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Legislative Assembly for the ACT: 1999 Week 7 Hansard (2 July) . . Page.. 2143 ..

MS CARNELL (continuing):

The statement read as follows:

Mr Speaker, I would like to present the Government's response to two reports presented by the Public Accounts Committee.

The first is, Report No. 14, 'Review of Auditor-General's Report No 8,1998 - Territory Operating Losses and Financial Position', the second being Report No. 17, the 'Review of Auditor-General's Report No. 9, 1998 - Financial Audits with years ending 30 June 1998'.

The Government Response to Report No. 17, pertaining to agency financial audits, addresses the two recommendations of the Committee.

I would like to assure the Assembly that this Government has made a strong commitment to ensuring that the budget and financial statements are consistent and comparable.

Mr Speaker, in response to the Committee's recommendations, it is important that a distinction be made between:

� the variations between budget forecast and actual outcome; and

� variations due to a change in accounting treatment.

The Budget process occurs a significant time before the annual financial statements are prepared. Budget forecasts are developed using a set of assumptions, based on past performance and known future transactions.

Mr Speaker, while every effort is made to present a best estimate in budget, the parameters underpinning the budget estimates may change during the year.

While such variations between budget and annual financial statements are unavoidable, the Government considers that these should be adequately explained in the financial statements.

On occasions, accounting methodology will change, refine or be clarified during the intervening period, and further information or advice about accounting treatment will evolve.

Mr Speaker, generally each variation is specific to an agency, and addressed on a specific basis. However, the Government has a range of general measures in place which cover all agencies. These include:

� the ongoing process through monthly reporting which monitors actual performance against budget estimates;

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