This section provides an overview of the NBA’s financial management and outcome in 2008–09. See Appendix 2 for details of overall NBA resourcing.
The functions of the NBA are outlined in the National Blood Authority Act 2003 and the National Blood Agreement. As a material statutory agency, the NBA has a range of corporate and compliance responsibilities under the National Blood Authority Act 2003, the Financial Management and Accountability Act 1997, the Public Service Act 1999, and ministerial, parliamentary and financial reporting requirements.
Under the National Blood Agreement, the NBA is funded 63 per cent by the Australian Government and 37 per cent by the state and territory governments. The funding covers both the national blood supply and the operations of the NBA.
The NBA operates wholly through two special accounts—the National Blood Account and the National Managed Fund (Blood and Blood Products) Special Account. Special accounts are accounts within the Consolidated Revenue Fund for setting aside and recording amounts to be used for specified purposes. Funding received from the Australian, state and territory governments is held within the special accounts and expended as required on the supply of blood, blood products and services and on the operation of the NBA.
Funding for the supply of blood and blood products, and the operation of the NBA is included in the National Blood Account established under section 40 of the National Blood Authority Act 2003.
The National Managed Fund (Blood and Blood Products) Special Account was established under section 20 of the Financial Management and Accountability Act 1997. This special account accumulates funds required to meet liabilities arising from potential product liability claims against the Australian Red Cross Blood Service. Contributions to the account are made by all governments and the ARCBS. In addition, interest is received on special account balances.
For budgeting and accounting, the NBA’s financial transactions are classified as either departmental or administered revenues or expenses. Departmental activities involve the use of assets, liabilities, revenues and expenses controlled by the agency in its own right—that is, for the operations of the NBA. Administered activities involve the management or oversight by the NBA on behalf of government, of activities and expenses controlled or incurred—mainly through the procurement of the products and services that make up the blood supply.
Transactions in the National Blood Account are separated into departmental and administered components. All balances in the National Managed Fund (Blood and Blood Products) Special Account are administered.
Members of the NBA’s finance team
Table 4.6 below summarises the NBA’s revenue and expenditure for 2008–09. The NBA’s Agency Resource Statement and Total Resources for Outcome tables are included as Appendix 2.
| Funding incl. appropriations ($m) | Expenditure ($m) | |
|---|---|---|
| Departmental—NBA operations | 9.854 | 9.749 |
| Administered—national blood and blood product supply | 840.083 | 793.056 |
This section provides a summary of the NBA’s financial performance for 2008–09. Details of departmental and administered results are shown in the audited financial statements, and this summary should be read in conjunction with those statements.
The NBA received an unqualified audit report for 2008–09.
The NBA’s departmental finances cover the NBA’s operations.
Funding for the NBA over 2005–06 to 2008–09 was provided to build capacity—particularly for risk management, appropriate patient blood management, and the safe use of blood and blood products. Although all planned initiatives in these areas are well under way, several factors have caused the progress of implementation to slip, resulting in an accumulation of funds not yet spent.
Drawing on these accumulated funds to meet the staffing and other costs of completing these initiatives will result in operating deficits in 2009–10, 2010–11 and 2011–12. These deficits have been approved by the Minister for Finance and Deregulation.
The NBA’s income statement reports a 2008–09 operating surplus of $0.105 million; this compares with an operating surplus of $1.380 million in 2007–08. Table 4.7 shows the NBA’s key results for 2007–08 and 2008–09.
| REVENUE AND EXPENSES | 2008–09 ($’000) |
2007–08 ($’000) |
MOVEMENT (PER CENT) |
|---|---|---|---|
| Contributions from the Australian Government | 5 865 | 5 993 | –2 |
| Contributions from states and territories and other revenue | 3 989 | 4 408 | –10 |
| Total revenue | 9 854 | 10 401 | –5 |
| Employee expenses | 6 162 | 5 826 | 6 |
| Supplier expenses | 2 709 | 2 621 | 3 |
| Other expenses | 878 | 574 | 53 |
| Total expenses | 9 749 | 9 021 | 8 |
| Operating result | 105 | 1 380 | –92 |
Total departmental revenue received in 2008–09 amounted to $9.854 million, made up of $5.865 million in funding from the Australian Government, $3.877 million in contributions received from the states and territories and other revenue, and $0.112 million for resources received free of charge. This represents a reduction of $0.547 million (4.9 per cent) on revenue received in 2007–08.
(‘Other revenue’ refers to contributions arising from officers transferring from other agencies and the use of funds provided in earlier years for specific projects.)
The NBA’s expenses for 2008–09 amounted to $9.749 million—8 per cent higher than in 2007–08. Almost half the increase was due to higher depreciation and amortisation expenses following the implementation of the internally developed Integrated Data Management System. Increases in employee expenses and supplier costs mainly reflected wage and cost increases and the level of activities carried out by the NBA in the year.
Details of the NBA’s assets and liabilities are presented in the audited financial statements in this report.
The NBA held cash of $0.022 million at 30 June 2009. Funds received from all jurisdictions are transferred to the Official Public Account held by the Department of Finance and Deregulation until required for expenditure. In the NBA’s financial statements this item is classified as a receivable. The funds represent amounts intended to be used for implementing key IT projects and for consultancies on the quality and appropriate use of blood products in Australia, as well as being surpluses from prior years, which will be accessed in 2009–10 and beyond to maintain the level of services.
The reduction in the carrying amount of non-financial assets largely results from the depreciation of infrastructure, plant and equipment—particularly IT equipment and furniture and fittings.
The NBA achieved a substantial $1.429 million reduction in payables in 2008–09. This was made up of a reduction in trade creditors, from $0.999 million to $0.381 million, and by accessing funds provided in earlier years for specific activities.
Employee provisions, which cover annual and long service leave entitlements, increased by $0.244 million largely because of accrued leave balances brought to the NBA by new staff. Much of the increase was accompanied by offsetting cash receipts to the value of the entitlements which is brought to account as revenue.
On behalf of the Australian Government, the NBA manages and coordinates the Australian blood supply in accordance with the National Blood Agreement between the Australian, state and territory governments. This includes negotiating and managing national contracts with suppliers of blood and blood-related products on behalf of all governments.
The NBA-administered finances include contributions from all states and territories and the Australian Government for the supply of blood and blood-related products. Each year the Australian Health Ministers Council approves an annual National Supply Plan and Budget, which is formulated by the NBA from demand estimates provided by the states and territories.
Total estimated revenue for 2008–09 is presented in Table 4.8. Because funding is provided to meet the cost of supplying blood and blood products, the increase of $129.6 million in funding (19 per cent) mainly reflects the increasing demand for blood and blood products in the year.
TABLE 4.8 Administered revenue, 2008–09 and 2007–08
| ADMINISTERED REVENUE | 2008–09 ($000) |
2007–08 ($000) |
MOVEMENT (PER CENT) |
|---|---|---|---|
| Funding for supply of blood and blood products | 829 190 | 699 596 | 19 |
| Total administered revenues | 829 190 | 699 596 | 19 |
Table 4.9 shows the NBA’s administered expenses in 2008–09 and 2007–08.
TABLE 4.9 Key results of administered expenses, 2007–08 and 2008–09
| ADMINISTERED EXPENSE | 2008–09 ($’000) |
2007–08 ($’000) |
MOVEMENT (PER CENT) |
|---|---|---|---|
| Grants to the private sector—non-profit organisation | 433 385 | 385 029 | 13 |
| Rendering of goods and services—external entities | 356 568 | 340 749 | 5 |
| Other | 3 103 | ||
| Total administered expenses | 793 056 | 725 778 | 9 |
Administered expenses for 2008–09 increased by 9 per cent over those for 2007–08. Total payments to commercial suppliers rose by 5 per cent due to increased demand for most products and some price increases; payments to the Australian Red Cross Blood Service have increased by 13 per cent.
Administered assets comprise the following:
Administered assets and liabilities increased marginally in 2008–09.
Unspent funds received from jurisdictions are transferred to the Official Public Account and are not classified as administered assets.