Financial Report 2016–17

This is the financial report of the Australian Academy of Science for the year ended 30 June 2017. It includes a balance sheet for the financial year, as well as statements of comprehensive income, changes in equity and cash flows.

Download the financial report (PDF 1mb)


Treasurer’s commentary on Financial Statements 2017

The Academy has posted an accounting surplus of $2,754,190 (2016 $167,860 deficit) for the year ended 30 June 2017 incorporating a non-cash change on fair value of the Investment Portfolio being an increase of $3,422,315 (2016 decrease of $431,657) and Impairment write down of specific Investments of $774,560 (2016 impairment of $925,417), resulting in a net surplus of $106,435, ($2016 loss of $599,517)

Compliance with accounting standards requires that significant changes in the market value of investments must be accounted for, but as the chart of funds under management illustrates, the trend in the value of the Academy’s endowments is upwards, reflecting the careful stewardship of these endowments. This financial result is an improvement on last years losses and the Academy is projecting surplus positions in future financial years, making more funds available for new initiatives.

Please see the below table detailing the Academy’s operating deficit and how it has been funded:

Academy Operations Untied Investments Special Purpose Funds Primary Connections (excluding grant and public good) Total per Accounts
Income
Operational Income $10,952,819 $847,204 $11,800,023
Net Investment Income* $914,466 $1,805,492 $28,347 $2,748,305
Donations** $484,541 $484,541
Total Income $10,952,819 $914,466 $2,290,033 $875,551 $15,032,869
Expenses
Operational Expense $12,733,796 $1,300,532 $14,034,328
Impairment Loss $774,560 $774,560
Fund Expense $115,571 $776,535 $892,106
Total Expense $12,733,796 $890,131 $776,535 $1,300,532 $15,700,994
Result -$1,780,977 $24,335 $1,513,498 -$424,981 -$668,125
Other Comprehensive Income $3,422,315 $3,422,315
Total Comprehensive Income -$1,780,977 $3,446,650 $1,513,498 -$424,981 $2,754,190

*NB – From 1 July 2015 capital movement has been apportioned between Special Purpose and Untied Funds (P264/14) resulting in the net allocation shown to Special Purpose Funds.
Untied Funds do not have allocation directly applied for purposes of reconciliation on this table.
**Primary Connections income does not include donations yet to be spent so this will differ from audited figures due to accounting treatment.

This shows that Academy operations cost $1.4 million and Primary Connections Operations $0.43 million, funded by net untied investment income of $1.44 million to the extent that grants did not cover expenditure. Please note that there were also some small transfers over the year from the Enlightening Fund to Academy Operations. This is a much better result than the prior year noting in particular that much of the untied expenses related to a large non cash impairment loss.

Performance to budget – The major positive variances can be attributed to:

  1. Investment income (net of sales and brokerage) is up on budget by 9%. The net gain on sale of investments amounting to $47,025 is not budgeted for; it is policy not to use capital gains as income.
  2. Cost of sales is down 46% due to Primary Connections units not selling as predicted.
  3. Activity in the Primary Connections – public good program was down on budget. This performance reflects the challenges in providing bursaries to teachers. Whilst in practice the Academy must treat the underspend as a future liability, it is recognised as a reduction in expense under accounting standards as the obligation is essentially an internal agreement.
  4. In similar fashion to 3, Primary Connections total costs are down 10%, largely through restructuring to accommodate lower sales.
  5. Various other departments have spent less than budgeted over the year.
  6. Depreciation expense is lower than budgeted by 3% as write offs have occurred over the year (mainly related to the previous CRM and web costs).

Negative variances can be attributed to:

  1. Primary Connections sales – actual unit sales were 62% down on budget. As noted the overall deficit for the unit was $424,981. Please also note that the result includes an apportionment of “interest” of $28,346 on the notional capital (especially retained earnings) of the business unit; balancing this, the unit nominally contributed $76,892 to central overheads such as Accounts, Insurance, IT and HR. Unit development costs are capitalised and then expensed once units are sold.
  2. Rental income is down 17% as office space has been reclaimed.
  3. A non-cash impairment loss of $774,560 has been booked as required as key detractors from performance were the banks, Healthscope and Telstra.  In particular as noted in the Annual Report the decreases in Healthscope and Telstra resulted in formal impairments in the accounts.

At the end of June 2017 the Academy employed 75 full time equivalent staff. The full audited accounts of the Academy are available on the Academy website (above) and a hard copy can be printed off for those who require one by calling the Academy Secretariat on 02 6201 9400.

For a more detailed break up of income and expenditure please refer to the charts below.

Income and Expenses

Investment history

© 2019 Australian Academy of Science

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