Chapter 1 - Annual reports of departments
Department of Defence
1.1
The Defence Annual Report 2003–2004 was presented to the President of
the Senate on 22 November 2004 and tabled in the Senate on 29 November 2004.
1.2
Mr Ric Smith, Secretary of the Department of Defence, and General Peter Cosgrove,
Chief of the Defence Force, in their joint review of the year, noted that ‘Australia's
strategic environment continued to present complex challenges in 2003–04’:
Defence remained focused on contributing to global and regional
efforts to combat terrorism, and to fostering regional stability. The post
September 11 demands on Defence continued to broaden, with increasingly
close involvement in whole–of–government national security responses. We have
responded well to expanded Government requirements, and it has been a rewarding
year for Defence in terms of the Australian Defence Force's (ADF) performance
on operations.
...
In the area of Defence management,
much has been achieved in implementing the Kinnaird review's recommendations
for improving Defence's performance in capability acquisition and procurement
and for further reform of the Defence Materiel Organisation. We have continued
to work at resolving challenging financial management matters and improving
internal coordination. The groundwork for enhanced performance has been laid,
but more needs to be done to improve asset and liability accounting. [1]
1.3
On budget matters in particular, the Secretary and CDF, in their review,
stated that ‘budget management practices continued the improvement of the last
few years...’:
New techniques such as our Portfolio Budgeting system and
proposed Force Element Product Costing model attracted interest from other
defence ministries and Commonwealth agencies.
In relation to certain accrual entries and provisions and their
resultant impact, the Secretary could not conclude on the financial statements
as a whole. The qualifications identified in previous years remain on the
statements for 2003–2004, and the scope of some of them has increased. In particular,
work by Defence's Management Audit Branch and the Australian National Audit
Office (ANAO) identified shortcomings in stock recording policies and
practices.
...
This outcome is disappointing, as
we had increased significantly the resources committed to trying to achieve
compliance with accrual accounting standards and the introduction of the new
accounting standards... These efforts will be strengthened in 2004–05.[2]
1.4
The Secretary and CDF concluded that in this matter Defence and ANAO
have accepted that while some of the problems might be quickly solved, others
are more deeply entrenched and will take some years to resolve. Defence
continues to work to reach beyond the Public Service, cash–based arrangements
of the past and to attain the corporate–like, accrual–based international
standards required of the organisation. They emphasised that cash and budget
management policy and practice remain sound, and Defence operations are not
evidently affected by the problems.[3]
1.5
The Committee commends the frank and even–handed appraisal of
shortcomings in stock recording policies and practices and looks forward to
future progress reports on the ongoing improvements flagged by the Defence
Organisation.
1.6
This annual report captures well the complexities of the Department. It
presents the activities of the Department in a clear, concise manner, which
helps the reader to locate any issue or subject of interest with a minimum of
effort.
1.7
The Committee finds the Defence Annual Report to be both an informative
and a well produced account of the Department’s activities over the past year
and that it meets all the requirements for departmental annual reports.
Department of Foreign Affairs
1.8
The Department of Foreign Affairs and Trade Annual Report 2003–2004 was presented
to the President on 6 October 2004 and tabled in the Senate on 16 November 2004.
1.9
In the Secretary’s review, Dr Ashton Calvert stated that during the year
in review the challenging international environment and demanding policy agenda
meant that the Department had to be creative and dynamic in the way it worked:
The response of the Department of Foreign Affairs and Trade
across the breadth of its activities—ranging from new regional counter–terrorism
arrangements to the active pursuit of market openings—has been prompt,
carefully targeted to Australian interests, and highly professional.
...
Close liaison and coordination with other Australian Government
departments and agencies and Australian industry in pursuit of our priorities
was an enduring theme in many of the department's key activities in 2003–04. By
working with others we ensured that Australia's interests overseas were
promoted in an effective and coherent manner. As a result, we achieved some
very positive outcomes which included, but were not limited to:
our strong policy coordination and
advocacy in Iraq, highlighted by the performance of our mission in Baghdad in
the most challenging circumstances;
our vigorous role in building
stronger counter–terrorism cooperation in the region, including through our substantial
contribution to the successful regional ministerial meeting in Bali;
our role in driving an ambitious trade agenda, featuring
our leadership of successful negotiations for tree trade agreements (FTAs) with
Australia's most important economic partner, the United States, and with Thailand.[4]
1.10
The Secretary also stated that the Department will continue to focus
resources on providing as safe a work environment as possible for its staff.
The Department will work to maintain an appropriate balance between furthering
Australian interests and providing services at high–risk locations on the one
hand, and ensuring the security of its personnel on those posts on the other.
To this end, the Department will undertake an extensive program of physical
security projects at posts, including further relocations where appropriate.[5]
1.11
Once again, for ease of reporting, the report of the Department of
Foreign Affairs and Trade (DFAT) has been divided into two volumes. Volume 1,
which is examined in this chapter deals with DFAT proper, while volume 2
reports on the Australian Agency for International Development (AusAID).
1.12
The Committee congratulates DFAT on the presentation of this report
which continues to meet the high standards attained by the Department in the
preparation of its previous annual reports. The Committee particularly
appreciated the inclusion of an extensive index and table of contents in the
report which assisted considerably in the location of specific information.
This annual report captures well the complexities of the Department. It
presents the activities of the Department in a clear, concise manner allowing
the reader to locate almost all issues or subjects of interest with a minimum
of effort.
1.13
The Committee accepts that the report has been prepared in accordance
with the guidelines and finds that DFAT has met the reporting requirements for
a departmental report.
Department of Veterans’ Affairs
1.14
The Department of Veterans’ Affairs Annual Report 2003–04 was presented
to the President of the Senate on 29 October 2004, and tabled in the Senate on 16 November 2004.
1.15
Dr Neil Johnston, Secretary of the Department of Veterans’ Affairs,
stated in the President/Chair/Secretary’s overview, that during the
period under review, the Department provided assistance and backup to the Clarke
Committee’s Review of Veterans’ Entitlements. After a process of consultation
with ex–service organisations (ESOs), the Department prepared detailed
submissions to Government on policy options arising from the recommendations of
the Clarke Report.[6]
The report made 109 recommendations, drawing on more that 3,000 submissions
from veteran organisations, individuals and interested parties:[7]
Following the Government's adoption of various recommendations
within the report, the Department—again in close consultation with
ESOs—arranged for the progressive implementation of these initiatives.
Implementation required the drafting of detailed legislation. The development
of new administrative procedures and phased implementation will be completed by
early 2005.[8]
1.16
As noted in DVA's report last year, the draft Military Rehabilitation
and Compensation Bill was released in June 2003. This year the Secretary was
pleased to report that:
After five years of sustained and complex effort, the Military
Rehabilitation and Compensation Act 2004 (MCRA) was given Royal Assent on 27 April 2004. The new legislation brings together the best elements of the Veterans'
Entitlement Act (VEA) and the Military Compensation and Rehabilitation Scheme
to create a single scheme for all Australian Defence Force (ADF) members who
are injured or who lose their lives during future service.
...
The new scheme has resulted in the need for the provision of
information and training to a diverse range of stakeholders, including the ADF
and their families, our staff and various ex–service and defence community
organisations. DVA continues to deliver an information program that provides
all stakeholders with timely, appropriate and accessible information about the
new scheme.[9]
1.17
As observed in last year’s report on annual reports, the Committee notes
the Department’s continued investment in information technology resources. The
Secretary explained that:
The implementation of the transition of DVA's computing
infrastructure to the MetaFrame environment has been a significant undertaking
during the last two years involving a large number of staff... It is pleasing
to know that everyone involved in the process was totally committed to
achieving the best outcome for DVA.
...
The Department will need to continue
with its IT development program to maximise the benefits that IT can provide
for efficient and best–practice service delivery. Development focus is now
being directed to a more integrated approach to IT support across business
areas and enhanced capability for electronic service delivery.[10]
1.18
The Committee commends the Department on producing a clear, concise and
legible list of tables and appendices detailing the Department’s financial
position, assets and commitments.
1.19
In conclusion, the Committee finds that the Department of Veterans’
Affairs has once again submitted a comprehensive and well designed annual
report that meets all the reporting requirements for a Commonwealth Department.
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