AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
Supporting better
outcomes for consumers,
business and the community
© Commonwealth of Australia 2014
ISSN: 1441–4775
With the exception of the Commonwealth Coat of Arms and where otherwise noted, all material
presented in this document is provided under a Creative Commons Attribution 3.0 Australia
(http://creativecommons.org/licenses/by/3.0/au) licence.
The details of the relevant licence conditions are available on the Creative Commons website
(accessible using the links provided), as is the full legal code for the CC BY 3.0 AU licence
(http://creativecommons.org/licenses/by/3.0/au/legalcode).
The document should be attributed as the Australian Financial Security Authority annual
report 2013–14.
Use of the Coat of Arms
The terms under which the Coat of Arms can be used are detailed on the It’s an Honour website,
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For further information regarding this publication, please contact:
Annual Reporting Officer
Communications Unit
Australian Financial Security Authority
GPO Box 821
Canberra ACT 2601
Tel: (02) 6270 3400
Fax: (02) 6270 3413
Email: [email protected]
This report is available at www.afsa.gov.au/about-us/annual-report.
Design: www.giraffe.com.au
CONTENTS
Letter of transmittal
iii
Contents
iv
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
iv
1
OVERVIEW
Chief Executive and Inspector-General’s review
2
The year at a glance
4
Outlook for 2014–15
5
Agency overview
6
Outcome and programme structure
2
PERFORMANCE
Programme 1.1: Personal insolvency and trustee services
12
Component 1.1.1: An efficient information and registry service
12
Component 1.1.2: An effective regulatory framework for insolvency practitioners
15
Component 1.1.3: Administration of insolvent estates where private insolvency
practitioners are not appointed
19
Component 1.1.4: Investigation of Bankruptcy Act offences
22
Component 1.1.5: Administration of proceeds of crime property
24
Programme 1.2: Operation of a national register of security interests in personal property
27
Component 1.2.1: A Personal Property Securities Register and registry services
27
3
MANAGEMENT AND ACCOUNTABILITY
Corporate governance
30
Client service
35
Disability reporting mechanisms
37
External scrutiny
37
Financial management
37
Management of AFSA’s people
41
4
OTHER MANDATORY INFORMATION
Freedom of information
50
Work health and safety
52
Consultancy services
52
Advertising and market research
56
Ecologically sustainable development and environmental performance
56
List of requirements
57
10
ANNUAL REPORT ON THE OPERATION OF THE BANKRUPTCY ACT 1966
5
OPERATION OF THE BANKRUPTCY ACT IN 2013–14
Objectives of the Bankruptcy Act
64
Personal insolvency activity
64
Bankruptcies under Part IV and Part XI
68
Debt agreements under Part IX
74
Personal insolvency agreements under Part X
77
Enforcement
80
Inspector-General reviews
82
Regulation of insolvency practitioners
85
Amendments to the Bankruptcy Act and the Bankruptcy Regulations
87
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
ANNUAL REPORT ON THE OPERATION OF THE PERSONAL PROPERTY
SECURITIES ACT 2009
6OPERATION OF THE PERSONAL PROPERTY SECURITIES ACT
IN 2013–14
Registrar’s introduction
92
Data on the use of the Personal Property Securities Register
94
Amendments to the Personal Property Securities Act, Personal Property Securities
Regulations and associated instruments
99
7
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014
Independent auditor’s report
102
Financial statements
105
ACRONYMS AND ABBREVIATIONS
GLOSSARY
INDEX
190
191
199
v
FIGURES
Figure 1: Organisational chart—AFSA’s senior executive at 30 June 2014
Figure 2: AFSA’s outcome and programme structure, 2013–14
8
10
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
TABLES
vi
Table 1: Registered trustees and registered debt agreement administrators
by state and territory, as at 30 June 2014
18
Table 2: Referral and investigation statistics, 2012–13 and 2013–14
23
Table 3: Membership of AFSA’s National Management Board in 2013–14
31
Table 4: Membership of AFSA’s Audit Committee in 2013–14
33
Table 5: Agency resource statement, 2013–14
38
Table 6: Expenses by outcome and programmes, 2013–14
39
Table 7: Number of employees by classification group, gender and location,
as at 30 June 2013 and 2014
45
Table 8: Non-ongoing employees by classification group and location,
as at 30 June 2014
46
Table 9: Part-time employees by classification group and location,
as at 30 June 2014
46
Table 10:Salary ranges for non–Senior Executive Service employees under
the enterprise agreement, as at 30 June 2014
47
Table 11:Salary range for Senior Executive Service employees, as at
30 June 2014
47
Table 12:Freedom of information requests and outcomes, 2013–14
51
Table 13: Details of consultancies, 2013–14
54
Table 14: Advertising, market research and media expenditure, 2013–14
56
Table 15: Personal insolvency activity
64
Table 16: Official Receiver notices
65
Table 17:Searches conducted on the National Personal Insolvency Index by type of user
65
Table 18: Section 305 activity
67
Table 19: Official Trustee estates
68
Table 20: Registered trustee estates
69
Table 21:Monies administered by the Official Trustee in administrations
under Parts IV and XI
70
Table 22:Monies administered by registered trustees in administrations
under Parts IV and XI
71
Table 23: Annulments
73
Table 24: Objections to discharge
73
Table 25: Part IX Debt agreements—status of debt agreements
75
Table 26: Part IX Debt agreements—receipts and payments
76
Table 27: Part X Administrations under Official Trustee control
78
Table 28: Part X Administrations under registered trustee control
78
Table 29: Part X Monies administered by the Official Trustee
79
Table 30: Part X Monies administered by registered trustees
79
Table 31: Breakdown of Bankruptcy Act prosecutions
80
Table 32: Prosecution outcomes
81
Table 33: Reviews of income contribution assessments
82
Table 34: Reviews of objections to discharge
83
Table 35: Reviews of hardship applications
84
Table 36: Reviews of registered trustee remuneration
84
Table 37: Administrative Appeals Tribunal reviews and decisions
85
Table 38: Searches conducted on the PPSR by type
94
Table 39: Searches conducted on the PPSR by type of user
94
Table 40: Activity regarding PPSR registrations
95
Table 41: Number of PPSR registrations by kind of interest
95
Table 42: Number of PPSR registrations by registration state
96
Table 43: Number of PPSR registrations by collateral class
96
Table 44: Number of PPSR registrations by kind of collateral 97
Table 45:Number of PPSR registrations that were removed or otherwise
amended by the Registrar
97
Table 46: Details of refusal of access to or suspension of the PPSR
98
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
vii
READER’S GUIDE
The Australian Financial Security Authority’s 2013–14 annual report has been prepared in accordance
with the Requirements for annual reports for departments, executive agencies and FMA Act bodies, as
approved by the Joint Committee of Public Accounts and Audit.
This publication also contains additional annual reports on the operation of the Bankruptcy Act 1966
and the Personal Property Securities Act 2009.
The annual report is divided into the following sections:
Section 1 comprises the Chief Executive and Inspector-General’s review for 2013–14, the agency
overview, information about AFSA’s major achievements during the year and priorities for 2014–15.
Section 2 contains reporting on the agency’s outcome and programme performance.
Section 3 contains reporting on corporate governance, external scrutiny, human resource management
and financial resource management.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
Section 4 contains other mandatory information, including reports required under specific legislation
and additional information useful for providing a clearer picture of the agency’s activities during
2013–14. A list of requirements (for ease of locating mandatory requirements) is also provided.
Section 5 contains the annual report on the operation of the Bankruptcy Act 1966 during 2013–14.
Section 6 contains the annual report on the operation of the Personal Property Securities Act 2009
during 2013–14.
Section 7 contains the audited financial statements for 2013–14.
viii
s e c t i o n 1 ov e rv i e w
Chief Executive and Inspector-General’s review
2
The year at a glance
4
Outlook for 2014–15
5
Agency overview
6
Outcome and programme structure
10
CHIEF EXECUTIVE AND INSPECTOR-GENERAL’S REVIEW
Welcome to the Australian Financial Security Authority’s (AFSA’s) 2013–14 annual report.
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
We achieved a great deal during
the year and as importantly, we
commenced or started planning for
many more things to come.
AFSA had a strong focus on strengthening our service delivery in 2013–14. At the National Service
Centre we transitioned to a single client relationship management system for Personal Property
Securities Register (PPSR) and insolvency services and improved the interactive voice response system
to ensure clients are directed to the correctly skilled people in the most efficient manner. We’ve also
added a client survey option to the interactive voice response system, which allows real-time surveying
of our service delivery.
In 2013–14 we continued to deliver strong outcomes to safeguard the integrity of the personal
insolvency system. Several significant prosecution results served as a healthy deterrent against
bankrupts and others who breach the Bankruptcy Act offence provisions.
In line with the government’s deregulation agenda, we’re undertaking a review of the efficiency and
effectiveness of our regulatory practice and procedure, which has included finalising a successful pilot
of eInspections that commenced in 2012–13.
Working closely with our stakeholders is important to us and 2013–14 was another active year of
building and strengthening relationships with key stakeholders. We held regular stakeholder forums
with insolvency practitioners and creditors and regular meetings of our PPSR stakeholder forums. We
provide news and updates to our stakeholders and the distribution list continues to grow, with a wide
range of stakeholders interested in staying informed.
We continue to look for additional ways to deliver information that’s easily accessible. In 2013–14
we implemented a variety of communication products in an ongoing effort to ensure that clients,
stakeholders and members of the public have access to the information they need about our services.
We continued our delivery of regular personal insolvency statistics, business and non-business
personal insolvency statistics and regional statistics, including maps, commentary and data format
options. We also issued quarterly PPSR statistical releases.
During the year, we placed an emphasis on strengthening our governance and quality assurance
arrangements. We established our Enterprise Capability Office, introduced a portfolio programme and
project governance framework and updated our risk management framework and plan. Our quality
programme established approved frameworks, guidelines and practices for many areas, including
document control and records management, standard operating procedures and work instructions that
have been rolled out across the organisation.
2
A review of the Personal Property Securities Act 2009 commenced in 2013–14. The final report of the
review is due to be submitted to the Australian Government by 30 January 2015 and we look forward to
learning more about the findings and recommendations of the review.
During the year, we hosted a number of Indonesian delegates as part of the ongoing assistance we’re
providing to the International Finance Corporation to assist with the integration of Indonesia’s online
personal property securities register. At the close of the financial year, the development of our new enterprise agreement is underway.
A number of other achievements and milestones in 2013–14 are listed on the next page. I thank the staff
at AFSA for another strong year of performance and I look forward to the challenges and opportunities
that 2014–15 will bring.
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Veronique Ingram
Chief Executive and Inspector-General in Bankruptcy
3
THE YEAR AT A GLANCE
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
2014
June
We released a new performance management framework to improve the
capabilities and performance of employees and the ability of employees to achieve
AFSA’s organisational outcomes.
May
We received a Merit Award from the International Association of Commercial
Administrators for co-design of the PPSR.
April
We introduced new business processes in response to the announcement that
AFSA would become a fully cost-recovered agency. We worked with stakeholders
to ensure our business processes and information products were appropriately
updated.
March
There were significant changes to the Privacy Act 1988 with the commencement
of the Privacy Amendment (Enhancing Privacy Protection) Act 2012. We undertook
major work to ensure our websites, forms, products and processes were
appropriately updated.
February
We developed a naming conventions framework to ensure AFSA’s position titles
were consistent and meaningful within divisions, classifications, throughout the
agency as a whole and across the rest of the Australian Public Service.
January
The two-year transition period for the PPSR came to an end. There were 281 010
transitional security interest registrations created on the PPSR in January 2014, a
552% increase from 43 074 in December 2013.
2013
4
December
We became one of the first government agencies to successfully transition to the
Telstra secure gateway as part of the whole-of-government gateway initiative.
November
We released our strategic plan for 2014–17 and our updated strategic roadmap,
providing clear guidance to our stakeholders about our planned future direction.
October
We developed and released a new quick motor vehicle search for the PPSR. The
new system provides a simplified search process, and emails a copy of the search
certificate and explanatory information direct to a user’s email address. This has
significantly improved the casual user’s experience.
September
We successfully completed the first phase of our data warehouse. This investment
has allowed us to verify our data and publish it earlier. In the longer term, it will
provide us with more robust, flexible and responsive reporting options.
August
We implemented our name change from the Insolvency and Trustee Service
Australia to the Australian Financial Security Authority, a name which better
reflects our roles and responsibilities.
July
We released the practitioner compliance programme for 2013–14. AFSA takes
a proactive and preventative approach to regulation, with a clear preference for
achieving early resolution of systemic issues.
OUTLOOK FOR 2014–15
Strengthening our knowledge
Strengthening service delivery
Strengthening our people
AFSA is well positioned to meet new and emerging challenges in 2014–15.
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
We will continue to ensure an effective regulatory framework for insolvency practitioners, working
closely with stakeholders as we finalise a review of the efficiency and effectiveness of our regulatory
practice and procedures. We will further embrace technology to lessen the regulatory burden on
practitioners—including the use of eInspections—and will continue our focus on ensuring that those
who advertise insolvency services do so in a balanced way.
We are committed to monitoring, refreshing and improving our existing technology. In 2014–15 we
will support our ICT capability by establishing and adopting a robust architecture framework and
good design principles. Our data warehouse will be rolled out to a wider audience and the existing
functionality will be supported and enhanced, with the implementation of real-time reporting. We’ll
continue to maintain and enhance business solutions as well as leveraging cloud and other service
delivery opportunities.
We are keen to support clients and stakeholders to be able to conduct business online and will work to
improve the online experience through self-serve options such as access to a new bankruptcy register
search, tutorials, online forms and helpful information on the website. We will increasingly provide
information to clients and stakeholders through digital products such as videos and podcasts, and will
continue to investigate how we can incorporate social media.
A review of the Personal Property Securities Act 2009 is underway and we look forward to the
opportunity to deliver outcomes from the review. We will continue to roll out our PPSR information
campaign, with a strong focus on stakeholder engagement and communication with the small and
medium enterprise sector. We will review the content on the PPSR website and include new resources
and a more client-focused menu structure.
AFSA will also continue to improve the way we do business through new initiatives. Our National Service
Centre will focus on innovation, reviewing business processes and supporting resources to identify
efficiencies. Organisationally, we will be working on maturing our corporate governance and enterprise
capability frameworks and reviewing our business continuity plan.
We will introduce a number of initiatives in 2014–15 to support and strengthen our people. These
include delivering our revised learning and development framework, an enhanced AFSA workforce plan
and our diversity programme. We will also be finalising negotiations and delivering our new
enterprise agreement.
5
AGENCY OVERVIEW
VISION
The Australian Financial Security Authority (AFSA) is a dynamic organisation that facilitates improved
and equitable financial outcomes for consumers, business and the community through excellence in
service delivery.
PURPOSE
AFSA’s purpose is to provide improved and equitable financial outcomes for consumers, business and
the community through application of bankruptcy and personal property securities laws, regulation of
personal insolvency practitioners, and trustee services.
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
OBJECTIVES
Service delivery optimisation—Continually improving our processes, governance and resource
management to support quality service delivery.
Knowledge management—To provide all stakeholders with quality information and reporting analysis.
Workforce and people—A highly skilled, engaged and adaptable workforce, supported by quality leadership.
FUNCTIONS
AFSA is an executive agency in the Attorney-General’s portfolio. The services provided by AFSA include:
●●
administering bankrupt estates as the Official Trustee, and registering all bankruptcies, debt
agreements and personal insolvency agreements
●●
ensuring compliance by debtors, bankrupts and their associates, practitioners and others with the
requirements of the Bankruptcy Act 1966 and associated legislation by:
operating the bankruptcy registry where debtor’s petitions are lodged, debt agreement proposals
are processed and public records on insolvency are maintained
■■
exercising Official Receiver powers to assist trustees to obtain information and recover property
■■
investigating possible offences under the Bankruptcy Act and preparing briefs of evidence for
prosecution
●●
maintaining the National Personal Insolvency Index
●●
providing information about the formal options for dealing with unmanageable debt under the
Bankruptcy Act
●●
regulating the administrations and activity of trustees and debt agreement administrators
●●
acting as a special trustee for Australian Government agencies pursuant to court orders—
particularly by locating, controlling and selling property under the proceeds of crime legislation
●●
●●
6
■■
administering and enforcing the Personal Property Securities Act 2009, including through the
provision of the national Personal Property Securities Register (PPSR)
providing information about transacting with the PPSR.
LEGISLATION
AFSA is responsible for administering the following Acts and associated Regulations, which provide a
legislative framework for its functions and services:
●●
the Bankruptcy Act 1966
●●
the Bankruptcy (Estate Charges) Act 1997
●●
the Personal Property Securities Act 2009.
AFSA also administers property in accordance with orders made under:
●●
the Proceeds of Crime Act 1987
●●
the Proceeds of Crime Act 2002.
ROLE
●●
●●
●●
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA fulfils each of the following roles created by the Bankruptcy Act:
Inspector-General in Bankruptcy—AFSA’s Chief Executive is also appointed as the InspectorGeneral in Bankruptcy. The Inspector-General is responsible for the general administration of the
Bankruptcy Act and has powers to regulate bankruptcy trustees and debt agreement administrators,
review decisions of trustees and investigate allegations of offences under the Act.
Official Trustee in Bankruptcy—The Official Trustee in Bankruptcy, a body corporate, administered
79% of bankruptcies in 2013-14 and also other personal insolvency arrangements. AFSA provides
personnel and resources to ensure that the Official Trustee can fulfil its responsibilities. The Official
Trustee also has responsibility under the Proceeds of Crime Act 2002 and the Customs Act 1901 to
control and deal with property under court orders made under these statutes.
Official Receiver—On behalf of the Official Receiver, AFSA operates a public bankruptcy registry
service with compliance and coercive powers to assist bankruptcy trustees to discharge their
responsibilities.
The Personal Property Securities Act creates the role of:
●●
Registrar of Personal Property Securities—The Registrar maintains the PPSR in compliance with
the Personal Property Securities Act 2009 and associated Regulations. This includes responsibility
for ensuring that the register is operational and accessible. The Registrar has various powers in
relation to the PPSR such as refusing access to the PPSR or suspending its operation, in certain
circumstances; removing or reinstating data on the PPSR; and conducting investigations into
matters for the purpose of performing his or her functions.
7
ORGANISATIONAL STRUCTURE
AFSA’s senior executive is led by the Chief Executive. The Chief Executive is directly assisted by:
●●
the Chief Operating Officer
●●
the National Manager Insolvency and Trustee Services
●●
the National Manager Regulation and Enforcement
●●
the General Counsel Legal and Governance
●●
the National Manager Client Services
●●
the Chief Information Officer
●●
the Chief Finance Officer.
The responsibilities of AFSA’s senior executive are shown in Figure 1 and discussed under ‘Groups and
divisions’ below.
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
FIGURE 1: AFSA’S SENIOR EXECUTIVE AT 30 JUNE 2014
Veronique Ingram
Chief Executive and
Inspector-General
Gavin McCosker
Chief Operating
Officer (COO)
COO Group
Peter Edwards
National Manager
Client Services
Kerrie Foster
Chief Information
Officer
ICT Services
David Bergman
National Manager
Insolvency and
Trustee Services
and Registrar of
Personal Property
Securities
8
Robert Hanlon
Chief Finance Officer
Finance, People and
Capability
Paul Shaw
National Manager
Regulation and
Enforcement
Andrew Sellars
General Counsel
Legal and
Governance
GROUPS AND DIVISIONS
The Chief Operating Officer Group coordinates and delivers key business-enabling services including
executive support, communications, financial management, information and communications
technology, human resource management, security, contract and property management and client
contact services. The group has three divisions:
●●
●●
The Client Services division provides a range of services including stakeholder communication and
engagement, as well as front-line service delivery for insolvency and PPSR enquiries, information
and transactions. It works to streamline services through process innovation, informed by the needs
of AFSA’s clients.
The ICT Services division delivers and supports business-enabling technology solutions and services
for AFSA staff and external clients. Insolvency services, proceeds of crime and the PPSR systems
comprise AFSA’s main technology solutions, along with a range of corporate applications, a business
intelligence capability and support services for Client Services and Regulation and Enforcement. The
division’s other responsibilities include delivering and managing robust infrastructure platforms,
providing help desk services and strategic technical advice, and delivering an enterprise architecture
capability.
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
●●
The Finance, People and Capability division provides a range of services across finance,
procurement, property, security and workforce management. It oversees the management of
property and security within the agency, AFSA’s current and future financial viability, and all
procurement services. Another key area of the division’s business is workforce management,
including the strategic direction for human capital management, learning and development within
the agency, recruitment processes and industrial relations.
The Insolvency and Trustee Services division provides information to debtors on options to deal with
unmanageable debt, and assesses and registers bankruptcy, debt agreement and personal insolvency
agreement applications from debtors and registered court-ordered insolvency administrations. It
issues bankruptcy notices on the application of creditors, and exercises the statutory powers of the
Official Receiver to obtain information and recover monies on the application of trustees administering
insolvent estates.
Insolvency and Trustee Services also maintains the National Personal Insolvency Index, and handles
pre-bankruptcy, most post-bankruptcy and general enquiries. In addition, it ensures that debt
agreement proposals comply with the law and conducts the voting process with creditors in relation to
debt agreements.
Insolvency and Trustee Services also conducts preliminary enquiries that identify matters to be
investigated for recovery of assets and possible offences. As the Official Trustee, it acts as special
trustee for government agencies pursuant to court orders and administers personal insolvencies where
no registered trustee has been appointed.
The Regulation and Enforcement division operates independently from AFSA’s other functional roles,
discharging the regulatory and review responsibilities of the Inspector-General in Bankruptcy under the
Bankruptcy Act. The enforcement function is responsible for investigating all alleged offences under the
Bankruptcy Act and preparing briefs for prosecution.
The Legal and Governance division provides legal advice and support to all of AFSA’s operations.
In addition to providing specialist advice on bankruptcy, personal property securities and proceeds
of crime legislation, the division provides advice on administrative law, contracts and other matters
relevant to AFSA’s corporate governance.
9
OUTCOME AND PROGRAMME STRUCTURE
Figure 2 shows AFSA’s outcome and programme structure for 2013–14, which remains unchanged from
the previous year.
FIGURE 2: AFSA’S OUTCOME AND PROGRAMME STRUCTURE, 2013–14
Outcome
1 . O v er v ie w A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
To provide improved and equitable financial outcomes for consumers, business and the community
through application of bankruptcy and personal property securities laws, regulation of personal
insolvency practitioners, and trustee services
Programme 1.1
Personal insolvency and trustee services
Component 1.1.1
An efficient information and registry service
Component 1.1.2
An effective regulatory framework
for insolvency practitioners
Component 1.1.3
Administration of insolvent estates where private
insolvency practitioners are not appointed
Component 1.1.4
Investigation of Bankruptcy Act offences
Component 1.1.5
Administration of proceeds of crime property
10
Programme 1.2
Operation of a national register of security
interests in personal property
Component 1.2.1
A Personal Property Securities Register
and registry services
section 2 PERFORMANCE
Programme 1.1: Personal insolvency and trustee services
12
Component 1.1.1: An efficient information and registry service
12
Component 1.1.2: An effective regulatory framework for insolvency practitioners
15
Component 1.1.3: Administration of insolvent estates where private insolvency practitioners are not appointed
19
Component 1.1.4:
Investigation of Bankruptcy Act offences
22
Component 1.1.5: Administration of proceeds of crime property
24
Programme 1.2: Operation of a national register of security interests in
personal property
27
Component 1.2.1: 27
A Personal Property Securities Register and registry services
PROGRAMME 1.1: PERSONAL INSOLVENCY AND
TRUSTEE SERVICES
COMPONENT 1.1.1: AN EFFICIENT INFORMATION AND
REGISTRY SERVICE
OVERVIEW
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA’s registry service assists debtors in making informed decisions on options to deal with
unmanageable debts. Where debtors decide to seek relief through formal insolvency options under the
Bankruptcy Act 1966, an efficient registry service processes the insolvency applications and maintains
the National Personal Insolvency Index (NPII), which is the permanent record of all personal insolvency
administrations in Australia.
DELIVERABLES
Component 1.1.1 includes the following deliverables:
●●
timely and relevant information given to clients about options to deal with unmanageable debt and
insolvency processes
●●
assessment of applications for personal insolvency administrations and the issuance of notices for
commencement of insolvency proceedings
●●
maintenance of a register of personal insolvency administrations (the NPII) which supports the
community to make informed commercial decisions.
INFORMATION
Key performance
indicator
Website information is current and accurate. Periodic educational
publications, seminars and training occurs for stakeholders.
AFSA WEBSITE
AFSA’s website, www.afsa.gov.au, provides our clients with information about personal insolvency
options and links to forms, booklets and resources. It acts as a portal for AFSA’s online services,
providing practitioner contact lists, translations, policies and practice statements, contact details,
corporate information and statistical reports.
The website was renamed from itsa.gov.au in August 2013 to reflect the agency’s name change. This
change also necessitated updates to the branding of documents, booklets and forms on the website.
During 2013–14, the AFSA website received a monthly average of 64 770 visits by users; a total of
777 237 user visits were recorded in 2013–14.
An online blog for practitioners, the Personal Insolvency News (http://personalinsolvencynews.
govspace.gov.au), continued to publish select and relevant information to practitioners and provides
another access point for feedback to AFSA.
12
INSOLVENCY PUBLICATIONS AND NEWSLETTERS
The Personal Insolvency Regulator newsletter, compiled by AFSA’s Regulation and Enforcement
division, continued to be published on a quarterly basis and served as a useful resource for all
practitioners. The newsletter is provided in PDF and HTML formats.
We also provided electronic updates and news to our stakeholders and published news and media
releases in the Personal Insolvency News blog as well as on the AFSA website.
We continued to provide information and articles for inclusion in insolvency publications such as the
Australian Restructuring Insolvency and Turnaround Association (ARITA) quarterly Australian Insolvency
Journal.
A number of resource materials were developed and distributed at forums throughout the year. These
products included a resource booklet for financial counsellors and a concise pamphlet titled Dealing
with unmanageable debt to assist debtors to understand the insolvency options available to them.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA continued to produce information packs for clients covering various options under the Bankruptcy
Act, including bankruptcy by debtor’s petition, declarations of intention, debt agreements, personal
insolvency agreements and sequestration orders. During 2013–14, 19 554 insolvency information packs
were issued in response to client requests received through the National Service Centre (compared with
24 717 in 2012–13).
SEMINARS, TRAINING AND FORUMS
Information sessions or training delivered to AFSA’s key stakeholder groups during 2013–14 included:
●●
registered trustee information sessions
●●
registered debt agreement administrator forums
●●
a joint major creditor and registered debt agreement administrator forum
●●
meetings with state and territory based financial counsellors.
Presentations were made at key forums and conferences, including ARITA’s national conference and
Financial Counselling Australia’s conference.
Our liaison work with legal and insolvency professionals continued during the year. AFSA continued to
attend meetings of the Law Council of Australia’s Insolvency and Reconstruction Law Committee and
the Consumer Law Consultative Committee.
We maintained strong relationships with key peak bodies, including ARITA, the Personal Insolvency
Professionals Association and Financial Counselling Australia. We continued to work closely with
other Australian Government organisations, including the Australian Securities and Investments
Commission, the Federal Court of Australia, the Australian Taxation Office, the Australian Federal
Police and the Commonwealth Director of Public Prosecutions.
13
REGISTRY
Key performance
indicator
New applications are assessed and registered in a timely manner in order to
maintain the integrity of the National Personal Insolvency Index.
AFSA operates an efficient registry service that processes several different types of personal insolvency
applications and orders, including debtor’s petitions, creditor’s petitions, debt agreements, personal
insolvency agreements and bankruptcy notices.
During 2013–14, we continued to assess and register new applications in a timely manner, ensuring the
ongoing maintenance and integrity of the NPII.
Information and data on the various types of insolvency applications can be found in the annual report
on the operation of the Bankruptcy Act in section 5.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
NATIONAL PERSONAL INSOLVENCY INDEX
Key performance
indicator
The National Personal Insolvency Index is current and accurate, supporting
commercial decision-making.
The NPII is the permanent electronic register of all personal insolvency administrations in Australia. It
is maintained by AFSA and contains details of creditor’s petitions, bankruptcies, debt agreements and
personal insolvency agreements.
Members of the community and businesses can search the NPII through index search agents, upon
payment of a fee. A list of agents is available on AFSA’s website.
Searches may be used to conduct credit checks or to verify a vendor’s credentials. For example, a
purchaser’s solicitor might conduct a search to confirm the vendor’s title to a property and their legal
capacity to sell.
AFSA provides current and accurate data on the NPII, which supports commercial decision-making.
Registration of notices of objections to discharge and withdrawal of objections, annulment certificates,
special resolutions and other documents that are lodged to amend the NPII are recorded within
24 hours of approval by the delegate in most cases.
14
OPENING UP ACCESS TO THE NPII
The National Personal Insolvency Index (NPII) is the permanent public record of
personal insolvency proceedings in Australia. It is maintained and updated by AFSA
and contains records going back to August 1928.
Currently, an individual or business that wants to search the NPII needs to use the
services of an index search agent—companies that have a contract with AFSA that
enables them to access NPII data and provide search results as part of the services
they offer. There are only a small number of index search agents.
AFSA is about to open up access to the NPII through a new self-search service on the
AFSA website and by allowing more organisations to become information brokers via a
business-to-government (B2G) connection. Both will be available in 2014–15.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The new self-search service—the bankruptcy register search—will provide search
capability to individuals and businesses 24 hours a day, seven days a week, for a fee. It
is a significant and exciting addition to AFSA’s online service delivery.
By accepting AFSA’s terms and conditions, existing index search agents will be able
to continue to access the NPII and provide search results as part of the services they
offer. In addition, the market will open up so other commercial providers that wish to
become information brokers will be able to by accepting AFSA’s terms and conditions.
These changes will provide more choice in how people use the NPII—either searching
it themselves or using a commercial service provider. It aligns to the business model
for the Personal Property Securities Register (PPSR)—which also allows users to
conduct their own search or access search results through a broker—and will enable
us to operate in a consistent way across our insolvency and PPSR services.
COMPONENT 1.1.2: AN EFFECTIVE REGULATORY FRAMEWORK
FOR INSOLVENCY PRACTITIONERS
OVERVIEW
The regulatory responsibilities of the Inspector-General in Bankruptcy, as set out in the Bankruptcy
Act, aim to ensure high national standards of personal insolvency practice and procedure. Both groups
of private practitioners (registered trustees and debt agreement administrators) and AFSA’s trustee
function (the Official Trustee) are regulated.
The regulatory functions, as they applied in 2013–14, were to:
●●
ensure that only suitably qualified persons who comply with their duties are registered to practise as
registered trustees and registered debt agreement administrators
●●
monitor unregistered debt agreement administrators and solicitor controlling trustees to assess
whether they continue to be eligible to act
●●
monitor the standards of trustees, debt agreement administrators and solicitor controlling trustees
and their administration, through a targeted programme of inspection of files, systems and practices
15
●●
investigate complaints within set timeframes and apply sanctions when appropriate
●●
work with trustees, administrators and solicitor controlling trustees to improve personal insolvency
knowledge and practice
●●
refer issues that may affect the operation of the Bankruptcy Act and policy development to the
Attorney-General’s Department.
In 2013–14, AFSA undertook work in all these functional areas.
DELIVERABLES
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Component 1.1.2 includes the following deliverables:
●●
planned inspection programme covering all personal insolvency practitioners finds generally high
standards of practice and no systemic issues
●●
review of decisions by, and complaints against, insolvency practitioners
●●
registration and deregistration of insolvency practitioners to maintain high standards in practice.
INSPECTION PROGRAMME FOR TRUSTEES AND DEBT AGREEMENT
ADMINISTRATORS
Key performance
indicator
Achievement of target inspection programme.
The purpose of this proactive programme is to evaluate the qualitative standard of trusteeship and
administration in accordance with the processes detailed in Inspector-General Practice Statement 11.
In 2013–14, AFSA completed its projected and targeted inspection programme. A particular focus was
ensuring that practitioners were complying with their duty to identify and refer offence referrals to AFSA
in the course of their investigative work. Targeted inspection activities led to disciplinary action being
taken against some practitioners. As a result of inspection findings in less serious cases, guidance
was provided on a practitioner-specific basis and information sessions were developed and delivered to
address needs.
Practitioners will notice a continued application of risk management principles in AFSA’s inspection
programme in 2014–15, with a focus on practitioners whose standards, processes, systems and
controls are deemed to require improvement.
16
COMPLAINTS AND STATUTORY REVIEWS
Key performance
indicator
Complaints are handled and statutory reviews completed within 60 days.
COMPLAINTS
AFSA handles complaints made by debtors and creditors about the conduct of personal insolvency
practitioners in accordance with the process detailed in Inspector-General Practice Statement 10.
In 2013–14, the Regulation and Enforcement division finalised 93% of complaints within 60 days.
The increased level of complexity of the complaints investigated resulted in a slight decrease in the
percentage finalised within 60 days (96% in 2012–13).
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
More detailed information about complaints can be found in section 5.
STATUTORY REVIEWS
The Bankruptcy Act gives the Inspector-General responsibility for reviewing decisions made by trustees
in the course of administering a bankrupt estate.
During 2013–14, AFSA completed 99% of its statutory reviews within the prescribed timeframe of
60 days. One statutory review was not finalised within this timeframe and was undertaken on the
Inspector-General’s own initiative due to public interest considerations. However, the statutory
timeframe for completing own-initiative reviews does not apply.
More detailed information on statutory reviews can be found in section 5.
REGISTRATION OF TRUSTEES AND ADMINISTRATORS
Key performance
indicator
Only suitably qualified people are registered as insolvency practitioners.
AFSA registers trustees and debt agreement administrators on behalf of the Inspector-General in
accordance with the processes detailed in:
●●
Inspector-General Practice Statements 13 and 8 for registered trustees
●●
Inspector-General Practice Statements 4 and 9 for registered debt agreement administrators.
These processes require the establishment of committees to interview new applicants and, where
required, to consider whether a registered personal insolvency practitioner should have their
registration removed or conditions imposed on their continued practice.
For trustees, the committees comprise the Inspector-General or her delegate, a representative
from ARITA and a member of the Australian Public Service (usually a senior employee from AFSA,
the Attorney-General’s Department or another Australian Government agency). For debt agreement
administrators, interviews are conducted by a delegate of the Inspector-General.
At 30 June 2014, there were 208 registered trustees and 60 registered debt agreement administrators
in Australia.
17
TABLE 1: REGISTERED TRUSTEES AND REGISTERED DEBT AGREEMENT
ADMINISTRATORS BY STATE AND TERRITORY, AS AT 30 JUNE 2014
This table shows the number of registered trustees and registered debt agreement administrators by
state and territory.
State or territory
Number of
registered
trustees
Number of registered debt
agreement administrators
New South Wales
61
18
5
0
Victoria
47
8
Queensland
49
24
South Australia
16
3
Northern Territory
1
0
Western Australia
22
5
7
2
208
60*
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Australian Capital Territory
Tasmania
Total
* Total includes 28 people operating in companies that are also registered. Companies can be registered only if
they have people with overall responsibility for the debt agreement business registered either as trustees or debt
agreement administrators under the Bankruptcy Act.
REGISTERED TRUSTEES
During the year, three trustees voluntarily resigned their registration. All three resignations were due to
retirement.
During 2013–14, AFSA received 14 applications from people seeking registration as trustees. Of these,
six applications were accepted, two were not accepted and six were pending decision at 30 June 2014.
REGISTERED DEBT AGREEMENT ADMINISTRATORS
During the year, five debt agreement administrators ceased to be registered. Of these, three voluntarily
resigned their registration and two registrations lapsed.
During 2013–14, AFSA received three applications from people and companies seeking registration as
debt agreement administrators. Of these, one application was accepted and two were pending decision
at 30 June 2014.
18
FORMER REGISTERED TRUSTEE RECEIVES PRISON
SENTENCE
On 30 May 2014, Trevor John Schmierer (a former registered trustee in bankruptcy)
pleaded guilty to three separate charges of dishonestly applying funds held in trust.
The total amount relevant to the charges was $38 607.
On each offence, Mr Schmierer was sentenced to two and a half years imprisonment
to be suspended after serving three months.
The sentences are to be served concurrently. The sentencing magistrate found that
Mr Schmierer had abused his position of trust as an accountant and that his offending
was of a persistent nature since it had happened on three separate occasions, including
deliberately filing false documents with AFSA in an attempt to cover up the fraud.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
This outcome followed AFSA’s disciplinary action against Mr Schmierer, in his capacity
as a registered trustee, which led to Mr Schmierer not renewing his registration to
practise in 2012–13.
AFSA will continue to apply its regulatory powers to ensure that Australia’s personal
insolvency system remains robust and proactive in identifying serious breaches of
duty and remedying them.
COMPONENT 1.1.3: ADMINISTRATION OF INSOLVENT ESTATES
WHERE PRIVATE INSOLVENCY PRACTITIONERS ARE NOT
APPOINTED
OVERVIEW
Australia’s personal insolvency system operates on the basis that a practitioner is appointed in every
administration under the Bankruptcy Act. When a private practitioner is not appointed, the Official
Trustee handles the matter, with AFSA appropriately resourcing the Official Trustee’s work.
The Official Trustee administers estates in a way that upholds the integrity of the bankruptcy system
and also has a role in dealing with public interest matters where there are no, or little likelihood of,
realisations in the estate and there are issues to be resolved that go to the credibility of the
bankruptcy system.
The Official Trustee transfers estates to private trustees when it is considered there is the potential
for a significant recovery and no objection is received from creditors of the estate. During the year a
national panel was created to replace the bankruptcy district–based panels. This initiative provides
private trustees that are willing to take estates with an even distribution of work from the panel
and assists the Official Trustee to manage the workload of estates that, for various reasons, are not
attractive to private trustees.
19
DELIVERABLES
Component 1.1.3 includes the following deliverables:
●●
reports provided to debtors, creditors and bankrupts
●●
collection of monies to facilitate payment of dividends to creditors
●●
ensuring that bankrupts comply with their statutory responsibilities
●●
quality investigation of the financial affairs of the bankrupt.
REPORTS TO CREDITORS
Key performance
indicator
Quality reports are issued as required by the Bankruptcy Act and standards.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The Official Trustee reports to creditors providing a summary of the bankrupt’s statement of affairs
and a determination on whether there is realisable property or income contributions that are likely to
provide a dividend to creditors. Reports on material events are also issued during the administration of
the estate. Reports are issued in a timely manner to provide known information and test its veracity, and
to elicit other information to assist the administration. Creditors are regularly informed of the progress
in the administration for specific purposes required by the Act, depending on the circumstances of
the administration.
ADMINISTRATION OF PERSONAL INSOLVENCIES
Key performance
indicator
Personal insolvencies are managed efficiently and effectively with appropriate
investigations and quality outcomes.
In 2013–14, the Official Trustee received 14 709 estates for administration, constituting 79% of all new
bankruptcies, compared to 16 612 or 80% of all new bankruptcies in 2012–13.
The majority of bankruptcies administered by the Official Trustee are voluntary debtor’s petitions
that involve few if any assets, have low-level income contributions and require investigation of a
less complex nature. The Official Trustee also administers other types of insolvencies, such as debt
agreements and personal insolvency agreements when the administrator has been deregistered.
There are a number of systems in place to identify estates with saleable assets, recoverable income
contributions or those requiring investigations, and there are economies of scale in dealing with the
large number of estates of this type. These estates are more efficiently dealt with by the Official Trustee
and are often not cost-efficient for private trustees to administer.
The Official Trustee has robust quality-assurance processes based on AFSA’s quality framework. The
Official Trustee comes under significant scrutiny from several internal and external bodies and is
prompt to update practices where necessary.
The Official Trustee exercises powers and performs functions in a commercially sound way. When the
Official Trustee becomes the trustee of bankrupt estates, preliminary investigations are completed,
contribution liabilities are assessed, and realisable assets are identified and sold. Further investigations
are undertaken where necessary, with a view to providing a return to creditors in an efficient manner
and without incurring unnecessary expense. When potential Bankruptcy Act offences are identified, the
bankrupt is referred to AFSA’s Regulation and Enforcement division.
20
REALISATIONS
Key performance
indicator
Realisations are achieved and dividends paid in a timely manner.
Realisations represent the proceeds of sale of the property in a bankrupt estate, the recovery
of income contributions, and successful recoveries from investigations. In 2013–14, the Official
Trustee achieved realisations in 45% of estates, a fall from 50% in 2012–13. In accordance with the
Bankruptcy Act, the Official Trustee promptly distributed the proceeds of realisations minus expenses
and remuneration as dividends. The timely distribution of dividends assists in minimising the impact
of insolvency on creditors.
RETENTION OF ADMINISTRATION FOR PUBLIC INTEREST
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The Official Trustee received a request from a purported creditor to transfer the administration
of the bankrupt estate to a private trustee in accordance with section 181A of the Bankruptcy
Act 1966. The Official Trustee determined that it would be preferable to hold a creditors’ meeting
pursuant to subsection 157(1) of the Act. During its investigations, the Official Trustee found that the bankrupt was the sole shareholder
and sole director of two companies and a shareholder in several other companies. The bankrupt
disclosed his directorships in the two companies, but failed to declare that he was the companies’
sole shareholder. He also failed to disclose his shareholdings in the other companies.
The Official Trustee issued a report to creditors calling for a meeting and detailing the outcomes of
its investigations and the fact that the creditor requesting the meeting was the bankrupt’s business
adviser. It later became evident that the creditor who requested the meeting was also a postbankruptcy creditor and did not have standing to request a meeting or instigate the transfer of the
estate; however, a major creditor did wish to consider the motion and the meeting was held.
Upon further investigation, the Official Trustee established that the bankrupt had continued to
manage the companies during bankruptcy. The Official Trustee also discovered that the bankrupt,
prior to the creditors’ meeting, had put in an offer of composition with the proposed trustee seeking
an annulment from bankruptcy.
At the meeting, the Official Trustee disallowed the majority of the claims by creditors as they
were company debts or incurred post-bankruptcy. The Official Trustee also rejected a substantial
claim made by a related-party creditor as it did not appear provable and the creditor could have
influenced the outcome of the vote. The proposal did not succeed and the estate was retained by
the Official Trustee for public interest.
As a consequence of the investigations, potential breaches of subsections 263(1)(a) and 265(1)(a)
and section 267 of the Bankruptcy Act have been referred to AFSA’s Regulation and Enforcement
division, and the bankrupt’s potential breach of subsection 206(A)(1) of the Corporations Act 2001
was referred to the Australian Securities and Investments Commission.
The Official Trustee has also had grounds to lodge an objection to the bankrupt’s discharge pursuant
to subsections 149D(1)(b) and (ma) of the Bankruptcy Act that extended the bankruptcy to eight years.
The Official Trustee will continue investigations with a view to providing a return to proved creditors
of the estate and ensuring the bankrupt complies with bankruptcy and other relevant legislation.
21
COMPONENT 1.1.4: INVESTIGATION OF BANKRUPTCY ACT
OFFENCES
OVERVIEW
AFSA is responsible for investigating alleged offences under the Bankruptcy Act 1966 and specified
sections of the Criminal Code Act 1995. Enforcement strategies include encouraging individuals
to comply with the Bankruptcy Act and, when necessary, forwarding briefs of evidence to the
Commonwealth Director of Public Prosecutions (CDPP).
DELIVERABLES
Component 1.1.4 includes the following deliverable:
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
●●
investigation of alleged offences under the Bankruptcy Act.
REFERRALS AND INVESTIGATIONS
Key performance
indicator
Alleged non-compliance and misconduct are addressed in a timely manner,
risk-based strategies are employed to address breaches of the Bankruptcy Act
and material offences are referred for prosecution action.
AFSA has qualified and experienced investigation staff who undertake bankruptcy offence investigations
and work closely with insolvency practitioners, creditors and other stakeholders. Stakeholders include
other government agencies, which supports a whole-of-government approach and enables professional
and timely outcomes in the bankruptcy offence referral and investigation process.
AFSA assesses alleged offence referrals for investigation as either compliance or complex
offence matters.
COMPLIANCE OFFENCES
Compliance offences are administrative-type offences where an individual (whether bankrupt or not) has
failed to provide the trustee or Official Receiver with specific information and/or documents and the matter
can be dealt with by way of an infringement notice or a letter seeking compliance in the first instance.
A high level of voluntary compliance was again achieved in 2013–14 through the issuing of compliance
letters to those persons who initially failed to comply with their responsibilities under the Bankruptcy
Act. Of the 1 332 offence referrals received in 2013–14, 957 related to allegations of non-compliance,
such as subsection 267B(1) (failure to comply with a notice), section 77C (Official Receiver powers) and
subsection 52(1A) (failure to file a sequestration order with the Official Receiver within two days).
Of those 957 referrals, 175 were resolved by voluntary compliance following direct contact from AFSA
investigators, 104 resulted in infringement notices being issued, and the remainder were either prosecuted
by the CDPP, involved issuance of a first offence warning letter, are currently under investigation, or have
been concluded due to insufficient evidence being available to support a prosecution.
Warning letters continued to prove a useful tool for managing non-compliance of alleged offenders
who committed minor infringements of the offence provisions of the Bankruptcy Act. In 2013–14, AFSA
issued warning letters to 161 alleged offenders regarding less serious non-compliance or breaches of
the Bankruptcy Act.
22
COMPLEX OFFENCES
Complex offences are offences that do not fall within the definition of a compliance offence and cannot
be resolved by way of an infringement notice or compliance letter.
Offence referrals from registered trustees increased significantly in 2013–14. Registered trustees
submitted 433 offence referrals during 2013–14, which is a 63% increase on the 265 referrals submitted
in 2012–13. Offence referrals from the Official Trustee and Official Receiver, however, decreased by 12%
in the same period, with 820 referrals received, compared to 929 in 2012–13.
AFSA received a further 79 referrals from a range of other sources during 2013–14, accounting for
6% of the overall number of offence referrals received. AFSA endeavours to assess and determine
investigations within 14 days in 95% of cases and complete them within 12 months in 90% of cases.
Work in this area is in accordance with Inspector-General Practice Statements 14 and 18.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
TABLE 2: REFERRAL AND INVESTIGATION STATISTICS, 2012–13 AND 2013–14
This table provides statistics on offence referrals and investigations.
2012–13
2013–14
1 262
1 332
719
665
99%
98%
Number of investigations commenced*
724
672
Number of investigations completed*
746
642
98%
98%
Number of offence referrals received
Number of referrals accepted
Proportion of referrals assessed within 14 days
Proportion of investigations completed within 12 months
* Includes offence referrals received in the previous year.
REFERRALS FOR PROSECUTION
In 2013–14, 122 briefs of evidence were forwarded to the CDPP. This represents a 39% decrease on
the number of briefs that were submitted in 2012–13. In total, the CDPP took action on 138 AFSA
prosecution briefs, including a portion of the briefs referred to the CDPP in 2012–13.
Of the briefs submitted, 72% were accepted for prosecution action. Reasons for the CDPP not accepting
matters included public interest factors, the accused absconding and not able to be located, or
insufficient evidence to support a prosecution (in 6% of the briefs).
23
BOAT BUILDER PLEADS GUILTY TO BANKRUPTCY ACT
OFFENCES
On 11 June 2014, Wayne Panther, a 49-year-old boat builder from the Sunshine Coast,
Queensland, was convicted in the Maroochydore District Court on charges relating to
obtaining credit and also obtaining payments to the value of $275 000 without disclosing that
he was an undischarged bankrupt.
Mr Panther, a twice bankrupt, pleaded guilty to charges and was sentenced to a total of
19 months imprisonment, to be released on a recognisance after serving six months.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The outcome was the result of a thorough investigation process and confirms that AFSA
and the courts take breaches of the Bankruptcy Act seriously, and will work with the
CDPP to prosecute accordingly.
COMPONENT 1.1.5: ADMINISTRATION OF PROCEEDS OF
CRIME PROPERTY
OVERVIEW
The Official Trustee administers property that is the subject of orders made under the Proceeds of
Crime Act 1987, the Proceeds of Crime Act 2002, the Customs Act 1901 and the Crimes Act 1914. The
Official Trustee is the custodian of restrained property and disposes of both forfeited property and
property available to satisfy pecuniary penalty orders.
AFSA works with members of the Commonwealth Criminal Assets Confiscation Taskforce when
performing its proceeds of crime role.
DELIVERABLES
Component 1.1.5 includes the following deliverables:
●●
control and administration of property pursuant to court orders
●●
maintenance of the Confiscated Assets Account in accordance with relevant requirements.
PROPERTY
Key performance
indicator
Action is taken to identify, locate, secure and achieve control of property in
accordance with timeframes contained in court orders, or in any event as
soon as practicable after receipt of court orders.
The purpose of the proceeds of crime legislation is to prevent criminals from being able to benefit from
their crimes, by depriving them of the proceeds and benefits gained from criminal conduct, and to
prevent the reinvestment of those proceeds and benefits in further criminal activities.
Accordingly, law enforcement agencies are empowered to seize suspected proceeds of crime, such as
cash and material possessions, including cars, boats and artworks. Proceeds of crime may be sold by the
government and the money raised redirected to Australian taxpayers, via crime-prevention programmes.
24
The Proceeds of Crime Act 1987, the Proceeds of Crime Act 2002, the Customs Act 1901 and the Crimes
Act 1914 together provide for the rights of the Australian Government to seize, forfeit and condemn
articles and goods gained from criminal conduct. Once sold, the net proceeds of forfeited property are
paid to a national fund called the Confiscated Assets Account (CAA), which is administered by AFSA. The
Official Trustee can be instructed by the court to take custody and control of property, and where a court
decides that the property should be surrendered to the Commonwealth, the Official Trustee is tasked
with realising (selling) the property. Official Trustee powers under the Commonwealth’s proceeds of
crime legislation are exercised by AFSA’s Inspector-General in Bankruptcy.
AFSA received 142 new orders under the Proceeds of Crime Act 2002 in 2013–14, consisting of
54 restraining orders, 74 forfeiture orders and 14 pecuniary penalty orders.
In 2013–14 the Official Trustee fulfilled its role in accordance with timeframes contained in court orders,
or as soon as practicable after receipt of court orders dependent on other factors such as legal issues
or the property being required for evidentiary or inspection purposes.
●●
locating and taking custody of suspected or known proceeds of crime
●●
securing, protecting, preserving and maintaining proceeds of crime, until the property is sold or
returned to the defendant
●●
monitoring and investigating controlled property
●●
dealing with property (for example, selling or disposing of property)
●●
distributing proceeds of crime
●●
holding funds claimed in non-public official accounts (restrained funds) or public official accounts
(forfeited funds).
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
In fulfilling its role, AFSA works closely with other government authorities, such as the Australian
Federal Police. AFSA’s role includes:
The Official Trustee provides reports to the CDPP and the Commonwealth Criminal Assets Confiscation
Taskforce in relation to each of the restraining and forfeiture matters handled by AFSA, as well as the
management of the CAA.
The CAA was established on 1 January 2003. All proceeds from property realised under the Customs
Act 1901 and the Proceeds of Crime Act 2002 must be paid into the CAA along with interest earned.
AFSA aims to send initial reports to stakeholders within three weeks of the originating court order
detailing all property seized. AFSA also provides regular monthly reports on transactions effected on
the CAA.
Proceeds from property realised under the Proceeds of Crime Act 1987 are paid into the Confiscated
Assets Special Account along with interest earned. Since the introduction of the 2002 Act in
January 2003, no new matters have been initiated under the 1987 Act.
Information on proceeds of crime accounts are detailed in AFSA’s financial statements in section 7.
25
INTERNATIONAL COOPERATION REAPS REWARDS
In May 2013 the Papua New Guinea Public Prosecutor, in conjunction with the
Commissioner of the Australian Federal Police Proceeds of Crime Litigation Team,
obtained orders restraining property of a Papua New Guinean national.
This action was a result of Taskforce Sweep, a multi-agency initiative relying on the
Mutual Assistance in Criminal Matters Act 1987, in this case securing property through
international cooperation.
The Official Trustee’s role in the operation is to maintain custody and control of the
designated property pending further orders in the matter.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The assets restrained consist of five properties in Queensland, funds in numerous bank
accounts and dozens of motor vehicles. Subsequent orders obtained in January 2014
restrained additional property consisting of a marine vessel.
The Official Trustee continues to maintain, secure and preserve the property under its
control, until additional orders are made.
26
PROGRAMME 1.2: OPERATION OF A NATIONAL REGISTER OF
SECURITY INTERESTS IN PERSONAL PROPERTY
COMPONENT 1.2.1: A PERSONAL PROPERTY SECURITIES
REGISTER AND REGISTRY SERVICES
OVERVIEW
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA administers a national online Personal Property Securities Register (PPSR) as required under the
Personal Property Securities Act 2009. The national online PPSR, supported by AFSA’s National Service
Centre, is used by businesses and individuals to register their security interests over personal property.
The PPSR also allows businesses and individuals to search the register for any security interest that
may exist over property they may be interested in purchasing or dealing with.
DELIVERABLES
Component 1.2.1 is primarily delivered by AFSA’s National Service Centre and includes the following
deliverables:
●●
operation of an online register of personal property securities which supports informed decisionmaking when dealing with personal property
●●
provision of registry services to facilitate searching the register by those who are unable to register
or search online.
PERSONAL PROPERTY SECURITIES CONTACT CENTRE
Key performance
indicator
The PPSR is easily and readily accessible.
The PPSR is an online register that is easily and readily accessible by members of the public 24 hours
a day. Details regarding refusal of access or suspension of the operation of the PPSR in 2013–14 can be
found in section 6.
During the year, AFSA’s National Service Centre continued to provide service support for registration
and search activities, with a strong focus on delivering services in a professional manner to meet
expectations of PPSR users.
In 2013–14, the National Service Centre managed more than 92 000 phone enquiries and more than
8 000 email or mail enquiries from PPSR clients. The centre provides general information on personal
property securities, and assists clients who are unable to perform searches online themselves or who
are experiencing difficulties in interacting with the register online.
The number of calls to the centre has continued to decrease as users have become familiar with the
register. The centre did, however, see a peak in the number of enquiries shortly before the end of the
transitional period (31 January 2014) as users sought to understand their requirements and options.
27
CLIENT SATISFACTION
Key performance
indicator
Client satisfaction with the information and registry services as measured by
periodic client feedback mechanisms.
2 . P erformance A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA has continued to work closely with our PPSR stakeholders, primarily through three
established forums:
●●
The PPS Stakeholder Forum is convened biannually and membership consists of invited
representatives from a wide range of Australian peak industry bodies and national associations.
●●
The PPS Operations Forum consists of business and industry representatives nominated by the peak
industry bodies and acts as a co-design forum, considering future enhancements to the PPSR and
associated business practices.
●●
The PPS Technical Forum brings together representatives from the major user organisations,
specifically business-to-government (B2G) users, has a focus on PPSR release and performance,
and feeds into the enhancements considered by the PPS Operations Forum.
We obtain client feedback through these forums, our National Service Centre, our website and our
complaints and compliments register.
The National Service Centre introduced real-time client surveys during 2013–14 through interactive
voice response software. The survey seeks feedback from clients on the timeliness and effectiveness
of the services provided. Feedback continues to be positive in relation to our service delivery, and
clients have provided valuable insights on areas for improvement, some of which have already been
addressed. For example, changes have been made to general incident processes, resulting in improved
communication to stakeholders and quicker resolution times. Further opportunities for B2G support
have been identified and will be addressed in the future.
28
s e c t i o n 3 MA N AG E ME N T A N D AC C O U N TA B I L I T Y
Corporate governance
30
Client service
35
Disability reporting mechanisms
37
External scrutiny
37
Financial management
37
Management of AFSA’s people
41
CORPORATE GOVERNANCE
AFSA’s corporate governance arrangements comprise the structures and procedures by which the
agency is directed and controlled, and the mechanisms by which those who direct and control the
agency are supervised.
MINISTER AND PARLIAMENT
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA’s Chief Executive reports to the Attorney-General and, in accordance with the Public Service
Act 1999 and, until 1 July 2014, the Financial Management and Accountability Act 1997, assists the
Attorney-General to fulfil his or her accountability obligations to the Parliament. In this annual report,
the Chief Executive accounts for AFSA’s performance and use of resources.
The Inspector-General is also required under the Bankruptcy Act to provide an annual report to the
Attorney-General, for presentation to the Parliament, on the operation of the Bankruptcy Act. The
Bankruptcy Act report can be found in section 5.
The Registrar of Personal Property Securities is also required under the Personal Property Securities
Act 2009 (PPS Act) to provide an annual report to the Attorney-General, for presentation to the
Parliament, on the operation of the PPS Act. The PPS Act report can be found in section 6.
AFSA’s accountability to the Parliament also includes scrutiny through relevant parliamentary
committees, including Senate Estimates hearings.
SENIOR EXECUTIVE ROLES AND RESPONSIBILITIES
The Chief Executive is responsible for managing and leading AFSA in accordance with the Public
Service Act 1999, the Financial Management and Accountability Act 1997 (until 1 July 2014) and other
legislation. As the Inspector-General in Bankruptcy, the Chief Executive is also responsible for the
general administration of the Bankruptcy Act.
Senior executive roles in AFSA are outlined in the organisational chart in section 1.
AFSA’s senior executives are responsible for supporting the Chief Executive and Inspector-General
in Bankruptcy in delivering the regulatory and operational services required under the legislative
framework that AFSA operates within and is responsible for.
AFSA’s senior executives hold relevant delegations and statutory positions as required under the Acts
that AFSA administers. These include the roles of the Official Receiver and the Registrar of Personal
Property Securities and relevant delegations to perform the functions of the Official Trustee, a body
corporate created under the Bankruptcy Act.
BOARDS AND COMMITTEES
AFSA’s governance structures and processes were reviewed and streamlined in July 2013. Some
changes included the disbanding of the Portfolio Board and the transfer of most of its functions to the
National Management Board. Other functions of the Portfolio Board were taken up in a restructure
of AFSA’s project governance arrangements. The Portfolio Board met once in 2013–14 before these
adjustments took effect.
In addition, the Business Solutions Planning Group was renamed the Operations Management
Committee to more accurately capture the role of this governance group.
30
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
NATIONAL MANAGEMENT BOARD
L–R: Gavin McCosker, Ray Shatte, David Bergman, Veronique Ingram, Andrew Sellars, Rob Hanlon, Peter Edwards,
Paul Shaw. Not pictured: Kerrie Foster.
The National Management Board assists the Chief Executive in managing the agency and discharging
the responsibilities of the Inspector-General, Official Receiver and Official Trustee. The board sets
AFSA’s strategic direction, determines appropriate policies, monitors performance, and supports and
advises the Chief Executive to oversee AFSA’s portfolio of work and ensure an appropriate balance of
organisational change and operations.
The National Management Board met 10 times during 2013–14. Notes of key matters considered at the
board’s meetings are published for employees in AFSA’s internal newsletter.
TABLE 3: MEMBERSHIP OF AFSA’S NATIONAL MANAGEMENT BOARD IN 2013–14
This table shows the membership of AFSA’s National Management Board and the duration of
membership during the report period.
Role
Name
Duration of
membership in
2013–14
Chief Executive and Inspector-General in Bankruptcy
Veronique Ingram
July 2013–June 2014
Chief Operating Officer
Gavin McCosker
July 2013–June 2014
Chief Finance Officer
Robert Hanlon
July 2013–June 2014
Chief Information Officer
Kerrie Foster
July 2013–June 2014
National Manager Insolvency and Trustee Services
David Bergman
July 2013–June 2014
Acting National Manager Regulation and Enforcement
Tim Cole
July–September 2013
National Manager Regulation and Enforcement
Paul Shaw
October 2013–June 2014
Acting General Manager Operations
Dipen Mitra
July–September 2013
General Counsel
Andrew Sellars
July 2013–June 2014
National Manager Client Services
Peter Edwards
September 2013–June
2014
External representative—governance and adviser
Ray Shatte
August 2013–June 2014
31
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
OPERATIONS MANAGEMENT COMMITTEE
Back row L–R: Mark Organ, Robert Tom*, Felix Padovan, Michael Piotrowicz, Tim Cole, Peter Edwards
Front row: L–R: Vanessa Goodey, Gilly Neeley, Beth Amos, Erica Verrusio*, Cheryl Cullen.
* Robert Tom and Erica Verrusio in attendance as invited guests.
The Operations Management Committee comprises key operational managers from across the agency
and has a specific focus on the development, monitoring and management of AFSA’s operational plan.
The committee met five times during 2013–14 and published notes of key matters after each meeting in
AFSA’s internal newsletter.
AUDIT COMMITTEE
L–R: David Bergman, Tim Cole, Mark Ridley and Peter McQuoid.
32
AFSA’s Audit Committee advises the Chief Executive and the National Management Board on a range
of audit and financial practice matters. It has four members: an independent (external) chair, an
independent (external) member and two AFSA senior executives.
The committee considers the results of the various internal and external audits and, importantly,
the action taken to respond to auditors’ recommendations. It also monitors AFSA’s application of
and compliance with systems and frameworks for ensuring high levels of internal controls, financial
reporting, risk management and fraud control.
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Audit Committee meetings are ordinarily attended by AFSA’s internal auditors (Moore Stephens), AFSA’s
Chief Operating Officer as Chief Audit Executive, the Chief Finance Officer, the Chief Information Officer
and the Finance Manager. Australian National Audit Office representatives attend as observers.
Internal audits completed during 2013–14 tested both compliance and performance, including practices
surrounding AFSA’s control framework, the cost recovery implementation of two new fees, and disaster
recovery. Internal audit also assisted AFSA in a range of other management-initiated reviews, including
review of AFSA’s contract management framework and processes to determine whether they represent
appropriate practice.
The Audit Committee met seven times during 2013–14.
TABLE 4: MEMBERSHIP OF AFSA’S AUDIT COMMITTEE IN 2013–14
This table shows the membership of AFSA’s Audit Committee and the duration of membership during
the reporting period.
Name
Role
Duration of committee
membership in 2013–14
Peter McQuoid
Chair (independent member)
July 2013 – June 2014
Mark Ridley
Independent member
July 2013 – June 2014
David Bergman
Member
July 2013 – June 2014
Tim Cole
Member
July 2013 – June 2014
Dipen Mitra
Reserve member
July – September 2013
NATIONAL CONSULTATIVE COMMITTEE
To assist in the process of consultation, encourage and facilitate an appropriate level of employee input
to decision-making, and enable organisational change to be handled effectively and efficiently, AFSA
has a National Consultative Committee and site consultative committees. The national committee is
the forum for consideration of issues such as national policy and practice and matters that will affect
all AFSA employees, while the site committees provide a forum for consideration of workplace issues
specific to individual work locations. Information on initiatives conducted during 2013–14 is provided
under ‘Management of AFSA’s people’ (page 43).
33
CORPORATE AND OPERATIONAL PLANS
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA maintains an integrated planning process, which is initiated at the annual planning workshop
each year. Linkages to AFSA’s strategic plan are contained in operational plans and individual employee
performance plans. National priorities and objectives and performance measures cascade down to
divisional plans and, ultimately, to individual employee performance and development plans. This
assists employees’ understanding of the expectations of their role and how their role contributes to the
achievement of AFSA’s overall outcomes.
VALUES, CONDUCT AND ETHICAL STANDARDS
AFSA’s strategic and operational plans and enterprise agreement play a lead role in reinforcing the
requirement for AFSA employees to uphold the Australian Public Service (APS) Values and comply
with the APS Code of Conduct. Information on initiatives conducted during 2013–14 is provided under
‘Management of AFSA’s people’ (page 42).
MANAGING RISK AND FRAUD
AFSA is committed to the management of risks to protect its clients and stakeholders, employees and
assets, and contractual and statutory obligations, as well as its reputation. Risk management is applied
as an ongoing practice by all employees and contracted service providers in all areas of the agency.
During 2013–14 AFSA’s risk management framework was refreshed and updated. The framework is
underpinned by the agency’s:
●●
risk management plan
●●
business continuity framework, plan and testing strategy
●●
fraud control plan
●●
disaster recovery plan
●●
risk registers at the strategic, operational and project levels, as well as specifically for fraud risks
●●
management assurance frameworks
●●
quality programme.
Intensive risk workshops were conducted at the divisional level with senior managers in attendance.
These workshops covered all elements of the Comcover risk management process, and used a
methodical approach to identifying risks to operational objectives, client services and reputation.
Risk management is embedded in AFSA’s strategic and operational planning process. It is also a
key part of governance at AFSA and is a standard consideration of operational and project
governance committees.
34
CLIENT SERVICE
NATIONAL SERVICE CENTRE
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA’s National Service Centre, based in Adelaide, manages an average of more than 600 phone
enquiries per day. Open six days a week, the centre provides general information on personal insolvency
and the Personal Property Securities Register (PPSR) and supports clients who experience any
difficulty with our online services. Clients who are unable to access the PPSR online can conduct a
PPSR search over the phone by calling the National Service Centre.
During 2013–14, the National Service Centre managed more than 200 000 phone enquiries and
50 000 written enquiries. Users have become more familiar with using the PPSR, which has resulted in
a reduced number of system support enquiries. While there was an increase in calls relating to the end
of the transition period in January 2014, PPSR calls continued to reduce over the period.
CLIENT SERVICE CHARTER
AFSA’s performance is measured against service standards as set out in the Client Service Charter. The
charter is available in brochure format and on the AFSA website.
In 2013–14, more than 50 000 copies of the charter were distributed to:
●●
every person for whom AFSA was administering a bankruptcy or debt agreement
●●
debtors making initial enquiries about bankruptcy and its alternatives, and debtors submitting debt
agreement proposals
●●
clients such as financial counsellors, creditors and registered trustees
●●
attendees at AFSA-run education and information sessions.
The number of copies distributed during the year was substantially higher than in previous years due
to increased promotion of our change in name from the Insolvency and Trustee Service Australia to the
Australian Financial Security Authority on 15 August 2013.
COMPLAINTS AND COMPLIMENTS
Complaints and compliments brought to the attention of AFSA staff members are managed through
the Complaints and Compliments Register. AFSA’s National Management Board, Operations
Management Committee and Audit Committee receive regular reports on complaint and compliment
statistics and issues.
INSOLVENCY COMPLAINTS
In 2013–14, AFSA recorded 101 general complaints (81 in 2012–13) about insolvency service
delivery standards.
Of the 101 complaints recorded, 42 (42%) were considered either justified or partially justified (38 in
2012–13). The majority of complaints related to service issues such as lack of response (21%), general
feedback (14%), accuracy of information (12%) and trustee actions and/or decisions (12%). All recorded
complaints were followed up. Where a complaint was found to be justified, remedial action was taken—
for example, to fully deliver the service initially requested, correct erroneous material or provide more
substantial information.
35
PERSONAL PROPERTY SECURITIES REGISTER COMPLAINTS
AFSA recorded 42 complaints (188 in 2012–13) about the operation of the PPSR during 2013–14.
Of the 42 complaints received, 11 (26%) were found to be justified or partially justified (25 in 2012–13).
The majority of complaints related to ICT and business systems (45%) and general feedback (29%). All
complaints were investigated and where a complaint was found to be justified, remedial action was
taken—for example, to fully deliver the service initially requested.
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
In 2013–14, we developed the quick motor vehicle search to make it easier for users conducting a
search. This enhancement provides a streamlined option for users and has significantly reduced
complaints about search complexity.
OMBUDSMAN COMPLAINTS
The Commonwealth Ombudsman’s office advised that it had received 79 approaches in relation to
AFSA during 2013–14, an increase on the 55 approaches made in the previous year. The Ombudsman
investigated 14 matters and at 30 June 2014, seven matters remained on hand.
There were no recordings of a section 12 notice with comments or suggestions for AFSA
during 2013–14.1
In addition, there were no complaints received by the Commonwealth Ombudsman’s office in relation to
the PPSR during 2013–14.
COMPLIMENTS
AFSA recorded 102 compliments about the quality of service provided in 2013–14 (114 in 2012–13).
Compliments mainly related to the professional, courteous and friendly service provided by AFSA
employees.
Examples of compliments received by AFSA in 2013–14 include the following:
I REALLY WOULD LIKE TO THANK ALL THE STAFF WHO PROCESSED
MY BANKRUPTCY SO EFFICIENTLY AND PROMPTLY. I WISH I COULD
HUG YOU ALL TO THANK YOU. YOUR SERVICE TO ME WAS SO GOOD
AND SPEEDY AND THAT IN EFFECT IT HELPED ME TO BECOME A
HAPPIER PERSON.
OUR NEW WEBSITE IS VERY EASY TO NAVIGATE AND HAS A Y
CLEAN AND PLEASING LAYOUT. AFSA HAS ALSO REALLY IMPROVED
TRANSPARENCY BY PUBLISHING GUIDES AND COMMENTARY ON
YOUR STATISTICS.
1 A review and revision of the Commonwealth Ombudsman’s office feedback procedures from 1 July 2013 resulted
in a change to the way in which investigative feedback is provided to agencies and led to the disuse of the
complaint outcome ‘administrative deficiency’. Now, where the Ombudsman has investigated a matter but does
not consider that the investigation has identified anything that requires agency action, a notice will be issued
advising the finalisation of the investigation (known as a section 12 notice—no comments or suggestions). If the
Ombudsman considers that the investigation has identified something that warrants comment or the making of a
suggestion, a notice will be issued advising the finalisation of the investigation with comments and/or suggestions
(a section 12 notice—comment/suggestion).
36
DISABILITY REPORTING MECHANISMS
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Since 1994, Commonwealth departments and agencies have reported on their performance as policy
adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In
2007–08, reporting on the employer role was transferred to the Australian Public Service Commission’s
State of the Service Report and the APS Statistical Bulletin. These reports are available at
www.apsc.gov.au. Since 2010–11, departments and agencies have no longer been required to report
on these functions in their annual reports.
The Commonwealth Disability Strategy has been overtaken by the National Disability Strategy
2010–2020, which sets out a 10-year national policy framework to improve the lives of people with
disability, promote participation and create a more inclusive society. A high-level two-yearly report
will track progress against each of the six outcome areas of the strategy and present a picture of
how people with disability are faring. The first of these reports will be available in late 2014 on the
Department of Social Services website (www.dss.gov.au).
EXTERNAL SCRUTINY
There were no significant developments in external scrutiny of AFSA during 2013–14. There were no
judicial decisions or decisions of administrative tribunals that have had, or may have, a significant
impact on the operations of AFSA.
AFSA was not the subject of any decisions by the Australian Information Commissioner that have had,
or may have, a significant impact on our operations. Similarly, there were no reports on the operations
of AFSA by the Auditor-General, a parliamentary committee or the Commonwealth Ombudsman during
the year.
FINANCIAL MANAGEMENT
OVERVIEW OF FINANCIAL PERFORMANCE
The financial statements for the year ended 30 June 2014 can be found in section 7 of this report.
The financial statements were prepared on an accrual basis in accordance with Australian Accounting
Standards and the Finance Minister’s Orders. The Australian National Audit Office issued an unmodified
audit report on the financial statements.
AFSA is required to repay the Commonwealth $10.96 million in 2013–14 for the initial investment
in the Personal Property Securities Register. The repayment is reflected as a return of equity to the
Commonwealth which is funded through operating surpluses.
37
TABLE 5: AGENCY RESOURCE STATEMENT, 2013–14
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
This table sets out AFSA’s 2013–14 agency resource statement.
Actual available
appropriation for
2013–14
$’000
Payments made
2013–14
$’000
Balance
remaining
$’000
(a)
(b)
(a) – (b)
Departmental appropriation
127,151
90,053
37,098
Total
127,151
90,053
37,098
127,151
90,053
0
0
Ordinary Annual Services
Total ordinary annual services
Departmental non-operating
Equity injections
Total
Total other services
Total Available Annual Appropriations
and payments
0
0
0
0
127,151
90,053
-
Special appropriations
Special appropriations limited by
criteria/entitlement
Bankruptcy Act 1966
442
Proceeds of Crime Act 1987
-
Proceeds of Crime Act 2002
67,114
Financial Management & Accountability
Act 1997
91
Total special appropriations
67,647
Special Accounts
Opening balance
77,015
Appropriation receipts
65,759
Non-appropriation receipts to
18,396
Special Accounts
Payments made
38
72,938
Total Special Account
161,170
72.938
Total resourcing and payments
288,321
230,638
Less appropriations drawn from special
appropriations above and credited to
special accounts
65,759
65,759
Total net resourcing and payments for
agency AFSA
222,562
164,879
88,232
TABLE 6: EXPENSES BY OUTCOME AND PROGRAMMES, 2013–14
This table outlines AFSA’s expenses by outcome and programmes.
Outcome 1: Improved and equitable financial
outcomes for consumers, business and the
community through application of bankruptcy and
personal property securities laws, regulation of
personal insolvency practitioners, and trustee
services.
Budget
2013–14
$’000
Actual
Expenses
2013–14
$’000
Variation
2013–14
$’000
0
1,044
-1,044
28,800
71,665
-42,865
48,443
48,972
-529
4,249
6,785
-2,536
81,492
128,466
-46,974
37,471
34,865
2,606
37,471
34,865
2,606
1,044
-1,044
28,800
71,665
-42,865
85,914
83,837
2,077
4,249
6,785
-2,536
118,963
163,331
-44,368
2012-13
2013-14
420
449
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Expenses for Outcome 1
Programme 1.1: Personal Insolvency & Trustee
Services
Administered expenses
Ordinary Annual Services
Special Accounts
Departmental expenses
Departmental appropriation
Expenses not requiring appropriation in the
Budget year
Total for Programme 1.1
Programme 1.2: Operation of a National Register of
Security Interests in Personal Property
Departmental expenses
Departmental appropriation
Total for Programme 1.2
Outcome 1 Totals by appropriation type
Administered Expenses
Ordinary annual services
Special Accounts
Departmental expenses
Departmental appropriation
Expenses not requiring appropriation in the
Budget year
Total expenses for Outcome 1
Average Staffing Level (number)
39
COST RECOVERY IN AFSA
Under the Australian Government’s Cost Recovery Guidelines, AFSA has adopted a formal cost recovery
regime in respect of fees and charges payable under the Bankruptcy Act and related legislation.
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA has completed a number of reviews of its fees and charges in accordance with those guidelines.
Cost Recovery Impact Statements for personal insolvency and trustee services and the Personal
Property Securities Register came into effect on 1 July 2013 covering the 2013–14 and 2014–15 financial
years. An amended Cost Recovery Impact Statement for personal insolvency and trustee services came
into effect on 1 April 2014 that introduced fees for processing debtor’s petitions and overseas travel
requests. An increase in the realisations charge from 1 July 2015 was also approved. AFSA ceased
recovery of the debtor’s petition fee from close of business on 23 June 2014.
Fees and charges have been determined after consultation with stakeholders through a Cost Recovery
Reference Group comprising representatives from various creditor associations, registered trustees,
the Law Council of Australia, debt agreement administrators and financial counsellors.
The net cost for AFSA’s insolvency programme can be represented by the appropriation funding
AFSA receives.
The administration of the PPSR also operates on a cost-recovery basis in accordance with Australian
Government policy and incorporates the provision and maintenance of an online register, and service
support via multiple channels.
Under the Australian Government’s Cost Recovery Guidelines, AFSA has adopted a formal cost recovery
regime in respect of fees and charges for personal insolvency and trustee services as well as the PPSR.
The current Cost Recovery Impact Statement for personal insolvency and trustee services is available
on the AFSA website and the current Cost Recovery Impact Statement for the Personal Property
Securities Register is available on the PPSR website.
ASSET MANAGEMENT
AFSA’s fixed asset base covers a wide range of asset types, including office fit-outs, purchased and
internally developed software, and plant and equipment.
AFSA actively manages its assets through its asset registers and maintains a comprehensive set of
asset management policies and procedures. Operational guidance is available to all staff through
AFSA’s intranet.
AFSA conducts an annual stocktake of assets to maintain the accuracy of asset records. Asset
valuations are undertaken on a regular basis to ensure asset values are fairly represented in the annual
financial statements.
The major asset purchases during 2013–14 related to the development of software, ICT infrastructure
and fit-out of the relocated Canberra office.
40
PROCUREMENT
During 2013–14, the Commonwealth Procurement Rules formed the basis for AFSA’s procurement
practices and procedures. The principles in the rules were reflected in AFSA’s Chief Executive’s
Instructions and operational guidance, which are available to all employees through AFSA’s intranet.
The Chief Executive’s Instructions and operational guidance were reviewed on a regular basis to
ensure consistency with the Commonwealth Procurement Rules and other policies that interact
with procurement.
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Procurement activities are coordinated by a central procurement team that liaises with business
areas and financial delegates. The team ensures consistency and compliance with the Commonwealth
Procurement Rules and other procurement-related policies. Advice and consideration is also provided
for risk management, probity, specification development and contract management.
MANAGEMENT OF AFSA’S PEOPLE
In 2013–14, AFSA’s key focus for people management was to continue to improve systems and
processes as the organisation continued to work towards the use of online services. Client service
excellence was a key priority, with a greater focus on efficiency and effectiveness of service. AFSA
continued the development of its workforce planning approach, building on foundations put in place
in previous years. Workforce planning was furthered with the formation of an agency-wide Workforce
Planning Reference Group, segmentation of the workforce using the APS job family model, and delivery
of a range of workforce diagnostics. Employee engagement was assisted by continuing information
sessions, quarterly manager workshops, regular team meetings and a targeted learning and
development strategy.
PERFORMANCE MANAGEMENT
During 2013–14, AFSA refreshed its performance management framework. The new framework is
designed to better align individual performance measures with AFSA’s strategic and operational plans.
It contains:
●●
nationally consistent behavioural expectations for managers and employees
●●
nationally consistent leadership attributes for managers
●●
new performance rating descriptors
●●
new forms.
As AFSA continues to improve online services, with a greater focus on client service, the performance
management framework, through the documentation of key role expectations, will be used to ensure
that each individual’s efforts align with AFSA objectives. In addition, the new framework focuses on
creating key performance indicators that are specific, measurable, achievable and time bound, so that
employees’ achievements are measured and recognised against the set expectations.
LEARNING AND DEVELOPMENT
In 2013–14, 86.4% of AFSA employees participated in some form of learning and development, with an
average of 30.8 hours per employee for the year. AFSA continued to assist 31 employees to progress
their tertiary studies in accordance with the AFSA Studies Assistance Scheme, which includes the
provision of study leave and assistance with course fees.
41
In addition, technical skills development was targeted in operational areas to increase productivity
and efficiency. A leadership programme was offered for team leaders and managers that included
a workplace project. Quarterly manager forums were established to ensure all managers receive
information and guidance on people management issues, including performance management,
workplace diversity, work health and safety, the APS Code of Conduct and dealing with staffing issues.
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Organisational learning programmes were evaluated for quality, relevance, accessibility and capabilities
acquired. In addition, follow-up evaluations were conducted to measure the link between participating
in the learning activity and improvements in job performance. The data gained from these evaluations
were used to improve the effectiveness of the learning and development programme in contributing to
improved workforce skills and capabilities.
During 2013–14, AFSA established a new organisational learning and development function to provide a
more strategic, effective and efficient delivery of activities that are closely aligned with AFSA’s business
needs and values. AFSA has embraced a learning culture underpinned by a focus on quality learning
outcomes, rather than quantity. This focus will continue over the years ahead.
The revised approach to learning and development focuses on the following key aspects:
●●
supporting the sharing of knowledge and expertise across the organisation
●●
ensuring managers and staff understand their accountabilities as APS employees
●●
developing managers and staff for future business needs
●●
integrating new staff effectively into the organisation
●●
skilling staff to perform well in their role
●●
equipping people managers to lead and develop their people.
STAFFING
At 30 June 2014, AFSA employed 439.91 paid full-time equivalent employees (464 actual paid
employees). This compares with 442.08 paid full-time equivalent employees (480 actual paid employees)
at 30 June 2013. Further details of AFSA’s workforce profile can be found on page 45. The slight
decrease in employee numbers is mainly due to the stabilising of the PPSR function.
APS VALUES, CODE OF CONDUCT AND ETHICAL BEHAVIOUR
AFSA’s operational plans and enterprise agreement play a lead role in reinforcing the requirement for
AFSA employees to uphold the APS Values and comply with the APS Code of Conduct. The values and
the code are also incorporated into AFSA’s performance management framework, and the generic
capability framework, which is used as the basis for selecting employees.
Information on the APS Values and Code of Conduct is contained in induction material given to each
new employee and is posted on AFSA’s intranet. Group-based induction also provides training on
the values and code. Formal procedures are in place for investigating and determining breaches
of the Code of Conduct and for handling reports from whistleblowers through the public interest
disclosure protocols. Training on the new Public Interest Disclosure Act 2013 was rolled out across
the organisation to ensure that staff understand their roles and responsibilities. AFSA has introduced
a manager induction programme that also reinforces the requirement to uphold ethical behaviour,
including the APS Values and Code of Conduct.
42
WORKPLACE DIVERSITY
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
During 2013–14 AFSA launched its new diversity programme for the period 2014–17. This programme
renews AFSA’s focus on using diversity to create a more productive, innovative and creative workplace
with high morale and excellence in service delivery. It commits to improving employment outcomes for
Indigenous people and for people with disability, as well as committing to the recognition of key dates
during the year, including Harmony Day, Reconciliation Week, NAIDOC Week and International Day of
People with Disability. The programme complements AFSA’s Multicultural Plan, Reconciliation Action
Plan, Indigenous employment strategy and disability employment strategy.
As at 30 June 2014, 2.7% of AFSA’s employees disclosed that they have a disability. This is an increase
from 2.5% at 30 June 2013.
AFSA employed seven employees (1.5%) who identified as Indigenous. This is an increase of 0.2
percentage points from the previous year. AFSA has committed to a target of 2.7% for Indigenous
employees by 2015.
As at 30 June 2014, 9.9% of AFSA’s employees were from non-English-speaking backgrounds. This
figure is a decrease of 1.5 percentage points from 30 June 2013.
The Enterprise Agreement 2011–14 assists in providing flexibility in work–life balance for AFSA
employees. As at 30 June 2014, 16.3% of employees were engaged on a part-time basis, which is a
decrease of 0.8 percentage points from 30 June 2013.
EMPLOYEE CONSULTATION
The National Consultative Committee and site consultative committees met to facilitate consultation
with employees on administrative and workplace issues, including operational policy and practice
changes, organisational change, accommodation and improvement strategies. Site consultative
committees met regularly in each of AFSA’s locations during 2013–14. A particular focus for the
consultative committees was the enterprise agreement and the upcoming bargaining round.
Specific consultation took place on a proposed new organisational structure for ICT as the role of the
Service Desk was fully implemented.
EMPLOYMENT CONDITIONS AND AGREEMENT-MAKING
The ITSA Enterprise Agreement 2011–14, which commenced on 7 July 2011, set the employment
conditions of all non–Senior Executive Service employees during 2013–14. Negotiations for a new AFSA
enterprise agreement commenced on 30 June 2014.
As of 30 June 2014, 11 employees had their employment arrangements supplemented by individual
flexibility arrangements in accordance with the enterprise agreement. All substantive Senior Executive
Service employees (not including the Chief Executive) had their employment conditions provided for
using determinations made under section 24 of the Public Service Act 1999.
43
PERFORMANCE PAY
AFSA’s enterprise agreement and section 24 determinations do not include any provision for
performance-based pay or bonuses.
REWARD AND RECOGNITION
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA encourages reward for and recognition of employees who make an exceptional contribution. Each
division regularly provides opportunities for reward and recognition in accordance with AFSA’s employee
recognition programme.
Each year, the Chief Executive presents Australia Day awards to individuals and teams who have
made outstanding contributions to the organisation. AFSA also acknowledges employees who achieve
15 years of continuous service in the APS. These employees are recognised and presented with a
certificate at events held quarterly. Employees are also recognised for every additional five years of
continuous service.
44
45
Total
Senior Executive
Service
Executive Level
1–2/Senior Legal
Officer – Principal
Legal Officer
APS 5–6
APS 1–4
Classification
0
F
30 June 2014
82
0
1
9
9
24
12
18
9
30 June 2013
95
1
4
13
26
18
24
9
0
30 June 2014
104
1
4
15
32
15
27
9
1
85
0
0
4
7
20
12
28
14
30 June 2013
30 June 2014
85
0
1
5
10
19
11
27
12
99
0
1
7
15
20
15
33
8
30 June 2014
88
0
0
7
12
21
13
25
10
SA
105
0
1
6
1
21
11
53
12
30 June 2014
101
0
1
7
1
16
11
57
8
WA
2
0
0
0
1
1
0
0
0
2
0
0
0
1
1
0
0
0
30 June 2014
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
84
0
13
F
M
7
20
F
M
16
18
F
M
10
30 June 2013
M
Gender
30 June 2013
Qld
30 June 2013
Vic
30 June 2013
ACT
Tas
10
0
0
0
1
1
5
2
1
30 June 2013
NSW
10
0
0
0
1
2
5
1
1
79
98
66
43
7
1
83
101
58
43
6
1
472
137
143
480
41
45
Total
30 June 2013
Number of employees by location
30 June 2014
This table shows the number of AFSA employees by classification, gender and location, as well as comparative figures for the previous year.
Figures include ongoing, non-ongoing, full-time and part-time employees, but exclude the Chief Executive.
TABLE 7: NUMBER OF EMPLOYEES BY CLASSIFICATION GROUP, GENDER AND LOCATION, AS AT 30 JUNE
2013 AND 2014
STAFFING PROFILE
30 June 2014
TABLE 8: NON-ONGOING EMPLOYEES BY CLASSIFICATION GROUP AND
LOCATION, AS AT 30 JUNE 2014
This table shows the number of non-ongoing AFSA employees by classification and location. Figures
include full-time and part-time employees.
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Classification
Number of employees by location
NSW
ACT
Vic
Qld
SA
WA
Tas
Total
APS 1–4
13
5
15
19
4
0
1
57
APS 5–6
8
7
1
1
1
0
2
20
Executive Level
1–2/ Senior
Legal Officer –
Principal Legal
Officer
1
1
1
0
0
0
0
3
22
13
17
20
5
0
3
80
Total
TABLE 9: PART-TIME EMPLOYEES BY CLASSIFICATION GROUP AND LOCATION,
AS AT 30 JUNE 2014
This table shows the number of part-time employees by classification group and location. Figures
include ongoing and non-ongoing employees.
Classification
NSW
ACT
Vic
Qld
SA
WA
Tas
Total
APS 1–4
4
0
8
9
28
0
0
49
APS 5–6
6
6
0
2
3
0
0
17
Executive Level
1–2/Senior Legal
Officer – Principal
Legal Officer
2
3
0
1
1
0
0
7
Senior Executive
Service
0
0
0
0
0
0
0
0
12
9
8
12
32
0
0
73
Total
46
Number of employees by location
TABLE 10: SALARY RANGES FOR NON–SENIOR EXECUTIVE SERVICE
EMPLOYEES UNDER THE ENTERPRISE AGREEMENT, AS AT 30 JUNE 2014
Classification
Minimum salary ($)
Maximum salary ($)
APS 1
43 102
47 638
APS 2
48 781
54 092
APS 3
55 561
59 965
APS 4
61 924
67 234
APS 5
69 069
74 596
APS 6
76 453
85 692
Executive Level 1/Senior Legal
Officer*
91 079
116 360
110 297
130 545
Executive Level 2/Principal
Legal Officer**
3 . M anagement and A ccountability A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
This table shows the salary ranges for non–Senior Executive Service employees under the ITSA
Enterprise Agreement 2011–14.
* The maximum salary for Executive Level 1 at 30 June 2014 was $107 215. Senior Legal Officers have additional pay
points. At 30 June 2014, the maximum salary for a Senior Legal Officer was $116 360.
** The same salary range applies to both Executive Level 2 officers and Principal Legal Officers.
TABLE 11: SALARY RANGE FOR SENIOR EXECUTIVE SERVICE EMPLOYEES, AS
AT 30 JUNE 2014
This table shows the salary range for Senior Executive Service employees.
Classification
Senior Executive Service
Minimum salary ($)
Maximum salary ($)
145 000
239 850
47
s e c t i o n 4 O T H E R MA N DAT O RY I N F O R M AT I O N
Freedom of information
50
Work health and safety
52
Consultancy services
52
Advertising and market research
56
Ecologically sustainable development and environmental performance
56
List of requirements
57
FREEDOM OF INFORMATION
INFORMATION PUBLICATION SCHEME
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Agencies subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information
to the public as part of the Information Publication Scheme (IPS). This requirement is in Part II of the
FOI Act and has replaced the former requirement to publish a section 8 statement in an annual report.
Each agency must display on its website a plan showing what information it publishes in accordance
with the IPS requirements.
AFSA has prepared an IPS plan in accordance with these requirements. The primary purpose of the
plan is to comply with subsection 8(1) of the FOI Act, and to assist AFSA to proactively disclose its
information holdings, in accordance with the objects of the FOI Act. AFSA’s objectives in relation to the
IPS plan are to implement appropriate mechanisms and procedures to:
●●
manage the information holdings relevant to the IPS
●●
proactively identify and publish all information required to be published under subsection 8(2) of the
FOI Act
●●
proactively identify and publish appropriate optional information under subsection 8(4) of the FOI Act
●●
review and ensure that information published under the IPS is accurate, up to date and complete, as
required by section 8B of the FOI Act
●●
ensure that information published under the IPS is discoverable, understandable and, to the extent
possible, reusable
●●
ensure that the format of online content conforms with the Web Content Accessibility Guidelines
(version 2)
●●
evaluate the usefulness and acceptance of AFSA’s IPS
●●
ensure that AFSA’s clients, stakeholders and the general public are as fully informed as possible
about AFSA’s role and responsibilities and the way its powers are exercised and functions performed.
The IPS plan is available on AFSA’s website, along with extensive information about AFSA’s functions
and operations. In addition, we have a range of hard-copy publications that are available on request
from AFSA and from other sources, such as financial counsellors. A general description of AFSA and its
function is contained in section 1 of this report.
PROCEDURES AND INITIAL CONTACT POINT
Freedom of information (FOI) contact officers will help applicants identify the particular documents
they seek. All national managers of AFSA’s divisions, together with specific officers at AFSA’s national
office in Canberra, are authorised to grant or deny access to documents. Enquiries about access to
documents or other matters relating to FOI may be directed to [email protected] or the following address:
FOI Coordinator
Australian Financial Security Authority
GPO Box 821
Canberra ACT 2601
50
STATISTICS
TABLE 12: FREEDOM OF INFORMATION REQUESTS AND OUTCOMES, 2013–14
This table sets out the number of FOI requests, and the outcomes of those requests.
Number of
requests
1
Requests received
48
Granted in full
12
Granted in part
20
Refused
13
Withdrawn/lapsed
3
Requests outstanding at the end of the year
1
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Requests carried over from the previous year
REVIEW OF DECISIONS
One request for an internal review of an FOI decision was received in 2013–14. No reviews of decisions
were conducted by the Office of the Australian Information Commissioner.
RESPONSE TIMES
Of the 48 FOI requests finalised in 2013–14, 47 were finalised within the applicable statutory time period
set out in the FOI Act. Administrative delays resulted in one request being finalised within 30 days of the
end of the applicable statutory time period.
FEES AND CHARGES
No application fee is charged for FOI requests or for internal review of access decisions. The FOI Act
provides for other charges to be imposed, including for the time taken to retrieve documents and in
making a decision on whether to grant access. However, where the request seeks access to personal
information of the applicant, no charges can be imposed, and in other cases the first five hours of
retrieval and decision-making time are free. These charges may be remitted or reduced in certain
circumstances.
No FOI fees or charges were imposed by AFSA in 2013–14.
51
WORK HEALTH AND SAFETY
AFSA is committed to providing a safe and healthy workplace for all employees. The following
information details our responses to our legal obligations under Schedule 2, Part 4 of the Work Health
and Safety Act 2011 (WHS Act).
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA’s work health and safety (WHS) management arrangements aim to facilitate a direct
relationship between AFSA and its employees to enable effective cooperation on health and safety
matters and promote and develop appropriate measures to ensure the health, safety and welfare of
employees at work.
AFSA maintains its proactive approach to WHS in all its locations, with each site taking responsibility for
its local WHS by conducting quarterly inspections and holding quarterly WHS committee meetings. In
addition, each site provides a quarterly report on WHS issues. An AFSA-wide WHS report is prepared on
a quarterly basis for the senior management group. The reports are tabled at meetings of the National
Consultative Committee and the National Management Board.
AFSA’s workers’ compensation premium for 2013–14 was 0.88% of the payroll, compared to 1.82% for
the overall average premium rate for the Commonwealth sector.
During 2013–14, work on the AFSAfe project was broadly completed, with WHS policies, education,
consultation and due diligence being fully implemented throughout AFSA. AFSA implemented a regular
reporting regime, requirements for working offsite and improved incident reporting.
During the year, AFSA had no notifications under section 38 of the WHS Act concerning health and
safety incidents, accidents or dangerous occurrences. No notices were issued under section 90, 191,
195 or 198 of the WHS Act, and no investigations were conducted.
AFSA has implemented a rehabilitation management system in response to the Guidelines for
Rehabilitation Authorities 2012, issued pursuant to section 41 of the Safety, Rehabilitation and
Compensation Act 1988. Training was rolled out across AFSA to ensure all employees and managers
understood their roles and responsibilities in relation to employee case management.
CONSULTANCY SERVICES
AFSA engages consultants where it lacks specialist expertise or when independent research, review or
assessment is required. Consultants are typically engaged to investigate or diagnose a defined issue
or problem; carry out defined reviews or evaluations; or provide independent advice, information or
creative solutions to assist in the agency’s decision-making.
Before engaging consultants, AFSA takes into account the skills and resources required for the task,
the skills available internally, and the cost-effectiveness of engaging external expertise. The decision to
engage a consultant is made in accordance with the Financial Management and Accountability Act 1997
and related Regulations, including the Commonwealth Procurement Rules and AFSA’s Chief Executive’s
Instructions.
During 2013–14, AFSA entered into 14 new consultancy contracts involving total actual expenditure
of $425 810.77 (inclusive of GST). In addition, four ongoing consultancy contracts were active during
2013–14, involving total actual expenditure of $628 539.76 (inclusive of GST).
52
Annual reports contain information about actual expenditure on contracts for consultancies.
Information on the value of contracts and consultancies is available on the AusTender website
(www.tenders.gov.au).
AUDITOR-GENERAL ACCESS PROVISIONS
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA’s standard contract templates include provisions allowing the Auditor-General to access a
contractor’s premises. AFSA does not have any contracts that do not contain the access provision.
EXEMPT CONTRACTS
AFSA does not have any contracts with a value of $10 000 or more (inclusive of GST) or any standing
offers that have been exempted by the Chief Executive from being published in AusTender on the basis
that they would disclose exempt matters under the Freedom of Information Act 1982.
Details of all other contracts with a value of $10 000 or more have been published on AusTender in
accordance with the reporting requirements of the Commonwealth Procurement Rules.
53
54
Subject matter of
consultancy
IT consultancy
IT consultancy
Social media
consultancy
SQL server consultant
Independent technical
determination services
Scoping study
4 Impact
Capgemini
Content Group
Encore IT
Services Pty Ltd
Ernst & Young
KPMG
New consultancies
Total
19/05/2014
28/04/2014
28/04/2014
06/11/2013
15/08/2013
05/07/2013
04/12/2012
Audit Committee
independent member
Ridley 4 Pty Ltd
24/11/2010
22/09/2010
Internal auditing
Moore Stephens
11/03/2013
Start date
PDM Consultancy Chair of Audit
Committee
Independent adviser to
the Portfolio Board
Jacobs Australia
Ongoing consultancies
Name of
consultant
This table provides information on AFSA’s consultancies.
30/06/2014
30/06/2014
15/05/2014
30/06/2014
31/12/2013
30/06/2014
30/12/2014
30/09/2014
23/11/2013
30/06/2016
End date
TABLE 13: DETAILS OF CONSULTANCIES, 2013–14
Limited
Limited
Open
Limited
Open
Open
Limited
Limited
Open
Open
Procurement
method
16 850.00
82 000.00
33 000.00
50 000.00
17 600.00
156 200.00
805 372.69
49 280.00
158 400.00
495 000.00
102 692.69
Contract
value ($, GST
inclusive)
0.00 Need for independent
research or assessment
0.00 Need for independent
research or assessment
26 649.41 Skills currently
unavailable within
agency
34 827.88 Need for specialised or
professional skills
17 600.00 Need for independent
research or assessment
136 206.68 Need for independent
research or assessment
628 539.76
21 340.00 Need for independent
research or assessment
40 241.59 Need for independent
research or assessment
259 068.17 Need for independent
research or assessment
307 890.00 Need for specialised or
professional skills
Expenditure for
2013–14 ($, GST Reason for consultancy
inclusive)
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
55
Financial investigation
and review services
Long service review
ICT online security
assessment
Review of ICT
expenditure
HR review
Development
of continuous
improvement strategy
Development of
risk management
framework
Pricewaterhouse
Coopers
Pricewaterhouse
Coopers
Saltbush
Consulting Pty
Ltd
Synergy Group
Limited
Tempo Strategies
Trustees for
the Mantis
Investment Trust
Trustees for
the Mantis
Investment Trust
29/10/2013
22/08/2013
12/05/2014
23/08/2013
02/09/2013
14/03/2014
16/07/2013
14/10/2013
Start date
30/11/2013
30/11/2013
30/06/2014
13/09/2013
30/10/2013
14/05/2014
16/08/2013
06/12/2013
End date
Open
Open
Open
Open
Open
Limited
Limited
Open
Procurement
method
651 989.29
74 821.00
56 823.96
55 000.00
31 950.83
10 780.00
10 147.50
10 000.00
46 816.00
Contract
value ($, GST
inclusive)
425 810.77
23 336.87 Need for independent
research or assessment
53 948.16 Need for independent
research or assessment
30 656.51 Need for independent
research or assessment
31 950.83 Need for independent
research or assessment
10 780.00 Need for independent
research or assessment
10 147.50 Need for specialised or
professional skills
3 506.93 Need for independent
research or assessment
46 200.00 Need for specialised or
professional skills
Expenditure for
2013–14 ($, GST Reason for consultancy
inclusive)
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Security review to use
cloud-based services
Paxus Australia
Pty Ltd
Total
Subject matter of
consultancy
Name of
consultant
ADVERTISING AND MARKET RESEARCH
TABLE 14: ADVERTISING, MARKET RESEARCH AND MEDIA EXPENDITURE,
2013–14
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
This table outlines AFSA’s total payments to advertising agencies, market research organisations,
polling organisations, direct mail organisations and media advertising organisations during 2013–14.
No advertising campaigns were conducted by AFSA during 2013–14.
Amount
($, GST inclusive)
Organisation
Description
Adcorp Australia Limited
Non-campaign government advertising
Fuji Xerox Businessforce Pty Ltd
Direct mailing services
Hall & Partners | Open Mind
Market research
61 380.00
Salmat Businessforce Pty Ltd
Direct mailing services
15 253.94
Universal McCann
Non-campaign government advertising
16 747.50
15 150.88
256 667.48
ECOLOGICALLY SUSTAINABLE DEVELOPMENT AND
ENVIRONMENTAL PERFORMANCE
The following information is presented in accordance with section 516A of the Environment Protection
and Biodiversity Conservation Act 1999.
During 2013–14, AFSA remained committed to the principles of ecologically sustainable development.
AFSA does not administer programmes or legislation relating to sustainable development or the
environment, so the direct impact of our activities on the environment is essentially confined to the
operation of our leased office accommodation.
The total energy consumption for tenant light and power in 2013–14 was 850 439 kilowatt hours
(861 260 kilowatt hours in 2012–13). The average energy consumption for tenant light and power
during 2013–14 was 6 057.26 megajoules per person (6 325.43 megajoules per person in 2012–13).
This continues a downward trend for tenant light and power total energy consumption and average per
person energy consumption.
AFSA relocated its Canberra head office to 4 National Circuit, Barton, in late 2013. The recently
completed office building at this address was designed to achieve 5-star energy and water ratings
under the National Australian Built Environment Rating System (NABERS) and five-star Green Star
ratings for design and as-built. In accordance with the Energy Efficiency in Government Operations
Policy, the lease for this tenancy includes a Green Lease Schedule. The fit-out was designed with
NABERS and Green Star principles in mind. The average energy consumption for tenant light and power
based on the first six months of occupation is expected to be below 4 000 megajoules per person on an
annualised basis.
AFSA’s tenancies in Adelaide, Brisbane and Melbourne are located in buildings that have a 5-star
NABERS energy (base building) rating, and the Sydney tenancy is located in a building with a
4.5-star NABERS energy (base building) rating.
56
AFSA continues its commitment to best practice and the latest environmental targets as required in
government operations.
LIST OF REQUIREMENTS
Letter of transmittal
Table of contents
Index
Glossary
PAGE
iii
iv–v
199–204
191–8
Contact officer
ii
Internet home page address and internet address for report
ii
Review by agency head
2–5
Chief Executive’s review
2–3
Summary of significant issues and developments
Overview of agency’s performance and financial results
Outlook for following year
Significant issues and developments—portfolio
4
12–28,
37–41
5
n.a.
Agency overview
6–10
Role and functions
6–7
Organisational structure
8–9
Outcome and programme structure
10
Where outcome and programme structure differs from the Portfolio Budget Statements,
Portfolio Additional Estimates Statements or other portfolio statements accompanying
any other additional appropriation bills, details of variation and reasons for change
n.a.
Portfolio structure
n.a.
Report on performance
12–28
Review of performance during the year in relation to programmes and contribution to
outcomes
12–28
Actual performance in relation to deliverables and key performance indicators set out
in the Portfolio Budget Statements, Portfolio Additional Estimates Statements or other
portfolio statements
12–28
Where performance targets differ from the Portfolio Budget Statements or Portfolio
Additional Estimates Statements, details of both former and new targets, and reasons
for change
n.a.
Narrative discussion and analysis of performance
12–28
Trend information
12–28
Significant changes in nature of principal functions or services
n.a.
Performance of purchaser–provider arrangements
n.a.
Factors, events or trends influencing agency performance
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
REQUIREMENT
12–28
57
REQUIREMENT
Contribution of risk management in achieving objectives
34
Performance against service charter customer service standards, complaints data, and
the agency’s response to complaints
35
Discussion and analysis of the agency’s financial performance
37–41
Discussion of any significant changes in financial results from the previous year, or
matters anticipated to have a significant impact on future operations or financial results
37–41
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Agency resource statement and summary resource tables by outcomes
Management and accountability
Corporate governance
Certification by agency head that the agency complies with the Commonwealth Fraud
Control Guidelines
38–9
30–47
30–4
iii
Statement of the main corporate governance practices in place
30–4
Names of the senior executive and their responsibilities
30–1
Senior management committees and their roles
30–3
Corporate and operational plans and associated performance reporting and review
34
Internal audit arrangements including approach adopted to identifying areas of
significant financial or operational risk and arrangements to manage those risks
32–3
Policy and practices on the establishment and maintenance of appropriate ethical
standards
34, 42
How nature and amount of remuneration for Senior Executive Service officers is
determined
43, 47
External scrutiny
37
Significant developments in external scrutiny
37
Judicial decisions and decisions of administrative tribunals and by the Australian
Information Commissioner
37, 85
Reports by the Auditor-General, a parliamentary committee, the Commonwealth
Ombudsman or an agency capability review
37
Management of human resources
41–7
Assessment of effectiveness in managing and developing human resources to achieve
agency objectives
41–4
Workforce planning, staff turnover and retention
Impact and features of enterprise or collective agreements, individual flexibility agreements,
determinations, common law contracts and Australian workplace agreements
Training and development undertaken and its impact
Work health and safety performance
58
PAGE
42, 45
43
41–2
52
Productivity gains
41–2
Statistics on staffing
45–7
PAGE
Enterprise or collective agreements, individual flexibility agreements, determinations,
common law contracts and Australian workplace agreements
43
Performance pay
44
Assets management
40
Assessment of effectiveness of assets management
40
Purchasing
41
Assessment of purchasing against core policies and principles
41
Consultants
52–3
A summary statement detailing the number of new consultancy services contracts
let during the year, the total actual expenditure on all new consultancy contracts let
during the year (inclusive of GST), the number of ongoing consultancy contracts that
were active in the reporting year, and the total actual expenditure in the reporting year
on the ongoing consultancy contracts (inclusive of GST); and a statement noting that
information on contracts and consultancies is available through the AusTender website.
54–5
Absence of provisions in contracts allowing access by the Auditor-General
53
Contracts exempted from publication in AusTender
53
Financial statements
Other mandatory information
102–89
49–59
Work health and safety (Schedule 2, Part 4 of the Work Health and Safety Act 2011)
52
Advertising and market research (section 311A of the Commonwealth Electoral
Act 1918) and statement on advertising campaigns
56
Ecologically sustainable development and environmental performance (section 516A of
the Environment Protection and Biodiversity Conservation Act 1999)
56
Compliance with the agency’s obligations under the Carer Recognition Act 2010
n.a.
Grants programmes
n.a.
Disability reporting—explicit and transparent reference to agency-level information
available through other reporting mechanisms
37
Information Publication Scheme statement
50
Correction of material errors in previous annual report
4 . O ther M andatory I nformation A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
REQUIREMENT
n.a.
Agency resource statements and resources for outcomes
38–9
List of requirements
57–9
n.a. = not applicable
Objectives of the Bankruptcy Act
XX
Personal insolvency activity
XX
Bankruptcies under Part IV and Part XI
XX
Debt agreements under Part IX
XX
59
ANNUAL REPORT ON THE OPERATION OF THE
BANKRUPTCY ACT 1966
s e c t i o n 5 O P E R AT I O N O F T H E B A N K R U P T CY AC T I N 2 0 1 3 – 1 4
Objectives of the Bankruptcy Act 64
Personal insolvency activity 64
Bankruptcies under Part IV and Part XI 68
Debt agreements under Part IX 74
Personal insolvency agreements under Part X 77
Enforcement 80
Inspector-General reviews 82
Regulation of insolvency practitioners 85
Amendments to the Bankruptcy Act and the Bankruptcy Regulations 87
OBJECTIVES OF THE BANKRUPTCY ACT
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
The objectives of the Bankruptcy Act 1966 are to:
●●
release insolvent debtors from debt
●●
provide for the repayment of debts to creditors in whole or in part from the assets of the debtor
●●
encourage the use of alternatives to bankruptcy
●●
ensure that debtors with the capacity to make payments to creditors from income during the period
of bankruptcy do so
●●
impose restrictions on commercial activities by insolvent debtors during the period of bankruptcy
●●
enable insolvent debtors who break bankruptcy laws to be prosecuted
●●
ensure the integrity of the personal insolvency system by providing a framework for registering and
regulating trustees and administrators.
PERSONAL INSOLVENCY ACTIVITY
Administrations under the Bankruptcy Act are Part IV—bankruptcies, Part XI—deceased estates,
Part IX—debt agreements and Part X—personal insolvency agreements.
TABLE 15: PERSONAL INSOLVENCY ACTIVITY
This table shows national personal insolvency activity, based on the type of administration.
Year
64
Number of
bankruptcies
(Parts IV and XI)
Number of
Number of debt
personal insolvency
agreements
agreements
(Part IX)
(Part X)
Total number
of personal
insolvencies
2008–09
27 483
8 567
437
36 487
2009–10
27 507
8 428
578
36 513
2010–11
23 102
8 054
375
31 531
2011–12
22 180
8 951
375
31 506
2012–13
20 875
9 651
311
30 837
2013–14
18 592
10 706
211
29 509
ASSISTANCE TO TRUSTEES TO GATHER INFORMATION AND
RECOVER PROPERTY
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
During 2013–14, the Official Receiver issued 902 statutory notices (970 in 2012–13) to help trustees
recover property or gather information and enforce payment of contributions.
TABLE 16: OFFICIAL RECEIVER NOTICES
This table shows the number of statutory notices issued by the Official Receiver.
Section of the
Bankruptcy Act
Type of statutory notice
Number of notices issued
2012–13
2013–14
0
1
s. 77AA
Access by Official Receiver and others to
premises
s. 77C
Obtain information and evidence
165
157
s. 77CA
Obtain statement of affairs
588
592
s. 81A
Offshore information notices
7
5
s. 139ZQ
Notice requiring payment following void
transaction
40
25
s. 139ZL
Payment of contribution liability
170
119
s. 139ZR
Charge over property
0
3
970
902
Total
NATIONAL PERSONAL INSOLVENCY INDEX
TABLE 17: SEARCHES CONDUCTED ON THE NATIONAL PERSONAL
INSOLVENCY INDEX BY TYPE OF USER
This table shows the number of searches conducted on the National Personal Insolvency Index (an
electronic public register that can be accessed by anyone for a fee).
Type of user
Index search agent
AFSA
Total searches
Number of searches
2012–13
2013–14
315 473
311 829
4 086
4 607
319 559
316 436
Further information on the National Personal Insolvency Index can be found in section 2.
65
COMMONWEALTH FUNDING ASSISTANCE PURSUANT TO
SECTION 305
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
Section 305 of the Bankruptcy Act allows the Minister (currently the Attorney-General), on the
application of the trustee of a bankrupt estate or of a personal insolvency agreement, to direct, in an
appropriate case, that the Commonwealth underwrite the cost of proceedings or enquiries about the
estate or the examinable affairs of the bankrupt or debtor.
The Minister has delegated the power to make a direction under section 305 to senior AFSA officials.
In exercising their discretion under section 305, the delegates have regard to the following guidelines
approved by the Attorney-General in March 2005.
Funding may be approved where:
(a) either:
(i)the trustee has reasonable prospects of a successful outcome in proceedings initiated, or
proposed to be initiated, by the trustee in the court or the Administrative Appeals Tribunal; or
(ii)the trustee should defend an application for a review of a decision by the trustee in the court or
the Administrative Appeals Tribunal; or
(iii)a party other than the bankrupt has instituted proceedings in the court or the Administrative
Appeals Tribunal that the trustee should defend;
and the creditors have insufficient financial resources to put the trustee in funds or to indemnify
the trustee against an award of costs; or
(b) the actions of the bankrupt or debtor give rise to the inference that the bankrupt or debtor is
intentionally breaching their obligations or duties under the Act; or
(c) a significant question of law has arisen that requires resolution.
Funding will ordinarily not be approved for instituting proceedings unless:
(a) the trustee has approached creditors to provide cash advances or indemnities in respect of costs,
or exhausted alternative opportunities for litigation funding (generally funding will not be provided
merely on the basis that creditors have refused to provide cash or indemnities); and
(b) the delegate is satisfied that undertaking the litigation is consistent with the Performance Standards
for Trustees in Schedule 4A of the Bankruptcy Regulations, particularly in relation to standards 2.4
and 2.13 concerning the realisation of assets and incurring only necessary and reasonable costs; and
(c) the delegate is satisfied that it would be appropriate for the trustee to commence the litigation.
66
TABLE 18: SECTION 305 ACTIVITY
Number of
applications
received
Number of
applications
approved*
Proportion of
applications
approved (%)
Amount
underwritten
($)
Expenditure by
financial year
($)
1999–00
42
38
90
322 586
457 965
2000–01
16
12
75
146 950
488 447
2001–02
54
50
93
646 329
360 968
2002–03
39
35
90
199 993
280 611
2003–04
80
62
78
721 822
522 584
2004–05
56
28
50
385 173
249 254
2005–06
43
23
53
183 691
179 721
2006–07
22
16
73
221 050
125 868
2007–08
16
6
38
211 050
97 993
2008–09
17
12
71
113 792
92 334
2009–10
32
29
91
178 000
87 822
2010–11
10
9
90
88 815
80 715
2011–12
15
15
100
88 632
30 048
2012–13
19
16
84
91 650
87 836
2013–14
20
18
90
42 736
13 277
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
This table shows the number of applications for funding under section 305 received and approved in
the past 15 years as at 30 June. It also shows the gross amount paid out under all approvals, including
those still in place from earlier years.
* These figures include all applications approved in the financial year, irrespective of whether they were lodged in
that year.
67
68
958
1 463
1 620
1 876
624
62
865
184
8 047
Vic
Qld
SA
NT
WA
Tas
Total
18 853
16 259
461
1 144
1 355
530
71
1 135
4 798
3 290
142
5 218
2013–14
93
1 489
5 515
3 658
175
6 038
2012–13
New
1 213
24
119
8
70
316
282
10
384
2012–13
1 400
49
151
12
91
356
345
8
388
2013–14
Reactivated
223
0
1
0
0
75
7
3
137
2012–13
2
0
0
0
0
0
1
0
1
2013–14
Transferred
from registered
trustees
Number received during year
20 141
575
1 457
107
1 566
5 646
4 169
180
6 441
2012–13
17 389
511
1 215
89
1 242
5 023
3 490
154
5 665
2013–14
Number
finalised during
year*
2 346
26
298
14
145
674
433
27
729
2012–13
820
13
93
0
45
193
130
6
340
2013–14
Number
transferred
to registered
trustees
* ‘Finalised’ refers to estates where all necessary work has been completed, whether or not the bankrupt has been discharged.
5 850
137
584
43
470
54
73
ACT
2 141
2013–14
2 743
2012–13
NSW
State or
territory
Number
on hand at
1 July
5 849
137
585
42
472
1 462
965
54
2 132
5 302
123
571
37
409
1 401
974
44
1 743
2013–14
Number
on hand at
30 June
2012–13
This table shows the number of estates handled by the Official Trustee. An insolvency proceeding is reported as one administration
regardless of whether there are multiple debtors. Each partner in an insolvency proceeding has an estate.
TABLE 19: OFFICIAL TRUSTEE ESTATES
BANKRUPTCIES UNDER PART IV AND PART XI
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
69
4 008
5 260
1 134
67
1 116
379
Vic
Qld
SA
NT
WA
Tas
21 566
406
1 493
82
1 238
5 826
4 425
229
7 867
2013–14
3 888
81
274
14
176
1 184
806
52
1 301
2012–13
3 873
85
326
23
177
1 099
860
45
1 258
2013–14
New
197
2
17
0
5
30
42
0
101
2012–13
114
0
3
1
7
26
22
2
53
2013–14
Reactivated
2 346
26
298
14
145
674
433
27
729
2012–13
820
13
93
0
45
193
130
6
340
2013–14
Transferred
from Official
Trustee
Number received during year
4 787
87
204
16
215
1 232
848
47
2 138
2012–13
2
0
0
0
0
0
1
0
1
2013–14
21 678
401
1 500
79
1 245
5 841
4 434
229
7 949
21 080
384
1 630
94
1 165
5 797
4 454
229
7 327
2013–14
Number
on hand at
30 June
2012–13
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
223
0
120
5 291
1
0
0
75
7
3
137
2012–13
Number
transferred to
Official Trustee
285
12
302
1 347
982
53
2 190
2013–14
Number
finalised during
year*
* ‘Finalised’ refers to estates where all necessary work has been completed, whether or not the bankrupt has been discharged.
20 257
200
ACT
Total
8 093
2012–13
Number
on hand at
1 July
NSW
State or
territory
This table shows the number of estates handled by registered trustees. An insolvency proceeding is reported as one administration regardless
of whether there are multiple debtors. Each partner in an insolvency proceeding has an estate.
TABLE 20: REGISTERED TRUSTEE ESTATES
70
7 894 597
2 477 453
4 157 545
1 613 917
34 496 175
Qld
SA/NT
WA
Tas
Total
36 505 999
1 194 960
4 286 049
3 033 110
9 079 009
5 948 422
12 964 450
* Trustee remuneration is inclusive of GST.
6 774 375
11 578 287
12 046 876
371 142
1 315 293
875 830
2 849 031
2 888 559
3 747 022
12 967 325
484 519
2 016 150
779 240
3 088 619
1 796 549
4 802 248
2013–14
2012–13
2012–13
2013–14
Dividends paid to
creditors ($)
Total receipts ($)
Vic
NSW/ACT
State or
territory
7 640 186
196 020
850 005
587 135
1 887 604
1 740 564
2 378 857
2012–13
9 458 205
279 747
1 235 935
606 304
2 299 317
1 576 587
3 460 314
2013–14
Trustee fees ($)*
15 610 843
1 041 477
1 808 977
1 271 329
3 009 395
3 022 468
5 457 197
2012–13
13 828 600
458 823
1 395 151
1 317 560
3 404 903
2 262 867
4 989 297
2013–14
Other payments ($)
35 297 904
1 608 639
3 974 275
2 734 294
7 746 030
7 651 590
11 583 076
2012–13
36 254 131
1 223 090
4 647 237
2 703 104
8 792 839
5 636 003
13 251 859
2013–14
Total payments ($)
This table shows receipts, payments and amounts held by the Official Trustee in the Common Investment Fund—Part IV bankruptcies and
Part XI administrations of deceased estates.
TABLE 21: MONIES ADMINISTERED BY THE OFFICIAL TRUSTEE IN ADMINISTRATIONS UNDER PART IV
AND PART XI
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
71
60 508 530
52 117 835
10 799 868
24 707 039
8 419 758
270 072 436
Vic
Qld
SA/NT
WA
Tas
Total
314 966 184
6 179 565
34 156 882
15 799 058
55 172 954
65 624 670
138 033 056
38 773 014
1 089 408
2 495 934
2 100 046
6 342 805
7 346 748
19 398 073
56 169 589
807 813
5 582 744
1 896 735
9 517 024
12 919 910
25 445 363
70 943 045
1 637 983
5 806 068
3 491 471
15 581 814
16 088 458
28 337 251
2012–13
79 162 198
1 651 945
7 361 133
3 782 577
18 033 171
17 353 631
30 979 741
2013–14
Trustee fees ($)*
133 673 448
3 389 595
12 824 541
4 214 854
24 854 746
31 473 434
56 916 279
2012–13
165 557 599
3 665 479
14 191 177
8 837 750
28 675 802
31 998 394
78 188 997
2013–14
Other payments ($)
243 389 507
6 116 985
21 126 543
9 806 371
46 779 365
54 908 640
104 651 603
2012–13
300 889 386
6 125 236
27 135 054
14 517 061
56 225 997
62 271 935
134 614 102
2013–14
Total payments ($)
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
* Trustee remuneration is inclusive of GST.
113 519 405
2013–14
2012–13
2012–13
2013–14
Dividends paid to
creditors ($)
Total receipts ($)
NSW/ACT
State or
territory
This table shows receipts, payments and amounts administered by registered trustees—Part IV bankruptcies and Part XI administrations of
deceased estates.
TABLE 22: MONIES ADMINISTERED BY REGISTERED TRUSTEES IN ADMINISTRATIONS UNDER PART IV AND
PART XI
CONTRIBUTIONS
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
Division 4B of Part VI requires that a bankrupt who derives income above a specified amount during
the period of their bankruptcy pay a contribution towards their bankrupt estate. The income level is
determined with reference to the pension rate in the Social Security Act 1991 and with regard to the
consumer price index.
The minimum income for compulsory contributions is referred to as the base income threshold
amount, with appropriate increases to this amount if the bankrupt has dependants. At 30 June 2014,
the base income threshold amount was $52 543.40. A bankrupt’s income is assessed against the
threshold amount every 12 months in order to determine their liability to make contributions.
A bankrupt who does not earn enough to be liable for compulsory contributions may still choose to
make a voluntary contribution towards the debts of their estate.
TRUST MONIES HELD BY TRUSTEES
All money received by a trustee, in their capacity as trustee of a Part IV bankruptcy, Part IX debt
agreement, Part X personal insolvency agreement or Part XI administration of the estate of a deceased
person, is required to be paid into a separate interest-bearing account. These funds are referred to as
trust funds. The Official Trustee holds these trust funds in the Common Investment Fund. Registered
trustees maintain separate accounts for each administration. Interest earned by trustees on these trust
funds is paid to the Commonwealth to partially offset the cost of administering the bankruptcy system.
ANNULMENTS
Once a debtor is bankrupt, their bankruptcy will be ended by either discharge or an annulment.
Annulments may be obtained in several ways:
72
●●
Section 74—When a bankrupt proposes a composition or scheme of arrangement for settlement
of all of their debts with their creditors, and it is accepted by creditors (a majority in number and at
least 75% in value of the creditors voting), the bankruptcy is immediately annulled.
●●
Section 153A—When a bankrupt pays all of their debts in full, including the costs of the
administration and the remuneration of the trustee, the bankruptcy is annulled on the date that the
final payment is made.
●●
Section 153B—If the court is satisfied that a sequestration order should not have been made or a
debtor’s petition should not have been presented or accepted by the Official Receiver, the court may
make an order annulling the bankruptcy.
TABLE 23: ANNULMENTS
This table shows the total number of bankruptcies annulled nationally, by type of annulment.
2012–13
2013–14
26
17
158
126
Official Trustee
113
112
registered trustees
206
222
16
10
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
Number of annulments
Type of annulment
Notices (s. 74(5A)) received from:
Official Trustee
registered trustees
Certificates (s. 153A) received from:
Applications (s. 153B) to the Federal Court with a result of
granted
DISCHARGE
Section 149 provides that, in the ordinary course of events, a bankrupt is automatically discharged
from bankruptcy three years after the date on which they filed their statement of affairs. Section 149A
extends the period of a person’s bankruptcy to five or eight years in circumstances where an objection
to discharge has been lodged by the trustee. The grounds upon which an objection may be lodged are
set out in section 149D.
TABLE 24: OBJECTIONS TO DISCHARGE
This table shows the total number of objections lodged and dealt with.
Number of objections
extending bankruptcy to five
years
Number of objections
extending bankruptcy to eight
years
2012–13
2013–14
2012–13
2013–14
7
7
109
131
66
60
498
626
cancelled
6
5
5
6
withdrawn
52
24
478
471
lapsed
24
41
196
359
Objections filed by:
Official Trustee
registered trustees
Objections:
73
DEBT AGREEMENTS UNDER PART IX
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
A debt agreement under Part IX of the Bankruptcy Act is a legally binding agreement between a debtor
and their creditors. Debt agreements are a flexible alternative to bankruptcy and the action is recorded
on the National Personal Insolvency Index.
A person cannot propose a debt agreement if their unsecured debts, divisible assets and after-tax
income exceed specific thresholds, which are updated twice a year. A person could not propose a debt
agreement if their unsecured debts or divisible assets exceeded $105 086.80 or their after-tax income
exceeded $78 815.10 at 30 June 2014.
When entering a debt agreement, a debtor is expected to propose an achievable and sustainable
offer to their creditors. The debtor’s offer is based on an analysis of their expected income from all
sources, household expenses and circumstances. A proposal is accepted if a majority of creditors
in value vote in favour of the debtor’s proposal. A debtor who proposes a debt agreement commits
an act of bankruptcy. A creditor can use this to apply to court to make the debtor bankrupt if the
proposal is not accepted by creditors.
AFSA checks that proposals comply with a range of legal requirements, such as:
●●
determining eligibility
●●
clarifying aspects of proposals to ensure that creditors are well informed to make a decision
on their vote
●●
conducting the voting process with creditors.
Some examples of the kinds of proposals offered are:
●●
periodic payments of amounts out of the debtor’s income to creditors
●●
lump-sum payment
●●
a moratorium on payments of debts
●●
payment from the proceeds of sale of property owned by the debtor.
Creditors are bound by the debt agreement, even those who voted against the proposal. Debts owing
to creditors are fixed at the date the proposal is entered on the index—interest does not accrue and
creditors cannot take or continue action against the debtor to collect their debts.
74
75
7 126
8 578
1 240
199
2 382
910
Vic
Qld
SA
NT
WA
Tas
31 528
414
ACT
Total
10 679
9 651
337
769
102
483
2 706
1 847
174
3 233
10 706
286
970
88
497
3 060
2 061
191
3 553
5 519
121
408
34
192
1 375
1 382
83
1 924
2012–13
6 225
153
475
47
246
1 616
1 501
74
2 113
2013–14
Number of
agreements
completed
1 330
46
95
7
67
383
294
13
425
2012–13
1 171
34
98
7
45
352
220
19
396
2013–14
Number of
agreements
terminated by
creditors
535
16
37
7
20
158
142
1
154
2012–13
504
6
53
5
25
148
111
8
148
2013–14
Number of
agreements
terminated by
6 month arrears
default
33 795
1 064
2 611
253
1 444
9 368
7 155
491
11 409
2012–13
36 582
1 167
2 952
281
1 629
10 294
7 378
585
12 296
2013–14
Number of
agreements not yet
completed at
30 June
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
33 776
1 074
2 608
252
1 448
9 350
7 149
495
11 400
2013–14
2012–13
2012–13
2013–14
Number of new
agreements made
NSW
State or
territory
Number of
agreements not yet
completed at 1 July
This table shows the number of debt agreements and their status in each state and territory.
TABLE 25: PART IX DEBT AGREEMENTS­—STATUS OF DEBT AGREEMENTS
76
69 620 940
2 772 640
43 693 840
48 671 851
7 378 337
1 440 843
15 521 871
5 390 578
194 490 900
ACT
Vic
Qld
SA
NT
WA
Tas
Total
211 264 076
6 121 689
17 321 483
1 669 094
8 653 103
54 852 894
44 598 869
3 307 211
74 739 733
140 529 264
3 978 932
10 803 460
1 035 329
5 315 948
35 045 083
31 879 434
1 994 026
50 477 052
151 761 081
4 471 906
12 140 946
1 208 260
6 222 113
39 273 974
32 353 970
2 305 562
53 784 350
2013–14
2012–13
2012–13
2013–14
Dividends paid to
creditors ($)
Total receipts ($)
NSW
State or
territory
43 010 597
1 118 272
3 498 949
309 083
1 597 279
10 896 441
9 614 920
627 639
15 348 014
2012–13
47 322 422
1 296 860
3 912 270
379 186
1 924 561
12 376 271
9 973 002
745 599
16 714 673
2013–14
Registered practitioner
fees ($)
7 679 965
220 476
624 888
52 094
286 455
1 914 697
1 773 298
105 365
2 702 692
2012–13
9 147 775
270 393
738 070
73 254
378 836
2 368 655
1 966 888
140 751
3 210 928
2013–14
Other payments ($)
191 219 826
5 317 680
14 927 297
1 396 506
7 199 682
47 856 221
43 267 652
2 727 030
68 527 758
2012–13
208 231 278
6 039 159
16 791 286
1 660 700
8 525 510
54 018 900
44 293 860
3 191 912
73 709 951
2013–14
Total payments ($)
This table shows receipts, payments and amounts held by the Official Trustee and practitioners who lodge an annual estate return.
Practitioners who lodge an annual estate return include registered debt agreement administrators and registered trustees.
TABLE 26: PART IX DEBT AGREEMENTS—RECEIPTS AND PAYMENTS
Money paid to debt agreement administrators is required to be kept in a separate interest-bearing trust account.
TRUST MONIES HELD BY DEBT AGREEMENT ADMINISTRATORS
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
PERSONAL INSOLVENCY AGREEMENTS UNDER PART X
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
A personal insolvency agreement is a legally binding arrangement between a debtor and their creditors
whereby the debtor offers to pay creditors in full or in part by instalments or a lump sum. Unlike a debt
agreement, there are no debt, asset or income limits to be eligible to propose a personal insolvency
agreement.
There are two steps necessary for the creation and putting into effect of a personal insolvency
agreement:
●●
appointment of a controlling trustee
●●
acceptance of the debtor’s proposal by creditors.
APPOINTMENT OF A CONTROLLING TRUSTEE
A debtor proposing a personal insolvency agreement must appoint a controlling trustee. Only a
registered trustee, the Official Trustee or a suitably qualified solicitor can act as a controlling trustee.
The appointment of a controlling trustee has a number of consequences:
●●
it is an ‘act of bankruptcy’ and so a creditor can use this to apply to court to make the debtor
bankrupt if the attempt to set up a personal insolvency agreement fails
●●
the appointment (and, if it eventuates, the setting up of a personal insolvency agreement) will be
recorded on the National Personal Insolvency Index
●●
details may also appear on a record held by a credit reporting agency.
Once a controlling trustee is appointed, any existing creditor’s petition to make a debtor bankrupt
cannot proceed until the meeting of creditors is held to consider the debtor’s proposal.
ACCEPTANCE OF THE PROPOSAL BY CREDITORS
A meeting of creditors is held to consider the debtor’s proposal. The debtor’s offer must be accepted by
a special resolution (defined in the Bankruptcy Act as a majority in number and at least three-fourths
in value of the creditors personally present, by telephone, by attorney or by proxy at the meeting) of the
debtor’s creditors. If the debtor’s creditors accept the proposal, a trustee must administer
the agreement.
Personal insolvency agreements are a very small component of overall insolvency administrations.
77
78
220
2013–14
2
5
0
12
8
10
38
59
1 189
1 199
2012–13
2013–14
Year
Number of
administrations
on hand at
1 July
209
306
Number of
administrations
received
2
5
Number of
administrations
transferred
from Official
Trustee
3
12
Number of
administrations
reactivated
This table shows Part X administrations under the control of registered trustees.
316
273
Number of
administrations
finalised
TABLE 28: PART X ADMINISTRATIONS UNDER REGISTERED TRUSTEE CONTROL
256
2012–13
Year
0
12
Number of
administrations
transferred to
Official Trustee
3
5
1 097
1 227
Number of
administrations
on hand at
30 June
189
219
Number of
Number of
Number of
Number of
Number of administrations
Number of
Number of administrations
administrations
administrations
administrations
transferred administrations administrations
transferred
on hand at
on hand at
received from registered
reactivated
finalised
to registered
1 July
30 June
trustees
trustees
This table shows Part X administrations under the control of the Official Trustee.
TABLE 27: PART X ADMINISTRATIONS UNDER OFFICIAL TRUSTEE CONTROL
PART X ADMINISTRATIONS UNDER OFFICIAL TRUSTEE AND REGISTERED TRUSTEE
CONTROL
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
79
10 674
Qld
251 559
0
0
0
7 529
203 487
40 543
1 234 635
0
0
4 082
11 284
1 090 786
128 482
412 870
0
9 890
0
0
341 962
61 018
920
0
0
0
0
920
0
2012–13
0
0
0
0
0
0
0
2013–14
Administrator fees ($)
23 197
2 073 576
8 958 340
544 502
SA/NT
WA
Tas
32 897 527
4 563 114
Qld
Total
8 567 292
8 190 702
NSW/ACT
6 450 786
3 840 908
13 391 559
247 762
1 422 165
1 626 127
2 497 245
3 757 353
4 080 740
17 125 988
262 673
5 963 128
808 458
2 003 696
4 007 291
8 476 786
109 258
1 802 086
539 901
1 438 345
2 188 844
2 398 353
2012–13
8 720 681
62 829
1 820 285
372 875
1 605 933
2 348 096
2 510 663
2013–14
Administrator fees ($)
11 583 927
155 913
4 953 815
965 009
864 987
2 308 791
2 335 412
2012–13
12 340 850
24 847
9 356 373
152 852
557 800
1 472 739
776 238
2013–14
Other payments ($)
3 470
0
0
0
0
3 020
450
2013–14
416 340
33 452 272
512 932
8 178 065
3 131 037
4 800 577
8 254 988
8 574 673
2012–13
0
9 890
0
0
344 982
61 468
2013–14
38 187 519
350 350
17 139 786
1 334 185
4 167 429
7 828 126
7 367 642
2013–14
Total payments ($)
1 258 752
0
0
4 082
11 284
1 114 680
128 706
2012–13
Total payments ($)
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
36 672 462
227 828
16 601 756
1 363 769
4 619 266
7 409 057
2013–14
2012–13
2012–13
2013–14
Dividends paid to
creditors ($)
Total receipts ($)
Vic
State or
territory
0
0
0
0
22 974
223
2012–13
Other payments ($)
This table shows monies administered by registered trustees in Part X personal insolvency agreements.
TABLE 30: PART X MONIES ADMINISTERED BY REGISTERED TRUSTEES
975 797
0
Tas
Total
0
WA
3 480
836 492
Vic
SA/NT
125 152
2013–14
2012–13
2012–13
2013–14
Dividends paid to
creditors ($)
Total receipts ($)
NSW/ACT
State or
territory
This table shows monies administered by the Official Trustee in Part X personal insolvency agreements.
TABLE 29: PART X MONIES ADMINISTERED BY THE OFFICIAL TRUSTEE
ENFORCEMENT
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
The investigation of insolvency related offences under the Bankruptcy Act and sections 137.1 and
137.2 of the Criminal Code Act 1995 is handled by the enforcement arm of AFSA’s Regulation and
Enforcement division. This responsibility involves assessing allegations of fraud and misconduct
that are referred from trustees, creditors, debt agreement administrators, the Official Receiver and
members of the community; investigating those allegations; and, where appropriate, preparing briefs
of evidence for prosecution by the Commonwealth Director of Public Prosecutions.
Information in relation to the investigation and referral of offences can be found in section 2.
TABLE 31: BREAKDOWN OF BANKRUPTCY ACT PROSECUTIONS
This table shows prosecution activity for offences under the Bankruptcy Act.
2012–13
2013–14
Number of offenders convicted or found guilty
148
92
Number of offences proven
209
141
During 2013–14, the most common offences leading to a finding of guilt were bankrupts who:
80
●●
made false declarations
●●
failed to comply with a notice
●●
failed to disclose information about their conduct or examinable affairs
●●
incurred any debts or liabilities by fraud
●●
failed to complete and file their statement of affairs with the Official Receiver
●●
obtained goods, services or credit without disclosing bankruptcy.
TABLE 32: PROSECUTION OUTCOMES
Offence section
Sanction
Section 267B(1)
Failure to comply with a notice
Convicted and released on self-recognisance in the sum of
$1 000 to be of good behaviour for 12 months. Ordered to
file statement of affairs with the Official Receiver within
14 days. Court costs of $146.71 to also be paid.
Section 267(2)
Make a false declaration
Convicted and sentenced to four months imprisonment
to be released forthwith. Pursuant to subsection 20(1)(b)
of the Crimes Act 1914, self-recognisance in the sum of
$5 000 entered into to be of good behaviour for two years
and ordered to pay court costs of $189.
Section 265(1)(ca)
Failure to disclose information about
conduct and examinable affairs
Convicted and sentenced to four months imprisonment.
Section 265(5)(b)
Incur debt or liability by fraud
Sentenced to imprisonment for maximum of 12 months
and to be released forthwith, conditional upon
recognisance of $1 000 being entered into to be of good
behaviour for two years.
Section 269(1)(a)
Obtain credit without disclosing
bankrupt status
Convicted and sentenced to 10 months imprisonment.
Section 269(1)(ac)
Obtain goods or services without
disclosing bankrupt status
Convicted pursuant to subsection 20(1)(b) of the Crimes
Act 1914. Sentenced to 12 months imprisonment to be
released forthwith upon entering into a recognisance in
the sum of $1 000 conditioned on being of good behaviour
for a period of two years. Ordered to pay court costs of
$338.
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
This table details the highest sanction imposed for each offence type during 2013–14.
SIGNIFICANT PROSECUTIONS
The following two significant prosecutions were made by AFSA during 2013–14.
On 11 November 2013, 47-year-old bankrupt Sabir Hussain from Greenacre was found guilty in the
Sydney Downing Centre Local Court of charges relating to incurring debt without an expectation of
being able to pay, failing to disclose information in his statement of affairs and leaving Australia without
the permission of his trustee. Mr Hussain was convicted of all charges and ordered to perform a
cumulative total of 500 hours community service.
On 14 March 2014, three-time bankrupt Thanh Thuy Ho, a 60-year-old accountant from Doncaster,
Victoria, pleaded guilty in Melbourne County Court to charges relating to using a false name to obtain
credit of more than $750 000, signing a false statement of affairs declaration and not disclosing his true
position to his bankruptcy trustee. Mr Ho, who was already serving a suspended sentence for a charge
of drug trafficking, was sentenced to a total of 18 months imprisonment to be released after serving
10 months in prison, on a recognisance of $1 000 to be of good behaviour for two years.
81
INSPECTOR-GENERAL REVIEWS
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
The Bankruptcy Act gives the Inspector-General responsibility for reviewing decisions made by trustees
in the course of administering a bankrupt estate.
The review processes are detailed in Inspector-General Practice Statements 12, 15 and 16.
There are five main categories of trustee decisions that can be reviewed by the Inspector-General:
●●
a decision to file an objection to discharge
●●
a decision to determine a bankrupt’s income and assess them as liable to pay compulsory
contributions
●●
a decision to not reassess a contribution liability as no hardship was established
●●
a decision to invoke the provisions to collect income contributions through the use of supervised
accounts
●●
a decision to claim remuneration.
Reviews are conducted by AFSA staff acting on delegation from the Inspector-General.
TABLE 33: REVIEWS OF INCOME CONTRIBUTION ASSESSMENTS
This table shows the number of reviews of income contribution assessments.
Official Trustee
Registered trustee
Total
2012–13
2013–14
2012–13
2013–14
2012–13
2013–14
Number of reviews on hand
at 1 July
1
1
2
4
3
5
Number of reviews received
4
3
32
46
36
49
Number of reviews
determined confirming
decision
1
0
2
2
3
2
Number of reviews
determined varying
decision*
0
0
16
19
16
19
Number of reviews
withdrawn by applicant
or refused**
3
4
12
22
15
26
Number of reviews on
hand at 30 June
1
0
4
7
5
7
Number of reviews
finalised
4
4
30
43
34
47
* Also includes cases where income assessment was partially varied.
** Includes cases where the applicant reached a settlement with their trustee. The decision to refuse to conduct a
review is appealable to the Administrative Appeals Tribunal.
82
TABLE 34: REVIEWS OF OBJECTIONS TO DISCHARGE
This table shows the number of reviews of objections to discharge.
Registered trustee
Total
2012–13
2013–14
2012–13
2013–14
2012–13
2013–14
Number of reviews on
hand at 1 July
0
1
7
4
7
5
Number of reviews
received
4
9
31
52
35
61
Number of reviews
determined confirming
decision
0
1
18
11
18
12
Number of reviews
determined cancelling
or varying decision
0
2
8
10
8
12
Number of reviews
withdrawn by applicant
or refused*
3
7
8
25
11
32
Number of reviews on
hand at 30 June
1
0
4
10
5
10
Number of reviews
finalised
3
10
34
46
37
56
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
Official Trustee
* Includes cases where the trustee has withdrawn the objection. The decision to refuse to conduct a review is
appealable to the Administrative Appeals Tribunal.
83
TABLE 35: REVIEWS OF HARDSHIP APPLICATIONS
This table shows the number of reviews of hardship applications.
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
Official Trustee
Registered trustee
Total
2012–13
2013–14
2012–13
2013–14
2012–13
2013–14
Number of reviews on
hand at 1 July
0
1
0
3
0
4
Number of reviews
received
2
2
10
11
12
13
Number of reviews
determined confirming
decision
0
2
3
3
3
5
Number of reviews
determined cancelling
or varying decision
0
0
1
2
1
2
Number of reviews
withdrawn by applicant
1
1
3
9
4
10
Number of reviews on
hand at 30 June
1
0
3
0
4
0
Number of reviews
finalised
1
3
7
14
8
17
TABLE 36: REVIEWS OF REGISTERED TRUSTEE REMUNERATION
This table shows the number of reviews of registered trustee remuneration.
2012–13
2013–14
4
18
Number of reviews received
64
87
Number of reviews determined confirming decision
21
47
5
9
Number of reviews withdrawn by applicant or refused
24
27
Number of reviews on hand at 30 June
18
22
Number of reviews on hand at 1 July
Number of reviews determined cancelling or varying decision
The Bankruptcy Act and Bankruptcy Regulations also give the Inspector-General powers to waive or
remit a narrow range of fees, estate charges, interest and penalties in exceptional circumstances. No
waiver or remission requests were received in either 2013–14 or the previous year.
84
ADMINISTRATIVE APPEALS TRIBUNAL REVIEWS OF
INSPECTOR-GENERAL DECISIONS
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
TABLE 37: ADMINISTRATIVE APPEALS TRIBUNAL REVIEWS AND DECISIONS
This table shows the number of applications to the Administrative Appeals Tribunal for reviews of the
Inspector-General’s decisions.
2012–13
2013–14
Number of applications on hand as at 1 July
12
4
Number of applications received
18
16
Number of applications finalised:
1
2
Inspector-General decisions set aside by Administrative Appeals Tribunal
Inspector-General decisions set aside by agreement*
Inspector-General decision confirmed or application dismissed or
withdrawn
Number of applications on hand as at 30 June
2
0
20
9
7
9
* Includes matters settled between the bankrupt and the trustee or Inspector-General.
REGULATION OF INSOLVENCY PRACTITIONERS
INVESTIGATION OF COMPLAINTS
AFSA handles complaints made by debtors and creditors about the conduct of personal insolvency
practitioners in accordance with the process detailed in Inspector-General Practice Statement 10.
All complaints received are examined and, where possible, quickly finalised without the need for
in-depth investigations or a report being requested from the trustee or administrator. Complainants
may be:
●●
informed that the trustee’s or administrator’s conduct is valid under the Bankruptcy Act and
complies with the expected standards of conduct
●●
directed to their trustee or administrator for additional information, or
●●
given information about the alternative and appropriate remedies available to them.
The remaining complaints are investigated and if deficiencies are identified, the remedial action taken
usually involves counselling, disciplinary proceedings and/or direct intervention in the trustee’s or
administrator’s conduct of the particular administration or litigation. The Regulation and Enforcement
division also looks for opportunities to use negotiation and alternative dispute resolution techniques to
achieve an outcome.
Ensuring issues and concerns that give rise to a complaint are more readily resolved at the source (that
is, when the complainant first makes contact with the practitioner) will continue to be a strategic focus
for AFSA in 2014–15.
85
COMPLAINTS AGAINST TRUSTEES
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
Of the 368 complaints received in 2013–14, 311 were against trustees (496 in 2012–13). The significant
reduction in complaints received may be attributed to improved practices by practitioners in dealing
with potential areas of concern at the source, which in turn prevented issues from being escalated
to the regulator to guide resolution. This followed the information sessions provided by AFSA on
Inspector-General Practice Direction 22—Effective Practitioner Communication and AFSA’s focus on
ensuring that practitioners have a quality internal complaint handling system.
The complaints encompassed five main areas:
●●
decisions concerning the claiming or disposal of assets—25% (22% in 2012–13)
●●
delays in the administration or lack of action—16% (11% in 2012–13)
●●
general administration and accounting—12% (new category)
●●
the extent of trustees’ fees and costs—10% (10% in 2012–13)
●●
lack of information or responsiveness—9% (21% in 2012–13).
AFSA investigated 189 complaints against trustees during 2013–14, of which 35 or 18.5% (16% in
2012–13) were found to be justified.
The justified complaints involved issues such as:
●●
lack of information or communication
●●
decisions concerning assets
●●
delays in administration or lack of action
●●
income and contribution liability assessment.
COMPLAINTS AGAINST DEBT AGREEMENT ADMINISTRATORS
Of the 24 complaints made against debt agreement administrators (50 in 2012–13), 14 required
investigation. The number of complaints shows a significant decrease on 2012–13 figures, and the
number requiring investigation decreased proportionally (22 in 2012–13). The significant reduction in
complaints received may be attributed to improved practices by practitioners in dealing with potential
areas of concern at the source, which in turn prevented issues from being escalated to the regulator
to guide resolution. This followed the information sessions provided by AFSA on Inspector-General
Practice Direction 22—Effective Practitioner Communication and AFSA’s focus on ensuring that
practitioners have a quality internal complaint handling system.
In 2013–14, 9 of the complaints (4 in 2012–13) were found to be justified. Justified complaints centred on
issues such as:
86
●●
information and communication—44% (50% in 2012–13)
●●
creditors’ claims and dividends—22% (50% in 2012–13).
ADVERTISING OF, MONITORING AND ATTENDANCE AT
CREDITOR MEETINGS
5 . O peration of the B ankruptcy A C T in 2 0 1 3 – 1 4 T H E O P E R A T I O N O F T H E B A N K R U P T C Y A C T 1 9 6 6 A N N U A L R E P O R T
AFSA also monitors personal insolvency agreement proposals and section 73 compositions and attends
meetings of creditors to determine the legitimacy of proposals and to ensure that procedures comply
with the Bankruptcy Act.
In 2013–14, 333 Part X and section 73 proposals were reviewed and 106 meetings of creditors were
attended, compared to 553 and 89, respectively, in 2012–13. Intervention and corrective action was
required in 30% of the matters reviewed, compared to 50% in 2012–13. Although regulatory intervention
decreased in percentage terms in 2013–14, it continued to be necessary due to instances of noncompliance arising from trustees failing to report adequately or to make sufficient enquiries, and
incorrect treatment of creditors’ claims. Remedial action by trustees included supplementary reports
to creditors, correction of procedural deficiencies prior to, or at the time of, the meeting, and in some
cases adjournment of the meeting until creditors were fully apprised of all material issues in relation
to an estate. The work some registered trustees choose to accept from unregistered pre-insolvency
advisers in this area continues to be a focus for AFSA and will be closely monitored.
In the majority of cases, intervention and the regulatory oversight of corrective action are performed at
the time the trustee is preparing to call the meeting. The proactive nature of this regulatory approach
allows appropriate outcomes for all stakeholders in accordance with best practice while also avoiding
the need for costly litigation.
AMENDMENTS TO THE BANKRUPTCY ACT AND THE
BANKRUPTCY REGULATIONS
There were a small number of amendments to the Bankruptcy Act during 2013–14 of a largely
technical nature.
A number of more substantive proposals are under consideration. During 2013–14, AFSA continued to
work collaboratively with the Attorney-General’s Department (responsible for bankruptcy policy), the
Treasury and the Australian Securities and Investments Commission. The timing and content of any
reforms are matters for government.
FEES AND CHARGES DETERMINATIONS
AFSA prepares regular Cost Recovery Impact Statements for its personal insolvency and trustee
services. An amended Cost Recovery Impact Statement for personal insolvency and trustee services
came into effect on 1 April 2014. This followed a government decision to make those services fully costrecovered. As a result of that review, a range of fees and remuneration changes were made.
On 27 March 2014, the Attorney-General made the Bankruptcy (Estate Charges) (Amount of Charge
Payable) Determination 2014, which provided that from 1 July 2014 the adjusted realisations charge is
6.0% (increasing from 4.7%, which had applied since 1 July 2013).
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In addition, two new fees were introduced pursuant to the Bankruptcy Amendment (2014
Measures No. 1) Regulation 2014, which were set out in the Bankruptcy (Fees and Remuneration)
Determination 2014. The fees applying from 1 April 2014 were:
●●
a fee of $150 to accompany requests by bankrupts (where the bankrupt estate is managed by the
Official Trustee) for permission to leave Australia
●●
a fee of $120 to present a debtor’s petition (payable until 23 June 2014—see below).
On 23 June 2014, the Senate passed a motion to cease the requirement to pay a fee to lodge a debtor’s
petition, as well as the item in the Bankruptcy (Fees and Remuneration) Determination 2014 setting the
amount of the fee. This means that from that date a fee to present a debtor’s petition no longer applied.
88
ANNUAL REPORT ON THE OPERATION OF THE
PERSONAL PROPERTY SECURITIES ACT 2009
s e c t i o n 6 O P E R AT I O N O F T H E P E R S O N A L P R O P E R T Y
S E C U R I T I E S AC T I N 2 0 1 3 – 1 4
Registrar’s introduction
92
Data on the use of the Personal Property Securities Register
94
Amendments to the Personal Property Securities Act, Personal Property Securities
Regulations and associated instruments 99
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REGISTRAR’S INTRODUCTION
The 30th of January 2014 marked the second anniversary of the national scheme for personal property
securities, supported by the online Personal Property Securities Register (PPSR) that replaced around
40 pre-existing Commonwealth, state and territory registers, including the ASIC Register of Company
Charges and various state and territory registers of encumbrances over motor vehicles.
During 2013–14, 2 473 471 registrations were created and 7 014 648 searches were conducted on
the PPSR.
THE TWO-YEAR TRANSITION PERIOD
CONCLUDED WITH A 552% INCREASE
IN NEWLY CREATED TRANSITIONAL
REGISTRATIONS.
The end of January 2014 was also the end of the transitional period for security interests that existed
before 30 January 2012. A secured party with respect to transitional security interests was required
to register their security interest on the PPSR before midnight on 31 January 2014 to take advantage
of ‘temporary perfection’ and preserve the priority of the security interest. To increase awareness of
the end of transition period, AFSA conducted a PPSR email and direct mail campaign that targeted
Australian businesses. There were 281 010 transitional security interest registrations created on the
PPSR in January 2014, a 552% increase from 43 074 in December 2013.
In 2013–14 AFSA delivered three PPSR releases, which included a number of enhancements to improve
the experience for web and business-to-government users.
A new quick motor vehicle search for casual users was implemented in October 2013. The new
system provides a simplified search process, and emails a copy of the search certificate and
explanatory information direct to a user’s email address. This has significantly improved the casual
user’s experience.
To support users in entering accurate data, the ability to verify an organisational grantor identifier at
the start of the registration process was implemented. This enhancement reduces the likelihood of web
users entering the wrong organisation identifier when creating a PPSR registration.
Enhancements were made to the ‘Current registrations for a secured party’ report before the end of
transition period, allowing users to pull reports from the PPSR that they could reconcile against their
own data, and ensure registrations were made before the end of the period to maintain their priority.
AFSA’s work on developing enhancements to the register in close consultation with business and
community stakeholders was recognised by the International Association of Commercial Administrators
in May 2014, when we received a merit award for outstanding innovation in collaborative reform and
co-design.
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As part of the Australian Government Internet Gateway Reduction Program, AFSA completed the
transition to the new shared secure internet gateway for the PPSR in May 2014. The benefits of this
progressive transition programme include improved operational efficiency, reliability and security.
Further progress has been made on addressing the outstanding data migration issues. A working group
was established to address the issue of approximately 27 000 registrations from the ASIC Register of
Company Charges that had multiple secured parties listed but were migrated with only one secured
party. Consultation with stakeholders is currently underway to identify a resolution for this issue.
In March 2014, the Australian Government introduced a bill to repeal a provision of the Personal
Property Securities Act 2009 (PPS Act) which deems leases of serial numbered goods to be security
interests where the lease is for 90 days or more. The bill is yet to be passed. Also in March 2014, the
Australian Government amended part of the definition of a motor vehicle in the PPS Regulations, to
provide that one of the requirements is that the property is capable of travelling at speeds of at least
10km per hour and which has one or more motors with a total power greater than 200 watts. The
revised definition of motor vehicle took effect from 1 July 2014.
During 2013–14 the PPSR website (www.ppsr.gov.au) received a monthly average of 119 497 visits.
Approximately 1.4 million visits were made to the website in 2013–14.
AFSA has continued to work on raising awareness of the website in the small to medium enterprise
market segment. Communication strategies included the introduction of the PPSR News page, which
allows users to subscribe to the latest news and information about the PPSR. Currently more than
5 000 subscribers receive the PPSR Update email communiqué every two months.
AFSA is committed to increasing awareness and understanding of the benefits and processes involved
with the PPSR by constantly reviewing and improving our communication strategy. Feedback from
recent market research has identified areas of improvements to the PPSR website which AFSA is
committed to delivering.
During 2013–14 the review of the operation of the PPS Act commenced; the final report is scheduled to
be completed by end of January 2015.
David Bergman
Registrar of Personal Property Securities
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DATA ON THE USE OF THE PERSONAL PROPERTY
SECURITIES REGISTER
The following tables provide information about the use of the PPSR, in terms of both searches
and registrations.
TABLE 38: SEARCHES CONDUCTED ON THE PPSR BY TYPE
This table provides information about the number of searches conducted based on the search criteria
entered.
Search type
Number of searches conducted
2012–13
2013–14
3 800 714
3 894 992
3 768 010
3 859 509
26 924
27 664
aircraft
3 299
4 718
intellectual property
2 481
3 101
112 163
134 604
1 886 900
2 757 021
308 223
227 948
64
83
6 108 064
7 014 648
Serial number
Comprising:
motor vehicle
watercraft
Individual grantor
Organisational grantor
PPSR registration number
Other searches
Total
TABLE 39: SEARCHES CONDUCTED ON THE PPSR BY TYPE OF USER
This table shows the number of searches conducted by type of PPSR user. There are two kinds of
external users: casual users and account customers. An account customer may have a pre-pay, payas-you-go or credit account.
Type of user
External user
Number of searches conducted
2012–13
2013–14
6 040 946
6 966 515
426 366
413 326
5 614 580
6 553 189
67 118
48 133
6 108 064
7 014 648
Comprising:
casual user
account customer
National Service Centre/internal*
Total
* Most National Service Centre/internal searches are conducted on behalf of an external user.
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TABLE 40: ACTIVITY REGARDING PPSR REGISTRATIONS
This table shows the number of transactions that resulted in the creation, amendment, discharge or
removal of registrations. It is possible for a single transaction to affect more than one registration.
Activity
Number of activities
2012–13
2013–14
Transactions to create registrations (financing
statements)
2 227 958
2 473 471
Transactions to amend registrations (financing
change statements, excluding to end the effect of
the registration)*
1 489 353
1 477 501
Transactions to discharge or remove registrations
(financing change statements to end the effect of
the registration)
1 309 781
1 329 013
* Excludes amendments that occurred as a result of the programmatic substitution of ABN for ACN.
TABLE 41: NUMBER OF PPSR REGISTRATIONS BY KIND OF INTEREST
This table shows the total number of current registrations on the PPSR by kind of interest as at the date
stated. Security interests created before the PPSR commenced on 30 January 2012 are transitional
security interests. Security interests created after that date but based on agreements in place prior to
30 January 2012 are also transitional security interests. All other security interests are non-transitional.
The transitional period, which provided secured parties temporary perfection of security interests,
ended at midnight on 31 January 2014 (Canberra time). Prescribed property is interests other than
security interests registered on the PPSR. This includes proceeds of crime, hoon liens, court orders and
other prescribed property.
Kind of interest
Number of current PPSR registrations
30 June 2013
30 June 2014
Transitional security interest
4 964 649
4 362 721
Non-transitional security interest
2 393 782
3 860 280
7 622
8 280
7 366 053
8 231 281
Prescribed property
Total
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TABLE 42: NUMBER OF PPSR REGISTRATIONS BY REGISTRATION STATE
This table shows the total number of registrations recorded on the PPSR by registration state as at the
date stated. A current registration has an end date that is a date in the future. An expired registration
has an end date that has passed. An archived registration is an expired registration that has been
removed from the register because it has been ineffective (i.e. expired) for more than seven years.
A restricted access registration is one that has certain details restricted by the Registrar.
State of registration
Number of PPSR registrations
30 June 2013
30 June 2014
Current
7 366 053
8 231 281
Expired or removed
2 583 368
4 191 593
Total
9 949 421
12 422 874
TABLE 43: NUMBER OF PPSR REGISTRATIONS BY COLLATERAL CLASS
This table shows the total number of current registrations recorded on the PPSR by collateral class as
at the date stated.
Collateral class
30 June 2013
30 June 2014
58 981
65 900
6 615
12 146
1 770 490
1 787 419
181 873
217 856
Financial property
15 201
28 175
Intangible property
66 947
83 769
Motor vehicle
3 998 373
4 219 291
Other goods
1 226 865
1 772 885
40 708
43 840
7 366 053
8 231 281
Agriculture
Aircraft
All present and after-acquired property—no
exceptions
All present and after-acquired property—with
exceptions
Watercraft
Total
96
Number of current PPSR registrations
6 . O peration of the P ersonal P roperty S ecurities A ct in 2 0 1 3 – 1 4 T H E O PER AT I O N O F T H E PERSONAL PROPERTY SECURITIES ACT 2009 A N N U A L RE P ORT
TABLE 44: NUMBER OF PPSR REGISTRATIONS BY KIND OF COLLATERAL
This table shows the total number of consumer and commercial registrations that were current on the
PPSR as at the date stated. Consumer property means personal property held by an individual, other
than personal property held in the course or furtherance, to any degree, of carrying on an enterprise
to which an ABN has been allocated. Commercial property is personal property other than consumer
property. Some migrated registrations record the collateral kind as unknown. Those registrations were
migrated from transitional registers which did not record this information.
Collateral kind
Number of current PPSR registrations
30 June 2013
30 June 2014
Consumer property
1 030 263
1 511 486
Commercial property
4 426 321
5 524 525
Unknown
1 909 469
1 195 270
Total
7 366 053
8 231 281
TABLE 45: NUMBER OF PPSR REGISTRATIONS THAT WERE REMOVED OR
OTHERWISE AMENDED BY THE REGISTRAR
This table shows the number of registrations that were removed or otherwise amended by the
Registrar. The PPS Act provides the Registrar with the power to amend and/or remove data on the
PPSR, including an entire registration. This may occur as a result of the administrative amendment
demand process (Part 5.6); the exercise of the discretion under Part 5.7; or, with respect to migrated
data, if the Registrar is satisfied that it was not in the determined class for migration (Part 9.4).
Application processed
Registrations
amended
298
221
49
11
Part 9.4—Transitional application of the PPS Act
n.a.
1
Total
347
233
Application type
Part 5.6—Amendment demands
Part 5.7—Removal of data and correction of
errors
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TABLE 46: DETAILS OF REFUSAL OF ACCESS TO OR SUSPENSION OF
THE PPSR
This table provides the date, time and reason for refusal of access to or suspension of the PPSR.
In 2013–14 the Registrar decided, pursuant to section 147(5) of the PPS Act, to refuse access to or
otherwise suspend the operation of the PPSR on four occasions.
Date
Canberra time
Reason
6 April 2014
1.30am–3.05am
Daylight savings adjustment
26–27 October 2014
7.00pm–1.00am
Deployment of application
update (R2 release)
17–18 May 2014
8.00pm–8.00am
Transition to internet
gateway provider
29–30 May 2014
10.00pm–2.00am
Extended maintenance window
In accordance with section 147(6) of the PPS Act and the PPS Regulations, the Registrar may also
refuse access to or otherwise suspend the operation of the PPSR with notice for a period not longer
than four hours. This power is generally used for scheduled maintenance of the PPSR. In 2013–14 the
standing outage period for scheduled maintenance was 10 p.m. Thursday to 1 a.m. Friday
(Canberra time).
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AMENDMENTS TO THE PERSONAL PROPERTY SECURITIES
ACT, PERSONAL PROPERTY SECURITIES REGULATIONS AND
ASSOCIATED INSTRUMENTS
ACTS
During 2013–14, the Statute Law Revision Act (No. 1) 2014 amended the PPS Act on 24 June. The
amendment corrected reference to an incorrect concept in subsection 36(1). Section 36, concerned with
instruments, included reference to goods.
REGULATIONS
The Personal Property Securities Amendment (Motor Vehicles) Regulation 2014 was made on
25 March 2014 to amend the Personal Property Securities Regulations 2010. The amendment changed
the definition of motor vehicle at sub-regulation 1.7(2)(b) starting on 1 July 2014.
The amendment is intended to reduce costs for small and medium hire businesses by reducing the
number of leases of equipment that will involve the making of registrations on the PPSR by serial
number.
DETERMINATIONS AND OTHER LEGISLATIVE INSTRUMENTS
During 2013–14, no determinations were made under the PPS Act. However, on 1 July 2013 the
Personal Property Securities (Fees) Determination 2013 (made on 17 June 2013) came into effect. It
specifies the fees payable for the purposes of the PPS Act. It also specifies the kinds of arrangements
for the payment of fees that may be approved by the Registrar under subsection 190(4) of the PPS Act.
VERIFICATION STATEMENTS
During 2013–14, no verification statements were issued under section 158 of the PPS Act. Under that
section the Registrar may, in certain circumstances, publish a single verification statement in relation
to a number of registration events.
Verification statements are not required to be registered on the Federal Register of Legislative
Instruments.
99
s e c t i o n 7 F I N A N C I A L S TAT E M E N T S F O R T H E
YEAR ENDED 30 JUNE 2014
Independent auditor’s report 102
Financial statements
105
102
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
103
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
104
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
2014
$'000
2013
$'000
3A
3B
3C
3D
3E
44,718
30,280
11,771
32
3,820
90,621
41,170
30,508
10,891
42
218
82,829
4A
4B
54,966
693
55,659
45,880
2,088
47,968
4C
86
86
55,745
47,968
(34,876)
(34,861)
46,944
12,068
44,119
9,258
17
17
814
814
12,085
10,072
Notes
NET COST OF SERVICES
Expenses
Employee benefits
Suppliers
Depreciation and amortisation
Finance costs
Write-down and impairment of assets
Total expenses
Own-source Income
Own-source revenue
Rendering of services
Other revenue
Total own-source revenue
Gains
Reversals of previous asset write-downs and impairments
Total gains
Total own-source income
Net (cost of)/contribution by services
Revenue from Government
Surplus attributable to the Australian Government
4D
OTHER COMPREHENSIVE INCOME
Items not subject to subsequent reclassification to net cost
of services
Changes in asset revaluation surplus
Total other comprehensive income
Total comprehensive income attributable to the
Australian Government
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 June 2014
The above statement should be read in conjunction with the accompanying notes.
105
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
STATEMENT OF FINANCIAL POSITION
as at 30 June 2014
2014
$'000
2013
$'000
6A
6B
1,831
37,390
39,221
2,823
26,879
29,702
7A, C
7B, C
7D, E
7F
2,367
7,773
28,837
1,749
40,726
3,489
4,103
35,786
1,268
44,646
79,947
74,348
8A
8B
5,811
1,642
7,453
4,587
1,383
5,970
9A
9B
9,462
990
10,452
8,615
976
9,591
Total liabilities
17,905
15,561
Net assets
62,042
58,787
EQUITY
Contributed equity
Reserves
Retained surplus
Total equity
(6,313)
1,862
66,493
62,042
2,517
1,845
54,425
58,787
Notes
ASSETS
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Non-financial assets
Land and buildings
Property, plant and equipment
Intangibles
Other non-financial assets
Total non-financial assets
Total assets
LIABILITIES
Payables
Suppliers
Other payables
Total payables
Provisions
Employee provisions
Other provisions
Total provisions
The above statement should be read in conjunction with the accompanying notes.
106
107
54,425
66,493
1,862
-
17
17
1,845
1,845
1,845
-
814
814
1,031
1,031
Asset revaluation
surplus
2013
2014
$'000
$'000
2,135
(8,830)
(6,313)
(10,965)
-
2,517
2,517
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
2,119
(8,846)
2,517
(10,965)
-
11,363
11,363
Contributed equity
2013
2014
$'000
$'000
Represents repayment to government for funds provided to establish the Personal Property Securities Register under cost recovery arrangements.
-
The above statement should be read in conjunction with the accompanying notes.
1.
Returns of equity1
Contributions by owners
Equity injection - Appropriations
Departmental capital budget
Total transactions with owners
Closing balance as at 30 June
9,258
9,258
45,167
45,167
-
12,068
12,068
Comprehensive income
Surplus/(Deficit) for the period
Other comprehensive income
Total comprehensive income
Transactions with owners
Distributions to owners
54,425
54,425
Opening balance
Balance carried forward from previous period
Adjustment for changes in accounting policies
Adjusted opening balance
Retained earnings
2013
2014
$'000
$'000
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
STATEMENT OF CHANGES IN EQUITY
for the period ended 30 June 2014
2,135
(8,830)
62,042
(10,965)
12,068
17
12,085
58,787
58,787
2,119
(8,846)
58,787
(10,965)
9,258
814
10,072
57,561
57,561
Total equity
2013
2014
$'000
$'000
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
CASH FLOW STATEMENT
for the period ended 30 June 2014
2014
$'000
2013
$'000
55,042
44,198
3,251
360
102,851
47,719
56,195
2,891
414
107,219
43,771
33,152
8,529
85,452
17,399
40,396
34,968
21,006
96,370
10,849
5,759
5,365
11,124
(11,124)
545
5,726
6,271
(6,271)
3,698
3,698
2,119
2,119
10,965
10,965
(7,267)
10,965
10,965
(8,846)
Net increase/(decrease) in cash held
(992)
(4,268)
Cash and cash equivalents at the beginning of the reporting
period
2,823
7,091
1,831
2,823
Notes
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
OPERATING ACTIVITIES
Cash received
Sale of goods and rendering of services
Appropriations
Net GST received from ATO
Other receipts
Total cash received
Cash used
Employees
Suppliers
Section 31 receipts transferred to OPA
Total cash used
Net cash from/(used by) operating activities
10
INVESTING ACTIVITIES
Cash used
Purchase of property, plant and equipment
Purchase of intangibles
Total cash used
Net cash from/(used by) investing activities
FINANCING ACTIVITIES
Cash received
Contributed equity
Total cash received
Cash used
Repayment to government
Total cash used
Net cash from/(used by) financing activities
Cash and cash equivalents at the end of the reporting
period
6A
The above statement should be read in conjunction with the accompanying notes.
108
2014
$'000
2013
$'000
52
5,403
5,455
105
4,534
4,639
69
1,383
1,452
105
5,876
173
6,154
49,992
8,451
5
58,448
59,899
54,444
33,759
9,957
10
43,726
49,880
45,241
BY MATURITY
Commitments receivable
Within 1 year
Between 1 to 5 years
More than 5 years
Total commitments receivable
1,298
1,846
2,311
5,455
1,833
1,310
1,496
4,639
Commitments payable
Capital commitments
Within 1 year
Between 1 to 5 years
More than 5 years
Total capital commitments
1,452
1,452
5,681
473
6,154
5,666
18,905
25,420
49,992
5,199
12,103
16,457
33,759
BY TYPE
Commitments receivable
Sublease rental income
Net GST recoverable on commitments
Total commitments receivable
Commitments payable
Capital commitments
Leasehold improvements
Intangibles
Property, plant and equipment
Total capital commitments
Other commitments
Operating leases
Other suppliers
Net GST payable on commitments
Total other commitments
Total commitments payable
Net commitments by type
Operating lease commitments
Within 1 year
Between 1 to 5 years
More than 5 years
Total operating lease commitments
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
SCHEDULE OF COMMITMENTS
as at 30 June 2014
The above statement should be read in conjunction with the accompanying notes.
109
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
SCHEDULE OF COMMITMENTS
as at 30 June 2014
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Other commitments
Within 1 year
Between 1 to 5 years
More than 5 years
Total other commitments
Total commitments payable
Net commitments by maturity
2014
$'000
2013
$'000
7,055
1,401
8,456
59,899
54,444
8,711
1,256
9,967
49,880
45,241
Note: Commitments are GST inclusive where relevant.
1.
Operating leases are effectively non-cancellable and comprise:
Nature of lease
Lease for office accommodation
Agreements for the provision of
copiers to site offices
2.
General description of leasing arrangement
 Some lease payments are subject to regular increases in
accordance with rent reviews; others are subject to pre-determined
percentage increases.
 For some office accommodation leases, the initial periods are still
current with the majority having an option to renew for up to 5
years at AFSA’s discretion, following a once-off adjustment of
rentals to current market levels.
 No contingent rentals exist.
 There are no renewal or purchase options available to AFSA.
Capital commitments comprise primarily of costs related to enhancements of the Personal Properties
and Securities Register and development of other IT projects.
The above statement should be read in conjunction with the accompanying notes.
110
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
SCHEDULE OF CONTINGENCIES
as at 30 June 2014
Notes
Contingent liabilities
Claims for costs
Total contingent liabilities
Net contingent liabilities
2014
$'000
2013
$'000
11
11
11
240
240
240
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Details about the contingent liabilities listed above and those that cannot be quantified or are considered
remote are disclosed in Note 11: Contingent Assets and Liabilities.
The above statement should be read in conjunction with the accompanying notes.
111
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME
for the period ended 30 June 2014
2014
$'000
2013
$'000
16A
16B
1,044
71,665
72,709
9,244
12,420
21,664
17A
22,558
22,558
22,034
22,034
17B
17C
17D
102,860
2,077
17,909
122,846
46,673
3,068
13,846
63,587
145,404
85,621
Net contribution by services
72,695
63,957
Total comprehensive income
72,695
63,957
Notes
NET COST OF SERVICES
Expenses
Write-down and impairment of assets
Other expenses
Total expenses
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Income
Revenue
Taxation revenue
Charges
Total taxation revenue
Non-taxation revenue
Fees and fines
Interest
Other revenue
Total non-taxation revenue
Total revenue
The above statement should be read in conjunction with the accompanying notes.
112
Notes
ASSETS
Financial assets
Cash and cash equivalents
Taxation receivables
Other receivables
Total financial assets
18A
18B
18C
Total assets administered on behalf of Government
LIABILITIES
Payables
Other payables
Total payables
19A
Total liabilities administered on behalf of Government
Net assets
2014
$'000
2013
$'000
88,463
11,651
49,009
149,123
77,234
9,730
32,751
119,715
149,123
119,715
165
165
1,374
1,374
165
1,374
148,958
118,341
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
ADMINISTERED SCHEDULE OF ASSETS AND LIABILITIES
as at 30 June 2014
The above statement should be read in conjunction with the accompanying notes.
113
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
ADMINISTERED RECONCILIATION SCHEDULE
Opening assets less liabilities as at 1 July
Adjusted opening assets less liabilities
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Net (cost of)/contribution by services
Income
Expenses
Payments to Non-CAC Act bodies
Transfers (to)/from the Australian Government
Appropriation transfers from Official Public Account
Refunds of administered revenues
Appropriation transfers to Official Public Account
Transfers to OPA
Closing assets less liabilities as at 30 June
The above statement should be read in conjunction with the accompanying notes.
114
2014
$'000
2013
$'000
118,341
118,341
95,427
95,427
145,404
85,621
(72,709)
(21,664)
533
498
(42,611)
148,958
(41,541)
118,341
2014
$'000
2013
$'000
21,198
2,101
17,909
85,620
126,828
18,514
4,266
13,846
47,742
4
84,372
647
1,209
71,665
73,521
53,307
385
8,662
11,665
20,712
63,660
53,307
63,660
77,234
54,617
533
533
498
498
42,611
42,611
41,541
41,541
88,463
77,234
Notes
OPERATING ACTIVITIES
Cash received
Charges
Interest
Other receipts
Fees and Fines
Net GST received
Total cash received
Cash used
Refunds of administered revenues
Other payments
Special account payments
Total cash used
Net cash from/(used by) operating activities
20
Net increase/(decrease) in cash held
Cash and cash equivalents at the beginning of the reporting
period
Cash from Official Public Account
Refunds of administered revenues
Total cash from official public account
Cash to Official Public Account
Special Accounts
Transfer to Government
Total cash to official public account
Cash and cash equivalents at the end of the reporting
period
18A
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
ADMINISTERED CASH FLOW STATEMENT
for the period ended 30 June 2014
AFSA does not have any administered cashflows for investing or financing activities.
The above statement should be read in conjunction with the accompanying notes.
115
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
ADMINISTERED SCHEDULE OF COMMITMENTS
as at 30 June 2014
BY TYPE
Commitments payable
Other commitments
CAA Determinations
Total other commitments
Total commitments payable
Net commitments by type
2014
$'000
2013
$'000
31,837
31,837
31,837
31,837
42,100
42,100
42,100
42,100
BY MATURITY
Commitments payable
Other commitments
Within 1 year
Between 1 and 5 years
More than 5 years
Total other commitments
Total commitments payable
Net commitments by maturity
13,877
17,960
31,837
31,837
31,837
21,350
20,750
42,100
42,100
42,100
Note: Commitments are GST inclusive where relevant.
The nature of the other commitments payable relates to funds committed by the Minister for Justice to
expenditure on law enforcement programs under section 298 of the Proceeds of Crime Act 2002.
The above statement should be read in conjunction with the accompanying notes.
116
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
ADMINISTERED SCHEDULE OF CONTINGENCIES
as at 30 June 2014
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Administered Contingencies
AFSA has no administered contingencies as at 30 June 2014 (30 June 2013: Nil). Details on the contingent
assets and liabilities that cannot be quantified or are considered remote are disclosed in Note 21.
The above statement should be read in conjunction with the accompanying notes.
117
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Table of Contents
Note 1: Significant Accounting Policies ......................................................................................................................... 119 Note 2: Events After the Reporting Period ..................................................................................................................... 131 Note 3: Expenses ............................................................................................................................................................ 132 Note 4: Own-Source Income .......................................................................................................................................... 134 Note 5: Fair Value Measurements .................................................................................................................................. 135 Note 6: Financial Assets ................................................................................................................................................. 140 7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 7: Non-Financial Assets ......................................................................................................................................... 142 Note 8: Payables ............................................................................................................................................................. 149 Note 9: Provisions .......................................................................................................................................................... 149 Note 10: Cash Flow Reconciliation ................................................................................................................................ 151 Note 11: Contingent Assets and Liabilities .................................................................................................................... 152 Note 12: Senior Executive Remuneration....................................................................................................................... 153 Note 13: Remuneration of Auditors................................................................................................................................ 158 Note 14: Financial Instruments ....................................................................................................................................... 159 Note 15: Financial Assets Reconciliation ....................................................................................................................... 162 Note 16: Administered Expenses .................................................................................................................................... 163 Note 17: Administered Income ....................................................................................................................................... 164 Note 18: Administered Financial Assets......................................................................................................................... 165 Note 19: Administered Payables..................................................................................................................................... 167 Note 20: Administered Cash Flow Reconciliation ......................................................................................................... 168 Note 21: Administered Contingent Assets and Liabilities .............................................................................................. 168 Note 22: Administered Financial Instruments ................................................................................................................ 169 Note 23: Administered Financial Assets Reconciliation ................................................................................................ 172 Note 24: Appropriations ................................................................................................................................................. 173 Note 25: Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund.......................... 180 Note 26: Special Accounts and FMA Act Section 39 ..................................................................................................... 181 Note 27: Other Assets Held in Trust ............................................................................................................................... 184 Note 28: Compensation and Debt Relief ........................................................................................................................ 185 Note 29: Reporting of Outcomes .................................................................................................................................... 186 Note 30: Competitive Neutrality and Cost Recovery ..................................................................................................... 187 Note 31: Net Cash Appropriation Arrangements ............................................................................................................ 189 118
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 1: Significant Accounting Policies
1.1 Objectives of Australian Financial Security Authority
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Australian Financial Security Authority (AFSA) is an Australian Government controlled entity. It is a not
for profit entity. AFSA is an Executive Agency established under the Public Service Act 1999, whose
functions include assisting the Inspector-General in Bankruptcy, the Official Trustee in Bankruptcy (“OT”)
and the Official Receivers (“OR”) in exercising their powers and performing their functions relating to the
administration and regulation of the personal insolvency system in Australia, pursuant to the Bankruptcy
Act 1966 and related bankruptcy legislation. In addition, AFSA assists the Registrar of Personal Property
Securities in the exercise of powers and performance of functions of the Registrar under the Personal
Property Securities Act 2009, including the operation of a national register of security interests in personal
property. AFSA also assists the OT in carrying out its duties in administering property and assets under
proceeds of crime legislation. In assisting the statutory offices and officials mentioned above, AFSA
officers exercise powers and perform functions as delegates of those offices/officials.
AFSA is structured to contribute to achieving improved and equitable financial outcomes for consumers,
business and the community through application of bankruptcy and personal property securities laws,
regulation of personal insolvency practitioners and trustee services. AFSA operates two programs to
achieve this outcome which are Personal Insolvency and Trustee Services and operation of a Register of
Security Interests in Personal Property.
The continued existence of AFSA in its present form and with its present programs is dependent on
Government policy and on continuing appropriations by Parliament for AFSA’s administration and
programs.
AFSA’s activities contributing towards this outcome are classified as either departmental or administered.
Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by
AFSA in its own right. Administered activities involve the management or oversight by AFSA on behalf of
the Government of items controlled or incurred by Government.
AFSA assists in conducting the following administered activities on behalf of the Government:

ensuring compliance by debtors, bankrupts and their associates, practitioners and others with the
requirements of the Bankruptcy Act 1966 and associated legislation by:
 operating the personal insolvency registry where public records on insolvency are maintained
and personal insolvency applications are received and assessed by the OR
 exercising OR powers to assist personal insolvency practitioners obtain information and recover
property; and
 investigating, on behalf of the Inspector-General, possible offences under the Bankruptcy Act
1966 and preparing briefs of evidence for prosecution
 regulating, on behalf of the Inspector-General, the administrations and activity of personal
insolvency practitioners.
 administering, on behalf of the OT, personal insolvencies when private practitioners are not
appointed.
 acting as a special trustee for the Commonwealth and Australian Government agencies pursuant to
court orders, particularly in locating, controlling and selling property (including carrying out the
duties of the OT under the proceeds of crime legislation).
119
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
AFSA conducts the following departmental activities on behalf of the Government:



administering a national online Personal Property Securities Register (“PPSR”) as required under the
Personal Property Securities Act 2009.
providing information about the PPSR and facilitating the registration of security interests and searching
of the PPSR online and through AFSA’s National Service Centre.
Providing insolvency related services to practitioners and others including bankruptcy data through the
Personal Insolvency Reporting Service.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
1.2 Basis of Preparation of the Financial Statements
The financial statements and notes are required by section 49 of the Financial Management and
Accountability Act 1997 and are general-purpose financial statements.
The financial statements and notes have been prepared in accordance with:


Finance Minister’s Orders (FMOs) for reporting periods ending on or after 1 July 2011; and
Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board (AASB) that apply for the reporting period.
The financial statements have been prepared on an accrual basis and are in accordance with the historical
cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is
made for the effect of changing prices on the results or the financial position.
The financial statements are presented in Australian dollars and values rounded to the nearest thousand
dollars unless disclosure of the full amount is specifically required.
Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and
liabilities are recognised in the Statement of Financial Position when and only when it is probable that
future economic benefits will flow to AFSA or a future sacrifice of economic benefits will be required and
the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising
under executory contracts are not recognised unless required by an accounting standard. Liabilities and
assets that are unrecognised are reported in the Schedule of Commitments or the Schedule of Contingencies.
Unless an alternative treatment is specifically required by an accounting standard, income and expenses are
recognised in the Statement of Comprehensive Income when and only when the flow, consumption or loss
of economic benefits has occurred and can be reliably measured.
Administered income, expenses, assets and liabilities and cash flows reported in the administered schedules
and related notes are accounted for on the same basis and using the same policies as for departmental items,
except where otherwise stated in Note 1.20.
1.3 Significant Accounting Judgements and Estimates
No accounting assumptions or estimates have been identified that have a significant risk of causing a
material adjustment to carrying amounts of assets and liabilities within the next accounting period.
120
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1.4 New Australian Accounting Standards
Adoption of new Australian Accounting Standard requirements
No accounting standard has been adopted earlier than the application date stated in the standard.

AASB 13
Fair Value Measurements

AASB 119
Employee Benefits
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The following new accounting standards were issued prior to the signing of these statements by the Chief
Executive and Chief Finance Officer and are applicable to the current reporting period and had a material
effect on Finance’s financial statements:
All other new, revised or amending standards that were issued prior to the sign-off date and applicable to the
current reporting period did not have a financial impact, and are not expected to have a future financial
impact on Finance.
Future Australian Accounting Standard requirements
The following new/revised standards were issued by the Australian Accounting Standards Board prior to
the signing of the statements by the Chief Executive and Chief Finance Officer, which are expected to have
a material impact on the entity’s financial statements for future reporting periods:
Standard /
Interpretation
Application Nature of impending changes in accounting policy and likely impact
date
on initial application
AASB 1055
Budgetary
Reporting
1 July 2014
This new Standard requires reporting of budgetary information and
explanation of significant variance between actual and budgeted
amounts.
Likely impact: New requirement to report budgetary information and to
explain significant variances between budget and actuals are at the
outcome level.
AASB 9
Financial
Instruments
1 July 2017
This revised Standard represents the first phase of a three phase project
to replace AASB 139 Financial Instruments: Recognition and
Measurement. The amendments reduce the four categories of financial
asset to two - amortised cost and fair value. Under AASB 9, assets are to
be measured at fair value unless they are held to collect cash flows and
solely comprise the payment of interest and principal on specified dates.
Gains and losses on assets carried at fair value are taken to profit and
loss, unless they are equity instruments not held for trading and the
entity initially elects to recognise gains/losses in other comprehensive
income.
Likely impact: May have an impact on the recognition and measurement
of financial instruments.
Other new accounting standards, revised standards or amending standards that were issued prior to sign-off
date and are applicable to future reporting periods are not expected to have a future financial impact.
121
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1.5 Revenue
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Revenue from the sale of goods is recognised when:
 the risks and rewards of ownership have been transferred to the buyer;
 AFSA retains no managerial involvement nor effective control over the goods;
 the revenue and costs incurred for the transaction can be reliably measured; and
 it is probable that the economic benefits associated with the transaction will flow to AFSA.
Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the
reporting date. The revenue is recognised when:
 the amount of revenue, stage of completion and transaction costs incurred can be reliably measured;
and
 the probable economic benefits with the transaction will flow to AFSA.
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due
less any impairment allowance. Collectability of debts is reviewed at balance date. Allowances are made
when the collectability of the debt is no longer probable. Receivables include amounts which are due to be
reimbursed to AFSA from Proceeds of Crime matters. AFSA has provided funds to pay expenses where
funds are not available in the respective matter. Collectability of these amounts is subject to the outcome of
legal process where appeals are current.
Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial
Instruments: Recognition and Measurement.
Revenue from Personal Property Securities Register
AFSA is responsible for the operation of a national PPSR which became operational on 30 January 2012.
Revenue is received from registration of security interests and searches of the PPSR.
Resources Received Free of Charge
Resources received free of charge are recognised as revenue when and only when a fair value can be
reliably determined and the services would have been purchased if they had not been donated. The use of
those resources is recognised as an expense. Resources received free of charge are recorded as either
revenue or gains depending on their nature.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their
fair value when the asset qualifies for recognition, unless received from another government agency as a
consequence of a restructuring of administrative arrangements (refer to Note 1.7).
Revenue from Government
Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and
reductions) are recognised as revenue when AFSA gains control of the appropriation, except for certain
amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when
it has been earned. Appropriations receivable are recognised at their nominal amounts.
1.6 Gains
Sale of Assets
Gains from disposal of assets are recognised when control of the asset has passed to the buyer.
122
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1.7 Transactions with the Government as Owner
Equity Injections
Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions)
and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.
Repayment to Government
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The FMOs require that distributions to owners be debited to contributed equity unless it is in the nature of a
dividend. AFSA has an obligation to repay the government for funds provided to establish the PPSR. The
funds are sourced from PPSR fees and charges and outlined in PPSR Cost Recovery Impact Statement.
1.8 Employee Benefits
Liabilities for ‘short term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination
benefits expected within twelve months of balance date are measured at their nominal amounts. The
nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.
Other long term employee benefit liabilities are measured as a net total of the present value of the defined
benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of
plan assets (if any) out of which the obligations are to be settled directly.
Leave
The liability for employee benefits includes provision for annual leave and long service leave. No provision
has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years
by employees of AFSA is estimated to be less than the annual entitlement for sick leave.
The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that
will be applied at the time the leave is taken, including AFSA’s employer superannuation contribution rates
to the extent that the leave is likely to be taken during service rather than paid out on termination.
The liability for long service leave has been determined using the Australian Government's shorthand
method as at 30 June 2014. The estimate of the present value of the liability takes into account attrition rates
and pay increases through promotion and inflation.
Separation and Redundancy
Where provision has been made for separations and redundancy benefit payments. AFSA recognises a
provision for termination when it has developed a detailed formal plan for the terminations and has
informed those employees affected that it will carry out the terminations.
Superannuation
Staff of AFSA are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector
Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or other superannuation funds of the
employee’s choice. The CSS and PSS are defined benefit schemes for the Australian Government. The
PSSap is a defined contribution scheme.
The liability for defined benefits is recognised in the financial statements of the Australian Government and
is settled by the Australian Government in due course. This liability is reported in the Department of
Finance’s administered schedules and notes.
123
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
AFSA makes employer contributions to the employee’s superannuation scheme at rates determined by an
actuary to be sufficient to meet the current cost to Government. AFSA accounts for the contributions as if
they were contributions to defined contribution plans.
The liability for accrued salaries recognised at 30 June comprises outstanding contributions for the final
fortnight of the year.
1.9 Leases
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
A distinction is made between finance leases and operating leases. Finance leases effectively transfer from
the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An
operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains
substantially all such risks and benefits.
Where an asset is acquired by means of a finance lease, the asset is capitalised at either the fair value of the
lease property or, if lower, the present value of minimum lease payments at the beginning of the lease term.
A liability is recognised at the same time and for the same amount.
The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period
of the lease. Lease payments are allocated between the principal component and the interest expense.
Operating lease payments are expensed on a straight line basis which is representative of the pattern of
benefits derived from the leased assets.
1.10 Borrowing Costs
All borrowing costs are expensed as incurred.
1.11 Fair Value Measurement
The entity deems transfers between levels of the fair value hierarchy to have occurred at the end of the
reporting period.
1.12 Cash
Cash is recognised at its nominal amount. Cash and cash equivalents include:
 cash on hand;
 demand deposits in bank accounts with an original maturity of 3 months or less that are readily
convertible to known amounts of cash and subject to insignificant risk of changes in value; and
 cash held by outsiders; and

cash held in special accounts.
1.13 Financial Assets
AFSA classifies its financial assets as loans and receivables.
The classification depends on the nature and purpose of the financial assets and is determined at the time of
initial recognition. Financial assets are recognised and derecognised upon ‘trade date’.
Effective Interest Method
The effective interest method is a method of calculating the amortised cost of a financial asset and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly
124
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
discounts estimated future cash receipts over the expected life of the financial asset, or, where appropriate, a
shorter period.
Income is recognised on an effective interest rate basis except for financial assets ‘at fair value through
profit or loss’.
Loans and Receivables
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted
in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at
amortised cost using the effective interest method less impairment. Interest is recognised by applying the
effective interest rate.
Impairment of Financial Assets
Financial assets are assessed for impairment at the end of each reporting period.
Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been
incurred for loans and receivables, then the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s
original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is
recognised in the Statement of Comprehensive Income.
During the year AFSA reduced impairment of receivables by $45,000 (2013: $70,000 increase).
1.14 Financial Liabilities
Financial liabilities are classified as either financial liabilities “at fair value through profit or loss‟ or other
financial liabilities. Financial liabilities are recognised and derecognised upon “trade date”.
Financial Liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair
value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability.
Other Financial Liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs. These liabilities are
subsequently measured at amortised cost using the effective interest method, with interest expense
recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the expected life of the financial liability, or, where
appropriate, a shorter period.
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the
goods or services have been received (irrespective of having been invoiced).
1.15 Contingent Liabilities and Contingent Assets
Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position but are
reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a
liability or asset, or represent an existing liability or asset in respect of which the amount cannot be reliably
125
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
measured. Contingent assets are disclosed when settlement is probable, but not virtually certain, and
contingent liabilities are disclosed when settlement is greater than remote.
1.16 Acquisition of Assets
Assets are recorded at cost of acquisition except as stated elsewhere in Note 1. The cost of acquisition
includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are
initially measured at fair value plus transaction costs where appropriate.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at
their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative
arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at
which they were recognised in the transferor agency’s accounts immediately prior to the restructuring.
1.17 Property, Plant and Equipment
Asset Recognition Threshold
Purchases of property, plant and equipment are recognised initially at cost in the Statement of Financial
Position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other
than where they form part of a group of similar items which are significant in total).
The initial cost of an asset includes an estimate of dismantling and removing the item and restoring the site
on which it is located. This is particularly relevant to “make-good‟ provisions in property leases taken up by
AFSA where there exists an obligation to restore the property to its original condition. These costs are
included in the value of AFSA’s leasehold improvements with a corresponding provision for the “makegood‟ recognised.
Revaluations
Fair values for each class of asset are determined as shown below:
Asset Class
Leasehold improvements
Property, plant and equipment
Heritage and cultural
Fair value measured at:
Depreciated replacement cost
Market selling price
Market selling price
Following initial recognition at cost, leasehold improvements and property, plant and equipment are carried
at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are
conducted with sufficient frequency to ensure that the carrying amounts of assets do not materially differ
from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon
the volatility of movements in market values for the relevant assets.
Revaluation adjustments are made on a class basis. Any revaluations increment is credited to equity under
the heading of asset revaluation surplus except to the extent that it reverses a previous revaluation
decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation
decrements for a class of assets are recognised in the surplus/deficit except to the extent that they reverse a
previous revaluation increment for that class. An independent valuation was undertaken on all asset classes
as at 30 June 2013 by the Australian Valuation Office.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of
the asset and the asset is restated to the revalued amount.
126
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
AFSA arranged for a materiality review by an independent valuer which confirmed that there was no
material difference between carrying amounts and asset fair values for all fixed asset classes as at 30 June
2014.
Depreciation
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their
estimated useful lives using, in all cases, the straight line-method of depreciation. Leasehold improvements
are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the
unexpired period of the lease.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and
necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.
Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
Leasehold improvements
Property, plant and equipment
2014
Lease term
1 to 10 years
2013
Lease term
3 to 10 years
The aggregate amount of depreciation allocated for each class of asset during the reporting period is
disclosed in Note 3C.
Impairment
All assets were assessed for impairment at 30 June 2014. Where indications of impairment exist, the asset’s
recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is
less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value
in use is the present value of future cash flows expected to be derived from the asset. Where the future
economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows,
and the asset would be replaced if AFSA were deprived of the asset, its value in use is taken to be its
depreciated replacement cost.
Derecognition
An item of property, plant, and equipment is derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal.
Heritage and Cultural
Heritage and cultural items include two paintings by indigenous artists.
Heritage and cultural assets are stored and managed in ways to preserve their heritage and cultural value
over time.
1.18 Intangibles
AFSA’s intangibles comprise internally developed software, externally purchased software and right to use
assets. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Software is amortised on a straight-line basis over its anticipated useful life. The useful life of AFSA’s
software is 1 to 10 years (2013: 1 to 10 years). All software assets were assessed for indications of
impairment as at 30 June 2014 including assets under construction.
127
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Intangible assets were assessed for impairment at 30 June 2014. An amount of $3.73m was impaired from
the Work in Progress account. The impairment has been assessed on the following basis:



Development work that supports multiple assets that cannot be attributed to one specific asset
$1.84m
Discontinuation of a contract $1.69m
Development work undertaken but not attributable to the final asset $0.20m
The total impairment amount is disclosed at Note 3E.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The Right to Use intangible asset recognises a lease incentive for the fit-out new office premises and the
associated costs. Under the arrangement, the lessor retained ownership of these assets however AFSA will
receive benefit from the use of these assets for the majority of their useful life.
1.19 Taxation
AFSA is exempt from all forms of taxation except fringe benefits tax (FBT) and the goods and services tax
(GST).
Income, expenses and assets are recognised net of GST except:
 where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
 for receivables and payables.
1.20 Reporting of Administered Activities
Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered
schedules and related notes.
Except where otherwise stated below, administered items are accounted for on the same basis and using the
same policies as for departmental items, including the application of Australian Accounting Standards.
Administered Cash Transfers to and from the Official Public Account
Revenue collected by AFSA for use by the Government rather than the entity is administered revenue.
Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance.
Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of
Government and reported as such in the schedule of administered cash flows and in the administered
reconciliation schedule. These transfers to and from the OPA are adjustments to the administered cash held
by the entity on behalf of the government and reported as such in the schedule of administered cash flows
and administered reconciliation schedule.
Administered Revenue
All administered revenues are revenues relating to ordinary activities performed by AFSA on behalf of the
Australian Government. As such, administered appropriations are not revenues of the individual entity that
oversees distribution or expenditure of the funds as directed.
AFSA’s fees and charges are set in accordance with the Australian Government Cost Recovery Guidelines,
with the results of AFSA’s reviews of fees and charges being promulgated via Cost Recovery Impact
Statements.
128
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Administered revenue includes realisation and interest charges relating to the realisation of assets by the OT
and Registered Trustees, remuneration and fees for work done by the OT under the Bankruptcy Act 1966
and proceeds of crime legislation. Collectability of Official Trustee fees in Proceeds of Crime matters may
be subject to the outcome of legal process where appeals are current. Other revenues under the Bankruptcy
Act 1966 include fees from searches of National Personal Insolvency Index, Bankruptcy notices, Debt
Agreement fees and various other charges.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Revenue under Proceeds of Crime legislation includes Pecuniary Penalty Orders (“PPO”) and forfeiture
orders. Both PPO and forfeiture orders are issued by the courts as a result of enforcement action taken on
criminal matters by Commonwealth Director of Public Prosecutions (CDPP) and Australian Federal Police
(AFP) during the year. Pursuant to forfeiture orders, assets are forfeited to the Commonwealth and the OT
acts on AFSA’s behalf to realise forfeited assets. The net proceeds from asset realisations are transferred to
AFSA’s administered special accounts (Confiscated Assets Account (CAA) or Confiscated Assets Special
Account (CASA)).
Accrued revenue to administered special accounts relating to Proceeds of Crime matters is recognised when
the OT determines funds are likely to be paid into the CAA or CASA.
Cash & Cash Equivalents
Cash and Cash Equivalents includes the administered and special bank accounts. The Common Investment
Fund Equalisation Bank account has been reclassified as Cash and Equivalents. Accordingly, the
comparative years figures have been restated to include adjustment to prior year balances. An analysis of the
accounts impacted follows:
2013
2013
Restated
Original
$’000
$’000
Cash and Cash Equivalents
77,234
77,045
Other Receivables
32,751
32,940
Financial Assets
Special Appropriations ('Recoverable GST exclusive')
Under Section 70 of the Proceeds of Crime Act 2002 upon realisation of assets held by the Official
Trustee the amount of special appropriations applied, includes recovery of fees and charges incurred by
the Official Trustee to maintain assets. The remaining balance is credited to the Confiscated Assets
Account. The disclosure of the appropriation amounts applied at Note 25D have been restated to reflect
amounts applied under Proceeds of Crime Act 2002 Section 70(1)(b) and Section 70(1)(c). The changes
on the comparative year as at 30 June 2013 as shown below.
129
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Appropriation Applied
2013
Restated
$'000
To apply payments of remuneration and other costs,
charges and expenses of the kind referred to in
subsection 288(1) payable
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
To credit remainder of money to CAA as required by
section 296
2013
Original
$'000
344
0
33,031
33,375
Loans and Receivables
Where loans and receivables are not subject to concessional treatment, they are carried at amortised cost
using the effective interest method. Gains and losses due to impairment, de-recognition and amortisation
are recognised through profit or loss.
The value of PPO’s due and owing to the Commonwealth at 30 June 2014 are disclosed as Administered
assets. Collectability of the debts is reviewed at end of the reporting period with reference to the status of
recovery action by CDPP and AFP. Impairment allowances are made when collectability of the debt is
judged to be less, rather than more, likely.
Administered Liabilities
Administered liabilities relate to GST payables, special account payments and accrued expenses.
Prior year expenses were understated for amounts owing at 30 June 2013. According, the comparative years
figures have been restated to include adjustment to prior year balances. An analysis of the accounts
impacted follows:
2013
2013
Restated
Original
$’000
$’000
1,374
607
12,420
11,653
Financial Liabilities
Other Payables
Expenses
Other Expenses
Special Trustee Role
Courts occasionally make orders which require the OR to take control of and administer real or personal
property in accordance with orders, such as under the Child Support Assessment Act 1989. The property held
is reported at note 28.
130
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1.21 Payments made under Legislation
The Australian Government continues to have regard to developments in case law, including the High
Court’s most recent decision on Commonwealth expenditure in Williams v Commonwealth [2014] HCA 23,
as they contribute to the larger body of law relevant to the development of Commonwealth programs. In
accordance with its general practice, the Government will continue to monitor and assess risk and decide on
any appropriate actions to respond to risks of expenditure not being consistent with constitutional or other
legal requirements.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 2: Events After the Reporting Period
There are no significant events that occurred after balance date that warrant disclosure, or must be brought
to account in the financial statements.
131
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 3: Expenses
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 3A: Employee Benefits
Wages and salaries
Superannuation
Defined contribution plans
Defined benefit plans
Leave and other entitlements
Separation and redundancies
Other employee expenses
Total employee benefits
Note 3B: Suppliers
Goods and services supplied or rendered
Consultants
Contractors
Estate management costs
IT costs
Legal costs
Property operating expense
Services from government
Travel
Record keeping
Bank fees
Printing and publishing
General admin expenses
Total goods and services supplied or rendered
Goods supplied in connection with
Related parties
External parties
Total good supplied
Services rendered in connection with
Related parties
External parties
Total services rendered
Total goods and services supplied or rendered
132
2014
$'000
2013
$'000
34,308
30,557
3,795
2,052
3,908
655
44,718
3,419
1,918
4,009
361
906
41,170
1,639
6,695
1,708
4,380
694
482
624
1,108
268
575
405
1,556
20,134
1,488
7,824
1,488
7,258
827
429
562
1,513
461
479
327
1,420
24,076
1
424
425
17
267
284
4,568
15,141
19,709
20,134
9,251
14,541
23,792
24,076
Other suppliers
Operating lease rentals in connection with
External parties
Minimum lease payments
Workers compensation expenses
Total other supplier expenses
Total supplier expenses
Note 3C: Depreciation and Amortisation
Depreciation
Property, plant and equipment
Leasehold improvements
Total depreciation
Amortisation
Intangibles - computer software
Intangibles - other
Make-good
Total amortisation
Total depreciation and amortisation
Note 3D: Finance Costs
Unwinding of make-good discount
Total finance costs
Note 3E: Write-Down and Impairment of Assets
Impairment on intangible assets
Asset write-downs - property, plant and equipment
Asset write-downs - other
Total write-down and impairment of assets
2014
$'000
2013
$'000
9,774
372
10,146
30,280
6,097
335
6,432
30,508
1,444
1,304
2,748
2,080
900
2,980
8,344
87
592
9,023
11,771
7,828
83
7,911
10,891
32
32
42
42
3,737
83
3,820
57
161
218
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
133
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 4: Own-Source Income
2014
$'000
2013
$'000
111
54,855
54,966
158
45,722
45,880
378
315
693
1,805
283
2,088
Own-Source Revenue
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 4A: Rendering of Services
Rendering of services in connection with
Related parties
External parties
Total rendering of services
Note 4B: Other Revenue
Reimbursement of legal and estate management costs
Other
Total other revenue
Gains
Note 4C: Reversals of Previous Asset Write-Downs and Impairment
Reversal of impairment losses
Other
Total reversals of previous asset write-downs and impairments
Note 4D: Revenue from Government
Appropriations
Departmental appropriations
Total revenue from Government
134
40
46
86
46,944
46,944
-
44,119
44,119
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 5: Fair Value Measurements
The following tables provide an analysis of assets and liabilities that are measured at fair value.
The different levels of the fair value hierarchy are defined below.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 5A: Fair Value Measurements
Fair value measurements at the end of reporting period by hierarchy for assets and liabilities in 2014
Fair value measurements at the end
of the reporting period using
Level 1
Level 2
Level 3
Fair Value
inputs
inputs
inputs
$'000
$'000
$'000
$'000
Non-financial assets
Leasehold Improvements
2,303
2,303
Leasehold Improvements (WIP)
64
64
Heritage & Cultural
10
10
Property, Plant & Equipment
4,035
1,188
2,847
Property, Plant & Equipment (WIP)
3,728
3,728
Total non-financial assets
10,140
4,990
5,150
Total fair value measurements of assets in the
statement of financial position
10,140
-
4,990
5,150
Fair value measurements - highest and best use differs from current use for non-financial assets
(NFAs)
AFSA’s assets are held for operational purposes and not held for the purposes of deriving profit. The
current use of all controlled assets is considered their highest and best use.
Note 5B: Level 1 and Level 2 Transfers for Recurring Fair Value Measurement
The entity's policy for determining when transfers between levels are deemed to have occurred can be found
in Note 1.11.
135
136
1,705
598
64
10
1,188
3,728
2,847
3
3
2
2
2
2
3
Leasehold Improvements (Make Good)
Leasehold Improvements (WIP)
Heritage & Cultural
Property, Plant & Equipment
Property, Plant & Equipment (WIP)
Property, Plant & Equipment
Fair
value
$'000
Leasehold Improvements
Non-financial assets
Category
(Level 2
or 3)
DRC
Market Approach
Market Approach
Market Approach
Market Approach
Net Present Value
Depreciated
Replacement Cost
(DRC)
Valuation
technique(s)1
Inputs used
Consumed Economic benefit/
Obsolescence of asset
Adjusted market transactions
Adjusted market transactions
Adjusted market transactions
Adjusted market transactions
Indexation rates
Discount rate
Current restoration costs (price per
square meter)
Consumed Economic benefit/
Obsolescence of asset
Repacement Cost New (proce per
square meter)
Level 2 and 3 fair value measurements - valuation technique and the inputs used for assets and liabilities in 2014
Note 5C: Valuation Technique and Inputs for Level 2 and Level 3 Fair Value Measurements
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
10.0% 37.5%
(22.1%) per
annum
2.54% 3.54%
0.55% to
2.6%
6.7% - 54.5%
(9.2%) per
annum
$15-$160
Range
(weighted
average)2
137
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
The weighted average is determined by assessing the fair value measurement as a proportion of the total fair value for the class against the total useful life of each
asset.
Property, Plant & Equipment - Consumed Economic Benefit /Obsolescence of asset
Assets that do not transact with enough frequency or transparency to develop objective opinions of value from observable market evidence have been measured
utilising the cost (Depreciated Replacement Costs or DRC) approach. Under the DRC approach the estimated cost to replace the asset is calculated and then
adjusted to take into account its consumed economic benefit/ asset obsolescence (accumulated Depreciation). Consumed economic benefit / assets obsolescence has
been determined based on professional judgement regrading physical, economic and external obsolescence factors relevant to the asset under consideration.
Current Restoration Costs, indexation rates and discount rate
Applicable makegood provisions have been determined in accordance with Australian Accounting Guidance Note 2010/1 Accounting for Decommissioning,
Restoration and Similar Provisions (‘Makegood”). Current restoration costs have been established based on analysed transactions, costing publications and industry
sources. Current restoration costs have been index to the obligation date (generally the expiry of the lease term) using building industry cost indexes relevant to the
assets location and then discounted, where the time value of money is material using an appropriate government bond rate to the length of the obligation. The
estimated provision is depreciated in line with the corresponding leasehold improvement asset.
Leasehold Improvements – Consumed economic benefit/ Obsolescence of asset
Assets that do not transact with enough frequent or transparency to develop objective opinions of value from observable market evidence have been measured
utilising the cost (Depreciated Replacement Costs or DRC) approach. Under the DRC approach the estimated cost to replace the asset is calculated and then adjusted
to take into account its consumed economic benefit/ asset obsolescence (accumulated depreciation). Consumed economic benefit / assets obsolescence has been
determined based on professional judgement regarding physical, economic and external obsolescence factors relevant to the asset under consideration.
There is no change in the valuation technique since the prior year.
Significant Level 3 inputs utilised by the entity are derived and evaluated as follows:
Recurring and non-recurring Level 3 fair value measurements - valuation processes
AFSA procured the service of the Australian Valuation Office (AVO) to undertake comprehensive valuation of all non-financial assets at 30 June 2013. AFSA tests
the procedures of the valuation model as an internal management review at least once every 12 months (with a formal revaluation undertaken once every three
years). If a particular asset class experiences significant and volatile changes in fair value (i.e. where indicators suggest that the value of the class has changed
materially since the previous reporting period), that class is subject to specific valuation in the reporting period, where applicable, regardless of timing of the last
specific valuation. The entity has engaged Australian Valuation Solutions (AVS) to provide written assurance that the models developed comply with AASB 13.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
138
Leasehold Improvements – Consumed economic benefit/ Obsolescence of asset
The significant unobservable inputs used in the fair value measurement of AFSA’s leasehold improvements and property, plant and equipment asset classes relate to
the consumed economic benefit / asset obsolescence. A significant increase (decrease) in this input would result in a significantly lower (higher) fair value
measurement.
Current Restoration Costs, indexation rates and discount rate
The significant unobservable inputs used in the fair value measurement of AFSA’s leasehold restoration cost (makegood) asset class relate to the current restoration
costs, escalation rates and discount rates. A significant increase (decrease) in this costs new and (or) escalation rates and decrease (increase) in the discount rate
would result in a significantly higher (lower) fair value measurement.
Recurring Level 3 fair value measurements - sensitivity of inputs
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
139
2
-
2,302
746
-
(1,896)
Leasehold
Improvements
2014
$'000
3,453
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
-
2,847
1,170
-
(934)
Property, plant
& equipment
2014
$'000
2,611
Non-financial assets
1. Open balance as determined in accordance with AASB 13.
2. Total gains/(losses) are recorded in the Statement of Comprehensive Income and represent amortisation and write down of assets.
3. There have been no transfers between levels in the hierarchy during the year.
4. The entity's policy for determining when transfers between levels are deemed to have occurred can be found in Note 1.11.
Changes in unrealised gains/(losses) recognised in net cost of services for assets held at the end of the
reporting period.
Transfers out of Level 34
Closing balance
Total gains/(losses) recognised in other comprehensive income
Purchases
Sales
Issues
Settlements
Transfers into Level 33
Total gains/(losses) recognised in net cost of services1
Opening balance
Recurring Level 3 fair value measurements - reconciliation of assets
Note 5D: Reconciliation for Recurring Level 3 Fair Value Measurements
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-
5,149
1,916
-
(2,830)
Total
2014
$'000
6,064
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 6: Financial Assets
2014
$'000
2013
$'000
Note 6A: Cash and Cash Equivalents
Cash on hand or on deposit
Total cash and cash equivalents
1,831
1,831
2,823
2,823
Note 6B: Trade and Other Receivables
Goods and services receivables in connection with
Related parties
External parties
Total goods and services receivables
195
6,428
6,623
63
5,942
6,005
Appropriations receivables
Existing programs
Total appropriations receivables
30,189
30,189
20,477
20,477
Other receivables
Statutory receivables
Accrued revenue
Other receivable
Total other receivables
Total trade and other receivables (gross)
677
81
758
37,570
403
64
155
622
27,104
Less impairment allowance
Goods and services
Total impairment allowance
Total trade and other receivables (net)
(180)
(180)
37,390
(225)
(225)
26,879
Trade and other receivables (net) expected to be
recovered
No more than 12 months
More than 12 months
Total trade and other receivables (net)
37,390
37,390
26,879
26,879
34,559
24,527
1,025
62
15
1,909
37,570
813
87
187
1,490
27,104
Trade and other receivables (gross) aged as follows
Not overdue
Overdue by
0 to 30 days
31 to 60 days
61 to 90 days
More than 90 days
Total trade and other receivables (gross)
140
Impairment allowance aged as follows
Not overdue
Overdue by
0 to 30 days
31 to 60 days
61 to 90 days
More than 90 days
Total impairment allowance
2014
$'000
2013
$'000
(17)
(17)
(10)
(1)
(4)
(148)
(180)
(8)
(2)
(146)
(52)
(225)
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Goods and services receivable was with entities external to the Australian Government. Credit terms net 30
days.
Appropriations receivable refer to un-drawn appropriations for the current and prior years that is controlled
by AFSA but held in the Official Public Account under the Government’s just-in-time drawdown
arrangements.
Reconciliation of the Impairment Allowance
Movements in relation to 2014
Opening balance
Amounts written off
Amounts recovered and reversed
Increase/(Decrease) recognised in net cost of services
Closing balance
Goods and
services
$'000
(225)
6
39
(180)
Other
receivables
$'000
-
Total
$'000
(225)
6
39
(180)
Goods and
services
$'000
(70)
6
(161)
(225)
Other
receivables
$'000
-
Total
$'000
(70)
6
(161)
(225)
Movements in relation to 2013
Opening balance
Amounts written off
Amounts recovered and reversed
Increase/(Decrease) recognised in net cost of services
Closing balance
141
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 7: Non-Financial Assets
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 7A: Land and Buildings
Leasehold improvements
Fair value
Accumulated depreciation
Total leasehold improvements
2014
$'000
2013
$'000
2,891
(1,123)
1,768
2,513
2,513
979
(380)
599
2,367
976
976
3,489
10
10
10
10
9,195
(1,432)
7,763
7,773
4,108
(15)
4,093
4,103
Make good assets
Fair value
Accumulated depreciation
Total make good assets
Total land and buildings
No indicators of impairment were found for land and buildings. (2013: Nil).
No land or buildings were expected to be sold or disposed within the next 12 months.
Note 7B: Property Plant and Equipment
Heritage and cultural
Fair value
Accumulated depreciation
Total heritage and cultural
Other property, plant and equipment
Fair value
Accumulated depreciation
Total other property, plant and equipment
Total property, plant and equipment
No indicators of impairment were found for property, plant and equipment. (2013: Nil).
No property, plant and equipment is expected to be sold or disposed within the next 12 months.
142
143
2,891
(1,123)
1,768
Total as at 30 June 2014 represented by
Gross book value
Accumulated depreciation and impairment
Total as at 30 June 2014
979
(380)
599
215
(592)
599
976
976
3,870
(1,503)
2,367
735
39
(1,896)
2,367
3,489
3,489
$’000
Total Land and
Buildings
10
10
10
10
10
$’000
Heritage and
Cultural
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
520
39
(1,304)
1,768
2,513
2,513
$’000
$’000
Additions
By purchase
Transfer from a related entity
Transfer to another asset class
Net revaluation increment/(decrement)
Write-off increment/(decrement)
Depreciation
Other movements
Disposals - other
Total as at 30 June 2014
As at 1 July 2013
Gross book value
Accumulated depreciation and impairment
Total as at 1 July 2013
Buildings Make Good
Assets
Buildings Leasehold
Improvements
Reconciliation of the opening and closing balances of property, plant and equipment for 2014
Note 7C: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
9,195
(1,432)
7,763
5,197
(1,444)
(83)
7,763
4,108
(15)
4,093
$’000
Other Property,
Plant &
Equipment
13,075
(2,935)
10,140
5,932
39
(3,340)
(83)
10,140
7,607
(15)
7,592
$’000
Total
144
504
(38)
(900)
(1)
2,513
2,513
2,513
Total as at 30 June 2013 represented by
Gross book value
Accumulated depreciation and impairment
Total as at 30 June 2013
5,899
(2,951)
2,948
Additions
By purchase
Transfer from a related entity
Transfer to another asset class
Net revaluation increment (decrement)
Depreciation expense
Other movements
Disposals - other
Total as at 30 June 2013
As at 1 July 2012
Gross book value
Accumulated depreciation and impairment
Total as at 1 July 2012
Buildings Leasehold
Improvements
$’000
976
976
844
(83)
10
976
769
(564)
205
Buildings - Make
Good Assets
$’000
3,489
3,489
504
806
(983)
9
3,489
6,668
(3,515)
3,153
Total Land and
Buildings
$’000
Reconciliation of the opening and closing balances of property, plant and equipment for 2013
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
10
10
10
10
-
Heritage and
Cultural
$’000
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
4,108
(15)
4,093
31
(12)
(2,080)
(57)
4,093
8,551
(2,340)
6,211
Other property,
Plant &
Equipment
$’000
7,607
(15)
7,592
545
794
(3,063)
9
(57)
7,592
15,219
(5,855)
9,364
Total
$’000
Note 7D: Intangibles
Computer software
Internally developed – in progress
Internally developed – in use
Purchased
Accumulated amortisation
Accumulated impairment losses
Total computer software
Other intangibles
Other intangibles
Accumulated amortisation
Total other intangibles
Total intangibles
2014
$'000
2013
$'000
769
48,397
4,810
(26,882)
(470)
26,624
5,422
45,349
4,023
(18,538)
(470)
35,786
2,300
(87)
2,213
28,837
35,786
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Indicators of impairment were found for intangibles assets. Refer to note 3E.
145
146
50,771
(17,171)
33,600
2,235
(3,531)
(103)
(206)
(7,342)
24,653
49,166
(24,513)
24,653
As at 1 July 2013
Gross book value
Accumulated amortisation and impairment
Total as at 1 July 2013
Additions
By purchase
Impairment recognised in net cost of services
Transfer to another asset class
Internally developed
Net revaluation increment (decrement)
Write-off increment/(decrement)
Amortisation
Other movements - write down
Disposals
Total as at 30 June 2014
Total as at 30 June 2014 represented by
Gross book value
Accumulated amortisation and impairment
Total as at 30 June 2014
Computer
software internally
developed
$’000
Reconciliation of the opening and closing balances of intangibles for 2014
Note 7E: Reconciliation of the Opening and Closing Balances of Intangibles
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
4,810
(2,839)
1,971
933
(1,002)
(146)
1,971
4,023
(1,837)
2,186
Computer
software
purchased
$’000
53,976
(27,352)
26,624
3,168
(3,531)
(103)
(206)
(8,344)
(146)
26,624
54,794
(19,008)
35,786
Total computer
software
$’000
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
2,300
(87)
2,213
2,236
64
(87)
2,213
-
Other
intangibles
$’000
56,276
(27,439)
28,837
5,404
(3,531)
(39)
(206)
(8,431)
(146)
28,837
54,794
(19,008)
35,786
Total
$’000
147
5,735
(6,697)
33,600
50,771
(17,171)
33,600
Additions
By purchase
Transfer from a related entity
Internally developed
Impairment loss recognised in net cost of services
Amortisation expense
Other movements - write down
Disposals
Total as at 30 June 2013
Total as at 30 June 2013 represented by
Gross book value
Accumulated amortisation and impairment
Total as at 30 June 2013
4,023
(1,837)
2,186
(9)
(1,131)
2,186
4,639
(1,313)
3,326
Computer software
purchased
$’000
35,786
54,794
(19,008)
35,786
5,726
(7,828)
-
37,888
50,039
(12,151)
Total computer
software
$’000
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
45,400
(10,838)
34,562
As at 1 July 2012
Gross book value
Accumulated amortisation and impairment
Total as at 1 July 2012
Computer software
internally
developed
$’000
Reconciliation of the opening and closing balances of intangibles for 2013
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-
-
-
Other
intangibles
$’000
35,786
54,794
(19,008)
35,786
5,726
(7,828)
-
37,888
50,039
(12,151)
Total
$’000
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2014
$'000
2013
$'000
Note 7F: Other Non-Financial Assets
Prepayments
Security deposit
Total other non-financial assets
1,737
12
1,749
1,254
14
1,268
Other non-financial assets expected to be recovered
No more than 12 months
More than 12 months
Total other non-financial assets
1,456
293
1,749
1,239
29
1,268
No indicators of impairment were found for other non-financial assets. (2013: Nil).
148
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2014
$'000
2013
$'000
Note 8A: Suppliers
Trade creditors
Accrued expenses
Property lease liabilities
Total suppliers
1,067
2,244
2,500
5,811
783
3,500
304
4,587
Suppliers expected to be settled
No more than 12 months
More than 12 months
Total suppliers
3,676
2,135
5,811
4,587
4,587
Suppliers in connection with
Related parties
External parties
Total suppliers
319
5,492
5,811
577
4,010
4,587
Note 8B: Other Payables
Salaries and wages
Superannuation
Revenue in advance
Other employee payables
Total other payables
995
170
477
1,642
834
144
318
87
1,383
Other payables expected to be settled
No more than 12 months
More than 12 months
Total other payables
1,642
1,642
1,383
1,383
Note 9A: Employee Provisions
Leave
Total employee provisions
9,462
9,462
8,615
8,615
Employee provisions expected to be settled
No more than 12 months
More than 12 months
Total employee provisions
3,062
6,400
9,462
3,628
4,987
8,615
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 8: Payables
Settlement was usually made within 30 days.
Note 9: Provisions
149
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 9B: Other Provisions
Provision for make good
Total other provisions
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Other provisions expected to be settled
No more than 12 months
More than 12 months
Total other provisions
As at 1 July 2013
Additional provisions made
Amounts used
Amounts reversed
Revaluation for makegood
Unwinding of discount or change in discount rate
Total as at 30 June 2014
2014
$'000
2013
$'000
990
990
976
976
251
739
990
403
573
976
Provision
for make
good
$’000
976
215
(168)
(63)
30
990
Total
$’000
976
215
(168)
(63)
30
990
AFSA currently has 6 agreements (2013: 6 agreements) for the leasing of premises which have provisions
requiring the entity to restore the premises to their original condition at the conclusion of the lease. AFSA
has made provision to reflect the present value of the ‘make good’ obligation.
150
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 10: Cash Flow Reconciliation
2014
$'000
2013
$'000
1,831
1,831
-
2,823
2,823
-
Reconciliation of net cost of services to net cash from/(used by) operating activities
Net (cost of)/contribution of services
(34,876)
Revenue from Government
46,944
(34,861)
44,119
Cash and cash equivalents as per
Cash flow statement
Statement of financial position
Discrepancy
Adjustments for non-cash items
Depreciation/amortisation
Unwinding make good discount
Reversal of unwinding of make good discount
Net write down of non-financial assets
Reversal of impairment losses
Movements in assets and liabilities
Assets
(Increase)/Decrease in net receivables
(Increase)/Decrease in prepayments
Liabilities
Increase/(Decrease) in employee provisions
Increase/(Decrease) in supplier payables
Increase/(Decrease) in other payables
Increase/(Decrease) in other provisions
Net cash from/(used by) operating activities
11,771
32
(46)
3,820
(40)
10,891
42
57
-
(12,074)
(480)
(8,772)
(392)
847
1,228
259
14
17,399
567
(1,061)
259
10,849
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Reconciliation of cash and cash equivalents as per statement of
financial position to cash flow statement
151
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 11: Contingent Assets and Liabilities
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Contingent liabilities
Balance from previous period
New contingent liabilities recognised
Re-measurement
Liabilities realised
Total contingent liabilities
Net contingent liabilities
2014
$'000
2013
$'000
240
11
(209)
(31)
11
11
282
129
(171)
240
240
Quantifiable Contingencies
The Schedule of Contingencies contains $10,958 of contingent liabilities (2013: $239,892) for claims in
respect of matters with expected costs orders against the Official Receiver and Inspector General. This is an
estimate based on information available to AFSA at year end.
Unquantifiable Contingencies
AFSA could be liable for legal costs, damages or other court awards against the Official Trustee, Official
Receiver or Inspector-General for legal actions initiated with respect to:
a) their administration or regulation of the personal insolvency system in Australia, particularly under
the Bankruptcy Act 1966; or
b) the Official Trustee’s role under the Proceeds of Crime Act 1987 and the Proceeds of Crime Act
2002.
AFSA advances moneys to the OT to ensure it can pay expenses incurred in performing its trustee duties
when there are no funds in bankrupt estates or proceed of crime matters. If funds eventually come into the
estate or matter, then the OT is reimbursed and funds returned to AFSA.
At 30 June 2014, AFSA was involved in extremely complex legal proceedings with a number of parties
involving the administration of and possible claims against forfeited assets under Proceeds of Crime
legislation. It is not possible to reliably estimate the total of any eventual amounts that may be received or
paid in relation to these claims and subsequent reimbursement of costs to AFSA.
Funding is approved under section 305 of the Bankruptcy Act 1966 for bankruptcy trustees to instigate or
defend legal proceedings. It is not possible to estimate the extent that approved and unutilised funding will
be used in the future.
Significant Remote Contingencies
AFSA has a number of remote contingencies as at 30 June 2014, which are not expected to result in any
potential gains or losses. These contingencies arise for the same reasons as the unquantifiable contingencies
above. The probability of the liability crystallising has been assessed as remote. These were not included in
the Schedule of Contingencies.
152
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 12: Senior Executive Remuneration
Short-term employee benefits
Salary
Other
Total short-term employee benefits
Post-employment benefits
Superannuation
Total post-employment benefits
Other long-term employee benefits
Annual leave accrued
Long-service leave
Total other long-term employee benefits
Termination benefits
Voluntary redundancy payments
Total termination benefits
Total senior executive remuneration expenses
2014
$
2013
$
1,407,526
35,004
1,442,530
1,274,377
35,753
1,310,130
201,356
201,356
186,110
186,110
28,808
49,575
78,384
10,024
(35,199)
(25,175)
-
-
1,722,270
1,471,065
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 12A: Senior Executive Remuneration Expense for the Reporting Period
Notes:
1. "Other" includes car parking and other allowances.
2. Note 12A excludes acting arrangements and part-year service where total remuneration expensed as a senior executive was less
than $195,000.
3. Note 12A was prepared on an accrual basis.
153
154
Substantive
senior
Average annual reportable remuneration1
executives
No.
Total reportable remuneration (including part-time arrangements)
less than $195,000
3
$225,000 to $254,999
3
$345,000 to $374,999
1
Total number of substantive senior executives
7
Average annual reportable remuneration paid to substantive executives in 2013
Substantive
senior
Average annual reportable remuneration1
executives
No.
Total reportable remuneration (including part-time arrangements)
less than $195,000
2
$195,000 to $224,999
2
$225,000 to $254,999
2
$255,000 to $284,999
1
$405,000 to $434,999
1
Total number of substantive senior executives
8
Contributed
superannuation3
$
12,858
30,750
49,548
95,721
205,434
297,194
21,896
25,369
33,376
36,556
46,284
151,958
182,950
202,916
232,530
372,703
Reportable
salary2
$
Contributed
superannuation3
$
Reportable
salary2
$
Average annual reportable remuneration paid to substantive executives in 2014
-
Reportable
allowances4
$
-
Reportable
allowances4
$
Note 12B: Average Annual Reportable Remuneration Paid to Substantive Senior Executives during the Reporting Period
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
-
Bonus paid5
$
-
Bonus paid5
$
108,579
236,183
346,742
Total
reportable
remuneration
$
173,854
208,319
236,292
269,086
418,986
Total
reportable
remuneration
$
155
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
5. 'Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. AFSA does not pay any bonuses under the
‘AFSA Enterprise Agreement 2011-2014’.
4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.
3. The 'contributed superannuation' amount is the average cost to AFSA for the provision of superannuation benefits to substantive senior executives in that
reportable remuneration band during the reporting period.
2. 'Reportable salary' includes the following:
a) gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column);
b) reportable fringe benefits (at the net amount prior to 'grossing up' for tax purposes);
c) reportable employer superannuation contributions; and
d) exempt foreign employment income.
Notes:
1. This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for
individuals in the band.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
156
Other highly
Average annual reportable remuneration1
paid staff
No.
Total reportable remuneration (including part time arrangements)
$195,000 to $224,999
1
Total number of other highly paid staff
1
Average annual reportable remuneration paid to other highly paid staff in 2013
Other highly
Average annual reportable remuneration1
paid staff
No.
Total reportable remuneration (including part time arrangements)
$195,000 to $224,999
3
$225,000 to $254,999
1
Total number of other highly paid staff
4
Contributed
superannuation3
$
31,790
165,956
25,324
17,962
176,420
213,261
Reportable
salary2
$
Contributed
superannuation3
$
Reportable
salary2
$
Average annual reportable remuneration paid to other highly paid staff in 2014
-
Reportable
allowances4
$
-
Reportable
allowances4
$
Note 12C: Average Annual Reportable Remuneration Paid to Other Highly Paid Staff during the Reporting Period
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
-
Bonus paid5
$
-
Bonus paid5
$
197,746
Total
reportable
remuneration
$
201,744
231,223
Total
reportable
remuneration
$
157
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
5. 'Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. AFSA does not pay any bonuses under the
‘AFSA Enterprise Agreement 2011-2014’.
4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.
3. The 'contributed superannuation' amount is the average cost to the AFSA for the provision of superannuation benefits to other highly paid staff in that reportable
remuneration band during the reporting period.
2. 'Reportable salary' includes the following:
a) gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column);
b) reportable fringe benefits (at the net amount prior to 'grossing up' for tax purposes);
c) reportable employer superannuation contributions; and
d) exempt foreign employment income.
Notes:
1. This table reports staff:
a) who were employed by the entity during the reporting period;
b) whose reportable remuneration was $195,000 or more for the reporting period; and
c) were not required to be disclosed in Table B or director disclosures.
Each row is an averaged figure based on headcount for individuals in the band.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 13: Remuneration of Auditors
2014
$'000
2013
$'000
253
57
310
220
50
270
Financial statement audit services were provided free of charge to AFSA by
the Australian National Audit Office (ANAO).
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Fair value of services received
Financial statement audit services
Bankruptcy accounts and records audit
Total fair value of services received
The ANAO provided assurance engagements free of charge to AFSA.
158
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 14A: Categories of Financial Instruments
Financial Assets
Loans and receivables
Cash - at bank and on hand
Receivables - goods and services
Other receivables
Total loans and receivables
Total financial assets
Financial Liabilities
Financial liabilities measured at amortised cost
Suppliers payable
Other payables
Total financial liabilities measured at amortised cost
Total financial liabilities
2014
$'000
2013
$'000
1,831
4,687
81
6,599
6,599
2,823
4,271
219
7,313
7,313
5,811
1,642
7,453
7,453
4,587
1,383
5,970
5,970
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 14: Financial Instruments
There is no net income or expenses associated with either the financial assets or financial liabilities (2013: nil).
Note 14B: Fair Value of Financial Instruments
Carrying
amount
2014
$'000
Fair
value
2014
$'000
Carrying
amount
2013
$'000
Fair
value
2013
$'000
Financial Assets
Cash - at bank and on hand
Receivables - goods and services
Other receivables
Total financial assets
1,831
4,687
81
6,599
1,831
4,687
81
6,599
2,823
4,271
219
7,313
2,823
4,271
219
7,313
Financial Liabilities
Suppliers payable
Other payables
Total financial liabilities
5,811
1,642
7,453
5,811
1,642
7,453
4,587
1,383
5,970
4,587
1,383
5,970
159
160
Notes
6A
6B
Receivables - goods and services
Total
Ageing of financial assets that were past due but not impaired for 2013
Receivables - goods and services
Total
Notes
6B
Notes
6B
Ageing of financial assets that were past due but not impaired for 2014
Cash - at bank and on hand
Receivables - goods and services
Total
0 to 30 days
$'000
746
746
0 to 30 days
$'000
997
997
Not past due
nor impaired
2014
$'000
1,831
3,613
5,444
Credit quality of financial assets not past due or individually determined as impaired
31 to 60 days
$'000
70
70
31 to 60 days
$'000
61
61
Not past due
nor impaired
2013
$'000
2,823
3,403
6,226
61 to 90 days
$'000
27
27
61 to 90 days
$'000
11
11
Past due or
impaired
2014
$'000
1,074
1,074
90+ days
$'000
25
25
90+ days
$'000
5
5
Past due or
impaired
2013
$'000
868
868
Total
$'000
868
868
Total
$'000
1,074
1,074
All figures for credit risk referred to do not take into account the value of any collateral or other security. AFSA has no significant exposures to any concentrations of credit risk.
The maximum exposure to credit risk is the risk that arises from potential default of a debtor or non collectability of debt amounts. This amount is equal to the total amount of goods
and services receivables totalling $4,867,000 (2013: $4,496,000). AFSA has assessed the risk of the non collectability of debt amounts and has made an allocation for impairment
allowance of $180,000 (2013: $225,000).
AFSA's maximum exposure to credit risk at reporting date in relation to each class of recognised financial asset is the carrying amount of those assets as indicated in the Balance
Sheet.
Note 14C: Credit Risk
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
161
Notes
8A
8B
Notes
8A
8B
On
demand
$'000
-
On
demand
$'000
-
Within 1
year
$'000
4,587
1,383
5,970
Within 1
year
$'000
5,811
1,642
7,453
1 to 2
years
$'000
-
1 to 2
years
$'000
-
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AFSA holds basic financial instruments that do not expose AFSA to significant 'currency risk' or 'other price risk'.
Note 14E: Market Risk
AFSA had no derivative financial liabilities in 2014 (2013: nil).
Suppliers
Other payables
Total
Maturities for non-derivative financial liabilities 2013
Suppliers
Other payables
Total
Maturities for non-derivative financial liabilities 2014
2 to 5
years
$'000
-
2 to 5
years
$'000
-
AFSA manages liquidity risk throughout the year by monitoring cash and deposit balances and the due dates (or maturities) for major liabilities.
More than
5 years
$'000
-
More than
5 years
$'000
-
Total
$'000
4,587
1,383
5,970
Total
$'000
5,811
1,642
7,453
AFSA’s financial liabilities are suppliers and other payables. Exposure to liquidity risk involves consideration of whether any difficulty will be encountered in meeting obligations
associated with financial liabilities.
Note 14D: Liquidity Risk
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 15: Financial Assets Reconciliation
2014
$'000
2013
$'000
Total financial assets as per statement of financial
position
39,221
29,702
Less: non-financial instrument components
Appropriations receivable
Other receivables
Total non-financial instrument components
Total financial assets as per financial instruments note
30,189
2,433
32,622
6,599
20,477
1,912
22,389
7,313
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Notes
162
14B
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 16A: Write-Down and Impairment of Assets
Impairment allowance
Bad debts
Total write-down and impairment of assets
2014
$'000
2013
$'000
1,044
1,044
9,094
150
9,244
33
27,100
18
152
44,362
71,665
33
11,711
177
202
297
12,420
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 16: Administered Expenses
Note 16B: Other Expenses
Official Trustee management fees
Program payments under Proceeds of Crime Act 2002 s298
Payments to the Official Trustee
Transcription services
Restitution payments
Other payments
Total other expenses
163
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 17: Administered Income
2014
$'000
2013
$'000
21,644
914
22,558
19,213
2,821
22,034
12,687
68,935
9,012
3,893
4,265
2,820
1,248
102,860
2,907
24,946
8,073
3,582
4,279
2,106
780
46,673
512
1,565
2,077
770
2,297
1
3,068
17,025
862
22
17,909
583
13,245
18
13,846
Revenue
Taxation Revenue
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 17A: Charges
Realisations charge
Interest charge
Total charges
Non-Taxation Revenue
Note 17B: Fees and Fines
Pecuniary Penalty Orders
Forfeiture Orders
Official Trustee fees
NPII search fees
Bankruptcy notice fees
Debt agreement proposal fees
Other
Total fees and fines
Note 17C: Interest
Interest on Common Investment Fund
Interest on CAA Special Account
Interest on CASA Special Account
Total interest
Note 17D: Other Revenue
Revenue under Proceeds of Crime Act 2002
Equitable sharing program
Other receipts
Total other revenue
164
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2014
$'000
2013
$'000
11
88,023
230
199
88,463
22
76,804
219
189
77,234
Accrued fees and charges
Total taxation receivables (gross)
11,651
11,651
9,730
9,730
Less: impairment allowance
Total taxation receivables (net)
11,651
9,730
11,651
9,730
11,651
9,730
Note 18A: Cash and Cash Equivalents
Confiscated Assets Special Account
Confiscated Assets Account
AFSA Administered bank account
CIF account
Total cash and cash equivalents
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 18: Administered Financial Assets
Note 18B: Taxation Receivables
Taxation receivables (gross) aged as follows
Not overdue
Overdue by
0 to 30 days
31 to 60 days
61 to 90 days
More than 90 days
Total taxation receivables (gross)
165
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 18C: Other Receivables
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Pecuniary Penalty Orders
DPP Fines and Costs
Forfeiture Order
Official Trustee fees
NPII search fees
Bankruptcy notice fees
Special Account Interest
Other
Total other receivables (gross)
Less
Impairment allowance
Total other receivables (net)
Other receivables (net) expected to be recovered
No more than 12 months
More than 12 months
Total other receivables (net)
Other receivables (gross) aged as follows
Not overdue
Overdue by
0 to 30 days
31 to 60 days
61 to 90 days
More than 90 days
Total other receivables (gross)
Impairment allowance aged as follows
Not overdue
Overdue by
0 to 30 days
31 to 60 days
61 to 90 days
More than 90 days
Total impairment allowance
166
2014
$'000
2013
$'000
40,267
239
16,211
4,098
300
61
147
914
62,237
31,838
170
8,881
2,543
263
416
171
775
45,057
(13,228)
49,009
(12,306)
32,751
49,009
49,009
32,751
32,751
6,361
12,964
25
817
1
55,033
62,237
1,530
29
18
30,516
45,057
-
(1)
(15)
(7)
(2)
(13,204)
(13,228)
(7)
(6)
(232)
(12,060)
(12,306)
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Opening balance
Amounts written off
Amounts recovered and reversed
Increase/(Decrease) recognised in net cost of services
Closing balance
Taxation
receivables
$'000
-
Other
receivables
$'000
(12,306)
122
79
(1,123)
(13,228)
Total
$'000
(12,306)
122
79
(1,123)
(13,228)
Taxation
receivables
$'000
-
Other
receivables
$'000
(3,212)
150
(9,244)
(12,306)
Total
$'000
(3,212)
150
(9,244)
(12,306)
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Reconciliation of the Impairment Allowance
Movements in relation to 2014
Movements in relation to 2013
Opening balance
Amounts written off
Amounts recovered and reversed
Increase/(Decrease) recognised in net cost of services
Closing balance
Credit term for goods and services were within 30 days. (within 30 days: 2013)
Note 19: Administered Payables
2014
$'000
2013
$'000
Statutory payable
Other payables
Total other payables
18
147
165
18
1,356
1,374
Other payables expected to be settled
No more than 12 months
More than 12 months
Total other payables
165
165
1,374
1,374
Note 19A: Other Payables
Settlement is usually made within 30 days.
167
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 20: Administered Cash Flow Reconciliation
2014
$'000
2013
$'000
Cash and cash equivalents as per
Schedule of administered cash flows
Schedule of administered assets and liabilities
Discrepancy
88,463
88,463
-
77,234
77,234
-
Reconciliation of net cost of services to net cash from/(used by)
operating activities
Net (cost of)/contribution by services
72,695
63,957
(18,179)
(1,638)
(1,209)
53,307
1,341
63,660
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Reconciliation of cash and cash equivalents as per administered
schedule of assets and liabilities to administered cash flow statement
Movements in assets and liabilities
Assets
(Increase) /Decrease in net receivables
Liabilities
Increase /(Decrease) in other payables
Net cash from/(used by) operating activities
Note 21: Administered Contingent Assets and Liabilities
Quantifiable Administered Contingencies
AFSA had no quantifiable contingencies at 30 June 2014 (2013 : Nil) .
Unquantifiable Administered Contingencies
AFSA could be liable for legal costs, damages or other court awards against the Official Trustee for legal
actions initiated with respect to the Official Trustee’s role under the Proceeds of Crime Act 1987 and the
Proceeds of Crime Act 2002.
At 30 June 2014, AFSA was involved in extremely complex legal proceedings with a number of parties
involving the administration of and possible claims against forfeited proceeds of crime assets. It is not
possible to reliably estimate the total of any eventual amounts that may be received or paid in relation to
these claims.
Significant Remote Administered Contingencies
AFSA had no significant remote contingencies at 30 June 2014.
168
Note 22: Administered Financial Instruments
Note 22A: Categories of Financial Instruments
Financial Assets
Loans and receivables
Cash - at bank and on hand
Receivables - administered revenues
Total loans and receivables
Total financial assets
Financial Liabilities
Financial liabilities measured at amortised cost
Other payables
Total financial liabilities measured at amortised cost
Total financial liabilities
2014
$'000
2013
$'000
88,463
147
88,610
88,610
77,234
171
77,405
77,405
147
147
147
1,356
1,356
1,356
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 22B: Fair Value of Financial Instruments
Financial Assets
Cash - on hand and at bank
Receivables - administered revenues
Total financial assets
Financial Liabilities
Other payables
Total financial liabilities
Carrying
amount
2014
$'000
Fair
value
2014
$'000
Carrying
amount
2013
$'000
Fair
value
2013
$'000
88,463
147
88,610
88,463
147
88,610
77,234
171
77,405
77,234
171
77,405
147
147
147
147
1,356
1,356
1,356
1,356
Note 22C: Net Gains or Losses on Financial Assets
Loans and receivables
Interest revenue
Net gains/(losses) on loans and receivables
Net gains/(losses) on financial assets
2,077
2,077
2,077
3,068
3,068
3,068
169
170
Receivables
Total
Ageing of financial assets that were past due but not impaired for 2013
Receivables
Total
Notes
18B
Notes
18B
Ageing of financial assets that were past due but not impaired for 2014
0 to 30 days
$'000
-
0 to 30 days
$'000
-
Credit quality of financial assets not past due or individually determined as impaired
Not past due
nor impaired
2014
Notes
$'000
Cash - at bank and on hand
18A
88,463
Receivables
18B & 18C
147
Total
88,610
All figures for credit risk referred to do not take into account the value of any collateral or other security.
AFSA has no significant exposures to any concentrations of credit risk.
31 to 60 days
$'000
-
31 to 60 days
$'000
-
Not past due
nor impaired
2013
$'000
77,234
171
77,405
61 to 90 days
$'000
-
61 to 90 days
$'000
-
Past due or
impaired
2014
$'000
-
90+ days
$'000
-
90+ days
$'000
-
Past due or
impaired
2013
$'000
-
The maximum exposure to credit risk is the risk that arises from potential default of a debtor or non collectability of debt amounts. This amount is equal to the total amount of
receivables totalling $146,804 (2013: $170,669). AFSA has assessed the risk of the non collectability of debt amounts and has made nil impairment allowance for financial
insstructments for 2014 (2013: nil).
AFSA's maximum exposure to credit risk at reporting date in relation to each class of recognised financial asset is the carrying amount of those assets as indicated in the
Administered Schedule of Assets and Liabilities.
Note 22D: Credit Risk
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Total
$'000
-
Total
$'000
-
171
Notes
19
Notes
19
On
demand
$'000
-
On
demand
$'000
-
Within 1
year
$'000
1,356
1,356
Within 1
year
$'000
147
147
1 to 2
years
$'000
-
1 to 2
years
$'000
-
2 to 5
years
$'000
-
2 to 5
years
$'000
-
More than
5 years
$'000
-
More than
5 years
$'000
-
Total
$'000
1,356
1,356
Total
$'000
147
147
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Interest Rate Risk
AFSA bank deposits are undertaken in consideration of the interest rate risk associated with changing market interest rates.
AFSA holds basic financial instruments that do not expose AFSA to certain market risks. AFSA is not exposed to significant 'currency risk' or 'other price risk'.
Note 22F: Market Risk
Other payables
Total
Maturities for non-derivative financial liabilities 2013
Other payables
Total
Maturities for non-derivative financial liabilities 2014
AFSA manages liquidity risk throughout the year by monitoring cash and deposit balances and the due dates (or maturities) for major liabilities.
Note 22E: Liquidity Risk
AFSA’s financial liabilities are other payables. Exposure to liquidity risk involves consideration of whether any difficulty will be encountered in meeting
obligations associated with financial liabilities.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 23: Administered Financial Assets Reconciliation
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Total financial assets as per administered schedule of assets and
liabilities
Less: non-financial instrument components
Taxation receivables
Other receivables
Total non-financial instrument components
Total financial assets as per administered financial instruments note
172
2014
$'000
2013
$'000
149,123
119,715
11,651
48,862
60,513
9,730
32,580
42,310
88,610
77,405
173
-
49,174
$'000
49,174
$'000
-
$'000
-
295
295
54,221
54,221
$'000
$'000
-
103,690
103,690
$'000
90,053
90,053
years)
$'000
and prior
2014 (current
applied in
Appropriation
13,636
13,636
$'000
Variance
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Notes:
1. Appropriations reduced under Appropriation Acts (No. 1& 3) 2013-14: sections 10, 11and 12 and under Appropriations Acts (No. 2 & 4) 2013-14: sections 12, 13 and 14. Departmental
appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request the Finance Minister to
reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister’s determination and is disallowable by Parliament.
2. Advance to the Finance Minister (AFM) - Appropriation Acts (No. 1& 3) 2013-14: section 13 and Appropriation Acts (No. 2 & 4) 2013-14: section 15.
Departmental
Ordinary annual services
Other services
Equity
Total departmental
$'000
Section 32
Total
Section 31
appropriation
Section 30
reduced1
AFM2
Appropriations
FMA Act
Annual
Appropriation Act
Appropriation
Annual Appropriations for 2014
Note 24A: Annual Appropriations ('Recoverable GST exclusive')
Note 24: Appropriations
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
174
-
46,399
$'000
46,399
$'000
-
$'000
-
-
-
47,396
47,396
$'000
$'000
-
93,795
93,795
$'000
96
88,760
88,664
years)
$'000
and prior
2013 (current
applied in
Appropriation
(96)
5,035
5,131
$'000
Variance
Notes:
1. Appropriations reduced under Appropriation Acts (No. 1& 3) 2012-13: sections 10, 11and 12 and under Appropriations Acts (No. 2 & 4) 2012-13: sections 12, 13 and 14. Departmental
appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request the Finance Minister to
reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister’s determination and is disallowable by Parliament.
2. Advance to the Finance Minister (AFM) - Appropriation Acts (No. 1& 3) 2012-13: section 13 and Appropriation Acts (No. 2 & 4) 2012-13: section 15.
3. At 30 June 2013, advice had been issued on behalf of the Prime Minister that there would be a reduction in appropriation of $161,000 but a determination had not been issued by the Finance
Minister. Table A does not, therefore, reflect this reduction. The determination was subsequently issued by the Finance Minister on 5 August 2013
Departmental
Ordinary annual services
Other services
Equity
Total departmental
$'000
Section 32
Total
Section 31
appropriation
Section 30
reduced1
AFM2
Appropriations
FMA Act
Annual
Appropriation Act
Appropriation
Annual Appropriations for 2013
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
175
2,135
-
Appropriations
reduced2
$'000
-
Section 32
$'000
2,135
Total Capital
Budget
Appropriations
$'001
3,361
Payments for
non-financial
assets3
$'000
-
Payments for
other
purposes
$'000
3,361
Total
payments
$'000
Capital Budget Appropriations applied in 2014
(current and prior years)
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
(1,226)
Variance
$'000
Notes:
1. Departmental Capital Budgets are appropriated under Appropriation Acts (No. 1, 3, 5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. For
more information on ordinary annual services appropriations, please see Table A: Annual Appropriations. AFSA does not receive any administered capital budget appropriations.
2. Appropriations reduced under Appropriation Acts (No.1, 3, 5) 2013-14: sections 10, 11, 12 and 15 or via a determination by the Finance Minister.
3. Payments made on non-financial assets include purchases of assets, expenditure on assets which has been capitalised, costs incurred to make good an asset to its original condition, and the capital
repayment component of finance leases.
Ordinary annual services Departmental Capital Budget1
Departmental
Annual
Capital
Budget
$'000
2014 Capital Budget Appropriations
Appropriation Act
FMA Act
Note 24B: Departmental and Administered Capital Budgets ('Recoverable GST exclusive')
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
176
2,119
-
Appropriations
reduced2
$'000
-
Section 32
$'000
2,119
Total Capital
Budget
Appropriations
$'001
3,662
Payments for
non-financial
assets3
$'000
-
Payments for
other
purposes
$'000
3,662
Total
payments
$'000
Capital Budget Appropriations applied in 2013
(current and prior years)
(1,543)
Variance
$'000
Notes:
1. Departmental Capital Budgets are appropriated under Appropriation Acts (No. 1, 3, 5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. For
more information on ordinary annual services appropriations, please see Table A: Annual Appropriations. AFSA does not receive any administered capital budget appropriations.
2. Appropriations reduced under Appropriation Acts (No.1, 3, 5) 2012-2013: sections 10, 11, 12 and 15 or via a determination by the Finance Minister.
3. Payments made on non-financial assets include purchases of assets, expenditure on assets which has been capitalised, costs incurred to make good an asset to its original condition, and the capital
repayment component of finance leases.
Ordinary annual services Departmental Capital Budget1
Departmental
Annual
Capital
Budget
$'000
2013 Capital Budget Appropriations
Appropriation Act
FMA Act
Note 24B: Departmental and Administered Capital Budgets ('Recoverable GST exclusive') (continued)
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Departmental
Appropriation Act no. 1 2011-12
Appropriation Act no. 3 2011-12
Appropriation Act no. 4 2011-12
Appropriation Act no. 1 2012-13
Appropriation Act no. 1 2013-14
Total departmental
2014
$'000
2013
$'000
32,115
32,115
5,600
17,861
23,461
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 24C: Unspent Departmental Annual Appropriations ('Recoverable GST exclusive')
AFSA did not receive any administered annual appropriations (2013: Nil).
177
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 24D: Special Appropriations ('Recoverable GST exclusive')
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Authority
Bankruptcy Act 1966 Section
286(3), (Administered)
Proceeds of Crime Act 1987
Section 20(3)(b), (Administered)
Proceeds of Crime Act 2002
Section 70(1)(b), (Administered)
Proceeds of Crime Act 2002
Section 70(1)(c), (Administered)
Proceeds of Crime Act 1987
Section 30(4)(b), (Administered)
Proceeds of Crime Act 2002
Section 100(1)(b), (Administered)
Proceeds of Crime Act 2002
Section 100(1)(c), (Administered)
178
Type
Purpose
Unlimited
To refund overpayments of a
charge or penalty, and to
remit fees that have caused
undue hardship
Unlimited
To give effect to forfeiture
orders, official trustee
remuneration & credit to
CASA for proceeds of
confiscated assets
Appropriation
Applied
2013
2014
$'000
$'000
442
297
-
-
Unlimited
To apply payments of
remuneration and other costs,
charges and expenses of the
kind referred to in subsection
288(1) payable
1,355
344
Unlimited
To credit remainder of money
to CAA as required by section
296
65,759
33,031
Unlimited
To give effect to forfeiture
orders, official trustee
remuneration in case of
serious offence
-
-
Unlimited
To apply payments of
remuneration and other costs,
charges and expenses of the
kind referred to in subsection
288(1) payable on conviction
of a serious offence
-
-
Unlimited
To credit the remainder of the
money and amounts received
to the CAA as required by
section 296 on conviction of a
serious offence
-
-
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Type
Purpose
Proceeds of Crime Act 1987
Section 101, (Administered)
Unlimited
To pay amounts ordered by
the court
Proceeds of Crime Act 2002
Section 323, (Administered)
Unlimited
Total for unlimited special appropriations
To pay amounts ordered by
the court
Financial Management &
Accountability Act 1997 Section 28 Refund
Total for refund special appropriations
Total Special Appropriations
To repay amounts required or
permitted by law
-
-
67,556
33,672
91
91
67,647
202
202
33,874
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Authority
Appropriation
Applied
2013
2014
$'000
$'000
179
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 25: Compliance with Statutory Conditions for Payments from the
Consolidated Revenue Fund
Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund
except under an appropriation made by law. The Department of Finance provided information to all
agencies in 2012 regarding the need for risk assessments in relation to compliance with statutory conditions
on payments from special appropriations, including special accounts.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
During 2012-13 additional legal advice was received that indicated there could be breaches of Section 83
under certain circumstances with payments for long service leave, goods and services tax and payments
under determinations of the Remuneration Tribunal. AFSA engaged a third party to undertake a review of
the 2012-13 and 2013-14 financial years. The review identified one instance of a breach of the statutory
conditions on payments in relation to an overpayment of long service leave in the sum of $3,421. The
amount of the overpayment has been recovered by AFSA.
180
181
1,369,421
725,397
44,492
769,890
2,139,311
-
189,311
485,203
24,392
-
509,595
698,906
-
-
-
21,889
-
-
21,889
-
-
32,729
-
-
32,729
Confiscated Assets
Special Account2
2013
2014
$
$
-
-
862,218
17,024,686
83,646,089
160,450,116
65,759,185
-
-
76,804,027
-
-
13,245,347
583,433
33,862,043
88,453,755
20,032,504
759
-
54,591,712
Confiscated Assets
Account3
2013
2014
$
$
-
-
-
-
-
-
-
-
172,339
-
-
172,339
Other Trust Moneys
Special Account4
2013
2014
$
$
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Balance brought forward from previous
period
Increases
Interest transferred from CIF Investments
Interest amounts credited
Recovery from CRF for s20(J)
Forfeiture orders and pecuniary penalty
orders
Other receipts
Receipts under restraining orders
Receipts under Equitable Sharing
program
Receipts under Customs Act
Refund of s298 Payments
Special Account receipts
Transfers in
Total increases
Available for payments
Decreases
Departmental
Payments made
Investments made from the special
account
Total departmental
Common Investment
Fund Equalisation
Account1
2013
2014
$
$
Note 26A: Special Accounts ('Recoverable GST exclusive')
Note 26: Special Accounts and FMA Act Section 39
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-
-
-
-
-
-
-
-
5,174
5,174
5,174
-
-
-
Services for Other
Entities and Trust
Moneys Special
Account5
2013
2014
$
$
182
500,000
500,000
500,000
198,906
Administered
Payments made to Consolidated
Revenue Fund (CRF) in accordance with
section 20H
Annual management fees
Program payments under s298
Payments to the Official Trustee
Transcription services
Restitution payments
Other payments
Payments to third parties under s20J
Total administered
Special Public Money
Special account payments
Other payments
Transfers out
Total special public money
Total decreases
Total balance carried to the next period
1,950,000
189,311
1,950,000
1,950,000
Common Investment
Fund Equalisation
Account1
2013
2014
$
$
10,840
11,049
10,840
10,840
10,840
21,889
10,840
10,840
Confiscated Assets
Special Account2
2013
2014
$
$
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
72,427,266
88,022,850
22,000
27,867,161
17,911
157,709
44,362,486
72,427,266
11,649,728
76,804,027
22,000
10,944,224
171,409
200,000
312,095
11,649,728
Confiscated Assets
Account3
2013
2014
$
$
-
172,339
172,339
172,339
-
-
Other Trust Moneys
Special Account4
2013
2014
$
$
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
-
-
5,174
5,174
5,174
-
-
Services for Other
Entities and Trust
Moneys Special
Account5
2013
2014
$
$
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. Appropriation: Financial Management and Accountability Act 1997 section 21 Establishing Instrument:
Bankruptcy Act 1966 section 20G
Purpose: For handling interest derived from the investment of money in the Common Investment Fund in
accordance with sections 20H and 20J of the Bankruptcy Act 1966.
2. Appropriation: Financial Management and Accountability Act 1997 section 21 Establishing Instrument:
Proceeds of Crime Act 1987, section 34A
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Purpose: To receive and deal with proceeds of confiscated assets in accordance with sections 34B -34E of
the Proceeds of Crime Act 1987.
3. Appropriation: Financial Management and Accountability Act 1997 section 21 Establishing Instrument:
Proceeds of Crime Act Crime Act 2002, section 295
Purpose: The purpose of the account is to receive and deal with proceeds of confiscated assets in
accordance with sections 296 – 299 of the Proceeds of Crime Act Crime Act 2002.
4. Appropriation: Financial Management and Accountability Act 1997, section 21 Establishing Instrument:
Financial Management and Accountability Act 1997, section 20
Purpose: For expenditure of moneys temporarily held on trust or otherwise for the benefit of a person other
than the Commonwealth. Pursuant to Financial Management and Accountability Determination 2012/02 the
account was abolished on 26 June 2012. In accordance with Department of Finance advice the funds held
in this account were transferred to the Consolidate Revenue Fund during the year. The funds are available
to be drawn down as required for payments to third parties.
5. Appropriation: Financial Management and Accountability Act 1997, section 21 Establishing Instrument:
Financial Management and Accountability Act 1997, section 20
Purpose: For the expenditure of moneys temporarily held on trust or otherwise for the benefit of a person
other than the Commonwealth. The Services for Other Entities and Trust Moneys Special Account replaced
Other Trust Moneys Special Account.
183
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 27: Other Assets Held in Trust
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Non-monetary assets
The Official Receiver holds assets in trust on behalf of individuals pursuant to Court Orders made under
Child Support Assessment Act 1989.
2014
$'000
2013
$'000
Non-monetary Assets
As at 1 July
Additions
Disposals
Changes in fair value
Total as at 30 June
3,119
(651)
(331)
2,137
3,170
(500)
449
3,119
Total assets held in trust
2,137
3,119
The values noted above are estimated fair values at the end of the reporting period.
The assets are comprised of real property
184
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2014
$
2013
$
Nil
Nil
48,253
Nil
Nil
Nil
471,880
Nil
Nil
Nil
No waivers were granted by the Inspector-General under the Bankruptcy
Act 1996 and Bankruptcy Regulations (2013: Nil).
Nil
Nil
No ex-gratia payments were provided for during the reporting period.
(2013: Nil).
Nil
Nil
There were no 'Act of Grace' payments during the reporting period (2013:
Nil).
Nil
Nil
There were no payments were made during the reporting period under the
Compensation for Detriment caused by Defective Administration (CDDA)
Scheme (2013: No payments).
Nil
Nil
There were no waivers of amounts owning to the Australian Government
made pursuant to subsection 34(1) of the Financial Management and
Accountability Act 1997 (2013: Nil).
Nil
Nil
No payments were made under s73 of the Public Service Act 1999 during
the reporting period (2013: Nil).
Nil
Nil
Departmental
No payments were made under s73 of the Public Service Act 1999 during
the reporting period (2013: Nil).
There was one payment made during the reporting period under the
Compensation for Detriment caused by Defective Administration caused by
Defective Administration (CDDA) Scheme (2013: Nil).
There were no "Act of Grace" payments during the reporting period (2013:
Nil).
There were two amounts owing to the Australian Government were made
pursuant to subsection 34(1) of the Financial Management and
Accountability Act 1997 (2013: Nil).
No ex-gratia payments were provided for during the reporting period
(2013: Nil).
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 28: Compensation and Debt Relief
Administered
185
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 29: Reporting of Outcomes
Note 29A: Net Cost of Outcome Delivery
Outcome 1
2013
2014
$'000
$'000
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Departmental
Expenses
Own-source income
Administered
Expenses
Income
Net cost/(contribution) of outcome delivery
186
Total
2014
$'000
2013
$'000
90,621
55,745
82,829
47,968
90,621
55,745
82,829
47,968
72,709
145,404
21,664
85,621
72,709
145,404
21,664
85,621
37,819
29,096
37,819
29,096
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2014
$'000
2013
$'000
49,259
40,794
56,343
32,417
1,888
91,941
843
89,603
Expenses
Departmental
Administered
Total expenses
90,311
90,311
82,559
82,559
Revenue
Departmental
Administered
Total revenue
54,870
43,216
98,086
45,779
40,344
86,123
4,410
3,497
1,010
62
158
8
185
771
72
208
35
525
123
4
5,959
187
15
5
7
5,322
454
454
-
Cost Recovery Summary
Amounts applied
Departmental
Annual appropriations
Own source revenue
Administered
Special appropriations (including special accounts)
Total amounts applied
Receivables
Not overdue
Overdue by
0 to 30 days
31 to 60 days
61 to 90 days
More than 90 days
Not overdue
Overdue by
0 to 30 days
31 to 60 days
61 to 90 days
More than 90 days
Total revenue
Amounts written off
Departmental
Administered
Total amounts written off
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 30: Competitive Neutrality and Cost Recovery
187
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Cost Recovered Activities
The activities which AFSA performs cost recovery upon are:
Insolvency Activities
Fees and charges related to the administration of the Bankruptcy Act 1966 including activities of the
Official Receiver and Official Trustee in relation to estate administration and, regulation and
enforcement under the Bankruptcy Act and administration of matters under the Proceeds of Crime
legislation.
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Documentation (the Cost Recovery Impact Statement) for Insolvency activities, is available at
https://www.afsa.gov.au/about-us/corporate-information/financial-statements-and-policies/cost-recoveryimpact-statement
Personal Property Security Register (PPSR) Activities
Fees and charges related to the operation of the PPSR relate to the registration of security interests, and
searches of the register by stakeholders.
Documentation (the Cost Recovery Impact Statement) for PPSR activities, is available at
http://www.ppsr.gov.au/AbouttheRegister/AboutFees/Pages/CostRecoveryImpactStatement.
Note 30B: Competitive Neutrality
AFSA was not subject to competitive neutrality during the year.
188
AUSTRALIAN FINANCIAL SECURITY AUTHORITY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2014
$'000
2013
$'000
Total comprehensive income less depreciation/amortisation expenses
previously funded through revenue appropriations1
15,195
13,390
Plus: depreciation/amortisation expenses previously funded through
revenue appropriation
(3,110)
(3,318)
Total comprehensive income - as per the Statement of
Comprehensive Income
12,085
10,072
7 . F inancial S tatements A U S T R A L I A N F I N A N C I A L S E C U R I T Y A U T H O R I T Y A N N U A L R E P O R T
Note 31: Net Cash Appropriation Arrangements
From 2010-11, the Government introduced net cash appropriation arrangements, where revenue appropriations for
depreciation/amortisation expenses ceased. Entities now receive a separate capital budget through equity appropriations. Capital
budgets are to be appropriated in the period when cash payment for capital expenditure is required.
189
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
ACRONYMS AND ABBREVIATIONS
190
ABN
Australian Business Number
ACN
Australian Company Number
AFSA
Australian Financial Security Authority
ARITA
Australian Restructuring Insolvency and Turnaround Association
APS
Australian Public Service
ASIC
Australian Securities and Investments Commission
B2G
business-to-government
CAA
Confiscated Assets Account
CDPP
Commonwealth Director of Public Prosecutions
FOI
freedom of information
FOI Act
Freedom of Information Act 1982
GST
goods and services tax
ICT
information and communications technology
IPS
Information Publication Scheme
ITSA
Insolvency and Trustee Service Australia
n.a.
not applicable
NABERS
National Australian Built Environment Rating System
NAIDOC
National Aboriginal and Islanders Day Observance Committee
NPII
National Personal Insolvency Index
NSC
National Service Centre
PPS Act
Personal Property Securities Act 2009
PPSR
Personal Property Securities Register
WHS
work health and safety
WHS Act
Work Health and Safety Act 2011
GLOSSARY
act of bankruptcy
An action or declaration which, if not carried through, can be used by a creditor to apply to the court to
make a person bankrupt.
administrative amendment demand process
A process under the Personal Property Securities Act 2009 which allows persons with an interest in
collateral described in a registration to demand to have the registration removed or amended in certain
circumstances.
Administrative Decisions (Judicial Review) Act 1977
An Act relating to the review on questions of law of certain administrative decisions.
all present and after-acquired property—no exceptions
A class of collateral that may be registered on the Personal Property Securities Register, sometimes
abbreviated to ‘AllPAAP’. This type of collateral class may arise if a grantor gives a security interest over
all of their present and future property under a general security agreement.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
all present and after-acquired property—with exceptions
A class of collateral that may be registered on the Personal Property Securities Register, sometimes
abbreviated to ‘AllPAAP except’. This type of collateral class may arise when a grantor gives a security
interest over all of their present and future property under a general security agreement, other than
particular excepted property.
annual estate return
The annual estate return is primarily used to collect information on the operation of the Bankruptcy
Act 1966 from debt agreement administrators, controlling trustees and registered trustees.
Subsection 12(1)(c) of the Bankruptcy Act empowers the Inspector-General in Bankruptcy to obtain this
information. AFSA also uses the annual estate return process for other purposes, such as calculation
of the annual realisations charges liability for monies received by administrators and trustees based
on data disclosed on the return; reconciliation of any realisations charges paid during the year; and
selection of administrations for inspection by AFSA’s Regulation and Enforcement division.
ASIC Register of Company Charges
Prior to commencement of the Personal Property Securities Register, company charges were recorded
on a register administered by the Australian Securities and Investments Commission (ASIC). Those
charges were migrated to the Personal Property Securities Register.
bankruptcy
A process where people who cannot pay their debts become bankrupt to receive the protection of
the Bankruptcy Act and their estate is administered by a trustee. It allows for the fair distribution of
property among creditors and the prosecution of dishonest debtors.
Bankruptcy Act 1966
The Commonwealth legislation which covers bankruptcy, Part IX (debt agreements) and
Part X arrangements. It deals with individuals; corporate entities are covered by the Corporations Law
administered by the Australian Securities and Investments Commission.
Bankruptcy (Estate Charges) Act 1997
An Act to impose charges in relation to certain matters under the Bankruptcy Act.
Bankruptcy Legislation Amendment Act 2010
An Act that introduced a range of amendments to the Bankruptcy Act 1966.
191
bankruptcy notice
A formal, final demand for payment of a debt by a creditor owed at least $2 000 on one or more final
judgments or final orders. This notice is issued by AFSA through the Official Receiver. Failure to pay
within 21 days is an act of bankruptcy.
bankruptcy trustee
See registered trustee.
Certificate of Appointment
A certificate issued by the Official Receiver confirming the appointment of a trustee to an insolvency
administration.
certification by registered debt agreement administrators
At the time a debt agreement proposal is lodged with the Debt Agreement Service, a debt agreement
administrator is required to make a certification pursuant to subsection 185C(2D) of the Bankruptcy
Act. There are four mandatory elements to each certification to do with consent, prescribed information,
affordability and sustainability, and full disclosure.
collateral class
On the Personal Property Securities Register, personal property that is collateral is divided into various
classes, such as motor vehicles, aircraft, intangible property, financial property, or ‘all present and
after-acquired property’.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
commercial property
Personal property other than consumer property.
Common Investment Fund
When AFSA, acting as the Official Trustee, administers an estate, all amounts held in respect of the
estate are deposited into the Common Investment Fund.
Commonwealth Electoral Act 1918
This Act requires AFSA to report on payments to advertising, market research, polling, direct mail and
media advertising organisations.
composition
See section 73 proposal.
consent to act
A Consent to Act and Trustee Declaration Form, completed jointly by a debtor and a trustee, gives
consent for the registered trustee to act on behalf of the debtor in the administration of that debtor’s
bankruptcy.
consumer property
Personal property of an individual person, except property held to carry on a business that has an
Australian Business Number (ABN).
controlling trustee of Part X section 188 authorities
Authority under section 188 of Part X of the Bankruptcy Act is given to either a person who is a private
bankruptcy trustee, AFSA or an eligible solicitor to investigate a debtor’s financial affairs and call a
meeting of the debtor’s creditors.
court
In the context of bankruptcy, the court usually refers to the Federal Court of Australia or the Federal
Circuit Court of Australia. Both of these courts can hear matters associated with personal insolvency.
creditor
A person or company to whom money is owed.
192
creditor’s petition
An application from a creditor to a court seeking to make a debtor involuntarily bankrupt (see
sequestration order).
Crimes Act 1914
Commonwealth legislation under which AFSA is responsible for investigating bankruptcy-related
offences.
Criminal Code Act 1995
Commonwealth legislation under which AFSA is responsible for investigating bankruptcy-related
offences.
custody and control orders
The court may order the Official Trustee to take custody and control of property covered by a restraining
order until further orders are made.
Customs Act 1901
See Proceeds of Crime Act 2002.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
debt agreement
Under Part IX of the Bankruptcy Act, a debt agreement results from creditors voting to accept a
proposal from a debtor to settle their debts. To be eligible to propose a debt agreement, a debtor must
be insolvent and meet threshold levels relating to unsecured debts and assets and after-tax income.
debt agreement administrator
An eligible person nominated by a debtor to handle a debt agreement on their behalf.
debtor
A person who owes money to a creditor.
debtor packs and fact sheets
AFSA has a number of information fact sheets available on specific issues in insolvency, together with a
pack of information issued to clients outlining the options available to deal with unmanageable debt.
debtor’s petition
An application from a debtor to become voluntarily bankrupt.
deceased estate
The estate of a deceased person. Part XI of the Bankruptcy Act contains provisions enabling the
insolvent estates of deceased persons to be administered in bankruptcy. It provides for both the
administration of deceased estates for persons who are insolvent at the date of death and those
deceased estates that subsequently become insolvent because of debts incurred by the legal personal
representative of the deceased estate.
declaration of intention to present a debtor’s petition
A device whereby a debtor may seek temporary relief from recovery action taken by a creditor. Once
such a declaration is accepted by AFSA, it prevents unsecured creditors from enforcing their debts for
a period of days. In December 2010, legislative changes increased the period of days from seven to
21 days. During this time debtors are able to consider their options under the Bankruptcy Act.
discharge
The end of bankruptcy. The date of discharge is the day after bankruptcy ends. The statutory period
of bankruptcy is three years and one day from when a person files their statement of affairs at AFSA
through the Official Receiver.
193
discharged bankrupt
The bankruptcy period automatically ends three years and one day after the date on which a bankrupt
files their statement of affairs without an objection to discharge being lodged. (See objection to
discharge from bankruptcy.)
distribution
See dividend.
dividend
A distribution that is made to creditors from any asset or income realisations in an administration
under the Bankruptcy Act.
Environment Protection and Biodiversity Conservation Act 1999
The government’s central piece of environmental legislation. It provides a legal framework to protect
and manage nationally and internationally important flora, fauna, ecological communities and heritage
places—defined in the Act as matters of national environmental significance.
equitable sharing programme
Arrangements between the Commonwealth and states or territories, or the Commonwealth and foreign
countries, whereby the proceeds of unlawful activities and breaches of criminal law are shared, based
on the contribution made to the recovery, investigation or prosecution of those proceeds.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
Financial Management and Accountability Act 1997
An Act to provide for the proper use and management of public money, public property and other
Commonwealth resources, and for related purposes. On 1 July 2014 it was replaced by the Public
Governance, Performance and Accountability Act 2013.
financing change statement
To change or amend information in a registration on the Personal Property Securities Register, a
person can lodge a financing change statement.
financing statement
To make a registration on the Personal Property Securities Register, a person lodges a financing
statement, which contains information about the interest in personal property that is being registered.
forfeited property
Property forfeited to the Commonwealth under proceeds of crime legislation.
forfeiture order
A court order forfeiting property to the Commonwealth under proceeds of crime legislation.
Freedom of Information Act 1982
An Act to give members of the public rights of access to official documents of the Australian
Government and of its agencies.
hoon lien
Some state and territory laws provide that motor vehicles used in the commission of certain offences
may be made subject to impoundment, immobilisation and forfeiture. A motor vehicle that has been the
subject of such sanctions may be registered on the Personal Property Securities Register as a ‘hoon lien’.
index search agent
A licensed information broker who can electronically access the National Personal Insolvency Index and
provide a search service to clients for a fee.
individual grantor
A person that is an individual person (as opposed to an organisation, such as a company) who grants a
security interest in personal property.
194
insolvent
A person is considered to be insolvent when they are unable to pay their debts as and when they fall due.
Inspector-General in Bankruptcy
An office created under the Bankruptcy Act to be responsible for the general administration of
the Bankruptcy Act and to have the powers to regulate bankruptcy trustees and debt agreement
administrators, review decisions of trustees and investigate allegations of offences under the Act.
interest charge
The interest earned on funds held by registered trustees and administrators is used to fund the cost of
conducting enquiries in certain bankruptcies, investigating alleged offences, monitoring and regulating
trustees and administrators and providing information to a range of clients.
Mutual Assistance in Criminal Matters Act 1987
An Act relating to the provision and obtaining of international assistance in criminal matters.
National Personal Insolvency Index
The permanent, electronic record of all personal insolvency administrations in Australia, which can be
accessed by anyone for a fee.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
non-conviction-based bonds
Where a person is charged with a federal offence, the court may order the person to be discharged
without conviction upon giving security by recognisance or otherwise, to the satisfaction of the court
(see section 19B of the Crimes Act 1914).
non-transitional security interest
A security interest that is created by a security agreement that was not in force prior to 30 January 2012
and continued in force after that time.
objection to discharge from bankruptcy
A period of bankruptcy can be extended by a trustee. When this happens, the trustee lodges an
objection with the Official Receiver at AFSA. Once it is registered on the National Personal Insolvency
Index, it is a valid objection. A trustee can lodge an objection if a bankrupt fails to cooperate, or fails
to meet the requirements of the Bankruptcy Act. In this instance, a bankruptcy can be extended to a
five or eight-year period from the date the bankrupt files their statement of affairs with AFSA through
the Official Receiver. In certain circumstances, the period of bankruptcy does not commence until a
bankrupt returns to Australia.
Official Receiver
A person who administers statutory functions under the Bankruptcy Act for the government. The
functions performed are different to those of a trustee.
Official Receiver notice
A notice issued by the Official Receiver, upon application by a trustee, to bankrupts, debtors or third
parties requiring them to provide information, attend to give information under oath, give access to
premises, deliver assets or make contribution payments, to better assist in the administration of a
bankrupt estate.
Official Trustee in Bankruptcy
The government equivalent of a registered trustee. This role is performed by employees at AFSA.
Ombudsman Act 1976
An Act to provide for the appointment of a Commonwealth Ombudsman to investigate people’s
complaints against public organisations.
organisational grantor
An organisation, such as a company, that grants a security interest in personal property.
195
outcome
Government outcomes are the intended results, impacts or consequences of actions by the government
on the Australian community.
Part X proposal
See personal insolvency agreement.
pecuniary penalty order
Under proceeds of crime legislation, if certain offences have been committed, pecuniary penalty orders can
be made, ordering payments to the Commonwealth of amounts based on the benefits that a person has
derived from such an offence and the benefits that the person has derived from other unlawful activity.
personal insolvency administrations
The total of all debt agreements, personal insolvency agreements, debtor’s petitions and sequestration
orders (including the administration of bankrupt deceased estates).
personal insolvency agreement
Under Part X of the Bankruptcy Act, a personal insolvency agreement results from creditors accepting
a debtor’s proposal to settle their debts. Unlike debt agreements, personal insolvency agreements are
not subject to income, asset or debt thresholds.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
personal insolvency practitioners
The combination of registered trustees in private practice, AFSA’s trustee function (the Official Trustee),
debt agreement administrators, and solicitors who act as trustees in personal insolvency agreements.
Personal Property Securities Act 2009
The Act responsible for setting law about security interests in personal property.
Personal Property Securities Register
A real-time online register where data in respect of security interests, as well as certain prescribed
personal property are registered. It acts as a noticeboard rather than as a definitive record of security
interests in personal property. It is not a register of title or ownership of personal property.
pre-bankruptcy moratorium
See declaration of intention to present a debtor’s petition.
prescribed property
In addition to security interests, registrations may be made on the Personal Property Securities
Register regarding certain types of property prescribed in the Personal Property Securities Regulations
2010, such as motor vehicles subject to hoon liens or property subject to a proceeds of crime order.
Proceeds of Crime Act 1987
See Proceeds of Crime Act 2002. Since the introduction, in January 2003, of the Proceeds of Crime Act
2002, no new matters have been initiated under the 1987 Act.
Proceeds of Crime Act 2002
The Official Trustee has responsibility under the Proceeds of Crime Act 2002 and the Customs Act 1901
to control and deal with property under court orders.
programmes
Agencies deliver programmes that are government actions taken to deliver the agencies’ stated
outcomes. Agencies are required to identify the programmes that contribute to government outcomes
over the budget and forward years.
Public Service Act 1999
An Act to provide for the establishment and management of the Australian Public Service, and for
other purposes.
196
realisation
Any asset or income raised in an administration under the Bankruptcy Act (see dividend).
realisations charge
A levy of the money received by trustees in bankruptcies, debt agreements, compositions and personal
insolvency agreements, used to fund the cost of conducting enquiries in certain bankruptcies,
investigating alleged offences, monitoring and regulating trustees and administrators and providing
information to a range of clients.
real property
Realty consisting of land, together with such things that are by law considered to be part of the land,
such as houses and fences.
registered trustee
Only licensed practitioners, registered through AFSA and referred to as registered trustees, are
permitted to have control of the administration of bankruptcies or agreements under Part X of the
Bankruptcy Act.
Registrar
The Registrar of Personal Property Securities.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
registrations
A registration is a financing statement (as amended by a financing change statement) that is registered
on the Personal Property Securities Register, most commonly relating to a security interest.
restrained property
Property subject to a restraining order under proceeds of crime legislation that must not be disposed
of, or otherwise dealt with, by any person except in the manner and circumstances specified in the
court order or under the legislation.
section 73 proposal
Such proposals are compositions and arrangements made by bankrupts through their trustees to
finalise their debts. The creditors vote on whether or not to accept such offers. An offer may involve
assets already in the bankruptcy or may include other money or assets that would not normally be
available to creditors, such as money provided by a relative. These offers benefit creditors as they
receive a dividend that would not otherwise be available. All creditors will receive an equal rate of
dividend unless the offer provides otherwise.
section 188 authority
A section 188 authority is signed by both the debtor and the controlling trustee to enable a meeting of
the debtor’s creditors to be called to consider a personal insolvency agreement. The authority does not
become effective until both parties have signed.
security interests
An interest in personal property provided for by a transaction that, in substance, secures payment or
performance of an obligation. It also includes ‘deemed’ security interests, which include the interest of
a lessor or bailor under certain types of leases or bailments.
sequestration order
An order made before a registrar of the Federal Court, a judge from the Federal Circuit Court or a judge
in the Federal Court making a person bankrupt based on a creditor’s petition or other application as
outlined under the Bankruptcy Act.
special resolution
A resolution passed by a majority in number and at least three-fourths in value of the creditors present
personally, by telephone, by attorney or by proxy at a meeting of creditors and voting on the resolution
of a personal insolvency agreement.
197
statement of affairs
When a debtor becomes bankrupt, they must complete a statement of affairs that truthfully discloses
all relevant details about their current financial position. This includes details of all debts, as well as
details about current and recently owned assets.
three-month arrears reporting
A debt agreement administrator has a duty to notify creditors that a three-month arrears default has
occurred—that is, when a debtor falls into arrears with respect to any payment and remains in arrears
for a period of three months.
transitional security interest
A security interest that existed or is created by a security agreement that was in force immediately prior
to 30 January 2012 and continued in force after that time.
trustee
See registered trustee and Official Trustee.
undischarged bankrupt
A person who is still operating within the designated period of their bankruptcy, generally a period of
three years. They have obligations to fulfil with their trustee and they have various restrictions upon
their conduct.
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
unsecured creditor
A creditor that does not have a hold over the chattels, assets or property purchased with the credit
afforded to a debtor. Such liabilities include credit card debts.
verification statement
A document which confirms the details of a registration and is issued by the Personal Property
Securities Register to the secured party’s address for service.
Work Health and Safety Act 2011
The Act that establishes a framework for the regulation of employers, employees and practices at
workplaces covered by the Act in order to protect the health and safety of employees at work.
198
A
Aboriginal and Torres Strait Islander employees, 43
achievements, 2013–14, 4
‘act of bankruptcy’, 77
Administrative Appeals Tribunal
reviews of Inspector-General decisions, 85
advertising, 56
AFSAfe project, 52
agency resource statement 2013–14, 38
alleged offences referred, 22, 23
annulments, 72, 73
APS Statistical Bulletin, 37
ASIC. see Australian Securities and Investments
Commission (ASIC)
asset management, 40
Attorney-General, 6, 30, 66, 87
Attorney-General’s Department, 16, 17, 87
Audit Committee, 32–3, 35
Auditor-General, 37, 53
audits, 33
AusTender, 53
Australia Day awards, 44
Australian Accounting Standards, 37
Australian Federal Police, 13, 25
Proceeds of Crime Litigation Team, 26
Australian Government Internet Gateway Reduction
Program, 93
Australian Information Commissioner, 37, 51
Australian Insolvency Journal, 13
Australian National Audit Office, 33, 37
Australian Public Service (APS)
Code of Conduct, 34, 42
job family model, 41
State of the Service Report, 37
Values, 34, 42
Australian Restructuring Insolvency and Turnaround
Association (ARITA), 13, 17
Australian Securities and Investments Commission
(ASIC), 13, 21, 87
Register of Company Charges, 92, 93
Australian Taxation Office, 13
awards
Australia Day, 44
International Association of Commercial
Administrators, 92
B
bankrupt estates. see insolvent estates
bankruptcies
administered by Official Trustee, 20
annulled, 73
discharged, 73
statistics, 64, 68–71
Bankruptcy Act 1966, 6, 7, 12, 16, 20, 22
administration of insolvent estates, 20
amendments, 87–8
annulments, 72, 73
applications under section 305, 66
breaches, 21, 22
cases, 24, 81
Commonwealth funding assistance, 66–7
contributions to estates (Part VI), 72
debt agreements (Part IX), 74–6
determinations, 87–8
discharge of bankrupt, 73
enforcement, 80–1
funding assistance, 66–7
hardship applications, reviews, 84
income contribution assessments, reviews, 82
Inspector-General
responsibilities, 15
reviews, 82–4
investigation of offences (see investigation of
Bankruptcy Act offences)
minor infringements, 22
objections to discharge of bankrupt, 73, 83
objectives, 64
offences, investigation, 22–4
official receiver notices, 65
Part IV bankruptcies, 68–72
Part XI bankruptcies, 68–72
personal insolvency activities, 64
personal insolvency agreements (Part X), 77–9
realisations, 21
remuneration of registered trustees, reviews, 84
roles created by, 7
section 73, 87
section 74, 72, 73
section 149, 21, 73
section 305, 66–7
section 153A, 72, 73
section 153B, 72, 73
trust monies held by trustees, 72
voluntary compliance, 22
Bankruptcy (Estate Charges) Act 1997, 7
bankruptcy notices, 9, 14
Bankruptcy Regulations
amendments, 87–8
Schedule 4A, 66
boards and committees, 30–3
Business Solutions Planning Group. see Operations
Management Committee
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
INDEX
C
Chief Executive. see also Inspector-General in
Bankruptcy
as Inspector-General in Bankruptcy, 7
reporting to Attorney-General, 30
responsibilities, 30
review, 2–3
Chief Executive’s Instructions, 41, 52
Chief Finance Officer, 33
199
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
Chief Information Officer, 33
Chief Operating Officer Group, 9
client satisfaction, 28, 35–6
Client Service Charter, 35
Client Services division, 9. see also National Service
Centre (NSC)
Code of Conduct (APS), 34, 42
Comcover, 34
commercial property, 97
committees and boards, 30–3
Common Investment Fund, 70, 71, 72
Commonwealth Criminal Assets Confiscation Taskforce,
24, 25
Commonwealth Director of Public Prosecutions (CDPP),
13, 22, 23, 24, 25, 80
Commonwealth Disability Strategy. see National
Disability Strategy 2010–2020
Commonwealth Ombudsman, 37
approaches received in relation to AFSA, 36
Commonwealth Procurement Rules, 41, 52, 53
complaints
about AFSA, 35, 36
handling, 17, 86
insolvency practitioners, 17, 85–6
PPSR, 36
Complaints and Compliments Register, 35
complex offences, 23
compliance letters, 22
compliance offences, 22
compliments, 35, 36
Confiscated Assets Account, 24, 25
Confiscated Assets Special Account, 25
consultancies, 52–3, 54–5
Consumer Law Consultative Committee, 13
consumer price index, 72
consumer property, 97
contracts, 53
contributions from bankrupts, 20, 21, 72
controlled property, 25
controlling trustees, 15–16
corporate governance, 30–4
corporate plans, 34
Corporations Act 2001, 21
Cost Recovery Guidelines, 40
Cost Recovery Impact Statements, 40, 87–8
Cost Recovery Reference Group, 40
court orders, 7, 9, 24, 25, 95
creditors
complaints against personal insolvency
practitioners, 17, 85–6
debtors’ proposals, 74, 77
dividends paid, 20, 21, 86
meetings, 87
personal insolvency agreements, 77–9
reports by controlling trustees, 20
reports by Official Trustee, 20
unsecured, 74
voting process, 9, 72, 74
creditors’ petitions, 14
200
Crimes Act 1914, 24, 25, 81
Criminal Code Act 1995, 22, 80
Customs Act 1901, 7, 24, 25
‘cutting red tape’ initiative, 93
D
Dealing with unmanageable debt, 13
debt agreement administrators. see also registered
trustees
complaints against, 86
disciplinary action, 16
inspection programme, 16
registration, 17–18
resignations, 18
statistics, 18
trust monies held by, 76
unregistered, 87
debt agreements. see also personal insolvency
agreements
legal requirements, 74
proposals, 74
statistics, 75–6
status, 75
terminated, 75
debtors
appointment of controlling trustee, 77
complaints against personal insolvency
practitioners, 17, 85–6
payments to creditors under debt agreement, 76
petitions, 6, 14, 20, 40
disability reporting, 37
discharge of bankrupt, 14, 73
objections, 73, 83
dividend payments, 20, 21
divisions, AFSA, 9
E
ecologically sustainable development, 56
employee recognition programme, 44
employees. see also Senior Executive Service
agreements, 43
conditions, 43
consultative committees, 33, 43, 52
Indigenous, 43
learning and development, 41–2
non-English-speaking backgrounds, 43
non-ongoing, 46
numbers, 42, 45–6
part-time, 43, 46
people with disability, 43
performance management, 41
performance pay, 44
profile, 42, 45–6
reward and recognition, 44
salary ranges, non–Senior Executive Service, 47
energy consumption, 56
enterprise agreement, 5, 34, 42, 43, 44
F
Federal Court of Australia, 13
Federal Register of Legislative Instruments, 99
fees and charges
cost recovery regime, 40
determinations, 87–8
Finance, People and Capability division, 9
Finance Minister’s Orders, 37
Financial Counselling Australia, 13
Financial Management and Accountability Act 1997, 30,
52
financial performance, 37
financial statements, 102–89
forfeited assets, 24
forfeiture orders, 25
fraud control, 33, 34
Freedom of Information Act 1982, 50, 51, 53
freedom of information. see also Information Publication
Scheme
contact officers, 50
fees and charges, 51
requests, 51
response times, 51
functions, AFSA, 6
funding assistance, Commonwealth (section 305), 66–7
G
groups, AFSA, 9
Guidelines for Rehabilitation Authorities 2012, 52
H
hardship applications reviewed, 84
head office, 56
I
ICT Services division, 9
income contribution assessments, 82
index search agents, 14, 15
Indigenous employees, 43
information and registry service
deliverables, 12
key performance indicators, 12, 14
information provision, 13
Information Publication Scheme, 50
infringement notices, 22, 23
Insolvency and Reconstruction Law Committee, 13
Insolvency and Trustee Service Australia (ITSA), 35
Insolvency and Trustee Services division, 9
insolvency information packs, 13
insolvency practitioners. see also debt agreement
administrators; registered trustees
creditor meetings, oversight, 87
regulation, 85–7
regulatory framework, 15–19
insolvency services, complaints about, 35
insolvent estates. see also Official Trustee
deliverables, 20
dividend payments, 20, 21
key performance indicators, 20, 21
overview, 19
realisations, 21
Inspector-General in Bankruptcy
Chief Executive as, 30
decisions reviewed by Administrative Appeals
Tribunal, 85
functions, 15–16
powers, 7, 84
powers of Official Trustee exercised by, 6
remission requests, 84
reporting to Attorney-General, 30
responsibilities, 15, 30
reviews
hardship applications, 84
income contribution assessments, 82
objections to discharge, 83
registered trustee remuneration, 84
role, 7
waiver requests, 84
Inspector-General Practice Direction 22—Effective
Practitioner Communication, 85, 86
Inspector-General Practice Statements, 16, 17, 23, 82
internal auditors, 33
International Association of Commercial Administrators,
92
investigation of Bankruptcy Act offences
briefs of evidence submitted to CDPP, 22, 23
deliverable, 22
investigations, 22, 23
key performance indicator, 22
offenders found guilty, 24
overview, 22
prosecutions (see prosecutions)
referrals, 22, 23
warning letters, 22
whole-of-government approach, 22
ITSA Enterprise Agreement 2011–14, 43, 47
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
Enterprise Agreement 2011–14, 43, 47
environmental performance, 56
Environment Protection and Biodiversity Conservation
Act 1999, 56
estates. see insolvent estates
ethical standards, 34
exempt contracts, 53
expenses 2013–14, 39
external scrutiny, 37
L
Law Council of Australia, 13, 40
learning and development, 41–2
Legal and Governance division, 9
legislative framework of AFSA, 7
letter of transmittal, iii
201
M
market research, 56
minister. see Attorney-General
Moore Stephens, 33
multiple secured parties, 93
Mutual Assistance in Criminal Matters Act 1987, 26
N
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
National Australian Built Environment Rating System
(NABERS), 56
National Consultative Committee, 33, 43, 52
National Disability Strategy 2010–2020, 37
National Management Board, 30, 31
National Personal Insolvency Index (NPII)
index search agents, 14, 15
key performance indicator, 14
purpose, 14
self-search service, 15
National Service Centre (NSC)
assistance provided, 27
client feedback, 28
deliverables, 27
enquiries, 27, 35
hours of operation, 27
newsletters, 13
notices. see bankruptcy notices
NPII. see National Personal Insolvency Index
O
objections to discharge, 73
reviews, 83
objectives, AFSA, 6
occupational health and safety. see work health and
safety
offences. see also complex offences; compliance
offences; investigation of Bankruptcy Act
offences
common, 80
minor, 22
referrals, 16, 22, 23
offenders
alleged, 22
found guilty of criminal offences, 24, 81
Official Receiver
annulments (section 153B), 72, 73
bankruptcy notices, 9, 14
offence referrals, 22, 23
powers, 7, 9, 20, 22, 25
role, 7, 30
sequestration orders, 22, 72
statutory notices, 65
Official Trustee in Bankruptcy
administered estates, 20
administered property, proceeds of crime, 24–5
administrations (Part X), 78
annulments (section 153A), 72, 73
Common Investment Fund, 70, 71, 72
202
dividends paid, 20, 21
forfeited property, 24
functions and powers
personal insolvency, 20
proceeds of crime, 24–6
hardship applications, 84
investments from trust funds, 70, 71, 72
legislation, 7
monies administered by, 9, 72, 79
national panel, 19
offence referrals, 16, 22, 23
personal insolvency agreements, 77–9
property control, 7, 20, 21, 24–5
realisations, 21
reports to creditors, 20
responsibilities, 19, 24
restrained property, 24
retention of estate for public interest, 21
reviews of decisions by Inspector-General, 82, 83, 84
role, 7, 25
and unsecured creditors, 74
Ombudsman. see Commonwealth Ombudsman
online services, 5, 12, 15, 27, 41
operating surplus, 37
operational plans, 34
Operations Management Committee, 30, 32, 35
organisational structure, 8
outcome and programme structure, 10
outlook for 2014–15, 5
P
Papua New Guinea Public Prosecutor, 26
parliamentary committees, 30
pecuniary penalty orders, 24, 25
people management, 41–7
people with disability, 43
performance management, 41
Performance Standards for Trustees, 66
personal insolvency. see also National Service Centre
activity, 64
applications, 12, 14, 67
statistics, 68–71, 78–9
personal insolvency agreements
and controlling trustees, 77
and creditors, 77–9
monitored by Regulation and Enforcement division,
77
proposals, 77
statistics, 64, 78–9
Personal Insolvency News blog, 12, 13
personal insolvency practitioners. see also debt
agreement administrators; trustees
complaints about, 17, 85–6
Personal Insolvency Professionals Association, 13
Personal Insolvency Regulator newsletter, 13
Personal Property Securities Act 2009, 3, 6, 7, 27, 30
amendments, 99
determinations, 99
registry service, 12–15
Component 1.1.2: An effective regulatory
framework for insolvency practitioners,
15–19
Component 1.1.3: Administration of insolvent
estates where private insolvency
practitioners are not appointed, 19–21
Component 1.1.4: Investigation of Bankruptcy
Act offences, 22–4
Component 1.1.5: Administration of proceeds of
crime property, 24–6
1.2: Operation of a national register of security
interests in personal property, 27–8
Component 1.2.1: A Personal Property
Securities Register and registry
services, 27–8
prosecutions
briefs of evidence to CDPP, 22, 23
cases, 81
offences
common, 80
proven, 80
offenders found guilty, 81
outcomes, 81
Public Interest Disclosure Act 2013, 42
Public Service Act 1999, 30, 43
publications, 13
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
fees determination, 99
review, 5, 93
verification statements, 99
Personal Property Securities Amendment (Motor
Vehicles) Regulation 2014, 99
Personal Property Securities (Fees) Determination 2013
(17 June 2013), 99
Personal Property Securities Register (PPSR). see also
National Service Centre (NSC)
client satisfaction, 28
complaints about, 36
cost recovery, 40
Cost Recovery Impact Statements, 40, 87–8
deliverables, 27
fees, 40
key performance indicators, 27, 28
motor vehicle search, 35, 92
online searches
enhancements, 92
by type, 94
by user, 94
overview, 27
refusal to access, 98
registrations
activity, 95
by collateral class, 97
by collateral type, 96
removed or amended, 97
by security interest, 95
by state, 96
repayment to Commonwealth, 37
searches, 92
stakeholder engagement, 28
suspension of, 98
Personal Property Securities Registrar
introduction by, 92–3
powers of, 97, 98
Portfolio Board, 30
practice statements. see Inspector-General Practice
Statements
Privacy Act 1988, 4
Privacy Amendment (Enhancing Privacy Protection) Act
2012, 4
Proceeds of Crime Act 1987, 7, 24, 25
Proceeds of Crime Act 2002, 7, 25
proceeds of crime property administration
Confiscated Assets Account, 24, 25
Confiscated Assets Special Account, 25
court orders, 25
deliverables, 24
key performance indicator, 24
overview, 24
purpose, 24
restrained property, 24
procurement, 41
programme structure, 10
programmes
1.1: Personal insolvency and trustee services, 12–26
Component 1.1.1: An efficient information and
R
realisations, 21
registered trustees. see also debt agreement
administrators
administrations
Part X, 77, 78, 79
Part XI, 71, 72
annulments (section 153A), 72, 73
cases, 19
complaints against, 17, 86
disciplinary action, 16, 19
inspection programme for, 16
monies administered by, 72, 79
objections to discharge reviews, 83
offence referrals, 23
Official Receiver notice, 65
registration, 17–18
remedial action, 85, 87
remuneration, reviews, 84
resignations, 18
statistics, 18
statutory reviews of decisions, 17
Registrar of Personal Property Securities
powers, 7
review by, 92–3
role, 7, 30
registry service. see also National Personal Insolvency
Index (NPII)
deliverables, 12
functions, 12
203
key performance indicators, 12, 14
Regulation and Enforcement division, 9, 13, 17, 20, 80,
85. see also Inspector-General in Bankruptcy
remuneration. see registered trustees; trustees
Requirements for annual reports for departments,
executive agencies and FMA Act bodies, viii
research, 56
restraining orders, 25
reviews
hardship applications, 84
income contribution assessments, 82
Inspector-General decisions, 85
objections to discharge, 83
registered trustee remuneration, 84
trustees’ decisions, 17
risk management, 16, 33, 34. see also fraud control
S
AUSTRALIAN FINANCIAL SECURITY AUTHORITY ANNUAL REPORT
Safety, Rehabilitation and Compensation Act 1988, 52
section 73 compositions, 87
seminars, 13
Senate Estimates, 30
senior executive, 8, 30
Senior Executive Service, 43
salary ranges, 47
sequestration orders, 13
site consultative committees, 33, 43
Social Security Act 1991, 72
solicitor controlling trustees, 15, 16
staff. see employees
stakeholders
information for, 13
training, 13
State of the Service Report, 37
Statute Law Revision Act (No. 1) 2014, 99
statutory reviews, 17
strategic plan, 34
Studies Assistance Scheme, 41
204
T
Taskforce Sweep, 26
tenancies, 56
trust monies, 72, 76, 79
trustees. see also controlling trustees; Official Trustee
in Bankruptcy; registered trustees
Commonwealth assistance, 66–7
complaints against, 17, 86
inspection programme for, 16
registration, 17–18
remuneration, 84
trust monies held by, 72, 79
U
unregistered debt agreement administrators, 87
unsecured creditors, 74
V
Values (APS), 34, 42
voluntary compliance, 22
W
warning letters, 22
websites
AFSA, 12
PPSR, 93
Work Health and Safety Act 2011, 52
work health and safety, 52
workers’ compensation, 52
workforce planning, 41
Workplace Diversity Program 2014–17, 43