2016 ANNUAL REPORT - Parliament of Victoria · Workforce Data 17 2016 Workforce Profile 18 ... with...

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2016ANNUALREPORT–

2 | FEDERATION TRAINING 2016 ANNUAL REPORT

Contents

Part One Operations 3

Introduction 4Board Chair’s and Managing Director’s Message 6Strategic Intent 7Organisational Chart as at 31 December 2016 8Governance and Management 9Highlights of 2016 10Institute Student Awards 10Staff Awards – Years of Service 10Working with Industry 10Major Commercial Activity 10International 11Industry Representation 11Our Community 11Future Initiatives 12Marketing 13Financial Overview 13Compliance Information 14Workforce Data 172016 Workforce Profile 18Environmental Performance 19

Part Two Financial and Other Information 20

Performance Statement for 2016 23Statement of Performance for the Year Ended 31 December 2016 including Key Performance Indicators 24Financial Summary 25

Part Three Financial Statements 26

Statement to the Board of Directors of Federation Training 29Disclosure Index 80Disclosure Index 82Acronyms 84

FEDERATION TRAINING 2016 ANNUAL REPORT | 3

Part One Operations


Introduction

About this Report

The Federation Training 2016 Annual Report is a report to the Parliament of Victoria required under Section 45 of the Financial Management Act 1994.

The 2016 Annual Report contains information on the operations of Federation Training: consolidated financial statements, performance statement and other information required under Standing Directions of the Minister for Finance under the Act (Section 4 Financial Management Reporting) and the Financial Reporting Directions given under that Act.

In the preparation of this report Federation Training has followed the reporting guidelines issued by the Higher Education and Skills Group, Department of Education and Training.

This report is based on the model Annual Report issued with these guidelines, in accordance with the Financial Management Act 1994, Australian Accounting Standards, Statement of Accounting concepts, authoritative pronouncements of the Australian Accounting Standards Board and other legislative requirements.

All financial information presented in this report is consistent with the audited consolidated financial report for Federation Training.

Queries in relation to this report can be addressed to:

Director, Finance and InfrastructureFederation TrainingPO Box 3279 GMC Morwell 3841

Further information about Federation Training can be obtained on Federation Training’s internet homepage www.federationtraining.edu.au

Jonathan DavisManaging Director

Date: 27/9/2017

Darrin DayDirector Finance and Infrastructure

Date: 27/9/2017


About Federation Training

Building on over 90 years’ experience in training and education Federation Training provides improved opportunities and outcomes for vocational education students across Gippsland and South Eastern Victoria.

With 14 campuses from Chadstone in Melbourne’s outer East across the state to Lakes Entrance, Federation Training offers a diverse range of programs and specially designed learning environments, providing students with the opportunity to get hands on experience and develop real skills in the industry of their choice.

Federation Training has a variety of courses from Pre-apprenticeships, Apprenticeships, and Traineeships, to Certificates, Diplomas and Advanced Diplomas. Students can choose to study courses in Business, Health, General Education or Trades.

Flexible study options mean that students can complete their course in a way that best suits their lifestyle. Students can study full time, part time or online with confidence that they will be equipped with the skills needed to get ahead in the workforce.

Federation Training has effective and appropriate relationships with local industry, in the development of courses to meet the requirements of the workplace. These initiatives ensure that students have access to significant employment opportunities once they graduate.

At Federation Training cares about our students’ career goals and set out to help them achieve their aspirations.

Manner of Establishment

Federation Training is established under the Education and Training Reform Act 2006 (the Act) and administered by the Minister for Training and Skills. In accordance with the Act, the Minister and the governing body of each institute exercise specific powers in relation to the function of the institution. The Minister is responsible to Parliament for the exercise of these powers.

Federation Training is a registered training organisation with the Australian Skills Quality Authority (ASQA).In 2016 the governing Ministers were:• The Hon. Steve Herbert, MP Minister for Training and Skills

from 3 December 2014 to 9 November 2016• The Hon. Gayle Tierney, MP Minister for Training and Skills

from 9 November 2016 to current


Board Chair’s and Managing Director’s Message

Federation Training’s vision is to be a leader in education and training, partnering with industries and communities to build a socially vibrant, economically strong Gippsland.

The Board, working in partnership with the Managing Director and senior management team, is working on a new plan to realise this vision. We are restoring accountability and responsibility and ensuring students, and the needs of the communities we serve, are at the heart of the way we do business.

We are redesigning the curriculum to ensure the training opportunities we provide meet student and industry needs, both now and into the future.

We are creating a new culture, with staff who are passionate about teaching and learning, and who do all they can to help their students get the skills they need for the jobs they want.

We have worked together to address the issues highlighted by the Victorian Auditor General in its previous years’ audits of the financial statements.

We have put in place an enhanced governance process to guide the business transformation needed to create a high performing, respected and sustainable education and training organisation.

These efforts, combined with Government’s ongoing support to help us with our transformation, have seen some strong results for students, industry and our communities in the past year:

• Over 80 people, including retrenched workers and the long-term unemployed, have secured apprenticeships, traineeships and job placements through Back to Work programs;

• Almost 500 people have received help to get a job, or retrain, through our Skills and Jobs Centres; and

• We’ve purchased equipment to support better course delivery and upgrade campus facilities to better ensure students are job-ready

But there is no ‘quick fix’ solution. We need to get this right, to ensure we meet the skills and training needs of local students, workers and businesses across Gippsland.

We look forward to reporting back on the outcomes from our community and stakeholder consultation forums in next year’s report. These outcomes will help us develop a comprehensive, community-driven strategic plan, with implementation to begin in 2018.

The Board of Directors would like to recognise and thank all staff for their contribution, drive, enthusiasm and commitment to Federation Training during this transformation period.

Des Powell AMBoard Chair

Date: 27/9/2017


Date: 27/9/2017


OURAMBITION

Growing Skills. Creating Futures.

OURPURPOSE

We provide accessible quality education and training that

inspires individuals to achieve and, in partnership, promote

industry and community development.

OURVALUES

• Integrity – ‘We do the right thing’

• Excellence – ‘We do it well’

• Responsibility – ‘We take ownership of it’

• Collaboration – ‘We do it together’

INTEGRITY

- Doing the right thing

- Commitment to work

and studies

- Honesty and transparency in all that we do

- Being accountable

- Delivering on our promises

COLLABORATION

- Working together

- Industry and community partnerships

- Engagement

- Cooperation

- Open communication

EXCELLENCE

- Quality delivery

- Qualified teachers with industry currency

- Industry and community relevance

- Student and client satisfaction

- Pride in the quality of our work

RESPONSIBILITY

- Ownership

- Empowerment

- Resilience

- Safety focused

What we mean by our VALUES…

Strategic Intent


Organisational Chart as at 31 December 2016

Board of Directors

Audit & Risk Committee Finance CommitteeRemuneration Committee

Board of Directors

Audit, Finance & Risk Committee

Curriculum & Quality Committee

Infrastructure Committee

Remuneration Committee

Board Membership Committee

Managing Director

Chief Financial Officer Chief Operating OfficerExecutive Director

Education, Quality & Compliance

Executive Director Sales, Marketing &

Innovation

Executive Director Engagement &

Capability

Managing Director

Director Curriculum & Quality

Director Community & Industry Development

Director Finance & Infrastructure

Director Information & Planning

Director People & Culture

2016 Board Governance Structure


2016 Executive Structure


Board of Directors

Audit & Risk Committee Finance CommitteeRemuneration Committee

Board of Directors

Audit, Finance & Risk Committee

Curriculum & Quality Committee

Infrastructure Committee


Board Membership Committee

Managing Director

Chief Financial Officer Chief Operating OfficerExecutive Director

Education, Quality & Compliance

Executive Director Sales, Marketing &

Innovation

Executive Director Engagement &

Capability

Managing Director

Director Curriculum & Quality

Director Community & Industry Development

Director Finance & Infrastructure

Director Information & Planning

Director People & Culture





Board Committees – 1 January to 30 June 2016

The Federation Training Board is supported in its corporate governance and management responsibilities by Committees, comprising Finance and Audit and Risk.

The role of each Committee is defined by Terms of Reference which are approved by the Federation Training Board. The Terms of Reference establish the Committee’s responsibilities, composition, structure and membership.

Serving members of the Finance Committee were:• Anthony Stone (Chairperson)• Mike Smith• Kevin Quigley• Rob Hogarth

Serving members of the Audit and Risk Committee were:• Rob Hogarth (Chairperson)• Mike Smith• Kevin Quigley• Dr Meredith Doig

The Chief Executive Officer, Chief Financial Officer and Chief Operating Officer attended Committee meetings by standing invitation.

Board Committees –1 July to 31 December 2017

The Federation Training Board from 1 July 2016 to 31 December 2016 was supported in its corporate governance and management responsibility by a combined Audit, Finance and Risk Committee and a Remuneration Committee

The role of each Committee is defined by Terms of Reference which are approved by the Federation Training Board.

The Terms of Reference establish the Committee’s responsibilities, composition, structure and membership.

The Audit, Finance and Risk Committee is responsible for matters of accountability, risk management and external and internal control affecting the operations of the Institute whilst ensuring the adequacy of the Institute’s financial reporting and financial management practices. The Committee also monitors the investment of the Institute’s funds in accordance with the Institute’s investment policy, and makes recommendations to the Board.

Serving members of the Audit, Finance and Risk Committee:

• Rob Hogarth (Chairperson)• Tony Nippard• Michelle Dowsett• Des Powell AM (Chair – ex officio)• Jonathan Davis (Managing Director – ex officio)

The Chief Financial Officer and Chief Operating Officer attended Committee meetings by standing invitation.


The Remuneration Committee oversees the recruitment, remuneration and performance review process of the Managing Director and Directors and provides recommendations to the Board.

Serving members of the Remuneration Committee:

• Des Powell AM (Chair)• Angela Hutson• David Williams


Governance and Management

Overview Operations, Objectives, Functions, Powers and Duties of the Board

A new Constitution of Federation Training Order 2016 came into operation on 1 July 2016. By virtue of the Constitution, the Institute is a Body Corporate by operation of sections 3.1.12 of the Education and Training Reform Act 2006 (the Act). In accordance with section 3.1.11(2) of the Act, the Board of Federation Training is established to oversee and govern the Institute.

Governance of the Board is in accordance with section 3.1.11(2a) of the Act in that there is established a Board of Directors to oversee and govern Federation Training. The Board of Directors is responsible and accountable for:• Governing in a manner that ensures the Institute is efficiently

and effectively managed• Ensuring the population of the areas is effectively serviced with

technical and further education that best suits their needs• Providing adult, community and further education services

which are responsible to the needs of industry and the community as well as ensuring that all of its statutory obligations are met

The Minister for Education and Training (the Minister) pursuant to the Act appoints and confirms Directors. As at 1 July 2016 the Board consists of:• Five Ministerial nominee Directors• Three Board Nominee Directors• One elected staff member• By appointment the Managing Director

The powers and duties of the Board are detailed by common law, legislation and Federation Training’s Constitution.

In administering appropriate governance the Directors ensure that the Board provides a clear direction for Federation Training and ensures its sustainability and viability into the future.

Board Members

From 1 January 2016 to 30 June 2016, the Board comprised the following Directors:• Michael Smith• Anthony Stone• Dr Meredith Doig• Ian Nethercote• Catherine Greaves• Debra Cerasa• Dr Jack Hamilton• Rob Hogarth• Kevin Quigley

2016 Board Members – 1 July 2016 to current

On 1 July 2016 the following Directors were appointed: • Des Powell AM• Michelle Dowsett• David Williams• Debra Cerasa• Tony Nippard• Rob Hogarth• Angela Hutson• Annabelle Roxon• Rod McLean• Jonathan Davis

2016 Executive Team

Jonathan Davis, Managing DirectorResponsible to the Board of Directors for the efficient overall management of Federation Training and the achievement of its strategic objectives, as determined by the Board of Directors. Acts as principal advisor to the Board of Directors and provides leadership of, and guidance to, the Executive Team of Federation Training. The Managing Director has specific responsibility for strategic development, leadership, transformation projects, the internal audit program, risk management and industry community engagement.

Liz Davenport, Chief Financial OfficerThe primary role of this function is to maintain a rigorous approach to financial accountability and financial sustainability.

Mark Potter, Chief Operating OfficerThe Chief Operating Officer is accountable for the delivery of support services to both students and staff. The key focus of the Operations function is to ensure that staff and students are able to work or learn in a safe environment that supports their ability to gain an education.

Karen Bird, Executive Director Education, Quality & ComplianceThe Executive Director, Education Quality and Compliance provides strategic advice and management of education and training, policy, innovation and planning issues, and overseeing educational quality and compliance.

Scott Dargan, Executive Director Sales, Marketing & InnovationExecutive Director, Sales, Marketing & Product Innovation leads a team with a strong focus on developing and implementing a commercially focused business culture across the organisation.

Jenni Hardy, Executive Director Engagement & CapabilityResponsible for the leadership of all business activities pertaining to Community Engagement, Workforce Engagement & Capability and management of relationships with key stakeholders.

Executive Departures in 2016

• Scott Dargan, Executive Director Sales, Marketing & Innovation departed on 21 November 2016

• Mark Potter, Chief Operating Officer departed on 16 December 2016


Highlights of 2016

Reopening of Forestec Campus

In April 2016, Federation Training re-opened its Forestec campus in the Colquhoun Forest with the assistance of Government Back to Work funding. Federation Training is partnering with the Gunaikurnai Land and Waters Aboriginal Corporation (GLAWAC) in the sharing of expertise, services and resources creating additional training opportunities for Koorie and mainstream students in conservation and land management and forestry programs. The shared use facility has allowed Federation Training to not only reopen an important community asset but also foster Koorie training programs and create additional tourism and community services for East Gippsland through the creation of a publicly available cultural exhibition space onsite.

TAFE Institute Wurreker Award

In October, Federation Training won the TAFE Institute Wurreker Award. This award is coordinated by the Victorian Aboriginal Education Association and celebrates the success of the Koorie community in Vocational Education and Training. Federation Training’s Koorie Unit provides a range of specifically designed courses and support services to suit the diverse needs of the Aboriginal community. Federation Training Trainer, Lee Nickless, was also a finalist in the 2016 Wurreker Awards, nominated for the Teacher/Trainer Award.

Koorie VCAL Program

2016 also saw the first Koorie VCAL program being run from the Morwell campus as apart of our overall VCAL delivery strategy.

Back to Work Projects

Another successful Government funded Back to Work project was the Paddock to Plate project. This project aimed to increase student enrolment numbers in entry level hospitality and horticulture training by reintegrating disengaged, unemployed and students with disabilities into course areas of skills shortage and regional need. In 2016 as the second year of the project, 170 students undertook the program that not only increased employment opportunities but also allowed for the re-opening and expansion of three training restaurants in Morwell, Leongatha and Bairnsdale.

Institute Student Awards

• Apprentice of the Year - Aleah Taylor• Outstanding Koorie Student of the Year - Dylan Rowlands• Trainee of the year - Daniel Lees• Outstanding Vocational (Business) Student of the Year -

Mathew Wardle• Outstanding Vocational (Community & Health) Student of the

Year - Holly Graske• Outstanding Vocational (Trades) Student of the Year - John

Roberts

Staff Awards – Years of Service

10 Years

• Fred Vanderslik• Peter McFadyen• Di Mowat• Steve Churches• Terry Love• Geoff Pye

15 Years

• Susan Fratczak• Lynn Huguenin• Sharon Walker• Trudy Walker

20 Years

• Gregory Hagger• Jenny Allitt• Karen Bird• Linda Austin

Working with Industry

Business Development

Federation Training’s commercial fee for service training activity has been successful across a wide range of industry sectors that the Institute has been operating in including:• Electrical and Power (ESI)• Emergency Management• Telecommunications• Health and Related Services• Community Services• Environment, Lands & Water

Major Commercial Activity

Federation Training has undertaken a wide range of major commercial activities in 2016, working with the following key industry stakeholders:• Esso Australia• Australian Paper• AusNet• Our Community• Health Republic Pty Ltd• Adult Multicultural Education Services (AMEP)• Kale Tyers Health and Children Services• NBN Athena• Zinfra Pty Ltd


International

Federation Training overseas operations in 2016 included the delivery of:• Australia Awards Fellowship PNG. Mentoring of the participants

in their workplace (January-May) and completion workshop followed by the graduation ceremony in PNG (May 2016).

• Delivery of short courses at Ok Tedi Mine, PNG - three training sessions (July 7-10, July 24-29, December 4-16) for the delivery of High Voltage Operator, Low Voltage Panel Rescue and First Aid courses.

Strategic Approach

Our strategic focus is on developing highly flexible and responsive programs that are suited to the international marketplace. Federation Training concentrates on Malaysia and Papua New Guinea to develop long-term, mutually beneficial and respectful relationships with partners to contextualise training specific for the industry demand, while ensuring our programs are offered in a culturally sensitive manner.

Risk Management Strategies

Federation Training is a member of Victorian TAFE International (VTI) and the Department of State Development Business and Innovation (DSDBI) International clusters to ensure up-to-date information is used to make sound business decisions in the offshore environment. In addition Federation Training monitors and mitigates against currency risk, reputation risk andcompliance.

Overseas Visits

• April 2016 China Trade Mission• May 2016 Australia Awards Fellowship PNG

Industry Representation

Federation Training, through its commercial and fee for service activities, is extensively involved and represented across multiple industry sectors. It is our strong view that wider industry engagement focussing on collaboration is critical to the long term viability of the TAFE sector.

Below is a summary of Federation Training industry engagement and representations:

• Victorian Electrical Supply Industry (VESI) forums • Industry Advisory Board, for the Victorian electrical supply

industry • Senior members of the Institute are members of the TAFE

Business Development Managers Network • Regional Development Victoria (RDV), Gippsland – currently an

active member of the Business Enterprise Hub Working Group. • Health Sector Opportunity, Latrobe City and subsequent

Health Forum. Federation Training is leading this forum and is focused on increasing the health skills base of the workforce in the Latrobe Valley

• NDS National Disability Services• Gippsland Disability Day Service Providers CEO Network • NBN Athena curriculum representative• Live NBN Test Bed site • Committee for Gippsland • The Central Gippsland Essential Industries Group (CGEIG)• A leading member of the consortium of Victorian TAFE’s

to drive collaboration and source international training opportunities for the group.

Our Community

Federation Training continues to build and foster important business and community relationships by being an active member and partner with many organisations, both government and private, across the broader Gippsland region.

Major Committee Representation

• Latrobe Valley Authority Collaboration• The Adult Community and Further Education (ACFE) Board• Committee for Gippsland• Gippsland Sports Academy• Gippsland Network Events; Latrobe, Baw Baw and Bass Coast

South Gippsland• Gippsland East Local Learning & Employment Network (LLEN)• Baw Baw Latrobe Local Learning & Employment Network

(LLEN)• South Gippsland Bass Coast Local Learning & Employment

Network (LLEN)• Baw Baw Skills Centre• South Gippsland Skills Centre• Leongatha Education Precinct• Leongatha Education Precinct (LEP)• South Gippsland Trade Skills Alliance• West Gippsland Trade Training Alliance• Baw Baw Shire Business Advisory Board

Major Sponsorships

• Regional Achievement Awards• Committee for Gippsland• Bendigo Bank Gippsland Business Awards• Gippsland Community Network Events• Latrobe’s Biggest Ever Blokes BBQ• Gippsland Sports Academy• Office National East Gippsland Business Awards 2016 • AFL Gippsland • Master Builders Members’ Night - Traralgon and Bairnsdale• Regional Achievement & Community Awards

Major Partnerships

• South Gippsland Trade Training Alliance • Gippsland Bass Coast LLEN• Gippsland Tech School• Hi-Tech Precinct – Health Innovation & Technology Enterprise

Centre• Gunaikurnai Land and Waters Aboriginal Corporation

(GLaWAC)• Anglicare Gippsland


Future Initiatives

Gippsland Tech School

The Gippsland Tech School, hosted by Federation Training in Morwell, will be a shared learning centre established by a partnership of local schools, industry partners, higher education providers and other stakeholders in the region. Federation Training is contracted to construct and operate the Gippsland Tech School at its Morwell Campus.

Anticipated to open early 2018, it will be housed in an existing building following an innovative redevelopment. The Gippsland Tech School facility is under construction. While this is happening, the Tech School host, committee and director are working with partner schools and local industry to finalise learning programs and determine equipment arrangements to ensure the Tech School is fully functional when it opens in early 2018.

The Gippsland Tech School will have an education focus aligned to industries predicted to experience strong economic and employment growth, including:

• Food and fibre• Health• New energy• Advanced manufacturing

Secondary students from eight partner schools will have access to high-tech learning at Gippsland Tech School. Our partners include:

School Partners:

• Baringa Special School • Berry Street Victoria Inc. (Morwell Campus)• Kurnai College• Lavalla Catholic College• Latrobe Special Developmental School• Lowanna College• St Paul's Anglican Grammar School• Traralgon College

Other Partners:

• Agribusiness Gippsland• Apprenticeships Group Australia• Baw Baw Latrobe LLEN• Catholic Education Office – Sale Diocese• Federation University Australia• Gippsland Trades and Labour Council• Latrobe City Council• Regional Development Victoria

Gippsland Hi-Tech Precinct

The premier’s announcement on 27 November 2016 that launched the Hi-Tech Precinct and announced the 17 million of funding for Federation University to design, build and construct the innovation centre. The Latrobe Valley Authority is the major authorising body that oversights the State Governments ‘Transformation of the Valley’ initiative and includes the Hi-Tech Precinct at Morwell. The institute is working with State Government to upgrade facilities at its Morwell Campus to compliment the new Tech School and Innovation Centre, completing the education pathway.

The Gippsland Hi-Tech Precinct will be a centre for research, business incubation, new product development, start up support, and education and training. It will support the growth of local industry and play an important role in supporting the expansion of the region’s growth sectors around health, food and fibre, advanced manufacturing and new energy. It will also create jobs by accelerating technology adoption and attracting new investment in the region, and centralise and connect the research and innovation already taking place.

The Precinct will be centred around the physical site on the corner of Monash Way and Princes Way in Morwell, but will be virtually connected throughout the region and beyond. The Precinct site in Morwell will feature an Innovation Centre to be opened by 2020. A primary objective of the precinct is to develop the skills of the region. The project will link industry and educators through the Tech School and tertiary education system and develop critical skills across the region. Industry engagement in the development of the programs is critical in understanding the specific skills and development needs of the region’s industry, now and in the future. This precinct will encourage cross-sectoral engagement and provide pathways for students to industry and higher education.

The centre will incorporate creative and innovative spaces to promote design thinking and practice. In a unique model, the Innovation Centre will be co-located and integrated with the Gippsland Tech School – meaning students will be directly linked with local industry and skills. Students from across the region will benefit from clear pathways from secondary school, through to vocational training, and tertiary and research, in one location. Students attending the Tech School will gain invaluable experience and exposure to real industry operations, creating job and research opportunities for graduates.

Federation Training is one of five key stakeholders in the Hi-Tech Precinct. The other partners are Federation University, Regional Development Victoria, The Department of Education and Fujitsu as anchor tenant. The partnership group is working closely with the Latrobe City Council aswell as both local and global industries and stakeholders to develop the most locally-appropriate model for the region. Community and industry input into future design and operations of the Precinct will be sought through the design process.


Marketing

Marketing Campaigns

In 2016, the Marketing Department managed operations across internal and external communications including advertising campaigns, events, social media, website and digital, publication development, media relations, internal communications and student recruitment activities.

In particular, the Marketing Department managed the development and implementation of two key campaigns: ‘Mid-Year 2016’ and ‘Growing Skills. Creating Futures’.

These campaigns in a changing environment enabled the Institute to increased the training delivery market share by 3% to 42.7% in Gippsland and in addition increased the employment status of our students by 4% to 49.1% which is 5% above state average in 2016.

Financial Overview

For the year ended 31 December 2016, the Institute achieved a net result surplus from transactions of $1.4 million (2015: $0.15 million). Taking changes in physical asset revaluation surplus, the Institute achieved a net result of $11.1 million (2015: $5.6 million).

Comprehensive Income Statement

The Institute achieved an improved comprehensive result for 2016 against budget and compared to the prior year due to the following factors:• a 2% increase in State Government contestable training

revenue• an increase in international education fee for service revenue• Government contributions through the TAFE rescue fund, TAFE

structural adjustment fund and TAFE funding boost to assist with the delivery of the distinct role of TAFE

• a government contribution for specialist teaching equipment and additional support funding

• a reduction in supplies and services expenditure as a result of effective cost management strategies.

At 31st December 2016, the Institute’s net worth continues to improve, with consolidated net assets and net worth increasing by 8.5% to $141.1 million (2015: $129.9 million). This improvement was due to the combined impact of the favorable trading results for the year and revaluation gains from the Institute’s properties.


Compliance Information

It is Federation Training’s intent to comply with all relevant legislation and subordinate instruments, including, but not limited to, the following:• Education and Training Reform Act 2006 (ETRA)• The Constitution of Federation Training Order 2014

(superseded by Order 2016) • Directions of the Minister for Training and Skills (or

predecessors) • TAFE institute Commercial Guidelines• TAFE institute Strategic Planning Guidelines• Public Administration Act 2004• Financial Management Act 1994• Freedom of Information Act 1982• Building Act 1993• Protected Disclosure Act 2012• Victorian Industry Participation Policy Act 2003• Fair Work Act 2009

Compliance with Building Act 1993

The Minister for Finance has issued instructions in accordance with the Building Act 1993 – No.126/1993, such that all public entities are required to ensure that all buildings under their control are safe and fit for occupation, comply with statutory requirements, buildings are maintained to a standard in which they remain safe and fit for occupancy and to report annually on measures taken to ensure compliance with the Building Act 1993. It is Federation Training’s practice to ensure that all works requiring building approval have plans certified, works in progress inspected and occupancy permits issued by independent building surveyors engaged on a job-by-job basis. It also ensures that plans for these works are lodged with the relevant local council.

A register of building surveyors and the jobs that they certify is maintained. Federation Training requires all building practitioners engaged on its works to show evidence of current registration upon their engagement. A condition of their contracts with Federation Training is that they maintain their registered status for the course of their contract.

All practitioners engaged by Federation Training maintained their registered status throughout the year. During the year, works and maintenance were undertaken to maximise conformity to relevant standards.

Carers Recognition Act 2012

Federation Training has reviewed the application and operation of the Carers Recognition Act and ensured that the Institute meets the applicable obligations of the Carers Recognition Act 2012.

Freedom of Information Act 1982

Federation Training is subject to the provisions of the Freedom of Information Act 1982 (the FOI Act). The FOI Act gives right of access to information held in documentary form by Federation Training.

It is Federation Training’s policy to facilitate all reasonable requests from students, staff and the general public, subject to privacy and confidentiality provisions, without recourse to the provisions of the FOI Act.

The authorised FOI Officer for Federation Training is the Manager Education Faculty.

Requests for access to information in documentary form in the custody of Federation Training should be made in writing to:

The Managing DirectorAttention FOI OfficerFederation Training, PO Box 3279 GMC Morwell VIC 3841

No requests were received directly by Federation Training in 2016 for access to Federation Training documents under the FOI Act.

Information Available on Request from the Accountable Officer

In compliance with the requirements of FRD 22G Standing Directions in the Report of Operations details in respect of the items listed below have been retained by Federation Training and are available to the relevant Ministers, Members of Parliament and the public on request (subject to the provisions of the Freedom of Information Act): • a statement that declarations of pecuniary interests have been

duly completed by all relevant officers;• details of shares held by a senior officer as nominee or held

beneficially in a statutory authority or subsidiary; • details of publications produced by the entity about itself, and

how these can be obtained; • details of changes in prices, fees, charges, rates and levies

charged by the entity; • details of any major external reviews carried out on the entity;• details of major research and development activities

undertaken by the entity; • details of overseas visits undertaken including a summary of

the objectives and outcomes of each visit;• details of major promotional, public relations and marketing

activities undertaken by the entity to develop community awareness of the entity and its services;

• details of assessments and measures undertaken to improve the occupational health and safety of employees;

• a general statement on industrial relations within the entity and details of time lost through industrial accidents and disputes;

• a list of major committees sponsored by the entity, the purposes of each committee and the extent to which the purposes have been achieved; and

• details of all consultancies and contractors including:• consultants/contractors engaged• services provided• expenditure committed to for each engagement

Enquiries regarding details of the above should be addressed to:

Darrin DayDirector, Finance and InfrastructureFederation TrainingPO Box 3279 GMC Morwell VIC 3841


National Competition Policy

Federation Training supports the Victorian Government’s Competitive Neutrality Policy as outlined in the Guide to Implementing Competitive Neutral Pricing Principles. We see competitive neutrality as a complementary mechanism to the ongoing quest to increase operating efficiencies by way of benchmarking and embracing better work practices.

Public Administration Act 2004

Federation Training employees are not employed under Part 3 of the Public Administration Act 2004. Data on headcount and the number of full time equivalents, separated by gender is show under Workforce Data. Further details on Federation Training staff are also provided in the annual Workforce Analysis and Comparison Application (WACA) which is provided to the Victorian Public Sector Commission to assist them with policy and planning.

Protected Disclosures Act 2012

In 2016 Federation Training policy and procedures were reviewed and updated to ensure they reflect the legislation contained in the Protected Disclosure Act 2012 (Vic).

Federation Training supports the making of disclosures that reveal corrupt conduct, conduct involving a substantial mismanagement of public resources, or conduct involving a substantial risk to public health and safety or the environment.

Disclosure can be made in accordance with Federation Training’s Protected Disclosure Procedure which is publicly available on the Federation Training website. Federation Training will take all reasonable steps to protect people who make such disclosures from any detrimental action or reprisal for making the disclosure. It will also afford natural justice to the person who is the subject of the disclosure.

Victorian Industry Participation Policy

Federation Training did not enter into any construction or contracts to which Victorian Industry Participation Policy (VIPP) applied.

Federation Training complies with the VIPP by ensuring that Federation Training considers opportunities from competitive local suppliers when awarding contracts. Wherever possible our non-contract purchasing is maintained with local suppliers where they are competitive and when going to market Federation Training ensures local suppliers have the opportunity to respond.

Compulsory Non-Academic Fees, Subscriptions and Charges

Federation Training did not collect any compulsory non-academic fees, subscriptions and charges from students and prospective students during the year ended 31 December 2016.

Pecuniary Interests

Declarations of pecuniary interests have been duly completed by all relevant officers.

Victorian Public Sector Travel Principles

Federation Training complies with the Victorian Public Sector Travel Principles

Overseas and Domestic Travel

All overseas and domestic travel by employees of Federation Training during 2016 were guided by the Federation Training Travel Policy and Procedure

2016 Government Advertising Campaign

Federation Training have not implemented any campaigns with government money over $100,000.

Major Reviews

There were no major external reviews carried out on the entity during the 2016 financial year. Federation Training has undertaken a series of internal reviews, including but not limited to:

• Governance Framework• Internal Audit Schedule and Processes• Review of Policies and Procedures• Organisational Structure• Asset Management • Capital Planning• Educational Quality• Risk Management

Information and Communication Technology Expenditure

For the 2016 reporting period, the Institute had a total expenditure of $3,594,985, with the details shown below:

2016 ICT Expenditure: See below

Business as Usual (BAU) ICT Expenditure

Non-Business as Usual (non-BAU) ICT Expenditure

Operational Expenditure Capital Expenditure

$3,594,985 $651,897 - $651,897

Note – total non-BAU expenditure = operational expenditure and capital expenditure.


Consultancies – Summary for 2016 (See Table below)

In 2016 there were 11 consultancies where the total fees payable were $10,000 or greater. The total expenditure incurred during 2016 in relation to these consultancies were $697,722. The following table constitutes compliance with the requirement to make this information publicly available.

Consultant Summary of Project Fee ($) Future expenditure ($)

Wilde and Woollard Building condition reports $135,700 Nil

Almahurst Business Solutions Student Management review and consultation $38,150 Nil

Energised Project Information Technology Business Planning $15,363 Nil

GIST Advisory Campus master plan case $27,545 Nil

Mairin OHS&E Company Hazardous Building Materials Reporting $19,437 Nil

Midweek Consulting Curriculum Planning and consultation $43,958 Nil

Telford Consulting Campus reviews and consultation $67,860 Nil

Executive Career Steps Workforce planning $148,972 Nil

Sturgess Executive Advisory Commercial review and consultation $100,818 Nil

Nina Schultz Workforce consultation $16,000 Nil

Grant Thornton Review and consultation $99,919 Nil

Note: Figures reported exclude GST.

In 2016 there were 10 consultancies where the total fees payable to the consultants were less than $10,000. The total expenditure incurred during 2016 in relation to these consultancies was $46,800.

The annual report will be available on the institute website once approved for publication.

Compliance with Australian and New Zealand Risk Management Standards

To the best of my knowledge and belief, I, Jonathan Davis certify Federation Training has risk management processes in place consistent with the key risk management principles outlined in the Australia and New Zealand Risk Management Standard AS/NZS ISO31000:2009 and that an appropriate internal control system is in place. This enable the Executive to understand, manage and satisfactorily control risk exposures.

I acknowledge that Federation Training has undertaken significant work during the year to review and further detail

Federation Training’s Risk Management policy and its related attachment, the Enterprise Risk Management Framework, to increase its alignment with the Australian and New Zealand Risk Management Standard AS/NZS ISO31000:2009 provisions.

The Audit and Risk Committee has verified this assurance and the risk framework of Federation Training has been reviewed.

Jonathan DavisManaging DirectorDate: 11/08/17

Staff Incident Statistics

Staff Incident Reporting 2016

Staff hazard or injury reports 60

Lost Time Injuries 1


Workforce Data

Equal Opportunity

Federation Training is committed to equal opportunity (including equal employment opportunity) and inclusive and fair processes in all human resource management procedures.

All policies and procedures and associated documentation are readily accessible for staff via the staff portal.

Organisational Values and Staff Code of Conduct

Federation Training assists staff to identify behaviours and ensures that policy and practice are underpinned by core public sector values through its Code of Conduct and Financial Code of Practice which are approved by the Board of Directors and are consistent with the Public Sector Code of Conduct for Victorian Public Sector Employees, issued by the Victorian Public Sector Commission. Principles of equal opportunity and fair and reasonable treatment of others are included in the Code of Conduct and a range of policies and guidelines, including a policy and guideline on conflicts of interest.

Professional Development

Federation Training staff had the opportunity to attend a variety of professional development training and programs to support them in their roles. Teaching staff were strongly supported to ensure that their teaching and industry qualifications were current and met ASQA requirements.

Federation Training received funding in 2016 from the VET Development Centre to build workforce capacity through making available professional development programs for teaching staff.

Industrial Relations

The teaching staff of Federation Training are covered by the Victorian TAFE Teaching Staff Multi-Enterprise Agreement (MEA) 2015.

The industrial trainers at the Chadstone Campus of Federation Training are covered by the Chadstone Trainers’ Enterprise Agreement 2016.

The administrative staff of Federation Training are currently covered by two Agreements from the previous two organisations:

• Central Gippsland Institute of TAFE Professional, Administrative, Clerical, Computing & Technical (PACCT) Staff Enterprise Agreement 2011

• East Gippsland Institute of TAFE (trading as Advance TAFE) PACCT Staff Enterprise Agreement 2012

The terms and conditions of both of these Agreements will continue to apply whilst negotiations are undertaken for one Agreement to cover all administrative staff of Federation Training.

Workplace Health and Safety Promoting a ‘Zero Tolerance’ Culture

Federation Training actively promotes a “zero tolerance” culture in relation to preventable workplace injuries and incidents by ensuring staff, students and any visitors to our facilities aware of

their obligations and responsibilities to Workplace Health and Safety. This is facilitated through induction processes and regular Occupational Health & Safety (OHS) meetings.

Federation Training has undertaken the following preventative and corrective actions to identified workplace health and safety risk:

• Monthly Workplace Health and Safety Committee meetings• Health and Safety Representative Training to its representatives• A review of asbestos register and issues addressed• Completed plant and equipment risk assessments• Introduced an online incident reporting system• Recruited and trained First Aid Officers and Emergency

Wardens• Subscribed to third party safety and environmental legislative

updates

Consultation

Federation Training consults with employees on workplace health and safety issues directly as well as through their Health and Safety Representatives and Workplace Health and Safety Committees.

Consultation is principally undertaken through the WHS Committee and its Health and Safety Representatives. The committee is represented by staff across every campus and meets once a month to review and address any issues that require attention.

Continuous Improvement

Federation Training achieves continuous improvement through the monitoring and review of measurable targets and objectives and improvement of health and safety management systems and initiatives

Federation Training is in the process of establishing objectives and targets as part of the safety management system benchmarked on AS/NZS 4801:2001 Occupational health and safety management systems – Specifications with guidance for use.

Compliance

Federation Training currently complies with all relevant health and safety legislation.

Resourcing

Federation Training has a Work Health & Safety (WHS) Team which works closely with the HR team to provide a healthy, safe and supportive workplace.

In addition, Federation Training offers an Employee Assistance Program to its employees.

Workforce Inclusion

Section 8 of the Public Administration Act 2004 requires the Institute to establish process that ensures:

• Employment decisions are based on merit• Employees are treated fairly and reasonably• Equipment employment opportunity is provided• Employees have a reasonable avenue of redress against unfair

or unreasonable treatment


Head count and FTE as at 31 December 2016

FT PT Total FTE 2016 FTE 2015

Teaching

Ongoing Positions

Female 12 28 40 33.45 30.5

Male 30 4 34 32.8 35.9

Fixed term

Female 4 24 28 18.8 21.3

Male 8 6 14 11.8 16.9

Casual

Female 40.86 24.18

Male 35.46 19.35

Gender (Head count total excluding casual)

Female 16 52 68 93.11 75.98

Male 38 10 48 80.06 72.15

Sub Total 173.17 148.13

Non-teaching

Executive Officers

Female 3 3 3 3

Male 2 2 2 2

PACCT ongoing

Female 58 25 83 73 73.84

Male 40 1 41 34.66 33.16

PACCT fixed-term

Female 22 15 37 29.46 40.04

Male 10 5 15 13.2 8.93

Casual

Female 11.39 14.87

Male 2.73 4.31


Female 83 40 123 116.85 131.75

Male 52 6 58 52.59 48.4

Sub Total 169.44 180.15

Total 342.61 328.28


Female 99 92 191 209.96 207.73

Male 90 16 106 132.65 120.55

Total 189 108 297 342.61 328.28

2016 Workforce Profile

The methodology for calculating FTE has changed from 2015 as per the Department of Education and Training Guidelines. This is to ensure consistency of reporting across all TAFE Institutes.


Environmental Performance

Federation Training has undertaken a number of strategies in line with government policy to reduce our energy usage and carbon footprint, including:• Monitoring and the use of sensors to ensure facilities are not

heated and air-conditioned when they are not occupied• Installation of smart metering of buildings to ensure closer

monitoring of energy consumption• Purchasing of renewable power.• Specific building design at the Chadstone and Leongatha

campuses to maximise the benefits of solar electricity for heating, cooling and power consumption, while minimising costs.

• Automatic controls on air-conditioning systems.• Continued installation of T5 and LED light fittings throughout

the campuses.• Conversion of urinals on all sites to waterless systems and

fitting refurbished buildings with dual flush cisterns and purpose built waterless urinals.

• Lighting controls, sensors and energy efficient glazing and window shading at various Campuses.

• Water collection, storage and re-distribution systems for landscape purposes.

• Utilising Skype for Business and videoconferencing to reduce our carbon footprint in lieu of driving vehicles.

• Installation of new high performance plant and equipment at Chadstone campus.

• Ongoing commissioning and maintenance regimes.• Design practices, construction and operation of buildings

that promote green building programs and technologies as expressed by the Green Building Council of Australia, particularly for the Gippsland Tech School and Campus renovations.

Federation Training aims to ensure that all opportunities to maintain or obtain procurement activities are environmentally friendly and support the objectives of the government’s Environmental Procurement Policy.


Part Two Financial and Other Information


INDEPENDENT AUDITOR’S REPORT

Auditing in the Public Interest

To the Board of Federation Training

Opinion I have audited the accompanying Statement of Performance for 2016 for Federation Training (the institute) which comprises the: Statement of Performance and Declaration by Board Chair, Managing Director and Director, Finance and

Infrastructure. In my opinion, the Statement of Performance for Federation Training in respect of the year ended 31 December 2016 presents fairly, in all material respects.

Basis for opinion I have conducted my audit in accordance with the Audit Act 1994 which incorporates the Australian Standards on Assurance Engagements. My responsibilities under the Act are further described in the Auditor’s Responsibilities for the Audit of the Statement of Performance section of my report.

The Auditor-General’s independence is established by the Constitution Act 1975. I and my staff are independent of the institute 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 Statement of Performance in Australia and 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.

Board's responsibilities for the statement of performance

The Board of the institute is responsible for the preparation and fair presentation of the Statement of Performance and for such internal control as the Board determines is necessary to enable the preparation and fair presentation of the Statement of Performance that is free from material misstatement, whether due to fraud or error.


Independent Auditor’s Report (continued)

2 Auditing in the Public Interest

Auditor’s responsibilities for the audit of the Statement of Performance

As required by the Audit Act 1994, my responsibility is to express an opinion on the Statement of Performance based on the audit. My objectives for the audit are to obtain reasonable assurance about whether the Statement of Performance 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 Standards on Assurance Engagements will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this performance report.

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

identify and assess the risks of material misstatement of the Statement of Performance, 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 our 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 Institute’s internal control

evaluate the overall presentation, structure and content of the Statement of Performance, including the disclosures, and whether the Statement of Performance represents the underlying events and results in a manner that achieves fair presentation.

I communicate with the Board 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.

MELBOURNE

Simone Bohan

20 September 2017

as delegate for the Auditor-General of Victoria


Performance Statement for 2016

Declaration by Board Chair, Managing Director and Director, Finance and Infrastructure

In our opinion, the accompanying Statement of performance of Federation training, in respect of the 2016 financial year, is presented fairly.

The Statement outlines the performance indicators as determined by the responsible Minister, predetermined targets where applicable, the actual results for the year against these indicators, and an explanation of any significant variance between the actual results and performance targets.

As at the date of signing, we are not aware of any circumstance which would render any particulars in the Statement to be misleading or inaccurate.


Date: 11/08/17Place: Melbourne

Darrin DayDirector, Finance and Infrastructure





Statement of Performance for the Year Ended 31 December 2016 including Key Performance Indicators

Performance indicators

Description and Methodology

Metric 2016 Target

2016 Actual

2015 Actual

Comment

Training Outcomes

Module load

completion rate.

Actual module completion /

expected (by unit).

Percentage 89.0% 88.9% 89.0% No major variations in the module

completion rates.

Student satisfaction. % value Proportion of

students who completed

a course and would

recommended the RTO.

Percentage 59.0% 63.5% 59.1% Target achieved.

Financial Management

Total cost per SCH

(excl. depreciation).

Total operational costs

(excluding depreciation and

amortisation) / total number

of student contact hours

(SCH).

Dollars 17.9 20.7 18.8 The target was not achieved due

to the lower number of student

enrolments throughout the year.

Working capital ratio Total current assets / (Total

current liabilities - annual &

long service leave liabilities

greater than 12 months).

Ratio 4.5 3.0 2.6 The working capital ratio improved

in 2016 compared to 2015 due to

additional cash injections made by the

State Government in 2016. The 2016

actual working capital ratio decreased

to the 2016 target is driven by lower

student enrolments, resulting in lower

expected cash balances and lower

receivables.

Operating margin

percentage.

Operating margin %

(EBIT excluding capital

contributions / total

revenue (excluding capital

contributions)

Percentage 0.6% 1.7% (9.3)% The net operating margin significantly

improved in 2016 due to additional

State Government grants.

Organisational Management

Revenue per

Teaching FTE Staff.

Training Revenue (excl.

revenue delivered by third

parties) per teaching FTE.

Dollars $240,139 $188,567 $223,503 The reduction in revenue generated

per teaching FTE is driven by lower

student enrolments throughout the

year.

Revenue per FTE

Staff.

Training Revenue (excl.

revenue delivered by third

parties) per total staffing FTE.

Dollars $108,358 $88,592 $159,166 The target has not been achieved

due to lower student enrolments

throughout the year and reduction in

fee for service income due to a loss of

a major contract.

Employment costs

as a proportion of

training revenue.

Employment and Third

Party training delivery costs

as a proportion of training

revenue (VTG and FFS).

Employment costs + 3rd

party training delivery costs /

Training Revenue

Percentage 77.3% 107.9% 85.0% The increase in the metric has been

driven by a decrease in government

funded and 'fee for service' training

streams.

Student Contact

Hours - Adjusted

(SCH).

Adjusted student contact

hours is a conservative

measure of enrolled hours

excluding withdrawn not

attended and credited units.

Units 2,506,853 2,213,506 2,426,770 The lower contact hours have been

driven by lower student enrolments

across Government funded and Fee

for Service training.

Training Revenue

diversity.

Training Revenue diversity.

Training revenue split by:

• Victorian Training

Guarantee (VTG)

• Fee for Service (FFS)

Percentage 56%

15%

54%

28%

51%

32%

Changes in market condition have

resulted in a shift in training revenue

diversity.


Financial Summary

5 Year Operating Statement (2012 - 2016)

2012 2013 2014 2015 2016

$'000 $'000 $'000 $'000 $'000

Operating revenue

Excluding FFS 27,674 18,950 39,086 41,696 45,232

Other revenue

Commercial and Full Fee paying 11,256 9,990 8,334 10,555 7,494

Capital revenue 8,002 2,702 - - -

Total revenue 46,932 31,642 47,420 52,251 52,726

Salaries and on-costs 27,743 23,272 32,875 28,485 30,981

Non-salary costs 10,174 9,937 21,861 18,053 15,065

Depreciation & amortisation 3,076 3,151 5,371 5,567 5,323

Total costs 40,993 36,360 60,107 52,104 51,370

Net result 5,939 (4,718) (12,687) 147 1,356

2015 was the first full year trading as Federation Training and therefore prior year’s results are not directly comparable.

2014 shows the performance of the former GippsTAFE January to April 2014 and Federation Training (amalgamation of GippsTAFE with Advance TAFE) from May to December 2014.


Part Three Financial Statements


Independent Auditor’s Report To the Board of Federation Training

Opinion I have audited the financial report of Federation Training (the entity) which comprises the:

balance sheet as at 31 December 2016 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 a summary of significant accounting

policies declaration by the Board Chair, Chief Executive Officer and Director Finance and

Infrastructure.

In my opinion the financial report presents fairly, in all material respects, the financial position of the entity as at 31 December 2016 and their financial performance and cash flows for the year then ended in accordance with the financial reporting requirements of Part 7 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. My responsibilities under the Act are further described 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 entity 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 Australia. 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.

Board member’s responsibilities for the financial report

The Board members of the entity are 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 Board members determine 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 Board members are responsible for assessing the entity’s ability to continue as a going concern, and using the going concern basis of accounting unless it is inappropriate to do so.


2

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 the 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 our 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 entity’s internal control

evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board members

conclude on the appropriateness of the Board member’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 entity’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 opinion. 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 entity 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 presentation.

I communicate with the Board members 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.

MELBOURNE 25 August 2017

Simone Bohan as delegate for the Auditor-General of Victoria


Statement to the Board of Directors of Federation Training

Finance Report for Year Ended 31 December 2016

Declaration by Board Chair, Managing Director and Director, Finance and Infrastructure

We certify that the attached financial statements for Federation Training have been prepared in accordance with Standing Direction 5.2 of the Financial Management Act 1994, applicable Financial Reporting Directions issued under that legislation, Australian Accounting Standards and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and notes to and forming part of the financial report, presents fairly the financial transactions during the year ended 31 December 2016 and financial position of the Institute as at 31 December 2016.

At the date of signing this financial report, we are not aware of any circumstance that would render any particulars included in the financial report to be misleading or inaccurate. There are reasonable grounds to believe that the Institute will be able to pay its debts as and when they became due and payable.

The Board Chair and the Managing Director sign this declaration as delegates of, and in accordance with a resolution of, the Board of Federation Training.



Darrin DayDirector, Finance and Infrastructure




The financial statements were authorised for issue by the Audit, Finance & Risk Committee on 14 June 2017.

The financial statements were authorised for issue by the Board of Directors on 11 August 2017.

The Board of Federation Training has the power to amend and reissue the financial statements.


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Financial Statementsfor

Federation TrainingFor the year ended 31 December 2016


FINANCIAL REPORT FOR YEAR ENDED 31 DECEMBER, 2016

DECLARATION BY THE BOARD CHAIR

CHIEF EXECUTIVE OFFICER

AND DIRECTOR OF FINANCE AND INFRASTRUCTURE

We certify that the attached financial statements for Federation Training have been prepared in accordance with

Standing Direction 5.2 of the Financial Management Act 1994, applicable Financial Reporting Directions issued under

that legislation, Australian Accounting Standards and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance

sheet, statement of changes in equity, cash flow statement and notes to and forming part of the financial report,

presents fairly the financial transactions during the year ended 31 December 2016 and financial position of the

Institute as at 31 December 2016.

At the date of signing this financial report, we are not aware of any circumstance that would render any particulars

included in the financial report to be misleading or inaccurate. There are reasonable grounds to believe that the

Institute will be able to pay its debts as and when they become due and payable.

The Board Chair and the Chief Executive Officer sign this declaration as delegates of, and in accordance with a

resolution of, the Board of Federation Training.



Jonathan DavisChief Executive Officer


Darrin DayDirector of Finance and Infrastructure



2016 2015

Note $'000 $'000

Continuing operations

Income from transactions

Government contributions - operating 2(a)(i) 38,677 33,839

Sale of goods and services 2(b) 13,647 16,946

Interest income 2(c) 133 135

Other income 2(d) 269 1,331

Total income from transactions 52,726 52,251

Expenses from transactions

Employee expenses 3(a) 30,981 28,485

Depreciation and amortisation 3(b) 5,323 5,567

Interest expense 3(c) 148 288

Supplies and services 3(d) 8,861 10,773

Other operating expenses 3(e) 6,014 6,075

Total expenses from transactions 51,327 51,188

Net result from transactions (net operating balance) 1,399 1,063

Other economic flows included in net result

Net gain/(loss) on non-financial assets 4(a) 144 122

Net gain/(loss) on financial instruments 4(b) (139) (1,038)

Other gains/(losses) from other economic flows 4(c) (48) -

Total other economic flows included in net result (43) (916)

Net result from continuing operations 1,356 147

Net result 1,356 147

Other economic flows - other comprehensive income

Changes in physical asset revaluation surplus 14 9,749 5,478

Total other economic flows – Other comprehensive income 9,749 5,478

Comprehensive result 11,105 5,625

Comprehensive Operating Statement

For the year ended 31 December 2016

The comprehensive operating statement should be read in conjunction with the notes to the financial statements.


Balance Sheet

As at 31 December 2016

2016 2015

Note $’000 $’000

Assets

Financial assets

Cash and deposits 15(a) 17,196 8,148

Receivables 5 2,813 5,576

Investments and other financial assets 6 2 2

Total financial assets 20,011 13,726

Non-financial assets

Inventories 7 6 195

Property, plant and equipment 8 136,243 129,881

Intangible assets 9 3,268 3,733

Other non-financial assets 10 895 575

Total non-financial assets 140,412 134,384

Total assets 160,423 148,110

Liabilities

Payables 11 4,430 3,861

Provisions 12 4,433 3,794

Borrowings 13 10,500 10,500

Total liabilities 19,363 18,155

Net assets 141,060 129,955

Equity

Accumulated surplus 24,534 23,178

Physical asset revaluation surplus 14 53,398 43,649

Contributed capital 63,128 63,128

Net worth 141,060 129,955

Commitments for expenditure 16 - -

Contingent assets and contingent liabilities 17

The balance sheet should be read in conjunction with the notes to the financial statements.


Statement of Changes in Equity


Physical asset revaluation

surplus

Accumulated surplus

Contributions by owner

Total

Note $'000 $'000 $'000 $'000

At 1 January 2015 38,171 23,031 63,128 124,330

Net result for the year - 147 - 147

Gain on revaluation of land 14 5,478 - - 5,478

Year ended 31 December 2015 43,649 23,178 63,128 129,955

Net result for the period - 1,356 - 1,356

Gain on revaluation of buildings 14 9,749 - - 9,749

Year ended 31 December 2016 53,398 24,534 63,128 141,060

The statement of changes in equity should be read in conjunction with the notes to the financial statements.


Cash Flow Statement


2016 2015

Note $'000 $'000

Cash flows from operating activities

Receipts

Government contributions - operating 2(a)(i) 38,677 34,326

User fees and charges received 17,939 17,013

Interest received 2(c ) 133 135

Other receipts 269 1,043

Total receipts 57,018 52,517

Payments

Payments to suppliers and employees (46,905) (49,188)

Goods and services tax received from/(paid to) the Australian Taxation Office1

258 (229)

Interest and other costs of finance paid - (140)

Total payments (46,647) (49,557)

Net cash flows from/(used in) operating activities 15(b) 10,371 2,960

Cash flows from investing activities

Payment for other financial assets - (2)

Proceeds from sale of property, plant and equipment 160 125

Payments for property, plant and equipment (1,484) (530)

Payments for intangibles - (150)

Net cash (used in)/provided by investing activities (1,324) (557)

Cash flows from financing activities

Repayment of borrowings - (3,200)

Net cash flows (used in)/from financing activities - (3,200)

Net (decrease)/increase in cash and cash equivalents 9,047 (797)

Cash and cash equivalents at the beginning of the financial year 8,148 8,945

Cash and cash equivalents at the end of the financial year 15(a) 17,195 8,148

The above cash flow statement should be read in conjunction with the notes to the financial statements.

Notes:

1 Goods and Services Tax recovered from/ paid to the Australian Taxation Office is presented on a net basis.


Note Accompanying Note 1 Statement of significant accounting policies 2 Income from transactions 3 Expenses from transactions 4 Other economic flows included in net result 5 Receivables 6 Investments and other financial assets 7 Inventories 8 Property, plant and equipment 9 Intangible assets 10 Other non-financial assets 11 Payables 12 Provisions 13 Borrowings 14 Reserves 15 Cash flow information 16 Commitments for expenditure 17 Contingent assets and contingent liabilities 18 Leases 19 Superannuation 20 Financial instruments 21 Responsible persons and executive officers 22 Ex-gratia expenses 23 Remuneration of auditors 24 Subsequent events 25 Economic dependency 26 Institute details


The annual financial statements represent the audited general purpose financial statements for Federation Training ("Institute"). Pursuant to an Order in Council effective from 1st May 2014, the name of Central Gippsland Institute of TAFE was changed to Federation Training. On the same day, the Order amalgamated Advance TAFE with Federation Training.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2016 and the comparative information presented for the year ended 31 December 2015.

The following is a summary of the material accounting policies adopted by the Institute in the preparation of the financial report. The accounting policies have been consistently applied unless otherwise stated.

1.01 Statement of compliance

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

For the purposes of preparing financial statements, the Institute is classed as a not-for-profit entity. Where appropriate, those AAS paragraphs applicable to not-for-profit entities have been applied.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

1.02 Basis of accounting preparation and measurement

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.

These financial statements are presented in Australian dollars, the functional and presentation currency of the Institute, and have been prepared in accordance with the historical cost convention. Historical cost is based on the fair values of the consideration given in exchange for assets. Exceptions to the historical cost convention include:

• non-financial physical assets which, subsequent to acquisition, are measured at a revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair value;

• the fair value of an asset other than land is generally based on its depreciated replacement value; and

• certain liabilities that are calculated with regard to actuarial assessments.

Critical accounting judgements and key sources of estimation uncertainty

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. Actual results may differ from these estimates.

The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements made by management in the application of AASs that have significant effects on the financial statements and estimates relate to:

• the fair value of land, buildings, infrastructure, plant and equipment and intangible assets; and

• actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates.

The following are the critical judgements apart from those involving estimations that the Institute has made in the process of applying the accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements:

• allowances for doubtful debts

Notes to the financial statements


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Fair value measurement

Consistent with AASB 13 Fair Value Measurement, the Institute determines the policies and procedures for both recurring fair value measurements such as property, plant and equipment, intangible assets and financial instruments and for non-recurring fair value measurements such as non-financial physical assets held for sale, in accordance with the requirements of AASB 13 and the relevant Financial Reporting Directions.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, the Institute has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

In addition, the Institute determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period."

The Valuer General Victoria (VGV) is the Institute’s independent valuation agency. The Institute, in conjunction with VGV, monitors changes in the fair value of each asset and liability through relevant data sources to determine whether revaluation is required.

1.03 Reporting entity

The financial statements cover Federation Training as an individual reporting entity. The Institute is a statutory body corporate, established pursuant to an act made by the Victorian Government under the Education and Training Reform Act 2006.

Its principal address is:

Federation Training Corner of Princes Drive and Monash Way, Morwell, Victoria, 3840.

1.04 Basis of consolidation

The Institute has no controlled entities.

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 Institute.

1.05 Events after reporting date

Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between the Institute and other parties, the transactions are only recognised when the agreement is irrevocable at or before balance date. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting date and before the date the statements are authorised for issue, where those events provide information about conditions which existed at the reporting date. Note disclosure is made about events between the reporting date and the date the statements are authorised for issue where the events relate to conditions which arose after the reporting date and are considered to be of material interest.

1.06 Goods and Services Tax

Income, expenses and assets are recognised net of the amount of associated Good and Services Tax (GST), unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority are presented as an operating cash flow.

Commitments and contingent assets or liabilities are also stated inclusive of GST.


1.07 Income from transactions

Income is recognised to the extent that it is probable that the economic benefits will flow to the entity and the income can be reliably measured at fair value. Amounts disclosed as income are, where applicable, net of returns, allowances and duties and taxes. Revenue is recognised for each of the Institute’s major activities as follows:

Government contributions

Government contributions are recognised as revenue in the period when the Institute gains control of the contributions. Control is recognised upon receipt or notification by relevant authorities of the right to receive a contribution for the current period.

Sale of goods and services

(i) Student fees and charges

Student fees and charges revenue is recognised by reference to the percentage of services provided. Where student fees and charges revenue has been clearly received in respect of courses or programs to be delivered in the following year, any non-refundable portion of the fees is treated as revenue in the year of receipt and the balance as Revenue in Advance.

(ii) Fee for Service

Fee for service revenue is recognised by reference to the percentage completion of each contract, i.e. in the reporting period in which the services are rendered. Where fee for service revenue of a reciprocal nature has been clearly received in respect of programs or services to be delivered in the following year, such amounts are disclosed as Revenue in Advance.

(iii) Revenue from sale of goods

Revenue from sale of goods is recognised by the Institute when:

a. the significant risks and rewards of ownership of the goods have transferred to the buyer;

b. the Institute retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

c. the amount of revenue can be reliably measured;

d. it is probable that the economic benefits associated with the transaction will flow to the Institute; and

e. the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest

Interest income includes interest received on bank term deposits and other investments and the unwinding over time of the discount on financial assets. Interest income is recognised using the effective interest method which allocates the interest over the relevant period.

Net realised and unrealised gains and losses on the revaluation of investments do not form part of income from transactions, but are reported either as part of income from other economic flows in the net result or as unrealised gains or losses taken directly to equity, forming part of the total change in net worth in the comprehensive result.

Other income

(i) Rental income

Rental income is recognised on a time proportional basis and is brought to account when the Institute's right to receive the rental is established.

Fair value of assets and services received free of charge or for nominal consideration

Contributions of resources received free of charge or for nominal consideration are recognised at their fair value when control is obtained over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not received as a donation.






1.08 Expenses from transactions

Expenses from transactions are recognised as they are incurred, and reported in the financial year to which they relate.

Employee benefits

Expenses for employee benefits are recognised when incurred.

Retirement benefit obligations

(i) Defined contribution plan

Contributions to defined contribution plans are expensed when they become payable.

(ii) Defined benefit plans

The amount charged to the statement of comprehensive income in respect of superannuation represents the contributions made by the Institute to the superannuation plan in respect of current services of current Institute staff. Superannuation contributions are made to the plans based on the relevant rules of each plan.

The Institute does not recognise any deferred liability in respect of the plan(s) because the Institute has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as and when they fall due. The Department of Treasury and Finance recognises and discloses the State's defined benefit liabilities in its finance report.

Depreciation and amortisation

Depreciation

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is calculated on a straight-line basis, at rates that allocate the asset's value, less any estimated residual value, over its estimated useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

Depreciation methods and rates used for each class of depreciable assets are:

2016 2015

Class of asset Method Rate(s) Rate(s)

Buildings Straight-Line 2.5% 2.5%

Plant & equipment Straight-Line 10 - 33.3% 10 - 33.3%

Motor vehicles Straight-Line 15 - 25% 15 - 25%

Other Straight-Line 10.0% 10.0%

The assets' residual values and useful lives are reviewed and adjusted if appropriate on an annual basis.

Amortisation

Intangible assets with finite lives are amortised on a straight-line basis over the assets' useful lives. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

"Intangible assets with indefinite lives are not amortised. The useful life of intangible assets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. In addition, the Institute tests all intangible assets with indefinite lives for impairment by comparing its recoverable amount with its carrying amount:

a. annually;

b. whenever there is an indication that the intangible asset may be impaired.

Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss.


Interest expense

Interest expense is recognised in the period in which it is incurred.

Interest expense includes interest on advances, loans, overdrafts, bonds and bills, deposits, interest components of finance lease repayments, and amortisation of discounts or premiums in relation to borrowings.

Grants and other transfers

Grants and other transfers to third parties are recognised as an expense in the reporting period in which they are paid or payable.

Fair value of assets and services provided free of charge or for nominal consideration

Resources provided free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether these contributions are subject to restrictions or conditions over their use. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

1.09 Other economic flows included in net result

Other economic flows measure the change in volume or value of assets or liabilities that do not result from transactions.

Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical assets and intangible assets.

Disposal of non-financial assets

Any gain or loss on disposal of non-financial assets is recognised at the date control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at the time.

Impairment of non-financial assets

All assets are assessed annually for indications of impairment, except for:

• Inventories; and

• Financial assets.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset's carrying value exceeds its recoverable amount, the difference is written off by a charge to the comprehensive operating statement, except to the extent that the write down can be debited to an asset revaluation reserve amount applicable to that class of asset.

If there is an indication that there has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash flows 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. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

Net gain/(loss) on financial instruments

Net gain/(loss) on financial instruments includes realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading, impairment and reversal of impairment for financial instruments at amortised cost, and disposals of financial assets.

Revaluations of financial instruments at fair value

The revaluation gain/(loss) on financial instruments at fair value excludes interest earned on financial assets, which is reported as part of income from transactions.






Impairment of financial assets

Financial assets have been assessed for impairment in accordance with Australian Accounting Standards. Where a financial asset's fair value at balance date has reduced by 10 per cent or more than its cost price, or where its fair value has been less than its cost price for a period of 12 or more months, the financial instrument is treated as impaired.

Bad and doubtful debts are assessed on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. The allowance for doubtful receivables and bad debts not written off by mutual consent are adjusted as ‘other economic flows’.

Other gains/(losses) from other economic flows

Other gains/(losses) from other economic flows include the gains or losses from reclassifications of amounts from reserves and/or accumulated surplus to net result, and from the revaluation of the present value of the long service leave liability due to changes in the bond interest rates.

This classification is consistent with the whole of government reporting format and is allowed under AASB 101 Presentation of Financial Statements.

1.10 Financial instruments

Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Categories of non-derivative financial instruments

Loans and receivables

Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted on an active market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Loans and receivables category includes cash and deposits (refer to Note 1.11), term deposits with maturity greater than three months, trade receivables, loans and other receivables, but not statutory receivables.

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. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest-bearing liability, using the effective interest rate method.

Financial instrument liabilities measured at amortised cost include all of the Institute's contractual payables, advances received and interest-bearing arrangements other than those designated at fair value through profit or loss.

1.11 Financial assets

Cash and deposits

Cash and deposits, including cash equivalents, comprise cash on hand and cash at bank, deposits at call and those highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short-term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

For cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as borrowings on the balance sheet.

Receivables

Receivables consist of:

• statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits or FBT recoverable; and

• contractual receivables, which include debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease receivables.

Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments.

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less an allowance for impairment.


A provision for doubtful receivables is made when there is objective evidence that the debts may not be collected and bad debts are written off when identified.

Investments and other financial assets

Investments are classified in the following categories:

• financial assets at fair value through profit or loss;

• loans and receivables;

• held to maturity investments; and

• available-for-sale financial assets.

The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition.

Any interest earned on the financial asset is recognised in the comprehensive operating statement as a transaction.

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; or

• the Institute retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or

• the Institute has transferred its rights to receive cash flows from the asset and either:

a. has transferred substantially all the risks and rewards of the asset; or

b. has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Institute has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of the Institute’s continuing involvement in the asset.

Impairment of financial assets

At the end of each reporting period, the Institute assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

Bad and doubtful debts for financial assets are assessed on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for doubtful receivables are classified as ‘other economic flows’ in the net result.

The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.






1.12 Leases

A lease is a right to use an asset for an agreed period of time in exchange for payment.

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership. Leases of property, plant and equipment are classified as finance infrastructure leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are classified as operating leases.

Operating leases

Institute as lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.

In the event that lease incentives are given to the lessee, the aggregate cost of incentives are recognised as a reduction of rental income over the lease term, on a straight-line basis unless another systematic basis is more representative of the time pattern over which the economic benefit of the leased asset is diminished.

Institute as lessee

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet.

All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.

In the event that lease incentives are received to enter into operating leases, the aggregate cost of incentives are recognised as a reduction of rental expense over the lease term on a straight-line basis, unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.13 Non-financial assets

Inventories

Inventories include goods and other property held either for sale or for distribution at a zero or nominal cost, or for consumption in the ordinary course of business operations. It includes land held-for-sale and excludes depreciable assets.

Property, plant and equipment

All non-financial physical assets are measured initially at cost and subsequently revalued at fair value less any subsequent accumulated depreciation and impairment. Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition.

The fair value of plant, equipment and vehicles, is normally determined by reference to the asset’s depreciated replacement cost. For plant, equipment and vehicles, existing depreciated historical cost is generally a reasonable proxy for depreciated replacement cost because of the short lives of the assets concerned.

The cost of constructed non-financial physical assets includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion of variable and fixed overheads.

For the accounting policy on impairment of non-financial physical assets, refer to Note 1.09 on Impairment of non-financial assets.

Library collections

Library collections are valued at fair value.

Leasehold improvements

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

Capitalisation threshold

The Institute's capitalisation threshold is $5,000 excluding GST (2014:$5,000 excluding GST).


Revaluations of non-financial physical assets

Non-current physical assets measured at fair value are revalued in accordance with Financial Reporting Directions (FRDs) issued by the Minister for Finance. A full revaluation normally occurs every five years, based upon the asset’s government purpose classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are generally used to conduct these scheduled revaluations. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value.

Revaluation increases are credited directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of that class of property, plant and equipment, previously recognised as an expense (other economic flows) in the net result, in which case the increase is recognised as income (other economic flows) in determining the net result.

Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the revaluation reserve in respect of the same class of property, plant and equipment, in which case they are debited to the revaluation reserve.

Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes.

Intangible assets

Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated depreciation/amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the Institute.

When the recognition criteria of AASB 138 Intangible Assets are met, internally generated intangible assets are recognised and measured at cost less accumulated depreciation/amortisation and impairment.

Expenditure on research activities is recognised as an expense in the period in which It is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated:

a. the technical feasibility of completing the intangible asset so that it will be available for use or sale;

b. an intention to complete the intangible asset and use or sell it;

c. the ability to use or sell the asset;

d. the intangible asset will generate probable future economic benefits;

e. the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

f. the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred.

Intangible assets are amortised on a straight-line basis over their useful lives as follows:

2016 2015

Method Rate(s) Rate(s)

Capitalised software development cost Straight-Line 10% 10%

Library software Straight-Line 15%-25% 15%-25%

Prepayments

Prepayments represent payments in advance of receipt of goods and services or that part of expenditure made in one accounting period covering a term extending beyond that period.




1.14 Liabilities

Payables

Payables consist of:

• contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to make future payments in respect of the purchase of those goods and services; and

• statutory payables, such as goods and services tax, fringe benefits tax or other taxes payables.

Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

Provisions

Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

Employee benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.

(i) Wages and salaries, and annual leave

Liabilities for wages and salaries, including non-monetary benefits annual leave and accumulating sick leave, are all recognised in the provision for employee benefits as 'current liabilities', because the Institute does not have an unconditional right to defer settlements of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for wages and salaries, annual leave and sick leave are measured at:

• undiscounted value - if the Institute expects to wholly settle within 12 months; or

• present vale - if the Institute does not expect to wholly settle within 12 months.

(ii) Long service leave

Liability for long service leave (LSL) is recognised in the provision for employee benefits.

Unconditional LSL is disclosed in the notes to the financial statements as a current liability, even where the Institute 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.

The components of the current LSL liability are measured at :

• nominal value (undiscounted value) - component that is expected to be wholly settled within 12 months; and

• present value (discounted value) - component that is not expected to be wholly settled within 12 months.

Conditional LSL is disclosed as a non-current liability. 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 LSL liability is measured at present value.

Any gain or loss following revaluation of the present value of non-current LSL 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.

(iii) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee decides to accept an offer of benefits in exchange for termination of employment. The Institute recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.




(iv) Employee benefits on-costs

Provision for on-costs such as payroll tax, workers compensation and superannuation are recognised separately from the provision for employee benefits.

(v) Performance payments

Performance payments for the Institute's Executive Officers are based on a percentage of the annual salary package provided under the contract of employment. A liability is provided for under the term of the contracts at reporting date and paid out in the next financial year.

Borrowings

Borrowings are initially measured at fair value, being the cost of the interest bearing liabilities, net of transaction costs. The measurement basis subsequent to initial recognition depends on whether the Institute has categorised its interest-bearing liabilities as either financial liabilities designated at fair value through profit or loss, or financial liabilities at amortised cost. Any difference between the initial recognised amount and the redemption value is recognised in net result over the period of the borrowing using the effective interest method.

The classification depends on the nature and purpose of the interest bearing liabilities. The Institute determines the classification of its interest bearing liabilities at initial recognition.

Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Derecognition of financial liabilities

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

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an ‘other economic flow’ in the comprehensive operating statement.

1.15 Commitments

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of note at their nominal value and inclusive of the GST payable. In addition, where it is considered appropriate and provides additional relevant information to users, 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.

1.16 Contingent assets and contingent liabilities

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer to Note 17) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of the GST receivable or payable respectively.

1.17 Equity

Contributed capital

Funding that is in the nature of contributions by the Victorian State Government is treated as contributed capital when designated in accordance with UIG Interpretation 1038 Contribution by Owners Made to Wholly-Owned Public Sector Entities. Commonwealth capital funds are not affected and are treated as income.

Transfers of net assets arising from the business combination are treated as contributed capital.

1.18 Foreign currency translations

Functional and presentation currency

Items included in the financial statements of the Institute are measured using the currency of the primary economic environment in which the Institute operates (the functional currency). The Institute's financial statements are presented in Australian dollars, which is Federation Training’s functional and presentation currency.






1.19 Materiality

In accordance with Accounting Standard AASB 108 Accounting Policies, Changes in Accounting Estimates and Error, when an Australian Accounting Standard specifically applies to a transaction, other event or condition, the accounting policies applied to that item shall be determined by applying the Standard, unless the effect of applying them is immaterial.

Accounting policies will be considered material if their omission or misstatement could, either individually or collectively, influence the economic decisions that users make on the basis of the financial statements. Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances.

1.20 Rounding of amounts

Amounts in the financial report have been rounded to the nearest thousand dollars, unless otherwise stated.

1.21 Comparative information

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

1.22 Going concern

The Institute remains dependent on State government for funding to enable it to continue as a going concern.

The Department of Education and Training has deferred $10.5 million of loan repayment to 2018.

The Institute has received a letter of ongoing support from the Department of Education. On the basis of this support, the Board of the Institute is of the view that the Institute will continue on a going concern basis.

1.23 Change in accounting policy

Subsequent to the 2015 reporting period, the following new and revised accounting standards have been adopted in the current period with their financial impact detailed as below.

AASB 2015-7 Amendments to Australian Accounting Standards - Fair Value

Disclosure of Not-for-Profit Public Sector Entities:

The Minister for Finance has approved the early adoption of AASB 2015-7. This enables Victorian not-for-profit public sector entities to benefit from some limited scope exemptions in relation to the fair value disclosure for the 2014-15 reporting period. The Institute has chosen to apply this early adoption. For fair value measurements that have been categorised within Level 3 of the fair value hierarchy, the Institute is no longer required to provide quantitative information about the ‘significant unobservable inputs’ used in determining the fair value measurement.


Standard/Interpretation Summary

Applicable for annual reporting periods beginning on Impact on public sector entity financial statements

AASB 9 Financial Instruments The key changes include the simplified

requirements for the classification and

measurement of financial assets, a

new hedging accounting model and

a revised impairment loss model to

recognise impairment losses earlier,

as opposed to the current approach

that recognises impairment only when

incurred.

1-Jan-18 The assessment has identified that the financial

impact of available for sale (AFS) assets will now be

reported through other comprehensive income (OCI)

and no longer recycled to the profit and loss. While

the preliminary assessment has not identified any

material impact arising from AASB 9, it will continue to

be monitored and assessed.

AASB 16 Leases The key changes introduced by AASB

16 include the recognition of most

operating leases (which are currently

not recognised) on balance sheet.

1-Jan-19 The assessment has indicated that as most operating

leases will come on balance sheet, recognition

of lease assets and lease liabilities will result in

an increase in lease assets and lease liabilities.

Depreciation of lease assets and interest on lease

liabilities will be recognised in the income statement

with marginal impact on the operating surplus. The

amounts of cash paid for the principal portion of

the lease liability will be presented within financing

activities and the amounts paid for the interest portion

will be presented within operating activities in the

cash flow statement. No change for lessors.

AASB 15 Revenue from Contracts

with Customers

The core principle of AASB 15 requires

an entity to recognise revenue when

the entity satisfies a performance

obligation by transferring a promised

good or service to a customer.

1-Jan-19 The changes in revenue recognition requirements

in AASB 15 may result in changes to the timing

and amount of revenue recorded in the financial

statements. The Standard will also require additional

disclosures on service revenue and contract

modifications. A potential impact will be the upfront

recognition of revenue from licenses that cover

multiple reporting periods. Revenue that was deferred

and amortised over a period may now need to be

recognised immediately as a transitional adjustment

against the opening returned earnings if there are no

former performance obligations outstanding.

1.24 New and revised AASBs in issue but not yet effective

Certain new accounting standards and interpretations have been published that are not effective for the 31 December 2016 reporting period.

As at 31 December 2016 the following standards and interpretations (applicable to the Institute) had been issued but were not mandatory for financial year ended 31 December 2016. The Institute has not, and does not intend to, adopt these standards early.




In addition to the new standards to the right, the AASB has issued a list of amending standards that are not effective for the 2016 reporting period (as

listed below). In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on public

sector reporting. The AASB Interpretation in the list below is also not effective for the 2016 reporting period and is considered to have insignificant

impacts on public sector reporting.

• AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010).

• AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments

• AASB 2014 7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2015)

• AASB 2014 8 Amendments to Australian Accounting Standards arising from AASB 9 (December 2015) – Application of AASB 9 (December 2009) and

AASB 9 (December 2010) [AASB 9 (2009 & 2010)]

• AASB 2015 2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 [AASB 7, AASB 101, AASB 134 & AASB

1049]

• AASB 2015 3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality

• AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses [AASB 112]

• AASB 2016 -2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107

• AASB 2016 -3 Amendments to Australian Accounting Standards – Clarifications to AASB 15

• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based Payment Transactions [AASB 2]



AASB 2014-1 Amendments to

Australian Accounting Standards

[Part E Financial Instruments]

Amends various AASs to reflect

the AASB's decision to defer the

mandatory application date of AASB 9

to annual reporting periods beginning

on or after 1 January 2018 as a

consequence of Chapter 6 Hedge

Accounting, and to amend reduced

disclosure requirements.

1-Jan-18 This amending standard will defer the application

period of AASB 9 to the 2018-19 reporting period in

accordance with the transition requirements.

AASB 2015-6 Amendments to

Australian Accounting Standards

– Extending Related Party

Disclosures to Not-for-Profit

Public Sector Entities [AASB 10,

AASB 124 & AASB 1049]

The Amendments extend the scope of

AASB 124 Related Party Disclosures to

not-for-profit public sector entities. A

guidance has been included to assist

the application of the Standard by not-

for-profit public sector entities.

1-Jul-16 The amending standard will result in extended

disclosures on the entity's key management personnel

(KMP), and the related party transactions.

AASB 2016 -4 Amendments to

Australian Accounting

Standards – Recoverable Amount

of Noncash-Generating

Specialised Assets of Not-for-

Profit Entities”

The standard amends AASB 136

Impairment of Assets to remove

references to using depreciated

replacement cost (DRC) as a measure

of value in use for not-for-profit

entities.

1-Jan-17 The assessment has indicated that there is

minimal impact. Given the specialised nature and

restrictions of public sector assets, the existing use

is presumed to be the highest and best use (HBU),

hence current replacement cost under AASB 13 Fair

Value Measurement is the same as the depreciated

replacement cost concept under AASB 136.




2016 2015

Income from transactions $'000 $'000

(a) Grants and other transfers (other than contributions by owners)

(i) Government contributions - operating

State government - contestable 14,130 13,843

State government - capital 650 4,725

Contributions by Commonwealth Government - 136

Other contributions by State Government 23,897 15,135

Total government contributions - operating 38,677 33,839

Total government contributions 38,677 33,839

(b) Sales of goods and services

Student fees and charges 4,704 5,472

Student material fees 935 434

Rendering of services

Fee for service - Government - 2,170

Fee for service - International operations - onshore 418 126

Fee for service - International operations - offshore - 103

Fee for service - other 7,076 8,156

Total rendering of services 7,494 10,555

Other non-course fees and charges

Sale of goods 514 485

Total other fees and charges 514 485

Total revenue from sale of goods and services 13,647 16,946

(c) Interest

Interest from financial assets not at fair value through profit or loss

Interest on bank deposits 133 135

Total interest from financial assets not at fair value through profit or loss 133 135

Total interest income 133 135

(d) Other income

Rental income

Hire of facilities 223 291

Total rental income 223 291

Donations, bequests and contributions 1 -

Other revenue 45 1,040

Total other income 269 1,331

NOTE 2 - INCOME FROM TRANSACTIONS




NOTE 3 - EXPENSES FROM TRANSACTIONS

2016 2015

Expenses from transactions $'000 $'000

(a) Employee expenses

Salaries, wages, overtime and allowances 24,609 22,031

Superannuation 2,227 2,083

Payroll tax 1,256 1,353

Worker's compensation 504 149

Long service leave 411 459

Annual leave 216 195

Termination benefits 467 298

Other 1,291 1,917

Total employee expenses 30,981 28,485

(b) Depreciation and amortisation

Depreciation of property, plant and equipment

Buildings 2,509 2,438

Plant and equipment 1,854 2,173

Motor vehicles 236 187

Library collections - -

Land improvements 61 57

Leasehold improvements 197 184

Furniture and fittings 1 3

Total depreciation 4,858 5,042

Amortisation of intangible assets

Software 465 525

Total amortisation 465 525

Total depreciation and amortisation 5,323 5,567

(c) Interest expense

Interest on government advances 148 288

Total interest expense 148 288

(d) Supplies and services

Purchase of supplies and consumables 2,301 2,457

Communication expenses 401 339

Contract and other services 2,732 4,265

Cost of goods sold/distributed (ancillary trading) 292 122

Building repairs and maintenance 1,461 2,127

Fees and charges 1,674 1,463

Total supplies and services 8,861 10,773

(e) Other operating expenses

General expenses

Marketing and promotional expenses 948 897

Occupancy expenses 1,390 1,438

Audit fees and services 329 364

Staff development 232 104

Travel and motor vehicle expenses 587 904

Motor vehicle taxes 128 131

Other expenses 467 445

HESG penalty 415 -

Total general expenses 4,496 4,283

Operating lease rental expenses

Lease payments 590 1,390

Total operating lease rental expenses 590 1,390

Subtotal 5,086 5,673

Equipment below capitalisation threshold 910 402

Ex-gratia expense 18 -

Total other operating expenses 6,014 6,075


NOTE 4 - OTHER ECONOMIC FLOWS INCLUDED IN NET RESULT



2016 2015

Other economic flows included in net result $'000 $'000

(a) Net gain/(loss) on non-financial assets (including property, plant and equipment and intangible assets)

Net gain/ (loss) on disposal of property plant and equipment 144 122

Total net gain/(loss) on non-financial assets 144 122

(b) Net gain/(loss) on financial instruments

Impairment of: - -

Receivables - increase in provision for doubtful receivables (139) (1,038)

Total net gain/(loss) on financial instruments (139) (1,038)

(c) Other gains/(losses) from other economic flows

Net gain/(loss) arising from revaluation of long service leave liability1 (48) -

Total other gains/(losses) from other economic flows (48) -

Notes: 1 Revaluation gain/(loss) due to changes in discount rates




NOTE 5 - RECEIVABLES

2016 2015

Receivables $’000 $’000

Current receivables

Contractual

Sale of goods and services 3,479 6,213

Provision for doubtful contractual receivables (See also Note 5(a) below) (666) (1,230)

Other receivables - 421

Total contractual 2,813 5,404

Statutory

GST recoverable from Australian Taxation Office - 172

FBT receivable from Australian Taxation Office - -

Total statutory - 172

Total current receivables 2,813 5,576

Total receivables 2,813 5,576

Notes:1 The average credit period for sales of goods and services and for other receivables is 30 days. Credit collection charges are levied as incurred on the outstanding balances. A provision has been made for estimated irrecoverable amounts from the sale of goods and services determined by a detailed review of debtors balances.

2016 2015

(a) Movement in the provision for doubtful contractual receivables $'000 $'000

Balance at beginning of the year 1,230 507

Reversal of unused provision recognised in the net result - -

Increase in provision for doubtful receivables 139 1,038

Write off of bad debts (703) (315)

Balance at end of the year 666 1,230

(b) Ageing analysis of contractual receivables

Refer to Note 20(ii) for the ageing analysis of contractual receivables.

(c) Nature and extent of risk arising from contractual receivables

Refer to Note 20(ii) for the nature and extent of credit risk arising from contractual receivables.




NOTE 6 - INVESTMENTS AND OTHER FINANCIAL ASSETS

2016 2015

Investments and other financial assets $'000 $'000

Current investments and other financial assets

Other

Rental bond1 2 2

Total current investments and other financial assets 2 2

Total non-current investments and other financial assets - -

Total investments and other financial assets 2 2

Notes:

1 This rental security bond matures within the next 12 months.

(a) Ageing analysis of investments and other financial assets Refer to Note 20(ii) for the ageing analysis of investments and other financial assets.

(b) Nature and extent of risk arising from investments and other financial assets Refer to Note 20(ii) for the nature and extent of risks arising from investments and other financial assets.

NOTE 7 - INVENTORIES

2016 2015

Inventories $'000 $'000

Current

Supplies and consumables - at cost - 37

Raw materials - at cost - 59

Finished goods - at cost - -

Inventories held-for-sale - at cost 6 99

Total current inventories 6 195




NOTE 8 - PROPERTY, PLANT AND EQUIPMENT

Notes

1 The useful lives of assets as stated in Note 1 are used in the calculation of depreciation as shown in Note 3(b).

In accordance with government purpose classifications, the Institute's property, plant and equipment are assets used for the purpose of education.

Property, plant and equipment includes all operational assets.

(a) Reconciliation of carrying amounts

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Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

At 1 January 2015

Cost - 110 399 - - - - - 509

Valuation 23,549 99,876 - 35,287 2,243 6,555 2,438 168 170,116

Accumulated depreciation - (16,827) - (21,446) (1,678) (836) (592) (159) (41,538)

Net book amount 23,549 83,159 399 13,841 565 5,719 1,846 9 129,087

Year ended 31 December 2015

Opening net book amount 23,549 83,159 399 13,841 565 5,719 1,846 9 129,087

Additions - 20 - 218 292 - - - 530

Disposals - - - (46) (126) - - - (172)

Asset revaluation 5,478 - - - - - - - 5,478

Depreciation1 - (2,438) - (2,173) (187) (184) (57) (3) (5,042)

Transfers and other movements 1 (1) (25) 30 (4) (29) 28 - -

Closing net book amount 29,028 80,740 374 11,870 540 5,506 1,817 6 129,881

At 31 December 2015

Cost - - 374 - - - - - 374

Valuation 29,028 100,005 - 35,953 1,857 6,498 2,438 168 175,947

Accumulated depreciation - (19,265) - (24,083) (1,317) (992) (621) (162) (46,440)

Net book amount 29,028 80,740 374 11,870 540 5,506 1,817 6 129,881


Opening net book amount 29,028 80,740 374 11,870 540 5,506 1,817 6 129,881

Additions - 345 143 665 331 - - - 1,484

Disposals - - - (9) (3) - - - (12)

Asset revaluation - 9,748 - - - - - - 9,748

Depreciation1 - (2,509) - (1,854) (236) (197) (61) (1) (4,858)

Transfers and other movements - 70 (374) 304 - - - - -

Closing net book amount 29,028 88,394 143 10,976 632 5,309 1,756 5 136,243

At 31 December 2016

Cost - - 143 - - - - - 143

Valuation 29,028 88,394 - 36,651 2,075 6,498 2,438 168 165,252

Accumulated depreciation - - - (25,675) (1,443) (1,189) (682) (163) (29,152)

Net book value at the end of the financial year

29,028 88,394 143 10,976 632 5,309 1,756 5 136,243





(b) Fair value measurement hierarchy for assets as at 31 December 2016 Carrying

amount as at 31 Dec 2015

Fair value hierarchy

Level 1 Level 2 Level 3

Classified in accordance with the fair value hierarchy, see Note 1

Quoted PricesObservable Price Inputs

Unobservable Inputs

$’000 $‘000 $‘000 $‘000

Land at fair value:

Specialised land 29,028 - - 29,028

Total of land at fair value 29,028 - - 29,028

Buildings at fair value:

Specialised buildings 88,394 - - 88,394

Total of buildings at fair value 88,394 - - 88,394

Plant, equipment and vehicles at fair value:

Motor vehicles 632 - - 632

Plant and equipment 10,976 - - 10,976

Total of plant, equipment and vehicles at fair value 11,608 - - 11,608

Other assets at fair value:

Land improvements 1,756 - - 1,756

Furniture and fittings 5 - - 5

Leasehold Improvements 5,309 - - 5,309

Total of other assets at fair value 7,070 - - 7,070

Notes

1. There were no transfers between Levels during the year.

(c) Valuations of property, plant and equipment

Fair value assessments have been performed at 31 December 2016 for all classes of assets.

The land and buildings were assessed by applying the Valuer General's land and building cumulative indexation factors for the calendar years 1 January 2013 to 31 December 2016. This assessment confirmed that the fair value of building had a material movement from the last formal revaluation date of 31 December 2012. Therefore, a managerial revaluation was carried out according to FRD 103F using the Valuer General's cumulative building indexation factors for the calendar years 1 January 2013 to 31 December 2016.

The next scheduled full revaluation for this purpose will be conducted in 2017.

Specialised land and specialised buildings

The market approach is used for specialised land, although is adjusted for the community service obligation (CSO) to reflect the specialised nature of the land being valued.

The CSO adjustment is a reflection of the valuer’s assessment of the impact of restrictions associated with an asset to the extent that is also equally applicable to market participants. This approach is in light of the highest and best use consideration required for fair value measurement, and takes into account the use of the asset that is physically possible, legally permissible, and financially feasible. As adjustments of CSO are considered as significant unobservable inputs, specialised land would be classified as Level 3 assets. For the Institute’s majority of specialised buildings, the depreciated replacement cost method is used, adjusting for the associated depreciation. As depreciation adjustments are considered as significant, unobservable inputs in nature, specialised buildings are classified as Level 3 fair value measurements.

An independent valuation of the Institute's specialised land and specialised buildings was performed by the Valuer General Victoria. The valuation was performed using the market approach adjusted for CSO. The effective date of the valuation is 31 December 2012.

Vehicles

Vehicles are valued using the depreciated replacement cost method. The Institute acquires new vehicles and at times disposes of them before the end of their economic life. The process of acquisition, use and disposal in the market is managed by experienced fleet managers in the Institute who set relevant depreciation rates during use to reflect the utilisation of the vehicles.




Plant and equipment

Plant and equipment is held at fair value. When plant and equipment is specialised in use, such that it is rarely sold other than as part of a going concern, fair value is determined using the depreciated replacement cost method.

There were no changes in valuation techniques throughout the period to 31 December 2016.

For all assets measured at fair value, the current use is considered the highest and best use.

(d) Reconciliation of Level 3 fair value as at 31 December 2016

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$'000 $'000 $'000 $'000 $'000 $'000 $'000

Opening balance 29,028 80,740 11,870 540 5,506 1,817 6

Purchases - 345 665 331 - - -

Gains recognised in net result - - - (11) - - -

Transfers in (out) of Level 3 - 70 304 - - - -

Revaluation - 9,748 - - - - -

Depreciation - (2,509) (1,854) (236) (197) (61) (1)

Subtotal 29,028 88,394 10,985 624 5,309 1,756 5

Closing balance 29,028 88,394 10,985 624 5,309 1,756 5 (e) Description of significant unobservable inputs to Level 3 valuations

Valuation technique Range Significant unobservable inputs

Specialised land Market approach 50–70% (60%)Community Service Obligation (CSO) adjustment

Specialised buildingsDepreciated replacement cost

$1,000–$1,500 /m2 ($1,300) 30–60 years

Direct cost per square metre Useful life of specialised buildings

Plant and equipmentDepreciated replacement cost

$3,000–$4,000 per unit 5–10 years (7 years)

Cost per unit Useful life plant and equipment

Motor vehiclesDepreciated replacement cost


Cost per unit Useful life of vehicles

Leasehold improvementsDepreciated replacement cost

$1,000–$1,500 /m2 ($1,300) 30–60 years

Cost per unit Useful life of leased assets

Land improvements Market approach 50–70% (60%)Community Service Obligation (CSO) adjustment

Furniture and fittingsDepreciated replacement cost


Cost per unit Useful life of furniture and fittings





NOTE 9 - INTANGIBLE ASSETS

Library software Other software Total

Intangible assets $’000 $'000 $'000


Gross carrying amount

Opening balance 1,538 4,891 6,429

Adjustments - 72 72

Additions - 150 150

Closing balance 1,538 5,113 6,651

Accumulated amortisation and impairment -

Opening balance (1,432) (889) (2,321)

Adjustments - (72) (72)

Amortisation of intangible assets (106) (419) (525)

Closing balance (1,538) (1,380) (2,918)

Net book value at end of financial year - 3,733 3,733

Library software Other software Total

Intangible assets $’000 $'000 $'000


Gross carrying amount

Opening balance 1,538 5,113 6,651

Adjustments - - -

Additions - - -

Closing balance 1,538 5,113 6,651

Software

Accumulated amortisation and impairment -

Opening balance (1,538) (1,380) (2,918)

Adjustments - - -

Amortisation of intangible assets - (465) (465)

Closing balance (1,538) (1,845) (3,383)

Net book value at end of financial year - 3,268 3,268




NOTE 10 - OTHER NON-FINANCIAL ASSETS

2016 2015

Other non-financial assets $'000 $'000

Current other non-financial assets

Prepayments 895 575

Total current other non-financial assets 895 575

Total other non-financial assets 895 575

NOTE 11 - PAYABLES

2016 2015

Payables $’000 $’000

Current

Contractual

Supplies and services1 2,412 1,537

Revenue in advance 572 1,551

Other payables 977 461

Total contractual 3,961 3,549

Statutory

GST payable 56 -

FBT payable 16 47

Other taxes Payable 101 117

Total statutory 173 164

Non-current

Contractual

Other payables - interest on advances from Government 296 148

Total non-current payables 296 148

Total payables2 4,430 3,861

Notes

1 The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice. 2 The carrying amounts of the Institute's payables are all denominated in Australian dollars.

(a) Maturity analysis of contractual payables

Refer to Note 20(iii) for the maturity analysis of contractual payables.

(b) Nature and extent of risk arising from contractual payables

Refer to Note 20(iii) for the nature and extent of risks arising from contractual payables.




NOTE 12 - PROVISIONS

2016 2015

Provisions $'000 $'000

Current provisions

Employee benefits (Note 12(a))1

Annual leave (Note 12(a)):

Unconditional and expected to wholly settle within 12 months2 853 840

Unconditional and expected to wholly settle after 12 months3 - -

Long service leave (Note 12(a)):


Unconditional and expected to wholly settle after 12 months3 1,402 1,706

3,168 3,038

Provisions for on-costs (Note 12(a) and Note 12(b)):


Unconditional and expected to wholly settle after 12 months3 244 281

543 500

Other provision

Other - HESG penalty 415 -

Total current provisions 4,126 3,538

Non-current

Employee benefits (Note 12(a))1,3 262 220

On-costs (Note 12(a) and Note 12 (b))1,3 45 36

Total non-current provisions 307 256

Total provisions 4,433 3,794

Notes:

1 Employee benefits consist of annual leave and long service leave accrued by employees. On-costs such as payroll tax and workers’ compensation insurance are not employee benefits and are reflected as a separate provision. 2 Amounts are measured at nominal values.3 Amounts are measured at present values.




NOTE 12 - PROVISIONS

2016 2015

(a) Employee benefits and on-costs $'000 $'000

Current employee benefits

Annual leave 853 840

Long service leave 2,315 2,198

3,168 3,038

Non-current employee benefits

Long service leave 262 220

Total employee benefits 3,430 3,258

Current on-costs 543 500

Non-current on-costs 45 36

Total on-costs 588 536

Total employee benefits and on-costs 4,018 3,794

(b) Movement in provisions 2015 2014

Employee benefits $'000 $'000

Opening balance 3,794 4,319

Additional provisions recognised 856 129

Reductions arising from payments/other sacrifices of future economic benefits (675) (654)

Closing balance 3,975 3,794

Current 3,711 3,538

Non-current 307 256

4,018 3,794




NOTE 13 - BORROWINGS

2016 2015

Borrowings $'000 $'000

Non-current

Advances from government 10,500 10,500

Total non-current borrowings 10,500 10,500

Total borrowings 10,500 10,500

The above loan advances are unsecured and bear interest rates between 0% - 4% (2015: 4% per cent). The term of a loan is generally agreed by the Minister at the time the advance is provided. Repayments commenced in 2015, but on 24 October 2015 the Department agreed to defer the principal and interest repayment until January 2018, one year after the implementation of the new funding model. The loan advances are held at amortised cost per accounting policy note 1.

(a) Maturity analysis of borrowings Refer to Note 20 (iii) for the maturity analysis of borrowings.

(b) Nature and extent of risk arising from borrowings Refer to Note 20 (iii) for the nature and extent of risks arising from borrowings.

(c) Default and breaches During the current and prior year, there were no defaults or breaches of any of the loan conditions.

NOTE 14 - RESERVES

2016 2015

Reserves $'000 $'000

(a) Physical asset revaluation surplus1:

Land - -

Balance at 1 January 16,347 10,869

Revaluation increments - Land - 5,478

Balance at 31 December 16,347 16,347

Buildings - -


Revaluation increments 9,749 -



Revaluation increments 9,749 5,478


Notes

1 The physical asset revaluation surplus arises on the revaluation of land and buildings.




NOTE 15 - CASH FLOW INFORMATION

2016 2015

Cash flow information $'000 $'000

(a) Reconciliation of cash and cash equivalents

Total cash and deposits disclosed in the balance sheet1 17,196 8,148

Balance as per cash flow statement 17,196 8,148

Notes:

1 The Institute does not hold a large cash reserve in its general bank account. Cash received by the Institute from the generation of income is generally paid into the Institute’s general bank account. Similarly, any Institute expenditure, including those in the form of cheques drawn by the Institute for the payment of goods and services to its suppliers and creditors are made via the Institute's general bank account. Balances above the threshold amount are swept to an interest bearing account on a daily basis.

2 Cash in sweeping account earns interest at a floating rate of 2% (2014: 2.5 %).

2016 2015

(b) Reconciliation of net result for the period $'000 $'000

Net result for the year 1,356 147

Non cash movements:

(Gain)/loss on sale or disposal of non-current assets (148) (125)

Depreciation and amortisation of non-current assets 5,323 5,567

Net (gain)/loss on financial instruments - 895

Movements in assets and liabilities

Decrease / (increase) in receivables 2,763 (2,517)

Decrease in inventories 189 203

(Increase) in other non-financial assets (320) (147)

Increase / (decrease) in payables 569 (537)

Increase / (decrease) in employee benefits 224 (526)

Increase in other provisions 415 -

Net cash flows from operating activities 10,372 2,960

NOTE 16 - COMMITMENTS FOR EXPENDITURE

2016 2015

Commitments for expenditure $'000 $'000

Commitments for non-cancellable operating leases in existence at the reporting date but not recognised as liabilities, payable:

Within one year 557 671

Later than one year but not later than five years 2,131 2,682

Later than five years 8,642 9,850

Total operating lease commitments 11,330 13,203

GST reclaimable on the above 1,030 1,200

Net operating lease commitments 10,300 12,003




NOTE 17 - CONTINGENT ASSETS AND CONTINGENT LIABILITIES

2016 2015

Contingent Assets and Contingent Liabilities $'000 $'000

Contingent Assets

Legal proceedings and disputes - 83

During 2015, Federation Training obtained evidence that it should expect to receive a further distribution from the liquidator of Lehman Brothers Australia Limited, of 11.97 cents in the dollar; which for Federation Training, meant a likely, but not certain, receivable of approximately $83,000. This was received during 2016, and no additional claims are expected.

Total Estimated Contingent Assets - 83

Contingent Liabilities

Legal proceedings and disputes

There were no known contingent liabilities as at balance date that may have a material effect on the financial operations of the Institute.

-

Total Estimated Contingent Liabilities - -

Total Estimated Contingent Assets and (Liabilities) - 83

NOTE 18 - LEASES

2016 2015

Leasing Arrangements $'000 $'000

Non-cancellable operating lease receivables

Payments due

Within one year 134 107

Later than one year but not later than five years 1 49

Total non-cancellable operating lease receivables 135 156

GST payable on the above (12) (16)

Net operating leases receivables 123 140

(i) Operating leases - as lessee

Refer to Note 16 (Commitments for expenditure).

(ii) Operating leases - as lessor

The institute leases out certain land and buildings, which are excess to current requirements, at current market rates.




NOTE 19 - SUPERANNUATION

Employees of the Institute are entitled to receive superannuation benefits and the Institute contributes to both defined benefit and defined contribution plans. The defined benefit plan(s) provides benefits based on years of service and final average salary.

The Institute does not recognise any defined benefit liability in respect of the plan(s) because the entity has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance recognises and discloses the State’s defined benefit liabilities in its financial statements.

However, superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive operating statement of the Institute.

The name and details of the major employee superannuation funds and contributions made by the Institute are as follows:

Institute

2016 2015

Superannuation $'000 $'000

Contributions paid for the year

Defined benefit plans :

State Superannuation Fund – revised and new 90 78

Total defined benefit plans 90 78

Defined contribution plans:

VicSuper 2,099 1,347

Other - 658

Total defined contribution plans 2,099 2,005

Total paid contribution for the year 2,189 2,083

Contribution outstanding at year-end

Defined benefit plans:

State Superannuation Fund – revised and new - 7

Total defined benefit plans - 7

Defined contribution plans:

VicSuper 209 172

Total defined contribution plans 209 172

Total 209 179




NOTE 20 - FINANCIAL INSTRUMENTS

(i) Financial risk management objectives and policies

The Institute’s principal financial instruments comprise cash assets, receivables (excluding statutory receivables) and payables (excluding statutory payables).

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument is disclosed in Note 1 to the financial statements.

The Institute’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk and liquidity risk.

The Institute’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Institute. The Institute uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and other price risks and ageing analysis for credit risk.

Risk management is carried out by the Finance department of the Institute under policies approved by the Board. The Finance department identifies , evaluates and manages financial risks in close co-operation with the operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

The carrying amounts of the Institute’s contractual financial assets and financial liabilities by category are disclosed below:

2016 2015

Carrying amount of financial instruments by category Note $'000 $'000

Loans and receivables

Cash and deposits 15 17,196 8,148

Receivables1:

Contractual receivables 5 2,813 5,404

Investment and other financial assets:

Other - rental bond 6 2 2

Total loans and receivables 20,011 13,554

Total financial assets 20,011 13,554

(g) Financial liabilities at amortised cost:

Payables1:

Supplies and services 11 2,412 1,537

Revenue in advance 11 572 1,551

Other payables 11 1,273 609

Borrowings:

Advances from government 13 10,500 10,500

Total financial liabilities at amortised cost 14,757 14,197

Total financial liabilities 14,757 14,197

Note:

1 Receivables and payables disclosed here exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST, FBT or other taxes recoverable or payable).

The net holding gains or losses of the Institute's contractual financial assets and financial liabilities by category are disclosed below.

The net holding gains or losses are determined as follows:• for cash and cash equivalents and loans or receivables, the net gain or loss is calculated by taking the movement in the fair value of the asset, the

interest income and minus any impairment recognised in the net result; and

• for financial liabilities measured at amortised cost, the net gain or loss is calculated by taking the interest expense.





2016 2015

Net holding gain/(loss) on financial instruments by category Note $'000 $'000

Interest income/(expense)

Financial assets - loans and receivables 2 (c) 133 135

Interest income/(expense) - financial assets 133 135

Financial liabilities at amortised cost 4 (b) (148) (288)

Interest income/(expense) - financial liabilities (148) (288)

Total interest income/(expense) (15) (153)

Impairment loss

Financial assets - loans and receivables 4(b)/5(a) 139 1,038

Total impairment loss 139 1,038

(ii) Credit risk

Credit risk arises from the contractual financial assets of the Institute, which comprise cash and deposits and non-statutory receivables. The Institute’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Institute.

Credit risk is measured at fair value and is monitored on a regular basis by the Management. It also monitors credit risk by actively assessing the rating quality and liquidity of counterparties:• all potential customers are rated for credit worthiness taking into account their size, market position and financial standing; and• customers that do not meet the Institute’s strict credit policies may only purchase in cash or using recognised credit cards.

The Institute does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Institute.

The contractual receivables balance at 31 December 2016 and 31 December 2015 do not include any counterparties with external credit ratings. Customers are assessed for credit worthiness using the criteria detailed above.

The Institute minimises credit risk in relation to student loans receivable through the engagement of an external collection agency.

In addition, the Institute does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. The Institute’s policy is to only deal with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Institute will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are overdue, and changes in debtor credit ratings.

The carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents the Institute’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

There are no material financial assets which are individually determined to be impaired. Currently the Institute does not hold any collateral as security nor credit enhancements relating to any of its financial assets.

There has been no significant change in the Institute’s exposure, or its objectives, policies and processes for managing credit risk or the methods used to measure this risk from the previous reporting period.





Carrying amount

Not past due and not

impaired

Past due but not impaired Impaired financial

assetsLess than 1

month 1-3 months3 months –

1 year 1-5 years

2016 Financial assets

Receivables1:

Contractual receivables 2,813 2,084 420 223 341 411 666


Other - rental bond 2 2 - - - - -

Total 2015 financial assets 2,815 2,086 420 223 341 411 666

2015 Financial assets

Receivables1:

Contractual receivables 5,404 3,859 217 437 944 1,177 1,230


Other - rental bond 2 2 - - - 2 -

Total 2014 financial assets 5,406 3,861 217 437 944 1,179 1,230

Ageing analysis of financial assets

The following table discloses the ageing analysis for the Institute's financial assets.

Credit quality of contractual financial assets 1

Financial institutions (AA rating)

Government agencies

(AAA rating)Other

counter-party Total

2016 $'000 $'000 $'000 $'000

Cash and deposits 17,196 - - 17,196

Receivables - - 2,813 2,813

Investments and other financial assets - - 2 2

Total contractual financial assets 2015 17,196 - 2,815 20,011

2015

Cash and deposits 8,148 - - 8,148

Receivables - - 5,404 5,404

Investments and other financial assets - - 2 2

Total contractual financial assets 2014 8,148 - 5,406 13,554

Note

1 The total amounts disclosed here exclude statutory amounts (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).

Note

1 Receivables disclosed here exclude statutory receivables (e.g. amounts owing from Victorian Government, GST, FBT or other taxes recoverable).





(iii) Liquidity risk

Liquidity risk is the risk that the Institute would be unable to meet its financial obligations as and when they fall due. The Institute operates under 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 Institute’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed on the face of the balance sheet.

The responsibility for liquidity risk management rests with the Institute’s board of directors, which has built an appropriate liquidity risk management framework for the management of the short, medium and long-term funding and liquidity requirements. The Institute manages liquidity risk by:• maintaining an adequate level of reserves and uncommitted funds that can be drawn at short notice to meet its short-term

obligations;• holding investments and other contractual financial assets that are readily tradeable in the financial markets; and• careful maturity planning of its financial obligations by matching the maturity profiles of financial assets and liabilities, and

continuously monitoring forecast and actual cash flows.

The Institute’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk. Cash for unexpected events is generally sourced from external borrowings.

There has been no significant change in the Institute’s exposure, or its objectives, policies and processes for managing liquidity risk or the methods used to measure this risk from the previous reporting period.

Maturity analysis of financial liabilities

The carrying amount detailed in the following table of contractual financial liabilities recorded in the financial statements, represents the Institute’s maximum exposure to liquidity risk.

The following table discloses the contractual maturity analysis for the Institute’s financial liabilities.

Carrying amount

Nominal amount

Maturity dates

Less than 1 month

1-3 months

3 months – 1 year

1-5 years 5+ years

$'000 $'000 $'000 $'000 $'000 $'000 $'000

2016 Financial liabilities

Payables1:

Supplies and services 2,412 2,412 2,208 152 51 - -

Other payables 1,273 1,273 977 - - 296 -

Borrowings

Advances from government 10,500 10,500 - - - 10,500 -

Total 2016 financial liabilities 14,185 14,185 3,185 152 51 10,796 -

2015 Financial liabilities

Payables1:

Supplies and services 1,537 1,537 1,190 343 4 - -

Other payables 609 609 461 - - 148 -

Borrowings

Advances from government 10,500 10,500 - - - 10,500 -

Total 2015 financial liabilities 12,646 12,646 1,651 343 4 10,648 -

Note

1 Payables disclosed here exclude statutory payables (e.g. amounts to Victorian Government, GST,FBT or other taxes payable).





(iv) Market risk

The Institute in its daily operations is exposed to a number of market risks. Market risks relate to the risk that market rates and prices will change and that this will have an adverse affect on the operating result and/or net worth of the Institute. e.g. an adverse movement in interest rates.

The Institute does not have a significant exposure to market risk that could have an adverse effect on its operating result.

The Institute’s exposure to market risk is primarily through interest rate risk. Objectives, policies and processes used to manage this risk are disclosed below.

The Board ensures that all market risk exposure is consistent with the Institute's business strategy and within the risk tolerance of the Institute. Regular risk reports are presented to the Board.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing market risk or the methods used to measure this risk from the previous reporting period.

Interest rate risk

Interest rate risk arises from the potential for a change in interest rates to change the expected net interest earnings in the current reporting period and in future years, or cause a fluctuation in the fair value of the financial instruments.

Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market interest rates. The Institute does not hold any interest bearing financial instruments that are measured at fair value, and therefore has no exposure to fair value interest rate risk.

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Institute manages cash flow interest rate risk through a mixture of investments, and undertaking fixed rate or non-interest bearing financial instruments with relatively even maturity profiles, with only insignificant amounts of financial liabilities at floating rate. Management has concluded for cash at bank, as financial assets that can be left at floating rate without necessarily exposing the Institute to significant risk. Management monitors movements in interest rates on a regular basis.

The Institute does not have a significant exposure to interest rate risk, all cash balances are placed with a top tier bank.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing interest rate risk or the methods used to measure this risk from the previous reporting period.

Interest rate movements have not been sufficiently significant during the year to have an impact on the Institute's year end result.

The Institute's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities are set out in the financial instrument composition and maturity analysis table below.





Weighted average

effective rate

Total Carrying Amount per

Balance Sheet

Interest rate exposure

Floating interest rate

Fixed interest rate

Non-Interest Bearing

2015 % $’000 $’000 $’000 $’000

Financial assets

Cash and deposits 2.0% 8,148 8,148 - -

Receivables1:

Contractual receivables 5,404 - - 5,404


Other - rental bond 2 - - 2

Total financial assets 13,554 8,148 - 5,406


Payables1:

Supplies and services 1,537 - - 1,537

Other payables 609 - - 609

Borrowings

Advances from government 0-4% 10,500 - 7,000 3,500

Total financial liabilities 12,646 - 7,000 5,646

Note

1 Receivables and payables disclosed here exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST, FBT or other taxes recoverable or payable).





Sensitivity analysis and assumptions

The Institute’s sensitivity to market risk is determined based on the observed range of actual historical data for the preceding five year period, with all variables other than the primary risk variable held constant. The following movements are ‘reasonably possible’ over the next 12 months: • a movement of 100 basis points up and down (2015: 100 basis points up and down) in market interest rates (AUD)

The following tables show the impact on the Institute’s net result and equity for each category of financial instrument held by the Institute at the end of the reporting period as presented to key management personnel, if the above movements were to occur.

Carrying amount

Interest rate risk

- 100 basis points + 100 basis points

Result Equity Result Equity

31 December 2016 $'000 $'000 $'000 $'000 $'000

Contractual financial assets

Cash and deposits 17,196 (172) (172) 172 172

Receivables 1 2,813 - - - -

Other financial assets 2 - - - -

Total increase/(decrease) in financial assets 20,011 (172) (172) 172 172

Contractual financial liabilities

Payables 1 2,412 - - - -

Other payables 1,273 - - - -

Advances from government 10,500 - - - -

Total increase/(decrease) in financial liabilities 14,185 - - - -

Total increase/ (decrease) (172) (172) 172 172

Carrying amount

Interest rate risk

- 100 basis points + 100 basis points

Result Equity Result Equity

31 December 2015 $'000 $'000 $'000 $'000 $'000

Cash and cash equivalents 8,148 (81) (81) 81 81

Receivables 1 5,404 - - - -

Other financial assets 2 - - - -

Total increase/(decrease) in financial assets 13,554 (81) (81) 81 81

Contractual financial liabilities

Payables 1 1,537 - - - -

Other payables 609 - - - -

Advances from government 10,500 - - - -

Total increase/(decrease) in financial liabilities 12,646 - - - -

Total increase/ (decrease) (81) (81) 81 81

Note

1 Receivables and payables disclosed here exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).





(vi) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

Fair values of financial instrument asset and liabilities are determined using the fair value hierarchy that categorises the inputs to valuation techniques used to measure fair value into three levels based on the degree to which the fair value is observable. • Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities

that the Institute can access at the measurement date.• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable

for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). • Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not

based on observable market data (unobservable inputs).

The Institute considers that the carrying amount of contractual receivables and payables is a reasonable approximation of their fair values due to the short-term nature of contractual receivables and payables.

Due to the short-term nature of the current receivables, their carrying value is assumed to approximate their fair value, and based on credit history it is expected that the receivables that are neither past due nor impaired will be received when due.

For other assets and other liabilities the fair value approximates their carrying value.

The carrying amounts and aggregate net fair values of financial assets and liabilities at balance date are:

2016 2015

Carrying Amount

Net Fair Value

Carrying Amount

Net Fair Value

$’000 $’000 $’000 $’000

Financial assets

Cash and deposits 17,196 17,196 8,148 8,148

Receivables1:

Contractual receivables 2,813 2,813 5,404 5,404


Rental bond 2 2 2 2

Total financial assets 20,011 20,011 13,554 13,554


Payables1:

Supplies and services 2,412 2,412 1,537 1,537

Other payables 1,273 1,273 609 609

Borrowings

Advances from government 10,500 10,500 10,500 10,500

Total financial liabilities 14,185 14,185 12,646 12,646

Note

1 Receivables and payables disclosed here exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).

The Institute did not have any financial instruments that are measured subsequent to initial recognition at fair value as at 31 December 2016 (2015:nil).

There have been no transfers between levels during the period.




NOTE 21 - RESPONSIBLE PERSONS AND EXECUTIVE OFFICERS

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons and executive officers for the reporting period.

(i) Minister

The Hon Gayle Tierney MP is the current Minister for Training and Skills (from 9 Nov 2016);The Hon Steve Herbert MP was the Minister for Training and Skills (to 9 Nov 2016).Remuneration of the Minister for Training and Skills is disclosed in the financial report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members interests which is completed by each member of the Parliament.

(ii) Chief executive officer (accountable officer)

Jonathan Davis (Commenced 27/6/2016)Wendy Wood (interim) (appointed 1/6/2014 and retired 30/6/2016)Remuneration received or receivable by the chief executive officer in connection with the management of the Institute during the reporting period as described in the table below.

(iii) Members of the board

Board Director / Chair - Des Powell AM (interim) (appointed 1/7/2016)Board Director / Chair - Michael Smith (appointed 1/5/2014- ceased 30/6/2016)Board Director - Debra Cerasa (appointed 1/7/2016) Board Nominee Director - Debra Cerasa (appointed 14/7/2014 - ceased 30 June 2016) Board Director - Michelle Dowsett (appointed 1/7/2016) Board Nominee Director - Robert Hogarth (appointed 14/7/2014 - ceased 30/6/2016 and reappointed on 27/7/2016)Board Nominee Director - Angela Hutson (appointed 1/7/2016) Board Nominee Staff Director - Rod McLean (appointed 12/6/2016)Board Director - Tony Nippard (appointed 1/7/2016) Board Nominee Director - Annabelle Roxon (appointed 1/7/2016) Board Director - David Williams (appointed 1/7/2016) Board Director - Dr Meredith Doig (appointed 1/5/2014, resigned 4/5/2016)Board Director - Catherine Greaves (appointed 14/07/2014 -31/3/2015, reappointed 2/12/2015-30/6/2016)Board Nominee Director - Dr Jack Hamilton (appointed 14/7/2014 - ceased 30/6/2016)Board Director - Ian Nethercote (appointed 1/5/2014 - ceased 30/6/2016)Board Nominee Director - Kevin Quigley (appointed 14/7/2014 - ceased 30/6/2016)Board Director - Anthony Stone (appointed 1/5/2014 - ceased 30/6/2016)

Remuneration of the board members and accountable officers in connection with the management of the Institute is disclosed below.

2016 No. 2015 No.

Income range

The number of board members and accountable officers whose total remuneration from the Institute was within the specified income bands are as follows:

Less than $10,000 4 1

$10,000 - $19,999 8 -

$20,000 - $29,999 3 7

$30,000 - $39,999 1 -

$50,000 - $59,999 - 1

$110,000 - $119,999 1 -

$190,000 - $199,999 1 -

$390,000 - $399,999 - 1

Total number of responsible persons including board members and accountable officer 18 10

Total remuneration of responsible persons including board members and accountable officer ($'000)

533 601





(iv) Executive officers

The following persons also had authority and responsibility for planning, directing and controlling the activities of Institute during the financial year:

Executive Director Education Programs - Karen Bird Executive Director Sales Marketing and Business Development - Scott Dargan (appointed 21/12/2015 and resigned 21/11/2016)Chief Financial Officer - Liz Davenport (appointed 14/12/2015 and resigned 25/01/2017)Executive Director Engagement and Capability - Jenni Hardy (resigned 6/01/2017)Chief Operating Officer- Mark Potter (appointed 2/7/2015 and resigned 16/12/2016)

Remuneration of executive officers

The number of executive officers and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands.

The base remuneration of executive officers is shown in the below table. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.

The total annualised employee equivalent provides a measure of full time equivalent executive offices over the reporting period.

Total Remuneration Base Remuneration

2016 No. 2015 No. 2016 No. 2015 No.

Income range

The number of executive officers, separately identifying base remuneration and total remuneration, disclosed within the income band of $10,000 in a table format:

$0- $9,999 - 1 - 1

$70,000 - $79,999 - - - 1

$80,000 - $89,999 - 1 - -

$100,000 - $109,999 - - - 1

$110,000 - $119,999 1 - - 1

$130,000 - $139,999 - 1 - 2

$140,000 - $149,999 - 2 - -

$150,000 - $159,999 - 1 - -

$170,000 - $179,999 2 - 2 -

$180,000 - $189,999 1 - 3 -

$200,000 - $209,999 - - 1 -

$260,000 - $269,999 1 - - -

$270,000 - $279,999 1 - - -

Total number of executive officers 6 6 6 6

Total annualised employee equivalent (AEE) 6 4 6 4

Total amount of remuneration ($'000) 1,250 667 1,086 624

Other transactions

Other related transactions and loans requiring disclosure under the Directions of the Minister for Finance have been considered and there are no matters to report.





(v) Payments to other personnel

The number of contractors charged with significant management responsibilities, to whom the total expenses paid by the Institute exceeded $100,000 per person is disclosed. These contractors are responsible for planning, directing or controlling, directly or indirectly, the Institute's activities.

Total expenses (exclusive of GST)

2016 2015

No. of contractors

No. of contractors

Expense band

$100,000 - $109,999 2 -

$110,000 - $119,999 1 -

$130,000 - $139,999 - -

$190,000 - $199,999 - 1

$200,000 - $209,999 1 1

$230,000 - $239,999 - -

$290,000 - $299,999 - 1

$320,000 - $329,999 - 1

Total expenses paid to other personnel ($'000) 323 1,025

Two contractor roles in 2015 were converted to full time employees during 2016.

NOTE 22 - EX-GRATIA EXPENSES

2016 2015

Ex-gratia expenses $'000 $'000

Other voluntary payments to rectify incorrect FBT on employees' packaged benefits 18 -

Total ex-gratia payments 18 -

NOTE 23 - REMUNERATION OF AUDITORS

2016 2015

Remuneration of auditors $'000 $'000

Remuneration of Victorian Auditor General's Office for:

Audit of the financial statements 170 205

Total remuneration of Victoria Auditor General's Office 170 205

Remuneration of other auditors

Internal Auditors 159 159

Total remuneration of other auditors 159 159

Total Remuneration of auditors 329 364




NOTE 24 - SUBSEQUENT EVENTS

Subsequent events

As part of the Victorian Government’s ‘Education State’ initiative, $125 million in funding was announced in 2015 to establish ten leading edge Tech Schools across the State. In April 2016, it was announced that the proposal for the Gippsland (Morwell) Tech School based on the Gippsland priority industry sectors has been accepted with Federation Training being the ‘Host’. As a result, Capital Works funding of $6.5m has been allocated to this project. Of this $650k has been received in 2016 for pre-construction activities and the remainder to be received in 2017 for construction activities.

Other than the above matters no matters or circumstances have arisen since the end of the reporting period which significantly affected or may significantly affect the operations of Federation Training, the results of those operations, or the state of affairs of Federation Training in future financial years.

NOTE 25 - ECONOMIC DEPENDENCY

2016 2015

Economic dependency $'000 $'000

Department of Education and Training

State government - contestable 14,130 13,843

State government - transition 650 4,725

Other contributions by State Government 23,897 15,135

Total Revenue 38,677 33,703

Advances from government 10,500 10,500

Total Advances 10,500 10,500

Total economic dependency 49,177 44,203

NOTE 26 - INSTITUTE DETAILS

The registered office of Federation Training is:

Federation Training Corner of Princes Drive and Monash Way, Morwell Victoria, 3840.

The principal place of business is:

Federation Training Corner of Princes Drive and Monash Way, Morwell Victoria, 3840.

Department of Education and Training

Federation Training is dependent on a significant volume of revenue derived from the Higher Education and Skills Group (formerly the Victorian Skills Commission). The revenues predominantly fund the delivery of general and specific training courses.


No. Source SUMMARY OF REPORTING REQUIREMENT Page

REPORT OF OPERATIONS

CHARTER AND PURPOSE

1 FRD 22G Manner of establishment and the relevant Minister 5

2 FRD 22GPurpose, functions, powers and duties linked to a summary of activities, programs and achievements

4-9

3 FRD 22G Nature and range of services provided including communities served 10-13

MANAGEMENT AND STRUCTURE

4 FRD 22G Organisational structure and chart, including responsibilities 8

5 FRD 22G Names of Board members 9

FINANCIAL AND OTHER INFORMATION

6 FRD 03A Accounting for Dividends N/A

7 FRD 07B Early adoption of authoritative accounting pronouncements 49

8 FRD 10A Disclosure Index 80-83

9 FRD 17B Long Service leave and annual leave for employees 47

10 FRD 20A Accounting for State motor vehicle lease arrangements prior to 1 Feb 2004 N/A

11 FRD 22G Operational and budgetary objectives, performance against objectives and achievements24-25, 32-34

12 FRD 22GOccupational health and safety statement including performance indicators, performance against those indicators. Reporting must be on the items listed at (a) to (e) in the FRD

16

13 FRD 22G

Workforce data for current and previous reporting period including a statement on employment and conduct principles and that employees have been correctly classified in the workforce data collections (see Attachment B for details of the Department’s required reporting approach to all workforce data contained in Annual Reports from 2016 onwards).

17-18

14 FRD 22G Summary of the financial results for the year including previous 4 year comparisons 13

15 FRD 22G Summary of significant changes in financial position 25

16 FRD 22GKey initiatives and projects, including significant changes in key initiatives and projects from previous years and expectations for the future

10, 12

17 FRD 22G Post-balance sheet date events likely to significantly affect subsequent reporting periods 39

18 FRD 22G Summary of application and operation of the Freedom of Information Act 1982 14

19 FRD 22G Discussion and analysis of operating results and financial results 13

20 FRD 22G Significant factors affecting performance 24

21 FRD 22GWhere a TAFE has a workforce inclusion policy, a measurable target and report on the progress towards the target should be included

17

22 FRD 22GSchedule of any government advertising campaign in excess of $100,000 or greater (exclusive of GST) include list from (a) – (d) in the FRD

N/A

23 FRD 22G Statement of compliance with building and maintenance provisions of the Building Act 1993 14

24 FRD 22GStatement, where applicable, on the implementation and compliance with the National Competition Policy

15

25 FRD 22G Summary of application and operation of the Protected Disclosure Act 2012 15

26FRD 22G and FRD 24C

Summary of Environmental Performance including a report on office based environmental impacts

19

DISCLOSURE INDEX



27 FRD 22G

Consultants:Report of Operations must include a statement disclosing each of the following1. Total number of consultancies of $10,000 or more (excluding GST)2. Location (e.g. website) of where details of these consultancies over $10,000 have been

made publicly available3. Total number of consultancies individually valued at less than $10,000 and the total

expenditure for the reporting periodAND for each consultancy more than $10,000, a schedule is to be published on the TAFE institute website listing:• Consultant engaged• Brief summary of project• Total project fees approved (excluding GST)• Expenditure for reporting period (excluding GST)• Any future expenditure committed to the consultant for the project

16 (The Annual

Report will

be available

on Institute

website once

approved)

28 FRD 22GStatement, to the extent applicable, on the application and operation of the Carers Recognition Act 2012 (Carers Act), and the actions that were taken during the year to comply with the Carers Act

14

29 FRD 22GList of other information available on request from the Accountable Officer, and which must be retained by the Accountable Officer (refer to list at (a) – (l) in the

14

30 FRD 22G

An entity shall disclose the following in the report of operations:a) Total entity ICT Business As Usual (BAU) expenditure for the full 12 month reporting period; andb) Total entity ICT Non-Business As Usual expenditure for the full 12 month reporting period; and provide a breakdown for: (i) Operational expenditure (OPEX); and (ii) Capital expenditure (CAPEX).

15

31 FRD 25B Victorian Industry Participation Policy Disclosures 15

32 FRD 26A Accounting for VicFleet motor vehicle lease arrangements on or after 1 February 2004 N/A

33 FRD 29A Workforce Data Disclosures on the public service employee workforce. 17-18

34 SD 3.7.1The Responsible Body must ensure that the Agency applies the Victorian Government Risk Management Framework.

16

35 FRD 22GAn entity’s report of operations shall contain general and financial information, including other relevant information, outlining and explaining an entity’s operations and activities for the reporting period.

4-25

36 SD 5.2.1(a)The Accountable Officer must implement and maintain a process to ensure the Agency’s Annual Report is prepared in accordance with the FMA, these Directions, the Instructions, applicable Australian Accounting Standards and Financial Reporting Directions.

4

37 SD 5.2.3The report of operations must be signed and dated by the Responsible Body or a member of the Responsible Body.

29

38CG 10(clause 27)

Major Commercial Activities 10

39 CG 12 Controlled Entities N/A

FINANCIAL REPORT

FINANCIAL STATEMENTS REQUIRED UNDER PART 7 OF THE FINANCIAL MANAGEMENT ACT 1984

40 SD 5.2.2(b)The financial statements have been prepared in accordance with applicable requirements in the FMA, the Directions, the Financial Reporting Directions and Australian Accounting Standards.

38



OTHER REQUIREMENTS UNDER STANDING DIRECTION / FINANCIAL MANAGEMENT ACT 1994 (FMA)

41SD 5.2.2(a) and FMA s 49

An Agency’s financial statements must include a signed and dated declaration by:• the Accountable Officer;• subject to Direction 5.2.2(c), the CFO; and• for Agencies with a statutory board or equivalent governing body established by or under

statute, a member of the Responsible Body.

4

23, 29

42 FRD 30C Rounding of amounts 49

43 SD 3.2.1.1(c)

The Responsible Body must establish an Audit Committee to:• review annual financial statements and make a recommendation to the Responsible Body

as to whether to authorise the statements before they are released to Parliament by the Responsible Minister

8

OTHER REQUIREMENTS AS PER FINANCIAL REPORTING DIRECTIONS IN NOTES TO THE FINANCIAL STATEMENTS

44 FRD 11A Disclosure of ex-gratia payments 78

45 FRD 21BDisclosures of Responsible Persons, Executive Officer and Other Personnel (Contractors with significant management responsibilities) in the Financial Report

76-78

46 FRD 102 Inventories 56

47 FRD 103F Non-financial physical assets 45-46

48 FRD 104 Foreign currency 48

49 FRD 105A Borrowing costs 48

50 FRD 106 Impairment of assets 43

Item No.

Source SUMMARY OF REPORTING REQUIREMENT Page

51 FRD 107B Investment properties N/A

52 FRD 109 Intangible assets 60

53 FRD 110 Cash flow statements 36

54 FRD 112D Defined benefit superannuation obligations 67

55 FRD 113A Investment in subsidiaries, jointly controlled entities and associates N/A

56 FRD 114B Financial instruments – general government entities and public non-financial corporations 68

57 FRD 119A Transfers through contributed capital 48

58 FRD 120I Accounting and reporting pronouncements applicable to the reporting period 49

COMPLIANCE WITH OTHER LEGISLATION, SUBORDINATE INSTRUMENTS AND POLICIES

59 Legislation

The TAFE institute Annual Report must contain a statement that it complies with all relevant legislation, and subordinate instruments, (and which should be listed in the Report) including, but not limited to, the following:• Education and Training Reform Act 2006 (ETRA)• TAFE institute constitution• Directions of the Minister for Training and Skills (or predecessors)• TAFE institute Commercial Guidelines• TAFE institute Strategic Planning Guidelines• Public Administration Act 2004• Financial Management Act 1994• Freedom of Information Act 1982• Building Act 1983• Protected Disclosure Act 2012• Victorian Industry Participation Policy Act 2003

14

60 ETRA s3.2.8Statement about compulsory non-academic fees, subscriptions and charges payable in 2016

15

DISCLOSURE INDEX



61 Policy Statement that the TAFE institute complies with the Victorian Public Sector Travel Principles 15

62Key Performance Indicators

See table on page 6 of the guidelines for required formatting. Institutes to report against:• KPIs set out in the annual Statement of Corporate Intent; and• Employment costs as a proportion of training revenue;• Training revenue per teaching FTE;• Operating margin percentage;• Training Revenue diversity.

24

OVERSEAS OPERATIONS OF VICTORIAN TAFE INSTITUTES

63

PAEC and VAGO (June 2003 Special Review item 3.110)

• Financial and other information on initiatives taken or strategies relating to the institute’s overseas operations

• Nature of strategic and operational risks for overseas operations• Strategies established to manage such risks of overseas operations• Performance measures and targets formulated for overseas operations• The extent to which expected outcomes for overseas operations have been achieved.

11


ACRONYMS

This listing is prepared to assist in the understanding of the Annual Report and related materials.

AAS Australian Accounting Standard

AASB Australian Accounting Standards Board

AEE Annualised employee equivalent

ARR Accounting rate of return

BTCC Berwick Trade Careers Centre

CCEF Caroline Chisholm Education Foundation

CEO Chief Executive Officer

DFS Detailed Facility Study

DREAM Dandenong Regional Educational Alliance Model (Dandenong TTC)

EBITDA Earnings before interest, taxes and amortisation

FTE Equivalent full time (when referring to staffing)

EFTSL Equivalent full time student load

ETR Education and Training Reform Act 2006

FBT Fringe benefits tax

FFS Fee-for-service

FMA Financial Management Act 1994

FMCF Financial Management Compliance Framework

FRD Financial Reporting Directions

FSC Forest Stewardship Council

FTE Full time employee

GST Goods and services tax

HACC Health and community care

IFRS International Financial Reporting Standards

LSL Long service leave

MBA Master of Business Administration

PACCT Professional, Administrative, Clerical, Computing and Technical

PAEC Decision of Public Accounts and Estimates Committee of Parliament December 1997

PPE Personal protective equipment

SCH Student contact hours

SD Standing Directions of the Minister for Finance issued under the Financial Management Act 1994

START School TAFE Alliance Regional Trade (Frankston TTC)

TELC Technology Enabled Learning Centre

TTC Trade Training Centre

TVET Company owned by the Ministerial Council for Tertiary Education and Employment

VCAL Victorian Certificate of Applied Learning

VCE Victorian Certificate of Education

VET Vocational Education and Training

WHS Workplace Health and Safety

NATIONAL PROVIDER NUMBER: 0417

CONTACT US

PO Box 3279 GMC Morwell, 3841

Call. 1300 133 717

Email. [email protected]

Online. federationtraining.edu.au

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96 Victoria St, Bairnsdale, 3875

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CHADSTONE CAMPUS41 Drummond St, Chadstone 3148

FORESTEC CAMPUS27 Scriveners Rd, Kalimna West VIC 3909

LAKES ENTRANCE (SEAMEC) CAMPUSBullock Island Rd, Bullock Island, Lakes Entrance, 3909

LEONGATHA CAMPUSNerrena Rd, Leongatha, 3953

MORWELL CAMPUS

Corner Princes Dr and Monash Way, Morwell, 3840

SALE MAIN CAMPUSWilliams Drive, Fulham, 3851

SALE G-TEC CAMPUS

37 Cobains Rd, Sale, 3850

SALE FLEXIBLE LEARNING CENTRE CAMPUSCnr Desailly St & Cunninghame St, Sale, 3850

TRARALGON CAMPUS49-63 Princes St, Traralgon, 3844

WARRAGUL CAMPUS116 - 118 Queen St, Warragul, 3820

YALLOURN CAMPUSMonash Rd, Newborough, 3825

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