Financial & 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.
|Total cost of services (expense limit)||1,281,944||1,299,833||17,889|
|Net cost of services||207,918||279,064||71,146(a)|
|Approved salary expense level||118,174||124,440||6,366(c)|
|Agreed borrowing limit||-||-||(d)|
(1) As specified in the Budgets Statements.
(2) Further explanations are contained in Note 9.12 ‘Explanatory statements (Controlled Operations)’ to the financial statements.
(a) The variation in Net Cost of Services is mainly due to grants and contributions from the Commonwealth Government during the year being reduced by $192.601 million.
(b) The variation in Total Equity is mainly due to:
– Infrastructure Asset Revaluation Reserve was overestimated by $2.1b (7.2%) during 2018/19 which was offset by the overestimate in the infrastructure assets, mainly due to a high estimated price of infrastructure and land under roads
– Surplus for the year was $61m higher than anticipated
– Contributed Equity was $88m higher than anticipated. This includes the equity transfer of Matagarup Bridge ($86m) from the Public Transport Authority.
(c) The variation in Salary Expense is mainly due to:
– a reduced Salary Expense Limit in 2018-19 relating to the Voluntary Targeted Separation Scheme in 2017-18 – a lower than estimated clearance of leave as a result of an increased Priority Projects Works Program
(d) Main Roads did not borrow any funds during the 2018-19 financial year.
|Agreed Working Cash Limit (at Budget)||41,941||39,047||(2,894) (e)|
(e) The variation in Working Cash Limit was a result of a slightly decreased recurrent operating payment requirement.
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.
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.
All disclosures in relation to capital works are included in the Financial Statements and Notes. 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 Investment Planning Committee and Main Roads Investment Executive, and according to their direct and in-direct 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 Transport Portfolio Investment Sub Committee for endorsement of 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.
Main Roads has a Business Case Guidelines document which details the minimum requirements and outlines the preferred template for a business case. Both State and Commonwealth templates have a section on alignment to State Priorities, Government Goals and Main Roads outcomes.
The Infrastructure Australia template has a section on alignment to Government goals and other strategies. Indirect economic benefits (those that are outside the scope of the usual Benefit Cost Assessment) are now being measured through wider economic benefits – these are an attempt to monetarise the benefits a project delivers to the wider economy through enabling infrastructure.
Main Roads has adopted a post project evaluation framework to measure project success – to ensure we are achieving the intended KPI’s and outcomes from project investment. This Benefit Realisation Framework is endorsed by Australian Transport Assessment and Planning and is a key feature of ISCA’s Rating Tool, V2.0.
Sustainable Procurement, Buy Local and WA Industry Participation Strategy
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 in the evaluation of tenders. With the introduction of the Western Australian Industry Participation Strategy, tenderers are required to submit local participation plans as part of their submission to demonstrate a commitment to involve local businesses, if awarded the contract.
In addition, we promote social procurement initiatives such as direct purchasing from Aboriginal businesses and Western Australian disability enterprises. Aboriginal procurement, employment and training targets are mandated in our major construction and maintenance contracts. Annual reporting outcomes is provided to the Department of Finance for publication (State Supply Commission) as required under the Buy Local Policy.
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. Further guidelines of expected behaviours of officers involved in the tendering and evaluation process is documented in the Tendering and Contract Administration Manual and Integrity Framework. An ongoing compliance program is in place to ensure these policies and procedures are adhered to.
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 procurement activities.
Our procedure for dealing with procurement grievances is referenced in all tender documents and is accessible from our website. The procedure is 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 the year, one grievance was received, reviewed and subsequently closed out. There has been an average of only 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 awarded contracts during 2018–19 with a combined estimated value of $10 million or more.
Advanteering Civil Engineers
|Albem Operations Pty Ltd & Highway Construction Pty Ltd|
|Bitutek Pty Ltd|
|BMD Constructions Pty Ltd (WA)|
|Central Earthmoving (Centrals C.E.M.)|
|Colas Western Australia Pty Ltd|
|CPB Contractors Pty Ltd|
|Decmil Southern Pty Ltd|
|Densford Civil Pty Ltd|
|Downer EDI Works Pty Ltd|
|Enviro Infrastructure Pty Ltd|
|Fortec Australia Pty Ltd|
|Freyssinet Australia Pty Ltd|
|Fulton Hogan Industries Pty Ltd|
|Georgiou Group Pty Ltd|
|Highway Construction Pty Ltd|
|Indus Mining Services Pty Ltd (Perth)|
|Jonor Construction Pty Ltd|
|Laing O’Rourke & BG&E JV|
|LendLease Services Pty Limited|
|MACA Civil/Coleman Rail JV|
|Regional Bridging Pty Ltd|
|SRG Global Civil Pty Ltd|
|Venture Smart Pty Limited|
|WBHO Infrastructure Australia Pty Ltd (Perth)|
Unauthorised Use of Credit Cards
We hold 520 corporate credit cards with transactions reviewed for personal use by incurring and certifying officers during statement processing.
During the financial year there were 41,139 credit card transactions totalling $31,484,874.41, of which 28 transactions totalling $1,562.46 were found to be either for personal expenditure or potentially personal.
- one transaction remains under investigation due to the officer’s leave at the end of the financial year
- all other transactions were accidental use of the corporate card instead of a personal card
- eleven transactions were the result of two accounts with companies remaining linked to the wrong card. This enabled repeat transactions to occur before detection at the end of the month.
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 represents 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
|Active contracts within the scope of the GBT Policy in the reporting period||19|
|Contracts granted a variation to the target training rate in the reporting period||0|
|Head contractors involved in the contracts||21|
|Construction apprentices/trainees required to meet target training rate across all contracts||383|
|Construction apprentices/trainees employed by head contractors and the subcontractors they are using for the contracts||361|
|Contracts which met or exceed the target training rate||13|
Statement of Expenditure
In accordance with Section 175ZE of the Electoral Act 1907, Main Roads Western Australia incurred expenses of $357,700 during 2018–19 in advertising, market research, polling, direct mail and media advertising. Expenditure was incurred in the following areas:
|Advertising Agencies Total||12,100|
|Direct Mail Organisations||$|
|Daniel's Printing Craftsmen||10,000|
|Direct Mail Organisations Total||29,600|
|Market Research Organisations||$|
|Market Research Organisations Total||145,200|
|Media Advertising Organisations||$|
|Adcorp Australia Pty Ltd||41,300|
|Angry Chicken Publishing Pty Ltd||21,600|
|Derby Visitor Centre||1,200|
|Farm Guide Pty Ltd||5,100|
|Initiative Pty Ltd||99,100|
|Kojonup Community Newspaper Incorporated||100|
|West Australian Newspaper||1,0000|
|Media Advertising Organisations Total||170,800|
Corporate Business Plan 2018–2022
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. This input is coordinated through our Strategic Plan, the Corporate Business Plan, Directorate and Branch Business Plans and ultimately all employees through Career Conversations, 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 and annually. Reporting varies from online scorecards and dashboard style information, through to staff communiques from Corporate Executive.
Stakeholder Map – Stakeholder Inclusiveness
For the purposes of our Sustainability reporting and communications the following is who we consider interested and influenced by our operations.
- State Treasury
- Federal Funding Agencies
- Full time, part time
- General Travelling Public
- Freight Industry
- Public Transport
- Interfacing landholders
Suppliers & Contractors
Refining Our Stakeholder Engagement Approach
We adopt stakeholder engagement principles based on the AA1000 Stakeholder Engagement Standard 2015 (AA1000SES) to help us design, implement and assess quality stakeholder engagement that delivers integrated, sustainable outcomes. The AA1000 principles of Inclusivity, Materiality and Responsiveness and Completeness align with our commitment to sustainability. The principles underpin our engagement processes for the entire project lifecycle to ensure we can effectively manage expectations about how feedback and involvement will influence decision making, whilst considering project, commercial and political realities.