DIMIA Annual Report 2001-02
DISCUSSION/ANALYSIS OF FINANCIAL PERFORMANCE
The department is largely funded on the basis of a Purchasing Agreement (the Agreement) with the Department of Finance and Administration (Finance), under which actual funding requirements vary depending on performance and delivery of outputs.
For 2001-02, a new Purchasing Agreement was negotiated with Finance, which has involved a number of challenges for the department.
For the first time, the Agreement covers Outcome Two, including Translating and Interpreting Services, which involves an element of cost recovery.
The new Agreement also requires the department to achieve greater savings amounting to approximately $31m. over the three-year life of the Agreement.
While the new Agreement has been effective in providing the department with a level of funding certainty, the department nevertheless has reported an operating loss of $37m. for the 2001-02 financial year.
This can be largely attributed to changes in the operating environment, as a result of the government's decision in August 2001 to manage offshore the reception and processing of unauthorised boat arrivals.
As a result, much of the infrastructure for reception and processing onshore was under-utilised, resulting in onshore operating costs in excess of the price in the Agreement.
Administered expenses in Outcome One show over expenditure due to an increase in detention debts written-off, from a budget of $16m. to actual of $52m. (prior year actual $19m.).
The increase is due to the recording of debts from previous years, which had not been included in the financial statements in those years.
All these debts have been written-off, as it is unlikely that they will be recovered.
Over-expenditure in Output 1.1, Non-humanitarian entry and stay, is due to an increase in activity levels, which required more resources to be deployed in this area.
Over-expenditure in 1.2,Refugee and humanitarian entry and stay, is mostly due to shifts in the allocation of overheads and Output 1.3, Enforcement of immigration law, is underspent due to lower activity levels as unauthorised boat arrivals are being processed offshore.
There was minor expenditure on Output 1.4, Safe haven, due to prior year's residual activities.
The department was given additional funding of $159m. at Additional Estimates for output 1.5,Offshore asylum seeker management in 2001-02. At 30 June 2002, $113m. had been spent on these activities.
The lower levels of expenditure can be attributed to government decisions which have resulted in fewer boat arrivals than anticipated.
Output 2.1, Settlement services, is over budget because of a significant increase in activities that required the deployment of more resources.
Outputs 2.2, Translating and interpreting services, 2.3, Australian citizenship and 2.4, Appreciation of cultural diversity expenditures are also above budget due to increases in activities and movements in the allocation of corporate overheads.