Finance and Logistics
The Mint’s internal controls and financial operations were audited by the Australian National Audit Office. The outcome was that the Mint received an unqualified audit report for its 2006-07 financial statements as shown in Appendix A.
The Mint has made significant progress in addressing its governance and systems controls. This has been done against the background of implementing tighter measures around the current financial management information system (FMIS). The work undertaken and experience gained will hold the Mint in good stead in preparing for the upgrade of its FMIS.
In 2006-07, the Mint generated an after tax operating surplus of $1 million through sales of circulating coins and numismatic products. The total revenue of $61 million declined from last year due largely to reduced demand for circulating coins. In addition, numismatic sales were impacted by the absence of any compelling or special national event that would normally boost revenue.
Inventory holdings significantly increased for the year as a consequence of preparing for the production shut down to allow for the building refurbishment to be undertaken.
Total capital funding of $11 million was received by the Mint from the Commonwealth, including $8.5 million for building refurbishment and $2.5 million for capital equipment.
The Mint administered $98 million of seigniorage revenue on behalf of the Commonwealth.
The Commonwealth Certificate of Compliance requirements were successfully met by the Mint. In the process the Chief Executive Instructions (CEIs) were improved and relevant staff awareness programs were delivered. Challenges for the future include management of risks associated with larger than normal inventory holdings; ensuring sufficient working capital is available for the Mint’s operations; securing implementation of major projects within budget and on time; and delivering efficient and effective management of the Mint’s fixed assets during the execution of major projects.
Procurement
The Mint has developed its internal policies and procedure for the procurement of goods and services, consistent with the Mint’s CEIs and the Commonwealth Procurement Guidelines.
During the 2006-07 year the Mint conducted several in-house seminars for officers with delegations under the Financial Management and Accountability Act 1997 (FMA Act 1997). These seminars were to inform officers of their responsibilities in the spending of public monies; officers also attended information sessions relating to the Certificate of Compliance. Mint officers will continue to attend seminars to maintain expertise with all aspects of government policy and legislation.
The procurement cell continues to provide advice and guidance internally to staff on the numerous tenders to be let as part of the refurbishment and related programs and more generally relating to operational requirements.
Consultancies
Consistent with the Commonwealth Procurement Guidelines Instructions the Mint engages consultants on the basis of:
- value for money;
- open and effective competition;
- ethics and fair dealing;
- accountability and reporting;
- national competitiveness and industry development; and
- support for other Australian Government policies.
Typically, consultants are engaged to investigate or diagnose a defined issue or problem; carry out defined research, reviews or evaluations; provide independent advice; and provide information or creative solutions to assist the Mint manage their decision making. The most common reasons for engagement of consultancy services are:
- unavailability of specialist in-house resources in the short timeframe allowed;
- the need for an independent study or review; and
- specialist skills and knowledge not available in-house.
The selection methods used for consultancies are categorised in column five of the table on the following page.
During 2006-07, three new consultancy contracts valued at $10,000 and over were entered into involving total expenditure of $110,025. In addition, four ongoing consultancy contracts valued at $10,000 and over were active during the year involving total actual expenditure of $134,058.
Information on expenditure on contracts and consultancies is also available on the AusTender website www.tenders.gov.au
Assets management
The Mint manages both current and non-current assets in accordance with guidelines set out in the CEIs and Australian Accounting Standards.
The Mint’s non-current assets are subject to an annual stocktake to ensure accuracy of records. The Mint’s asset revaluation strategy, applied with sufficient frequency, ensures correctness of the carrying fair value amount as at reporting date. In 2006-07, the Australian Valuation Office conducted a formal revaluation of the Mint’s coin collection, plant and equipment and leasehold improvements.
The Mint manages four types of fixed asset classes: plant and equipment, leasehold improvements, intangibles and the National Coin Collection. These assets have a total net value of $25.6 million, including $1.1 million work in progress associated with the Mint building refurbishment project.
All assets were assessed for impairment at the reporting date.
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