1.1
The Senate Education and Employment Legislation Committee's (the committee) report on annual reports provides an overview of the committee's examination of annual reports referred to it for the 2019–20 financial year.
1.2
This is the first of two reports on annual reports that the committee is required to produce in 2021.
Terms of reference
1.3
Under Senate Standing Order 25(20), the annual reports of certain departments and agencies are referred to the committee for examination and assessment. The committee is required to:
(a)
Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;
(b)
Consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration;
(c)
Investigate and report to the Senate on any lateness in the presentation of annual reports;
(d)
In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate;
(e)
If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;
(f)
Report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year;
(g)
Draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and
(h)
Report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.
Purpose of annual reports
1.4
The tabling and scrutiny of annual reports by Senate committees under Standing Order 25(20) is an important element in the process of government accountability to the Parliament. The information provided in annual reports is placed on the public record and assists the Parliament in its examination of the performance of departments and agencies and the administration of government programs.
Allocated portfolios
1.5
In accordance with a resolution of the Senate on 31 August 2016, as amended on 12 February 2018 and on 13 February 2020, the committee is responsible for the examination of the expenditure and outcomes of the following portfolios:
Education, Skills and Employment, including Industrial Relations; and
Industry, Science, Energy and Resources, excluding Industry, Science, Energy and Resources but including Small Business.
Machinery of government changes
Administrative Arrangements Order of 29 May 2019 (May 2019 AAO)
1.6
On 29 May 2019, the Governor-General made a new Administrative Arrangements Order (AAO) to replace the AAO made on 4 April 2019. The changes under the May 2019 AAO relevant to the portfolio responsibilities of the committee include:
Transfer of responsibility for industrial relations from the Employment portfolio to the Attorney-General’s portfolio;
Transfer of responsibility for vocational education and training, and apprenticeships from the Education portfolio to the Employment portfolio; and
Transfer of responsibility for migrant adult education from the Education portfolio to the Home Affairs portfolio.
1.7
As part of a departmental restructure to accommodate the changes, the Attorney-General’s Department established an Industrial Relations Group.
1.8
On 4 July 2019, the Senate resolved that industrial relations matters should remain within the portfolio responsibility of the committee.
Administrative Arrangements Order of 5 December 2019 (December 2019 AAO)
1.9
The December 2019 AAO, with effect from 1 February 2020, replaced the former May 2019 AAO. The changes under the December 2019 AAO relevant to the portfolio responsibilities of the committee include:
Transfer employment and skills functions to the renamed Department of Education, Skills and Employment; and
Transfer small business and energy functions to the renamed Department of Industry, Science, Energy and Resources.
Annual reporting requirements
1.10
Annual reporting requirements for non‑corporate and corporate Commonwealth entities are set out in section 46 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). Annual reporting requirements for Commonwealth companies can be found in Section 97 of the PGPA Act.
1.11
The Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), established under the PGPA Act, details the requirements for the corporate plan and annual performance statements. Sections 16E and 16F for Commonwealth entities and 27A for Commonwealth companies.
1.12
In addition to legislative requirements, the Department of Finance (Finance) provides Resource Management Guides (RMG's) for Commonwealth entities which provide further detail on the content requirements for annual reports under the Commonwealth Performance Framework. Material available from the Finance website includes the following guides which apply to the reports being examined:
Annual performance statements for Commonwealth entities: Resource Management Guide No. 134;
Annual reports for non-corporate Commonwealth entities: Resource Management Guide No. 135;
Annual reports for corporate Commonwealth entities: Resource Management Guide No. 136;
Annual reports for Commonwealth companies: Resource Management Guide No. 137;
Commonwealth entities Executive Remuneration Reporting Guide for Annual Reports: Resource Management Guide 138; and
Commonwealth companies Executive Remuneration Reporting Guide for Annual Reports: Resource Management Guide 139.
PGPA Act bodies
1.13
The PGPA Act categorises bodies as Commonwealth entities and Commonwealth companies as detailed below:
Non-corporate Commonwealth entity—an entity that is legally and financially part of the Commonwealth, and includes departments of state, parliamentary departments, statutory authorities, and listed entities (a body, person, group of persons or organisation that is prescribed by rules made under the PGPA Act);
Corporate Commonwealth entity—a body corporate that has a separate legal personality from the Commonwealth, and includes certain statutory authorities. It can act in its own right exercising certain legal rights such as entering into contracts and owning property; and
Commonwealth company—a company established by the Commonwealth under the Corporations Act 2001 that is controlled by the Commonwealth.
Reports examined
1.14
In accordance with Standing Order 25(20)(f), this report examines annual reports tabled between 1 May and 31 October 2020. The annual reports examined in this report are categorised as follows:
Non-corporate Commonwealth entities:
Asbestos Safety and Eradication Agency (ASEA);
Attorney-General's Department (AGD's);
Australian Building and Construction Commission (ABCC);
Australian Research Council (ARC);
Australian Skills Quality Authority (ASQA);
Department of Education, Skills and Employment (DESE)
Fair Work Commission (FWC);
Fair Work Ombudsman and Registered Organisations Commission Entity;
Seafarers Safety, Rehabilitation and Compensation Authority (Seacare Authority);
Safe Work Australia (SWA); and
Tertiary Education Quality and Standards Authority (TEQSA).
Corporate Commonwealth entities:
Australian Curriculum Assessment and Reporting Authority (ACARA);
Australian National University (ANU);
Coal Mining Industry (Long Service Leave Funding) Corporation (Coal LSL); and
Comcare and Safety, Rehabilitation and Compensation Commission.
Commonwealth companies:
Australian Institute for Teaching and School Leadership (AITSL).
Reports not examined
1.15
The committee is not obliged to report on Acts, statements of corporate intent, surveys, policy papers, budget documents or corporate plans. Where a report is referred to two standing committees, the committee has deferred examination of those reports to the committee which has primary oversight of the portfolio where the department or agency sits. Accordingly, the following documents were referred to the committee but not examined for the purposes of this report:
Australian Building and Construction Commission – Performance of the functions and the exercise of powers of the Australian Building and Construction Commissioner – Quarterly Report – Third quarter of 2019-20 – Operations from 1 January to 31 March inclusive – Section 20(5) of the Building and Construction Industry (Improving Productivity) Act 2016;
Australian Building and Construction Commission – Performance of the functions and the exercise of powers of the Australian Building and Construction Commissioner – Quarterly Report – Fourth Quarter of 2019-20 – Operations from 1 April - 30 June inclusive – Section 20(5) of the Building and Construction Industry (Improving Productivity) Act 2016;
Department of Industry, Science, Energy and Resources – Annual Report – 2019-20;
Final budget outcome 2019–20—Report by the Treasurer (The Hon. Josh Frydenberg MP) and the Minister for Finance (Senator the Hon. Mathias Cormann), dated September 2020;
Independent Review of the temporary JobKeeper provisions of the Fair Work Act – Section 789GZB of the Fair Work Act 2009;
National School Resourcing Board – Annual review of state and territory compliance with section 22A of the Australian Education Act 2013 – 2018 funding year – Section 128(10)(b) of the Australian Education Act 2013;
National School Resourcing Board – Review of needs-based funding requirements – Final report - December 2019 – Section 128(10)(b) of the Australian Education Act 2013; and
National School Resourcing Board – Review of the loading for students with disability: Final report - December 2019 – Section 128(10)(b) of the Australian Education Act 2013.
Timeliness
Presentation to ministers
1.16
Section 46 of the PGPA Act requires Commonwealth entities, both corporate and non-corporate, to prepare annual reports and for such reports to be provided to the responsible Minister by the fifteenth day of the fourth month after the end of the reporting period for the entity. Certain agencies, however, may have a specific date stipulated by their enabling legislation.
1.17
For Commonwealth companies, the deadline for providing the report to the responsible Minister is stipulated under section 97 of the PGPA Act, namely four months after the end of the company's reporting period.
1.18
With the exception of Coal LSL, all annual reports requiring examination by the committee were presented to the relevant Ministers in a timely manner.
1.19
Coal LSL applied to the Minister for an extension in providing their annual report which was approved in the Senate on 6 October 2020. Their annual report was subsequently presented out of sitting on 26 November 2020 and has been included in this report.
Tabling in Parliament
1.20
According to the Finance RMG's, entities are expected to table their annual reports prior to Senate estimates hearings held in October. The committee encourages Commonwealth entities to table their annual reports prior to those hearings in order to assist the committee's scrutiny of estimates.
1.21
Appendix 1 includes information regarding the date each annual report was:
submitted to the responsible minister;
first sighted by the responsible minister; and
tabled (or presented) in both Houses of Parliament.
1.22
The committee thanks all portfolio entities for submitting their annual reports to the responsible minister by 15 October 2020 or otherwise seeking an extension.
Senate debate
1.23
Senate Standing Order 25(20)(d) requires the committee to take into account any relevant remarks about the reports made in debate in the Senate. The committee notes that the annual reports examined in this report have not been the subject of comments or debates in the Senate.
Bodies not presenting annual reports to the Senate
1.24
The committee is required to report to the Senate on whether there are any bodies which should have presented an annual report to the Senate but did not. The committee is satisfied that all bodies have presented their annual reports in a timely manner or were otherwise granted an extension.
2020-21 reporting requirements for non-Corporate Commonwealth entities
1.25
The Public Governance, Performance and Accountability Amendment (Consultancy and Non-Consultancy Contract Expenditure Reporting) Rules 2020 (Amendment Rules) were registered on the Federal Register of Legislation on 3 June 2020. The Amendment Rules implement Recommendation 38 of the Independent Review into the operation of the PGPA Act and Rule.
1.26
The Amendment Rules require non-corporate Commonwealth entities to disclose in annual reports the number of, and expenditure on, consultancy and non-consultancy contracts and additional information about those organisations receiving that expenditure.
1.27
Non-corporate Commonwealth entities are reminded that these new disclosure requirements apply for the 2020-21 reporting period.
Method of assessment and general comments on reports
1.28
Senate Standing Order 25(20)(a) requires the committee to examine the annual reports referred to it to determine whether they are timely and 'apparently satisfactory'. In making this assessment, the committee considers whether the reports comply with relevant requirements.
1.29
All reports presented to the committee by departments and agencies met the total requirements specified in the relevant PGPA Rule. The committee considers all reports to be 'apparently satisfactory'. The committee does suggest though, that the List of Requirements within the annual report includes page numbers for increased accessibility.
1.30
The following chapter examines selected annual reports in further detail.