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

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1 Division 24 Part 5 Education Services Minister for Education; Aboriginal Affairs; Electoral Affairs Appropriations, Expenses and Cash Assets d 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 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 , , , , , , ,836 TOTAL APPROPRIATIONS , , , , , , ,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 to Parliament on 8 May 2014, are outlined below: d Streamlined Process Incentive Funding... Tariffs, Fees and Charges (Teacher Registration Board of Western Australia)... Tariffs, Fees and Charges (Training Accreditation Council)... Adjustments to Commonwealth Grants (Western Australian Aboriginal Education and Training Council)... Workforce Renewal Policy (51) 1,692 1,163 1,580 2,007 (1,041) (825) (423) (325) (89) - (467) (467) (467) (467) (4) (42) (100) (162) (228) 271

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 and 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. The number of reviews is anticipated to rise by 57% relative to 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 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 d 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,

3 Outcomes and Key Effectiveness Indicators (a) d 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 % 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% 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% Percentage of teachers compliant with the Teacher Registration Act % 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. d Target Note 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) Efficiency Indicators (b) Cost of Regulatory Services per Registered Provider/Institution... $14, $14, $15, $15, Cost of Recurrent Funding Programs per Student... $7.11 $7.23 $6.79 $6.98 Cost of Loan Services per Loan Advance... $ $ $ $ Hourly Cost of Providing Policy Advice and Support... $ $ $ $ Cost of Review Services per School... $30, $25, $28, $19, Cost of Regulatory Services per Teacher... $92.87 $ $ $ (a) The expansion of the Low Interest Loan Scheme (LILS) from has impacted the Total Cost of Service. This increase is reflected across all efficiency indicators from the onwards. (b) All efficiency indicators for and have been re-stated to reflect new methodology as per changes to the Outcome Based Management structure for the. 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. Explanation of Significant Movements (Notes) 1. The decrease in the indicator for the Target compared to the d of 33% reflects improved efficiencies as a result of a significant increase in the number of reviews of IPS being undertaken. 2. The increase in the indicator for the Target compared to the d of 30% reflects an increase in the Cost of Services attributable to the Teacher Registration Board of Western Australia (TRBWA) represented by the significant increase in renewals of registration expected during. 273

4 Asset Investment Program The Department s Asset Investment Program for comprises ongoing replacement of office furniture, fittings and information technology (IT) upgrades. The Department and the TRBWA have co-located in. It is anticipated that an amount of $1.6 million will be spent in on the fit-out for the new office accommodation. d Total Cost d Expenditure to d Expenditure WORKS IN PROGRESS IT Upgrade and Replacement TRBWA Related Asset Investment... COMPLETED WORKS Furniture and Fittings - Program... IT Upgrade and Replacement - Program... Office Fit-out Co-location of the Department of Education Services with the TRBWA... NEW WORKS Furniture and Fittings Program... Program... Program... Program... IT Upgrade and Replacement Program... Program... Program... Program... Total Cost of Asset Investment Program ,600 1,600 1, ,007 1,717 1, FUNDED BY Drawdowns from the Holding Account Internal Funds and Balances... 1, Total Funding... 1,

5 Financial Statements Income Statement Expenses The Income Statement shows an increase in Total Cost of Services of $3.8 million (8%) in when compared to the d. 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. 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. Income Total income for is budgeted at $26.7 million which is 7% higher than the d 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. Service appropriations for the d are $10.8 million (54%) below the due to the application of the Government s Cash Management Policy as announced in the 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 by $4.1 million (11%) compared to d. Statement of Cashflows The closing cash assets balance of $9 million represents a decrease of $0.5 million (6%) in comparison to the d of $9.5 million. Employee benefits, supplies and services, accommodation expenses and finance costs are expected to increase in. At the same time fee revenue for the TRBWA is budgeted to increase. 275

6 INCOME STATEMENT (a) (Controlled) d 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) Supplies and services... 6,331 7,607 6,515 7,025 7,121 8,031 9,019 Accommodation ,135 1,135 2,120 1,609 1,607 1,672 Depreciation and amortisation Finance costs... 15,792 28,491 28,594 30,762 32,769 32,475 32,475 Other expenses 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, Interest revenue... 13,975 17,355 17,355 17,805 18,405 18,111 18,111 Other revenue 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 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, d and are 96, 98 and 99 respectively. In some cases the figures for and 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 d Other Miscellaneous Grants Other Scholarships TOTAL

7 STATEMENT OF FINANCIAL POSITION (a) (Controlled) d CURRENT ASSETS Cash assets... 22,481 11,525 9,182 8,644 8,387 8,193 7,999 Restricted cash Holding account receivables Receivables Loans to schools... 27,357 28,500 27,857 29,357 31,357 31,357 31,357 Other , 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 ,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, , Receivables - Loans to schools , , , , , , ,235 Other , Total non-current assets , , , , , , ,382 TOTAL ASSETS , , , , , , ,686 CURRENT LIABILITIES Employee provisions... 1,100 1,794 1,100 1,100 1,100 1,100 1,100 Payables 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 1,685 1,685 1,685 1,685 Borrowings , , , , , , ,043 Other , Total non-current liabilities , , , , , , ,899 TOTAL LIABILITIES , , , , , , ,890 EQUITY Contributed equity Accumulated surplus/(deficit)... (22,824) (37,771) (37,820) (41,948) (46,087) (50,173) (54,337) Reserves... 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 , , , , , , ,686 (a) Full audited financial statements are published in the agency s Annual Report. (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. 277

8 STATEMENT OF CASHFLOWS (a) (Controlled) d CASHFLOWS FROM STATE GOVERNMENT Service appropriations... 18,865 19,497 8,728 22,003 23,485 24,028 24,559 Holding account drawdowns 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 Sale of goods and services... 5,005 5,138 5,087 6,932 6,508 6,925 7,352 GST receipts Interest received... 6,108 7,150 7,150 7,600 8,200 7,906 7,906 Other receipts 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 (a) Full audited financial statements are published in the agency s Annual Report. (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. 278

9 NET APPROPRIATION DETERMINATION (a) d 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 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 GST Receipts on Sales 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 Other Receipts from the Commonwealth Other Receipts 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 Statements. 279

10 DETAILS OF ADMINISTERED TRANSACTIONS d INCOME Other Interest Revenue Service Appropriation (a) , , , , , , ,836 TOTAL ADMINISTERED INCOME , , , , , , ,843 EXPENSES Grants to Charitable and Other Public Bodies Per Capita Grants to Non-Government Schools (a) , , , , , , ,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 Australian Music Examinations Board Grant Teacher Training for Vocational Education and Training in Non-Government Schools (VETiS) (b) All Other Grants Statutory Authorities Curtin University of Technology - Debt Charges Other Superannuation - Higher Education Institutions... 3,869 4,040 4,040 4,040 4,040 4,040 4,040 Finance Costs TOTAL ADMINISTERED EXPENSES , , , , , , ,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 Mid-year Review. The Department will be administering an additional $13.9 million in per capita grants in. Funding arrangements for financial years through to 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 and to support CARE schools which helps student with social, emotional and behavioural difficulties. (b) The Department will be administering $0.7 million in for teacher training in relation to VETiS in anticipation of changes to the Western Australian Certificate of Education. 280