Chapter 2

Annual reports of Commonwealth Departments

2.1        For the financial year 2015–16, the annual reports of the following departments were referred to the committee for examination and report:

2.2        The committee considers the annual reports of the departments to be 'apparently satisfactory' and to have been presented to the Parliament in a timely manner.  

Department of Health

Tabling of the report

2.3        The Department of Health (DOH) 2015–16 annual report was tabled in the House of Representatives on 17 October 2016, in time for examination at the Supplementary Estimates 2015–16 hearing.[1] The report was later tabled in the Senate on 7 November 2016.[2]

Secretary's review

2.4        The Secretary, Mr Martin Bowles PSM, highlighted several significant factors impacting the Department's work during the reporting period, including:

Chief Medical Officer's Report

2.5        The Chief Medical Officer (CMO), Professor Chris Baggoley AO, addressed several important issues in the work of the Department in his report including:

2.6        The committee extends its thanks to Professor Baggoley for his service as Australia's CMO following his retirement in July 2016. Professor Brendan Murphey was appointed as Australia's new CMO and commenced in October 2016.

Ministerial responsibilities

2.7        As at 30 June 2016, the Ministers and Assistant Minister responsible for the portfolio and its agencies were:

Changes in administrative arrangements

2.8        Machinery of Government (MoG) changes made in the AAO issued on 30 September 2015 resulted in:

2.9        In 2015–16 there were a number of changes to portfolio entities as a result of Smaller Government reform initiatives:

Performance reporting

2.10      The annual report addresses Key Performance Indicators (KPIs) as listed in the Portfolio Budget Statements 2015–16. The majority of DOH performance targets were met across the 11 deliverable outcomes reported on. The committee particularly commends the results of Outcome 4: Acute Care, Outcome 6: Private Health and Outcome 10: Sport and Recreation, in which 100 per cent of performance criteria were met.

2.11      Performance criteria under Outcome 1: Population Health, included six instances where the 2015–16 result is reported as 'Data not available'. Whilst the committee acknowledges that some DOH data may not be available in time for inclusion in its annual report, the committee encourages the Department to provide more information on when the data will become available and where the data will be published once available.

2.12      Performance criteria which were reported as not met can be found in: Outcome 3: Access to Mental and Dental Services, Outcome 5: Primary Health Care, Outcome 7: Health Infrastructure, Regulation, Safety and Quality, Outcome 8: Health Workforce and Capacity, Outcome 9: Biosecurity and Emergency Response and Outcome 11: Ageing and Aged Care. The committee notes that, in the instances where performance criteria were not met, DOH provided additional information indicating the cause of the targets not being met.

2.13      Major community outcomes achieved during the reporting period include:

2.14      DOH reported that it is at the forefront of significant health challenges, including: addressing chronic disease as a leading cause of preventable death; increasing participation in cancer screening programs;[12] regulating new gene technology;[13] equitable distribution of the health sector workforce;[14] antimicrobial resistance[15] and better targeted aged care services to Indigenous Australians[16]. The committee notes these challenges will require sustained and targeted work efforts in order to be addressed.

2.15      The Australian National Audit Office (ANAO) concluded four reports into the operations of DOH throughout the 2015–16 reporting period. The reports examined the effectiveness of the administration of the Radiation Oncology Health Program Grants Scheme;[17] the effectiveness of the administration of the Child Dental Benefits Schedule;[18] the effectiveness of records management arrangements;[19] and the effectiveness of the implementation of deregulation activities[20]. The ANAO made 10 recommendations which were directly relevant to DOH; all of which DOH agreed with.

Financial performance

2.16      In 2015–16 DOH administered $55.8 billion in expenses on behalf of the Commonwealth, which was comprised primarily of personal benefits of $39.6 billion. The Department incurred an operating loss—exclusive of unfunded depreciation—of $5.5 million on account of the transfer of ageing and aged care functions, transferred to the Department as a result of the administrative Arrangement Orders (AAO) of 30 September 2015.

Department of Social Services

Tabling of the report

2.17      The Department of Social Services (DSS) 2015–16 annual report was tabled on 13 October 2016, in time for examination at the Budget Supplementary Estimates 2016–17 hearing.[21]

Secretary's review

2.18      DSS Secretary, Mr Finn Pratt AO PSM, highlighted several significant achievements of DSS during the reporting period, including:

Changes in administrative arrangements

2.19      Machinery of Government (MoG) changes made during the reporting period resulted in portfolio responsibility for:

Ministerial responsibilities

2.20      As at 30 June 2016, the Ministers and Parliamentary Secretaries responsible for the portfolio and its agencies were:

Performance reporting

2.21      The 2015–16 annual report highlights several key performance results including:

2.22      The committee commends DSS for preparing a substantive and well-presented annual report. The report is relevant to a broad audience and contains critical information on DSS' performance.

2.23      As noted in previous committee reports, the KPIs for DSS are extensive. It would, however, aid the committee in its examination of future annual reports if DSS, when reporting on its performance criteria, could indicate whether the reported result is considered to have met, substantially met, exceeded, or not met the performance criteria's target.

2.24      During the reporting period, the ANAO concluded five performance audits involving DSS. Two of these performances audits were specific to DSS.[27] The ANAO reported on DSS administration of the Early Intervention Services for Children with Disability (EISCD). The overall conclusion of the report found that DSS was effective in administering some areas of the EISCD, but noted administration could be improved, and made four associated recommendations.[28] ANAO also reported on the effectiveness of DSS administration of the National Rental Affordability Scheme (NRAS). The ANAO concluded that the administration of NRAS could have been better implemented.[29]

 Financial performance

2.25      In 2015–16 DSS managed a budget of $120.9 billion, approximately one quarter of the Commonwealth Budget. The budget included $120.3 billion in administered appropriations, of which $113.4 billion of payments were made to individuals and $6.9 billion for programs, subsidies, and grants to support the community. The remaining $0.6 billion of departmental appropriations formed the operating expenditure of DSS. DSS achieved a small surplus of $0.8 million.[30]

Department of Human Services

Tabling of the report

2.26      The Department of Human Services (DHS) 2015–16 annual report was tabled in the House of Representatives on 17 October 2016, in time for examination at the Supplementary Estimates 2015–16 hearing.[31] The report was later tabled in the Senate on 7 November 2016.[32]

Secretary's review

DHS Secretary, Ms Kathryn Campbell CSC, noted several achievements during the 2015–16 year including:

2.27      The Secretary's review also comments on the issue of telephone call wait times for customers, suggesting that some customers found the Department's wait times frustrating and that phone service levels were improving from past years. The committee notes that Centrelink customer feedback and Medicare customer feedback highlights issues with phone services as the most frequent complaint from amongst 142 453 DHS customer feedback contacts (Centrelink and Medicare contacts).[34]

Ministerial Responsibilities

2.28      As at 30 June 2016, the Minister responsible for the Human Services Portfolio was Minister for Human Services, the Hon. Alan Tudge MP.[35]

Performance reporting

2.29      The annual report addresses the KPIs as listed in the Portfolio Budget Statements 2015–16. The committee acknowledges that DHS met 31 of its 36 KPIs. The KPIs met in 2015–16 are a small proportional improvement on the KPIs met during the 2014–15 reporting period.[36]

2.30      DHS continued to focus on service delivery across its three key programs and delivered a number of important results including:

2.31      Budget measures for Strengthening the Integrity of Welfare Payments were achieved within budget and time criteria. Through the Employment Income Matching project $401.2 million was raised and over 101 000 compliance interventions were completed. The AUSTRAC Data Matching project raised $8.4 million in savings, albeit with less compliance reviews conducted than intended, due to the resource intensiveness of the investigations.[38]

2.32      The ANAO published five reports into the operations of DHS throughout the financial year and made a total of 12 recommendations that related to DHS. The reports investigated: the administration of the Financial Information Service; the administration of the Radiation Oncology Health Program Grants Scheme; administration of the Disability Support Pension eligibility; and, review process, administration of the Child Dental Benefits Schedule and administration of procurement initiatives to support opportunities for Indigenous Australians. DHS accepted all of the recommendations made by the ANAO.[39]

2.33      Uniform reporting standards across departments and agencies assists to increase transparency by providing a framework for important information to be presented in a high quality and recognisable format. The committee notes that DHS has provided all the information on consultant contracts required under 17AG(7)(a) of the Public Governance and Performance Accountability Rule 2014, albeit in a format differing from the prescriptive statement of  paragraph 17AG(7)(b).

Financial performance

2.34      DHS administered approximately $172.1 billion in expenses on behalf of the Commonwealth in 2015–16, which constitutes approximately 41 per cent of total government outlays. The total income for DHS in 2015–16 was $4417.1 million, of which $4223.5 million was government appropriations and $193.6 million sourced from self-generated revenue and gains. Accounting for amortisation and unfunded depreciation, DHS reported a small operating deficit of $3.2 million.[40] 

2.35      DHS remained in a sound financial position during 2015–16. DHS reported equity of $639.0 million and assets valued at $2061.1 million. Liabilities of DHS were reported as $1363.1 million, a one per cent decrease from the 2014–15 financial year.[41]  

2.36      DHS presentation of summary financial performance information is clear and reader friendly. However, the committee encourages DHS to present this information in a way that better complies with subdivision 17AF of the Public Governance, Performance and Accountability Rule 2014, which requires information be presented in a table that summarises the total resources and payments of the department.

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