Discussion and Analysis - Balance Sheet
Total assets at 30 June 2011 were $1,101.9m compared to the 2009-10 total of $792.0m. The major elements of the year-on-year variation ($309.9m) were movements in financial assets ($69.0m), an increase in the value of buildings ($170.5m), an increase in the value of land ($54.0m), a decrease in plant and equipment ($2.2m), the acquisition of new emergency response and transport vehicles ($12.0m), an increase in capital works in progress ($7.1m), and a decrease in other non-financial assets ($0.4m).
Financial assets totalled $205.0m (2009-10 $136.1m) and included money owed to CFA ($9.3m), and cash at bank and deposits ($195.7m).
Cash reserves, which include brigade cash holdings, are held for specific purposes and include carry forward amounts for initiatives such as Victorian Bushfires Royal Commission Outcomes and Bushfires Portfolio Programs ($51.9m), Radio Replacement ($34.3m), Regional Dispatch Radio System ($24.0m), EAS Capability ($20.8m), Structural Personal Protective Clothing ($9.4m), Crew Protection ($7.6m), Special Projects ($5.3m), Grants ($0.6m), carry forwards for other CFA activities ($14.1m), and CFA and brigades capital works programs ($22.0m).
Non-financial assets totalled $897.0m (2009-10 $655.9m) and included inventories and goods held in store ($6.3m), prepayments made by CFA ($1.3m), and property, plant and equipment ($889.3m). In accordance with government requirements, a physical revaluation of land and building assets is required to be undertaken every five years. This occurred during 2010-11 and resulted in an increase to CFA’s land and buildings of $213.1m.
Plant and equipment
This includes computer hardware, general plant and communications equipment to a total value of $8.9m (2009-10 $11.1m).
Capital works in progress
At the end of the year, the value of expenditure on capital works such as buildings, emergency response vehicles, and plant and equipment which were not yet completed, totalled $42.1m (2009-10 $35.0m).
Total liabilities at 30 June 2011 amounted to $97.2m compared to the previous year’s total of $91.1m. The variation of $6.1m was caused by decreased amounts accrued in relation to payables, and increases in the provisions for employee benefits and volunteer compensation.
A total of $61.0m (2009-10 $53.4m) is accrued for annual leave and long service leave payments to staff. Most of this amount will become payable at a future date.
Goods or services not yet paid for
At the end of the year a total of $19.3m was owed for goods or services already provided but not yet paid for. This was a decrease of $4.6m over the corresponding figure last year, which is related to reduced major bushfire response activity during 2010-11.
Provision for volunteer compensation
Based on previous claims and actuarial calculations, a total of $13.1m has been estimated to allow for compensation for injuries to volunteers up to 30 June 2011. This is an increase of $3.2m compared to the figure at 30 June 2010.
Interest bearing liabilities (borrowings)
CFA borrowings at 30 June 2011 were $3.9m (2009-10 $3.9m) to fund the cost of constructing a new regional office.
The major assets of CFA volunteer brigades – Land, Buildings, Plant and Equipment, and Bank/Cash Equivalents – are recognised as assets by CFA in the Annual Financial Statements. New brigade assets and Bank/Cash Equivalents are included annually in CFA’s financial statements. Bank/Cash Equivalents were brought to account for the first time in the 2006-07 accounts. The cash balances are funds that have been accumulated by brigades over many decades, predominantly for the replacement of existing capital equipment and the purchase of supplementary equipment in their respective brigades. They appear as Other Income in the Operating Statement and as Bank/Cash Equivalents in the Balance Sheet. The Bank/Cash Equivalents incorporated in these financial statements are those held by the brigades at 30 June 2011.
The brigades are funded by CFA and supplemented by community fundraising and donations. Brigade costs borne by CFA are included in the expense analysis of the Annual Financial Statements, either by specific reference (e.g. Volunteer Compensation, Other Volunteer and Brigade Support, Grants to Volunteer Associations) or by inclusion (under the appropriate expense heading) with CFA’s other costs of a similar nature (e.g. Depreciation, Building Operating and Maintenance, Motor Vehicle, Training and Skills Maintenance, Uniforms and Equipment). As the majority of brigade transactions are thus included in CFA’s accounts, the remaining separate revenues and expenses of the brigades are not reflected in the Authority’s financial statements.
In order to comply with the Income Tax Assessment Act 1997, relating to tax deductible gifts, the CFA and Brigades Donations Fund was established under a Trust Deed dated 7 June 2004. The trustees are responsible for the preparation of separate financial statements that are subject to independent audit and the financial transactions of the fund are consolidated into CFA’s Annual Financial Statements.
CFA volunteer brigades also receive support under the State Government’s Volunteer Emergency Services Equipment Program (VESEP). VESEP assists eligible emergency service organisations by providing contributory funding for vehicles and equipment. CFA also provides brigades with access to an extended credit facility to support brigade-related small asset acquisition programs.
CFA and Brigades Donations Trust Fund
CFA provided regular and accurate reports of the Trust’s operations and financial status to the satisfaction of the Trustees. A total of 1,190 brigades were registered with the Trust at 30 June 2011.
The Trust received $6.4m during the 2010-11 financial year deposited to the account, compared with $7.1m during 2009-10.
The 30 June 2011 Trust bank balance was $1.6m ($0.6m cash at bank and $1m short term investment) compared with $1.3m on 30 June 2010.
Each year, the contributions received from the State Government and insurance companies provide funding for that year’s recurrent expenditure and capital works. These contributions are classified as income. After deducting recurrent expenses for the year, CFA’s net result is determined. The 2010-11 result is $69.9 million. Contributions not used for recurrent expenditure provide funding for CFA’s capital expenditure program, and also represent funds held for specific programs which have either not yet commenced, or are partially implemented. CFA’s accumulated surplus of $325.2 million as disclosed in the balance sheet is an accounting entry reflecting the total of the prior year’s operating results, and does not indicate the level of CFA’s cash reserves and/or liquidity.