1. Appropriation Act (No.1) 2017–18.
2. Departmental appropriation combines ordinary annual services (Appropriation Act No 1) and retained revenue receipts under section 74 of the Public Governance, Performance and Accountability Act 2013.
3. Does not include ‘special public money’ held in accounts like ‘services for other entities and trust moneys’ special accounts.

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

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

1. In 2017 a restructure with the Department of Finance for the transfer to the Digital Transformation Agency (DTA) of whole-of-government ICT and ICT procurement policy and services functions. This restructure was finalised in 2018, transferring special account related balances (2017: nil), see note 6.1.

Accounting Policy

Restructuring of Administrative Arrangements

Net assets received from or relinquished to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

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

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

1. Other relates to employee allowances including higher duties, individual flexible arrangements, emergency warden, departmental liaison and first aid officer.

Accounting Policy

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

1. The increase in Information technology and communications relates to the whole-of-government ICT procurement arrangements transferred to the DTA in 2017–18.
2. Relates to collaboration with other government agencies on digital capability design.
3. Relates to corporate services fees, low value assets, advertising and office supplies.

Note: Commitments are GST inclusive where relevant.

Operating lease commitment—leases for office accommodation

Office accommodation lease payments are subject to periodic increases in accordance with the rent review provisions in the lease agreements. The three leases entered into by the DTA all have renewal options which vary from 1 to 5 years. The DTA has entered into a revised lease arrangement for the head office accommodation that is effective 1 July 2018 and is reflected in the above commitment values.

Accounting Policy

Operating lease payments are expensed on a straight-line basis (where impact is material)
which is representative of the pattern of benefits derived from the leased assets.

PM&C transferred $10 million to the DTA in 2017. PM&C was reimbursed for this transfer through the Trusted Digital Identity expense measure in the 2017 Mid-Year Economic and Fiscal Outlook (MYEFO). No further contribution has been received in 2018.

Accounting Policy

Resources 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.

Credit terms for goods and services were within 30 days (2017: 30 days).

Receivables have been assessed for impairment at the end of each reporting period. The majority of receivables managed by the DTA are with other Commonwealth entities therefore currently no allowance for impairment has been made as at 30 June 2018 (2017: nil).

Accounting Policy

(Loans and Receivables)

Trade receivables, loans and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

No significant items of property, plant and equipment are expected to be sold or disposed of within the next 12 months.

As at 30 June 2018, the value of contractual commitments for the acquisition of leasehold improvements and plant and equipment is $2.5 million (2016–17: Nil).

Accounting Policy

(Asset recognition threshold )

Property, plant and equipment is the generic term that covers leasehold improvements and plant and equipment. Purchases of property, plant and equipment and intangibles 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.

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by the DTA where there is an obligation to restore the asset to its original condition. These costs are included in the value of the DTA’s leasehold improvements with a corresponding provision for the ‘make good’ recognised.

Intangibles

The DTA’s intangibles comprise internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. Software is amortised on a straight-line basis over an anticipated useful life of 2 to 3 years.

Revaluations

Following 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, generally this will be on a three year cycle unless a significant event occurs that would impact the fair value of assets.

Fair values for each class of asset are determined as shown below:

In 2017 a valuation of property, plant and equipment assets was undertaken by International Valuation & Property Services (IVPS).

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the DTA 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:

Impairment

All assets were assessed for impairment during 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.

A write-down of $12,000 was recognised in 2018 for leasehold improvement assets which were not WHS compliant. In 2017 $3,000 of plant and equipment assets were disposed as a result of the annual asset stocktake process.

Settlement is usually made within 30 days.

The DTA has entered into three lease arrangements (one under a Memorandum of Understanding agreement) for the leasing of premises. These arrangements have provisions requiring the DTA to restore the premises to the original condition at the conclusion of the lease.

Accounting Policy

Provision for the restoration of leased premises (make good) is based on future obligations relating to the underlying assets. The provision is disclosed at the present value of the obligation utilising the appropriate Government bond rate.

1. Appropriation: Public Governance, Performance and Accountability Act 2013 (PGPA Act) section 78.
   Establishing Instrument: PGPA Act Determination (Establishment of ICT Coordinated Procurement Special Account 2017).
   Purpose: The ICT Coordinated Procurement Special Account has been established for the purpose of administering the operations of centralised ICT procurement for the Australian Government.
2. Increases in the special account includes $96.1 million transferred from Department of Finance, refer note 6.1A Restructuring.

Accounting Policy

Liabilities for ‘short-term employee benefits’ and termination benefits due within 12 months of the end of reporting period are measured at their nominal amounts.

Leave

The 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 DTA’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 provision is disclosed at the present value of the obligation using the short hand method that utilises the appropriate Government bond rate.

No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the DTA is estimated to be less than the annual entitlement for sick leave.

Superannuation

The DTA’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or another fund of their choice.

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 DTA makes employer contributions to the employees’ superannuation scheme. For Commonwealth defined benefits schemes, these rates are determined by an actuary to be sufficient to meet the current cost to the Government. The DTA accounts for the contributions as if they were contributions to defined contribution plans.

1. The DTA has determined the KMP to be the Chief Executive Officer (CEO) and 6 Executive Officers as at 30 June 2018. The KMP in 2016–17 included the CEO and 4 executive officers.
2. The total number of KMP that are included in the above table is 10 (2017: 12) representing the people who individually occupied the KMP positions during the year.
3. The above KMP remuneration excludes the remuneration and other benefits of the Portfolio Ministers. The Portfolio Ministers’ remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.

Note 5.2B: Net Gains or Losses on Financial Assets and Liabilities

The DTA has no gains or losses on financial instruments.

Accounting Policy

(Financial assets)

The DTA classifies its financial assets in the following categories:

1. held-to-maturity investments
2. loans and receivables.

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.

Financial Liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’. 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).