DIMA Annual Report 2000-01

Discussion / analysis of financial performance

In 2000-01 the operating surplus for the department was around $30 million, less a capital use charge of around $13 million (repaid to consolidated revenue). Of the $17 million residual operating surplus, around $13 million relates to:

• unspent monies for safe haven operations, some of which is required in 2001-02
  
  
• payments to be made to Coastwatch for coastal surveillance activities in future years
  
  
• the 2000-01 Budget measure relating to the pilot program for targeted reintegration assistance and to support character checking (which is likely to be expended in 2001-02).

The underlying surplus for the department is very small (around $4 million or 0.6 per cent of departmental resourcing). This reflects a year in which resources were nearly fully expended to deliver a significant range and high volume of outputs for the Government.

In 2000-01 the department operated under a purchasing agreement arrangement with the Department of Finance and Administration for Outcome One. However, the purchasing agreement outcomes are significantly lower than projected in Budget estimates (mainly due to lower than projected unauthorised boat arrivals which incur related entry, detention and processing costs). This has meant that approximately $100 million has been able to be returned to consolidated revenue from the approved parliamentary appropriations to DIMA.

The final outcome and output results show shifts between outputs compared to budgets. Some of these changes are due to ongoing improvement in costing and corporate attribution methodologies being applied to the output results. In conjunction with the undertaking of a pricing review for 2001-02 Budget purposes, improved attribution information from the department's new activity-based costing (ABC) model has been used to assess output results for 2000-01. Output budget estimates for 2000-01 were prepared before these ABC data were available and are therefore not as accurate in this area. Further improvements in these attribution processes will occur in forthcoming years.

Expenses for Output 1.1 exceeded budget estimates due to a range of factors. These included Olympic and Paralympic Games costs borne by DIMA, inclusion of the Electronic Travel Authority System (ETAS) costs (from Output 1.3) and the start of processing of applications relating to changes in treatment of New Zealand immigrants. In addition, activity levels were significantly above purchasing agreement targets, particularly for family entry (permanent) and temporary residence, and there has been growth in overseas post activities.

The number of unauthorised boat arrivals was below projected levels in 200001 resulting in both Output 1.2 and Output 1.3 coming in under budget. There has been some growth in resource usage compared to 1999-2000 in these outputs due to additional costs in asylum-seeker processing and detention centre expenditure, as well as some growth in activity in other areas of the Purchasing Agreement.

Output 1.4 had minimal activity related to the provision of safe havens during the year. Access to these funds from 2000-01 has, however, been retained until all safe haven work is completed. Unspent appropriation will be forfeited to consolidated revenue at that time.

Outcome Two did not operate under a purchasing agreement arrangement in 2000-01. An increase in Output 2.1 relative to Budget reflects some growth in fee-free translating services (paid for by this output) and re-attribution of corporate overhead expenses.

For Output 2.2, Translating and Interpreting Services, the figures are well above Budget due to generally strong growth in the demand for services (both externally and internally) and a significant increase in corporate overhead attribution due to changes in attribution methodologies.

Results for Output 2.3 and Output 2.4 mainly reflect changes in attribution of corporate overhead costs.

A shift in the Average Staffing Level (ASL) for 2000-01 (relative to budgeted figures) has occurred from Outcome Two to Outcome One due to improved attribution information. The 2001-02 Budget figures will be updated accordingly in the 2001-02 Additional Estimates process.

For administered items, higher than expected expenses for the asylum seeker assistance scheme and assisted passage for refugees meant that Outcome One budget was exceeded and the department had to seek additional funding from the Advance to the Finance Minister to meet client demand. The administered expenses also exceeded budget estimates for Outcome Two mainly due to some accrued expenses for the Adult Migrant English Program not being recognised correctly in the transition from cash to accrual budgeting last year. This outcome did not exceed cash available from its appropriations.

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