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Annual Report2017-18

Enquiries about the content of this annual report and the use of this document are welcome to:

Director, Corporate and FinanceInfrastructure and Project Financing Agency

PO Box 6500 Barton ACT 2600 Email [email protected] Website www.ipfa.gov.au

The electronic version of this report is available at https://www.ipfa.gov.au/reports/reports

ISSN: 2209-8429 (Print)

ISSN: 2209-8437 (Online)

Copyright information

© Infrastructure and Project Financing Agency 2018

With the exception of the Commonwealth Coat of Arms and where otherwise noted, all material presented in this document is provided under a Creative Commons Attribution 3.0 Australia licence.

The details of the relevant licence conditions are available on the Creative Commons website (creativecommons.org/licences/by/3.0/au) as is the full legal code for the licence (creativecommons.org/licences/by/3.0/au/legalcode).

This document must be attributed as the Infrastructure and Project Financing Agency Annual Report 2017-18

Visual design by Boheem Layout by Boheem Printing by Direct Impressions

Contents

SECTION 1PAGE 3

Agency Overview

SECTION 2PAGE 11

Report on Performance

SECTION 3PAGE 27

Financial Statements

SECTION 4PAGE 47

References

Chief Executive Officer Review 04

Role of IPFA 06

Governance and Organisational Structure 08

Annual Performance Statement 12

Organisational Performance 19

Financial Performance 24

Independent Auditor's Report 28

Statement by the Chief Executive Officer and the Chief Financial Officer 30

Statement of Comprehensive Income 31

Statement of Financial Position 32

Statement of Changes in Equity 33

Cash Flow Statement 34

Notes 35

List of Requirements 48

Glossary 55

Index 56

ANNUAL REPORT 01

Agency Overview

SECTION 1

01.

AG

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This report outlines the Infrastructure and Project Financing Agency’s (IPFA) operations in our inaugural year as an independent executive agency providing commercial and financial advisory services to the Australian Government and Commonwealth agencies.

I was delighted to be appointed as Chief Executive Officer on 11 December 2017 and thank my predecessor John O’Neil for his leadership as interim CEO.

Through the establishment of IPFA on 1 July 2017, the Australian Government recognised that access to in-house commercial and financial expertise strengthens the Commonwealth as a strategic investor and partner in national infrastructure projects.

Over the past year, our team of project advisory experts have supported the Australian Government’s decision making and implementation processes for nationally significant

infrastructure investments across the transport, energy, water and social infrastructure sectors in Australia’s cities and regions.

We are delivering our vision of enabling commercial excellence in Australian Government infrastructure investment for the benefit of all Australians.

In 2017-18 we:

• Supported the Australian Rail Track Corporation with the recruitment of specialist Public Private Partnership capacity and conducted market soundings for the Department of Infrastructure, Regional Development and Cities in respect of intermodal terminals in Queensland and Victoria for the Inland Rail Project.

• Assisted the Department of Infrastructure, Regional Development and Cities to deliver the landmark Western Sydney City Deal with the NSW Government and the eight local councils of Western Sydney.

I am pleased to present the 2017-18 Annual Report for the Infrastructure and Project Financing Agency.

Chief Executive Officer Review

LEILANI FREW CHIEF EXECUTIVE OFFICER

04 INFRASTRUCTURE AND PROJECT FINANCING AGENCY

• AdvisedtheDepartmentofInfrastructure,RegionalDevelopmentandCitiesinrespectoftheirsubordinatedloantoSydneyMotorwayCorporationwhoisdeliveringtheWestConnex Motorway.

• ProvidedadvisoryservicestotheDepartmentofEnvironmentandEnergyinrelationtothePort Augusta Concentrated Solar Thermal Project.

• SupportedtheDepartmentofHomeAffairsinthedevelopmentoftheirNational Disaster Mitigation Framework for Critical Infrastructure.

Inadditiontothecommercialandfinancialadviceweprovide,wewereestablishedtostrengthenthecapabilityoftheCommonwealth,recognisingthatamoresophisticatedandexpert

publicservicecanbettersupporttheAustralianGovernmentinitsinfrastructureinvestmentdecisions,reducedependencyonexternaladvisorsandimproveretentionofcriticalcommercialknowledge.

In2017-18,wedeliveredaprogramof10knowledgesharingactivities.Withenhancedfinancialandcommercialcapability,theCommonwealthisnowbetterequippedtopartnerwiththestatesandterritories,andindustry,onprojectstodeliverbettervalueandbetteroutcomesforallAustralians.

TheseachievementsareunderpinnedbyourfocusonopencollaborationwithotherAustralianGovernmentstakeholdersandagencies,buildingstrong,trusting

partnershipswithourstateandterritorycounterparts,andbroadeningtheCommonwealth’srelationshipsacrossindustryandtheprivatesector.

IampleasedthatthroughourengagementacrossthepublicandprivatesectorswearebeingrecognisedasapositiveagentofchangeinAustralia’sinfrastructuresector.

Wehavemadesignificantprogressinourfirstyear,withthefullsupportofourMinisters,ourcolleaguesacrosstheAustralianPublicServiceandofcourse,IPFA’scapableanddedicatedstaff.Thankyouallforyourcontributiontooursuccess.

IamproudtobeleadingIPFAandlookforwardtoprovidinganupdateonourstrongprogressnextyear.

MsLeilaniFrewChiefExecutiveOfficer

I am pleased that through our engagement across the public and private sectors we are being recognised as a positive agent of change in Australia’s infrastructure sector.

01.

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ANNUAL REPORT 05

01.

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About IPFA

Our Values

Excellence Integrity Collaboration

Client-focussed Dynamic

Our Role

Established in July 2017, IPFA is an independent executive agency under the Public Service Act 1999. For the purposes of the Public Governance Performance and Accountability Act 2013, IPFA is a non-corporate Commonwealth entity.

IPFA is an executive agency within the portfolio of the Department of Infrastructure, Regional Development and Cities. Our Chief Executive Officer reports to the Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development.

IPFA provides commercial and financial advisory services to Government and all portfolio agencies across the Commonwealth. Our work supports the Commonwealth infrastructure activities in the transport, energy, water, cities and social sectors.

Enabling commercial excellence in Australian Government Infrastructure investment for the benefit of all Australians.

The provision of infrastructure in Australia faces challenges from vast distances, a population concentrated in sprawling cities and finite financial resources within the economy. Australian citizens expect quality infrastructure outcomes that meet their needs and deliver on promised benefits.

To address these challenges, the Australian Government is undertaking significant investments in economic and social infrastructure as part of a broader economic growth strategy to improve productivity, create jobs and lift economic growth.

Our Purpose

As the Australian Government’s independent infrastructure and project finance executive agency, our purpose is to:

Provide independent

commercial and financial advice to

support the delivery of Australian Government

infrastructure projects

Build the Australian

Government’s capability to deliver infrastructure

priorities

Strengthen

confidence in the Australian

Government’s investment through better-informed decisions and investment

management

IPFA’s primary purpose is to support the delivery of Commonwealth infrastructure investments through the provision of independent commercial and financial advice.

01.

07ANNUAL REPORT

AG

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LEILANI FREW

Chief Executive Officer

BILL BRUMMITT

Managing Director, Strategy, Communications

and People

CHRIS ALLEN

Managing Director, Transport

ROB RITCHIE

Managing Director, Energy and Water

CATHERINE BLACK

Managing Director, Cities and Social

(Commenced 3 September 2018)

GILES LAMB

Director, Corporate and Finance

Figure 1 Leadership team as at 30 June 2018

IPFA Governance FrameworkIPFA has a framework of policies and guidelines supported by Accountable Authority Instructions, operational guidelines, HR policies, processes and behaviours to ensure it delivers on its purpose and vision, conforms to its obligations and meets expectations of accountability and transparency.

IPFA Leadership TeamThe central element of IPFA’s corporate governance framework is its leadership team, which provides leadership in pursuing and achieving IPFA’s purposes and vision as outlined in its corporate plan.

IPFA’s leadership team is responsible for setting and monitoring IPFA’s strategic direction, overseeing the business of IPFA, identifying risks, and managing IPFA’s budget and people.

IPFA Corporate PlanIPFA’s 2017-20 Corporate Plan performance is measured and reported in the annual performance statement contained in this annual report.

IPFA’s Corporate Plan is the key component of IPFA’s strategic planning framework. It discusses IPFA and IPFA’s broader operating environment. It also discusses IPFA’s performance framework including our success measures, key performance indicators and targets.

Risk Management FrameworkIPFA’s risk management and oversight is contained in IPFA’s Risk Management Policy and Framework developed in accordance with the Commonwealth Risk Management Policy.

These provide IPFA the basis to identify, prevent or mitigate the impact of uncertainty on the achievement of IPFA’s purposes as stated in its corporate plan.

Within the framework, IPFA has conducted strategic and operation risk assessments and developed strategies to mitigate these risks.

IPFA takes an integrated approach to risk management with consideration and management of risk forming a key component of our operational work.

The treatment of IPFA’s identified risks takes into account IPFA’s defined risk appetite in its risk policy statement.

IPFA’s corporate governance framework includes IPFA’s leadership team, corporate planning, risk and fraud management as well as audit and assurance.

Governance & Organisational Structure

01.

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ANNUAL REPORT 09

IPFA Audit CommitteeIPFA’s Audit Committee was established in 2017-18 under section 45 of the Public Governance Performance and Accountability Act 2013 and Public Governance and Accountability Rule 17 - Audit Committees for Commonwealth Entities.

IPFA’s Audit Committee reviews and gives advice and assurance about the appropriateness of IPFA’s systems and frameworks for

• Financial reporting• Performance reporting• Risk oversight

and management

• Internal control.

IPFA’s Audit Committee comprises an independent chair and two independent members from both within and outside of the Australian Public Service.

The Audit Committee is directly accountable to IPFA’s Chief Executive Officer.

IPFA’s Audit Committee met three times in 2017-18. Its long term work program provides for four meetings a year.

Internal AuditIPFA’s Internal Audit function was established in 2017-18.

IPFA has engaged contracted audit providers to undertake this function.

A two year Strategic Audit Plan has been developed, linked to the planning cycle of IPFA’s strategic objectives, risks and forward planning.


Report on Performance

SECTION 2

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As the accountable authority of the Infrastructure and Project Financing Agency, I present the 2017-18 annual performance statement of the Infrastructure and Project Financing Agency, as required under paragraphs 39(1)(a) and 39(1)(b) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act); and section 16F of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule). In my opinion, these annual performance statements are based on properly maintained records, accurately reflect the performance of the Infrastructure and Project Financing Agency for 2017-18, and comply with subsection 39(2) of the PGPA Act.

Leilani Frew Chief Executive Officer

Annual Performance Statement

IPFA is committed to supporting the Australian Government in achieving the maximum benefit for taxpayer funds applied to nationally significant infrastructure projects.

As the Australian Government’s independent infrastructure and project finance executive agency, our purpose is to:

• Provide independent commercial and financial advice to support the delivery of Australian Government infrastructure projects

• Build the Australian Government’s capability to deliver infrastructure priorities

• Strengthen confidence in the Australian Government’s investment through better-informed decisions and investment management.

We achieve our purpose through our vision and goals and by working collaboratively with Australian Government stakeholders and agencies, state and territory counterparts, and our industry partners.

Our vision is enabling commercial excellence in Australian Government infrastructure investment for the benefit of all Australians.

Our strategic goals are:

• Be sought after for our people and influential advice

• Commercial excellence in the Australian Government’s investment in and delivery of priority projects.

2017-2020 Corporate Plan Purpose

ANNUAL REPORT 13

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Being established on 1 July 2017 prior to the development of its Corporate Plan, IPFA initially worked towards a single program outcome, as described in the IPFA Portfolio Budget Statement from the 2017-18 Budget.

“To leverage additional private sector investment in infrastructure and secure better returns from the Commonwealth’s investment by assisting the Government to identify, assess, and broker financing opportunities for infrastructure and projects, including through engagement with Commonwealth entities, State and Territory governments and the private sector.”

In March 2018, IPFA released its 2017-18 Corporate Plan, which is available on our website. The Plan provides the Agency’s success measures and targets for the period to 2017-21.

In 2017-18, IPFA assisted the Government on a number of significant infrastructure projects, including Snowy Hydro 2.0, the Inland Rail Public Private Partnership, Inland Rail Intermodal Terminals, Western Sydney Rail and the Port Augusta Concentrated Solar Thermal Project. This involved working with a number of Government agencies, notably the Departments of the Prime Minister and Cabinet, Finance, Treasury, Infrastructure, Regional Development and Cities, and Environment and Energy.

Performance Results


2017-18 IPFA Portfolio Budget Statement Measures

Performance Criteria Target Result against Performance Criteria

Development of capability and procedures to perform the key functions of IPFA, particularly the provision of quality advice to the Government on the assessment and brokering of private financing opportunities for significant infrastructure projects

Recruitment of suitably skilled staff and contractors, including a Chief Executive Officer

The permanent Chief Executive Officer commenced on 11 December 2017.

IPFA’s recruitment activities over the year have resulted in an organisation of 14 FTE Australian Public Service employees and 5 contractors, with an appropriate mix of skills, including specialist commercial and financial expertise.

Development of capabilities and frameworks with which to perform the assessment, advice and brokering of private financing opportunities for significant infrastructure projects

In 2017-18, IPFA developed capability and frameworks to enable it to perform its role, including completion of its recruitment activities and publication of its Corporate Plan.

Establishment of required governance and organisational arrangements, including relevant policies and procedures

In 2017-18, IPFA established governance and organisation arrangements that comply with the requirements of the PGPA Act and its role to enable it to meet its strategic objectives.

Commencement of engagement with key stakeholders, including Commonwealth agencies, states and territories and the private sector

IPFA has been extremely active in its engagement with key stakeholders across the Commonwealth, relevant state and territory government agencies as well as with private sector and industry partners.

Development of capability and procedures to perform the key functions of IPFA, particularly the provision of quality advice to the Government on the assessment and brokering of private financing opportunities for significant infrastructure projects

Provision of high quality and timely advice to Government agencies, the Prime Minister and the Cabinet on preferred financing approaches and priority projects for engagement

IPFA has been an active adviser to Government, the Prime Minister and the Cabinet, throughout the year, providing commercial and financial advice on priority projects primarily in the transport and energy sectors.

Analysis, development and/or review of tailored financing (and alternative funding) options for specific infrastructure projects

IPFA has analysed, developed and/or reviewed financing (and alternative) funding options for key infrastructure projects, including the Inland Rail Project and the Western Sydney City Deal.

Provision of first stand- alone report on innovative financing opportunities for transformative economic infrastructure to the Cabinet

Initial report delivered in October 2017 with further updates to be provided via quarterly Cabinet memoranda.

IPFA Performance SummaryThe progress made by IPFA over the 2017-18 financial year lays a strong foundation for meeting its targets outlined in its Corporate Plan from 2018-19.

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2017-18 Corporate Plan Measures

Our partners seek our commercial and financial adviceThe value of IPFA and our advice will be evident when we are viewed as the trusted advisor and first point of call, rather than a mandated partner, and we are approached to be involved in decision-making processes for nationally-significant infrastructure projects from day one.

Source: IPFA Corporate Plan 2017-20

KPI Our advice is proactively sought by government and agencies

2017-18 Target 25% of our work is sought proactively through unsolicited approaches from agencies and/or Government

Result IPFA worked throughout the year to actively engage with Commonwealth agencies and highlight its service offerings to support their work on major infrastructure projects.

In 2017-18, over 90% of our commercial and advisory work has been a result of approaches from agencies and/or Government. This outcome is a testament to the client-focused and collaborative approach that IPFA has sought to apply in the provision of its services.

KPI Stakeholders are satisfied with our advice and involvement

2017-18 Target 75% of stakeholders are satisfied that we are improving outcomes and providing valued advice.

Result IPFA received solicited and unsolicited feedback from stakeholders on our advice and involvement on their projects and transactions. In addition, IPFA sought general feedback on its performance from stakeholders throughout the year.

Our stakeholder satisfaction rating for 2017-18 was 72%.

For our first year of operations, it is pleasing that IPFA’s work is having a positive impact. IPFA continues to work closely with its stakeholders to deliver an improved result in later years.

Our involvement improves outcomes for and our advice is valued by all stakeholdersA successful engagement on a project will be evident if it can be seen that our advice was adopted and/or it is acknowledged that we played a significant role in supporting decision-making on delivery of the project.



KPI Delivery of agreed activities and positive stakeholder/market regard for our contribution

2017-18 Target 100% of committed activities completed within timeframes

Result Our stakeholders have advised that timely delivery of advice is important to them.

Our performance against this target is based on the timeframes set as at the point our engagement. As a result, only 64% of IPFA’s committed activities in 2017-18 were completed within timeframes.

The result has highlighted that as IPFA’s work is set in an environment where the timeframes for delivery may change with shifting priorities, there is a need for the target to reflect any variations without compromising on our stakeholders expectations of timely delivery.

2017-18 Target 75% of feedback from external stakeholders regarding our contribution is positive

Result During the course of 2017-18, IPFA received external feedback on its operations and contribution to supporting the delivery of the government’s infrastructure agenda. This included through the media, discussion forums and from stakeholders external to the Commonwealth.

97% of feedback from external stakeholders was positive.

Our contribution increases confidence in the Australian Government’s infrastructure investment decisions and processesA key area of success will be where external stakeholders acknowledge the value of having a more sophisticated Australian Government investor in infrastructure and how we have contributed to a greater level of confidence in stakeholders in the government’s decisions and processes.


03.

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Over 2017-18, IPFA focussed on building and strengthening its capability and capacity to build our influence, in line with its purposes. This included:

• Utilising our resources effectively to ensure the delivery of high quality, independent and timely advice

• Promoting effective communication and engagement, to embed a shared vision of IPFA’s culture and values

• Developing and maintaining collaborative and trust-based stakeholder engagement and partnerships, through working across all levels of Government and also with project proponents to support the delivery of appropriate advice

• Developing and fostering a diverse, inclusive, high-performance and flexible working culture, to support the attraction, engagement, enabling and retention of talented staff

• As a new non-corporate Commonwealth entity, finalising establishment activities, to ensure the efficient operation of our governance and corporate structure.

Analysis of Performance Against Purpose

KPI Facilitation of quality knowledge sharing and development programs, events and forums

2017-18 Target 10 knowledge sharing activities

Result During 2017-18, IPFA hosted and/or delivered 10 knowledge-sharing activities for colleagues across the Australian public service.

2017-18 Target 75% satisfaction with quality of the activity.

Result IPFA did not seek or receive any specific feedback on its knowledge-sharing activities.

Our work strengthens the commercial and financial capability of the Australian GovernmentWe are partnering with agencies across government to raise the level of in-house commercial and financial expertise and capability of infrastructure arrangements. A more sophisticated and expert public service can better support the Australian Government in its infrastructure investment decisions, reduce dependency on external advisors and improve the retention of critical commercial knowledge.



Human Resource Management

Employment StatisticsAs at 30 June 2018, IPFA had a total of 9 APS employees, including part-time and non-ongoing employees (based on headcount). Of these employees, 6 were based in IPFA’s Canberra Office, and 3 located in IPFA’s Sydney office.

A detailed profile of IPFA’s staffing profile is provided below:

Type Status Location Gender

Total Ongoing Non-Ongoing Full Time Part Time Canberra Sydney Female Male Other

CEO 1 1 - 1 - - 1 1 - -SES B1 1 1 - 1 - 1 - - 1 -

EL2 3 3 - 2 1 2 1 1 2 -EL1 1 1 - 1 - 1 - - 1 -APS 3 2 1 3 - 2 1 2 1 -

Total 9 8 1 8 1 6 3 4 5 -

No IPFA employees as at 30 June 2018 have identified themselves as indigenous.All of these employees commenced with IPFA during 2017-18, consistent with IPFA establishing operations during the year. IPFA had an average staffing level (ASL) of 7.5 during the year.

Employment ArrangementsIPFA’s SES staff are employed under the terms of individual determinations made under section 24(1) of the Public Service Act 1999. The amount of remuneration received by SES officers in IPFA is determined on an individual basis by the Chief Executive Officer.

IPFA’s non-SES staff are employed under common law contracts under the National Employment Standards, Public Service Act 1999 and the APS Award 2015.

In addition to the APS staff above, IPFA has a number of labour hire contractors engaged for their technical or specialist skills and capabilities. * Note: IPFA did not engage any employees at the levels of APS

1-4 during 2017-18.

Classification Minimum ($) Maximum ($)

APS1* 45,000 49,000

APS2* 52,000 56,000

APS3* 58,000 63,000

APS4* 65,000 71,000

APS5 72,000 85,000

APS6 80,000 105,000

EL1 104,000 135,000

EL2 129,000 157,500

SES 234,000 234,000

Details of the salary ranges applying to IPFA staff in 2017-18 are provided below.

Organisational Performance

ANNUAL REPORT 19

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Non-salary benefitsIPFA provides its staff and contractors with a mobile phone and a tablet and/or laptop. These provide them with reasonable flexibility in how, when and where they perform their roles. This allows staff and contractors to balance their work, personal commitments and interests.

This flexibility is assisted by:

• Extensive use of mobile technology, including video conferencing, teleconferencing and Skype

• Access to flexible working arrangements such as part time hours and compressed hours

• Various forms of leave that can be accessed flexibly.

Where there is a demonstrated business need, staff may be provided with airline lounge memberships. In addition, staff may be reimbursed for costs such as professional membership fees, as well as health care costs such as influenza vaccinations.

IPFA did not pay performance bonuses to staff in 2017-18.

Workforce Planning, Recruitment, Retention and TurnoverIPFA recognises that its people are its most valuable resources. The IPFA team, formed in the space of only one year, collectively has significant expertise and experience in infrastructure policy and reform, advisory and governance, sponsorship, development,

procurement and delivery, corporate and project financing, and commercial and legal arrangements.

IPFA seeks to foster a diverse, inclusive, high performance and flexible working culture. This will support it in attracting, engaging, enabling and retaining talented staff.

IPFA uses a variety of strategies to achieve this, notably through flexible working arrangements, targeted recruitment processes, and training and skills development.

During 2017-18, IPFA had an employee turnover rate of 13 per cent.

Ethical StandardsIPFA’s commitment to high ethical and professional standards underpins the quality of its work. The independence of IPFA’s advice is a critical factor in IPFA’s support of the Australian Government and its agencies in their infrastructure investment analysis, and subsequent decision-making and delivery of nationally significant infrastructure projects.

IPFA staff and contractors are obliged to adhere to standards of integrity and behaviour governed by the APS legislative, regulatory and ethical framework, and reinforced in IPFA policies and procedures. Their accountability for performance, probity and ethical behaviour is aligned with the APS values and APS code of conduct as set out in the Public Service Act 1999.

Disability ReportingIPFA is committed to a diverse workforce and provides reasonable adjustment and support to employees with a disability. Both its Canberra and Sydney offices are accessible for employees and visitors.

Reporting on disability is available from the Australian Public Service Commission’s State of the Service Report and the APS statistical bulletin. Both of these reports are available from www.apsc.gov.au.

Supporting Employees with Carer ResponsibilitiesIPFA fully supports employees with carer responsibilities. Carer support, consistent with the requirements under sections 7 and 8 of the Carer Recognition Act 2010, includes:

• Family-friendly work arrangements, such as access to and leadership in availing of flexible working arrangements

• Specific leave provisions to support IPFA staff with caring responsibilities

• A non-discriminatory definition of immediate family that recognises family members by blood, marriage, traditional kinship, current or former partner or de facto partner, and those in a genuine domestic or household relationship.


Work Health and SafetyIPFA is committed to providing a safe workplace for all staff and contractors. As part of this commitment, IPFA has:

• Developed work health and safety policies and procedures

• Provided ergonomically appropriate workstation equipment, including sit-stand desks and dual monitors

• Promoted the use of taxi and other car-with-driver services where employees are required to work longer hours or attend late-evening functions

• Provided reimbursement to staff for the cost of voluntary influenza vaccinations

During 2017-18, there were no notifiable Work Health and Safety incidents that required reporting to Comcare. No directions or notices were given to IPFA by Comcare, and no work health and safety investigations were undertaken. IPFA has no active workers compensation claims as at 30 June 2018.

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Fraud Prevention and ControlSection 10 of the Public Governance, Performance and Accountability Rule 2014, requires that Australian Government entities include a section detailing their compliance with the rule. In accordance with PGPA Fraud rule, IPFA has:

• prepared fraud risk assessments and fraud control plans;

• has in place appropriate fraud prevention, detection, investigation and reporting mechanisms that meet its specific needs; and

• All reasonable measures have been taken all reasonable measures to appropriately deal with fraud relating to it.

No instances of fraud or potential fraud were detected during 2017-18.

IPFA’s Fraud and Corruption control policy and plan support IPFA’s risk management process.

Compliance with Financial LawIn 2017-18, IPFA had no significant issues under paragraph 19(1) (e) of the PGPA, relating to noncompliance with the finance law.

External ScrutinyDuring 2017-18, IPFA appeared at Senate Estimates on 3 occasions:

• on 23 October 2017, before the Finance and Public Administration Legislation Committee

• 26 February 2018 and 21 May 2018, before the Senate Rural and Regional Affairs and Transport Legislation Committee.

No decisions made by a court or administrative tribunal or by the Australian Information Commissioner had or may have a significant effect on the operations of IPFA in 2017-18. IPFA was not subject of any agency capability reviews or reports by a Parliamentary Committee or the Commonwealth Ombudsman during 2017-18.

Other than for the audit of its financial statements under section 43 of the PGPA Act, IPFA was not subject to any reports or reviews by the Australian National Audit Office.

Other Management Issues

Environmental Protection and Biodiversity ConservationSection 516A of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) requires that Australian Government entities include a section detailing their environmental performance and contribution to ecologically sustainable development in their Annual Report.

IPFA’s day-to-day operations continue to look for practical ways to reduce its impact on the environment in the areas of energy efficiency and waste reduction. These include:

• With two offices across both Sydney and Canberra, supporting the use of electronic solutions such as video-conferencing, telephone conferencing and Skype, as far as possible for meetings and conferences

• Minimising paper usage through adoption of digital signatures on routine forms and internal correspondence, as well as adopting electronic storage procedures for key records

• Providing recycling bins and using recycled products and materials where practical

• Reducing power consumption, by having lights automatically dim in workplaces following periods of inactivity.

Information Publication SchemeIPFA received no requests for information under the Freedom of Information Act 1982 during 2017-2018.

Information to be published in accordance with the Information Publication Scheme, including any future requests under the Freedom of Information Act 1982, will be made available at the IPFA website https://www.ipfa.gov.au/privacy-legals#freedom-of-information.

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23ANNUAL REPORT

Overview of financial performance and future financial viability

IPFA is operating within its appropriation and has sufficient cash reserves to fund its debts as and when they fall due. In monitoring financial performance, IPFA excludes the impact of depreciation and amortisation expenses, consistent with the net cash appropriation arrangements introduced by the Government in 2010-11.

In 2017-18, after adjusting for depreciation and amortisation expenses, IPFA recorded an operating surplus of $0.9m.

IPFA has received approval to carry forward this surplus into 2018-19, as reflected in its 2018-19 Portfolio Budget Statements. This reprofiling of expenses between years is to support IPFA as it implements its first two years’ work program.

IPFA budgets to remain financial sustainable into the forward estimates. The past 12 months, and the next 12 months, have been focussed on maximising IPFA’s operational effectiveness over its initial two years. This includes engagement of additional

contract staff in 2018-19, along with the filling of all vacancies, to enable IPFA to provide greater support to the Government on nationally-significant infrastructure projects.

During 2017-18, IPFA procured much of its back office operations from other entities (notably the Department of the Prime Minister and Cabinet) and the private sector. This enabled IPFA to avail of economies of scale in the delivery of these services, and also purchase technical services only as required.

Expense Categories

Employees49%

Other7%

Goods and Services 44%

Financial PerformanceThe work of IPFA is funded by Government appropriation. As a non-corporate Commonwealth entity, IPFA aims to operate to a break even position, rather than to make a surplus.

Total expenses ($,000)

Actual 2017-18

Budget 2018-19

Forward Year 1

2019-20

Forward Year 2

2020-21

Forward Year 3

2020-21

5000

6000

4000

3000

2000

1000

0


EXPENSE IMPACTSIPFA spends most of its budget on employees and contract services. IPFA is split between two roughly equivalent-sized offices, in Canberra and Sydney.

IPFA’s total expenses for 2017-18 was $3.3m

REVENUE IMPACTSIPFA received the vast majority of its income from appropriations from Government. An amount of $46,700 was received in the form of Resources Received Free of Charge, and relates to the provision of audit services from the Australian National Audit Office.

FINANCIAL POSITIONAs at 30 June 2018, IPFA had net equity of $1.0m, representing $1.8m of assets and $0.8m of liabilities. Most of IPFA’s assets and liabilities are of a financial nature, with the largest asset balances being cash and receivables (including appropriation receivables), and liabilities relating to employee provisions and supplier payables.

ENTITY RESOURCE STATEMENTThe entity resource statement provides additional information about the various funding sources that IPFA may draw upon during the year.

2017-18 2017-18 2017-18

Actual available

approprationPayments

madeRemaining

balance

$'000 $'000DepartmentalAnnual appropriations - ordinary annual services1

Prior year appropriations available - - -

Departmental Appropriation 4,212 3,327 885 Total - ordinary annual services 4,212 3,327 885 Annual appropriations - other services - non-operating2

Equity injection 105 105 - Total - other services 105 105 - Total departmental resourcing 4,317 3,432 885

Total net resourcing for IPFA 4,317 5,083

1. Appropriation Act (No.1) 2017-182. Appropriation Act (No.2) 2017-18

$,000 2017-18 Budget 1

(a)

2017-18 Actual

(b)

2017-18 Variation

(a) - (b)

Program 1.1: Infrastructure and Project Financing AgencyDepartmental expensesDepartmental appropriation 2 4,212 3,294 918Expenses not requiring appropriation in the Budget year 3

27 75 (48)

Total for program 1.1 4,239 3,369 870Total expenses for Outcome 1 4,239 3,369 870

2016-17 2017-18

Average staffing level (number) - 8

Table 2 Expenses by Outcome

Table 1 Resource Statement

1. Full year budget as published in the 2017-18 Portfolio Budget Statements

2. Departmental appropriation combines ordinary annual services (Appropriation Act No.s 1 and 3) and retained revenue receipts under section 74 of the Public Governance, Performance and Accountability Act 2013

3. Expenses not requiring appropriation in the Budget year includes depreciation and amortisation expenses, as well as an amount relating to Audit Services provided by the Australian National Audit Office

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Purchasing and ProcurementIPFA’s purchasing activities were undertaken in accordance with the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Commonwealth Procurement Rules.

The CEO’s Accountable Authority Instructions (AAIs) support these by providing further direction to IPFA staff and contractors when conducting procurement activities on behalf of IPFA.

No contracts in excess of $10,000 (including GST) were exempted by IPFA’s CEO from being published on AusTender on the basis that they would disclose exempt matters under the Freedom of Information Act 1982.

IPFA held no contract to the value of $100,000 or more that did not provide for the Auditor-General to have access to the contractor’s premises.

ConsultantsIPFA engages consultants where specialist or technical expertise is required. Consultants are typically engaged in Commonwealth agencies to:

• Investigate or diagnose a defined issue or problem

• Carry out independent reviews or evaluations

• Provide objective advice

• Provide recommendations to assist in decision making.

In 2017-18, IPFA entered into a new consultancy contract for the provision of internal audit services. The engagement of consultants is assessed to ensure value for money and compliance with the PGPA Act, the Commonwealth Procurement Rules and IPFA’s Accountable Authority Instructions.

During 2017-18, one new consultancy contract was entered into involving total actual expenditure of $26,488 (including GST). There were no ongoing consultancy contracts active during the period, due to IPFA only commencing operations in 2017-18.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.

Procurement Initiatives to support Small BusinessIPFA supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.

IPFA’s procurement practices support SMEs by the use of the Commonwealth Contracting Suite for low-risk procurements under $200,000. This reduces process costs for SMEs by creating consistency and simplifying liability, insurance and indemnity requirements.

Practices also support the use of electronic systems or other processes to facilitate on-time payment, including the use of credit cards.

Advertising and Market ResearchIPFA did not undertake media advertising campaigns and therefore did not make any payments to advertising agencies in 2017-18. IPFA did not make any payments to direct mail organisations or polling organisations.

Grant ProgramsIPFA does not administer any grant programs.


Financial StatementsFor the period ending 30 June 2018

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Infrastructure and Project Financing Agency

Statement of Comprehensive IncomeFOR THE PERIOD ENDED 30 JUNE 2018

Notes 2018 $

Original Budget $

NET COST OF SERVICES

EXPENSES

Employee benefits 1.1A 1,625,252 2,689,000

Suppliers 1.1B 1,715,560 1,523,000

Depreciation 2.2A 27,967 27,000

Total expenses 3,368,779 4,239,000

OWN-SOURCE INCOME

Own-source revenue

Rendering of services 1.2A 23,353 -

Resources received free of charge 1.2B 46,700 -

Total own-source revenue 70,853 -

Total own-source income 70,853 -

Net cost of services (3,298,726) (4,239,000)

Revenue from Government 1.2C 4,212,000 4,212,000

Total comprehensive income/(loss) 913,274 (27,000)

The above statement should be read in conjunction with the accompanying notes.

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Statement of Financial PositionAS AT 30 JUNE 2018

Notes 2018 $

Original Budget $

ASSETS

Financial assets

Cash and cash equivalents 2.1A 519,746 -

Trade and other receivables 2.1B 1,094,058 262,000

Total financial assets 1,613,804 262,000

Non-financial assets

Property, plant and equipment 2.2A 144,930 78,000 *

Prepayments 23,438 -

Total non-financial assets 168,368 78,000

Total assets 1,782,172 340,000

LIABILITIES

Payables

Suppliers 241,138 -

Other payables 2.3A 73,308 -

Total payables 314,446 -

Provisions

Employee provisions 4.1A 449,452 262,000

Total provisions 449,452 262,000

Total liabilities 763,898 262,000

Net assets 1,018,274 78,000

EQUITY

Contributed equity 105,000 105,000

Retained surplus 913,274 (27,000)

Total equity 1,018,274 78,000

* Includes $71,000 budgeted as investment property in the Portfolio Budget Statements.



Notes 2018 $

Original Budget $

CONTRIBUTED EQUITYOpening balanceBalance carried forward from previous period - -

Contributions by owners

Equity injection - Appropriations 105,000 105,000

Total transactions with owners 105,000 105,000

Closing balance as at 30 June 105,000 105,000

RETAINED EARNINGSOpening balanceBalance carried forward from previous period - -

Comprehensive income

Surplus / (deficit) for the period 913,274 (27,000)

Total comprehensive income 913,274 (27,000)

Closing balance as at 30 June 913,274 (27,000)

TOTAL EQUITY

Opening balance

Balance carried forward from previous period - -

Comprehensive income

Surplus for the period 913,274 (27,000)

Total comprehensive income 913,274 (27,000)

Transactions with owners

Contributions by owners

Equity injection - Appropriations 105,000 105,000

Total transactions with owners 105,000 105,000

Closing balance as at 30 June 1,018,274 78,000


Statement of Changes in EquityFOR THE PERIOD ENDED 30 JUNE 2018


Accounting PolicyEquity Injections Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

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Budget Variances CommentaryExpenses on the statement of comprehensive income are lower than budget primarily due to timing issues associated with the establishment of IPFA during 2017-18. Within expenses, employee benefits are somewhat lower than budget, slightly offset by supplier expenses being above budget. This is due to reallocation of expenses within the year only (compared to the original budget). The expenses variance is reflected in above budget net cash inflows disclosed on the cash flow statement and has led to above budget cash and cash equivalents on the statement of financial position. Trade and other receivables are above budget both due to this issue and the existance of receivables related to leave entitlements attached to staff transferred to the agency. The payables balance primarily represents amounts owed for property rental and other supplier costs provided under a memorandum of understanding with the Department of the Prime Minister and Cabinet. Employee provisions are greater than in the budget due to transferred staff leave entitlements.

As part of its 2018-19 budget, IPFA has reprofiled the underspend into 2018-19, allowing IPFA to complete its establishment activities and implement its first two-year work program.

Notes 2018 $

Original Budget $

OPERATING ACTIVITIESCash received

Appropriations 3,327,000 3,950,000

Net GST Received 58,426 -

Total cash received 3,385,426 3,950,000

Cash used

Employees 1,241,078 2,402,000

Suppliers 1,556,705 1,548,000

Total cash used 2,797,783 3,950,000

Net cash from operating activities 587,643 -

INVESTING ACTIVITIES

Cash usedPurchase of property, plant and equipment 172,897 105,000

Total cash used 172,897 105,000

Net cash used by investing activities (172,897) (105,000)

FINANCING ACTIVITIES

Cash receivedContributed Equity 105,000 105,000

Total cash received 105,000 105,000

Net cash from financing activities 105,000 105,000

Net increase in cash held 519,746 -

Cash and cash equivalents at the beginning of the reporting period - -

Cash and cash equivalents at the end of the reporting period 2.1A 519,746 -


Cash Flow StatementFOR THE PERIOD ENDED 30 JUNE 2018



The Basis of PreparationThe financial statements are general purpose financial statements and are required by section 42 of the PGPA Act.

The financial statements have been prepared in accordance with:

a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and

b) Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars.

New Australian Accounting Standards All new, revised and amending standards and interpretations that were issued by the Australian Accounting Standards Board (AASB) prior to the sign-off date and are applicable to the

current reporting period did not have a material effect on the entity’s financial statements.

Taxation IPFA is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Events After the Reporting Period There are no known events occuring after the reporting period that could impact the financial statements.

Overview

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Departmental Financial PerformanceThis section analyses the financial performance of Infrastructure and Project Financing Agency for the year ended 30 June 2018.

2018 $

Note 1.1A: Employee BenefitsWages and salaries 1,245,529Superannuation

Defined contribution plans 90,953Defined benefit plans 80,835

Leave and other entitlements 207,935Total employee benefits 1,625,252

Accounting PolicyAccounting policies for employee related expenses is contained in the People and Relationships Section.

Note 1.1B: Suppliers Goods and services supplied or renderedContractors 986,406 Travel 143,613Recruitment 104,491ICT services 80,155Other 179,453Total goods and services supplied or rendered 1,494,118

Goods supplied 35,559Services rendered 1,458,559 Total goods and services supplied or rendered 1,494,118

Other suppliersOperating lease rentals 205,353Workers compensation insurance 16,089

Total other suppliers 221,442

Total suppliers 1,715,560

Note 1.1 Expenses

Operating lease rentals relate to payments made to the Department of the Prime Minister and Cabinet (PM&C) under a sub-lease arrangement for accommodation in premises located in Canberra and Sydney that are leased by PM&C. The agreement does not have a specified term and is cancellable by either party. Under the terms of the sub-lease IPFA reimburses PM&C costs that are payable to the lessor.


2018 $

OWN-SOURCE REVENUENote 1.2A: Rendering of ServicesRendering of services 23,353

Total rendering of services 23,353

Accounting PolicyRevenue from rendering of services is recognised when IPFA acknowledges that the services have been performed.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

Note 1.2B: Other Revenue

Resources received free of charge (ANAO audit fee) 46,700

Total other revenue 46,700

Accounting PolicyResources Received Free of ChargeResources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Note 1.2C: Revenue from Government

Appropriations

Departmental appropriations 4,212,000

Total revenue from Government 4,212,000

Note 1.2 Own-Source Revenue and Gains

Accounting PolicyRevenue from Government Amounts appropriated for departmental appropriations for the year are recognised as Revenue from Government when the entity gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts. Funding received or receivable from non-corporate Commonwealth entities (appropriated to the non-corporate Commonwealth entity as a corporate Commonwealth entity payment item for payment to this entity) is recognised as Revenue from Government by the corporate Commonwealth entity unless the funding is in the nature of an equity injection or a loan.

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2018

$

Note 2.1A: Cash and Cash EquivalentsCash on hand or on deposit 519,746Total cash and cash equivalents 519,746

Note 2.1B: Trade and Other Receivables Appropriations receivablesAppropriations receivables 885,000Total appropriations receivables 885,000

Goods and services receivablesGoods and services 155,901GST receivable from the Australian Taxation Office 53,157Total goods and services receivables 209,058Total trade and other receivables (gross) 1,094,058

Less impairment allowance -

Total trade and other receivables (net) 1,094,058

Departmental Financial Position

This section analyses Infrastructure and Project Financing Agency's assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section.

Note 2.1 Financial Assets

Accounting Judgements and EstimatesFinancial assets are assessed for impairment at the end of each reporting period.

Accounting PolicyReceivablesCollectability of debts is reviewed as at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable. Credit terms for receivables were within 30 days.


Leasehold Improvements

$

Plant and equipment

$Total

$

As at 1 July 2017

Gross book value - - -

Accumulated depreciation, amortisation and impairment - - -

Total as at 1 July 2017 - - -

Additions

Purchase 129,117 43,780 172,897

Depreciation and amortisation (20,885) (7,082) (27,967)

Total as at 30 June 2018 108,232 36,698 144,930

Total as at 30 June 2018 represented by

Gross book value 129,117 43,780 172,897

Accumulated depreciation, amortisation and impairment (20,885) (7,082) (27,967)

Total as at 30 June 2018 represented by 108,232 36,698 144,930

Note 2.2 Non-Financial Assets

Note 2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment

No indicators of impairment were found for leasehold improvements, or property, plant and equipment. No leasehold improvements, or property, plant and equipment are expected to be sold or disposed of within the next 12 months. As at 30 June 2018 the agency has no contractual commitments for the purchase of additional property, plant and equipment.

Leasehold improvements relate to IPFA’s premises in Sydney NSW. These premises have been provided to IPFA by the Department of the Prime Minister and Cabinet (PM&C), which has obtained them under a separate sub-lease arrangement. The arrangement does not have a specified term and is cancellable by either party. Under the terms of the sub-lease IPFA reimburses PM&C costs that are payable to the lessor.

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Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition ThresholdPurchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

RevaluationsFollowing initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised

in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

DepreciationDepreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the entity using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2018Leasehold improvements Lease terms

Plant and equipment 2 to 6 years

ImpairmentAll assets were assessed for impairment at 30 June 2018. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from

the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its current replacement cost.

DerecognitionAn item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Fair valueAll property, plant and equipment are measured at fair value in the Statement of Financial Position. When estimating fair value, market prices (with adjustment) were used where available. Where market prices were not available, current replacement cost was used (ie level 3).

Level 3 measurements use inputs to estimate fair value where there are no observable market prices for the assets being valued.

The future economic benefits of IPFA’s plant and equipment and leasehold improvements are not primarily dependent on their ability to generate cash flows. IPFA has not disclosed quantitative information about the significant unobservable inputs for the level 3 measurements in these classes.

Accounting Policy


Note 2.3 Payables

2018 $

Note 2.3A: Other Payables

Salaries and wages 11,252

Superannuation 2,745

PAYG Payable 39,248

Other 20,063

Total other payables 73,308

Amounts are expected to be settled in no more than 30 days.

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2018 $

Departmental

Appropriation Act (No. 1) 2017-18 885,000

Total departmental 885,000

Annual Appropriation1

$

Adjustments to appropriation

$

Total appropriation

$

Appropriation applied in 2018

$Variance2

$

Departmental

Ordinary Annual Services 4,212,000 - 4,212,000 3,327,000 885,000

Capital Budget3 - - - - -

Other services

Equity Injections 105,000 - 105,000 105,000 -

Total departmental 4,317,000 - 4,317,000 3,432,000 885,000

Funding

This section identifies the Infrastructure and Project Financing Agency 's funding structure.

Note 3.1 Appropriations Note 3.1A: Annual Appropriations ('Recoverable GST exclusive')

Annual Appropriations for 2018

Note 3.1B: Unspent Annual Appropriations (‘Recoverable GST exclusive’)

1. No amount of the appropriation has been quarantined for administrative purposes.

2. Variance in the appropriation applied primarily due to timing issues associated with the establishment of IPFA during 2017-18.

3. Departmental Capital Budgets are appropriated through Appropriation Acts (No. 1, 3, 5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.


Accounting policyLiabilities for short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

LeaveThe liability for employee benefits includes provision for annual leave and long service leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the entity’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to the short hand method as at 30 June 2018. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and RedundancyProvision is made for separation and redundancy benefit payments where applicable. The entity recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

SuperannuationThe entity's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The entity makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The entity accounts for the contributions as if they were contributions to defined contribution plans. The liability for superannuation recognised as at 30 June represents outstanding contributions.

Accounting Judgements and EstimatesThe long service leave provision has been calculated by applying the shorthand method detailed in the Resource Management Guidance No.125: Commonwealth Entities Financial Statements Guide.

People and RelationshipsThis section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

Note 4.1 Employee Provisions Note 4.1A: Employee Provisions

2018

$Leave 449,452

Total employee provisions 449,452

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The total number of key management personnel that are included in the above table are two. The positions related to the appointment of an interim CEO and later the CEO.

The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister whose remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.

Note 4.3 Related Party Disclosures

Related party relationships: The entity is an Australian Government controlled entity. Related parties to this entity are Infrastructure and Project Financing Agency members, Key Management Personnel including the Portfolio Minister and Executive, and other Australian Government entities.

Transactions with related parties: Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions to be separately disclosed.

Note 4.2 Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any Infrastructure and Project Financing Agency member. The entity has determined the key management personnel to be the Chief Executive Officer. Key management personnel remuneration is reported in the table below:

2018 $

Short-term employee benefits 365,122

Post-employment benefits 20,533

Other long-term benefits 37,339

Termination benefits -

Total key management personnel remuneration expenses 422,994


Managing UncertaintiesThis section analyses how IPFA manages financial risks within its operating environment.

Note 5.1 Contingent Assets and Liabilities

Quantifiable ContingenciesThere were no quantifiable contingent assets or liabilities in this reporting period.

Unquantifiable ContingenciesThere were no unquantifiable contingent assets or liabilities in this reporting period.

Accounting PolicyContingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

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Accounting PolicyFinancial assetsThe entity classifies its financial assets as receivables only.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.

Impairment of Financial AssetsFinancial assets are assessed for impairment at the end of each reporting period.

Financial liabilitiesFinancial liabilities are classified as supplier and other payables only.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

Note 5.2 Financial Instruments Note 5.2A: Categories of Financial Instruments

Note 5.2B: Fair Value of Financial Instruments

Financial assets The fair values of all monetary financial assets approximate their carrying amounts.

Financial liabilities The fair values of all monetary financial liabilities approximate their carrying amounts. All financial liabilities are current, therefore a maturity analysis is not required.

2018 $

Financial Assets

Loans and receivables

Cash and cash equivalents 519,746

Trade and other receivables 37,379

Total loans and receivables 557,125

Total financial assets 557,125

Financial Liabilities

Financial liabilities measured at amortised cost

Trade creditors and accruals 180,430

Other payables 18,185

Total financial liabilities measured at amortised cost 198,615

Total financial liabilities 198,615


References

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PGPA Rule Reference Part of Report Description Requirement

17AI Inside cover A copy of the letter of transmittal signed and dated by accountable authority on date final text approved, with statement that the report has been prepared in accordance with section 46 of the Act and any enabling legislation that specifies additional requirements in relation to the annual report.

Mandatory

17AD(h) Aids to access

17AJ(a) Page 1 Table of contents. Mandatory

17AJ(b) Page 56 Alphabetical index. Mandatory

17AJ(c) Page 55 Glossary of abbreviations and acronyms. Mandatory

17AJ(d) Page 48 List of requirements. Mandatory

17AJ(e) Inside cover Details of contact officer. Mandatory

17AJ(f) Inside cover Entity’s website address. Mandatory

17AJ(g) Inside cover Electronic address of report. Mandatory

17AD(a) Review by accountable authority

17AD(a) Page 4 A review by the accountable authority of the entity. Mandatory

17AD(b) Overview of the entity

17AE(1)(a)(i) Page 6 A description of the role and functions of the entity. Mandatory

17AE(1)(a)(ii) Page 9 A description of the organisational structure of the entity.

Mandatory

17AE(1)(a)(iii) Page 14 A description of the outcomes and programmes administered by the entity.

Mandatory

17AE(1)(a)(iv) Page 13 A description of the purposes of the entity as included in corporate plan.

Mandatory

List of requirements

Section 17AJ(d) of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) requires the following list of requirements be included in the annual report as an aid of access.


17AE(1)(b) N/A An outline of the structure of the portfolio of the entity. Portfolio departments mandatory

17AE(2) N/A Where the outcomes and programs administered by the entity differ from any Portfolio Budget Statement, Portfolio Additional Estimates Statement or other portfolio estimates statement that was prepared for the entity for the period, include details of variation and reasons for change.

If applicable, Mandatory

17AD(c) Report on the Performance of the entity

Annual performance Statements

17AD(c)(i); 16F

Page 12 Annual performance statement in accordance with paragraph 39(1)(b) of the Act and section 16F of the Rule.

Mandatory

17AD(c)(ii) Report on Financial Performance

17AF(1)(a) Page 24 A discussion and analysis of the entity’s financial performance.

Mandatory

17AF(1)(b) Page 25 A table summarising the total resources and total payments of the entity.

Mandatory

17AF(2) N/A If there may be significant changes in the financial results during or after the previous or current reporting period, information on those changes, including: the cause of any operating loss of the entity; how the entity has responded to the loss and the actions that have been taken in relation to the loss; and any matter or circumstances that it can reasonably be anticipated will have a significant impact on the entity’s future operation or financial results.

If applicable, Mandatory.

17AD(d) Management and Accountability

Corporate Governance

17AG(2)(a) Page 22 Information on compliance with section 10 (fraud systems)

Mandatory

17AG(2)(b)(i) Inside cover A certification by accountable authority that fraud risk assessments and fraud control plans have been prepared.

Mandatory

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17AG(2)(b)(ii) Page 22 A certification by accountable authority that appropriate mechanisms for preventing, detecting incidents of, investigating or otherwise dealing with, and recording or reporting fraud that meet the specific needs of the entity are in place.

Mandatory

17AG(2)(b)(iii) Page 22 A certification by accountable authority that all reasonable measures have been taken to deal appropriately with fraud relating to the entity.

Mandatory

17AG(2)(c) Page 9 An outline of structures and processes in place for the entity to implement principles and objectives of corporate governance.

Mandatory

17AG(2)(d) – (e)

Page 22 A statement of significant issues reported to Minister under paragraph 19(1)(e) of the Act that relates to noncompliance with Finance law and action taken to remedy noncompliance.


External Scrutiny

17AG(3) Page 22 Information on the most significant developments in external scrutiny and the entity’s response to the scrutiny.

Mandatory

17AG(3)(a) Page 22 Information on judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner that may have a significant effect on the operations of the entity.


17AG(3)(b) Page 22 Information on any reports on operations of the entity by the Auditor-General (other than report under section 43 of the Act), a Parliamentary Committee, or the Commonwealth Ombudsman.


17AG(3)(c) Page 22 Information on any capability reviews on the entity that were released during the period.


Management of Human Resources

17AG(4)(a) Page 20 An assessment of the entity’s effectiveness in managing and developing employees to achieve entity objectives.

Mandatory


17AG(4)(b) Page 19 Statistics on the entity’s APS employees on an ongoing and nonongoing basis; including the following:

· Statistics on staffing classification level;

· Statistics on full-time employees;

· Statistics on part-time employees;

· Statistics on gender;

· Statistics on staff location;

· Statistics on employees who identify as Indigenous.

Mandatory

17AG(4)(c) Page 19 Information on any enterprise agreements, individual flexibility arrangements, Australian workplace agreements, common law contracts and determinations under subsection 24(1) of the Public Service Act 1999.

Mandatory

17AG(4)(c)(i) Page 19 Information on the number of SES and non SES employees covered by agreements etc identified in paragraph 17AG(4)(c).

Mandatory

17AG(4)(c)(ii) Page 19 The salary ranges available for APS employees by classification level.

Mandatory

17AG(4)(c)(iii) Page 20 A description of non-salary benefits provided to employees.

Mandatory

17AG(4)(d)(i) Page 20 Information on the number of employees at each classification level who received performance pay.


17AG(4)(d)(ii) Page 20 Information on aggregate amounts of performance pay at each classification level.


17AG(4)(d)(iii) Page 20 Information on the average amount of performance payment, and range of such payments, at each classification level.


17AG(4)(d)(iv) Page 20 Information on aggregate amount of performance payments.


Assets Management

17AG(5) N/A An assessment of effectiveness of assets management where asset management is a significant part of the entity’s activities

If applicable, mandatory

Purchasing

17AG(6) Page 26 An assessment of entity performance against the Commonwealth Procurement Rules.

Mandatory

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Consultants

17AG(7)(a) Page 26 A summary statement detailing the number of new contracts engaging consultants entered into during the period; the total actual expenditure on all new consultancy contracts entered into during the period (inclusive of GST); the number of ongoing consultancy contracts that were entered into during a previous reporting period; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST).

Mandatory

17AG(7)(b) Page 26 A statement that “During [reporting period], [specified number] new consultancy contracts were entered into involving total actual expenditure of $[specified million]. In addition, [specified number] ongoing consultancy contracts were active during the period, involving total actual expenditure of $[specified million]”.

Mandatory

17AG(7)(c) Page 26 A summary of the policies and procedures for selecting and engaging consultants and the main categories of purposes for which consultants were selected and engaged.

Mandatory

17AG(7)(d) Page 26 A statement that “Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.”

Mandatory

Australian National Audit Office Access Clauses

17AG(8) N/A If an entity entered into a contract with a value of more than $100 000 (inclusive of GST) and the contract did not provide the Auditor-General with access to the contractor’s premises, the report must include the name of the contractor, purpose and value of the contract, and the reason why a clause allowing access was not included in the contract.


Exempt contracts

17AG(9) N/A If an entity entered into a contract or there is a standing offer with a value greater than $10 000 (inclusive of GST) which has been exempted from being published in AusTender because it would disclose exempt matters under the FOI Act, the annual report must include a statement that the contract or standing offer has been exempted, and the value of the contract or standing offer, to the extent that doing so does not disclose the exempt matters.



Small business

17AG(10)(a) Page 26 A statement that “[Name of entity] supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.”

Mandatory

17AG(10)(b) Page 26 An outline of the ways in which the procurement practices of the entity support small and medium enterprises.

Mandatory

17AG(10)(c) N/A If the entity is considered by the Department administered by the Finance Minister as material in nature—a statement that “[Name of entity] recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website.”


Financial Statements

17AD(e) Page 27 Inclusion of the annual financial statements in accordance with subsection 43(4) of the Act.

Mandatory

17AD(f) Other Mandatory Information

17AH(1)(a)(i) N/A If the entity conducted advertising campaigns, a statement that “During [reporting period], the [name of entity] conducted the following advertising campaigns: [name of advertising campaigns undertaken]. Further information on those advertising campaigns is available at [address of entity’s website] and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available on the Department of Finance’s website.”


17AH(1)(a)(ii) Page 26 If the entity did not conduct advertising campaigns, a statement to that effect.


17AH(1)(b) Page 26 A statement that “Information on grants awarded by [name of entity] during [reporting period] is available at [address of entity’s website].”


17AH(1)(c) Page 20 Outline of mechanisms of disability reporting, including reference to website for further information.

Mandatory

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17AH(1)(d) Page 23 Website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of FOI Act can be found.

Mandatory

17AH(1)(e) N/A Correction of material errors in previous annual report If applicable, mandatory

17AH(2) Page 21 Work health and safety (Schedule 2, Part 4 of the Work Health and Safety Act 2011)

Mandatory

Page 23 Ecologically sustainable development and environmental performance (section 516A of the Environment Protection and Biodiversity Conservation Act 1999)

Page 20 Compliance with obligations under the Carer Recognition Act 2010


Term Meaning

ANAO Australian National Audit Office

APS Australian Public Service

APS Act Public Service Act 1999

APS Employee A person engaged under section 22, or a person who is engaged as an APS employee under section 72 of the APS Act. Non-ongoing APS employees are engaged under subsections 22(2)(b) or 22(2)(c) of the APS Act. Ongoing APS employees are engaged under subsection 22(2)(a) of the APS Act.

CEO Chief Executive Officer

CFO Chief Finance Officer

EPBC Act Environment Protection and Biodiversity Conservation Act 1999

FOI Act Freedom of Information Act 1982

Grant Commonwealth financial assistance covered by the Commonwealth Grants Rules and Guidelines

GST Goods and Services Tax

ICT Information and Communications Technology

IT Information Technology

KPI Key Performance Indicator

MP Member of Parliament

PGPA Act Public Governance, Performance and Accountability Act 2013

PGPA Rule Public Governance, Performance and Accountability Rule 2014

SES Senior Executive Service

SME Small and Medium Enterprise

WHS Work Health and Safety

WOAG Whole of Australian Government

Glossary

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Index

AAccountable Authority . . . . . . 12

Advertising and Market Research 26

Analysis of Performance Against Purpose . . . . . . . . . . . . . . . 18

Auditor-General . . . . . . . . . . 28

AusTender . . . . . . . . . . . . . 26

Australian Information Commissioner . . . . . . . . . . . 22

Australian National Audit Office . . . . . . . . . . . . . . 22, 28

Australian Public Service Commission (APSC) . . . . . . . . 20

CCarer Recognition Act 2010 . . . 20

Chief Executive Officer Review . 04

Comcare. . . . . . . . . . . . . . . 21

Common law contract . . . . . . . 19

Commonwealth Ombudsman . . 22

Commonwealth Procurement Rules. . . . . . . . . . . . . . . . . 26

Compliance with Financial Law . 22

Consultants . . . . . . . . . . . . . 26

Contractors . . . . . . . . . . . 19, 20

Contracts . . . . . . . . . . . . 19, 26

Corporate Plan . . . . . . . . . . . 09

DDepartment of Finance . . . . . . 26

Department of the Prime Minister and Cabinet. . . . . . . . . . . . . 24

Disability Reporting . . . . . . . . 20

EEmployment Arrangements . . . 19

Employment Statistics. . . . . . . 19

Environmental Protection and Biodiversity Conservation. . . . . 23

Environment Protection and Biodiversity Conservation Act 1999 . . . . . . . . . . . . . . 23

Ethical Standards . . . . . . . . . 20

External Scrutiny . . . . . . . . . . 22

FFinancial Statements . . . . . . . 27

Fraud Prevention and Control . . 22

Freedom of Information Act 1982 . . . . . . . . . . . . . . . . . 23

Frew, Leilani . . . . . . . . . . 04, 08

GGovernance and Organisational Structure . . . . . . . . . . . . . . 09

Grant Programs . . . . . . . . . . 26

IICT . . . . . . . . . . . . . . . . . 36

Independent Auditor’s Report . . . . . . . . . . . . . . 28, 29

Information Publication Scheme . 23

IPFA Audit Committee . . . . . . 10

IPFA Governance Framework . . 09

IPFA Leadership Team . . . . . . 09

LLeadership Team. . . . . . . . . . 09

List of Requirements. . . . . . . . 48

MManagement Issues . . . . . . . . 22

Market Research . . . . . . . . . . 26


NNon-salary benefits . . . . . . . . 20

PPerformance Pay. . . . . . . . . . 20

Performance Results . . . . . . . 14

Prime Minister . . . . . . . . . . . 15

Procurement Initiatives to support Small Business . . . . 26

Public Governance, Performance and Accountability Act 2013 . . 06

Purchasing and Procurement . . 26

RReport on Financial Performance 24

Risk Management Framework . 09

SSenate Estimates . . . . . . . . . 22

Staff . . . . . . . . . . . . . . . . 19

Statement of Comprehensive Income . . . . . . . . . . . . . . . 31

Statement of Financial Position 32

Strategic Goals . . . . . . . . . . 13

Supporting Employees with Carer Responsibilities . . . . . . 20

WWork Health and Safety . . . . . 21

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PO Box 6500 Barton ACT 2600 Email [email protected] Website www.ipfa.gov.au

annual report 2017-18 - ipfa€¦ · in my opinion, these annual performance statements are based...

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