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Part C - Agency Budget Statements (continued)
Office of Renewable Energy Regulator (continued)

Section 3 - Budgeted Financial Statements

• Analysis of Budgeted financial Statements
• Departmental Financial Statement
• Schedule of Administered Activity
• Table 3.1 – Budgeted Departmental Statement of Financial Performance
• Table 3.2 – Budgeted Departmental Statement of Financial Position
• Table 3.3 – Budgeted Departmental Statement of Cash Flows
• Table 3.4 – Departmental Capital Budget Statement
• Table 3.5 – Departmental Non-Financial Assets - Summary of Movement
• Table 3.6 – Schedule of Budgeted Revenues and Expenses Administered on Behalf of Government
• Table 3.7 – Schedule of Budgeted Assets and Liabilities Administered on Behalf of Government
• Table 3.8 – Schedule of Budgeted Administered Cash Flows
• Table 3.9 – Schedule of Administered Capital Budget
• Table 3.10 – Schedule of Administered Non-Financial Assets – Summary of Movement (Budget Year 2004-05)
• Notes to the Financial Statements

The budgeted departmental financial statements for the Office of the Renewable Energy Regulator (ORER) are presented in this section. Information from the budgeted financial statements, forms part of the financial statements that will appear in the ORER's 2004-05 Annual Report, and is also required as input into the Whole of Government Accounts.

ANALYSIS OF BUDGETED FINANCIAL STATEMENTS

Budgeted Departmental Statement of Financial Performance

The Agency is budgeting towards a small surplus for 2004-05, representing funds retained for capital purchases. The Agency also projects a small deficit position for 2003-04 as it utilises unspent funds from prior year appropriations. The statement also reflects a transfer of $0.365m from the ORER to the Official Public Account (OPA). This represents prior year renewable energy certificate related revenue required to be returned to the OPA.

Total revenue is increased from previous years and reflects the increasing administration costs of the mandatory renewable energy target as the target grows in size and numbers of participants increases.

The ORER is anticipating increased costs particularly in the areas of service provision (relating to operating an internet-based registry for renewable energy certificates) and, to a lesser extent, in staffing costs.

Budgeted Departmental Statement of Financial Position

The agency's budget displays asset purchases, as a licence to technical software required to administer the Renewable Energy (Electricity) Act 2000 is purchased and depreciated.

Schedule of Budgeted Revenues and Expenses Administered on behalf of Government

The ORER is responsible for three types of administered funds. While these funds are handled through the ORER, none of these funds are available for the ORER to access. The three administered funds are:

Incoming revenue – Renewable energy certificate related fees: These are statutory fees for the creation and surrender of renewable energy certificates under the Renewable Energy (Electricity) Act 2000. The ORER collects these fees and returns any revenue to the Official Public Account.

Incoming revenue – Renewable energy shortfall related fees: These are the penalties under the Renewable Energy (Electricity) Act 2000 which are imposed when a party liable to surrender renewable energy certificates fails to surrender sufficient certificates to discharge their liability (within a certain flexibility margin).

Outgoing expenses – Renewable energy shortfall related fees: The ORER is appropriated funds to meet the cost of paying renewable energy shortfall fees. The Act provides that a company paying a renewable energy shortfall fee can recover that shortfall payment if, in the next three years, the company surrenders additional renewable energy certificates to cover the shortfall. In these instances, the ORER draws from the Official Public Account an amount equal to the refund amount, less any administration fees specified in regulations.

DEPARTMENTAL FINANCIAL STATEMENTS

Budgeted Departmental Statement of Financial Performance

This statement provides a picture of the expected financial results for the Office of the Renewable Energy Regulator by identifying full accrual expenses and revenues and highlights whether the Office of the Renewable Energy Regulator is operating at a sustainable level.

Budgeted Departmental Statement of Financial Position

This statement shows the financial position of the Office of the Renewable Energy Regulator. It helps decision makers to track the management of the Office of the Renewable Energy Regulator's assets and liabilities.

Budgeted Departmental Statement of Cash Flows

Budgeted cash flows, as reflected in the statement of cash flows, provide important information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities.

Departmental Capital Budget Statement

Shows all planned capital expenditure (capital expenditure on non-financial assets), whether funded either through capital appropriations for additional equity or borrowings, or from funds from internal sources.

Departmental Non-financial Assets – Summary of Movement

Shows budgeted acquisitions and disposals of non-financial assets during the budget year.

SCHEDULE OF ADMINISTERED ACTIVITY

Schedule of Budgeted Revenues and Expenses Administered on behalf of Government

This schedule identifies the main revenues and expenses administered on behalf of the Government except revenue from administered appropriations. As a result of new requirements under the Finance Minister's Orders (FMO) in 2001 02, the receipt of administered appropriations from the Official Public Account is no longer reported as administered revenue. Under the new FMOs only transactions external to the Commonwealth are reported as revenue.

Schedule of Budgeted Assets and Liabilities Administered on behalf of Government

This schedule shows the assets and liabilities administered on behalf of the Government.

Schedule of Budgeted Administered Cash Flows

This schedule shows cash flows administered on behalf of the Government.

Schedule of Administered Capital Budget

This schedule shows details of planned administered capital expenditure.

Schedule of Administered Non-financial Assets – Summary of Movement

This schedule discloses details of movements in administered non-financial assets.

 

 

 

 

 

 

TABLE 3.9 - SCHEDULE OF ADMINISTERED CAPITAL BUDGET

The Office of the Renewable Energy Regulator has not been appropriated any Administered Capital in 2004-05.

TABLE 3.10 - SCHEDULE OF ADMINISTERED NON-FINANCIAL ASSETS - SUMMARY OF MOVEMENT (BUDGET YEAR 2004-05)

The Office of the Renewable Energy Regulator does not administer any non-financial assets on behalf of the Commonwealth.

Notes to the Financial Statements

1. General notes on accrual budgeting framework

(a) Departmental Financial Statements and Notes of Administered Items

Under the Australian Government's accrual budgeting framework, and consistent with Australian Accounting Standards, transactions that agencies control (departmental transactions) are separately budgeted for and reported on from transactions over which agencies do not have control (administered transactions). This ensures that agencies are only held fully accountable for the transactions over which they have control.

• Departmental assets are those assets, liabilities, revenues and expenses in relation to an agency or authority that are controlled by the agency. Departmental expenses include employee and supplier expenses and other administrative costs, which are incurred by the agency in providing its goods and services.
• Administered items are revenues, expenses, assets and liabilities that are managed by an agency or authority on behalf of the Government according to set Government directions. Administered expenses include subsidies, grants and personal benefit payments and administered revenues include taxes, fees, fines and excises.

(b) Appropriations in the Accrual Budgeting Framework

Under the Australian Government's accrual budgeting framework, separate annual appropriations are provided for:

• departmental price of outputs appropriations: representing the Government's purchase of outputs from agencies;
• departmental capital appropriations: for investments by the Government for either additional equity injections or loans in agencies;
• administered expense appropriations: for the estimated administered expenses relating to an existing outcome, a new outcome or a Specific Purpose Payment to the States; and
• administered capital appropriations: for increases in administered equity through funding non-expense administered payments.

Special appropriations fund the majority of payments from the Consolidated Revenue Fund (especially for those that are entitlement driven or involve transfers to state governments).

(c) Administered investments in controlled entities

Each Commonwealth Department is required to show an administered investment in each Commonwealth Authority and Company (CAC) Act 1997 entity within their portfolio. These administered investments should be valued at the Commonwealth's ownership interest in the net assets of those CAC entities, fixed at a notional acquisition date of 30 June 1997.

(d) Asset Valuation

From 1 July 2002 Commonwealth agencies and authorities are required to use either the cost basis or the fair value basis to measure property, plant and equipment. The shift from the deprival method of valuation to fair value should occur gradually over a three-year period. Fair value essentially reflects the current market value of an asset. See guidance from the Department of Finance and Administration on how to calculate fair value.

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