2.1
This chapter summarises the Australian Criminal Intelligence Commission (ACIC) Annual Report 2018–19 (annual report) compliance requirements and assesses the ACIC against them. It provides an overview of ACIC activities and priorities, changes to its senior management committees, financial performance, and notable findings from the Commonwealth Ombudsman.
Annual report compliance
Australian Crime Commission Act 2002 (ACC Act) requirements
2.2
ACIC annual reports must comply with requirements specified in section 61 of the ACC Act. Subsection 61(2) requires that annual reports include the following:
(a)
a description of any special ACC investigations undertaken during the year;
(b)
a description, which may include statistics, of any patterns or trends, and the nature and scope, of any criminal activity that have come to the attention of the ACC during that year in the performance of its functions;
(c)
any recommendations for changes in the laws of the Commonwealth, of a participating State or of a Territory, or for administrative action, that, as a result of the performance of the ACC's functions, the Board considers should be made;
(d)
the general nature and the extent of any information furnished by the CEO during that year to a law enforcement agency;
(da)
the general nature and the extent of any information disclosed by the CEO during that year to a body corporate under section 59AB;
(e)
the extent to which investigations by the ACC have resulted in the prosecution in that year of persons for offences;
(ea)
the extent to which investigations by the ACC have resulted in confiscation proceedings;
(g)particulars of the number and results of:
(ii)
applications made to the Federal Court or the Federal Circuit Court under the Administrative Decisions (Judicial Review) Act 1977 for orders of review in respect of matters arising under this Act; and
(iii)other court proceedings involving the ACC;
being applications and proceedings that were determined, or otherwise disposed of, during that year.
PGPA Act requirements
2.3
As a Commonwealth entity, the ACIC must comply with the Public Governance, Performance and Accountability Act 2013 (PGPA Act), which requires Commonwealth entities to provide an annual report to the responsible minister for presentation to the Parliament on the entity's activity during the reporting period. Under the PGPA Act, Commonwealth entities are required to prepare annual performance statements and include a copy of these statements in their annual reports tabled in the Parliament. The ACIC's annual performance statement appears in section 2 of the annual report.
2.4
The ACIC must also comply with the requirements in the Public Governance, Performance and Accountability Rule 2014. These requirements stipulate the format and specific content to be included in the annual report.
Committee comment
2.5
Based on the committee's assessment, the ACIC's 2018–19 annual report meets both the ACC Act and PGPA Act and Rule requirements. However, while the annual report clearly indicates in a table in Appendix A where each of the PGPA requirements has been met, the requirements of Section 61(2) of the ACC Act have not been clearly identified as addressed. The ACIC could consider, in future annual reports, including a statement or table which also sets out that each of the ACC Act requirements have been met.
Overview of ACIC activities and priorities 2018–19
2.6
The annual report provides a summary of ACIC activities and priorities for 2018–19. Some of the ACIC's activities included the:
production of 99 analytical intelligence products;
discovery of 95 previously unknown targets;
addition of 12 targets to the Australian Priority Organisation Target List (APOT);
release of key reports on gangs, cybercrime, wastewater drug data and emerging threats to sports entities;
provision of assistance to disrupt three APOT targets and 28 criminal entities, seize $2.3 billion worth of drugs, and arrest 169 people;
provision of 17 systems that helped its partners prevent, detect and reduce crime; and
sharing of 8,440 information and intelligence products with stakeholders.
2.7
During 2018–19, the ACIC focused its efforts on one priority—disrupting high-priority serious organised crime threats. This approach differs to previous years in which the agency had a longer list of priorities. Consequently, the ACIC acknowledged declines in quantitative results, overall numbers and the use of coercive powers in its performance criteria reporting due to focussing on a smaller number of higher priority threats.
Senior management and committees restructure
2.8
The structure of the ACIC senior management committee has undergone a series of changes over the years. Analysis of previous annual reports shows that the following committees were abolished in 2018–19:
Strategic Investment Committee;
SitRep and Strategy Meeting; and
Human Source Management Committee.
2.9
Strategic investment is listed as one of the areas that the Commission Executive Committee supports and may imply that the role of the Strategic Investment Committee was relocated to this committee.
Committee comment
2.10
The committee would welcome a short explanation on the rationale behind the ACIC committee changes.
Staff, retention and turnover
2.11
The annual report provides statistics about the ACIC's staffing profile. Comparisons of the 2016–17, 2017–18 and 2018–19 average staffing levels, staff turnover and retention rates are provided in Table 2.1.
2.12
The average staffing level (ASL) during 2018–19 was 745.61, plus 21 secondees funded by the ACIC and 17 secondees funded by jurisdictions.
2.13
According to the annual report, a total of 170 staff left the agency during the 2018–19 year. This was predominantly due to resignations (67), external transfers (49) and voluntary redundancies (36). Other reasons included retirement (7) and the completion of a non-ongoing contract (6). The retention rate for the 2018–19 was 80.9 per cent. This is a decrease of 6.4 percentage points from the previous year.
Table 2.1: Comparison of the ACIC retention and turnover rates
|
Year
|
Average core staffing level
|
No. of staff turnover
|
Retention rate (%)
|
|
2016–17
|
781.69
|
118
|
88.9
|
|
2017–18
|
780.06
|
130
|
87.3
|
|
2018–19
|
745.61
|
170
|
80.9
|
Source: ACIC, Annual Report 2016–17, pp. 189 and 198; ACIC, Annual Report 2017–18, pp. 172 and 179; ACIC, Annual Report 2018–19, pp. 88 and 98.
Committee comment
2.14
The committee commends the ACIC for continuing to provide both retention and turnover rates, as together these rates provide a more holistic picture of staff movement than would either rate viewed in isolation. In addition, the committee considers it may be helpful if the ACIC provided some commentary on the trends. For example, during the current reporting period, there might have been value in commentary on the increase in the staff turnover rate, the decrease in the retention rate, the declining retention rate over the last three years and on voluntary redundancy given the number was significantly higher in the last two years.
Workplace diversity
2.15
Overall, the ACIC gender balance appears relatively equal, with men making up 51 per cent and women 49 per cent of employees in the 2018–19 period. However, when considering gender balance by job classification, it is apparent that there is clear underrepresentation of women in more senior roles at the ACIC. As the annual report states, '[t]here are 119 more women than men at classification levels APS 1—6, but 127 more men than women at the EL1, EL2 and SES levels'. This imbalance has been an ongoing and relatively unchanged feature of the ACIC, as is apparent in the three years of data presented below in Table 2.2.
Table 2.2:
Gender balance progress at the ACIC
|
Year
|
Percentage of women in organisation
|
Percentage of women at EL and SES levels
|
Percentage of women at APS 1–6 levels
|
|
2016–17
|
50.86
|
34.76
|
66.50
|
|
2017–18
|
49.40
|
32.99
|
66.16
|
|
2018–19
|
49
|
33.16
|
65.46
|
Source: ACIC, Annual Report 2016–17, pp. 192 and 257; ACIC, Annual Report 2017–18, pp. 175 and 238; ACIC, Annual Report 2018–19, pp. 91 and 148.
Committee comment
2.16
The committee notes the progress that remains to be made in achieving gender balance across all classification levels at the ACIC, particularly at the Executive Level and Senior Executive Service levels. The committee commends the agency on developing its Gender Action Plan 2017–19, whilst reiterating its suggestion from the last report that the ACIC should consider making a copy of the Gender Action Plan 2017–19 publicly available. Likewise, to ensure accountability the committee would welcome details of the ACIC's Gender Equality Pledge. The committee notes that the annual report made no mention of a future Gender Action Plan.
Cultural diversity
2.17
In 2018–19, 16 per cent of ACIC employees identified that Australia is not their country of birth and 15 per cent do not speak English as their first language. Table 2.3 provides a comparison across the 2016–17, 2017–18, and 2018–19 years, and shows that rates of cultural diversity at the organisation have been relatively stable in the last two reporting periods.
Table 2.3: Comparison of cultural diversity data
|
Year
|
Staff born overseas (%)
|
Staff who do not speak English as a first language (%)
|
Staff from a non-English speaking background (%)
|
Indigenous rate (%)
|
|
2016–17
|
22.8
|
8.3
|
N/a
|
1.23
|
|
2017–18
|
15.9
|
14.79
|
N/a
|
1.64
|
|
2018–19
|
16
|
15
|
22
|
1.6
|
Source: ACIC, Annual Report 2016–17, pp. 193–194; ACIC, Annual Report 2017–18, p. 176; ACIC, Annual Report 2018–19, pp. 92–93.
2.18
The rate of Indigenous employment at the ACIC in 2018–19 was 1.6 per cent. As a comparison, the Australian Bureau of Statistics reports that in 2016 Aboriginal and Torres Strait Islanders comprised 3.3 per cent of Australia's population.
2.19
In the April prior to the reporting period, the ACIC launched its Reconciliation Action Plan 2018–20 (RAP). According to the RAP, the ACIC 'will make a meaningful contribution to reconciliation with practical actions and goals to drive greater equality and understanding of Aboriginal and Torres Strait Islander culture'. The annual report briefly summarises these actions.
Committee comment
2.20
The committee acknowledges the steps undertaken by the ACIC to participate in reconciliation and notes that a copy of the RAP 2018–20 continues to be available from the ACIC website. The committee commends the agency for the work it has carried out to date in implementing the plan. The committee looks forward to the results of the ACIC RAP 2018–20, noting it would have been helpful for the ACIC to comment on its progress at the halfway stage.
2.21
The committee notes that the ACIC rate of Indigenous employment appears to be stable rather than improving and acknowledges the difficulty in accurately capturing data on cultural diversity due to reliance on self-disclosure by staff. The committee suggests that the ACIC also consider providing a breakdown of Indigenous staffing by classification level in its annual reports to enable comparison against broader APS-wide trends.
Disability
2.22
The percentage of staff that identify as having a disability has been on a slight downwards trend. In the 2016–17 year, 2.7 per cent of ACIC employees identified as having a disability, in 2017–18 this figure was 2.4 per cent, and in 2018–19 this figure was 2.1 per cent. The ACIC's Disability Action Plan 2017–19, with provisions on accessibility and inclusivity in the workplace, is coming towards its end during the reporting period. The agency continues to maintain a silver membership with the Australian Network on Disability.
Committee comment
2.23
The committee looks forward to the outcomes of the Disability Action Plan 2017–19. The ACIC might consider making a copy of the plan publicly available to enable the committee to evaluate the success of the plan.
Internal audits and risk management
2.24
The ACIC internal audit team is accountable to the CEO and the Audit Committee and has three main responsibilities: '[1] auditing organisational and operational systems and processes[, 2] monitoring the implementation of audit outcomes [and 3] developing business improvement opportunities to enhance effectiveness and efficiency in all ACIC business areas'.
2.25
In 2018–19, the ACIC internal audit team examined the following areas:
management of operational equipment and exhibits; and
2.26
The Audit Committee represents the ACIC's risk oversight. During 2018–19, the ACIC:
completed the Comcover risk management benchmarking exercise to assess the maturity of our current approach and guide further development;
focused on approaches to improving risk culture and understanding at all levels; and
participated in multiagency risk forums and consulted with partner agencies on better practice approaches to managing risk.
Committee comment
2.27
The committee acknowledges the work of the ACIC in regularly monitoring, reviewing and improving its systems and processes. The ACIC could consider providing an overview or summary of the outcomes of the internal audit team's examinations in future annual reports. This will assist to improve transparency and facilitate the committee's examination of the ACIC's function and performance.
Misconduct, fraud and corruption activity
2.28
The annual report summarises the features of the ACIC's Fraud and Corruption Control Plan, and the process when fraud or corruption is suspected.
Committee comment
2.29
In previous years, the ACIC's annual report has included the number of misconduct, fraud and corruption allegations during the reporting period. However, this information is not included in the 2018–19 report.
2.30
If there were in fact no misconduct, fraud and corruption allegations during the reporting period, a statement in the annual report to that effect would be helpful. The committee understands that reporting methods may change, however an explanation should be provided for clarity. Changes in how information is presented in annual reports, when not fully explained, can complicate comparison between reporting periods and detract from the committee's ability to scrutinise the agency's performance and functions.
Financial performance
2.31
The ACIC's financial result for 2018–19 was an operating deficit of $2.305 million. However, 'with the exclusion of unfunded depreciation and capital funding, the ACIC would have realised a surplus of $2.576 million for the financial year'.
2.32
The ACIC's operating appropriation for 2018–19 was $99.970 million.
In 2018–19, $78.147 million was allocated for base funding, with the remainder tied funding allocated as follows:
$1.754 million funding for the Australian Gangs Intelligence Coordination Centre;
$0.891 million to enhance physical security to all office buildings and personnel security capabilities, in response to the current heightened security threat;
$4.385 million to develop and enhance the ACIC's cybercrime intelligence and analysis capability in response to recommendations of the 2016 Cyber Security Review;
$0.361 million to support 24/7 operation of the Cyber Security Centre to prevent and combat cyber security threats;
$0.350 million to design the Criminal Intelligence Checking capability and its integration with other background checking processes;
$12.854 million for the development of the National Criminal Intelligence System Tranche 1 program; and
$1.228 million to support Enhancing the Criminal Intelligence Capability program, provide better training to ACIC and partner agencies workforce of effective intelligence work capability.
2.33
The ACIC's revenue for 2018–19 was generated from its appropriation of ordinary annual services ($99.970 million) and own source income, which totalled $132.987 million. Own source income was derived from provision of National Policing Information Services ($104.933 million), provision of services ($13.307 million), and Proceeds of Crime Trust Account ($12.348 million). A further $2.399 million in resources were received free of charge.
2.34
The annual report notes a number of major variances between the funds allocated in the 2018–19 Portfolio Budget Statements and the final outcome for 2018–19. Some of the ACIC's explanations included:
the ACIC appropriation was reduced by $3.622 million;
revenues were higher than expected due to greater demand for the National Police Checking services, and there was unexpected revenue from the Proceeds of Crime Act and other services; and
a review of assets resulted in the write off of several items.
2.35
In 2018–19, the ACIC commenced one new consultancy contract (worth $108,125). There were no ongoing consultancy contracts active during the year.
2.36
The Australian National Audit Office determined the ACIC had 'compl[ied] with Australian Accounting Standards – Reduced Disclosure Requirements and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015[,] and present[ed] fairly … [its] financial position … as at 30 June 2019 and its financial performance and cash flows for the year then ended'.
Committee comment
2.37
The committee notes that in previous years the ACIC has referred to total appropriation in the body of the report, whereas in this annual report there is only mention of operating appropriation. To enable yearly comparison, the ACIC might consider reverting to reporting the total appropriation in future reports.
Commonwealth Ombudsman reports
2.38
During 2018–19, the Commonwealth Ombudsman visited the ACIC's offices in Brisbane, Sydney and Melbourne to conduct seven inspections. The ACIC received reports on those inspections and commented:
The reports include issues that were self-disclosed by the ACIC to the Ombudsman during inspections, as well as instances that the Ombudsman identified based on its review of our records. In most of the reports the Ombudsman also expressed satisfaction with the ACIC's transparency, commitment to compliance measures and remedial action.
2.39
At the committee's public hearing on 8 May 2020, Senator Scarr sought clarification on the stage self-disclosure is identified. Mr Phelan responded that it is 'mostly picked up by the operatives themselves who have authorised activity and then realised that something else should've been done, or by the relevant compliance teams…'.
Committee comment
2.40
The committee notes that the Commonwealth Ombudsman is yet to table the abovementioned reports outlining the results of the inspections in Parliament. The committee looks forward to seeing the reports and will provide its comments in a future examination report. In future ACIC annual reports, the committee would welcome more detail on the Commonwealth Ombudsman's findings and how any issues are being addressed.