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5. Financial performance
The financial results9 for the 2020-21, 2021-22 and 2022-23 years are shown below:
Table 5 - Financial performance
| 2020-21 | 2021-22 | 2022-23 | |
|---|---|---|---|
| Operational Expenses (A) | 19,369 | 19,197 | 21,650 |
| Cost Recovered Revenue – includes fees for services and levies (B)10 | 23,233 | 24,394 | 24,323 |
| Government appropriation - interest equivalency payment (C) | 965 | 58 | 34 |
| Balance = (B+C)-(A) | 4,828 | 5,255 | 2,707 |
AICIS’ activities are cost recovered from industry except for a modest amount of appropriation funding in the form of an interest equivalency payment from interest earned on funds held in the Industrial Chemicals Special Account. The surplus in 2022-23 was above the original estimate for the year. The 10% increase in total cost-recovered revenue over budget stems from higher than forecasted top tier introducers, (over>$5 m introduction value), and contribution from prior year registration level upgrades. Upgrades occur when registrants are identified through compliance monitoring, or self-report as having under-declared their introduction value and are subject to pay a higher registration charge.
Targets for operational expenses were not achieved for the full year and represented a variance of 4%. This underspend is primarily due to: contractors who were engaged later in the year than projected, consulting, project and legal costs, travel and training costs and costs related to lower than anticipated level of fees for services activity.
A review of financial performance is undertaken annually, and detailed performance information is discussed with industry representative bodies. AICIS uses this information to determine its balance management strategy and aims to maintain reserves in accordance with this strategy.
Depreciation equivalence is accumulated in cash reserves for the replacement of assets. The Government expects AICIS to manage within its cost recovery resources and therefore investment in new, or replacement of existing IT assets must come from the responsible management of cash reserves.
9 The historical financial performance of NICNAS prior to the commencement of AICIS in 2020 is not presented in the above table, due to the significant changes in regulatory activity under AICIS.
10 Projected revenue does not reflect any adjustment made to recover CPI and wage growth currently included within the projected cost base. AICIS will continue to consult with industry on how the indexed costs should be recovered across the forward years as part of future annual CRIS updates in accordance with the Charging Framework.