Financial and Other Disclosures
Financial Targets: Actuals Compared to Budget
The following table provides a comparison of the financial targets and outcomes against criteria included in the Resource Agreement between the Commissioner of Main Roads, Minister for Transport and the Treasurer.
| 2016-17 Target(1)$000 | 2016-17 Actual $000 | Variation(2)$000 | |
|---|---|---|---|
| Total cost of services (expense limit) | 1,202,755 | 1,328,464 | 125,709 |
| Net cost of services | 341,110 | 925,365 | 584,255(a) |
| Total equity | 49,418,987 | 45,936,261 | (3,482,726)(b) |
| Approved salary expense level | 118,701 | 116,440 | (2,261) |
| Agreed borrowing limit | 766 | - | (766)(c) |
- (1) As specified in the Budgets Statements.
- (2) Further explanations are contained in Note 42 ‘Explanatory statements’ to the financial statements.
- a) The variation in Net Cost of Services is mainly due to lower than anticipated receipt of Commonwealth Grants for major capital works.
- b) The variation in Total Equity is mainly due to the Comprehensive Revaluation of Infrastructure Road Assets undertaken as at 30 June 2017 using construction unit rates obtained from professional quantity surveying firms which represent the fair value to replace the assets, and applying these against the units for each infrastructure category.
- c) The variation in Agreed borrowing limit is due to no outstanding loan borrowings from WATC.
| 2016-17 Agreed Limit $000 | 2016-17 Target (1)/Actual (2) $000 | VVariation (3) $000 | |
|---|---|---|---|
| Agreed Working Cash Limit (at Budget) | 35,808 | 35,808 | n/a |
| Agreed Working Cash Limit (at Actuals) | 35,808 | 36,997 | 1,189 |
- (1) Target to reflect the agency’s anticipated working cash for the relevant financial year.
- (2) Actual to reflect the actual working cash held at the close of the financial year.
- (3) Exceed agreed limit during the financial year.
Reporting to the Department of Treasury
We provide monthly, quarterly and annual financial statement information to the Department of Treasury, which is subject to external audit by the Office of the Auditor General. This is an independent check on the integrity of our financial reporting. We are also required to report annually against achievement of financial targets and financial measures in the Resource Agreement between the Commissioner of Main Roads, Managing Director of Main Roads, Minister for Transport and the Treasurer.
Management Reporting
Both Financial Reports and Program Management Reports are tabled monthly and quarterly at Corporate Executive. These report on projects and progress against key performance indicators. In addition, regions and branches conduct monthly finance reviews, with reports presented at Directorate Management meetings.
Accounting and Financial Management Policies
A comprehensive Financial Management Manual containing accounting and financial management policies and procedures is maintained together with Control Self-Assessment Checklists. These documents communicate accountability for procedures within responsibility areas and enhance the level of internal control. The Manual and Checklists enable management as well as internal and external auditors to monitor compliance with established policies and procedures and, together with the Financial Management Act 2006 (WA) and the Treasurer’s Instructions, are available online to all employees.
Capital Works
Our annual Strategic Asset Plan details our 10-year investment needs and drivers. The Strategic Asset Plan adheres to the Department of Treasury’s Strategic Asset Management Framework. We assess projects for funding by submitting comprehensive Business Cases to the Road Planning Investment Committee and Corporate Executive, and according to their economic, environmental and social impacts. Each capital project follows the national Austroads project evaluation methodology where a Benefit Cost Ratio (BCR) must be conducted and calculated. This incorporates quantifiable economic data and is supplemented by simplified economic, environmental and social assessments.
The BCR records information on the benefits of a project on travel time savings, vehicle operating costs and smoother travel, safety, and maintenance. Other benefits and costs are considered via a multi-criteria analysis. Our approved priority Capital projects are then submitted to the Department of Transport’s Portfolio Investment Steering Committee for rating and assessment against all Transport Portfolio priorities, with shortlisted priorities submitted to the Minister for Transport for approval as part of the Department of Treasury’s Annual Budget Cycle. Capital works financial progress is reported to the Corporate Executive on a monthly basis and to the Department of Transport’s Transport Portfolio Investment Coordination Branch on a quarterly basis.
Sustainable Procurement and Buy Local
The State Supply Commission Policy on sustainable procurement requires us to demonstrate that we have considered sustainability in our procurement of goods and services. We have gone beyond the requirements of this policy to reflect this in not only our processes for procuring goods and services but also in procuring works. We apply the Western Australian Government’s Buy Local Policy where we consider and give preference to local providers in our purchases as the benefits to industry development and employment are recognised. Buy Local Policy clauses are also included in all our tender documents and tender assessments. In addition we promote social procurement initiatives such as: direct purchasing from Aboriginal Businesses; using WA Disability Enterprises to provide works, goods and services; and giving recognition to our contractors who employ Aboriginal people and businesses.
| Awarded to businesses located within the ‘prescribed distance’ of a regional delivery point as defined in the Buy Local Policy | |||||||
| 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | ||||
|---|---|---|---|---|---|---|---|
| Metro | Regional | Metro | Regional | Metro | Regional | Metro | Regional |
| n/a | 71 | n/a | 57 | n/a | 51 | n/a | 52 |
| Awarded to a ‘local business’ as defined in the Buy Local Policy (Target 80%) | |||||||
| Metro | Regional | Metro | Regional | Metro | Regional | Metro | Regional |
| 96 | 100 | 99 | 91 | 91 | 88 | 91 | 96 |
Ethical Procurement
Our procurement policies and procedures comply with the requirements of the State Supply Commission and are certified to AS/NZS 9001:2015. These policies are contained in the Procurement Management Manual, with further guidelines of expected behaviours of officers involved in the tendering and evaluation process documented in the Tendering and Contract Administration Manual. An ongoing compliance program is in place to ensure these policies and procedures are implemented. Conflict of interest and misconduct awareness training sessions are ongoing.
A Tender Committee, consisting of two experienced senior officers from our organisation and two senior external Government officials, provides additional assurance that procurement actions comply with policies and standards for high risk and potentially contentious procurements. External probity auditors are engaged for large, complex or controversial procurements activities
Procurement Grievances
Our procedure for dealing with procurement grievances is referenced in all tender documents and a copy is accessible from our website. The procedure has been endorsed by the Western Australian Road Construction and Maintenance Industry Advisory Group and provides for a customer-focused, fair and structured, and relationship-based approach to reviewing grievances lodged by contractors. During 2016/17 one grievance was received, reviews and subsequently closed out. There has been an average of one grievance per year over the past five years, confirming our procurement processes continue to be fair and equitable. The table below lists our major suppliers and contractors and their award value over the past year.
| Major Suppliers/Contractors | 2017 Award Value $million (GST excl) |
|---|---|
| Metropolitan Roads Improvement Alliance | 403.6 |
| BGC Contracting Pty Ltd & Laing O'Rourke Australia Construction Pty Ltd# | 399.8 |
| CPB Contractors Pty Ltd | 259.3 |
| WBHO Infrastructure Australia Pty Ltd | 39.3 |
| GHD Pty Ltd | 33.0 |
| BMD Constructions Pty Ltd (WA) | 24.9 |
| MACA Civil Pty Ltd | 18.4 |
| APP Corporation Pty Limited | 11.8 |
| Empired Limited | 9.2 |
| Parsons Brinckerhoff Australia Pty Ltd | 7.5 |
Unauthorised Use of Credit Cards
We hold 386 corporate credit cards with transactions reviewed for personal use by incurring and certifying officers during statement processing.
During the financial year there were 31,066 credit card transactions, 21 of which were found to be for personal expenditure totalling $2,153.06. All of which has been reimbursed.
- Nine transactions were accidental use of the corporate card instead of a personal card identified immediately by the card holder
- Six transactions were accidental use of the corporate card instead of a personal card identified at time of reviewing the statement
- Three transactions were the result of the EFTPOS machine picking up the wrong card where both personal and corporate cards were in close proximity
- Three transactions were the result of policy confusion on responsibility for the expense.
Due to the nature of the personal expenditure in each instance, no disciplinary action was deemed to be required.
Pricing Policies of Services Provided
Our supply of goods and services represent works and services carried out for other public sector and private bodies on a cost recovery basis. Details are available in the notes to the Financial Statements. Relevant Pricing Policies we set are developed in accordance with the Department of Treasury’s Costing and Pricing Government Services Guidelines.
Government Building Training Policy
State Government Building and Construction Contracts
| Measure | Number |
|---|---|
| Active contracts within the scope of the GBT Policy in the reporting period | 9 |
| Contracts granted a variation to the target training rate in the reporting period | 0 |
| Head contractors involved in the contracts | 9 |
| Construction apprentices/trainees required to meet target training rate across all contracts | 505 |
| Construction apprentices/trainees employed by head contractors and the subcontractors they are using for the contracts | 251 |
| Contracts which met or exceed the target training rate | 3 |
State Government Maintenance Contracts
The new policy, effective from 1 October 2015, has not been applied retrospectively to our maintenance contracts (Integrated Services Arrangements), which were implemented during 2010 and 2011. Whilst the policy includes an option for agencies to consider transitioning existing contracts to the new Policy.
Statement of expenditure required under Section 175ze of the Electoral Act 1907
In accordance with Section 175ZE of the Electoral Act 1907, Main Roads Western Australia incurred $1,081,700.00 during 2016-17 in advertising, market research, polling, direct mail and media advertising. Expenditure was incurred in the following areas:
| $ | |
|---|---|
| ADVERTISING AGENCIES | |
| 303 Mullenlowe Group Pty Ltd | 224,100.00 |
| A Team Printing Pty Ltd | 3,800.00 |
| Albany Chamber Of Comm | 3,800.00 |
| Anthologie | 29,000.00 |
| Cooch Creative Pty Ltd | 20,400.00 |
| Daniels Printing Craftsmen | 35,100.00 |
| Icon Illustration | 500.00 |
| Linkletters | 9,200.00 |
| Quality Press Wa | 14,800.00 |
| Snap East Perth | 11,000.00 |
| The Brand Agency | 19,300.00 |
| Advertising Agencies Total | 367,400.00 |
| DIRECT MAIL ORGANISATIONS | |
| Quickmail | 14,900.00 |
| Direct Mail Organisations Total | 14,900.00 |
| MARKET RESEARCH ORGANISATIONS | |
| Metrix Consulting Pty Ltd | 83,500.00 |
| Market Research Organisations Total | 83,500.00 |
| POLLING ORGANISATIONS | Nil |
| MEDIA ADVERTISING ORGANISATIONS | |
| Adcorp Australia Ltd | 155,200.00 |
| Carat Australia Media Services Pty Ltd | 362,000.00 |
| 8,400.00 | |
| Optimum Media Decisions (WA) Pty Ltd | 86,600.00 |
| Radio Mora | 3,700.00 |
| Media Advertising Organisations Total | 615,900.00 |
| Grand Total | 1,081,700.00 |
Corporate Business Plan 2017–21
Our Corporate Business Plan specifically identifies priorities, actions, targets and measures that must be considered as part of the development of Directorate and Branch Business Plans. Our integrated approach to planning is based on input from partners, stakeholders, customers and employees. The input is coordinated through our Strategic Plan, the Corporate Business Plan, Directorate and Branch Business Plans and ultimately all employees through Individual Performance Agreements, as shown in the chart. Our Corporate Business Plan aligns with our strategic direction and government goals and objectives. Our Corporate Business Plan is the basis for all Directorate and Branch Business Plans and ensures planning, delivery, maintenance and operational activities are aligned with our corporate direction.
We review our progress monthly, quarterly, biannually and annually. Reporting varies from online scorecards and dashboard style information, through to staff communiques from Corporate Executive.
Disability Access and Inclusion Plan
Our Disability Access and Inclusion Plan (DAIP) was put in place to support the state government’s vision for a better quality of life for all Western Australians. It implements, at an agency level, Australia’s commitment to international human rights instruments such as the Convention on the Rights of Persons with Disabilities. The plan, since it was first launched in 1995, adds further emphasis to the significant progress we have made in addressing the needs of people with disabilities. Staff and members of the public were widely consulted in developing the plan and initiatives
The DAIP ensures that we provide for all people in the community including those with a disability, which could range from mobility to cognitive issues. The initiatives we undertake include access to our buildings, tactile ground-surface indicators to aid vision impaired pedestrians, and audible tactile provisions at pedestrian crossing traffic signals.