Annual reports of departments and agencies are referred to Senate
legislation committees under Senate Standing Order 25(20). The Economics
Legislation Committee is responsible for the scrutiny of departments and
agencies in the following portfolios:
- Innovation, Industry, Science and Research;
- Resources, Energy and Tourism; and
The structures and outcomes for each of these portfolios for
2008-09 are summarised in Appendices 1, 2 and 3, respectively.
Standing Order 25(20) requires the committee to:
- examine each annual report referred to it and report to the
Senate whether the report is apparently satisfactory;
- 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;
- investigate and report to the Senate on any lateness in the
presentation of annual reports;
- in considering an annual report, take into account any relevant
remarks about the report made in debate in the Senate;
- if the committee so determines, consider annual reports of
departments and budget-related agencies in conjunction with examination of
- 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;
- draw to the attention of the Senate any significant matters
relating to the operations and performance of the bodies furnishing the annual
- 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
Purpose and requirements of annual reports
Annual reports provide information on the success (or otherwise)
of agencies in meeting targets outlined in budget statements, their primary
function being to assist in ensuring the public accountability of government
agencies. The tabling of annual reports in the Parliament, and scrutiny by
Senate committees, allows Parliament to make informed judgments on the
executive's performance in administering government programmes.
Departments of State and Executive Agencies present their annual
reports pursuant to subsections 63(2) and 70(2) of the Public Service Act
1999, respectively. These entities, as well as prescribed agencies under
section 5 of the Financial Management and Accountability Act 1997 (FMA
Act), are required to comply with the Department of the Prime Minister and
Cabinet's Requirements for Annual Reports for Departments, Executive
Agencies and FMA Act Bodies, approved by the Joint Committee of Public
Accounts and Audit.
Commonwealth authorities and companies present their annual
reports pursuant to their own enabling legislation and/or sections 9 and 36 of
the Commonwealth Authorities and Companies Act 1997 (CAC Act), respectively.
The enabling legislation of some agencies may require that agency
to report on matters other than those included in the guidelines, or impose
different reporting requirements. The committee's view is that such agencies,
while bound by their enabling legislation, should also comply with the
requirements imposed under the government's policy, to the extent that the
requirements do not conflict.
The legislation governing the annual reports of agencies
considered in this report is shown in Appendices 4, 5 and 6.
Reports referred to the committee
Under Standing Order 25(20)(f), the committee is required to
report on the annual reports of departments and agencies tabled in the Senate between
1 November and 30 April of the following year by the tenth sitting day after 30
June of that year. This year that date
is 17 November 2010.
This report therefore examines the 2008-09 annual reports of the following
agencies (which were tabled in the Senate or presented to the President between
1 November 2009 and 30 April 2010):
Anglo-Australian Observatory (AAO)
- Auditing and Assurance Standards Board (AUASB)
Australian Accounting Standards Board (AASB)
- Australian Prudential Regulation Authority (APRA)
- Australian Reinsurance Pool Corporation (ARPC)
- Australian Securities and Investments Commission (ASIC)
- Companies Auditors and Liquidators Disciplinary Board (CALDB)
- Corporations and Markets Advisory Committee (CAMAC)
- Financial Reporting Council (FRC)
- Financial Reporting Panel (FRP)
- Innovation Australia
- Innovation Investment Fund (IIF) companies
Superannuation Complaints Tribunal (SCT)
- Tourism Australia
In its report, Annual reports (No. 1 of 2010), the
committee inadvertently noted that the following reports should have been
tabled more promptly:
- Companies Auditors and Liquidators Disciplinary Board (CALDB)
- Royal Australian Mint
- Takeovers Panel
In fact the above four reports were all presented to the
President on 30 October 2009 and therefore met the relevant timing
Comments on all of the above reports are contained in Chapter 2.
Standing Order 25(20)(c) requires the committee to report to the
Senate on the late presentation of annual reports.
Departments and FMA Act entities
Section 4 of the Requirements for Annual Reports states
that annual reports of departments and agencies under the FMA Act framework are
to be presented to each House of Parliament on or before 31 October in the year
the report is given.
CAC Act entities
Section 9 of the CAC Act stipulates that the deadline for
furnishing the minister with the annual reports of Commonwealth authorities is
the 15th day of the 4th month after the end of the financial year, that is, 15
October where the end of the financial year is 30 June.
Section 36 of the CAC Act stipulates that Commonwealth companies
must give their annual reports to the responsible minister by the earlier of
- four months after the end of the financial year, or
- 21 days before the next annual general meeting of the company
after the end of the financial year.
Entities reporting in accordance with their own legislation are
often required to prepare for the relevant minister their annual report 'as
soon as is practicable' after a particular date. The committee draws attention
to subsections 34C(2) and 34C(3) of the Acts Interpretation Act 1901,
which stipulate that where no date for providing a report to a minister is
specified, the report should be presented no more than six months after the
reporting period, and the minister must provide the report to the Parliament
within 15 sitting days after he or she receives it.
Government policy for all annual
While the legislative requirements for the tabling of annual
reports vary between different types of agencies the government's policy is
'that all annual reports should be tabled by 31 October'.
The committee notes that of the annual reports considered in this
report, only the four listed in paragraph 1.11 and the Productivity Commission's
report (which was tabled on time in the House of Representatives), have met the
requirement set down by this policy.
While it is government policy that all annual reports should be
tabled by 31 October, dates for the tabling of annual reports set in
legislation vary between agencies and as such will be considered in the
specific comments on annual reports below where necessary.
Remarks made in the Senate
Senate Standing Order 25(20)(d) directs the committee to take
into account remarks made in the Senate when considering annual reports.
None of the annual reports considered in this report have been
the subject of debate in the Senate.
Bodies not presenting annual reports to the Senate
The committee is required to report to the Senate each year under
Standing Order 25(20)(h) on whether there are any bodies not presenting
annual reports to the Senate which should. The committee is satisfied that
there are no such bodies within the Innovation, Industry, Science and Research;
Resources, Energy and Tourism; or Treasury portfolios.
Other comments on reports
The Requirements for Annual Reports outlines the government's
view of the purpose of annual reports:
The primary purpose of annual reports of departments is
accountability, in particular to the Parliament.
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.
In accordance with Standing Order 25(20)(a) the committee is
required to examine reports and inform the Senate as to whether they are
'apparently satisfactory'. In doing so the committee considers compliance with
the reporting guidelines specified by the legislation under which departments
and agencies present their annual reports.
The committee considers that the reports it has examined are
generally 'apparently satisfactory'.
Despite this, the committee believes that some aspects of agency
annual reports can be improved. In this report the committee has particularly
focussed on examining whether or not agency annual reports contain:
- appropriate compliance indexes; and
- discussion of external scrutiny and parliamentary accountability.
While no longer mandatory under the reporting requirements, the
committee recommends the inclusion of a compliance index in annual reports,
which preferably should include a nil return entry where the agency has nothing
to report under an item. A compliance index is a useful feature of reports and
considerably assists the committee's task of assessing reports. It also assists
agencies by clearly showing that their compliance obligations have been met.
Where agencies have reporting requirements under various Acts the
inclusion of a comprehensive compliance index covering all relevant
requirements is a useful addition to agency annual reports.
External scrutiny and parliamentary
The Requirements for Annual
Reports states that annual reports:
... must provide information on the most significant
developments in external scrutiny of the department and the department's
response, including particulars of:
(a) judicial decisions and decisions of administrative
tribunals that have had, or may have, a significant impact on the operations of
the department; and
(b) reports on the operations of the department by the
Auditor-General (other than the report on financial statements), a
Parliamentary committee or the Commonwealth Ombudsman.
Clause 11 of Schedule 1 of the Commonwealth Authorities and
Companies (Report of Operations) Orders 2008 states that the same
requirements apply to Commonwealth authorities that present their annual
reports in accordance with the provisions of section 9 of the CAC Act.
As noted above, the primary purpose of annual reports is
accountability to the Parliament – it is therefore important that details about
external scrutiny are included in a clear manner in annual reports. It is
particularly important that details about parliamentary scrutiny are included
in annual reports, including appearances at Senate estimates hearings (which
are the subject of bi-annual reports to the Senate).
With this in mind, the committee believes that future annual
reports could be improved by more systematic reporting in relation to
parliamentary committee inquiries and reports, and reports of the
Auditor-General and Ombudsman. The committee notes that the ACT Chief
Minister's 2007-2010 Annual Report Directions require ACT Government
agencies to include a schedule of completed Legislative Assembly committee
inquiries, and reports of the Auditor-General and Ombudsman, that relate to the
operations of that agency. Agencies are also required to provide details on the
implementation of recommendations in their annual reports.
The committee recommends that the government, in consultation
with the Joint Committee of Public Accounts and Audit, amend the annual
reporting requirements for government entities to provide for more systematic
reporting in relation to external scrutiny, including for parliamentary
committee inquiries and reports, in line with sections B.2 and B.3 of the ACT
2007-2010 Annual Report Directions.
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