Annual Report 2004-2005 - Forensicare

Financial Overview
FINANCIAL MANAGEMENT
This year again presented Forensicare with considerable financial
challenges with the Council of Forensicare approving a deficit budget
of $3.073 million. It was therefore a significant achievement to
deliver the markedly better result of $0.9 million deficit outlined
below, and detailed in the 2004-2005 Financial Statements. The
result included depreciation of $1.232 million, which is provided
for separately by Government via capital payments in response to
submissions by Forensicare. No Capital Funds were provided to
Forensicare by the Department of Human Services for the 2004-
2005 financial year.
Forensicare reviewed the Financial Management Framework, in
conjunction with our internal auditors, Deloitte Touche Tohmatsu,
under the Business Risk Assessment Review. This process is
designed to support sound financial management and accountability
practices, and has been formally adopted by Council.
The framework restates the various elements of our financial
management policies, practices and procedures. It clarifies the way
in which our organisation manages its financial activities, and
documents the clearer lines of accountability and reporting
Our financial framework is based on the following principles –
• support for the increased autonomy and accountability of
operational areas of the organisation
RATIOS
Current Ratio – Liquidity
This graph indicates Forensicare’s ability to meet its financial
commitments in the short-term (next twelve months). A ratio of 1 or
greater indicates a strong financial capability to meet commitments.
3.0
2.5
2.0
1.5
1.0
0.5
0.0
04/05 03/04 02/03 01/02 00/01 99/00
Equity/Assets – Stability
This graph indicates Forensicare’s long-term stability. The stability
over the past twelve month period clearly shows Forensicare is
maintaining a position of viability.
• integration of systems to enhance information available to meet
the diverse and growing needs of management
• transparency through standardisation of business reporting
templates
• quality financial management information that is sourced
and reproduced consistently from a common platform
• flexible capacity to adapt to meet changing information needs
in our environment.
The framework encourages strong governance, continuous
improvement, and compliance with standards to support
Forensicare’s strategic directions.
During the current and previous reporting periods, Forensicare
has undertaken a number of internal financial reviews/assessments
to assist the Council and executive in managing the financial
performance of the organisation. The reviews have consisted of the
following –
• Expenditure comparisons by major component
• Expenditure patterns
• Deficit Management Strategies
• Long-Term Financial Budget Management Plan.
The financial statements presented later in this report (pages 60-75)
provide greater detail, and are prepared in accordance with the
applicable Australian Accounting Standards and the Financial
Management Act 1994.
0.94
0.93
0.92
0.91
0.90
0.89
0.88
0.87
0.86
0.85
0.84
04/05 03/04 02/03 01/02 00/01 99/00
Budget Composition
Department of Self Funding Corrections Care Plan TOTAL BUDGET
Human Services Victoria Assessments
Funding Funding Funding
Budgeted Revenue $27,218,407 $216,873 $2,778,101 $155,070 $30,368,451
Budgeted Expenditure $29,003,927 $216,873 $2,764,062 $170,110 $32,154,972
Surplus / Deficit ($1,785,520) - $14,039 ($15,040 ) ($1,786,521)
55