Financial statements

Comprehensive operating statement, for the financial year ended 30 June 2021

The accompanying notes form part of these financial statements.

Balance sheet, as at 30 June 2021

The accompanying notes form part of these financial statements.

Cash flow statement, for the financial year ended 30 June 2021

The accompanying notes form part of these financial statements.

Statement of changes in equity for the financial year ended 30 June 2021

The accompanying notes form part of these financial statements.

Notes to the financial statements

1. About this report

The Victorian Public Sector Commission (the Commission) was established on 1 April 2014 through an amendment to the Public Administration Act 2004 (the Act) and replaced the State Services Authority which was abolished pursuant to clause 3 of Schedule 3 of the Act.

The Commission’s principal address is:

3 Treasury Place
East Melbourne Victoria 3002

A description of the nature of the principal services is included in the Report of operations of the Annual Report which does not form part of these financial statements.

Basis of preparation

These financial statements are prepared in Australian dollars and the historical cost convention is used unless a different measurement basis is specifically disclosed in the note associated with the item measured on a different basis.

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income, and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

Consistent with the requirements of AASB 1004 Contributions, contributions by owners (that is, contributed capital and its repayment) are treated as equity transactions and, therefore, do not form part of the income and expenses of the Commission.

Judgements, estimates, and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances.

These judgements and assumptions made by management in applying Australian Accounting Standards (AASs) that have significant effects on the financial statements and estimates are disclosed in the notes to which they relate. Actual results may differ from these estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods that are affected by the revision.

These financial statements cover the Commission as an individual reporting entity and include all the controlled activities of the Commission.

Compliance

These general-purpose financial statements have been prepared on a going concern basis in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards (AASs) including Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of AASB 1049 Whole of Government and General Government Sector Financial Reporting.

Where appropriate, those AASs paragraphs applicable to not-for-profit entities have been applied. Accounting policies selected and applied in these financial statements ensure that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events are reported.

Other accounting policies

Significant and other accounting policies that summarise the recognition and measurement basis used and are relevant to an understanding of the financial statements are provided throughout the notes to the financial statements.

2. Funding of our services

The Commission’s services include:

• strengthening the efficiency, effectiveness, and capability of the public sector in order to meet existing and emerging needs and deliver high quality services; and
• maintaining, and advocating for, public sector professionalism and integrity.

The Commission is predominantly funded by Parliamentary appropriations for the provision of outputs. The Parliamentary appropriations are received by the Department of Premier and Cabinet (DPC) and on-forwarded to the Commission in the form of grants. Other than grants from DPC the Commission also receives grants and fee for service income from other Victorian Government agencies.

2.1 Income that funds the delivery of our services

2.2 Grants

Income from grants (other than contribution by owners) is recognised when the Commission obtains control over the contribution. The Commission has determined that this grant income is recognised as income of not-for-profit entities in accordance with AASB 1058, except for grants that are reciprocal in nature (i.e. equal value is given back by the recipient of the grant to the provider) and are enforceable with sufficiently specific performance obligations, they are accounted for as revenue from contracts with customers in accordance with AASB 15.

Income from grants that are enforceable and with sufficiently specific performance obligations and accounted for as revenue from contracts with customers.

Income from grants without any sufficiently specific performance obligations, or that are not enforceable, is recognised when the Commission has an unconditional right to receive cash which usually coincides with raising of invoices by the Commission. In the situation of grants from the Department of Premier and Cabinet, income is recognised when the grants are transferred to the Commission.

2.3 Provision of services

The Provision of service income includes transactions that the Commission has determined to be classified as revenue from contracts with customers in accordance with AASB 15.

Performance obligations and revenue recognition policies

Revenue is measured based on the consideration specified in the contract with the customer. The Commission recognises revenue when it transfers control of a service to the customer, i.e. when, or as, the performance obligations for the provision of services to the customer are satisfied.

For services rendered, where customers simultaneously receive and consume the services as it is provided, revenue is recognised progressively as contract assets until the customer is subsequently invoiced in accordance with the terms of the service agreement. For other customers that are only able to consume the services when they have been completed, revenue is only recognised upon completion and delivery of the services. In rare circumstance where there may be a change in the scope of services provided, the customer will be provided with a new contract for the additional services to be rendered and revenue is recognised consistent with accounting policy above.

Consideration received in advance of recognising the associated revenue from the customer is recorded as a contract liability. Where the performance obligations are satisfied but not yet billed, a contract asset is recorded.

3. Cost of delivering our services

This section provides an account of the expenses incurred by the Commission in delivering its services. The funds that enable the provision of the services were disclosed in Note 2.

3.1 Expenses incurred in the delivery of services

3.2 Employee benefits

3.2.1 Employee benefits in the comprehensive operating statement

Employee benefits include all costs related to employment including salaries and wages, superannuation, fringe benefits tax, leave entitlements, termination payments and WorkCover premiums.

3.2.2 Employee benefits in the balance sheet

Provision is made for benefits accruing to employees in respect of annual leave and long service leave for services rendered up to the reporting date and recorded as an expense during the period the services are delivered.

Current provisions

The annual leave liability is classified as a current liability as the Commission does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Unconditional long service leave is disclosed as a current liability; even where the Commission does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

No provision has been made for sick leave as all sick leave is non-vesting and it is not considered probable that the average sick leave taken in the future will be greater than the benefits accrued in the future. As sick leave is non-vesting, an expense is recognised in the Statement of Comprehensive Income as it is taken.

Employment on-costs such as payroll tax, workers compensation and superannuation are included as a component of the provision for employee benefits.

Non-current provisions

Conditional long service leave is disclosed as a non-current liability where there is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current long service leave is measured at present value.

Any gain or loss following revaluation of the present value of non-current long service leave liability is recognised as a transaction, except to the extent that a gain or loss arises due to changes in bond interest rates for which it is then recognised as an ‘other economic flow’ in the net result.

The Commission does not recognise any defined benefit liabilities because it has no legal or constructive obligation to pay future benefits relating to its employees. Instead, the Department of Treasury and Finance (DTF) discloses in its annual financial statements the net defined benefit cost related to the members of these plans as an administered liability (on behalf of the State as the sponsoring employer).

3.3 Capital asset charge

A capital asset charge is a charge levied by the Department of Treasury and Finance (DTF) on the budgeted written down value of non-current physical assets in the Commission’s balance sheet which aims to attribute the opportunity cost of capital used in service delivery and provide incentives to the Commission to identify and dispose of underutilised or surplus assets in a timely manner. The capital asset charge is calculated on the budgeted carrying amount of applicable non-current physical assets.

3.4 Other operating expenses

Other operating expenses generally represent the day-to-day running costs incurred in delivering services of the Commission.

Other operating expenses are recognised as an expense in the reporting period in which they are incurred

4. Key assets available to support delivery of our services

The Commission controls property, plant and equipment in fulfilling its objectives and conducting its activities. These assets represent the key resources that the Commission uses for the delivery of these services.

4.1 Property, plant, and equipment

Initial recognition

Items of property, plant, and equipment are measured initially at cost. Where an asset is acquired for nil or nominal cost, the cost is its fair value at the date of acquisition.

The cost of leasehold improvements is capitalised and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.

The cost of motor vehicle under a lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, as determined at the inception of the lease.

Subsequent measurement

Property, plant, and equipment is subsequently measured at fair value less accumulated depreciation and impairment. Fair value is determined with regard to the asset’s highest and best use (considering legal or physical restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset).

Impairment

Property, plant, and equipment is tested for impairment whenever there is an indication that an asset may be impaired.

The assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is considered to be an impairment and is written off as an ‘other economic flow’, except to the extent that it can be offset to an asset revaluation surplus amount applicable to that class of asset.

The recoverable amount for most assets is measured at the higher of current replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

4.1.1 Reconciliation of movements in carrying amount of property, plant, and equipment

4.2 Intangible assets

4.2.1 Reconciliation of movements in carrying amounts of intangible assets

 

Intangible assets which comprise capitalised software and work-in-progress represent separately identifiable assets without physical substance.  Work-in-progress represents the enhancement work on the Victorian Government Careers website and the development work on the State Workforce Data Analysis and Collection Application.

Initial recognition

Purchased intangible assets are initially measured at cost when the recognition criteria in AASB 138 Intangible Assets are met. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the Commission.

Subsequent measurement

Intangible assets with finite useful lives are amortised as an ‘expense from transactions’ on a straight-line basis over their useful lives.

Impairment

Intangible assets with finite useful lives are tested for impairment annually and whenever an indication of impairment is identified.

4.3 Asset depreciation

Notes:

(a)  The Right of use buildings depreciation charges relates to the Commission’s accommodation lease which has been accounted for, under AASB16 up until 31 October 2019. Post 1 November 2019, VPSC’s building lease is centrally managed by DTF.

Depreciation is calculated on a straight-line basis, at rates that allocate the asset’s value, less any estimated residual value, to its useful life. Depreciation begins when the asset is available for use in the location and condition necessary for it to be capable of operating in the manner intended by the Commission.

Useful life of assets

The estimated useful lives, residual values and depreciation method are reviewed at least annually.  Typical estimated useful lives applicable for the different classes are included in the table below:

Leasehold improvements are depreciated over the shorter of the lease term and their useful lives.

5. Other assets and liabilities

This section sets out those assets and liabilities that arose from the Commission’s delivery of services.

5.1 Receivables

Note:

(i) Amounts receivable from government departments represent funds held in the Public Account within the Department of Treasury and Finance. These funds belong to, and are available for operations of, the Commission.

Contractual receivables are classified as financial instruments and measured at amortised cost. They are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.

Statutory receivables do not arise from contracts and are recognised and measured similarly to contractual receivables (except for impairment) but are not classified as financial instruments.

5.2 Payables

Payables represent liabilities for goods and services provided to the Commission that are unpaid at the end of the financial year. Payables are initially measured at fair value, being the cost of the goods and services, and then subsequently measured at amortised cost.

5.3 Unearned income

Unearned income predominantly represents fees and charges received for training courses and assessments to be held in future periods for the Graduate Recruitment Scheme and Classification Assessment Implementation, which are disclosed in other income. Such income is recognised as unearned income within the liabilities section of the balance sheet.

5.4 Prepayments

Prepayments represent payments in advance of receipt of goods or services, or the payments made for services covering a term extending beyond that financial accounting period.

5.5 Other provisions

The make-good provision is recognised in accordance with the agreement over the leased premises. The Commission is required to remove any leasehold improvements from the leased premises and restore the premises to its original condition at the end of the lease term.

The make-good provision relates to the new leasing agreement the Commission entered during the 2018-19 financial year on the existing premises.

6. How we financed our operations

This section provides information on the sources of finance available to the Commission during its operations, along with interest expenses (the cost of lease liabilities) and other information related to financing activities of the Commission.

This section also includes disclosures on commitments for expenditure.

6.1 Borrowings

Borrowings of the Commission relate to lease liabilities on motor vehicles.

Leases are recognised as assets and liabilities of the Commission at amounts equal to the fair value of the lease asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The lease asset is depreciated over the shorter of the estimated useful life of the asset or the term of the lease.

Minimum lease payments are apportioned between reduction of the lease liability and periodic finance charges which are calculated using the interest rate implicit in the lease and charged directly to the comprehensive operating statement.

Leases are secured borrowings as the rights to the leased assets will revert to the lessor in the event of a default.

There were no defaults and breaches of any lease condition during the current or previous year.

6.2 Reconciliation of net result for the year to cash flow from operating activities

6.3 Commitments for expenditure

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are recorded below at their nominal value and inclusive of GST. Where it is considered appropriate, additional relevant information such as the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.

Note:

(a) In accordance with a Government initiative, from 1 November 2019 most of the Government accommodation leases are centrally managed by DTF. These commitments represent amounts payable to DTF to meet costs associated with the Commissions use of these accommodation facilities that are included in an occupancy agreement between the Commission and DTF.

7. Risks, contingencies, and valuation judgement

The Commission is exposed to risk from its activities and outside factors. In addition, it is often necessary to make judgements and estimates associated with recognition and measurement of items in the financial statements.

This section sets out financial instrument specific information (including exposures to financial risks) as well as those items that are contingent in nature or require a higher level of judgement to be applied, which for the Commission relates mainly to fair value determination.

 7.1. Financial instruments specific disclosures

Financial instruments arise out of contractual agreements between entities that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of the Commission’s activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation.  For example, statutory receivables do not meet the definition of financial instruments as they do not arise under contract. The Commission’s statutory receivables are disclosed in note 5.1.

Categories of financial assets

Financial assets at amortised cost

Financial assets are measured at amortised costs. These assets are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method less any impairment.

The Commission recognises the following assets in this category:

• cash and deposits; and
• trade receivables (excluding statutory receivables)

Categories of financial liabilities

Financial liabilities at amortised cost

Financial instrument liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs.

Financial instrument liabilities measured at amortised cost include all of the Commission’s contractual payables and borrowings.

Derecognition of financial assets and liabilities

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the asset have expired.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

7.2 Categorisation of financial instruments

Note:

(a)  The Commission has relinquished petty cash float previously held.

(b)  Receivables disclosed here exclude statutory receivables (i.e. amounts receivable from government departments and GST recoverable).

7.3 Financial risk management objectives and policies

As a whole, the Commission’s financial risk management program seeks to manage the risks arising from volatility in financial instruments.

The Commission’s main financial risks include credit risk, liquidity risk and market risk. The Commission manages these financial risks in accordance with its financial risk management policy.

Credit risk

Credit risk arises from the financial assets of the Commission, which comprise cash and receivables. The Commission’s exposure to credit risk arises from the potential default of counterparties on their contractual obligations resulting in financial loss to the Commission. Credit risk is measured at fair value and is monitored on a regular basis.

Credit risk associated with the Commission’s financial assets is minimal because the main debtor is the Victorian Government.

Liquidity risk

Liquidity risk arises when the Commission is unable to meet its financial obligations as they fall due.  The Commission operates under the Victorian Government’s fair payments policy of settling financial obligations within 30 days and in the event of a dispute, making payments within 30 days from the date of resolution.

The Commission’s exposure to liquidity risk is deemed insignificant based on prior period data and a current assessment of this risk.  Maximum exposure to liquidity risk is the carrying amount of financial liabilities. The Commission manages its liquidity risk by maintaining an adequate level of uncommitted funds that can be used at short notice to meet its short-term obligations.

Market risk

The Commission has no material exposure to interest rate, foreign currency or other price risks. Interest rates on the Commission’s lease liabilities are fixed.

7.4 Contingent assets and contingent liabilities

Contingent assets and contingent liabilities are not recognised in the balance sheet but are disclosed and, if quantifiable, are measured at nominal value.

Contingent assets and liabilities are presented inclusive of GST receivable or payable respectively.

Contingent assets

Contingent assets are possible assets that arise from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

These are classified as either quantifiable, where the potential economic benefit is known, or non-quantifiable.

There were no contingent assets relating to the Commission as at 30 June 2021 (30 June 2020: Nil).

Contingent liabilities

Contingent liabilities are:

• possible obligations that arise from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or
• present obligations that arise from past events but are not recognised because:
• it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations; or
• the amount of the obligations cannot be measured with sufficient reliability.

Contingent liabilities are also classified as either quantifiable or non-quantifiable.

There were no contingent liabilities relating to the Commission as at 30 June 2021 (30 June 2020: Nil

8. Other disclosures

This section includes additional material disclosures required by accounting standards or otherwise for the understanding of this financial report.

8.1 Restructuring of administrative arrangements

With effect from 1 December 2020, as part of a machinery of government restructure, the Commission (Transferee) assumed responsibility for the Jobs and Skills Exchange, from the Department of Premier and Cabinet (Transferor).

The net assets assumed by the Commission for the Jobs and Skills Exchange due to the administrative restructure is recognised in the balance sheet at the carrying amount of those assets in the transferor’s balance sheet immediately before the transfer.

The net asset transfers were treated as a contribution of capital by the State.

Note:

(a)  This includes cash transferred, which is recognised as part of the amount recoverable from the government by the Commission.

8.2 Subsequent events

Due to further machinery of government administrative restructuring, certain sections of the Public Sector Reform Unit within the Department of Premier and Cabinet, will be transitioned to the Commission. The effective date for this transfer is 1 July 2021.

8.3 Responsible persons

In accordance with the Ministerial Directions issued by the Assistant Treasurer under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

Names

The persons who held the positions of Minister and Accountable Officer in the Commission during the financial year were as follows:

Responsible ministers

Name: The Hon Daniel Andrews, MP, Premier
Term: 01 July 2020 to 07 July 2020

Name: The Hon Danny Pearson, MP, Minister for Government Services
Term: 08 July 2020 to 30 June 2021

Accountable officer

Name: Adam Fennessy, Commissioner
Term: 01 July 2020 to 30 June 2021

Remuneration

Remuneration received or receivable by the Accountable Officer, in connection with the management of the Commission during the reporting period was in the range of $490,000 - $499,000 ($520,000 - $529,999 in 2019-20).

Amounts relating to the Minister are reported in the financial statements of the Department of Parliamentary Services.

8.4 Remuneration of executives

The number of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the table below. Total annualised employee equivalents provide a measure of full time equivalent executive officers over the reporting period.

Remuneration comprises employee expenses in all forms of consideration paid, payable or provided by the entity or on behalf of the entity, in exchange for services rendered, and is disclosed in the following categories:

• short-term employee expenses include amounts such as wages, salaries, annual leave or sick leave that are usually paid or payable on a regular basis, as well as non-monetary benefits such as allowances and free or subsidised goods or services;
• post-employment benefits include employer contributions for members of both defined benefit and defined contribution superannuation plans;
• other long-term benefits include long service leave, other long-service benefit or deferred compensation; and
• termination benefits include termination of employment payments, such as severance packages.

Remuneration of executive officers

Notes:

(a)  Annualised employee equivalent is based on paid working hours of 38 ordinary hours per week over the 52 weeks for the reporting period

8.5 Related parties

The Commission is a wholly owned and controlled entity of the State of Victoria. Related parties of the Commission include

• all key management personnel and their close family members;
• all cabinet ministers and their close family members; and
• all departments and public sector entities that are controlled and consolidated into the whole of State consolidated financial statements.

Significant transactions with government-related entities

The Commission received grants from the Department of Premier and Cabinet of $12 million (2020: $10 million)

Key management personnel (KMP) of the Commission during the financial year include the Portfolio Minister, the Commissioner and the members of the Senior Executive Team as detailed below.

Key management personnel

Adam Fennessy PSM
Commissioner (27 July 2020 to 30 June 2021)

Julia Griffith PSM
Acting Commissioner (1 July 2020 to 26 July 2020, 11 January 2021 to 19 January 2021, 1 April 2021 to 9 April 2021)

Julia Griffith PSM
Deputy Commissioner (27 July 2020 to 10 January 2021, 20 January to 30 June 2021)

Elizabeth Langdon
Deputy Commissioner (1 December 2020 to 8 March 2021)

Natasha Thompson
Executive Director (1 July 2020 to 30 June 2021)

Daen Dorazio
Executive Director (1 July 2020 to 30 June 2021)

Verity Harris
Executive Director (1 July 2020 to 30 June 2021)

Christian Hofmann
Director (8 March to 30 June 2021)

The compensation detailed below excludes the salary and benefit the Portfolio Minister receives. The Minister’s remuneration and allowance are set by the Parliamentary Salaries and Superannuation Act 1968 and are reported in the financial report of the Department of Parliamentary Services.

Notes:

(a)  The amount disclosed for 2020 is inclusive of remuneration received/receivable by incumbent acting in the capacity of VPSC Commissioner during the period of the role’s vacancy.

Transactions with KMPs and other related parties

Given the breadth and depth of State government activities, related parties transact with the Victorian public sector in a manner consistent with other members of the public. Further employment of processes within the Victorian public sector occur on terms and conditions consistent with the Public Administration Act 2004 and Codes of Conduct and Standards issued by the Victorian Public Sector Commission. Procurement processes occur on terms and conditions consistent with the Victorian Government Procurement Board requirements.

Outside of normal citizen type transactions with the Commission, there were no related party transactions that involved KMPs and their close family members. No provision has been required, nor any expense recognised, for impairment of receivables from related parties.

8.6 Remuneration of auditor

No other direct services to the Commission were provided by the Victorian Auditor-General’s Office.

8.7 Australian Accounting Standards issued that are not yet effective which are applicable to the Commission

Certain new and revised accounting standards have been issued but are not effective for the 2020-21 reporting period. These accounting standards have not been applied to the Commission’s Financial Statements.

The Commission is reviewing its existing policies and assessing the potential implications of these accounting standards which includes:

• AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non‑Current

This Standard amends AASB 101 to clarify requirements for the presentation of liabilities in the statement of financial position as current or non-current. It initially applied to annual reporting periods beginning on or after 1 January 2022 with earlier application permitted however the AASB has recently issued AASB 2020-6 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current – Deferral of Effective Date to defer the application by one year to periods beginning on or after 1 January 2023. The Commission will not early adopt the Standard.

The Commission is in the process of analysing the impacts of this Standard. However, it is not anticipated to have a material impact.

Several other amending standards and AASB interpretations have been issued that apply to future reporting periods but are considered to have limited impact on the Commission’s reporting.

• AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other Amendments.
• AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definitions of Accounting Estimates.

Accountable Officer’s and Chief Financial Officer’s declaration

The attached financial statements for the Victorian Public Sector Commission have been prepared in accordance with Direction 5.2 of the Standing Directions of the Minister of Finance under the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards including interpretations, and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, cash flow statement, statement of changes in equity and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2021 and the financial position of the Victorian Public Sector Commission as at 30 June 2021.

At the time of signing, we are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate.

We authorise the attached financial statements for issue on 6 September 2021.

Andrew Davis
Chief Financial Officer
Melbourne
6 September 2021

Adam Fennessy PSM
Victorian Public Sector Commissioner
Melbourne
6 September 2021

Victorian Auditor General's Office Independent Auditor's Report

To the Commissioner of the Victorian Public Sector Commission

Opinion

I have audited the financial report of the Victorian Public Sector Commission (the Commission) which comprises the:

• balance sheet as at 30 June 2021
• comprehensive operating statement for the year then ended
• statement of changes in equity for the year then ended
• cash flow statement for the year then ended
• notes to the financial statements, including significant accounting policies
• Accountable Officer’s and Chief Financial Officer’s declaration.

In my opinion the financial report presents fairly, in all material respects, the financial position of the Commission as at 30 June 2021 and its financial performance and cash flows for the year then ended in accordance with the financial reporting requirements of the Financial Management Act 1994 and applicable Australian Accounting Standards.

Basis for opinion

I have conducted my audit in accordance with the Audit Act 1994 which incorporates the Australian Auditing Standards. I further describe my responsibilities under that Act and those standards in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report.

My independence is established by the Constitution Act 1975. My staff and I are independent of the Commission in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Victoria. My staff and I have also fulfilled our other ethical responsibilities in accordance with the Code.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Commissioner’s responsibilities for the financial report

The Commissioner is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards and the Financial Management Act 1994, and for such internal control as the Commissioner determines is necessary to enable the preparation and fair presentation of a financial report that is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Commissioner is responsible for assessing the Commission’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is inappropriate to do so.

Auditor’s responsibilities for the audit of the financial report

As required by the Audit Act 1994, my responsibility is to express an opinion on the financial report based on the audit. My objectives for the audit are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal control
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Commissioner
• conclude on the appropriateness of the Commissioner’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Commission’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify my My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Commission to cease to continue as a going concern.
• evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair

I communicate with the Commissioner regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Timothy Maxfield

As delegate for the Auditor-General of Victoria
Melbourne
10 September 2021