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Note 9: Other Operating Expenses

2017 Forecast Actual
Budget
2016
$m
Budget
2017
$m
30 June
2017
$m
30 June
2016
$m
5,428 5,481 Grants and subsidies 4,906 4,962
1,215 1,255 Rental and leasing costs 1,289 1,266
744 652 Amortisation and impairment of non-financial assets 1,102 963
1,320 865 Impairment of financial assets 607 861
842 779 Cost of concessionary lending 753 747
583 636 Lottery prize payments 652 537
244 376 Inventory expenses 278 261
3 3 Fees paid to audit firms other than the Auditor-General
(refer below)
5 5
29,031 28,965 Other operating expenses 28,704 27,041
39,410 39,012 Total other operating expenses 38,296 36,643

Where grants and subsidies are at the government's discretion until payment, the expense is recognised when the payment is made.  Otherwise, the expense is recognised when the specified criteria for the grant or subsidy have been fulfilled and notice has been given to the government.

Operating leases, where the lessor substantially retains the risks and rewards of ownership, are recognised in a systematic manner over the term of the lease.  Leasehold improvements are capitalised and the cost is amortised over the unexpired period of the lease or the estimated useful life of the improvements, whichever is shorter.  Lease incentives received are recognised evenly over the term of the lease as a reduction in rental expense.

Operating expenses relate to those expenses incurred in the course of undertaking the functions and activities of entities included in the financial statements of the Government, excluding those expenses separately identified in the statement of financial performance and other notes.

Audit fees paid to the Controller and Auditor-General

Fees paid to the Controller and Auditor-General for the audit of the financial statements of the Government and its reporting entities (including audit service providers) were $42.1 million (2016: $40.8 million). These fees include $0.2 million (2016: $0.2 million) for the audit of these financial statements. Audit Fees for assurance and related services paid to the Controller and Auditor-General were $0.3 million (2016: $0.4 million). As the Controller and Auditor-General is part of the Government reporting entity, these fees are eliminated on consolidation.

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