INDEPENDENT LIVING CENTRE OF WESTERN AUSTRALIA (INC) Special Purpose Financial Report for the year ended 30 June 2017 C O N T E N T S Statement by the Board Independent Auditor s Report Income Statement Balance Sheet Cash Flow Statement Notes to the Financial Statements
AUDITOR S INDEPENDENCE DECLARATION RSM Australia Pty Ltd 8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au As lead auditor for the audit of the financial report of Independent Living Centre of Western Australia (Inc) for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) (ii) the auditor independence requirements of the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act) in relation to the audit; and any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA PTY LTD Perth, WA Dated: 23 August 2017 ALASDAIR WHYTE Director C:\Users\ssin\Desktop\WIP\ILC grant acquittal\signed docs\independence Declaration.docx THE POWER OF BEING UNDERSTOOD AUDIT TAX CONSULTING RSM A ustr alia Pt y Ltd is a member of t he RSM networ k and t ra des as RSM. RSM is t he tr ading name used by t he member s o f t he RSM netwo r k. E ac h member o f t he RSM networ k is an independent ac co unting and co ns ulting firm whic h pract ic es i n it s o wn r ig ht. T he RSM networ k is not its elf a separ at e leg al entit y in any jurisdictio n. RSM A ustr alia Pt y Ltd A CN 009 321 37 7 at f Bir danco Pr ac tic e Tr ust A BN 6 5 31 9 3 82 479 tr ading as RSM Liability limited by a scheme approved under Professional Standards Legislation
INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF INDEPENDENT LIVING CENTRE OF WESTERN AUSTRALIA (INC) RSM Australia Pty Ltd 8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au Opinion We have audited the financial report of the Independent Living Centre of Western Australia (Inc) (registered entity), which comprises the balance sheet as at 30 June 2017, the income statement and cash flow statement for the year then ended and notes to the financial statements, including a summary of significant accounting policies and the statement by the board. In our opinion, the financial report of the Independent Living Centre of Western Australia (Inc) has been prepared in accordance with Division 60 of the Australian Charities and Not-for-profits Commission Act 2012, including: (a) (b) giving a true and fair view of the registered entity s financial position as at 30 June 2017 and of its financial performance and cash flows for the year ended on that date; and complying with Australian Accounting Standards to the extent described in Note 1, and Division 60 of the Australian Charities and Not-for-profits Commission Regulation 2013. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Independent Living Centre of Western Australia (Inc) 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 our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter Basis of Accounting We draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared to assist the Independent Living Centre of Western Australia (Inc) to meet the requirements of Division 60 of the Australian Charities and Not-for-profits Commission Act 2012. As a result, the financial report may not be suitable for another purpose. Our opinion is not modified in respect of this matter. THE POWER OF BEING UNDERSTOOD AUDIT TAX CONSULTING RSM A ustr alia Pt y Ltd is a member of t he RSM networ k and t ra des as RSM. RSM is t he tr ading name used by t he member s o f t he RSM netwo r k. E ac h member o f t he RSM networ k is an independent ac co unting and co ns ulting firm whic h pract ic es i n it s o wn r ig ht. T he RSM networ k is not its elf a separ at e leg al entit y in any jurisdictio n. RSM A ustr alia Pt y Ltd A CN 009 321 37 7 at f Bir danco Pr ac tic e Tr ust A BN 6 5 31 9 3 82 479 tr ading as RSM Liability limited by a scheme approved under Professional Standards Legislation
Responsibilities of Management and Those Charged with Governance for the Financial Report The board of the registered entity are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act) and for such internal control as the board determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the board is responsible for assessing the registered entity s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the registered entity or to cease operations, or has no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives 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 our 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. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar4.pdf. This description forms part of our auditor's report. RSM AUSTRALIA PTY LTD Perth, WA Dated: 25 August 2017 ALASDAIR WHYTE Director
INCOME STATEMENT NOTE 2017 2016 INCOME $ $ Operating grants 3(a) 12,046,811 11,195,389 Donations and contributions 54,357 4,331 Product sales and hire 98,103 101,475 Fees and charges 1,216,236 834,782 Sale of Trial Equipment 235,073 150,919 Profit on sale of plant / equipment 24,778 10,584 Interest 212,564 265,918 Other including membership 105,016 94,517 13,992,938 12,657,915 EXPENDITURE Employee salaries and wages 6,800,739 5,821,380 Contract and consulting services 560,897 394,149 Staff employment and development costs 99,094 92,577 Fringe benefits tax Motor vehicle 23,154 22,303 Travelling and motor vehicle 156,853 183,288 Equipment purchases & leasehold improvements 121,600 697,613 Respite brokerage and services 756,825 651,520 Equipment brokerage 3,797,660 3,375,447 Depreciation of equipment 241,360 192,395 Repairs and maintenance 328,249 436,204 Building, Rental and Variable outgoings 487,266 483,829 Insurance 47,674 42,423 Printing, stationery and subscriptions 87,220 77,713 Telephone and communications 159,599 148,273 Postage and courier 36,850 32,233 Publicity and displays 113,104 48,320 Audit and legal fees 17,390 15,470 Bank fees 5,784 5,627 Bad Debt write off 4,000 - Catering and facility hire 26,024 28,327 Research, Board and ED 22,232 28,873 Other expenses 20,287 17,671 13,913,861 12,795,635 Net surplus (deficit) from operating activities 79,077 (137,720) Capital grants 3(b) 49,379 92,444 Increase in net assets for the year 128,456 (45,276) The accompanying notes form part of this financial report
BALANCE SHEET As at 30 June 2017 NOTE 2017 2016 $ $ CURRENT ASSETS Cash at bank and interest bearing deposits 2(a) 8,792,814 9,626,817 Receivables 385,072 212,280 Prepayments 22,776 22,776 9,200,662 9,861,873 NON CURRENT ASSETS Property, plant and equipment 4 617,580 535,524 617,580 535,524 TOTAL ASSETS 9,818,242 10,397,397 CURRENT LIABILITIES Payables 2,031,381 1,801,463 Deferred grant income 3 4,325,046 5,385,821 Provisions 5 634,884 579,895 6,991,311 7,767,179 NON CURRENT LIABILITIES Provisions 5 325,484 257,227 TOTAL LIABILITIES 7,316,795 8,024,406 NET ASSETS 2,501,447 2,372,991 EQUITY Accumulated funds at beginning of year 2,372,991 2,418,267 Net surplus / (deficit) from operating activities 79,077 (137,720) Capital grants 3(b) 49,379 92,444 Accumulated funds at end of year 2,501,447 2,372,991 ACCUMMULATED FUNDS (Restricted by) Designated by Board Friends of the ILC, Freda Jacob s Legacy 3,765 3,765 Plant, Furniture and Equipment 1,224,857 1,124,166 Strategic Business Initiatives 301,138 242,859 Budget Strategic initiatives 2017-18 107,146 - ILCA Database work 23,790 23,790 Noah's Ark Merger 387,032 387,032 The Niche operations 78,225 78,225 Total 2(a)(ii) 2,125,953 1,859,837 Funded service equipment and service provision 2(b) 375,494 513,154 TOTAL RESTRICTED AND DESIGNATED FUNDS 2,501,447 2,372,991 The accompanying notes form part of this financial report
CASHFLOW STATEMENT NOTE 2017 2016 $ $ Cash flows from operating activities Grants received 10,986,036 10,705,795 Payments to employees (6,677,493) (5,904,382) Payments for material and service (6,641,844) (6,678,101) Receipt from services and contributions 1,376,620 906,380 Donations received 54,357 4,331 Interest received 212,564 265,918 Other income 105,016 94,517 Net cash used in operating activities 2(c) (584,744) (605,542) Cash flows from investing activities Proceeds from sale of plant and equipment 143,680 67,053 Grant funding used for capital purchase 49,379 92,444 Payments for purchase of plant and equipment 4(a) (442,318) (249,188) Net cash used in investing activities (249,259) (89,691) Net increase in cash held (834,003) (695,233) Cash held at the beginning of the financial year 9,626,817 10,322,051 Cash at the end of the financial year 8,792,814 9,626,817 The accompanying notes form part of this financial report
NOTES TO THE FINANCIAL STATEMENTS 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (a) (b) Basis of accounting In the Board s opinion, the Centre is not a reporting entity because there are no users dependent on general purpose financial statements These are special purpose financial statements that have been prepared for the purposes of complying with the Australian Charities and Not-for-profits Commission Act 2012 and associated regulations. The Board has determined that the accounting policies adopted are appropriate to meet the needs of the members. These financial statements have been prepared in accordance with the recognition and measurement requirements specified by the Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the disclosure requirements of AASB 101 'Presentation of Financial Statements', AASB 107 'Statement of Cash Flows', AASB 108 'Accounting Policies, Changes in Accounting Estimates and Errors', AASB 1048 'Interpretation of Standards' and AASB 1054 'Australian Additional Disclosures', as appropriate for not-for-profit oriented entities. The financial report has been prepared an accruals basis, in accordance with the significant accounting policies disclosed below, which are consistent with the policies adopted in the previous financial period. Income tax Under the provisions of Section 50-5 of the Income Tax Assessment Act, 1997, as amended, the Centre is exempt from income tax. (c) (d) (e) Depreciation of plant and equipment The depreciable amount of all plant and equipment is depreciated over the useful life of the asset to the Centre commencing from the time the asset is ready for use. Donations Donated plant and equipment is brought to account where an estimate of its fair value can reasonably be made at the date of donation. Accounting for Government funding The Centre s core activities as outlined in Note 7, are supported by grants received from the federal, state and local governments. Grants received on the condition that specified services are delivered, or conditions are fulfilled, are considered reciprocal. Such grants are initially recognised as a liability and revenue is recognised as services are performed or conditions fulfilled. Revenue from non-reciprocal grants is recognised when received.
NOTES TO THE FINANCIAL STATEMENTS 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) (f) (g) Resource accounting On occasions the Centre may receive resources restricted for particular purposes. To facilitate observance of these limitations, the financial statements list separately those funds which are restricted or designated and those funds which are unrestricted. Restricted funds are those funds presently available for use, but expendable only for operating purposes specified by the donor grantor or by statute. When the Centre specifies a purpose for the expenditure of funds, where none has been stated by the original donor, such funds are classified as designated funds; and Unrestricted funds are those funds presently available for use by the Centre at the discretion of the Board. Employee entitlements Provision is made for the Centre's liability for employee entitlements arising from services rendered by employees to balance date. Employee entitlements expected to be settled within one year together with entitlements arising from wages and salaries, annual leave, long service leave and vesting sick leave which will be settled after one year, have been measured at their nominal amount. Other employee entitlements payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those entitlements. Contributions are made by the Centre to an employee superannuation fund and are charged as expenses when incurred. (h) (i) Cash For the purposes of the cash flow statement, cash includes cash on hand, and in banks and investments, net of outstanding bank overdrafts. Comparative figures Where required, comparative figures have been adjusted to conform with changes in presentation for the current financial year.
NOTES TO THE FINANCIAL STATEMENTS 2. NOTES TO THE CASHFLOW STATEMENT (a) Reconciliation of cash Cash at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the income statement as follows: 2017 2016 $ $ (i) Externally Restricted cash 2(b) 4,700,540 5,898,975 (ii) Internally Restricted cash - Board Designation 2,125,953 1,859,837 (iii) Internally Restricted cash - leave liabilities 960,368 837,122 Unrestricted cash 1,005,953 1,030,883 8,792,814 9,626,817 (b) Externally Restricted cash Unexpended grant funds 4,325,046 5,385,821 Funded service equipment and service provision 375,494 513,154 2(a)(i) 4,700,540 5,898,975 (c) Reconciliation of net cash provided by operating activities to the net income for the year Net income for the year 128,456 (45,276) Depreciation 241,360 192,395 (Profit) / Loss from sale of plant and equipment (24,778) (10,584) Funding used for capital purchase (49,379) (92,444) Movement in assets and liabilities : Receivables (172,792) (180,796) Payables 229,918 103,759 Deferred grant Income (1,060,775) (489,594) Employee provisions 123,246 (83,002) Net cash provided by operating activities (584,744) (605,542)
NOTES TO THE FINANCIAL STATEMENTS 3 GRANT INCOME (Accrual Basis) $ 2017 2017 2017 2017 2017 30 June Deferred Grants Surpluses for period Grants Expensed in period Income Recognised Grants Received (a) Operating grants: Disability Services Commission General Services 141,783-1,790,850 1,790,850 1,706,635 Equipment brokerage 1,500,000-1,901,215 1,901,215 1,500,000 (ii) Timelimited grants operational 662,193-436,667 436,667 Equipment trial project 218,678-45,284 45,284 128,962 Disability Services Commission 2,522,654-4,174,016 4,174,016 3,335,597 Home and Community Care / Health Department General services 608,734-2,918,724 2,918,724 3,149,116 (ii) Timelimited grants 473,742-358,777 358,777 57,928 Home and Community Care / Health Department 1,082,476-3,277,501 3,277,501 3,207,044 Lotterywest 22,872-378,990 378,990 372,640 Equipment and subsidy brokerage 44,374-2,077,404 2,077,404 1,997,012 Commonwealth funding programs 320,475-1,866,596 1,866,596 1,926,262 Other Operational Grants 50,551-211,614 211,614 Other Funding held 183,061-60,690 60,690 172,103 Total operating grant movements 4,226,463-12,046,811 12,046,811 11,010,658 (b) Capital grants : (i) Commonwealth funding programs 98,583-24,622 24,622 - Lotterywest - - 24,757 24,757 24,757 Other - - - - - Total capital grant movements 98,583-49,379 49,379 24,757 2(b) 4,325,046-12,096,190 12,096,190 11,035,415
NOTES TO THE FINANCIAL STATEMENTS 3 GRANT INCOME (Accrual Basis) $ 2016 2016 2016 2016 2016 30 June Deferred Grants Surpluses for period Grants Expensed in period Income Recognised Grants Received (c) Operating grants: Disability Services Commission General Services 225,998-1,821,779 1,821,779 1,679,760 Equipment brokerage 1,901,215-1,615,840 1,615,840 1,000,000 (ii) Timelimited grants operational 1,098,860-350,608 350,608 487,141 Equipment trial project 135,000 - - - Disability Services Commission 3,361,073-3,788,227 3,788,227 3,166,901 Home and Community Care / Health Department General services 378,342-2,790,084 2,790,084 2,631,010 (ii) Timelimited grants 774,591-425,348 425,348 579,939 Home and Community Care / Health Department 1,152,933-3,215,432 3,215,432 3,210,949 Lotterywest 29,222-289,209 289,209 318,431 Equipment and subsidy brokerage 124,766-1,911,902 1,911,902 2,036,668 Commonwealth funding programs 260,809-1,659,823 1,659,823 1,768,762 Other Operational Grants 262,165-140,692 140,692 30,162 Other Funding held 71,648-190,104 190,104 122,400 Total operating grant movements 5,262,616-11,195,389 11,195,389 10,654,273 3(a) (d) Capital grants : (i) Commonwealth funding programs 123,205-54,825 54,825 116,802 Lotterywest - - 27,164 27,164 27,164 Other - - 10,455 10,455 - Total capital grant movements 123,205-92,444 92,444 143,966 3(b) 2(b) 5,385,821-11,287,833 11,287,833 10,798,239
NOTES TO THE FINANCIAL STATEMENTS 2017 2016 $ $ 4 PLANT AND EQUIPMENT Opening Cost of Plant and Equipment 3,214,303 3,181,963 Purchases at Cost 4(a) 442,318 249,188 Disposals at Cost (341,627) (216,848) Closing Cost of Plant and Equipment 3,314,994 3,214,303 Opening Depreciation on Plant and Equipment 2,678,779 2,646,764 Current year Depreciation 241,360 192,395 Disposals at Cost (222,725) (160,380) Closing Depreciation on Plant and Equipment 2,697,414 2,678,779 Written Down Value of Plant and Equipment 617,580 535,524 5 PROVISIONS (a) Current Annual Leave 369,075 304,942 Sick Leave 98,180 87,893 Long Service Leave 167,629 187,060 634,884 579,895 (b) Non-Current Long Service Leave 325,484 257,227 325,484 257,227 (c) Total Provisions 2(a)(iii) 960,368 837,122 6 COMMITMENTS The Centre is a lessee for a peppercorn rental $1 annually (excluding variable outgoings) of the premises it occupies at The Niche, Suite A, 11 Aberdare Road, Nedlands, WA, 6009. The lessor is the Queen Elizabeth II Medical Centre Trust and the term of the lease is for 30 years, commencing on 27 February 2001. Commercial leases operate for the premises at : Unit 13, 86 Wanneroo Road Westminster WA 6061, until 29 th August 2018; Unit 19, 386 Wanneroo Road Westminster WA 6061, for a term of 12 months to 30 th June 2018; 5 Bookham Street Morley WA 6062, until 1 st February 2018. Cockburn Health and Community Facility, Suite 6b, 11 Wentworth Parade, Cockburn WA 6164 until 15 th June 2018. 2017 2016 $ $ Lease commitments - operating Committed at the reporting date but not recognised as liabilities, payable: Within one year 238,090 153,260 One to five years 8,605 96,133 246,695 249,393
NOTES TO THE FINANCIAL STATEMENTS 7 SERVICE AGREEMENT The Centre has entered into a number of service agreements, namely with, The Disability Services Commission of the Western Australian Government for the period - 1 July 2017 to 30 June 2018; The State Government Home and Community Care Program (HACC) for the period 1 July 2017 to 30 June 2018; The Commonwealth Department of Social Services (DSS) all for the period - 1 July 2017 to 30 June 2019, some extending to 30 June 2019 and Lottery West for the period 1 July 2017 to 30 June 2018. Pursuant to these agreements, the Centre is funded by these Government Departments to provide people with disabilities, the frail aged and their families, access to professional expertise and services that contribute to the outcomes of wellbeing, independence, positive relationships, development of abilities, skills and competencies and participation in community life. During the period of these Agreements, service delivery by the Centre must comply with the provisions of the Disability Services Act 1993 (WA) and the performance standards set out in all agreements and there must be acquittal financial reporting to the relevant bodies at the end of each financial year ended 30 June. 8 RELATED PARTY INFORMATION Members of the Board during the year were: Ms M Bramley (Chairperson) Ms I Mooney (Deputy Chairperson) Mr R Back Ms Jo Carden (resigned October 2016) Mr David Cook (joined April 2017) Dr Kay Cox Mr Jim Ellis (resigned February 2017) Mr D Gribble (resigned September 2016) Mr R Gore Mr T Nayton (resigned March 2017) Ms R O Callaghan Mr I Sloan (joined April 2017) Ms Cate Thomas (joined January 2017) Members of the Board serve in a voluntary capacity and are not remunerated. There were no transactions, commercial or otherwise, between the Centre and any member of the Board.
9 CONTINGENT LIABILITIES INDEPENDENT LIVING CENTRE OF WESTERN AUSTRALIA (INC) NOTES TO THE FINANCIAL STATEMENTS The Centre has no contingent liabilities as at 30 June 2017 and 30 June 2016. 10 REMUNERATION OF AUDITORS During the financial year the following fees were paid or payable to the auditors for: 2017 2016 $ $ Audit services RSM Australia Pty Ltd 11,300 11,000 11 EVENTS AFTER THE REPORTING PERIOD No matter or circumstance has arisen since 30 June 2017 that has significantly affected, or may significantly affect the incorporated association's operations, the results of those operations, or the incorporated association's state of affairs in future financial years.