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Chapter 2 - Australian Crime Commission Annual Report 2003–2004
The Australian Crime Commission Act 2002 (the
'ACC Act') establishes the Commission (section 7) and section 7A sets out its
functions, which include:
- to maintain a database
of the material from the collection correlation, analysis and dissemination of
criminal information and intelligence;
- to undertake, when
authorised by the Board, intelligence operations;
- to investigate, when
authorised by the Board, matters relating to federally relevant criminal
- to provide reports to
the Board on the outcomes of those operations or investigations;
- to provide strategic
criminal intelligence assessments, and any other criminal information and
intelligence, to the Board;
- to provide advice to
the Board on national criminal intelligence priorities; and
- other functions as are
conferred on the ACC by other provisions of the ACC Act or by any other Act.
The Annual Report
requirements for the ACC are set out under section 61 of the ACC Act, which
- descriptions of
investigations into federally relevant criminal activity that the Board had
determined to be a special investigation;
- descriptions of trends
in criminal activity;
- recommendations for
legislative reform or administrative action; and
- information on the
nature and extent of dissemination of information by the ACC, as well as the
numbers of prosecutions, confiscations or court applications.
The Annual Report
Requirements published by the Department of Prime Minister and Cabinet state
that the requirements apply as 'a matter of policy' to prescribed agencies under section 5 of
the Financial Management and
Accountability Act 1997 (FMA Act). The ACC is one of those prescribed
agencies, and accordingly provides a report in the terms specified by these
requirements, as well as those prescribed under the ACC Act.
The core requirements
under the FMA Act include: reporting on performance, management accountability,
corporate governance and financial statements. As is evident from the guide to
the ACC report, these requirements are complied with.
Accountability and governance structures
The ACC operates in a
complex accountability environment, of which this Committee is part. If these
accountability systems are to operate effectively, it is essential that they
operate in practice as they are intended to in theory.
In this respect, the
Committee is pleased to note that the Annual Report provides information on, not
only the membership, but also the attendance at the ACC Board meetings. This
table also reflects that the great majority of the ex-officio members of the
ACC Board attended all meetings.
As required by the
Act, the ACC received a briefing from the Commonwealth Ombudsman, Professor John McMillan and his staff, on the ACC's involvement in controlled
operations. The Ombudsman outlined the
process and outcomes of their audit program on ACC records. The Ombudsman
further reported his satisfaction with the cooperation provided by the ACC, and
with the standard of the record keeping.
Since the Committee's
examination of the ACC Annual Report 2002-03, the ACC has also released key
planning documents that also form an important part of the overall
accountability framework. These include the Corporate Plan 2004-07 and the
Business Plan 2003-04, and constitute elements of the 'integrated planning
framework' set out in the Corporate Plan.
The Committee commends
the ACC for the production of these documents, and will monitor their
implementation in the coming reporting period.
In a complex
jurisdictional environment, one of the greatest challenges faced by the ACC is
developing strong working relationships with its stakeholders, including the
state and territory police forces. This task is obviously assisted by the
membership of the ACC Board. Nevertheless, legislation cannot compel
constructive cooperation and the full sharing of information.
In this respect, the
Committee notes the considerable amount of work done by the ACC to foster and
develop these relationships, including the memoranda of understanding with both
AUSTRAC and the Australian Tax Office.
Mr Milroy described some of the measures taken to develop a closer
understanding of 'client' needs in relation to information:
As part of this information-sharing
working group, Mr Phelan is actually taking his experts to each jurisdiction to
get an understanding of what stakeholders are currently using, and at the same
time briefing them on the capabilities of the ACC systems and on the new ALERT
initiative and the benefit that is to Australian law enforcement in particular.
... So we are trying to work across jurisdictions to end up with a far more
advanced and more efficient national criminal intelligence database which will
benefit not only the ACC but also our partner agencies.
The Committee also
notes Mr Phelan's comment that the cost for individual jurisdictions to
acquire information and intelligence systems is rising continually. This
provides a strong incentive to develop stronger linkages with a national
Effectiveness of the legal framework
The Committee notes a
number of issues raised in both the Annual Report and elsewhere relating to the
adequacy of the overall legal framework in which the ACC operates.
of coercive powers and contempt provisions
Both the ACC and Mr Henderson, the Northern Territory Minister for Police, Fire and
Emergency Services, have drawn the Committee's attention to limitations in the
operation of the ACC's coercive powers.
In particular, the
offences for 'failure to attend' and 'failure to answer questions' are proving
less than effective. After being charged, the witnesses are invariably granted
bail, and six months or more may pass before the matter is heard and a penalty
imposed. This provides little real deterrence, and leaves the ACC without the
benefit of the information sought.
One suggested response
to this weakness is to replace the current offences with a more serious
'contempt' provision. The ACC further noted that the provisions relating to
various types of privilege, such as legal professional privilege, may need
Currently, there is
limited capacity for the ACC to provide indemnity from prosecution to those
assisting in inquiries, since it is a decision for the Commonwealth Director of
There is a view that
this limits the effectiveness of the ACC inquiries. Similarly, the different
rules for granting immunity across Australian jurisdictions increases administrative
complexity and raises the potential for an inconsistent approach nationally.
drug related legislation
The ACC Annual Report identified a
number of legislative issues relating to illicit drugs:
deficiencies and non-uniformity throughout jurisdictions relating to supply and
possession of precursor chemicals.
- Limited appropriate
legislation at a Commonwealth and state level governing the importation and
control of pill presses and related lab apparatus including glassware.
- Regular non-compliance
by chemical suppliers with the voluntary National Code of Practice.
- Lack of appropriate
'children found in lab' legislation.
- Amendments to Schedule
VI of the Customs Act 1901 to include
pseudoephedrine as a prohibited drug import.
The ACC Annual Report
notes that a comprehensive review of jurisdictional firearm legislation was
forwarded to the Attorney General's Department and other jurisdictions. This
review resulted from the Firearms Trafficking Determination which commenced in
to attack Established Criminal Networks
According to the ACC
Annual Report, there is an identified need for law reform to address more
effectively the issue of established criminal networks, including permitting
the commencement of prosecutions under the corporations law and for the
Victorian Fisheries Act to include
indictable offences in circumstances of serious criminality.
law enforcement agencies to databases
enforcement, particularly in relation to organised crime, requires access to
the fullest possible amount of information. The ACC discussed with the
Committee current efforts to understand the legal, physical, technical and
other impediments that might prevent law enforcement agencies from providing
the full range of intelligence reports for inclusion into the Australian
Criminal Intelligence Database (ACID). The ACC Board has established the
Information-sharing Working Group, which aims to understand what the problems
are and to come up with cooperative solutions with partner agencies to achieve
One of the principal
legal impediments is likely to be the privacy legislation in various
jurisdictions that places strict controls on the release of information. As Mr Phelan told the Committee:
The history of databases in Australia really reflects legislatures across Australia – all states and federally – coming up with information
sources or databases to cover information specific to whatever is the purpose
of the agency that owns it. So surrounding each of those databases will be a
purposeful clause to do with privacy, the ability to access information and so
Mr Phelan explained that:
It is a very big issue for an agency
set up for one particular purpose to be able to access the other databases,
given the overall privacy legislation in Australia. Part of the role of the information-sharing working group
is to help us identify what those databases are and what they are carrying so
that we can purposefully work through each of them and understand how we can
perhaps deal with any legislative, privacy or other reasons to encourage a
maximisation of the provision of information to ACID itself.
for improvement in the sharing of information was raised by the submission from
the Insurance Australia Group. The IAG has estimated that insurance fraud cost
$832 million in 2003, and a significant proportion of this can be attributed to
the activities of organised criminal groups. They point out that:
[T]here is an urgent need for a
national law enforcement body to collect, analyse and assess information from
insurers in order to gather intelligence about fraud networks operating across
the industry. Currently there is no mechanism for the sharing of such data.
IAG proposes legislative
change to require insurers to provide information to the ACC, similar to the
way that the Australian Prudential Regulatory Authority currently obtains
claims data on public liability and professional indemnity insurance.
The raising of these
issues by the ACC is consistent with the requirements of Section 61(2)(c) of
the ACC Act, and the Committee considers it important that these matters be put
in the public domain early in the policy cycle. There is a danger that these
legislative measures, which often involve a balancing of civil rights with
police operational effectiveness, are developed in private government-to-government
discussions and then presented to Parliament as a fait accompli.
Some of these issues,
particularly the consideration of the 'contempt' provision, will be considered
by the Committee in detail in the course of its forthcoming evaluation of the
2.26 The Committee
recommends that, to provide an opportunity for proper public debate, the
government involve the Committee at an early stage of the development of
legislation affecting important operational or civil liberties issues.
The role of the PJC
The Chief Commissioner
of Police in Victoria has written to the Committee questioning the role for an
ongoing Parliamentary Joint Committee, on the basis that there are:
sufficient reporting obligations,
legislative requirements and oversight by both the ACC Board and the IGC-ACC,
without the need for [an] additional layer of accountability through this PJC.
Nixon also points the additional accountability that will be
provided by the likely creation of an independent Commonwealth body to detect
and investigate corruption among law enforcement officers.
considers that it is important to find the right balance between proper
oversight of the ACC and overly restrictive or duplicated scrutiny that wastes
resources or impedes the effective conduct of the ACC's work. Since the
Committee is itself a creation of the ACC Act, the Committee's role and
effectiveness will be considered in the forthcoming evaluation of the act. The
Committee will commission an independent evaluation of its own role, and will
make a detailed submission to this separate evaluation.
However, the Committee
makes two preliminary observations in response to the Commissioner.
First, the role of the
Committee is not duplicated by either the IGC or the ACC Board. The primary
task of both groups is the management and strategic direction of the ACC. They
cannot therefore act in an independent scrutiny role. To use an analogy, the
control of a public company by a competent and effective Board is not a
substitute to the accountability of both the company and the board to the
shareholders. In this case, the 'shareholders' are the Australian taxpaying
public, represented by the Parliament.
Equally, the IGC membership
comprises government ministers and are members of the Executive. For reasons of
practicality, and by reason of Australia's constitutional arrangements, it is not appropriate that
scrutiny of executive agencies is the sole responsibility of executive
ministers. Rather, they must be accountable to the Parliament or the judiciary.
These rules are based
on sound experience. History shows that the instinctive reaction of government
agencies, when confronted with corruption, malpractice or incompetence, is to keep
the matter private. Bureaucracies, and police bureaucracies in particular, are
notoriously reluctant to allow external scrutiny. A strict application of this
separation of powers is even more essential given that the ACC wields powers
equivalent to a Royal Commission – powers that were previously granted only to
the judiciary, for a limited purpose and duration. It is well to remember that
these now settled but once extraordinary powers would not have been granted by
the Federal Parliament to either the NCA or the ACC had there not been a
guarantee of parliamentary oversight.
It must also be
recognised that a scrutinising body will only have legitimacy when there is a public
perception of independence. Neither a ministerial body nor a board possess such
a public perception. In this context, the Committee notes that neither the ACC
Board nor the IGC report publicly on their activities.
The second issue is
that the fight against organised crime – like that against terrorism – has
particular and sometimes unique characteristics, and there is a general
acceptance that law enforcement agencies need specialist powers to combat the
sophisticated, cross-jurisdictional and hidden activities of organised
However, the granting
of these powers involves authorising law enforcement agencies to act in ways
that significantly infringe the basic rights, freedoms and privacy of
Australian citizens. These powers cannot be granted lightly. Nor are these
concerns over civil rights merely theoretical, given the history of police corruption
and abuse of power that has emerged from several Royal Commissions.
protection of these basic rights against the need for effective policing
requires that Parliament has a sophisticated understanding of the
characteristics of organised crime, and the implications of this for the
operation of the criminal law. The expertise developed by a specialist Committee
such as the PJC is crucial to the Parliament's role in finding this balance.
For these reasons, the
Committee considers that its role remains relevant and necessary and as part of
the evaluation of the ACC Act, the Committee will be arguing for the retention
of a specialist parliamentary committee. The priority should be to ensure the
effectiveness of the Committee as a part of the overall accountability
Performance of the ACC
single outcome and associated outputs are:
OUTCOME: Enhanced Australian law enforcement
- Criminal Intelligence Services
- Criminal Intelligence Operations
- Investigations into federally relevant
measures against each of these outputs are discussed under the relevant
headings set out below. However, the Committee notes the comments of the
Families and Friends for Drug Law Reform ACT (FFDLR). In their submission, they
make the general criticism that the ACC's performance measures largely refer to
levels of activity, but do not address whether that activity is effective in
achieving the organisation's objective. Nor do the performance measures set any
particular level of activity as a goal.
What is required for the performance
criteria to be meaningful is that they provide a measure of whether the level
of serious organised crime is disrupted and deterred. The number of arrests and
value of proceeds of crime forfeited are a measure of this only with an
estimate of the amount of crime involved and of the financial turnover of that
Accordingly, the FFDLR
recommend that the ACC Annual Report include an assessment of the extent to
which the ACC's activity has affected the overall level of criminality.
The issue of
performance criteria is a vexed question for many organisations, and is
particularly so for one such as the ACC.
of the ACC's operating environment complicate the design of transparent
performance measures. There is also the danger that a focus on the wrong
performance measures can create perverse incentives that drive the organisation
in the wrong direction.
Organised crime is
inherently characterised by its secrecy, sophistication and operation across
jurisdictional borders. Unlike more obvious crimes such as assault, organised
crime may go unreported, particularly in relation to fraud or 'high tech' crime.
Similarly, the extent of organised crime involvement in individual incidents of
crime may go unrecognised. This makes determining the extent of the problem
difficult. Thus, for example, does a rising number of arrests for drug
trafficking indicate a rising level of success against the organised crime
importation networks, or are law enforcement agencies simply arresting the same
percentage of an increasing number of offenders?
have implications for the design of the ACC's performance measures.
First, the difficulty
of accurately assessing the extent of organised criminal activity means that
great care must be taken in interpreting information on the impact of ACC
activities on organised crime. A focus on measuring success by 'clean-up rates'
as a percentage of problem, could create perverse incentives for the ACC to
minimise the extent of the crime its 'finds', so that its successes give the
false impression of being highly effective.
Second, a focus on
'results' such as the number of arrests, charges laid or convictions secured
could create the perverse incentive for the ACC to concentrate its efforts on
simpler 'easier to solve' crime, instead of the resource intensive
investigations into complex organised crime that they ought to be focused on.
Third, given the
highly collaborative environment that the ACC must foster with partner law
enforcement organisations, a focus on 'results' by the ACC could put pressure
on the ACC to emphasise unilateral activity for which it can claim all the
credit. Again, this runs counter to what is required: the focus of the ACC on assisting
partner agencies with its specialist investigative resources, even if the
ultimate 'credit' goes to the lead agency involved.
Fourth – and a problem
general to all knowledge based organisations – is that quantitative measures of
performance, such as the number of reports disseminated, may be misleading,
since quantity of activity is no indicator of quality.
For these reasons, the
Committee accepts that while it is relatively easy to point to limitations in
the performance measures selected by the ACC, it is somewhat harder to
Nevertheless, both the
Parliament and the public generally need as much accurate and detailed
information as possible. This is necessary to inform their assessment of the
threat posed by organised crime, as well as the adequacy of the response
measured in terms of budgets, and the powers granted by legislation to law
The Committee also
notes that under Paragraph 61(2)(b) of the Act, the ACC Annual Report should
contain information patterns or trends and the nature and scope of criminal
Whilst the Annual
Report contains significant information about what the ACC has been targeting,
and the results of particular investigations and operations, there is
relatively little general discussion of trends and patterns in organised crime
in Australia. A useful comparison is the public version of the 'UK threat Assessment – the threat from serious and organised
crime', published annually by the National Criminal Intelligence Service. The
Royal Canadian Mounted Police also publish various reports about aspects of organised crime.
The ACC's Illicit Drug
Data Report is an excellent source of information, and the Committee is also
aware of material published by the Australian Institute of Criminology relating to organised crime, including money
laundering, serious fraud, and people trafficking, and also notes the
cooperative arrangements between the Institute and the Australian Federal
Police's High Tech Crime Centre.
Nevertheless, none of
the principal products of the ACC, such as the Picture of Criminality and the
National Threat Assessments, are available to the public in any form. Wherever
possible, this information should be published, and the Committee encourages
the ACC to consider release of public versions of key documents such as the
'Picture of Criminality'. The Committee also encourages collaboration between the
Australian Institute of Criminology and the ACC in developing publicly
2.56 The Committee
recommends that the ACC consider the release of public versions of key
research, including a declassified version of the Picture of Criminality.
Criminal intelligence services
There are five key
performance measures for this output:
- number and value of
disseminations provided to other law enforcement agencies;
- provision and
maintenance of criminal intelligence systems;
- number and
significance of strategic criminal assessments and other intelligence and
- acceptance by ACC
Board of advice on national criminal intelligence priorities; and
- number of criminal
intelligence priorities that become intelligence operations.
and value of disseminations provided to other law enforcement agencies
In this reporting
period the ACC has endeavoured to give additional meaning to the raw figures
provided in previous annual reports and those of its predecessor, the NCA. For
example, the table on page 30 provides details of the number of disseminations,
reports and intelligence product and following it there is information on the
feedback received in relation to that information.
and maintenance of criminal intelligence systems
In this performance
measure, the ACC has reported on the systems known as ALEIN, ACID and ALERT. At
the public hearing, the Committee asked the ACC about the security of these
databases, a particularly in the light of the statement in the Annual Report
that in the reporting period, 1580 new users 'self-registered' to ALEIN. The
Committee's concern surrounded whether or not the entry point was controlled by
the agencies that use it.
The ACC explained that
ALEIN is an interface for delivering certain systems to the users – law
enforcement agencies across Australia and New Zealand, including of course the ACC. ACID is the specific
database within ALEIN. However, the ACC said that the control of the database
... with great difficulty, I would have
to say. We have a risk management framework around ACID and ALEIN, so we do
declare the minimum standards that we expect for people who are able to access
The ACC told the
Committee that there is a certain amount of risk management attached to the use
of the databases:
... where we are relying on the quality of
information provided by our partners out there in law enforcement agencies, we
obviously need to take a risk in terms of who is accessing it. We rely on the
agencies concerned to essentially ensure that only those who are properly
accredited to do so can access their systems.
The Committee notes
the safeguards which exist to protect the data. The Report indicates a steady
growth in the numbers of users of the database, and the information contained
in it. This is a useful measure of the acceptance within the law enforcement
community of the ACC's role in providing useful criminal intelligence. However,
growing numbers of users accessing the system from different jurisdictions, and
bound by various security and access regimes, poses an increasing and difficult
to manage threat of unauthorised access to, and disclosure of information.
The development of an
effective national criminal intelligence sharing network is a vital part of a
coherent national response to organised crime. It is also appropriate that law
enforcement agencies have access to all information that is relevant to their
investigations. However, the Committee is concerned that cross jurisdictional information
sharing arrangements do not inadvertently result in 'holes' in accountability.
It is important that there is absolute clarity over what information is
accessed; what are the relevant legislative controls; who may access the
information; for what purpose, and what accountability measures apply.
2.63 The Committee
recommends that the ACC review the legal and administrative arrangements
governing information on its intelligence networks and provide the Committee
with a briefing on the results. This should include both any current limits to
the access to information, as well as access, accountability and control
and significance of strategic criminal assessments and other intelligence and
The table on page 33
of the ACC Annual Report indicates that there were three Strategic Criminal
Assessments in the reporting year, compared to four in the previous reporting
year. Two of those reported this year concern the Picture of Criminality, which
is summarised in the box on pages 33-34, and which has been discussed above.
Included in this
category are several other 'intelligence products' which included intelligence
assessments/reports/alerts (31), information bulletins (18), information
items/OSI reports (3079), presentations and briefings (73) and operational
reports (one). In each case the ACC gives a general comment as to the perceived
usefulness of each product by the agencies who have used it.
by the Board of advice on national criminal intelligence priorities
appreciates that the acceptance of the ACC's advice by its governing body is a
matter of some importance to the ACC; however, non-acceptance of the ACC's
advice by the Board may not necessarily signify flaws in the advice, but may
reflect decisions made on alternative policy, resource, or political
considerations. Accordingly the value of this criterion as a performance
measure in its present form is not clear.
criminal intelligence priorities that become intelligence operations
Similarly, it is not
clear why these are necessarily a measure of performance. It may be that the
work invested in them reflects a measure of achievement, but the Report does
not explain why this is so.
indicated in this report none of these – nor the following – performance
indicators is set against a background of benchmarks. There appear to be no
estimates of the volume of work expected, nor is there any standard set which
would measure success. The Committee appreciates that the ACC operates in a
dynamic environment, but considers that the Commission could further refine the
standards by which it assesses its own performance.
2.69 The Committee
recommends continued refinement of the performance measures, including an
explanation of the significance of quantitative and qualitative indicators.
Criminal intelligence operations
There are four
performance measures for this output.
- number conducted and
proposals actioned by Board;
- achievement of
objectives of intelligence operations;
- use of coercive powers;
- collaboration with
partner law enforcement agencies.
The ACC has provided
comprehensive information in a number of ways on this set of indicators. There
are tables which set out the use of coercive powers in relation to both
documents and people (tables 3.1 to 3.5), as well as narrative which describes
each of the determinations, the activities undertaken within each one, and the
It would be useful if
the Annual Report explained how the ACC decides what matters have sufficient
priority to be put to the Board for consideration as a recommended determination.
This is particularly the case given that the ACC uses the Board's acceptance of
its recommendations as a performance measure. The Committee appreciates that these
considerations may be sensitive, but a general discussion of how relative
priorities are determined would put the information into a clearer context.
recommends that the performance indicators relating to criminal intelligence operations
include – subject to reasonable security considerations – how priority is allocated
to matters submitted to the ACC Board for consideration.
The use of coercive
powers was a matter of some concern to the Committee when the ACC was
established. From the information contained in the Annual Report, it appears
that the most frequent use of the powers is in relation to drug matters, which
is an outcome which would be expected in the light of the prevalence of this
kind of serious crime.
The details concerning
determinations include numbers of arrests and charges laid. While the Committee
acknowledges that all charges are unlikely to be dealt with in the space of a
reporting period, the Committee would like to see some material in each annual
report which gives some indication of the stage the charges laid in the
reporting period have reached: for example charged, prosecution brief served,
committal hearing, trial or concluded.
The Committee notes
that Table 6E1 gives some
information; however some of these matters appear to relate to pre-ACC
activity. Further, the table does not specify what the date at the top of the
column is – the date of arrest, charge, first court appearance, date of trial
or last court appearance.
The Committee is also
aware that despite considerable intelligence work, some charges do not proceed.
Information concerning the total number of charges, the number which proceed
and the number which are successfully prosecuted would be a useful measure of
the success of ACC investigations and the extent of the disruption to criminal
2.77 The Committee
recommends that information relating to the results of legal proceedings be
refined to indicate more clearly the numbers of charges that proceed and are
into federally relevant criminal activity
There are six
performance measures for this output:
- number conducted and
allocated by the ACC Board;
- value of proceeds of
- use of coercive powers;
- achievement of
objectives of investigations;
- number and
significance of arrests and charges arising from investigations; and
- collaboration with
partner law enforcement agencies.
The comments set out
above equally apply to these performance measures which require the provision
of figures. For example, 'value of proceeds of crime forfeited'.
In the Firearms
Trafficking Determination, we are told that a range of assets were restrained,
and these are listed. Table 4.2 then indicates that $1,581,200 in assets were
restrained, but there is no indication of whether this figure represents the
assets mentioned above, or how many matters it relates to. The same applies to
the proceeds of crime figures given for Established Criminal Networks.
A further measure is
'achievement of objectives of investigations'; nowhere are these articulated or
confirmed as achieved, except in oblique terms. There are some instances in
which figures in context are given, for example the results for the Established
Criminal Networks on page 61, but these also contain unsupported assertions
such as 'significant disruption of established criminal networks in Australia'. There is no exploration of what constitutes 'significant
disruptions' nor how this relates to any previously set objectives.
The reporting on this
output is in large part very general, and where specifics are noted, they are
usually not placed in a context nor are the outcomes clear. Implicit in the
performance measures is the existence of performance objectives, and while they
may be clear to the ACC this is not communicated in the report.
2.83 The Committee
recommends further refinement of the reporting measures for 'Investigations
into Federally relevant criminal activity', including more specific breakdown
of information relating to forfeiture of the proceeds of crime, and the meaning
of qualitative measures such as 'disruption of established criminal networks'.
The Corporate Services
section of the report includes compliance with the requirements to provide
information on matters such as Social Justice, Occupational Health and Safety
and Energy Management, Ecologically Sustainable Development, Complaints,
Freedom of Information and use of consultants. This section complies with the
requirements for Annual Reports, and all areas have been reported.
The ACC has received
an unqualified audit certificate for its 2003-2004 financial statements. The appropriation for
2003-2004 was $65.471 million. There was a less than expected deficit of $3.3
million including an operating loss of $1.4 million. The Report explains the
deficit 'reflected the commitment to expenditure in this year on lapsed tied
funding programs where funding had not been expended in 2002-3 and carried
The ACC's revenue
includes a number of tied funding arrangements – in total $11.9 million. These
are set out on page 86 of the Annual Report. This type of funding over a three
or four year period was also a feature of the NCA's budget. No tied allocations
have carried over from the NCA to the ACC.
Police Commissioner's views on ACC funding.
Nixon, Chief Commissioner of Police in Victoria, sought re-examination of the ACC's funding model. Under
Commonwealth funding is provided, but
tied to a particular crime category (for instance, the determination in respect
to money laundering & tax fraud whereby $29.97 million over 4 years was
provided, with an expectation that approximately $53m would be subject to tax
assessment and proceeds of crime action, reduces the flexibility of the ACC and
is in conflict with the governance model.
Ms Nixon argues that:
The ACC provides advice to the ACC
Board on how the resources should be allocated, according to the priorities set
by the ACC Board. It is then a matter for the ACC Board to determine how the
funding should be allocated, having regard to the national priorities, risks
and threats. The current funding arrangements usurp the authority of the ACC
Nixon's views have some merit, in that around one sixth of the
Commission's expenditure is directly controlled by the Commonwealth, therefore limiting
the discretion of the ACC Board. However, this indirect control by the
Commonwealth minister reflects the Commonwealth's role in funding the ACC,
unlike earlier arrangements with the NCA which involved contributions from all
jurisdictions. Conversely, it could also be argued that the Commonwealth is
always assured of a significant voice on the ACC Board by reason of the
membership: seven of the 16 members represent Commonwealth organisations.
considers that this is a matter which should be examined in the review of the
operation of the ACC Act prescribed under section 61A.
The Committee is
pleased to note that the current Annual Report was presented out of session on 21 December 2004, and tabled in both Houses on 8 February 2005, which is a considerable improvement on previous years.
The delay in tabling
the Annual Report was noted on the previous occasion, and has been a near
perennial theme of this Committee's reports on the NCA Annual Report over
recent years. The Committee commends the Commission on the more timely release
of the current report. It is the Committee's understanding that this is in large
part due to revised arrangements for clearing the report with the members of
the Intergovernmental Committee.
However, the Committee still notes that it
exceeds the normal due date of reports of 31 October. Whilst appreciating the
administrative difficulties of achieving this, the Committee hopes to see
continuing improvement in this regard.
The ACC Annual Report
is a well produced, professional publication. The Committee commends the
Commission on its work in producing the report, and hopes that the comments and
suggestions contained in this report will provide assistance to the Commission
to enhance the information it provides in its Annual Reports.
Senator Santo Santoro
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