Minister for Education; Aboriginal Affairs; Electoral Affairs Estimated Actual $ 000. Budget $ 000

(1)

Part 5 Minister for Education; Aboriginal Affairs; Electoral Affairs

Appropriations, Expenses and Cash Assets

2013-14 Actual

$’000

2014-15 Budget

$’000

2014-15 Estimated

Actual

$’000

2015-16 Budget Estimate

$’000

2016-17 Forward Estimate

$’000

DELIVERY OF SERVICES

Item 28 Net amount appropriated to

deliver services ... 18,697 19,562 8,793 22,061 23,534 24,077 24,608 Amount Authorised by Other Statutes

- Salaries and Allowances Act 1975 ... 306 313 313 320 329 329 329

Total appropriations provided to deliver

services ... 19,003 19,875 9,106 22,381 23,863 24,406 24,937 ADMINISTERED TRANSACTIONS

Item 29 Amount provided for Administered Grants, Subsidies and

Other Transfer Payments ... 402,927 424,689 424,779 439,446 424,836 423,836 423,836 TOTAL APPROPRIATIONS ... 421,930 444,564 433,885 461,827 448,699 448,242 448,773 EXPENSES

Total Cost of Services ... 36,131 50,956 49,782 53,620 55,417 56,163 57,435 Net Cost of Services ^(a) ... 14,509 24,884 24,802 26,959 28,452 28,942 29,551 CASH ASSETS ^(b) ... 22,835 11,858 9,546 9,018 8,771 8,577 8,383

(a) Represents Total Cost of Services (expenses) less retained revenues applied to the agency’s services. Reconciliation to the ‘Total appropriations provided to deliver services’ includes adjustments related to movements in cash balances and other accrual items such as resources received free of charge, receivables, payables and superannuation.

(b) As at 30 June each financial year.

Spending Changes

All recurrent spending changes, other than cash flow timing changes and non-discretionary accounting adjustments, impacting on the agency’s Income Statement since presentation of the 2014-15 Budget to Parliament on 8 May 2014, are outlined below:

2014-15 Estimated

Actual

$’000

2015-16 Streamlined Budget Process Incentive Funding ... - 426 - - -

2015-16 Tariffs, Fees and Charges (Teacher Registration Board of

Western Australia) ... (51) 1,692 1,163 1,580 2,007 2015-16 Tariffs, Fees and Charges (Training Accreditation Council) ... (1,041) (825) (423) (325) (89) Adjustments to Commonwealth Grants (Western Australian Aboriginal

Education and Training Council) ... - (467) (467) (467) (467)

(2)

Significant Issues Impacting the Agency

• The review of non-government schools funding, commissioned by the Minister for Education, is progressing, with new funding arrangements expected to be implemented from the commencement of the 2016 calendar year.

• The Department will continue to administer $2 million between 2015-16 and 2016-17 to support curriculum and re-engagement (CARE) schools which help students with social, emotional and behavioural difficulties.

• The Department will continue to review Independent Public Schools (IPS) during 2015-16. The number of reviews is anticipated to rise by 57% relative to 2014-15 in line with the increase in the total number of schools attaining IPS status.

Resource Agreement

The following performance information (financial and non-financial) is the subject of a Resource Agreement signed by the Minister, Accountable Authority and Treasurer under Part 3, Division 5 of the Financial Management Act 2006.

Outcomes, Services and Key Performance Information

Relationship to Government Goals

Broad government goals are supported at agency level by specific outcomes. Agencies deliver services to achieve these outcomes. The following table illustrates the relationship between the agency’s service and desired outcome, and the government goal it contributes to. The key effectiveness indicators measure the extent of impact of the delivery of services on the achievement of desired outcomes. The key efficiency indicators monitor the relationship between the service delivered and the resources used to produce the service.

Government Goal Desired Outcome Service

Results-Based Service Delivery:

Greater focus on achieving results in key service delivery areas for the benefit of all Western Australians.

Education and training providers, and teachers, comply with the appropriate regulatory and policy requirements.

1. Regulation, Review, Funding, and Policy Advice

Service Summary

Expense

2013-14 Actual

$’000

2014-15 Budget

$’000

2014-15 Estimated

Actual

$’000

$’000 1. Regulation, Review, Funding, and Policy

Advice ... 36,131 50,956 49,782 53,620 55,417 56,163 57,435 Total Cost of Services ... 36,131 50,956 49,782 53,620 55,417 56,163 57,435

(3)

Outcomes and Key Effectiveness Indicators

^(a)

2013-14 Actual

2014-15 Budget

2014-15 Estimated

Actual

2015-16 Budget Target

Note

Outcome: Education and training providers, and teachers, comply with the appropriate regulatory and policy requirements:

Percentage of non-government schools complying with registration

requirements of the School Education Act 1999 ... 93.3% 90% 95% 90%

Percentage of providers of education services to full fee international students complying with registration requirements of the Education Service Providers (Full Fee Overseas Students) Registration Act 1991 (WA) and the Education Services for Overseas Students Act 2000

(Commonwealth) ... 100% 100% 100% 100%

Percentage of Registered Training Organisations compliant with the Australian Quality Training Framework Essential Standards for

Registration ... 97% 100% 100% 100%

Percentage of reviewed Independent Public Schools that have met

service and delivery requirements ... 100% 100% 100% 100%

Percentage of teachers compliant with the Teacher Registration Act 2012 .... 100% 100% 100% 100%

(a) Further detail in support of the key effectiveness indicators is provided in the agency’s Annual Report.

Services and Key Efficiency Indicators

1. Regulation, Review, Funding, and Policy Advice

Provision of regulatory, review, funding and policy advisory services, as required by legislation or government policy, to support provision of quality services by registered and/or accredited education and training providers.

2013-14 Actual

2014-15 Budget

2014-15 Estimated

Actual

2015-16 Budget Target

Note

$’000 $’000 $’000 $’000

Total Cost of Service ^(a) ... 36,131 50,956 49,782 53,620 Less Income ... 21,622 26,072 24,980 26,661 Net Cost of Service ... 14,509 24,884 24,802 26,959 Employees (Full Time Equivalents) ... 96 99 98 99

Efficiency Indicators ^(b)

Cost of Regulatory Services per Registered Provider/Institution ... $14,182.59 $14,635.89 $15,324.36 $15,408.86 Cost of Recurrent Funding Programs per Student ... $7.11 $7.23 $6.79 $6.98 Cost of Loan Services per Loan Advance ... $680.63 $761.00 $709.53 $739.23 Hourly Cost of Providing Policy Advice and Support ... $131.53 $133.89 $125.70 $124.59

Cost of Review Services per School ... $30,320.34 $25,702.98 $28,884.12 $19,281.15 1 Cost of Regulatory Services per Teacher ... $92.87 $112.68 $100.79 $131.34 2

(a) The expansion of the Low Interest Loan Scheme (LILS) from 2013-14 has impacted the Total Cost of Service. This increase is reflected across all efficiency indicators from the 2014-15 Budget onwards.

(b) All efficiency indicators for 2013-14 Actual and 2014-15 Budget have been re-stated to reflect new methodology as per changes to the Outcome Based Management structure for the 2015-16 Budget. The efficiency indicator ‘Cost of Funding Services per Funded Unit’ has been replaced by ‘Cost of Recurrent Funding Programs per Student’ and ‘Cost of Loan Services per Loan Advance’.

(4)

Asset Investment Program

The Department’s Asset Investment Program for 2015-16 comprises ongoing replacement of office furniture, fittings and information technology (IT) upgrades. The Department and the TRBWA have co-located in 2014-15. It is anticipated that an amount of $1.6 million will be spent in 2014-15 on the fit-out for the new office accommodation.

Estimated Total Cost

$’000

Estimated Expenditure

to 30-6-15

$’000

2014-15 Estimated Expenditure

$’000

WORKS IN PROGRESS IT Upgrade and Replacement

TRBWA Related Asset Investment ... 232 82 30 30 40 40 40

COMPLETED WORKS

Furniture and Fittings - 2014-15 Program ... 13 13 13 - - - -

IT Upgrade and Replacement - 2014-15 Program ... 22 22 22 - - - -

Office Fit-out

Co-location of the Department of Education Services

with the TRBWA ... 1,600 1,600 1,600 - - - - NEW WORKS

Furniture and Fittings

2015-16 Program ... 10 - - 10 - - -

2016-17 Program ... 5 - - - 5 - -

2017-18 Program ... 5 - - - - 5 -

2018-19 Program ... 5 - - - 5

IT Upgrade and Replacement

2015-16 Program ... 25 - - 25 - - -

2016-17 Program ... 30 - - - 30 - -

2017-18 Program ... 30 - - - - 30 -

2018-19 Program ... 30 - - - 30

Total Cost of Asset Investment Program ... 2,007 1,717 1,665 65 75 75 75 FUNDED BY

Drawdowns from the Holding Account ... 35 35 35 35 35

Internal Funds and Balances ... 1,630 30 40 40 40

Total Funding ... 1,665 65 75 75 75

(5)

Financial Statements

Income Statement Expenses

The Income Statement shows an increase in Total Cost of Services of $3.8 million (8%) in 2015-16 when compared to the 2014-15 Estimated Actual.

This is due to an increase of $2.2 million in the budget expenses for the operation of the LILS and $0.5 million increase in supplies and services expenditure representing additional expenditure to be incurred by the TRBWA. This is in response to the significant increase in renewals of registration expected during 2015-16. Accommodation expenses are increasing by

$1 million representing dual rent for redundant tenancies that have yet to be backfilled, as well as additional expenditure for the current tenancy. The $0.3 million increase in employee benefits is attributable to a rise in salaries and wages expenditure resulting from indexation of 2.5%.

The increase in finance costs is attributable to the increase in LILS funding to $55 million in 2015-16.

Income

Total income for 2015-16 is budgeted at $26.7 million which is 7% higher than the 2014-15 Estimated Actual of

$25 million. This is predominantly due to the increase in revenue expected for the TRBWA as a result of a significant increase in renewals of registration during 2015-16.

Service appropriations for the 2014-15 Estimated Actual are $10.8 million (54%) below the 2014-15 Budget due to the application of the Government’s Cash Management Policy as announced in the 2014-15 Mid-year Review.

Statement of Financial Position

The most significant assets in the Department’s statement of financial position are loans and advances provided to schools for asset investment under the LILS. These assets are offset by liabilities represented by borrowings from the Western Australian Treasury Corporation.

Notwithstanding the Department’s deficiency of net assets, the financial statements have been prepared as a going concern.

This basis has been adopted as the Department is a Government agency which is funded from Parliamentary appropriation from the Consolidated Account. The Department’s total equity is expected to decline in 2015-16 by $4.1 million (11%) compared to 2014-15 Estimated Actual.

Statement of Cashflows

The 2015-16 closing cash assets balance of $9 million represents a decrease of $0.5 million (6%) in comparison to the

2014-15 Estimated Actual of $9.5 million. Employee benefits, supplies and services, accommodation expenses and finance

costs are expected to increase in 2015-16. At the same time fee revenue for the TRBWA is budgeted to increase.

(6)

INCOME STATEMENT (Controlled)

2013-14 Actual

$’000

2014-15 Budget

$’000

2014-15 Estimated

Actual

$’000

COST OF SERVICES

Expenses

Employee benefits ^(b) ... 11,843 12,656 12,652 12,974 13,257 13,389 13,521

Grants and subsidies ^(c) ... 179 135 135 35 35 35 38

Supplies and services ... 6,331 7,607 6,515 7,025 7,121 8,031 9,019 Accommodation ... 576 1,135 1,135 2,120 1,609 1,607 1,672

Depreciation and amortisation ... 503 456 378 378 378 378 456

Finance costs ... 15,792 28,491 28,594 30,762 32,769 32,475 32,475

Other expenses ... 907 476 373 326 248 248 254

TOTAL COST OF SERVICES ... 36,131 50,956 49,782 53,620 55,417 56,163 57,435 Income

Sale of goods and services... 6,063 7,980 6,888 8,636 8,340 8,890 9,553

Grants and subsidies ... 1,394 467 467 - - - -

Interest revenue ... 13,975 17,355 17,355 17,805 18,405 18,111 18,111

Other revenue ... 190 270 270 220 220 220 220

Total Income... 21,622 26,072 24,980 26,661 26,965 27,221 27,884 NET COST OF SERVICES ... 14,509 24,884 24,802 26,959 28,452 28,942 29,551 INCOME FROM STATE GOVERNMENT

Service appropriations ... 19,003 19,875 9,106 22,381 23,863 24,406 24,937

Resources received free of charge ... 422 700 700 450 450 450 450

TOTAL INCOME FROM STATE

GOVERNMENT ... 19,425 20,575 9,806 22,831 24,313 24,856 25,387 SURPLUS/(DEFICIENCY) FOR THE PERIOD ... 4,916 (4,309) (14,996) (4,128) (4,139) (4,086) (4,164)

(a) Full audited financial statements are published in the agency’s Annual Report.

(b) The Full Time Equivalents for 2013-14 Actual, 2014-15 Estimated Actual and 2015-16 Budget Estimate are 96, 98 and 99 respectively. In some cases the figures for 2013-14 and 2014-15 may differ from previously published figures due to changes in calculation methodology.

(c) Refer to the Details of Controlled Grants and Subsidies table below for further information.

DETAILS OF CONTROLLED GRANTS AND SUBSIDIES

2013-14 Actual

$’000

2014-15 Budget

$’000

2014-15 Estimated

Actual

$’000

Other Miscellaneous Grants ... 144 100 100 - - - -

Other Scholarships ... 35 35 35 35 35 35 38

TOTAL ... 179 135 135 35 35 35 38

(7)

STATEMENT OF FINANCIAL POSITION

^(a)

(Controlled)

2013-14 Actual

$’000

2014-15 Budget

$’000

2014-15 Estimated

Actual

$’000

CURRENT ASSETS

Cash assets ... 22,481 11,525 9,182 8,644 8,387 8,193 7,999

Restricted cash ... 354 333 364 374 384 384 384

Holding account receivables ... 35 275 35 35 35 35 35

Receivables ... 138 490 138 138 138 138 138

Loans to schools ... 27,357 28,500 27,857 29,357 31,357 31,357 31,357 Other ... 996 1,033 996 996 996 996 996 Assets held for sale ... 2,395 - 2,395 2,395 2,395 2,395 2,395 Total current assets ... 53,756 42,156 40,967 41,939 43,692 43,498 43,304 NON-CURRENT ASSETS

Holding account receivables ... 246 349 589 932 1,275 1,618 1,961

Property, plant and equipment ... 1,754 4,185 3,281 3,208 3,145 3,082 2,941

Intangibles ... 1,445 960 1,205 965 725 485 245 Receivables - Loans to schools ... 174,175 198,320 195,944 217,815 240,279 236,257 232,235

Other ... - 1,388 - - - - -

Total non-current assets ... 177,620 205,202 201,019 222,920 245,424 241,442 237,382 TOTAL ASSETS ... 231,376 247,358 241,986 264,859 289,116 284,940 280,686 CURRENT LIABILITIES

Employee provisions ... 1,100 1,794 1,100 1,100 1,100 1,100 1,100

Payables ... 456 403 456 456 456 456 456

Borrowings ... 27,357 28,500 27,857 29,357 31,357 31,357 31,357 Other ... 6,513 5,690 6,433 6,348 6,258 6,168 6,078 Total current liabilities ... 35,426 36,387 35,846 37,261 39,171 39,081 38,991 NON-CURRENT LIABILITIES

Employee provisions ... 1,685 729 1,685 1,685 1,685 1,685 1,685 Borrowings ... 215,785 246,160 240,971 266,557 293,043 293,043 293,043 Other ... 171 1,165 171 171 171 171 171 Total non-current liabilities ... 217,641 248,054 242,827 268,413 294,899 294,899 294,899 TOTAL LIABILITIES... 253,067 284,441 278,673 305,674 334,070 333,980 333,890 EQUITY

Contributed equity ... 18 18 18 18 18 18 18

Accumulated surplus/(deficit) ... (22,824) (37,771) (37,820) (41,948) (46,087) (50,173) (54,337) Reserves ... 1,115 670 1,115 1,115 1,115 1,115 1,115 Total equity ^(b)... (21,691) (37,083) (36,687) (40,815) (44,954) (49,040) (53,204)

TOTAL LIABILITIES AND EQUITY ... 231,376 247,358 241,986 264,859 289,116 284,940 280,686

(b) Notwithstanding the Department’s deficiency of net assets, the financial statements have been prepared as a going concern. This basis has been adopted as the Department is a Government agency which is funded from Parliamentary appropriation from the Consolidated Account.

(8)

STATEMENT OF CASHFLOWS (Controlled)

2013-14 Actual

$’000

2014-15 Budget

$’000

2014-15 Estimated

Actual

$’000

$’000 CASHFLOWS FROM STATE

GOVERNMENT

Service appropriations ... 18,865 19,497 8,728 22,003 23,485 24,028 24,559

Holding account drawdowns ... 35 35 35 35 35 35 35

Net cash provided by State Government ... 18,900 19,532 8,763 22,038 23,520 24,063 24,594

CASHFLOWS FROM OPERATING ACTIVITIES

Payments

Employee benefits ... (11,679) (12,656) (12,652) (12,974) (13,257) (13,389) (13,521) Grants and subsidies ... (179) (135) (135) (35) (35) (35) (38) Supplies and services ... (5,934) (6,876) (5,784) (6,543) (6,638) (7,548) (8,535) Accommodation ... (580) (1,135) (1,118) (2,103) (1,592) (1,590) (1,655) Finance costs ... (7,735) (14,869) (14,869) (16,764) (18,464) (18,170) (18,170) Other payments... (1,643) (882) (899) (878) (801) (801) (808) Receipts ^(b)

Regulatory fees and fines ... 1,219 2,842 1,801 1,704 1,832 1,965 2,201

Grants and subsidies ... 594 467 467 - - - -

Sale of goods and services... 5,005 5,138 5,087 6,932 6,508 6,925 7,352

GST receipts ... 768 525 525 525 525 525 525

Interest received ... 6,108 7,150 7,150 7,600 8,200 7,906 7,906

Other receipts ... 991 120 120 120 120 120 120

Net cash from operating activities ... (13,065) (20,311) (20,307) (22,416) (23,602) (24,092) (24,623) CASHFLOWS FROM INVESTING

ACTIVITIES

Purchase of non-current assets ... - (65) (1,665) (65) (75) (75) (75)

Net cash from investing activities ... - (65) (1,665) (65) (75) (75) (75)

CASHFLOWS FROM FINANCING ACTIVITIES

Repayment of borrowings ... (31,426) (28,360) (28,360) (29,915) (31,410) (57,190) (57,190) Other payments... (49,928) (54,300) (54,300) (55,700) (57,100) (31,320) (31,320) Proceeds from borrowings ... 49,928 54,300 54,300 55,700 57,100 57,100 57,100 Other proceeds ... 31,352 28,280 28,280 29,830 31,320 31,320 31,320

Net cash from financing activities... (74) (80) (80) (85) (90) (90) (90)

NET INCREASE/(DECREASE) IN CASH

HELD ... 5,761 (924) (13,289) (528) (247) (194) (194)

Cash assets at the beginning of the reporting

period ... 17,074 12,782 22,835 9,546 9,018 8,771 8,577

Cash assets at the end of the reporting

period ... 22,835 11,858 9,546 9,018 8,771 8,577 8,383

(b) A determination by the Treasurer, pursuant to section 23 of the Financial Management Act 2006, provides for the retention of some cash receipts by the Department. Refer to the Net Appropriation Determination table below for further information. Other receipts are retained under the authority of other relevant Acts of Parliament.

(9)

NET APPROPRIATION DETERMINATION

^(a)

2013-14 Actual

$’000

2014-15 Budget

$’000

2014-15 Estimated

Actual

$’000

Regulatory Fees and Fines

Regulatory Fees - Receipts ... 1,219 2,842 1,801 1,704 1,832 1,965 2,201 Grants and Subsidies

Direct Grants and Subsidies Received from

Commonwealth - Recurrent ... 594 467 467 - - - -

Sale of Goods and Services

Receipts - Sale of Goods and Services ... 5,005 5,138 5,087 6,932 6,508 6,925 7,352

GST Receipts

GST Receipts from the Australian Taxation

Office ... 755 396 396 396 396 396 396

GST Receipts on Sales ... 13 129 129 129 129 129 129

Other Receipts

Interest Received ... 5,987 7,150 7,150 7,600 8,200 7,906 7,906 Interest Received - Monies Held in

Participating Trust Funds ... 121 - - - -

Other Receipts from the Commonwealth ... 800 - - - -

Other Receipts ... 191 120 120 120 120 120 120

TOTAL ... 14,685 16,242 15,150 16,881 17,185 17,441 18,104

(a) The moneys received and retained are to be applied to the Department’s services as specified in the Budget Statements.

(10)

DETAILS OF ADMINISTERED TRANSACTIONS

2013-14 Actual

$’000

2014-15 Budget

$’000

2014-15 Estimated

Actual

$’000

INCOME

Other

Interest Revenue ... 7 7 7 7 7 7 7

Service Appropriation ^(a) ... 402,927 424,689 424,779 439,446 424,836 423,836 423,836 TOTAL ADMINISTERED INCOME ... 402,934 424,696 424,786 439,453 424,843 423,843 423,843 EXPENSES

Grants to Charitable and Other Public Bodies

Per Capita Grants to Non-Government

Schools ^(a) ... 366,424 388,875 388,875 400,040 389,867 388,884 388,893 Supplementation Grants for Special

Education Students ... 20,015 21,049 21,049 22,917 21,049 21,049 21,049 Non-Government School Psychology

Services Grant ... 4,235 4,305 4,305 4,624 4,305 4,305 4,305 Funding for Western Australian Hospital

Services and Western Australian

Institute for Deaf Education ... 5,656 4,862 4,862 6,236 4,862 4,862 4,862

Grants for Students at Risk and Other

Programs ... 349 325 325 520 325 325 325

Australian Music Examinations Board

Grant ... 167 176 176 181 176 176 176

Teacher Training for Vocational Education and Training in

Non-Government Schools (VETiS) ^(b) ... - 825 915 666 - - -

All Other Grants ... 148 193 193 193 193 193 193

Statutory Authorities

Curtin University of Technology - Debt

Charges ... 43 35 35 25 15 6 -

Other

Superannuation - Higher Education

Institutions ... 3,869 4,040 4,040 4,040 4,040 4,040 4,040

Finance Costs ... 7 11 11 11 11 3 -

TOTAL ADMINISTERED EXPENSES ... 400,913 424,696 424,786 439,453 424,843 423,843 423,843

(a) A review of existing funding for per capita grants to non-government schools for the 2015 calendar year was undertaken as part of the 2014-15 Mid-year Review. The Department will be administering an additional $13.9 million in per capita grants in 2015-16. Funding arrangements for financial years 2016-17 through to 2018-19 will be considered as part of the review of the non-government schools funding model commissioned by the Minister for Education. The Department continues to administer $2 million between 2015-16 and 2016-17 to support CARE schools which helps student with social, emotional and behavioural difficulties.

(b) The Department will be administering $0.7 million in 2015-16 for teacher training in relation to VETiS in anticipation of changes to the Western Australian Certificate of Education.