2.1
In accordance with Standing Order 25(20)(a), and as noted in paragraph 1.35, the Committee has examined annual reports against relevant legislative and reporting requirements and found them to be ‘apparently satisfactory’. This chapter highlights some of the findings in relation to the annual reports examined.
Performance reporting
Availability of performance framework documents
2.2
The availability of relevant performance framework documents is essential to be able to assess a body’s level of achievement of planned performance. Commonwealth entities and companies are required to set out in their corporate plan each year how it will achieve its purpose and how its performance will be measured and assessed. For budget funded entities, the portfolio budget statements (PBS) also set out performance information in the delivery of departmental programs. Therefore access to these documents for the relevant financial year is necessary when examining a body’s performance as set out in the annual report.
2.3
While these documents have been primarily located on agencies’ websites, the Government’s Transparency Portal has now become an important repository for PGPA Act performance framework documents. Since the launch of the Transparency Portal website in 2019, the Committee has monitored the availability of the annual report, corporate plan and PBS for the relevant bodies it oversights.
2.4
The 2020-21 annual reports for all Commonwealth entities and companies were available in HTML format on the Transparency Portal and in PDF format on most bodies’ websites. The Australian War Memorial provided its report in PDF format on its website as well as a link to the report in the Transparency Portal. However, the Department of Veterans’ Affairs only provided a link to its 2020-21 report on the Transparency Portal website and did not provide the report in PDF format on its website as it has done in previous years. The availability of annual reports as a complete document in PDF format is an important resource which the Committee hopes to see continue to be available in addition to the HTML format in the Transparency Portal.
2.5
All 2020-21 corporate plans for the bodies whose annual reports were examined were located and available for reference. While not all of the corporate plans were easily navigable on an agency’s website, they were available on the Transparency Portal website. The availability of these documents on the Transparency Portal going forward, addresses the issue of their continued availability on agencies’ websites, which the Committee has raised with concern in previous reports.
2.6
All 2020-21 PBSs were also available on the websites for Department of Defence, Department of Foreign Affairs and Trade, and Department Veterans’ Affairs and the Transparency Portal.
‘Clear read’ principle
2.7
Department of Finance guidance on annual performance statements notes the importance of the alignment of the annual performance statement with the corporate plan and the PBS:
Annual performance statements should include information that demonstrates the connection between the corporate plan, PBS and annual performance statements to enable a ‘clear read’ across the three documents.
To achieve this, entities may wish to include a diagram demonstrating how the performance information fits together across the documents, or page number references to the corresponding information in corporate plans and the PBS.
It is good practice for entities to set out the discussion of the achievement of performance in their annual performance statements in the same order as the corporate plan, reinforcing the connection between the documents. Each performance measure should also be expressed in a consistent way to aid the clear read between its planned performance information and performance results.
2.8
Overall, most annual reports examined demonstrated a ‘clear read’ between the review of performance presented in the annual report and the source documents. As the Committee has noted previously, the inclusion of references in the performance information to the relevant part of the corporate plan or PBS for each measure assisted in examination of these reports and many reports now incorporate this feature.
2.9
A number of bodies include numbering for each performance measure which also assists in connecting the result in the annual report. It was noted that the Department of Foreign Affairs and Trade included numbering for each performance measure for the first time in its 2020-21 corporate plan, and which assisted in reviewing the corresponding performance information.
2.10
The Committee noted in its last report which examined the Australian War Memorial’s (AWM) 2019-20 report that there was not a ‘clear read’ between its framework documents. The performance measures set out in the AWM’s
2019-20 Corporate Plan referenced 13 program components, five of which were not listed in the corresponding PBS. The Committee notes that this discrepancy has been addressed in the AWM’s 2020-21 Corporate Plan which includes an explanatory page on the AWM’s program components identifying the five internal components which are linked to performance measures, but do not appear with the eight program components published in the PBS. The Committee welcomes this clarification in the AWM Corporate Plan; however, its reporting against performance measures from the corporate plan continued to lack clarity. The AWM performance statement included all performance criteria from the PBS in sequence as set out in the PBS, but did not provide a ‘clear read’ between each measure set out in the AWM’s corresponding corporate plan.
2.11
The inclusion of a summary table or chart of performance results with a clear indicator of the level of achievement providing a snapshot and an accessible overview of performance was a useful feature and was included in several reports. The Committee notes that the Department of Foreign Affairs and Trade’s 2020-21 report included a table summarising performance results which had not been included in recent reports, and this was particularly helpful given the large number of performance measures for the department.
Performance results
2.12
In reviewing the annual reports of Commonwealth entities and companies, the Committee examined whether all performance measures set out in the corporate plan and PBS were reported against in the annual report.
2.13
While most bodies reported against all planned performance measures in their report’s performance information, there were some instances where results for some measures could not be located. For example, some measures listed in the corporate plans for the RAAF Welfare Recreational Company and the RAAF Welfare Trust Fund did not appear to be reported against in the annual performance statement.
2.14
The Committee was pleased to note that some issues noted in its earlier report regarding the inclusion of all performance measures in the annual reports had been addressed in the 2020-21 reports for some bodies. For example, this year’s reports of the Australian Signals Directorate and the Australian Strategic Policy Institute presented results for all required performance measures from the corporate plan/PBS which the Committee had noted were incomplete in its 2019-20 annual report.
Australian National Audit Office Performance Statement Audit Pilot Program
2.15
In 2019, the Auditor-General agreed to a request from the Minister for Finance to conduct a pilot program of audits of annual performance statements of Commonwealth entities subject to the PGPA Act in consultation with the Joint Committee of Public Accounts and Audit with the intent:
…to drive improvements in the transparency and quality of entities’ performance reporting and, in turn, increase entities’ accountability to the Parliament and public.
2.16
The Department of Veterans’ Affairs (DVA) was one of three departments selected for the pilot program and the Committee previously noted the findings of the assurance audit of its 2019-20 annual performance statements. The Australian National Audit Office (ANAO) advised of the continuation of the pilot program for the 2020-21 performance statements of the same departments noting that there was:
…improvement during the pilot program in the standard of performance statements preparation and reporting for each of the audited entities, demonstrating that mandated audits of performance statements can drive more transparent and meaningful performance reporting to Parliament.
2.17
The Committee notes the tabling of the Audit report of the 2020-21 annual performance statement – Department of Veterans’ Affairs by the Minister for Finance on 8 April 2022. The Committee also notes that the 2020-21 Annual Performance Statements for DVA were prepared in accordance with the requirements of Division 3 of Part 2-3 of the Public, Governance, Performance and Accountability Act 2013, except for the matters described in the Bases for Qualified Conclusion section of the report regarding the results of two performance measures where the Auditor-General was unable to conclude whether the results reported against were accurate and complete, and supported by appropriate records.
Compliance indexes
2.18
The PGPA Rule requires all Commonwealth entities and companies to include the list of relevant reporting requirements with details of where those requirements are found in the annual report. Most bodies again satisfactorily met this requirement and this assisted in the examination of reports. However, there were some instances of missing and incomplete lists.
2.19
The Committee notes that the 2020-21 reports of the Royal Australian Air Force Veterans’ Residences Trust and Navy Canteens did not include a compliance index. This has been a recurring issue and has been noted in earlier reports of the Committee and it hopes to see this issue rectified in future reports.
2.20
Most bodies included exact page number references for the required items but there were some exceptions. For example, the Australian Strategic Policy Institute referred to the relevant chapter in the report for the required information, while the Australian War Memorial referred to the relevant section of the report only. Although not prescribed in the PGPA Rule, the inclusion of precise page references in the list of requirements enhances access to information and assists in the examination of annual reports.
2.21
For the reports of non-corporate Commonwealth entities, all but one report listed all of the new requirements concerning new consultancy and non-consultancy contract expenditure reporting in the list of requirements. The list of requirements for the Australian Centre for International Agricultural Research only included the new reporting requirements in relation to consultancy contracts under item 17AG(7) of the PGPA Rule, but did not include reporting requirements in relation to non-consultancy contracts under item 17AG(7A) and 7AGA. However, the required information on non-consultancy contracts was included in the body of the report.
2.22
It was noted that the list of requirements in the report of the Royal Australian Air Force Welfare Trust Fund omitted to list five items under the PGPA Rule. If a reporting item has a nil return for the reporting period or is not applicable, the Department of Finance advises that it should be reported as such rather than omitted from the list.
2.23
Agencies are reminded that the full and up-to-date list of annual reporting items is a mandatory inclusion in the annual report.
Enhanced reporting requirements
New consultancy/non-consultancy contract reporting
2.24
The Committee was pleased to note that all of 2020-21 reports of non-corporate Commonwealth entities examined included the enhanced reporting in relation to the new reportable consultancy/non-consultancy contract expenditure under the sections 17AG(7) and (7A) and section 17AGA. Most bodies included all required elements and set out this information in accordance with the Department of Finance guidance for best practice. However, one of the required statements on reportable non-consultancy contracts under item 17AG(7A)(b) was not located in the Department of Defence’s report, even though the compliance index indicated this information was included.
Senator the Hon Eric Abetz
Chair