|
Budget $’000
|
Actual $’000
|
|
Grants and other contributions
|
157 165
|
159 761
|
|
User charges
|
1912
|
1618
|
|
Interest
|
910
|
589
|
|
Other revenue
|
43
|
16
|
|
Total income
|
160 030
|
161 984
|
|
Gains on disposal/revaluation of assets
|
–
|
3080
|
|
Total income from continuing operations
|
160 030
|
165 064
|
|
Employee expenses
|
68 398
|
66 235
|
|
Supplies and services
|
14 884
|
11 748
|
|
Outsourced service delivery
|
72 784
|
72 903
|
|
Grants and subsidies
|
–
|
–
|
|
Depreciation and amortisation
|
3476
|
3817
|
|
Other
|
488
|
561
|
|
Total expenses
|
160 030
|
155 264
|
|
Operating result from continuing operations
|
–
|
9800
|
|
Increase in asset revaluation surplus
|
–
|
130
|
|
Total comprehensive income
|
–
|
9930
|
Table 2. Legal Aid Queensland 2020–21 operating budget versus actual performance
The 2020–21 operating surplus of $9.8 million has been substantially influenced by the actual non-cash gains on disposal and revaluation of assets of $3.080 million, with the majority of this associated with a comprehensive revaluation undertaken for our land and building assets located at 44 Herschel Street, Brisbane. A significant portion of the $3.080 million is associated with the valuation increase for the building asset, this being $2.933 million. Furthermore, the 30 June 2021 operating surplus is significantly influenced by an underspend in employee expenditure of $2.163 million and an underspend of $3.136 million in supplies and services expenditure. A sizeable portion of supplies and services expenditure totalling $0.714 million relating to IT equipment in response to the COVID-19 pandemic was originally budgeted for in 2020–21, but was largely incurred in 2019–20. Further savings were achieved in the supplies and services expenditure due to certain expenses not being incurred as expected during the pathway out of the COVID-19 lockdown.
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. This sound financial position 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 2020–21
Figure 4. Income 2020–21
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 to 80 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 5. Expenses 2020–21
Figure 6. Payments to private lawyers 2020–21
Assets
The most valuable assets we have are cash and cash equivalents (of $63.3 million), and our land and building in Brisbane (currently valued at $28 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 of the matter. 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 asset revaluation reserve. The accumulated surplus balance as at 30 June 2021 was $31.4 million, which represents about 60 percent of our total equity. The second component of our equity is the revaluation reserve and this represents the increase, over time, in the value of the land and buildings we own in Brisbane where our head office is located. The 30 June 2021 balance of the asset revaluation reserve was $20.7 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