Aboriginal Housing Office Group of Staff 

Financial report
 for the year ended 30 June 2007	

	
		2007	2006	
	Notes	$'000	$'000	
Revenue				
Personnel Services	2		6,722			6,391		
Total Revenue			6,722			6,391		
			-			-		
Expenses				
Employee related expenses	3		6,722			6,391		
Total Expenses			6,722			6,391		
OPERATING RESULT			-			-		

The accompanying notes form part of these financial statements.	

		2007	2006	
	Notes	$'000	$'000	
Surplus / (Deficit) for the year			-			-				
TOTAL INCOME AND EXPENSE RECOGNISED FOR THE YEAR			-			-				
Accumulated Funds			-			-				
			-			-				

The accompanying notes form part of these financial statements.	

		            2007	            2006	
	Notes	            $'000	            $'000	
ASSETS				
Current Assets				
Receivables	4		2,695			2,799		
Other	5		931			650		
Total Current Assets			3,626			3,449		
Total Assets			3,626			3,449		
Current Liabilities				
Payables	6		690			204		
Provisions	7		1,641			1,745		
Total Current Liabilities			2,331			1,949		
Non‑Current Liabilities				
Provisions	7		1,295			1,500		
Total Non‑Current Liabilities			1,295			1,500		
Total Liabilities			3,626			3,449		
Net Assets			-			-		
				
EQUITY				
Accumulated funds			-			-		
Total Equity			-			-		

The accompanying notes form part of these financial statements.	

		2007	2006	
	Notes	$'000	$'000	
CASH FLOWS FROM OPERATING ACTIVITIES						
Net Cash Provided / (Used) by Operating Activities			-			-				
NET CASH FLOWS FROM OPERATING ACTIVITIES	8		-			-				
CASH FLOWS FROM INVESTING ACTIVITIES						
Net Cash Provided / (Used) by Investing Activities			-			-				
NET INCREASE (DECREASE) IN CASH HELD			-			-				
Opening cash and cash equivalents			-			-				
CLOSING CASH AND CASH EQUIVALENTS			-			-				

1	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	
(a)	Reporting entity	
	
The Aboriginal Housing Office Group of Staff (the Group) was established pursuant to Part 1 of Schedule 1 to the Public Sector Employment and Management Act 2002.	
	
The Group is a NSW government department. The Group is a not‑for‑profit entity and it has no cash generating units. The accounts of the Group are consolidated as part of the NSW Total State Sector Accounts.	
	
The Group's objective is to provide personnel services to the Aboriginal Housing Office (the Office).	
	
The financial report for the year ended 30 June 2007 has been authorised for issue by the Chairman on behalf of the Board on 18 October 2007.	
(b)	Basis of Preparation	
	
The Group's financial statements are a general purpose financial report which has been prepared in accordance with:	
	
•		
applicable Australian Accounting Standards (which include Australian equivalents to International Financial Reporting Standard (AEIFRS));	
	•		the requirements of the Public Finance and Audit Act 1983 and Regulation 2005	
	
Generally, the historical cost basis of accounting has been adopted and the financial report does not take into account changing money values or current valuations.  However, certain provisions are measured at fair value.  Refer Note. 7.	
	
Judgements, key assumptions and estimations that management has made are disclosed in the relevant notes to the financial statements.	
	
All amounts are rounded to the nearest one thousand dollars and are expressed in Australian currency.	
(c)	Statement of Compliance	
	
The financial statements and notes comply with Australian Accounting Standards, which include AEIFRS.	
(d)	Income Recognition	
	
Income is measured at the fair value of the consideration or contribution received or receivable. 	
	
Revenue from rendering of personnel services is recognised when the services are provided and only to the extent that the associated recoverable expenses are recognised.	
(e)	Employee Benefits and other provisions	
	
(i)	
Salaries and Wages, Annual Leave, Sick Leave and On‑Costs	

Liabilities for salaries and wages (including non‑monetary benefits), annual leave and paid sick leave that fall due wholly within 12 months of the reporting date are recognised and measured in respect of employees' services up to the reporting date at undiscounted amounts based on the amounts expected to be paid when the liabilities are settled.	

Unused non‑vesting sick leave does not give rise to a liability as it is not considered probable that sick leave taken in the future will be greater than the benefits accrued in the future.	

The outstanding amounts of payroll tax, workers' compensation insurance premiums and fringe benefits tax, which are consequential to employment, are recognised as liabilities and expenses where the employee benefits to which they relate have been recognised.	

(ii)	
Long Service Leave and Superannuation	

Long service leave is measured at present value in accordance with AASB 119 Employee Benefits. This is based on the application of certain factors (specified in NSWTC 07/04) to employees with 5 or more years of service, using current rates of pay. These factors were determined based on an actuarial review to approximate present value.

	
The Group's liabilities for long service leave and superannuation are not assumed by the Crown Entity.  However the Group contributes to the Non Budget Sector Treasury Pool Long Service Leave Fund.  	

The superannuation expense for the financial year is determined by using the formulae specified in the Treasurer's Directions.  The expense for certain superannuation schemes (ie Basic Benefit and First State Super) is calculated as a percentage of the employees' salary.  For other superannuation schemes (ie State Superannuation Scheme and State Authorities Superannuation Scheme), the expense is calculated as a multiple of the employees' superannuation contributions.	

The Group contributes to a Superannuation Fund administrator.  Refer Note 7 for further information. 	
	
(iii)	
Other Provisions	

Other provisions exist when the Group has a present legal or constructive obligation as a result of a past event; where it is probable that an outflow of resources will be required to settle the obligation; and when a reliable estimate can be made of the amount of the obligation.	
(f)	Receivables	
	
Receivables have been recognised for the payment of personnel services rendered to the Aboriginal Housing Office.	
(g)	Payables 	
	
Payables include accrued wages, salaries and related on‑costs (such as payroll tax, fringe benefits tax and workers compensation insurance).	
	
A short‑term payable with no stated interest rate are measured at historical cost.	
(h)	New Australian Accounting Standards Issued but not Effective	
	
At reporting date, a number of Australian Accounting Standards adopted by the Australian Accounting Standards Board have been issued but are not yet operative and have not been early adopted by the Division. NSW Treasury mandate precludes early adoption of these accounting standards.	
	
The Group has reviewed the new accounting standards and at this stage does not anticipate any impact on the figures reported in this financial report.	
2	REVENUES	

	2007	2006	
	$'000	$'000	
			
Personnel Services income		6,722			6,391		
		6,722			6,391		

3	EXPENSES	

	2007	2006	
	$'000	$'000	
	Employee related expenses			
Salaries and wages (including recreation leave)		5,788			5,363		
Superannuation ‑ defined contribution plans		383			353		
Long service leave		209			252		
Workers compensation insurance		13			18		
Payroll and Fringe Benefits tax		329			399		
Job Assistance Scheme		-			6		
		6,722			6,391		
4	CURRENT ASSETS ‑ RECEIVABLES	

	2007	2006	
	$'000	$'000	
Current 			
Personnel Services Fees		2,177			2,561		
Employee Services		493			215		
Other		25			23		
		2,695			2,799		
		2,695			2,799		
5	CURRENT ASSETS ‑ OTHER 	

	2007	2006	
	$'000	$'000	
Current 			
Long service leave pool contribution		931			650		
		931			650		
6	CURRENT LIABILITIES ‑ PAYABLES	

	2007	2006	
	$'000	$'000	
Current 			
Accrued salaries, wages and on‑costs		690			204		
		690			204		
7	CURRENT / NON‑CURRENT LIABILITIES ‑ PROVISIONS	

	2007	2006	
	$'000	$'000	
Current 			
Employee benefits and related on‑costs			
Recreation leave		567			612		
Long service leave		3			324		
Payroll tax		140			148		
Fringe benefits tax		-			11		
Long service leave pool contribution		931			650		
		1,641			1,745		

	2007	2006	
	$'000	$'000	
Non‑current 			
Superannuation		1,215			1,449		
Long service leave and related on‑costs		80			51		
		1,295			1,500		

Aggregate employee benefits and related on‑costs	

	2007	2006	
	$'000	$'000	
			
Provisions ‑ current		1,641			1,745		
Provisions ‑ non‑current		1,295			1,500		
Accrued salaries, wages and on‑costs		690			204		
		3,626			3,449		

SUPERANNUATION FUNDS					
					
30 June 2007 superannuation position 					
Basis – AASB 119					

 	SASS	SANCS	SSS	TOTAL	
 	30-Jun-07	30-Jun-07	30-Jun-07	30-Jun-07	
Member Numbers	 	 	 	 	
	 				
Contributors	4	11	7	22	
Deferred benefits	0	0	0	0	
Pensioners	0	0	0	0	
Pensions fully commuted	0 	0	0	0	
Superannuation Position for AASB 119 purposes	A$	A$	A$	A$	
					
Accrued liability	492,053	390,476	4,323,070	5,205,599	
 	 	 	 	 	
Estimated reserve account balance	(259,668)	(261,098)	(3,469,397)	(3,990,163)	
 	232,385	129,378	853,673	1,215,436	
					
Future Service Liability (Note 1)	(230,768)	(158,259)	(374,068)	(763,095)	
Surplus in excess of recovery available from schemes	0	0	0	0	
Net (asset)/liability to be recognised in balance sheet	232,385	129,378	853,673	1,215,436	
					
Note 1:					
The Future Service Liability (FSL) does not have to be recognised by an employer.  It is only used to determine if an asset ceiling limit should be imposed (AASB 119, para 58).  Under AASB 119, any prepaid superannuation asset recognised cannot exceed the total of any unrecognised past service cost and the present value of any economic benefits that may be available in the form of refunds from the plan or reductions in future contributions to the plan.  Where the “surplus in excess of recovery” is zero, no asset ceiling limit is imposed.	

Disclosure Items 30 June 2007					

Accounting policy {AASB 119 –  paragraph 120A(a) }					
					
Actuarial gains and losses are recognised immediately in profit and loss in the year in which they occur.			
					
Fund information {AASB 119 – paragraph 120A(b) }					
					
The Pooled Fund holds in trust the investments of the closed NSW public sector superannuation schemes:			
State Authorities Superannuation Scheme (SASS)					
State Superannuation Scheme (SSS)					
Police Superannuation Scheme (PSS)					
State Authorities Non-contributory Superannuation Scheme (SANCS).				
					
These schemes are all defined benefit schemes – at least a component of the final benefit is derived from a multiple of member salary and years of membership.		
					
All the Schemes are closed to new members.					
					
Reconciliation of the present value of the defined benefit obligation {AASB 119 – paragraph 120A(c)}		
					
	SASS	SANCS	SSS		
	Financial Year to 30 June 2007	Financial Year to 30 June 2007	Financial Year to 30 June 2007		
	A$	A$	A$		
Present value of partly funded defined benefit obligations at beginning of the year	421,558	322,624	3,378,399		
Current service cost	26,865	18,406	75,599		
Interest cost	24,914	18,472	201,188		
Contributions by fund participants	14,828	0	68,378		
Actuarial (gains)/losses	13,361	(7,310)	281,635		
Benefits paid	(9,474)	38,284	317,870		
Past service cost	0	0	0		
Curtailments	0	0	0		
Settlements	0	0	0		
Business Combinations	0	0	0		
Exchange rate changes	0	0	0		
Present value of partly funded defined benefit obligations at end of the year	492,053	390,476	4,323,070		

					
Reconciliation of the fair value of fund assets {AASB 119 – paragraph 120A(e)}		
					
	SASS	SANCS	SSS		
	Financial Year to 30 June 2007	Financial Year to 30 June 2007	Financial Year to 30 June 2007		
	A$	A$	A$		
Fair value of Fund assets at beginning of the year	192,748	171,642	2,308,923		
Expected return on fund assets	15,746	13,077	180,232		
Actuarial gains/(losses)	19,347	16,578	522,134		
Employer contributions	26,473	21,517	71,860		
Contributions by Fund participants	14,828	0	68,378		
Benefits paid	(9,474)	38,284	317,870		
Settlements	0	0	0		
Business combinations	0	0	0		
Exchange rate changes	0	0	0		
Fair value of Fund assets at end of the year	259,668	261,098	3,469,397		

					
Reconciliation of the assets and liabilities recognised in the balance sheet {AASB 119 – paragraphs 120A(d) and (f)}		
					
	SASS	SANCS	SSS		
	Financial Year to 30 June 2007	Financial Year to 30 June 2007	Financial Year to 30 June 2007		
	A$	A$	A$		
Present value of partly funded defined benefit obligations at end of year	492,053	390,476	4,323,070		
Fair value of fund assets at end of year	(259,668)	(261,098)	(3,469,397)		
Subtotal	232,385	129,378	853,673		
Unrecognised past service cost	0	0	0		
Unrecognised gain/(loss) 	0	0	0		
Adjustment for limitation on net asset	0	0	0		
Net Liability/(Asset) recognised in balance sheet at end of year	232,385	129,378	853,673		

					
Expense recognised in income statement {AASB 119 – paragraph 46 & 120A(g)}		
					
 	SASS	SANCS	SSS		
	Financial Year to 30 June 2007	Financial Year to 30 June 2007	Financial Year to 30 June 2007		
					
Components Recognised in Income Statement	A$	A$	A$		
Current service cost	26,865	18,406	75,599		
Interest cost	24,914	18,472	201,188		
Expected return on Fund assets (net of expenses)	(15,746)	(13,077)	(180,232)		
Actuarial losses/(gains) recognised in year	(5,986)	(23,887)	(240,499)		
Past service cost	0	0	0		
Movement in adjustment for limitation on net asset	0	0	0		
Curtailment or settlement (gain)/loss	0	0	0		
Expense/(income) recognised 	30,048	(87)	(143,943)		

Amounts recognised in the statement of recognised income and expense {AASB 119 – paragraph 120A(h)}		
					
	SASS	SANCS	SSS		
	Financial Year to 30 June 2007	Financial Year to 30 June 2007	Financial Year to 30 June 2007		
	A$	A$	A$		
Actuarial (gains)/losses 	0	0	0		
Adjustment for limit on net asset	0	0	0		

					
Cumulative amount recognised in the statement of recognised income and expense {AASB 119 – paragraph 120A(i)}	
					
	SASS	SANCS	SSS		
	Financial Year to 30 June 2007	Financial Year to 30 June 2007	Financial Year to 30 June 2007		
	A$	A$	A$		
Cumulative amount of actuarial (gains)/losses	0	0	0		
Cumulative adjustment for limitation on net asset	0	0	0		

					
Fund assets {AASB 119 – paragraph 120A(j)}					
					
The percentage invested in each asset class at the balance sheet date:	
					
 	30-Jun-07				
Australian equities	33.6%				
Overseas equities	26.5%				
Australian fixed interest securities	6.8%				
Overseas fixed interest securities	6.4%				
Property	10.1%				
Cash	9.8%				
Other	6.8%				
					
Fair value of Fund assets {AASB 119 – paragraph 120A(k)}	
					
All Fund assets are invested by STC at arm’s length through independent fund managers.	
					
Expected rate of return on assets {AASB119 – paragraph 120A(l)}	
					
The expected return on assets assumption is determined by weighting the expected long-term return for each asset class by the target allocation of assets to each class.  The returns used for each class are net of investment tax and investment fees.		
					
Actual Return on Fund Assets {AASB 119 – paragraph 120A(m)}	
					
 	SASS	SANCS	SSS		
	Financial Year to 30 June 2007	Financial Year to 30 June 2007	Financial Year to 30 June 2007		
					
 	A$	A$	A$		
Actual return on Fund assets	30,304	29,655	381,162		

					
Valuation method and principal actuarial assumptions at the balance sheet date {AASB 119 – paragraph 120A(n)}		
a) Valuation Method					
The Projected Unit Credit (PUC) valuation method was used to determine the present value of the defined benefit obligations and the related current service costs. This method sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation.		

b) Economic Assumptions					
					
 	30-Jun-07				
Salary increase rate (excluding promotional increases)	4.0% pa to June 2008; 3.5% pa thereafter				
Rate of CPI Increase	2.5% pa				
Expected rate of return on assets backing current pension liabilities	7.6%				
Expected rate of return on assets backing other liabilities	7.6%				
Discount rate	6.4% pa				

c) Demographic Assumptions					
The demographic assumptions at 30 June 2007 are those used in the 2006 triennial actuarial valuation. A selection of the most financially significant assumptions is shown below:		
					
(i) SASS Contributors - the number of SASS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and redundancy. Promotional salary increase rates are also shown.		

					
					
(ii) SSS Contributors - the number of SSS contributors expected in any one year (out of 10,000 members), at the ages shown, to leave the fund as a result of death, disability, resignation, retirement and preservation. Promotional salary increase rates are also shown.

					
					
(iii) SSS Commutation - the proportion of SSS members assumed to commute their pension to a lump sum in any one year.		

(iv) SSS Pensioner Mortality - assumed mortality rates (in 2006/2007) for SSS pensioners (separately for normal retirement/spouses and invalidity).		

(v) SSS Pensioner Mortality Improvements - per annum assumed rates of mortality improvement for SSS pensioners.		

					
					
Historical information {AASB119 – paragraph 120A(p)}	
					
	SASS	SANCS	SSS		
	Financial Year to 30 June 2007	Financial Year to 30 June 2007	Financial Year to 30 June 2007		
	A$	A$	A$		
Present value of defined benefit obligation	492,053	390,476	4,323,070		
Fair value of Fund assets	(259,668)	(261,098)	(3,469,397)		
(Surplus)/Deficit in Fund	232,385	129,378	853,673		
Experience adjustments – Fund liabilities 	13,361	(7,310)	281,635		
Experience adjustments – Fund assets	(19,347)	(16,578)	(522,134)		
					
Expected contributions {AASB119 – paragraph 120A(q)}	
					
	SASS	SANCS	SSS		
					
	A$	A$	A$		
Expected employer contributions	28,173	20,433	63,592		
					
Disclosures required under paragraph Aus121.1 and Aus121.2				
					
Aus121.1 Funding arrangements for employer contributions 					

(a)   Surplus/deficit					
					
The following is a summary of the 30 June 2007 financial position of the Fund calculated in accordance with AAS 25 “Financial Reporting by Superannuation Plans”:		
					
 	SASS	SANCS	SSS		
	30-Jun-07	30-Jun-07	30-Jun-07		
	A$	A$	A$		
Accrued benefits	488,151	386,985	3,972,297		
Net market value of Fund assets	(259,668)	(261,098)	(3,469,397)		
Net (surplus)/deficit	228,483	125,887	502,900		

					
(b)   Contribution recommendations					
					
Recommended contribution rates for the entity are: 					
					
 	SASS	SANCS	SSS		
					
 	multiple of member contributions	% member salary	multiple of member contributions		
	1.90	2.50	0.93		

(c)    Funding method					
					
The method used to determine the employer contribution recommendations at the last actuarial review was the Aggregate Funding method.  The method adopted affects the timing of the cost to the employer.		
					
Under the Aggregate Funding method, the employer contribution rate is determined so that sufficient assets will be available to meet benefit payments to existing members, taking into account the current value of assets and future contributions. 		

(d)   Economic assumptions					
					
The economic assumptions adopted for the last actuarial review of the Fund were:			
					
Weighted-Average Assumptions	 			
Expected rate of return on Fund assets backing current pension liabilities	 	7.7% pa			
Expected rate of return on Fund assets backing other liabilities	 	7.0% pa			
Expected salary increase rate	 	4.0% pa			
Expected rate of CPI increase	 	2.5% pa			

Aus121.2 Nature of asset/liability					
If a surplus exists in the employer's interest in the Fund, the employer may be able to take advantage of it in the form of a reduction in the required contribution rate, depending on the advice of the Fund's actuary.		
					
Where a deficiency exists, the employer is responsible for any difference between the employer’s share of fund assets and the defined benefit obligation.			

	
8	NOTE TO CASH FLOW STATEMENT	

Reconciliation of Net Cash Provided by Operating Activities to Operating Results	

	2007	2006	
	$'000	$'000	

Operating Results		-			-				
Decrease / (increase) in receivables		(177)			(511)				
Increase / (decrease) in payables		486			144				
Increase / (decrease) in provisions		(309)			367				
Net Cash Provided by Operating Activities		-			-				

9	FINANCIAL INSTRUMENTS	

The Group’s principal financial instruments are outlined below.  These financial instruments arise directly from the Group’s operations or are required to finance the Group’s operations.  The Group does not enter into or trade financial instruments for speculative purposes.  The Group does not use financial derivatives.	

Receivables	

All trade debtors are recognised as amounts receivable at balance date. Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance for impairment is raised when there is objective evidence that the entity will not be able to collect all amounts due. The credit risk is the carrying amount (net of any allowance for impairment). No interest is earned on trade debtors. The carrying amount approximates net fair value. 	

Payables	

The liabilities are recognised for amounts due to be paid in the future for goods or services received, whether or not invoiced. Amounts owing to suppliers (which are unsecured) are settled in accordance with the policy set out in Treasurer's Direction 219.01. If trade terms are not specified, payment is made no later than the end of the month following the month in which an invoice or a statement is received. Treasurer's Direction 219.01 allows the Minister to award interest for late payment. Nil interest was payable during the year (2005 ‑06 Nil).	
10	CONTINGENT LIABILITIES AND CONTINGENT ASSETS	

The Group has no contingent liabilities or contingent assets to disclose.	
11	AFTER BALANCE DATE EVENTS	

There are no events subsequent to balance date which affect the financial report.	

End of audited financial statements.