Part 5: Other Information

Agency financial performance

The AOFM recorded an operating surplus on agency activities of $0.6 million for the 2020–21 financial year, comprising total revenue of $16.8 million and expenses of $16.2 million. The surplus was due to lower than anticipated operating costs.

The AOFM reported a sound net worth and liquidity position at 30 June 2021, with net assets of $27.2 million, represented by total assets of $35.8 million and total liabilities of $8.6 million.

At 30 June 2021, the AOFM had unspent appropriations totalling $29.3million. Of this, $0.7 million was repealed on 1 July 2021. Unspent appropriations are available to settle liabilities as and when they fall due and for future asset replacements and improvements.

Agency resource statement and resources for outcomes

Outcome 1: The advancement of macroeconomic growth and stability and effective operation of financial markets, through issuing debt, investing in financial assets and managing debt, investments and cash for the Australian Government
	Budget(a)	Actual Expenses	Variation
	2020-21	2020-21
	$'000	$'000	$'000
Program1.1: Australian Office of Financial Management
Departmental expenses
Departmental appropriation and other receipts	15,521	15,360	161
Expenses not requiring appropriation in the Budget year	880	885	(5)
Administered expenses before re-measurements
Expenses not requiring appropriation (b)	2,365	2,740	(375)
Special appropriations expenses
Commonwealth Inscribed Stock Act 1911	17,123,036	17,122,677	359
Australian Business Securitisation Fund Act 2019	-	-	-
Structured Finance Support (Coronavirus Economic Response Package) Act 2020
(Coronavirus Economic Response Package) Act 2020	-	-	-
Financial Agreement Act 1994	8	8	-
Total expenses for program1.1	17,141,810	17,141,670	140
	2020-21	2020-21
Average staffing level (number)	46	46	0

(a) The Budget figure for 2020-21 is the estimated actual 2020-21 expenses as reported in table 2.1 of the 2021-22 Portfolio Budget Statements.

(b) Expenses not requiring appropriation represents expected credit loss expenses on investments in structured finance securities.

Please note: in the Budget papers the item is reported against expenses, whilst in the Annual Financial Statements it is reported as an offset to interest revenue.

Table 13: AOFM Resource statement

	Actual available appropriation 2020-21 $'000	Net Payments made 2020-21 $'000	Appropriations extinguished 2020-21 $'000	=	Balance 2020-21 $'000
Ordinary annual services
Departmental appropriation(a)(b)	45,366	15,127	1,036		29,203
Receipts from other sources (s74)(c)	134	-	-		134
Total departmental	45,500	15,127	1,036		29,337
Administered expenses
Total administered	-	-	-		-
Total ordinary annual services	45,500	15,127	1,036		29,337
Other services
Departmental non-operating	-	-	-		-
Total other services	-	-	-		-
Total available annual appropriations (A+B)	45,500	15,127	1,036		29,337
Special appropriations - operating
Commonwealth Inscribed Stock Act 1911	21,718,633	21,718,633	-		-
Financial Agreement Act 1994	7	7	-		-
Public Governance, Performance and Accountability Act 2013	3	3	-		-
Subtotal	21,718,643	21,718,643	-		-
Special appropriations - investing and financing
Commonwealth Inscribed Stock Act 1911	172,658,451	172,658,451	-		-
Public Governance, Performance and Accountability Act 2013	535,000,000	535,000,000	-		-
Subtotal	707,658,451	707,658,451	-		-
Total special appropriations	729,377,094	729,377,094	-		-
Total appropriations excluding special accounts
(A + B + C)	729,422,594	729,392,221	1,036		29,337
Special Accounts
Debt Retirement Reserve Trust	47	23	-		24
Structured Finance Support Fund (d)	13,316,015	10,530	-		13,305,485
Australian Business Securitisation Fund (e)	485,314	86,814	-		398,500
Total Special Account	13,801,376	97,367	-		13,704,009
Total net resourcing and payments for AOFM
(A + B + C + D)	743,223,970	729,489,588	1,036		13,733,346

(a) Actual available appropriation comprises Supply Act (No.1) 2020-21 and Appropriation Act (No.1) 2020-‍21 plus carried forward appropriation balances at 1 July 2020.

(b) Includes capital budget appropriation for 2020-21 of $0.366 million.

(d) Structured Finance Support Fund Special Account was established in March 2020.

The special account received its statutory funding of $15 billion on 25 March 2020.

(e) Australian Business Securitisation Fund Special Account was established in April 2019.

The special account received its first credit of funding of $250 million on 1 July 2019.

The special account received its second credit of funding of $250 million on 1 July 2020.

Grant programs

Under the Financial Agreement Act 1994, the Commonwealth is required to contribute to the Debt Retirement Reserve Trust Account to assist the New South Wales and Victorian governments to redeem maturing debt on allocation to them. Monies standing to the credit of this Account are held for the purposes prescribed by the Financial Agreement Act 1994.

Total amounts paid by the Commonwealth into the Debt Retirement Reserve Trust Account for 2020-21 were $605.

Advertising and market research

The AOFM incurred expenditure of $5,509 in advertising to promote the Australian Government Securities market to investors.

The AOFM incurred expenditure of $31,965.08 during 2020-21 to media advertising organisations for staff recruitment.

Remuneration

Table 14: Remuneration

Key Management Personnel

		Short term benefits			Post-employment	Other long-term benefits		Termination benefits
		Base salary and annual leave	Bonuses	Other benefits	Superannuation	Long service leave	Other	Termination benefits	Total
Name	Position	$	$	$	$	$	$	$	$
Rob Nicholl	CEO	405,208			53,281	9,791			468,280

The CEO’s remuneration conditions are established by the Secretary to the Treasury. AOFM does not have any SES staff other than Key Management Personnel.

Table 14: Remuneration (continued)

		Short term benefits			Post-employment	Other long-term benefits		Termination benefits
		Average base salary and annual leave	Average bonuses	Average other benefits	Average superannuation	Average long service leave	Average other	Average termination benefits	Average total
Remuneration Band	Number	$	$	$	$	$	$	$	$
255,000 to 279,999	3	213,026			37,640	17,127			267,793
280,000 to 304,999	3	241,411			38,803	7,431			287,644
305,000 to 329,999	1	256,337			43,814	9,119			309,270
330,000 to 354,999	1	269,919			46,128	21,679			337,726
380,000 to 404,999	1	320,385			59,471	10,775			390,631

Highly Paid Staff

Remuneration for Other Highly Paid Staff is established by the AOFM’s Enterprise Bargaining Agreement.

Freedom of information

Entities 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, replacing 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. In 2020‑21, the AOFM worked with the Treasury on one FOI request, that was later withdrawn.

An agency plan showing what information is published in accordance with the IPS requirements, including material relevant to the AOFM, is accessible from the AOFM’s website at https://www.aofm.gov.au/about/access-information/information-publicatio….

Ecologically sustainable development

The AOFM’s operations have an impact on the environment typical of office operations. Facilities management services are provided to the AOFM by the Treasury under a Memorandum of Understanding. Information on the environmental impact of these services is published in the Treasury’s Annual Report.

Management structure of the AOFM’s debt and assets

The assets and liabilities managed by the AOFM and held on its administered balance sheet in 2020‑21 were AGS (Treasury Bonds, TIBs and Treasury Notes), cash deposits with the RBA, investments made through the Australian Business Securitisation Fund (ABSF) and Structured Finance Support Fund (SFSF), and loans to the States under various Commonwealth‑State Housing Agreements.

For financial and risk management purposes, these assets and liabilities are allocated into different portfolios: long‑term debt; cash management; and investments for policy purposes. This allocation recognises the different objectives, risks and management approaches required in each area.

The long‑term debt portfolio includes all Treasury Bonds and TIBs.

The cash management portfolio includes Treasury Notes and assets held to manage within‑year variability in the Australian Government’s financing requirements. This portfolio is used to fund differences in timing of government payments and receipts, as well as providing contingency liquidity.

The investments for policy purposes portfolio includes all receivables arising from policy programs including the ABSF, SFSF and housing advances portfolio.

The ABSF is a fund created to support provision of finance to small to medium enterprises (SMEs) on more competitive terms.
The SFSF comprises investments in structured finance markets used by smaller lenders that provide consumer and business finance, investing in rated term securitisations and securitisation warehouses.
The housing advances portfolio comprises loans for public housing made to the states and territories. These loans, not evidenced by the issue of securities, were made under previous Commonwealth‑state financing arrangements. The last of these loans is due to mature on 30 June 2042.