Preface


Preface

Terms of reference  

1.         The committee is responsible for examining annual reports of departments and agencies within two portfolios: Defence (including the Department of Veterans' Affairs), and Foreign Affairs and Trade.

2.         Under Standing Order 25(20), the committee is required to report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on reports tabled by 30 April each year by the tenth sitting day after 30 June of that year. This report also examines annual reports that were tabled after 31 October 2013.

3.         The standing order states:  

Annual reports of departments and agencies shall stand referred to the committees in accordance with an allocation of departments and agencies in a resolution of the Senate. Each committee shall:

a) Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;

b) Consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration;

c) Investigate and report to the Senate on any lateness in the presentation of annual reports;

d) In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate;

e) If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;

f) Report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year;

g) Draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and

h) Report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

Role of annual reports

4.         Annual reports place a great deal of information about government departments and agencies on the public record. Accordingly, the tabling of annual reports continues to be an important element of accountability to Parliament and more broadly to the Australian people. The information provided in annual reports assists Parliament in the effective examination of the performance of departments and agencies and the administration of government programs. Indeed, as noted in the Requirements for annual reports:

Annual reports serve to inform the Parliament (through the responsible Minister), other stakeholders, educational and research institutions, the media and the general public about the performance of departments in relation to services provided. Annual reports are a key reference document and a document for internal management. They form part of the historical record.

...

Annual reports and Portfolio Budget Statements  (PB Statements) are the principal formal accountability mechanisms between government and departments and from departments through (or on behalf of) government to the Parliament.[1]

Assessment of annual reports

5.         The committee examines annual reports to determine whether they are timely and 'apparently satisfactory' and whether they comply with the relevant requirements for the preparation of annual reports of departments and authorities.[2] The requirements are set down in the following instruments:

  • for portfolio departments and bodies prescribed under the FMA Act: Public Service Act 1999, subsections 63(2) and 70(2), and the Requirements for annual reports for departments, executive agencies and FMA Act bodies, Department of Prime Minister and Cabinet, 24 June 2013;
  • for Commonwealth authorities and companies: the Commonwealth Authorities and Companies Act 1997 (CAC Act); Commonwealth authorities and companies reporting under the CAC Act are required to comply with the Commonwealth Authorities (Annual Reporting) Orders 2011 and the Commonwealth Companies (Annual Reporting) Orders 2011, respectively;
  • and for non–statutory bodies: the guidelines are contained in the government response to the report of the Senate Standing Committee on Finance and Government Operations on Non–statutory Bodies, Senate Hansard, 8 December 1987, vol s124, pp. 2643–45 (requirements were modified in 1987).

6.         For FMA Act bodies, significant amendments in the Requirements for Annual Reports for the 2012–13 period relate to:

  • Spatial reporting—a new requirement has been added for selected portfolio agencies to report on expenditure in relation to the Spatial Reporting Framework.[3]

7.         For Commonwealth authorities and companies, the annual reports for the 2011–12 financial year were the first annual reports to be prepared under the new orders with the exception of clauses dealing with related entity transactions, which apply to annual reports for each financial year ending on or after 30 June 2013.

Annual reports considered

8.         The annual reports of the following organisations have been examined by the committee:

Defence portfolio

            Department of Defence and Defence Materiel Organisation

            AAF Company

            ASC Pty Ltd

            Army and Air Force Canteen Service (AAFCANS)

            Australian Strategic Policy Institute

            Defence Housing Australia

            Royal Australian Air Force Welfare Recreational Company

            Royal Australian Air Force Veterans' Residences Trust Fund

            Royal Australian Navy Central Canteens Board

            Services Trust Funds

Foreign Affairs portfolio

            Department of Foreign Affairs and Trade

Australian Agency for International Development (AusAID)

Australian Centre for International Agricultural Research

Australian Safeguards and Non-Proliferation Office

Trade portfolio

            Australian Trade Commission

            Export Finance and Insurance Corporation

            Tourism Australia

Veterans' Affairs

Department of Veterans' Affairs, Repatriation Commission and Military Rehabilitation and Compensation Commission

Australian War Memorial

Repatriation Medical Authority

Veterans' Review Board

General comments on the annual reports

Timeliness in tabling reports

9.         Under Senate Standing Order 25(20)(c), the committee must report to the Senate any lateness in the presentation of annual reports.

10.       In accordance with the Requirements for Annual Reports published in June 2013, agencies are required to present:

A copy of the annual report...to each House of Parliament on or before 31 October in the year in which the report is given. If Senate Supplementary Budget Estimates hearings are scheduled to occur prior to 31 October, it is best practice for annual reports to be tabled prior to those hearings.[4]

11.       A number of annual reports were tabled late. On 31 October 2013, the Secretary of the Department of Defence wrote to Senator the Hon David Johnston, Minister for Defence, noting the finalisation of the annual report had been delayed due to significant demands on the time of both the Secretary and the Chief of the Defence Force as a result of unavoidable official travel and continuing operational requirements. The Secretary requested approval from the minister for an extension of the due date for tabling the report to 13 November 2013.[5] The report was tabled in the Senate and the House of Representatives on 13 November 2013.

12.       The Chair of AAF Company wrote to the Minister for Defence seeking an extension for the tabling of AAF Company's 2012–2013 Annual Report to 30 November 2013 due to the delayed receipt of the ANAO's audit report.[6] The report was presented out of sitting on 22 November 2013 and tabled in both houses of Parliament on 2 December 2013.

13.       The Chairman of the Royal Australian Navy Central Canteens Board (RANCCB) likewise wrote to the Minister for Defence, seeking an extension of the tabling date to 29 November 2013 due to the late completion of the ANAO's audit report.[7] The report was tabled in the House of Representatives on 12 December 2013 and in the Senate on 11 February 2014.

14.       A table detailing the dates relating to the timeliness of presentation is at Appendix 1. It should be noted that, apart from those referred to above, the following annual reports were also tabled after 31 October 2013:

  • ASC Pty Ltd— report tabled in both houses of Parliament on 13 November 2013;
  • Australian Strategic Policy Institute Limited—report presented out of sitting on 6 November 2013 and tabled in the Senate on 12 November 2013;
  • Defence Housing Australia—report presented out of sitting on 6 November 2013 and tabled in the Senate on 12 November 2013;
  • Royal Australian Air Force Welfare Recreational Company—report tabled in the House of Representatives on 2 December 2013 and in the Senate on 3 December 2013;
  • Royal Australian Air Force Veterans’ Residences Trust Fund—report presented out of sitting on 7 November 2013 and tabled in the Senate on 12 November 2013; and
  • Services Trust Funds—report presented out of sitting on 6 November 2013 and tabled in the Senate on 12 November 2013.

Matters of significance

15.       In accordance with Senate Standing Order 25, the committee is to note any significant matters relating to the operations and performance of the bodies presenting their annual reports. The committee notes that on 18 September 2013, the Prime Minister, the Hon Tony Abbott MP, announced Machinery of Government changes and released revised Administrative Arrangement Orders. The changes included the integration of AusAID into the Department of Foreign Affairs and Trade and the inclusion of tourism in the Trade portfolio.[8] As such, the 2012–13 annual report will be last from AusAID and for the first time, Tourism Australia falls under this committee's portfolio coverage.

Comments made in the Senate

16.       In accordance with Standing Order 25(20)(d), the committee notes that the annual report of AusAID was the subject of comment in the Senate.

17.       Senator Faulkner remarked that the AusAID annual report provided:

...a valuable insight into the management of Australia's foreign aid program for the 2012-13 financial year. I think that recent events in the Philippines in the wake of Supertyphoon Haiyan are a very stark reminder of the importance of our aid program in lending a hand to some of the world's most vulnerable people. Australia's aid program also serves our national interests, of course, by promoting stability and prosperity in our region and around the world.[9]

18.       Senator Faulkner commended the AusAID annual report and credited ''the former AusAID, now merged with the Department of Foreign Affairs and Trade, and other participating government agencies for their excellent work'.[10]

Bodies not presenting annual reports to the Senate

19.       The committee is required to report to the Senate each year on whether there are any bodies that do not present annual reports to the Senate and which should present such reports. The committee is satisfied that there are no bodies within these portfolios that do not meet their reporting requirements to the Senate.

Standard of reports

20.       The committee found all reports to be generally of a high standard. They effectively described the function, activities and financial positions of the various departments and agencies. The committee therefore found all of the annual reports to be 'apparently satisfactory'.

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