3.1
The committee has selected the annual reports of the following entities for closer examination:
Australian Commission on Safety and Quality in Health Care (ACSQHC);
Australian Sports Foundation (ASF); and
Australian Institute of Family Studies (AIFS).
Australian Commission on Safety and Quality in Health Care
3.2
The ACSQHC is funded jointly by the Commonwealth, state and territory governments to lead and coordinate national improvements in the safety and quality of health care in Australia.
3.3
The ACSQHC is a corporate Commonwealth entity whose functions are specified by the National Health Reform Act 2011. These functions include:
formulating standards, guidelines and indicators relating to healthcare safety and quality matters;
advising health ministers on national clinical standards;
promoting, supporting and encouraging the implementation of these standards, related guidelines and indicators;
monitoring the implementation and impact of the standards;
promoting, supporting and encouraging the implementation of programs and initiatives relating to healthcare safety and quality;
formulating model national schemes that provide for the accreditation of organisations that provide healthcare services, and relate to healthcare safety and quality; and
publishing reports and papers relating to healthcare safety and quality.
Reports from the Chair and Chief Executive Officer
3.4
Chair of the ACSQHC, Professor Villis Marshall AC, emphasised the role of the agency in 2020–21 in supporting Australia’s pandemic response, including by leading the National Clinical Taskforce, which revised the National Safety and Quality Health Service Standard on Preventing and Controlling Healthcare-Associated Infection to include emerging evidence on airborne COVID-19 transmission. ACSQHC also provided staff to assist with contact tracing in New South Wales.
3.5
Professor Marshall commented on the need to balance this work against other national priorities for safety and quality of health care. An example of the ACSQHC’s work in this regard was the online program Better Care Everywhere: Healthcare variation in practice. Professor Marshall stated that this was the first program of its kind dedicated to reducing unwarranted variation in clinical care in Australia.
3.6
Adjunct Professor Debora Picone AO, ACSQHC Chief Executive Officer, also drew attention to the challenge of balancing the pandemic response against the needs of other, longstanding health challenges:
The Commission continued to address national health priorities throughout the year, while also supporting our health service organisations to respond rapidly and effectively to the ongoing pandemic. Our staff have demonstrated their adaptability and commitment to supporting safe and high-quality health care in this challenging environment.
3.7
Some of ACSQHC’s activities to address these longstanding health challenges included:
the release of the Fourth Australian Atlas of Healthcare Variation;
the release of Australia’s first clinical care standards on third and fourth degree perineal tears, and the management of peripheral intravenous catheters;
maintenance of accreditation status for healthcare organisations during the response phase of the pandemic, and subsequent resumption of accreditation assessments; and
briefings and submissions to inform the Royal Commission into Aged Care Quality and Safety and the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability.
Performance reporting
3.8
ACSQHC reported on the following four priority areas:
Priority 1: Safe delivery of health care;
Priority 2: Partnering with consumers;
Priority 3: Partnering with healthcare professionals; and
Priority 4: Quality, value and outcomes.
3.9
ACSQHC provided detailed summaries of the programs and activities undertaken in support of each of these priorities. Although specific performance targets are not outlined in the annual report, the committee acknowledges that these performance targets are detailed in the Corporate Plan 2020–21.
3.10
It would assist the committee if commentary on performance is accompanied by a statement of the relevant performance targets. Without this information, it is difficult for the committee to properly assess whether the performance targets are being met without referring to other documents. The committee encourages ACSQHC to provide further information about its performance measures in future annual reports.
Financial performance
3.11
In 2020–21, ACSQHC reported expenses totalling $24.418 million and income totalling $29.275 million, resulting in an operating surplus of $0.857 million. ACSQHC reported total assets valued at $18.636 million and liabilities valued at $13.754 million, resulting in net equity valued at $4.882 million.
3.12
Significant expenses included employee benefits ($13.260 million) and contracts for services ($9.003 million). Almost all income received ($29.241 million) was attributed to either project funding ($9.009 million) or contributions from the Commonwealth Government ($11.897 million) or state and territory governments ($8.335 million). ACSQHC carried forward unearned income worth $7.847 million, representing revenue from contractual obligations that are yet to be discharged.
Compliance Index
3.13
Under the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), Commonwealth entities are required to include a compliance index (or table of requirement) in annual reports.
3.14
The committee observes that the ASCQHC Annual Report refers to reporting requirements under the Public Governance, Performance and Accountability Amendment (Corporate Commonwealth Entity Annual Reporting) Rule 2016, which was repealed on 8 May 2016.
3.15
The committee also notes that the compliance index provided in the ASCQHC annual report is not in the form required by the PGPA Rule. Use of the mandatory format for compliance reporting drives consistency across annual reporting to Government and helps to make certain information contained within annual reports easier to locate, more readily comparable, and therefore more accessible to the public.
3.16
Using a compliance index template other than the form required by the PGPA Rule creates risks that some mandatory reporting items may not be included in the report or that it may not be possible to discern whether a reporting requirement has been met.
3.17
Issues with the compliance table contained within the ASCQHC annual report fall into three broad categories:
lack of explicit confirmation that ‘mandatory, if applicable’ reporting items did not apply to the ASCQHC in FY2020–21 (including for example, information on dividends paid or recommended and details of any community service obligations);
items that were reported on but not referenced by the ACSQHC compliance index (including for example, statistics on the entity’s employees on an ongoing and non-ongoing basis and a statement of significant issues reported to the Minister); and
additional matters that are not required to be included in the compliance index even though other legislation may require these matters to be included elsewhere in the annual report.
3.18
The committee draws the ASCQHC’s attention to the requirements of the PGPA Rule and requests that the current compliance index is used for future annual reports and that all sections of the table are accurately completed.
Australian Sports Foundation
3.19
The ASF is a Commonwealth company established under the Australian Sports Commission Act 1989 to raise money for the development of sport in Australia. ASF receives donations from individual and corporate philanthropists and distributions from ancillary funds. These donations create the funding pool for the group to make discretionary grants to eligible organisations in respect of sporting projects. ASF makes grant payments to registered sporting, community, educational and other eligible organisations, and athletes to facilitate the development of sport in Australia.
3.20
ASF is the parent entity and sole shareholder of ASF Community Sports Fund Pty Ltd (the Community Sports Fund). The Community Sports Fund is the corporate trustee for ASF.
Directors’ Report
3.21
ASF Directors reported that the COVID-19 pandemic has had a dramatic impact on professional and community sport, including ‘thousands of community clubs facing a serious threat to their survival due to a combination of reduced income and increased costs.’
3.22
The Directors noted that this provided both opportunities and risks for ASF in fulfilling its purpose of raising money for Australian sport. A significant source of risk is ASF’s reliance on philanthropic giving. Directors noted that the JBWere NAB Charitable Giving Index fell by four per cent in 2020 and a further 16 per cent in the first half of 2021.
Performance reporting
3.23
The committee notes the requirement that annual reports must ‘provide information about the entity’s performance in achieving its purposes’.
3.24
The ASF annual report provides a brief, non-exhaustive summary of some of its performance measures and key performance indicators during the reporting period. The committee notes that the ASF’s performance objectives for 2020–21 are not easily accessible online and include:
Donations $: Achieve more than $75.0 million per annum in philanthropic donations to sport by 2024 (FY2020–21 KPI: $45.0 million)
Registered Projects #: Achieve more than 10 000 registered organisations by 2024 (FY2020–21 KPI: 5500)
Sports Foundation Programs:
(i)
Establish funding programs around four key pillars: Active Kids, Women and Girls, Inclusion and Recovery;
(ii)
Secure Corporate Partnership revenues to assist in funding programs and contribute to covering our operating expenses
(FY2020–21 KPI: Raise $2.0 million for Sports Foundation programs; Raise $1.3 million through corporate partnerships)
Sports Foundation Revenues: Generate sufficient income to cover Sports Foundation operating costs, and develop and expand its operations. Achieve Sports Foundation operating income of $5.5 million by 2024
(FY2020–21 KPI: Generate Sports Foundation operating income of more than $3.0 million).
3.25
The ASF annual report does not appear to contain specific information about the ASF’s performance against each of these performance objectives. The committee requests that ASF familiarise itself with the reporting requirements of the PGPA Rule and anticipates that future annual reports prepared by ASF will include detailed performance reporting.
Financial performance
3.26
In 2020–21, ASF reported expenses totalling approximately $50.7 million and income totalling $56.0 million, resulting in an operating surplus of approximately $5.4 million. ASF reported a total accumulated surplus of around $9.0 million.
3.27
ASF’s income is primarily comprised of the gross value of donations received ($50.9 million) and government grants ($4.7 million). Significant expenses included the value of grants made to sporting organisations ($47.4 million) and employee benefits ($2.3 million).
Governance, audit and risk
3.28
The committee is of the view that future reports would benefit from the inclusion of more information about governance practices and audit committee functions. ASF could also consider whether it is able to provide more detailed information about its ethics and risk management policies.
3.29
ASF may wish to consider including more information in future reports to demonstrate the differences in function and activity of the ‘Finance, Audit and Risk Committees’ for both the Australian Sports Foundation and the ASF Community Sports Fund Pty Ltd. Based on the information provided in the report, it appears that both committees had identical membership and met concurrently throughout the reporting period.
3.30
The committee notes that it is unclear whether any part of the remuneration received by the Chair of the Finance, Audit and Risk Committee was attributable to their role as Chair of this committee.
Compliance Index
3.31
The committee observes that the ASF Annual Report compliance index does not appear to be in the form required by the PGPA Rule. In particular, the compliance index combines and paraphrases compliance index requirements. As noted at paragraphs 3.15–16, use of the mandatory format for compliance reporting drives consistency across annual reporting to Government and helps to make certain information contained within annual reports easier to locate, more readily comparable across years and entities.
3.32
As with the ASCQHC Annual Report, it is unclear whether several reporting items—described as ‘mandatory, if applicable’—applied to the ASF in FY 2020–21 due to the absence of specific confirmation that the relevant circumstances giving rise to a reporting obligation did not apply. These reporting items were:
information on dividends paid or recommended;
details of any community service obligations the government business enterprise has including: (a) an outline of actions taken to fulfil those obligations; and (b) an assessment of the cost of fulfilling those obligations; and
a statement regarding the exclusion of information on the grounds that the information is commercially sensitive and would be likely to result in unreasonable commercial prejudice to the government business enterprise.
Australian Institute of Family Studies
3.33
AIFS is a non-corporate Commonwealth entity within the Department of Social Services portfolio. The AIFS was established in February 1980 under the Australian Family Law Act 1975 and its functions are designated under section 114B of this Act.
3.34
The AIFS' purpose is to 'create and communicate knowledge that accelerates positive outcomes for children and families'. As outlined in its Corporate Plan, the AIFS has the following four strategic priorities:
Create knowledge: research and advice in the design, implementation and evaluation of policy and practice
Communication knowledge: resources and education for policy, practice, research and the community
Connect and collaborate: bringing policy makers, service providers and researchers together
Activate: sustainability as a research institute
3.35
AIFS has six research programs:
Family Law and Family Violence;
Family Policy and Service System;
Child and Family Evidence;
Australian Gambling Research Centre; and
Longitudinal and Lifecourse Studies.
Report from the Acting Director
3.36
In his review of AIFS work in the 2020–21 year, Acting Director, Mr Andrew Whitecross noted that the AIFS worked on 31 research projects, including:
the completion of two 'Families in Australia' survey;
five research projects conducted by the Australian Gambling Research Centre;
the Child Care Package Evaluation;
the National Elder Abuse Prevalence study;
Growing Up in Australia: The Longitudinal Study of Australian Children;
Ten to Men: The Australian Longitudinal Study on Male Health; and
the Australian Military and Veterans' Families study.
3.37
The Acting Director also highlighted how AIFS communicates its research findings, including through:
conducting events, including several webinars;
producing 77 papers and releasing four reports;
participating in the Child Family Community Australia information exchange; and
finalising the redevelopment of the AIFS website.
Performance reporting
3.38
AIFS has one outcome: 'increased understanding of factors affecting how families function by conducting research and communicating findings to policy makers, service providers and the broader community'.
3.39
The entity measures its performance against output measures, outcome measures, and impact measures. It also provides analysis on achievement of objectives against the entity's strategic objectives.
Output measures
3.40
AIFS' output measures include:
robust, credible research on issues facing Australian families;
access to high quality research and information;
platforms and opportunities for cross-sector dialogue and collaboration; and
practices, processes and culture that ensure sustainability.
3.41
The committee notes that AIFS delivered similar results against these measures compared to the previous financial year. One output measure was impacted as no face-to-face events were held in the reporting period due to COVID-19. This resulted in a decrease compared to the 2019–20 year.
3.42
The committee notes that in 2019–20 the AIFS stopped setting year-on-year targets for output as '[s]mall increases or decreases in these output numbers are not particularly meaningful; for example, the number of projects may decrease but do not tell a story about the national significance of projects and the impact they have'.
Outcome measures
3.43
AIFS has the following outcome measures:
end users seek out AIFS' research, resources, and expertise;
end users and stakeholders find AIFS' research and resources relevant to their work; and
maintain organisational capability to achieve impact.
3.44
Under outcome measures, the AIFS met 9 of 13 targets.
3.45
In relation to the first outcome measure, the AIFS met most of its targets. AIFS did not meet its target for 'accessing publications'. This was attributed to the method used to set the target which was based on year-on-year trends since 2016. This method did not consider changes in how publications could be viewed on the website. The annual report notes that this will be accounted for in future target setting.
3.46
The AIFS did not meet its target for the 'number of media citations' which was attributed to personnel changes, the dominance of the COVID-19 pandemic in the news cycle, cancellation of the AIFS 2020 conference and delays in report releases.
3.47
For the second outcome measure, AIFS met two of three targets. It did not meet its target for 'used AIFS resources in work practice' (target 80 per cent, result 77 per cent) due to a change in survey sample size. The annual report notes that the stakeholder survey was considerably larger than the previous year, and noted that despite the percentage decrease there are more organisations using AIFS resources.
3.48
For the third target, AIFS used the results of the APS Employee Census and measures staff engagement, staff wellbeing and innovation. AIFS achieved its target for staff wellbeing (76 per cent) but did not achieve its target for staff engagement (target: 77 per cent; result: 74 per cent) and innovation (target: 70 per cent; result: 68 per cent). The annual report notes that the questions on innovation were not included in the 2019–20 census.
3.49
The committee commends the AIFS for meeting most of its outcome measure targets. The committee notes that Table 3.2 'Outcomes performance 2020/21' is clear and provides information on performance targets and actual results. The committee recommends that the AIFS include additional information regarding whether a target was achieved in similar tables in future reports for ease of readability.
Impact measures
3.50
AIFS has the following three impact measures:
better understanding among stakeholders about issues facing Australian families;
improved capacity of stakeholders to use research to inform policy and service design; and
deeper insight into outcomes and impacts of policy and service design on children and families.
3.51
In 2020–21, AIFS exceeded its targets across all impact measures. The committee commends the AIFS for this achievement.
Financial performance
3.52
In 2020–21, AIFS incurred a deficit of $530 124 which was attributed to depreciation and amortisation expenses, the impacts of COVID-19, and the adverse impact of movements in employee provisions due to discount factors. The annual report notes that without the depreciation and amortisation expenses, the entity would have reported a surplus of $418 552.
3.53
AIFS' total operating revenue was approximately $15.4 million (which included government appropriations of around $4.4 million) and its total operating expenses were approximately $15.97 million.
3.54
The AIFS also reported several budget variances and noted that explanations for major variances are provided where the variance is greater than 10 per cent for a line item or greater than $600 000 unless the variance is a trivial amount.
3.55
Some reported variances include:
suppliers: cash paid for suppliers was less than planned due to delays in contract and consultant payments associated largely with fieldwork;
sale of goods and rendering of services: most of AIFS' revenue is earned from commissioned research and/or evaluation projects, lower than expected cash was received due to the cancellation of the AIFS Conference and delays to new research projects impacted by COVID-19; and
other revenue: lower revenue was earned due to the cancellation of the AIFS Conference impacted by COVID-19.
Compliance index
3.56
The committee notes that the compliance index has a page reference for each mandatory requirement, however, there are several instances where the information does not appear to be included in the annual report.
3.57
For example, the compliance index indicates that information about salary ranges for APS employees by classification is included on page 50 of the report; however, this information does not appear on this page or elsewhere in the report. Other examples include references to requirements for:
information about executive remuneration;
information about audit committee membership and attendance at committee meetings; and
policies and procedures for engaging consultants;
3.58
The committee draws AIFS' attention to all of the requirements of the PGPA Rule and requests that these sections are included in future annual reports and correctly referenced in the compliance index.
General comments on other reports
Compliance index
3.59
Annual reports are one of the principal accountability mechanisms of the PGPA Act, the committee considers that it is vital that these reports be easily accessible for all readers. The compliance index (or list of requirements) is an important tool for accessibility.
3.60
The PGPA Rules specify a particular format for agencies to use when completing their compliance index. The committee encourages all agencies to avoid divergence from the required format.
3.61
The committee notes that in the annual reports of a number of entities, the compliance indexes indicated large page ranges and, in some cases, whole chapters to locate specific information. For example, Hearing Australia, the National Disability Insurance Agency, National Blood Authority and Sport Integrity Australia reference whole sections or subsections, rather than providing specific page references for each mandatory reporting requirement.
3.62
In addition, the committee urges entities to take care in the preparation of their compliance indexes to ensure there are no errors in the page number references. For example, the compliance index for Hearing Australia references the requirement to report significant issues to the Minister that relates to non‑compliance with financial law, as being in Appendix 1 of the report; however, it is reported in Appendix 12.
3.63
As noted in previous 'Reports on annual reports' the committee recommends all entities provide a precise page range for each requirement to improve the overall accessibility of annual reports.
Reportable consultancy and non-consultancy contracts
3.64
When providing information on reportable consultancy and non-consultancy contracts entities are required to state the total actual expenditure in the reporting on these contracts inclusive of GST.
3.65
Some entities, such as the NDIS Quality and Safeguards Commission, reported on total expenditure for consultancy and non-consultancy contracts but did not provide information on whether the figures where inclusive of GST.
3.66
The committee reminds all entities of the requirement to report total expenditure inclusive of GST for reportable consultancy and non-consultancy contracts.
Colour and illustrations
3.67
The advice to government agencies regarding the use of colour and illustrations is that:
While acknowledging that the cost of colour printing has decreased, author bodies must have regard to limiting the use of colour and illustrations to where it enhances the reader’s understanding of the material. An excessive use of colour, illustrations and photography is not fit for the purposes of accountability and reporting to Parliament.
3.68
While some colour and images are useful in creating a flow to reports, particularly when cases studies are used, some agencies had whole pages in colour, containing photographs and large texted quotes. For example, the National Disability Insurance Agency annual report included several pages printed in colour with a significant portion of the pages also containing photographs and/or an illustration.
3.69
The committee encourages all agencies to take into consideration the use of colour and photography when preparing annual reports.
Apparently satisfactory
3.70
As noted in Chapter 1, the committee has assessed all reports of the Health and Social Services portfolios as apparently satisfactory. However, the committee reiterates its requests for Commonwealth entities and companies to familiarise themselves with the requirements of the PGPA Act and PGPA Rule.
3.71
The committee anticipates that the matters identified in this report will be rectified in future annual reports.
Chair