Chapter 2 - Annual reports of statutory and non–statutory authorities and government companies


Chapter 2 - Annual reports of statutory and non–statutory authorities and government companies

Defence portfolio

The Army and Air Force Canteen Service
[trading as Frontline Defence Services]

2.2        The Army and Air Force Canteen Service Annual Report 2005–2006 was presented to the President of the Senate on 31 October 2006 and tabled in the Senate on 7 November 2006.

2.3        The report is tabled in accordance with section 9 of the Commonwealth Authorities and Companies Act 1997.

2.4        The Army and Air Force Canteen Service (AAFCANS) was established as a statutory authority under the Army and Air Force Canteen Service Regulations 1959. It was formed to provide goods, facilities and services to, or for the entertainment and recreation of, designated members of the 'Defence family'.

2.5        The Board adopted the trade name ‘Frontline Defence Services’ (‘Frontline’) in 1997 as part of a major business realignment.[1] Under the regulations, Frontline returns its profits or surplus to bases for the provision or improvement of welfare and amenities for Defence personnel.[2]

2.6        During the financial year under review, the report stated that of the 22 bases Frontline directly operated only eight produced a positive contribution to head office overheads and of the 25 taverns only six produced a positive contribution.[3]

2.7        The Chairman reported that:

Despite these market limitations, the existing infrastructure of the Frontline organisation ensures that it is able to efficiently, and on a cost effective basis, provide goods and services to its customer base. For it to continue Frontline requires continuation of the financial support from its owners.[4]

2.8        The Chairman also reported that in 2005 Frontline operations were scrutinised under the 'Uhrig review' of Commonwealth Authorities. Following this review, a working group was formed. Its function was to provide a proposal to the Frontline owners for the future direction of Frontline and Defence requirements. The outcomes from the working group were presented to key stakeholders, and in turn presented to the Minister, 'stipulating the Defence Statement of Requirement for Frontline and the support programs recommended'.[5]

2.9        The Chairman went on to explain that:

In June 2006 Frontline received communication from the Minister advising the processes of formalisation of...

  • service agreements and sureties between Defence and Frontline Defence Services, and
  • conditional funding support in line with Frontline restructuring to deliver agreed services at a lower cost to Defence.

With the above support and operational efficiencies budgeted for the financial year 2006–2007, the Frontline Board is working with the Commonwealth to establish a long term solution whereby key stakeholders service expectations are met with commercially sustainable operations. [6]

2.10      The 2005–2006 report is an informative account of the operations and performance of Frontline Defence Services. The committee finds that this report fulfils all requirements outlined in the guidelines for statutory bodies.

Annual report 2004–2005

2.11      In its previous report on annual reports (no 1 of 2006), the committee noted, however, that the annual report for the period 2004–2005 had not been received within the required tabling time line. To date, a report for this period has not been tabled in the Parliament.

2.12      On 31 May 2006, during the Budget estimates hearing the chair of the committee drew attention to the late reporting for the previous two years. Defence officials informed the committee that the submission of Frontline's annual reports was the responsibility of Frontline’s board. They could not offer a view as to why Frontline's board was late with its annual reports.[7]

2.13      Apart from this statement, the committee is unaware of any explanation as to why the 2004–2005 report is late and finds this to be unsatisfactory.

Australian War Memorial

2.14      The Australian War Memorial Annual Report 2005–2006 was tabled in the Senate on 10 October 2006. The Australian War Memorial (AWM) is a statutory authority within the Veterans’ Affairs portfolio and functions in accordance with the requirements of the Australian War Memorial Act 1980 and the Commonwealth Authorities and Companies (CAC) Act 1997.[8]

2.15      The purpose of the Australian War Memorial is 'to commemorate the sacrifice of those Australians who have died in war.’[9]

2.16      In the Chairman’s report, Mr Adrian Clunies–Ross, reported that during the year the Australian War Memorial's Council and staff directed their attention to the construction of the C E W Bean building and the planning for the Post–1945 Conflicts galleries. The Chairman explained that in early 2006, the Council approved the planning for the new galleries that will 'tell the story of Australia's involvement in war from the development of the Cold War in 1945 through to the current deployments in Iraq and Afghanistan'.[10]

2.17      The Chairman went on to outline important corporate matters:

The Council has again been most satisfied with the management of the Memorial's finances, which is a very significant aspect of corporate governance. The work of the financial staff in conjunction with the oversight of the Finance, Audit and Compliance Committee of Council has produced a result which Council considers to be stringently controlled, properly recorded, and in compliance with government requirements. The financial staff are to be congratulated on the continuous high standards they set themselves and attain.[11]

2.18      The Chairman stated that in the previous year the Uhrig report, relating to statutory authorities and office holders, was released. The report was of particular interest to the Council, as it 'potentially affected the relationships of the Chairman and the Director with the Ministers and the Department of Veterans' Affairs'.

2.19      The Chairman stated that:

During the course of the year the Director and staff worked closely with the Department to produce a response to the report, which was considered by Council at the May meeting. From Council's viewpoint the report is entirely satisfactory as it re–affirms the present effective arrangements with some additional Statements of Expectations from the Minister and Responses from Council.[12]

2.20      The committee finds that the War Memorial’s Annual Report provides a comprehensive coverage of the organisation’s activities during 2005–2006. It is an informative and well produced document, which allows the reader to access information easily. The committee concludes that this report complies with all reporting requirements for statutory authorities.

Other reports

2.21      Other Defence portfolio authorities, agencies and/or companies which had their annual reports examined by the committee, but were not otherwise commented upon in this edition, include:

  • Australian Military Forces Relief Trust Fund Annual Report 2005–2006
  • Australian Strategic Policy Institute Annual Report 2005–2006
  • ASC Limited Annual Report 2006
  • Defence Force Remuneration Tribunal Nineteenth Annual Report 2005–2006
  • Defence Force Retirement and Death Benefits Authority Annual Report 2005–2006
  • Defence Housing Authority Annual report 2005–2006
  • Military Rehabilitation and Compensation Commission Annual Report 2005–2006
  • Military Superannuation and Benefits Board Annual Report 2005–2006
  • Repatriation Medical Authority Twelfth Annual Report 2005–2006
  • Royal Australian Air Force Veterans’ Residences Trust Fund Annual Report 2005–2006
  • Royal Australian Air Force Welfare Trust Fund Annual Report 2005–2006
  • Royal Australian Navy Relief Trust Fund Annual Report 2005–2006, and
  • Veterans’ Review Board Annual Report 2005–2006.

2.22      The committee considers that all the annual reports of the above–mentioned organisations fully met their respective reporting requirements.

Foreign Affairs and Trade portfolio

Australian Agency for International Development (AusAID)

2.23      The Australian Agency for International Development Annual Report 2005–2006 was presented to the President of the Senate on 25 October 2006, and tabled in the Senate on 6 November 2006.

2.24      AusAID administers Australia’s overseas aid program. According to the annual report, the objective of the aid program is to 'advance the national interest by assisting developing countries to reduce poverty and achieve sustainable development'.[13]

2.25      AusAID advises the government on development policy and manages Australian development cooperation programs focused on achieving broad–based growth, stability and effective governance, particularly in our region. In this way, AusAID contributes to the formulation and implementation of Australia's broader foreign policy framework. It is an administratively autonomous agency within the Foreign Affairs and Trade portfolio. The Director General reports directly to the Minister for Foreign Affairs and the Parliamentary Secretary on all aspects of aid policy and operations.[14]

2.26      In the Director General’s review, Mr Bruce Davis stated that 2005–2006 was a momentous year for the Australian aid program.[15] The Director General listed five key areas of focus for the agency during 2005–2006:

  • developing and publishing Australian aid: promoting growth and stability, the first White Paper produced on the Australian aid program;
  • implementing and fully programming the $1 billion Australia–Indonesia Partnership for Reconstruction and Development;
  • contributing to whole–of–government responses to transboundary issues such as avian influenza and interventions such as the Regional Assistance Mission to Solomon Islands (RAMSI);
  • taking a lead role in the region in response to the HIV/AIDS epidemic, including through the development of innovative partnerships with private sector groups; and
  • responding quickly and effectively to regional emergency and humanitarian crises such as the Pakistani and Indonesian earthquakes in October 2005 and May 2006 respectively.[16]

2.27      As mentioned above, in April 2006, the Government launched the White Paper on the Australian aid program. The Director General stated that the White Paper provided a strategic framework to guide the direction of the aid program over the next ten years:

The White Paper sets out a series of organising themes and effectiveness strategies for Australian aid and outlines a range of initiatives to give effect to government policy. At the time of launch, the government announced the first of these initiatives which involves a major expansion of scholarship programs.[17]

2.28      The committee notes in the report that AusAID's substantial policy output during 2005–2006 was mirrored by a parallel program of corporate reform:

The 2006–2010 Agency Business Plan was launched on the same day as the White Paper and maps the substantial changes required for the agency to deliver a more effective and significantly scaled–up aid program. Developed in close consultation with AusAID staff, the plan identifies four key performance areas for the agency:

  • policy and program
  • people and organisation
  • business processes and systems, and
  • partnerships and outreach.

The demands of the White Paper implementation required substantial structural change to the agency during the year. A corporate reform project was created to drive the agenda outlined in the business plan. The project's work program included streamlining business processes, improving people management and analysing international experiences of scaling–up amongst other donors.[18]

2.29      The committee finds that AusAID’s annual report provides a comprehensive coverage of the organisation’s activities during 2005–2006. As usual the committee considers it to be of high quality: it is informative and well produced. The committee concludes that this report complies with all reporting requirements for non–statutory authorities.

Australian Trade Commission (Austrade)

2.30      The Australian Trade Commission Annual Report 2005–2006 was tabled in the Senate on 11 October 2006.

2.31      Australian Trade Commission is a statutory authority responsible to the Minister for Trade and the Australian Government. Until 30 June 2006, Austrade operated under the Australian Trade Commission Act 1985, Commonwealth Authorities and Companies Act 1997, and the Export Market Development Grants Act 1997. It was governed by a Board whose members were drawn from business and government.

2.32      On 1 July 2006, following amendments to the Australian Trade Commission Act 1985, and the Export Market Development Grants Act 1997, Austrade became an agency under the Financial Management and Accountability Act 1997 and the Public Service Act 1999, and managed by a Chief Executive Officer.[19]

2.33      The annual report states that ‘Austrade contributes to community wealth by helping more Australians succeed in export and international business’.[20]

2.34      In his Managing Director’s report, Mr Peter O’Byrne reported on the review of Austrade's corporate governance:

...As part of the Government's response to the recommendations of the 'Uhrig review', the Deputy Prime Minister and Minister for Trade decided that Austrade would cease to be governed by a board under the Commonwealth Authorities and Companies Act 1997 and become an agency under the Financial Management and Accountability Act 1997 and the Public Service Act 1999, managed by a Chief Executive Officer. To give effect to this assessment, amendments were required to the Australian Trade Commission Act 1985 and the Export Market Development Grants Scheme Act 1997. These amendments came into effect On 1 July 2006.[21]

During 2005–2006 Austrade established a team to set up new governance arrangements to ensure the strong accountability features of the Board were translated into effective internal and external accountability mechanisms appropriate to Austrade's revised enabling legislation. The project included the preparation of new Schedules of Delegations and Chief Executive's Instructions, the amendment of several human resources, procurement and other management policies, and the establishment of a new Chief Executive's Management Board and an Audit and Risk Committee.[22]

2.35      Mr O’Byrne also noted that Austrade had another year of growth in its activity and outcomes, with a significant increase in the number of Australian businesses assisted to achieve export sales.

2.36      Some highlights for the year for Austrade were:

  • the dollar value of export successes achieved by clients, with acknowledged assistance by Austrade, totalled $18.4 billion;
  • the delivery of a business matching program—Business Club Australia: Melbourne 2006—in the lead up to and during the Melbourne 2006 Commonwealth Games, which attracted over 7,800 Australians and international members and delivered 57 business networking events;
  • the implementation of the Australian Government's decision to continue the TradeStart program for another four years and to extend the EMDG scheme until the end of 2010–11; and
  • with the support of DFAT, the provision by Austrade of on–the–ground consular assistance to locate and evacuate Australians caught up in the aftermath of Hurricane Katrina.[23]

2.37      The committee is satisfied with Austrade's tables which describe its performance and outcomes for the year and its descriptions of accountability and corporate governance requirements.[24]

2.38      The committee finds that Austrade's annual report provides a comprehensive coverage of the organisation’s activities during 2005–2006. In keeping with previous examinations, the committee considers this annual report to be informative and produced in a manner that allows the reader easy access to information. The committee concludes that this report complies with all reporting requirements for statutory authorities.

Other reports

2.39      Other Foreign Affairs and Trade portfolio authorities and/or agencies which had their annual reports examined by the committee but were otherwise not commented upon in this edition, include:

  • Australia–Japan Foundation Annual Report 2005–2006
  • Australian Centre for International Agricultural Research Annual Report 2005–2006
  • Australian Safeguards and Non–Proliferation Office Annual Report 2005–2006, and
  • Export Finance and Insurance Corporation Annual Report 2006.

2.40      The committee considers that all the annual reports of the abovementioned organisations fully met their respective reporting requirements.

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