Chapter 1Introduction
Reference
1.1Under Senate Standing Order 25(20), the annual reports of departments and agencies under the Senate Foreign Affairs, Defence and Trade Legislation Committee’s (the committee) allocated portfolios stand referred to the committee for examination and report. Under the Standing Order, in this year’s second report, the committee is required to examine those annual reports presented to the parliament between 1 November 2022 and 30 April 2023.
1.2Copies of this and other committee reports can be obtained from the SenateTable Office or online at the committee’s webpage.
Terms of reference
1.3Under Standing Order 25(20) the committee is required to:
(a)Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;
(b)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;
(c)Investigate and report to the Senate on any lateness in the presentation of annual reports;
(d)In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate;
(e)If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;
(f)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;
(g)Draw the attention of the Senate to any significant matters relating to the operations and performance of bodies furnishing the annual reports; and
(h)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.
Allocated portfolios
1.4In accordance with the resolution of the Senate on 27 July 2022, the committee has oversight of the following portfolios:
Defence, including Veterans’ Affairs; and
Foreign Affairs and Trade.
Role of annual report
1.5The key purpose of annual reports is accountability through informing the parliament, stakeholders and other interested parties of the operations and performance of public sector departments, agencies, companies and statutory office holders. Annual reports are a key publication under the Commonwealth performance framework where Commonwealth entities and companies are required to report on actual performance against planned performance information. Additionally, annual reports are an important reference document and form a critical part of the historical record.
Reports examined
1.6During the period 1 November 2022 and 30 April 2023, five annual reports of bodies were presented to the parliament and referred to the committee for examination. Reports examined included those from the categories of bodies under the Public Governance, Performance and Accountability Act 2013 (PGPAAct), and those which are prepared by statutory offices or office holders. The examined reports include:
Department of Defence;
Department of Veterans’ Affairs;
Army and Air Force Canteen Service;
Australian Strategic Policy Institute; and
Australian Centre for International Agricultural Research.
Assessment of annual reports
1.7Senate Standing Order 25(20) requires the committee to examine reports referred to it to determine whether they are timely and ‘apparently satisfactory’. The committee must consider whether the reports comply with the relevant legislation or requirements for the preparation of annual reports in forming its assessment.
Annual reporting requirements
Public Governance, Performance and Accountability Act 2013
1.8The PGPA Act is the legislative basis of the Commonwealth performance framework which governs how the Commonwealth public sector uses and manages public resources. It sets out the key requirements for governance, performance reporting and accountability required of Commonwealth entities and companies. A brief description of the different governance structures of these bodies for the purposes of the PGPA Act is set out in Appendix 2, which provides a summary of annual reporting requirements.
Annual reports
1.9Section 46 of the PGPA Act sets out the annual reporting requirements in relation to Commonwealth entities, which states that annual reports must comply with any requirements prescribed by the rules. Section 97 sets out the annual reporting requirements for Commonwealth companies, including those of the Corporations Act 2001 and any additional information prescribed by the rules.
Corporate plans and annual performance statements
1.10The Commonwealth performance framework also includes the requirement for Commonwealth entities and companies to prepare and publish corporate plans each year, pursuant to sections 35 and 95 of the PGPA Act. Under section 39 of the PGPA Act, Commonwealth entities must prepare an annual performance statement in the annual report. Entities use the annual performance statement to report on results achieved against targets, goals and measures established at the beginning of a reporting year in its corporate plan, in addition to key performance indicators set out in portfolio budget/additional estimates statements.
1.11It is noted that Commonwealth companies are not required to prepare annual performance statements. However, companies are required to include in their annual report a report on the actual performance results achieved against the performance information published in their corporate plan.
Public Governance, Performance and Accountability Rule 2014
1.12The Public Governance, Performance and Accountability Rule 2014 (PGPARule) sets out the detailed mandatory requirements for the preparation of corporate plans, annual performance statements and annual reports for Commonwealth entities and, wherever relevant, Commonwealth companies.
1.13The Department of Finance (Finance) publishes resource management guides (RMGs) for Commonwealth entities on a wide range of topics, including on the annual reporting obligations under the PGPA Act and mandatory requirements for the content of annual reports as prescribed by the PGPA Rule.
Statutory office holders and statutory bodies
1.14Statutory office holders are engaged or employed under an Act which may prescribe annual reporting requirements pursuant to the office. It is also noted that there may be reporting requirements in the enabling legislation for statutory bodies (which may also be Commonwealth entities).
Non-statutory bodies
1.15Non-statutory bodies (NSBs) are established by a minister and are not pursuant to a statute. Annual reporting requirements for NSBs are contained in the government response to the Senate Standing Committee on Finance and Public Administration Report on Non-Statutory Bodies, dated 8 December 1987.
Non-reporting bodies
1.16Standing Order 25(20)(h) requires that the committee inquire into, and report on, any bodies which do not present annual reports to the Senate but should present such reports. There are four such bodies that have not presented annual reports to the parliament as of the tabling date:
Royal Australian Airforce Welfare Trust Fund;
Royal Australian Air Force Veterans’ Residences Trust Fund;
Royal Australian Navy Central Canteens Board; and
RAAF Welfare Recreational Company.
Timeliness
1.17Under Standing Order 25(20)(c), the committee must report to the Senate any lateness in the presentation of annual reports. The committee notes that different reporting timeframes apply to different categories of bodies. These are set out in Appendix 3.
Review of timeliness of reports examined
1.18Under Standing Order 25(20)(c), the committee is required to investigate and report to the Senate any lateness in the presentation of annual reports. The committee considers the timely presentation of annual reports to the parliament an important element of accountability.
1.19Appendix 1 lists the annual reports tabled between 1 November 2022 and 30April2023 and referred to the committee for examination. This table includes the dates the reports were tabled in the Senate (or received by the President out of session) and the House of Representatives. For the purposes of the committee’s examination of timeliness, the earlier date is taken as the presentation date to the parliament. The table also includes the dates the reports were submitted to, and received by, the minister, if available.
1.20There are two elements regarding the timeframe for the preparation and presentation of annual reports: the provision of the report to the minister and the presentation of the report to the parliament. Both of these elements were examined by the committee in investigating any lateness in presentation of the annual reports.
Commonwealth entities and companies
1.21All of the 2021-22 annual reports examined except for two met the required date for the provision of the report to the minister. The report of the Army and Air Force Canteen Service (AAFCANS) was submitted to the minister on 6December2022, and the Australian Strategic Policy Institute (ASPI) report was submitted to the minister on 28 October 2022. Neither of these reports met the 15 October deadline.
1.22In relation to the reports of Commonwealth companies examined, the report of the Royal Australian Air Force Welfare Recreational Company remains outstanding.
Statutory office/office holders
1.23The annual reports of statutory office/office holders follow less prescriptive tabling requirements (see Appendix 3). While the minister, upon receipt of the annual report, must present the report to the parliament within 15 sitting days, the preparation and furnishing of the report to the minister is required ‘as soon as practicable’ or ‘as soon as possible’ after the end of the reporting period. The tabling timeframe for reports falling into this category were considered to have generally met the legislative requirements.
Senate debate
1.24In accordance with Standing Order 25(20)(d), the committee is required to take into account any relevant remarks about the reports made in debate in the Senate. The committee notes that none of the annual reports examined in this report have been the subject of comments or debate at the time of preparing this report.
Assessment of reports
1.25Under Standing Order 25(20)(a), the committee is required to examine the annual reports of departments and agencies and report to the Senate on whether they are ‘apparently satisfactory’. In its examination of the annual reports referred, the committee found them to be of a satisfactory standard and largely adhering to relevant requirements. The committee considers the reports examined to be ‘apparently satisfactory’.