to specific areas of an organisation's financial management of Commonwealth funds in line with the provisions of the funding agreement between organisations and the Commonwealth of Australia as represented by the Department.

As part of this analysis, Cogent will undertake a physical check of all invoices and bank statements relating to the operations of the organisation over a specified period (previous financial year). These checks will include all transactions associated with the following areas of financial management:

• Asset management - focusing on arrangements in place for:
  

  - Treatment of depreciation expenses;
  - Purchase and disposal of any assets, particularly the treatment of proceeds from the sale of assets;
  - Any lease arrangements, particularly those associated with internal leasing structures;
  

• Travel and Allowances – in terms of cost, personnel involved and relevance to the funded project(s);
• Cash Management – including level of credit card usage; cash cheques and incidence of cash advances or cash withdrawals;
• Management of grant related income and expenditure – specifically:
  

  - Arrangements for and rate of attribution of overheads – particularly where this involves a specific or uniform charge against each grant, to ensure that any funds not spent on overheads are re-attributed to the grant at the end of the financial year
  - Treatment of grant related or generated income, including interest earned on grant funds;
  - Related party transactions, such as payments to any subsidiaries of the organisation or the CEO and Directors of the organisation;
  - Internal transfers of funds; and
  - Whether any surplus of funds for each grant is recorded as a liability, or transferred to equity, in the organisations' accounts.
  

If you are unable to access the attachment or would like more information please email: QRaC@health.gov.au, or call 02 6289 5291.