CHAIR—Welcome, Commissioner, Mr Colvin and Mr Van Dam. Senator Ludwig, would you like to start?

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Senator LUDWIG—We have the annual report. Are there corrections that you wish to make or matters that you wish to highlight?

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Mr Keelty—No.

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Senator LUDWIG—I do not seem to be able to search on the financial statements in the annual report. For example, go to page 207, where the AFP’s average staffing levels are listed. I was trying to find one of the answers that Mr Van Dam, the Chief Operating Officer, gave at a previous hearing. He said that there would be 4,369, excluding ACT police, and that that would appear in the annual report. I cannot find it in the annual report. What happens is that when you select a piece of text you can copy and paste it, because the annual report is provided in a format that I can do that with. Usually, you can then search for various figures. The difficulty is that when I copy and paste this I cannot search. Do you prevent me from doing that when you provide the annual report or is there a different way that you put those figures in?

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Mr Van Dam—Do you mean in the material available on the website?

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Senator LUDWIG—Yes, as a PDF file.

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Mr Van Dam—I am not in a position to answer you. I do not know the answer to that question, but Mr Gaukroger may.

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Mr Gaukroger—No.

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Mr Van Dam—In relation to your earlier question, however, I think my previous answer to you was correct in the sense that 5,150, the figure on page 207 of the annual report, is a figure that includes ACT policing. I am advised that the figure for ACT policing is 781. If you subtract 781 from 5,150, I believe the answer is 4,369. I think the comments at a previous hearing arose from the errors that occurred previously in relation to whether ACT policing had or had not been included in certain total figures.

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Senator LUDWIG—Yes. That is why I could not find it when I searched. That is very helpful. Could you have a look at the PDF file for next time. It is helpful for me when I look at your financial statements to be able to cut and paste and then search on terms.

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Mr Van Dam—Certainly.

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Senator LUDWIG—It has been the same in a number of different computers that I have tried, so I suspect it is to do with the way those figures have been imported from somewhere else and put in the PDF file for your annual report.

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Mr Van Dam—I will not speculate on why it is that we might do that, but we will certainly take that on board.

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Senator LUDWIG—I want to turn to one of the matters from the last hearing that I have got some answers back from you on, and that is current ratios. Mr Gaukroger, at the recent hearing you described to the committee what you called the AFP’s current ratio—that is, the agency’s current assets divided by its current liabilities. You told the committee that the AFP’s current ratio was 2.1 at the moment, putting it at the top end of what you described as the normal operating range. You provided an overview of some other departments as well, to show what their ratios were. As a rule of thumb, what would the normal operating range be for your organisation?

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Mr Gaukroger—The benchmark that from my own experience I would consider normal is between one and two. Again from experience, it can get below one but if it gets much below 0.5 you have to do a lot of detailed analysis to see whether there is a solvency issue there. It is a benchmark as to how an agency—or a private sector organisation, for that matter—is travelling.

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Senator LUDWIG—When an agency’s ratio is well above two, what does that mean?

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Mr Gaukroger—It can mean a couple of things. Generally, it could mean that there is a good deal of capital commitment coming up in the future, because the money for the capital expenditure is included in the cash component of the current ratio. The capital expenditure is not included in that ratio at all, so it means that you have to build up that ratio if there are going to be some significant improvements in the future.

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Senator LUDWIG—If it is below one—say at 0.5—what would that indicate?

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Mr Gaukroger—It could mean a number of things. It could mean a very stable agency in terms of its capital program. It could be a telltale sign that there are some solvency issues. It could mean that they are running perfectly well. It depends on the break-up of the balance sheet and the operations, so you really have to look at it on a case-by-case basis and analyse it accordingly.

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Senator LUDWIG—Mr Van Dam also indicated that there was a reasonable capital acquisition program ahead. In answer to—

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Mr Van Dam—Question 7.

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Senator LUDWIG—question 7, you indicated that there are a range of capital programs that will have expenditure. Are they all of the major capital projects for the foreseeable future that you have on the books currently?

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Mr Van Dam—The foreseeable future is quite a long time.

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Senator LUDWIG—Ones that are currently announced or under planning for the next four years, then.

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Mr Van Dam—What we have tried to capture here are those projects for which we have a clear commitment. This represents the bulk of what I understand our capital commitment to be. There will be a range of smaller capital items, as we have talked about previously, year on year. But we have tried to capture here those reasonably substantial capital items that are already committed to.

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Senator LUDWIG—So that would go out to at least three years?

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Mr Van Dam—Yes. We have tried to cover the next three years.

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Senator LUDWIG—So you would be able to calculate on an annual basis what that expenditure over the next three years would be?

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Mr Van Dam—I could not give it to you right now.

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Senator LUDWIG—No.

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Mr Van Dam—But I would be able to give you an estimate of what the outlays are likely to be over that period.

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Senator LUDWIG—That would be helpful. In terms of the initiation of the projects, do they come from the minister, from internal decision making or are they imposed by the need to build another building because the current one is no longer suitable? I am just trying to work out the decision-making process.

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Mr Van Dam—If you refer to question 7, we have tried to give you an indication of that. I apologise; I realise that you have not had that material very long. We have tried to differentiate between specific budget decisions made by government and appropriated by government and what was—

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Senator LUDWIG—Yes.

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Mr Van Dam—We have tried to answer that question for you.

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Senator LUDWIG—How is the decision making done for those projects which are internally funded, such as the Anzac Park West headquarters and the financial management information system? Is that Commissioner Kee