2.1
This chapter examines selected annual reports in greater detail in accordance with standing orders. The committee has selected the annual reports of the Director of National Parks, the Australian National Maritime Museum, and the National Film and Sound Archive of Australia for examination. The following summaries draw attention to significant matters relating to the operations and performance of these bodies during the year under review.
Environment portfolio
Director of National Parks
2.2
The Director of National Parks’ (DNP) annual report for 2019-20 was presented to the Senate out-of-session on 30 October 2020 and subsequently tabled in the House of Representatives and the Senate on 9 November.
2.3
The DNP is a corporate Commonwealth entity and has a single director, the person appointed to the office named the Director of National Parks. The DNP is responsible for the conservation and management of the Australian Government’s terrestrial and marine protected area estates established under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).
2.4
Under the EPBC Act, the DNP’s functions include:
administer, manage and control Commonwealth reserves and conservation zones;
protect, conserve and manage biodiversity and heritage in Commonwealth reserves and conservation zones;
contribute to the protection, conservation and management of biodiversity and heritage in areas outside Commonwealth reserves and conservation zones;
cooperate with any country in matters relating to the establishment and management of national parks and nature reserves in that country; and
provide, and assist in the provision of, training in knowledge and skills relevant to the establishment and management of national parks and nature reserves.
2.5
As at 30 June 2020, the DNP is responsible for seven terrestrial parks and gardens and 59 marine parks. Three of the land-based parks are wholly or partly leased to the DNP by the Aboriginal Owners and are jointly managed by the Director and Board of Management and are made available by their Traditional Owners to visitors and tour operators. The majority of Board members are Indigenous persons nominated by the Traditional Owners. There are also advisory committees who provide advice to the Director on the management of other reserves. These boards and committees play crucial roles in determining the policies and priorities for the management of each protected area.
2.6
Dr James Findlay served as the appointed Director from 26 November 2018 until his departure on 25 August 2020 when Mr James Larsen took over as the Acting Director. In the Director’s message, Mr Larsen thanked Dr Findlay for his contributions and highlighted some of the challenges faced by the DNP over the 2019-20 reporting period and its response:
This year has been one of resilience and adaptability. Over the summer, severe weather events including the black summer bushfires and hailstorms, forced the closure of the Australian National Botanic Gardens and Booderee National Park. Additionally, impacts from the ongoing COVID-19 pandemic will continue to have far reaching impacts on the way the agency operates. In response, we prioritized the safety of the public, Indigenous and local communities and staff, through further closures of our places, and by transitioning to working from home arrangements for our staff.
Performance reporting
2.7
The DNP reports on its annual performance in reflection of its Portfolio Budget Statements 2019-20 (PBS) (which appears in the Department of Agriculture, Water and the Environment’s PBS) and its Corporate Plan 2019-2023. The DNP’s performance is measured against three purposes:
Resilient places and ecosystems: to protect and conserve the natural and cultural values of Commonwealth reserves
Criterion 1: Enhance level of active engagement of Australian Marine Parks and engagement of users and stakeholders
Criterion 2: Populations of threatened and significant species are increasing
Criterion 3: Populations of priority invasive species are reduced
Criterion 4: Increase the knowledge base for long-term adaptive management of the marine reserves
Multiple benefits to Traditional Owners and local communities: to support the aspirations of Traditional Owners in managing their land and sea country
Criterion: Increase in numbers of Indigenous staff and/or contractors directly or indirectly providing park services
Amazing destinations: to offer world class natural and cultural experiences, enhancing Australia’s visitor economy
Criterion: Maintain or improve the level of visitor satisfaction and number of visitors.
2.8
In relation to ‘Resilient places and ecosystems,’ the targets were achieved for criterion 1 which focused on engagement of Australian Marine Parks. All six Marine Park Networks had a management plan in effect and all six Marine Park Advisory Committees met twice throughout the year. On criterion 2: increase in populations of threatened and significant species, the target was not achieved. The report cited issues such as COVID-19, changes in monitoring status and changes in population trends as what lead to this result. A detailed explanation can be found in the annual report. On criterion 3: reduction in populations of priority invasive species, the target was achieved. The proportion of priority invasive species with ‘decreasing or stable’ population trends has increased to 24 per cent in 2019-20 when compared to 2018-19 and the proportion of invasive species with ‘increasing’ populations trends has reduced from 20 per cent to 16 per cent. Finally, on criterion 4: increase marine reserves long-term monitoring sites, the target was achieved with one new site established at Tasman Fracture Marine Park, Tasmania.
2.9
In relation to ‘Multiple benefits to Traditional Owners and local communities,’ the criterion to increase in numbers of Indigenous staff had two targets. The first target to increase the numbers of Indigenous staff was not achieved. The number of employees who identified as Aboriginal or Torres Strait Islander decreased by 18 from the last reporting period, totalling 197 employees in 2019-20. The closure of the Uluru climb in October 2019, the closure of the Booderee National Park between late 2019 and early 2020 due to bushfires, and the closure of all three jointly managed Parks due to the COVID-19 pandemic were cited as the reason for the decrease in the numbers of Indigenous staff. The second target to achieve an increase in value of services provided by Indigenous providers was achieved with a 29 per cent ($0.83 million) increase from 2018-19.
2.10
In relation to ‘Amazing destinations,’ the criterion had two targets. The first target to achieve a five per cent increase in visitor numbers was not achieved with 990 993 visitors in 2019-20 as compared with 1 329 185 visitors in 2018-19 which reflects a decrease of 25 per cent. The DNP explained that ‘every terrestrial park and garden experienced a decline in visitor numbers due to impacts of bushfires, poor air quality, hailstorms, and the COVID-19 pandemic, all of which resulted in closures restricting visitor entry.’ The second target to maintain or improve levels of visitor satisfaction was achieved with 95 per cent of visitors reporting being satisfied or very satisfied with their visit in 2019-20, compared to 93 per cent of visitors in 2018-19.
2.11
The PGPA Rule requires that the Portfolio Audit Committee be confident that the information provided is generally accurate and based on sound processes. On 14 September 2020, the Committee endorsed the DNP’s draft Annual Performance Statement as appropriate performance reporting under the PGPA Act and Rule.
2.12
On 21 June 2019, the Australian National Audit Office (ANAO) published a report on the Management of Commonwealth National Parks. The objective of the audit was to assess the effectiveness of the Director’s management of the six terrestrial Commonwealth national parks. The ANAO provided seven recommendations, all of which the DNP agreed to. Of particular note were two recommendations relating to performance measurement, monitoring and reporting:
Recommendation 6: The Director of National Parks improve the relevance, reliability and completeness of performance measures presented in its corporate plan by:
ensuring performance measures identify beneficiaries and signal the impacts of activities;
specifying targets and baselines, data sources and rigorous methodologies against each performance criterion; and
monitoring and reporting on its performance for all significant aspects of its purposes, including conservation of cultural heritage values.
Recommendation 7: For improved transparency of the Director’s impact in managing the national parks, the Director of National Parks should publish the technical audits of management plans.
In June 2019, the Australian National Audit Office (ANAO) tabled a report on the Director of National Parks Performance Framework, finding the framework lacked in relevance, reliability and completeness. As a result, a new Performance Framework will be implemented from 1 July 2020. This Annual Report provides the last update of the audited Performance Framework.
2.14
The committee looks forward to the results of the implementation of the DNP’s new Performance Framework in its 2020-21 annual report.
Financial reporting
2.15
The Acting Director and Chief Financial Officer stated:
In our opinion, the attached financial statements for the year ended 30 June 2020 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.
In our opinion, at the date of this statement, there are reasonable grounds to believe that the Director of National Parks will be able to pay its debts as and when they fall due.
2.16
The DNP reported a total comprehensive income loss of $10.3 million for the year ended 30 June 2020. The original budget expected a loss of $5.5 million. Explanations were provided for any variances between the original budget and actual outcome and related to higher than expected expenditure with suppliers and additional funding from the Department of Agriculture, Water and the Environment.
2.17
The DNP noted that it is a not-for-profit entity and its continued existence in its present form and with its present programs ‘is dependent on Government policy and continuing funding by Parliament for the Director of National Parks’ administration and programs.’
2.18
The impacts of the 2020 summer bushfires and COVID-19 pandemic on the DNP’s financial position as at 30 June 2020, as well as looking ahead to the 2020-21 financial year, were covered in the notes to the financial statements:
COVID-19 has impacted on the activities of the Director of National Parks over the fourth quarter of 2019-20, leading to a decline in revenue due to the closure of international borders and enforced restrictions. It is anticipated this decline will continue into the next financial year.
Also, due to the severity of these events, the Australian Government announced several stimulus packages including financial assistance to businesses and families of those affected. The financial packages announced by the government that involved the Director of National Parks were in response to the extraordinary impact of the above events and amounted to over $11.959 million from 2019-20 to 2020-21. Payments for measures commencing in 2019-20 were made in quarter four. Payments will continue into the new financial year where applicable. The 2019-20 significant payments made by the department related to:
Waiving of entry fees to commonwealth operated national parks:
$4.203 million; and
Tour operator licence and permit operator package: $0.386 million.
2.19
The Australian National Audit Office’s (ANAO) independent report found that the DNP’s financial statements for the year ended 30 June 2020 were compliant and presented fairly its financial position, financial performance, and cash flows.
2.20
The committee considers that the DNP has met its reporting obligations as a corporate Commonwealth entity under the PGPA Act and PGPA Rule, finding its annual report for 2019-20 to be 'apparently satisfactory'.
Communications portfolio
Australian National Maritime Museum of Australia
2.21
The Australian National Maritime Museum of Australia’s (ANMM) annual report for 2019-20 was presented to the Senate out of session on 30 October 2020 and subsequently tabled in the House of Representatives and the Senate on 9 November.
2.22
The ANMM is a corporate Commonwealth entity established by the Australian National Maritime Museum Act 1990. Its mission is to lead the promotion and conservation of Australia’s maritime heritage and culture through:
developing and sharing our collections, knowledge and expertise;
motivating learning through research, educational programs and products;
supporting community participation to retain our maritime heritage; and
exploring contemporary issues.
2.23
In the Director’s report, Mr Kevin Sumption outlined some of the challenges and highlights experienced by ANMM in the 2019-20 financial year, stating:
This was truly the best and worst of years, as we observed extraordinarily strong results in the first three quarters, and were on track to deliver the best year on record, only to be somewhat thwarted by the COVID-19 pandemic.
2.24
Mr Sumption reported some of the challenges faced by ANMM, including:
The closure of the museum to the general public from 24 March to 22 June 2020 on advice from government due to the COVID-19 pandemic and the impact this had on revenue, visitation and face-to-face learning;
For public safety during the pandemic, the museum was impacted by the cancellation events such as the VIVID festival and closure of institutions which host the museum’s touring exhibitions; and
The disruption to the Encounters 2020 program including being unable to proceed with the Endeavour replica’s circumnavigation of Australia and associated shore-based activities as well as the search for Cook’s Endeavour in Newport, Rhode Island, USA.
2.25
And some of the achievements, including:
Reporting that total visitor engagement in 2019-20, excluding Encounters 2020, was on target at 4.1 million which is an increase of 800 000 from last year;
The success of the museum’s diverse exhibitions, including Sea Monsters—Prehistoric ocean predators, Wildlife Photographer of the Year, and Bligh: Hero or Villain?;
The highlight of the offsite program was the voyage of the Endeavour replica to New Zealand from 12 September to 21 December 2019 which recorded
19 427 visitors at six ports across New Zealand;
Finalisation of the national migration story publication We are many—Stories of Australia’s migrants;
Expansion of the museum’s collection of Indigenous maritime heritage with 34 new acquisitions; and
The development of virtual offerings, including virtual learning, to cater to an increased online audience, for example: the online collection, two educational games, and a partnership with ABC Education to provide the ‘Virtual Endeavour’ VR tour.
Performance reporting
2.26
The ANMM’s programs are guided by six priorities, which are outlined in its Corporate Plan for 2019-23, including: (1) sharing the national maritime story, (2) compelling experiences, (3) supporting reconciliation, (4) a trusted voice and custodian, (5) a strong financial future, and (6) people first.
2.27
The ANMM assess these priorities with performance criterion as laid out in their 2019-20 Portfolio Budget Statements and 2019-23 Corporate Plan. Usefully, a breakdown of the criteria, results, methodology and analysis were provided in great detail which also included results from previous years. The ANMM stated ‘these annual performance statements are based on properly maintained records, accurately reflect the performance of the entity, and comply with [subsection] 39(2) of the PGPA Act.’
2.28
‘Priority 1: sharing the national maritime story’ included three criteria—engagement; Encounters 2020; and collection digitation and online accessibility—all of which were achieved. Firstly, the total engagement target was met, though whilst total visitation was under the target, student participation and online participation exceeded expectations. ANMM stated ‘despite the impact of the COVID-19 pandemic on total visitation, this was still a strong year for visitation and the results exceeded total visitation for every previous year except 2017-18 (1.87M) and 2018-19 (2.1M).’ Secondly, the Encounters 2020 engagement exceeded the target of 1 839 400 with 3 439 730 people engaged despite many elements of the program unable to go ahead due to the pandemic. The pivot to online engagement and media reporting assisted the results significantly. Lastly, the targets for collection digitisation and online accessibility were met in the 2019-20 period.
2.29
‘Priority 2: compelling experiences’ included three criteria—visitation; exhibitions; and visitor satisfaction—all of which were achieved. The ANMM stated ‘Onsite visitation was ahead of target at 916 579 and would most likely have broken records but for COVID-19.’ On the other hand, international visitation was 24 per cent behind target and the number of people able to participate in public programs was significantly below target, both due to the impacts of the pandemic with travel restrictions and the cancellation of events. Six exhibitions were delivered, ahead of the target of four. Visitor satisfaction was at 94 per cent, above the target of 90 per cent.
2.30
‘Priority 3: supporting reconciliation’ included three criteria—expenditure on major Indigenous acquisitions; percentage of staff and volunteers who have completed cultural awareness training; and Aboriginal and Torres Strait Islander Advisory Committee satisfaction with progress—all of which were achieved. ANMM reported that 100 per cent of staff and volunteers had received cultural awareness training. The ANMM is in its second year of its Reconciliation Action Plan and with ‘another year to go, 68% of the deliverables have been completed and 22% are in progress.’
2.31
‘Priority 4: a trusted voice and custodian’ included three criteria—learning; partnerships; and National Maritime Collection—all of which were achieved. Whilst the number of educational institutions participating in organised school learning programs onsite was significantly below target (287 of a target of 650), the target number of students participating in school programs (onsite, offsite and online) was significantly exceeded (a target of 172 013 with 379 543 students participating). The number of formal partnerships with educational and research institutions exceeded the target of 10 with 56. The number of accessions to the National Maritime Collection totalled 711 objects against a target of 100 and the number of new acquisitions was 120 against a target of 100 in the period 2019-20.
2.32
‘Priority 5: a strong financial future’ is measured on the percentage of total income that is self-generated (excluding Encounters 2020 revenue). The target of 53 per cent was not met with 42.8 per cent achieved in the 2019-20 period. ANMM explained:
Self-generated revenue was $19.7M, which is behind target by 16.4% ($3.9M). The majority of self-generated revenue lines were severely affected by the closure of the museum as result of COVID-19 during quarter 4…
The museum received insurance proceeds of $1.2M relating to the
COVID-19 insurable event, which partially offset some of the commercial revenue losses.
2.33
Mr Sumption, outlined expectations for the period 2020-21 and noted a number of measures planned to assist the ANMM’s financial recovery:
It is deeply disappointing to report that our pattern of year-on-year growth in self-generated revenue was not realised this year due to COVID-19… and this is expected to continue in 2020-21. To progress a strong financial future, we began various ICT (Information, Communications and Technology) infrastructure upgrade projects, achieved our savings target from sustainability investments, began a trial of third-party licensing of the museum’s collection, and developed a VIP management strategy and a new fundraising strategy.
2.34
‘Priority 6: people first’ is measured on museum staff satisfaction as reported in the Australian Public Service Commission’s State of the Service Survey. However, the survey was delayed in the period 2019-20 due to COVID-19 and therefore the ANMM was unable to report on this priority.
2.35
A number of corrections to the 2018-19 results in the Annual Performance Statement published in the ANMM’s Annual Report for 2018-19 were provided, including:
On page 26, consequential change to total visitation: omit 2 107 611 and insert 2 108 701;
On page 26, consequential change to total visitor engagement: omit
3 286 598 and insert 3 287 768;
On page 28, visitors to the museum (offsite): omit 1 089 592 and insert
1 090 682; and
On page 33, under ‘International visitors’, omit ‘behind’ and insert ‘ahead of’ in the sentence: ‘The museum’s ‘China-ready’ tourism initiatives again contributed to China being the highest source of international visitors for the fourth year running, behind the United States of America, United Kingdom and New Zealand.’
Financial reporting
2.36
The Chairman, Chief Executive Officer and Chief Financial Officer stated:
In our opinion, the attached financial statements for the year ended 30 June 2020 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.
In our opinion, at the date of this statement, there are reasonable grounds to believe that the Australian National Maritime Museum (the museum) will be able to pay its debts as and when they fall due.
2.37
The ANMM reported a total comprehensive income deficit of $2.1 million for the year ended 30 June 2020. Explanations were provided for any variances between the original budget and actual outcome.
2.38
The Chairman of ANMM, Mr Mullen, provided a breakdown of the ANMM’s financial position:
In 2019-20, total expenses were $43M, which was 9.5% lower than budgeted, primarily due to the suspension of the Encounters 2020 program, including the circumnavigation of Australia by the Endeavour replica, and savings measures implemented in the final quarter of the year to offset the lost revenue impacts associated with COVID-19. Total revenue was $40.1M, of which $19.7M (42.8% excluding one-offs) was self-generated. Excluding the Collection Development Acquisition Budget (CDAB) depreciation-related loss that the museum is able to incur, approval for a forecast operating loss of $1.324M was sought despite significant cuts to discretionary expenditure and ambition. Subsequent to this application being made, the museum’s final result improved to a profit of $900K (excluding CDAB depreciation) due to a successful insurance claim being made by the museum for lost revenue impacts associated with COVID-19. Notably, this position was also able to be reached without any reductions in APS employees.
2.39
Mr Mullen went on to explain:
…we are doing our very best to navigate these challenging times without turning to government for additional support, and despite this still are being able to maintain the museum as one of Australia’s premier cultural institutions. However, I must advise that we estimate that due to
COVID-19, total own-source revenue in 2020-21 will decrease by $10M (or around 45%) from previous years. This downward revision comes on top of the already challenging revenue environment (such as reductions in operating grants, reduced interest returns and increased depreciation expenditure). To manage this situation, we will need to implement further significant expenditure cuts in discretionary areas and anticipate seeking approval to incur an operating loss next year, covered by reserves, so as to balance our budget. While I am confident the museum will come out of the crisis leaner and smaller, but still healthy and performing, we are increasingly reliant upon the expertise and support of our Councillors, director, museum staff, volunteers, Members and donors.
2.40
The ANAO’s independent report found that the ANMM’s financial statements for the year ended 30 June 2020 were compliant and presented fairly its financial position, financial performance, and cash flows.
2.41
The committee commends the ANMM for the provision of a significant amount of information in relation to both performance and financial reporting, including detailed explanations for any shortfalls in outcomes demonstrating commitment to accountability and transparency.
2.42
The committee considers that ANMM has met its reporting obligations as a corporate Commonwealth entity under the PGPA Act and PGPA Rule, noting its annual report for 2019-20 to be 'apparently satisfactory'.
National Film and Sound Archive of Australia
2.43
The National Film and Sound Archive of Australia’s (NFSA) annual report for
2019-20 was tabled in the House of Representatives and the Senate on
11 November 2020.
2.44
The NFSA is a corporate Commonwealth entity established by the National Film and Sound Archive of Australia Act 2008 to collect, preserve and share Australia’s national audiovisual collection and to make it available to audiences worldwide for enjoyment, learning, insight and creativity.
2.45
In the Chair’s report, Ms Gabrielle Trainor raised a number of noteworthy achievements, including:
Broadening the NFSA’s remit to include video games in the national audiovisual collection with six Australian games having been preserved thus far;
Online engagement was significantly expanded with new online exhibitions, articles and interactive screenings, including events such as Archie Roach: His Story in Song;
Continued work on digitisation to preserve materials from degradation and technological obsolescence; and
Ongoing efforts to preserve Aboriginal and Torres Strait Islander culturally significant audiovisual materials, including projects with Strehlow Research Centre and Pitjantjatjara Yankunytjatjara Media.
2.46
In the Chief Executive Officer’s report, Mr Jan Müller highlighted the discovery of the only colour footage of Sir Don Bradman playing cricket, as well as the last known footage of the Tasmanian Tiger by the NFSA’s curators and researchers. He also spoke to the transformation of the NFSA over the period:
This year has shown us to be a resilient and flexible organisation, as we’ve restructured to prepare for the NFSA of the future. Through the difficulties of the COVID-19 pandemic we’ve embraced online engagement like never before…
With no change in our annual government appropriation, in 2019 we reoriented the organisation to position the NFSA as:
Supportive of digitisation and engagement
A collaborative and project-based workforce
Efficient and sustainable.
A new organisational structure came into effect on 1 November 2019 and included a change to the make-up and numbers of our staff. During this period of change there was minimal disruption for our stakeholders, and we remained productive – in fact we delivered more than ever before.
Performance reporting
2.47
The NFSA has five strategic priorities designed to deliver its purpose:
Priority 1: Digitise the national audiovisual collection
Outcome: By 2025 we will digitise over 40,000 audiovisual collection items every year.
Priority 2: Establish the National Centre for Excellence in Audiovisual Heritage
Outcome: By 2025 we will be recognised in the Australian galleries, libraries, archives and museums sector as the National Centre for Excellence in Audiovisual Heritage.
Priority 3: Build our national profile
Outcome: By 2025 we will be recognised as Australia’s national audiovisual archive, a leader in our field, a source of vibrant, relevant and exciting engagement and the first point of call for audiovisual content.
Priority 4: Collect, preserve and share multimedia and new media
Outcome: By 2025 we will be the national leader in collecting, preserving and sharing multimedia and new media content.
Priority 5: Redefine our physical presence
Outcome: By 2025 we will have a strong physical presence which is fit for purpose, targeted, future-proof and nationwide.
2.48
In its annual performance statements, the NFSA reports its performance against these strategic priorities. Each strategic priority is reviewed by performance criteria, an annual target, achievements and a discussion of results. The NFSA stated its performance statements ‘accurately presents the entity’s performance in accordance with subsection 39(2) of the PGPA Act.’
2.49
The NFSA achieved all of its targets for 2019-20 on strategic priority 1 and 5. For strategic priority 2, two targets were ‘achieved’, two ‘partially achieved’ and one ‘not achieved’. Against the target of 200 participants in the NFSA’s Digital Directions conference, 160 participated with competition from similar events in the same time period cited as the reason for the lower than expected attendance. The target to develop an Indigenous Strategy on time and within budget was partially achieved. No explanation was provided for the result, however it was noted that the Strategy would be published in November 2020. The target to develop a detailed business case for the National Centre for Excellence in Audiovisual Heritage on time and within budget was not achieved. However, the NFSA noted that with the funding announced by the Minister in June 2020, it would be able to establish the centre with the project commencing in the second half of 2020.
2.50
For strategic priority 3, eight targets were ‘achieved’ and four were ‘partially achieved’. Both the target of 100 000 visits to the organisation and 12 000 students participating in education programs fell short with 97 523 visits and
7 760 students. A shortfall was also recorded for the target of 40 000 visitors to exhibitions with 32 525 visitors. Each of these targets was impacted by the COVID-19 pandemic which resulted in the temporary closure of the NFSA, as well as students being unable to travel to the ACT to participate in the NFSA’s programs from March to June 2020. The 2019-20 bushfires also had an impact with the subsequent smoke hazard experienced in Canberra, resulting in a
25-30 per cent downturn in visitation across what is normally a busy summer holiday period. Finally, out of a target of 11 million Facebook users,
7 million users were reached, however no explanation was provided for the shortfall.
2.51
For strategic priority 4, four were ‘achieved’ and one was ‘partially achieved’. The acquisitions target was partially achieved with 37 747 of the targeted
60 000 acquisitions secured in the reporting period. The NFSA explained the shortfall as being caused by the ‘extended bushfire season and the COVID-19 pandemic.’
2.52
The committee encourages that explanations be provided for all missed targets in future reports.
Financial reporting
2.53
The Chair, Chief Executive Officer and Chief Financial Officer stated:
In our opinion, the attached financial statements for the year ended 30 June 2020 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.
In our opinion, at the date of this statement, there are reasonable grounds to believe that the National Film and Sound Archive of Australia (NFSA) will be able to pay its debts as and when they fall due.
2.54
The NFSA reported a total comprehensive surplus of $8,593,000 for the year ended 30 June 2020. It was noted that ‘the surplus of $8.6 million is
$17.3 million higher than the original budget deficit amount of $8.7 million.’ This was the original budget reported in the 2019-20 Portfolio Budget Statements published in May 2019. The following explanations were provided for the budget variances:
Employee benefits were $1 million lower than the original budget due to capitalisation of salaries for those employees directly engaged in creating digital collection items;
Supplier expenses were $1.6 million lower than original budget due to a reduction in activities following this year's severe weather events and COVID-19 pandemic;
Depreciation and amortisation was $6.9 million lower than the original budget due to a change in depreciation policy for collection items;
Other revenue was $1.5 million higher than the original budget due to grants received from the Portfolio Department for touring and outreach and the stonework modernisation capital works;
With regard to donations of gifted collection, the value is difficult to forecast as it is dependent on the nature and quantum of the items received. A notional $3.5 million was included in the original budget, while the actual value of $2.8 million, in accordance with the valuation policy, was determined as the items were accessioned into the collection; and
Revenue from Government was $1.2 million higher than the original budget to due to additional funding received in June 2020.
2.55
The NFSA was allocated additional funding in the 2019-20 financial year. In April 2020, the Government provided the NFSA with $1.215 million additional funding to address the impacts of COVID-19 on its operations. The committee notes that there appears to be a discrepancy in the receipt date of the $1.2 million, with both April and June listed on different pages in the report. The committee encourages the NFSA to include a clarification or correction in the 2020-21 annual report.
2.56
Further funding was announced by the Minister on the last day of the 2019-20 financial year with $5.5 million to be allocated over four years to assist the NFSA to meet its Digitisation Strategy 2018-2025 to save Australia’s audiovisual heritage from deterioration through digitisation.
2.57
The ANAO’s independent report found that the NFSA’s financial statements for the year ended 30 June 2020 were compliant and presented fairly its financial position, financial performance, and cash flows.
Compliance index
2.58
As a corporate Commonwealth entity, NFSA is required to prepare its annual report in accordance with the legislative requirements of the PGPA Rule. Such entities are required to include the table set out in the PGPA Rule, however NFSA provided a modified version of the compliance index. Despite this, all the required information was able to be located in the annual report.
2.59
References throughout the report to the relevant sections of the PGPA Act, PGPA Rule and other applicable legislation were useful flags for readers and made the report more accessible. Overall, the report was well presented.
2.60
The committee views the NFSA as having met its reporting obligations as a corporate Commonwealth entity under the PGPA Act and PGPA Rule and considers its annual report for 2019-20 to be 'apparently satisfactory'.