State Procurement Board

2016-17 Annual Report

State Procurement Board

Level 7 Westpac House 91 King William St

ADELAIDE SA 5000

GPO Box 1046 ADELAIDE SA 5001

www.spb.sa.gov.au

Contact phone number 8226 5001

Contact email spb@sa.gov.au

Date presented to Minister: 28 September 2017

2016-17 ANNUAL REPORT for the State Procurement Board

To: Tom Koutsantonis MP

Treasurer

Minister for Finance

Minister for State Development

Minister for Mineral Resources and Energy

This annual report is presented to Parliament to meet the statutory reporting requirements of the State Procurement Act 2004 and meets the requirements of Premier and Cabinet Circular PC013 Annual Reporting.

This report is verified to be accurate for the purposes of annual reporting to the Parliament of South Australia.

Submitted on behalf of the State Procurement Board by:

Nicolle Rantanen

Presiding Member

Signature Date 1 I

21Page

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Contents

Contents .................................................................................................................... 3

Section A: Reporting required under the Public Sector Act 2009, the Public

Sector Regulations 2010 and the Public Finance and Audit Act 1987 ................. 4

Section B: Reporting required under any other act or regulation ....................... 4

State Procurement Act 2004 .............................................................................................. 4

Section C: Reporting of public complaints as requested by the Ombudsman. 10

Summary of complaints by subject .................................................................................. 10

Appendix: Audited financial statements 2016-17 ................................................ 11

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Section A: Reporting required under the Public Sector Act

2009, the Public Sector Regulations 2010 and the Public

Finance and Audit Act 1987

Nil return. In accordance with the State Procurement Act 2004, in 2016-17 the Department of

Treasury and Finance had administrative responsibility for providing support to the State

Procurement Board. Refer to the Department of Treasury and Finance’s 2016-17 Annual

Report.

Section B: Reporting required under any other act or

regulation

Name and date of act or regulation

State Procurement Act 2004

23—Annual report

(1) The Board must, on or before 30 September in each year, deliver to the Minister a

report on the administration of this Act and the work of the Board during the financial year

ending on the preceding 30 June.

(2) The report must incorporate the audited accounts of the Board for the relevant

financial year.

ADMINISTRATION OF THE ACT AND THE WORK OF THE BOARD

Background

The State Procurement Board (Board) provides the Government of South Australia with independent oversight of public sector procurement. The following report details the Board’s activities undertaken during 2016/17 in key functional areas relating to its legislative and policy framework.

Procurement Reform

The Board supported the delivery of a major procurement reform strategy to:

send a strong signal that Government will be a better customer by reducing red tape and finalising procurements expeditiously

deliver a less complex, more agile procurement framework, including simplifying procurement to a higher value and standardising procurement practices and documents across government

increase the commercial acumen available to agencies.

Many of the required outcomes are also reflected in the Board’s three-year Strategic Plan 2016-18, which recognises the legislative and governance framework that underpins the Board’s role and aligns Board activities with broader government objectives including achieving value for money and building procurement capability across government. There

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has been strong achievement in procurement reform and many of the initiatives are now embedded and subject to regular review and improvement.

The five strategic outcomes of the plan are:

procurement underpins State objectives

public authorities achieve value for money

the South Australian public sector is recognised as leading practice

suppliers proactively engage with government and offer innovation and savings

procurement is a key enabler for effective government business operations.

The Board’s achievements in 2016-17 include:

increasing the simple procurement threshold to $550,000, to reduce effort, cost and time required by suppliers and agencies to undertake simple procurements

simplifying the procurement process for procurements up to and including $550,000, with public authorities now able to seek:

a minimum of one quote up to $33,000

a minimum of three written quotes to be sought from $33,000 to $220,000

a minimum of five written quotes to be sought from $220,000 to $550,000

removing red tape and contracting costs for suppliers through reduced indemnity, liability and insurance requirements for suppliers under low to medium risk procurements. Suppliers are no longer required to provide indemnities, and the State is not required to be named on insurance policies, or be provided with a copy of the insurance certificate

the introduction of a default liability cap for low to medium risk contracts, set between one and five times the value of the contract, reduces insurance costs and barriers to participation for small businesses, and costs previously associated with negotiation of liability clauses

simplification of the Board’s suite of standard bid and contract documentation, to better standardise procurement practices and documents across government, improving the market approach process for public authorities and suppliers

a new Invitation to Supply template which includes provision for alternative offers to encourage innovation

a system to monitor whether agencies are achieving the objectives of their original acquisition plans and contracts has been implemented

lowering the dollar threshold at which forward procurement plans are published to $220,000, providing greater visibility and opportunities for business to participate in government procurement

updating the Job Description Matrix as part of the Capability Development Framework which advocates a holistic approach to the capability development of procurement staff across government.

The Board has introduced the Procurement Governance Policy, which requires that major agency procurement governance committees include at least one external commercial advisory representative with relevant experience, and the Industry Participation Advocate (or delegate). As part of the procurement reform agenda, the Department of Premier and Cabinet (DPC) has appointed an across-Government Chief Procurement Officer (CPO), reporting to the Chief Executive, DPC. The CPO has been appointed to the Board, to ensure alignment in across government procurement governance and reform co-ordination. The Board has commenced delegation of some of its operational functions to the CPO. The CPO has begun working closely with agencies to improve productivity and efficiency through performance monitoring, benchmarking and the use of data analytics. Under the

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procurement reform strategy, the CPO will also increase oversight of agency procurement savings targets.

Accreditation Program

The Board undertakes an Accreditation Program designed to assess the quality and appropriateness of the goods and services procurement operations of public authorities.

Public authorities are required to demonstrate clearly defined and implemented procurement strategies, governance, processes and systems in order for the Board to provide a procurement authority to the public authority’s principal officer. This authority allows the public authority to undertake and approve procurements, up to a designated dollar value, without reference to the Board.

The Accreditation Program applies to all public authorities with a procurement authority greater than $220,000 and has a focus on the following performance categories:

Leadership and Strategy

Organisation and People

Governance and Performance Management

Processes and Systems

Relationships – Internal and External.

All public authorities with a procurement authority greater than $220,000 have been reviewed by an independent lead reviewer between 2013 and 2016.

In 2016/17, two additional reviews of public authorities were completed due to significant organisational changes in their procurement functions. These reviews were for the Department of Planning, Transport and Infrastructure, which has recently undergone significant changes in its procurement function, and the Department of the Premier and Cabinet, which consolidated its three procurement functions (ICT procurement, across-government contracts and DPC specific procurement) into one procurement function.

Findings from the Accreditation Reviews have assisted the Board to identify common issues across public authorities and provide additional policy guidance and training, such as improved contract management guidance as well as developing a range of Better Practice Guides to assist public authorities with their procurement operations.

The current program is now complete. A review of the program is under way, with a view to commencing the next four year cycle in 2018.

Assurance Review Program

The Assurance Review Program enables the Board to meet its statutory obligations under section 12, (1)(e) of the Act, that is “to investigate and keep under review levels of compliance with the Board’s procurement policies, principles, guidelines, standards and directions”.

The objective of the Assurance Program is to assess the performance of each public authority in complying with the Act and the Board’s procurement policies, principles, guidelines and directions, and applies to all public authorities.

The program focuses on how public authorities manage their procurement risks through reviewing and validating the following areas:

that internal procurement policies, procedures and delegations comply with the Board’s policy framework and processes exist to facilitate timely approval, updating and promulgation

compliance to the Board’s policies and guidelines through a review of transactions

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approved by the public authority

The 2012-2016 reviews undertaken conclude the cycle of the assurance program, in which 16 large public authorities and 26 base level public authorities (i.e public authorities with a procurement authority of $220,000) were reviewed. In late 2016, the Board conducted five base level public authority reviews and exempted four base level public authorities from an assurance review due to the low procurement spend profile of these entities.

Findings from the current Program have assisted the Board to identify issues across public authorities and provide additional policy guidance and training, such as developing a Contract Register policy to ensure all contracts are recorded by public authorities, improved guidance on when it is appropriate to enter a direct negotiation with a supplier, clearer guidance on sustainable procurement and additional contract management guidance.

The current Program is now complete. The program is currently being reviewed with a view to commencing the next four year cycle in 2018.

Development of Not for Profit Funding Guidelines

Section 6 of the State Procurement Regulations 2005 excluded community welfare funding arrangements with non-profit bodies from the definition of procurement operations in the Act, thereby enabling public authorities to undertake those operations without overview by the Board. This exemption was removed, effective 1 July 2017, following Cabinet approval in June 2017 to support the implementation of the South Australian Not-for-profit Funding reforms.

The South Australian Government approved DPC Circular 044 - South Australian Funding Policy for the Not-for-Profit Sector which comes into effect from 1 July 2017. This Circular aims to support and strengthen collaborative partnerships between government and the not-for-profit (NFP) sector. It provides a consistent approach to all aspects of South Australian Government funding, sets clear requirements for public authorities, reduces the administrative burden on NFPs and maintains their independence. Government funding for NFPs is either via procurement or grants.

The DPC Circular is based on best practice principles for government and NFP funding relationships including:

Robust planning and design

Collaboration and partnership

Proportionality

An outcomes orientation

Achieving value with relevant money

Governance and accountability

Probity and transparency

Community development principles

The State Procurement Board has consulted with key public authorities that contract with the NFP sector and representatives from the NFP sector and has updated the following policies to incorporate NFP principles identified in the DPC Circular:

Procurement Policy Framework

Acquisition Planning Policy

Supplier Selection Policy

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Contract Management Policy

Simple Procurement Policy

These policy updates will come into effect from 1 July 2017.

A standard not-for-profit funded services agreement is currently being developed to simplify the contracting process for NFP funded services.

Training and Capability Development

Under the Act, the Board is required “to assist in the development and delivery of training and development courses and activities relevant to the procurement operations of public authorities”. This is facilitated in a number of ways within the Board’s Capability Development Program:

i. Capability Assessment

An assessment of the capability of 270 procurement staff across government identified priority skills uplift opportunities in negotiation, contract implementation and contract management. Becoming more outcome focused and creating greater public value was also identified as an improvement opportunity. The data gathered has been used to recalibrate existing training workshops and will be used as a benchmark for future assessments. The report has been considered by the Board and the CPO and operational improvements and strategies to address skills gaps are being developed in conjunction with agency stakeholders.

ii. Vocational Qualifications

The Board continued to facilitate opportunities for employees to gain vocational qualifications in procurement. 12 participants from across Government undertook study towards an Advanced Diploma of Government (Procurement & Contracting) during the reporting period.

iii. Targeted Training Program

The Board’s Targeted Procurement Training Program hosted 378 attendees participating in 31 workshops during 2016-17. The program included topics that focussed on increasing understanding of specific Board policies and guidelines as well as broader aspects of good procurement practice.

The suite of workshops is delivered by Registered Training Organisations and caters for those new to, or with an interest in, procurement right through to experienced practitioners seeking to refresh their knowledge. Adjustments were made to some workshops in the second half of the financial year in response to the capability review. Mapping of training inventory has been undertaken to determine any gaps, and priority will be given to offering niche training moving forward that aligns with the priority skills improvement opportunities.

The Board continued to monitor participant feedback including a sample of participant/manager follow-up on the application of knowledge in the workplace. The quantitative rating for overall participant satisfaction during 2016-17 was 80%.

Networking and Professional Development

The Board continued to host a regular forum for agency heads of procurement, facilitated by the Presiding Member of the Board in the first half of the financial year and subsequently by the Chief Procurement Officer. The forum is an important communication mechanism for sharing ideas and discussion on procurement topics of interest. The Board’s staff continued to represent South Australia on the Australasian Procurement

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and Construction Council’s Procurement Capability Development Working Group, which met regularly to develop and progress strategies aimed at building government procurement capability and enhancing the growth of the procurement profession.

Supplier Survey

The supplier survey, designed to elicit the experiences of suppliers that have tendered for government procurements on the SA Tenders and Contracts website, continued to provide useful feedback for integration into the policy framework and the capability development program.

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Section C: Reporting of public complaints as requested by

the Ombudsman

Summary of complaints by subject

Public complaints received by the State Procurement Board

Category of complaints by subject Number of instances

Supplier Complaints 0

Data for the past five years is available at: https://data.sa.gov.au/data/dataset/state-

procurement-board-annual-report-data-public-complaints

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Appendix: Audited financial statements 2016-17

For official use only ~ Government of South Australia

~"f/l:;J Auditor-General's Department ~

Level 9 Ourref: A17/233 State Administration Centre 200 Victoria Square Adelaide SA 5000

DX 56208 Victoria Square

Tel +618 8226 9640 28 September 2017 Fax +618 8226 9688

ABN 53 327 061 410

audgensa@audit.sa.gov.au www.audit.sa.gov.au

Ms N Rantanen Presiding Member State Procurement Board Level8 State Administration Centre ADELAIDE SA 5001

Dear Ms Rantanen

Audit of the State Procurement Board for the year to 30 June 2017

We have completed the audit of your accounts for the year ended 30 June 2017. Three key outcomes from the audit are the: 1 Independent Auditor's Report on your agency's financial report 2 opinion on your financial controls 3 audit management letters.

1 Independent Auditor's Report

We are returning the financial statements for the State Procurement Board, with the Independent Auditor's Report. This report is unmodified.

2 Opinion on financial controls

In my opinion, the controls exercised by the State Procurement Board in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities, are sufficient to provide reasonable assurance that the financial transactions of the State Procurement Board have been conducted properly and in accordance with law.

3 Audit management letters

As the audit did not identify any significant matters requiring management attention, we will not issue any audit management letters.

1

For official use only

What the audit covered

Our audit covered the principal areas of the agency's financial operations and included test reviews of systems, processes, internal controls and financial transactions. Some notable areas were:

expenditure revenue cash remuneration of Board Members review of minutes.

Our audits meet statutory audit responsibilities under the Public Finance and Audit Act 1987 and the Australian Auditing Standards.

I would like to thank the staff and management of your agency for their assistance during this year's audit.

Yours sincerely

~ Auditor-General

enc

2

INDEPENDENT AUDITOR'S REPORT Government of South Australia

Auditor-General's Department

To the Presiding Member State Procurement Board

Level 9 State Administration Centre 200 Victoria Square Adelaide SA 5000

DX 56208 Victoria Square

Tel +618 8226 9640 Fax +618 8226 9688

ABN 53 327 061 410

audgensa@audit.sa.gov.au www.audit.sa.gov.au

As required by section 31 (1 )(b) of the Public Finance and Audit Act 1987 and section 22(2) of the State Procurement Act 2004, I have audited the financial report of the State Procurement Board for the financial year ended 30 June 2017.

Opinion

In my opinion, the accompanying financial report gives a true and fair view of the financial position of the State Procurement Board as at 30 June 2017, its financial performance and its cash flows for the year then ended in accordance with the Treasurer's Instructions promulgated under the provisions of the Public Finance and Audit Act 1987 and Australian Accounting Standards.

The financial report comprises:

• • •

a Statement of Comprehensive Income for the year ended 30 June 2017 a Statement of Financial Position as at 30 June 2017 a Statement of Changes in Equity for the year ended 30 June 2017 a Statement of Cash Flows for the year ended 30 June 2017 notes, comprising significant accounting policies and other explanatory information a Certificate from the Presiding Member and Director, Financial Services.

Basis for opinion

I conducted the audit in accordance with the Public Finance and Audit Act 1987 and Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of my report. I am independent of the State Procurement Board. The Public Finance and Audit Act 1987 establishes the independence of the Auditor-General. In conducting the audit, the relevant ethical requirements of APES 11 0 Code of Ethics for Professional Accountants have been met.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my opinion.

Responsibilities of the Director, Financial Services and the Board for the financial report

The Director, Financial Services is responsible for the preparation of the financial report that gives a true and fair view in accordance with the Treasurer's Instructions promulgated under the provisions of the Public Finance and Audit Act 1987 and the Australian Accounting Standards, and for such internal control as management determines 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.

The Board are responsible for overseeing the entity's financial reporting process.

Auditor's responsibilities for the audit of the financial report

My 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 my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 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 my 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

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Director, Financial Services

• 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.

My report refers only to the financial report described above and does not provide assurance over the integrity of electronic publication by the entity on any website nor does it provide an opinion on other information which may have been hyperlinked to/from the report.

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 the audit.

Andrew Richardson Auditor-General 28 September 2017

State Procurement Board

Financial Statements

for the year ended 30 June 2017

Certification of the Financial Statements

We certify that the:

• financial statements of the State Procurement Board:

are in accordance with the accounts and records of the State Procurement Board;

comply with relevant Treasurer's instructions;

comply with relevant accounting standards; and

present a true and fair view of the financial position of the State Procurement Board at the end of the 30 June 2017 financial year and the results of its operations and cash flows for the financial year.

• Internal controls employed by the State Procurement Board over its financial reporting and its preparation of the general purpose financial statements have been effective throughout the financial year.

Signed in accordance with a resolution of the State Procurement Board.

Nicolle Rantanen

Presiding Member

State Procurement Board

"2... 7 September 2017

Paul Williams

Director, Financial Services

Department of Treasury and Finance

2 7 September 2017

State Procurement Board Statement of Comprehensive Income for the year ended 30 June 2017

Expenses

Employee benefits expenses

Supplies and services

Total expenses

Income

Revenues from fees and charges

Total income

Net Cost of Providing Services

Revenues from SA Government

Revenues from SA Government

Total revenues from SA Government

Net Result

Total Comprehensive Result

Note

4

6

7

8

The net result and comprehensive result are attributable to the SA Government as

owner.

The above statement should be read in conjunction with the accompanying notes.

2017 $'000

63 410 473

70 70

( 403)

450 450

47

47

2016 $'000

61

505 566

90 90

( 476)

439 439

( 37)

( 37)

State Procurement Board Statement of Financial Position As at 30 June 2017

Current Assets

Cash and cash equivalents Receivables

Total current assets

Total Assets

Current Liabilities

Payables Other liabilities

Total current liabilities

Total Liabilities

Net Assets

Equity

Retained earnings

Total Equity

The total Equity is attributable to the SA Government as owner.

Unrecognised contractual commitments Contingent assets and liabilities

Note

9 10

11 12

16

Note

13 14

The above statement should be read in conjunction with the accompanying notes.

2017 2016 $'000 $'000

956 909 1

957 909

957 909

46 42 3

46 45

46 45

911 864

911 864 911 864

State Procurement Board Statement of Changes in Equity for the year ended 30 June 2017

Balance at 30 June 2015

Net result for 2015-16

Total comprehensive results for 2015-16

Balance at 30 June 2016

Net result for 2016-17

Total comprehensive results for 2016-17 ·

Balance at 30 June 2017

All changes in Equity are attributable to the SA Government as owner.

The above statement should be read in conjunction with the accompanying notes.

Retained Total

Earnings Equity

$'000 $'000

901 901

( 37) (37}

( 37) ( 37)

864 864

47 47

47 47

911 911

State Procurement Board Statement of Cash Flows for the year ended 30 June 2017

Cash Flows from Operating Activities

Cash outflows

Employee benefit payments Payments for supplies and services

Cash used in operations

Cash inflows

Fees and charges Other receipts

Cash generated from operations

Cash flows from SA Government:

Revenues from SA Government

Cash generated from SA Government

Net Cash provided by I (Used in) Operating Activities

Net Increase/(Decrease) in Cash and Cash Equivalents

Cash and cash equivalents at the beginning of the period

Cash and Cash Equivalents at the End of the Period

Note

9

The above statement should be read in conjunction with the accompanying notes.

2017 2016 $'000 $'000

( 63) ( 61) ( 406} ( 515} ( 469) ( 576)

69 91 7

69 84

447 442 447 442

47 (50)

47 (50)

909 959 956 909

State Procurement Board Notes To And Forming Part Of The Financial Statements

Note 1 Objective of the State Procurement Board

Note 2 Significant accounting policies

Note 3 New and revised accounting standards and policies

Note 4 Employee benefits

Note 5 Remuneration of Board members

Note 6 Supplies and services

Note 7 Revenues from fees and charges

Note 8 Revenues from SA Government

Note 9 Cash and cash equivalents

Note 1 0 Receivables

Note 11 Payables

Note 12 Other liabilities

Note 13 Unrecognised contractual commitments

Note 14 Contingent assets and contingent liabilities

Note 15 Events after the reporting period

Note 16 Equity

Note 17 Related party transactions

State Procurement Board Notes to and forming part of the financial statements Note 1 Objective of the State Procurement Board

The State Procurement Board (the Board) was established under the State Procurement Act 2004 (The Act). The Act

states the Board is the same body corporate as the State Supply Board established under the State Supply Act 1985.

Under the Act the Board must have regard and seek to further the object of the Act by advancing government priorities

and objectives by a system of procurement for public authorities directed towards:

• Obtaining value for money in the expenditure of Government funds;

• Providing for ethical and fair treatment of participants; and

• Ensuring probity, accountability and transparency in procurement operations.

The Board is serviced for administrative and financial functions, together with strategic and managerial support by the

Department of Treasury and Finance, Public Finance Branch and Shared Services SA.

Note 2 Significant accounting policies

a) Statement of compliance

These financial statements have been prepared in compliance with section 23 of the Public Finance and Audit Act 1987.

The financial statements are general purpose financial statements. The accounts have been prepared in accordance with

relevant Australian Accounting Standards (Reduced Disclosure Requirements) and comply with Treasurer's Instructions

and Accounting Policy Statements promulgated under the provisions of the Public Finance and Audit Act 1987.

The Board has applied Australian Accounting Standards that are applicable to not-for-profit entities, as the Board is a not­

for-profit entity.

b) Basis of preparation

The preparation of the financial statements requires:

The use of certain accounting estimates and requires management to exercise its judgement in the process of

applying the Board's accounting policies. The areas involving a higher degree of judgement or where assumptions

and estimates are significant to the financial statements, these are outlined in the applicable notes.

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

transactio·ns or other events are reported.

Compliance with Accounting Policy Statements issued pursuant to section 41 of the Public Finance and Audit Act

1987. In the interest of public accountability and transparency the accounting policy statements require the

following note disclosures, which have been included in this financial report:

• Board I committee member and remuneration information, where a board/committee member is entitled to

receive income from membership other than a direct out-of-pocket reimbursement.

The Board's Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity

have been prepared on an accrual basis and are in accordance with the historical cost convention.

The Statement of Cash Flows has been prepared on a cash basis.

The financial statements have been prepared based on a twelve month period and presented in Australian currency.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June

2017 and the comparative information presented.

c) Reporting entity

The Board is a body corporate established by statute. Its financial arrangements are administered, but not controlled, by

the Department of Treasury and Finance.

State Procurement Board Notes to and forming part of the financial statements d) Comparative information

The presentation and classification of items in the financial statements are consistent with prior periods except where

specific revised accounting standards and/or accounting policy statements has required a change.

Where presentation or classification of items in the financial statements have been amended, comparative figures have

been adjusted to conform to changes in presentation in these financial statements unless impracticable.

e) Rounding

All amounts in the financial statements and accompanying notes have been rounded to the nearest thousand dollars

($'000).

f) Taxation

The Board is not subject to income tax. The Board is liable for payroll tax, fringe benefits tax, goods and services tax (GST).

The Department of Treasury and Finance (DTF) prepares the Business Activity Statement on behalf of the Board under

the grouping provisions of the GST legislation. Under these provisions, DTF is liable for the payments and entitled to the

receipt of GST. As such, GST applicable to the Board forms part of the Statement of Comprehensive Income and Statement

of Financial Position of DTF.

g) Events after the reporting period

Adjustments are. made to amounts recognised in the financial statements, where an event occurs after 30 June and before

the date the financial statements are authorised for issue, where those events provide information about conditions that

existed at 30 June.

Note disclosure is made about events between 30 June and the date the financial statements are authorised for issue

where the events relate to a condition which arose after 30 June and which may have a material impact on the result of

subsequent years.

h) Income

Income is recognised to the extent that it is probable that the flow of economic benefits to or from the Board will occur and

can be reliably measured.

Income has been aggregated according to its nature and has not been offset unless required or permitted by a specific

accounting standard, or where offsetting reflects the substance of the transaction or other event.

The following are specific recognition criteria:

a) Contributions received

Grants for program funding are recognised as revenues when the Board obtains control over the funding. Control over

appropriations is normally obtained upon receipt.

b) Fees and charges

Revenues from fees and charges are derived from the provision of training to other SA Government agencies and to the

public. The revenue is recognised upon delivery of the service to the clients or by reference to the stage of completion.

i) Expenses

Expenses are recognised to the extent that it is probable that the flow of economic benefits from the Board will occur and

can be reliably measured.

Expenses have been aggregated according to their nature and have not been offset unless required or permitted by a

specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

The following are specific recognition criteria:

Employee benefit expenses

State Procurement Board Notes to and forming part of the financial statements Employee benefit expenses include all costs related to employment including wages and salaries and leave entitlements. These are recognised when incurred.·

Superannuation

The amount charged to the Statement of Comprehensive Income represents the contributions made by the Board to the

superannuation plan in respect of current services of current Board staff.

j) Current and non-current classification

Assets and liabilities are characterised as either current or non-current in nature. The Board has a clearly identifiable

operating cycle of twelve months. Assets and liabilities that are sold, consumed or realised as part of the normal operating

cycle even when they are not expected to be realised within twelve months after the reporting date have been classified

as current assets or current liabilities. AWother assets and liabilities are classified as non-current.

k) Assets

Assets have been classified according to their nature and have not been offset unless required or permitted by a specific

accounting standard, or where offsetting reflects the substance of the transaction or other event.

Special deposit account

The Board records all transactions in the SDA. The Board may only utilise the reported balance in the SDA in accordance

with its approved Budget or with prior approval of the Treasurer.

Cash and Cash Equivalents

Cash and cash equivalents in the Statement of Financial Position includes cash at bank and deposits at call that are readily

converted to cash and which are subject to insignificant risk of change in value.

Cash is measured at nominal value.

The Board's physical cash balance is included within a bank account, namely the Department of Treasury and Finance

Support Operations Account, which comprises of cash balances for several deposit accounts and is managed in

accordance with Treasurer's Instruction 6 Deposit Accounts and Banking.

I) Liabilities

Liabilities have been classified according to their nature and have not been offset unless required or permitted by a

specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

Payables

Payables include creditors and accrued expenses.

Creditors represent the amounts owing for goods and services received prior to the end of the reporting period that are

unpaid at the end of the reporting period. Creditors include all unpaid invoices received relating to the normal operations

of the Board.

Accrued expenses represent goods and services provided by other parties during the period that are unpaid at the end of

the reporting period and where an invoice has not been received.

All payables are measured at their nominal amount and are normally settled within 30 days from the date of the invoice

or date the invoice is first received.

Note 3 New and revised accounting standards and policies

The Board did not voluntarily change any of its accounting policies during 2016-17

State Procurement Board Notes to and forming part of the financial statements Note 4 Employee benefits

Board fees

Employment on-costs - superannuation

Employment on-costs - payroll tax

Total employee benefits expenses

The Board has no other employee expenses.

Note 5 Remuneration of Board members

Board members during the 2017 financial year were:

State Procurement Board

Ms Nicolle Rantanen* (Chair) Ms Deborah Black Ms Debra Contala* Mr David Henchliffe Mr Martin McMahon* Mr Jason Schell* Ms Marielle Smith Mr Jam in Woolcock*

Date Appointed/Resigned

11-Apr-16 (Appointed) 08-0ct-15 (Appointed) 31-0ct-15 (Appointed) 14-Nov-15 (Appointed) 22-Nov-15 (Appointed) 02-F eb-17 (Appointed) 08-0ct-15 (Appointed) 08-0ct-15 (Appointed)

2017 2016

$'000 $'000

55

5 3

63

53

5 3

61

The members named above also belong to the Procurement Approval Committee (PAC) and their remuneration is included

in note 4.

* In accordance with the Department of Premier and Cabinet Circular Number 016, SA Government employees did not

receive any remuneration for SA Government Board duties during the financial year. The number of members whose

remuneration received or receivable falls within the following bands:

2017 2016

Number Number

$0-$9,999 5 7

$1 0,000 - $19,999 2 3

$20,000- $29,999 II 1

Total number of board members 8 10

11 Includes remuneration of $9 000 which relates to duties performed by the board member in 2015-16.

Remuneration of members reflects all costs of performing board/committee member duties including sitting fees,

superannuation contributions, fringe benefits tax and any other salary sacrifice arrangements. The total remuneration received or receivable by members was $60 000 ($58 000).

Amounts paid to a superannuation plan for board/committee members was $5 000 ($5 000).

Unless otherwise disclosed, transactions with members are on conditions no more favourable than those which it is

reasonable to expect the entity would have adopted if dealing with the related party at arm's length in the same

circumstances.

State Procurement Board Notes to and forming part of the financial statements Note 6 Supplies and services

2017 2016 $'000 $'000

Professional fees 374 445 Information technology 4 9 Advertising/marketing and promotions 6

General. administration and consumables 24 39 Other 8 6

Total supplies and services 410 505

Note 7 Revenues from fees and charges

2017 2016 $'000 $'000

Other fees and charges 70 90 Total revenue from fees and charges 70 90

Note 8 Revenues from SA Government

2017 2016 $'000 $'000

Revenues from SA Government 450 439 Total revenues from SA Government 450 439

Note 9 Cash and cash equivalents

2017 2016 $'000 $'000

Deposits with the Treasurer 956 909 Total cash and cash equivalents 956 909

Deposits with the Treasurer are non-interest bearing. The carrying amount of cash and cash equivalents represents fair value.

Note 10 Receivables

Current

Receivables

Total current receivables

Total receivables

2017 2016 $'000 $'000

1

1

State Procurement Board Notes to and forming part of the financial statements Note 11 Payables

2017 2016 $'000 $'000

Current

Accrued expens·es 46 42 Total current payables 46 42

Total payables 46 42

Note 12 Other liabilities

2017 2016 $'000 $'000

Current

Unearned revenue 3

Total current other liabilities 3

Total other liabilities 3

State Procurement Board Notes to and forming part of the financial statements Note 13 Unrecognised contractual commitments

There are no unrecognised contractual commitments as at 30 June 2017.

Note 14 Contingent assets and contingent liabilities

The Board is not aware of any contingent assets or liabilities. In addition the Board has made no guarantee.

Note 15 Events after the reporting period

There were no events occurring after the end of the reporting period that had a material financial implication on these

financial statements.

Note 16 Equity

Retained earnings

Total equity

Note 17 Related party transactions

2017 $'000

911

911

2016 $'000

864

864

The Board is established pursuant to the State Procurement Act 2004 (The Act), administered by the Department of

Treasury and Finance and is a wholly owned and controlled entity of the Crown.

Related parties of the board include all key management personnel and their close family members; all Cabinet Ministers

and their close family members; and all public authorities that are controlled and consolidated into the whole of government

financial statements and other interests of the Government.

Key Management Personnel

Key management personnel of the State Procurement Board includes the Minister and the board's members who have

responsibility for the strategic direction and management of the board.

For the total compensation for the board's key management personnel refer to note 5.

The Minister's remuneration and allowances are set by the Parliamentary Remuneration Act 1990 and the Remuneration

Tribunal of SA respectively are payable from the .Consolidated Account (via the Department of Treasury and Finance) under section 6 of the Parliamentary Remuneration Act 1990.