Preface
Introduction
- The committee is responsible for examining annual
reports of departments and agencies within two portfolios: Defence (including
the Department of Veterans’ Affairs), and Foreign Affairs and Trade.[1]
- Under Standing Order 25(21), the Committee is
required to report on annual reports tabled by 31 October each year by the
tenth sitting day of the following year, and on reports tabled by 30 April each
year by the tenth sitting day after 30 June of that year.
- The standing
order states:
Annual report of departments and agencies shall stand referred
to the legislation committees in accordance with an allocation of departments
and agencies in a resolution of the Senate. Each committee shall:
- examine each annual report referred to it and report to the Senate
whether the report is apparently satisfactory;
- 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;
- investigate and report to the Senate on any lateness in the presentation
of annual reports;
- in considering an annual report, take into account any relevant remarks
about the report made in debate in the Senate;
- if the committee so determines, consider annual reports of departments
and budget–related agencies in conjunction with examination of estimates;
- 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;
- draw to the attention of the Senate any significant matters relating to
the operations and performance of the bodies furnishing the annual reports; and
- 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.
Role of annual reports
- Annual reports place a great deal of information
about government departments and agencies on the public record. Accordingly,
the tabling of annual reports continues to be an important element of
accountability to Parliament. The information provided in annual reports
assists Parliament in the effective examination of the performance of
departments and agencies and the administration of government programs. Indeed,
as noted in the Requirements for Annual Reports:
Annual reports serve to inform the Parliament (through the
responsible Minister), other stakeholders, educational and research
institutions, the media and the general public about the performance of
departments in relation to services provided. Annual reports are a key
reference document and a document for internal management. They form part of
the historical record.[2]
Assessment of annual reports
- The annual reports are examined
by the committee to determine whether they are timely and ‘apparently
satisfactory’.[3]
The committee considers whether the reports comply with the relevant
requirements for the preparation of annual reports of departments and
authorities.
- The requirements are set
down in the following instruments:
- for portfolio departments: Public Service Act 1999,
subsections 63(2) and 70(2), and the Requirements for annual reports for
departments executive agencies and FMA Act bodies, Department of Prime
Minister and Cabinet, June 2006;
- for Commonwealth authorities and companies: the Commonwealth
Authorities and Companies Act 19; in particular, the Commonwealth
Authorities and Companies (Report of Operations) Orders 2002; and
- for non–statutory bodies: the guidelines are contained in the
Government response to the report of the Senate Standing Committee on Finance
and Government Operations on Non–statutory bodies, Senate Hansard,
8 December 1987, vol s124, pp. 2643–45 (requirements were
modified in 1987).
Excerpts of
the reporting requirements are at appendix 3.
General comments on the annual reports
- The following annual reports have been examined
by the committee:
Defence portfolio
Army and Air Force Canteen Service, trading as Frontline
Defence Services
ASC Pty Ltd
Australian
Military Forces Relief Trust Fund [late]
Australian
Strategic Policy Institute Limited
Australian War
Memorial
Defence Force
Remuneration Tribunal [late]
Defence Force
Retirement and Death Benefits Authority [late]
Defence
Housing Authority [late]
Defence
Materiel Organisation
Department of
Defence
Department of Veterans’ Affairs, Repatriation Commission and the National Treatment Monitoring
Committee
Military
Rehabilitation and Compensation Commission
Military
Superannuation and Benefits Board of Trustees [late]
Repatriation
Medical Authority
Royal
Australian Air Force Veterans’ Residences Trust Fund
Royal
Australian Air Force Welfare Trust Fund [late]
Royal
Australian Navy Relief Trust Fund [late], and
Veterans' Review
Board [late].
Foreign Affairs and Trade portfolio
Australian Agency for International Aid Development (AusAID)
Australian Centre for International Agricultural Research
(ACIAR)
Australian Safeguards and Non–Proliferation Office (ASNO)
Australia–Japan Foundation
Australian Trade Commission (Austrade)
Department of Foreign Affairs and Trade, and
Export Finance and Insurance
Corporation (EFIC).
Timeliness in tabling annual reports
- Section 63 of the Public Service
Act 1999 requires the secretary of a department, after the end of each
financial year, to give a report to the agency minister for presentation to the
Parliament on the department’s activities during the year.
- The
letter of transmittal is to be dated on the day the signatory approves the
final text of the report for printing. The committee noted that several
agencies did not have a date on their letter of transmittal, or, did not have a
letter of transmittal in the front of the report. Providing these details will
assist the committee in determining whether reports comply with the relevant
requirements.
- The Requirements
for Departmental Annual Reports specify that a copy of the annual report is
to be laid before each House of the Parliament on or before 31 October in
the year in which the report is given. The annual reports of eight agencies were
late in being presented to the Senate.[4] A table detailing the dates relating to the timeliness of presentation is at appendix
3.
Comments made in the Senate
- The committee is obliged, under Senate Standing
Order 25(21)(d) to consider any remarks made about these reports in the Senate.
There were no comments in the Senate on any of these reports.
Matters of significance
- In accordance with SO25, the committee is to note any significant
matters relating to the operations and performance of the bodies presenting
their annual report.
- The committee draws attention to the financial statements of the Department
of Defence and Department of Veterans' Affairs; a summary of which is contained
in the relevant section in the following chapter. Also, a summary of the
financial statements for the Defence Materiel Organisation, Defence Housing
Authority and the Military Superannuation and Benefits Scheme is outlined
below.
ANAO audit findings
- Each year, the Australian National Audit Office
(ANAO) issues two reports on the results of the audits of the financial
statements of Australian Government reporting entities. The committee draws on
the report published in December 2006 that provides a summary of the final
results of the audit for the financial year ended 30 June 2006 to highlight some of the more significant results that relate to relevant portfolios.
Defence Materiel Organisation
- The financial year 2005–06 was the first year of
operation of the Defence Materiel Organisation (DMO) as a separate prescribed
agency under the Financial Management and Accountability Act 1997. With
its establishment as a separate agency, DMO had to establish its own internal
management and reporting framework. The ANAO audit noted that throughout the
audit such frameworks 'were not fully established at the date of prescription
and continued to evolve throughout the first year of operation'.[5]
- As a consequence, the ANAO's results of the Audits
of Financial Statements identified a number of weaknesses and made observations
with regard to the management of appropriations, the DMO special account and
maturity of reporting processes.[6]
Defence Housing Authority
- The ANAO's results of the Audits of Financial
Statements found that DHA needed to arrange the timely engagement of
independent professional valuers in the assessment of impairment for DHA
inventory, investment property and infrastructure.[7]
Military Superannuation and Benefits Scheme
- The ANAO's results of the Audits of Financial
Statements found that the Military Superannuation and Benefits Scheme (MSBS)
had breached sections of the Corporations Act 2001. The breaches were:
- 152 members did not receive periodic statements for one or more
years since 2002 (the trustees have addressed this issue);
- 26,466 preserved benefit members were provided with a member
statement for the year ended 30 June 2005 containing incorrect information
regarding their preserved benefits (this error is to be corrected for the year
ended 30 June 2006);
- 105 new recruits to the Defence Force over the period 1 January 2006 to 31 March 2006 did not receive their new member kit, which includes
the Scheme's Product Disclosure Statement, within the prescribed three months
of entry;
- 1,139 Defence Force Retirement and Death Benefits Scheme
contributors did not receive a Product Disclosure Statement in the specified
timeframe upon receipt of their government co–contributors into the MSBS (the
information has been distributed).[8]
Bodies not presenting annual reports to the Senate
- The committee
is required to report to the Senate each year on whether there are any bodies that
do not present annual reports to the Senate and which should present such
reports. The Committee is satisfied that there are no bodies, within these portfolios,
which do not meet their reporting requirements to the Senate.
- The
committee, however, does note Frontline's failure to present its annual report
for the period 2004–2005 (see paragraph 2.9).
Standard of reports
- The committee found all reports to be generally of
a high standard. They effectively described the function, activities and
financial positions of the various departments and agencies. The committee
therefore finds all of the annual reports to be ‘apparently satisfactory’.
Steve Hutchins
Acting Chair
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