ATTACHMENT C: Management Discussion & Analysis (Controlled) 2020-21

General overview

Objectives

The Justice and Community Safety Directorate (the Directorate) seeks to maintain a safe, just and resilient community in the ACT. This is realised by working with the ACT Government, key stakeholders and the community to:

  • strengthen community safety;
  • protect people’s rights and interests;
  • care for and support vulnerable people;
  • enhance access to justice; and
  • build community resilience to emergency.

To achieve our vision for a safe, just and resilient community, the Directorate aims to be community-minded; human-rights focussed; inclusive and diverse; passionate about its work; and committed to making a positive difference.

Performance

The following financial information is based on audited Financial Statements for 2019-20 and 2020-21.

Total Net Cost of Services

 

 

Actual

 

Budget

 

Actual

 

Estimate1

 

Estimate1

 

Estimate1

2019-20

2020-21

2020-21

2021-22

2022-23

2023-24

$m

$m

$m

$m

$m

$m

 

Total Expenses

 

425.5

 

430.7

 

435.5

 

459.8

 

463.4

 

470.4

Total Own Source Revenue

 

45.2

 

40.4

 

45.3

 

35.8

 

35.4

 

36.3

Net Cost of Services

380.3

390.3

390.2

424.0

428.0

434.1

Note 1: The Estimate is based on 2021-22 Budget Paper which was published on 06 October 2021.

Comparison to Original Budget

The Directorate’s net cost of services for 2020-21 of $390.2m was in line with the 2020-21 original budget (see also Attachment A) due to:

  • higher own source revenue of $4.9m or 12.1%, as outlined at Total Own Source Revenue – Comparison to Original Budget of $40.4m, which is partially offset by higher expenditure of $4.8m or 1.1%, as outlined at Total Expenditure – Comparison to Original Budget of $430.7m.

Comparison to 2019-20

The Directorate’s 2020-21 net cost of services of $390.2m was $9.9m or 2.6% higher than 2019-20 due to:

  • higher total expenses of $10m or 2.3%, relating mainly to the employee, superannuation, borrowing costs and grants and purchased services which is partially offset by lower supplies and services as outlined at Total Expenses – Comparison to 2019-20 Expenditure of $425.5m.

 

Total Expenses

Components of Expenses

Figure 1: Components of Expenses indicates the components of actual expenses for 2020-21. Total expenses were $435.5m, comprising employee expenses of $244.2m, supplies and services of

$105.1m, superannuation of $34.9m, depreciation and amortisation of $28.3m, borrowing costs and other expenses of $14.3m, and grants and purchased services of $8.5m.

Figure 1: Components of Expenses

Comparison to Original Budget

Total expenses in 2020-21 are $435.5m, which is $4.8m or 1.1% higher than the 2020-21 original budget primarily due to higher employee and superannuation expenses of $9.6m primarily relating to higher than budgeted staff recruited to implement various government activities, including professional legal services and increased staffing costs associated with response to COVID-19 pandemic ($1.5m).

This was partially offset by lower:

  • grants and purchased services of $1.9m mainly relating to delays in receiving the Commonwealth Grants for Disaster Risk Reduction and Natural Disaster Resilience Program as a result of the COVID-19 Pandemic for which the funding has been transferred to 2021-22;
  • supplies and services of $1.3m relating to delays in various projects including better protective clothing for our firefighters ($0.6m) and Increasing opportunities for Aboriginal and Torres Strait Islander people involved with the justice system ($0.3m) for which the funding has been transferred to 2021-22;
  • lower ambulance bad debt expense ($0.7m); and
  • lower depreciation ($0.7m) due to delays in completion of capital projects associated with changes to project timelines, COVID-19 restrictions and delays in procurement and project implementation.

Comparison to 2019-20 Expenses

Total 2020-21 expenses of $435.5m are $10m, or 2.3% higher than 2019-20 mainly due to higher:

  • employee and superannuation expenses of $7.2m relating to additional staffing ($11.3m) associated with new budget initiatives including More ACT Fire & Rescue Staff and Construction of Acton Station and increased staff employed associated with COVID-19 which is partially offset by lower Long Service Leave costs ($4.2m) due to the lower rate used to estimate the present value of long service leave liabilities and lower workers’ compensation insurance premium ($2.6m) due to lower rates set by the ACT Public Sector Workers’ Compensation Fund;
  • grants and purchased services of $4.3m due to higher grants payments relating to COVID-19 ($1.6m), additional grants to Community Legal Centre organisations ($1.2m), Disaster Risk Reduction Commonwealth grants ($0.7m), Justice Housing Program grants ($0.6m) and Justice Reinvestment and Justice Safety program grants ($0.4m). These are partially offset by lower ACT Road Safety funding ($0.2m) which was transferred to the Transport Canberra and City Services Directorate (TCCS) following the Restructure of Administrative Arrangement changes; and
  • borrowing costs of $1.3m primarily relating to full year the impact of interest payments for ACT Courts Facilities Public Private Partnerships (PPP) in 2020-21 following completion of the facilities in January 2020.

This is partially offset by lower Supplies and Services $2.1m mainly relating to a decrease in one-off operating expenses in 2019-20 relating to bushfire emergency incident responses which is partially offset by higher expenses related to an additional provision made for assessment and remediation of contaminated sites of Per- and Polyfluoroalkyl Substances (PFAS) and fuel tanks.

 

Total Own Source Revenue

Components of Own Source Revenue

Figure 2: Components of Own Source Revenue identifies the components of revenue for 2020-21. Total own source revenue was $45.3m, comprising Sales of Goods and Services from Contracts with Customers of $22.3m, Other Revenue of $17.4m, Grants and Contributions of $5.3m and other gains of $0.3m.

Figure 2: Components of Own Source Revenue

Comparison to Original Budget

Own source revenue for 2020-21 was $45.3m, which was $4.9m or 12.1% higher than the 2020-21 original budget. This was primarily due to higher than expected:

  • Sales of Goods and Services from Contracts with Customers of $2.4m mainly relating to higher government solicitor client funded services revenue ($0.8m), Emergency Services Agency (ESA) Helicopter Charges recovery($0.8m), Ambulance Transport Fees ($0.6m) and Fire Alarm Monitoring fees ($0.3m) mainly due to higher than anticipated demand for these services; and
  • Other revenue of $1.6m relating mainly to higher insurance recoveries related to the Alexander Maconochie Centre (AMC) fire and hailstorm damages ($0.7m) and part-year cost recovery from the Transport Canberra and City Services Directorate (TCCS) following the restructure of Administrative Arrangement (AA) transfer ($0.9m).

Comparison to 2019-20 Own Source Revenue

Total 2020-21 own source revenue of $45.3m was consistent with 2019-20 revenue of $45.2m. There is a decrease of $3.3m in Sales of Goods and Services from Contracts with Customers which is mainly due to high level of bushfire emergency incident responses in 2019-20. The decrease has been fully offset by an increase of $3.4m in Other Revenue mainly due to higher revenue received to cover employee and other expenses relating to COVID-19 Domestic and Family Violence Response, COVID-19 stock recoveries, higher insurance recovery for repair and maintenance cost associate with fire and hailstorm damage at ACT Alexander Maconochie Centre and part year cost recovery from the Transport Canberra and City Services Directorate (TCCS) following the Restructure of Administrative Arrangement (AA) transfer on 4 November 2020.

 

Total Assets

Components of Total Assets

Figure 3: Total Assets at 30 June 2021 identifies the categories of assets held by the Directorate. Total assets held were $612.9m, comprising non-current assets of $583.6m, cash and cash equivalents of $11.9m and receivables, inventory and other assets of $17.4m.

Figure 3: Total Assets at 30 June 2021

Comparison to Original Budget

Total assets of $612.9m at 30 June 2021 were $19.8m, or 3.3% higher than the 2020-21 original budget. This was mainly due to higher:

  • Capital works in Progress of $14.6m due to delay in completion of capital works projects associated with changes to project timelines, COVID-19 restrictions and delays in procurement and project implementation; and
  • Property, Plant and Equipment of $5.1m mainly due to higher fair value of assets as at 30 June 2021 following a revaluation process.

Comparison to 30 June 2020 Assets

Total assets of $612.9m at 30 June 2021 were $5.1m, or 1% higher than at 30 June 2020. This was mainly due to higher Property, Plant and Equipment of $19.1m mainly relating to an increase in the value of Directorate’s land, building, leasehold improvement, and community and heritage assets following a revaluation at 30 June 2021.

This is partially offset by lower:

  • Cash and cash equivalents of $7.4m due to use of available cash for operating activities rather than Controlled Recurrent Payments;
  • Capital Works In Progress of $3.0m due to the delay in completion of construction works for ACT Courts and Tribunal (Courts), Winnunga Model of Care health facilities in Alexander Maconochie Centre (AMC) and commissioning of ambulances for the ACT Emergency Services Agency (ESA), partially offset by higher computer software due to works relating to

ACT Corrective Services Information Management system and Staff Mobile Duress Alarm at AMC and the ESA Territory Radio Network Upgrade; and

  • Intangible assets of $3.2m due to impact of amortisation.

 

Total Liabilities

Components of Total Liabilities

Figure 4: Total Liabilities at 30 June 2021 identifies the categories of liabilities held by the Directorate. Total liabilities were $287.8m, comprising total employee benefits of $104.3m, lease liabilities of $155.4m, Payables and other liabilities of $28.1m.

Figure 4: Total Liabilities at 30 June 2021

Comparison to Original Budget

Total liabilities at 30 June 2021 of $287.8m were $21.3m, or 8% higher than the 2020-21 original budget. This was mainly due to higher than expected:

  • payables of $4.3m mainly due to higher than expected number of outstanding invoices;
  • other provisions of $10.7m mainly due to provisions for assessment and remediation of contaminated sites of Per- and Polyfluoroalkyl Substances (PFAS) and fuel tanks; and
  • employee benefits of $6.4m mainly due to increased number of staff.

Comparison to 2019-20 Liabilities

Total liabilities at 30 June 2021 of $287.8m were $6.9m, or 2.5% higher than at 30 June 2020. This is mainly due to higher:

  • other provisions of $10.4m mainly relating to increase in a provision for associated with progressive assessment of Per- and Poly-Fluoroalkyl Substances (PFAS) contaminated sites and potential level of remediation that may be required ($9.0m) on Emergency Services Agency sites; increase in make good provision of the Directorate's leased accommodation ($0.7m); and a new provision for ACT Fire & Rescue outstanding penalty payments ($0.5m).

This is partially offset by lower lease liabilities of $2.6m due to repayments of principal components of the ACT Courts Facilities PPP leases.

Attachment A

Comparison of Net Cost of Services to Original Budget 2020-21

 

Description (Controlled)

2020-21

2020-21

Variance

Original

Budget

Actual

$'000

$'000

$'000

%

 

Expenses

 

 

 

 

Employee and Superannuation

269,617

279,183

(9,566)

-4%

Supplies and Services

106,410

105,120

1,290

1%

Depreciation and Amortisation

29,057

28,342

715

2%

Borrowing Costs

12,588

12,480

108

1%

Grants and Purchased Services

10,429

8,513

1,916

18%

Other Expenses

2,600

1,847

753

29%

Total Expenses

430,701

435,485

(4,784)

-1%

Own Source Revenue

 

 

 

 

Sales of Goods and Services from Contracts with Customers

19,927

22,323

2,396

12%

Grants and Contributions

4,677

5,252

575

12%

Gains from Disposal of Assets

0

304

304

100%

Other Revenue

15,765

17,391

1,626

10%

Total Own Source Revenue

40,369

45,270

4,901

12%

 

Total Net Cost of Services

 

390,332

 

390,215

 

117

 

0.03%