|
Budget $’000
|
Actual $’000
|
|
Grants and other contributions
|
140 421
|
144 563
|
|
User charges
|
1900
|
2475
|
|
Interest and other revenue
|
1900
|
991
|
|
Other revenue
|
43
|
84
|
|
Total income
|
144 264
|
148 113
|
|
Employee expenses
|
62 120
|
65 788
|
|
Supplies and services
|
11 498
|
12 630
|
|
Outsourced service delivery
|
65 987
|
68 408
|
|
Grants and subsidies
|
–
|
50
|
|
Depreciation and amortisation
|
4071
|
4171
|
|
Revaluation decrement
|
–
|
2409
|
|
Other
|
588
|
569
|
|
Total expenses
|
144 264
|
154 025
|
|
Operating result from continuing operations
|
–
|
(5912)
|
|
Increase in asset revaluation surplus
|
–
|
3642
|
|
Total comprehensive income
|
–
|
(2270)
|
Table 2. 2019–20 budget versus actual performance
The strong demand for services has shaped the outcome financially for us in 2019–20 with an operating deficit of $5.912 million, or 3.99 percent of total income. This result, compared with a balanced operating budget, is strongly influenced by greater salary and wages expenses, along with strong demand in family law, general criminal law and child protection matters. Furthermore, the operating deficit is influenced by a revaluation decrease (non-cash) of $2.409 million associated with our building at 44 Herschel Street, Brisbane as assessed at 30 June 2020. With the exclusion of the building revaluation decrease, these drivers contributing to the operating deficit have largely provided frontline services to clients in need of legal assistance. Despite the operating deficit of $5.912 million for this year, our financial position remains healthy and reflects the board and management’s commitment to sound financial management principles to ensure the long term sustainability of core services.
Our continued focus on managing our finances has maintained our balance sheet’s strength and stability while allowing the organisation to continue to deliver frontline services in a timely and effective way. Depsite our operating deficit this year, our financial position still allows us to invest in our assets and operational infrastructure, which ultimately helps us deliver services more efficiently to our clients. We will continue to minimise costs and risks in relation to liabilities and contingent liabilities through our ongoing focus on sound governance practices in our financial management.
The organisation collectively has a strong focus on financial management and this allows for a greater ability to plan and deliver against objectives while meeting our core responsibility to provide cost effective services to financially disadvantaged Queenslanders.
Income
Federal and state government grants are our main income source, with relatively little income derived from service charges or clients’ contributions towards their legal costs (see Figure 4 for more information).
Another part of our overall income management focuses on interest income earned on cash investments. This portion of income is moderate in nature but important as it helps deliver core services and provide operational support functions.
Figure 3. Income and expenditure 2019-20
Expenses
Our major expenditure categories cover salary and wages for our staff along with paying our statewide network of private law firms to carry out legal aid work on our behalf (see Figure 6 for more information). The expenditure paid to private law firms is consistent with our mixed service delivery model, which allocates about 75 percent of legally-aided matters to private lawyers. The remaining costs support the in-house legal practice and infrastructure for all service delivery (see Figure 5 for more information). Our continued focus on expenditure management has contributed significantly to the organisational delivery.
Figure 4. Income 2019-20
Assets
The most valuable assets we have are cash and cash equivalents (of $50.2 million), and our land and building in Brisbane (currently valued at $25 million). Other assets we own include unique computer-based business systems, car fleet and money owed to us by clients.
Liabilities
Our largest liability is money we have to put aside to pay private lawyers for work assigned to them but not yet completed. Sometimes these cases can take several years to complete so money needs to be kept aside from the outset and as a matter progresses. This is shown as a provision in the accounts. In addition to this, our other main liabilities include known future payments to suppliers and providing payments associated with annual leave entitlements for our staff.
Equity
Equity is made up of two components—first the accumulated surplus (also known as retained earnings), which essentially is money in the bank and available to use for business needs, and secondly the land asset revaluation reserve. The accumulated surplus balance as at 30 June 2020 was $21.6 million, which represents about 51 percent of our total equity. The second component of our equity is the land revaluation reserve and this represents the increase, over time, in the value of the land we own in Brisbane where our head office is located. The 30 June 2020 balance of the land asset revaluation reserve was $20.6 million.
Cash
We have maintained and managed healthy cash levels over the past number of years to ensure we can pay our employees, ensure payment to our network of private lawyers for matters they finalise, and to allow us to replace equipment and other assets along with upgrading our facilities when and where required. We invest this cash in low-risk funds managed by the Queensland Government’s central financing authority. This investment strategy provides us with some income from interest earned but also protects us from market fluctuations.
Figure 5. Expenses 2019-20
Figure 6. Payments to private lawyers 2019-20