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Membership of the Committee
Report on Annual Reports - Overview
Departments
Department of Family and Community Services 2002-2003     Department of Health and Ageing 2002-2003
Statutory authorities
Australian Hearing Services (Australian Hearing) 2002-2003     Australian Institute of Family Studies 2002-2003     Australian Institute of Health and Welfare 2002-2003     Australian Radiation Protection and Nuclear Safety Agency 2002-2003     Centrelink 2002-2003     Commissioner for Complaints 2002-2003     Food Standards Australia New Zealand 2002-2003     Gene Technology Regulator 2002-2003     Health Insurance Commission 2002-2003     National Health and Medical Research Council 2002     Operations of the Registered Health Benefits Organisations 2002-2003     Private Health Insurance Administration Council 2002-2003     Private Health Insurance Ombudsman 2002-2003     Professional Services Review 2002-2003     Social Security Appeals Tribunal 2002-2003
Non-statutory bodies
Pharmaceutical Benefits Pricing Authority 2002-2003
Government companies and Government business enterprises
Aged Care Standards and Accreditation Agency Ltd 2002-2003     Alcohol Education and Rehabilitation Foundation Ltd 2002-2003     Health Services Australia Ltd (HSA) 2002-2003     Medibank Private Ltd 2002-2003     National Institute of Clinical Studies 2002-2003
Appendix 1 - List of Annual Reports examined

Senate Community Affairs Legislation Committee Secretariat

Mr Elton Humphery - Secretary
Mr Peter Short - Senior Research Officer
Ms Leonie Peake - Research Officer
Ms Ingrid Zappe - Executive Assistant

The Senate
Parliament House
Canberra ACT 2600

Phone: 02 6277 3515
Fax: 02 6277 5829
E-mail: community.affairs.sen@aph.gov.au
Internet:http://www.aph.gov.au/senate_ca

Membership of the committee

Report on annual reports - overview

This report was prepared pursuant to Standing Order 25 (21) relating to the consideration of annual reports by Committees. The Senate Order requires that the Committee examine the reports referred to it to determine whether they are timely and 'apparently satisfactory'. In forming its assessment the Committee has considered whether the reports comply with the relevant guidelines for the preparation of annual reports:

• for portfolio departments, the Requirements for Departmental Annual Reports, issued by Department of Prime Minister and Cabinet, tabled in the Senate on 20 June 2000.

• for statutory authorities, Guidelines for the Content, Preparation and Presentation of Annual Reports by Statutory Authorities, tabled in the Senate on 11 November 1982.

• for non-statutory bodies, guidelines tabled in the Senate on 8 December 1987.

• for Commonwealth authorities and companies, the Commonwealth Authorities and Companies Act 1997.

A list of reports examined by the Committee is at Appendix 1.

Timeliness of reports

The annual reports referred to the Committee were tabled within the specified reporting period.

General comments

The Committee’s examination of the annual reports referred to it has shown that the reports address the relevant reporting guidelines in a satisfactory manner and are 'apparently satisfactory' in terms of the Standing Order. The reports are generally of a high calibre in terms of presentation and in the extent of information presented. However, some reports need to provide more transparent performance reporting.

Comments made in the Senate

The Committee is obliged, under Senate Standing Order 25(21) (d) to consider any remarks made about these reports in the Senate. Where comments have been made they are referred to in the section below on the evaluation of individual reports.

Bodies not presenting annual reports to the Senate

The Committee is required to report to the Senate on whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

The Committee considers that there are no bodies within its portfolio areas which do not meet their reporting requirements to the Senate in this regard.

DEPARTMENTS

Department of Family and Community Services 2002-2003

Timeliness

1.1 The report was tabled in the Senate on 28 October 2003 and in the House of Representatives on 4 November 2003, within the required 15 sitting days.

Quality

1.2 The annual report provides a well-structured and comprehensive overview of the Department’s functions and activities. The sections of the report on performance reporting provide a more analytical assessment of how far the Department has progressed towards meeting its outcomes than in previous reports.

1.3 The structure of the report follows last year's format with volume 1 providing an overview of Departmental operations, while volume 2 provides more detail of Departmental outcomes, including performance reporting.

Reporting requirements

1.4 All reporting requirements are met. The report was referred to in the Senate in relation to a discussion of child care funding.[1]

Performance reporting

1.5 The Department's performance reporting is generally good. As the report notes, 'the collection of performance information, its analysis and reporting of that performance to stakeholders is critical in supporting decision-making to further improve the degree to which outcomes are achieved ' (volume 2, p.3). As noted above, volume 1 of the report gives a broad picture of the achievements, challenges and highlights of the Department's policy and program implementation. The volume, however largely concentrates on 'achievements' and future reports should attempt a more balanced approach, especially as the volume purports to give 'an overarching view' of Departmental activities (volume 1, p.vi).

1.6 Volume 2 of the report provides a more satisfactory approach. In its last report, the Committee noted that the sections of the report on performance reporting could be improved by providing a more thoroughly analytical approach in acknowledging where outcomes and goals have not been achieved. The Committee is pleased to note that the current report satisfactorily address these concerns and provides a more transparent approach than previous reports. The information on outcomes now includes a discussion of achievements and also where further work by the Department is required.

External scrutiny

1.7 The report provides concise information on the external scrutiny of its activities by a range of agencies, including the Privacy Commissioner, the Commonwealth Ombudsman and the Australian National Audit Office (ANAO) (volume 2, pp.225-32).

1.8 In relation to ANAO audits conducted in 2002-03, the Department indicates that it was the subject of seven such reviews during the reporting period. A summary of these audit reports is provided in the annual report and the Department’s actions in response to the recommendations is also discussed (volume 2, pp.228-29).

1.9 The Commonwealth Ombudsman received 2432 complaints about the Child Support Agency - a departmental agency - in 2002-03, an increase of 21 percent over the previous year.[2] The Department noted that the increase in complaints was due to an increase in the CSA client base and problems associated with the introduction of CSA's new computer system. The Department noted that the IT issues are now 'fully resolved and complaint numbers are stabilising in response' (p.228).

Consultancies

1.10 The report provides details of consultancy services, including the cost of individual consultancies and the reason for engaging the consultancies (volume 2, pp.281-289).

1.11 The report shows that during the 2002-03 financial year, 107 consultancy services were engaged (where the amount paid was $10,000 or greater) with an overall expenditure of $16.8 million for the portfolio as a whole, compared with $13.2 million in the previous year. Of these consultancy services, the Department engaged 79 - for a total amount of $15 million (p.281).

Department of Health and Ageing 2002-2003

Timeliness

1.12 The report was tabled in the Senate on 30 October 2003 and in the House of Representatives on 4 November 2003, within the required 15 sitting days.

Quality

1.13 The annual report provides a detailed review of the Department’s outcomes and activities. The Department acknowledges that while the primary purpose of the report is to provide members of the Parliament with an accurate description of the activities of the Department, it recognises that the report is also a valuable source of information for the community thus the main outcome performance reports are written in a 'reader friendly' essay- type style (p.iii).

Reporting requirements

1.14 All reporting requirements are met.

Performance reporting

1.15 The report provides details of the Department’s activities during the 2002-03 financial year against the performance indicators presented in the 2002-03 Portfolio Budget Statements and Portfolio Additional Estimates Statements.

1.16 The report is structured into several parts - an overview section which provides an explanation of the Department’s activities and broad strategic directions and priorities; outcome performance reports, which discuss the main activities, including major achievements and challenges of the nine Departmental outcomes; information on management and accountability; financial statements; and appendices which provide a range of statistical and other information.

1.17 The Secretary’s review discusses a number of policy challenges and achievements over the reporting period, although the review tends to concentrate on 'achievements' and less so on 'challenges'. Previous reports tended to give a more balanced overview and this should be a feature of future reports. The report notes that the challenge remains 'to deliver and implement reforms to produce a better and fairer Medicare, for improved and sustainable public and private health sectors, and for improvements in our overall level of public health' (p.6).

1.18 The report also contains detailed performance information in the form of outcome performance reports which discuss the major achievements and challenges of the nine outcomes within the Department. These sections of the report provide a more balanced overview of departmental activities and discuss both 'achievements' and 'challenges' in some detail.

External scrutiny

1.19 The report provides useful information on the external scrutiny of its activities by several bodies including the ANAO, the Commonwealth Ombudsman and the Parliament (pp.266-270). Departmental responses to issues raised in relation to Audit reports and the Commonwealth Ombudsman are discussed in the report.

Consultancies

1.20 The report provides detailed information on consultancies, including details of the amounts paid and the reason for engaging individual consultancies (pp.450-469). The report states that the Department engaged 457 consultants during 2002-03. Expenditure on consultancies in 2002-03 was $29.2 million - an increase over the previous year’s expenditure of $23 million (p.450).

1.21 The report notes that the increased expenditure was due to a number of factors including increased research support in areas of expanding policy development; substantial work in relation to human embryo usage in research; a review of pricing arrangements in residential aged care; and the acquisition of new functions by the Department, for example, CRS Australia (p.450).

STATUTORY AUTHORITIES

Australian Hearing Services (Australian Hearing) 2002-2003

1.22 All reporting requirements are met. The report provides a useful overview of the activities of Australian Hearing.

1.23 Australian Hearing provided 317 792 audiological services over the last 12 months and fitted 96,607 hearing aids - as against 93,810 in 2001-02 (pp.7, 52). The report notes that as part of its service to Indigenous Australians, 356 visits were made to 129 communities, often in remote locations - similar to 2001-02 levels (p.7). Further details of operational performance are provided in the report (see pp.9-13).

Australian Institute of Family Studies 2002-2003

1.24 All reporting requirements are met. The report provides a comprehensive review of the Institute’s activities and programs.

1.25 In relation to performance reporting, the report provides a detailed analysis in the form of a 'summary of research performance' undertaken by the Institute. This provides information in terms of performance outcomes, with most of the planned outputs listed as having been achieved or ongoing (see pp.56-70). This year's report goes some way towards improving performance reporting by a greater emphasis on discussing performance against outputs throughout the report.

Australian Institute of Health and Welfare 2002-2003

1.26 All reporting requirements are met. The report provides a concise account of the Institute’s functions and activities.

1.27 The Committee in several previous reports expressed concerns in relation to the Institute's performance reporting, arguing that this aspect of its reporting could be improved by a greater emphasis on measuring performance against outcomes and goals. The Committee is pleased to note that the current report addresses these concerns with a greater emphasis on performance measures. Significantly, the report also identifies where the Institute did not meet its work program goals in each of its output groups, and outlines the reasons why the outcomes were not achieved.

Australian Radiation Protection and Nuclear Safety Agency 2002-2003

1.28 All reporting requirements are met. The report was referred to in the Senate in relation to a discussion on nuclear medicine.[3]

1.29 The report provides a comprehensive review of the Agency’s functions and activities. The report, as in previous years, provides a balanced assessment of its performance and financial results, including an open and frank account of areas where objectives have not been met (pp.3-11). The report also sets out a number of objectives to be addressed in the next financial year (pp.10-11).

Centrelink 2002-2003

1.30 All reporting requirements are met. The report was referred to in the Senate in relation to a discussion of family payments.[4] The report provides a detailed overview of the operations of Centrelink.

1.31 Centrelink reports on achievements against performance targets set out in FaCS’ 2002-03 Portfolio Budget Statements and Portfolio Additional Estimates Statements. These performance targets support key outcomes identified by the portfolio Minister and Centrelink across a number of responsibilities, including customer services, community and business partnerships and staffing.

1.32 The report provides a number of performance measures against which Centrelink’s operations can be assessed. The Balanced Scorecard is the key instrument for measuring and reporting Centrelink’s performance and reports against a number of corporate goals. The report comments that in 2002-03, Centrelink conducted a review of its Balanced Scorecard, resulting in a more strategic focus and inclusion of both lead and lag indicators. The new Balanced Scorecard will come into operation from July 2003 (p.45). Detailed aspects of performance reporting are provided in the report (see pp.44-65).

1.33 The report, as in previous years, also provides information in relation to external scrutiny by a number of bodies including the Commonwealth Ombudsman, the Privacy Commissioner and the ANAO.

1.34 The Commonwealth Ombudsman received 9,642 complaints about Centrelink in 2002-03, an increase of 8 per cent over the previous year. The Ombudsman stated that Centrelink complaints continue to account for over half of all complaints received by the Office. The Ombudsman noted that a number of types of complaints emerged during the year, including adequacy of advice given to clients; staff awareness of social security provisions; costs and delays; and the processing of customer compensation claims.[5] Centrelink noted that during 2002-03, cooperative working relationship established with the Ombudsman's Office continued, enabling the timely resolution of issues raised (p.38).

1.35 The report also provides information on ANAO audits and action taken by Centrelink in response to issues raised in these reports (pp.36-38). Information is also included on privacy matters, including liaison with the Federal Privacy Commissioner (pp.87-89).

Commissioner for Complaints 2002-2003

1.36 All reporting requirements are met. The report provides a useful overview of the Commissioner’s activities. The report makes good use of graphs and charts to illustrate statistical data.

1.37 The report notes that the office will increase its focus on connecting with service providers, the community and consumers and to this end will implement a 'targeted approach to educational initiatives, with a focus on agencies that interface with the commissioner's office and key provider and consumer groups' (p.iv).

1.38 The report states that the Scheme received 1,227 complaints in 2002-2003 compared to 1,249 complaints in the last financial year. The majority of the complaints related to aged residential care services (p.34). The average time taken to finalise complaints was 40.8 days in 2002-2003, similar to that achieved in 2001-2002 (p.40).

Food Standards Australia New Zealand 2002-2003

1.39 All reporting requirements are met. This is the first annual report of FSANZ, which replaced the Australia New Zealand Food Authority in July 2002. FSANZ, in cooperation with the Australian, State and Territory Governments and the New Zealand Government, develops food standards and other food regulatory measures for Australia and New Zealand.

1.40 The report notes that the new regulatory arrangements 'provide the basis for more broadly based approaches that will ultimately ensure that the public health outcomes are strengthened for both consumers and industry' (p.9).

1.41 The report provides a comprehensive review of the operations of FSANZ. The main body of the report provides detailed performance reporting through a series of program reports which provide information on activities undertaken assessed against a range of performance indicators.

Gene Technology Regulator 2002-2003

1.42 All reporting requirements are met. The quarterly report for October-December 2002 was referred to in the Senate in relation to a discussion on national health and Queensland health issues.[6]

1.43 The GTR operates through a system of dual reporting responsibilities. The Gene Technology Act 2000 requires the GTR to provide a report to the Minister after each quarter on the operations of the Regulator during that period and the Minister must table the report in both Houses of Parliament within 15 sitting days of receipt of the report. The annual report of the GTR is incorporated within the Department of Health and Ageing’s annual report.

1.44 The quarterly reports provide a detailed overview of the activities of the Regulator. The reports provide information on the activities and outcomes achieved in relation to the implementation of the national regulatory system; the regulatory activities undertaken during the quarter; and the activities of the three advisory committees.

Health Insurance Commission 2002-2003

1.45 All reporting requirements are met. The report provides a comprehensive overview of the Commission’s activities and performance.

1.46 The report provides performance measures relating to its customer base, internal business processes and growth and development objectives. Statistics on most of these measures remained at 2001-02 levels or had improved over the reporting period (p.10). Data on customer relations, especially in regard to community satisfaction, pharmacist satisfaction and prompt processing remained at high levels, although recorded levels of medical practitioner satisfaction were lower than the other measures (pp.10, 70). The report also contains a useful 'year in summary' table in which a range of statistical data is provided (pp.2-3).

1.47 In relation to external scrutiny, the report notes that the Commonwealth Ombudsman received 125 complaints about the HIC in 2002-03 - 152 complaints were received in 2001-02 (p.169). In relation to privacy issues, the report states that the HIC submits annual returns to the Privacy Commissioner listing the types and use of information it holds. The report indicates that HIC procedures have been found to be satisfactory whenever the Privacy Commissioner has audited compliance with the Privacy Act 1988. During 2002-03, the HIC did not receive any complaints under the Privacy Act from the office of the Privacy Commissioner (p.170).

National Health and Medical Research Council 2002

1.48 All reporting requirements are met. The report provides a detailed review of the functions and operations of the Council.

1.49 The report comments on developments over the reporting period, including redesign of the grants arrangements which the report noted has been met with 'widespread support' (p.2). A range of research initiatives for the improvement of Indigenous health were detailed in the NHMRC's last report - the current report comments that the NHMRC has made 'significant advances this year to extend our efforts' in this area, and details are provided in the report (pp.2,6).

Operations of the Registered Health Benefits Organisations 2002- 2003

1.50 All reporting requirements are met. The report provides a comprehensive overview of the financial operations of registered health benefits organisations. The report makes good use of tables and graphs to illustrate a range of statistical information.

1.51 The report noted that 2002-03 has been a 'difficult year for the private health insurance industry with continuing cost increases reflected in narrow underwriting margins, and concern over the governance practices in some parts of the industry' (p.1). Another concern raised in the report was the extent of management expenses of some funds (pp.1, 33-34). The report noted that the industry 'remains capitally adequate, however it is clear that without an improvement in underwriting margins, the industry will continue to be challenged in maintaining its prudential position, particularly if there is again a downturn in investment markets' (p.1).

Private Health Insurance Administration Council 2002-2003

1.52 All reporting requirements are met. The report was referred to in the Senate in relation to a discussion of the financial viability of health funds.[7]

1.53 The report provides a concise review of the operations of the Council. The report provides performance information against several output groups (pp.23-33).

1.54 The report states that 2002-03 has seen greater efforts by PHIAC towards encouraging the industry towards improved corporate governance and risk management. Details of these initiatives are discussed in the report (pp.18-33). PHIAC stated that it continues to 'strengthen and refine its role as regulator' and over the next year 'will continue to take an increasingly pro-active attitude to issues of governance and financial management, and through its cooperation with the industry, continue to improve its approach to regulation' (p.6).

Private Health Insurance Ombudsman 2002-2003

1.55 All reporting requirements are met. The report provides a concise analysis of the activities of the Ombudsman. The report notes that the powers of the Ombudsman have been strengthened and the office has been given an additional function to report on the performance and service delivery of health funds. The report stated that the proposed changes 'strike a reasonable balance between providing the Ombudsman with greater authority in key areas and maintaining an emphasis on cooperation and prompt informal resolution of complaints' (p.7).

1.56 The report states that the Ombudsman received 3568 complaints in 2002-03, compared with 3182 in 2001-02 (p.15). The office finalised 3572 complaints during the year (an average of 298 per month), compared with an average of 265 complaints finalised per month in the previous year (p.15). Further details of performance outcomes are provided in the report (pp.11-21).

Professional Services Review 2002-2003

1.57 All reporting requirements are met. The report provides a useful overview of the operations of the Professional Services Review (PSR).

1.58 The report comments that 2002-03 was a 'period of steady progress' for the PSR, although this activity was modified by responses to legal decisions in cases where the process was challenged. The report noted, however, that 'the results of court and tribunal decisions this year have been in favour of the PSR' (p.vii).

1.59 Regarding operational activities, the report notes that the PSR received 52 referrals from the HIC in 2002-03 (compared to 94 cases in 2001-02). Of cases in 2002-03, 39 were either dismissed by the Director of the PSR or agreements were negotiated with the practitioner due to insufficient grounds on which a committee could reasonably find the practitioner had engaged in inappropriate practice. Another 17 cases were sent to PSR committees for further examination (pp.13-14).

Social Security Appeals Tribunal 2002-2003

1.60 All reporting requirements are met. The report provides a concise account of the activities of the Tribunal. The report notes that during the reporting period the Tribunal took a number of steps to 'strengthen its operations and achieve a more nationally consistent approach' and these measures are outlined in the report (pp.1-2). The report also noted that the Tribunal will undertake strategies to maintain or improve quality, consistency and timeliness of decisions (p.1).

1.61 The report stated that in 2002-03, some 9,576 applications were lodged with the tribunal, an increase of 7 per cent over the previous year. The Tribunal finalised 9,762 applications during the year, an 11 per cent increase in finalisation of cases over 2001-02. The average time between lodging and finalising an application was 9.3 weeks (compared to 8.4 weeks in 2001-02). The internal SSAT standard is to finalise appeals within 10 weeks of lodgment. Further details of performance outcomes are provided in the report (pp.13-24).

NON-STATUTORY BODIES

Pharmaceutical Benefits Pricing Authority 2002-2003

1.62 All reporting requirements are met. The report provides a concise overview of the operations of the Authority. The report provides information on pricing matters dealt with by the Authority and activities under the Pharmaceutical Industry Investment Program. The report also includes a range of statistical data (pp.17-30).

GOVERNMENT COMPANIES AND GOVERNMENT BUSINESS ENTERPRISES

Aged Care Standards and Accreditation Agency Ltd 2002-2003

1.63 All reporting requirements are met. The report notes that the Agency undertook an extensive range of visits to aged care homes over the reporting period and processed three-quarters of the 'second round' of accreditation. The Agency also reported that it had made substantial improvements to its internal operations (pp.5-6).

1.64 Regarding external scrutiny, the report refers to the recent Audit Office report into the effectiveness of the management of the accreditation process. That report found that while the Agency had adequately identified its legislative responsibilities for accreditation, there were some weaknesses in the Agency's management systems which impacted adversely on its management of the accreditation process.[8] The Agency indicated that it accepted all the ANAO recommendations and provides details of its implementation of these recommendations (pp.5-6).

Alcohol Education and Rehabilitation Foundation Ltd 2002-2003

1.65 All reporting requirements are met. The Foundation aims to prevent and reduce harm associated with alcohol and other licit substance misuse, particularly among vulnerable population groups, through the provision of grants to organisations. The report reflects the Foundation's first full year of operations.

1.66 The report states that the Foundation approved 153 grants totalling over $19 million in 2002-03. The report also notes that the Foundation has reviewed its operations and priorities and appointed an independent evaluator to report on the social impact and cost effectiveness of its grants program (p.8).

Health Services Australia Ltd (HSA) 2002-2003

1.67 All reporting requirements are met. The company achieved an operating profit before tax of $5.1 million. The report notes that HSA won new business in the occupational health sector which, together with the contribution of its subsidiaries, generated an increase in overall group revenue of 7 per cent, compared with the last financial year (p.2).

1.68 The report also notes that the loss of revenue resulting from reduced Centrelink referrals necessitated a restructure of its operations but that HSA has placed a high priority on identifying opportunities to 'expand our client base and developing new services' (p.2).

Medibank Private Ltd 2002-2003

1.69 All reporting requirements are met. The report noted that it has improved its poor financial performance in the last financial year and recorded a $10.4 million operating surplus in 2002-03. Regarding performance measures, the report notes that its market share is now 29.7 per cent; 92.3 per cent of member contributions were returned as benefits; and member complaints were reduced by 7.3 per cent compared to the previous financial year (p.4). The report also provides a number of useful key performance trends relating to its operations (pp.6-7).

National Institute of Clinical Studies 2002-2003

1.70 All reporting requirements are met. The report stated that during 2002-03 the Institute further developed its programs, with work initiated in all clinical priority areas (p.7). The report discusses strategies and achievements against a number of operational goals. Future reports, however, need to provide more of an objective assessment of the Institute’s performance rather than an emphasis only on 'achievements'.

Senator Sue Knowles

Chairman
March 2004

Appendix 1 - ANNUAL REPORTS EXAMINED BY SENATE COMMUNITY AFFAIRS LEGISLATION COMMITTEE

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