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  Chapter Title - Departmental Overview
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  Spacer Image New e-Solutions Group for 2000-01 > Financial Performance > The Finance & Administration Portfolio
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FINANCIAL PERFORMANCE

DOFA further consolidated its financial performance following the financial reforms introduced throughout the Commonwealth.

The operating surplus for 1999-2000 was $244.5 million, substantially more than in 1998-99. It also exceeded the forecast in DOFA's 1999-2000 Portfolio Budget Statement by $88 million.

Operating revenues during the year improved markedly. Importantly, dependence on government revenue was reduced significantly while other revenue sources increased. The Property Group completed the introduction of commercial rents for the non-Defence estate during the year, and this contributed significantly towards DOFA's strong performance. Good returns from the disposal of surplus property and interest earnings arising from the first year of devolved banking also contributed to the result.

Contract management initiatives and staffing rationalisation to levels reflecting commercial reality lowered expenses by $189 million, or some 30 per cent less than 1998-99 expenses. Reduced expenses were in line with budget expectations.

DOFA's overall performance in terms of outcomes reflects the above results, although actual and budgeted individual outcomes varied. Service charges for departmental overheads were re-allocated to better reflect use by business groups; this contributed to increases over budget in the prices of Outcomes 1 and 3, and a decrease for Outcome 2. However, the price for Outcome 2 increased by $41.6 million, largely due to the disposal of surplus property, the introduction of commercial rents and earnings on interest, as outlined above.

Based on overall performance, DOFA paid a dividend of $71.7 million from the surplus to the Government. Further, a strong cash flow resulting from the disposal of surplus property and careful management of DOFA's working capital position saw the return of $382.6 million in capital. DOFA now has a strong financial base, with the prospect of ongoing operating surpluses. Continuing dividends to Government are forecast for future years. A review of output pricing is scheduled for 2000-01, and the results of the review will be taken into account for the 2001-02 Budget.



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